1
EXHIBIT 4-K
AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF APRIL 14, 2000
AMONG
TRUSERV CORPORATION,
VARIOUS FINANCIAL INSTITUTIONS,
AND
BANK OF AMERICA, N.A.,
AS AGENT
ARRANGED BY BANC OF AMERICA SECURITIES LLC
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TABLE OF CONTENTS
Section Page
ARTICLE I DEFINITIONS
1.1 Certain Defined Terms......................................................... 1
1.2 Other Interpretive Provisions................................................. 20
1.3 Accounting Principles......................................................... 21
1.4 Currency Equivalents Generally................................................ 21
1.5 Introduction of Euro.......................................................... 21
ARTICLE II THE CREDITS
2.1 Amounts and Terms of Commitments.............................................. 22
2.2 Loan Accounts................................................................. 22
2.3 Procedure for Committed Borrowing............................................. 23
2.4 Conversion and Continuation Elections for Committed Borrowings................ 24
2.5 Utilization of Commitments in Offshore Currencies............................. 25
2.6 Bid Borrowings................................................................ 26
2.7 Procedure for Bid Borrowings.................................................. 27
2.8 Termination or Reduction of Commitments....................................... 29
2.8.1 Voluntary Termination or Reduction of Commitments....................... 29
2.8.2 Mandatory Reductions of Commitments..................................... 30
2.8.3 All Reductions of Commitments........................................... 30
2.9 Prepayments................................................................... 30
2.9.1 Optional Prepayments.......................................... 30
2.9.2 Mandatory Prepayments......................................... 31
2.10 Currency Exchange Fluctuations............................................ 31
2.11 Repayment................................................................. 31
2.12 Interest.................................................................. 31
2.13 Fees...................................................................... 32
(a) Certain Fees..................................................... 32
(b) Commitment Fees.................................................. 32
2.14 Computation of Fees and Interest.......................................... 32
2.15 Payments by the Company................................................... 33
2.16 Payments by the Lenders to the Agent...................................... 33
2.17 Sharing of Payments, Etc.................................................. 34
2.18 Swing Line Commitment..................................................... 35
2.19 Borrowing Procedures for Swing Line Loans................................. 35
2.20 Prepayment or Refunding of Swing Line Loans............................... 36
2.21 Participations in Swing Line Loans........................................ 36
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Section Page
2.22 Participation Obligations Unconditional................................... 37
2.23 Conditions to Swing Line Loans............................................ 37
2.24 BA Subfacility............................................................ 37
(a) Creation......................................................... 37
(b) Notice........................................................... 38
(c) Issuance Fee..................................................... 38
(d) Payment.......................................................... 38
(e) Participations in BAs............................................ 39
(f) Limitation of Liability.......................................... 39
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY
3.1 Taxes...................................................................... 40
3.2 Illegality................................................................. 41
3.3 Increased Costs and Reduction of Return.................................... 41
3.4 Funding Losses............................................................. 42
3.5 Inability to Determine Rates............................................... 43
3.6 Reserves on Offshore Rate Loans............................................ 43
3.7 Certificates of Lenders.................................................... 44
3.8 Substitution of Lenders.................................................... 44
3.9 Survival................................................................... 44
ARTICLE IV CONDITIONS PRECEDENT
4.1 Conditions to Effectiveness................................................ 44
(a) Agreement........................................................ 44
(b) Resolutions; Incumbency; Certificate of Incorporation; Bylaws.... 44
(c) Good Standing.................................................... 45
(d) Legal Opinion.................................................... 45
(e) Payment of Fees.................................................. 45
(f) Certificate...................................................... 45
(g) Guaranty......................................................... 46
(h) Security Agreement............................................... 46
(i) Pledge Agreement................................................. 46
(j) Intercreditor Agreement.......................................... 46
(k) Trademark Security Agreement..................................... 46
(l) Amendment of Certain Agreements.................................. 46
(m) Other Documents.................................................. 46
4.2 Conditions to All Credit Extensions........................................ 46
(a) Notice........................................................... 46
(b) Continuation of Representations and Warranties................... 46
(c) No Existing Default.............................................. 46
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Section Page
ARTICLE V REPRESENTATIONS AND WARRANTIES
5.1 Organization; Subsidiary Preferred Stock................................... 47
5.2 Financial Statements....................................................... 47
5.3 Actions Pending............................................................ 47
5.4 Outstanding Debt........................................................... 47
5.5 Title to Properties........................................................ 47
5.6 Taxes...................................................................... 48
5.7 Conflicting Agreements and Other Matters................................... 48
5.8 Use of Proceeds............................................................ 48
5.9 ERISA...................................................................... 49
5.10 Governmental Consent....................................................... 49
5.11 Environmental Compliance................................................... 49
5.12 Disclosure................................................................. 49
5.13 Hostile Tender Offers...................................................... 50
5.14 Priority of Obligations.................................................... 50
5.15 Year 2000 Problem.......................................................... 50
ARTICLE VI AFFIRMATIVE COVENANTS
6.1 Financial Statements....................................................... 50
6.2 Certificates; Other Information............................................ 51
6.3 Notices.................................................................... 52
6.4 Preservation of Corporate Existence, Etc................................... 53
6.5 Maintenance of Property.................................................... 53
6.6 Insurance.................................................................. 53
6.7 Payment of Obligations..................................................... 53
6.8 Compliance with Laws....................................................... 54
6.9 Compliance with ERISA...................................................... 54
6.10 Inspection of Property and Books and Records............................... 54
6.11 Environmental Laws......................................................... 54
6.12 Use of Proceeds............................................................ 54
6.13 Covenant to Secure Obligations Equally..................................... 55
6.14 Cooperative Status......................................................... 55
6.15 Collateral/Accounting Systems Examination.................................. 55
6.16 Real Estate Documents...................................................... 55
6.17 Further Assurances......................................................... 56
6.18 Waiver of Negative Pledge.................................................. 56
ARTICLE VII NEGATIVE COVENANTS
7.1 Fixed Charge Coverage Ratio................................................ 57
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Section Page
7.2 Lien Restrictions.......................................................... 57
7.3 Debt Restrictions.......................................................... 58
7.4 Sale of Assets............................................................. 59
7.5 Merger..................................................................... 59
7.6 Restrictions on Transactions with Affiliates and Stockholders.............. 59
7.7 Issuance of Stock by Subsidiaries.......................................... 59
7.8 Compliance with ERISA...................................................... 59
7.9 No Change in Subordination Terms, etc...................................... 60
7.10 Nature of Business......................................................... 60
7.11 Restricted Investments..................................................... 60
7.12 Restricted Payments........................................................ 61
7.13 Use of Proceeds............................................................ 61
7.14 Ratio of Borrowing Base to Debt............................................ 62
7.15 Minimum EBITDA............................................................. 62
7.16 Inactive Subsidiaries...................................................... 62
7.17 Amendments to Financing Agreements......................................... 62
ARTICLE VIII EVENTS OF DEFAULT
8.1 Event of Default........................................................... 62
8.2 Remedies................................................................... 65
8.3 Rights Not Exclusive....................................................... 65
ARTICLE IX THE AGENT
9.1 Appointment and Authorization; "Agent"..................................... 66
9.2 Delegation of Duties....................................................... 66
9.3 Liability of Agent......................................................... 67
9.4 Reliance by Agent.......................................................... 67
9.5 Notice of Default.......................................................... 67
9.6 Credit Decision............................................................ 68
9.7 Indemnification of Agent................................................... 68
9.8 Agent in Individual Capacity............................................... 68
9.9 Successor Agent............................................................ 69
9.10 Withholding Tax............................................................ 69
9.11 Co-Agents.................................................................. 70
ARTICLE X MISCELLANEOUS
10.1 Amendments and Waivers.................................................... 71
10.2 Notices................................................................... 72
10.3 No Waiver; Cumulative Remedies............................................ 72
10.4 Costs and Expenses........................................................ 72
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Section Page
10.5 Company Indemnification................................................... 73
10.6 Payments Set Aside........................................................ 73
10.7 Successors and Assigns.................................................... 74
10.8 Assignments, Participations, etc.......................................... 74
10.9 Confidentiality........................................................... 75
10.10 Set-off................................................................... 76
10.11 Automatic Debits of Fees.................................................. 76
10.12 Notification of Addresses, Lending Offices, Etc........................... 76
10.13 Counterparts.............................................................. 76
10.14 Severability.............................................................. 77
10.15 No Third Parties Benefited................................................ 77
10.16 Governing Law and Jurisdiction............................................ 77
10.17 Waiver of Jury Trial...................................................... 77
10.18 Judgment.................................................................. 78
10.19 Entire Agreement.......................................................... 78
10.20 Amendment and Restatement................................................. 78
10.21 Bid Loan Option........................................................... 78
10.22 Intercreditor Agreement; Collateral Matters............................... 78
10.23 Waiver.................................................................... 79
SCHEDULES
Schedule 1.1 Pricing Schedule
Schedule 2.1 Commitments and Pro Rata Shares
Schedule 5.7 Restrictive Agreements
Schedule 6.16 Mortgaged Property
Schedule 7.2 Liens
Schedule 7.11 Investments
Schedule 10.2 Offshore and Domestic Lending Offices; Addresses for Notices
EXHIBITS
Exhibit A Form of Notice of Borrowing
Exhibit B Form of Notice of Conversion/Continuation
Exhibit C [Intentionally Deleted]
Exhibit D [Intentionally Deleted]
Exhibit E Form of Compliance Certificate
Exhibit F Form of Legal Opinion of Counsel to the Company
Exhibit G Form of Assignment and Acceptance
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Exhibit H Form of Note
Exhibit I Form of Subordinated Note
Exhibit J Form of Trademark Security Agreement
Exhibit K Form of Guaranty
Exhibit L Form of Pledge Agreement
Exhibit M Form of Security Agreement
Exhibit N Form of Intercreditor Agreement
Exhibit O Form of Borrowing Base Certificate
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AMENDED AND RESTATED CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of April 14,
2000, among TRUSERV CORPORATION, a Delaware corporation (the "Company"), the
several financial institutions from time to time party to this Agreement
(collectively the "Lenders"; individually each a "Lender"), and BANK OF AMERICA,
N.A. (in its individual capacity, "Bank of America"), as Accepting Lender, Swing
Line Lender and Agent.
WHEREAS, the Company, the Lenders and Bank of America (then known as Bank
of America National Trust and Savings Association), as agent, are parties to a
Credit Agreement dated as of July 1, 1997 (as amended prior to the date hereof,
the "Original Agreement"); and
WHEREAS, the parties hereto have agreed to amend and restate the Original
Agreement to make various changes thereto;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms. The following terms have the following meanings:
Absolute Rate - see subsection 2.7(b)(ii)(D).
Absolute Rate Auction means a solicitation of Competitive Bids
setting forth Absolute Rates pursuant to Section 2.7.
Absolute Rate Bid Loan means a Bid Loan that bears interest at a
rate determined with reference to the Absolute Rate.
Acceptance Documents means such documents and agreements as the
Accepting Lender may reasonably require in connection with any BA
hereunder.
Accepting Lender means BofA in its capacity as accepting lender
hereunder, together with any successor in such capacity.
Affiliate means, as to any Person, any other Person which, directly
or indirectly, is in control of, is controlled by, or is under common
control with, such Person. A Person
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shall be deemed to control another Person if the controlling Person
possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such other Person, whether
through the ownership of voting securities, membership interests, by
contract, or otherwise.
Agent means BofA in its capacity as agent for the Lenders hereunder,
and any successor agent arising under Section 9.9.
Agent-Related Persons means the Agent and any successor thereto in
such capacity hereunder, together with their respective Affiliates, and the
officers, directors, employees, agents and attorneys-in-fact of such
Persons and Affiliates.
Agent's Payment Office means (i) in respect of payments in Dollars,
the address for payments to the Agent set forth on Schedule 10.2 or such
other address as the Agent may from time to time specify in accordance with
Section 10.2 and (ii) in the case of payments in any Offshore Currency,
such address as the Agent may from time to time specify in accordance with
Section 10.2.
Agreed Alternative Currency - see subsection 2.5(e).
Agreement means this Amended and Restated Credit Agreement.
Applicable Currency means, as to any particular payment or Loan,
Dollars or the Offshore Currency in which it is denominated or is payable.
Arranger means Banc of America Securities LLC.
Asset Sale means the sale, lease, assignment or other transfer for
value (each a "Disposition") by the Company or any Subsidiary to any Person
(other than the Company or a Subsidiary) of any fixed asset of the Company
or such Subsidiary.
Assignee - see subsection 10.8(a).
Attorney Costs means and includes all fees and charges of any law
firm or other external counsel, and, without duplication, the allocated
cost of internal legal services and all disbursements of internal counsel.
BA means a draft drawn by the Company on, and accepted and
discounted by, the Accepting Lender pursuant to Section 2.24 in the
standard form for bankers' acceptances used by the Accepting Lender.
BA Commission means the percentage set forth under the heading "BA
Commission" on Schedule 1.1 opposite the applicable Fixed Charge Coverage
Ratio.
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BA Outstandings means at any time the sum of (a) the maximum
aggregate amount which is, or at any time thereafter may become, payable by
the Accepting Lender under all BAs which have been accepted plus (b) the
aggregate amount of all payments made by the Accepting Lender under BAs and
not previously reimbursed by the Company.
Bankruptcy Code means the Federal Bankruptcy Reform Act of 1978 (11
U.S.C.ss.101, et seq.).
Bankruptcy Law - see subsection 8.1(h).
Base Rate means, for any day, a per annum rate equal to the higher
of: (a) the sum of 0.50% plus the latest Federal Funds Rate; and (b) the
rate of interest in effect for such day as publicly announced from time to
time by BofA in San Francisco, California, as its "reference rate." (The
"reference rate" is a rate set by BofA based upon various factors including
BofA's costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans, which may
be priced at, above, or below such announced rate.) Any change in the
reference rate announced by BofA shall take effect at the opening of
business on the day specified in the public announcement of such change.
Base Rate Committed Loan means a Committed Loan that bears interest
based on the Base Rate.
Base Rate Margin means the percentage set forth under the heading
"Base Rate Margin" on Schedule 1.1 opposite the applicable Total Senior
Debt to EBITDA Ratio.
Benefited Obligations has the meaning set forth in the Intercreditor
Agreement.
Benefited Parties has the meaning set forth in the Intercreditor
Agreement.
Bid Borrowing means a Borrowing hereunder consisting of one or more
Bid Loans made to the Company on the same day by one or more Lenders.
Bid Loan means a Loan in Dollars by a Lender to the Company under
Section 2.6, which may be a LIBOR Bid Loan or an Absolute Rate Bid Loan.
Bid Loan Lender means, in respect of any Bid Loan, the Lender making
such Bid Loan to the Company.
BofA means Bank of America, N.A., a national banking association.
Borrowing means a borrowing hereunder consisting of Loans of the
same Type
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and in the same Applicable Currency made to the Company on the same day by
one or more Lenders under Article II, and, other than in the case of Base
Rate Committed Loans, having the same Interest Period. A Borrowing may be a
Bid Borrowing or a Committed Borrowing.
Borrowing Base means, as of the last day of any fiscal month, the
total of (i) 85% of the remainder of (x) the daily average for such month
of the amount of "Accounts and notes receivable, net" as would be shown on
the Company's consolidated balance sheet minus (y) the sum of all Debt
payable to Members and all Indebtedness secured by a Lien on such
receivables (other than Liens in favor of the Collateral Agent) plus (ii)
50% of the remainder of (x) the amount, based on the lower of cost or
market value, of "Inventories" as would be shown on the Company's
consolidated balance sheet as of the last day of such month minus (y) all
Indebtedness secured by a Lien on such Inventories (other than Liens in
favor of the Collateral Agent) plus (iii) the remainder of (x) the
Specified Percentage (as defined below) of the amount of "Properties, less
accumulated depreciation" as would be shown on the Company's consolidated
balance sheet as of the last day of such month minus (y) the
then-outstanding amount of all Indebtedness secured by a Lien on any such
properties (other than Liens in favor of the Collateral Agent); provided
that the "Accounts and notes receivable, net" "Inventories" and
"Properties, less accumulated depreciation" of ▇▇▇▇▇▇ Canada Hardware and
Variety Company Inc. and of TruServ Canada Cooperative Inc. shall be
excluded in determining amounts pursuant to clauses (i), (ii) and (iii)
above; and provided, further that the amount determined pursuant to clause
(ii) (the "Inventory Amount") shall be reduced by the amount (if any)
necessary so that the Inventory Amount is not more than 45% of the total of
clauses (i), (ii) and (iii). For purposes of the foregoing, "Specified
Percentage" means (a) from January 1, 2000 through December 31, 2000, 40%,
(b) from January 1, 2001 through December 31, 2001, 30%, and (c)
thereafter, 20%.
Borrowing Date means any date on which a Borrowing occurs under
Section 2.3, 2.7 or 2.18.
Business Day means any day other than a Saturday, Sunday or other
day on which commercial banks in New York City, Chicago, Charlotte or San
Francisco are authorized or required by law to close and (i) with respect
to disbursements and payments in Dollars relating to Offshore Rate Loans, a
day on which dealings are carried on in the applicable offshore Dollar
interbank market and (ii) with respect to disbursements and payments in and
calculations pertaining to any Offshore Currency, a day on which commercial
banks are open for foreign exchange business in London, England, and on
which dealings in the relevant Offshore Currency are carried on in the
applicable offshore foreign exchange interbank market in which disbursement
of or payment in such Offshore Currency will be made or received hereunder.
Capital Adequacy Regulation means any guideline, request or
directive of any
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central bank or other Governmental Authority, or any other law, rule or
regulation, whether or not having the force of law, in each case, regarding
capital adequacy of any bank or of any corporation controlling a bank.
Capitalized Lease Obligation means any rental obligation which,
under GAAP, is or will be required to be capitalized on the books of the
Company or any Subsidiary, taken at the amount thereof accounted for as
indebtedness (net of interest expense).
Closing Date means the date on which all conditions precedent set
forth in Section 4.1 are satisfied or waived by all Lenders (or, in the
case of subsection 4.1(e), waived by the Person entitled to receive the
applicable payment).
Code means the Internal Revenue Code of 1986 and regulations
promulgated thereunder.
Collateral Agent means BofA in its capacity as collateral agent
under the Intercreditor Agreement, together with any successor thereto in
such capacity.
Collateral Documents means the Security Agreement, the Trademark
Security Agreement, the Pledge Agreement, each Mortgage and any other
document or instrument pursuant to which the Company or any Guarantor
grants to the Collateral Agent, for the benefit of the Benefited Parties, a
security interest in any of its property to secure the payment of any of
the Benefited Obligations.
Commitment - see Section 2.1.
Commitment Fee Rate means the percentage set forth under the heading
"Commitment Fee Rate" on Schedule 1.1 opposite the applicable Total Senior
Debt to EBITDA Ratio.
Committed Borrowing means a Borrowing hereunder consisting of
Committed Loans made by the Lenders ratably from time to time according to
their respective Unused Commitment Shares.
Committed Loan means a Loan by a Lender to the Company under Section
2.1, which may be an Offshore Rate Committed Loan or a Base Rate Committed
Loan (each a "Type" of Committed Loan).
Company - see the Preamble.
Competitive Bid means an offer by a Lender to make a Bid Loan in
accordance with Section 2.7.
Competitive Bid Request - see subsection 2.7(a).
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Compliance Certificate means a certificate substantially in the form
of Exhibit E.
Computation Date means any date on which the Agent determines the
Dollar Equivalent amount of any Offshore Currency Loans pursuant to
subsection 2.5(a).
Consolidated Capitalization means, as of the time of any
determination, the sum of (i) Consolidated Net Worth and (ii) Funded Debt.
Consolidated Net Earnings means with respect to any period:
(i) consolidated gross revenues of the Company and its Subsidiaries,
minus
(ii) all operating and non-operating expenses of the Company and its
Subsidiaries including all charges of a proper character (including current
and deferred taxes on income, provision for taxes on unremitted foreign
earnings which are included in gross revenues, current additions to
reserves and merger integration costs),
but not including in gross revenues:
(a) any extraordinary gains or losses (net of expenses and
taxes applicable thereto) resulting from the sale, conversion or
other disposition of capital assets (i.e., assets other than current
assets);
(b) any gains resulting from the appraised write-up of assets;
(c) any equity of the Company or any Subsidiary in the
unremitted earnings of any corporation which is not a Subsidiary;
(d) any earnings of any Person acquired by the Company or any
Subsidiary through purchase, merger or consolidation or otherwise
for any year prior to the year of acquisition; or
(e) any deferred credit representing the excess of equity in
any Subsidiary at the date of acquisition over the cost of the
investment in such Subsidiary;
all determined in accordance with GAAP; provided that, to the extent that
amounts are deducted from Consolidated Net Earnings during the Company's
1999 fiscal year as a result of SOP 98-5, "Reporting the Costs of Start-up
Activities", issued by the American Institute of Certified Public
Accountants ("SOP 98-5"), in excess of the amount that would have been
deducted absent SOP 98-5, such excess shall be added back to Consolidated
Net Earnings.
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Consolidated Net Worth means, as of any date of determination, the
sum of (i) the par value (or value stated on the books of the Company) of
the capital stock of all classes of the Company, plus (or minus in the case
of a surplus deficit) (ii) the amount of the consolidated surplus, whether
capital or earned, of the Company and its Subsidiaries, all determined in
accordance with GAAP.
Contractual Obligation means, as to any Person, any provision of any
security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust or other instrument, document or
agreement to which such Person is a party or by which it or any of its
property is bound.
Conversion/Continuation Date means any date on which, under Section
2.4, the Company (a) converts Committed Loans of one Type to another Type
or (b) continues as Committed Loans of the same Type, but with a new
Interest Period, Committed Loans having an Interest Period expiring on such
date.
Cost of Funds Rate means, for any day, the rate per annum quoted by
BofA as its costs for obtaining Federal Funds on such day. The Costs of
Funds Rate for any day which is not a Business Day shall be the Cost of
Funds Rate for the preceding Business Day.
Credit Extension means and includes (a) the making of any Loan
hereunder and (b) the acceptance of any BA hereunder.
Debt means Short Term Debt and Funded Debt.
Dollar Equivalent means, at any time, (a) as to any amount
denominated in Dollars, the amount thereof at such time, and (b) as to any
amount denominated in an Offshore Currency, the equivalent amount in
Dollars as determined by the Agent at such time on the basis of the Spot
Rate for the purchase of Dollars with such Offshore Currency on the most
recent Computation Date provided for in subsection 2.5(a) or such other
date as is specified herein.
Dollars, dollars and $ each mean lawful money of the United States.
EBITDA means, for any period, Consolidated Net Earnings for such
period plus, to the extent deducted in computing such Consolidated Net
Earnings, interest expense, taxes, depreciation and amortization.
Effective Date - see Section 4.1.
Environmental Claims means all claims, however asserted, by any
Governmental
15
Authority or other Person alleging potential liability or responsibility
for violation of any Environmental Law, or for release or injury to the
environment.
Environmental Laws means all federal, state or local laws, statutes,
common law duties, rules, regulations, ordinances and codes, together with
all administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental
Authorities, in each case relating to environmental, health, safety and
land use matters.
ERISA means the Employee Retirement Income Security Act of 1974 and
regulations promulgated thereunder.
ERISA Affiliate means any trade or business (whether or not
incorporated) under common control with the Company within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code
for purposes of provisions relating to Section 412 of the Code).
ERISA Event means (a) a Reportable Event with respect to a Pension
Plan; (b) a withdrawal by the Company or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a
substantial cessation of operations which is treated as such a withdrawal;
(c) a complete or partial withdrawal by the Company or any ERISA Affiliate
from a Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Pension Plan amendment as a termination under Section 4041
or 4041A of ERISA, or the commencement of proceedings by the PBGC to
terminate a Pension Plan or Multiemployer Plan; (e) an event or condition
which might reasonably be expected to constitute grounds under Section 4042
of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan or Multiemployer Plan; or (f) the imposition
of any liability under Title IV of ERISA, other than PBGC premiums due but
not delinquent under Section 4007 of ERISA, upon the Company or any ERISA
Affiliate.
Event of Default - see Section 8.1.
Excess Net Cash Proceeds means Net Cash Proceeds from Assets Sales
which, together with all other Net Cash Proceeds from Asset Sales after
January 1, 2000 (excluding the amount of such Net Cash Proceeds, if any,
previously applied to reduce the Commitments pursuant to Section 2.8.2),
exceed $10,000,000.
Exchange Act means the Securities Exchange Act of 1934 and
regulations promulgated thereunder.
Facility Fee Rate means the percentage set forth under the heading
"Facility Fee
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Rate" on Schedule 1.1 opposite the applicable Fixed Charge Coverage Ratio.
Federal Funds Rate means, for any day, the rate set forth in the
weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York (including
any such successor, "H.15(519)") on the preceding Business Day opposite the
caption "Federal Funds (Effective)"; or, if for any relevant day such rate
is not so published on any such preceding Business Day, the rate for such
day will be the arithmetic mean as determined by the Agent of the rates for
the last transaction in overnight Federal funds arranged prior to 9:00 a.m.
(New York City time) on that day by each of three leading brokers of
Federal funds transactions in New York City selected by the Agent.
Fee Letter - see subsection 2.13(a).
Fixed Charge Coverage Ratio means, as of the last day of any fiscal
quarter, the ratio of
(a) the sum, for the period of four consecutive fiscal
quarters ending on such day, of (i) Consolidated Net Earnings plus
(ii) to the extent deducted in determining such Consolidated Net
Earnings, interest expense, taxes, operating lease expense,
depreciation and amortization, plus (iii) for the period of four
fiscal quarters ending March 31, 2000, June 30, 2000 and September
30, 2000, Special 1999 Charges (to the extent taken in such period),
plus (iv) for the period of four fiscal quarters ending March 31,
2000 and June 30, 2000, Special A/P Charges (to the extent taken in
such period),
to
(b) the sum for such period of (i) operating lease expense
and (ii) interest expense;
each as determined for the Company and its Subsidiaries on a consolidated
basis.
Foreign Subsidiary means each Subsidiary of the Company which is
organized under the laws of any jurisdiction other than, and which is
conducting the majority of its business outside of, the United States or
any state thereof.
FRB means the Board of Governors of the Federal Reserve System, and
any Governmental Authority succeeding to any of its principal functions.
Funded Debt means and includes, (i) any obligation payable more than
one year from the date of creation thereof which under GAAP is shown on a
balance sheet as a liability (including Capitalized Lease Obligations and
notes payable to Members but
17
excluding reserves for deferred income taxes and other reserves to the
extent that such reserves do not constitute an obligation); (ii)
indebtedness payable more than one year from the date of creation thereof
which is secured by any lien on property owned by the Company or any
Subsidiary and (iii) Guarantees (excluding Guarantees of loans made to
Members in an amount not exceeding in the aggregate $20,000,000).
Further Taxes means any and all present or future taxes, levies,
assessments, imposts, duties, deductions, fees, withholdings or similar
charges (including net income taxes and franchise taxes), and all
liabilities with respect thereto, imposed by any jurisdiction on account of
amounts payable or paid pursuant to Section 3.1.
FX Trading Office means the Foreign Exchange Trading Center #5193,
San Francisco, California, of BofA, or such other office of BofA or any of
its Affiliates as BofA may designate from time to time.
GAAP means generally accepted accounting principles set forth from
time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants
and statements and pronouncements of the Financial Accounting Standards
Board (or agencies with similar functions of comparable stature and
authority within the U.S. accounting profession), which are applicable to
the circumstances as of the date of determination.
Governmental Authority means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary
or regulatory authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.
Guarantee means, with respect to any Person, any direct or indirect
liability, contingent or otherwise, of such Person with respect to any
indebtedness, lease, dividend or other obligation of another, including,
without limitation, any such obligation directly or indirectly guaranteed,
endorsed (other than for collection of deposit in the ordinary course of
business) or discounted or sold with recourse by such Person, or in respect
of which such Person is otherwise directly or indirectly liable, including,
without limitation, any such obligation in effect guaranteed by such Person
through any agreement (contingent or otherwise) to purchase, repurchase or
otherwise acquire such obligation or any security therefor, or to provide
funds for the payment or discharge of such obligation (whether in the form
of loans, advances, stock purchases, capital contributions or otherwise),
or to maintain the solvency or any balance sheet or other financial
condition of the obligor of such obligation, or to make payment for any
products, materials or supplies or for any transportation or services
regardless of the non-delivery or non-furnishing thereof, in any such case
if the purpose or intent of such agreement is to provide assurance that
such obligation will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such obligation will
be protected against loss in
18
respect thereof. The amount of any Guarantee shall be equal to the
outstanding principal amount of the obligation guaranteed or such lesser
amount to which the maximum exposure of the guarantor shall have been
specifically limited.
Guarantor means, on any day, each Subsidiary that has executed a
counterpart of the Guaranty on or prior to that day (or is required to
execute a counterpart of the Guaranty on that day).
Guaranty means the Guaranty executed by various Subsidiaries,
substantially in the form of Exhibit K.
Hostile Tender Offer means, with respect to the use of proceeds of
any Loan or BA, any offer to purchase, or any purchase of, shares of
capital stock of any corporation or equity interests in any other entity,
or securities convertible into or representing the beneficial ownership of,
or rights to acquire, any such shares or equity interests, if such shares,
equity interests, securities or rights are of a class which is publicly
traded on any securities exchange or in any over-the-counter market, other
than purchases of such shares, equity interests, securities or rights
representing less than 5% of the equity interests or beneficial ownership
of such corporation or other entity for portfolio investment purposes, and
such offer or purchase has not been duly approved by the board of directors
of such corporation or the equivalent governing body of such other entity
prior to the date on which the Company makes the borrowing request for such
Loan or the request for such BA.
Inactive Subsidiary means any Subsidiary which does not actively
conduct business and which has less than $100,000 of assets.
Indebtedness means, with respect to any Person, without duplication,
(i) all items (excluding items of contingency reserves or of reserves for
deferred income taxes) which in accordance with GAAP would be included in
determining total liabilities as shown on the liability side of a balance
sheet of such Person as of the date on which Indebtedness is to be
determined, (ii) all indebtedness secured by any Lien on any property or
asset owned or held by such Person subject thereto, whether or not the
indebtedness secured thereby shall have been assumed and (iii) all
indebtedness of others with respect to which such Person has become liable
by way of Guarantee.
Indemnified Liabilities - see Section 10.5.
Indemnified Person - see Section 10.5.
Independent Auditor - see subsection 6.1(a).
Insolvency Proceeding means, with respect to any Person, (a) any
case, action or
19
proceeding with respect to such Person before any court or other
Governmental Authority relating to bankruptcy, reorganization, insolvency,
liquidation, receivership, dissolution, winding-up or relief of debtors, or
(b) any general assignment for the benefit of creditors, composition,
marshalling of assets for creditors, or other, similar arrangement in
respect of its creditors generally or any substantial portion of its
creditors; undertaken under U.S. Federal, state or foreign law, including
the Bankruptcy Code.
Intercreditor Agreement means the Intercreditor Agreement dated as
of April 14, 2000 among the Agent, the Collateral Agent and various other
parties, substantially in the form of Exhibit N.
Interest Payment Date means (i) as to any Loan other than a Base
Rate Committed Loan or a Swing Line Loan, the last day of each Interest
Period applicable to such Loan, (ii) as to any Base Rate Committed Loan,
the last Business Day of each calendar quarter, and (iii) as to any Swing
Line Loan, each Business Day (or as otherwise agreed between the Company
and the Swing Line Lender); provided that (a) if any Interest Period for an
Offshore Rate Committed Loan exceeds three months, the date that falls
three months after the beginning of such Interest Period shall also be an
Interest Payment Date and (b) as to any Bid Loan, such intervening dates
prior to the maturity thereof as may be specified by the Company and agreed
to by the applicable Bid Loan Lender in the applicable Competitive Bid also
shall be Interest Payment Dates.
Interest Period means, (a) as to any Offshore Rate Loan, the period
commencing on the Borrowing Date of such Loan or (in the case of any
Offshore Rate Committed Loan) on the Conversion/Continuation Date on which
the Loan is converted into or continued as an Offshore Rate Committed Loan,
and ending on the date one, two, three or six months thereafter as selected
by the Company in its Notice of Committed Borrowing, Notice of
Conversion/Continuation or Competitive Bid Request, as the case may be; and
(b) as to any Absolute Rate Bid Loan, a period of not more than 180 days as
selected by the Company in the applicable Competitive Bid Request; provided
that:
(i) if any Interest Period would otherwise end on a day that
is not a Business Day, such Interest Period shall be extended to the
following Business Day unless, in the case of an Offshore Rate Loan,
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 preceding Business Day;
(ii) any Interest Period for an Offshore Rate Loan that
begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such Interest
Period; and
20
(iii) no Interest Period for any Loan shall extend beyond
the scheduled Termination Date.
Investments means any loan or advance to, or ownership, purchase or
acquisition of any security (including stock) or obligations of, or any
other interest in, or any capital contribution made to, any Person.
IRS means the Internal Revenue Service, and any Governmental
Authority succeeding to any of its principal functions under the Code.
Lender - see the Preamble. References to the "Lenders" shall include
BofA in its capacity as Accepting Lender and as Swing Line Lender.
Lending Office means, as to any Lender, the office or offices of
such Lender specified as its "Lending Office" or "Domestic Lending Office"
or "Offshore Lending Office", as the case may be, on Schedule 10.2, or such
other office or offices as such Lender may from time to time notify the
Company and the Agent.
LIBOR Auction means a solicitation of Competitive Bids setting forth
a LIBOR Bid Margin pursuant to Section 2.7.
LIBOR Bid Loan means any Bid Loan that bears interest at a rate
based upon the Offshore Rate.
LIBOR Bid Margin - see subsection 2.7(c)(ii)(C).
Lien means any mortgage, pledge, security interest, encumbrance,
lien (statutory or otherwise) or charge of any kind (including any
agreement to give any of the foregoing, any conditional sale or other title
retention agreement, any lease in the nature thereof, and the filing of or
agreement to give any financing statement under the Uniform Commercial Code
of any jurisdiction) or any other type of preferential arrangement for the
purpose, or having the effect, of protecting a creditor against loss or
securing the payment or performance of an obligation.
Loan means an extension of credit by a Lender to the Company under
Article II. A Loan may be a Committed Loan, a Bid Loan or a Swing Line
Loan.
Loan Documents means this Agreement, any Note, the Guaranty, the
Collateral Documents, the Fee Letter, the Intercreditor Agreement and all
other documents delivered to the Collateral Agent, the Agent or any Lender
in connection herewith.
Margin Stock means "margin stock" as such term is defined in
Regulation T, U or X of the FRB.
21
Material Adverse Effect means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties,
condition (financial or otherwise) or prospects of the Company or the
Company and its Subsidiaries taken as a whole; (b) a material impairment of
the ability of the Company or any Subsidiary to perform its obligations
under any Loan Document; or (c) a material adverse effect upon the
legality, validity, binding effect or enforceability against the Company or
any Subsidiary of any Loan Document.
Member means any Person which is a member of the Company.
Minimum Tranche means, in respect of Loans comprising part of the
same Borrowing, or to be converted or continued under Section 2.4, (a) in
the case of Base Rate Committed Loans, $1,000,000 or a higher integral
multiple thereof and (b) in the case of Offshore Rate Committed Loans, a
minimum Dollar Equivalent amount of $5,000,000 and an integral multiple of
1,000,000 units of the Applicable Currency.
Mortgage means a mortgage, deed of trust, leasehold mortgage or
similar instrument granting the Collateral Agent a Lien on real property
owned or leased by the Company or any Subsidiary.
Multiemployer Plan means any Plan which is a "multiemployer plan"
(as such term is defined in section 4001(a)(3) of ERISA).
Net Cash Proceeds means, with respect to any Asset Sale, the
aggregate cash proceeds (including cash proceeds received by way of
deferred payment of principal pursuant to a note, installment receivable or
otherwise, but only as and when received) received by the Company or any
Subsidiary pursuant to such Asset Sale net of (i) the direct costs relating
to such Asset Sale (including sales commissions and legal, accounting and
investment banking fees), (ii) taxes paid or reasonably estimated by the
Company to be payable as a result thereof (after taking into account any
available tax credits or deductions and any tax sharing arrangements) and
(iii) amounts required to be applied to the repayment of any Debt or lease
obligations secured by a Lien (other than Liens in favor of the Collateral
Agent) on any asset subject to such Asset Sale (if such Lien is permitted
by Section 7.2).
Note means a promissory note executed by the Company in favor of a
Lender pursuant to subsection 2.2(b), in substantially the form of Exhibit
H.
Notice of Borrowing means a notice in substantially the form of
Exhibit A.
Notice of Committed Borrowing means a Notice of Borrowing requesting
Committed Loans pursuant to Section 2.3.
22
Notice of Conversion/Continuation means a notice in substantially
the form of Exhibit B.
Obligations means all advances, debts, liabilities, obligations,
covenants and duties arising under any Loan Document owing by the Company
to any Lender, the Agent or any Indemnified Person, whether direct or
indirect (including those acquired by assignment), absolute or contingent,
due or to become due, or now existing or hereafter arising.
Offshore Currency means at any time Canadian dollars, English pounds
sterling, French francs, Deutschemarks, Japanese yen, and any Agreed
Alternative Currency.
Offshore Currency Loan means any Offshore Rate Committed Loan
denominated in an Offshore Currency.
Offshore Rate means, for any Interest Period, with respect to
Offshore Rate Loans comprising part of the same Borrowing, the rate of
interest per annum determined by the Agent as the average (rounded upwards,
if necessary, to the nearest 0.01%) of the rates at which deposits in the
Applicable Currency in the approximate amount of the Offshore Rate Loan of
each Reference Lender (or, in the case of a Bid Borrowing in which no
Reference Lender is participating, in the approximate amount of the largest
Loan included in such Borrowing) for such Interest Period would be offered
by such Reference Lender to major banks in the offshore interbank market at
their request at approximately 11:00 a.m. (New York City time) two Business
Days prior to the commencement of such Interest Period.
Offshore Rate Committed Loan means a Committed Loan that bears
interest based on the Offshore Rate. An Offshore Rate Committed Loan may be
an Offshore Currency Loan or a Loan denominated in Dollars.
Offshore Rate Loan means an Offshore Rate Committed Loan or a LIBOR
Bid Loan.
Offshore Rate Margin means the percentage set forth under the
heading "Offshore Rate Margin" on Schedule 1.1 opposite the applicable
Total Senior Debt to EBITDA Ratio.
Organization Documents means, for any corporation, the certificate
or articles of incorporation, the bylaws, any certificate of determination
or instrument relating to the rights of preferred shareholders of such
corporation, any shareholder rights agreement, and all applicable
resolutions of the board of directors (or any committee thereof) of such
corporation.
23
Original Agreement - see the Recitals.
Other Taxes means any present or future stamp, court or documentary
taxes or any other excise or property taxes, charges or similar levies
which arise from any payment made hereunder or from the execution,
delivery, performance, enforcement or registration of, or otherwise with
respect to, this Agreement or any other Loan Document.
Overnight Rate means, for any day, the rate of interest per annum at
which overnight deposits in the Applicable Currency, in an amount
approximately equal to the amount with respect to which such rate is being
determined, would be offered for such day by BofA's London Branch to major
banks in the London or other applicable offshore interbank market. The
Overnight Rate for any day which is not a Business Day shall be the
Overnight Rate for the preceding Business Day.
Participant - see subsection 10.8(c).
Payment Sharing Notice means a written notice from the Company or
any Lender informing the Agent that an Event of Default has occurred and is
continuing and directing the Agent to allocate payments received from the
Company in accordance with subsection 2.17(b).
PBGC means the Pension Benefit Guaranty Corporation, or any
Governmental Authority succeeding to any of its principal functions under
ERISA.
Pension Plan means a pension plan (as defined in Section 3(2) of
ERISA) subject to Title IV of ERISA with respect to which the Company or
any ERISA Affiliate may have any liability.
Person means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture or Governmental Authority.
Plan shall mean any employee pension benefit plan (as such term is
defined in section 3 of ERISA) which is or has been established or
maintained, or to which contributions are or have been made, by the Company
or any ERISA Affiliate.
Pledge Agreement means the Pledge Agreement among the Company,
various Subsidiaries of the Company and the Collateral Agent, substantially
in the form of Exhibit L.
Preferred Stock, as applied to any corporation, means shares of such
corporation that shall be entitled to preference or priority over any other
shares of such corporation in respect of either the payment of dividends or
the distribution of assets upon liquidation, or
24
both.
Pro Rata Share means, as to any Lender at any time, the percentage
equivalent (expressed as a decimal, rounded to the ninth decimal place) at
such time of such Lender's Commitment divided by the combined Commitments
of all Lenders (or, after the Commitments have terminated, of (i) the
Dollar Equivalent amount of such Lender's Loans plus (without duplication)
the participation of such Lender in (or, in the case of the Accepting
Lender or the Swing Line Lender, its unparticipated portion of) all BA
Outstandings and Swing Line Loans divided by (ii) the Dollar Equivalent
amount of all outstanding Loans plus all BA Outstandings).
Reference Lender means each of BofA, Bank of Montreal and PNC Bank,
National Association.
Replacement Lender - see Section 3.7.
Reportable Event means, any of the events set forth in Section
4043(b) of ERISA or the regulations thereunder, other than any such event
for which the 30-day notice requirement under ERISA has been waived in
regulations issued by the PBGC.
Required Lenders means Lenders having Pro Rata Shares of 66-2/3% or
more.
Requirement of Law means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of
a Governmental Authority, in each case applicable to or binding upon the
Person or any of its property or to which the Person or any of its property
is subject.
Reset Date means the first date after the Effective Date on which
the Total Senior Debt to EBITDA Ratio has been below 3.00 to 1.00 for a
period of four consecutive fiscal quarters.
Responsible Officer means the chief executive officer, chief
operating officer, chief financial officer, treasurer or chief accounting
officer of the Company, general counsel of the Company or any other officer
of the Company involved principally in its financial administration or its
controllership function.
Restricted Investments shall mean any Investment prohibited by
Section 7.11.
Restricted Payment - see Section 7.12.
Same Day Funds means (i) with respect to disbursements and payments
in Dollars, immediately available funds, and (ii) with respect to
disbursements and payments in an Offshore Currency, same day or other funds
as may be determined by the Agent to be
25
customary in the place of disbursement or payment for the settlement of
international banking transactions in the relevant Offshore Currency.
SEC means the Securities and Exchange Commission or any Governmental
Authority succeeding to any of its principal functions.
Secured Funded Debt means Funded Debt which is secured by any Lien.
Security Agreement means the Security Agreement among the Company,
various Subsidiaries and the Collateral Agent, substantially in the form of
Exhibit M.
Senior Funded Debt means Funded Debt of the Company which is not
Subordinated Debt.
Short Term Debt means, as of any date of determination with respect
to any Person, (i) all Indebtedness of such Person for borrowed money other
than Funded Debt of such Person and (ii) Guarantees by such Person of Short
Term Debt of Persons other than Members.
Special A/P Charges means, at any time, the first $15,000,000 of
accounts payable charges taken by the Company during the first and second
fiscal quarters of its 2000 fiscal year.
Special 1999 Charges means up to $100,000,000 of accounting
adjustments taken by the Company during the 1999 fiscal year.
Spot Rate for a currency means the rate quoted by BofA as the spot
rate for the purchase by BofA of such currency with another currency
through its FX Trading Office at approximately 8:00 a.m. (San Francisco
time) on the date two Business Days prior to the date as of which the
foreign exchange computation is made.
Subordinated Debt shall mean any Indebtedness of the Company which
contains terms of subordination identical to or, in the reasonable
determination of the Agent no less favorable to the Lenders than, the terms
of subordination set forth in Exhibit I hereto and, which by virtue of such
language and any necessary action of the Board of Directors of the Company,
is subordinated to the Obligations.
Subsidiary means any corporation all of the stock of every class of
which, except directors' qualifying shares, shall, at the time as of which
any determination is being made, be owned by the Company either directly or
through Subsidiaries. Notwithstanding the foregoing, for purposes of
calculating the financial covenants, each of ▇▇▇▇▇▇ Canada Hardware and
Variety Company Inc. and TruServ Canada Cooperative Inc. will be deemed a
Subsidiary of the Company if, in accordance with GAAP, it is consolidated
in
26
the financial statements of the Company required to be delivered pursuant
to clauses (a) and (b) of Section 6.1 hereof.
Substantial Stockholder means (i) any Person owning, beneficially or
of record, directly or indirectly, either individually or together with all
other Persons to whom such Person is related by blood, adoption or
marriage, stock of the Company (of any class having ordinary voting power
for the election of directors) aggregating five percent (5%) or more of
such voting power or (ii) any Person related by blood, adoption or marriage
to any Person described or coming within the provisions of clause (i) of
this definition.
Swing Line Commitment means the commitment of the Swing Line Lender
to make Swing Line Loans hereunder. The Swing Line Commitment is a
subfacility under the combined Commitments and not a separate, independent
commitment.
Swing Line Lender means BofA in its capacity as swing line lender
hereunder, together with any successor thereto in such capacity.
Swing Line Loan - see Section 2.18.
Taxes means any and all present or future taxes, levies,
assessments, imposts, duties, deductions, charges or withholdings, fees,
withholdings or similar charges, and all liabilities with respect thereto,
excluding, in the case of each Lender and the Agent, such taxes (including
income taxes or franchise taxes) as are taxes imposed on or measured by its
net income by the jurisdiction (or any political subdivision thereof) under
the laws of which such Lender or the Agent, as the case may be, is
organized or maintains a lending office.
Termination Date means the earlier to occur of:
(a) June 30, 2002; and
(b) the date on which the Commitments terminate in
accordance with the provisions of this Agreement.
Total Outstandings means at any time the sum of (a) the Dollar
Equivalent principal amount of all outstanding Loans (whether Committed
Loans, Bid Loans or Swing Line Loans) plus (b) BA Outstandings.
Total Senior Debt means the sum of (a) all Debt of the Company and
its Subsidiaries other than Subordinated Debt and (b) the principal or face
amount of all outstanding "LC Obligations" under and as defined in the
Intercreditor Agreement.
Total Senior Debt to EBITDA Ratio means, as of the last day of any
fiscal quarter,
27
the ratio of (a) the remainder of (i) the daily average of the amount of
Total Senior Debt outstanding during the last fiscal month of such fiscal
quarter minus (ii) the daily average of cash and marketable securities
during the last fiscal month of such fiscal quarter to (b) the sum of (i)
EBITDA for the period of four consecutive fiscal quarters then ending, plus
(ii) for the period of four fiscal quarters ending March 31, 2000, June 30,
2000 and September 30, 2000, Special 1999 Charges (to the extent taken in
such period), plus (iii) for the period of four fiscal quarters ending
March 31, 2000 and June 30, 2000, Special A/P Charges (to the extent taken
in such period).
Trademark Security Agreement means the Trademark Security Agreement
between the Company and the Collateral Agent, substantially in the form of
Exhibit J.
Type has the meaning specified in the definition of "Committed
Loan."
Unfunded Pension Liability means the excess of a Pension Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the current
value of that Plan's assets, determined in accordance with the assumptions
used for funding the Pension Plan pursuant to Section 412 of the Code for
the applicable plan year.
United States and U.S. each means the United States of America.
Unmatured Event of Default means any event or circumstance which,
with the giving of notice, the lapse of time, or both, would (if not cured
or otherwise remedied during such time) constitute an Event of Default.
Unused Commitment Share means, for any Lender at any time, a
fraction (a) the numerator of which is the remainder of (i) the Commitment
of such Lender minus (ii) the sum of (x) the aggregate Dollar Equivalent
principal amount of all then outstanding Loans of such Lender (excluding,
in the case of the Swing Line Lender, all Swing Line Loans) and (b) the
denominator of which is the remainder of (i) the aggregate Commitments of
all Lenders, minus (ii) the aggregate Dollar Equivalent principal amount of
all then outstanding Loans of all Lenders. Solely for purposes of the
foregoing, (i) Loans to be repaid with the proceeds of Loans proposed to be
made shall be deemed not to be outstanding; and (ii) funded participations
in Swing Line Loans pursuant to Section 2.21 and in obligations with
respect to BAs pursuant to subsection 2.24(e) shall be deemed to constitute
Loans (but unfunded participations of the types described above shall not
constitute Loans).
Year 2000 Problem means the risk that computer applications and
embedded microchips in non-computing devices may be unable to recognize and
perform properly date-sensitive functions involving certain dates prior to
and any date after December 31, 1999.
1.2 Other Interpretive Provisions.
28
(a) The meanings of defined terms are equally applicable to
the singular and plural forms of the defined terms.
(b) The words "hereof", "herein", "hereunder" and similar
words refer to this Agreement as a whole and not to any particular
provision of this Agreement; and subsection, Section, Schedule and Exhibit
references are to this Agreement unless otherwise specified.
(c) (i) The term "documents" includes any and all
instruments, documents, agreements, certificates, indentures, notices and
other writings, however evidenced.
(ii) The term "including" is not limiting and means
"including without limitation."
(iii) In the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and
including"; the words "to" and "until" each mean "to but excluding",
and the word "through" means "to and including."
(d) Unless otherwise expressly provided herein, (i)
references to agreements (including this Agreement) and other contractual
instruments shall be deemed to include all subsequent amendments and other
modifications thereto, but only to the extent such amendments and other
modifications are not prohibited by the terms of any Loan Document, and
(ii) references to any statute or regulation are to be construed as
including all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting the statute or regulation.
(e) The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of
this Agreement.
(f) This Agreement and other Loan Documents may use several
different limitations, tests or measurements to regulate the same or
similar matters. All such limitations, tests and measurements are
cumulative and shall each be performed in accordance with their terms.
Unless otherwise expressly provided herein, any reference to any action of
the Agent, the Lenders or the Required Lenders by way of consent, approval
or waiver shall be deemed modified by the phrase "in its/their sole
discretion."
(g) This Agreement and the other Loan Documents are the
result of negotiations among and have been reviewed by counsel to the
Agent, the Company and the other parties, and are the products of all
parties. Accordingly, they shall not be construed against the Lenders or
the Agent merely because of the Agent's or Lenders' involvement in their
preparation.
1.3 Accounting Principles.
(a) Unless the context otherwise clearly requires, all
accounting terms not expressly defined herein shall be construed, and all
financial computations required under this Agreement shall be made, in
accordance with GAAP, consistently applied; provided that if the
29
Company notifies the Agent that the Company wishes to amend any covenant in
Article VII to eliminate the effect of any change in GAAP on the operation of
such covenant (or if the Agent notifies the Company that the Required Lenders
wish to amend Article VII for such purpose), then the Company's compliance with
such covenant shall be determined on the basis of GAAP in effect immediately
before the relevant change in GAAP became effective, until either such notice is
withdrawn or such covenant is amended in a manner satisfactory to the Company
and the Required Lenders.
(b) References herein to "fiscal year" and "fiscal quarter" refer to
such fiscal periods of the Company.
1.4 Currency Equivalents Generally. For all purposes of this Agreement (but
not for purposes of the preparation of any financial statements delivered
pursuant hereto), the equivalent in any Offshore Currency or other currency of
an amount in Dollars, and the equivalent in Dollars of an amount in any Offshore
Currency or other currency, shall be determined at the Spot Rate.
1.5 Introduction of Euro. For the avoidance of doubt, the parties hereto
affirm and agree that neither the fixation of the conversion rate of any
Offshore Currency of a country that is a member of the European Union against
the Euro as a single currency, in accordance with the Treaty Establishing the
European Economic Community, as amended by the Treaty on the European Union (the
Maastricht Treaty), nor the conversion of any Obligations under the Loan
Documents from an Offshore Currency of a country that is a member of the
European Union into Euro, shall require the early termination of this Agreement
or the prepayment of any amount due under the Loan Documents or create any
liability of one party to another party for any direct or consequential loss
arising from any of such events. As of the date that any such Offshore Currency
is no longer the lawful currency of its respective country, all payment
obligations under the Loan Documents that would otherwise be in such Offshore
Currency shall thereafter by satisfied in Euro.
ARTICLE II
THE CREDITS
2.1 Amounts and Terms of Commitments. Each Lender severally agrees, on the
terms and conditions set forth herein, to make Committed Loans to the Company
from time to time on any Business Day during the period from the Closing Date to
the Termination Date, in an aggregate Dollar Equivalent amount not to exceed at
any time outstanding the amount set forth on Schedule 2.1 (such amount, as the
same may be reduced under Section 2.8 or as a result of one or more assignments
under Section 10.8, such Lender's "Commitment"); provided, however, that the
Total Outstandings shall not at any time exceed the combined Commitments; and
provided, further, that the aggregate Dollar Equivalent principal amount of all
outstanding Loans
30
(whether Committed Loans or Bid Loans) of any Lender plus such Lender's
participation interest in all Swing Line Loans and BA Outstandings shall not at
any time exceed such Lender's Commitment. Within the foregoing limits, and
subject to the other terms and conditions hereof, the Company may borrow under
this Section 2.1, prepay under Section 2.9 and reborrow under this Section 2.1.
2.2 Loan Accounts. (a) The Loans made by each Lender shall be evidenced by
one or more accounts or records maintained by such Lender in the ordinary course
of business. The accounts or records maintained by the Agent and each Lender
shall be rebuttably presumptive evidence of the amount of the Loans made by the
Lenders to the Company, and the interest and payments thereon. Any failure so to
record or any error in doing so shall not, however, limit or otherwise affect
the obligation of the Company hereunder to pay any amount owing with respect to
the Loans.
(b) Upon the request of any Lender made through the Agent, the Loans
made by such Lender may be evidenced by one or more Notes, instead of or in
addition to loan accounts. Each such Lender shall endorse on the schedules
annexed to its Note(s) the date, amount and maturity of each Loan made by it and
the amount of each payment of principal made by the Company with respect
thereto. Each such Lender is irrevocably authorized by the Company to endorse
its Note(s) and each Lender's record shall be rebuttably presumptive evidence;
provided, however, that the failure of a Lender to make, or an error in making,
a notation thereon with respect to any Loan shall not limit or otherwise affect
the obligations of the Company hereunder or under any such Note to such Lender.
2.3 Procedure for Committed Borrowing. (a) Each Committed Borrowing shall
be made upon the Company's irrevocable written notice delivered to the Agent in
the form of a Notice of Committed Borrowing, which notice must be received by
the Agent prior to (i) 11:00 a.m. (Chicago time) four Business Days prior to the
requested Borrowing Date, in the case of Offshore Currency Loans, (ii) 9:00
a.m.(Chicago time) two Business Days prior to the requested Borrowing Date, in
the case of Offshore Rate Loans denominated in Dollars, and (iii) 11:00 a.m.
(Chicago time) on the requested Borrowing Date, in the case of Base Rate Loans,
specifying:
(A) the amount of the Committed Borrowing, which shall be in
an aggregate amount not less than the Minimum Tranche;
(B) the requested Borrowing Date, which shall be a Business
Day;
(C) the Type of Loans comprising such Committed Borrowing;
(D) in the case of Offshore Rate Committed Loans, the
duration of the initial Interest Period therefor; and
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(E) in the case of a Borrowing of Offshore Currency Loans,
the Applicable Currency.
(b) The Dollar Equivalent amount of any Committed Borrowing in an
Offshore Currency will be determined by the Agent for such Borrowing on the
Computation Date therefor in accordance with subsection 2.5(a). The Agent will
promptly notify each Lender of its receipt of any Notice of Committed Borrowing
and of the amount of such Lender's Unused Commitment Share of such Borrowing. In
the case of a Borrowing comprised of Offshore Currency Loans, such notice will
provide the approximate amount of each Lender's Unused Commitment Share of such
Borrowing, and the Agent will, upon the determination of the Dollar Equivalent
amount of such Borrowing as specified in the related Notice of Committed
Borrowing, promptly notify each Lender of the exact amount of such Lender's
Unused Commitment Share of such Borrowing.
(c) Each Lender will make the amount of its Unused Commitment Share
of each Committed Borrowing available to the Agent for the account of the
Company at the Agent's Payment Office on the Borrowing Date requested by the
Company in Same Day Funds and in the requested currency (i) in the case of a
Committed Borrowing comprised of Loans in Dollars, by noon (Chicago time) and
(ii) in the case of a Borrowing comprised of Offshore Currency Loans, by such
time as the Agent may specify. The proceeds of all such Committed Loans will
then be made available to the Company by the Agent at such office by crediting
the account of the Company on the books of BofA with the aggregate of the
amounts made available to the Agent by the Lenders and in like funds as received
by the Agent.
(d) After giving effect to any Committed Borrowing, unless the Agent
otherwise consents, there may not be more than ten different Interest Periods in
effect for all Committed Borrowings.
2.4 Conversion and Continuation Elections for Committed Borrowings. (a) The
Company may, upon irrevocable written notice to the Agent in accordance with
subsection 2.4(b):
(i) elect, as of any Business Day, in the case of Base Rate
Committed Loans, or as of the last day of the applicable Interest Period,
in the case of Offshore Rate Committed Loans denominated in Dollars, to
convert any such Committed Loans (or any part thereof in an aggregate
amount not less than the Minimum Tranche) into Committed Loans in Dollars
of any other Type; or
(ii) elect as of the last day of the applicable Interest Period,
to continue any Committed Loans having Interest Periods expiring on such
day (or any part thereof in an amount not less than the Minimum Tranche) as
Committed Loans of the same Type;
provided that if at any time the aggregate amount of Offshore Rate Committed
Loans denominated in Dollars in respect of any Committed Borrowing is reduced,
by payment, prepayment, or conversion of part thereof, to be less than the
Minimum Tranche, such Offshore
32
Rate Committed Loans shall automatically convert into Base Rate Committed Loans.
(b) The Company shall deliver a Notice of Conversion/Continuation to
be received by the Agent not later than (i) 11:00 a.m. (Chicago time) four
Business Days prior to the Conversion/Continuation Date, if the Committed Loans
are to be continued as Offshore Currency Loans; (ii) 10:00 a.m. (Chicago time)
two Business Days in advance of the Conversion/Continuation Date, if the
Committed Loans are to be converted into or continued as Offshore Rate Committed
Loans denominated in Dollars; and (iii) 11:00 a.m. (Chicago time) on the
Conversion/Continuation Date, if the Committed Loans are to be converted into
Base Rate Committed Loans, specifying:
(A) the proposed Conversion/Continuation Date;
(B) the aggregate amount of Committed Loans to be converted
or continued;
(C) the Type of Committed Loans resulting from the proposed
conversion or continuation; and
(D) in the case of conversions into Offshore Rate Committed
Loans, the duration of the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable to
Offshore Rate Committed Loans denominated in Dollars, the Company has failed to
select timely a new Interest Period to be applicable to such Offshore Rate
Committed Loans, the Company shall be deemed to have elected to convert such
Offshore Rate Committed Loans into Base Rate Committed Loans effective as of the
expiration date of such Interest Period. If the Company has failed to select a
new Interest Period to be applicable to Offshore Currency Loans by the
applicable time on the fourth Business Day in advance of the expiration date of
the current Interest Period applicable thereto as provided in subsection 2.4(b),
or if any Event of Default or Unmatured Event of Default shall then exist,
subject to the provisions of subsection 2.5(d), the Company shall be deemed to
have elected to continue such Offshore Currency Loans on the basis of a one
month Interest Period.
(d) The Agent will promptly notify each Lender of its receipt of a
Notice of Conversion/Continuation, or, if no timely notice is provided by the
Company, the Agent will promptly notify each Lender of the details of any
automatic conversion. All conversions and continuations shall be made ratably
according to the respective outstanding principal amounts of the Committed Loans
with respect to which the notice was given held by each Lender.
(e) Unless the Required Lenders otherwise consent, during the
existence of an Event of Default or Unmatured Event of Default, the Company may
not elect to have a Loan converted into or continued as an Offshore Rate
Committed Loan.
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(f) After giving effect to any conversion or continuation of
Committed Loans, unless the Agent shall otherwise consent, there may not be more
than ten different Interest Periods in effect for all Committed Loans.
2.5 Utilization of Commitments in Offshore Currencies. (a) The Agent will
determine the Dollar Equivalent amount with respect to (i) any Borrowing
comprised of Offshore Currency Loans as of the requested Borrowing Date, (ii)
all outstanding Offshore Currency Loans as of the last Business Day of each
month, and (iii) any outstanding Offshore Currency Loan as of any redenomination
date pursuant to this Section 2.5 or Section 3.2 or 3.5 and any date on which
the Commitments are reduced pursuant to Section 2.8.
(b) In the case of a proposed Borrowing comprised of Offshore
Currency Loans, the Lenders shall be under no obligation to make Offshore
Currency Loans in the requested Offshore Currency as part of such Borrowing if
the Agent has received notice from any of the Lenders by 3:00 p.m. (Chicago
time) four Business Days prior to the day of such Borrowing that such Lender
cannot provide Loans in the requested Offshore Currency, in which event the
Agent will promptly give notice to the Company that the Borrowing in the
requested Offshore Currency is not then available, and notice thereof also will
be given promptly by the Agent to the Lenders. If the Agent shall have so
notified the Company that any such Borrowing in a requested Offshore Currency is
not then available, the Company may, by notice to the Agent not later than 3:00
p.m. (Chicago time) three Business Days prior to the requested date of such
Borrowing, withdraw the Notice of Committed Borrowing relating to such requested
Borrowing. If the Company does so withdraw such Notice of Committed Borrowing,
the Borrowing requested therein shall not occur and the Agent will promptly so
notify each Lender. If the Company does not so withdraw such Notice of Committed
Borrowing, the Agent will promptly so notify each Lender and such Notice of
Committed Borrowing shall be deemed to be a Notice of Committed Borrowing that
requests a Borrowing comprised of Base Rate Loans in an aggregate amount equal
to the amount of the originally requested Borrowing as expressed in Dollars in
the Notice of Committed Borrowing; and in such notice by the Agent to each
Lender the Agent will state such aggregate amount of such Borrowing in Dollars
and such Lender's Unused Commitment Share thereof.
(c) In the case of a proposed continuation of Offshore Currency
Loans for an additional Interest Period pursuant to Section 2.4, the Lenders
shall be under no obligation to continue such offshore Currency Loans if the
Agent has received notice from any of the Lenders by 3:00 p.m. (Chicago time)
four Business Days prior to the day of such continuation that such Lender cannot
continue to provide Loans in the relevant Offshore Currency, in which event the
Agent will promptly give notice to the Company that the continuation of such
Offshore Currency Loans in the relevant Offshore Currency is not then available,
and notice thereof also will be given promptly by the Agent to the Lenders. If
the Agent shall have so notified the Company that any such continuation of
Offshore Currency Loans is not then available, any Notice of
Continuation/Conversion with respect thereto shall be deemed withdrawn and such
Offshore Currency Loans shall be repaid on the last day of the Interest Period
with respect to such offshore
34
Currency Loans.
(d) Notwithstanding anything herein to the contrary, during the
existence of an Event of Default, upon the request of the Required Lenders, all
or any part of any outstanding Offshore Currency Loans shall be redenominated
and converted into Base Rate Committed Loans in Dollars with effect from the
last day of the Interest Period with respect to such Offshore Currency Loans.
The Agent will promptly notify the Company of any request pursuant to the
foregoing sentence.
(e) The Company shall be entitled to request that Loans hereunder
also be permitted to be made in any other lawful currency, in addition to the
eurocurrencies specified in the definition of "Offshore Currency" herein, that
in the opinion of the Required Lenders is at such time freely traded in the
offshore interbank foreign exchange markets and is freely transferable and
freely convertible into Dollars (an "Agreed Alternative Currency"). The Company
shall deliver to the Agent any request for designation of an Agreed Alternative
Currency not later than 10:00 a.m. (Chicago time) at least seven Business Days
in advance of the date of any Borrowing hereunder proposed to be made in such
Agreed Alternative Currency. Upon receipt of any such request the Agent will
promptly notify the Lenders thereof, and each Lender will use its best efforts
to respond to such request within two Business Days of receipt thereof. Each
Lender may grant or accept such request in its sole discretion. The Agent will
promptly notify the Company of the acceptance or rejection of any such request.
2.6 Bid Borrowings. In addition to Committed Borrowings pursuant to Section
2.3, each Lender severally agrees that the Company may, as set forth in Section
2.7, from time to time request the Lenders prior to the Termination Date to
submit offers to make Bid Loans to the Company; provided that the Lenders may,
but shall have no obligation to, submit such offers and the Company may, but
shall have no obligation to, accept any such offers; and provided, further, that
(a) the Total Outstandings shall not at any time exceed the combined
Commitments, (b) the aggregate Dollar Equivalent principal amount of all
outstanding Loans (whether Bid Loans or Committed Loans) of any Lender plus such
Lender's participation interest in all Swing Line Loans and BA Outstandings
shall not at any time exceed such Lender's Commitment, and (c) after giving
effect to any Bid Borrowing, there may not be more than ten (10) different
Interest Periods in effect for all Bid Borrowings.
2.7 Procedure for Bid Borrowings.
(a) When the Company wishes to request the Lenders to submit offers
to make Bid Loans hereunder, it shall transmit to the Agent and each Lender by
telephone call followed promptly by facsimile transmission a notice in
substantially the form of Exhibit C (a "Competitive Bid Request") so as to be
received no later than 9:00 a.m. (Chicago time) (x) four Business Days prior to
the date of a proposed Bid Borrowing in the case of a LIBOR Auction or (y) on
the date of a proposed Bid Borrowing in the case of an Absolute Rate Auction,
specifying:
35
(i) the date of such Bid Borrowing, which shall be a
Business Day;
(ii) the aggregate amount of such Bid Borrowing, which shall
be a minimum amount of $3,000,000 or a higher integral multiple of
$1,000,000;
(iii) whether the Competitive Bids requested are to be for
LIBOR Bid Loans or Absolute Rate Bid Loans or both; and
(iv) the duration of the Interest Period applicable thereto,
subject to the provisions of the definition of "Interest Period"
herein.
Subject to subsection 2.7(b), the Company may not request Competitive Bids for
more than three Interest Periods in a single Competitive Bid Request and may not
request Competitive Bids more than twice in any period of five Business Days.
(b)(i) Each Lender may at its discretion submit a Competitive Bid
containing an offer or offers to make Bid Loans in response to any
Competitive Bid Request. Each Competitive Bid must comply with the
requirements of this subsection 2.7(b) and must be submitted to the Company
by facsimile transmission at the Company's office for notices not later
than 9:30 a.m. (Chicago time) (1) three Business Days prior to the proposed
date of Borrowing, in the case of a LIBOR Auction, or (2) on the proposed
date of Borrowing, in the case of an Absolute Rate Auction.
(ii) Each Competitive Bid shall be in substantially the form
of Exhibit D, specifying therein:
(A) the proposed date of Borrowing;
(B) the principal amount of each Bid Loan for which
such Competitive Bid is being made, which principal amount (x) may
be equal to, greater than or less than the Commitment of the quoting
Lender, (y) must be $3,000,000 or a higher integral multiple of
$1,000,000 and (z) may not exceed the principal amount of Bid Loans
for which Competitive Bids were requested;
(C) if the Company elects a LIBOR Auction, the
margin above or below LIBOR (the "LIBOR Bid Margin") offered for
each such Bid Loan, expressed as a percentage (rounded to the
nearest 1/16th of 1%) to be added to or subtracted from the
applicable LIBOR, and the Interest Period applicable thereto;
(D) if the Company elects an Absolute Rate Auction,
the rate of interest per annum (which shall be an integral multiple
of 1/100th of 1%) (the "Absolute Rate") offered for each such Bid
Loan; and
36
(E) the identity of the quoting Lender.
A Competitive Bid may contain up to three separate offers by the quoting
Lender with respect to each Interest Period specified in the related
Competitive Bid Request.
(iii) Any Competitive Bid shall be disregarded if it:
(A) is not substantially in conformity with Exhibit
D or does not specify all of the information required by subsection
(b)(ii) of this Section;
(B) contains qualifying, conditional or similar
language;
(C) proposes terms other than or in addition to
those set forth in the applicable Competitive Bid Request; or
(D) arrives after the time set forth in subsection
(b)(i) of this Section.
(c) Not later than 10:00 a.m. (Chicago time) three Business Days
prior to the proposed date of Borrowing, in the case of a LIBOR Auction, or
10:00 a.m. (Chicago time) on the proposed date of Borrowing, in the case of an
Absolute Rate Auction, the Company shall notify each Lender whose Competitive
Bid the Company is accepting of its acceptance of the offer received pursuant to
subsection 2.7(b) and the amount of the Bid Loan or Bid Loans to be made by such
Lender on the date of the Bid Borrowing. The Company shall be under no
obligation to accept any offer and may choose to reject all offers. The Company
may accept any Competitive Bid in whole or in part; provided that:
(i) the aggregate principal amount of each Bid Borrowing may
not exceed the applicable amount set forth in the related Competitive Bid
Request;
(ii) the principal amount of each Bid Borrowing must be
$3,000,000 or a higher integral multiple of $1,000,000;
(iii) acceptance of offers may only be made on the basis of
ascending LIBOR Bid Margins or Absolute Rates, as the case may be, within
each Interest Period; and
(iv) the Company may not accept any offer that is described
in subsection 2.7(b)(iii) or that otherwise fails to comply with the
requirements of this Agreement.
(d) If offers are made by two or more Lenders with the same
LIBOR Bid Margins or Absolute Rates, as the case may be, for a greater aggregate
principal amount than the amount in respect of which such offers are accepted
for the related Interest Period, the principal
37
amount of Bid Loans in respect of which such offers are accepted shall be
allocated by the Company among such Lenders as nearly as possible (in such
multiples, not less than $1,000,000, as the Company may deem appropriate) in
proportion to the aggregate principal amounts of such offers.
(e)(i) The Company shall notify the Agent of all Competitive Bids
accepted and the amount and maturity of each Bid Loan of each Lender whose
Competitive Bid has been accepted.
(ii) Each Lender which has received notice pursuant to
subsection 2.7(c) that its Competitive Bid has been accepted shall make the
amounts of such Bid Loans available to the Agent for the account of the
Company at the Agent's Payment Office by 1:00 p.m. (Chicago time) on the
date of the Bid Borrowing, in Same Day Funds.
(iii) Promptly following each Bid Borrowing, the Agent shall
notify each Lender of the amount and maturity of each Bid Loan borrowed
pursuant to such Bid Borrowing.
(iv) From time to time, the Company and the Lenders shall
furnish such information to the Agent as the Agent may request relating to
the making of Bid Loans, including the amounts, interest rates, dates of
borrowings and maturities thereof, for purposes of the allocation of
amounts received from the Company for payment of all amounts owing
hereunder.
(f) If, on the proposed date of Borrowing, the Commitments have
not been terminated and all applicable conditions to funding referenced in
Sections 3.2, 3.5 and 4.2 hereof are satisfied, the Lender or Lenders whose
offers the Company has accepted will fund each Bid Loan so accepted. Nothing in
this Section 2.7 shall be construed as a right of first offer in favor of the
Lenders or to otherwise limit the ability of the Company to request and accept
credit facilities from any Person (including any of the Lenders), provided that
no Event of Default or Unmatured Event of Default would otherwise arise or exist
as a result of the Company executing, delivering or performing under such credit
facilities.
2.8 Termination or Reduction of Commitments.
2.8.1 Voluntary Termination or Reduction of Commitments. The Company may,
upon not less than five Business Days' prior notice to the Agent, terminate the
Commitments, or permanently reduce the Commitments by an aggregate amount of
$5,000,000 or a higher integral multiple of $1,000,000; unless, after giving
effect thereto and to any payments or prepayments of Loans made on the effective
date thereof, the aggregate principal Dollar Equivalent amount of all Loans
would exceed the amount of the combined Commitments then in effect.
2.8.2 Mandatory Reductions of Commitments. (a) If, at any time, the
Company and its Subsidiaries receive any Excess Net Cash Proceeds, the
Commitments shall be reduced by an
38
amount equal to the product of (i) such Excess Net Cash Proceeds multiplied by
(ii) 0.75 multiplied by (iii) a fraction, the numerator of which is the amount
of the Commitments as in effect prior to such reduction and the denominator of
which is the sum of (A) the amount of the Commitments as in effect prior to such
reduction plus (B) the outstanding principal amount of the Shelf Obligations and
the Senior Note Obligations (each as defined in the Intercreditor Agreement)
prior to any prepayment thereof on account of such Net Cash Proceeds; provided
that (x) no such reduction shall be required unless the aggregate amount of
Excess Net Cash Proceeds (excluding Excess Net Cash Proceeds previously applied
to reduce the Commitments pursuant to this Section) equals or exceeds $400,000;
and (y) the amount of Excess Net Cash Proceeds to be applied on any single
occasion shall be rounded down to an integral multiple of $100,000 (it being
understood that the amount of Excess Net Cash Proceeds in excess of any such
integral multiple shall be applied on the next date on which Excess Net Cash
Proceeds are applied).
(b) The aggregate amount of the Commitments shall be automatically
reduced (to the extent not already at or below the specified amount) to (i)
$275,000,000 on December 31, 2000 and (ii) $250,000,000 on December 31, 2001.
2.8.3 All Reductions of Commitments. Once reduced in accordance with this
Section 2.8, the Commitments may not be increased. Any reduction of the
Commitments shall be applied to each Lender according to its Pro Rata Share. All
accrued commitment fees to, but not including, the effective date of any
reduction or termination of Commitments, shall be paid on the effective date of
such reduction or termination.
2.9 Prepayments.
2.9.1 Optional Prepayments. (a) Subject to Section 3.4, the Company may,
from time to time, upon irrevocable notice to the Agent not later than 11:00
a.m. (Chicago time) on any Business Day, ratably prepay Committed Loans in whole
or in part, in minimum Dollar Equivalent amounts of not less than the Minimum
Tranche. The Company shall deliver a notice of prepayment in accordance with
Section 10.2 to be received by the Agent not later than (i) 11:00 a.m. (Chicago
time) three Business Days in advance of the prepayment date if the Committed
Loans to be prepaid are Offshore Rate Committed Loans, and (ii) 10:00 a.m.
(Chicago time) on the prepayment date if the Committed Loans to be prepaid are
Base Rate Loans. Such notice of prepayment shall specify the date and amount of
such prepayment and whether such prepayment is of Base Rate Loans, Offshore Rate
Committed Loans, or any combination thereof and the Applicable Currency. Such
notice shall not thereafter be revocable by the Company. The Agent will promptly
notify each Lender of its receipt of any such notice, and of such Lender's share
of such prepayment (ratably in accordance with each Lender's aggregate Dollar
Equivalent principal amount of Loans outstanding). If such notice is given by
the Company, the Company shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified therein,
together with, in the case of Offshore Rate Committed Loans, accrued interest to
each such date on the amount prepaid and any amounts required pursuant to
Section 3.4.
39
(b) No Bid Loan may be voluntarily prepaid without the consent of the
Lender that holds such Bid Loan.
2.9.2 Mandatory Prepayments. If on any date on which the Commitments are
reduced pursuant to Section 2.8.2, the Total Outstandings exceed the aggregate
amount of the Commitments as so reduced, the Company shall immediately prepay
Loans in an amount equal to such excess.
2.10 Currency Exchange Fluctuations. Subject to Section 3.4, if on any
Computation Date the Agent shall have determined that the Total Outstandings
exceed the combined Commitments of all Lenders by more than $250,000 due to a
change in applicable rates of exchange between Dollars, on the one hand, and
Offshore Currencies on the other hand, then the Agent shall give notice to the
Company that a prepayment is required under this subsection, and the Company
agrees thereupon to make prepayments of Loans such that, after giving effect to
such prepayment, the Total Outstandings do not exceed the combined Commitments
of all Lenders.
2.11 Repayment. The Company shall repay each Bid Loan on the last day of
each Interest Period therefor. The Company shall repay all Loans (including any
outstanding Bid Loan) on the Termination Date.
2.12 Interest. (a) Each Committed Loan shall bear interest on the
outstanding principal amount thereof from the applicable Borrowing Date at a
rate per annum equal to (i) at all times such Committed Loan is a Base Rate
Loan, the sum of the Base Rate as in effect from time to time plus the Base Rate
Margin as in effect from time to time and (ii) at all times such Committed Loan
is an Offshore Rate Loan, the sum of the Offshore Rate for the applicable
Interest Period plus the Offshore Rate Margin as in effect from time to time.
Each Swing Line Loan shall bear interest on the outstanding principal amount
thereof from the applicable Borrowing Date at a rate per annum equal to the sum
of (i) the Federal Funds Rate as in effect from time to time plus (ii) the
applicable Offshore Rate Margin as in effect from time to time plus (iii) 0.10%.
(b) Interest on each Loan shall be paid in arrears on each Interest
Payment Date. Interest also shall be paid on the date of any conversion of
Offshore Rate Committed Loans under Section 2.4 and prepayment of Offshore Rate
Committed Loans under Section 2.9, in each case for the portion of the Loans so
prepaid. During the existence of any Event of Default, interest shall be paid on
demand of the Agent at the request or with the consent of the Required Lenders.
(c) Notwithstanding subsection (a) of this Section, while any Event
of Default exists, the Company shall pay interest (after as well as before entry
of judgment thereon to the extent permitted by law) on the principal amount of
all outstanding Loans and, to the extent
40
permitted by applicable law, on any other amount payable hereunder or under any
other Loan Document, at a rate per annum equal to the rate otherwise applicable
thereto pursuant to the terms hereof or such other Loan Document (or, if no such
rate is specified, the Base Rate) plus 2%. All such interest shall be payable on
demand.
(d) Anything herein to the contrary notwithstanding, the obligations
of the Company to any Lender hereunder shall be subject to the limitation that
payments of interest shall not be required for any period for which interest is
computed hereunder, to the extent (but only to the extent) that contracting for
or receiving such payment by such Lender would be contrary to the provisions of
any law applicable to such Lender limiting the highest rate of interest that may
be lawfully contracted for, charged or received by such Lender, and in such
event the Company shall pay such Lender interest at the highest rate permitted
by applicable law.
2.13 Fees.
(a) Certain Fees. The Company shall pay certain fees to the Agent
and the Arranger for their own respective accounts at the times and in the
amounts required by the letter agreement (the "Fee Letter") among the Company,
the Agent and the Arranger dated March 10, 2000.
(b) Commitment Fees. The Company shall pay to the Agent for the
account of each Lender a commitment fee in such Lender's Pro Rata Share of the
unused amount of the combined Commitments, as calculated by the Agent on a
quarterly basis in arrears on the last day of each calendar quarter and on the
Termination Date, at the Commitment Fee Rate. Such commitment fees shall accrue
from the Effective Date to the Termination Date and shall be due and payable
quarterly in arrears on the last Business Day of each calendar quarter and on
the Termination Date. The commitment fees shall accrue at all times after the
Effective Date, including at any time during which one or more conditions in
Article IV are not met. For purposes of calculating commitment fees, Swing Line
Loans shall not be deemed to constitute usage of the Commitments.
2.14 Computation of Fees and Interest. (a) All computations of interest
for Base Rate Committed Loans when the Base Rate is determined by BofA's
"reference rate", and all computations of interest for Offshore Currency Loans
denominated in English pounds sterling shall be made on the basis of a year of
365 or 366 days, as the case may be, and actual days elapsed. All other
computations of interest and fees shall be made on the basis of a 360-day year
and actual days elapsed. Interest and fees shall accrue during each period
during which such interest or such fees are computed from the first day thereof
to the last day thereof.
(b) Each determination of an interest rate or a Dollar Equivalent
amount by the Agent shall be conclusive and binding on the Company and the
Lenders in the absence of manifest error. The Agent will, at the request of the
Company or any Lender, deliver to the Company or such Lender, as the case may
be, a statement showing the quotations used by the Agent in
41
determining any interest rate or Dollar Equivalent amount. Each Reference Lender
agrees to deliver to the Agent timely information for the purpose of determining
the Offshore Rate. If any one of the Reference Lenders shall fail to furnish
such information to the Agent for any such interest rate, the Agent shall
determine such interest rate on the basis of the information furnished by the
remaining Reference Lender or Reference Lenders.
2.15 Payments by the Company. (a) All payments to be made by the Company
shall be made without set-off, recoupment or counterclaim. Except as otherwise
expressly provided herein, all payments by the Company shall be made to the
Agent for the account of the Lenders at the Agent's Payment Office, and (i) with
respect to principal of, interest on, and any other amount relating to any
Offshore Currency Loan, shall be made in the Offshore Currency in which such
Loan is denominated or payable, and (ii) with respect to all other amounts
payable hereunder, shall be made in Dollars. Such payments shall be made in Same
Day Funds and (x) in the case of Offshore Currency payments, no later than such
time on the dates specified herein as may be determined by the Agent to be
necessary for such payment to be credited on such date in accordance with normal
banking procedures in the place of payment, and (y) in the case of any Dollar
payments, no later than 11:00 a.m. (Chicago time) on the date specified herein.
The Agent will promptly distribute to each Lender its Pro Rata Share (or other
applicable share as expressly provided herein) of such payment in like funds as
received. Any payment received by the Agent later than the time specified in
clause (x) or (y) above shall be deemed to have been received on the following
Business Day and any applicable interest or fee shall continue to accrue.
(b) Whenever any payment is due on a day other than a Business Day,
such payment shall be made on the following Business Day (unless, in the case of
an Offshore Rate Loan, the following Business Day is in another calendar month,
in which case such payment shall be made on the preceding Business Day), and
such extension of time shall in such case be included in the computation of
interest or fees, as the case may be.
(c) Unless the Agent receives notice from the Company prior to the
date on which any payment is due to the Lenders that the Company will not make
such payment in full as and when required, the Agent may assume that the Company
has made such payment in full to the Agent on such date in Same Day Funds and
the Agent may (but shall not be so required), in reliance upon such assumption,
distribute to each Lender on such due date an amount equal to the amount then
due such Lender. If and to the extent the Company has not made such payment in
full to the Agent, each Lender shall repay to the Agent on demand such amount
distributed to such Lender, together with interest thereon at the Federal Funds
Rate or, in the case of a payment in an Offshore Currency, the Overnight Rate
for each day from the date such amount is distributed to such Lender until the
date repaid.
2.16 Payments by the Lenders to the Agent. (a) Unless the Agent receives
notice from a Lender on or prior to the Closing Date or, with respect to any
Committed Borrowing after the Closing Date, at least one Business Day prior to
the date of a Committed Borrowing that such Lender will not make available as
and when required hereunder to the Agent for the account of the Company the
amount of such Lender's Pro Rata Share of such Committed Borrowing, the
42
Agent may assume that such Lender has made such amount available to the Agent in
Same Day Funds on the Borrowing Date and the Agent may (but shall not be so
required), in reliance upon such assumption, make available to the Company on
such date a corresponding amount. If and to the extent any Lender shall not have
made its full amount available to the Agent in Same Day Funds and the Agent in
such circumstances has made available to the Company such amount, such Lender
shall on the Business Day following such Borrowing Date make such amount
available to the Agent, together with interest at the Federal Funds Rate or, in
the case of a payment in an Offshore Currency, the Overnight Rate for each day
during such period. A notice of the Agent submitted to any Lender with respect
to amounts owing under this subsection (a) shall be conclusive, absent manifest
error. If such amount is so made available, such payment to the Agent shall
constitute such Lender's Committed Loan on the date of Borrowing for all
purposes of this Agreement. If such amount is not made available to the Agent on
the Business Day following the Borrowing Date, the Agent will notify the Company
of such failure to fund and, upon demand by the Agent, the Company shall pay
such amount to the Agent for the Agent's account, together with interest thereon
for each day elapsed since the date of such Borrowing, at a rate per annum equal
to the interest rate applicable at the time to the Committed Loans comprising
such Committed Borrowing.
(b) The failure of any Lender to make any Loan on any Borrowing Date
shall not relieve any other Lender of any obligation hereunder to make a Loan on
such Borrowing Date, but no Lender shall be responsible for the failure of any
other Lender to make the Loan to be made by such other Lender on any Borrowing
Date.
2.17 Sharing of Payments, Etc. (a) Whenever any payment received by the
Agent to be distributed to the Lenders is insufficient to pay in full the
amounts then due and payable to the Lenders, and the Agent has not received a
Payment Sharing Notice, such payment shall be distributed to the Lenders (and
for purposes of this Agreement shall be deemed to have been applied by the
Lenders, notwithstanding the fact that any Lender may have made a different
application in its books and records) in the following order: first, to the
payment of the principal amount of the Loans which is then due and payable and
any reimbursement obligation of the Company in respect of any BA which is then
due and payable, ratably among the Lenders (including the Accepting Lender and
the Swing Line Lender) in accordance with the aggregate amount of such
Obligations owed to each Lender; second, to the payment of interest then due and
payable on the Loans and on any unpaid reimbursement obligations in respect of
BAs, ratably among the Lenders (including the Accepting Lender and the Swing
Line Lender) in accordance with the aggregate amount of interest owed to each
Lender; third, to the payment of the fees payable under subsection 2.13(b) and
(c), ratably among the Lenders in accordance with their respective Pro Rata
Shares; and fourth, to the payment of any other amount payable under this
Agreement, ratably among the Lenders in accordance with the aggregate amount
owed to each Lender.
(b) After the Agent has received a Payment Sharing Notice, and for so
long thereafter as any Event of Default exists, all payments received by the
Agent to be distributed to the Lenders shall be distributed to the Lenders (and
for purposes of this Agreement shall be deemed to have
43
been applied by the Lenders, notwithstanding the fact that any Lender may have
made a different application in its books and records) in the following order:
first, to the payment of amounts payable under Section 10.4, ratably among the
Lenders in accordance with the aggregate amount owed to each Lender; second, to
the payment of fees payable under subsection 2.13(b) and (c), ratably among the
Lenders in accordance with their respective Pro Rata Shares; third, to the
payment of the interest accrued on and the principal amount of all of the Loans
and all reimbursement obligations of the Company in respect of BAs, regardless
of whether any such amount is then due and payable, ratably among the Lenders
(including the Accepting Lender and the Swing Line Lender) in accordance with
the aggregate amount of such Obligations owed to each Lender; and fourth, to the
payment of any other amount payable under this Agreement, ratably among the
Lenders (including the Accepting Lender and the Swing Line Lender) in accordance
with the aggregate amount owed to each Lender.
(c) If, other than as expressly provided elsewhere herein, any Lender
shall obtain any payment or other recovery (whether voluntary, involuntary,
through the exercise of any right of set-off, or otherwise) on account of
principal of or interest on any Loan or any reimbursement obligation in respect
of a BA, or any other amount payable hereunder, in excess of the share of
payments and other recoveries such Lender would have received if such payment or
other recovery had been distributed pursuant to the provisions of subsection
2.17(a) or (b) (whichever is applicable at the time of such payment or other
recovery), such Lender shall immediately (i) notify the Agent of such fact and
(ii) purchase from the other Lenders such participations in the Loans made by
(or other Obligations owed to) them as shall be necessary to cause such
purchasing Lender to share the excess payment or other recovery pro rata with
each of them in accordance with the order of payments set forth in subsection
2.17(a) or (b), as the case may be; provided that if all or any portion of such
excess payment or other recovery is thereafter recovered from the purchasing
Lender, such purchase shall to that extent be rescinded and each other Lender
shall repay to the purchasing Lender the purchase price paid therefor, together
with an amount equal to such paying Lender's ratable share (according to the
proportion of (A) the amount of such paying Lender's required repayment to (B)
the total amount so recovered from the purchasing Lender) of any interest or
other amount paid or payable by the purchasing Lender in respect of the total
amount so recovered. The Company agrees that any Lender so purchasing a
participation from another Lender may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off, but subject
to Section 10.10) with respect to such participation as fully as if such Lender
were the direct creditor of the Company in the amount of such participation. The
Agent will keep records (which shall be conclusive and binding in the absence of
manifest error) of participations purchased under this Section and will in each
case notify the Lenders following any such purchases or repayments.
2.18 Swing Line Commitment. Subject to the terms and conditions of this
Agreement, the Swing Line Lender agrees to make loans to the Company on a
revolving basis (each such loan, a "Swing Line Loan") from time to time on any
Business Day during the period from the Closing Date to the Termination Date in
an aggregate principal amount at any one time outstanding not to exceed U.S.
$30,000,000; provided, however, that, after giving effect to any
44
proposed Swing Line Loan, the Total Outstandings shall not exceed the combined
Commitments.
2.19 Borrowing Procedures for Swing Line Loans. The Company shall provide
a Notice of Borrowing or telephonic notice (followed by a confirming Notice of
Borrowing) to the Agent and the Swing Line Lender of each proposed borrowing
pursuant to Section 2.18 not later than 12:00 noon (Chicago time) on the
proposed Borrowing Date. Each such notice shall be effective upon receipt by the
Agent and the Swing Line Lender and shall specify the date and the principal
amount of borrowing. Unless the Swing Line Lender has received written notice
prior to 11:00 a.m. (Chicago time) on the proposed Borrowing Date from the Agent
or any Lender that one or more of the conditions precedent set forth in Article
IV with respect to such borrowing is not then satisfied, the Swing Line Lender
shall pay over the requested principal amount to the Company on the requested
Borrowing Date in Same Day Funds. Each Swing Line Loan shall be made on a
Business Day and shall be in the amount of at least U.S. $500,000 and an
integral multiple of U.S. $100,000. The Swing Line Lender will promptly notify
the Agent of the making and amount of each Swing Line Loan.
2.20 Prepayment or Refunding of Swing Line Loans. (a) The Company may, at
any time and from time to time, prepay any Swing Line Loan in whole or in part,
in an amount of at least U.S. $500,000 and an integral multiple of U.S.
$100,000. The Company shall deliver a notice of prepayment to the Agent and the
Swing Line Lender not later than 11:00 a.m. (Chicago time) on the Business Day
of such prepayment, specifying the date and amount of such prepayment. If such
notice is given by the Company, the payment amount specified in such notice
shall be due and payable on the date specified therein.
(b) The Swing Line Lender may, at any time in its sole and absolute
discretion, on behalf of the Company (which hereby irrevocably directs the Swing
Line Lender to act on its behalf), request each Lender to make a Base Rate
Committed Loan in an amount equal to such Lender's Unused Commitment Share of
the principal amount of the Swing Line Loans outstanding on the date such notice
is given. Unless any of the events described in subsection 8.1(g), (h), (i) or
(j) shall have occurred (in which event the procedures of Section 2.21 shall
apply), and regardless of whether the conditions precedent set forth in this
Agreement to the making of a Base Rate Committed Loan are then satisfied or the
aggregate amount of such Base Rate Committed Loans is not in the minimum or
integral amount otherwise required hereunder, each Lender shall make the
proceeds of its Base Rate Committed Loan available to the Agent for the account
of the Swing Line Lender at the Agent's Payment Office prior to 12:00 noon
(Chicago time) in Same Day Funds on the Business Day next succeeding the date
such notice is given. The proceeds of such Base Rate Committed Loans shall be
immediately applied to repay the outstanding Swing Line Loans.
2.21 Participations in Swing Line Loans. (a) If an event described in
subsection 8.1(g), (h), (i) or (j) occurs (or for any reason the Lenders may not
make Revolving Loans pursuant to Section 2.20), each Lender will, upon notice
from the Agent, purchase from the Swing Line Lender (and the Swing Line Lender
will sell to each Lender) an undivided participation interest in
45
all outstanding Swing Line Loans in an amount equal to such Lender's Unused
Commitment Share of the outstanding principal amount of the Swing Line Loans
(and each Lender will immediately transfer to the Agent, for the account of the
Swing Line Lender, in immediately available funds, the amount of its
participation).
(b) Whenever, at any time after the Swing Line Lender has received
payment for any Lender's participation interest in the Swing Line Loans pursuant
to subsection 2.21(a), the Swing Line Lender receives any payment on account
thereof, the Swing Line Lender will distribute to the Agent for the account of
such Lender its participation interest in such amount (appropriately adjusted,
in the case of interest payments, to reflect the period of time during which
such Lender's participation interest was outstanding and funded) in like funds
as received; provided, however, that in the event that such payment received by
the Swing Line Lender is required to be returned, such Lender will return to the
Agent for the account of the Swing Line Lender any portion thereof previously
distributed by the Swing Line Lender to it in like funds as such payment is
required to be returned by the Swing Line Lender.
2.22 Participation Obligations Unconditional. (a) Each Lender's
obligation to make Base Rate Committed Loans pursuant to Section 2.20 and/or to
purchase participation interests in Swing Line Loans pursuant to Section 2.21
shall be absolute and unconditional and shall not be affected by any
circumstance whatsoever, including (a) any set-off, counterclaim, recoupment,
defense or other right which such Lender may have against the Swing Line Lender,
the Company or any other Person for any reason whatsoever; (b) the occurrence or
continuance of an Event of Default; (c) any adverse change in the condition
(financial or otherwise) of the Company or any other Person; (d) any breach of
this Agreement or any other Loan Document by the Company or any other Lender;
(e) any inability of the Company to satisfy the conditions precedent to
borrowing set forth in this Agreement on the date upon which any Loan is to be
refunded or any participation interest therein is to be purchased; or (f) any
other circumstance, happening or event whatsoever, whether or not similar to any
of the foregoing.
(b) Notwithstanding the provisions of subsection 2.22(a), no Lender
shall be required to make any Base Rate Committed Loan to the Company to refund
a Swing Line Loan pursuant to Section 2.20 or to purchase a participation
interest in a Swing Line Loan pursuant to Section 2.21 if, prior to the making
by the Swing Line Lender of such Swing Line Loan, the Swing Line Lender received
written notice from any Lender specifying that such Lender believes in good
faith that one or more of the conditions precedent to the making of such Swing
Line Loan were not satisfied and, in fact, such conditions precedent were not
satisfied at the time of the making of such Swing Line Loan; provided that the
obligation of such Lender to make such Base Rate Committed Loan and to purchase
such participation interest shall be reinstated upon the earlier to occur of (i)
the date on which such Lender notifies the Swing Line Lender that its prior
notice has been withdrawn and (ii) the date on which all conditions precedent to
the making of such Swing Line Loan have been satisfied (or waived by the
Required Lenders or all Lenders, as applicable).
2.23 Conditions to Swing Line Loans. Notwithstanding any other provision
of this
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Agreement, the Swing Line Lender shall not be obligated to make any Swing Line
Loan if an Event of Default or Unmatured Event of Default exists or would result
therefrom.
2.24 BA Subfacility.
(a) Creation. Subject to the terms and conditions hereof, at any
time and from time to time from the Closing Date through the day 30 days prior
to the scheduled Termination Date, the Accepting Lender shall create and
discount such BAs as the Company may request by notice to the Accepting Lender
in accordance with the procedure set forth in subsection (b) below; provided
that upon creating and discounting any BA, the Total Outstandings will not
exceed the combined Commitments; and provided, further, that BA Outstandings
shall not at any time exceed $100,000,000. The maturity of any BA shall not be
less than 30 days or more than 180 days and shall not extend beyond the
scheduled Termination Date. Each BA shall comply with the Acceptance Documents
and shall be executed on behalf of the Company and presented to the Accepting
Lender pursuant to such procedures as are provided or required by the Accepting
Lender. The face amount of each BA shall be $3,000,000 or a higher integral
multiple of $1,000,000. The creation and maturity date of each BA shall be a
Business Day. Notwithstanding the foregoing, the Accepting Lender shall not be
obligated to create or discount any BA (i) that is not "eligible" pursuant to
paragraph 7 of Section 13 of the Federal Reserve Act (12 U.S.C. ss.372), as
amended from time to time, (ii) if creation thereof would cause the Accepting
Lender to exceed the maximum amount of outstanding bankers' acceptances
permitted by applicable law or (iii) if, in the reasonable opinion of the
Accepting Lender, general conditions in the public market for rediscounting
bankers' acceptances render it inadvisable to do so.
(b) Notice. Each request for a BA shall be submitted in writing (or
requested by telephone and promptly confirmed in writing) to the Accepting
Lender and the Agent by 11:00 a.m. (Chicago time) on the date of creation of the
requested BA and shall be accompanied by such documents as are specified therein
and in the Acceptance Documents. The Accepting Lender will promptly notify the
Agent (which shall promptly advise each Lender) of the creation of each BA and
the amount and tenor thereof.
(c) Issuance Fee. Upon the creation by the Accepting Lender of a BA,
the Accepting Lender shall discount such BA by deducting from the face amount
thereof a discount determined by the then current quoted discount rate for
bankers' acceptances of the Accepting Lender plus the BA Commission, with such
discount and BA Commission applied against the face amount of the BA, and the
Accepting Lender shall make such net amount available in immediately available
funds to the Company. The Accepting Lender shall retain from the amount so
deducted a commission, for the account solely of the Accepting Lender, equal to
.05% per annum (computed on the basis of the actual number of days elapsed over
a year of 360 days). On the date of issuance of each BA, the Accepting Lender
shall make available in immediately available funds to the Lenders, according to
their respective Pro Rata Shares, an amount equal to the BA Commission (after
the Accepting Lender's issuance fee of .05% has been deducted therefrom) for
such BA. The Accepting Lender may retain or rediscount, at its election, any BA
and the amount
47
received by the Accepting Lender upon payment thereof at maturity or upon
rediscounting shall be solely for the account of the Accepting Lender.
(d) Payment. As and when the Accepting Lender honors a BA, the
Company agrees to immediately repay the Accepting Lender in immediately
available funds the amount advanced by the Accepting Lender. In the event that
such funds are not made available to the Accepting Lender by the Company, then,
in order to implement the foregoing, the Company irrevocably authorizes the
Agent and each Lender to treat each such advance by the Accepting Lender as a
request for a Base Rate Committed Loan in the amount of such advance, to issue
Base Rate Committed Loans simultaneously with any such advance in the aggregate
amount of such advance, and to credit the proceeds of such Base Rate Committed
Loan so as to immediately eliminate the liability of the Company to the
Accepting Lender pertaining to such BA and immediately eliminate the liability
of each other Lender to the Accepting Lender with respect to its Unused
Commitment Share relating to such BA.
(e) Participations in BAs. Each Lender shall be deemed at all times
to have a participation in each outstanding BA in an amount equal to the result
obtained by multiplying (i) such Lender's Unused Commitment Share times (ii) the
face amount of such BA. Without limiting the scope and nature of each Lender's
participation in any BA, to the extent that the Accepting Lender has not been
reimbursed by the Company (pursuant to an advance pursuant to clause (d) or
otherwise) for any payment required to be made by the Accepting Lender under any
BA, each Lender shall, according to its Unused Commitment Share, reimburse the
Accepting Lender promptly upon demand for the amount of such payment. The
obligation of each Lender to so reimburse the Accepting Lender shall be absolute
and unconditional and shall not be affected by the occurrence of an Event of
Default, an Unmatured Event of Default or any other occurrence or event. Any
such reimbursement shall not relieve or otherwise impair the obligation of the
Company to reimburse the Accepting Lender for the amount of any payment made by
the Accepting Lender under any BA, together with interest at the Base Rate plus
2%. The Company hereby specifically acknowledges and agrees that if the Company
fails to perform in accordance with the terms of any BA, the Acceptance
Documents related thereto or this Agreement as it relates to such BA, each
lender shall have a claim against the Company, to the extent of such Lender's
pro rata participation in such BA.
(f) Limitation of Liability. None of the Accepting Lender, any other
Lender or any of their respective directors, officers, agents or employees shall
be liable, except for gross negligence or willful misconduct, for any action
taken or omitted under or in connection with any BA, any draft to which a BA
relates or any documents which in turn relate or pertain to any such draft. When
dealing with any BA, draft or related document, the Accepting Lender shall be
entitled to act (and shall be fully protected against any claim of loss by the
Company occasioned by the lack, or claimed lack, of authenticity or authority of
the issuance of any draft or any signature thereon, in acting) upon any
telegram, telex, teletype, bank wire, cable or radiogram or any written
application, notice, report, statement, certificate, resolution, request, order,
consent, letter or other instrument or communication reasonably believed in good
faith by the Accepting
48
Lender to be genuine and correct and to have been signed or sent or made by a
proper Person. The Accepting Lender shall examine Acceptance Documents with
reasonable care to ascertain that they appear on their face to be in accordance
with the terms and conditions of the related BA. The Company further agrees
that, if any BA shall not, in the reasonable opinion of the Agent or the
Required Lenders, meet all requirements for "eligible" bankers' acceptances (as
determined in accordance with paragraph 7 of Section 13 of the Federal Reserve
Act (12 U.S.C. ss.372)), the Company shall, upon demand by the Agent, pay to the
Agent for the account of each of the Lenders additional amounts sufficient to
compensate the Lenders for any increased costs resulting therefrom (including
costs resulting from any reserve requirement, premium liability to the Federal
Deposit Insurance Corporation, or a higher discount rate). To demand payment
under this subsection 2.24(f), the Agent shall deliver to the Company a
certificate setting forth in reasonable detail the amount payable to the Agent
(for the account of each of the Lenders) hereunder and such certificate shall be
conclusive and binding on the Company in the absence of manifest error.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.1 Taxes. (a) Any and all payments by the Company to each Lender and each
Agent under this Agreement and any other Loan Document shall be made free and
clear of, and without deduction or withholding for, any Taxes. In addition, the
Company shall pay all Other Taxes.
(b) If the Company shall be required by law to deduct or withhold
any Taxes, Other Taxes or Further Taxes from or in respect of any sum payable
hereunder to any Lender or the Agent, then:
(i) the sum payable shall be increased as necessary so that,
after making all required deductions and withholdings (including deductions
and withholdings applicable to additional sums payable under this Section),
such Lender or the Agent, as the case may be, receives and retains an
amount equal to the sum it would have received and retained had no such
deductions or withholdings been made;
(ii) the Company shall make such deductions and withholdings;
(iii) the Company shall pay the full amount deducted or withheld
to the relevant taxing authority or other authority in accordance with
applicable law; and
(iv) the Company shall also pay to the Agent for the account of
any applicable Lender or the Agent, at the time interest is paid, all
additional amounts which such Lender or the Agent specifies as necessary to
preserve the after-tax yield such Lender or Agent would have received if
such Taxes, Other Taxes or Further Taxes had not been imposed.
49
(c) The Company agrees to indemnify and hold harmless each Lender
and the Agent for the full amount of Taxes, Other Taxes and Further Taxes in the
amount that such Lender or the Agent specifies as necessary to preserve the
after-tax yield such Lender would have received if such Taxes, Other Taxes or
Further Taxes had not been imposed, and any liability (including penalties,
interest, additions to tax and reasonable expenses) arising therefrom or with
respect thereto, whether or not such Taxes, Other Taxes or Further Taxes were
correctly or legally asserted. Payment under this indemnification shall be made
within 30 days after the date the Company receives written demand therefor from
such Lender or the Agent.
(d) Within 30 days after the date of any payment by the Company of
Taxes, Other Taxes or Further Taxes, the Company shall furnish to each Lender
and the Agent the original or a certified copy of a receipt evidencing payment
thereof, or other evidence of payment satisfactory to such Lender or the Agent.
(e) If the Company is required to pay any amount to any Lender or
the Agent pursuant to subsection (b) or (c) of this Section, then such Lender or
the Agent shall use reasonable efforts (consistent with legal and regulatory
restrictions) to change the jurisdiction of its Lending Office or other relevant
office so as to eliminate any such additional payment by the Company which may
thereafter accrue, if such change in the good faith judgment of such Lender or
the Agent is not otherwise disadvantageous to such Lender or the Agent.
3.2 Illegality. (a) If any Lender determines that the introduction of any
applicable Requirement of Law, or any change in any applicable Requirement of
Law, or in the interpretation or administration of any applicable Requirement of
Law, has made it unlawful, or that any central bank or other Governmental
Authority has asserted that it is unlawful, for any Lender or its applicable
Lending Office to make Offshore Rate Loans in any Applicable Currency, then, on
notice thereof by the Lender to the Company through the Agent, any obligation of
that Lender to make Offshore Rate Loans in such Applicable Currency (including
in respect of any LIBOR Bid Loan as to which the Company has accepted such
Lender's Competitive Bid, but which has not yet been borrowed) shall be
suspended until the Lender notifies the Agent and the Company that the
circumstances giving rise to such determination no longer exist.
(b) If a Lender determines that it is unlawful to maintain any
Offshore Rate Loan in any Applicable Currency, the Company shall, upon its
receipt of notice of such fact and demand from such Lender (with a copy to the
Agent), prepay in full such Offshore Rate Loan of such Lender then outstanding,
together with interest accrued thereon and amounts required under Section 3.4,
either on the last day of the Interest Period thereof or, if earlier, on the
date on which such Lender may no longer lawfully continue to maintain such
Offshore Rate Loan. If the Company is required to so prepay any Offshore Rate
Committed Loan, then concurrently with such prepayment, the Company shall borrow
from the affected Lender, in the amount of such repayment, a Base Rate Committed
Loan.
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(c) If the obligation of any Lender to make or maintain Offshore
Rate Committed Loans has been so terminated or suspended, all Loans which would
otherwise be made by such Lender as Offshore Rate Committed Loans shall be
instead Base Rate Committed Loans.
(d) Before giving any notice to the Agent or demand upon the Company
under this Section, the affected Lender shall designate a different Lending
Office with respect to its Offshore Rate Loans if such designation will avoid
the need for giving such notice or making such demand and will not, in the good
faith judgment of the Lender, be illegal in any respect or otherwise
disadvantageous to the Lender.
3.3 Increased Costs and Reduction of Return. (a) If after the date hereof
any Lender determines that, due to either (i) the introduction of or any change
(other than any change by way of imposition of or increase in reserve
requirements included in the calculation of the Offshore Rate) in or in the
interpretation of any law or regulation or (ii) the compliance by that Lender
with any guideline or request from any central bank or other Governmental
Authority (whether or not having the force of law), there shall be any increase
in the cost to such Lender of agreeing to make or making, funding or maintaining
any Offshore Rate Loan or of participating in any BA or, in the case of the
Accepting Lender, of agreeing to accept or accepting BAs, then the Company shall
be liable for, and shall from time to time, upon demand (with a copy of such
demand to be sent to the Agent), pay to the Agent for the account of such
Lender, additional amounts as are sufficient to compensate such Lender for such
increased costs.
(b) If after the date hereof any Lender shall have determined that
(i) the introduction of any Capital Adequacy Regulation, (ii) any change in any
Capital Adequacy Regulation, (iii) any change in the interpretation or
administration of any Capital Adequacy Regulation by any central bank or other
Governmental Authority charged with the interpretation or administration
thereof, or (iv) compliance by the Lender (or its Lending Office) or any
corporation controlling the Lender with any Capital Adequacy Regulation, affects
or would affect the amount of capital required or expected to be maintained by
the Lender or any corporation controlling the Lender and (taking into
consideration such Lender's or such corporation's policies with respect to
capital adequacy and such Lender's desired return on capital) determines that
the amount of such capital is increased as a consequence of its Commitment,
loans, credits or obligations under this Agreement, then, upon demand of such
Lender to the Company through the Agent, the Company shall pay to the Lender,
from time to time as specified by the Lender, additional amounts sufficient to
compensate the Lender for such increase.
(c) Notwithstanding the foregoing Section 3.3(a) and (b), if any
Lender fails to notify the Company of any event which will entitle such Lender
to compensation pursuant to this Section 3.3 within 180 days after such Lender
obtains knowledge of such event, then such Lender shall not be entitled to any
compensation from the Company for any such increased cost or reduction of return
arising prior to the date which is 180 days before the date on which such
51
Lender notifies the Company of such event.
3.4 Funding Losses. The Company shall reimburse each Lender and hold each
Lender harmless from any loss or reasonable expense which the Lender may sustain
or incur as a consequence of:
(a) the failure of the Company to make on a timely basis any payment
of principal of any Offshore Rate Loan;
(b) the failure of the Company to borrow, continue or convert a Loan
after the Company has given (or is deemed to have given) a Notice of Borrowing,
a Notice of Conversion/ Continuation or accepted a Competitive Bid;
(c) the failure of the Company to make any prepayment of a Committed
Loan in accordance with any notice delivered under Section 2.9;
(d) the prepayment or other payment (including after acceleration
thereof) of an Offshore Rate Loan on a day that is not the last day of the
relevant Interest Period; or
(e) the automatic conversion under Section 2.4 of any Offshore Rate
Committed Loan to a Base Rate Committed Loan on a day that is not the last day
of the relevant Interest Period;
including any such loss or reasonable expense arising from the liquidation or
reemployment of funds obtained by it to maintain its Offshore Rate Loans or from
fees payable to terminate the deposits from which such funds were obtained or
from changes relating to any Offshore Currency Loans. For purposes of
calculating amounts payable by the Company to the Lenders under this Section and
under subsection 3.3(a), each Offshore Rate Loan made by a Lender (and each
related reserve, special deposit or similar requirement) shall be conclusively
deemed to have been funded at the Offshore Rate used in determining the interest
rate for such Offshore Rate Loan by a matching deposit or other borrowing in the
interbank eurodollar market for a comparable amount and for a comparable period,
whether or not such Offshore Rate Loan is in fact so funded.
3.5 Inability to Determine Rates. If the Agent determines that for any
reason adequate and reasonable means do not exist for determining the Offshore
Rate for any requested Interest Period with respect to a proposed Offshore Rate
Loan, or any Lender determines that the Offshore Rate applicable pursuant to
subsection 2.12(a) for any requested Interest Period with respect to a proposed
Offshore Rate Loan does not adequately and fairly reflect the cost to such
Lender of funding such Loan, the Agent will promptly so notify the Company and
each Lender. Thereafter, the obligation of the Lenders to make or maintain
Offshore Rate Committed Loans hereunder shall be suspended until the Agent
revokes such notice in writing. Upon receipt of such notice, the Company may
revoke any Notice of Committed Borrowing or Notice of
52
Conversion/Continuation then submitted by it. If the Company does not revoke
such Notice, the Lenders shall make, convert or continue the Committed Loans, as
proposed by the Company, in the amount specified in the applicable notice
submitted by the Company, but such Loans shall be made, converted or continued
as Base Rate Committed Loans instead of Offshore Rate Committed Loans.
In the case of any Offshore Currency Loans, the Borrowing or continuation
shall be in an aggregate amount equal to the Dollar Equivalent amount of the
originally requested Borrowing or continuation in the Offshore Currency, and to
that end any outstanding Offshore Currency Loans which are the subject of any
continuation shall be redenominated and converted into Base Rate Loans in
Dollars with effect from the last day of the Interest Period with respect to
such Offshore Currency Loans.
3.6 Reserves on Offshore Rate Loans. The Company shall pay to each Lender,
as long as such Lender shall be required under regulations of the FRB to
maintain reserves with respect to liabilities or assets consisting of or
including Eurocurrency funds or deposits (currently known as "Eurocurrency
liabilities") and, in respect of any Offshore Currency Loans, under any
applicable regulations of the relevant Governmental Authority in the country in
which the Offshore Currency of such Offshore Currency Loan circulates,
additional costs on the unpaid principal amount of each Offshore Rate Committed
Loan and Offshore Currency Loan equal to the actual costs of such reserves
allocated to such Loan by such Lender (as determined by such Lender in good
faith, which determination shall be conclusive), payable on each date on which
interest is payable on such Loan, provided the Company shall have received at
least 15 days' prior written notice (with a copy to the Agent) of the amount of
such additional interest from such Lender. If a Lender fails to give notice 15
days prior to the relevant Interest Payment Date, such additional interest shall
be payable 15 days from receipt of such notice.
3.7 Certificates of Lenders. Any Lender claiming reimbursement or
compensation under this Article III shall deliver to the Company (with a copy to
the Agent) a certificate setting forth in reasonable detail the amount payable
to the Lender hereunder and such certificate shall be conclusive and binding on
the Company in the absence of manifest error.
3.8 Substitution of Lenders. Upon the receipt by the Company from any
Lender (an "Affected Lender") of a claim for compensation under Section 3.1 or
3.3 or a notice pursuant to Section 3.2 (which claim or notice results from
circumstances applicable to such Lender and not Lenders generally) the Company
may: (i) request the Affected Lender to use its best efforts to obtain a
replacement bank or financial institution satisfactory to the Company to acquire
and assume all or a ratable part of all of such Affected Lender's Loans and
Commitment (a "Replacement Lender"); (ii) request one more of the other Lenders
to acquire and assume all or part of such Affected Lender's Loans and
Commitment; or (iii) designate a Replacement Lender. Any such designation of a
Replacement Lender under clause (i) or (iii) shall be subject to the prior
written consent of the Agent, the Swing Line Lender and the Accepting Lender
(which consents shall not be unreasonably withheld).
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3.9 Survival. The agreements and obligations of the Company in this
Article III shall survive the payment of all other Obligations and the
termination of this Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
4.1 Conditions to Effectiveness. This Agreement shall become effective,
all loans outstanding under the Original Agreement shall be deemed to be Loans
made hereunder, and all accrued interest and fees payable under the Original
Agreement shall be payable hereunder, on the date on which the Agent has
received the following (the "Effective Date"):
(a) Agreement. This Agreement executed by the Company and the
Required Lenders.
(b) Resolutions; Incumbency; Certificate of Incorporation; Bylaws.
(i) Copies of the resolutions of the board of directors of the
Company and each Guarantor authorizing the transactions contemplated
hereby, certified as of the Effective Date by the Secretary or an Assistant
Secretary of the Company or such Guarantor;
(ii) a certificate of the Secretary or Assistant Secretary of
the Company and each Guarantor certifying the names and true signatures of
the officers of the Company and each Guarantor authorized to execute and
deliver this Agreement, the Intercreditor Agreement and all other Loan
Documents to be delivered by it hereunder; and
(iii) copies of the certificate of incorporation and by-laws (or
other organizational documents) of the Company and each Guarantor,
certified by the Secretary or an Assistant Secretary of the Company or such
Guarantor.
(c) Good Standing. A copy of a good standing certificate as of a
recent date for the Company and each Guarantor from the Secretary of State (or
similar, applicable Governmental Authority) of its respective state of
incorporation.
(d) Legal Opinion. An opinion of counsel to the Company and the
Guarantors in form and substance reasonably acceptable to the Agent.
(e) Payment of Fees.
(i) Evidence of payment by the Company of all accrued and unpaid
fees,
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costs and reasonable expenses to the extent then due and payable on the
Effective Date, together with Attorney Costs of the Agent to the extent
invoiced prior to or on the Effective Date, plus such additional amounts of
Attorney Costs as shall constitute the Agent's reasonable estimate of
Attorney Costs incurred or to be incurred by it through the closing
proceedings (provided that such estimate shall not thereafter preclude
final settling of accounts between the Company and the Agent), including
any such costs, fees and reasonable expenses arising under or referenced in
Sections 2.13 and 10.4; and
(ii) Evidence of payment by the Company of an amendment fee for
the account of each Lender which has executed and delivered a counterpart
of this Agreement on or before April 14, 2000, in each case in an amount
equal to 0.25% of such Lender's Commitment.
(f) Certificate. A certificate signed by a Responsible Officer,
dated as of the Closing Date, stating that:
(i) the representations and warranties contained in Article V
are true and correct on and as of such date, as though made on and as of
such date;
(ii) no Event of Default or Unmatured Event of Default exists or
would result from the execution and delivery of this Agreement and the
other Loan Documents; and
(iii) since December 31, 1999, no event or circumstance has
occurred that has resulted or could reasonably be expected to result in a
Material Adverse Effect.
(g) Guaranty. The Guaranty, signed by each Guarantor.
(h) Security Agreement. The Security Agreement signed by the Company
and each Guarantor, together with evidence, satisfactory to the Collateral
Agent, that the Company and each Guarantor have delivered to the Collateral
Agent all financing statements and other documents necessary to perfect the
Collateral Agent's Lien on all collateral granted under the Security Agreement.
(i) Pledge Agreement. The Pledge Agreement, executed by the Company
and each Guarantor that as of the Effective Date has one or more Subsidiaries,
together with all stock certificates, stock powers and other items required to
be delivered in connection therewith.
(j) Intercreditor Agreement. The Intercreditor Agreement, signed by
the parties thereto and consented to by the Company and the Guarantors.
(k) Trademark Security Agreement. The Trademark Security Agreement,
signed by the Company.
55
(l) Amendment of Certain Agreements. Evidence, satisfactory to the
Agent, that each of the "Operative Documents" as defined in the Synthetic Lease
Guaranty, the Shelf Agreement and each Senior Note Agreement (each as defined in
the Intercreditor Agreement) has been amended to conform in all material
respects with the representations, warranties, covenants and defaults contained
in this Agreement.
(m) Other Documents. Such other approvals, opinions, documents or
materials as the Agent or any Lender may reasonably request.
4.2 Conditions to All Credit Extensions. The obligation of each Lender to
make any Credit Extension to be made by it (or any Bid Loan as to which the
Company has accepted the relevant Competitive Bid) is subject to the
satisfaction of the following conditions precedent on the date of such Credit
Extension:
(a) Notice. The Agent (and, in the case of a Swing Line Loan, the
Swing Line Lender) shall have received a Notice of Borrowing or the Agent and
the Accepting Lender shall have received a request for acceptance of a BA.
(b) Continuation of Representations and Warranties. The
representations and warranties in Article V shall be true and correct on and as
of the date of such Credit Extension with the same effect as if made on and as
of such date (except to the extent such representations and warranties expressly
refer to an earlier date, in which case they shall have been true and correct as
of such earlier date).
(c) No Existing Default. No Event of Default or Unmatured Event of
Default shall exist or shall result from such Borrowing.
Each Notice of Borrowing, Competitive Bid Request and request for acceptance of
a BA submitted by the Company hereunder shall constitute a representation and
warranty by the Company that, as of the date of such notice or request and as of
the date of the applicable Credit Extension, the conditions in this Section 4.2
are satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Agent and each Lender as
follows:
5.1 Organization; Subsidiary Preferred Stock. The Company is a corporation
duly organized and existing in good standing under the laws of the State of
Delaware, each Subsidiary is duly organized and existing in good standing under
the laws of the jurisdiction in which it is
56
formed, and the Company has and each Subsidiary has the power to own its
respective property and to carry on its respective business as now being
conducted. No Subsidiary has outstanding any shares of stock of a class which
has priority over any other class as to dividends or in liquidation.
5.2 Financial Statements. The audited consolidated financial statements of
the Company and its Subsidiaries as at December 31, 1998 and the unaudited
consolidated financial statements of the Company and its Subsidiaries as at
September 30, 1999, copies of each of which have been delivered to each Lender,
were prepared in accordance with GAAP (subject, in the case of such unaudited
statements, to the absence of footnotes and to normal year-end adjustments) and
present fairly the consolidated financial condition of the Company and its
Subsidiaries as at such dates and the results of their operations for the
periods then ended.
5.3 Actions Pending. There is no action, suit, investigation or proceeding
pending or, to the knowledge of the Company, threatened against the Company or
any of its Subsidiaries, or any properties or rights of the Company or any of
its Subsidiaries, by or before any court, arbitrator or administrative or
governmental body which could be reasonably expected to result in any material
adverse change in the business, property or assets, condition (financial or
otherwise) or operations of the Company and its Subsidiaries taken as a whole or
the ability of the Company to perform its obligations under this Agreement.
5.4 Outstanding Debt. Neither the Company nor any of its Subsidiaries has
outstanding any Debt except as permitted by Section 7.3. There exists no default
under the provisions of any instrument evidencing Debt of the Company or any of
its Subsidiaries in an amount greater than $250,000 or of any agreement relating
thereto (it being understood that the representation and warranty in this
sentence is made after giving effect to the effectiveness of this Agreement and
the amendments referred to in subsection 4.1(l)).
5.5 Title to Properties. The Company has and each of its Subsidiaries has
good and marketable title to its respective real properties (other than
properties which it leases) and good title to all of its other respective
properties and assets, including the properties and assets reflected in the most
recent audited balance sheet referred to in Section 5.2 (other than properties
and assets disposed of in the ordinary course of business), subject to no Lien
of any kind except Liens permitted by Section 7.2. All leases necessary in any
material respect for the conduct of the respective businesses of the Company and
its Subsidiaries are valid and subsisting and are in full force and effect.
5.6 Taxes. The Company has and each of its Subsidiaries has filed all
federal, state and other income tax returns which, to the best knowledge of the
officers of the Company and its Subsidiaries, are required to be filed, and each
has paid all taxes as shown on such returns and on all assessments received by
it to the extent that such taxes have become due, except such taxes (i) as are
being contested in good faith by appropriate proceedings for which adequate
reserves have
57
been established in accordance with GAAP or (ii) the non-payment of which (a)
could not be reasonably expected to have a material adverse effect on the
business, condition (financial or otherwise) or operations of the Company and
its Subsidiaries taken as a whole and (b) does not result in the creation of any
Lien other than Liens permitted by Section 7.2.
5.7 Conflicting Agreements and Other Matters. Neither the Company nor any
of its Subsidiaries is a party to any contract or agreement or subject to any
charter or other corporate restriction which materially and adversely affects
its business, property or assets, condition (financial or otherwise) or
operations. None of the execution and delivery of this Agreement or any other
Loan Document, the making of the Loans, the creation of the BAs or the
fulfillment of or compliance with the terms and provisions hereof and of the
other Loan Documents will conflict with, or result in a breach of the terms,
conditions or provisions of, or constitute a default under, or result in any
violation of, or result in the creation of any Lien upon any of the properties
or assets of the Company or any of its Subsidiaries pursuant to, the charter or
by-laws of the Company or any of its Subsidiaries, any award of any arbitrator
or any agreement (including any agreement with stockholders), instrument, order,
judgment, decree, statute, law, rule or regulation to which the Company or any
of its Subsidiaries is subject. Neither the Company nor any of its Subsidiaries
is a party to, or otherwise subject to any provision contained in, any
instrument evidencing Indebtedness of the Company or such Subsidiary, any
agreement relating thereto or any other contract or agreement (including its
charter) which limits the amount of, or otherwise imposes restrictions on the
incurring of, Debt of the Company of the type that the Obligations constitute
except as set forth in the agreements listed in Schedule 5.7 attached hereto (as
such Schedule 5.7 may have been modified from time to time by written
supplements thereto delivered by the Company and accepted in writing by the
Required Lenders).
5.8 Use of Proceeds. None of the proceeds of any Loan or BA will be used,
directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of purchasing or carrying any "margin stock" as defined in Regulation
U of the FRB (herein called "margin stock") or for the purpose of maintaining,
reducing or retiring any Indebtedness which was originally incurred to purchase
or carry any stock that is then currently a margin stock or for any other
purpose which might constitute the transactions contemplated hereby a "purpose
credit" within the meaning of such Regulation U, unless the Company shall have
delivered to the Lenders, on the date of borrowing of such Loan or the
acceptance of such BA, an opinion of counsel satisfactory to the Lenders stating
that the making of such Loan or the acceptance of such BA does not constitute a
violation of such Regulation U. Neither the Company nor any agent acting on its
behalf has taken or will take any action which might cause this Agreement or the
Loans or the BAs to violate Regulation T, Regulation U or any other regulation
of the FRB or to violate the Exchange Act, in each case as in effect now or as
the same may hereafter be in effect.
5.9 ERISA. No accumulated funding deficiency (as defined in section 302 of
ERISA and section 412 of the Code), whether or not waived, exists with respect
to any Plan (other than a Multiemployer Plan). No liability to the PBGC has been
or is expected by the Company or any ERISA Affiliate to be incurred with respect
to any Plan (other than a Multiemployer Plan) by the
58
Company, any Subsidiary or any ERISA Affiliate which is or would be materially
adverse to the business, property or assets, condition (financial or otherwise)
or operations of the Company and its Subsidiaries taken as a whole. Neither the
Company, any Subsidiary nor any ERISA Affiliate has incurred or presently
expects to incur any withdrawal liability under Title IV of ERISA with respect
to any Multiemployer Plan which is or would be materially adverse to the
business, property or assets, condition (financial or otherwise) or operations
of the Company and its Subsidiaries taken as a whole. The execution and delivery
of this Agreement and the making of Loans and the creation and acceptance of the
BAs will be exempt from or will not involve any transaction which is subject to
the prohibitions of section 406 of ERISA and will not involve any transaction in
connection with which a penalty could be imposed under section 502(i) of ERISA
or a tax could be imposed pursuant to section 4975 of the Code.
5.10 Governmental Consent. Neither the nature of the Company or of any
Subsidiary, nor any of their respective businesses or properties, nor any
relationship between the Company or any Subsidiary and any other Person, nor any
circumstance in connection with the making of the Loans is such as to require
any authorization, consent, approval, exemption or any action by or notice to or
filing with any court or administrative or governmental body (other than routine
filings after the Closing Date with the Securities and Exchange Commission
and/or state Blue Sky authorities) in connection with the execution and delivery
of this Agreement, the making of the Loans, the creation and acceptance of the
BAs or the fulfillment of or compliance with the terms and provisions of the
Loan Documents.
5.11 Environmental Compliance. The Company and its Subsidiaries and all of
their respective properties and facilities have complied at all times and in all
respects with all applicable foreign, federal, state, local and regional
statutes, laws, ordinances and judicial or administrative orders, judgments,
rulings and regulations relating to protection of the environment except, in any
such case, where failure to so comply could not reasonably be expected to result
in a material adverse effect on the business, condition (financial or otherwise)
or operations of the Company and its Subsidiaries taken as a whole or the
ability of the Company to perform its obligations under this Agreement.
5.12 Disclosure. Neither this Agreement nor any other document, certificate
or statement furnished to the Agent or any Lender by or on behalf of the Company
in connection herewith contains any untrue statement of a material fact or omits
to state a material fact necessary in order to make the statements contained
herein and therein not misleading. There is no fact peculiar to the Company or
any of its Subsidiaries which materially adversely affects or in the future may
(so far as the Company can now foresee) materially adversely affect the
business, property or assets, condition (financial or otherwise) or operations
of the Company or any of its Subsidiaries and which has not been set forth in
this Agreement.
5.13 Hostile Tender Offers. None of the proceeds of any Loans or the BAs
will be used to finance a Hostile Tender Offer.
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5.14 Priority of Obligations. The Obligations constitute "Superior
Indebtedness" as such term is defined in the Company's Promissory (subordinated)
Notes, the form of which is attached hereto as Exhibit I, and the Subordinated
Debt is subordinated to the Obligations.
5.15 Year 2000 Problem. The Company and its Subsidiaries (a) have
reviewed the areas within their business and operations which could be adversely
affected by, and have developed or are developing a program to address on a
timely basis, the Year 2000 Problem and (b) have made appropriate inquiries as
to the effect the Year 2000 Problem will have on their material suppliers and
customers. Based on such a review, program and inquiries, the Company reasonably
believes that the Year 2000 Problem will not have a Material Adverse Effect.
ARTICLE VI
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any BA shall
be outstanding or any Loan or other Obligation shall remain unpaid or
unsatisfied, unless the Required Lenders waive compliance in writing:
6.1 Financial Statements. The Company shall deliver to the Agent, in
form and detail reasonably satisfactory to the Agent and the Required Lenders,
with sufficient copies for each Lender:
(a) as soon as available, but not later than 120 days after
the end of each fiscal year, a copy of the audited consolidated balance sheet of
the Company and its Subsidiaries as at the end of such year and the related
consolidated statements of income or operations, shareholders' equity and cash
flows for such year, setting forth in each case in comparative form the figures
for the previous fiscal year, and accompanied by the opinion of Ernst & Young or
another nationally-recognized independent public accounting firm ("Independent
Auditor") which report (x) shall state that such consolidated financial
statements present fairly the financial position for the periods indicated in
conformity with GAAP applied on a basis consistent with prior years and (y)
shall not be qualified or limited because of a restricted or limited examination
by the Independent Auditor of any material portion of the Company's or any
Subsidiary's records; and
(b) as soon as available, but not later than 60 days after the
end of each of the first three fiscal quarters of each fiscal year, a copy of
the unaudited consolidated balance sheet of the Company and its Subsidiaries as
of the end of such quarter and the related consolidated statements of income,
shareholders' equity and cash flows for the period commencing on the first day
and ending on the last day of such quarter, and certified by a Responsible
Officer as fairly presenting, in accordance with GAAP (subject to ordinary, good
faith year-end audit adjustments), the financial position and the results of
operations of the Company and the
60
Subsidiaries.
6.2 Certificates; Other Information. The Company shall furnish to
the Agent, with sufficient copies for each Lender:
(a) concurrently with the delivery of the financial statements
referred to in subsection 6.1(a), a certificate of the Independent Auditor
stating that in making the examination necessary therefor no knowledge was
obtained of any Event of Default or Unmatured Event of Default, except as
specified in such certificate;
(b) concurrently with the delivery of the financial statements
referred to in subsections 6.1(a) and (b), (i) a Compliance Certificate executed
by a Responsible Officer and (ii) a schedule of the daily and 30 day average
amounts of accounts receivable and Debt outstanding during the fiscal quarter
ending on the date as of which such financial statements were prepared, together
the calculations necessary to demonstrate compliance with Sections 7.14 and 7.3;
(c) promptly, copies of all financial statements and reports
that the Company sends to its shareholders, and copies of all financial
statements and regular, periodical or special reports (including Forms 10K, 10Q
and 8K) that the Company or any Subsidiary may make to, or file with, the SEC;
(d) promptly, such information or documentation as the Agent,
at the request of any Lender, may request from time to time regarding the
efforts of the Company and its Subsidiaries to address the Year 2000 Problem;
(e) within 30 days after the end of each fiscal month, a
calculation in reasonable detail of the Borrowing Base as of the last day of
such month, substantially in the form of Exhibit O;
(f) concurrently with the execution of any amendment to the
Synthetic Lease Guaranty, the Senior Note Agreements or the Shelf Note Agreement
(each as defined in the Intercreditor Agreement), a copy of such executed
amendment;
(g) simultaneously with the delivery thereof under the Senior
Note Agreements (as defined in the Intercreditor Agreement), copies of all
information and notices required to be given by the Company pursuant to
paragraph 5A thereof (or any successor provision thereto) or any other notice,
report or other written information delivered to any noteholder under the Senior
Note Agreements; and
(h) promptly, such additional information regarding the
business, financial or corporate affairs of the Company or any Subsidiary as the
Agent, at the request of any Lender, may from time to time request.
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6.3 Notices. The Company shall promptly notify the Agent and each
Lender promptly after a Responsible Officer obtains knowledge of:
(a) the occurrence of any Event of Default or Unmatured
Event of Default;
(b) any of the following matters that has resulted or may
reasonably be expected to result in a Material Adverse Effect: (i) any breach or
non-performance of, or any default under, a Contractual Obligation of the
Company or any Subsidiary; (ii) any dispute, litigation, investigation,
proceeding or suspension between the Company or any Subsidiary and any
Governmental Authority; or (iii) the commencement of, or any material
development in, any litigation or proceeding affecting the Company or any
Subsidiary including pursuant to any applicable Environmental Law;
(c) the occurrence of any of the following events affecting
the Company or any ERISA Affiliate (but in no event more than 10 days after such
event; provided that the Company shall notify the Agent and each Lender not less
than ten days before the occurrence of any event described in clause (ii)
below), and deliver to the Agent and each Lender a copy of any notice with
respect to such event that is filed with a Governmental Authority and any notice
delivered by a Governmental Authority to the Company or any ERISA Affiliate with
respect to such event:
(i) an ERISA Event;
(ii) a contribution failure with respect to a Pension Plan
sufficient to give rise to a Lien under Section 302(f) of ERISA;
(iii) a material increase in the Unfunded Pension
Liability of any Pension Plan;
(iv) the adoption of, or the commencement of contributions
to, any Plan subject to Section 412 of the Code by the Company or any
ERISA Affiliate; or
(v) the adoption of any amendment to a Plan subject to
Section 412 of the Code, if such amendment results in a material
increase in contributions or Unfunded Pension Liability; and
(d) any material change in accounting policies or
financial reporting practices by the Company or any of its consolidated
Subsidiaries.
Each notice under this Section shall be accompanied by a
written statement by a Responsible Officer setting forth details of the
occurrence referred to therein, and stating what action the Company or any
affected Subsidiary proposes to take with respect thereto and at what time. Each
notice under subsection 6.3(a) shall describe with particularity any and all
clauses or provisions of this Agreement or any other Loan Document that have
been breached or violated.
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6.4 Preservation of Corporate Existence, Etc. The Company shall, and
shall cause each Subsidiary to:
(a) preserve and maintain in full force and effect its
corporate existence and good standing under the laws of its state or
jurisdiction of incorporation;
(b) preserve and maintain in full force and effect all
governmental rights, privileges, qualifications, permits, licenses and
franchises necessary or desirable in the normal conduct of its business except
(i) in connection with transactions permitted by Section 7.6 and sales of assets
permitted by Section 7.5 and (ii) to the extent the non-preservation or
non-maintenance thereof could not reasonably be expected to have a Material
Adverse Effect;
(c) use reasonable efforts, in the ordinary course of
business, to preserve its business organization and goodwill; and
(d) preserve or renew all of its registered patents,
trademarks, trade names and service marks, the non-preservation of which could
reasonably be expected to have a Material Adverse Effect.
Notwithstanding the provisions of this Section 6.4, the
Company may dissolve or liquidate any Inactive Subsidiary.
6.5 Maintenance of Property. The Company shall, and shall cause each
Subsidiary to, maintain and preserve all its property which is used or useful in
its business in good working order and condition, ordinary wear and tear
excepted and make all necessary repairs thereto and renewals and replacements
thereof except where the failure to do so could not reasonably be expected to
have a Material Adverse Effect. The Company and each Subsidiary shall use the
standard of care typical in the industry in the operation and maintenance of its
facilities.
6.6 Insurance. The Company shall, and shall cause each Subsidiary to,
maintain with financially sound and reputable insurers, insurance in such
amounts and against such liabilities and hazards as customarily maintained by
the Company in accordance with its practices, policies and procedures prior to
the Closing Date. Together with each delivery of financial statements under
subsection 6.1(a), the Company will, upon the request of any Lender, deliver a
certificate of a Responsible Officer specifying the details of such insurance in
effect.
6.7 Payment of Obligations. The Company shall, and shall cause each
Subsidiary to, pay and discharge as the same shall become due and payable all
their respective obligations and liabilities, including:
(a) all tax liabilities, assessments and governmental charges
or levies upon it or its properties or assets, unless the same are being
contested in good faith by appropriate proceedings and adequate reserves in
accordance with GAAP are being maintained by the
63
Company or such Subsidiary;
(b) all lawful claims which, if unpaid, would by law become a
Lien upon its property; and
(c) all indebtedness, as and when due and payable, but subject
to any subordination provisions contained in any instrument or agreement
evidencing such Indebtedness.
6.8 Compliance with Laws. The Company shall, and shall cause each
Subsidiary to, comply in all material respects with all Requirements of Law of
any Governmental Authority having jurisdiction over it or its business
(including the Federal Fair Labor Standards Act), except such as may be
contested in good faith or as to which a bona fide dispute may exist.
6.9 Compliance with ERISA. The Company shall, and shall cause each of
its ERISA Affiliates to: (a) maintain each Plan in compliance in all material
respects with the applicable provisions of ERISA, the Code and other federal or
state law; (b) cause each Plan which is qualified under Section 401(a) of the
Code to maintain such qualification; and (c) make all required contributions to
any Plan subject to Section 412 of the Code.
6.10 Inspection of Property and Books and Records. The Company shall,
and shall cause each Subsidiary to, maintain proper books of record and account,
in which full, true and correct entries in conformity with GAAP consistently
applied shall be made of all financial transactions and matters involving the
assets and business of the Company and such Subsidiary. The Company shall, and
shall cause each Subsidiary to, permit representatives and independent
contractors of the Agent or any Lender to visit and inspect any of their
respective properties, to examine their respective corporate, financial and
operating records, and make copies thereof or abstracts therefrom, and to
discuss their respective affairs, finances and accounts with their respective
directors, officers, and independent public accountants, all at the reasonable
expense of the Company and at such reasonable times during normal business hours
and as often as may be reasonably desired, upon reasonable advance notice to the
Company; provided that when an Event of Default exists the Agent or any Lender
may do any of the foregoing at the reasonable expense of the Company at any time
during normal business hours without advance notice.
6.11 Environmental Laws. The Company shall, and shall cause each
Subsidiary to, conduct its operations and keep and maintain its property in
material compliance with all material Environmental Laws.
6.12 Use of Proceeds. The Company shall use the proceeds of the Loans
and the BAs to repay Debt and for working capital and other general corporate
purposes not in contravention of any applicable Requirement of Law or of any
Loan Document.
6.13 Covenant to Secure Obligations Equally. The Company covenants
that, if it or any Subsidiary shall create or assume any Lien upon any of its
property or assets, whether now owned
64
or hereafter acquired, other than Liens permitted by the provisions of Section
7.2 (unless prior written consent to the creation or assumption thereof shall
have been obtained pursuant to Section 10.1), it will make or cause to be made
effective provision whereby the Obligations will be secured by such Lien equally
and ratably with any and all other Debt thereby secured so long as any such
other Debt shall be so secured.
6.14 Cooperative Status. The Company covenants that it will at all
times maintain its status as a cooperative for purposes of Subchapter T of the
Code; provided, however, in the event that the Code or other applicable law is
modified after the date hereof and as a result of such modification the Company
is unable to satisfy its obligations under this Section, then the Required
Lenders and the Company shall agree, or in good faith negotiate to agree, to
amend the covenants contained in this Agreement so that the application of such
covenants (following such modification of the Code or other applicable law and
the effect thereof on the Company) will be substantially the same as prior
thereto.
6.15 Collateral/Accounting Systems Examination. The Company covenants
that it will (a) cooperate with the Agent, the Lenders and their respective
representatives in commencing a collateral and accounting systems examination
within 30 days following the Effective Date and completing such examination as
promptly as practicable thereafter and (b) pay all reasonable costs and expenses
in connection with such examination.
6.16 Real Estate Documents. (a)(i)The Company shall, and shall cause
each applicable Guarantor to, promptly (and, in any event, no later than April
26, 2000) execute and deliver a Mortgage providing for a fully perfected Lien,
in favor of the Collateral Agent, in all right, title and interest of the
Company or such Guarantor in each parcel of real property listed on Part 1 of
Schedule 6.16 (each a "Primary Property").
(ii) The Company shall, and shall cause each applicable
Guarantor to, promptly (and in any event, no later than May 10, 2000)
execute and deliver a Mortgage providing for a fully perfected Lien, in
favor of the Collateral Agent, in all right, title and interest of the
Company or such Guarantor in each parcel of real property listed on
Part 2 of Schedule 6.16 (each a "Secondary Property"; the Primary
Properties and the Secondary Properties are collectively referred to as
the "Properties").
(b) The Company shall, and shall cause each Guarantor to, promptly
(and, in any event, no later than May 15, 2000 for each Primary Property and May
31, 2000 for each Secondary Property) provide the following documents in
connection with each Mortgage referred to above:
(i) an ALTA Loan Title Insurance Policy, issued by an
insurer acceptable to the Collateral Agent, insuring the Collateral
Agent's Lien on the Property subject to such Mortgage and containing
such endorsements as the Collateral Agent may reasonably require (it
being understood that the amount of coverage, exceptions to coverage
and status of title set forth in such policy shall be acceptable to the
Collateral
65
Agent);
(ii) copies of all documents of record concerning
such Property as shown on the commitment for the ALTA Loan Title
Insurance Policy referred to above;
(iii) original or certified copies of all insurance
policies required to be maintained with respect to such Property by
this Agreement or the applicable Mortgage; and
(iv) a flood insurance policy covering such Property,
reasonably satisfactory to the Collateral Agent, if required by the
Flood Disaster Protection Act of 1973.
Additionally, in the case of any real property leased by the Company or
any Guarantor, the Company shall use its best efforts to, or shall cause such
Guarantor to use its best efforts to, provide a consent, in form and substance
satisfactory to the Collateral Agent, from the owner and each mortgagee of such
property (a) consenting to the Mortgage in favor of the Collateral Agent with
respect to such property and (b) waiving any landlord's Lien in respect of
personal property kept at the premises subject to such lease.
6.17 Further Assurances. The Company shall (a) cause all Subsidiaries
to guarantee the obligations of the Company hereunder pursuant to the Guaranty
(and in furtherance of the foregoing, immediately upon the creation or
acquisition of any Subsidiary, cause such Subsidiary to execute and deliver a
counterpart of the Guaranty, together with such other documents, including
resolutions and opinions of counsel, as the Agent or any Lender may reasonably
request), provided neither TruServ Specialty Company, LLC nor any Inactive
Subsidiary or Foreign Subsidiary (other than ▇▇▇▇▇▇ Canada Hardware and Variety
Company Inc.) shall have an obligation to execute a counterpart of the Guaranty;
and (b) take, and cause each of Guarantors to take, such actions as are
necessary or as the Agent or the Required Lenders may reasonably request from
time to time (including the execution and delivery of security agreements,
pledge agreements, financing statements, mortgages, deeds of trust and other
documents, the filing or recording of any of the foregoing, the delivery of
stock certificates and other collateral with respect to which perfection is
obtained solely by possession, the notation of the Collateral Agent's Liens on
certificates of title for vehicles and the delivery of opinions of counsel) to
ensure that the obligations of the Company and each Guarantor hereunder and
under the Guaranty, as applicable, are secured by perfected security interests
in substantially all of the personal property of each such entity, and provided
further that neither the Company nor any Guarantor shall be required to pledge
more than 65% of the stock of any Foreign Subsidiary (other than ▇▇▇▇▇▇ Canada
Hardware and Variety Company Inc.).
6.18 Waiver of Negative Pledge. The Company will, not later than June
30, 2000, cause The Industrial Development Authority of the State of New
Hampshire (the "▇▇▇") to waive the negative pledge set forth in Section 8.1 of
the Loan Agreement dated as of October 1, 1982
66
between the ▇▇▇ and the Company (then known as ▇▇▇▇▇▇ & Company) to permit a
Lien in favor of the Collateral Agent on the Project (as defined in the Loan
Agreement referred to above).
ARTICLE VII
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any BA shall
be outstanding or any Loan or other Obligation shall remain unpaid or
unsatisfied, unless the Required Lenders waive compliance in writing:
7.1 Fixed Charge Coverage Ratio. The Company will not permit the
Fixed Charge Coverage Ratio as of the end of any fiscal quarter to be less than
the applicable ratio set forth below:
Fiscal Quarter(s) Ending Ratio
------------------------ -----
3/31/00 through 6/30/00 1.20 to 1.00
9/30/00 1.40 to 1.00
12/31/00 through 12/31/01 1.75 to 1.00
3/31/02 and thereafter 1.85 to 1.00.
7.2 Lien Restrictions. The Company will not and will not permit any
Subsidiary to create, assume or suffer to exist any Lien upon any of its
property or assets, whether now owned or hereafter acquired (whether or not
provision is made for the equal and ratable securing of the Obligations in
accordance with the provisions of Section 6.13), except:
(a) Liens for taxes not yet due or which are being actively
contested in good faith by appropriate proceedings and with respect to
which the Company or the applicable Subsidiary maintains adequate
reserves,
(b) Liens incidental to the conduct of its business or the
ownership of its property and assets which were not incurred in
connection with the borrowing of money or the obtaining of advances or
credit,
(c) Liens on property or assets of a Subsidiary to secure
obligations of such Subsidiary to the Company or another Subsidiary,
(d) Liens in existence on the Closing Date and described on
Schedule 7.2,
(e) Liens in respect of capital leases entered into in
connection with, or any
67
Lien arising in connection with, the acquisition of property, after
the date hereof and attaching only to the property being acquired, if
the Indebtedness secured thereby does not exceed 100% of the lesser of
(i) the fair market value of the property acquired at the time of
acquisition thereof and (ii) the total purchase price of the property
so acquired,
(f) other Liens (including Liens arising under capital
leases), in addition to the Liens permitted by clauses (a) through (d)
above and clause (g) below, securing Indebtedness of the Company or any
Subsidiary (other than Indebtedness that constitutes Subordinated
Debt); provided, however, that (i) such Indebtedness is permitted by
the provisions of Section 7.3 and (ii) the aggregate outstanding
principal amount of all such Indebtedness (other than Indebtedness
listed on Schedule 7.2(f)) does not at any time exceed (A) prior to the
Reset Date, $25,000,000 and (B) on and after the Reset Date, an amount
equal to 10% of the consolidated total assets of the Company, and
(g) Liens in favor of the Collateral Agent.
7.3 Debt Restrictions. The Company will not and will not permit any
Subsidiary to create, incur, assume or suffer to exist any Debt, except:
(a) Senior Funded Debt,
(b) Subordinated Debt,
(c) Debt under the Guaranty, and
(d) Short Term Debt of the Company;
provided that the ratio of (x) the sum of (i) the aggregate amount (without
duplication) of all Senior Funded Debt plus (ii) an amount equal to (A) the
remainder of the lowest daily average amount of Short Term Debt outstanding for
any period of 30 consecutive days during the 12-month period ending on the most
recently completed month minus (B) the daily average of cash and marketable
securities for such 30-day period to (y) the sum of (i) Consolidated
Capitalization plus (ii) Special 1999 Charges plus (iii) Special A/P Charges
plus (iv) the amount determined pursuant to clause (x)(ii) above shall not at
any time exceed the ratio set forth below during any period set forth below:
Specified
Period Ending Percentage
------------- ----------
Through 12/31/01 60%
Thereafter 55%
For purposes of this Section 7.3, Debt represented by the Loans or
arising under the BAs
68
shall be considered Short Term Debt.
Without limiting the foregoing provisions of this Section, the Company
will not permit the aggregate principal amount of all Debt of the Company and
its Subsidiaries (other than (i) Debt hereunder and under the other Loan
Documents, (ii) Debt referred to on Schedule 5.7 which was outstanding on March
31, 2000 and (iii) Subordinated Debt owed to Members) to exceed $35,000,000 at
any time prior to the Reset Date.
7.4 Sale of Assets. The Company will not and will not permit any
Subsidiary to sell, lease or transfer or otherwise dispose of any assets of the
Company or any Subsidiary other than in the ordinary course of business (which
shall be deemed to include the planned sale of up to ten distribution
facilities); provided that the Company and its Subsidiaries may sell, lease,
transfer or otherwise dispose of assets outside the ordinary course of business
so long as the aggregate amount of all assets sold, leased, transferred or
otherwise disposed of outside the ordinary course of business during the most
recent 36-month rolling period when added together, without duplication, with
(a) any shares of stock or Debt of any Subsidiary sold or otherwise disposed of,
or with respect to which the Company or any Subsidiary has parted control of,
except to the Company or another Subsidiary, during such period and (b) any
assets then proposed to be sold outside of the ordinary course of business do
not constitute more than 10% of the consolidated total assets of the Company as
of the end of the most recent fiscal quarter for which the Company has delivered
financial statements pursuant to Section 6.1.
7.5 Merger. The Company will not and will not permit any Subsidiary
to merge or consolidate with any other Person, except that Subsidiaries may be
merged into the Company or any other Subsidiary and the Company may merge after
the Reset Date with another Person, provided that the Company is the surviving
corporation and no Event of Default or Unmatured Event of Default shall exist
either immediately before or after such merger.
7.6 Restrictions on Transactions with Affiliates and Stockholders.
The Company will not and will not permit any Subsidiary to directly or
indirectly, purchase, acquire or lease any property from, or sell, transfer or
lease any property (other than shares of stock of the Company) to, or otherwise
deal with (i) any Affiliate or Substantial Stockholder, or (ii) any corporation
in which an Affiliate, Substantial Stockholder or the Company (either directly
or through Subsidiaries) owns 5% or more of the outstanding voting stock, except
that (a) any such Affiliate or Substantial Stockholder may be a director,
officer or employee of the Company or any Subsidiary and may be paid reasonable
compensation in connection therewith (b) the Company and its Subsidiaries may
perform or engage in any of the foregoing in the ordinary course of business
upon terms no less favorable to the Company or such Subsidiary (as the case may
be) than if no such relationship described in clauses (i) and (ii) above existed
and (c) the Company may sell to or purchase from any such Person shares of the
Company's stock subject to the provisions of Section 7.11.
7.7 Issuance of Stock by Subsidiaries. The Company will not permit
any Subsidiary to
69
(either directly, or indirectly by the issuance of rights or options for, or
securities convertible into, such shares) issue, sell or otherwise dispose of
any shares of any class of its stock (other than directors' qualifying shares)
except to the Company or another Subsidiary; provided, however, TruServ Canada
Cooperative Inc. may issue and sell shares of its stock in the ordinary course
of business consistent with its practices as of April 13, 1992.
7.8 Compliance with ERISA. The Company will not and will not permit
any Subsidiary to engage in any transaction in connection with which the Company
or any Subsidiary could be subject to either a civil penalty assessed pursuant
to section 502(i) of ERISA or a tax imposed by section 4975 of the Code,
terminate or withdraw from any Plan (other than a Multiemployer Plan) in a
manner, or take any other action with respect to any such Plan (including,
without limitation, a substantial cessation of operations within the meaning of
section 4062(f) of ERISA), which could result in any liability of the Company or
any Subsidiary to the PBGC, to a trust established pursuant to section
4041(c)(3)(B)(ii) or (iii) or 4042(i) of ERISA, or to a trustee appointed under
section 4042(b) or (c) of ERISA, incur any liability to the PBGC on account of a
termination of a Plan under section 4064 of ERISA, fail to make full payment
when due of all amounts which, under the provisions of any Plan, the Company or
any Subsidiary is required to pay as contributions thereto, or permit to exist
any accumulated funding deficiency, whether or not waived, with respect to any
Plan (other than a Multiemployer Plan), if, in any such case, such penalty or
tax or such liability, or the failure to make such payment, or the existence of
such deficiency, as the case may be, could be reasonably expected to have a
material adverse effect on the Company and its Subsidiaries taken as a whole.
7.9 No Change in Subordination Terms, etc. The Company will not and
will not permit any Subsidiary to amend, alter or otherwise change any provision
of any of the subordinated promissory notes now or hereafter issued by the
Company or take any other action (or refrain from taking an action) which would
have the effect of eliminating or altering in any way the effect of the
subordination language appearing in such subordinated promissory notes or the
rights of the Agent and the Lenders arising as a result thereof.
7.10 Nature of Business. The Company will not and will not permit any
Subsidiary to engage in the business of underwriting risks for insurance
purposes, or in any other aspect of insurance related business other than in the
ordinary course of business in accordance with its practices as of the Closing
Date; or purchase and sell real estate (other than on an agency basis) for
purposes other than those relating directly to its principal business except for
purchases and sales of store locations in the ordinary course of business which
in the aggregate for the Company and its Subsidiaries taken as a whole do not
exceed $10,000,000 during any rolling consecutive five year period.
7.11 Restricted Investments. The Company will not and will not permit
any Subsidiary to make or permit a Subsidiary to make any Investment except the
Company and any Subsidiary may:
70
(a) make or permit to remain outstanding loans or advances to
any Subsidiary other than an Inactive Subsidiary,
(b) after the Reset Date, own, purchase or acquire stock,
obligations or securities of a Subsidiary or of a corporation which
immediately after such purchase or acquisition will be a Subsidiary,
(c) acquire and own stock, obligations or securities received
in settlement of debts (created in the ordinary course of business)
owing to the Company or any Subsidiary,
(d) own, purchase or acquire prime commercial paper, banker's
acceptances and certificates of deposit in United States and Canadian
commercial banks (having combined capital and surplus of not less than
U.S. $100,000,000) and repurchase agreements with respect to the
foregoing, in each case due within one year from the date of purchase
and payable in the United States in United States dollars, obligations
of the government of the United States or any agency thereof, and
obligations guaranteed by the government of the United States,
(e) make or permit to remain outstanding travel and other
similar advances to officers and employees in the ordinary course of
business,
(f) permit to remain outstanding Investments existing on the
Closing Date and described on Schedule 7.11,
(g) maintain deposit accounts with financial institutions in
the ordinary course of business; provided that the amount maintained in
deposit accounts with financial institutions other than the Lenders
shall not exceed (x) in the case of any one such account, $200,000 for
more than three consecutive Business Days; and (y) in the case of all
such accounts in the aggregate, $600,000 for more than two consecutive
Business Days, and
(h) to the extent applicable, make Investments permitted under
Section 7.12 below.
Notwithstanding the foregoing, the Company will not permit the aggregate amount
of Investments in TruServ Specialty Company, LLC to exceed $1,500,000 at any
time.
7.12 Restricted Payments. The Company will not and will not permit
any Subsidiary to pay or declare cash dividends, cash patronage dividends or
dividends on any class of its stock (other than dividends in kind) or redeem,
purchase or otherwise acquire, or make any redemptions, purchase, or other
acquisition of any of its stock or apply miscellaneous deductions in lieu of
patronage dividends, or make or permit any Subsidiary to make any Restricted
Investment (each a "Restricted Payment") except to the extent that the aggregate
amount of all
71
such Restricted Payments made in any fiscal year does not exceed the Specified
Percentage (as defined below) of Consolidated Net Earnings for such fiscal year.
For purposes of the foregoing, "Specified Percentage" means 40%. Notwithstanding
the foregoing, the Company will not, and will not permit any Subsidiary, to make
or pay any Restricted Payment (a) prior to January 1, 2001, or (b) if at the
time such Restricted Payment is made or paid, or after giving effect thereto, an
Event of Default or Unmatured Event of Default would exist.
7.13 Use of Proceeds. The Company will not, and will not permit any
Subsidiary to, use any portion of the proceeds of any Credit Extension, directly
or indirectly, (i) to purchase or carry Margin Stock, (ii) to repay or otherwise
refinance indebtedness of the Company or others incurred to purchase or carry
Margin Stock, (iii) to extend credit for the purpose of purchasing or carrying
any Margin Stock, or (iv) to acquire any security in any transaction that is
subject to Section 13 or 14 of the Exchange Act.
7.14 Ratio of Borrowing Base to Debt. The Company will not permit the
ratio of (a) the Borrowing Base as of the last day of any fiscal month to (b)
the remainder of (i) the daily average of the amount of Total Senior Debt
outstanding during the fiscal month ending on such date minus (ii) the daily
average of cash and marketable securities during the fiscal month ending on such
date to be equal to or less than the applicable ratio set forth below:
Fiscal Month(s) Ending Ratio
---------------------- -----
04/3/99 through 05/29/99 1.10 to 1
7/3/99 through 10/2/99 1.15 to 1
10/30/99 through 12/31/99 1.20 to 1
01/29/00 1.10 to 1
2/26/00 through 12/31/00 1.20 to 1
01/27/01 1.10 to 1
2/24/01 through 12/31/01 1.20 to 1
01/26/02 1.10 to 1
2/23/02 and thereafter 1.20 to 1.
7.15 Minimum EBITDA. The Company will not permit the sum of (i)
EBITDA as of the end of any four consecutive fiscal quarters, plus (ii) for the
period of four fiscal quarters ending March 31, 2000, June 30, 2000 and
September 30, 2000, Special 1999 Charges (to the extent taken during such
period), plus (iii) for the period of four fiscal quarters ending March 31, 2000
and June 30, 2000, Special A/P Charges (to the extent taken during such period),
to be less than $85,000,000.
7.16 Inactive Subsidiaries. The Company will not at any time permit
its Inactive Subsidiaries, taken as a whole, to have more than $200,000 of
assets (based on fair market value) or to generate more than $5,000 of revenues
in any fiscal quarter.
7.17 Amendments to Financing Agreements. The Company will not, and
will not
72
permit any Subsidiary to, amend, modify, supplement or restate any Financing
Agreement (as defined in the Intercreditor Agreement).
ARTICLE VIII
EVENTS OF DEFAULT
8.1 Event of Default. Any of the following events which occur and
are continuing for any reason whatsoever (and whether such occurrence shall be
voluntary or involuntary or come about or be effected by operation of law or
otherwise) shall constitute an "Event of Default":
(a) The Company defaults in the payment of any principal of
any Loan or any amount due in respect of any BA when the same shall
become due.
(b) The Company defaults in the payment of any interest, fee
or other amount payable hereunder or under any other Loan Document for
more than three (3) Business Days after the date due.
(c) The Company or any Subsidiary defaults (whether as primary
obligor or as guarantor or other surety) in any payment of principal of
or interest on any other obligation for money borrowed (or any
Capitalized Lease Obligation, any obligation under a conditional sale
or other title retention agreement, any obligation issued or assumed as
full or partial payment for property whether or not secured by a
purchase money mortgage or any obligation under notes payable or drafts
accepted representing extensions of credit) beyond any period of grace
provided with respect thereto, or the Company or any Subsidiary fails
to perform or observe any other agreement, term or condition contained
in any agreement under which any obligation is created (or if any other
event thereunder or under any such agreement shall occur and be
continuing) and the effect of such failure or other event is to cause,
or to permit the holder or holders of such obligation (or a trustee on
behalf of such holder or holders) to cause, such obligation to become
due (or to be repurchased by the Company or any Subsidiary) prior to
any stated maturity, provided that the aggregate amount of all
obligations as to which such a payment default shall occur and be
continuing or such a failure or other event causing or permitting
acceleration (or resale to the Company or any Subsidiary) shall occur
and be continuing exceeds $5,000,000.
(d) Any representation or warranty made by the Company or any
Subsidiary herein or in any other Loan Document or by the Company or
any Subsidiary or any of their respective officers in any writing
furnished in connection with or pursuant to this Agreement or any other
Loan Document shall be false in any material respect on the date as of
which made.
(e) The Company fails to perform or observe any agreement
contained in Article
73
VII.
(f) The Company fails to perform or observe any other
agreement, term or condition contained herein and such failure shall
not be remedied within 30 days after any Responsible Officer obtains
actual knowledge of such failure.
(g) The Company or any Subsidiary makes an assignment for the
benefit of creditors or is generally not paying its debts as such debts
become due.
(h) Any decree or order for relief in respect of the Company
or any Subsidiary (other than an Inactive Subsidiary) is entered under
any bankruptcy, reorganization, compromise, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar law,
whether now or hereafter in effect (herein called a "Bankruptcy Law"),
of any jurisdiction.
(i) The Company or any Subsidiary (other than an Inactive
Subsidiary) petitions or applies to any tribunal for, or consents to,
the appointment of, or taking possession by, a trustee, receiver,
custodian, liquidator or similar official of the Company or such
Subsidiary, or of any substantial part of the assets of the Company or
such Subsidiary, or commences a voluntary case under the Bankruptcy Law
of the United States or any proceedings (other than proceedings for the
voluntary liquidation and dissolution of a Subsidiary) relating to the
Company or such Subsidiary under the Bankruptcy Law of any other
jurisdiction.
(j) Any such petition or application is filed, or any such
proceedings are commenced, against the Company or any Subsidiary (other
than an Inactive Subsidiary) and the Company or such Subsidiary by any
act indicates its approval thereof, consent thereto or acquiescence
therein, or an order, judgment or decree is entered appointing any such
trustee, receiver, custodian, liquidator or similar official, or
approving the petition in any such proceedings, and such order,
judgment or decree remains unstayed and in effect for more than 30
days.
(k) Any order, judgment or decree is entered in any
proceedings against the Company decreeing the dissolution of the
Company and such order, judgment or decree remains unstayed and in
effect for more than 60 days.
(l) Any order, judgment or decree is entered in any
proceedings against the Company or any Subsidiary decreeing a split-up
of the Company or such Subsidiary which requires the divestiture of
assets representing a substantial part, or the divestiture of the stock
of a Subsidiary whose assets represent a substantial part, of the
consolidated assets of the Company and its Subsidiaries
74
(determined in accordance with GAAP) or which requires the divestiture
of assets, or stock of a Subsidiary, which shall have contributed a
substantial part of the consolidated net income of the Company and its
Subsidiaries (determined in accordance with GAAP) for any of the three
fiscal years then most recently ended, and such order, judgment or
decree remains unstayed and in effect for more than 60 days.
(m) A final judgment in an amount in excess of $7,000,000 is
rendered against the Company or any Subsidiary and, within 60 days
after entry thereof, such judgment is not discharged or execution
thereof stayed pending appeal, or within 60 days after the expiration
of any such stay, such judgment is not discharged.
(n) An Event of Default exists under and as defined in the
Intercreditor Agreement.
(o) The Guaranty shall cease to be in full force and effect
with respect to any Guarantor (other than as a result of a transaction
permitted hereunder), any Guarantor shall fail (subject to any
applicable grace period) to comply with or to perform any applicable
provision of the Guaranty, or any Guarantor (or any Person by, through
or on behalf of such Guarantor) shall contest in any manner the
validity, binding nature or enforceability of the Guaranty with respect
to such Guarantor.
(p) Any Collateral Document shall cease to be in full force
and effect with respect to the Company or any Guarantor (other than as
a result of a transaction permitted hereunder), the Company or any
Guarantor shall fail (subject to any applicable grace period) to comply
with or to perform any applicable provision of any Collateral Document
to which such entity is a party, or the Company or any Guarantor (or
any Person by, through or on behalf of the Company or such Guarantor)
shall contest in any manner the validity, binding nature or
enforceability of any Collateral Document.
8.2 Remedies. If any Event of Default occurs, the Agent shall, at
the request of, or may, with the consent of, the Required Lenders, do any or all
of the following:
(a) declare the Commitment of each Lender to make Committed
Loans, the obligation of the Swing Line Lender to make Swing Line Loans
and the obligation of the Accepting Lender to accept BAs to be
terminated, whereupon such Commitments and obligations shall be
terminated;
(b) declare the unpaid principal amount of all outstanding
Loans, all interest accrued and unpaid thereon, and all other amounts
owing or payable hereunder or under any other Loan Document to be
immediately due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby expressly waived by
the Company;
(c) demand that the Company deliver to the Agent for the
benefit of the
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Accepting Lender and the Lenders cash collateral in an
amount equal to the aggregate maximum amount which may be required to
be paid by the Accepting Lender in connection with all outstanding BAs,
whereupon the Company shall be obligated to deliver such cash
collateral; and
(d) exercise on behalf of itself and the Lenders all rights
and remedies available to it and the Lenders under the Loan Documents
or applicable law;
provided, however, that upon the occurrence of any event specified in subsection
(g), (h), (i) or (j) of Section 8.1, the obligation of each Lender to make Loans
and of the Accepting Lender to accept BAs shall automatically terminate and the
unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable and the Company
shall automatically become obligated to the Agent for the benefit of the
Accepting Lender and the Lenders cash collateral in an amount equal to the
aggregate maximum amount which may be required to be paid by the Accepting
Lender in connection with all outstanding BAs, all without further act of the
Agent or any Lender.
8.3 Rights Not Exclusive. The rights provided for in this Agreement
and the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.
ARTICLE IX
THE AGENT
9.1 Appointment and Authorization; "Agent". (a) Each Lender hereby
irrevocably (subject to Section 9.9) appoints, designates and authorizes the
Agent to take such action on its behalf under the provisions of this Agreement
and each other Loan Document and to exercise such powers and perform such duties
as are expressly delegated to it by the terms of this Agreement or any other
Loan Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall the Agent
have or be deemed to have any fiduciary relationship with any Lender, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agent. Without limiting the generality of the
foregoing sentence, the use of the term "agent" in this Agreement with reference
to the Agent is not intended to connote any fiduciary or other implied (or
express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties.
(b) The Accepting Lender shall act on behalf of the Lenders
with respect to
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any BA accepted by it and the documents associated therewith. The Accepting
Lender shall have all of the benefits and immunities (i) provided to the Agent
in this Article IX with respect to any acts taken or omissions suffered by the
Accepting Lender in connection with BAs accepted by it or proposed to be
accepted by it and the documents and agreements pertaining thereto as fully as
if the term "Agent", as used in this Article IX, included the Accepting Lender
with respect to such acts or omissions and (ii) as additionally provided in this
Agreement with respect to the Accepting Lender.
(c) The Swing Line Lender shall have all of the benefits and
immunities (i) provided to the Agent in this Article IX with respect to any acts
taken or omissions suffered by the Swing Line Lender in connection with Swing
Line Loans made or proposed to be made by it as fully as if the term "Agent", as
used in this Article IX, included the Swing Line Lender with respect to such
acts or omissions and (ii) as additionally provided in this Agreement with
respect to the Swing Line Lender.
9.2 Delegation of Duties. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
9.3 Liability of Agent. None of the Agent-Related Persons shall (i) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (ii) be responsible in any manner to any of the Lenders for any recital,
statement, representation or warranty made by the Company or any Subsidiary or
Affiliate of the Company, or any officer thereof, contained in this Agreement or
in any other Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Agent under or in
connection with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of the Company or any other party to
any Loan Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Lender to ascertain or
to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the properties, books or records of the Company or any of the Company's
Subsidiaries or Affiliates.
9.4 Reliance by Agent. (a) The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons, and upon advice and statements of legal counsel (including counsel
to the Company), independent accountants and other experts selected by the
Agent. The Agent shall be fully justified in failing or
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refusing to take any action under this Agreement or any other Loan Document
unless it shall first receive such advice or concurrence of the Required Lenders
(or, if expressly required hereunder, all Lenders) as it deems appropriate and,
if it so requests, it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement or any other Loan Document in accordance with a request or consent of
the Required Lenders and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Lenders.
(b) For purposes of determining compliance with the conditions
specified in Section 4.1, each Lender that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter either sent by the Agent to such Lender for consent,
approval, acceptance or satisfaction, or required thereunder to be consented to
or approved by or acceptable or satisfactory to the Lender.
9.5 Notice of Default. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Event of Default or Unmatured Event of
Default, except with respect to defaults in the payment of principal, interest
and fees required to be paid to the Agent for the account of the Lenders, unless
the Agent shall have received written notice from a Lender or the Company
referring to this Agreement, describing such Event of Default or Unmatured Event
of Default and stating that such notice is a "notice of default". The Agent will
notify the Lenders of its receipt of any such notice. The Agent shall take such
action with respect to such Event of Default or Unmatured Event of Default as
may be requested by the Required Lenders in accordance with Article VIII;
provided, however, that unless and until the Agent has received any such
request, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Event of Default or
Unmatured Event of Default as it shall deem advisable or in the best interest of
the Lenders.
9.6 Credit Decision. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Agent hereinafter taken, including any review of the affairs of the
Company and its Subsidiaries, shall be deemed to constitute any representation
or warranty by any Agent-Related Person to any Lender. Each Lender represents to
the Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of the
Company and its Subsidiaries, and all applicable bank regulatory laws relating
to the transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to the Company hereunder. Each Lender also
represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of the Company. Except for notices,
reports and other documents expressly herein required to be furnished to the
Lenders by the Agent, the Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the business,
prospects, operations,
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property, financial and other condition or creditworthiness of the Company.
Except for notices, reports and other documents expressly herein required to be
furnished to the Lenders by the Agent, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of the Company which may come into the possession
of any of the Agent-Related Persons.
9.7 Indemnification of Agent. Whether or not the transactions
contemplated hereby are consummated, the Lenders shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Company and without limiting the obligation of the Company to do so), pro rata,
from and against any and all Indemnified Liabilities; provided, however, that no
Lender shall be liable for the payment to any Agent-Related Person of any
portion of the Indemnified Liabilities resulting solely from such Person's gross
negligence or willful misconduct. Without limitation of the foregoing, each
Lender shall reimburse the Agent upon demand for its ratable share of any costs
or out-of-pocket expenses (including Attorney Costs) incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that the Agent is not
reimbursed for such expenses by or on behalf of the Company. The undertaking in
this Section shall survive the payment of all Obligations hereunder and the
resignation or replacement of the Agent.
9.8 Agent in Individual Capacity. BofA and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Company and its
Subsidiaries and Affiliates as though BofA were not the Agent, the Accepting
Lender and the Swing Line Lender hereunder, in each case without notice to or
consent of the Lenders. The Lenders acknowledge that, pursuant to such
activities, BofA or its Affiliates may receive information regarding the Company
or its Affiliates (including information that may be subject to confidentiality
obligations in favor of the Company or such Subsidiary) and acknowledge that the
Agent shall be under no obligation to provide such information to them. With
respect to its Loans, BofA and any Affiliate thereof shall have the same rights
and powers under this Agreement as any other Lender and may exercise the same as
though BofA were not the Agent, the Accepting Lender or the Swing Line Lender.
9.9 Successor Agent. The Agent may, and at the request of the Required
Lenders shall, resign as Agent upon 30 days' notice to the Lenders and the
Company. If the Agent resigns under this Agreement, the Required Lenders (with,
if no Event of Default and Unmatured Event of Default then exists, the consent
of the Company, not to be unreasonably withheld) shall appoint from among the
Lenders a successor agent for the Lenders. If no successor agent is appointed
prior to the effective date of the resignation of the Agent, the Agent may
appoint, after consulting with the Lenders and the Company, a successor agent
from among the Lenders. Upon the
79
acceptance of its appointment as successor agent hereunder, such successor agent
shall succeed to all the rights, powers and duties of the retiring Agent and the
term "Agent" shall mean such successor agent and the retiring Agent's
appointment, powers and duties as Agent shall be terminated. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Article IX and
Sections 10.4 and 10.5 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Agreement. If no
successor agent has accepted appointment as Agent by the date which is 30 days
following a retiring Agent's notice of resignation, the retiring Agent's
resignation shall nevertheless thereupon become effective and the Lenders shall
perform all of the duties of the Agent hereunder until such time, if any, as the
Required Lenders appoint a successor agent as provided for above.
Notwithstanding the foregoing, however, BofA may not be removed as the Agent at
the request of the Required Lenders unless BofA or any Affiliate of BofA shall
also simultaneously be replaced as "Accepting Lender" and as "Swing Line Lender"
hereunder pursuant to documentation in form and substance reasonably
satisfactory to BofA and, if applicable, such Affiliate.
9.10 Withholding Tax. (a) If any Lender is a "foreign corporation,
partnership or trust" within the meaning of the Code and such Lender claims
exemption from, or a reduction of, U.S. withholding tax under Sections 1441 or
1442 of the Code, such Lender agrees with and in favor of the Agent, to deliver
to the Agent:
(i) if such Lender claims an exemption from, or a
reduction of, withholding tax under a United States tax treaty,
properly completed IRS Form W-8BEN before the payment of any interest
in the first calendar year and before the payment of any interest in
each third succeeding calendar year during which interest may be paid
under this Agreement;
(ii) if such Lender claims that interest paid under
this Agreement is exempt from United States withholding tax because it
is effectively connected with a United States trade or business of such
Lender, two properly completed and executed copies of IRS Form W-8ECI
before the payment of any interest is due in the first taxable year of
such Lender and in each succeeding taxable year of such Lender during
which interest may be paid under this Agreement, and IRS Form W-9; and
(iii) such other form or forms as may be required
under the Code or other laws of the United States as a condition to
exemption from, or reduction of, United States withholding tax.
Each such Lender agrees to promptly notify the Agent of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction.
(b) If any Lender claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form W-8BEN
and such Lender sells, assigns, grants a participation in, or otherwise
transfers all or part of the Obligations of the Company to
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such Lender, such Lender agrees to notify the Agent of the percentage amount in
which it is no longer the beneficial owner of Obligations of the Company to such
Lender. To the extent of such percentage amount, the Agent will treat such
Lender's IRS Form W-8BEN as no longer valid.
(c) If any Lender claiming exemption from United States
withholding tax by filing IRS Form W-8ECI with the Agent sells, assigns, grants
a participation in, or otherwise transfers all or part of the Obligations of the
Company to such Lender, such Lender agrees to undertake sole responsibility for
complying with the withholding tax requirements imposed by Sections 1441 and
1442 of the Code.
(d) If any Lender is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such Lender
an amount equivalent to the applicable withholding tax after taking into account
such reduction. If the forms or other documentation required by subsection (a)
of this Section are not delivered to the Agent, then the Agent may withhold from
any interest payment to such Lender not providing such forms or other
documentation an amount equivalent to the applicable withholding tax.
(e) If the IRS or any other Governmental Authority of the
United States or other jurisdiction asserts a claim that the Agent did not
properly withhold tax from amounts paid to or for the account of any Lender
(because the appropriate form was not delivered or was not properly executed, or
because such Lender failed to notify the Agent of a change in circumstances
which rendered the exemption from, or reduction of, withholding tax ineffective,
or for any other reason) such Lender shall indemnify the Agent fully for all
amounts paid, directly or indirectly, by the Agent as tax or otherwise,
including penalties and interest, and including any taxes imposed by any
jurisdiction on the amounts payable to the Agent under this Section, together
with all costs and expenses (including Attorney Costs). The obligation of the
Lenders under this subsection shall survive the payment of all Obligations and
the resignation or replacement of the Agent.
9.11 Co-Agents. None of the Lenders identified on the signature pages
of this Agreement or any related document as a "co-agent" shall have any right,
power, obligation, liability, responsibility or duty under this Agreement other
than those applicable to all Lenders as such. Without limiting the foregoing,
none of the Lenders so identified as a "co-agent" shall have or be deemed to
have any fiduciary relationship with any Lender. Each Lender acknowledges that
it has not relied, and will not rely, on any of the Lenders so identified in
deciding to enter into this Agreement or in taking or not taking action
hereunder.
ARTICLE X
MISCELLANEOUS
10.1 Amendments and Waivers. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent with respect to any
departure by the
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Company or any applicable Subsidiary therefrom, shall be effective unless the
same shall be in writing and signed by the Required Lenders (or by the Agent at
the written request of the Required Lenders) and the Company and acknowledged by
the Agent, and then any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided that no
such waiver, amendment, or consent shall, unless in writing and signed by all
the Lenders and the Company and acknowledged by the Agent, do any of the
following:
(a) increase or extend the Commitment of any Lender (or reinstate
any Commitment terminated pursuant to Section 8.2);
(b) postpone or delay any date fixed by this Agreement or any other
Loan Document for any payment of principal, interest, fees or other amounts due
to the Lenders (or any of them) hereunder or under any other Loan Document;
(c) reduce the principal of, or the rate of interest specified
herein on, any Loan, reduce the BA Commission or the amount of any BA, or
(subject to clause (iv) below) reduce any fees or other amounts payable
hereunder or under any other Loan Document;
(d) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Obligations which is required for the Lenders or
any of them to take any action hereunder; or
(e) amend this Section, or Section 2.13, or any provision herein
providing for consent or other action by all Lenders; and, provided further,
that (i) no amendment, waiver or consent shall, unless in writing and signed by
the Agent in addition to the Required Lenders or all the Lenders, as the case
may be, affect the rights or duties of the Agent under this Agreement or any
other Loan Document, (ii) no amendment, waiver or consent shall, unless in
writing and signed by the Accepting Lender in addition to the Required Lenders
or all Lenders, as the case may be, affect the rights or duties of the Accepting
Lender under this Agreement or any other Loan Document, (iii) no amendment,
waiver or consent shall, unless in writing and signed by the Swing Line Lender
in addition to the Required Lenders or all Lenders, as the case may be, affect
the rights or duties of the Swing Line Lender under this Agreement or any other
Loan Document, and (iv) the Fee Letter may be amended, or rights or privileges
thereunder waived, in a writing executed by the parties thereto.
10.2 Notices. (a) All notices, requests and other communications shall
be in writing (including, unless the context expressly otherwise provides, by
facsimile transmission, provided that any matter transmitted by the Company by
facsimile (i) shall be immediately confirmed by a telephone call to the
recipient at the number specified on Schedule 10.2, and (ii) shall be followed
promptly by delivery of a hard copy original thereof) and mailed, faxed or
delivered, to the address or facsimile number specified for notices on Schedule
10.2; or, as directed to the Company or the Agent, to such other address as
shall be designated by such party in a written
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notice to the other parties, and as directed to any other party, at such other
address as shall be designated by such party in a written notice to the Company
and the Agent.
(b) All such notices, requests and communications shall, when
transmitted by overnight delivery, or faxed, be effective when delivered or
transmitted in legible form by facsimile machine, respectively, or if mailed,
upon the third Business Day after the date deposited into the U.S. mail,
certified mail, return receipt requested; except that notices pursuant to
Article II or IX to the Agent, the Accepting Lender or the Swing Line Lender
shall not be effective until actually received by the Agent, as the case may be.
(c) Any agreement of the Agent and the Lenders herein to
receive certain notices by telephone or facsimile is solely for the convenience
and at the request of the Company. The Agent and the Lenders shall be entitled
to rely on the authority of any Person purporting to be a Person authorized by
the Company to give such notice and the Agent and the Lenders shall not have any
liability to the Company or any other Person on account of any action taken or
not taken by the Agent or the Lenders in reliance upon such telephonic or
facsimile notice. The obligation of the Company to repay the Obligations shall
not be affected in any way or to any extent by any failure by the Agent and the
Lenders to receive written confirmation of any telephonic or facsimile notice or
the receipt by the Agent and the Lenders of a confirmation which is at variance
with the terms understood by the Agent and the Lenders to be contained in the
telephonic or facsimile notice.
10.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delaying exercising, on the part of the Agent or any Lender, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege.
10.4 Costs and Expenses. The Company shall:
(a) whether or not the transactions contemplated hereby are
consummated, pay or reimburse the Agent, the Accepting Lender and the Swing Line
Lender within five Business Days after demand (subject to subsection 4.1(e)) for
all reasonable costs and expenses incurred by the Agent, the Accepting Lender
and the Swing Line Lender in connection with the development, preparation,
delivery, administration and execution of, and any amendment, supplement, waiver
or modification to (in each case, whether or not consummated), this Agreement,
any other Loan Document and any other documents prepared in connection herewith
or therewith, and the consummation of the transactions contemplated hereby and
thereby, including (i) reasonable Attorney Costs incurred by the Agent, the
Accepting Lender and the Swing Line Lender with respect thereto and (ii) the
reasonable fees and charges of any financial advisor retained by the Agent or by
counsel to the Agent (but without duplication of fees and charges of any
financial advisor retained by the Collateral Agent or its counsel); and
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(b) pay or reimburse the Agent and each Lender within five
Business Days after demand (subject to subsection 4.1(e)) for all reasonable
costs and expenses (including Attorney Costs) incurred by them in connection
with the enforcement, attempted enforcement, or preservation of any rights or
remedies under this Agreement or any other Loan Document during the existence of
an Event of Default or after acceleration of the Loans and other Obligations
(including in connection with any "workout" or restructuring regarding the Loans
and other Obligations, and including in any Insolvency Proceeding or appellate
proceeding); provided that the Company shall not be obligated to pay or
reimburse the Agent or any Lender in respect of any suit or proceeding in which
the Company is adverse to the Agent or such Lender and final nonappealable
judgment is rendered by a court of competent jurisdiction in favor of the
Company on all counts.
10.5 Company Indemnification. Whether or not the transactions
contemplated hereby are consummated, the Company shall indemnify and hold the
Agent-Related Persons, and each Lender and each of their respective officers,
directors, employees, counsel, agents and attorneys-in-fact (each an
"Indemnified Person") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses and disbursements (including Attorney Costs) of any kind or
nature whatsoever which may at any time (including at any time following
repayment of the Obligations and the termination, resignation or replacement of
the Agent or replacement of any Lender) be imposed on, incurred by or asserted
against any such Person in any way relating to or arising out of this Agreement
or any document contemplated by or referred to herein, or the transactions
contemplated hereby or thereby, or any action taken or omitted by any such
Person under or in connection with any of the foregoing, including with respect
to any investigation, litigation or proceeding (including any Insolvency
Proceeding or appellate proceeding) related to or arising out of this Agreement
or the Loans or the BAs or the use of the proceeds thereof, or related to any
Offshore Currency transactions entered into in connection herewith, whether or
not any Indemnified Person is a party thereto (all the foregoing, collectively,
the "Indemnified Liabilities"); provided that the Company shall have no
obligation hereunder to any Indemnified Person with respect to Indemnified
Liabilities resulting solely from the gross negligence or willful misconduct of
such Indemnified Person. The agreements in this Section shall survive payment of
all other Obligations and the termination of this Agreement.
10.6 Payments Set Aside. To the extent that the Company makes a payment
to the Agent or any Lender, or the Agent or any Lender exercises its right of
set-off, and such payment or the proceeds of such set-off or any part thereof
are subsequently invalidated, declared to be fraudulent or preferential, set
aside or required (including pursuant to any settlement entered into by the
Agent or such Lender in its discretion) to be repaid to a trustee, receiver, or
any other party, in connection with any Insolvency Proceeding or otherwise, then
(a) to the extent of such recovery the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such set-off had not occurred and (b)
each Lender severally agrees to pay to the Agent upon demand its pro rata share
of any amount so recovered from or repaid by the Agent or any Lender.
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10.7 Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that the Company may not assign or transfer any
of its rights or obligations under this Agreement without the prior written
consent of the Agent and each Lender.
10.8 Assignments, Participations, etc. (a) Any Lender may, with the
written consent of the Accepting Lender, the Swing Line Lender and the Agent,
which consents shall not be unreasonably withheld, at any time assign and
delegate to one or more Persons (provided that no written consent of the
Accepting Lender, the Swing Line Lender or the Agent shall be required in
connection with any assignment and delegation by a Lender to an Affiliate of
such Lender) (each an "Assignee") all, or any ratable part of all, of the Loans,
the Commitment and the other rights and obligations of such Lender hereunder, in
a minimum amount of $10,000,000 (or, if less, all of such Lender's remaining
rights and obligations hereunder); provided, however, that (x) no assignment and
delegation may be made to any Person if, at the time of such assignment and
delegation, the Company would be obligated to pay any greater amount under
Article III to the Assignee than the Company is then obligated to pay to the
assigning Lender under such Article (and if any assignment is made in violation
of the foregoing, the Company will not be required to pay the incremental
amounts) and (y) the Company, the Accepting Lender, the Swing Line Lender and
the Agent may continue to deal solely and directly with such Lender in
connection with the interest so assigned to an Assignee until (i) written notice
of such assignment, together with payment instructions, addresses and related
information with respect to the Assignee, shall have been given to the Company
and the Agent by such Lender and the Assignee; (ii) such Lender and its Assignee
shall have delivered to the Company and the Agent an Assignment and Acceptance
in the form of Exhibit G ("Assignment and Acceptance") together with any Note or
Notes subject to such assignment and (iii) the assignor Lender or Assignee has
paid to the Agent a processing fee in the amount of $2,500.
(b) From and after the date that the Agent notifies the
assignor Lender that it has received and provided its consent (and received the
consent of the Accepting Lender and the Swing Line Lender) with respect to an
executed Assignment and Acceptance and payment of the above-referenced
processing fee, (i) the Assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, shall have the rights and obligations of a
Lender under the Loan Documents, and (ii) the assignor Lender shall, to the
extent that rights and obligations hereunder and under the other Loan Documents
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights and be released from its obligations under the Loan Documents.
(c) Any Lender may at any time sell to one or more commercial
banks or other Persons not Affiliates of the Company (a "Participant")
participating interests in any Loans, the Commitment of such Lender and the
other interests of such Lender (the "originating Lender") hereunder and under
the other Loan Documents; provided, however, that (i) the originating
85
Lender's obligations under this Agreement shall remain unchanged, (ii) the
originating Lender shall remain solely responsible for the performance of such
obligations, (iii) the Company, the Agent, the Swing Line Lender and the
Accepting Lender shall continue to deal solely and directly with the originating
Lender in connection with the originating Lender's rights and obligations under
this Agreement and the other Loan Documents, and (iv) no Lender shall transfer
or grant any participating interest under which the Participant has rights to
approve any amendment to, or any consent or waiver with respect to, this
Agreement or any other Loan Document, except to the extent such amendment,
consent or waiver would require unanimous consent of the Lenders as described in
the first proviso to Section 10.1. In the case of any such participation, the
Participant shall be entitled to the benefit of Sections 3.1, 3.3 and 10.5 as
though it were also a Lender hereunder (provided that no Participant shall
receive any greater compensation pursuant to Article III than would have been
paid to the participating Lender if no participation had been sold), and if
amounts outstanding under this Agreement are due and unpaid, or shall have been
declared or shall have become due and payable upon the occurrence of an Event of
Default, each Participant shall be deemed to have the right of set-off in
respect of its participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement.
(d) Notwithstanding any other provision in this Agreement, any
Lender may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in this Agreement and any Note held by
it in favor of any Federal Reserve Bank in accordance with Regulation A of the
FRB or U.S. Treasury Regulation 31 CFR ss.203.14, and such Federal Reserve Bank
may enforce such pledge or security interest in any manner permitted under
applicable law.
10.9 Confidentiality. Each Lender agrees to take and to cause its
Affiliates to take normal and reasonable precautions and exercise due care to
maintain the confidentiality of all information provided to it by the Company or
any Subsidiary, or by the Agent on the Company's or such Subsidiary's behalf,
under this Agreement or any other Loan Document, and neither such Lender nor any
of its Affiliates shall use any such information other than in connection with
or in enforcement of this Agreement and the other Loan Documents or in
connection with other business now or hereafter existing or contemplated with
the Company or any Subsidiary; except to the extent such information (i) was or
becomes generally available to the public other than as a result of disclosure
by such Lender, or (ii) was or becomes available on a non-confidential basis
from a source other than the Company, provided that such source is not bound by
a confidentiality agreement with the Company or any Subsidiary known to such
Lender; provided, however, that any Lender may disclose such information (A) at
the request or pursuant to any requirement of any Governmental Authority to
which such Lender is subject or in connection with an examination of such Lender
by any such authority; (B) pursuant to subpoena or other court process; (C) when
required to do so in accordance with the provisions of any applicable
Requirement of Law; (D) to the extent reasonably required in connection with any
litigation or proceeding to which the Agent or any Lender or any of their
respective Affiliates may be party; (E) to the extent reasonably required in
connection with the exercise of any remedy hereunder or
86
under any other Loan Document; (F) to such Lender's independent auditors and
other professional advisors; (G) to any Participant or Assignee, actual or
potential, provided that such Person agrees in writing to keep such information
confidential to the same extent required of the Lenders hereunder; (H) as to any
Lender or its Affiliate, as expressly permitted under the terms of any other
document or agreement regarding confidentiality to which the Company or any
Subsidiary is party or is deemed party with such Lender or such Affiliate; and
(I) to its Affiliates. Each Lender shall, to the extent permitted by applicable
law, use reasonable efforts to give the Company timely notice of any event
described in clause (B) or (C) of the preceding sentence which may require
disclosure of confidential information so that the Company will have an
opportunity to seek a protective order.
10.10 Set-off. In addition to any rights and remedies of the Lenders
provided by law, if an Event of Default exists, or the Obligations have been
accelerated, each Lender is authorized at any time and from time to time,
without prior notice to the Company, any such notice being waived by the Company
to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held by, and other indebtedness at any time owing by, such Lender to or for the
credit or the account of the Company against any and all Obligations owing to
such Lender, now or hereafter existing, irrespective of whether or not the Agent
or such Lender shall have made demand under this Agreement or any other Loan
Document and although such Obligations may be contingent or unmatured. Each
Lender agrees promptly to notify the Company and the Agent after any such
set-off and application made by such Lender; provided that the failure to give
such notice shall not affect the validity of such set-off and application.
10.11 Automatic Debits of Fees. With respect to any non-use fee,
arrangement fee or other fee, or any other cost or expense (including Attorney
Costs) due and payable to the Agent, the Swing Line Lender, the Accepting Lender
or BofA under the Loan Documents, the Company hereby irrevocably authorizes BofA
to debit any deposit account of the Company with BofA in an amount such that the
aggregate amount debited from all such deposit accounts does not exceed such fee
or other cost or expense. If there are insufficient funds in such deposit
accounts to cover the amount of the fee or other cost or expense then due, such
debits will be reversed (in whole or in part, in BofA's sole discretion) and
such amount not debited shall be deemed to be unpaid. No such debit under this
Section shall be deemed a set-off.
10.12 Notification of Addresses, Lending Offices, Etc. Each Lender
shall notify the Agent in writing of any change in the address to which notices
to such Lender should be directed, of addresses of any Lending Office, of
payment instructions in respect of all payments to be made to it hereunder and
of such other administrative information as the Agent shall reasonably request.
10.13 Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of which taken together shall be deemed to constitute but one
and the same instrument.
10.14 Severability. The illegality or unenforceability of any provision
of this Agreement
87
or any instrument or agreement required hereunder shall not in any way affect or
impair the legality or enforceability of the remaining provisions of this
Agreement or such instrument or agreement.
10.15 No Third Parties Benefited. This Agreement is made and entered
into for the sole protection and legal benefit of the Company, the Lenders, the
Agent, the Agent-Related Persons and the Indemnified Persons, and their
respective permitted successors and assigns, and no other Person shall be a
direct or indirect legal beneficiary of, or have any direct or indirect cause of
action or claim in connection with, this Agreement or any other Loan Document.
10.16 Governing Law and Jurisdiction. (a) THIS AGREEMENT AND ANY NOTES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
ILLINOIS; PROVIDED THAT THE COMPANY, THE AGENT AND THE LENDERS SHALL RETAIN ALL
RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE
OF ILLINOIS OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF ILLINOIS, AND
BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE COMPANY, THE AGENT AND
THE LENDERS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF SUCH COURTS. EACH OF THE COMPANY, THE AGENT AND
THE LENDERS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE
COMPANY, THE AGENT AND THE LENDERS EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY
ILLINOIS LAW.
10.17 Waiver of Jury Trial. THE COMPANY, THE LENDERS AND THE AGENT EACH
WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION,
PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST
ANY OTHER PARTY OR ANY AGENT-RELATED PERSON OR INDEMNIFIED PERSON, PARTICIPANT
OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE.
THE COMPANY, THE LENDERS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE
OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE
FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY
JURY
88
IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER
PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION
HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENT, RENEWAL,
SUPPLEMENT OR MODIFICATION TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
10.18 Judgment. If, for the purposes of obtaining judgment in any
court, it is necessary to convert a sum due hereunder or any other Loan Document
in one currency into another currency, the rate of exchange used shall be that
at which in accordance with normal banking procedures the Agent could purchase
the first currency with such other currency on the Business Day preceding that
on which final judgment is given. The obligation of the Company in respect of
any such sum due from it to the Agent hereunder or under any other Loan Document
shall, notwithstanding any judgment in a currency (the "Judgment Currency")
other than that in which such sum is denominated in accordance with the
applicable provisions of this Agreement (the "Agreement Currency"), be
discharged only to the extent that on the Business Day following receipt by the
Agent of any sum adjudged to be so due in the Judgment Currency, the Agent may
in accordance with normal banking procedures purchase the Agreement Currency
with the Judgment Currency. If the amount of the Agreement Currency so purchased
is less than the sum originally due to the Agent in the Agreement Currency, the
Company agrees, as a separate obligation and notwithstanding any such judgment,
to indemnify the Agent or the Person to whom such obligation was owing against
such loss. If the amount of the Agreement Currency so purchased is greater than
the sum originally due to the Agent in such currency, the Agent agrees to return
the amount of any excess to the Company (or to any other Person who may be
entitled thereto under applicable law).
10.19 Entire Agreement. This Agreement, together with the other Loan
Documents, embodies the entire agreement and understanding among the Company,
the Lenders and the Agent, and supersedes all prior or contemporaneous
agreements and understandings of such Persons, verbal or written, relating to
the subject matter hereof and thereof.
10.20 Amendment and Restatement. This Agreement amends and restates the
Original Agreement in its entirety and, after the Effective Date the Original
Agreement shall be of no further force or effect (except for any provision
thereof which by its terms survives termination thereof).
10.21 Bid Loan Option. Notwithstanding any provision of this Agreement
to the contrary, the Company shall not have the option of borrowing any Bid
Loans. All borrowings under Section 2 of this Agreement shall be Committed Loans
or Swing Line Loans.
10.22 Intercreditor Agreement; Collateral Matters. (a) The Lenders
hereby authorize the
89
Agent to sign the Intercreditor Agreement on behalf of the Lenders and
acknowledge and agree that Bank of America may act as Collateral Agent under the
Intercreditor Agreement and as Agent hereunder.
(b) The Lenders irrevocably authorize the Collateral Agent, at its
option and in its discretion, (i) to release any Lien on any property granted to
or held by the Collateral Agent under any Collateral Document (x) upon
termination of the Commitments and payment in full of all Loans and all other
obligations of the Company hereunder; (y) which is sold or to be sold or
disposed of as part of or in connection with any disposition permitted hereunder
or (z) if approved, authorized or ratified in writing by the Required Lenders;
(ii) to subordinate any Lien on any property granted to or held by the
Collateral Agent under any Collateral Document to the holder of any Lien on such
property which is permitted by Section 7.2 hereof; and (iii) to release any
Guarantor from its obligations under the Guaranty if such entity ceases to be a
Subsidiary as a result of a transaction permitted hereunder. Upon request by the
Collateral Agent at any time, the Required Lenders will confirm in writing the
Collateral Agent's authority to release or subordinate its interest in
particular types or items of property, or to release any Guarantor from its
obligations under the Guaranty, pursuant to this Section 10.22.
10.23 Waiver. By signing this Agreement, the Required Lenders waive the
Company's non-compliance with the financial covenants contained in Section 7.1
of the Original Agreement for the periods ended December 31, 1999 and March 31,
2000 or with Section 7.3 of the Original Agreement for the periods ended
December 31, 1999, January 31, 2000, February 29, 2000 and March 31, 2000.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
90
TRUSERV CORPORATION
By:
Title:
By:
Title:
BANK OF AMERICA, N.A., as Agent
By:
Title:
BANK OF AMERICA, N.A., as a Lender
By:
Title:
BANK OF MONTREAL, as Co-Agent and as a
Lender
By:
Title:
BANK ONE, NA (Main Office Chicago),
as Co-Agent and as a Lender
By:
Title:
PNC BANK, NATIONAL ASSOCIATION, as
Co-Agent and as a Lender
91
By:
Title:
WACHOVIA BANK, N.A., as Co-Agent and as
a Lender
By:
Title:
THE NORTHERN TRUST COMPANY, as a Lender
By:
Title:
ABN AMRO BANK N.V., as a Lender
By:
Title:
By:
Title:
NATIONAL CONSUMER COOPERATIVE BANK, as
a Lender
By:
Title:
92
UMB BANK, N.A.
By:
Title:
93
SCHEDULE 1.1
PRICING SCHEDULE
Beginning with the Effective Date, the Offshore Rate Margin, the Base
Rate Margin, the BA Commission and the Commitment Fee Rate shall be 3.00%,
2.00%, 3.00% and 0.50%, respectively. Each of the foregoing shall be adjusted,
to the extent applicable, 60 days (or, in the case of the last fiscal quarter of
any fiscal year, 120 days) after the end of each fiscal quarter based on the
applicable Total Senior Debt to EBITDA Ratio, determined pursuant to the table
below, as of the last day of such fiscal quarter; provided that if the Company
fails to deliver the financial statements required by Section 6.1 and the
related Compliance Certificate by the 60th day (or, if applicable, the 120th
day) after any fiscal quarter, the Offshore Rate Margin, the Base Rate Margin,
the BA Commission and the Commitment Fee Rate that would apply if the Total
Senior Debt to EBITDA Ratio were greater than 3.75 to 1 shall apply until such
financial statements are delivered.
-----------------------------------------------------------------------------------------------------------------
Total Senior Debt Offshore Rate Base Rate Commitment Fee
to EBITDA Ratio Margin Margin BA Commission Rate
----------------- ------------- --------- ------------- -------------
-----------------------------------------------------------------------------------------------------------------
Equal to or greater than 3.75 to 1 3.00% 2.00% 3.00% 0.50%
-----------------------------------------------------------------------------------------------------------------
Equal to or greater than 3.00 to 1 but
less than 3.75 to 1 2.50% 1.50% 2.50% 0.50%
-----------------------------------------------------------------------------------------------------------------
Equal to or greater than 2.25 to 1 but
less than 3.00 to 1 2.00% 1.00% 2.00% 0.45%
-----------------------------------------------------------------------------------------------------------------
Less than 2.25 to 1 1.50% 0.50% 1.50% 0.40%
-----------------------------------------------------------------------------------------------------------------
94
SCHEDULE 2.1
COMMITMENTS
AND PRO RATA SHARES
Pro Rata
Lender Commitment Share
------ ---------- -----
Bank of America, N.A. $ 50,000,000 16.▇▇▇▇▇▇▇▇%
Bank of Montreal $ 40,000,000 13.▇▇▇▇▇▇▇▇%
Bank One, NA $ 40,000,000 13.▇▇▇▇▇▇▇▇%
PNC Bank, National $ 40,000,000 13.33333333%
Association
Wachovia Bank, N.A. $ 40,000,000 13.33333333%
The Northern Trust Company $ 25,000,000 8.▇▇▇▇▇▇▇▇%
ABN AMRO Bank N.V. $ 25,000,000 8.33333333%
National Consumer Cooperative Bank $ 20,000,000 6.▇▇▇▇▇▇▇▇%
UMB Bank $ 20,000,000 6.66666667%
TOTAL $300,000,000 100%
95
SCHEDULE 5.7
RESTRICTIVE AGREEMENTS
Shelf Agreement (as defined in the Intercreditor Agreement)
Senior Note Agreements (as defined in the Intercreditor Agreement)
"Operative Documents" referred to in the Synthetic Lease Guaranty (as defined in
the Intercreditor Agreement)
96
SCHEDULE 6.16
MORTGAGED PROPERTY
PART 1. PRIMARY PROPERTIES
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
PART 2. SECONDARY PROPERTIES
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
97
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
6829-B and ▇▇▇▇-▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ Industrial Park
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇
98
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇'▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
99
SCHEDULE 7.2
LIENS
A. Capital Leases Capitalized Value Estimated Obligation
-------------- ----------------- --------------------
Transportation Equipment
Lessors of Tractors & Trailers
Integra Business $1,532,000 $417,000
Met Life $10,172,000 $1,543,000
NationsBank $3,807,000 $2,121,000
Norlease Inc. $2,824,000 $354,000
Signet Lease (First Union) $786,000 $566,000
======== ========
$19,121,000 $5,001,000
B. Liens under the "Operative Documents" referred to in the Synthetic Lease
Guaranty (as defined in the Intercreditor Agreement)
100
SCHEDULE 10.2
-------------
OFFSHORE AND DOMESTIC LENDING OFFICES,
ADDRESSES FOR NOTICES
--------------------------------------
BANK OF AMERICA, N.A., as Agent
Bank of America, N.A.
Agency Management Services #33499
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Attention: Senior Agency Officer
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BANK OF AMERICA, N.A., as a Lender
Domestic and Offshore Lending Office:
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Notices (other than Borrowing notices and Notices of Conversion/Continuation):
Bank of America, N.A.
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BANK OF MONTREAL,
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as Co-Agent and as a Lender
Domestic and Offshore Lending Office:
Bank of Montreal
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BANK ONE, NA (Main Office Chicago),
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as Co-Agent and as a Lender
Domestic and Offshore Lending Office:
Bank One, NA
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PNC BANK, NATIONAL ASSOCIATION,
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as Co-Agent and as a Lender
Domestic and Offshore Lending Office:
PNC Bank, National Association
One PNC Plaza
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with a copy to:
PNC Bank, National Association
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WACHOVIA BANK, N.A.,
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102
as Co-Agent and as a Lender
Domestic and Offshore Lending Office:
Wachovia Bank, N.A.
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ABN AMRO BANK N.V.,
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as a Lender
Domestic and Offshore Lending Office:
ABN AMRO Bank N.V.
10 East 53rd Street - 37th Floor
New York, New York 10022
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NATIONAL CONSUMER COOPERATIVE BANK,
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as a Lender
Domestic and Offshore Lending Office:
National Consumer Cooperative Bank
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THE NORTHERN TRUST COMPANY,
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as a Lender
Domestic and Offshore Lending Office:
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The Northern Trust Company
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UMB BANK, N.A.,
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as a Lender
Domestic and Offshore Lending Office:
UMB Bank, N.A.
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TRUSERV CORPORATION
Address for Notices:
TruServ Corporation
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