EXHIBIT 4.2
AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
by and among
\
STAGE STORES, INC.
SPECIALTY RETAILERS, INC.,
PALAIS ROYAL, INC.,
THE FIRST NATIONAL BANK OF BOSTON
and the other lending institutions listed
on SCHEDULE 1 hereto
and
THE FIRST NATIONAL BANK OF BOSTON,
as Agent
January 31, 1997
TABLE OF CONTENTS
PAGE
SS.1. DEFINITION AND RULES OF INTERPRETATION
ss.1.1 Definitions........................................ 1
ss.1.2 Rules of Interpretation............................ 17
SS.2. THE REVOLVING CREDIT FACILITY
ss.2.1 Commitment to Lend................................. 18
ss.2.2 Commitment Fee..................................... 18
ss.2.3 Reduction of Total Commitment...................... 19
ss.2.4 The Revolving Credit Notes......................... 19
ss.2.5 Interest on Revolving Credit Loans................. 19
ss.2.6 Requests for Revolving Credit Loans................ 20
ss.2.7 Conversion Options................................. 20
2.7.1. Conversion to Different Type of Revolving
Credit Loan.............................. 20
2.7.2. Continuation of Type of Revolving Credit Loan 21
2.7.3 Eurodollar Rate Loans....................... 21
ss.2.8 Funds for Loan..................................... 21
2.8.1. Funding Procedures......................... 21
2.8.2. Advances by Agent.......................... 21
SS.3. REPAYMENT OF THE REVOLVING CREDIT LOANS
ss.3.1 Maturity........................................... 22
ss.3.2 Mandatory Repayments of Loans...................... 22
3.2.1. Exceeding Total Commitment................. 22
3.2.2. Cleanup Provision.......................... 22
ss.3.3 Optional Repayments of Loans....................... 23
SS.4. LETTERS OF CREDIT
ss.4.1 Letter of Credit Commitments....................... 23
4.1.1. Commitment to Issue Letters of Credit 23
4.1.1.1. General Provisions........................ 23
4.1.1.2 Commitment to Issue Stand Alone
Letters of Credit........................ 24
4.1.1.3. Commitment to Issue Revolver
Letters of Credit.......... 24
4.1.2. Letter of Credit Applications.............. 24
4.1.3. Terms of Letters of Credit................. 25
4.1.4. Reimbursement Obligations of Banks......... 25
4.1.5. Participations of Banks.................... 25
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PAGE
4.1.6. Reduction of Total LC Commitment........... 25
ss.4.2 Reimbursement Obligation of the Borrower........... 25
ss.4.3 Letter of Credit Payments.......................... 26
ss.4.4 Obligations Absolute............................... 27
ss.4.5 Reliance by Issuer................................. 27
ss.4.6 Letter of Credit Fee............................... 28
ss.4.7 Commitment Fee on Stand Alone Letters of Credit 28
SS.5. CERTAIN GENERAL PROVISIONS
ss.5.1 Closing Fee........................................ 28
ss.5.2 Agent's Fee........................................ 29
ss.5.3 Funds for Payments................................. 29
5.3.1 Payments to Agent........................... 29
5.3.2 No Offset, etc.............................. 29
ss.5.4 Computations....................................... 29
ss.5.5 Inability to Determine Eurodollar Rate............. 29
ss.5.6 Illegality......................................... 30
ss.5.7 Additional Costs, Etc.............................. 30
ss.5.8 Capital Adequacy................................... 32
ss.5.9 Certificate........................................ 32
ss.5.10 Indemnity.......................................... 32
ss.5.11 Interest After Default............................. 32
ss.5.12 Interest Limitation................................ 33
SS.6. COLLATERAL SECURITY AND GUARANTIES
ss.6.1 Security of Borrower............................... 33
ss.6.2 Guaranties......................................... 34
ss.6.3 Guaranties and Security of Subsidiaries............ 34
ss.6.4 Termination of Security Interest................... 34
SS.7. REPRESENTATIONS AND WARRANTIES
ss.7.1 Corporate Authority................................ 34
7.1.1 Incorporation; Good Standing................ 34
7.1.2 Authorization............................... 34
7.1.3 Enforceability.............................. 35
ss.7.2 Governmental Approvals............................. 35
ss.7.3 Title to Properties; Leases........................ 35
ss.7.4 Financial Statements and Projections............... 35
7.4.1 Financial Statements........................ 35
7.4.2 Projections................................. 36
ss.7.5 No Material Changes, Etc........................... 36
ss.7.6 Franchises, Patents, Copyrights, Etc............... 36
ss.7.7 Litigation......................................... 36
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PAGE
ss.7.8 No Materially Adverse Contracts, Etc............... 37
ss.7.9 Compliance with Other Instruments, Law, Etc. 37
ss.7.10 Tax Status......................................... 37
ss.7.11 No Event of Default................................ 37
ss.7.12 Holding Company and Investment Company Acts 37
ss.7.13 Absence of Financing Statements, Etc............... 38
ss.7.14 Perfection of Security Interest.................... 38
ss.7.15 Certain Transactions............................... 38
ss.7.16 Employee Benefit Plans............................. 38
7.16.1 In General................................. 38
7.16.2 Terminablility of Welfare Plans............ 38
7.16.3 Guaranteed Pension Plans................... 39
7.16.4 Multiemployer Plans........................ 39
ss.7.17 Regulations U and X................................ 39
ss.7.18 Environmental Compliance........................... 39
ss.7.19 Subsidiaries, Etc.................................. 41
ss.7.20 Senior Debt........................................ 42
ss.7.21 Fiscal Year........................................ 42
ss.7.22 Insurance.......................................... 42
SS.8. AFFIRMATIVE COVENANTS OF THE BORROWER
ss.8.1 Punctual Payment................................... 42
ss.8.2 Maintenance of Office.............................. 42
ss.8.3 Records and Accounts............................... 43
ss.8.4 Financial Statements, Certificates and Information 43
ss.8.5 Notices .......................................... 46
8.5.1 Defaults.................................... 46
8.5.2 Environmental Events........................ 46
8.5.3 Notification of Claim against Collateral 46
8.5.4 Notice of Litigation and Judgments.......... 47
ss.8.6 Corporate Existence; Maintenance of Properties 47
ss.8.7 Insurance.......................................... 47
ss.8.8 Taxes .......................................... 47
ss.8.9 Inspection of Properties and Books, Etc............ 48
8.9.1 General..................................... 48
8.9.2 Appraisals.................................. 48
8.9.3 Environmental Assessments................... 48
8.9.4 Communications with Accountants............. 49
ss.8.10 Compliance with Laws, Contracts,
Licenses and Permits............................. 49
ss.8.11 Employee Benefit Plans............................. 49
ss.8.12 Use of Proceeds.................................... 50
ss.8.13 Further Assurances................................. 50
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PAGE
SS.9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER
ss.9.1 Restrictions on Indebtedness....................... 50
ss.9.2 Restrictions on Liens.............................. 52
ss.9.3 Restrictions on Investments........................ 53
ss.9.4 Distributions; Repayment........................... 54
ss.9.5 Merger, Consolidation and Disposition of Assets 55
9.5.1 Mergers and Acquisitions.................... 55
9.5.2 Disposition of Assets....................... 56
ss.9.6 Sale and Leaseback................................. 56
ss.9.7 Compliance with Environmental Laws................. 56
ss.9.8 Senior Note and Senior Subordinated Note Payments 57
ss.9.9 Changes in Terms of Senior Notes and Senior
Subordinated Notes......................... 57
ss.9.10 Employee Benefit Plans............................. 57
ss.9.11 Transactions with Affiliates....................... 58
ss.9.12 Fiscal Year........................................ 58
ss.9.13 Negative Pledges................................... 59
ss.9.14 Upstream Limitations............................... 59
SS.10. FINANCIAL COVENANT OF THE BORROWER
ss.10.1 Debt Service Ratio................................. 59
ss.10.2 Capital Expenditures............................... 60
ss.10.3 Total Funded Debt to EBITDA........................ 60
ss.10.4 Minimum EBITDA..................................... 60
ss.10.5 Current Assets..................................... 61
ss.10.6 Seasonal Debt Service Ratio........................ 61
SS.11. CLOSING CONDITIONS
ss.11.1 Loan Documents..................................... 61
ss.11.2 Certified Copies of Charter Documents.............. 61
ss.11.3 Corporate, Action.................................. 61
ss.11.4 Incumbency Certificate............................. 61
ss.11.5 Validity of Liens.................................. 62
ss.11.6 Title Search Results............................... 62
ss.11.7 Taxes .......................................... 62
ss.11.8 Title Insurance.................................... 62
ss.11.9 Certificates of Insurance.......................... 62
ss.11.10 Solvency Certificate............................... 62
ss.11.11 Opinion of Counsel................................. 63
ss.11.12 Payment of Fees.................................... 63
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PAGE
SS.12. CONDITIONS TO ALL BORROWINGS
ss.12.1. Representations True; No Event of Default.......... 63
ss.12.2. No Legal Impediment................................ 63
ss.12.3 Governmental Regulation............................ 63
ss.12.4 Proceedings and Documents.......................... 63
SS.13. EVENTS OF DEFAULT; ACCELERATION; ETC.
ss.13.1 Events of Default and Acceleration................. 64
ss.13.2 Termination of Commitments......................... 68
ss.13.3 Remedies........................................... 68
ss.13.4 Distribution of Collateral Proceeds................ 68
SS.14. SETOFF .......................................... 69
SS.15. THE AGENT
ss.15.1 Authorization...................................... 70
ss.15.2 Employees and Agents............................... 70
ss.15.3 No Liability....................................... 71
ss.15.4 No Representations................................. 71
ss.15.5 Payments........................................... 71
15.5.1. Payments to Agent......................... 71
15.5.2. Distribution by Agent..................... 71
15.5.3. Delinquent Banks.......................... 72
ss.15.6 Holders of Notes................................... 72
ss.15.7 Indemnity.......................................... 72
ss.15.8 Agent as Bank...................................... 73
ss.15.9 Resignation........................................ 73
ss.15.10 Notification of Defaults and Events of Default 73
ss.15.11 Duties in the Case of Enforcement.................. 73
SS.16. EXPENSES .......................................... 73
SS.17. INDEMNIFICATION............................................. 74
SS.18. SURVIVAL OF COVENANTS, ETC.................................. 75
SS.19. ASSIGNMENT AND PARTICIPATION................................ 75
ss.19.1 Conditions to Assignment by Banks.................. 75
ss.19.2 Certain Representations and Warranties;
Limitations; Covenants..................... 76
ss.19.3 Register........................................... 77
ss.19.4 New Notes.......................................... 77
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PAGE
ss.19.5 Participations..................................... 77
ss.19.6 Disclosure......................................... 78
ss.19.7 Assignee or Participant Affiliated with the Borrower 78
ss.19.8 Miscellaneous Assignment Provisions................ 78
ss.19.9 Assignment by Borrower............................. 79
SS.20. NOTICES, ETC. .......................................... 79
SS.21. GOVERNING LAW .......................................... 79
SS.22. HEADINGS .......................................... 80
SS.23. COUNTERPARTS .......................................... 80
SS.24. ENTIRE AGREEMENT, ETC....................................... 80
SS.25. WAIVER OF JURY TRIAL........................................ 80
SS.26. CONSENTS, AMENDMENTS, WAIVERS, ETC.......................... 80
SS.27. SEVERABILITY .......................................... 81
SS.28. TRANSITIONAL ARRANGEMENTS................................... 81
ss.28.1 Original Credit Agreement Superseded............... 81
ss.28.2 Return and Cancellation of Notes................... 81
ss.28.3 Interest and Fees Under Superseded Agreement 82
SS.29. COVENANT OF SSI............................................. 82
SCHEDULES
Schedule 1 Banks/Commitments
Schedule 6.3 Title to Properties; Leases
Schedule 6.7 Litigation
Schedule 6.14 Transactions with Affiliates
Schedule 6.15.3 ERISA Matters
Schedule 6.17 Environmental Matters
Schedule 6.18 Joint Ventures
Schedule 6.21 Insurance
Schedule 8.1 Indebtedness
Schedule 8.2 Liens
EXHIBITS
Exhibit A Form of Revolving Credit Note
Exhibit B Form of Loan Request
Exhibit C Form of Compliance Certificate
Exhibit D Form of Assignment and Acceptance
Exhibit E Form of Guaranty
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AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
This AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT is made as of the
31st day of January, 1997, by and among STAGE STORES, INC. ("SSI"), a Delaware
corporation (for the limited purpose of ss.29 hereof only), SPECIALTY RETAILERS,
INC. ("SRI"), a Delaware corporation, PALAIS ROYAL, INC. (the "Borrower"), a
Texas corporation having its principal place of business at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, and THE FIRST NATIONAL BANK OF BOSTON and the other
lending institutions listed on SCHEDULE 1 and THE FIRST NATIONAL BANK OF BOSTON
as agent for itself and such other lending institutions.
WHEREAS, pursuant to a Revolving Credit Agreement dated as of January 28,
1994 (as amended and in effect from time to time, the "Original Credit
Agreement") by and among SRI, the Borrower, certain of the Banks (as hereinafter
defined) and the Agent (as hereinafter defined), the Banks party thereto made
available revolving credit loans for general corporate and working capital
purposes; and
WHEREAS, the Borrower has requested, among other things, additional
financing to refinance certain Indebtedness and for general corporate and
working capital purposes, and the Banks are willing to provide such additional
financing on the terms and conditions set forth herein;
NOW, THEREFORE, SRI, the Borrower, the Banks and the Agent agree that on
the Closing Date the Original Credit Agreement is hereby amended and restated in
its entirety and shall remain in full force and effect only as set forth herein.
SS.1. DEFINITIONS AND RULES OF INTERPRETATION.
SS.1.1. DEFINITIONS. The following terms shall have the meanings set
forth in this ss.1 or elsewhere in the provisions of this Credit Agreement
referred to below:
ACQUISITION CAPITAL EXPENDITURES. Capital Expenditures made by SRI
or the Borrower and (a) funded by Indebtedness incurred or assumed by the
Borrower or SRI as permitted by ss.9.1(l) in connection with any
acquisition permitted by ss.9.5.1 or (b) which the Borrower can
demonstrate to the satisfaction of the Agent, pursuant to an officer's
certificate signed by an officer of the Borrower and completed with
sufficient detail, (i) were made in connection with an acquisition
permitted by ss.9.5.1 or the expansion of the Borrower's business if such
expansion is not considered an acquisition; and (ii) were made with
proceeds of a Loan; and (iii) do not exceed, in the aggregate, $10,000,000
during the term of this Credit Agreement.
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ADJUSTMENT DATE. The first day of the next calendar month
immediately following the day in which a Compliance Certificate is to be
delivered by the Borrower pursuant to ss.8.4(e).
AFFILIATE. Any Person that would be considered to be an affiliate of
the Borrower under Rule 144(a) of the Rules and Regulations of the
Securities and Exchange Commission, as in effect on the date hereof, if
the Borrower were issuing securities.
AGENT'S HEAD OFFICE. The Agent's head office located at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other location as the
Agent may designate from time to time.
AGENT. The First National Bank of Boston acting as agent for the
Banks.
AGENT'S FEE. See ss.5.2.
AGENT'S SPECIAL COUNSEL. ▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP or such other
counsel as may be approved by the Agent.
APPLICABLE MARGIN. For each period commencing on an Adjustment Date
through the date immediately preceding the next Adjustment Date (each a
"Rate Adjustment Period"), the Applicable Margin shall be the applicable
margin set forth below with respect to the Borrower's Debt Service Ratio,
as determined for the fiscal period of the Borrower and its Subsidiaries
ending immediately prior to the applicable Rate Adjustment Period.
--------------------------------------------------------------------------------
Base Rate Eurodollar Letters of
TIER Debt Service Ratio Loans Rate Loans Credit
--------------------------------------------------------------------------------
1 Less than 1.10:1.00 1 1/2% 2 3/4% 2 3/4%
--------------------------------------------------------------------------------
2 Equal to or greater than 1 1/4% 2 1/2% 2 1/2%
1.10:1.00 but less than
1.30:1.00
--------------------------------------------------------------------------------
3 Equal to or greater than 1% 2 1/4% 2 1/4%
1:30:1.00 but less than
1.50:1.00
--------------------------------------------------------------------------------
4 Equal to or greater than 3/4% 2% 2%
1:50:1.00 but less than
1.70:1.00
--------------------------------------------------------------------------------
5 Equal to or greater than 1/2% 1 3/4% 1 3/4%
1.70:1.00
--------------------------------------------------------------------------------
Notwithstanding the foregoing, (a) for Loans outstanding and the
Letter of Credit Fees payable during the period commencing on the Closing
Date through the date immediately preceding the Adjustment Date occuring
after the fiscal quarter ending April 30, 1997, the Applicable Margin
shall be the Applicable Margin set forth in Tier 3; (b) in the event the
Debt Service Ratio reflected in the financial statements delivered with
the Compliance Certificate pursuant to ss.8.4(a) differs from such ratio
in the financial statements delivered
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pursuant to ss.8.4(b) for the fiscal quarter which is the last fiscal
quarter of a fiscal year, then the Debt Service Ratio as reflected in the
financial statements delivered pursuant to ss.8.4(a) shall govern from and
after the date of delivery of such financial statement pursuant to
ss.8.4(a); and (c) if the Borrower fails to deliver any Compliance
Certificate pursuant to ss.8.4(e) hereof of if a Default or Event of
Default has occurred and is continuing, then, for the period commencing on
the next Adjustment Date to occur subsequent to such failure or occurrence
through the date immediately following the date on which such Compliance
Certificate is delivered or such Default or Event of Default has been
cured or waived, as the case may be, the Applicable Margin shall be the
highest Applicable Margin set forth above.
ASSIGNMENT AND ACCEPTANCE. See ss.19.1.
BALANCE SHEET DATE. November 2, 1996.
BANKS. FNBB and the other lending institutions listed on SCHEDULE 1
hereto and any other Person who becomes an assignee of any rights and
obligations of a Bank pursuant to ss.19.
BASE RATE. The higher of (a) the annual rate of interest announced
from time to time by FNBB at its head office in Boston, Massachusetts, as
its "base rate" and (b) one-half of one percent (1/2%) above the Federal
Funds Effective Rate. For the purposes of this definition, "Federal Funds
Effective Rate" shall mean for any day, the rate per annum equal to the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers,
as published for such day (or, if such day is not a Business Day, for the
next preceding Business Day) by the Federal Reserve Bank of New York, or,
if such rate is not so published for any day that is a Business Day, the
average of the quotations for such day on such transactions received by
the Agent from three funds brokers of recognized standing selected by the
Agent.
BASE RATE LOANS. Loans bearing interest calculated by reference to
the Base Rate.
BORROWER. As defined in the preamble hereto.
BUSINESS DAY. Any day on which banking institutions in Boston,
Massachusetts, are open for the transaction of banking business and, in
the case of Eurodollar Rate Loans, also a day which is a Eurodollar
Business Day.
CAPITAL ASSETS. Fixed assets, both tangible (such as land,
buildings, fixtures, machinery and equipment) and intangible (such as
patents, copyrights, trademarks, franchises and good will) and including
the capital stock or other equity interests of another Person; PROVIDED
that Capital Assets shall not
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include any item customarily charged directly to expense or depreciated
over a useful life of twelve (12) months or less in accordance with
Generally Accepted Accounting Principles.
CAPITAL EXPENDITURES. Without duplication, amounts paid or
indebtedness incurred by SRI or any of its Subsidiaries in connection with
the purchase or lease under Capitalized Leases by SRI or any of its
Subsidiaries of Capital Assets that would be required to be capitalized
and shown on the balance sheet of such Person in accordance with Generally
Accepted Accounting Principles.
CAPITALIZED LEASES. Leases under which SRI or any of its
Subsidiaries is the lessee or obligor, the discounted future rental
payment obligations under which are required to be capitalized on the
balance sheet of the lessee or obligor in accordance with Generally
Accepted Accounting Principles.
CERCLA. See ss.7.18.
CLOSING DATE. The first date on which the conditions set forth in
ss.11 have been satisfied.
CODE. The Internal Revenue Code of 1986.
COLLATERAL. All of the property, rights and interests of the
Borrower and its Subsidiaries that are or are intended to be subject to
the security interests and mortgages created by the Security Documents.
COMMITMENT. With respect to each Bank, the amount set forth on
SCHEDULE 1 hereto as the amount of such Bank's commitment to make Loans
to, and to participate in the issuance, extension and renewal of the
Revolver Letters of Credit for the account of, the Borrower, as the same
may be reduced from time to time; or if such commitment is terminated
pursuant to the provisions hereof, zero.
COMMITMENT PERCENTAGE. With respect to each Bank, the percentage set
forth on SCHEDULE 1 hereto as such Bank's percentage of the aggregate
Commitments of all of the Banks.
COMPLIANCE CERTIFICATE. See ss.8.4(e).
CONSOLIDATED OR CONSOLIDATED. With reference to any term defined
herein, shall mean that term as applied to the accounts of SRI, the
Borrower and their Subsidiaries, consolidated in accordance with Generally
Accepted Accounting Principles.
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CONSOLIDATED CURRENT ASSETS. All assets of SRI, the Borrower and
their Subsidiaries on a consolidated basis that, in accordance with
Generally Accepted Accounting Principles are properly classified as
current assets, PROVIDED that (a) notes and accounts receivable shall be
included only if good and collectible as determined by SRI or the
Borrower in accordance with the Borrower's established practice
consistently applied and, with respect to such notes, only if payable on
demand or within one (1) year from the date as of which Consolidated
Current Assets are to be determined and if not directly or indirectly
renewable or extendible at the option of the debtors, by their terms, or
by the terms of any instrument or agreement relating thereto, beyond one
(1) year, and, with respect to such accounts receivable, only if payable
on terms which are determined by SRI or the Borrower in accordance with
established credit terms consistently applied; and such notes and
accounts receivable shall be taken at their face value less reserves
determined to be sufficient in accordance with Generally Accepted
Accounting Principles; and (ii) inventory shall be included only if and
to the extent that the same shall consist of saleable finished goods
ready and available for shipment to purchasers thereof or saleable
finished goods available for shipment and located on the Mortgaged
Property or classified as "in transit" consistent with the Borrower's
past practices.
CONSOLIDATED CURRENT LIABILITIES. All liabilities of SRI, the
Borrower and their Subsidiaries on a consolidated basis maturing on demand
or within one (1) year from the date as of which Consolidated Current
Liabilities are to be determined, and such other liabilities as may
properly be classified as current liabilities in accordance with Generally
Accepted Accounting Principles; provided, however that Consolidated
Current Liabilities shall exclude outstanding Loans and the principal
amount of the loans outstanding under the Seasonal Revolving Agreement.
CONSOLIDATED FINANCIAL OBLIGATIONS. With respect to any fiscal
period, an amount equal to the sum of all scheduled and other mandatory
principal payments in respect of Indebtedness of SRI, the Borrower and its
Subsidiaries paid or due and payable in such period, including without
limitation the principal portion of all payments in respect of Capitalized
Leases of SRI, the Borrower and their Subsidiaries paid or due and payable
in such period. Demand obligations shall be deemed to be due and payable
during any fiscal quarter during which such obligations are outstanding.
CONSOLIDATED NET INCOME. The consolidated net income (or deficit) of
SRI, the Borrower and their Subsidiaries, after deduction of all expenses,
taxes, and other proper charges, determined in accordance with Generally
Accepted Accounting Principles, after eliminating therefrom all
extraordinary nonrecurring items of income or expense.
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CONSOLIDATED OPERATING CASH FLOW. For any period, an amount equal to
(a) EBITDA for such period, LESS (b) the sum of (i) cash payments for all
income taxes paid during such period, calculated on a consolidated basis,
PLUS (ii) Capital Expenditures made by SRI or any of its Subsidiaries
during such period other than Acquisition Capital Expenditures, PLUS (iii)
without duplication of amounts included in Capital Expenditures, the cash
portion of the purchase price for the assets purchased in any acquisition
permitted pursuant to ss.9.5.1 and paid in such period, PLUS (iv)
distributions to SRI (including distributions for income taxes) not
otherwise deducted in calculating Consolidated Net Income.
CONSOLIDATED TOTAL INTEREST EXPENSE. For any period, the aggregate
amount of interest required to be paid or accrued by SRI, the Borrower and
their Subsidiaries during such period on all Indebtedness of SRI, the
Borrower and their Subsidiaries outstanding during all or any part of such
period, other than interest accrued on the Junior Subordinated Notes,
whether such interest was or is required to be reflected as an item of
expense or capitalized, including payments consisting of interest in
respect of Capitalized Leases and including commitment fees, agency fees,
facility fees and similar fees or expenses in connection with the
borrowing of money, LESS interest income actually received in the period.
CONVERSION REQUEST. A notice given by the Borrower to the Agent of
the Borrower's election to convert or continue a Loan in accordance with
ss.2.7.
CREDIT AGREEMENT. This Amended and Restated Revolving Credit
Agreement, including the Schedules and Exhibits hereto.
DEBT SERVICE. The sum of Consolidated Total Interest Expense PLUS
Consolidated Financial Obligations.
DEBT SERVICE RATIO. At any time and for any period, the ratio of
Consolidated Operating Cash Flow to Debt Service.
DEFAULT. See ss.13.1.
DISTRIBUTION. The declaration or payment of any dividend on or in
respect of any shares of any class of capital stock of any Person, other
than dividends payable solely in shares of common stock of such Person;
the purchase, redemption, or other retirement of any shares of any class
of capital stock of any Person, directly or indirectly through a
Subsidiary of such Person or otherwise; the return of capital by any
Person to its shareholders as such; or any other distribution on or in
respect of any shares of any class of capital stock of any Person.
DOLLARS or $. Dollars in lawful currency of the United States of
America.
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DOMESTIC LENDING OFFICE. Initially, the office of each Bank
designated as such in SCHEDULE 1 hereto; thereafter, such other office of
such Bank, if any, located within the United States that will be making or
maintaining Base Rate Loans.
DRAWDOWN DATE. The date on which any Loan is made or is to be made,
and the date on which any Loan is converted or continued in accordance
with ss.2.7.
EBITDA. With respect to any fiscal period, an amount calculated on a
consolidated basis equal to the sum of (a) Consolidated Net Income for
such period, PLUS (b) all depreciation and all amortization for such
period (excluding amortization related to interest expense previously
added in calculating Consolidated Net Income), PLUS (c) without
duplication, other noncash charges made in calculating Consolidated Net
Income for such period, PLUS (d) without duplication, tax expense for such
period, PLUS (e) without duplication, Consolidated Total Interest Expense
paid or accrued during such period.
ELIGIBLE ASSIGNEE. Any of (a) a commercial bank or finance company
organized under the laws of the United States, or any State thereof or the
District of Columbia, and having total assets in excess of $1,000,000,000;
(b) a savings and loan association or savings bank organized under the
laws of the United States, or any State thereof or the District of
Columbia, and having a net worth of at least $100,000,000, calculated in
accordance with Generally Accepted Accounting Principles; (c) a commercial
bank organized under the laws of any other country which is a member of
the Organization for Economic Cooperation and Development (the "OECD"), or
a political subdivision of any such country, and having total assets in
excess of $1,000,000,000, PROVIDED that such bank is acting through a
branch or agency located in the country in which it is organized or
another country which is also a member of the OECD; (d) the central bank
of any country which is a member of the OECD; and (e) if, but only if, any
Event of Default has occurred and is continuing, any other bank, insurance
company, commercial finance company or other financial institution or
other Person approved by the Agent, such approval not to be unreasonably
withheld.
EMPLOYEE BENEFIT PLAN. Any employee benefit plan within the meaning
of ss.3(3) of ERISA maintained or contributed to by SRI or the Borrower,
other than a Guaranteed Pension Plan or a Multiemployer Plan.
ENVIRONMENTAL LAWS. See ss.7.18(a).
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA AFFILIATE. Any Person which is treated as a single employer
with the Borrower under ss.414 of the Code.
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ERISA REPORTABLE EVENT. A reportable event with respect to a
Guaranteed Pension Plan within the meaning of ss.4043 of ERISA and the
regulations promulgated thereunder as to which the requirement of notice
has not been waived.
EUROCURRENCY RESERVE RATE. For any day with respect to a Eurodollar
Rate Loan, the maximum rate (expressed as a decimal) at which any lender
subject thereto would be required to maintain reserves under Regulation D
of the Board of Governors of the Federal Reserve System (or any successor
or similar regulations relating to such reserve requirements) against
"Eurocurrency Liabilities" (as that term is used in Regulation D), if such
liabilities were outstanding. The Eurocurrency Reserve Rate shall be
adjusted automatically on and as of the effective date of any change in
the Eurocurrency Reserve Rate.
EURODOLLAR BUSINESS DAY. Any day on which commercial banks are open
for international business (including dealings in Dollar deposits) in
London or such other eurodollar interbank market as may be selected by the
Agent in its sole discretion acting in good faith.
EURODOLLAR LENDING OFFICE. Initially, the office of each Bank
designated as such in SCHEDULE 1 hereto; thereafter, such other office of
such Bank, if any, that shall be making or maintaining Eurodollar Rate
Loans.
EURODOLLAR RATE. For any Interest Period with respect to a
Eurodollar Rate Loan, the rate of interest equal to (a) the per annum rate
at which the Reference Bank's Eurodollar Lending Office is offered Dollar
deposits two (2) Eurodollar Business Days prior to the beginning of such
Interest Period in the interbank eurodollar market where the eurodollar
and foreign currency and exchange operations of such Eurodollar Lending
Office are customarily conducted, for delivery on the first day of such
Interest Period for the number of days comprised therein and in an amount
comparable to the amount of the Eurodollar Rate Loan of the Reference Bank
to which such Interest Period applies, divided by (b) a number equal to
1.00 minus the Eurocurrency Reserve Rate.
EURODOLLAR RATE LOANS. Loans bearing interest calculated by
reference to the Eurodollar Rate.
EVENT OF DEFAULT. See ss.13.1.
FEE LETTER. The Fee Letter dated on or prior to the Closing Date
between the Borrower and the Agent, and in form and substance satisfactory
to the Agent.
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FNBB. The First National Bank of Boston, a national banking
association, in its individual capacity.
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. (a) When used in ss.10,
whether directly or indirectly through reference to a capitalized term
used therein, means (i) principles that are consistent with the principles
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors, in effect for the fiscal year including the Balance Sheet
Date, and (ii) to the extent consistent with such principles, the
accounting practice of the Borrower reflected in its financial statements
for the fiscal year including the Balance Sheet Date, and (b) when used in
general, other than as provided above, means principles that are (i)
consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its predecessors, as in effect from time to
time, and (ii) consistently applied with past financial statements of the
Borrower adopting the same principles, provided that in each case referred
to in this definition of "Generally Accepted Accounting Principles" a
certified public accountant would, insofar as the use of such accounting
principles is pertinent, be in a position to deliver an unqualified
opinion (other than a qualification regarding changes in Generally
Accepted Accounting Principles) as to financial statements in which such
principles have been properly applied.
GUARANTEED PENSION PLAN. Any employee pension benefit plan within
the meaning of ss.3(2) of ERISA maintained or contributed to by SRI, the
Borrower or any ERISA Affiliate the benefits of which are guaranteed on
termination in full or in part by the PBGC pursuant to Title IV of ERISA,
other than a Multiemployer Plan.
GUARANTY. The Amended and Restated Guaranty, dated or to be dated on
or prior to the Closing Date, made by SRI in favor of the Banks and the
Agent pursuant to which SRI guaranties to the Banks and the Agent the
payment and performance of the Obligations and in substantially the form
of EXHIBIT E hereto.
HAZARDOUS SUBSTANCES. See ss.7.18(b).
INDEBTEDNESS. All obligations, contingent and otherwise, that in
accordance with Generally Accepted Accounting Principles should be
classified upon the obligor's balance sheet as liabilities, or to which
reference should be made by footnotes thereto, including in any event and
whether or not so classified: (a) all debt and similar monetary
obligations, whether direct or indirect; (b) all liabilities secured by
any mortgage, pledge, security interest, lien, charge or other encumbrance
existing on property owned or acquired subject thereto, whether or not the
liability secured thereby shall have been assumed; and (c) all guarantees,
endorsements and other contingent obligations whether direct or indirect
in respect of indebtedness of others, including any obligation to supply
funds to or in any manner to invest in, directly or indirectly, the
debtor, to purchase indebtedness, or to assure the owner of indebtedness
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against loss, through an agreement to purchase goods, supplies, or
services for the purpose of enabling the debtor to make payment of the
indebtedness held by such owner or otherwise, and the obligations to
reimburse the issuer in respect of any letters of credit.
INTEREST PAYMENT DATE. (a) As to any Base Rate Loan, the last day of
each fiscal quarter for such fiscal quarter; and (b) as to any Eurodollar
Rate Loan in respect of which the Interest Period is (i) three (3) months
or less, the last day of such Interest Period and (ii) more than three (3)
months, the date that is three (3) months from the first day of such
Interest Period and, in addition, the last day of such Interest Period.
INTEREST PERIOD. With respect to each Loan, (a) initially, the
period commencing on the Drawdown Date of such Loan and ending on the last
day of one of the periods set forth below (with respect to a Eurodollar
Rate Loan, as selected by the Borrower in a Loan Request) (i) for any Base
Rate Loan, the last day of the fiscal quarter; and (ii) for any Eurodollar
Rate Loan, 1, 2, 3, or 6 months; and (b) thereafter, each period
commencing on the last day of the next preceding Interest Period
applicable to such Loan and ending on the last day of one of the periods
set forth above, as selected by the Borrower in a Conversion Request;
PROVIDED that all of the foregoing provisions relating to Interest Periods
are subject to the following:
(A) if any Interest Period with respect to a Eurodollar Rate
Loan would otherwise end on a day that is not a Eurodollar Business
Day, that Interest Period shall be extended to the next succeeding
Eurodollar Business Day unless the result of such extension would be
to carry such Interest Period into another calendar month, in which
event such Interest Period shall end on the immediately preceding
Eurodollar Business Day;
(B) if any Interest Period with respect to a Base Rate Loan
would end on a day that is not a Business Day, that Interest Period
shall end on the next succeeding Business Day;
(C) if the Borrower shall fail to give notice as provided in
ss.2.7, the Borrower shall be deemed to have requested a conversion
of the affected Eurodollar Rate Loan to a Base Rate Loan and the
continuance of all Base Rate Loans as Base Rate Loans on the last
day of the then current Interest Period with respect thereto;
(D) any Interest Period relating to any Eurodollar Rate Loan
that begins on the last Eurodollar Business Day of a calendar month
(or on a day for which there is no numerically corresponding day in
the calendar month at the end of such Interest Period) shall end on
the last Eurodollar Business Day of a calendar month; and
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(E) any Interest Period relating to any Eurodollar Rate Loan
that would otherwise extend beyond the Maturity Date shall end on
the Maturity Date.
INVESTMENTS. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness
of, or for loans, advances, capital contributions or transfers of property
to, or in respect of any guaranties (or other commitments as described
under Indebtedness), or obligations of, any Person. In determining the
aggregate amount of Investments outstanding at any particular time: (a)
the amount of any Investment represented by a guaranty shall be taken at
the principal amount of the obligations guaranteed and still outstanding;
(b) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption,
retirement, repayment, liquidating dividend or liquidating distribution);
(c) there shall not be deducted in respect of any Investment any amounts
received as earnings on such Investment, whether as dividends, interest or
otherwise; and (d) there shall not be deducted from the aggregate amount
of Investments any decrease in the value thereof.
JUNIOR SUBORDINATED NOTES. Collectively, the subordinated promissory
notes issued by SRI or the Borrower to SSI evidencing subordinated
intercompany loans from SSI to SRI or the Borrower, as the case may be,
which notes shall contain terms, conditions and subordination provisions
acceptable to the Agent, including, without limitation, no cash payments
of interest or principal prior to December 31, 2003.
LC COMMITMENT. With respect to each Bank, the amount set forth on
SCHEDULE 1 hereto as the amount of such Bank's commitment to participate
in the issuance, extension and renewal of the Stand Alone Letters of
Credit for the account of the Borrower, as the same may be reduced from
time to time; or if such commitment is terminated pursuant to the
provisions hereof, zero.
LC COMMITMENT PERCENTAGE. With respect to each Bank, the percentage
set forth on SCHEDULE 1 hereto as such Bank's percentage of the aggregate
LC Commitments of all the Banks.
LETTER OF CREDIT. Any of the Revolver Letters of Credit and/or the
Stand Alone Letters of Credit.
LETTER OF CREDIT APPLICATION. See ss.4.1.1.
LETTER OF CREDIT PARTICIPATION. See ss.4.1.4.
LOAN DOCUMENTS. This Credit Agreement, the Notes, the Letter of
Credit Applications, the Letters of Credit, and the Security Documents.
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LOAN REQUEST. See ss.2.6.
LOANS. Revolving credit loans made or to be made by the Banks to the
Borrower pursuant to ss.2.
MAJORITY BANKS. As of any date, the Banks whose Outstanding Loans
and Letter of Credit Participations equal at least sixty-six and
two-thirds percent (66 2/3%) of the sum of (a) the aggregate outstanding
principal amount of the Notes on such date PLUS (b) the aggregate
Reimbursement Obligations and Unpaid Reimbursement Obligations on Stand
Alone Letters of Credit PLUS (c) the Maximum Drawing Amount on all issued
and outstanding Stand Alone Letters of Credit; and if no such principal is
Outstanding, the Banks whose aggregate Commitments constitute at least
sixty-six and two-thirds percent (66 2/3%) of the sum of the Total
Commitment plus the Total LC Commitment.
MATURITY DATE. January 29, 2000.
MAXIMUM DRAWING AMOUNT. The maximum aggregate amount that the
beneficiaries may at any time draw under outstanding Letters of Credit, as
such aggregate amount may be reduced from time to time pursuant to the
terms of the Letters of Credit.
MORTGAGE. The deed of trust, dated as of January 28, 1994, from the
Borrower to the Agent with respect to the fee interest of the Borrower in
the Mortgaged Property, as amended pursuant to the First Amendment to
Mortgage dated as of the date hereof.
MORTGAGED PROPERTY. The Borrower's Real Estate located in
Jacksonville, Texas and all buildings, improvements, fixtures and
equipment thereon which is subject to and more particularly described in
the Mortgage.
MULTIEMPLOYER PLAN. Any multiemployer plan within the meaning of
ss.3(37) of ERISA maintained or contributed to by the Borrower or any
ERISA Affiliate.
NOTES. The Revolving Credit Notes.
OBLIGATIONS. All indebtedness, obligations and liabilities of any of
SRI, the Borrower and its Subsidiaries to any of the Banks and the Agent,
individually or collectively, existing on the date of this Credit
Agreement or arising thereafter, direct or indirect, joint or several,
absolute or contingent, matured or unmatured, liquidated or unliquidated,
secured or unsecured, arising by contract, operation of law or otherwise,
provided that such indebtedness, obligations or liabilities arise or are
incurred under this Credit Agreement or any of the other Loan Documents or
in respect of any of the Loans
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made or Reimbursement Obligations incurred or any of the Notes, Letter of
Credit Application, Letter of Credit or other instruments at any time
evidencing any thereof. For the avoidance of doubt, the term Obligations
does not include any indebtedness, obligations and/or liabilities of any
of SRI, the Borrower and its Subsidiaries to any of the Seasonal Revolver
Banks or the Seasonal Revolver Agent arising or incurred under the
Seasonal Revolving Agreement.
OUTSTANDING. With respect to the Loans, the aggregate unpaid
principal thereof as of any date of determination.
PBGC. The Pension Benefit Guaranty Corporation created by ss.4002 of
ERISA and any successor entity or entities having similar
responsibilities.
PERMITTED LIENS. Liens, security interests and other encumbrances
permitted by ss.9.2.
PERSON. Any individual, corporation, partnership, trust,
unincorporated association, business, or other legal entity, and any
government or any governmental agency or political subdivision thereof.
POOLING AND SERVICING AGREEMENT. The Amended and Restated Pooling
and Servicing Agreement, dated as of August 11, 1995, among the
Receivables Subsidiary, as Transferor, SRI, as Servicer and Bankers Trust
(Delaware), as trustee in the form of the counterpart previously delivered
to the Agent, including all supplements and amendments thereto, whether
entered into prior to or after the Closing Date.
RATE ADJUSTMENT PERIOD. As defined in the definition of Applicable
Margin.
REAL ESTATE. All real property at any time owned or leased (as
lessee or sublessee) by the Borrower or any of its Subsidiaries.
RECEIVABLES PURCHASE AGREEMENT. The Amended and Restated
Receivables Purchase Agreement by and among the Borrower and the
Receivables Subsidiary dated as of May 30, 1996.
RECEIVABLES SUBSIDIARY. SRI Receivables Purchase Co., Inc., a
Delaware corporation.
RECEIVABLES SUBSIDIARY NOTES. The promissory notes issued by the
Receivables Subsidiary on May 30, 1996 in the aggregate principal amount
of not more than $30,000,000, and which notes are secured by the
Transferor Retained Certificates (as such term is defined in the Pooling
and Servicing Agreement) and/or rights in the Transferor Interest (as such
term is defined in
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the Pooling and Servicing Agreement) and are in form and substance
reasonably satisfactory to the Agent.
RECORD. The grid attached to a Note, or the continuation of such
grid, or any other similar record, including computer records, maintained
by any Bank with respect to any Loan referred to in such Note.
REFERENCE BANK. FNBB.
REIMBURSEMENT OBLIGATION. The Borrower's obligation to reimburse the
Agent and the Banks on account of any drawing under any Letter of Credit
as provided in ss.4.2.
REPURCHASE AMOUNT. See ss.9.8.
REPURCHASE DATE. See ss.9.8.
REVOLVER LETTERS OF CREDIT. See ss.4.1.1.2.
REVOLVING CREDIT NOTE RECORD. A Record with respect to a Revolving
Credit Note.
REVOLVING CREDIT NOTES. See ss.2.4.
SEASONAL DEBT SERVICE RATIO. For any period consisting of the
immediately preceding twelve (12) fiscal months (treated as a single
accounting period) from such test date of SRI and its Subsidiaries, the
ratio of Consolidated Operating Cash Flow to Debt Service.
SEASONAL REVOLVING AGREEMENT. The Amended and Restated Revolving
Credit Agreement dated as of the date hereof among SSI, SRI, the Borrower,
The First National Bank of Boston and the other lending institutions
listed on SCHEDULE 1 thereto (the "Seasonal Revolver Banks") and The First
National Bank of Boston as agent for the Seasonal Revolver Banks (the
"Seasonal Revolver Agent"), as the same may be amended, restated, modified
or supplemented from time to time, pursuant to which the Seasonal Revolver
Banks have agreed, subject to the terms and conditions contained therein,
to make loans available to the Borrower in the aggregate principal amount
of not more than $10,000,000.
SRI. As defined in the preamble hereto.
SECURITY AGREEMENT. The Amended and Restated Security Agreement,
dated or to be dated on or prior to the Closing Date, among the Borrower,
SRI and the Agent and in substantially the form of EXHIBIT G hereto.
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SECURITY DOCUMENTS. The Guaranty, the Mortgage, the Security
Agreement, the Trademark Agreements and the Stock Pledge Agreement.
SENIOR NOTES. The 10% Series A Senior Notes Due 2000 and the 10%
Series B Senior Notes Due 2000, issued pursuant to the Senior Notes
Indenture.
SENIOR NOTES INDENTURE. The Indenture, dated as of August 2, 1993,
entered into by SRI, the Borrower and The First National Bank of Boston as
Trustee in connection with the issuance of the Senior Notes, in the form
of the counterpart previously delivered to the Agent, and as amended,
supplemented or modified from time to time as permitted by ss.9.9.
SENIOR SUBORDINATED NOTES. The 11% Series A Senior Subordinated
Notes Due 2003 and the 11% Series B Senior Subordinated Notes Due 2003,
issued pursuant to the Senior Subordinated Notes Indenture.
SENIOR SUBORDINATED NOTES INDENTURE. The Indenture, dated as of
August 2, 1993, entered into by SRI, the Borrower and The First National
Bank of Boston as Trustee in connection with the issuance of the Senior
Subordinated Notes, in the form of the counterpart previously delivered to
the Agent, and as amended, supplemented or modified from time to time as
permitted by ss.9.9.
SRI INDENTURE CONSENT. The Consent Solicitation Statement of SRI
dated October 1, 1996, which sets forth the amendments to each of the
Senior Notes Indenture, the Senior Subordinated Notes Indenture and the
SRI Subordinated Notes Indenture in the form delivered to the Agent on
October 8, 1996.
SRI SUBORDINATED NOTES. The 11% Series C Senior Subordinated Notes
Due 2003 and the 11% Series D Senior Subordinated Notes Due 2003, issued
pursuant to the SRI Subordinated Notes Indenture in an aggregate principal
amount not to exceed $18,250,000.
SRI SUBORDINATED NOTES INDENTURE. The Indenture, dated as of July
27, 1995, entered into between SRI and The First National Bank of Boston
as Trustee in connection with the issuance of the SRI Subordinated Notes,
in the form of the counterpart previously delivered to the Agent, and as
amended, supplemented or modified from time to time as permitted by
ss.9.9.
STAND ALONE LETTER OF CREDIT. see ss.4.1.1.1.
STOCK PLEDGE AGREEMENT. The Amended and Restated Stock Pledge
Agreement, dated or to be dated on or prior to the Closing Date, between
the Borrower and the Agent and in substantially the form of EXHIBIT F
hereto.
SUBORDINATED DEBT. The Senior Subordinated Notes, the SRI
Subordinated Notes and such other unsecured Indebtedness of SRI, the
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Borrower or any of its Subsidiaries that is consented to by the Majority
Banks in their sole discretion and is expressly subordinated and made
junior to the payment and performance in full of the Obligations, and
evidenced as such by a written instrument containing subordination
provisions in form and substance approved by the Banks in writing.
SUBSIDIARY. Any corporation, association, trust, or other business
entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a majority (by
number of votes) of the outstanding Voting Stock.
SURVEY. In relation to the Mortgaged Property, an instrument survey
of the Mortgaged Property dated as of a date subsequent to January 1,
1994, which shall show the location of all buildings, structures,
easements and utility lines on the Mortgaged Property, shall be sufficient
to remove the survey exception from the Title Policy, shall show that all
buildings and structures are within the lot lines of the Mortgaged
Property, shall not show any encroachments by others, shall show the
zoning district or districts in which the Mortgaged Property is located in
a flood hazard district as established by the Federal Emergency Management
Agency or any successor agency or is located in any flood plain, flood
hazard or wetland protection district established under federal, state or
local law.
SURVEYOR CERTIFICATE. In relation to the Mortgaged Property for
which a Survey has been conducted, a certificate executed by the surveyor
who prepared the Survey dated as of a recent date and containing such
information relating to the Mortgaged Property as the Agent or the Title
Insurance Company may require, such certificate to be satisfactory to the
Agent in form and substance.
TITLE COMMITMENT. In relation to the Mortgaged Property, the ALTA
standard form title insurance commitment issued by the Title Insurance
Company (with commitments for such reinsurance or co-insurance as the
Agent may require, any such reinsurance to be with direct access
endorsements) insuring the priority of the Mortgage of the Mortgaged
Property and that the Borrower holds marketable fee simple title to the
Mortgaged Property, subject only to the encumbrances permitted by the
Mortgage and which does not contain exceptions for mechanics liens,
persons in occupancy or matters which would be shown by a survey (except
as may be permitted by the Mortgage), does not commit to insure over any
matter except to the extent that any such affirmative insurance is
acceptable to the Agent in its sole discretion, and contains such
endorsements and affirmative commitment for insurance as the Agent in its
discretion may require, including but not limited to (a) comprehensive
endorsement, (b) variable rate of interest endorsement, (c) usury
endorsement, (d) revolving credit endorsement, (e) doing business
endorsement and (f) ALTA form 3.1 zoning endorsement.
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TITLE INSURANCE COMPANY shall mean the Cherokee County Title Co.,
Inc.
TOTAL COMMITMENT. The sum of the Commitments of the Banks, as in
effect from time to time.
TOTAL FUNDED INDEBTEDNESS. All Indebtedness of SRI, the Borrower and
their Subsidiaries for borrowed money (other than Indebtedness consisting
of the Loans and Indebtedness consisting of the "Loans" as such term is
defined in the Seasonal Revolving Agreement), purchase money Indebtedness
evidenced by notes or bonds, and with respect to Capitalized Leases,
determined on a consolidated basis in accordance with Generally Accepted
Accounting Principles.
TOTAL LC COMMITMENT. The sum of the LC Commitments of the Banks,
as in effect from time to time.
TRADEMARK AGREEMENTS. The Amended and Restated Trademark Collateral
Security and Pledge Agreements, each dated or to be dated on or prior to
the Closing Date, between the Borrower and the Agent and SRI and the Agent
and in substantially the form of EXHIBIT H hereto.
TYPE. As to any Loan, its nature as a Base Rate Loan or a Eurodollar
Rate Loan.
UNIFORM CUSTOMS. With respect to any Letter of Credit, the Uniform
Customs and Practice for Documentary Credits (1993 Revision),
International Chamber of Commerce Publication No. 500 or any successor
version thereto adopted by the Agent in the ordinary course of its
business as a letter of credit issuer and in effect at the time of
issuance of such Letter of Credit.
UNPAID REIMBURSEMENT OBLIGATION. Any Reimbursement Obligation for
which the Borrower does not reimburse the Agent and the Banks on the date
specified in, and in accordance with, ss.4.2.
VOTING STOCK. Stock or similar interests, of any class or classes
(however designated), the holders of which are at the time entitled, as
such holders, to vote for the election of a majority of the directors (or
persons performing similar functions) of the corporation, association,
trust or other business entity involved, whether or not the right so to
vote exists by reason of the happening of a contingency.
SS.1.2. RULES OF INTERPRETATION.
(a) A reference to any document or agreement shall include such document
or agreement as amended, modified or supplemented from time to time
in accordance with its terms and the terms of this Credit Agreement.
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(b) The singular includes the plural and the plural includes the
singular.
(c) A reference to any law includes any amendment or modification to
such law.
(d) A reference to any Person includes its permitted successors and
permitted assigns.
(e) Accounting terms not otherwise defined herein have the meanings
assigned to them by Generally Accepted Accounting Principles applied
on a consistent basis by the accounting entity to which they refer.
(f) The words "include", "includes" and "including" are not limiting.
(g) All terms not specifically defined herein or by Generally Accepted
Accounting Principles, which terms are defined in the Uniform
Commercial Code as in effect in the Commonwealth of Massachusetts,
have the meanings assigned to them therein, with the term
"instrument" being that defined under Article 9 of the Uniform
Commercial Code.
(h) Reference to a particular "ss." refers to that section of this
Credit Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of like import
shall refer to this Credit Agreement as a whole and not to any
particular section or subdivision of this Credit Agreement.
SS.2. THE REVOLVING CREDIT FACILITY.
SS.2.1. COMMITMENT TO LEND. Subject to the terms and conditions set forth
in this Credit Agreement, each of the Banks severally agrees to lend to the
Borrower and the Borrower may borrow, repay, and reborrow from time to time
between the Closing Date and the Maturity Date upon notice by the Borrower to
the Agent given in accordance with ss.2.6, such sums as are requested by the
Borrower up to a maximum aggregate amount Outstanding (after giving effect to
all amounts requested) at any one time equal to such Bank's Commitment MINUS
such Bank's Commitment Percentage of the sum of the Maximum Drawing Amount and
all Unpaid Reimbursement Obligations on the Revolver Letters of Credit, PROVIDED
that the sum of the Outstanding amount of the Loans (after giving effect to all
amounts requested) PLUS the Maximum Drawing Amount and all Unpaid Reimbursement
Obligations on the Revolver Letters of Credit shall not at any time exceed the
Total Commitment. The Loans shall be made PRO RATA in accordance with each
Bank's Commitment Percentage. Each request for a Loan hereunder shall constitute
a representation and warranty by the Borrower that the conditions set forth in
ss.11 and ss.12, in the case of the initial Loans to be made on the Closing
Date, and ss.12, in the case of all other Loans, have been satisfied on the date
of such request.
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SS.2.2. COMMITMENT FEE. The Borrower agrees to pay to the Agent for the
accounts of the Banks in accordance with their respective Commitment Percentages
a commitment fee calculated at the rate of one-half of one percent (1/2%) per
annum on the average daily amount during each calendar quarter or portion
thereof from the date hereof to the Maturity Date by which the Total Commitment
MINUS the sum of the Maximum Drawing Amount and all Unpaid Reimbursement
Obligations on the Revolver Letters of Credit exceeds the Outstanding amount of
Loans during such calendar quarter. The commitment fee shall be payable
quarterly in arrears on the first day of each calendar quarter for the
immediately preceding calendar quarter commencing on the first such date
following the date hereof, with a final payment on the Maturity Date or any
earlier date on which the Commitments shall terminate.
SS.2.3. REDUCTION OF TOTAL COMMITMENT. The Borrower shall have the right
at any time and from time to time upon five (5) Business Days' prior written
notice to the Agent to reduce by $1,000,000 or an integral multiple thereof or
terminate entirely the Total Commitment, whereupon the Commitments of the Banks
shall be reduced PRO RATA in accordance with their respective Commitment
Percentages of the amount specified in such notice or, as the case may be,
terminated. Promptly after receiving any notice of the Borrower delivered
pursuant to this ss.2.3, the Agent will notify the Banks of the substance
thereof. Upon the effective date of any such reduction or termination, the
Borrower shall pay to the Agent for the respective accounts of the Banks the
full amount of any commitment fee then accrued on the amount of the reduction.
No reduction or termination of the Commitments under this ss.2.3 may be
reinstated.
SS.2.4. THE REVOLVING CREDIT NOTES. The Loans shall be evidenced by
separate amended and restated promissory notes of the Borrower in substantially
the form of EXHIBIT A hereto (each a "Revolving Credit Note"), dated as of the
Closing Date and completed with appropriate insertions. One Revolving Credit
Note shall be payable to the order of each Bank in a principal amount equal to
such Bank's Commitment or, if less, the Outstanding amount of all Loans made by
such Bank, plus interest accrued thereon, as set forth below. The Borrower
irrevocably authorizes each Bank to make or cause to be made, at or about the
time of the Drawdown Date of any Loan or at the time of receipt of any payment
of principal on such Bank's Revolving Credit Note, an appropriate notation on
such Bank's Revolving Credit Note Record reflecting the making of such Loan or
(as the case may be) the receipt of such payment. The Outstanding amount of the
Loans set forth on such Bank's Revolving Credit Note Record shall be PRIMA FACIE
evidence of the principal amount thereof owing and unpaid to such Bank, but the
failure to record, or any error in so recording, any such amount on such Bank's
Revolving Credit Note Record shall not limit or otherwise affect the obligations
of the Borrower hereunder or under any Revolving Credit Note to make payments of
principal of or interest on any Revolving Credit Note when due.
SS.2.5. INTEREST ON REVOLVING CREDIT LOANS. Except as otherwise provided
in ss.5.11,
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(a) each Base Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of
the Interest Period with respect thereto at the rate per annum equal to
the Base Rate PLUS the Applicable Margin;
(b) each Eurodollar Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of
the Interest Period with respect thereto at the rate per annum equal to
the Eurodollar Rate for such Interest Period PLUS the Applicable Margin;
and
(c) the Borrower promises to pay interest on each Loan in arrears on
each Interest Payment Date with respect thereto and at maturity of such
Loan.
SS.2.6. REQUESTS FOR REVOLVING CREDIT LOANS. The Borrower shall give to
the Agent written notice (which may be by facsimile) in the form of EXHIBIT B
hereto (or telephonic notice confirmed in a writing in the form of EXHIBIT B
hereto) of each Loan requested hereunder (a "Loan Request") no less than (a) one
(1) Business Day prior to the proposed Drawdown Date of any Base Rate Loan and
(b) three (3) Eurodollar Business Days prior to the proposed Drawdown Date of
any Eurodollar Rate Loan. Each such notice shall specify (i) the principal
amount of the Loan requested, (ii) the proposed Drawdown Date of such Loan,
(iii) with respect to a Eurodollar Rate Loan, the Interest Period for such Loan
and (iv) the Type of such Loan. Promptly upon receipt of any such notice, the
Agent shall notify each of the Banks thereof. Each Loan Request shall be
irrevocable and binding on the Borrower and shall obligate the Borrower to
accept the Loan requested from the Banks on the proposed Drawdown Date. Each
Loan Request (i) pertaining to Eurodollar Rate Loans shall be in a minimum
aggregate amount of $1,000,000 or a whole multiple of $250,000 in excess
thereof; and (ii) pertaining to Base Rate Loans shall be in a minimum aggregate
amount of $100,000 or a whole multiple of $50,000 in excess thereof.
SS.2.7. CONVERSION OPTIONS.
2.7.1. CONVERSION TO DIFFERENT TYPE OF REVOLVING CREDIT LOAN. The
Borrower may elect from time to time to convert any Outstanding Loan to a Loan
of another Type, PROVIDED that (a) with respect to any such conversion of a Loan
to a Base Rate Loan, the Borrower shall give the Agent at least one (1) Business
Days' prior written notice of such election and such conversion shall only be
made on the last day of the Interest Period with respect thereto; (b) with
respect to any such conversion of a Base Rate Loan to a Eurodollar Rate Loan,
the Borrower shall give the Agent at least three (3) Eurodollar Business Days'
prior written notice of such election; and (c) no Loan may be converted into a
Eurodollar Rate Loan when any Default or Event of Default has occurred and is
continuing. On the date on which such conversion is being made each Bank shall
take such action as is necessary to transfer its Commitment Percentage of such
Loans to its Domestic Lending Office or its Eurodollar Lending Office, as the
case may be. All or any part of Outstanding Loans of any Type may be
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converted into a Loan of another Type as provided herein, PROVIDED that any
partial conversion (a) into a Eurodollar Rate Loan shall be in an aggregate
principal amount of $1,000,000 or a whole multiple of $250,000 in excess thereof
and (b) into a Base Rate Loan shall be in an aggregate principal amount of
$100,000 or a whole multiple of $50,000 in excess thereof. Each Conversion
Request relating to the conversion of a Loan to a Eurodollar Rate Loan shall be
irrevocable by the Borrower.
2.7.2. CONTINUATION OF TYPE OF REVOLVING CREDIT LOAN. Any Loan of
any Type may be continued as a Loan of the same Type upon the expiration of an
Interest Period with respect thereto by compliance by the Borrower with the
notice provisions contained in ss.2.7.1; PROVIDED that no Eurodollar Rate Loan
may be continued as such when any Default or Event of Default has occurred and
is continuing, but shall be automatically converted to a Base Rate Loan on the
last day of the first Interest Period relating thereto ending during the
continuance of any Default or Event of Default of which officers of the Agent
active upon the Borrower's account have actual knowledge. In the event that the
Borrower fails to provide any such notice with respect to the continuation of
any Eurodollar Rate Loan as such, then such Eurodollar Rate Loan shall be
automatically converted to a Base Rate Loan on the last day of the first
Interest Period relating thereto. The Agent shall notify the Banks promptly when
any such automatic conversion contemplated by this ss.2.7 is scheduled to occur.
2.7.3. EURODOLLAR RATE LOANS. Any conversion to or from Eurodollar
Rate Loans shall be in such amounts and be made pursuant to such elections so
that, after giving effect thereto, the aggregate principal amount of all
Eurodollar Rate Loans having the same Interest Period shall not be less than
$1,000,000 or a whole multiple of $250,000 in excess thereof.
SS.2.8. FUNDS FOR LOAN.
2.8.1. FUNDING PROCEDURES. Not later than 11:00 a.m. (Boston time)
on the proposed Drawdown Date of any Loans, each of the Banks will make
available to the Agent, at the Agent's Head Office, in immediately available
funds, the amount of such Bank's Commitment Percentage of the amount of the
requested Loans. Upon receipt from each Bank of such amount, and upon receipt of
the documents required by ss.ss.11 and 12 and the satisfaction of the other
conditions set forth therein, to the extent applicable, the Agent will make
available to the Borrower the aggregate amount of such Loans made available to
the Agent by the Banks. The failure or refusal of any Bank to make available to
the Agent at the aforesaid time and place on any Drawdown Date the amount of its
Commitment Percentage of the requested Loans shall not relieve any other Bank
from its several obligation hereunder to make available to the Agent the amount
of such other Bank's Commitment Percentage of any requested Loans.
2.8.2. ADVANCES BY AGENT. The Agent may, unless notified to the
contrary by any Bank prior to a Drawdown Date, assume that such Bank has made
available to the Agent on such Drawdown Date the amount of such Bank's
Commitment Percentage of the Loans to be made on such Drawdown Date, and the
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Agent may (but it shall not be required to), in reliance upon such assumption,
make available to the Borrower a corresponding amount. If any Bank makes
available to the Agent such amount on a date after such Drawdown Date, such Bank
shall pay to the Agent on demand an amount equal to the product of (a) the
average computed for the period referred to in clause (c) below, of the weighted
average interest rate paid by the Agent for federal funds acquired by the Agent
during each day included in such period, TIMES (b) the amount of such Bank's
Commitment Percentage of such Loans, TIMES (c) a fraction, the numerator of
which is the number of days that elapse from and including such Drawdown Date to
the date on which the amount of such Bank's Commitment Percentage of such Loans
shall become immediately available to the Agent, and the denominator of which is
365. A statement of the Agent submitted to such Bank with respect to any amounts
owing under this paragraph shall be PRIMA FACIE evidence of the amount due and
owing to the Agent by such Bank. If the amount of such Bank's Commitment
Percentage of such Loans is not made available to the Agent by such Bank within
three (3) Business Days following such Drawdown Date, the Agent shall be
entitled to recover such amount from the Borrower on demand, with interest
thereon at the rate per annum applicable to the Loans made on such Drawdown
Date.
SS.3. REPAYMENT OF THE REVOLVING CREDIT LOANS.
SS.3.1. MATURITY. The Borrower promises to pay on the Maturity Date, and
there shall become absolutely due and payable on the Maturity Date, all of the
Loans Outstanding on such date, together with any and all accrued and unpaid
interest thereon and any outstanding fees, expenses and other amounts owing
hereunder.
SS.3.2. MANDATORY REPAYMENTS OF LOANS.
ss.3.2.1. EXCEEDING TOTAL COMMITMENT. If at any time the sum of the
Outstanding amount of the Loans, the Maximum Drawing Amount of the Revolver
Letters of Credit and all Unpaid Reimbursement Obligations on the Revolver
Letters of Credit exceeds the Total Commitment, then the Borrower shall
immediately pay the amount of such excess to the Agent for the respective
accounts of the Banks for application: first, to any Unpaid Reimbursement
Obligations on the Revolver Letters of Credit; second, to the Loans; and third,
to provide to the Agent cash collateral for Reimbursement Obligations as
contemplated by ss.4.2(b) and (c). Each payment of any Unpaid Reimbursement
Obligations on the Revolver Letters of Credit or prepayment of Loans shall be
allocated among the Banks, in proportion, as nearly as practicable, to each
Bank's Commitment Percentage of such Reimbursement Obligation or (as the case
may be) the respective unpaid principal amount of each Bank's Revolving Credit
Note, with adjustments to the extent practicable to equalize any prior payments
or repayments not exactly in proportion.
SS.3.2.2. CLEANUP PROVISION. The Borrower shall either (a) reduce
the aggregate principal amount of Outstanding Loans (which shall include the
Maximum Drawing Amount of all issued and outstanding Revolver Letters of Credit
and all Reimbursement Obligations and Unpaid Reimbursement Obligations relating
to the
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Revolver Letters of Credit) to not more than $20,000,000 for a period of sixty
(60) consecutive days during the period commencing on the date hereof through
and including November 30, 1997 and thereafter for the twelve (12) month period
beginning on each December 1 and ending on each November 30 (the "Cleanup
Period") or (b) reduce the aggregate principal amount of Outstanding Loans
(which shall include the Maximum Drawing Amount of all issued and outstanding
Revolver Letters of Credit and all Reimbursement Obligations and Unpaid
Reimbursement Obligations relating to the Revolver Letters of Credit) to not
more than $10,000,000 for forty-five (45) consecutive days during the Cleanup
Period.
SS.3.3. OPTIONAL REPAYMENTS OF LOANS. The Borrower shall have the right,
at its election, to repay the Outstanding amount of the Loans, as a whole or in
part, at any time without penalty or premium, PROVIDED that any full or partial
prepayment of the Outstanding amount of any Eurodollar Rate Loans pursuant to
this ss.3.3 may be made only on the last day of the Interest Period relating
thereto. The Borrower shall give the Agent, no later than 12:00 noon, Boston
time, at least one (1) Business Day's prior written notice of any proposed
prepayment pursuant to this ss.3.3 of Base Rate Loans, and three (3) Eurodollar
Business Days' notice of any proposed prepayment pursuant to this ss.3.3 of
Eurodollar Rate Loans, in each case specifying the proposed date of prepayment
of Loans and the principal amount to be prepaid. Each such partial prepayment of
the Loans shall be in a minimum aggregate amount of $100,000 or a whole multiple
of $50,000 in excess thereof, shall be accompanied by the payment of accrued
interest on the principal prepaid to the date of prepayment and shall be
applied, in the absence of instruction by the Borrower, first to the principal
of Base Rate Loans and then to the principal of Eurodollar Rate Loans. Each
partial prepayment shall be allocated among the Banks, in proportion, as nearly
as practicable, to the respective unpaid principal amount of each Bank's
Revolving Credit Note, with adjustments to the extent practicable to equalize
any prior repayments not exactly in proportion.
SS.4. LETTERS OF CREDIT.
SS.4.1. LETTER OF CREDIT COMMITMENTS.
4.1.1. COMMITMENT TO ISSUE LETTERS OF CREDIT.
4.1.1.1. GENERAL PROVISIONS. The execution and delivery by the
Borrower of a Letter of Credit Application requesting a standby letter of credit
shall automatically be deemed a request for a Stand Alone Letter of Credit;
PROVIDED, HOWEVER, in the event the Borrower does not have sufficient
availability under the Total LC Commitment for the issuance of such requested
Letters of Credit, the portion of such request which exceeds the availability of
the Total LC Commitment shall instead be deemed a request for a Revolver Letter
of Credit.
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4.1.1.2 COMMITMENT TO ISSUE STAND ALONE LETTERS OF CREDIT. Subject
to the terms and conditions hereof (including, without limitation, the
provisions of ss.4.1.1.1 above) and the execution and delivery by the Borrower
of a letter of credit application on the Agent's customary form (a "Letter of
Credit Application"), the Agent on behalf of the Banks and in reliance upon the
agreement of the Banks set forth in ss.4.1.4 and upon the representations and
warranties of the Borrower contained herein, agrees, in its individual capacity,
to issue, extend and renew for the account of the Borrower one or more standby
or documentary letters of credit (individually, a "Stand Alone Letter of
Credit"), in such form as may be requested from time to time by the Borrower and
agreed to by the Agent; PROVIDED, HOWEVER, that, after giving effect to such
request, (a) the sum of the aggregate Maximum Drawing Amount and all Unpaid
Reimbursement Obligations pertaining to such Stand Alone Letters of Credit shall
not exceed the Total LC Commitment. If at any time the sum of the Maximum
Drawing Amount and all Unpaid Reimbursement Obligations on the Stand Alone
Letters of Credit exceeds the Total LC Commitment, then the Borrower shall
immediately pay the amount of such excess to the Agent for the respect accounts
of the Banks for application: first to any Unpaid Reimbursement Obligations on
the Stand Alone Letters of Credit; and second, to provide to the Agent cash
collateral for Reimbursment Obligations as contemplated by ss.4.2(b) and (c).
Each payment of any Unpaid Reimbursement Obligation on the Stand Alone Letters
of Credit shall be allocated among the Banks, in proportion, as nearly as
practicable, to such Bank's LC Commitment Percentage of such Reimbursement
Obligation, with adjustments to the extent practicable to equalize any prior
payments or repayments not exactly in proportion.
4.1.1.3. COMMITMENT TO ISSUE REVOLVER LETTERS OF CREDIT. Subject to
the terms and conditions hereof (including, without limitation, the provisions
of ss.4.1.1.1 above) an the execution and delivery by the Borrower of a Letter
of Credit Application, the Agent on behalf of the Banks and in reliance upon the
agreement of the Banks set forth in ss.4.1.4 and upon the representations and
warranties of the Borrower contained herein, agrees, in its individual capacity,
to issue, extend and renew for the account of the Borrower one or more standby
letters of credit (individually, a "Revolver Letter of Credit"), in such form as
may be requested from time to time by the Borrower and agreed to by the Agent;
PROVIDED, HOWEVER, that after giving effect to such request (a) the sum of the
aggregate Maximum Drawing Amount and all Unpaid Reimbursement Obligations
pertaining to such Revolver Letters of Credit shall not exceed $10,000,000 at
any one time and (b) the sum of (i) the Maximum Drawing Amount on all Revolver
Letters of Credit, (ii) all Unpaid Reimbursement Obligations on all Revolver
Letters of Credit and (iii) the amount of all Loans Outstanding shall not exceed
the Total Commitment.
4.1.2. LETTER OF CREDIT APPLICATIONS. Each Letter of Credit
Application shall be completed to the satisfaction of the Agent. In the event
that any provision of any Letter of Credit Application shall be inconsistent
with any provision of this Credit Agreement, then the provisions of this Credit
Agreement shall, to the extent of any such inconsistency, govern.
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4.1.3. TERMS OF LETTERS OF CREDIT. Each Letter of Credit issued,
extended or renewed hereunder shall, among other things, (a) provide for the
payment of sight drafts for honor thereunder when presented in accordance with
the terms thereof and when accompanied by the documents described therein, and
(b) have an expiry date no later than the earlier to occur of (i) the first
anniversary date of the date of issue, extension or renewal and (ii) the date
which is fifteen (15) days prior to the Maturity Date. Each Letter of Credit so
issued, extended or renewed shall be subject to the Uniform Customs.
4.1.4. REIMBURSEMENT OBLIGATIONS OF BANKS. Each Bank severally
agrees that it shall be absolutely liable, without regard to the occurrence of
any Default or Event of Default or any other condition precedent whatsoever, to
the extent of such Bank's Commitment Percentage or LC Commitment Percentage, as
the case may be, to reimburse the Agent on demand for the amount of each draft
paid by the Agent under each Letter of Credit to the extent that such amount is
not reimbursed by the Borrower pursuant to ss.4.2 (such agreement by a Bank
being called herein the "Letter of Credit Participation" of such Bank).
4.1.5. PARTICIPATIONS OF BANKS. Each such payment made by a Bank
shall be treated as the purchase by such Bank of a participating interest in the
Borrower's Reimbursement Obligation under ss.4.2 in an amount equal to such
payment. Each Bank shall share in accordance with its participating interest in
any interest which accrues pursuant to ss.4.2.
4.1.6. REDUCTION OF TOTAL LC COMMITMENT. The Borrower shall have the
right at any time and from time to time upon five (5) Business Days' prior
written notice to the Agent to reduce by $1,000,000 or an integral multiple
thereof or terminate entirely the Total LC Commitment, whereupon the LC
Commitments of the Banks shall be reduced PRO RATA in accordance with their
respective LC Commitment Percentages of the amount specified in such notice or,
as the case may be, terminated. Promptly after receiving any notice of the
Borrower delivered pursuant to this ss.4.1.6, the Agent shall notify the Banks
of the substance thereof. Upon the effective date of any such reduction or
termination, the Borrower shall pay to the Agent for the respective accounts of
the Banks the full amount of any commitment fees then accrued on the amount of
the reduction. No reduction or termination of the LC Commitments under this
ss.4.1.6 may be reinstated.
SS.4.2. REIMBURSEMENT OBLIGATION OF THE BORROWER. In order to induce the
Agent to issue, extend and renew each Letter of Credit and the Banks to
participate therein, the Borrower hereby agrees to reimburse or pay to the
Agent, for the account of the Agent or (as the case may be) the Banks, with
respect to each Letter of Credit issued, extended or renewed by the Agent
hereunder,
(a) except as otherwise expressly provided in ss.4.2(b), (c) and
(d), on each date that any draft presented under such Letter of Credit is
honored by the
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Agent, or the Agent otherwise makes a payment with respect thereto, (i)
the amount paid by the Agent under or with respect to such Letter of
Credit, and (ii) the amount of any taxes, fees, charges or other costs and
expenses whatsoever incurred by the Agent or any Bank in connection with
any payment made by the Agent or any Bank under, or with respect to, such
Letter of Credit,
(b) upon the reduction (but not termination) of (i) the Total
Commitment to an amount less than the Maximum Drawing Amount on the
Revolver Letters of Credit or (ii) the Total LC Commitment to an amount
less than the Maximum Drawing Amount on the Stand Alone Letters of Credit,
an amount equal to such difference, which amount shall be held by the
Agent for the benefit of the Banks and the Agent as cash collateral for
all Obligations, PROVIDED, HOWEVER, in the event that after such amount is
deposited with the Agent the Maximum Drawing Amount decreases, the Agent
shall refund to the Borrower an amount equal to such decrease, and
(c) upon the termination of the Total Commitment, the Total LC
Commitment or the acceleration of the Reimbursement Obligations with
respect to all Letters of Credit in accordance with ss.13, an amount equal
to the then Maximum Drawing Amount on all Letters of Credit, which amount
shall be held by the Agent for the benefit of the Banks and the Agent as
cash collateral for all Obligations.
Each such payment shall be made to the Agent at the Agent's Head Office in
immediately available funds. Interest on any and all amounts remaining unpaid by
the Borrower under this ss.4.2 at any time from the date such amounts become due
and payable (whether as stated in this ss.4.2, by acceleration or otherwise)
until payment in full (whether before or after judgment) shall be payable to the
Agent on demand at the rate specified in ss.5.11 for overdue principal on the
Loans. Any interest which accrues on amounts being held by the Agent as cash
collateral for all Obligations shall also be held as cash collateral for all
Obligations to the extent required to satisfy the provisions of clauses (a)
through (d) above.
SS.4.3. LETTER OF CREDIT PAYMENTS. If any draft shall be presented or
other demand for payment shall be made under any Letter of Credit, the Agent
shall notify the Borrower of the date and amount of the draft presented or
demand for payment and of the date and time when it expects to pay such draft or
honor such demand for payment. If the Borrower fails to reimburse the Agent as
provided in ss.4.2 on or before the date that such draft is paid or other
payment is made by the Agent, the Agent may at any time thereafter notify the
Banks committed to participate in such Letter of Credit of the amount of any
such Unpaid Reimbursement Obligation. No later than 3:00 p.m. (Boston time) on
the Business Day next following the receipt of such notice, each Bank shall make
available to the Agent, at the Agent's Head Office, in immediately available
funds, such Bank's Commitment Percentage or LC Commitment Percentage, as the
case may be, of such Unpaid Reimbursement Obligation, together with an amount
equal to the product of (a) the average, computed for the period
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referred to in clause (c) below, of the weighted average interest rate paid by
the Agent for federal funds acquired by the Agent during each day included in
such period, TIMES (b) the amount equal to such Bank's Commitment Percentage or
LC Commitment Percentage, as the case may be, of such Unpaid Reimbursement
Obligation, TIMES (c) a fraction, the numerator of which is the number of days
that elapse from and including the date the Agent paid the draft presented for
honor or otherwise made payment to the date on which such Bank's Commitment
Percentage or LC Commitment Percentage, as the case may be, of such Unpaid
Reimbursement obligation shall become immediately available to the Agent, and
the denominator of which is 360. The responsibility of the Agent to the Borrower
and the Banks shall be only to determine that the documents (including each
draft) delivered under each Letter of Credit in connection with such presentment
shall be in conformity in all material respects with such Letter of Credit.
SS.4.4. OBLIGATIONS ABSOLUTE. The Borrower's obligations under this ss.4
shall be absolute and unconditional under any and all circumstances and
irrespective of the occurrence of any Default or Event of Default or any
condition precedent whatsoever or any setoff, counterclaim or defense to payment
which the Borrower may have or have had against the Agent, any Bank or any
beneficiary of a Letter of Credit. The Borrower further agrees with the Agent
and the Banks that the Agent and the Banks shall not be responsible for, and the
Borrower's Reimbursement Obligations under ss.4.2 shall not be affected by,
among other things, the validity or genuineness of documents or of any
endorsements thereon, even if such documents should in fact prove to be in any
or all respects invalid, fraudulent or forged, PROVIDED that such documents
conform on their face with the terms of the applicable Letter of Credit or any
dispute between or among the Borrower, the beneficiary of any Letter of Credit
or any financing institution or other party to which any Letter of Credit may be
transferred or any claims or defenses whatsoever of the Borrower against the
beneficiary of any Letter of Credit or any such transferee. The Agent and the
Banks shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit. The Borrower agrees that
any action taken or omitted by the Agent or any Bank under or in connection with
each Letter of Credit and the related drafts and documents, if done in good
faith and without gross negligence or willful misconduct, shall be binding upon
the Borrower and shall not result in any liability on the part of the Agent or
any Bank to the Borrower.
SS.4.5. RELIANCE BY ISSUER. To the extent not inconsistent with ss.4.4,
the Agent shall be entitled to rely, and shall be fully protected in relying
upon, any Letter of Credit, draft, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel, independent accountants and
other experts selected by the Agent. As between the Agent and the Banks, the
Agent shall be fully justified in failing or refusing to take any action under
this Credit Agreement unless it shall first have received such advice or
concurrence of the Majority Banks as it reasonably deems appropriate or it shall
first
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be indemnified to its reasonable satisfaction by the Banks against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. As between the Agent and the Banks, the
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Credit Agreement in accordance with a request of the Majority
Banks, and such request and any action taken or failure to act pursuant thereto
shall be binding upon the Banks and all future holders of the Revolving Credit
Notes or of a Letter of Credit Participation.
SS.4.6. LETTER OF CREDIT FEE. The Borrower shall, on the first day of each
fiscal quarter for the immediately preceding fiscal quarter and at such other
time or times as such charges are customarily made by the Agent, pay a fee (in
each case, a "Letter of Credit Fee") to the Agent (a) in respect of each standby
Stand Alone Letter of Credit and Revolver Letter of Credit equal to the
Applicable Margin set forth in the column headed "Letters of Credit" in such
definition then in effect of the Maximum Drawing Amount of such Letter of Credit
(the "Standby Margin") PLUS the Agent's customary issuance fee, which shall
equal one quarter of one percent (1/4%) per annum of the Maximum Drawing Amount
of each Letter of Credit (the "Issuance Fee"), and (b) in respect of each
documentary Stand Alone Letter of Credit equal to (i) the Agent's Issuance Fee
or amendment fee, as the case may be, PLUS (ii) the Agent's customary time
negotiation fee PLUS (iii) the Applicable Margin set forth in the column headed
"Letters of Credit" in such definition then in effect LESS three-quarters of one
percent (3/4%) per annum of the Maximum Drawing Amount of such documentary
Letter of Credit (the "Documentary Margin"). The Agent shall retain for its own
account the Issuance Fees on all Letters of Credit and all amendment and
negotiation fees, and will remit the remainder of the Letter of Credit Fees to
the Banks in accordance with their respective Commitment Percentages and LC
Commitment Percentages, as the case may be.
SS.4.7. COMMITMENT FEE ON STAND ALONE LETTERS OF CREDIT. The Borrower
agrees to pay to the Agent for the accounts of the Banks in accordance with
their respective Commitment Percentages a commitment fee calculated at the rate
of one-half of one percent (1/2%) per annum on the average daily amount during
each calendar quarter or portion thereof from the date hereof to the Maturity
Date by which the Total LC Commitment exceeds the sum of the Maximum Drawing
Amount and all Unpaid Reimbursement Obligations on the Stand Alone Letters of
Credit during such calendar quarter. The commitment fee shall be payable
quarterly in arrears on the first day of each calendar quarter for the
immediately preceding calendar quarter commencing on the first such date
following the date hereof, with a final payment on the Maturity Date or any
earlier date on which the Commitments shall terminate.
SS.5. CERTAIN GENERAL PROVISIONS.
SS.5.1. CLOSING FEE. The Borrower agrees to pay to the Agent on the
Closing Date a closing fee as described in a fee letter dated as of the date
herewith (the "Fee Letter").
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SS.5.2. AGENT'S FEE. The Borrower shall pay to the Agent an Agent's fee as
provided in the Fee Letter.
SS.5.3. FUNDS FOR PAYMENTS.
5.3.1. PAYMENTS TO AGENT. All payments of principal, interest,
Reimbursement Obligations, commitment fees, Letter of Credit Fees and any other
amounts due hereunder or under any of the other Loan Documents shall be made to
the Agent, for the respective accounts of the Banks and the Agent, at the
Agent's Head Office or at such other location in the Boston, Massachusetts, area
that the Agent may from time to time designate, in each case in immediately
available funds.
5.3.2. NO OFFSET, ETC. All payments by the Borrower hereunder and
under any of the other Loan Documents shall be made without setoff or
counterclaim and free and clear of and without deduction for any taxes, levies,
imposts, duties, charges, fees, deductions, withholdings, compulsory loans,
restrictions or conditions of any nature now or hereafter imposed or levied by
any jurisdiction or any political subdivision thereof or taxing or other
authority therein unless the Borrower is compelled by law to make such deduction
or withholding. If any such obligation is imposed upon the Borrower with respect
to any amount payable by it hereunder or under any of the other Loan Documents,
the Borrower will pay to the Agent, for the account of the Banks or (as the case
may be) the Agent, on the date on which such amount is due and payable hereunder
or under such other Loan Document, such additional amount in Dollars as shall be
necessary to enable the Banks or the Agent to receive the same net amount which
the Banks or the Agent would have received on such due date had no such
obligation been imposed upon the Borrower. The Borrower will deliver promptly to
the Agent certificates or other valid vouchers for all taxes or other charges
deducted from or paid with respect to payments made by the Borrower hereunder or
under such other Loan Document.
SS.5.4. COMPUTATIONS. All computations of interest on the Base Rate Loans
shall be based on a 365 or 366 day year, as the case may be, and paid for the
actual number of days elapsed, and all computations of interest on the
Eurodollar Rate Loans and of commitment fees, Letter of Credit Fees or other
fees shall be based on a 360-day year and paid for the actual number of days
elapsed. Except as otherwise provided in the definition of the term "Interest
Period" with respect to Eurodollar Rate Loans, whenever a payment hereunder or
under any of the other Loan Documents becomes due on a day that is not a
Business Day, the due date for such payment shall be extended to the next
succeeding Business Day, and interest shall accrue during such extension. The
Outstanding amount of the Loans as reflected on the Revolving Credit Note
Records from time to time shall be considered correct and binding on the
Borrower unless the Agent or such Bank shall notify the Borrower to the
contrary.
SS.5.5. INABILITY TO DETERMINE EURODOLLAR RATE. In the event, prior to the
commencement of any Interest Period relating to any Eurodollar Rate Loan, the
Agent
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shall determine or be notified by the Majority Banks that adequate and
reasonable methods do not exist for ascertaining the Eurodollar Rate that would
otherwise determine the rate of interest to be applicable to any Eurodollar Rate
Loan during any Interest Period, the Agent shall forthwith give notice of such
determination (which shall be conclusive and binding on the Borrower and the
Banks) to the Borrower and the Banks. In such event (a) any Loan Request or
Conversion Request with respect to Eurodollar Rate Loans shall be automatically
withdrawn and shall be deemed a request for Base Rate Loans, (b) each Eurodollar
Rate Loan will automatically, on the last day of the then current Interest
Period relating thereto, become a Base Rate Loan, and (c) the obligations of the
Banks to make Eurodollar Rate Loans shall be suspended until the Agent or the
Majority Banks determines that the circumstances giving rise to such suspension
no longer exist, whereupon the Agent or, as the case may be, the Agent upon the
instruction of the Majority Banks, shall so notify the Borrower and the Banks.
SS.5.6. ILLEGALITY. Notwithstanding any other provisions herein, if any
present or future law, regulation, treaty or directive or the interpretation or
application thereof shall make it unlawful for any Bank to make or maintain
Eurodollar Rate Loans, such Bank shall forthwith give notice of such
circumstances to the Borrower and the other Banks and thereupon (a) the
commitment of such Bank to make Eurodollar Rate Loans or convert Loans of
another Type to Eurodollar Rate Loans shall forthwith be suspended and (b) such
Bank's Loans then Outstanding as Eurodollar Rate Loans, if any, shall be
converted automatically to Base Rate Loans on the last day of each Interest
Period applicable to such Eurodollar Rate Loans or within such earlier period as
may be required by law. The Borrower hereby agrees promptly to pay the Agent for
the account of such Bank, upon demand by such Bank, any additional amounts
necessary to compensate such Bank for any costs incurred by such Bank in making
any conversion in accordance with this ss.5.6, including any interest or fees
payable by such Bank to lenders of funds obtained by it in order to make or
maintain its Eurodollar Rate Loans hereunder.
SS.5.7. ADDITIONAL COSTS, ETC. If any present or future applicable law,
which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to any Bank or the Agent by any central bank or other fiscal,
monetary or other authority (whether or not having the force of law), shall:
(a) subject any Bank or the Agent to any tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature with respect to
this Credit Agreement, the other Loan Documents, any Letters of
Credit, such Bank's Commitment, LC Commitment or the Loans (other
than taxes based upon or measured by the income or profits of such
Bank or the Agent), or
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(b) materially change the basis of taxation (except for changes in taxes
on income or profits) of payments to any Bank of the principal of or
the interest on any Loans or any other amounts payable to any Bank
or the Agent under this Credit Agreement or any of the other Loan
Documents, or
(c) impose or increase or render applicable (other than to the extent
specifically provided for elsewhere in this Credit Agreement) any
special deposit, reserve, assessment, liquidity, capital adequacy or
other similar requirements (whether or not having the force of law)
against assets held by, or deposits in or for the account of, or
loans by, or letters of credit issued by, or commitments of an
office of any Bank, or
(d) impose on any Bank or the Agent any other conditions or requirements
with respect to this Credit Agreement, the other Loan Documents, any
Letters of Credit, the Loans, such Bank's Commitment, such Bank's LC
Commitment or any class of loans, letters of credit or commitments
of which any of the Loans or such Bank's Commitment or LC Commitment
forms a part, and the result of any of the foregoing is
(i) to increase the cost to any Bank of making, funding,
issuing, renewing, extending or maintaining any of the
Loans or such Bank's Commitment, LC Commitment or any
Letter of Credit, or
(ii) to reduce the amount of principal, interest,
Reimbursement Obligation or other amount payable to such
Bank or the Agent hereunder on account of such Bank's
Commitment, LC Commitment, any Letter of Credit or any
of the Loans, or
(iii) to require such Bank or the Agent to make any payment or
to forego any interest or Reimbursement Obligation or
other sum payable hereunder, the amount of which payment
or foregone interest or Reimbursement Obligation or
other sum is calculated by reference to the gross amount
of any sum receivable or deemed received by such Bank or
the Agent from the Borrower hereunder,
then, and in each such case, the Borrower will, upon demand made by such Bank or
(as the case may be) the Agent at any time and from time to time and as often as
the occasion therefor may arise, pay to such Bank or the Agent such additional
amounts as will be sufficient to compensate such Bank or the Agent for such
additional cost, reduction, payment or foregone interest or Reimbursement
Obligation or other sum.
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SS.5.8. CAPITAL ADEQUACY. If after the date hereof any Bank or the Agent
determines that (a) the adoption of or change in any law, governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law) regarding capital requirements for banks or bank holding companies or any
change in the interpretation or application thereof by a court or governmental
authority with appropriate jurisdiction, or (b) compliance by such Bank or the
Agent or any corporation controlling such Bank or the Agent with any law,
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law) of any such entity regarding capital adequacy, has the
effect of reducing the return on such Bank's or the Agent's commitment with
respect to any Loans to a level below that which such Bank or the Agent could
have achieved but for such adoption, change or compliance (taking into
consideration such Bank's on the Agent's then existing policies with respect to
capital adequacy and assuming full utilization of such entity's capital) by any
amount deemed by such Bank or (as the case may be) the Agent to be material,
then such Bank or the Agent may notify the Borrower of such fact. To the extent
that the amount of such reduction in the return on capital is not reflected in
the Base Rate, the Borrower agrees to pay such Bank or (as the case may be) the
Agent for the amount of such reduction in the return on capital as and when such
reduction is determined upon presentation by such Bank or (as the case may be)
the Agent of a certificate in accordance with ss.5.9 hereof. Each Bank shall
allocate such cost increases among its customers in good faith and on an
equitable basis.
SS.5.9. CERTIFICATE. A certificate setting forth any additional amounts
payable pursuant to ss.ss.5.7 or 5.8 and a brief explanation of such amounts
which are due, submitted by any Bank or the Agent to the Borrower, shall be
conclusive, absent manifest error, that such amounts are due and owing.
SS.5.10. INDEMNITY. The Borrower agrees to indemnify each Bank and to hold
each Bank harmless from and against any loss, cost or expense (including loss of
anticipated profits) that such Bank may sustain or incur as a consequence of (a)
default by the Borrower in payment of the principal amount of or any interest on
any Eurodollar Rate Loans as and when due and payable, including any such loss
or expense arising from interest or fees payable by such Bank to lenders of
funds obtained by it in order to maintain its Eurodollar Rate Loans, (b) default
by the Borrower in making a borrowing or conversion after the Borrower has given
(or is deemed to have given) a Loan Request or a Conversion Request relating
thereto in accordance with ss.2.6 or ss.2.7 or (c) the making of any payment of
a Eurodollar Rate Loan or the making of any conversion of any such Loan to a
Base Rate Loan on a day that is not the last day of the applicable Interest
Period with respect thereto, including interest or fees payable by such Bank to
lenders of funds obtained by it in order to maintain any such Loans.
SS.5.11. INTEREST AFTER DEFAULT. During the continuance of a Default or an
Event of Default, the principal and interest of the Loans, Reimbursement
Obligations and Unpaid Reimbursement Obligations shall, until such Default or
Event of Default has been cured or remedied or such Default or Event of Default
has been waived by the
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Majority Banks pursuant to ss.26, bear interest at a rate per annum equal to two
percent (2%) above the rate of interest otherwise applicable to such Loans
pursuant to ss.2.5.
SS.5.12. INTEREST LIMITATION. Notwithstanding any other term of this
Credit Agreement or any Note or any other document referred to herein or
therein, the maximum amount of interest which may be charged to or collected
from any Person liable hereunder or under any Note by the Banks, shall be
absolutely limited to, and shall in no event exceed, the maximum amount of
interest (the "Maximum Rate") which could lawfully be charged to collected under
applicable law (including, to the extent applicable, the provisions of Section
5197 of the Revised Statutes of the United States of America, as amended, 12
U.S.C. Section 85, as amended), so that the maximum of all amounts constituting
interest under applicable law, howsoever computed, shall never exceed as to any
Person liable therefor the Maximum Rate, and any term of this Credit Agreement
or any Note or any other document referred to herein or therein which could be
construed as providing for interest in excess of such lawful maximum shall be
and hereby is made expressly subject to and modified by the provisions of this
paragraph. If, in any month, the effective interest rate on any amounts owing
pursuant to this Credit Agreement, the Notes or any of the other Loan Documents,
absent the Maximum Rate limitation contained herein, would have exceeded the
Maximum Rate, and if in the future months, such effective interest rate would
otherwise be less than the Maximum Rate, then the effective interest rate for
such month shall be increased to the Maximum Rate until such time as the amount
of interest paid hereunder equals the amount of interest which would have been
paid if the same had not been limited by the Maximum Rate. In the event that,
upon payment in full of the Borrower's Obligations pursuant to this Credit
Agreement, the Notes or the other Loan Documents, the total amount of interest
paid or accrued under the terms of this Credit Agreement is less than the total
amount of interest which would have been paid or accrued had the interest not
been limited hereby to the Maximum Rate, then the Borrower shall, to the extent
permitted by such applicable federal, state or other law, pay to the Banks
hereunder or under the Notes an amount equal to the excess, if any, of (i) the
lesser of (A) the amount of interest which would have been charged if the
Maximum Rate had, at all times, been in effect with respect to the Obligations
hereunder or under the Notes and (B) the amount of interest which would have
accrued had the effective interest rate applicable not been limited hereunder by
the Maximum Rate over (ii) the amount of interest actually paid or accrued under
this Credit Agreement.
SS.6. COLLATERAL SECURITY AND GUARANTIES.
SS.6.1. SECURITY OF BORROWER. The Obligations shall be secured by a
perfected first priority security interest (subject only to Permitted Liens
entitled to priority under applicable law) in the Mortgaged Property, a pledge
of the stock of the Receivables Subsidiary, and a first priority security
interest in certain other assets of the Borrower, whether now owned or hereafter
acquired, pursuant to the terms of the Security Documents to which the Borrower
is a party.
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SS.6.2. GUARANTIES. The Obligations shall also be guaranteed
pursuant to the terms of the Guaranty. The obligations of SRI under the Guaranty
shall be in turn secured by a perfected first priority security interest
(subject only to Permitted Liens entitled to priority under applicable law) in
certain assets of SRI, whether now owned or hereafter acquired, pursuant to the
terms of the Security Documents to which SRI is a party.
SS.6.3. GUARANTIES AND SECURITY OF SUBSIDIARIES. In the event any
new Subsidiary of the Borrower is formed or acquired after the Closing Date,
simultaneously with such formation or acquisition, the Loan Documents shall be
amended and/or supplemented as necessary to make the terms and conditions of the
Loan Documents applicable to such Subsidiary, each such Subsidiary shall become
a guarantor of the Obligations hereunder and secure its obligations under such
guaranty by a perfected first priority security interest (subject only to
Permitted Liens entitled to priority under applicable law) in certain assets of
such Subsidiary, whether then owned or thereafter acquired, pursuant to the
terms of the Security Documents to which such Subsidiary will become a party,
with all such additional documents or modifications to be in form and substance
satisfactory to the Agent.
SS.6.4. TERMINATION OF SECURITY INTEREST. The security interest
granted pursuant to this ss.6 shall, upon the indefeasible repayment in full, in
cash, of all the Obligations other than Obligations in respect of indemnities
relating to unasserted claims which survive termination of this Credit
Agreement, the termination of the Commitments, the LC Commitments and the return
of all issued and unexpired Letters of Credit, terminate.
SS.7. REPRESENTATIONS AND WARRANTIES. Each of the Borrower and
SRI represents and warrants to the Banks and the Agent as follows:
SS.7.1. CORPORATE AUTHORITY.
7.1.1. INCORPORATION; GOOD STANDING. Each of SRI, the Borrower and
each of their respective Subsidiaries (a) is a corporation duly organized,
validly existing and in good standing under the laws of its state of
incorporation, (b) has all requisite corporate power to own its property and
conduct its business as now conducted and as presently contemplated, and (c) is
in good standing as a foreign corporation and is duly authorized to do business
in each jurisdiction where such qualification is necessary except where a
failure to be so qualified would not have a materially adverse effect on the
business, assets or financial condition of SRI, the Borrower and their
Subsidiaries on a consolidated basis.
7.1.2. AUTHORIZATION. The execution, delivery and performance of
this Credit Agreement and the other Loan Documents to which SRI, the Borrower or
any of their Subsidiaries is or is to become a party and the transactions
contemplated hereby and thereby (a) are within the corporate authority of such
Person, (b) have been duly authorized by all necessary corporate proceedings,
(c) do not conflict with or result in
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any breach or contravention of any provision of law, statute, rule or regulation
to which SRI, the Borrower or any Subsidiary is subject or any judgment, order,
writ, injunction, license or permit applicable to SRI, the Borrower or any
Subsidiary and (d) do not conflict with any provision of the corporate charter
or bylaws of, or any agreement or other instrument binding upon, SRI, the
Borrower or any of their Subsidiaries.
7.1.3. ENFORCEABILITY. The execution and delivery of this Credit
Agreement and the other Loan Documents to which SRI, the Borrower or any of
their Subsidiaries is or is to become a party will result in valid and legally
binding obligations of such Person enforceable against it in accordance with the
respective terms and provisions hereof and thereof, except as enforceability is
limited by bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or affecting generally the enforcement of creditors' rights and
except to the extent that availability of the remedy of specific performance or
injunctive relief is subject to the discretion of the court before which any
proceeding therefor may be brought.
SS.7.2. GOVERNMENTAL APPROVALS. The execution, delivery and performance by
SRI, the Borrower and any of their Subsidiaries of this Credit Agreement and the
other Loan Documents to which SRI, the Borrower or any of their Subsidiaries is
or is to become a party and the transactions contemplated hereby and thereby do
not require the approval or consent of, or filing with, any governmental agency
or authority other than those already obtained.
SS.7.3. TITLE TO PROPERTIES; LEASES. Except as indicated on SCHEDULE 7.3
hereto, SRI, the Borrower and their Subsidiaries own all of the assets reflected
in the consolidated and consolidating balance sheet of SRI, the Borrower and
their Subsidiaries as at the Balance Sheet Date or acquired since that date
(except property and assets sold or otherwise disposed of in the ordinary course
of business since that date), subject to no rights of others, including any
mortgages, leases, conditional sales agreements, title retention agreements,
liens or other encumbrances except Permitted Liens.
SS.7.4. FINANCIAL STATEMENTS AND PROJECTIONS.
7.4.1. FINANCIAL STATEMENTS. There has been furnished to each of the
Banks a consolidated and consolidating balance sheet of SSI and its Subsidiaries
as at the Balance Sheet Date, and a consolidated and consolidating statement of
income of SSI and its Subsidiaries for the period then ended, certified by a
member of senior management of the Borrower. Such balance sheet and statement of
income have been prepared in accordance with Generally Accepted Accounting
Principles and fairly present the financial condition of SSI, SRI and the
Borrower as at the close of business on the date thereof (excluding normal
year-end adjustments) and the results of operations for the period then ended.
There are no contingent liabilities of SSI or any of its Subsidiaries as of such
date involving material amounts, known to the officers of SSI, SRI or the
Borrower, which were not disclosed in such balance sheet and the notes related
thereto. In addition, there has been furnished to each of the Banks SSI's most
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recent Form 10-K (the "10-K") for the fiscal year ended January, 1996 and Form
10-Q (the '"10-Q") for the fiscal quarter ended November 2, 1996.
7.4.2. PROJECTIONS. The six (6) month seasonal income statement plan
of SSI and its Subsidiaries on a consolidated basis, for the six (6) month
period commencing January 30, 1997 and through July 30, 1997 (and, with the six
month seasonal income statement plan for the six month period commencing on the
Saturday closest to July 30 through the Saturday closest to January 30, the
"Seasonal Projections"), the projected capital budget and projected cash flow
statements for the fiscal year ended January 28, 1997 (the "Fiscal Year
Projections") and the annual projected balance sheets, income statements and
cash flow statements of SSI and its Subsidiaries on a consolidated basis for the
1996 to 2000 fiscal years (the "Annual Projections" and, collectively with the
Seasonal Projections, and the Fiscal Year Projections, the "Projections"),
copies of which have been delivered to each Bank, disclose all assumptions made
with respect to general economic, financial and market conditions used in
formulating such Projections. The Projections are based upon reasonable
estimates and assumptions, have been prepared on the basis of the assumptions
stated therein and as at the Closing Date reflect the reasonable estimates of
SSI and its Subsidiaries of the results of operations and other information
projected therein, it being understood that the projections are not guarantees
of results and that actual results will vary from the projections, and such
variations may be material.
SS.7.5. NO MATERIAL CHANGES, ETC. Since the Balance Sheet Date there has
occurred no materially adverse change in the financial condition or business of
SRI, the Borrower and their Subsidiaries as shown on or reflected in the
consolidated balance sheet of SRI, the Borrower and their Subsidiaries as at the
Balance Sheet Date, or the consolidated and consolidating statement of income
for the fiscal year then ended, other than changes in the ordinary course of
business that have not had any materially adverse effect either individually or
in the aggregate on the business or financial condition of SRI, the Borrower and
their Subsidiaries on a consolidated basis. Since the Balance Sheet Date,
neither SRI nor the Borrower has made any Distributions.
SS.7.6. FRANCHISES, PATENTS, COPYRIGHTS, ETC. Each of SRI, the Borrower
and each of their Subsidiaries possesses all franchises, patents, copyrights,
trademarks, trade names, licenses and permits, and rights in respect of the
foregoing, adequate for the conduct of its business substantially as now
conducted without known conflict with any rights of others.
SS.7.7. LITIGATION. Except as set forth in SCHEDULE 7.7 hereto, there are
no actions, suits, proceedings or investigations of any kind pending or
threatened against SRI, the Borrower or any of their Subsidiaries before any
court, tribunal or administrative agency or board that, if adversely determined,
would reasonably be expected, either in any case or in the aggregate, materially
adversely affect the properties, assets, financial condition or business of SRI,
the Borrower or any of their Subsidiaries or materially impair the right of SRI,
the Borrower and their Subsidiaries, considered as a whole, to carry on business
substantially as now conducted by them, or
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result in any substantial liability not adequately covered by insurance, or for
which adequate reserves are not maintained on the consolidated balance sheet of
SRI, the Borrower and their Subsidiaries, or which question the validity of this
Credit Agreement or any of the other Loan Documents, or any action taken or to
be taken pursuant hereto or thereto.
SS.7.8. NO MATERIALLY ADVERSE CONTRACTS, ETC. Neither SRI, the Borrower
nor any of their Subsidiaries is subject to any charter, corporate or other
legal restriction, or any judgment, decree, order, rule or regulation that has
or is expected in the future to have a materially adverse effect on the
business, assets or financial condition of SRI, the Borrower or any of their
Subsidiaries. Neither SRI, the Borrower nor any of their Subsidiaries is a party
to any contract or agreement that has or is expected, in the judgment of the
Borrower's officers, to have any materially adverse effect on the business of
SRI, the Borrower and their Subsidiaries on a consolidated basis.
SS.7.9. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. Each of SRI, the
Borrower and any of their Subsidiaries is not in violation of any provision of
its charter documents, bylaws, or any agreement or instrument to which it may be
subject or by which it or any of its properties may be bound or any decree,
order, judgment, statute, license, rule or regulation, in any of the foregoing
cases in a manner that could reasonably be expected to materially and adversely
affect the financial condition, properties or business of SRI, the Borrower and
their Subsidiaries on a consolidated basis.
SS.7.10. TAX STATUS. SRI, the Borrower and their Subsidiaries (a) have
made or filed all federal and state income and all other tax returns, reports
and declarations required by any jurisdiction to which any of them is subject,
(b) have paid all taxes and other governmental assessments and charges shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith and by appropriate proceedings and (c) have set
aside on their books provisions reasonably adequate for the payment of all taxes
for periods subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any jurisdiction, and the
officers of the Borrower know of no basis for any such claim.
SS.7.11. NO EVENT OF DEFAULT. No Default or Event of Default has occurred
and is continuing.
SS.7.12. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. Neither SRI, the
Borrower nor any of their Subsidiaries is a "holding company", or a "subsidiary
company" of a "holding company", or an affiliate" of a "holding company", as
such terms are defined in the Public Utility Holding Company Act of 1935; nor is
it an "investment company", or an "affiliated company" or a "principal
underwriter" of an "investment company", as such terms are defined in the
Investment Company Act of 1940.
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SS.7.13. ABSENCE OF FINANCING STATEMENTS, ETC. Except with respect to
Permitted Liens, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or recorded with any
filing records, registry or other public office, that purports to cover, affect
or give notice of any present or possible future lien on, or security interest
in, any assets or property of SRI, the Borrower or any of their Subsidiaries or
any rights relating thereto.
SS.7.14. PERFECTION OF SECURITY INTEREST. All filings, assignments,
pledges and deposits of documents or instruments have been made and all other
actions have been taken that are necessary, under applicable law, to establish
and perfect the Agent's security interest in the Collateral. The Collateral and
the Agent's rights with respect to the Collateral are not subject to any setoff,
claims, withholdings or other defenses. Each of SRI and the Borrower is the
owner of the Collateral free from any lien, security interest, encumbrance and
any other claim or demand, except for Permitted Liens.
SS.7.15. CERTAIN TRANSACTIONS. Except (a) as disclosed on SCHEDULE 7.15
hereto; (b) for consulting arrangements with ▇▇▇▇ Capital, Inc. and (c) for
arm's length transactions pursuant to which SRI, the Borrower or any of their
Subsidiaries makes payments in the ordinary course of business upon terms no
less favorable than SRI, the Borrower or such Subsidiary could obtain from third
parties, none of the officers, directors, or employees of SRI, the Borrower or
any of their Subsidiaries is presently a party to any contract, agreement or
other arrangement with SRI, the Borrower or any of their Subsidiaries (other
than for services as employees, officers and directors), providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Borrower, any corporation,
partnership, trust or other entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.
SS.7.16. EMPLOYEE BENEFIT PLANS.
7.16.1. IN GENERAL. Each Employee Benefit Plan and each Guaranteed
Pension Plan has been maintained and operated in compliance in all material
respects with the provisions of ERISA and, to the extent applicable, the Code,
including but not limited to the provisions thereunder respecting prohibited
transactions and the bonding of fiduciaries and other persons handling plan
funds as required by ss.412 of ERISA. The Borrower has heretofore delivered to
the Agent the most recently completed annual report, Form 5500, with all
required attachments, and actuarial statement required to be submitted under
ss.103(d) of ERISA, with respect to each Guaranteed Pension Plan.
7.16.2. TERMINABILITY OF WELFARE PLANS. No Employee Benefit Plan
which is an employee welfare benefit plan within the meaning of ss.3(1) or
ss.3(2)(B) of ERISA, provides benefit coverage subsequent to termination of
employment except as required by Title I, Part 6 of ERISA or applicable state
insurance laws. The Borrower may terminate each such Plan at any time (or at any
time subsequent to the expiration
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of any applicable bargaining agreement) in the discretion of the Borrower
without liability to any Person other than for claims arising prior to
termination.
7.16.3. GUARANTEED PENSION PLANS. Each contribution required to be
made to a Guaranteed Pension Plan, whether required to be made to avoid the
incurrence of an accumulated funding deficiency, the notice or lien provisions
of ss.302(f) of ERISA, or otherwise, has been timely made. No waiver of an
accumulated funding deficiency or extension of amortization periods has been
received with respect to any Guaranteed Pension Plan, and neither the Borrower
not any ERISA Affiliate is obligated to or has posted security in connection
with an amendment of a guaranteed Pension Plan pursuant to ss.307 of ERISA or
ss.401(a)(29) of the Code. Except as set forth on SCHEDULE 7.16.3 hereto, no
liability to the PBGC (other than required insurance premiums, all of which have
been paid) has been incurred by the Borrower or any ERISA Affiliate with respect
to any Guaranteed Pension Plan and there has not been any ERISA Reportable
Event, or any other event or condition which presents a material risk of
termination of any Guaranteed Pension Plan by the PBGC. Based on the latest
valuation of each Guaranteed Pension Plan (which in each case occurred within
twelve months of the date of this representation), and on the actuarial methods
and assumptions employed for that valuation, the aggregate benefit liabilities
of all such Guaranteed Pension Plans within the meaning of ss.4001 of ERISA did
not exceed the aggregate value of the assets of all such Guaranteed Pension
Plans, disregarding for this purpose the benefit liabilities and assets of any
Guaranteed Pension Plan with assets in excess of benefit liabilities, by more
than $100,000.
7.16.4. MULTIEMPLOYER PLANS. Neither the Borrower nor any ERISA
Affiliate has incurred any material liability (including secondary liability) to
any Multiemployer Plan as a result of a complete or partial withdrawal from such
Multiemployer Plan under ss.4201 of ERISA or as a result of a sale of assets
described in ss.4204 of ERISA that has not been satisfied in full. Neither the
Borrower nor any ERISA Affiliate has been notified that any Multiemployer Plan
is in reorganization or insolvent under and within the meaning of ss.4241 or
ss.4245 of ERISA or is at risk of entering reorganization or becoming insolvent,
or that any Multiemployer Plan intends to terminate or has been terminated under
ss.4041A of ERISA.
SS.7.17. REGULATIONS U AND X. The proceeds of the Loans shall be used to
convert existing Indebtedness to the Banks under the Original Credit Agreement
to Loans and Letters of Credit, as the case may be, hereunder and for working
capital and general corporate purposes The Borrower will obtain Letters of
Credit solely for working capital and general corporate purposes. No portion of
any Loan is to be used, and no portion of any Letter of Credit is to be
obtained, for the purpose of purchasing or carrying any "margin security" or
"margin stock" as such terms are used in Regulations U and X of the Board of
Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.
SS.7.18. ENVIRONMENTAL COMPLIANCE. Except as set forth on SCHEDULE 7.18
hereto:
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(a) none of SRI, the Borrower, any of their Subsidiaries or any operator
of the Real Estate or any operations thereon is in violation of any
judgment, decree, order, law, license, rule or regulation pertaining
to environmental matters, including without limitation, those
arising under the Resource Conservation and Recovery Act ("RCRA"),
the Comprehensive Environmental Response, Compensation and Liability
Act of 1980 as amended ("CERCLA"), the Superfund Amendments and
Reauthorization Act of 1986 ("▇▇▇▇"), the Federal Clean Water Act,
the Federal Clean Air Act, the Toxic Substances Control Act, or any
state or local statute, regulation, ordinance, order or decree
relating to health, safety or the environment (hereinafter
"Environmental Laws"), which violation would reasonably be expected
to have a material adverse effect on the environment or the
business, assets or financial condition of SRI, the Borrower and
their Subsidiaries on a consolidated basis;
(b) neither SRI, the Borrower nor any of their Subsidiaries has received
written notice from any third party including, without limitation:
any federal, state or local governmental authority, (i) that any one
of them has been identified by the United States Environmental
Protection Agency ("EPA") as a potentially responsible party under
CERCLA with respect to a site listed on the National Priorities
List, 40 C.F.R. Part ▇▇▇ ▇▇▇▇▇▇▇▇ ▇ (1986); (ii) that any hazardous
waste, as defined by 42 U.S.C. ss. 9601(5), any hazardous substances
as defined by 42 ▇.▇.▇.▇▇. 9601(14), any pollutant or contaminant as
defined by 42 U.S.C.ss.9601(33) and any toxic substances, oil or
hazardous materials or other chemicals or substances regulated by
any Environmental Laws ("Hazardous Substances") which any one of
them has generated, transported or disposed of has been found at any
site at which a federal, state or local agency or other third party
has conducted or has ordered that SRI, the Borrower or any of its
Subsidiaries conduct a remedial investigation, removal or other
response action pursuant to any Environmental Law; or (iii) that it
is or shall be a named party to any claim, action, cause of action,
complaint, or legal or administrative proceeding (in each case,
contingent or otherwise) arising out of any third party's incurrence
of costs, expenses, losses or damages of any kind whatsoever in
connection with the release of Hazardous Substances except for such
of the foregoing clauses (i) through (iii) which would not
reasonably be expected to have a materially adverse effect on the
business, assets or financial condition of SRI, the Borrower and
their Subsidiaries on a consolidated basis;
(c) except as would not reasonably be expected to have a materially
adverse effect on the business, assets or financial condition of
SRI, the Borrower and their Subsidiaries on a consolidated basis:
(i) no portion of the Real Estate has been used for the handling,
processing, storage or disposal of Hazardous Substances except in
accordance with applicable
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Environmental Laws; and no underground tank or other underground
storage receptacle for Hazardous Substances is located on any
portion of the Real Estate; (ii) in the course of any activities
conducted by SRI, the Borrower, their Subsidiaries or operators of
its properties, no Hazardous Substances have been generated or are
being used on the Real Estate except in accordance with applicable
Environmental Laws; (iii) there have been no releases (i.e. any past
or present releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, disposing or dumping) or
threatened releases of Hazardous Substances on, upon, into or from
the properties of the Borrower or its Subsidiaries, which releases
would have a material adverse effect on the value of any of the Real
Estate or adjacent properties or have a materially adverse effect on
the environment; (iv) to the best of the Borrower's knowledge, there
have been no releases on, upon, from or into any real property in
the vicinity of any of the Real Estate which, through soil or
groundwater contamination, has come to be located on, and which
would have a material adverse effect on the value of, the Real
Estate; and (v) in addition, to the best of the Borrower's
knowledge, any Hazardous Substances that have been generated on any
of the Real Estate have been transported offsite only by carriers
having an identification number issued by the EPA, treated or
disposed of only by treatment or disposal facilities maintaining
valid permits as required under applicable Environmental Laws, which
transporters and facilities have been and are operating in
compliance with such permits and applicable Environmental Laws; and
(d) Neither SRI, the Borrower nor any of their Subsidiaries, any
Mortgaged Property or any of the other Real Estate is subject to any
applicable Environmental Law requiring the performance of Hazardous
Substances site assessments, or the removal or remediation of
Hazardous Substances, or the giving of notice to any governmental
agency or the recording or delivery to other Persons of an
environmental disclosure document or statement by virtue of the
transactions set forth herein and contemplated hereby, or as a
condition to the recording of any Mortgage or to the effectiveness
of any other transactions contemplated hereby where the failure to
comply with such Environmental Laws would be expected to have a
materially adverse effect on the business, assets or financial
condition of SRI, the Borrower and their Subsidiaries on a
consolidated basis.
SS.7.19. SUBSIDIARIES, ETC. The Receivables Subsidiary is the only
Subsidiary of the Borrower, and the Borrower owns one hundred percent (100%) of
the issued and outstanding capital stock of the Receivables Subsidiary. The
Borrower is the only direct Subsidiary of SRI, and SRI owns one hundred percent
(100%) of the issued and outstanding capital stock of the Borrower. SRI is the
only Subsidiary of SSI, and SSI owns one hundred percent (100%) of the issued
and outstanding capital stock of SRI.
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Except as set forth on SCHEDULE 7.19 hereto, neither SRI, the Borrower nor any
Subsidiary of the Borrower or SRI is engaged in any joint venture or partnership
with any other Person.
SS.7.20. SENIOR DEBT. The execution, delivery and performance of this
Credit Agreement and the other Loan Documents to which SRI, the Borrower or any
of their Subsidiaries is or is to become a party and, the transactions
contemplated hereby and thereby (a) does not violate any provision of the Senior
Notes, the Senior Subordinated Notes, the Senior Notes Indenture or the Senior
Subordinated Notes Indenture (b) the Indebtedness arising hereunder constitutes
permitted "Indebtedness" (as defined in the Senior Notes Indenture and Senior
Subordinated Notes Indenture (collectively, the "Indentures")) pursuant to the
terms of the Indentures, (c) the liens arising as a result of this transaction
constitute "Permitted Liens" (as defined in the Indentures) pursuant to the
terms of the Indentures and (d) the Obligations constitute "Senior Debt" (as
defined in the Senior Subordinated Notes Indenture) pursuant to the terms of the
Senior Subordinated Notes Indenture, to which the Senior Subordinated Notes are
subordinated and junior in rights of payment.
SS.7.21. FISCAL YEAR. Each of SRI and the Borrower has a fiscal year which
ends on the Saturday closest to the end of January of each year.
SS.7.22. INSURANCE. Each of SRI, the Borrower and each of their
Subsidiaries maintains with financially sound and reputable insurers insurance
with respect to its properties and businesses against such casualties and
contingencies as are in accordance with general practices of businesses engaged
in similar activities and similar geographic areas, with the details of such
coverage being more fully described on SCHEDULE 7.22 hereto.
SS.8. AFFIRMATIVE COVENANTS OF THE BORROWER. Each of SRI and the Borrower
covenants and agrees that, so long as any Loan, Unpaid Reimbursement Obligation,
Letter of Credit or Note is outstanding or any Bank has any obligation to make
any Loans or the Agent has any obligation to issue, extend or renew any Letters
of Credit:
SS.8.1. PUNCTUAL PAYMENT. The Borrower will duly and punctually pay or
cause to be paid the principal and interest on the Loans, all Reimbursement
Obligations, the Letter of Credit Fees, the commitment fees, the Agent's fee and
all other amounts provided for in this Credit Agreement and the other Loan
Documents to which the Borrower or any of its Subsidiaries is a party, all in
accordance with the terms of this Credit Agreement and such other Loan
Documents.
SS.8.2. MAINTENANCE OF OFFICE. The Borrower will maintain its chief
executive office in ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇, or at such other place in
the United States of America as the Borrower shall designate upon written notice
to the Agent, where notices, presentations and demands to or upon the Borrower
in respect of the Loan Documents to which the Borrower is a party may be given
or made.
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SS.8.3. RECORDS AND ACCOUNTS. SRI and the Borrower will (a) keep, and
cause each of their Subsidiaries to keep, true and accurate records and books of
account in which full, true and correct entries will be made in accordance with
Generally Accepted Accounting Principles and (b) maintain adequate accounts and
reserves for all taxes (including income taxes), depreciation, depletion,
obsolescence and amortization of its properties and the properties of its
Subsidiaries, contingencies, and other reserves.
SS.8.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The Borrower
will deliver to each of the Banks:
(a) as soon as practicable, but in any event not later than one hundred
ten (110) days after the end of each fiscal year of the Borrower,
the consolidated balance sheet of SSI and its Subsidiaries and the
consolidating balance sheet of SSI and its Subsidiaries, each as at
the end of such year, and the related consolidated statement of
income and consolidated statement of cash flow and consolidating
statement of income, each setting forth in comparative form the
figures for the previous fiscal year and all such consolidated and
consolidating statements to be in reasonable detail, prepared in
accordance with Generally Accepted Accounting Principles, and
certified (as to consolidated statements) without qualification by
SSI's accountants or by other independent certified public
accountants satisfactory to the Agent, together with a written
statement from such accountants to the effect that they have read a
copy of this Credit Agreement, and that, in making the examination
necessary to said certification, they have obtained no knowledge of
any Default or Event of Default, or, if such accountants shall have
obtained knowledge of any then existing Default or Event of Default
they shall disclose in such statement any such Default or Event of
Default; PROVIDED that such accountants shall not be liable to the
Banks for failure to obtain knowledge of any Default or Event of
Default;
(b) as soon as practicable, but in any event not later than fifty (50)
days after the end of each of the fiscal quarters of the Borrower,
copies of the unaudited consolidated balance sheet of SSI and its
Subsidiaries and the unaudited consolidating balance sheets of SSI
and its Subsidiaries, each as at the end of such quarter, and the
related consolidated and consolidating statements of income and
consolidated and consolidating statement of cash flow for the
portion of the fiscal year then elapsed, all in reasonable detail
and prepared in accordance with Generally Accepted Accounting
Principles, together with a certification by the principal financial
or accounting officer of SRI and the Borrower that the information
contained in such financial statements fairly presents the financial
position of SRI and its Subsidiaries on the date thereof and for the
period then ended (subject to year-end adjustments);
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(c) as soon as practicable, but in any event within thirty-five (35)
days after the end of each month in each fiscal year of the
Borrower, preliminary and unaudited monthly consolidated income
statement and balance sheet of SSI and its Subsidiaries for such
month and unaudited monthly consolidating income statement and
balance sheet of SSI and its Subsidiaries for such month, and the
related consolidated and consolidating financial statements of SSI
and its Subsidiaries for the portion of the Borrower's fiscal year
then elapsed, setting forth in comparative form the figures set
forth in the Seasonal Projections and projected capital budget
portion of the Fiscal Year Projections delivered
pursuant to ss.7.4.2 (or, if updated, pursuant to ss.8.4(d) or (h))
for the comparable period and those figures for the comparable
period in the preceding fiscal year (in the consolidated statement
only), each prepared in accordance with Generally Accepted
Accounting Principles, together with a certification by the
principal financial or accounting officer of SRI that the
information contained in such financial statements fairly presents
the financial condition of SRI and its Subsidiaries on the date
thereof and for the period then ended (subject to any quarterly and
year-end adjustments);
(d) not later than January 1 and July 1 of each year, the Seasonal
Projections of SRI, the Borrower and their Subsidiaries, and not
later than January 15 of each year, (i) the Fiscal Year Projections
of SRI, the Borrower and their Subsidiaries, updating those Seasonal
Projections and Fiscal Year Projections delivered to the Banks and
referred to in ss.7.4.2 and (ii) the cash flow budget of SSI and its
Subsidiaries for such year;
(e) simultaneously with the delivery of the financial statements
referred to in subsections (a) and (b) above, a statement certified
by the principal financial or accounting officer of the Borrower in
substantially the form of EXHIBIT C hereto (the "Compliance
Certificate") and setting forth in reasonable detail computations
evidencing compliance with the covenants contained inss.10 and (if
applicable) reconciliations to reflect changes in Generally Accepted
Accounting Principles since the Balance Sheet Date, and within ten
(10) Business Days after the Borrower's fiscal month ending in
December of each fiscal year, a Compliance Certificate setting forth
in reasonable detail computations evidencing compliance with the
covenant contained inss.10.6 hereof. To the extent that the
Compliance Certificate states that (i) the financial statements of
SSI and its Subsidiaries fairly present in all material respects the
financial condition of SRI and its Subsidiaries for the period in
respect of which such certificate shall be given and (ii) the
consolidated revenue of SRI and its Subsidiaries constitutes
substantially all of the consolidated revenues of SSI and its
Subsidiaries and that the combined assets of SRI and its
Subsidiaries constitutes substantially all of the consolidated
assets of SSI
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and its Subsidiaries, then for purposes of demonstrating compliance
with ss.10 hereof, SRI and the Borrower may use the consolidated
financial statements of SSI in lieu of the actual consolidated
financial statements of SRI and the Borrower;
(f) as soon as practicable, but in any event within thirty-five (35)
days after the end of each month in each fiscal year of the
Borrower, (i) a store by store analysis setting forth the financial
information for each store (including such store's monthly sales)
for such month, a comparison of such information to the Borrower's
current budget for such store and a comparison of such information
to the similar financial information for such store in the prior
year, as well as an aggregate financial statement for all stores as
compared to the similar financial information for all stores
contained in the Borrower's budget and a comparison of such
information to the same information for all stores in the prior year
and (ii) a calculation of the Borrower's EBITDA for the prior month;
(g) contemporaneously with the filing or mailing thereof, copies of all
material of a financial nature filed with the Securities and
Exchange Commission and sent to the stockholders of SSI generally,
including without limitation, copies of the 10-K and 10-Q of SSI;
(h) contemporaneously with the receipt by the Borrower thereof, copies
of all letters and other reports of substance submitted to SSI, the
Borrower or SRI by independent certified public accountants in
connection with any annual or interim audit of the books of SSI, the
Borrower or SRI made by such accountants, including, without
limitation, all reconciliations made from SSI's management prepared
financial statements to its 10-K and 10- Q for the same period;
(i) from time to time upon request of the Agent, Annual Projections of
SRI, the Borrower and their Subsidiaries updating those Annual
Projections delivered to the Banks and referred to in ss.7.4.2 or,
if applicable, updating any later such Annual Projections delivered
in response to a request pursuant to this ss.8.4(i);
(j) as soon as practicable, but in any event within three (3) days after
the end of each of the Borrower's fiscal weeks for the Borrower's
fiscal month of December of each year, a store by store analysis
setting forth the sales for each store for such fiscal week and a
comparison of such information to the similar information for such
store in the prior year, as well as an aggregate financial statement
for all stores as compared to the similar information for all stores
contained in the Borrower's budget and a comparison of such
information to the same information for all stores in the prior
year;
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(k) as soon as practicable, but in any event within thirty-five (35)
days after the end of each fiscal month of the Borrower, the
Borrower's "cash flow report", which report shall set forth the
Borrower's cash flow for such month, a comparison of such
information to the Borrower's current monthly budget for such month,
together with a comparison of such information to the Borrower's
actual budget, together with any and all updates to the Borrower's
budget;
(l) contemporaneously with the mailing or other dissemination thereof,
copies of all press releases by SSI or any of its Subsidiaries; and
(m) from time to time such other financial data and information as the
Agent or any Bank may reasonably request.
SS.8.5. NOTICES.
8.5.1. DEFAULTS. The Borrower will promptly notify the Agent and
each of the Banks in writing of the occurrence of any Default or Event of
Default. If any Person shall give any notice or take any other action in respect
of a claimed default (whether or not constituting an Event of Default) under
this Credit Agreement or any other note, evidence of indebtedness, indenture or
other obligation to which or with respect to which the Borrower or any of its
Subsidiaries is a party or obligor, whether as principal, guarantor, surety or
otherwise, the Borrower shall forthwith give written notice thereof to the Agent
and each of the Banks, describing the notice or action and the nature of the
claimed default.
8.5.2. ENVIRONMENTAL EVENTS. The Borrower will promptly give notice
to the Agent and each of the Banks (a) of any violation of any Environmental Law
that SRI, the Borrower or any of their Subsidiaries reports in writing or is
reportable by such Person in writing (or for which any written report
supplemental to any oral report is made) to any federal, state or local
environmental agency and (b) upon becoming aware thereof, of any inquiry,
proceeding, investigation, or other action pursuant or related to Environmental
Laws, including a written notice from any agency of potential environmental
liability, or any federal, state or local environmental agency or board, that
could reasonably be expected to materially adversely affect the assets,
liabilities, financial conditions or operations of SRI, the Borrower and their
Subsidiaries on a consolidated basis, or the Agent's mortgages, deeds of trust
or security interests pursuant to the Security Documents.
8.5.3. NOTIFICATION OF CLAIM AGAINST COLLATERAL. The Borrower will,
immediately upon becoming aware thereof, notify the Agent and each of the Banks
in writing of any setoff, claims (including, with respect to the Real Estate,
environmental claims), withholdings or other defenses to which any of the
Collateral, or the Agent's rights with respect to the Collateral, are subject.
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8.5.4. NOTICE OF LITIGATION AND JUDGMENTS. SRI and the Borrower
will, and will cause each of their Subsidiaries to, give notice to the Agent and
each of the Banks in writing within fifteen (15) days of becoming aware of any
litigation or proceedings threatened in writing or any pending litigation and
proceedings affecting SRI, the Borrower or any of their Subsidiaries or to which
SRI, the Borrower or any of their Subsidiaries is or becomes a party involving
an uninsured claim against SRI, the Borrower or any of their Subsidiaries that
could reasonably be expected to have a materially adverse effect on SRI, the
Borrower and their Subsidiaries on a consolidated basis and stating the nature
and status of such litigation or proceedings. SRI and the Borrower will, and
will cause each of their Subsidiaries to, give notice to the Agent and each of
the Banks, in writing, in form and detail satisfactory to the Agent, within ten
(10) days of any judgment not covered by insurance, final or otherwise, against
SRI, the Borrower or any of their Subsidiaries in an amount in excess of
$200,000.
SS.8.6. CORPORATE EXISTENCE; MAINTENANCE OF PROPERTIES. Each of SRI and
the Borrower will do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence, rights and franchises and
those of their Subsidiaries. Each (a) will cause all of its properties and those
of their Subsidiaries used or useful in the conduct of its business or the
business of their Subsidiaries to be maintained and kept in good condition,
repair and working order and supplied with all necessary equipment, (b) will
cause to be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Borrower may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times, and (c) will, and will cause each of
their Subsidiaries to, continue to engage primarily in the businesses now
conducted by them and in related businesses; PROVIDED that nothing in this
ss.8.6 shall prevent SRI or the Borrower from discontinuing the operation and
maintenance of any of its properties or any of those of its Subsidiaries (unless
such Subsidiary is the Borrower) if such discontinuance is, in the judgment of
SRI or the Borrower, as the case may be, desirable in the conduct of its or
their business and that do not in the aggregate materially adversely affect the
business of SRI, the Borrower and their Subsidiaries on a consolidated basis.
SS.8.7. INSURANCE. SRI and the Borrower will, and will cause each of their
Subsidiaries to, maintain with financially sound and reputable insurers
insurance with respect to its properties and business against such casualties
and contingencies as described on SCHEDULE 7.22 hereto, and as shall be in
accordance with the general practices of businesses engaged in similar
activities in similar geographic areas and in amounts, containing such terms, in
such forms and for such periods as may be reasonable and prudent. The Borrower
will, and will cause each of their Subsidiaries to, maintain insurance on the
Mortgaged Property in accordance with the terms of the Mortgage.
SS.8.8. TAXES. SRI and the Borrower will, and will cause each of their
Subsidiaries to, duly pay and discharge, or cause to be paid and discharged,
before the same shall become overdue, all taxes, assessments and other
governmental charges
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imposed upon it and its real properties, sales and activities, or any part
thereof, or upon the income or profits therefrom, as well as all claims for
labor, materials, or supplies that if unpaid would reasonably be expected by law
to become a lien or charge upon any of its property; PROVIDED that any such tax,
assessment, charge, levy or claim need not be paid if the validity or amount
thereof shall currently be contested in good faith by appropriate proceedings
and if SRI, the Borrower or such Subsidiary shall have set aside on its books
adequate reserves with respect thereto; and PROVIDED FURTHER that SRI, the
Borrower and each of their Subsidiaries will pay all such taxes, assessments,
charges, levies or claims forthwith upon the commencement of proceedings to
foreclose any lien that may have attached as security therefor.
SS.8.9. INSPECTION OF PROPERTIES AND BOOKS, ETC.
8.9.1. GENERAL. SRI and the Borrower shall permit the Banks, through
the Agent or any of the Banks' other designated representatives, to visit,
during normal business hours, and inspect any of the properties of SRI, the
Borrower or any of their Subsidiaries, to examine the books of account of SRI,
the Borrower and their Subsidiaries (and to make copies thereof and extracts
therefrom), and to discuss the affairs, finances and accounts of SRI, the
Borrower and their Subsidiaries with, and to be advised as to the same by, their
and their officers, all at such reasonable times and intervals as the Agent or
any Bank may reasonably request. Each of SRI, the Borrower and any of their
Subsidiaries shall permit the Agent, the Banks or any of their or their
designated representatives to conduct commercial finance examinations, such
examinations to be at the Borrower's expense, PROVIDED, HOWEVER, if no Default
or Event of Default exists or is continuing, the Borrower shall only be required
to pay for one such examination per calendar year.
8.9.2. APPRAISALS. If an Event of Default shall have occurred and be
continuing, or if any Bank is required by any law, rule, regulation or directive
to obtain an appraisal, upon the request of the Agent, the Borrower will obtain
and deliver to the Agent appraisal reports in form and substance and from
appraisers satisfactory to the Agent, stating (a) the then current fair market,
orderly liquidation and forced liquidation values of the Mortgaged Property and
(b) the then current business value of each of the Borrower and its
Subsidiaries. All such appraisals shall be conducted and made at the expense of
the Borrower.
8.9.3. ENVIRONMENTAL ASSESSMENTS. If an Event of Default shall have
occurred and be continuing or if the Borrower gives notice pursuant to
ss.8.5.2(a) to the Agent and the Banks of a violation of an Environmental Law or
becomes aware of any inquiry, proceeding, investigation or other action pursuant
to or related to Environmental Laws, the Agent may, in its discretion for the
purpose of assessing and ensuring the value of the Mortgaged Property, obtain
one or more environmental assessments or audits of such Mortgaged Property
prepared by a hydrogeologist, an independent engineer or other qualified
consultant or expert approved by the Agent to evaluate or confirm (a) whether
any Hazardous Materials are present in the soil or water at such Mortgaged
Property and (b) whether the use and operation of such
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Mortgaged Property complies with all Environmental Laws. Environmental
assessments may include without limitation detailed visual inspections of such
Mortgaged Property including any and all storage areas, storage tanks, drains,
dry ▇▇▇▇▇ and leaching areas, and the taking of soil samples, surface water
samples and ground water samples, as well as such other investigations or
analyses as the Agent deems appropriate. All such environmental assessments
shall be conducted and made at the expense of the Borrower.
8.9.4. COMMUNICATIONS WITH ACCOUNTANTS. Each of SRI and the Borrower
authorizes the Agent and, if accompanied by the Agent, the Banks to communicate
directly with SRI's and the Borrower's independent certified public accountants
and authorizes such accountants to disclose to the Agent and the Banks any and
all financial statements and other supporting financial documents and schedules
including copies of any management letter with respect to the business,
financial condition and other affairs of SRI, the Borrower or any of their
Subsidiaries. At the request of the Agent, SRI or the Borrower shall deliver a
letter addressed to such accountants instructing them to comply with the
provisions of this ss.8.9.4.
SS.8.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS. Each of
SRI and the Borrower will, and will cause each of their Subsidiaries to, comply
with (a) the applicable laws and regulations wherever its business is conducted,
including all Environmental Laws except for such noncompliance which would not
reasonably be expected to have a materially adverse effect on the business,
assets or financial condition of SRI, the Borrower and their Subsidiaries on a
consolidated basis, (b) the provisions of its charter documents and by-laws, (c)
all agreements and instruments by which it or any of its properties may be bound
and (d) all applicable decrees, orders, and judgments. If any authorization,
consent, approval, permit or license from any officer, agency or instrumentality
of any government shall become necessary or required in order that SRI, the
Borrower or any of their Subsidiaries may fulfill any of its obligations
hereunder or any of the other Loan Documents to which SRI, the Borrower or such
Subsidiary is a party, SRI and the Borrower will, or (as the case may be) will
cause such Subsidiary to, immediately take or cause to be taken all reasonable
steps within the power of SRI or the Borrower or such Subsidiary to obtain such
authorization, consent, approval, permit or license and furnish the Agent and
the Banks with evidence thereof.
SS.8.11. EMPLOYEE BENEFIT PLANS. Upon the Agent's request, the Borrower
will (i) promptly furnish to the Agent a copy of the most recent actuarial
statement required to be submitted under ss.103(d) of ERISA and Annual Report,
Form 5500, with all required attachments, in respect of each Guaranteed Pension
Plan and (ii) promptly upon receipt or dispatch, furnish to the Agent any
notice, report or demand sent or received in respect of a Guaranteed Pension
Plan under ss.ss.302, 4041, 4042, 4043, 4063, 4065, 4066 and 4068 of ERISA, or
in respect of a Multiemployer Plan, under ss.ss.4041A, 4202, 4219, 4242, or 4245
of ERISA.
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SS.8.12. USE OF PROCEEDS. The Borrower will use the proceeds of the Loans
and will obtain Letters of Credit to convert existing Indebtedness to the Banks
under the Original Credit Agreement to Loans and Letters of Credit, as the case
may be, hereunder and for working capital and general corporate purposes.
SS.8.13. FURTHER ASSURANCES. Each of SRI and the Borrower will, and will
cause each of their Subsidiaries to, cooperate with the Banks and the Agent and
execute such further instruments and documents as the Banks or the Agent shall
reasonably request to carry out to their satisfaction the transactions
contemplated by this Credit Agreement and the other Loan Documents.
SS.9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER. Each of SRI and the
Borrower covenants and agrees that, so long as any Loan, Unpaid Reimbursement
Obligation, Letter of Credit or Note is outstanding or any Bank has any
obligation to make any Loans or the Agent has any obligations to issue, extend
or renew any Letters of Credit:
SS.9.1. RESTRICTIONS ON INDEBTEDNESS. Each of SRI and the Borrower will
not, and will not permit any of their Subsidiaries to, create, incur, assume,
guarantee or be or remain liable, contingently or otherwise, with respect to any
Indebtedness other than:
(a) Indebtedness to the Banks and the Agent arising under any of the
Loan Documents;
(b) current liabilities of SRI, the Borrower or such Subsidiary incurred
in the ordinary course of business not incurred through (i) the
borrowing of money, or (ii) the obtaining of credit except for
credit on an open account basis extended in connection with normal
purchases of goods and services;
(c) Indebtedness in respect of taxes, assessments or governmental
charges to the extent that payment therefor shall not at the time be
required to be made in accordance with the provisions of ss.8.8;
(d) Indebtedness in respect of judgments or awards that have been in
force for less than the applicable period for taking an appeal so
long as execution is not levied thereunder or in respect of which
SRI, the Borrower or such Subsidiary shall at the time in good faith
be prosecuting an appeal or proceedings for review and in respect of
which a stay of execution shall have been obtained pending such
appeal or review;
(e) endorsements for collection, deposit or negotiation and warranties
of products or services, in each case incurred in the ordinary
course of business;
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(f) Indebtedness of SRI and the Borrower evidenced by the Senior Notes
and Indebtedness of SRI and the Borrower consisting of Subordinated
Debt;
(g) obligations of SRI or the Borrower under Capitalized Leases not
exceeding $4,000,000 in aggregate amount at any time outstanding;
(h) Indebtedness incurred in connection with the acquisition after the
date hereof of any real or personal property by SRI or the Borrower,
PROVIDED that the aggregate principal amount of such Indebtedness of
SRI and the Borrower shall not exceed the aggregate amount of
$3,000,000 outstanding at any one time;
(i) Indebtedness existing on the date hereof and listed and described on
SCHEDULE 9.1 hereto;
(j) Indebtedness of a Subsidiary of the Borrower to the Borrower, which
Indebtedness exists on the Closing Date;
(k) Indebtedness arising under the Receivables Purchase Agreement and
Pooling and Servicing Agreement;
(l) in addition to the Indebtedness incurred pursuant to clause (h)
above, Indebtedness incurred or assumed by SRI or the Borrower in
connection with acquisitions permitted byss.9.5.1, PROVIDED that the
aggregate principal amount of such Indebtedness incurred or assumed
by SRI and the Borrower shall not exceed the aggregate amount of
$8,000,000 during the term of this Credit Agreement and PROVIDED,
FURTHER that such Indebtedness is expressly subordinated in right of
payment to the Obligations on terms acceptable to the Agent,
including without limitation no cash payments of principal until
after the Maturity Date;
(m) Indebtedness in respect of dividends declared by SRI, the Borrower
or the Receivables Subsidiary as permitted under ss.9.4 but not yet
paid;
(n) Indebtedness in respect of indemnification obligations of SRI and
the Borrower to their respective officers and directors pursuant to
their charter documents;
(o) Indebtedness to the Seasonal Revolver Banks and the Seasonal
Revolver Agent arising under the Seasonal Revolving Agreement;
(p) Indebtedness of the Receivables Subsidiary evidenced by the
Receivables Subsidiary Notes; and
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(q) Indebtedness of SRI and the Borrower to SSI pursuant to the Junior
Subordinated Notes, PROVIDED, the aggregate principal amount of all
such Indebtedness shall not exceed $65,000,000 outstanding at any
one time.
SS.9.2. RESTRICTIONS ON LIENS. Each of SRI and the Borrower will not, and
will not permit any of their Subsidiaries to, (a) create or incur or suffer to
be created or incurred or to exist any lien, encumbrance, mortgage, pledge,
charge, restriction or other security interest of any kind upon any of its
property or assets of any character whether now owned or hereafter acquired, or
upon the income or profits therefrom; (b) transfer any of such property or
assets or the income or profits therefrom for the purpose of subjecting the same
to the payment of Indebtedness or performance of any other obligation in
priority to payment of its general creditors; (c) acquire, or agree or have an
option to acquire, any property or assets upon conditional sale or other title
retention or purchase money security agreement, device or arrangement; (d)
suffer to exist for a period of more than thirty (30) days after the same shall
have been incurred any Indebtedness or claim or demand against it that if unpaid
would reasonably be expected by law or upon bankruptcy or insolvency, or
otherwise, to be given any priority whatsoever over its general creditors; or
(e) sell, assign, pledge or otherwise transfer any accounts, contract rights,
general intangibles, chattel paper or instruments, with or without recourse;
PROVIDED that each of SRI, the Borrower and any Subsidiary of SRI or of the
Borrower may create or incur or suffer to be created or incurred or to exist:
(i) liens to secure taxes, assessments and other government charges
in respect of obligations not overdue;
(ii) deposits or pledges made in connection with, or to secure
payment of, workmen's compensation, unemployment insurance, old age
pensions or other social security obligations;
(iii) liens on properties other than the Mortgaged Property in
respect of judgments or awards, the Indebtedness with respect to which is
permitted by ss.9.1(d);
(iv) liens of carriers, warehousemen, mechanics and materialmen, and
other like liens on properties other than the Mortgaged Property, in
existence less than 120 days from the date of creation thereof in respect
of obligations not overdue;
(v) liens in respect of Capitalized Leases;
(vi) encumbrances on Real Estate other than the Mortgaged Property
consisting of easements, rights of way, zoning restrictions, restrictions
on the use of real property and defects and irregularities in the title
thereto, landlord's or lessor's liens under leases to which the Borrower
or a Subsidiary of the Borrower is a party, and other minor liens or
encumbrances none of which in the reasonable opinion of the Borrower
interferes materially with the use of the
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property affected in the ordinary conduct of the business of the Borrower
and its Subsidiaries, which defects do not individually or in the
aggregate have a materially adverse effect on the business of the Borrower
individually or of the Borrower and its Subsidiaries on a consolidated
basis;
(vii) liens existing on the date hereof and listed on SCHEDULE 9.2
hereto;
(viii) purchase money security interests in or purchase money
mortgages on real or personal property other than Mortgaged Properties
acquired after the date hereof to secure purchase money Indebtedness of
the type and amount permitted by ss.9.1(h), incurred in connection with
the acquisition of such property, which security interests or mortgages
cover only the real or personal property so acquired;
(ix) liens and encumbrances on the Mortgaged Property as and to the
extent permitted by the Mortgage;
(x) liens in favor of the Agent for the benefit of the Banks and the
Agent under the Loan Documents;
(xi) liens on the Borrower's or the Receivable Subsidiary's credit
card receivables in favor of the buyers pursuant to the Receivables
Purchase Agreement and the Pooling and Servicing Agreement, to the extent
that the same do not constitute a true sale;
(xii) liens on assets and property of SRI, the Borrower and their
Subsidiaries when such assets and property, individually and in the
aggregate, have a value of less than $50,000; and
(xiii) liens in favor of the holders of the Receivables Subsidiary
Notes on the Transferor Retained Certificates and the Transferor Interest
(as such terms are defined in the Pooling and Servicing Agreement).
SS.9.3. RESTRICTIONS ON INVESTMENTS. Each of SRI and the Borrower will
not, and will not permit any of their Subsidiaries to, make or permit to exist
or to remain outstanding any Investment except Investments in:
(a) marketable direct or guaranteed obligations of the United States of
America that mature within six (6) months from the date of purchase
by the Borrower;
(b) demand deposits, certificates of deposit, bankers acceptances and
time deposits with maturities of six (6) months or less of United
States banks having capital and surplus in excess of $500,000,000;
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(c) securities commonly known as "commercial paper" issued by a
corporation organized and existing under the laws of the United
States of America or any state thereof that at the time of purchase
have been rated and the ratings for which are not less than "P 1" if
rated by ▇▇▇▇▇'▇ Investors Services, Inc., and not less than "A 1"
if rated by Standard and Poor's;
(d) Investments consisting of acquisitions permitted by ss.9.5.1 hereof;
(e) Investments with respect to Indebtedness permitted by ss.9.1(j) so
long as such entities remain Subsidiaries of either SRI or the
Borrower, as the case may be;
(g) Investments in the Receivables Subsidiary received in consideration
of sales of accounts receivable permitted under ss.9.5.2; and
(h) Investments consisting of loans to officers, directors and employees
of SRI and the Borrower or Investments consisting of the repurchase
by SRI or the Borrower of real property consisting of the personal
residences of certain officers, directors or employees of SRI or the
Borrower in connection with relocation of such officers, directors
or employees, which loans and repurchases shall not exceed at any
one time, in the aggregate, $3,000,000 LESS the sum of (i)
Investments consisting of loans to officers, directors and employees
of SRI and the Borrower then outstanding on the Closing Date PLUS
(ii) the amount of any Distributions made for the repurchase of
employee stock pursuant toss.9.4 net of the amount of any sales of
stock to employees.
SS.9.4. DISTRIBUTIONS; REPAYMENT. SRI will not make any Distributions or
make any repayments in respect of intercompany indebtedness or any other
payments to any stockholder of SRI, PROVIDED, HOWEVER, if no Default or Event of
Default has occurred or is continuing or would exist after giving effect
thereto, SRI shall be permitted to (a) make a payment to SSI to reimburse it for
(i) its out-of-pocket administrative expenses (including without limitation,
legal, accounting, franchise tax and general operating expenses) in an amount
not to exceed, in the aggregate, $500,000 in any fiscal year, and (ii) the
amount of income tax payments to be made by SSI pursuant to the terms of the
Federal Income Tax Allocation Agreement dated as of August 2, 1993 by and among
SSI, SRI, the Borrower and the Receivables Subsidiary, in the form delivered to
the Agent prior to the Closing Date in an aggregate amount with respect to each
year not to exceed SSI's actual income tax paid with respect to such year, and
(b) make Distributions to SSI in an amount which shall not exceed at any time,
in the aggregate, $2,500,000 LESS the sum of (i) Distributions previously made
to SSI for the repurchase of employee stock net of the amount of any sales of
stock to employees PLUS (ii) the amount of Investments made consisting of
employee loans or repurchases permitted pursuant to ss.9.3(h), PROVIDED such
Distribution is used by SSI for the repurchase of employee stock. The Borrower
will not, and will not permit its
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Subsidiaries to, directly or indirectly make any repayments in respect of
intercompany indebtedness or any other payments to any Affiliate other than SRI
or the Borrower. In addition, the Borrower will not permit its Subsidiaries to,
directly or indirectly, make any Distributions prior to the repayment by such
Subsidiary of all intercompany indebtedness of such Subsidiary PROVIDED,
HOWEVER, so long as no Default or Event of Default has occurred or is continuing
or would exist as a result thereof, the Receivables Subsidiary shall be
permitted to make Distributions to the Borrower prior to the repayment of all of
its intercompany indebtedness in an amount not to exceed the amount of Defaulted
Receivables (as defined in the Receivables Purchase Agreement) repurchased by
the Borrower from the Receivables Subsidiary pursuant to the terms and
conditions set forth in the Receivables Purchase Agreement and Pooling and
Servicing Agreement and provided that such Distributions are made by the end of
the calendar month in which the Borrower purchased such Defaulted Receivables.
SS.9.5. MERGER, CONSOLIDATION AND DISPOSITION OF ASSETS.
9.5.1. MERGERS AND ACQUISITIONS. Neither SRI nor the Borrower will
become a party to any merger or consolidation, or agree to or effect any asset
acquisition or stock acquisition (other than the acquisition of assets in the
ordinary course of business consistent with past practice (including, without
limitation, the purchase of deminimis amounts of capital stock by SRI or any of
its Subsidiaries of another Person in the same or a similar line of business) or
the merger of SRI and the Borrower) except (a) the merger of SRI with and into
the Borrower, with the Borrower being the surviving entity and changing its name
to "Specialty Retailers, Inc.", PROVIDED that (i) no Default or Event of Default
has occurred and is continuing or would exist after giving effect thereto; (ii)
the Borrower has provided the Agent with prior written notice of such merger;
(iii) the Borrower has provided to the Agent copies of all documents, instrument
and agreements pertaining to the merger, and such documents, instruments and
agreements are in form and substance satisfactory to the Agent; (iv) the
Borrower has delivered to the Agent evidence that the merger would not either
(1) violate the terms of any other agreement to which either the Borrower or SRI
is a party or (2) if any violation would occur, such violation of any such
agreement or agreements would have a material adverse effect on the SRI, the
Borrower or any of their Subsidiaries, (v) all actions as are required by the
Agent have been taken to continue the perfected first priority security interest
of the Agent in the Collateral and (vi) the Loan Documents have been amended to
reflect the change in the Borrower's name thereunder; and (b) the Borrower may
effect acquisitions of entities which are in the same or a similar line of
business as the Borrower, PROVIDED, that (i) no Default or Event of Default has
occurred or is continuing or would exist after giving effect thereto; (ii) the
Borrower has provided the Agent with prior written notice of each such
acquisition; (iii) the aggregate total consideration for all such acquisitions
(which shall include, without limitation, the cash purchase price of such
acquisition and any Indebtedness incurred or assumed by the Borrower in
connection therewith) does not exceed, in the aggregate, $10,000,000 during the
term of this Credit Agreement; (iv) the Borrower has demonstrated to the Agent
based on a PRO FORMA Compliance Certificate covenant compliance with ss.10 on a
PRO FORMA basis immediately prior to and after
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giving effect to each such acquisition on the assumption that each such
acquisition occurred at the beginning of the covenant calculations period; (v)
any payments on acquisition related debt instruments shall be included in the
calculation of Debt Service; and (vi) any acquisition related debt instruments
would not violate the restrictions on Indebtedness set forth in ss.9.1.
In the event any new Subsidiary is formed as a result of or in connection
with any acquisition, and such Subsidiary is not immediately merged with and
into the Borrower with the Borrower being the surviving entity, the Loan
Documents shall be amended and/or supplemented as necessary to make the terms
and conditions of the Loan Documents applicable to such Subsidiary, and such
Subsidiary shall be required to execute and deliver to the Agent (a) a guaranty
satisfactory to the Agent guaranteeing the Obligations of the Borrower to the
Agent and the Banks and (b) a security agreement and such other security
documents as the Agent and the Banks shall require in order to grant to the
Agent for the benefit of the Agent and the Banks a first priority perfected
security interest on all of such new Subsidiary's assets.
9.5.2. DISPOSITION OF ASSETS. Each of SRI and the Borrower will not,
and will not permit any of its Subsidiaries to, become a party to or agree to or
effect any disposition of assets, other than (a) the disposition of assets
(including obsolete assets) in the ordinary course of business, consistent with
past practices, (b) the sale of credit card receivables to the Receivables
Subsidiary pursuant to the Receivables Purchase Agreement and the pooling and
sale of such receivables in the Receivables Subsidiary pursuant to the Pooling
and Servicing Agreement, in each case for consideration having a value at least
equal to ninety-five percent (95%) of the book value thereof determined in
accordance with Generally Accepted Accounting Principles, (c) the disposition of
any assets pursuant to a trade-in of such asset for a similar asset, and (d) the
disposition by sale to an independent and unrelated third party for fair value
of assets, not to exceed $1,000,000 in the aggregate in any fiscal year;
PROVIDED, that only for the fiscal year ending in January 1997 such $1,000,000
limit shall be increased to $2,000,000.
SS.9.6. SALE AND LEASEBACK. The Borrower will not, enter into any
arrangement, directly or indirectly, whereby the Borrower shall sell or transfer
the Mortgaged Property in order then or thereafter to lease such property or
lease other property that the Borrower intends to use for substantially the same
purpose as the property being sold or transferred.
SS.9.7. COMPLIANCE WITH ENVIRONMENTAL LAWS. Each of SRI and the Borrower
will not, and will not permit any of their Subsidiaries to, (a) use any of the
Real Estate or any portion thereof for the handling, processing, storage or
disposal of Hazardous Substances, (b) cause or permit to be located on any of
the Real Estate any underground tank or other underground storage receptacle for
Hazardous Substances, (c) generate any Hazardous Substances on any of the Real
Estate, (d) conduct any activity at any Real Estate or use any Real Estate in
any manner so as to cause a release (i.e. releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
disposing or dumping) or threatened release
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of Hazardous Substances on, upon or into the Real Estate or (e) otherwise
conduct any activity at any Real Estate or use any Real Estate in any manner
where any of the foregoing clauses (a) through (e) would reasonably be expected
to have a materially adverse effect on the business, financial condition or
assets of SRI, the Borrower and their Subsidiaries on a consolidated basis.
SS.9.8. SENIOR NOTE AND SENIOR SUBORDINATED NOTE PAYMENTS. Neither the
Borrower nor SRI will, nor will either of them permit any of their Subsidiaries
to, make any payment of, or in respect of, the Junior Subordinated Notes, the
Senior Subordinated Notes, or any other Subordinated Debt including, without
limitation, any direct or indirect purchase, repurchase, redemption or other
acquisition or retirement for value of all or any part of the Senior
Subordinated Notes, the Junior Subordinated Notes or any other Subordinated
Debt, or to optionally prepay, repurchase, redeem, defease or otherwise
optionally repay or retire for value all or any part of the Senior Notes except
that:
(a) SRI may, so long as no Default or Event of Default has occurred or
is continuing or would exist after giving effect thereto, make
regularly scheduled interest payments when permitted by the terms of
the Senior Subordinated Notes and the SRI Subordinated Notes.
(b) SRI may, so long as no Default or Event of Default has occurred or
is continuing or would exist after giving effect thereto and SRI and
the Borrower can demonstrate to the satisfaction of the Agent PRO
FORMa compliance with the covenants set forth in ss.10 hereof both
before and after giving effect to any payment, make regularly
scheduled required principal payments when permitted by the terms of
the Senior Subordinated Notes and the SRI Subordinated Notes.
SS.9.9. CHANGES IN TERMS OF SENIOR NOTES AND SENIOR SUBORDINATED NOTES.
Without the written consent of the Majority Banks, neither the Borrower nor SRI
will make any changes of any promissory note, indenture, agreement or other
instrument evidencing or governing the Senior Notes, the Senior Subordinated
Notes, any Subordinated Debt, the Senior Note Indenture or the Senior
Subordinated Note Indenture; PROVIDED, HOWEVER, SRI shall be permitted to amend
the Senior Notes Indenture, the Senior Subordinated Notes Indenture and the SRI
Subordinated Notes Indenture pursuant to the SRI Indenture Consent or if such an
amendment is of an immaterial or ministerial nature that would not have any
adverse effect on the Agent's or the Banks' rights under the Loan Documents or
SRI's or the Borrower's rights under the Loan Documents.
SS.9.10. EMPLOYEE BENEFIT PLANS. Neither SRI, the Borrower nor any ERISA
Affiliate will
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(a) engage in any "prohibited transaction" within the meaning of ss.406
of ERISA or ss.4975 of the Code which could result in a material
liability for the Borrower or any of its Subsidiaries; or
(b) permit any Guaranteed Pension Plan to incur an "accumulated funding
deficiency", as such term is defined in ss.302 of ERISA, whether or
not such deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an extent
which, or terminate any Guaranteed Pension Plan in a manner which,
could result in the imposition of a lien or encumbrance on the
assets of the Borrower or any of its Subsidiaries pursuant to
ss.302(f) or ss.4068 of ERISA; or
(d) amend any Guaranteed Pension Plan in circumstances requiring the
posting of security pursuant to ss.307 of ERISA or ss.401(a)(29) of
the Code; or
(e) permit or take any action which would result in the aggregate
benefit liabilities (with the meaning of ss.4001 of ERISA) of all
Guaranteed Pension Plans exceeding the value of the aggregate assets
of such Plans, disregarding for this purpose the benefit liabilities
and assets of any such Plan with assets in excess of benefit
liabilities by more than $100,000.
SS.9.11. TRANSACTIONS WITH AFFILIATES. Except for arm's-lengths
transactions pursuant to which SRI, the Borrower or any of their Subsidiaries
makes payments in the ordinary course of business upon terms no less favorable
than SRI, the Borrower or such Subsidiary could obtain from third parties, no
officer, director or employee of SRI, the Borrower or any of their Subsidiaries
will become party to any transaction with SSI, the Borrower or any of their
Subsidiaries (other than for services as employees, officers and directors),
including any contract, agreement, or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or other wise requiring payments to or from any officer,
director or such employee or any corporation, partnership, trust or other entity
in which any officer, director, or any such person has a substantial interest or
is an officer, director, trustee or partner; PROVIDED, HOWEVER, SRI shall be
permitted to pay to ▇▇▇▇ Venture Capital, a California limited partnership
and/or its Affiliates, fees for services not to exceed, in the aggregate
$1,000,000 per annum, the Receivables Subsidiary shall be permitted to make
payments to SRI for collecting and servicing receivables in the amounts provided
in the Pooling and Servicing Agreement as in effect on the date hereof and the
Borrower shall be permitted, pursuant to the Receivables Purchase Agreement as
in effect on the date hereof, to repurchase the Defaulted Receiveables (as such
term is defined in the Receivables Purchase Agreement) in the amounts and on the
terms in such Receiveables Purchase Agreement as in effect on the date hereof.
9.12. FISCAL YEAR. Neither SRI nor the Borrower will change the date of
the end of their respective fiscal years from that set forth in ss.7.21 hereof.
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9.13. NEGATIVE PLEDGES. Neither SRI, the Borrower nor any of their
Subsidiaries will enter into any agreement (excluding this Credit Agreement, the
Loan Documents, the Senior Notes Indenture, the SRI Subordinated Notes Indenture
and the Senior Subordinated Notes Indenture) prohibiting the creation or
assumption of any lien upon its properties, revenues or assets or those of any
of its Subsidiaries, whether now owned or hereafter acquired other than
agreements with Persons prohibiting any such lien on assets in which such Person
has a prior security interest which is permitted by ss.9.2.
9.14. UPSTREAM LIMITATIONS. The Borrower will not, nor will the Borrower
permit any of its Subsidiaries to enter into any agreement, contract or
arrangement (other than the Credit Agreement and the other Loan Documents and,
as to the Receivables Subsidiary, the Receivables Purchase Agreement and such
Receivables Subsidiary's charter and organizational documents, all as in effect
on the Closing Date) that restricts the ability of any Subsidiary to pay or make
dividends or distributions in cash or kind, to make loans, advances or other
payments of whatsoever nature or to make transfers or distributions of all or
any part of its assets to the Borrower or to any Subsidiary of such Subsidiary.
SS.10. FINANCIAL COVENANT OF THE BORROWER. The Borrower covenants and
agrees that, so long as any Loan, Unpaid Reimbursement Obligation, Letter of
Credit or Note is outstanding or any Bank has any obligation to make any Loans
or the Agent has any obligation to issue, extend or renew any Letters of Credit:
SS.10.1. DEBT SERVICE RATIO. The Borrower will not, for any period
consisting of the preceding four (4) consecutive fiscal quarters (treated as a
single accounting period), permit the Debt Service Ratio for any fiscal quarter
ending during any period described in the table set forth below to be less than
the ratio set forth opposite such period in such table:
PERIOD RATIO
Fourth fiscal quarter, 1996 1.30:1.00
First fiscal quarter, 1997 1.20:1.00
Second fiscal quarter, 1997 1.20:1.00
Third fiscal quarter, 1997 1.20:1.00
Fourth fiscal quarter, 1997 1.40:1.00
First fiscal quarter, 1998 1.20:1.00
Second fiscal quarter, 1998 1.30:1.00
Third fiscal quarter, 1998 1.30:1.00
Fourth fiscal quarter, 1998 1.40:1.00
First fiscal quarter, 1999 1.20:1.00
Second fiscal quarter, 1999 1.30:1.00
Third fiscal quarter, 1999 1.10:1.00
each fiscal quarter ending thereafter 1.20:1.00
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SS.10.2 CAPITAL EXPENDITURES. Neither SSI, SRI nor the Borrower will make,
nor permit any Subsidiary to make, Capital Expenditures (including any
expenditures made in connection with any permitted acquisitions but excluding
any expenditures consisting of indebtedness incurred or assumed as permitted by
ss.9.1(l) in connection with any permitted acquisitions) in the fiscal year that
exceed in the aggregate, (a) $30,000,000 for the 1996 fiscal year; (b)
$40,000,000 for the 1997 fiscal year; (c) $45,000,000 for the 1998 fiscal year;
and (d) $50,000,000 for each fiscal year thereafter.
SS.10.3. TOTAL FUNDED DEBT TO EBITDA. The Borrower will not, at any time
during any period described in the table set forth below, permit the ratio of
Total Funded Indebtedness on such date to EBITDA for the four most recently
ended fiscal quarters to exceed the ratio set forth opposite such period in such
table:
PERIOD RATIO
Fourth fiscal quarter, 1996 3.75:1.00
First fiscal quarter, 1997 3.65:1.00
Second fiscal quarter, 1997 3.60:1.00
Third fiscal quarter, 1997 3.55:1.00
Fourth fiscal quarter, 1997 3.25:1.00
First fiscal quarter, 1998 3.15:1.00
Second fiscal quarter, 1998 3.10:1.00
Third fiscal quarter, 1998 3.05:1.00
Fourth fiscal quarter, 1998 2.75:1.00
First fiscal quarter, 1999 2.65:1.00
Second fiscal quarter, 1999 2.60:1.00
Third fiscal quarter, 1999 2.55:1.00
each fiscal quarter ending thereafter 2.25:1.00
SS.10.4. MINIMUM EBITDA. The Borrower will not, as of the end of any
fiscal quarter ending during any period described in the table set forth below,
permit the EBITDA of SSI, the Borrower and their Subsidiaries for the period of
the four (4) immediately preceding consecutive fiscal quarters then ending, to
be less than the amount set forth opposite such period in such table:
PERIOD AMOUNT
Fourth fiscal quarter, 1996 $ 80,000,000
First fiscal quarter, 1997 $ 82,000,000
Second fiscal quarter, 1997 $ 84,000,000
Third fiscal quarter, 1997 $ 86,000,000
Fourth fiscal quarter, 1997 $ 95,000,000
First fiscal quarter, 1998 $ 97,000,000
Second fiscal quarter, 1998 $ 99,000,000
Third fiscal quarter, 1998 $101,000,000
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Fourth fiscal quarter, 1998 $108,000,000
First fiscal quarter, 1999 $110,000,000
Second fiscal quarter, 1999 $112,000,000
Third fiscal quarter, 1999 $114,000,000
each fiscal quarter ending thereafter $123,000,000
SS.10.5. CURRENT ASSETS. The Borrower will not at any time permit the
ratio of Consolidated Current Assets to Consolidated Current Liabilities to be
less than 2.50:1.00.
SS.10.6. SEASONAL DEBT SERVICE RATIO. The Borrower will not permit the
Seasonal Debt Service Ratio as at the last day of the Borrower's December fiscal
month for the period of the immediately preceding twelve (12) fiscal months of
the Borrower to be less than the ratio set forth opposite such period in such
table:
PERIOD RATIO
Last day of fiscal month ending December, 1997 1.40:1.00
Last day of fiscal month ending December, 1998 1.40:1.00
Last day of fiscal month ending December, 1999 1.20:1.00
SS.11. CLOSING CONDITIONS. The obligations of the Banks to make the
initial Loans and of the Agent to issue any initial Letters of Credit shall be
subject to the satisfaction of the following conditions precedent on or prior to
the date hereof:
SS.11.1. LOAN DOCUMENTS. Each of the Loan Documents shall have been duly
executed and delivered by the respective parties thereto, shall be in full force
and effect and shall be in form and substance satisfactory to each of the Banks.
Each Bank shall have received a fully executed copy of each such document.
SS.11.2. CERTIFIED COPIES OF CHARTER DOCUMENTS. Each of the Banks shall
have received from SRI, the Borrower and each of their Subsidiaries which is a
party to any of the Loan Documents, a copy, certified by a duly authorized
officer of such Person to be true and complete on the Closing Date, of each of
(a) its charter or other incorporation documents as in effect on such date of
certification, and (b) its by-laws as in effect on such date.
SS.11.3. CORPORATE ACTION. All corporate action necessary for the valid
execution, delivery and performance by SRI, the Borrower and each of their
Subsidiaries of this Credit Agreement and the other Loan Documents to which it
is or is to become a party shall have been duly and effectively taken, and
evidence thereof satisfactory to the Banks shall have been provided to each of
the Banks.
SS.11.4. INCUMBENCY CERTIFICATE. Each of the Banks shall have received
from SRI, the Borrower and each of their Subsidiaries an incumbency certificate,
dated as of the Closing Date, signed by a duly authorized officer of SRI, the
Borrower or such
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Subsidiary, and giving the name and bearing a specimen signature of each
individual who shall be authorized: (a) to sign, in the name and on behalf of
each of SRI, the Borrower or such Subsidiary, each of the Loan Documents to
which SRI, the Borrower or such Subsidiary is or is to become a party; (b) in
the case of the Borrower, to make Loan Requests and Conversion Requests and to
apply for Letters of Credit; and (c) to give notices and to take other action on
its behalf under the Loan Documents.
SS.11.5. VALIDITY OF LIENS. The Security Documents shall be effective to
create in favor of the Agent a legal, valid and enforceable first (except for
Permitted Liens entitled to priority under applicable law) security interest in
and lien upon the Collateral. All filings, recordings, deliveries of
instruments, stock certificates and stock powers duly executed in blank and
other actions necessary or desirable in the opinion of the Agent to protect and
preserve such security interests shall have been duly effected. The Agent shall
have received evidence thereof in form and substance satisfactory to the Agent.
SS.11.6. TITLE SEARCH RESULTS. The Agent shall have received from SRI and
the Borrower the results of the title searches with respect to the Collateral,
indicating no liens other than Permitted Liens and otherwise in form and
substance satisfactory to the Agent.
SS.11.7. TAXES. The Agent shall have received evidence of payment of real
estate taxes and municipal charges on all Real Estate not delinquent on or
before the Closing Date.
SS.11.8. TITLE INSURANCE. The Agent shall have received an endorsement to
the Title policy covering the Mortgaged Property from the Title Insurance
Company and in amounts satisfactory to the Agent, committing to insure the
interest of the Agent and each of the Banks as mortgagee under the Mortgage.
SS.11.9. CERTIFICATES OF INSURANCE. The Agent shall have received (a) a
certificate of insurance from an independent insurance broker dated as of the
Closing Date, identifying insurers, types of insurance, insurance limits, and
policy terms, and otherwise describing the insurance obtained in accordance with
the provisions of this Credit Agreement and the Mortgage and (b) certified
copies of all policies evidencing such insurance (or certificates therefor
signed by the insurer or an agent authorized to bind the insurer).
SS.11.10. SOLVENCY CERTIFICATE. Each of the Banks shall have received an
officer's certificate of the Borrower dated as of the Closing Date as to the
solvency of SRI, the Borrower and their Subsidiaries both before and immediately
following the consummation of the transactions contemplated herein and in form
and substance satisfactory to the Banks.
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SS.11.11. OPINION OF COUNSEL. Each of the Banks and the Agent shall have
received a favorable legal opinion addressed to the Banks and the Agent, dated
as of the Closing Date, in form and substance satisfactory to the Banks and the
Agent, from:
(a) ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, counsel to SRI, the Borrower and its Subsidiaries;
and
(b) local counsel to the Borrower as to real estate matters.
SS.11.12. PAYMENT OF FEES. The Borrower shall have paid to the Agent the
Closing Fee and Agent's Fee pursuant to ss.ss.5.1 and 5.2.
SS.12. CONDITIONS TO ALL BORROWINGS. The obligations of the Banks to make
any Loan, and of the Agent to issue, extend or renew any Letter of Credit, in
each case whether on or after the Closing Date, shall also be subject to the
satisfaction of the following conditions precedent:
SS.12.1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT. Each of the
representations and warranties of any of SRI, the Borrower and their
Subsidiaries contained in this Credit Agreement, the other Loan Documents or in
any document or instrument delivered pursuant to or in connection with this
Credit Agreement shall be true in all material respects as of the date as of
which they were made and shall also be true in all material respects at and as
of the time of the making of such Loan or the issuance, extension or renewal of
such Letter of Credit, with the same effect as if made at and as of that time
(except to the extent of changes resulting from transactions contemplated or
permitted by this Credit Agreement and the other Loan Documents or changes
occurring in the ordinary course of business that singly or in the aggregate are
not materially adverse, or to the extent that such representations and
warranties relate expressly to an earlier date) and no Default or Event of
Default shall have occurred and be continuing. The Agent shall have received a
certificate of the Borrower signed by an authorized officer of the Borrower to
such effect.
SS.12.2. NO LEGAL IMPEDIMENT. No change shall have occurred in any law or
regulations thereunder or interpretations thereof that in the reasonable opinion
of any Bank would make it illegal for such Bank to make such Loan or to
participate in the issuance, extension or renewal of such Letter of Credit or in
the reasonable opinion of the Agent would make it illegal for the Agent to
issue, extend or renew such Letter of Credit.
SS.12.3. GOVERNMENTAL REGULATION. Each Bank shall have received such
statements in substance and form reasonably satisfactory to such Bank as such
Bank shall require for the purpose of compliance with any applicable regulations
of the Comptroller of the Currency or the Board of Governors of the Federal
Reserve System.
SS.12.4. PROCEEDINGS AND DOCUMENTS. All proceedings in connection with the
transactions contemplated by this Credit Agreement, the other Loan Documents and
all other documents incident thereto shall be satisfactory in substance and in
form to the
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Banks and to the Agent and the Agent's Special Counsel, and the Banks, the Agent
and such counsel shall have received all information and such counterpart
originals or certified or other copies of such documents as the Agent may
reasonably request.
SS.13. EVENTS OF DEFAULT; ACCELERATION; ETC.
SS.13.1. EVENTS OF DEFAULT AND ACCELERATION. If any of the following
events ("Events of Default" or, if the giving of notice or the lapse of time or
both is required, then, prior to such notice or lapse of time, "Defaults") shall
occur:
(a) the Borrower shall fail to pay any principal of the Loans or
interest on the Loans or any Reimbursement Obligation when the same
shall become due and payable, whether at the stated date of maturity
or any accelerated date of maturity or at any other date fixed for
payment;
(b) the Borrower shall fail to pay the commitment fee, any Letter of
Credit Fee, the Agent's fee, or other sums due hereunder or under
any of the other Loan Documents, within three (3) days after the
same shall become due and payable, whether at the stated date of
maturity or any accelerated date of maturity or at any other date
fixed for payment;
(c) the Borrower or SRI shall fail to comply with any of its covenants
contained in ss.8.1, ss.8.3, ss.8.5-8.10, ss.8.12, ss.9 or ss.10 or
any of the covenants contained in the Mortgage or SSI shall fail to
comply with the covenant contained in ss.29;
(d) the Borrower or SRI shall fail to comply with the provisions of
ss.8.4 for a period of twenty-four (24) hours after written notice
of such failure has been given to the Borrower by the Agent;
(e) SRI, the Borrower or any of their Subsidiaries shall fail to perform
any term, covenant or agreement contained herein or in any of the
other Loan Documents (other than those specified elsewhere in this
ss.13.1) for fifteen (15) days after written notice of such failure
has been given to the Borrower by the Agent;
(f) any representation or warranty of SRI, the Borrower or any of their
Subsidiaries in this Credit Agreement or any of the other Loan
Documents or in any other document or instrument delivered pursuant
to or in connection with this Credit Agreement shall prove to have
been false in any material respect upon the date when made or deemed
to have been made or repeated;
(g) SRI, the Borrower or any of their Subsidiaries shall fail to pay at
maturity, or within any applicable period of grace, any obligation
for borrowed money or credit received or in respect of any
Capitalized Leases
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in an aggregate amount in excess of $250,000, or fail to observe or
perform any material term, covenant or agreement contained in any
agreement by which it is bound, evidencing or securing such borrowed
money or credit received or in respect of any such Capitalized
Leases for such period of time as would permit (assuming the giving
of appropriate notice if required) the holder or holders thereof or
of any obligations issued thereunder to accelerate the maturity
thereof;
(h) any of SRI, the Borrower or any of their Subsidiaries shall make an
assignment for the benefit of creditors, or admit in writing their
inability to pay or generally fail to pay their debts as they mature
or become due, or shall petition or apply for the appointment of a
trustee or other custodian, liquidator or receiver of SRI, the
Borrower or any of their Subsidiaries or of any substantial part of
the assets of SRI, the Borrower or any of their Subsidiaries or
shall commence any case or other proceeding relating to SRI, the
Borrower or any of their Subsidiaries under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law of any jurisdiction, now
or hereafter in effect, or shall take any action to authorize or in
furtherance of any of the foregoing, or if any such petition or
application shall be filed or any such case or other proceeding
shall be commenced against SRI, the Borrower or any of their
Subsidiaries and SRI, the Borrower or any of their Subsidiaries
shall indicate their approval thereof, consent thereto or
acquiescence therein;
(i) a decree or order is entered appointing any such trustee, custodian,
liquidator or receiver or adjudicating any of SRI, the Borrower or
any of their Subsidiaries bankrupt or insolvent, or approving a
petition in any such case or other proceeding, or a decree or order
for relief is entered in respect of SRI, the Borrower or any of
their Subsidiaries in an involuntary case under federal bankruptcy
laws as now or hereafter constituted;
(j) there shall remain in force, undischarged, unsatisfied and unstayed,
for more than thirty (30) days, whether or not consecutive, any
final judgment against SRI, the Borrower or any of their
Subsidiaries that, with other outstanding final judgments,
undischarged, against SRI, the Borrower or any of their Subsidiaries
exceeds in the aggregate $250,000;
(k) any default or event of default shall have occurred and be
continuing under the Senior Notes Indenture of the Senior
Subordinated Notes Indenture, or the holders of all or any part of
the Senior Notes or the Subordinated Debt shall accelerate the
maturity of all or any part of the Senior Notes or the Subordinated
Debt or the Senior Notes or the Subordinated Debt shall be prepaid,
redeemed or repurchased in whole or in part, except as permitted
under ss.9.8 or any Servicer Default, Payout
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Event, Insolvency Event or Trigger Event (as each of such terms is
defined in the Pooling and Servicing Agreement) shall have occurred
or any Purchase Termination Event or Incipient Purchase Termination
Event (as such terms are defined in the Receivables Purchase
Agreement) shall have occurred or any Change of Control or Change of
Control Offer (as such terms are defined in the Senior Notes
Indenture and the Senior Subordinated Notes Indenture) shall have
occurred;
(l) if any of the Loan Documents shall be cancelled, terminated, revoked
or rescinded or the Agent's security interest, mortgages or liens in
substantially all of the Collateral shall cease to be perfected or
shall cease to have the priority contemplated by the Security
Documents, in each case otherwise than in accordance with the terms
thereof or with the express prior written agreement, consent or
approval of the Banks, or any action at law, suit in equity or other
legal proceeding to cancel, revoke or rescind any of the Loan
Documents shall be commenced by or on behalf of SRI, the Borrower or
any of their Subsidiaries party thereto or any of their respective
stockholders, or any court or any other governmental or regulatory
authority or agency of competent jurisdiction shall make a
determination that, or issue a judgment, order, decree or ruling to
the effect that, any one or more of the Loan Documents is illegal,
invalid or unenforceable in accordance with the terms thereof;
(m) the Borrower or any ERISA Affiliate incurs any liability to the PBGC
or a Guaranteed Pension Plan pursuant to Title IV of ERISA in an
aggregate amount exceeding $1,000,000; the Borrower or any ERISA
Affiliate is assessed withdrawal liability pursuant to Title IV of
ERISA by a Multiemployer Plan requiring aggregate annual payments
exceeding $1,000,000, or any of the following occurs with respect to
a Guaranteed Pension Plan; (i) an ERISA Reportable Event, or a
failure to make a required installment or other payment (within the
meaning ofss.302(f)(1) of ERISA), provided the Agent determines in
its reasonable discretion that such event (A) could be expected to
result in liability of the Borrower to the PBGC or the Plan in an
aggregate amount exceeding $1,000,000 and (B) could constitute
grounds for the termination of such Plan by the PBGC, for the
appointment by the appropriate United States District Court of a
trustee to administer such Plan or for the imposition of a lien in
favor of the Guaranteed Pension Plan; (ii) the appointment by a
United States District Court of a trustee to administer such Plan;
or (iii) the institution by the PBGC of proceedings to terminate
such Plan.
(n) SRI, the Borrower or any of their Subsidiaries shall be enjoined,
restrained or in any way prevented by the order of any court or any
administrative or regulatory agency from conducting any material
part of its business and such order shall continue in effect for
more than thirty (30) days;
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(o) there shall occur any material damage to, or loss, theft or
destruction of, any Collateral, whether or not insured, or any
strike, lockout, labor dispute, embargo, condemnation, act of God or
public enemy, or other casualty, which in any such case causes, for
more than fifteen (15) consecutive days, the cessation or
substantial curtailment of revenue producing activities at any
facility of SRI, the Borrower or any of their Subsidiaries if such
event or circumstance is not covered by business interruption
insurance and would have a material adverse effect on the business
or financial condition of SRI, the Borrower and their Subsidiaries
on a consolidated basis;
(p) there shall occur the loss, suspension or revocation of, or failure
to renew, any license or permit now held or hereafter acquired by
SRI, the Borrower or any of their Subsidiaries if such loss,
suspension, revocation or failure to renew would have a material
adverse effect on the business or financial condition of SRI, the
Borrower and their Subsidiaries on a consolidated basis;
(q) SRI, the Borrower or any of their Subsidiaries shall be indicted for
a federal crime, a punishment for which could include the forfeiture
of any assets of SRI, the Borrower or such Subsidiary having a fair
market value in excess of $250,000;
(r) SSI shall, at any time prior to the consummation of the merger of
SRI and the Borrower as contemplated byss.9.5.1 hereof, legally or
beneficially own less than one hundred percent (100%) of the shares
of the capital stock of SRI and after such merger, shall at any time
legally or beneficially own less than one hundred percent (100%) of
the shares of the capital stock of the Borrower, and SRI shall, at
any time prior to the consummation of the merger of SRI and the
Borrower as contemplated by ss.9.5.1 hereof, legally or beneficially
own less than one hundred percent (100%) of the shares of the
capital stock of the Borrower;
(s) the Receivables Subsidiary shall make any Distribution which, after
giving effect to such Distribution, results in the value of the
Receivable Subsidiary's unencumbered interest in the amount of the
Aggregate Principal Receivables PLUS the aggregate amount of the
Finance Charge Receivables (as such terms are defined in the Pooling
and Servicing Agreement) being less than $25,000,000; or
(t) there shall occur a Default or Event of Default under any of the
Seasonal Revolving Agreement.
then, and in any such event, so long as the same may be continuing, the Agent
may, and upon the request of the Majority Banks shall, by notice in writing to
the Borrower
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declare all amounts owing with respect to this Credit Agreement, the Notes and
the other Loan Documents and all Reimbursement Obligations to be, and they shall
thereupon forthwith become, immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby expressly
waived by the Borrower; PROVIDED that in the event of any Event of Default
specified in ss.ss.13.1(h), 13.1(i) or 13.1(l), all such amounts shall become
immediately due and payable automatically and without any requirement of notice
from the Agent or any Bank.
SS.13.2. TERMINATION OF COMMITMENTS. If any one or more of the Events of
Default specified in ss.13.1(h), ss.13.1(i) or ss.13.1(l) shall occur, any
unused portion of the credit hereunder shall forthwith terminate and each of the
Banks shall be relieved of all further obligations to make Loans to the Borrower
and the Agent shall be relieved of all further obligations to issue, extend or
renew Letters of Credit. If any other Event of
Default shall have occurred and be continuing, or if on any Drawdown Date or
other date for issuing, extending or renewing any Letter of Credit the
conditions precedent to the making of the Loans to be made on such Drawdown Date
or (as the case may be) to issuing, extending or renewing such Letter of Credit
on such other date are not satisfied, the Agent may and, upon the request of the
Majority Banks, shall, by notice to the Borrower, terminate the unused portion
of the credit hereunder, and upon such notice being given such unused portion of
the credit hereunder shall terminate immediately and each of the Banks shall be
relieved of all further obligations to make Loans and the Agent shall be
relieved of all further obligations to issue, extend or renew Letters of Credit.
No termination of the credit hereunder shall relieve the Borrower or any of its
Subsidiaries of any of the Obligations.
SS.13.3. REMEDIES. In case any one or more of the Events of Default shall
have occurred and be continuing, and whether or not the Banks shall have
accelerated the maturity of the Loans pursuant to ss.13.1, each Bank, if owed
any amount with respect to the Loans or the Reimbursement Obligations, may, with
the consent of the Majority Banks but not otherwise, proceed to protect and
enforce its rights by suit in equity, action at law or other appropriate
proceeding, whether for the specific performance of any covenant or agreement
contained in this Credit Agreement and the other Loan Documents or any
instrument pursuant to which the Obligations to such Bank are evidenced,
including as permitted by applicable law the obtaining of the EX PARTE
appointment of a receiver, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of such Bank. No remedy herein conferred upon any Bank
or the Agent or the holder of any Note or purchaser of any Letter of Credit
Participation is intended to be exclusive of any other remedy and each and every
remedy shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or any
other provision of law.
SS.13.4. DISTRIBUTION OF COLLATERAL PROCEEDS. In the event that following
the occurrence or during the continuance of any Default or Event of Default, the
Agent or any Bank, as the case may be, receives any monies in connection with
the enforcement
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of any the Security Documents, or otherwise with respect to the realization upon
any of the Collateral, such monies shall be distributed for application as
follows:
(a) First, to the payment of, or (as the case may be) the reimbursement
of the Agent for or in respect of all reasonable costs, expenses,
disbursements and losses which shall have been incurred or sustained
by the Agent in connection with the collection of such monies by the
Agent, for the exercise, protection or enforcement by the Agent of
all or any of the rights, remedies, powers and privileges of the
Agent under this Credit Agreement or any of the other Loan Documents
or in respect of the Collateral or in support of any provision of
adequate indemnity to the Agent against any taxes or liens which by
law shall have, or may have, priority over the rights of the Agent
to such monies;
(b) Second, to all other Obligations in such order or preference as the
Majority Banks may determine; PROVIDED, HOWEVER, that distributions
in respect of such obligations shall be made (i) PARI PASSU among
Obligations with respect to the Agent's fee payable pursuant
toss.5.2 and all other Obligations and (ii) Obligations owing to the
Banks with respect to each type of Obligation such as interest,
principal, fees and expenses, shall be made among the Banks PRO
RATA; and PROVIDED, FURTHER, that the Agent may in its discretion
make proper allowance to take into account any Obligations not then
due and payable;
(c) Third, upon payment and satisfaction in full or other provisions for
payment in full satisfactory to the Banks and the Agent of all of
the Obligations, to the payment of any obligations required to be
paid pursuant to ss.9-504(1)(c) of the Uniform Commercial Code of
the Commonwealth of Massachusetts; and
(d) Fourth, the excess, if any, shall be returned to the Borrower or to
such other Persons as are entitled thereto.
SS.14. SETOFF. Regardless of the adequacy of any collateral, during the
continuance of any Event of Default, any deposits or other sums credited by or
due from any of the Banks to the Borrower and any securities or other property
of the Borrower in the possession of such Bank may be applied to or set off by
such Bank against the payment of Obligations and any and all other liabilities,
direct, or indirect, absolute or contingent, due or to become due, now existing
or hereafter arising, of the Borrower to such Bank. Each of the Banks agrees
with each other Bank that (a) if an amount to be set off is to be applied to
Indebtedness of the Borrower to such Bank, other than Indebtedness evidenced by
the Notes held by such Bank or constituting Reimbursement Obligations owed to
such Bank, such amount shall be applied ratably to such other Indebtedness and
to the Indebtedness evidenced by all such Notes held by such Bank or
constituting Reimbursement Obligations owed to such Bank, and (b) if such Bank
shall receive from the Borrower, whether by voluntary payment, exercise of the
right of
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setoff, counterclaim, cross action, enforcement of the claim evidenced by the
Notes held by, or constituting Reimbursement Obligations owed to, such Bank by
proceedings against the Borrower at law or in equity or by proof thereof in
bankruptcy, reorganization, liquidation, receivership or similar proceedings, or
otherwise, and shall retain and apply to the payment of the Note or Notes held
by, or Reimbursement Obligations owed to, such Bank any amount in excess of its
ratable portion of the payments received by all of the Banks with respect to the
Notes held by, and Reimbursement Obligations owed to, all of the Banks, such
Bank will make such disposition and arrangements with the other Banks with
respect to such excess, either by way of distribution, PRO TANTO assignment of
claims, subrogation or otherwise as shall result in each Bank receiving in
respect of the Notes held by it or Reimbursement obligations owed it, its
proportionate payment as contemplated by this Credit Agreement; PROVIDED that if
all or any part of such excess payment is thereafter recovered from such Bank,
such disposition and arrangements shall be rescinded and the amount restored to
the extent of such recovery, but without interest.
SS.15. THE AGENT.
SS.15.1. AUTHORIZATION. The Agent is authorized to take such action on
behalf of each of the Banks and to exercise all such powers as are hereunder and
under any of the other Loan Documents and any related documents delegated to the
Agent, together with such powers as are reasonably incident thereto, PROVIDED
that no duties or responsibilities not expressly assumed herein or therein shall
be implied to have been assumed by the Agent. The relationship between the Agent
and the Banks is that of an independent contractor. The term "Agent" is for
convenience only and is used to describe, as a form of convention, the
independent contractual relationship between the Agent and each of the Banks.
Nothing contained in this Credit Agreement or any of the other Loan Documents
shall be construed to create an agency, trust or other fiduciary relationship
between the Agent and any of the Banks. As an independent contractor empowered
by the Banks to exercise certain rights and perform certain duties and
responsibilities hereunder and under the other Loan Documents, the Agent is
nevertheless a "representative" of the Banks, as that term is defined in Article
I of the Uniform Commercial Code, for purposes of actions for the benefit of the
Banks and the Agent with respect to all collateral security and guaranties as
"secured party", "mortgagee" or the like on all financing statements and other
documents and instruments, whether recorded or otherwise, relating to the
attachment, perfection, priority or enforcement of any security interests,
mortgages or deeds of trust in collateral security intended to secure the
payment or performance of any of the Obligations, all for the benefit of the
Banks and the Agent.
SS.15.2. EMPLOYEES AND AGENTS. The Agent may exercise its powers and
execute its duties by or through employees or agents and shall be entitled to
take, and to rely on, advice of counsel concerning all matters pertaining to its
rights and duties under this Credit Agreement and the other Loan Documents. The
Agent may utilize the services of such Persons as the Agent in its sole
discretion may reasonably determine, and all reasonable fees and expenses of any
such Persons shall be paid by the Borrower.
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SS.15.3. NO LIABILITY. Neither the Agent nor any of its shareholders,
directors, officers or employees nor any other Person assisting them in their
duties nor any agent or employee thereof, shall be liable for any waiver,
consent or approval given or any action taken, or omitted to be taken, in good
faith by it or them hereunder or under any of the other Loan Documents, or in
connection herewith or therewith, or be responsible for the consequences of any
oversight or error of judgment whatsoever, except that the Agent or such other
Person, as the case may be, may be liable for losses due to its willful
misconduct or gross negligence.
SS.15.4. NO REPRESENTATIONS. The Agent shall not be responsible for the
execution or validity or enforceability of this Credit Agreement, the Notes, the
Letters of Credit, any of the other Loan Documents or any instrument at any time
constituting, or intended to constitute, collateral security for the Notes, or
for the value of any such collateral security or for the validity,
enforceability or collectability of any such amounts owing with respect to the
Notes, or for any recitals or statements, warranties or representations made
herein or in any of the other Loan Documents or in any certificate or instrument
hereafter furnished to it by or on behalf of the Borrower or any of its
Subsidiaries, or be bound to ascertain or inquire as to the performance or
observance of any of the terms, conditions, covenants or agreements herein or in
any instrument at any time constituting, or intended to constitute, collateral
security for the Notes or to inspect any of the properties, books or records of
the Borrower or any of its Subsidiaries. The Agent shall not be bound to
ascertain whether any notice, consent, waiver or request delivered to it by the
Borrower or any holder of any of the Notes shall have been duly authorized or is
true, accurate and complete. The Agent has not made nor does it now make any
representations or warranties, express or implied, nor does it assume any
liability to the Banks, with respect to the credit worthiness or
financial conditions of SRI, the Borrower or any of its Subsidiaries. Each Bank
acknowledges that it has, independently and without reliance upon the Agent or
any other Bank, and based upon such information and documents as it has deemed
appropriate, made its own credit analysis and decision to enter into this Credit
Agreement.
SS.15.5. PAYMENTS.
15.5.1. PAYMENTS TO AGENT. A payment by the Borrower to the Agent
hereunder or any of the other Loan Documents for the account of any Bank shall
constitute a payment to such Bank. The Agent agrees promptly to distribute to
each Bank such Bank's PRO RATA share of payments received by the Agent for the
account of the Banks except as otherwise expressly provided herein or in any of
the other Loan Documents.
15.5.2. DISTRIBUTION BY AGENT. If in the opinion of the Agent the
distribution of any amount received by it in such capacity hereunder, under the
Notes or under any of the other Loan Documents might involve it in liability, it
may refrain from making distribution until its right to make distribution shall
have been
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adjudicated by a court of competent jurisdiction. If a court of competent
jurisdiction shall adjudge that any amount received and distributed by the Agent
is to be repaid, each Person to whom any such distribution shall have been made
shall either repay to the Agent its proportionate share of the amount so
adjudged to be repaid or shall pay over the same in such manner and to such
Persons as shall be determined by such court.
15.5.3. DELINQUENT BANKS. Notwithstanding anything to the contrary
contained in this Credit Agreement or any of the other Loan Documents, any Bank
that fails (a) to make available to the Agent its PRO RATA share of any Loan or
to purchase any Letter of Credit Participation or (b) to comply with the
provisions of ss.14 with respect to making dispositions and arrangements with
the other Banks, where such Bank's share of any payment received, whether by
setoff or otherwise, is in excess of its PRO RATA share of such payments due and
payable to all of the Banks, in each case as, when and to the full extent
required by the provisions of this Credit Agreement, shall be deemed delinquent
(a "Delinquent Bank") and shall be deemed a Delinquent Bank until such time as
such delinquency is satisfied. A Delinquent Bank shall be deemed to have
assigned any and all payments due to it from the Borrower, whether on account of
Outstanding Loans, Unpaid Reimbursement Obligations, interest, fees or
otherwise, to the remaining nondelinquent Banks for application to, and
reduction of, their respective PRO RATA shares of all Outstanding Loans and
Unpaid Reimbursement Obligations. The Delinquent Bank hereby authorizes the
Agent to distribute such payments to the nondelinquent Banks in proportion to
their respective PRO RATA shares of all Outstanding Loans and Unpaid
Reimbursement Obligations. A Delinquent Bank shall be deemed to have satisfied
in full a delinquency when and if, as a result of application of the assigned
payments to all Outstanding Loans and Unpaid Reimbursement Obligations of the
nondelinquent Banks, the Banks' respective PRO RATA shares of all Outstanding
Loans and Unpaid Reimbursement Obligations have returned to those in effect
immediately prior to such delinquency and without giving effect to the
nonpayment causing such delinquency.
SS.15.6. HOLDERS OF NOTES. The Agent may deem and treat the payee of any
Note or the purchaser of any Letter of Credit Participation as the absolute
owner or purchaser thereof for all purposes hereof until it shall have been
furnished in writing with a different name by such payee or by a subsequent
holder, assignee or transferee.
SS.15.7. INDEMNITY. The Banks ratably agree hereby to indemnify and hold
harmless the Agent from and against any and all claims, actions and suits
(whether groundless or otherwise), losses, damages, costs, expenses (including
any expenses for which the Agent has not been reimbursed by the Borrower as
required by ss.16), and liabilities of every nature and character arising out of
or related to this Credit Agreement, the Notes, or any of the other Loan
Documents or the transactions contemplated or evidenced hereby or thereby, or
the Agent's actions taken hereunder or thereunder, except to the extent that any
of the same shall be directly caused by the Agent's willful misconduct or gross
negligence.
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SS.15.8. AGENT AS BANK. In its individual capacity, FNBB shall have the
same obligations and the same rights, powers and privileges in respect to its
Commitment and the Loans made by it, and as the holder of any of the Notes and
as the purchaser of any Letter of Credit Participations, as it would have were
it not also the Agent.
SS.15.9. RESIGNATION. The Agent may resign at any time by giving sixty
(60) days' prior written notice thereof to the Banks and the Borrower. Upon any
such resignation, the Majority Banks shall have the right to appoint a successor
Agent. Unless a Default or Event of Default shall have occurred and be
continuing, such successor Agent shall be reasonably acceptable to the Borrower.
If no successor Agent shall have been so appointed by the Majority Banks and
shall have accepted such appointment within thirty (30) days after the retiring
Agent's giving of notice of resignation, then the retiring Agent may, on behalf
of the Banks, appoint a successor Agent, which shall be a financial institution
having a rating of not less than A or its equivalent by Standard & Poor's
Corporation. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation, the provisions of this Credit
Agreement and the other Loan Documents shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was acting
as Agent.
SS.15.10. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT. Each Bank hereby
agrees that, upon learning of the existence of a Default or an Event of Default,
it shall promptly notify the Agent thereof. The Agent hereby agrees that upon
receipt of any notice under this ss.15.10 it shall promptly notify the other
Banks of the existence of such Default or Event of Default.
SS.15.11. DUTIES IN THE CASE OF ENFORCEMENT. In case one of more Events of
Default have occurred and shall be continuing, and whether or not acceleration
of the Obligations shall have occurred, the Agent shall, if (a) so requested by
the Majority Banks and (b) the Banks have provided to the Agent such additional
indemnities and assurances against expenses and liabilities as the Agent may
reasonably request, proceed to enforce the provisions of the Security Documents
authorizing the sale or other disposition of all or any part of the Collateral
and exercise all or any such other legal and equitable and other rights or
remedies as it may have in respect of such Collateral. The Majority Banks may
direct the Agent in writing as to the method and the extent of any such sale or
other disposition, the Banks hereby agreeing to indemnify and hold the Agent,
harmless from all liabilities incurred in respect of all actions taken or
omitted in accordance with such directions, PROVIDED that the Agent need not
comply with any such direction to the extent that the Agent reasonably believes
the Agent's compliance with such direction to be unlawful or commercially
unreasonable in any applicable jurisdiction.
SS.16. EXPENSES. The Borrower agrees to pay (a) the reasonable costs of
producing and reproducing this Credit Agreement, the other Loan Documents and
the
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other agreements and instruments mentioned herein, (b) any taxes (including any
interest and penalties in respect thereto) payable by the Agent or any of the
Banks (other than taxes based upon the Agent's or any Bank's net income) on or
with respect to the transactions contemplated by this Credit Agreement (the
Borrower hereby agreeing to indemnify the Agent and each Bank with respect
thereto), (c) the reasonable fees, expenses and disbursements of the Agent's
Special Counsel or any local counsel to the Agent incurred in connection with
the preparation, administration or interpretation of the Loan Documents and
other instruments mentioned herein, each closing hereunder, and amendments,
modifications, approvals, consents or waivers hereto or hereunder, (d) the fees,
expenses and disbursements of the Agent incurred by the Agent in connection with
the preparation, administration or interpretation of the Loan Documents and
other instruments mentioned herein, including all title insurance premiums and
surveyor, engineering and appraisal charges, environmental site assessment
charges, and expenses associated with commercial finance examinations, (e) all
fees, disbursements of the Agent incurred by the Agent in connection with the
administration and maintenance of the Loan Documents and other instruments
mentioned herein, including any additional title insurance premiums, appraisal
charges, site assessment charges, and periodic commercial financial
examinations; (f) all reasonable out-of-pocket expenses (including without
limitation reasonable attorneys' fees and costs, which attorneys may be
employees of any Bank or the Agent, and reasonable consulting, accounting,
appraisal, investment banking and similar professional fees and charges)
incurred by any Bank or the Agent in connection with (i) the enforcement of or
preservation of rights under any of the Loan Documents against the Borrower or
any of its Subsidiaries or the administration thereof after the occurrence of a
Default or Event of Default and (ii) any litigation, proceeding or dispute
whether arising hereunder or otherwise, in any way related to any Bank's or the
Agent's relationship with the Borrower or any of its Subsidiaries and (g) all
reasonable fees, expenses and disbursements of any Bank or the Agent incurred in
connection with UCC searches, UCC filings or mortgage recordings. The covenants
of this ss.16 shall survive payment or satisfaction of all other Obligations.
SS.17. INDEMNIFICATION. The Borrower agrees to indemnify and hold harmless
the Agent and the Banks from and against any and all claims, actions and suits
whether groundless or otherwise, and from and against any and all liabilities,
losses, damages and expenses of every nature and character arising out of this
Credit Agreement or any of the other Loan Documents or the transactions
contemplated hereby (except to the extent arising from the gross negligence of
willful misconduct of the Agent or the applicable Bank) including, without
limitation, (a) any actual or proposed use by the Borrower or any of its
Subsidiaries of the proceeds of any of the Loans or Letters of Credit, (b) SRI,
the Borrower or any of its Subsidiaries entering into or performing this Credit
Agreement or any of the other Loan Documents or (c) with respect to SRI, the
Borrower and its Subsidiaries and their respective properties and assets, the
violation of any Environmental Law, the presence, disposal, escape, seepage,
leakage, spillage, discharge, emission, release or threatened release of any
Hazardous Substances or any action, suit, proceeding or investigation brought or
threatened with respect to any Hazardous Substances (including, but not limited
to, claims with respect
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to wrongful death, personal injury or damage to property), in each case
including, without limitation, the reasonable fees and disbursements of counsel
and allocated costs of internal counsel incurred in connection with any such
investigation, litigation or other proceeding. In litigation, or the preparation
therefor, the Banks and the Agent shall be entitled to select their own counsel
and, in addition to the foregoing indemnity, the Borrower agrees to pay promptly
the reasonable fees and expenses of such counsel. If, and to the extent that the
obligations of the Borrower under this ss.17 are unenforceable for any reason,
the Borrower hereby agrees to make the maximum contribution to the payment in
satisfaction of such obligations which is permissible under applicable law. The
covenants contained in this ss.17 shall survive payment or satisfaction in full
of all other Obligations.
SS.18. SURVIVAL OF COVENANTS, ETC. All covenants, agreements,
representations and warranties made herein, in the Notes, in any of the other
Loan Documents or in any documents or other papers delivered by or on behalf of
the Borrower or any of its Subsidiaries pursuant hereto shall be deemed to have
been relied upon by the Banks and the Agent, notwithstanding any investigation
heretofore or hereafter made by any of them, and shall survive the making by the
Banks of any of the Loans and the issuance, extension or renewal of any Letters
of Credit, as herein contemplated, and shall continue in full force and effect
so long as any Letter of Credit or any amount due under this Credit Agreement or
the Notes or any of the other Loan Documents remains outstanding or any Bank has
any obligation to make any Loans or the Agent has any obligation to issue,
extend or renew any Letter of Credit, and for such further time as may be
otherwise expressly specified in this Credit Agreement. All statements contained
in any certificate or other paper delivered to any Bank or the Agent at any time
by or on behalf of the Borrower or any of its Subsidiaries pursuant hereto or in
connection with the transactions contemplated hereby shall constitute
representations and warranties by the Borrower or such Subsidiary hereunder.
SS.19. ASSIGNMENT AND PARTICIPATION.
SS.19.1. CONDITIONS TO ASSIGNMENT BY BANKS. Except as provided herein,
each Bank may assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Credit Agreement (including all or
a portion of its Commitment Percentage, Commitment and LC Commitment and the
same portion of the Loans at the time owing to it, the Notes held by it and its
participating interest in the risk relating to any Letters of Credit); PROVIDED
that (a) each of the Agent and (except in the case of an assignment to an
Affiliate of a Bank or if a Default or Event of Default has occurred and is
continuing) the Borrower shall have given its prior written consent to such
assignment, which consent, in the case of the Borrower and the Agent, will not
be unreasonably withheld, (b) each such assignment shall be of a constant, and
not a varying, percentage of all the assigning Bank's rights and obligations
under this Credit Agreement, (c) each assignment shall be in an amount of not
less than $5,000,000, (d) FNBB and its Affiliates shall retain, free of any such
assignment, an amount of its Commitment of not less than $13,000,000 and (e) the
parties to such assignment shall execute and deliver to the Agent, for recording
in the Register (as
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hereinafter defined), an Assignment and Acceptance, substantially in the form of
EXHIBIT D hereto (an "Assignment and Acceptance"), together with any Notes
subject to such assignment. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each Assignment and
Acceptance, which effective date shall be at least five (5) Business Days after
the execution thereof, (i) the assignee thereunder shall be a party hereto and,
to the extent provided in such Assignment and Acceptance, have the rights and
obligations of a Bank hereunder, and (ii) the assigning Bank shall, to the
extent provided in such assignment and upon payment to the Agent of the
registration fee referred to in ss.19.3, be released from its obligations under
this Credit Agreement.
SS.19.2. CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS; COVENANTS.
By executing and delivering an Assignment and Acceptance, the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows: (a) other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned thereby free and clear
of any adverse claim, the assigning Bank makes no representation or warranty,
express or implied, and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Credit Agreement, the other Loan
Documents or any other instrument or document furnished pursuant hereto or the
attachment, perfection or priority of any security interest or mortgage; (b) the
assigning Bank makes no representation or warranty and assumes no responsibility
with respect to the financial condition of the Borrower and its Subsidiaries or
any other Person primarily or secondarily liable in respect of any of the
Obligations, or the performance or observance by the Borrower and its
Subsidiaries or any other Person primarily or secondarily liable in respect of
any of the Obligations of any of their obligations under this Credit Agreement
or any of the other Loan Documents or any other instrument or document furnished
pursuant hereto or thereto; (c) such assignee confirms that it has received a
copy of this Credit Agreement, together with copies of the most recent financial
statements referred to in ss.7.4 and ss.8.4 and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (d) such assignee will,
independently and without reliance upon the assigning Bank, the Agent or any
other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Credit Agreement; (e) such assignee represents and
warrants that it is an Eligible Assignee; (f) such assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Credit Agreement and the other Loan Documents as are
delegated to the Agent by the terms hereof or thereof, together with such powers
as are reasonably incidental thereto; (g) such assignee agrees that it will
perform in accordance with their terms all of the obligations that by the terms
of this Credit Agreement are required to be performed by it as a Bank; (h) such
assignee represents and warrants that it is legally authorized to enter into
such Assignment and Acceptance; and (i) such assignee acknowledges that it has
made arrangements with the assigning Bank satisfactory to such assignee with
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respect to its PRO RATA share of Letter of Credit Fees in respect of outstanding
Letters of Credit.
SS.19.3. REGISTER. The Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register or similar list (the "Register") for
the recordation of the names and addresses of the Banks and the Commitment
Percentage of, and principal amount of the Revolving Credit Loans owing to and
Letter of Credit Participations purchased by, the Banks from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, the Agent and the Banks may treat each Person whose name is
recorded in the Register as a Bank hereunder for all purposes of this Credit
Agreement. The Register shall be available for inspection by the Borrower and
the Banks at any reasonable time and from time to time upon reasonable prior
notice. Upon each such recordation, the assigning Bank agrees to pay to the
Agent a registration fee in the sum of $3,000.
SS.19.4. NEW NOTES. Upon its receipt of an Assignment and Acceptance
executed by the parties to such assignment, together with each Note subject to
such assignment, the Agent shall (a) record the information contained therein in
the Register, and (b) give prompt notice thereof to the Borrower and the Banks
(other than the assigning Bank). Within five (5) Business Days after receipt of
such notice, the Borrower, at its own expense, shall execute and deliver to the
Agent, in exchange for each surrendered Note, a new Note to the order of such
Eligible Assignee in an amount equal to the amount assumed by such Eligible
Assignee pursuant to such Assignment and Acceptance and, if the assigning Bank
has retained some portion of its obligations hereunder, a new Note to the order
of the assigning Bank in an amount equal to the amount retained by it hereunder.
Such new Notes shall provide that they are replacements for the surrendered
Notes, shall be in an aggregate principal amount equal to the aggregate
principal amount of the surrendered Notes, shall be dated the effective date of
such in Assignment and Acceptance and shall otherwise be substantially the form
of the assigned Notes. Within five (5) days of issuance of any new Notes
pursuant to this ss.19.4, the Borrower shall deliver an opinion of counsel,
addressed to the Banks and the Agent, relating to the due authorization,
execution and delivery of such new Notes and the legality, validity and binding
effect thereof, in form and substance satisfactory to the Banks. The surrendered
Notes shall be cancelled and returned to the Borrower.
SS.19.5. PARTICIPATIONS. Each Bank may sell participations to one or more
banks or other entities in all or a portion of such Bank's rights and
obligations under this Credit Agreement and the other Loan Documents; PROVIDED
that (a) each such participation shall be in an amount of not less than
$5,000,000, (b) any such sale or participation shall not affect the rights and
duties of the selling Bank hereunder to the Borrower and (c) the only rights
granted to the participant pursuant to such participation arrangements with
respect to waivers, amendments or modifications of the Loan Documents shall be
the rights to approve waivers, amendments or modifications that would reduce the
principal of or the interest rate on any Loans, extend the term or increase the
amount of the Commitment of such Bank as it relates
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to such participant, reduce the amount of any commitment fees or Letter of
Credit Fees to which such participant is entitled or extend any regularly
scheduled payment date for principal or interest.
SS.19.6. DISCLOSURE. The Borrower agrees that in addition to disclosures
made in accordance with standard and customary banking practices any Bank may
disclose information obtained by such Bank pursuant to this Credit Agreement to
assignees or participants and potential assignees or participants hereunder;
PROVIDED that such assignees or participants or potential assignees or
participants shall agree (a) to treat in confidence such information unless such
information otherwise becomes public knowledge, (b) not to disclose such
information to a third party, except as required by law or legal process and (c)
not to make use of such information for purposes of transactions unrelated to
such contemplated assignment or participation.
SS.19.7. ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE BORROWER. If any
assignee Bank is an Affiliate of the Borrower, then any such assignee Bank shall
have no right to vote as a Bank hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or other modifications to any of the Loan Documents or
for purposes of making requests to the Agent pursuant to ss.13.1 or ss.13.2, and
the determination of the Majority Banks shall for all purposes of this Agreement
and the other Loan Documents be made without regard to such assignee Bank's
interest in any of the Loans. If any Bank sells a participating interest in any
of the Loans or Reimbursement Obligations to a participant, and such participant
is the Borrower or an Affiliate of the Borrower, then such transferor Bank shall
promptly notify the Agent of the sale of such participation. A transferor Bank
shall have no right to vote as a Bank hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or modifications to any of the Loan Documents or for
purposes of making requests to the Agent pursuant to ss.13.1 or ss.13.2 to the
extent that such participation is beneficially owned by the Borrower or any
Affiliate of the Borrower, and the determination of the Majority Banks shall for
all purposes of this Agreement and the other Loan Documents be made without
regard to the interest of such transferor Bank in the Loans to the extent of
such participation.
SS.19.8. MISCELLANEOUS ASSIGNMENT PROVISIONS. Any assigning Bank shall
retain its rights to be indemnified pursuant to ss.16 with respect to any claims
or actions arising prior to the date of such assignment. If any assignee Bank is
not incorporated under the laws of the United States of America or any state
thereof, it shall, prior to the date on which any interest or fees are payable
hereunder or under any of the other Loan Documents for its account, deliver to
the Borrower and the Agent certification as to its exemption from deduction or
withholding of any United States federal income taxes. If any Reference Bank
transfers all of its interest, rights and obligations under this Credit
Agreement, the Agent shall, in consultation with the Borrower and with the
consent of the Borrower and the Majority Banks, appoint another Bank to act as a
Reference Bank hereunder. Anything contained in this ss.19 to the contrary
notwithstanding, any Bank may at any time pledge all or any portion of its
interest and
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rights under this Credit Agreement (including all or any portion of its Notes)
to any of the twelve Federal Reserve Banks organized under ss.4 of the Federal
Reserve Act, 12 U.S.C. ss.341. No such pledge or the enforcement thereof shall
release the pledgor Bank from its obligations hereunder or under any of the
other Loan Documents.
SS.19.9. ASSIGNMENT BY BORROWER. The Borrower shall not assign or transfer
any of its rights or obligations under any of the Loan Documents without the
prior written consent of each of the Banks.
SS.20. NOTICES, ETC. Except as otherwise expressly provided in this Credit
Agreement, all notices and other communications made or required to be given
pursuant to this Credit Agreement or the Notes or any Letter of Credit
Applications shall be in writing and shall be delivered in hand, mailed by
United States registered or certified first class mail, postage prepaid, sent by
overnight courier, or sent by telegraph, telecopy, facsimile or telex and
confirmed by delivery via courier or postal service, addressed as follows:
(a) if to the Borrower, at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
Attention: _______________, or at such other address for notice as
the Borrower shall last have furnished in writing to the Person
giving the notice;
(b) if to the Agent, at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇-▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇, Attention: ▇▇▇▇▇ F.X. ▇▇▇▇▇▇▇▇, Vice
President, or such other address for notice as the Agent shall last
have furnished in writing to the Person giving the notice; and
(c) if to any Bank, at such Bank's address set forth on SCHEDULE 1
hereto, or such other address for notice as such Bank shall have
last furnished in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or made
and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile and
(ii) if sent by registered or certified first-class mail, postage prepaid, on
the third Business Day following the mailing thereof.
SS.21. GOVERNING LAW. THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE
SPECIFICALLY PROVIDED THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS
UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES
BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE BORROWER
AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT AGREEMENT OR ANY OF
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THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF
MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE
NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT
BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN SS.20. THE
BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN
INCONVENIENT COURT.
SS.22. HEADINGS. The captions in this Credit Agreement are for convenience
of reference only and shall not define or limit the provisions hereof.
SS.23. COUNTERPARTS. This Credit Agreement and any amendment hereof may be
executed in several counterparts and by each party on a separate counterpart,
each of which when executed and delivered shall be an original, and all of which
together shall constitute one instrument. In proving this Credit Agreement it
shall not be necessary to produce or account for more than one such counterpart
signed by the party against whom enforcement is sought.
SS.24. ENTIRE AGREEMENT, ETC. The Loan Documents and any other documents
executed in connection herewith or therewith express the entire understanding of
the parties with respect to the transactions contemplated hereby. Neither this
Credit Agreement nor any term hereof may be changed, waived, discharged or
terminated, except as provided in ss.26.
SS.25. WAIVER OF JURY TRIAL. The Borrower hereby waives its right to a
jury trial with respect to any action or claim arising out of any dispute in
connection with this Credit Agreement, the Notes or any of the other Loan
Documents, any rights or obligations hereunder or thereunder or the performance
of which rights and obligations. Except as prohibited by law, the Borrower
hereby waives any right it may have to claim or recover in any litigation
referred to in the preceding sentence any special, exemplary, punitive or
consequential damages or any damages other than, or in addition to, actual
damages. The Borrower (a) certifies that no representative, agent or attorney of
any Bank or the Agent has represented, expressly or otherwise, that such Bank or
the Agent would not, in the event of litigation, seek to enforce the foregoing
waivers and (b) acknowledges that the Agent and the Banks have been induced to
enter into this Credit Agreement, the other Loan Documents to which it is a
party by, among other things, the waivers and certifications contained herein.
SS.26. CONSENTS, AMENDMENTS, WAIVERS, ETC. Any consent or
approval required or permitted by this Credit Agreement to be given by all of
the Banks may be given, and any term of this Credit Agreement, the other Loan
Documents or any other instrument related hereto or mentioned herein may be
amended, and the performance or observance by the Borrower or any of its
Subsidiaries of any terms of this Credit Agreement, the other Loan Documents or
such other instrument or the
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continuance of any Default or Event of Default may be waived (either generally
or in a particular instance and either retroactively or prospectively) with, but
only with, the written consent of the Borrower and the written consent of the
Majority Banks. Notwithstanding the foregoing, the reduction of the principal of
or the rate of interest on the Notes (other than interest accruing pursuant to
ss.5.11.2 following the effective date of any waiver by the Majority Banks of
the Default or Event of Default relating thereto), the extension of the term of
the Notes, any change in a date fixed for payment on the Loans, the increase in
the amount of the Commitments of the Banks, and the decrease in the amount of
commitment fee or Letter of Credit Fees hereunder may not be changed without the
written consent of the Borrower and the written consent of each Bank affected
thereby; the definition of Majority Banks may not be amended without the written
consent of all of the Banks; and the amount of the Agent's Fee or any Letter of
Credit Fees payable for the Agent's account and ss.15 may not be amended without
the written consent of the Agent. No waiver shall extend to or affect any
obligation not expressly waived or impair any right consequent thereon. No
course of dealing or delay or omission on the part of the Agent or any Bank in
exercising any right shall operate as a waiver thereof or otherwise be
prejudicial thereto. No notice to or demand upon the Borrower shall entitle the
Borrower to other or further notice or demand in similar or other circumstances.
SS.27. SEVERABILITY. The provisions of this Credit Agreement are severable
and if any one clause or provision hereof shall be held invalid or unenforceable
in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof, in
such jurisdiction, and shall not in any manner affect such clause or provision
in any other jurisdiction, or any other clause or provision of this Credit
Agreement in any jurisdiction.
SS.28. TRANSITIONAL ARRANGEMENTS.
28.1. ORIGINAL CREDIT AGREEMENT SUPERSEDED. This Credit Agreement
shall on the Closing Date supersede the Original Credit Agreement in its
entirety, except as provided in this ss.28. On the Closing Date, the rights and
obligations of the parties evidenced by the Original Credit Agreement shall be
evidenced by the Credit Agreement and the other Loan Documents, the "Loans" as
defined in the Original Credit Agreement shall be converted to Loans as defined
herein, and all outstanding letters of credit issued by the Agent for the
account of the Borrower prior to the Closing Date shall, for the purposes of
this Credit Agreement, be Stand Alone Letters of Credit.
28.2. RETURN AND CANCELLATION OF NOTES. As soon as reasonably
practicable after its receipt of its Revolving Credit Note hereunder on the
Closing Date, the Banks will promptly return to the Borrower, marked
"Substituted" or "Cancelled", as the case may be, any notes of the Borrower held
by the Banks pursuant to the Original Credit Agreement.
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28.3. INTEREST AND FEES UNDER SUPERSEDED AGREEMENT. All interest and
fees and expenses, if any, owing or accruing under or in respect of the Original
Credit Agreement through the Closing Date shall be calculated as of the Closing
Date (prorated in the case of any fractional periods), and shall be paid in
accordance with the method, and on the dates, specified in the Original Credit
Agreement, as if the Original Credit Agreement were still in effect. Commencing
on the Closing Date, the commitment fees shall be payable by the Borrower to the
Agent for the account of the Banks in accordance with ss.2.2. hereof.
SS.29. COVENANT OF SSI. SSI covenants and agrees that, so long as any
Loan, Unpaid Reimbursement Obligation, Letter of Credit or Note is outstanding
or any Bank has any obligation to make any Loans or the Agent has any obligation
to issue, extend or renew any Letters of Credit, SSI will not (a) create or
incur or suffer to be created or incurred or to exist any lien, encumbrance,
mortgage, pledge, charge, restriction or other security interest of any kind
upon any of the capital stock of SRI, and, subsequent to the merger of SRI and
the Borrower as contemplated by ss.9.5.1. hereof, the capital stock of the
Borrower or (b) transfer any of such capital stock for the purpose of subjecting
the same to the payment of Indebtedness or performance of any other obligation
in priority to payment of its general creditors. The parties hereto hereby
acknowledge and agree that SSI is executing this Credit Agreement for the sole
purpose of being bound by the covenant contained in this ss.29.
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IN WITNESS WHEREOF, the undersigned have duly executed this Amended and
Restated Credit Agreement as a sealed instrument as of the date first set forth
above.
PALAIS ROYAL, INC.
By:____________________________________
Name:
Title:
SPECIALTY RETAILERS, INC.
By:____________________________________
Name:
Title:
STAGE STORES, INC.
By:____________________________________
Name:
Title:
THE FIRST NATIONAL BANK OF
BOSTON, individually and as
Agent
By:_____________________________________
Name: ▇▇▇▇▇ F.X. ▇▇▇▇▇▇▇▇
Title: Vice President
UNION BANK OF CALIFORNIA, N.A.
By:______________________________________
Name:
Title:
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CREDITANSTALT-BANKVEREIN
By:______________________________________
Name:
Title:
BANQUE PARIBAS
By:______________________________________
Name:
Title:
CREDIT SUISSE FIRST BOSTON
By:______________________________________
Name:
Title:
DLJ CAPITAL FUNDING
By:______________________________________
Name:
Title:
THE FUJI BANK, LIMITED
By:______________________________________
Name:
Title:
HIBERNIA NATIONAL BANK
By:______________________________________
Name:
Title:
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Schedule 1
COMMITMENT OF
REVOLVER AND COMMITMENT OF LC TOTAL
REVOLVER LETTERS COMMITMENT STAND ALONE COMMITMENT COMMITMENT
BANKS OF CREDIT PERCENTAGE LETTERS OF CREDIT PERCENTAGE PERCENTAGE
----- ----------- ----------- ---------------- ----------- -----------
First National Bank ...... $13,333,333 26.66666666% $ 4,000,000 26.66666667% 26.66666667%
of Boston
Union Bank of ............ $10,000,000 20% $ 3,000,000 20% 20%
California, N.A ..........
Creditanstalt- ........... $ 6,666,667 13.33333333% $ 2,000,000 13.33333333% 13.▇▇▇▇▇▇▇▇%
Bankverein
Banque Paribas ........... $ 4,000,000 8% $ 1,200,000 8% 8%
Credit Suisse First ...... $ 4,000,000 8% $ 1,200,000 8% 8%
Boston
DLJ Capital .............. $ 4,000,000 8% $ 1,200,000 8% 8%
Funding
The Fuji Bank, ........... $ 4,000,000 8% $ 1,200,000 8% 8%
Limited
Hibernia National ........ $ 4,000,000 8% $ 1,200,000 8% 8%
Bank
Total .................... $50,000,000 100% $15,000,000 100% 100%