1
Exhibit 10.1
CREDIT AGREEMENT
dated as of
April 24, 2001
among
▇▇-▇▇▇ STORES, INC.
as Lead Borrower for:
▇▇-▇▇▇ STORES, INC.
FCA OF OHIO, INC.
HOUSE OF FABRICS, INC.
▇▇-▇▇▇ STORES SUPPLY CHAIN MANAGEMENT, INC.
The LENDERS Party Hereto,
FLEET NATIONAL BANK
as Issuing Bank
FLEET RETAIL FINANCE INC.
as Administrative Agent and Collateral Agent
CONGRESS FINANCIAL CORPORATION,
as Documentation Agent
GMAC COMMERCIAL CREDIT, LLC
NATIONAL CITY COMMERCIAL FINANCE, INC.
THE CIT GROUP/BUSINESS CREDIT, INC.
as Co-Agents
and
FLEET SECURITIES INC.
as Arranger and Syndication Agent
---------------------------
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TABLE OF CONTENTS
PAGE
ARTICLE I.........................................................................................................1
DEFINITIONS.......................................................................................................1
SECTION 1.1 DEFINED TERMS ..............................................................................1
SECTION 1.2 TERMS GENERALLY ...........................................................................24
SECTION 1.3 ACCOUNTING TERMS; GAAP ....................................................................24
ARTICLE II.......................................................................................................24
AMOUNT AND TERMS OF CREDIT.......................................................................................24
SECTION 2.1 COMMITMENT OF THE LENDERS .................................................................24
SECTION 2.2 RESERVES; CHANGES TO RESERVES .............................................................25
SECTION 2.3 MAKING OF LOANS ...........................................................................26
SECTION 2.4 OVERADVANCES ..............................................................................27
SECTION 2.5 SWINGLINE LOANS ...........................................................................27
SECTION 2.6 LETTERS OF CREDIT .........................................................................28
SECTION 2.7 SETTLEMENTS AMONGST REVOLVING LENDERS .....................................................32
SECTION 2.8 NOTES; REPAYMENT OF LOANS .................................................................33
SECTION 2.9 INTEREST ON LOANS .........................................................................34
SECTION 2.10 DEFAULT INTEREST ..........................................................................34
SECTION 2.11 CERTAIN FEES ..............................................................................34
SECTION 2.12 UNUSED COMMITMENT FEE .....................................................................34
SECTION 2.13 LETTER OF CREDIT FEES .....................................................................35
SECTION 2.14 NATURE OF FEES ............................................................................35
SECTION 2.15 TERMINATION OR REDUCTION OF COMMITMENTS ...................................................36
SECTION 2.16 ALTERNATE RATE OF INTEREST ................................................................36
SECTION 2.17 CONVERSION AND CONTINUATION OF LOANS ......................................................36
SECTION 2.18 MANDATORY PREPAYMENT; COMMITMENT TERMINATION; CASH COLLATERAL .............................37
SECTION 2.19 OPTIONAL PREPAYMENT OF LOANS; REIMBURSEMENT OF LENDERS ....................................39
(ii)
3
SECTION 2.20 MAINTENANCE OF LOAN ACCOUNT; STATEMENTS OF ACCOUNT ........................................40
SECTION 2.21 CASH RECEIPTS .............................................................................41
SECTION 2.22 APPLICATION OF PAYMENTS ...................................................................43
SECTION 2.23 INCREASED COSTS ...........................................................................43
SECTION 2.24 CHANGE IN LEGALITY ........................................................................44
SECTION 2.25 PAYMENTS; SHARING OF SETOFF ...............................................................45
SECTION 2.26 TAXES .....................................................................................46
SECTION 2.27 SECURITY AND MORTGAGE INTERESTS IN COLLATERAL .............................................48
SECTION 2.28 MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS. ...........................................48
ARTICLE III......................................................................................................49
REPRESENTATIONS AND WARRANTIES...................................................................................49
SECTION 3.1 ORGANIZATION; POWERS ......................................................................49
SECTION 3.2 AUTHORIZATION; ENFORCEABILITY .............................................................49
SECTION 3.3 GOVERNMENTAL APPROVALS; NO CONFLICTS ......................................................49
SECTION 3.4 FINANCIAL CONDITION .......................................................................49
SECTION 3.5 PROPERTIES ................................................................................50
SECTION 3.6 LITIGATION AND ENVIRONMENTAL MATTERS ......................................................50
SECTION 3.7 COMPLIANCE WITH LAWS AND AGREEMENTS .......................................................50
SECTION 3.8 INVESTMENT AND HOLDING COMPANY STATUS .....................................................51
SECTION 3.9 TAXES .....................................................................................51
SECTION 3.10 ERISA .....................................................................................51
SECTION 3.11 DISCLOSURE. ...............................................................................51
SECTION 3.12 SUBSIDIARIES ..............................................................................51
SECTION 3.13 INSURANCE .................................................................................51
SECTION 3.14 LABOR MATTERS .............................................................................52
SECTION 3.15 SECURITY DOCUMENTS ........................................................................52
SECTION 3.16 FEDERAL RESERVE REGULATIONS ...............................................................52
SECTION 3.17 SOLVENCY ..................................................................................52
ARTICLE IV.......................................................................................................52
(iii)
4
CONDITIONS.......................................................................................................52
SECTION 4.1 CLOSING DATE ..............................................................................53
SECTION 4.2 CONDITIONS PRECEDENT TO EACH LOAN AND EACH LETTER OF CREDIT ...............................55
ARTICLE V........................................................................................................56
AFFIRMATIVE COVENANTS............................................................................................56
SECTION 5.1 FINANCIAL STATEMENTS AND OTHER INFORMATION ................................................56
SECTION 5.2 NOTICES OF MATERIAL EVENTS ................................................................58
SECTION 5.3 INFORMATION REGARDING COLLATERAL ..........................................................59
SECTION 5.4 EXISTENCE; CONDUCT OF BUSINESS ............................................................59
SECTION 5.5 PAYMENT OF OBLIGATIONS ....................................................................59
SECTION 5.6 MAINTENANCE OF PROPERTIES .................................................................59
SECTION 5.7 INSURANCE .................................................................................59
SECTION 5.8 CASUALTY AND CONDEMNATION .................................................................60
SECTION 5.9 BOOKS AND RECORDS; INSPECTION AND AUDIT RIGHTS ............................................60
SECTION 5.10 COMPLIANCE WITH LAWS ......................................................................61
SECTION 5.11 USE OF PROCEEDS AND LETTERS OF CREDIT .....................................................61
SECTION 5.12 ADDITIONAL SUBSIDIARIES ...................................................................61
SECTION 5.13 FURTHER ASSURANCES ........................................................................61
ARTICLE VI.......................................................................................................62
NEGATIVE COVENANTS...............................................................................................62
SECTION 6.1 INDEBTEDNESS AND OTHER OBLIGATIONS ........................................................62
SECTION 6.2 LIENS .....................................................................................63
SECTION 6.3 FUNDAMENTAL CHANGES .......................................................................64
SECTION 6.4 INVESTMENTS, LOANS, ADVANCES, GUARANTEES AND ACQUISITIONS .................................64
SECTION 6.5 ASSET SALES ...............................................................................65
SECTION 6.6 RESTRICTED PAYMENTS; CERTAIN PAYMENTS OF INDEBTEDNESS .....................................66
SECTION 6.7 TRANSACTIONS WITH AFFILIATES ..............................................................66
SECTION 6.8 RESTRICTIVE AGREEMENTS ....................................................................66
(iv)
5
SECTION 6.9 AMENDMENT OF MATERIAL DOCUMENTS ...........................................................67
SECTION 6.10 ADDITIONAL SUBSIDIARIES ...................................................................67
SECTION 6.11 FINANCIAL COVENANTS .......................................................................67
ARTICLE VII......................................................................................................67
EVENTS OF DEFAULT................................................................................................67
SECTION 7.2 WHEN CONTINUING ...........................................................................70
SECTION 7.3 REMEDIES ON DEFAULT .......................................................................70
SECTION 7.4 APPLICATION OF PROCEEDS ...................................................................71
ARTICLE VIII.....................................................................................................71
THE AGENTS.......................................................................................................71
SECTION 8.1 ADMINISTRATION BY ADMINISTRATIVE AGENT ....................................................71
SECTION 8.2 THE COLLATERAL AGENT ......................................................................71
SECTION 8.3 SHARING OF EXCESS PAYMENTS ................................................................71
SECTION 8.4 AGREEMENT OF REQUIRED LENDERS .............................................................72
SECTION 8.5 LIABILITY OF AGENTS .......................................................................72
SECTION 8.6 REIMBURSEMENT AND INDEMNIFICATION .........................................................73
SECTION 8.7 RIGHTS OF AGENTS ..........................................................................73
SECTION 8.8 INDEPENDENT LENDERS AND ISSUING BANK ......................................................74
SECTION 8.9 NOTICE OF TRANSFER ........................................................................74
SECTION 8.10 SUCCESSOR AGENT ...........................................................................74
SECTION 8.11 REPORTS AND FINANCIAL STATEMENTS ..........................................................74
SECTION 8.12 DOCUMENTATION AGENT, CO-AGENTS, SYNDICATION AGENT AND ARRANGER ............................75
ARTICLE IX.......................................................................................................75
MISCELLANEOUS....................................................................................................75
SECTION 9.1 NOTICES ...................................................................................75
SECTION 9.2 WAIVERS; AMENDMENTS .......................................................................75
(v)
6
SECTION 9.3 EXPENSES; INDEMNITY; DAMAGE WAIVER ........................................................77
SECTION 9.4 DESIGNATION OF LEAD BORROWER AS BORROWERS' AGENT ..........................................78
SECTION 9.5 SUCCESSORS AND ASSIGNS ....................................................................80
SECTION 9.6 SURVIVAL ..................................................................................82
SECTION 9.7 COUNTERPARTS; INTEGRATION; EFFECTIVENESS ..................................................82
SECTION 9.8 SEVERABILITY ..............................................................................83
SECTION 9.9 RIGHT OF SETOFF ...........................................................................83
SECTION 9.10 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS ................................83
SECTION 9.11 WAIVER OF JURY TRIAL ......................................................................83
SECTION 9.12 HEADINGS ..................................................................................84
SECTION 9.13 INTEREST RATE LIMITATION ..................................................................84
SECTION 9.14 ADDITIONAL WAIVERS ........................................................................84
SECTION 9.15 DESIGNATED SENIOR INDEBTEDNESS ............................................................85
(vi)
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EXHIBITS
--------
A. Assignment and Acceptance
B-1. Revolving Notes
B-2 Term Notes
B-3 Swingline Note
C Opinion of Counsel to Loan Parties
D. Borrowing Base Certificate
(vii)
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SCHEDULES
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1.1 Lenders and Commitments
1.2 Fiscal Periods
2.21(a) DDAs
2.21(b) Credit Card Arrangements
2.21(c) Blocked Accounts
2.21(f) Disbursement Accounts
3.05(c)(i) Title to Properties; Real Estate Owned
3.05(c)(ii) Leased Properties
3.06 Disclosed Matters
3.12 Subsidiaries
3.13 Insurance
5.01(m) Financial Reporting Requirements
6.01 Indebtedness
6.02 Liens
6.04 Investments
6.11 Financial Performance Covenants
(viii)
9
CREDIT AGREEMENT dated as of April 24, 2001 among
▇▇-▇▇▇ STORES, INC., an Ohio corporation, having a principal place of
business at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, as Lead Borrower for
the Borrowers, being
said ▇▇-▇▇▇ STORES, INC., and
FCA of Ohio, Inc., an Ohio corporation, having a principal
place of business at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, and
House of Fabrics, Inc., a Delaware corporation, having a
principal place of business at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, and
▇▇-▇▇▇ Stores Supply Chain Management, Inc., an Ohio
corporation, having a principal place of business at ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
the LENDERS party hereto; and
FLEET NATIONAL BANK, as Issuing Bank, a national banking association
having a place of business at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇; and
FLEET RETAIL FINANCE INC., as Administrative Agent and Collateral Agent
for the Lenders, a Delaware corporation, having its principal place of
business at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; and
CONGRESS FINANCIAL CORPORATION, as Documentation Agent; and
GMAC COMMERCIAL CREDIT, LLC, NATIONAL CITY COMMERCIAL FINANCE, INC. AND
THE CIT GROUP/BUSINESS CREDIT, INC., as Co-Agents
in consideration of the mutual covenants herein contained and benefits to be
derived herefrom.
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINED TERMS. As used in this Agreement, the following
terms have the meanings specified below:
"ACH" shall mean automated clearing house transfers.
"ACCOUNT" shall mean any right to payment for goods sold or leased or
for services rendered, whether or not earned by performance, or any right to
payment for credit extended for goods sold or leased or services rendered.
"ADJUSTED LIBO RATE" means, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.
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"ADMINISTRATIVE AGENT" means FRF, in its capacity as administrative
agent for the Lenders hereunder.
"AFFILIATE" means, with respect to a specified Person, another Person
that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"AGENTS" shall mean collectively, the Administrative Agent and the
Collateral Agent.
"ALTERNATE BASE RATE" shall mean, for any day, the higher of (a) the
annual rate of interest then most recently announced by Fleet at its head office
in Boston, Massachusetts as its "Base Rate" and (b) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1% (0.50%) per annum. If for any reason
the Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Federal
Funds Effective Rate for any reason, including the inability or failure of the
Administrative Agent to obtain sufficient quotations thereof in accordance with
the terms hereof, the Alternate Base Rate shall be determined without regard to
clause (b) of the first sentence of this definition, until the circumstances
giving rise to such inability no longer exist. Any change in the Alternate Base
Rate due to a change in Fleet's Base Rate or the Federal Funds Effective Rate
shall be effective on the effective date of such change in Fleet's Base Rate or
the Federal Funds Effective Rate, respectively.
"APPLICABLE MARGIN" means initially, the rates for Base Rate Loans and
Eurodollar Loans, set forth in Level 2, below:
Level Performance Criteria Base Rate Loans Eurodollar Loans
-----------------------------------------------------------------------------------
1 Excess Availability 0% 1.75%
greater than or equal
to $100,000,000
-----------------------------------------------------------------------------------
2 Excess Availability 0% 2.00%
greater than or equal
to $50,000,000 but
less than $100,000,000
-----------------------------------------------------------------------------------
3 Excess Availability 0% 2.25%
less than $50,000,000
-----------------------------------------------------------------------------------
The Applicable Margin will remain at Level 2 until April 30, 2002, provided that
the Applicable Margin shall be immediately increased to the percentages set
forth in Level 3 at any time that the Excess Availability requirements of Level
2 are not satisfied; in the event that the Applicable Margin is increased to
▇▇▇▇▇ ▇, the Applicable Margin shall not thereafter be reduced to Level 2 unless
and until Excess Availability is greater than $50,000,000 for thirty (30)
consecutive days. In no event shall the Applicable Margin be set at ▇▇▇▇▇ ▇ from
the Closing Date through April 30, 2002 (even if the Excess Availability
requirements for Level 1 have been met). Commencing
2
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May 1, 2002, the Applicable Margin shall be adjusted monthly as of the first day
of each calendar month, based upon the average Excess Availability for the
immediately preceding calendar month. Upon the occurrence of an Event of
Default, the Applicable Margin shall be immediately increased to the percentages
set forth in Level 3 (even if the Excess Availability requirements for another
Level have been met) and interest shall be determined in the manner set forth in
Section 2.10.
" APPRAISAL PERCENTAGE" shall mean 85%.
"APPRAISED VALUE" means the net appraised liquidation value of the
Borrowers' Inventory as set forth in the Borrowers' stock ledger (expressed as a
percentage of the Cost of such Inventory) as determined from time to time by the
Administrative Agent in accordance with its standard procedures and with the
assistance of an independent appraiser satisfactory to the Administrative Agent.
"ARRANGER" means FSI.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.05), and accepted by the Administrative Agent, in the form
of Exhibit A or any other form approved by the Administrative Agent.
"AVAILABILITY RESERVES" means such reserves as the Administrative Agent
from time to time determines in the Administrative Agent's discretion as being
appropriate to reflect the impediments to the Agents' ability to realize upon
the Collateral. Without limiting the generality of the foregoing, Availability
Reserves may include (but are not limited to) reserves based on (i) Rent; (ii)
Gift Certificates and Merchandise Credit Liability; (iii) Frequent Shopper
Programs; (iv) Layaways and Customer Deposits; (v) customs, duties, and other
costs to release Inventory which is being imported into the United States; and
(vi) outstanding taxes and other governmental charges, including, ad valorem,
real estate, personal property, and other taxes which might have priority over
the interests of the Collateral Agent in the Collateral and either which have
not been paid when due (unless such taxes are the subject of a bona fide dispute
and are supported by funded reserves) or which the Administrative Agent, in its
discretion, believes may impede the Agents' ability to realize upon the
Collateral.
"BASE RATE LOAN" shall mean any Loan bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"BLOCKED ACCOUNT AGREEMENTS" has the meaning set forth in Section
2.21(c).
"BLOCKED ACCOUNT BANKS" shall mean the banks with whom the Borrowers
have entered into Blocked Account Agreements.
"BLOCKED ACCOUNTS" shall have the meaning set forth in Section 2.21(c).
"BOARD" means the Board of Governors of the Federal Reserve System of
the United States of America.
3
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"BORROWERS" means collectively, ▇▇-▇▇▇ Stores, Inc., an Ohio
corporation, FCA of Ohio, Inc., an Ohio corporation, House of Fabrics, Inc., a
Delaware corporation, and ▇▇-▇▇▇ Stores Supply Chain Management, Inc., an Ohio
corporation.
"BORROWING" shall mean (a) the incurrence of Loans of a single Type, on
a single date and having, in the case of Eurodollar Loans, a single Interest
Period, or (b) a Swingline Loan.
"BORROWING BASE" means, at any time of calculation, an amount equal to
(a) the Receivables Advance Rate of the face amount of Eligible Credit
Card Receivables, PLUS
(b) the lesser of (i) Appraisal Percentage of the Appraised Value of
Eligible Inventory, or (ii) the Inventory Advance Rate of (A) the Cost
of Eligible Inventory minus (B) Inventory Reserves; PLUS
(c) 50% of the FLV of Eligible Real Estate less Realty Reserves; MINUS
(d) the then amount of all Availability Reserves.
"BORROWING BASE CERTIFICATE" has the meaning assigned to such term in
Section 5.01(e).
"BORROWING REQUEST" means a request by the Lead Borrower on behalf of
the Borrowers for a Borrowing in accordance with Section 2.03.
"BREAKAGE COSTS" shall have the meaning set forth in Section 2.19(b).
"BUSINESS DAY" means any day that is not a Saturday, Sunday or other
day on which commercial banks in Boston, Massachusetts are authorized or
required by law to remain closed, PROVIDED that, when used in connection with a
Eurodollar Loan, the term "Business Day" shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.
"CAPITAL EXPENDITURES" means, for any period, (a) the additions to
property, plant and equipment and other capital expenditures of the Borrowers
that are (or would be) set forth in a consolidated statement of cash flows of
the Borrowers for such period prepared in accordance with GAAP and (b) Capital
Lease Obligations incurred by the Borrowers during such period.
"CAPITAL LEASE OBLIGATIONS" of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"CASH COLLATERAL ACCOUNT" shall mean an interest-bearing account
established by the Borrowers with the Collateral Agent at Fleet under the sole
and exclusive dominion and control of the Collateral Agent designated as the
"▇▇-▇▇▇ Stores Cash Collateral Account".
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"CASH CONTROL EVENT" means that Excess Availability is less than
$50,000,000.00. For purposes of Section 2.21(h) hereof, the occurrence of a Cash
Control Event shall be deemed continuing notwithstanding that Excess
Availability may thereafter exceed the amount set forth in the preceding
sentence unless and until Excess Availability exceeds such amounts for sixty
(60) consecutive days, in which case a Cash Control Event shall no longer be
deemed to be continuing for purposes of Section 2.21(h) hereof; provided that a
Cash Control Event shall be deemed continuing (even if Excess Availability
exceeds the required amounts for three consecutive months) if a Cash Control
Event has occurred and been discontinued on three (3) occasions in any twelve
month period.
"CASH RECEIPTS" has the meaning provided therefor in Section 2.21(c).
"CERCLA" means the Comprehensive Environmental Response, Compensation,
and Liability Act, 42 U.S.C. ss. 9601 et seq.
"CHANGE IN CONTROL" means, at any time, (a) occupation of a majority of
the seats (other than vacant seats) on the board of directors of the Lead
Borrower by Persons who were neither (i) nominated by the board of directors of
the Lead Borrower nor (ii) appointed by directors so nominated; or (b) the
acquisition of twenty-five percent (25%) or more of the capital stock of the
Lead Borrower by any Person or group of Persons other than the Family Group, or
(c) the failure of the Lead Borrower to own, directly or indirectly, 100% of the
capital stock of all of the other Borrowers (unless the Administrative Agent
shall have consented to any disposition of any or all of such stock, which
consent shall not be unreasonably withheld).
"CHANGE IN LAW" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender or the Issuing
Bank (or, for purposes of Section 2.23(b), by any lending office of such Lender
or by such Lender's or the Issuing Bank's holding company, if any) with any
request, guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
"CHARGES" has the meaning provided therefor in Section 9.13.
"CLOSING DATE" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
"COLLATERAL" means any and all "Collateral" as defined in any
applicable Security Document.
"COLLATERAL AGENT" means FRF, in its capacity as collateral agent under
the Security Documents.
"COMMERCIAL LETTER OF CREDIT" means any Letter of Credit issued for the
purpose of providing the primary payment mechanism in connection with the
purchase of any materials, goods or services by the Borrowers in the ordinary
course of business of the Borrowers.
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"COMMITMENT" shall mean, with respect to each Lender, the aggregate
commitment of such Lender hereunder in the amount set forth opposite its name on
SCHEDULE 1.1 hereto (being the aggregate of the Revolving Commitments and Term
Commitments of such Lender) or as may subsequently be set forth in the Register
from time to time, as the same may be reduced from time to time pursuant to
Section 2.15.
"COMMITMENT FEE" has the meaning provided therefor in Section 2.12.
"COMMITMENT PERCENTAGE" shall mean, with respect to each Lender, that
percentage of the Commitments of all Lenders hereunder in the amount set forth
opposite its name on SCHEDULE 1.1 hereto or as may subsequently be set forth in
the Register from time to time, as the same may be reduced from time to time
pursuant to Section 2.15.
"CONSOLIDATED NET WORTH" shall mean, at any time of calculation, an
amount equal to (a) Consolidated Total Assets, MINUS (b) Consolidated Total
Liabilities, PLUS (c) the lesser of (i) the sum of (A) non-cash deferred
financing charges written off during the period of calculation, plus (B) the net
increase in non-cash expenses for the period of calculation arising from the
termination of the Existing Synthetic Lease, or (ii) $3,000,000.00, PLUS (d)
non-cash expenses arising under FAS 133 in connection with the ▇▇▇▇-to-market of
the value of Hedging Agreements of the Lead Borrower and its Subsidiaries during
the period of calculation, plus (e) the lesser of (i) non-cash expenses incurred
in connection with all store closings occurring at any time after the Closing
Date, or (ii) $5,000,000.00, each of the foregoing as determined in accordance
with GAAP.
"CONSOLIDATED TOTAL ASSETS" means, at any date, all assets of the Lead
Borrower and its Subsidiaries that, in accordance with GAAP, should be
classified as assets on a Consolidated balance sheet of the Lead Borrower and
its Subsidiaries.
"CONSOLIDATED TOTAL LIABILITIES" means, at any date, all liabilities of
the Lead Borrower and its Subsidiaries that, in accordance with GAAP, should be
classified as liabilities on the Consolidated balance sheet of the Lead Borrower
and its Subsidiaries, including, in all events, all Indebtedness of the Lead
Borrower and its Subsidiaries, whether or not so classified.
"CONTROL" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise. The
terms "CONTROLLING" and "CONTROLLED" have meanings correlative thereto.
"COST" means the average cost of purchases, as reported on the
Borrowers' stock ledger, based upon the Borrowers' accounting practices which
are in effect on the date of this Agreement. "Cost" does not include inventory
capitalization costs or other non-purchase price charges (such as freight) used
in the Borrowers' calculation of cost of goods sold; provided that the
Administrative Agent acknowledges that freight is included in the cost of the
Borrowers' imported Inventory in accordance with the Borrowers' accounting
practices which are in effect on the date of this Agreement.
"COVENANT COMPLIANCE EVENT" means that Excess Availability at any time
is less than or equal to $35,000,000. For purposes hereof, the occurrence of a
Covenant Compliance Event shall be deemed continuing as long as the Borrowers
have not achieved Consolidated Net Worth
6
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required pursuant to Section 6.12 hereof, notwithstanding that Excess
Availability may thereafter exceed the amounts set forth in the preceding
sentence.
"CREDIT CARD NOTIFICATIONS" has the meaning provided therefor in
Section 2.21(c).
"CREDIT EXTENSIONS" as of any day, shall be equal to the sum of (a) the
principal balance of all Loans then outstanding, and (b) the then amount of the
Letter of Credit Outstandings.
"DDAS" means any checking or other demand deposit account maintained by
any Borrower.
"DDA NOTIFICATION" has the meaning provided therefor in Section
2.21(c).
"DEFAULT" means any event or condition that constitutes an Event of
Default or that upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"DOLLARS" or "$" refers to lawful money of the United States of
America.
"ELIGIBLE CREDIT CARD RECEIVABLES means Accounts due to a Borrower on a
non-recourse basis from Visa, Mastercard, American Express Co., and other major
credit card processors reasonably acceptable to the Administrative Agent as
arise in the ordinary course of business, which have been earned by performance
and are deemed by the Administrative Agent in its reasonable discretion to be
eligible for inclusion in the calculation of the Borrowing Base. Without
limiting the foregoing, unless otherwise approved in writing by the
Administrative Agent, none of the following shall be deemed to be Eligible
Credit Card Receivables:
(a) Accounts that have been outstanding for more than
five (5) Business Days from the date of sale;
(b) Accounts with respect to which a Borrower does not
have good, valid and marketable title thereto, free
and clear of any Encumbrance (other than Encumbrances
granted to the Collateral Agent, for its benefit and
the ratable benefit of the Secured Parties, pursuant
to the Security Documents);
(c) Accounts that are not subject to a first priority
security interest in favor of the Collateral Agent,
for the benefit of itself and the Secured Parties (it
being the intent that chargebacks in the ordinary
course by the credit card processors shall not be
deemed violative of this clause);
(d) Accounts which are disputed, are with recourse, or
with respect to which a claim, counterclaim, offset
or chargeback has been asserted (to the extent of
such claim, counterclaim, offset or chargeback);
(e) Accounts which the Administrative Agent determines in
its reasonable discretion to be uncertain of
collection.
"ELIGIBLE IN-TRANSIT INVENTORY" shall mean, as of the date of
determination thereof, without duplication of other Eligible Inventory,
Inventory (a) not yet delivered to the Borrowers,
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16
(b) for which payment has been made by the Borrowers, (c) which has been
consigned to a Borrower (along with delivery to a Borrower of the documents of
title with respect thereto), (d) as to which a customs broker agency agreement,
satisfactory to the Administrative Agent, is in effect, and (e) which otherwise
would constitute Eligible Inventory.
"ELIGIBLE INVENTORY" shall mean, as of the date of determination
thereof, (a) Eligible In- Transit Inventory, (b) Eligible L/C Inventory but only
if and to the extent that the Administrative Agent in its reasonable discretion
determines to include such as Eligible Inventory, and (c) items of Inventory of
the Borrowers that are finished goods, merchantable and readily saleable to the
public in the ordinary course deemed by the Administrative Agent in its
reasonable discretion to be eligible for inclusion in the calculation of the
Borrowing Base. Without limiting the foregoing, unless otherwise approved in
writing by the Administrative Agent, none of the following shall be deemed to be
Eligible Inventory:
(a) Inventory that is not owned solely by the Borrowers, or is
leased or on consignment or the Borrowers do not have good and valid
title thereto;
(b) Inventory (including any portion thereof in transit
from vendors, other than Eligible In-Transit Inventory) that is not
located at a warehouse facility used by a Borrower in the ordinary
course or at a property that is owned or leased by the Borrowers;
(c) Inventory that represents (i) goods damaged, defective or
otherwise unmerchantable, (ii) goods that do not conform in all
material respects to the representations and warranties contained in
this Agreement or any of the Security Documents, or (iii) goods to be
returned to the vendor;
(d) Inventory that is not located in the United States of
America (excluding territories and possessions thereof) other than
Eligible In-Transit Inventory;
(e) Inventory that is not subject to a perfected
first-priority security interest in favor of the Collateral Agent for
the benefit of the Secured Parties;
(f) Inventory which consists of samples, labels, bags,
packaging, and other similar non-merchandise categories.
(g) Inventory as to which insurance in compliance with the
provisions of Section 5.07 hereof is not in effect.
(h) Inventory which has been sold but not yet delivered or as
to which any Borrower has accepted a deposit.
(i) Inventory relating to the Lead Borrower's investment in,
or otherwise provided to, ▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc. in excess of $750,000.00
at Cost.
"ELIGIBLE L/C INVENTORY" shall mean, as of the date of determination
thereof, without duplication of other Eligible Inventory, Inventory (a) not yet
delivered to the Borrowers, (b) the purchase of which is supported by a
Commercial Letter of Credit having an expiry within sixty (60) days of such date
of determination, (c) which has been consigned to a Borrower or to the Issuing
Bank (along with delivery to a Borrower or the Issuing Bank, as applicable, of
the
8
17
documents of title with respect thereto), (d) as to which a customs broker
agency agreement, satisfactory to the Administrative Agent, is in effect, and
(e) which otherwise would constitute Eligible Inventory.
"ELIGIBLE REAL ESTATE" means the Real Estate located (a) in Hudson,
Ohio constituting the Borrowers' corporate headquarters and a distribution
center (but excluding the vacant land adjoining such property), and (b) Visalia,
California constituting a distribution center, in each case only if such Real
Estate satisfies each of the following conditions:
(a) a Borrower owns fee title thereto (intending to exclude
hereby, inter alia, any properties which are the subject of a Synthetic
Lease); and
(b) the applicable Borrower has executed and delivered to the
Collateral Agent such Mortgages and other documents as the Collateral
Agent may reasonably request; and
(c) the applicable Borrower shall have delivered to the
Collateral Agent title insurance, environmental studies, and other real
estate items, as reasonably required by, and satisfactory to, the
Collateral Agent, including, but not limited to, those items required
by the Financial Institutions Reform, Recovery and Enforcement Act of
1989, as amended, and the rules and regulations adopted pursuant
thereto; and
(d) the Collateral Agent has a perfected first-priority lien
in such properties for the benefit of the Secured Parties; and
(e) each of such properties have been appraised by a third
party appraiser acceptable to the Collateral Agent; and
(f) as to any particular property, as to which the mortgagor
is in compliance with the representations, warranties and covenants set
forth in the Mortgage relating to such property, unless the
Administrative Agent, in its discretion, otherwise determines to waive
this requirement in the determination of Eligible Real Estate.
"ENVIRONMENTAL LAWS" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by or with any Governmental
Authority, relating in any way to the environment, preservation or reclamation
of natural resources, handling, treatment, storage, disposal, Release or
threatened Release of any Hazardous Material or to health and safety matters.
"ENVIRONMENTAL LIABILITY" means any liability, contingent or otherwise
(including any liability for damages, natural resource damage, costs of
environmental remediation, administrative oversight costs, fines, penalties or
indemnities), of any Borrower directly or indirectly resulting from or based
upon (a) violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of
any Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that, together with the Lead Borrower, is treated as a single
employer under Section 414(b) or (c) of the Code or, solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
"ERISA EVENT" means (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which the 30-day notice period is waived); (b) the existence
with respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Lead Borrower or any of its ERISA Affiliates of
any liability under Title IV of ERISA with respect to the termination of any
Plan; (e) the receipt by the Lead Borrower or any ERISA Affiliate from the PBGC
or a plan administrator of any notice relating to an intention to terminate any
Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence
by the Lead Borrower or any of its ERISA Affiliates of any liability with
respect to the withdrawal or partial withdrawal from any Plan or Multiemployer
Plan; or (g) the receipt by the Lead Borrower or any ERISA Affiliate of any
notice, or the receipt by any Multiemployer Plan from te Lead Borrower or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.
"EURODOLLAR BORROWING" shall mean a Borrowing comprised of Eurodollar
Loans.
"EURODOLLAR LOAN" shall mean any Loan bearing interest at a rate
determined by reference to the Adjusted LIBO Rate in accordance with the
provisions of Article II.
"EVENT OF DEFAULT" has the meaning assigned to such term in Section
7.01.
"EXCESS AVAILABILITY" means, as of any date of determination, the
excess, if any, of (a) the lesser of the Borrowing Base or the aggregate
Commitments, over (b) the sum of (i) the outstanding Credit Extensions, and (ii)
all then held checks, accounts payable which are beyond credit terms then
accorded the Borrowers and overdrafts.
"EXCLUDED TAXES" means, with respect to the Agents, any Lender, the
Issuing Bank or any other recipient of any payment to be made by or on account
of any obligation of the Borrowers hereunder, (a) income or franchise taxes
imposed on (or measured by) its gross or net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which any Borrower is located and (c) in the case
of a Foreign Lender (other than an assignee pursuant to a request by a Borrower
under Section 2.28(b), any withholding tax that is imposed on amounts payable to
such Foreign Lender at the time such Foreign Lender becomes a party to this
Agreement (or designates a new lending office) or is attributable to such
Foreign Lender's failure to comply with Section 2.26(e), except to the extent
that such Foreign Lender (or its assignor, if any) was
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entitled, at the time of designation of a new lending office (or assignment), to
receive additional amounts from the Borrowers with respect to such withholding
tax pursuant to Section 2.26(a).
"EXISTING SYNTHETIC LEASE" means the Synthetic Lease with respect to
the property in Visalia, Tulare County, California.
"FLV" means, as to any Eligible Real Estate, the forced liquidation
value of such Eligible Real Estate determined in accordance with an independent
appraisal acceptable to the Administrative Agent, which appraisal shall assume,
among other things, a marketing time of not greater than six (6) months.
"FRF" means Fleet Retail Finance Inc., a Delaware corporation.
"FRF CONCENTRATION ACCOUNT" shall have the meaning set forth in Section
2.21(c).
"FSI" means Fleet Securities, Inc., a Massachusetts corporation.
"FACILITY GUARANTEE" means the Guaranty executed by the Facility
Guarantors in favor of the Agents, the Issuing Bank and the Lenders.
"FACILITY GUARANTORS" means all Subsidiaries of each Borrower now
existing or hereafter created other than Foreign Subsidiaries.
"FACILITY GUARANTORS COLLATERAL DOCUMENTS" means all security
agreements, mortgages, pledge agreements, deeds of trust, and other instruments,
documents or agreements executed and delivered by any Facility Guarantor to
secure the Facility Guarantee.
"FAMILY GROUP" means (i) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ and their respective spouses, heirs, legatees, lineal descendants,
executors, administrators, and other represntatives, and (ii) any trust, family
partnership or similar investment entity of which any of the foregoing Persons
are trustee(s), managing member(s), managing partner(s) or similar officer(s)
and/or that is for the benefit of any of the foregoing Persons as long as one or
more of such Persons has the exclusive or joint right to control the voting and
disposition of securities held by such trust, family partnership or similar
investment entity.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by Fleet from three Federal funds brokers of recognized
standing selected by it.
"FEE LETTER" means the letter entitled "Fee Letter" among the Borrowers
and the Administrative Agent of even date herewith, as such letter may from time
to time be amended.
"FINANCIAL OFFICER" means, with respect to any Borrower, the chief
financial officer, controller or assistant controller of such Borrower.
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20
"FISCAL PERIOD" means the accounting periods of the Borrowers based
upon the Borrowers' accounting practices which are in effect on the date of this
Agreement, such fiscal periods being reflected on SCHEDULE 1.2 hereto.
"FLEET" means Fleet National Bank, a national banking association.
"FLEET DISBURSEMENT ACCOUNTS" has the meaning provided therefor in
Section 2.21(f).
"FOREIGN LENDER" means any Lender that is organized under the laws of a
jurisdiction other than the United States of America or any State thereof or the
District of Columbia.
"FOREIGN SUBSIDIARY" means any Subsidiary that is organized under the
laws of a jurisdiction other than the United States of America or any State
thereof or the District of Columbia.
"FRONTING FEE" has the meaning assigned to such term in Section
2.13(b).
"GAAP" means generally accepted accounting principles in the United
States of America.
"GIFT CERTIFICATE AND MERCHANDISE CREDIT LIABILITY" means, at any time,
the aggregate face value at such time of (a) outstanding gift certificates and
gift cards of the Borrowers entitling the holder thereof to use all or a portion
of the certificate to pay all or a portion of the purchase price for any
Inventory, and (b) outstanding merchandise credits of the Borrowers.
"GOVERNMENTAL AUTHORITY" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"GUARANTEE" of or by any Person (the "GUARANTOR") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the "PRIMARY OBLIGOR") in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation, PROVIDED that the term "Guarantee" shall not include endorsements
for collection or deposit in the ordinary course of business.
"HAZARDOUS MATERIALS" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant
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to any Environmental Law, including any material listed as a hazardous substance
under Section 101(14) of CERCLA.
"HEDGING AGREEMENT" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement, or
other interest or currency exchange rate or commodity price hedging arrangement.
"INDEBTEDNESS" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding current
accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all Guarantees by such Person of
Indebtedness of others (including, without limitation, under any Synthetic
Leases), (h) all Capital Lease Obligations of such Person, (i) all obligations,
contingent or otherwise, of such Person as an account party in respect of
letters of credit and letters of guaranty (j) all obligations, contingent or
otherwise, of such Person in respect of bankers' acceptances, (k) all Hedging
Agreements, and (l) the principal and interest portions of all rental
obligations of such Person under any Synthetic Lease, tax retention operating
lease, off-balance sheet loan or similar off-balance sheet financing where such
transaction is considered borrowed money indebtedness for tax purposes but is
classified as an operating lease in accordance with GAAP. The Indebtedness of
any Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such Person
is liable therefor as a result of such Person's ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor.
"INDEMNIFIED TAXES" means Taxes other than Excluded Taxes.
"INDEMNITEE" has the meaning provided therefor in Section 9.03(b).
"INDENTURE" means the Indenture dated May 5, 1999 with respect to the
Lead Borrower's issuance of 10 3/8% Senior Subordinated Notes in the aggregate
face amount of $150,000,000.00 due in 2007.
"INTEREST PAYMENT DATE" means (a) with respect to any Base Rate Loan
(including a Swingline Loan), the last day of each calendar month, and (b) with
respect to any Eurodollar Loan, the last day of each calendar quarter and the
last day of the Interest Period applicable to the Borrowing of which such Loan
is a part.
"INTEREST PERIOD" means, with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as the Lead Borrower may elect, PROVIDED that (a) if any Interest
Period would end on a day other than a Business Day, such Interest Period shall
be extended to the next succeeding Business Day unless such next
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succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day, and (b) any
Interest Period that commences on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period, and (c) any Interest Period
which would otherwise end after the Maturity Date shall end on the Maturity
Date. For purposes hereof, the date of a Borrowing initially shall be the date
on which such Borrowing is made and thereafter shall be the effective date of
the most recent conversion or continuation of such Borrowing.
"INVENTORY" has the meaning assigned to such term in the Security
Agreement.
"INVENTORY ADVANCE RATE" means the following percentages for the
periods indicated:
---------------------------------------------------------------
PERIOD INVENTORY ADVANCE RATE
---------------------------------------------------------------
January though July of each year 60%
---------------------------------------------------------------
August of each year 62.5%
---------------------------------------------------------------
September through November of each 65%
year
---------------------------------------------------------------
December of each year 60%
---------------------------------------------------------------
"INVENTORY RESERVES" means such reserves as may be established from
time to time by the Administrative Agent in the Administrative Agent's
reasonable discretion with respect to the determination of the saleability, at
retail, of the Eligible Inventory or which reflect such other factors as affect
the market value of the Eligible Inventory. Without limiting the generality of
the foregoing, Inventory Reserves may include (but are not limited to) reserves
based on (i) obsolescence; (ii) seasonality; (iii) Shrink; (iv) imbalance; (v)
change in Inventory character; (vi) change in Inventory composition; (vii)
change in Inventory mix; (viii) markdowns (both permanent and point of sale);
(ix) retail markons and markups inconsistent with prior period practice and
performance; industry standards; current business plans; or advertising calendar
and planned advertising events.
"ISSUING BANK" means Fleet, in its capacity as the issuer of Letters of
Credit hereunder, and any successor to Fleet in such capacity (which may only be
a Lender selected by the Administrative Agent in its discretion). The Issuing
Bank may, in its discretion, arrange for one or more Letters of Credit to be
issued by Affiliates of the Issuing Bank, in which case the term "Issuing Bank"
shall include any such Affiliate with respect to Letters of Credit issued by
such Affiliate.
"L/C DISBURSEMENT" means a payment made by the Issuing Bank pursuant to
a Letter of Credit.
"LEAD BORROWER" means ▇▇-▇▇▇ Stores, Inc., an Ohio corporation.
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"LENDERS" shall mean the Persons identified on SCHEDULE 1.1 hereto and
each assignee that becomes a party to this Agreement as set forth in Section
9.05(b). Without limiting the foregoing, the term "Lenders" include each
Revolving Lender and each Term Lender.
"LETTER OF CREDIT" shall mean a letter of credit that is (i) issued
pursuant to this Agreement for the account of any Borrower, (ii) a Standby
Letter of Credit or Commercial Letter of Credit, (iii) issued in connection with
the purchase of Inventory by any Borrower and for other purposes for which a
Borrower has historically obtained letters of credit, or for any other purpose
that is reasonably acceptable to the Administrative Agent, and (iv) in form and
substance reasonably satisfactory to the Issuing Bank.
"LETTER OF CREDIT FEES" shall mean the fees payable in respect of
Letters of Credit pursuant to Section 2.13.
"LETTER OF CREDIT OUTSTANDINGS" shall mean, at any time, the sum of (a)
with respect to Letters of Credit outstanding at such time, the aggregate
maximum amount that then is or at any time thereafter may become available for
drawing or payment thereunder PLUS (b) all amounts theretofore drawn or paid
under Letters of Credit for which the Issuing Bank has not then been reimbursed.
"LIBO RATE" means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate of interest (rounded upwards, if necessary to the next
1/16 of 1%) determined by the Administrative Agent to be the prevailing rate per
annum at which deposits in dollars are offered to Fleet by banks in the London
interbank market at 10:00 a.m. (Boston time) not less than two Business Days
before the first day of the Interest Period for the subject Eurodollar
Borrowing, for a deposit approximately in the amount of the subject Borrowing
and for a period of time approximately equal to such Interest Period.
"LIEN" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"LINE FEE" means a fee equal to 0.375% per annum (on the basis of
actual days elapsed in a year of 360 days) of the average daily balance of the
difference between (x) each Lender's Commitment and (y) the sum of (i) such
Lender's Commitment Percentage of the principal amount of Loans then
outstanding, and (ii) such Lender's Commitment Percentage of the then Letter of
Credit Outstandings for each day commencing on the date hereof and ending on but
excluding the Termination Date.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Letters of
Credit, the Fee Letter, all Borrowing Base Certificates, the Blocked Account
Agreements, the DDA Notifications, the Credit Card Notifications, the Security
Documents, the Facility Guarantee, and any other instrument or agreement
executed and delivered in connection therewith.
"LOAN PARTY" or "LOAN PARTIES" means the Borrowers and the Facility
Guarantors.
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"LOANS" shall mean all loans (including, without limitation, Revolving
Loans, Term Loans, and Swingline Loans) at any time made to the Borrowers or for
account of the Borrowers pursuant to this Agreement.
"MARGIN STOCK" has the meaning assigned to such term in Regulation U.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, operations, property, assets, prospects, or condition, financial or
otherwise, of the Lead Borrower and its Subsidiaries taken as a whole, or (b)
the validity or enforceability of this Agreement or any of the other Loan
Documents or any of the material rights or remedies of the Administrative Agent,
the Collateral Agent or the Lenders hereunder or thereunder.
"MATERIAL INDEBTEDNESS" means Indebtedness (other than the Loans and
Letters of Credit) or obligations in respect of one or more Hedging Agreements
of any one or more of the Borrowers in an aggregate principal amount exceeding
$10,000,000.00. For purposes of determining the amount of Material Indebtedness
at any time, the "principal amount" of the obligations in respect of any Hedging
Agreement at such time shall be the maximum aggregate amount that a Borrower
would be required to pay if such Hedging Agreement were terminated at that time.
"MATURITY DATE" means April 30, 2005.
"MAXIMUM RATE" has the meaning provided therefor in Section 9.14.
"MINORITY LENDERS" has the meaning provided therefor in Section
9.02(d).
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc.
"MORTGAGES" means the Mortgages/Deeds of Trust, Security Agreements and
Assignments between the Borrower owning the Real Estate encumbered thereby and
the Collateral Agent for the benefit of the Secured Parties.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"NET PROCEEDS" means, with respect to any event, (a) the cash proceeds
received in respect of such event, including (i) any cash received in respect of
any non-cash proceeds, but only as and when received, (ii) in the case of a
casualty, insurance proceeds, and (iii) in the case of a condemnation or similar
event, condemnation awards and similar payments, in each case net of (b) the sum
of (i) all reasonable fees and out-of-pocket expenses (including appraisals, and
brokerage, legal, title and recording tax expenses and commissions) paid by any
Borrower to third parties (other than Affiliates) in connection with such event,
and (ii) in the case of a sale or other disposition of an asset (including
pursuant to a casualty or condemnation), the amount of all payments required to
be made by any Borrower as a result of such event to repay (or to establish an
escrow for the repayment of) Indebtedness (other than Loans) which is secured by
such asset and constitutes a Permitted Encumbrance that is senior to the Lien of
the Collateral Agent.
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"NONCOMPLIANCE NOTICE" has the meaning provided therefor in Section
2.05(b).
"NOTES" shall mean (i) the promissory notes of the Borrowers
substantially in the form of Exhibit B-1, each payable to the order of a
Revolving Lender, evidencing the Revolving Loans, (ii) (i) the promissory notes
of the Borrowers substantially in the form of Exhibit B-2, each payable to the
order of a Term Lender, evidencing the Term Loans and (iii) the promissory note
of the Borrowers substantially in the form of Exhibit B-3, payable to the
Swingline Lender, evidencing the Swingline Loans.
"OBLIGATIONS" means (a) the due and punctual payment by the Loan
Parties of (i) the principal of, and interest on the Loans, when and as due,
whether at maturity, by acceleration, upon one or more dates set for prepayment
or otherwise, (ii) each payment required to be made by the Loan Parties under
the Credit Agreement in respect of any Letter of Credit, when and as due,
including payments in respect of reimbursement of disbursements, interest
thereon and obligations to provide cash collateral and (iii) all other monetary
obligations, including fees, costs, expenses and indemnities, whether primary,
secondary, direct, contingent, fixed or otherwise, of the Loan Parties to the
Secured Parties under the Credit Agreement and the other Loan Documents, and (b)
the due and punctual performance of all covenants, agreements, obligations and
liabilities of the Loan Parties under or pursuant to the Credit Agreement and
the other Loan Documents, (c) the due and punctual payment and performance of
all the covenants, agreements, obligations and liabilities of each Loan Party
under or pursuant to this Agreement, and the other Loan Documents, (d) any
Hedging Agreements which are permitted pursuant to Section 6.01(a)(viii) hereof,
and (e) any transaction with FRF as Collateral Agent or Administrative Agent, or
Fleet, or any of their respective Affiliates, which arises out of any cash
management, depository, investment, letter of credit, interest rate protection
or other Hedging Agreement, equipment leasing or other banking or financial
services provided by any such Person, as each may be amended from time to time.
"OTHER TAXES" means any and all current or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made under any Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, any Loan Document.
"OVERADVANCE" means, at any time of calculation, a circumstance in
which the Credit Extensions exceed the lesser of (a) the Commitments or (b) the
Borrowing Base.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"PAYMENT CONDITIONS" means, at the time of determination, that (a) no
Default or Event of Default then exists or would arise as a result of the making
of the subject payment, and (b) prior to, and, on a pro forma twelve months
basis after giving effect to, the subject payment, Excess Availability shall be
equal to or greater than $60,000,000.00.
"PERFECTION CERTIFICATE" means a certificate in the form of Annex 1 to
the Security Agreement or any other form approved by the Collateral Agent.
"PERMITTED ENCUMBRANCES" means:
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(a) Liens imposed by law for taxes that are not yet due or are
being contested in compliance with Section 5.05;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the
ordinary course of business and securing obligations that are not
overdue by more than 60 days or are being contested in compliance with
Section 5.05;
(c) pledges and deposits made in the ordinary course of
business in compliance with workers' compensation, unemployment
insurance and other social security laws or regulations;
(d) deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature, in each case
in the ordinary course of business;
(e) judgment liens in respect of judgments that do not
constitute an Event of Default under clause (k) of Article VII; and
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do
not materially detract from the value of the affected property or
interfere with the ordinary conduct of business of the Borrowers or any
Subsidiary.
PROVIDED that, except as provided in any one or more of clauses (a) through (f)
above, the term "Permitted Encumbrances" shall not include any Lien securing
Indebtedness.
"PERMITTED INVESTMENTS" means each of the following:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America),
in each case maturing within one year from the date of acquisition
thereof;
(b) investments in commercial paper maturing within 270 days
from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from S&P or from
Moody's;
(c) investments in certificates of deposit, banker's
acceptances and time deposits maturing within 180 days from the date of
acquisition thereof issued or guaranteed by or placed with, and demand
deposit and money market deposit accounts issued or offered by, any
domestic office of any commercial bank organized under the laws of the
United States of America or any State thereof that has a combined
capital and surplus and undivided profits of not less than
$500,000,000; and
(d) fully collateralized repurchase agreements with a term of
not more than 30 days for securities described in clause (a) above
(without regard to the limitation on
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maturity contained in such clause) and entered into with a financial
institution satisfying the criteria described in clause (c) above or
with any primary dealer.
provided that, notwithstanding the foregoing, no such investments shall be
permitted unless (i) either (A) no Loans are then outstanding, or (B) the
investment is a temporary investment pending expiration of an Interest Period
for a Eurodollar Loan, the proceeds of which investment will be applied to the
Obligations after the expiration of such Interest Period, and (b) such
investments are pledged to the Administrative Agent as additional collateral for
the Obligations pursuant to such agreements as may be reasonably required by the
Administrative Agent.
"PERMITTED OVERADVANCE" means an Overadvance determined by the
Administrative Agent, in its reasonable discretion, (a) which is made to
maintain, protect or preserve the Collateral and/or the Lenders' rights under
the Loan Documents, or (b) which is otherwise in the Lenders' interests;
PROVIDED THAT Permitted Overadvances shall not (i) exceed five percent (5%) of
the then Borrowing Base in the aggregate outstanding at any time or (ii) remain
outstanding for more than forty-five (45) consecutive Business Days, unless in
case of clause (ii), the Required Supermajority Lenders otherwise agree; and
PROVIDED FURTHER that the foregoing shall not (1) modify or abrogate any of the
provisions of Section 2.06(f) hereof regarding the Lender's obligations with
respect to L/C Disbursements, or (2) result in any claim or liability against
the Administrative Agent (regardless of the amount of any Overadvance) for
"inadvertent Overadvances" (i.e. where an Overadvance results from changed
circumstances beyond the control of the Administrative Agent (such as a
reduction in the collateral value)), and FURTHER PROVIDED THAT in no event shall
the Administrative Agent make an Overadvance, if after giving effect thereto,
the principal amount of the Credit Extensions would exceed the Commitments.
"PERSON" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"PLAN" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Lead
Borrower or any ERISA Affiliate is (or, if such plan were terminated, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in Section
3(5) of ERISA.
"PLEDGE AGREEMENT" means the Pledge Agreement dated as of April 24,
2001 among the Borrowers and the Collateral Agent for the benefit of the Secured
Parties, as amended and in effect from time to time.
"PREPAYMENT AMOUNT" means, (a) if Excess Availability is equal to or
greater than $60,000,000.00 after giving effect to the subject Prepayment Event,
zero, or (b) if Excess Availability is less than $60,000,000.00 after giving
effect to the subject Prepayment Event, such amount as shall result in Excess
Availability becoming equal to at least $60,000,000.00. The amounts payable
under clause (b) of this definition shall be payable whether or not a Cash
Control Event then exists.
"PREPAYMENT EVENT" means any of the following events:
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(a) any sale, transfer or other disposition (including
pursuant to a sale and leaseback transaction) of any property or asset
of a Borrower, other than any sale, transfer or other disposition
permitted by Sections 6.05 (a)(i) or (b);
(b) any casualty or other insured damage to, or any taking
under power of eminent domain or by condemnation or similar proceeding
of, any property or asset of a Borrower, unless (i) the proceeds
therefrom are required to be paid to the holder of a Lien on such
property or asset having priority over the Lien of the Collateral
Agent, or (ii) the proceeds therefrom are utilized for purposes of
replacing or repairing the assets in respect of which such proceeds,
awards or payments were received within 12 months of the occurrence of
the damage to or loss of the assets being repaired or replaced.;
(c) the issuance by a Borrower of any equity securities, other
than (i) any such issuance of equity securities to another Borrower,
(ii) any such issuance of equity securities in connection with any
employee benefit plans; or
(d) the incurrence by a Borrower of any Indebtedness of the
type described in clause (a), (b) or (c) of the definition of the term
"Indebtedness", other than Indebtedness permitted by Section 6.01(a).
"REAL ESTATE"means all land, together with the buildings, structures,
parking areas, and other improvements thereon, now or hereafter owned by any
Borrower, including all easements, rights-of-way, and similar rights relating
thereto and all leases, tenancies, and occupancies thereof.
"REALTY RESERVES" means such reserves as the Administrative Agent from
time to time determines in the Administrative Agent's discretion as being
appropriate to reflect the impediments to the Agents' ability to realize upon
any Eligible Real Estate. Without limiting the generality of the foregoing,
Availability Reserves may include (but are not limited to) reserves for (i)
environmental remediation, (ii) municipal taxes and assessments, (iii) repairs
and (iv) remediation of title defects.
"RECEIVABLES ADVANCE RATE" means eighty-five percent (85%).
"REGISTER" has the meaning set forth in Section 9.05(c).
"REGULATION U" means Regulation U of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"REGULATION X" means Regulation X of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"RELATED PARTIES" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"RELEASE" has the meaning set forth in Section 101(22) of CERCLA.
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"REQUIRED LENDERS" shall mean, at any time, Lenders having Commitments
at least equal to 51% of the Total Commitments, or if the Commitments have been
terminated, Lenders whose percentage of the outstanding Obligations (after
settlement and repayment of all Swingline Loans by the Lenders) aggregate not
less than 51% of all such Obligations.
"REQUIRED SUPERMAJORITY LENDERS" shall mean, at any time, Lenders
having Commitments outstanding representing at least 66 2/3% of the Total
Commitments outstanding or if the Commitments have been terminated, Lenders
whose percentage of the outstanding Obligations (after settlement and repayment
of all Swingline Loans by the Lenders) aggregate not less than 66 2/3% of all
such Obligations.
"RESERVES" means all (if any) Realty Reserves, Inventory Reserves, and
Availability Reserves.
"RESTRICTED PAYMENT" means any dividend or other distribution (whether
in cash, securities or other property) with respect to any shares of any class
of capital stock of any Borrower or any Subsidiary, or any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such shares of capital stock of a member of
any Borrower or any Subsidiary or any option, warrant or other right to acquire
any such shares of capital stock of any Borrower or any Subsidiary.
"REVOLVING COMMITMENT" means, with respect to each Lender, the
commitment of such Lender set forth as its Revolving Commitment opposite its
name on SCHEDULE 1.1 hereto or as may subsequently be set forth in the Register
from time to time, as the same may be reduced from time to time pursuant to
Section 2.15.
"REVOLVING COMMITMENT PERCENTAGE" means with respect to each Revolving
Lender, that percentage of the Revolving Commitments of all Revolving Lenders
hereunder in the amount set forth opposite its name on SCHEDULE 1.1 hereto or as
may subsequently be set forth in the Register from time to time, as the same may
be reduced from time to time pursuant to Section 2.15.
"REVOLVING LENDER" means each Lender having a Revolving Commitment as
set forth on SCHEDULE 1.1 hereto or in the Assignment and Acceptance by which it
becomes a Lender.
"REVOLVING LOANS" means all Loans at any time made by a Revolving
Lender pursuant to Section 2.01.
"S&P" means Standard & Poor's.
"SECURED PARTIES" has the meaning assigned to such term in the Security
Agreement.
"SECURITY AGREEMENT" means the Security Agreement dated as of April 24,
2001 among the Borrowers and the Collateral Agent for the benefit of the Secured
Parties, as amended and in effect from time to time.
"SECURITY DOCUMENTS" means the Security Agreement, the Pledge
Agreement, the Mortgages, the Facility Guarantors Collateral Documents, and each
other security agreement or
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other instrument or document executed and delivered pursuant to Section 5.12 to
secure any of the Obligations.
"SETTLEMENT DATE" has the meaning provided in Section 2.07(b) hereof.
"SHRINK" means Inventory which has been lost, misplaced, stolen, or is
otherwise unaccounted for.
"SOLVENT" means, with respect to any Person on a particular date, that
on such date (a) at fair valuations, all of the properties and assets of such
Person are greater than the sum of the debts, including contingent liabilities,
of such Person, (b) the present fair saleable value of the properties and assets
of such Person is not less than the amount that would be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person is able to realize upon its properties and assets and
pay its debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (d) such Person
does not intend to, and does not believe that it will, incur debts beyond such
Person's ability to pay as such debts mature, and (e) such Person is not engaged
in a business or a transaction, and is not about to engage in a business or
transaction, for which such Person's properties and assets would constitute
unreasonably small capital after giving due consideration to the prevailing
practices in the industry in which such Person is engaged.
"STANDBY LETTER OF CREDIT" means any Letter of Credit other than a
Commercial Letter of Credit.
"STATUTORY RESERVE RATE" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as "Eurocurrency Liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"SUBSIDIARY" means, with respect to any Person (the "PARENT") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held, or (b) that is, as of such date,
otherwise Controlled, by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent.
"SWINGLINE LENDER" means FRF, in its capacity as lender of Swingline
Loans hereunder.
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"SWINGLINE LOAN" shall mean a Loan made by the Swingline Lender to the
Borrowers pursuant to Section 2.05 hereof.
"SYNTHETIC LEASE" means any lease or other agreement for the use or
possession of property creating obligations which do not appear as Indebtedness
on the balance sheet of the lessee thereunder but which, upon the insolvency or
bankruptcy of such Person, may be characterized as Indebtedness of such lessee
without regard to the accounting treatment.
"TAXES" means any and all current or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"TERM COMMITMENT" means, with respect to each Lender, the commitment of
such Lender set forth as its Term Commitment opposite its name on SCHEDULE 1.1
hereto or as may subsequently be set forth in the Register from time to time, as
the same may be reduced from time to time pursuant to Section 2.15.
"Term COMMITMENT PERCENTAGE" means with respect to each Term Lender,
that percentage of the Term Commitments of all Term Lenders hereunder in the
amount set forth opposite its name on SCHEDULE 1.1 hereto or as may subsequently
be set forth in the Register from time to time, as the same may be reduced from
time to time pursuant to Section 2.15.
"TERM LENDER" means each Lender having a Term Commitment as set forth
on SCHEDULE 1.1 hereto or in the Assignment and Acceptance by which it becomes a
Lender.
"TERM LOANS" means all Loans at any time made by a Term Lender pursuant
to Section 2.01.
"TERMINATION DATE" shall mean the earliest to occur of (i) the Maturity
Date, or (ii) the date on which the maturity of the Loans are accelerated and
the Commitments are terminated, or (iii) the date of the occurrence of any Event
of Default pursuant to Section 7.01(h) or 7.01(i) hereof.
"TOTAL COMMITMENT" shall mean, at any time, the sum of the Commitments
at such time.
"TYPE", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate.
"UNUSED COMMITMENT" shall mean, on any day, (a) the then Total
Commitments MINUS (b) the sum of (i) the principal amount of Loans then
outstanding (including the principal amount of Swingline Loans then outstanding)
and (ii) the then Letter of Credit Outstandings.
"UNRESTRICTED SUBSIDIARY" means a Subsidiary of a Loan Party designated
by the Lead Borrower's board of directors as such, provided that no Subsidiary
may be designated as an Unrestricted Subsidiary unless (a) none of its assets
are included in the calculation of Borrowing Base immediately prior to such
Subsidiary's being designated as an Unrestricted Subsidiary, (b) the value of
its total assets do not exceed $1,000,000.00 in the aggregate, (c) such
Subsidiary
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may be designated as an Unrestricted Subsidiary under the Indenture, and (D) no
Default or Event of Default exists at the time of such designation.
"WITHDRAWAL LIABILITY" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.2 TERMS GENERALLY. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including"
shall be deemed to be followed by the phrase "without limitation". The word
"will" shall be construed to have the same meaning and effect as the word
"shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth
herein), (b) any reference herein to any Person shall be construed to include
such Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
SECTION 1.3 ACCOUNTING TERMS; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect on the Closing Date, PROVIDED
that, if the Borrowers notify the Administrative Agent that the Borrowers
request an amendment to any provision hereof to reflect the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrowers that the Required Lenders request an amendment to any provision
hereof for such purpose), regardless of whether any such notice is given before
or after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such provision shall have
been amended in accordance herewith.
ARTICLE II
AMOUNT AND TERMS OF CREDIT
SECTION 2.1 COMMITMENT OF THE LENDERS.
(a) Each Revolving Lender severally and not jointly with any other
Lender, agrees, upon the terms and subject to the conditions herein set forth,
to extend credit to the Borrowers on a revolving basis, in the form of Revolving
Loans and Letters of Credit and in an amount not to
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exceed the lesser of such Lender's Revolving Commitment or such Lender's
Revolving Commitment Percentage of (x) the Borrowing Base, less (y) the then
outstanding principal balance of the Term Loans, subject to the following
limitations:
(i) The aggregate outstanding amount of the Credit Extensions
and Swingline Loans shall not at any time exceed the lower of (i)
$365,000,000 or, in each case, any lesser amount to which the
Commitments have then been reduced by the Borrowers pursuant to Section
2.15, and (ii) the then amount of the Borrowing Base.
(ii) No Lender shall be obligated to issue any Letter of
Credit, and Letters of Credit shall be available from the Issuing Bank,
subject to the ratable participation of all Revolving Lenders, as set
forth in Section 2.06. The Borrowers will not at any time permit the
aggregate Letter of Credit Outstandings to exceed $150,000,000.
(iii) Subject to all of the other provisions of this
Agreement, Revolving Loans that are repaid may be reborrowed prior to
the Termination Date. No new Credit Extension, however, shall be made
to the Borrowers after the Termination Date.
(b) Each Term Lender, severally and not jointly with any other Lender,
agrees, upon the terms and subject to the conditions herein set forth, on the
Closing Date to make Term Loans to the Borrowers in an amount equal to such Term
Lender's Term Commitment. Term Loans that are repaid may not be reborrowed.
(c) Each Borrowing of Revolving Loans (other than Swingline Loans)
shall be made by the Revolving Lenders pro RATA in accordance with their
respective Revolving Commitments. Each Borrowing of Term Loans shall be made by
the Term Lenders PRO RATA in accordance with their respective Term Commitments.
The failure of any Lender to make any Loan shall neither relieve any other
Lender of its obligation to fund its Loan in accordance with the provisions of
this Agreement nor increase the obligation of any such other Lender.
SECTION 2.2 RESERVES; CHANGES TO RESERVES.
(a) The initial Inventory and Availability Reserves as of the date of
this Agreement are the following:
(i) Rent (an Availability Reserve): An amount equal to two
months base rents for a leased premises located in the states of
Washington, Virginia, Pennsylvania and any other state which grants
a landlord a priority lien for unpaid rent.
(ii) Import Load (an Inventory Reserve): An amount equal to
100% of the amounts reflected in the Borrowers' perpetual inventory
for Inventory
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imported into the United States of America in excess of the actual
cost of such Inventory.
(iii) Gift Certificate and Merchandise Credit Liability (an
Availability Reserve): An amount equal to fifty percent (50%) of
the Borrowers' Gift Certificate and Merchandise Credit Liability
outstanding from time to time.
(iv) Packaway Inventory (an Inventory Reserve): An amount
equal to all packaway Inventory of the Borrowers in excess of
$20,000,000.00 at Cost.
(v) Customer Deposits (an Availability Reserve): An amount
equal to 100% of the Borrowers' customer deposit liability, whether
for layaways, special orders or otherwise.
(vi) Shrink (an Inventory Reserve): An amount equal to
$17,000,000.00.
(b) The Administrative Agent may hereafter establish additional
Reserves or change any of the foregoing Reserves, in the exercise of the
reasonable judgment of the Administrative Agent.
SECTION 2.3 MAKING OF LOANS.
(a) Except as set forth in Sections 2.16 and 2.24, Loans (other than
Swingline Loans) by the Lenders shall be either Base Rate Loans or Eurodollar
Loans as the Lead Borrower on behalf of the Borrowers may request subject to and
in accordance with this Section 2.03, provided that all Swingline Loans shall be
only Base Rate Loans. All Loans made pursuant to the same Borrowing shall,
unless otherwise specifically provided herein, be Loans of the same Type. Each
Lender may fulfill its Commitment with respect to any Loan by causing any
lending office of such Lender to make such Loan; but any such use of a lending
office shall not affect the obligation of the Borrowers to repay such Loan in
accordance with the terms of the applicable Note. Each Lender shall, subject to
its overall policy considerations, use reasonable efforts (but shall not be
obligated) to select a lending office which will not result in the payment of
increased costs by the Borrowers pursuant to Section 2.23. Subject to the other
provisions of this Section 2.03 and the provisions of Section 2.24, Borrowings
of Loans of more than one Type may be incurred at the same time, but no more
than five (5) Borrowings of Eurodollar Loans may be outstanding at any time.
(b) The Lead Borrower shall give the Administrative Agent three
Business Days' prior telephonic notice (thereafter confirmed in writing) of each
Borrowing of Eurodollar Loans and one Business Day's prior notice of each
Borrowing of Base Rate Loans. Any such notice, to be effective, must be received
by the Administrative Agent not later than 11:00 a.m., Boston time, on the third
Business Day in the case of
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Eurodollar Loans prior to, and on the first Business Day in the case of Base
Rate Loans prior to, the date on which such Borrowing is to be made. Such notice
shall be irrevocable and shall specify the amount of the proposed Borrowing
(which shall be in an integral multiple of $1,000,000, but not less than
$5,000,000 in the case of Eurodollar Loans) and the date thereof (which shall be
a Business Day) and shall contain disbursement instructions. Such notice shall
specify whether the Borrowing then being requested is to be a Borrowing of Base
Rate Loans or Eurodollar Loans and, if Eurodollar Loans, the Interest Period
with respect thereto. If no election of Interest Period is specified in any such
notice for a Borrowing of Eurodollar Loans, such notice shall be deemed a
request for an Interest Period of one month. If no election is made as to the
Type of Loan, such notice shall be deemed a request for Borrowing of Base Rate
Loans. The Administrative Agent shall promptly notify each Lender of its
proportionate share of such Borrowing, the date of such Borrowing, the Type of
Borrowing being requested and the Interest Period or Interest Periods applicable
thereto, as appropriate. On the borrowing date specified in such notice, each
Lender shall make its share of the Borrowing available at the office of the
Administrative Agent at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, no later
than 1:00 p.m., Boston time, in immediately available funds. Unless the
Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing that such Lender will not make available to the
Administrative Agent such Lender's share of such Borrowing, the Administrative
Agent may assume that such Lender has made such share available on such date in
accordance with this Section and may, in reliance upon such assumption, make
available to the Borrowers a corresponding amount. In such event, if a Lender
has not in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrowers severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount with interest thereon, for each day from and including the date such
amount is made available to the Borrowers to but excluding the date of payment
to the Administrative Agent, at (i) in the case of such Lender, the greater of
the Federal Funds Effective Rate and a rate determined by the Administrative
Agent in accordance with banking industry rules on interbank compensation or
(ii) in the case of the Borrowers, the interest rate applicable to Base Rate
Loans. If such Lender pays such amount to the Administrative Agent, then such
amount shall constitute such Lender's Loan included in such Borrowing. Upon
receipt of the funds made available by the Lenders to fund any Borrowing
hereunder, the Administrative Agent shall disburse such funds in the manner
specified in the notice of borrowing delivered by the Lead Borrower and shall
use reasonable efforts to make the funds so received from the Lenders available
to the Borrowers no later than 4:00 p.m., Boston time.
SECTION 2.4 OVERADVANCES. The Agents and the Lenders have no obligation
to make any Loan or to provide any Letter of Credit if an Overadvance would
result. The Administrative Agent may, in its discretion, make Permitted
Overadvances without the consent of the Lenders and each Lender shall be bound
thereby. Any Permitted Overadvances may constitute Swingline Loans. The making
of any Permitted Overadvance is for the benefit of the Borrowers; such Permitted
Overadvances constitute Revolving Loans and Obligations. The making of any such
Permitted Overadvances on any one occasion shall not obligate the Administrative
Agent or any Lender to make or permit any Permitted Overadvances on any other
occasion or to permit such Permitted Overadvances to remain outstanding.
SECTION 2.5 SWINGLINE LOANS
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(a) The Swingline Lender is authorized by the Lenders, but is not
obligated, to make Swingline Loans up to $25,000,000 plus the Permitted
Overadvance in the aggregate outstanding at any time, consisting only of Base
Rate Loans, upon a notice of Borrowing received by the Administrative Agent and
the Swingline Lender (which notice, at the Swingline Lender's discretion, may be
submitted prior to 1:00 p.m., Boston time, on the Business Day on which such
Swingline Loan is requested). Swingline Loans shall be subject to periodic
settlement with the Revolving Lenders under Section 2.07 below.
(b) Swingline Loans may be made only in the following circumstances:
(A) for administrative convenience, the Swingline Lender may, but is not
obligated to, make Swingline Loans in reliance upon the Borrowers' actual or
deemed representations under Section 4.02, that the applicable conditions for
borrowing are satisfied or (B) for Permitted Overadvances, or (C) if the
conditions for borrowing under Section 4.02 cannot be fulfilled, the Borrowers
shall give immediate notice thereof to the Administrative Agent and the
Swingline Lender (a "NONCOMPLIANCE NOTICE"), and the Administrative Agent shall
promptly provide each Lender with a copy of the Noncompliance Notice. If the
conditions for borrowing under Section 4.02 cannot be fulfilled, the Required
Lenders may direct the Swingline Lender to, and the Swingline Lender thereupon
shall, cease making Swingline Loans (other than Permitted Overadvances) until
such conditions can be satisfied or are waived in accordance with Section 9.02
hereof. Unless the Required Lenders so direct the Swingline Lender, the
Swingline Lender may, but is not obligated to, continue to make Swingline Loans
beginning one Business Day after the Non-Compliance Notice is furnished to the
Lenders. Notwithstanding the foregoing, no Swingline Loans shall be made
pursuant to this subsection (b) (other than Permitted Overadvances) if the
aggregate outstanding amount of the Credit Extensions and Swingline Loans would
exceed the lower of (i) $365,000,000 or any lesser amount to which the
Commitments have then been reduced by the Borrowers pursuant to Section 2.15,
and (ii) the then amount of the Borrowing Base.
SECTION 2.6 LETTERS OF CREDIT.
(a) Upon the terms and subject to the conditions herein set forth, the
Lead Borrower on behalf of the Borrowers may request the Issuing Bank, at any
time and from time to time after the date hereof and prior to the Termination
Date, to issue, and subject to the terms and conditions contained herein, the
Issuing Bank shall issue, for the account of the Borrowers one or more Letters
of Credit; PROVIDED that no Letter of Credit shall be issued if after giving
effect to such issuance (i) the aggregate Letter of Credit Outstandings shall
exceed $150,000,000, or (ii) the aggregate Credit Extensions (including
Swingline Loans) would exceed the limitation set forth in Section 2.01(a)(i);
and PROVIDED, FURTHER, that no Letter of Credit shall be issued if the Issuing
Bank shall have received notice from the Administrative Agent or the Required
Lenders that the conditions to such issuance have not been met.
(b) Each Standby Letter of Credit shall expire at or prior to the close
of business on the earlier of (i) the date one year after the date of the
issuance of such Letter of Credit (or, in the case of any renewal or extension
thereof, one year after such renewal or extension) and (ii) the date that is
five Business Days prior to the Maturity Date, PROVIDED that each Standby Letter
of
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Credit may, upon the request of the Lead Borrower, include a provision whereby
such Letter of Credit shall be renewed automatically for additional consecutive
periods of 12 months or less (but not beyond the date that is five Business Days
prior to the Maturity Date) unless the Issuing Bank notifies the beneficiary
thereof at least 30 days prior to the then-applicable expiration date that such
Letter of Credit will not be renewed.
(c) Each Commercial Letter of Credit shall expire at or prior to the
close of business on the earlier of (i) the date 210 days after the date of the
issuance of such Commercial Letter of Credit and (ii) the date that is five
Business Days prior to the Maturity Date.
(d) Drafts drawn under each Letter of Credit shall be reimbursed by the
Borrowers in dollars on the same Business Day of any such drawing by paying to
the Administrative Agent an amount equal to such drawing not later than 12:00
noon, Boston time, on (i) the date that the Borrowers shall have received notice
of such payment, if such notice is received prior to 10:00 a.m., Boston time, on
such date, or (ii) the Business Day immediately following the day that the
Borrowers receive such notice, if such notice is received after 10:00 a.m.,
Boston time on the day of receipt, PROVIDED that the Lead Borrower may, subject
to the conditions to borrowing set forth herein, request in accordance with
Section 2.03 that such payment be financed with a Revolving Loan consisting of a
Base Rate Loan or Swingline Loan in an equivalent amount and, to the extent so
financed, the Borrowers' obligation to make such payment shall be discharged and
replaced by the resulting Base Rate Loan or Swingline Loan. The Issuing Bank
shall, promptly following its receipt thereof, examine all documents purporting
to represent a demand for payment under a Letter of Credit. The Issuing Bank
shall promptly notify the Administrative Agent and the Borrowers by telephone
(confirmed by telecopy) of such demand for payment and whether the Issuing Bank
has made or will make payment thereunder, PROVIDED that any failure to give or
delay in giving such notice shall not relieve the Borrowers of their obligation
to reimburse the Issuing Bank and the Lenders with respect to any such payment.
(e) If the Issuing Bank shall make any L/C Disbursement, then, unless
the Borrowers shall reimburse the Issuing Bank in full on the date such payment
is made, the unpaid amount thereof shall bear interest, for each day from and
including the date such payment is made to but excluding the date that the
Borrowers reimburse the Issuing Bank therefor, at the rate per annum then
applicable to Base Rate Loans, PROVIDED that, if the Borrowers fail to reimburse
such Issuing Bank when due pursuant to paragraph (d) of this Section, then
Section 2.10 shall apply. Interest accrued pursuant to this paragraph shall be
for the account of the Issuing Bank, except that interest accrued on and after
the date of payment by any Revolving Lender pursuant to paragraph (g) of this
Section to reimburse the Issuing Bank shall be for the account of such Revolving
Lender to the extent of such payment.
(f) Immediately upon the issuance of any Letter of Credit by the
Issuing Bank (or the amendment of a Letter of Credit increasing the amount
thereof), and without any further action on the part of the Issuing Bank, the
Issuing Bank shall be deemed to have sold to each Revolving Lender, and each
such Revolving Lender shall be deemed unconditionally and irrevocably to have
purchased from the Issuing Bank, without recourse or warranty, an undivided
interest and participation, to the extent of such Lender's Revolving Commitment
Percentage, in such Letter
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of Credit, each drawing thereunder and the obligations of the Borrowers under
this Agreement and the other Loan Documents with respect thereto. Upon any
change in the Revolving Commitments pursuant to Section 9.05, it is hereby
agreed that with respect to all Letter of Credit Outstandings, there shall be an
automatic adjustment to the participations hereby created to reflect the new
Revolving Commitment Percentages of the assigning and assignee Revolving
Lenders. Any action taken or omitted by the Issuing Bank under or in connection
with a Letter of Credit, if taken or omitted in the absence of gross negligence
or willful misconduct, shall not create for the Issuing Bank any resulting
liability to any Lender.
(g) In the event that the Issuing Bank makes any L/C Disbursement and
the Borrowers shall not have reimbursed such amount in full to the Issuing Bank
pursuant to this Section 2.06, the Issuing Bank shall promptly notify the
Administrative Agent, which shall promptly notify each Revolving Lender of such
failure, and each Revolving Lender shall promptly and unconditionally pay to the
Administrative Agent for the account of the Issuing Bank the amount of such
Revolving Lender's Revolving Commitment Percentage of such unreimbursed payment
in dollars and in same day funds. If the Issuing Bank so notifies the
Administrative Agent, and the Administrative Agent so notifies the Revolving
Lenders prior to 11:00 a.m., Boston time, on any Business Day, each such
Revolving Lender shall make available to the Issuing Bank such Revolving
Lender's Revolving Commitment Percentage of the amount of such payment on such
Business Day in same day funds. If and to the extent such Revolving Lender shall
not have so made its Revolving Commitment Percentage of the amount of such
payment available to the Issuing Bank, such Revolving Lender agrees to pay to
the Issuing Bank, forthwith on demand such amount, together with interest
thereon, for each day from such date until the date such amount is paid to the
Administrative Agent for the account of the Issuing Bank at the Federal Funds
Effective Rate. Each Revolving Lender agrees to fund its Revolving Commitment
Percentage of such unreimbursed payment notwithstanding a failure to satisfy any
applicable lending conditions or the provisions of Sections 2.01 or 2.06, or the
occurrence of the Termination Date. The failure of any Revolving Lender to make
available to the Issuing Bank its Revolving Commitment Percentage of any payment
under any Letter of Credit shall neither relieve any Revolving Lender of its
obligation hereunder to make available to the Issuing Bank its Revolving
Commitment Percentage of any payment under any Letter of Credit on the date
required, as specified above, nor increase the obligation of such other
Revolving Lender. Whenever any Revolving Lender has made payments to the Issuing
Bank in respect of any reimbursement obligation for any Letter of Credit, such
Revolving Lender shall be entitled to share ratably, based on its Revolving
Commitment Percentage, in all payments and collections thereafter received on
account of such reimbursement obligation.
(h) Whenever the Borrowers desire that the Issuing Bank issue a Letter
of Credit (or the amendment, renewal or extension of an outstanding Letter of
Credit), the Lead Borrower shall give to the Issuing Bank and the Administrative
Agent at least two Business Days' prior written (including telegraphic, telex,
facsimile or cable communication) notice (or such shorter period as may be
agreed upon in writing by the Issuing Bank and the Lead Borrower) specifying the
date on which the proposed Letter of Credit is to be issued, amended, renewed or
extended (which shall be a Business Day), the stated amount of the Letter of
Credit so requested, the expiration date of such Letter of Credit, the name and
address of the beneficiary thereof, and the
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provisions thereof. If requested by the Issuing Bank, the Borrowers shall also
submit a letter of credit application on the Issuing Bank's standard form in
connection with any request for the issuance, amendment, renewal or extension of
a Letter of Credit.
(i) The obligations of the Borrowers to reimburse the Issuing Bank for
any L/C Disbursement shall be unconditional and irrevocable and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances,
including, without limitation (it being understood that any such payment by the
Borrowers shall be without prejudice to, and shall not constitute a waiver of,
any rights the Borrowers might have or might acquire as a result of the payment
by the Issuing Bank of any draft or the reimbursement by the Borrowers thereof):
(i) any lack of validity or enforceability of any Letter of Credit; (ii) the
existence of any claim, setoff, defense or other right which the Borrowers may
have at any time against a beneficiary of any Letter of Credit or against any of
the Lenders, whether in connection with this Agreement, the transactions
contemplated herein or any unrelated transaction; (iii) any draft, demand,
certificate or other document presented under any Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect; (iv) payment by the Issuing
Bank of any Letter of Credit against presentation of a demand, draft or
certificate or other document which does not comply with the terms of such
Letter of Credit; (v) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing, that might, but for the provisions of this
Section, constitute a legal or equitable discharge of, or provide a right of
setoff against, the Borrowers' obligations hereunder; or (vi) the fact that any
Event of Default shall have occurred and be continuing. None of the
Administrative Agent, the Lenders, the Issuing Bank or any of their Affiliates
shall have any liability or responsibility by reason of or in connection with
the issuance or transfer of any Letter of Credit or any payment or failure to
make any payment thereunder (irrespective of any of the circumstances referred
to in the preceding sentence), or any error, omission, interruption, loss or
delay in transmission or delivery of any draft, notice or other communication
under or relating to any Letter of Credit (including any document required to
make a drawing thereunder), any error in interpretation of technical terms or
any consequence arising from causes beyond the control of the Issuing Bank,
PROVIDED that the foregoing shall not be construed to excuse the Issuing Bank
from liability to the Borrowers to the extent of any direct damages (as opposed
to consequential damages, claims in respect of which are hereby waived by the
Borrowers to the extent permitted by applicable law) suffered by the Borrowers
that are caused by the Issuing Bank's failure to exercise care when determining
whether drafts and other documents presented under a Letter of Credit comply
with the terms thereof. The parties hereto expressly agree that, in the absence
of gross negligence or willful misconduct on the part of the Issuing Bank (as
finally determined by a court of competent jurisdiction), the Issuing Bank shall
be deemed to have exercised care in each such determination. In furtherance of
the foregoing and without limiting the generality thereof, the parties agree
that, with respect to documents presented that appear on their face to be in
compliance with the terms of a Letter of Credit, the Issuing Bank may, in its
sole discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.
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(j) If any Event of Default shall occur and be continuing, on the
Business Day that the Borrowers receive notice from the Administrative Agent or
the Required Lenders demanding the deposit of cash collateral pursuant to this
paragraph, the Borrowers shall deposit in the Cash Collateral Account an amount
in cash equal to 105% of the Letter of Credit Outstandings as of such date plus
any accrued and unpaid interest thereon. Each such deposit shall be held by the
Collateral Agent as collateral for the payment and performance of the
Obligations of the Borrowers under this Agreement. The Collateral Agent shall
have exclusive dominion and control, including the exclusive right of
withdrawal, over such Cash Collateral Account. Other than any interest earned on
the investment of such deposits, which investments shall be made at the option
and sole discretion of the Collateral Agent at the request of the Borrowers and
at the Borrowers' risk and expense, such deposits shall not bear interest.
Interest or profits, if any, on such investments shall accumulate in such
account. Moneys in such Cash Collateral Account shall be applied by the
Collateral Agent to reimburse the Issuing Bank for payments on account of
drawings under Letters of Credit for which it has not been reimbursed and, to
the extent not so applied, shall be held for the satisfaction of the
reimbursement obligations of the Borrowers for the Letter of Credit Outstandings
at such time or, if the Loans have matured or the maturity of the Loans has been
accelerated, be applied to satisfy other Obligations of the Borrowers under this
Agreement.
SECTION 2.7 SETTLEMENTS AMONGST REVOLVING LENDERS
(a) The Swingline Lender may (but shall not be obligated to), at any
time, on behalf of the Borrowers (which hereby authorize the Swingline Lender to
act in their behalf in that regard) request the Administrative Agent to cause
the Revolving Lenders to make a Revolving Loan (which shall be an Base Rate
Loan) in an amount equal to such Lender's Revolving Commitment Percentage of the
outstanding amount of Swingline Loans made in accordance with Section 2.05,
which request may be made regardless of whether the conditions set forth in
Article IV have been satisfied. Upon such request, each Revolving Lender shall
make available to the Administrative Agent the proceeds of such Revolving Loan
for the account of the Swingline Lender. If the Swingline Lender requires a
Revolving Loan to be made by the Revolving Lenders and the request therefor is
received prior to 12:00 Noon, Boston time, on a Business Day, such transfers
shall be made in immediately available funds no later than 3:00 p.m., Boston
time, that day; and, if the request therefor is received after 12:00 Noon,
Boston time, then no later than 3:00 p.m., Boston time, on the next Business
Day. The obligation of each Revolving Lender to transfer such funds is
irrevocable, unconditional and without recourse to or warranty by the
Administrative Agent or the Swingline Lender. If and to the extent any Revolving
Lender shall not have so made its transfer to the Administrative Agent, such
Revolving Lender agrees to pay to the Administrative Agent, forthwith on demand
such amount, together with interest thereon, for each day from such date until
the date such amount is paid to the Administrative Agent at the Federal Funds
Effective Rate.
(b) The amount of each Lender's Revolving Commitment Percentage of
outstanding Revolving Loans (excluding Swingline Loans) shall be computed weekly
(or more frequently in the Administrative Agent's discretion) and shall be
adjusted upward or downward based on all Revolving Loans (excluding
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Swingline Loans) and repayments of Revolving Loans (excluding Swingline Loans)
received by the Administrative Agent as of 3:00 p.m., Boston time, on the first
Business Day following the end of the period specified by the Administrative
Agent (such date, the "SETTLEMENT DATE").
(c) The Administrative Agent shall deliver to each of the Revolving
Lenders promptly after the Settlement Date a summary statement of the amount of
outstanding Revolving Loans (excluding Swingline Loans) for the period and the
amount of repayments received for the period. As reflected on the summary
statement: (x) the Administrative Agent shall transfer to each Revolving Lender
its applicable Revolving Commitment Percentage of repayments, and (y) each
Revolving Lender shall transfer to the Administrative Agent (as provided below),
or the Administrative Agent shall transfer to each Revolving Lender, such
amounts as are necessary to insure that, after giving effect to all such
transfers, the amount of Revolving Loans made by each Revolving Lender with
respect to Revolving Loans (excluding Swingline Loans) shall be equal to such
Revolving Lender's applicable Revolving Commitment Percentage of Revolving Loans
(excluding Swingline Loans) outstanding as of such Settlement Date. If the
summary statement requires transfers to be made to the Administrative Agent by
the Revolving Lenders and is received prior to 12:00 Noon, Boston time, on a
Business Day, such transfers shall be made in immediately available funds no
later than 3:00 p.m., Boston time, that day; and, if received after 12:00 Noon,
Boston time, then no later than 3:00 p.m., Boston time, on the next Business
Day. The obligation of each Revolving Lender to transfer such funds is
irrevocable, unconditional and without recourse to or warranty by the
Administrative Agent. If and to the extent any Revolving Lender shall not have
so made its transfer to the Administrative Agent, such Revolving Lender agrees
to pay to the Administrative Agent, forthwith on demand such amount, together
with interest thereon, for each day from such date until the date such amount is
paid to the Administrative Agent at the Federal Funds Effective Rate.
SECTION 2.8 NOTES; REPAYMENT OF LOANS.
(a) The Loans made by each Lender (and to the Swingline Lender, with
respect to Swingline Loans) shall be evidenced by a Note duly executed on behalf
of the Borrowers, dated the Closing Date, in substantially the form attached
hereto as Exhibit ▇-▇, ▇-▇ or B-3, as applicable, payable to the order of each
such Lender (or the Swingline Lender, as applicable) in an aggregate principal
amount equal to such Lender's Revolving Commitment or Term Commitment, as
applicable (or, in the case of the Note evidencing the Swingline Loans,
$25,000,000).
(b) The outstanding principal balance of all Swingline Loans shall be
repaid on the earlier of the Termination Date or, on the date otherwise
requested by the Swingline Lender in accordance with the provisions of Section
2.07(a). The outstanding principal balance of all other Obligations shall be
payable on the Termination Date (subject to earlier repayment as provided
below). Each Note shall bear interest from the date thereof on the outstanding
principal balance thereof as set forth in this Article II. Each Lender is hereby
authorized by the Borrowers to endorse on a schedule attached to each Note
delivered to such Lender (or on a continuation of such schedule attached to such
Note and made a part thereof), or otherwise to record in such Lender's internal
records, an appropriate notation evidencing the date and amount of each Loan
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from such Lender, each payment and prepayment of principal of any such Loan,
each payment of interest on any such Loan and the other information provided for
on such schedule; PROVIDED, HOWEVER, that the failure of any Lender to make such
a notation or any error therein shall not affect the obligation of the Borrowers
to repay the Loans made by such Lender in accordance with the terms of this
Agreement and the applicable Notes.
SECTION 2.9 INTEREST ON LOANS.
(a) Subject to Section 2.10, each Base Rate Loan shall bear interest
(computed on the basis of the actual number of days elapsed over a year of 365
or 366 days, as applicable) at a rate per annum that shall be equal to the then
Alternate Base Rate, PLUS the Applicable Margin for Base Rate Loans.
(b) Subject to Section 2.10, each Eurodollar Loan shall bear interest
(computed on the basis of the actual number of days elapsed over a year of 360
days) at a rate per annum equal, during each Interest Period applicable thereto,
to the Adjusted LIBO Rate for such Interest Period, PLUS the Applicable Margin
for Eurodollar Loans.
(c) Accrued interest on all Loans shall be payable in arrears on each
Interest Payment Date applicable thereto, at maturity (whether by acceleration
or otherwise), after such maturity on demand and (with respect to Eurodollar
Loans) upon any repayment or prepayment thereof (on the amount prepaid).
SECTION 2.10 DEFAULT INTEREST.
Effective upon the occurrence of any Event of Default and at all times
thereafter while such Event of Default is continuing, at the option of the
Administrative Agent or upon the direction of the Required Lenders, interest
shall accrue on all outstanding Loans (including Swingline Loans) (after as well
as before judgment, as and to the extent permitted by law) at a rate per annum
(computed on the basis of the actual number of days elapsed over a year of 360
days) equal to the rate (including the Applicable Margin for Loans) in effect
from time to time PLUS 2.00% per annum, and such interest shall be payable on
demand.
SECTION 2.11 CERTAIN FEES.
The Borrowers shall pay to the Administrative Agent, for the account of
the Administrative Agent, the fees set forth in the Fee Letter as and when
payment of such fees is due as therein set forth.
SECTION 2.12 UNUSED COMMITMENT FEE.
Each Revolving Lender shall be paid the Line Fee at the times and in
the manner set forth below. The Borrowers shall pay to the Administrative Agent
for the account of the Revolving Lenders, a commitment fee (the "COMMITMENT
FEE") equal to 0.375% per annum (on the basis of actual days elapsed in a year
of 360 days) of the average daily balance of the Unused Commitment for each day
commencing on and including the Closing Date and ending on but excluding the
Termination Date. The Commitment Fee so accrued in any calendar quarter shall
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be payable on the first Business Day of the immediately succeeding calendar
quarter, except that all Commitment Fees so accrued as of the Termination Date
shall be payable on the Termination Date. If the Commitment Fee actually paid by
the Borrowers is insufficient to pay the Line Fee due the Revolving Lenders, the
deficiency shall be paid to the revolving Lenders by the Swingline Lender from
its own funds (and the Borrowers shall have no liability with respect thereto).
The Administrative Agent shall pay the Commitment Fee (and any amounts payable
by the Swingline Lender hereunder) to the Revolving Lenders based upon their pro
rata share of the aggregate Line Fee due to all Lenders; PROVIDED THAT for
purposes of calculating the pro rata share of any Person which is both the
Swingline Lender and a Revolving Lender, such Person's share shall be equal to
the difference between (i) the sum of such Person's Revolving Commitment, and
(ii) the sum of (A) such Person's Revolving Commitment Percentage of the
principal amount of Revolving Loans then outstanding (including the principal
amount of Swingline Loans then outstanding), and (B) such Person's Revolving
Commitment Percentage of the then Letter of Credit Outstandings.
SECTION 2.13 LETTER OF CREDIT FEES.
(a) The Borrowers shall pay the Administrative Agent, for the account
of the Revolving Lenders, on the last day of each calendar quarter, in arrears,
a fee (each, a "Letter of Credit Fee") equal to the following per annum
percentages of the average face amount of the following categories of Letters of
Credit outstanding during the subject quarter:
(i) Standby Letters of Credit: The Applicable Margin for
Eurodollar Loans.
(ii) Commercial Letters of Credit: The Applicable Margin for
Eurodollar Loans minus .50%.
(iii) After the occurrence and during the continuance of an
Event of Default, at the option of the Administrative Agent or upon
the direction of the Required Lenders, the Letter of Credit Fee
shall be increased by an amount equal to two percent (2%) per
annum.
(b) The Borrowers shall pay to the Administrative Agent, for the
account of the Issuing Bank, and in addition to all Letter of Credit Fees
otherwise provided for hereunder, such fronting fees and other fees and charges
in connection with the issuance, negotiation, settlement, amendment and
processing of each Letter of Credit issued by the Issuing Bank as are
customarily imposed by the Issuing Bank from time to time in connection with
letter of credit transactions.
SECTION 2.14 NATURE OF FEES.
All fees shall be paid on the dates due, in immediately available
funds, to the Administrative Agent, for the respective accounts of the
Administrative Agent, the Issuing Bank, and the Lenders, as provided herein.
Once paid, all fees shall be fully earned and shall not be refundable under any
circumstances.
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SECTION 2.15 TERMINATION OR REDUCTION OF COMMITMENTS.
Upon at least two Business Days' prior written notice to the
Administrative Agent, the Borrowers may at any time in whole permanently
terminate, or from time to time in part permanently reduce, the Commitments.
Each such reduction shall be in the principal amount of $5,000,000 or any
integral multiple thereof. Each such reduction or termination shall (i) be
applied ratably to the Commitments of each Lender and (ii) be irrevocable when
given. At the effective time of each such reduction or termination, the
Borrowers shall pay to the Administrative Agent for application as provided
herein (i) all Commitment Fees accrued on the amount of the Commitments so
terminated or reduced through the date thereof, and (ii) any amount by which the
Credit Extensions outstanding on such date exceed the amount to which the
Commitments are to be reduced effective on such date, in each case PRO RATA
based on the amount prepaid.
SECTION 2.16 ALTERNATE RATE OF INTEREST.
If prior to the commencement of any Interest Period for a Eurodollar
Borrowing:
(a) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders that
the Adjusted LIBO Rate for such Interest Period will not adequately and fairly
reflect the cost to such Lenders (or Lender) of making or maintaining their
Loans (or its Loan) included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrowers and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrowers and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Borrowing
Request that requests the conversion of any Borrowing to, or continuation of any
Borrowing as, a Eurodollar Borrowing shall be ineffective and (ii) if any
Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made
as a Borrowing of Base Rate Loans.
SECTION 2.17 CONVERSION AND CONTINUATION OF LOANS.
The Lead Borrower on behalf of the Borrowers shall have the right at
any time, on three Business Days' prior irrevocable notice to the Administrative
Agent (which notice, to be effective, must be received by the Administrative
Agent not later than 11:00 a.m., Boston time, on the third Business Day
preceding the date of any conversion), (x) to convert any outstanding Borrowings
of Loans (but in no event Swingline Loans) of one Type (or a portion thereof) to
a Borrowing of Loans of the other Type or (y) to continue an outstanding
Borrowing of Eurodollar Loans for an additional Interest Period, subject to the
following:
(a) no Borrowing of Loans may be converted into, or continued as,
Eurodollar Loans at any time when an Event of Default has occurred and is
continuing (nothing contained herein
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being deemed to obligate the Borrowers to incur Breakage Costs upon the
occurrence of an Event of Default unless the Obligations are accelerated);
(b) if less than a full Borrowing of Loans is converted, such
conversion shall be made PRO RATA among the Lenders, as applicable, in
accordance with the respective principal amounts of the Loans comprising such
Borrowing held by such Lenders immediately prior to such refinancing;
(c) the aggregate principal amount of Loans being converted into or
continued as Eurodollar Loans shall be in an integral of $1,000,000 and at least
$5,000,000;
(d) each Lender shall effect each conversion by applying the proceeds
of its new Eurodollar Loan or Base Rate Loan, as the case may be, to its Loan
being so converted;
(e) the Interest Period with respect to a Borrowing of Eurodollar Loans
effected by a conversion or in respect to the Borrowing of Eurodollar Loans
being continued as Eurodollar Loans shall commence on the date of conversion or
the expiration of the current Interest Period applicable to such continuing
Borrowing, as the case may be;
(f) a Borrowing of Eurodollar Loans may be converted only on the last
day of an Interest Period applicable thereto;
(g) each request for a conversion or continuation of a Borrowing of
Eurodollar Loans which fails to state an applicable Interest Period shall be
deemed to be a request for an Interest Period of one month; and
(h) no more than five (5) Borrowings of Eurodollar Loans may be
outstanding at any time.
If the Lead Borrower does not give notice to convert any Borrowing of Eurodollar
Loans, or does not give notice to continue, or does not have the right to
continue, any Borrowing as Eurodollar Loans, in each case as provided above,
such Borrowing shall automatically be converted to a Borrowing of Base Rate
Loans at the expiration of the then-current Interest Period. The Administrative
Agent shall, after it receives notice from the Lead Borrower, promptly give each
Lender notice of any conversion, in whole or part, of any Loan made by such
Lender.
SECTION 2.18 MANDATORY PREPAYMENT; COMMITMENT TERMINATION; CASH
COLLATERAL.
The outstanding Obligations shall be subject to mandatory prepayment as
follows:
(a) If at any time the amount of the Credit Extensions exceeds the
lower of (i) the then amount of the Commitments and (ii) the then amount of the
Borrowing Base, the Borrowers will immediately upon notice from the
Administrative Agent (A) prepay the Loans in an amount necessary to eliminate
such excess, with payments first being applied to Revolving Loans and then to
the Term Loans, and (B) if, after giving effect to the prepayment in full of all
outstanding
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Loans such excess has not been eliminated, deposit cash into the Cash Collateral
Account in an amount equal to 105% of the Letters of Credit Outstanding.
(b) The Revolving Loans shall be repaid daily in accordance with the
provisions of Section 2.21(i) hereof.
(c) In the event and on each occasion that any Net Proceeds are
received by or on behalf of a Borrower in respect of any Prepayment Event, the
Borrowers shall, immediately after such Net Proceeds are received, prepay the
Loans in an aggregate principal amount equal to (i) if an Event of Default then
exists, such Net Proceeds, or (ii) if no Event of Default then exists, the
Prepayment Amount. The Net Proceeds prepaid from any Prepayment Event shall be
paid FIRST, in reduction of the Swingline Loans, SECOND, in reduction of the
other Loans, with payments first being applied, if no Event of Default then
exists, to Revolving Loans and then to the Term Loans, THIRD, if an Event of
Default then exists, to the Cash Collateral Account as collateral for the Letter
of Credit Outstandings up to 105% thereof, FOURTH,, to all other Obligations. If
all Obligations are paid, any excess Net Proceeds shall be deposited in a
separate cash collateral account, and as long as no Event of Default then
exists, shall be released to the Borrowers upon the request of the Lead Borrower
and utilized by the Borrowers prior to any further Revolving Loans being made.
(d) Subject to the foregoing, outstanding Base Rate Loans shall be
prepaid before outstanding Eurodollar Loans are prepaid. Each partial prepayment
of Eurodollar Loans shall be in an integral multiple of $1,000,000. No
prepayment of Eurodollar Loans shall be permitted pursuant to this Section 2.18
other than on the last day of an Interest Period applicable thereto, unless the
Borrowers simultaneously reimburse the Lenders for all "Breakage Costs" (as
defined below) associated therewith. In order to avoid such Breakage Costs, as
long as no Event of Default has occurred and is continuing, at the request of
the Lead Borrower, the Administrative Agent shall hold all amounts required to
be applied to Eurodollar Loans in the Cash Collateral Account and will apply
such funds to the applicable Eurodollar Loans at the end of the then pending
Interest Period therefor (provided that the foregoing shall in no way limit or
restrict the Agents' rights upon the subsequent occurrence of an Event of
Default). No partial prepayment of a Borrowing of Eurodollar Loans shall result
in the aggregate principal amount of the Eurodollar Loans remaining outstanding
pursuant to such Borrowing being less than $5,000,000. Any prepayment of the
Term Loans shall permanently reduce the Term Commitments; any prepayment of the
Revolving Loans shall not permanently reduce the Revolving Commitments.
(e) All amounts required to be applied to all Loans hereunder (other
than Swingline Loans) shall be applied ratably in accordance with each Lender's
Commitment Percentage; all amounts required to be applied to Revolving Loans
hereunder (other than Swingline Loans) shall be applied ratably in accordance
with each Revolving Lender's Revolving Commitment Percentage; and all amounts
required to be applied to Term Loans hereunder shall be applied ratably in
accordance with each Term Lender's Term Commitment Percentage.
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(f) Upon the Termination Date, the credit facility provided hereunder
shall be terminated in full and the Borrowers shall pay, in full and in cash,
all outstanding Loans and all other outstanding Obligations.
SECTION 2.19 OPTIONAL PREPAYMENT OF LOANS; REIMBURSEMENT OF LENDERS.
(a) The Borrowers shall have the right at any time and from time to
time to prepay outstanding Loans in whole or in part, (x) with respect to
Eurodollar Loans, upon at least two Business Days' prior written, telex or
facsimile notice to the Administrative Agent prior to 11:00 a.m., Boston time,
and (y) with respect to Base Rate Loans, on the same Business Day if written,
telex or facsimile notice is received by the Administrative Agent prior to 1:00
p.m., Boston time, subject to the following limitations:
(i) Subject to Section 2.18, all prepayments shall be
paid to the Administrative Agent for application, FIRST, to
the prepayment of outstanding Swingline Loans, SECOND, to the
prepayment of other outstanding Loans ratably in accordance
with each Lender's Commitment Percentage, and THIRD, to the
funding of a cash collateral deposit in the Cash Collateral
Account in an amount equal to 105% of all Letter of Credit
Outstandings.
(ii) Subject to the foregoing, outstanding Base Rate
Loans shall be prepaid before outstanding Eurodollar Loans are
prepaid. Each partial prepayment of Eurodollar Loans shall be
in an integral multiple of $1,000,000. No prepayment of
Eurodollar Loans shall be permitted pursuant to this Section
2.19 other than on the last day of an Interest Period
applicable thereto, unless the Borrowers simultaneously
reimburse the Lenders for all "Breakage Costs" (as defined
below) associated therewith. No partial prepayment of a
Borrowing of Eurodollar Loans shall result in the aggregate
principal amount of the Eurodollar Loans remaining outstanding
pursuant to such Borrowing being less than $5,000,000.
(iii) Each notice of prepayment shall specify the
prepayment date, the principal amount and Type of the Loans to
be prepaid and, in the case of Eurodollar Loans, the Borrowing
or Borrowings pursuant to which such Loans were made. Each
notice of prepayment shall be irrevocable and shall commit the
Borrowers to prepay such Loan by the amount and on the date
stated therein. The Administrative Agent shall, promptly after
receiving notice from the Borrowers hereunder, notify each
Lender of the principal amount and Type of the Loans held by
such Lender which are to be prepaid, the prepayment date and
the manner of application of the prepayment.
(b) The Borrowers shall reimburse each Lender on demand for any loss
incurred or to be incurred by it in the reemployment of the funds released (i)
resulting from any prepayment (for any reason whatsoever, including, without
limitation, conversion to Base Rate Loans or acceleration by virtue of, and
after, the occurrence of an Event of Default) of any Eurodollar
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Loan required or permitted under this Agreement, if such Loan is prepaid other
than on the last day of the Interest Period for such Loan or (ii) in the event
that after the Lead Borrower delivers a notice of borrowing under Section 2.03
in respect of Eurodollar Loans, such Loans are not made on the first day of the
Interest Period specified in such notice of borrowing for any reason other than
a breach by such Lender of its obligations hereunder or the delivery of any
notice pursuant to Section 2.16. Such loss shall be the amount as reasonably
determined by such Lender as the excess, if any, of (A) the amount of interest
which would have accrued to such Lender on the amount so paid or not borrowed at
a rate of interest equal to the Adjusted LIBO Rate for such Loan, for the period
from the date of such payment or failure to borrow to the last day (x) in the
case of a payment or refinancing with Base Rate Loans other than on the last day
of the Interest Period for such Loan, of the then current Interest Period for
such Loan or (y) in the case of such failure to borrow, of the Interest Period
for such Loan which would have commenced on the date of such failure to borrow,
over (B) the amount of interest which would have accrued to such Lender on such
amount by placing such amount on deposit for a comparable period with leading
banks in the London interbank market (collectively, "BREAKAGE COSTS"). Any
Lender demanding reimbursement for such loss shall deliver to the Borrowers from
time to time one or more certificates setting forth the amount of such loss as
determined by such Lender and setting forth in reasonable detail the manner in
which such amount was determined.
(c) In the event the Borrowers fail to prepay any Loan on the date
specified in any prepayment notice delivered pursuant to Section 2.19(a), the
Borrowers on demand by any Lender shall pay to the Administrative Agent for the
account of such Lender any amounts required to compensate such Lender for any
loss incurred by such Lender as a result of such failure to prepay, including,
without limitation, any loss, cost or expenses incurred by reason of the
acquisition of deposits or other funds by such Lender to fulfill deposit
obligations incurred in anticipation of such prepayment. Any Lender demanding
such payment shall deliver to the Borrowers from time to time one or more
certificates setting forth the amount of such loss as determined by such Lender
and setting forth in reasonable detail the manner in which such amount was
determined.
(d) Whenever any partial prepayment of Loans are to be applied to
Eurodollar Loans, such Eurodollar Loans shall be prepaid in the chronological
order of their Interest Payment Dates.
SECTION 2.20 MAINTENANCE OF LOAN ACCOUNT; STATEMENTS OF ACCOUNT.
(a) The Administrative Agent shall maintain an account on its books in
the name of the Borrowers (the "LOAN ACCOUNT") which will reflect (i) all
Swingline Loans and all loans and advances made by the Lenders to the Borrowers
or for the Borrowers' account, including the Loans, (ii) all L/C Disbursements,
fees and interest that have become payable as herein set forth, and (iii) any
and all other Obligations that have become payable.
(b) The Loan Account will be credited with all amounts received by the
Administrative Agent from the Borrowers or from others for the Borrowers'
account, including all amounts received in the FRF Concentration Account from
the Blocked Account Banks, and
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the amounts so credited shall be applied as set forth in Sections 2.22(a) and
(b). After the end of each month, the Administrative Agent shall send to the
Borrowers a statement accounting for the charges, loans, advances and other
transactions occurring among and between the Administrative Agent, the Lenders
and the Borrowers during that month. The monthly statements shall, absent
manifest error, be an account stated, which is final, conclusive and binding on
the Borrowers.
SECTION 2.21 CASH RECEIPTS.
(a) Annexed hereto as SCHEDULE 2.21(a) is a list of all present DDAs,
which Schedule includes, with respect to each depository (i) the name and
address of that depository; (ii) the account number(s) maintained with such
depository; and (iii) to the extent known, a contact person at such depository.
(b) Annexed hereto as SCHEDULE 2.21(b) is a list describing all
arrangements to which any Borrower is a party with respect to the payment to any
Borrower of the proceeds of all credit card charges for sales by any Borrower.
(c) On or prior to the Closing Date, the Borrowers shall (i) deliver to
the Administrative Agent notifications executed on behalf of the Borrowers to
each depository institution with which any DDA is maintained in form
satisfactory to the Administrative Agent, of the Administrative Agent's interest
in such DDA (each, a "DDA NOTIFICATION"), and (ii) deliver to the Administrative
Agent notifications executed on behalf of the Borrowers to each of the
Borrower's credit card clearinghouses and processors of notice in form
satisfactory to the Administrative Agent, (each, a "CREDIT CARD NOTIFICATION"),
and (iii) entered into agency agreements with the banks maintaining the deposit
accounts identified on Schedule 2.21(c) (collectively, the "BLOCKED ACCOUNTS"),
which agreements (the "BLOCKED ACCOUNT AGREEMENTS") shall be in form and
substance satisfactory to the Administrative Agent. The DDA Notifications,
Credit Card Notifications and Blocked Account Agreements shall require, after
the occurrence of a Default or Cash Control Event, the sweep on each Business
Day of all available cash receipts from the sale of Inventory and other assets,
all collections of Accounts, and all other cash payments received by the
Borrowers from any Person or from any source or on account of any sale or other
transaction or event (all such cash receipts and collections, "CASH RECEIPTS"),
to a concentration account maintained by the Collateral Agent at Fleet (the "FRF
CONCENTRATION ACCOUNT"). In that regard, after the occurrence of a Default or
Cash Control Event, the Borrowers shall cause the ACH or wire transfer to a
Blocked Account or to the FRF Concentration Account, no less frequently than
daily (and whether or not there is then an outstanding balance in the Loan
Account) of (A) the then contents of each DDA, each such transfer to be net of
any minimum balance, not to exceed $5,000.00, as may be required to be
maintained in the subject DDA by the bank at which such DDA is maintained; and
(B) the proceeds of all credit card charges not otherwise provided for pursuant
hereto. Further, whether or not any Obligations are then outstanding, after the
occurrence of a Default or Cash Control Event, the Borrowers shall cause the ACH
or wire transfer to the FRF Concentration Account, no less frequently than
daily, of the then entire ledger balance of each Blocked Account, net of such
minimum balance, not to exceed $5,000.00, as may be required to be maintained in
the subject Blocked Account by the bank at which such Blocked Account is
maintained. In the event that, notwithstanding the provisions of
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this Section 2.21, after the occurrence of a Default or Cash Control Event, the
Borrowers receive or otherwise have dominion and control of any such proceeds or
collections, such proceeds and collections shall be held in trust by the
Borrowers for the Administrative Agent and shall not be commingled with any of
the Borrowers' other funds or deposited in any account of any Borrower other
than as instructed by the Administrative Agent.
(d) The Borrowers shall accurately report to the Administrative Agent
all amounts deposited in the Blocked Accounts to ensure the proper transfer of
funds as set forth above. If at any time other than the times set forth above
any cash or cash equivalents owned by the Borrowers are deposited to any
account, or held or invested in any manner, otherwise than in a Blocked Account
that is subject to a Blocked Account Agreement, the Administrative Agent shall
require the Borrowers to close such account and have all funds therein
transferred to an account maintained by the Administrative Agent at Fleet and
all future deposits made to a Blocked Account which is subject to a Blocked
Account Agreement.
(e) The Borrowers may close DDAs or Blocked Accounts and/or open new
DDAs or Blocked Accounts, subject to the execution and delivery to the
Administrative Agent of appropriate DDA Notifications or Blocked Account
Agreements (unless expressly waived by the Administrative Agent) consistent with
the provisions of this Section 2.21 and otherwise satisfactory to the
Administrative Agent. Unless consented to in writing by the Administrative
Agent, the Borrowers may not maintain any bank accounts or enter into any
agreements with credit card processors other than the ones expressly
contemplated herein.
(f) The Borrowers may also maintain with the Administrative Agent at
Fleet one or more disbursement accounts (the "FLEET DISBURSEMENT ACCOUNTS") to
be used by the Borrowers for disbursements and payments (including payroll) in
the ordinary course of business or as otherwise permitted hereunder. The only
Disbursement Accounts as of the Closing Date are those described in SCHEDULE
2.21(f).
(g) The FRF Concentration Account is, and shall remain, under the sole
dominion and control of the Collateral Agent. Each Borrower acknowledges and
agrees that (i) such Borrower has no right of withdrawal from the FRF
Concentration Account, (ii) the funds on deposit in the FRF Concentration
Account shall continue to be collateral security for all of the Obligations and
(iii) the funds on deposit in the FRF Concentration Account shall be applied as
provided in Section 2.22(a).
(h) So long as (i) no Default has occurred, and (ii) no Cash Control
Event has occurred, daily, the Borrowers may direct, and shall have sole control
over, the manner of disposition of its funds in the DDA Accounts and Blocked
Accounts. Effective upon notice to the Lead Borrower from the Collateral Agent
(x) after the occurrence of a Default or (y) in the event of a Cash Control
Event (which notice may be given by telephone if promptly confirmed in writing),
the FRF Concentration Account will, without any further action on the part of
any Borrower or the Collateral Agent convert into a closed account under the
exclusive dominion and control of the Collateral Agent in which funds are held
subject to the rights of the Collateral Agent hereunder. In such event, all
amounts in the FRF Concentration Account from time to
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time may be applied to the Obligations in such order and manner as provided in
Section 2.22 hereof, and the Administrative Agent may, in its discretion, but
shall not be obligated to, transfer any amounts in the FRF Concentration Account
to the Fleet Disbursement Accounts.
SECTION 2.22 APPLICATION OF PAYMENTS.
(a) Subject to the provisions of Section 2.21,as long as no Event of
Default then exists, all amounts received in the FRF Concentration Account from
any source, including the Blocked Account Banks, shall be applied, on the day
immediately following receipt, in the following order: FIRST, to pay interest
due and payable on Credit Extensions and to pay fees and expense reimbursements
and indemnification then due and payable to the Administrative Agent, FSI, the
Issuing Bank, the Collateral Agent, and the Lenders; SECOND to repay outstanding
Swingline Loans; THIRD, to repay other outstanding Revolving Loans that are Base
Rate Loans and all outstanding reimbursement obligations under Letters of
Credit; FOURTH, to repay outstanding Revolving Loans that are Eurodollar Loans
and all Breakage Costs due in respect of such repayment pursuant to Section
2.19(b) or, at the Borrowers' option (if no Event of Default has occurred and is
then continuing), to fund a cash collateral deposit to the Cash Collateral
Account sufficient to pay, and with direction to pay, all such outstanding
Eurodollar Loans on the last day of the then-pending Interest Period therefor;
FIFTH if any Event of Default has occurred and is continuing, to fund a cash
collateral deposit in the Cash Collateral Account in an amount equal to 105% of
all Letter of Credit Outstandings; SIXTH, to pay all other Obligations that are
then outstanding and then due and payable. If all Obligations are paid, any
excess amounts shall be deposited in a separate cash collateral account, and as
long as no Event of Default then exists, shall be released to the Borrowers upon
the request of the Lead Borrower and utilized by the Borrowers prior to any
further Revolving Loans being made. Any other amounts received by the
Administrative Agent, the Issuing Bank, the Collateral Agent, or any Lender as
contemplated by Section 2.21 shall also be applied in the order set forth above
in this Section 2.22.
(b) All credits against the Obligations shall be conditioned upon final
payment to the Administrative Agent of the items giving rise to such credits and
shall be subject to one (1) Business Day's clearance and collection. If any item
deposited to the FRF Concentration Account and credited to the Loan Account is
dishonored or returned unpaid for any reason, whether or not such return is
rightful or timely, the Administrative Agent shall have the right to reverse
such credit and charge the amount of such item to the Loan Account and the
Borrowers shall indemnify the Administrative Agent, the Collateral Agent, the
Issuing Bank and the Lenders against all claims and losses resulting from such
dishonor or return.
SECTION 2.23 INCREASED COSTS.
(a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Lender or any holding
company of any Lender (except any such reserve requirement reflected in
the Adjusted LIBO Rate) or the Issuing Bank; or
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(ii) impose on any Lender or the Issuing Bank or the London
interbank market any other condition affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit or
participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
Borrowers will pay to such Lender or the Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing Bank,
as the case may be, for such additional costs incurred or reduction suffered.
(b) If any Lender or the Issuing Bank determines that any Change in Law
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender's or the Issuing Bank's capital or on the capital of
such Lender's or the Issuing Bank's holding company, if any, as a consequence of
this Agreement or the Loans made by, or participations in Letters of Credit held
by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level
below that which such Lender or the Issuing Bank or such Lender's or the Issuing
Bank's holding company could have achieved but for such Change in Law (taking
into consideration such Lender's or the Issuing Bank's policies and the policies
of such Lender's or the Issuing Bank's holding company with respect to capital
adequacy), then from time to time the Borrowers will pay to such Lender or the
Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or the Issuing Bank or such Lender's or the Issuing
Bank's holding company for any such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or the Issuing Bank or its
holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section and setting forth in reasonable detail the manner in which such
amount or amounts were determined shall be delivered to the Borrowers and shall
be conclusive absent manifest error. The Borrowers shall pay such Lender or the
Issuing Bank, as the case may be, the amount shown as due on any such
certificate within ten (10) Business Days after receipt thereof.
(d) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's or the Issuing Bank's right to demand such compensation.
SECTION 2.24 CHANGE IN LEGALITY.
(a) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, if (x) any Change in Law shall make it unlawful for a Lender to
make or maintain a Eurodollar Loan or to give effect to its obligations as
contemplated hereby with respect to a Eurodollar Loan or (y) at any time any
Lender determines that the making or continuance of any of its Eurodollar Loans
has become impracticable as a result of a contingency occurring after the date
hereof which adversely affects the London interbank market or the position of
such Lender in the London interbank market, then, by written notice to the
Borrowers, such Lender may (i) declare that Eurodollar Loans will not thereafter
be made by such Lender hereunder, whereupon
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any request by the Borrowers for a Eurodollar Borrowing shall, as to such Lender
only, be deemed a request for an Base Rate Loan unless such declaration shall be
subsequently withdrawn; and (ii) require that all outstanding Eurodollar Loans
made by it be converted to Base Rate Loans, in which event all such Eurodollar
Loans shall be automatically converted to Base Rate Loans as of the effective
date of such notice as provided in paragraph (b) below. In the event any Lender
shall exercise its rights under clause (i) or (ii) of this paragraph (a), all
payments and prepayments of principal which would otherwise have been applied to
repay the Eurodollar Loans that would have been made by such Lender or the
converted Eurodollar Loans of such Lender shall instead be applied to repay the
Base Rate Loans made by such Lender in lieu of, or resulting from the conversion
of, such Eurodollar Loans.
(b) For purposes of this Section 2.24, a notice to the Borrowers by any
Lender pursuant to paragraph (a) above shall be effective, if lawful, and if any
Eurodollar Loans shall then be outstanding, on the last day of the then-current
Interest Period; and otherwise such notice shall be effective on the date of
receipt by the Borrowers.
SECTION 2.25 PAYMENTS; SHARING OF SETOFF.
(a) The Borrowers shall make each payment required to be made by it
hereunder or under any other Loan Document (whether of principal, interest, fees
or reimbursement of drawings under Letters of Credit, or of amounts payable
under Sections 2.19(b), 2.23 or 2.26, or otherwise) prior to 12:00 noon, Boston
time, on the date when due, in immediately available funds, without setoff or
counterclaim. Any amounts received after such time on any date may, in the
discretion of the Administrative Agent, be deemed to have been received on the
next succeeding Business Day for purposes of calculating interest thereon. All
such payments shall be made to the Administrative Agent at its offices at ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, except payments to be made directly to the
Issuing Bank or Swingline Lender as expressly provided herein and except that
payments pursuant to Sections 2.19(b), 2.23, 2.26 and 9.03 shall be made
directly to the Persons entitled thereto and payments pursuant to other Loan
Documents shall be made to the Persons specified therein. The Administrative
Agent shall distribute any such payments received by it for the account of any
other Person to the appropriate recipient promptly following receipt thereof. If
any payment under any Loan Document shall be due on a day that is not a Business
Day, except with respect to Eurodollar Borrowings, the date for payment shall be
extended to the next succeeding Business Day, and, in the case of any payment
accruing interest, interest thereon shall be payable for the period of such
extension. All payments under each Loan Document shall be made in dollars.
(b) If at any time insufficient funds are received by and available to
the Administrative Agent to pay fully all amounts of principal, unreimbursed
drawings under Letters of Credit, interest and fees then due hereunder, such
funds shall be applied (i) first, towards payment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (ii) second, towards
payment of principal and unreimbursed drawings under Letters of Credit then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal and unreimbursed drawings under Letters of Credit then due
to such parties.
(c) If any Lender shall, by exercising any right of setoff or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans or participations in drawings under Letters of
Credit or Swingline Loans resulting in such Lender's
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receiving payment of a greater proportion of the aggregate amount of its Loans
and participations in drawings under Letters of Credit and Swingline Loans and
accrued interest thereon than the proportion received by any other Lender, then
the Lender receiving such greater proportion shall purchase (for cash at face
value) participations in the Loans and participations in drawings under Letters
of Credit and Swingline Loans of other Lenders to the extent necessary so that
the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans and participations in drawings under Letters of Credit
and Swingline Loans, PROVIDED that (i) if any such participations are purchased
and all or any portion of the payment giving rise thereto is recovered, such
participations shall be rescinded and the purchase price restored to the extent
of such recovery, without interest, and (ii) the provisions of this paragraph
shall not be construed to apply to any payment made by the Borrowers pursuant to
and in accordance with the express terms of this Agreement or any payment
obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Loans or participations in drawings under Letters of
Credit to any assignee or participant, other than to the Borrowers or any
Affiliate thereof (as to which the provisions of this paragraph shall apply).
The Borrowers consent to the foregoing and agree, to the extent they may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrowers rights of setoff and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of the Borrowers in the amount
of such participation.
(d) Unless the Administrative Agent shall have received notice from the
Borrowers prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or the Issuing Bank hereunder that the
Borrowers will not make such payment, the Administrative Agent may assume that
the Borrowers have made such payment on such date in accordance herewith and
may, in reliance upon such assumption, distribute to the Lenders or the Issuing
Bank, as the case may be, the amount due. In such event, if the Borrowers have
not in fact made such payment, then each of the Lenders or the Issuing Bank, as
the case may be, severally agrees to repay to the Administrative Agent forthwith
on demand the amount so distributed to such Lender or Issuing Bank with interest
thereon, for each day from and including the date such amount is distributed to
it to but excluding the date of payment to the Administrative Agent, at the
greater of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation.
(e) If any Lender shall fail to make any payment required to be made by
it pursuant to this Agreement, then the Administrative Agent may, in its
discretion (notwithstanding any contrary provision hereof), apply any amounts
thereafter received by the Administrative Agent for the account of such Lender
to satisfy such Lender's obligations under such Sections until all such
unsatisfied obligations are fully paid.
SECTION 2.26 TAXES.
(a) Any and all payments by or on account of any obligation of the
Borrowers hereunder or under any other Loan Document shall be made free and
clear of and without deduction for any Indemnified Taxes or Other Taxes,
PROVIDED that if the Borrowers shall be required to deduct any Indemnified Taxes
or Other Taxes from such payments, then (i) the sum payable shall be increased
as necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section) the Administrative
Agent,
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Lender or Issuing Bank (as the case may be) receives an amount equal to the sum
it would have received had no such deductions been made, (ii) the Borrowers
shall make such deductions and (iii) the Borrowers shall pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable
law.
(b) In addition, the Borrowers shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrowers shall indemnify the Administrative Agent, each Lender
and the Issuing Bank, within 10 Business Days after written demand therefor, for
the full amount of any Indemnified Taxes or Other Taxes paid by the
Administrative Agent, such Lender or the Issuing Bank, as the case may be, on or
with respect to any payment by or on account of any obligation of the Borrowers
hereunder or under any other Loan Document (including Indemnified Taxes or Other
Taxes imposed or asserted on or attributable to amounts payable under this
Section) and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability delivered
to the Borrowers by a Lender or the Issuing Bank, or by the Administrative Agent
on its own behalf or on behalf of a Lender or the Issuing Bank setting forth in
reasonable detail the manner in which such amount was determined, shall be
conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrowers to a Governmental Authority, the Borrowers shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction in withholding tax shall deliver to the Borrowers and the
Administrative Agent two copies of either United States Internal Revenue Service
Form 1001 or Form 4224, or, in the case of a Foreign Lender's claiming exemption
from or reduction in U.S. Federal withholding tax under Section 871(h) or 881(c)
of the Code with respect to payments of "portfolio interest", a Form W-8, or any
subsequent versions thereof or successors thereto (and, if such Foreign Lender
delivers a Form W-8, a certificate representing that such Foreign Lender is not
a bank for purposes of Section 881(c) of the Code, is not a 10-percent
shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of the
Borrowers and is not a controlled foreign corporation related to the Borrowers
(within the meaning of Section 864(d)(4) of the Code)), properly completed and
duly executed by such Foreign Lender claiming complete exemption from or reduced
rate of, U.S. Federal withholding tax on payments by the Borrowers under this
Agreement and the other Loan Documents. Such forms shall be delivered by each
Foreign Lender on or before the date it becomes a party to this Agreement (or,
in the case of a transferee that is a participation holder, on or before the
date such participation holder becomes a transferee hereunder) and on or before
the date, if any, such Foreign Lender changes its applicable lending office by
designating a different lending office (a "New Lending Office"). In addition,
each Foreign Lender shall deliver such forms promptly upon the obsolescence or
invalidity of any form previously delivered by such Foreign Lender.
Notwithstanding any other provision of this Section 2.26(e), a Foreign Lender
shall not be required to deliver any form pursuant to this 2.26(e) that such
Foreign Lender is not legally able to deliver.
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(f) The Borrowers shall not be required to indemnify any Foreign Lender
or to pay any additional amounts to any Foreign Lender in respect of U.S.
Federal withholding tax pursuant to paragraph (a) or (c) above to the extent
that the obligation to pay such additional amounts would not have arisen but for
a failure by such Foreign Lender to comply with the provisions of paragraph (e)
above. Should a Lender become subject to Taxes because of its failure to deliver
a form required hereunder, the Borrowers shall, at such Lender's expense, take
such steps as such Lender shall reasonably request to assist such Lender to
recover such Taxes.
SECTION 2.27 SECURITY AND MORTGAGE INTERESTS IN COLLATERAL.
To secure their Obligations under this Agreement and the other Loan
Documents, the Borrowers shall grant to the Collateral Agent, for its benefit
and the ratable benefit of the other Secured Parties, a first-priority security
and mortgage interest in all of the Collateral pursuant hereto and to the
Security Documents.
SECTION 2.28 MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS.
(a) If any Lender requests compensation under Section 2.23, or if the
Borrowers are required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.26,
then such Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender, such designation or assignment (i) would eliminate
or reduce amounts payable pursuant to Section 2.23 or 2.26, as the case may be,
in the future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrowers
hereby agree to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment; PROVIDED, HOWEVER, that the
Borrowers shall not be liable for such costs and expenses of a Lender requesting
compensation if (i) such Lender becomes a party to this Agreement on a date
after the Closing Date and (ii) the relevant Change in Law occurs on a date
prior to the date such Lender becomes a party hereto.
(b) If any Lender requests compensation under Section 2.23, or if the
Borrowers are required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.26,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrowers may, at their sole expense and effort, upon notice to such Lender and
the Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.05), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment), PROVIDED that (i) the Borrowers
shall have received the prior written consent of the Administrative Agent, the
Issuing Bank and Swingline Lender, which consent shall not unreasonably be
withheld, (ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and participations in unreimbursed drawings
under Letters of Credit and Swingline Loans, accrued interest thereon, accrued
fees and all other amounts payable to it hereunder, from the assignee (to the
extent of such outstanding principal and accrued interest and fees) or the
Borrowers (in the case of all other amounts) and (iii) in the case of any such
assignment resulting from a claim for compensation under Section 2.23 or
payments
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required to be made pursuant to Section 2.26, such assignment will result in a
reduction in such compensation or payments. A Lender shall not be required to
make any such assignment and delegation if, prior thereto, as a result of a
waiver by such Lender or otherwise, the circumstances entitling the Borrowers to
require such assignment and delegation cease to apply.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each Loan Party represents and warrants to the Agents and the Lenders
that:
SECTION 3.1 ORGANIZATION; POWERS. Each Loan Party is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, has all requisite power and authority to carry on its business as
now conducted and, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, is qualified to do business in, and is in good standing in, every
jurisdiction where such qualification is required.
SECTION 3.2 AUTHORIZATION; ENFORCEABILITY. The transactions
contemplated hereby and by the other Loan Documents to be entered into by each
Loan Party are within such Loan Party's corporate powers and have been duly
authorized by all necessary corporate and, if required, stockholder action. This
Agreement has been duly executed and delivered by each Loan Party that is a
party hereto and constitutes, and each other Loan Document to which any Loan
Party is a party, when executed and delivered by such Loan Party will
constitute, a legal, valid and binding obligation of such Loan Party (as the
case may be), enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.
SECTION 3.3 GOVERNMENTAL APPROVALS; NO CONFLICTS. The transactions to
be entered into contemplated by the Loan Documents (a) do not require any
consent or approval of, registration or filing with, or any other action by, any
Governmental Authority, except for such as have been obtained or made and are in
full force and effect and except filings and recordings necessary to perfect
Liens created under the Loan Documents, (b) will not violate any applicable law
or regulation or the charter, by-laws or other organizational documents of any
Loan Party or any order of any Governmental Authority, (c) will not violate or
result in a default under any indenture, agreement or other instrument binding
upon any Loan Party or its assets, or give rise to a right thereunder to require
any payment to be made by any Loan Party, and (d) will not result in the
creation or imposition of any Lien on any asset of any Loan Party, except Liens
created under the Loan Documents.
SECTION 3.4 FINANCIAL CONDITION. The Lead Borrower has heretofore
furnished to the Lenders the consolidated balance sheet, and statements of
income, stockholders' equity, and cash flows for the Lead Borrower and its
Subsidiaries as of and for the fiscal year ending February 3, 2001 and as of and
for the fiscal month ending March 3, 2001, certified by a Financial Officer of
the Borrowers. Such financial statements present fairly, in all material
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respects, the financial position, results of operations and cash flows of the
Lead Borrower and its Subsidiaries as of such dates and for such periods in
accordance with GAAP, subject to year end audit adjustments and the absence of
footnotes. Since the date of such financial statements, there have been no
changes in the assets, liabilities, financial condition, business or prospects
of the Borrowers other than changes in the ordinary course of business, the
effect of which has not been materially adverse.
SECTION 3.5 PROPERTIES. (a) Except as disclosed in Schedules 3.05(c)(i)
and 3.05(c)(ii), each Loan Party has good title to, or valid leasehold interests
in, all its real and personal property material to its business, except for
defects which could not reasonably be expected to have a Material Adverse
Effect.
(b) Each Loan Party owns, or is licensed to use, all trademarks, trade
names, copyrights, patents and other intellectual property material to its
business, and the use thereof by the Loan Parties does not infringe upon the
rights of any other Person, except for any such infringements that, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.
(c) Schedule 3.05(c)(i) sets forth the address (including county) of
all Real Estate that is owned by the Loan Parties as of the Closing Date,
together with a list of the holders of any mortgage or other Lien thereon.
Schedule 3.05(c)(ii) sets forth the address (including county) of all Real
Estate that is leased by the Loan Parties as of the Closing Date, together with
a list of the holders of any mortgage or other Lien thereon.
SECTION 3.6 LITIGATION AND ENVIRONMENTAL MATTERS. (a) There are no
actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of any Borrower, threatened
against or affecting any Loan Party (i) as to which there is a reasonable
possibility of an adverse determination and that, if adversely determined, could
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect (other than those set forth on Schedule 3.06) or (ii)
that involve any of the Loan Documents.
(b) Except for the matters set forth on Schedule 3.06and except with
respect to any other matters that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, no Loan Party (i)
has failed to comply with any Environmental Law or to obtain, maintain or comply
with any permit, license or other approval required under any Environmental Law,
(ii) has become subject to any Environmental Liability, (iii) has received
notice of any claim with respect to any Environmental Liability or (iv) knows of
any basis for any Environmental Liability.
(c) Since the date of this Agreement, there has been no change in the
status of the matters set forth on Schedule 3.06 that, individually or in the
aggregate, has resulted in, or could reasonably be expected to result in, a
Material Adverse Effect.
SECTION 3.7 COMPLIANCE WITH LAWS AND AGREEMENTS. Each Loan Party is in
compliance with all laws, regulations and orders of any Governmental Authority
applicable to it or its property and all indentures, material agreements and
other instruments binding upon it or its property, and except where the failure
to do so, individually or in the aggregate, could not
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reasonably be expected to result in a Material Adverse Effect. No Default has
occurred and is continuing.
SECTION 3.8 INVESTMENT AND HOLDING COMPANY STATUS. No Loan Party is (a)
an "investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940 or (b) a "holding company" as defined in, or
subject to regulation under, the Public Utility Holding Company Act of 1935.
SECTION 3.9 TAXES. Each Loan Party has timely filed or caused to be
filed all tax returns and reports required to have been filed and has paid or
caused to be paid all taxes required to have been paid by it, except (a) taxes
that are being contested in good faith by appropriate proceedings, for which
such Loan Party has set aside on its books adequate reserves, and as to which no
Lien has arisen, or (b) to the extent that the failure to do so could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 3.10 ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed by more
than $500,000 the fair market value of the assets of such Plan, and the present
value of all accumulated benefit obligations of all underfunded Plans (based on
the assumptions used for purposes of Statement of Financial Accounting Standards
No. 87) did not, as of the date of the most recent financial statements
reflecting such amounts, exceed by more than $1,000,000 the fair market value of
the assets of all such underfunded Plans.
SECTION 3.11 DISCLOSURE. The Borrowers have disclosed to the Lenders
all agreements, instruments and corporate or other restrictions to which any
Loan Party is subject, and all other matters known to any of them, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. None of any of the reports, financial statements,
certificates or other information furnished by or on behalf of any Loan Party to
the Administrative Agent or any Lender in connection with the negotiation of
this Agreement or any other Loan Document or delivered hereunder or thereunder
(as modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
SECTION 3.12 SUBSIDIARIES. Schedule 3.12 sets forth the name of, and
the ownership interest of each Loan Party in each Subsidiary as of the Closing
Date. The Loan Parties are not party to any joint venture, general or limited
partnership, or limited liability company, agreements or any other business
ventures or entities.
SECTION 3.13 INSURANCE. Schedule 3.13 sets forth a description of all
insurance maintained by or on behalf of the Borrowers and their Subsidiaries as
of the Closing Date. As of
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the Closing Date, all premiums in respect of such insurance that are due and
payable have been paid.
SECTION 3.14 LABOR MATTERS. As of the Closing Date, there are no
strikes, lockouts or slowdowns against any Loan Party pending or, to the
knowledge of the Borrowers, threatened. The hours worked by and payments made to
employees of the Loan Parties have not been in violation of the Fair Labor
Standards Act or any other applicable federal, state, local or foreign law
dealing with such matters to the extent that any such violation could reasonably
be expected to have a Material Adverse Effect. All payments due from any Loan
Party, or for which any claim may be made against any Loan Party, on account of
wages and employee health and welfare insurance and other benefits, have been
paid or accrued as a liability on the books of such member. The consummation of
the transactions contemplated by the Loan Documents will not give rise to any
right of termination or right of renegotiation on the part of any union under
any collective bargaining agreement to which any Loan Party is bound.
SECTION 3.15 SECURITY DOCUMENTS. The Security Documents create in favor
of the Collateral Agent, for the ratable benefit of the Secured Parties, a
legal, valid and enforceable security or mortgage interest in the Collateral, as
applicable, and the Security Documents constitute the creation of a fully
perfected first priority Lien on, and security or mortgage interest, as
applicable, in, all right, title and interest of the Loan Parties thereunder in
such Collateral, in each case prior and superior in right to any other Person.
SECTION 3.16 FEDERAL RESERVE REGULATIONS. (a) No Loan Party is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of buying or carrying Margin Stock.
(b) No part of the proceeds of any Loan or any Letter of Credit will be
used, whether directly or indirectly, and whether immediately, incidentally or
ultimately, (i) to buy or carry Margin Stock or to extend credit to others for
the purpose of buying or carrying Margin Stock or to refund indebtedness
originally incurred for such purpose or (ii) for any purpose that entails a
violation of, or that is inconsistent with, the provisions of the Regulations of
the Board, including Regulation U or X.
(c) Less than 25% of the assets of the Borrowers on a consolidated
basis consist of Margin Stock.
SECTION 3.17 SOLVENCY. Each of the Loan Parties is Solvent. No transfer
of property is being made by any Loan Party and no obligation is being incurred
by any Loan Party in connection with the transactions contemplated by this
Agreement or the other Loan Documents with the intent to hinder, delay, or
defraud either present or future creditors of any Loan Party.
ARTICLE IV
CONDITIONS
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SECTION 4.1 CLOSING DATE. The obligation of the Lenders to make each
Loan and of the Issuing Bank to issue each Letter of Credit, including the
initial Loan and the initial Letter of Credit, is subject to the following
conditions precedent:
(a) The Agents (or their counsel) shall have received from each party
hereto other than the Lenders either (i) a counterpart of this Agreement and all
other Loan Documents signed on behalf of such party or (ii) written evidence
satisfactory to the Agents (which may include telecopy transmission of a signed
signature page of this Agreement) that such party has signed a counterpart of
this Agreement and all other Loan Documents.
(b) The Agents shall have received a favorable written opinion
(addressed to each Agent and the Lenders and dated the Closing Date) of
▇▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇, LLP, counsel for the Loan Parties substantially in the
form of Exhibit C, and covering such other matters relating to the Loan Parties,
the Loan Documents or the transactions contemplated thereby as the Required
Lenders shall reasonably request. The Borrowers hereby request such counsel to
deliver such opinion.
(c) The Agents shall have received such documents and certificates as
the Agents or their counsel may reasonably request relating to the organization,
existence and good standing of each Loan Party, the authorization of the
transactions contemplated by the Loan Documents and any other legal matters
relating to the Borrowers, the Facility Guarantors, the Loan Documents or the
transactions contemplated thereby, all in form and substance satisfactory to the
Agents and their counsel.
(d) After giving effect to the first funding under the Loans; any
charges to the Loan Account made in connection with the establishment of the
credit facility contemplated hereby; and all Letters of Credit to be issued at,
or immediately subsequent to, such establishment, Excess Availability shall be
not less than $75,000,000. The Agents shall have received a Borrowing Base
Certificate dated the Closing Date, relating to the month ended on March 31,
2001, and executed by a Financial Officer of the Lead Borrower.
(e) The Agents shall have received a certificate, reasonably
satisfactory in form and substance to the Agents, with respect to the solvency
of the Lead Borrower and its Subsidiaries on a consolidated basis as of the
Closing Date.
(f) The consummation of the transactions contemplated hereby shall not
(a) violate any applicable law, statute, rule or regulation or (b) conflict
with, or result in a default or event of default under, any material agreement
of any Loan Party.
(g) All necessary consents and approvals to the transactions
contemplated hereby shall have been obtained and shall be satisfactory to the
Agents.
(h) The Collateral Agent shall have received (a) appraisals of the
Collateral consisting of Inventory and Real Estate by a third party appraiser
acceptable to the Collateral Agent; and (b) title insurance, environmental site
assessments, and other real estate requirements, as may be reasonably requested
by the Collateral Agent, including, but not limited to, those items
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required by the Financial Institutions Reform, Recovery and Enforcement Act of
1989, as amended, and the rules and regulations adopted pursuant thereto.
(i) The Agents shall be reasonably satisfied that any financial
statements delivered to them fairly present the business and financial condition
of the Borrowers and their Subsidiaries, and that there has been no material
adverse change in the assets, business, financial condition, income or prospects
of the Borrowers and their Subsidiaries since the date of the most recent
financial information delivered to the Agents.
(j) The Administrative Agent shall have received and be satisfied with
monthly detailed one-year financial projections and business assumptions for the
Borrowers and their Subsidiaries.
(k) There shall not be pending any litigation or other proceeding, the
result of which could reasonably be expected to have a Material Adverse Effect.
(l) There shall not have occurred any default of any material contract
or agreement of any Loan Party, including, without limitation, under the
Indenture.
(m) The Collateral Agent shall have received results of searches or
other evidence reasonably satisfactory to the Collateral Agent (in each case
dated as of a date reasonably satisfactory to the Collateral Agent) indicating
the absence of liens on the assets of the Loan Parties, except for liens for
which termination statements and releases reasonably satisfactory to the
Collateral Agent are being tendered concurrently with such extension of credit.
(n) The Collateral Agent shall have received all documents and
instruments, including Uniform Commercial Code financing statements and
mortgages, required by law or reasonably requested by the Collateral Agent to be
filed, registered or recorded to create or perfect the first priority Liens
intended to be created under the Loan Documents and all such documents and
instruments shall have been so filed, registered or recorded to the satisfaction
of the Collateral Agent.
(o) All fees due at or immediately after the Closing Date and all costs
and expenses incurred by the Agents in connection with the establishment of the
credit facility contemplated hereby (including the fees and expenses of counsel
to the Agents) shall have been paid in full.
(p) The consummation of the transactions contemplated hereby shall not
(a) violate any applicable law or (b) conflict with, or result in a default or
event of default under, any material agreement of any Loan Party, including,
without limitation, under the Indenture (and the Agents and the Lenders shall
receive a satisfactory opinion of Loan Parties' counsel to that effect). No
event shall exist which is, or solely with the passage of time, the giving of
notice or both, would be a default under any material agreement of any Loan
Party.
(q) No material changes in governmental regulations or policies
affecting the Loan Parties, the Agents, the Arranger or any Lender involved in
this transaction shall have occurred prior to the Closing Date.
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(r) There shall not have occurred any disruption or material adverse
change in the financial or capital markets in general that would, in the
reasonable opinion of the Agents, have a material adverse effect on the market
for loan syndications or adversely affecting the syndication of the Loans.
(s) There shall be no events of default on the Closing Date on any long
term debt held by any of the Borrowers or Facility Guarantors.
(t) (i) All obligations under the Existing Synthetic Lease and the
Borrowers' existing senior credit facility with KeyBank National Association
shall have been repaid, (ii) title to the property which is the subject of the
Existing Synthetic Lease shall have been transferred to a Borrower, and (iii)
all Liens with respect to the foregoing financing and lease arrangements on any
of the Borrowers' assets shall have been terminated.
(u) There shall have been delivered to the Administrative Agent such
additional instruments and documents as the Agents or counsel to the Agents
reasonably may require or request.
The Administrative Agent shall notify the Borrowers and the Lenders of the
Closing Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans and of the Issuing
Bank to issue Letters of Credit hereunder shall not become effective unless each
of the foregoing conditions is satisfied (or waived pursuant to Section 9.02) at
or prior to 12:00 noon, Boston time, on April 30, 2001, (and, in the event such
conditions are not so satisfied or waived, this Agreement shall terminate at
such time).
SECTION 4.2 CONDITIONS PRECEDENT TO EACH LOAN AND EACH LETTER OF
CREDIT.
In addition to those conditions described in Section 4.01, the
obligation of the Revolving Lenders to make each Revolving Loan and of the
Issuing Bank to issue each Letter of Credit, is subject to the following
conditions precedent:
(a) NOTICE. The Administrative Agent shall have received a notice with
respect to such Borrowing or issuance, as the case may be, as required by
Article II.
(b) REPRESENTATIONS AND WARRANTIES. All representations and warranties
contained in this Agreement and the other Loan Documents or otherwise made in
writing in connection herewith or therewith shall be true and correct in all
material respects on and as of the date of each Borrowing or the issuance of
each Letter of Credit hereunder with the same effect as if made on and as of
such date, other than representations and warranties that relate solely to an
earlier date.
(c) NO DEFAULT. On the date of each Borrowing hereunder and the
issuance of each Letter of Credit, the Loan Parties shall be in compliance with
all of the terms and provisions set forth herein and in the other Loan Documents
to be observed or performed and no Default or Event of Default shall have
occurred and be continuing.
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(d) BORROWING BASE CERTIFICATE. The Administrative Agent shall have
received the timely delivery of the most recently required Borrowing Base
Certificate, with each such Borrowing Base Certificate including schedules as
required by the Administrative Agent.
The request by the Borrowers for, and the acceptance by the Borrowers of, each
extension of credit hereunder shall be deemed to be a representation and
warranty by the Borrowers that the conditions specified in this Section 4.02
have been satisfied at that time and that after giving effect to such extension
of credit the Borrowers shall continue to be in compliance with the Borrowing
Base. The conditions set forth in this Section 4.02 are for the sole benefit of
the Administrative Agent and each Revolving Lender and may be waived by the
Administrative Agent in whole or in part without prejudice to the Administrative
Agent or any Revolving Lender.
ARTICLE V
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated and the principal
of and interest on each Loan and all fees payable hereunder shall have been paid
in full and all Letters of Credit shall have expired or terminated and all L/C
Disbursements shall have been reimbursed, each Loan Party covenants and agrees
with the Agents and the Lenders that:
SECTION 5.1 FINANCIAL STATEMENTS AND OTHER INFORMATION. The Borrowers
will furnish to the Agents:
(a) within 95 days after the end of each fiscal year of the Lead
Borrower, its consolidated and consolidating balance sheet and related
statements of operations, stockholders' equity and cash flows as of the end of
and for such year, setting forth in each case in comparative form the figures
for the previous fiscal year, all audited (in the case of such consolidated
statements) and reported on by independent public accountants of recognized
national standing (without a "going concern" or like qualification or exception
and without a qualification or exception as to the scope of such audit) to the
effect that such consolidated financial statements present fairly in all
material respects the financial condition and results of operations of the Lead
Borrower and its consolidated Subsidiaries on a consolidated basis in accordance
with GAAP consistently applied;
(b) within 50 days after the end of each fiscal quarter of the Lead
Borrower, its consolidated balance sheet and related statements of operations,
stockholders' equity and cash flows, and a summary of all Capital Expenditures,
as of the end of and for such fiscal quarter and the elapsed portion of the
fiscal year, all certified by one of its Financial Officers as presenting in all
material respects the financial condition and results of operations of the Lead
Borrower and its consolidated Subsidiaries on a consolidated basis in accordance
with GAAP consistently applied, subject to normal year end audit adjustments and
the absence of footnotes;
(c) within 30 days after the end of each fiscal month of the Lead
Borrower, its consolidated balance sheet and related statements of operations,
stockholders' equity and cash flows, and a summary of all Capital Expenditures,
as of the end of and for such fiscal month and
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the elapsed portion of the fiscal year, all certified by one of its Financial
Officers as presenting in all material respects the financial condition and
results of operations of the Lead Borrower and its consolidated Subsidiaries on
a consolidated basis in accordance with GAAP consistently applied, subject to
normal year end audit adjustments and the absence of footnotes;
(d) concurrently with any delivery of financial statements under clause
(a), (b), or (c) above, a certificate of a Financial Officer of the Lead
Borrower (i) certifying as to whether a Default has occurred and, if a Default
has occurred, specifying the details thereof and any action taken or proposed to
be taken with respect thereto, and (ii) setting forth reasonably detailed
calculations (A) with respect to the performance covenants included in the
definition of "Applicable Margin", and (B) demonstrating compliance with Section
6.11 (whether or not the provisions of Section 6.11 are then applicable), and
(iii) stating whether any change in GAAP or in the application thereof has
occurred since the date of the Lead} Borrower's audited financial statements
referred to in Section 3.04 and, if any such change has occurred, specifying the
effect of such change on the financial statements accompanying such certificate;
(e) within thirty (30) days prior to the commencement of each fiscal
year of the Lead Borrower, a detailed consolidated budget by month for such
fiscal year (including a projected consolidated balance sheet and related
statements of projected operations and cash flow as of the end of and for such
fiscal year) and, promptly when available, any significant revisions of such
budget;
(f) within five (5) days after the end of each Fiscal Period, a
certificate in the form of Exhibit E (a "BORROWING BASE CERTIFICATE") showing
the Borrowing Base as of the close of business on the last day of the
immediately preceding Fiscal Period, each such Certificate to be certified as
complete and correct on behalf of the Borrowers by a Financial Officer of the
Lead Borrower, provided, however, if a Cash Control Event exists, such Borrowing
Base Certificate (showing the Borrowing Base as of the close of business on the
last day of the immediately preceding week) shall be furnished weekly on
Wednesday of each week for such period as such Cash Control Event is deemed to
exist;
(g) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by any
Loan Party with the Securities and Exchange Commission, or any Governmental
Authority succeeding to any or all of the functions of said Commission, or with
any national securities exchange, as the case may be;
(h) promptly upon receipt thereof, copies of all reports submitted to
any Loan Party by independent certified public accountants in connection with
each annual, interim or special audit of the books of the Loan Parties or any of
their Subsidiaries made by such accountants, including any management letter
commenting on the Loan Parties' internal controls submitted by such accountants
to management in connection with their annual audit;
(i) the financial and collateral reports described on Schedule 5.01(m)
hereto, at the times set forth in such Schedule;
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(j) a detailed summary of the Net Proceeds received from any Prepayment
Event within one (1) Business Day after receipt of such proceeds;
(k) notice of any intended sale or other disposition of assets of any
Loan Party permitted hereunder or incurrence of any Indebtedness permitted
hereunder at least thirty (30) Business Days prior to the date of consummation
such sale or disposition or incurrence of such Indebtedness; and
(l) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of any Loan
Party, or compliance with the terms of any Loan Document, as the Agents or any
Lender may reasonably request.
SECTION 5.2 NOTICES OF MATERIAL EVENTS. The Borrowers will furnish to
the Administrative Agent, the Issuing Bank, the Collateral Agent, and each
Lender prompt written notice of the following:
(a) the occurrence of any Default or Event of Default;
(b) the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or affecting any Loan
Party or any Affiliate thereof that, if adversely determined, could reasonably
be expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together with any
other ERISA Events that have occurred, could reasonably be expected to result in
a Material Adverse Effect; and
(d) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
(e) any change in any Borrower's executive officers.
(f) any failure by any Loan Party to pay rent at any of such Loan
Party's locations, which failure continues for more than ten (10) days following
the day on which such rent first came due.
(g) the discharge by any Borrower of their present independent
accountants or any withdrawal or resignation by such independent accountants.
(h) any material change in the business, operations, or financial
affairs of any Loan Party.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Lead Borrower setting
forth the details of the event or development requiring such notice and, if
applicable, any action taken or proposed to be taken with respect thereto.
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SECTION 5.3 INFORMATION REGARDING COLLATERAL. (a) The Lead Borrower
will furnish to the Agents prompt written notice of any change (i) in any Loan
Party's corporate name or in any trade name used to identify it in the conduct
of its business or in the ownership of its properties, (ii) in the location of
any Loan Party's chief executive office, its principal place of business, any
office in which it maintains books or records relating to Collateral owned by it
or any office or facility at which Collateral owned by it is located (including
the establishment of any such new office or facility), (iii) in any Loan Party's
identity or corporate structure or (iv) in any Loan Party's Federal Taxpayer
Identification Number. The Lead Borrower also agrees promptly to notify the
Agents if any material portion of the Collateral is damaged or destroyed.
(b) Each year, at the time of delivery of annual financial statements
with respect to the preceding fiscal year pursuant to clause (a) of Section
5.01, the Lead Borrower shall deliver to the Agents a certificate of a Financial
Officer of the Lead Borrower setting forth the information required pursuant to
Section 2 of the Perfection Certificate or confirming that there has been no
change in such information since the date of the Perfection Certificate
delivered on the Closing Date or the date of the most recent certificate
delivered pursuant to this Section.
SECTION 5.4 EXISTENCE; CONDUCT OF BUSINESS. Each Loan Party will, and
will cause each of the Subsidiaries to, do or cause to be done all things
necessary to comply with its respective charter, certificate of incorporation,
articles of organization, and/or other organizational documents, as applicable;
and by-laws and/or other instruments which deal with corporate governance, and
to preserve, renew and keep in full force and effect its legal existence and the
rights, licenses, permits, privileges, franchises, patents, copyrights,
trademarks and trade names material to the conduct of its business, PROVIDED
that the foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 6.03.
SECTION 5.5 PAYMENT OF OBLIGATIONS. Each Loan Party will, and will
cause each of the Subsidiaries to, pay its Indebtedness and other obligations,
including tax liabilities, before the same shall become delinquent or in
default, except where (a) the validity or amount thereof is being contested in
good faith by appropriate proceedings, (b) such Loan Party or such Subsidiary
has set aside on its books adequate reserves with respect thereto in accordance
with GAAP, (c) such contest effectively suspends collection of the contested
obligation and enforcement of any Lien securing such obligation and (d) the
failure to make payment pending such contest could not reasonably be expected to
result in a Material Adverse Effect. Nothing contained herein shall be deemed to
limit the rights of the Administrative Agent under Section 2.02(b) hereof.
SECTION 5.6 MAINTENANCE OF PROPERTIES. Each Loan Party will, and will
cause each of the Subsidiaries to, keep and maintain all property material to
the conduct of its business in good working order and condition, ordinary wear
and tear excepted and with the exception of storing closings and asset
dispositions permitted hereunder.
SECTION 5.7 INSURANCE. (a) Each Loan Party shall (i) maintain insurance
with financially sound and reputable insurers reasonably acceptable to the
Administrative Agent (or,
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to the extent consistent with prudent business practice, a program of
self-insurance approved by the Administrative Agent) on such of its property and
in at least such amounts and against at least such risks as is customary with
companies in the same or similar businesses operating in the same or similar
locations, including public liability insurance against claims for personal
injury or death occurring upon, in or about or in connection with the use of any
properties owned, occupied or controlled by it (including the insurance required
pursuant to the Security Documents); (ii) maintain such other insurance as may
be required by law; and (iii) furnish to the Administrative Agent, upon written
request, full information as to the insurance carried.
(b) Fire and extended coverage policies maintained with respect to any
Collateral shall be endorsed or otherwise amended to include (i) a
non-contributing mortgage clause (regarding improvements to real property) and
lenders' loss payable clause (regarding personal property), in form and
substance satisfactory to the Collateral Agent, which endorsements or amendments
shall provide that the insurer shall pay all proceeds otherwise payable to the
Loan Parties under the policies directly to the Collateral Agent, (ii) a
provision to the effect that none of the Loan Parties, the Administrative Agent,
the Collateral Agent, or any other party shall be a coinsurer and (iii) such
other provisions as the Collateral Agent may reasonably require from time to
time to protect the interests of the Lenders. Commercial general liability
policies shall be endorsed to name the Collateral Agent as an additional
insured. Business interruption policies shall name the Collateral Agent as a
loss payee and shall be endorsed or amended to include (i) a provision that,
from and after the Closing Date, the insurer shall pay all proceeds otherwise
payable to the Loan Parties under the policies directly to the Administrative
Agent or the Collateral Agent, (ii) a provision to the effect that none of the
Loan Parties, the Administrative Agent, the Collateral Agent or any other party
shall be a co-insurer and (iii) such other provisions as the Collateral Agent
may reasonably require from time to time to protect the interests of the
Lenders. Each such policy referred to in this paragraph also shall provide that
it shall not be canceled, modified or not renewed (i) by reason of nonpayment of
premium except upon not less than 30 days' prior written notice thereof by the
insurer to the Collateral Agent (giving the Collateral Agent the right to cure
defaults in the payment of premiums) or (ii) for any other reason except upon
not less than 60 days' prior written notice thereof by the insurer to the
Collateral Agent. The Borrowers shall deliver to the Collateral Agent, prior to
the cancellation, modification or nonrenewal of any such policy of insurance, a
copy of a renewal or replacement policy (or other evidence of renewal of a
policy previously delivered to the Collateral Agent) together with evidence
satisfactory to the Collateral Agent of payment of the premium therefor.
SECTION 5.8 CASUALTY AND CONDEMNATION. Each Borrower will furnish to
the Agents and the Lenders prompt written notice of any casualty or other
insured damage to any material portion of any Collateral or the commencement of
any action or proceeding for the taking of any material portion of the
Collateral or any part thereof or interest therein under power of eminent domain
or by condemnation or similar proceeding.
SECTION 5.9 BOOKS AND RECORDS; INSPECTION AND AUDIT RIGHTS; APPRAISALS.
(a) Each Loan Party will, and will cause each of the Subsidiaries to, keep
proper books of record and account in which full, true and correct entries are
made of all dealings and transactions in relation to its business and
activities. Each Loan Party will, and will cause each of the Subsidiaries to,
permit any representatives designated by any Agent, upon reasonable prior
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notice, to visit and inspect its properties, to examine and make extracts from
its books and records, and to discuss its affairs, finances and condition with
its officers and independent accountants, all at such reasonable times and as
often as reasonably requested.
(b) Each Loan Party will, and will cause each of the Subsidiaries to,
from time to time upon the request of the Collateral Agent or the Required
Lenders through the Administrative Agent, permit any Agent or professionals
(including investment bankers, consultants, accountants, lawyers and appraisers)
retained by the Agents to conduct appraisals, commercial finance examinations
and other evaluations, including, without limitation, of (i) the Borrowers'
practices in the computation of the Borrowing Base and (ii) the assets included
in the Borrowing Base and related financial information such as, but not limited
to, sales, gross margins, payables, accruals and reserves, and pay the
reasonable fees and expenses of the Agents or such professionals with respect to
such evaluations and appraisals. Without limiting the foregoing, the Loan
Parties acknowledge that the Agents intend to undertake at least three inventory
appraisals and three commercial finance examinations each fiscal year.
SECTION 5.10 COMPLIANCE WITH LAWS. Each Loan Party will, and will cause
each of the Subsidiaries to, comply with all laws, rules, regulations and orders
of any Governmental Authority applicable to it or its property, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 5.11 USE OF PROCEEDS AND LETTERS OF CREDIT. The proceeds of
Loans made hereunder and Letters of Credit issued hereunder will be used only
(a) to refinance existing senior bank facilities, (b) to finance the acquisition
of working capital assets of the Borrowers, including the purchase of inventory
and equipment, in each case in the ordinary course of business, (c) to finance
Capital Expenditures of the Borrowers, and (d) for general corporate purposes,
including stock and bond repurchases to the extent permitted herein. No part of
the proceeds of any Loan will be used, whether directly or indirectly, for any
purpose that entails a violation of any of the Regulations of the Board,
including Regulations U and X.
SECTION 5.12 ADDITIONAL SUBSIDIARIES. If any additional Subsidiary is
formed or acquired after the Closing Date, the Lead Borrower will notify the
Agents and the Lenders thereof and (a) if such Subsidiary is not a Foreign
Subsidiary or an Unrestricted Subsidiary, the Borrowers will cause such
Subsidiary to become a Loan Party hereunder and each applicable Security
Document in the manner provided therein within three Business Days after such
Subsidiary is formed or acquired and promptly take such actions to create and
perfect Liens on such Subsidiary's assets to secure the Obligations as any Agent
or the Required Lenders shall reasonably request and (b) if any shares of
capital stock or Indebtedness of such Subsidiary are owned by or on behalf of
any Loan Party, the Borrowers will cause such shares and promissory notes
evidencing such Indebtedness to be pledged within three Business Days after such
Subsidiary is formed or acquired (except that, if such Subsidiary is a Foreign
Subsidiary, shares of stock of such Subsidiary to be pledged may be limited to
65% of the outstanding shares of voting stock of such Subsidiary).
SECTION 5.13 FURTHER ASSURANCES. Each Loan Party will execute any and
all further documents, financing statements, agreements and instruments, and
take all such further actions
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(including the filing and recording of financing statements and other
documents), that may be required under any applicable law, or which any Agent or
the Required Lenders may reasonably request, to effectuate the transactions
contemplated by the Loan Documents or to grant, preserve, protect or perfect the
Liens created or intended to be created by the Security Documents or the
validity or priority of any such Lien, all at the expense of the Loan Parties.
The Loan Parties also agree to provide to the Agents, from time to time upon
request, evidence reasonably satisfactory to the Agents as to the perfection and
priority of the Liens created or intended to be created by the Security
Documents.
(b) If any material assets are acquired by any Loan Party after the
Closing Date (other than assets constituting Collateral under the Security
Agreement that become subject to the Lien of the Security Agreement upon
acquisition thereof), the Lead Borrower will notify the Agents and the Lenders
thereof, and the Loan Parties will cause such assets to be subjected to a Lien
securing the Obligations and will take such actions as shall be necessary or
reasonably requested by any Agent or the Required Lenders to grant and perfect
such Liens, including actions described in paragraph (a) of this Section, all at
the expense of the Loan Parties. (c) Upon the request of the Administrative
Agent, the Borrowers shall cause each of its customs brokers to deliver an
agreement to the Administrative Agent covering such matters and in such form as
the Administrative Agent may reasonably require.
ARTICLE VI
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the principal of
and interest on each Loan and all fees payable hereunder have been paid in full
and all Letters of Credit have expired or terminated and all L/C Disbursements
shall have been reimbursed, each Loan Party covenants and agrees with the Agents
and the Lenders that:
SECTION 6.1 INDEBTEDNESS AND OTHER OBLIGATIONS. (a) The Loan Parties
will not, and will not permit any Subsidiary to, create, incur, assume or permit
to exist any Indebtedness, except:
(i) Indebtedness created under the Loan Documents;
(ii) Indebtedness set forth in Schedule 6.01;
(iii) Indebtedness of any Loan Party to any other Loan
Party;
(iv) Guarantees by any Loan Party of Indebtedness of any other
Loan Party or Subsidiary PROVIDED that Guarantees by any Borrower of
Indebtedness of any Subsidiary that is not a Borrower shall be subject
to Section 6.04;
(v) Indebtedness of any Loan Party to finance the acquisition
of any fixed or capital assets, including Capital Lease Obligations and
any Indebtedness assumed in connection with the acquisition of any such
assets or secured by a Lien on
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any such assets prior to the acquisition thereof, and extensions,
renewals and replacements of any such Indebtedness that do not increase
the outstanding principal amount thereof or result in an earlier
maturity date or decreased weighted average life thereof, PROVIDED THAT
the aggregate principal amount of Indebtedness permitted by this clause
(v) shall not exceed $10,000,000.00 at any time outstanding;
(vi) Indebtedness under the Indenture;
(vii) Indebtedness incurred to refinance any Real Estate owned
by any Loan Party or incurred in connection with sale-leaseback
transactions permitted hereunder, PROVIDED THAT (A) the terms of such
Indebtedness are reasonably acceptable to the Administrative Agent, and
(B) with respect to any Eligible Real Estate, the proceeds therefrom
are at least equal to the amounts then available to be borrowed with
respect thereto under clause (c) of the definition of Borrowing Base;
(viii) Indebtedness under Hedging Agreements with (A) FRF or
an Affiliate of FRF or (B) any other Lender or an Affiliate of such
other Lender to the extent approved in writing by FRF in its sole
discretion;
(ix) Indebtedness to any Affiliate of FRF in an amount not to
exceed the principal sum of $30,000,000.00, provided that the terms of
such Indebtedness are reasonably acceptable to the Administrative Agent
and the Required Lenders; and
(x) other unsecured Indebtedness in an aggregate principal
amount not exceeding $100,000,000.00 at any time outstanding, provided
that the terms of such Indebtedness are reasonably acceptable to the
Administrative Agent.
(b) None of the Loan Parties will, nor will they permit any Subsidiary
to, issue any preferred stock (except for preferred stock (i) all dividends in
respect of which are to be paid (and all other payments in respect of which are
to be made) in additional shares of such preferred stock, in lieu of cash, until
all Obligations have been repaid in full and all Commitments terminated, (ii)
that is not subject to redemption other than redemption at the option of the
Loan Party issuing such preferred stock and (iii) all payments in respect of
which are expressly subordinated to the Obligations) or be or become liable in
respect of any obligation (contingent or otherwise) to purchase, redeem, retire,
acquire or make any other payment in respect of (i) any shares of capital stock
of any Loan Party or (ii) any option, warrant or other right to acquire any such
shares of capital stock.
SECTION 6.2 LIENS. The Loan Parties will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Lien on any property
or asset now owned or hereafter acquired by it, or assign or sell any income or
revenues (including accounts receivable) or rights in respect of any thereof,
except:
(a) Liens created under the Loan Documents;
(b) Permitted Encumbrances;
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(c) any Lien on any property or asset of any Loan Party set forth in
Schedule 6.02, PROVIDED that (i) such Lien shall not apply to any other property
or asset of any Loan Party and (ii) such Lien shall secure only those
obligations that it secures as of the Closing Date, and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount
thereof;
(d) Liens on fixed or capital assets acquired by any Loan Party,
PROVIDED that (i) such Liens secure Indebtedness permitted by clause (v) of
Section 6.01(a), (ii) such Liens and the Indebtedness secured thereby are
incurred prior to or within 90 days after such acquisition or the completion of
such construction or improvement, (iii) the Indebtedness secured thereby does
not exceed 100% of the cost of acquiring such fixed or capital assets and (iv)
such Liens shall not apply to any other property or assets of the Loan Parties;
(e) Liens to secure Indebtedness permitted under Section 6.01(a)(ix)
hereof as long as such Liens are subordinate to the Liens created under the Loan
Documents; and
(f) Liens to secure Indebtedness permitted by clause (vii) of Section
6.01(a) PROVIDED THAT such Liens shall not apply to any property or assets of
the Loan Parties other than the Real Estate so refinanced or which is the
subject of a sale-leaseback transaction.
SECTION 6.3 FUNDAMENTAL CHANGES. (a) The Loan Parties will not merge
into or consolidate with any other Person, or permit any other Person to merge
into or consolidate with it, or liquidate or dissolve, except that, if at the
time thereof and immediately after giving effect thereto no Default shall have
occurred and be continuing, (i) any Subsidiary may merge into a Borrower in a
transaction in which a Borrower is the surviving corporation, and (ii) any
Subsidiary that is not a Borrower may merge into any Subsidiary that is not a
Borrower, PROVIDED that any such merger involving a Person that is not a wholly
owned Subsidiary immediately prior to such merger shall not be permitted unless
also permitted by Section 6.04.
(b) The Loan Parties will not engage to any material extent in any
business other than businesses of the type conducted by the Loan Parties on the
date of execution of this Agreement and businesses reasonably related thereto.
SECTION 6.4 INVESTMENTS, LOANS, ADVANCES, GUARANTEES AND ACQUISITIONS.
The Loan Parties will not purchase, hold or acquire (including pursuant to any
merger with any Person that was not a wholly owned Subsidiary prior to such
merger) any capital stock, evidences of indebtedness or other securities
(including any option, warrant or other right to acquire any of the foregoing)
of, make or permit to exist any loans or advances to, guarantee any obligations
of, or make or permit to exist any investment or any other interest in, any
other Person, or purchase or otherwise acquire (in one transaction or a series
of transactions) any assets of any other Person constituting a business unit,
except:
(a) Permitted Investments;
(b) investments existing on the Closing Date, and set forth on Schedule
6.04, to the extent such investments would not be permitted under any other
clause of this Section;
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(c) loans or advances made by any Loan Party to any other Loan Party,
PROVIDED that any such loans and advances made by a Borrower shall be evidenced
by a promissory note pledged pursuant to the Pledge Agreement;
(d) Guarantees constituting Indebtedness permitted by Section 6.01,
PROVIDED that such Guarantees by the Borrowers shall not exceed $5,000,000.00 in
the aggregate at any time outstanding;
(e) investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers, in each case in the ordinary course of business; and
(f) loans or advances to employees for the purpose of travel,
entertainment or relocation in the ordinary course of business in an amount not
to exceed $500,000.00 to any employee or $2,000,000.00 in the aggregate at any
time outstanding.
SECTION 6.5 ASSET SALES. The Loan Parties will not, and will not permit
any of the Subsidiaries to, sell, transfer, lease or otherwise dispose of any
asset, including any capital stock, nor will the Loan Parties permit any of the
Subsidiaries to issue any additional shares of its capital stock or other
ownership interest in such Subsidiary, except:
(a) (i) sales of Inventory in the ordinary course of business, or (ii)
used or surplus equipment, or (iii) Permitted Investments, in each case in the
ordinary course of business;
(b) sales, transfers and dispositions among the Loan Parties and their
Subsidiaries, PROVIDED that any such sales, transfers or dispositions involving
a Subsidiary that is not a Loan Party shall be made in compliance with Section
6.08;
(c) sale-leaseback transactions involving any Borrower's Real Estate as
long as, with respect to any Eligible Real Estate, the net proceeds therefrom
are at least equal to the amounts then available to be borrowed with respect
thereto under clause (c) of the definition of Borrowing Base;
(d) the sale of certain vacant land in Hudson, Ohio adjacent to the
corporate headquarters and distribution center of the Borrowers;
(e) Provided that no Overadvance shall result after giving effect
thereto, bulk sales or dispositions of the Borrowers' Inventory not in the
ordinary course of business in an amount not to exceed, in the aggregate from
and after the Closing Date, ten percent (10%) of the Cost of the Borrowers'
Eligible Inventory as of the Closing Date;
PROVIDED that all sales, transfers, leases and other dispositions permitted
hereby (other than sales, transfers and other disposition permitted under clause
(b)) shall be made at arm's length and for fair value and solely for cash
consideration (other than (x) sales, transfers and other dispositions permitted
under clause (b)); and FURTHER PROVIDED THAT the authority granted under clauses
(a)
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through (e) hereof may be terminated in whole or in part by the Agents upon the
occurrence and during the continuance of any Event of Default.
SECTION 6.6 RESTRICTED PAYMENTS; CERTAIN PAYMENTS OF INDEBTEDNESS. (a)
The Loan Parties will not, and will not permit any Subsidiary to, declare or
make, or agree to pay or make, directly or indirectly, any Restricted Payment,
except as long as no Default or Event of Default exists or would arise therefrom
(i) the Loan Parties may declare and pay dividends with respect to their capital
stock payable solely in additional shares of their common stock, (ii) the
Subsidiaries of the Lead Borrower may declare and pay dividends ratably with
respect to their capital stock, and (iii) only if the Payment Conditions are
then satisfied, the Lead Borrower may (A) pay cash dividends on its capital
stock in an amount not to exceed $5,000,000.00 in any fiscal year, and/or (B)
repurchase its capital stock.
(b) The Loan Parties will not, and will not permit any Subsidiary to,
make or agree to pay or make, directly or indirectly, any payment or other
distribution (whether in cash securities or other property) of or in respect of
principal of or interest on any Indebtedness, or any payment or other
distribution (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any Indebtedness,
except:
(i) payment of regularly scheduled interest and principal
payments as and when due in respect of any permitted Indebtedness;
(ii) refinancings of Indebtedness described in clause (i),
above, to the extent permitted by Section 6.01; and
(iii) redemptions of the Indebtedness due under the Indenture,
if the Payment Conditions are then satisfied.
SECTION 6.7 TRANSACTIONS WITH AFFILIATES. The Loan Parties will not,
and will not permit any Subsidiary to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) transactions in the ordinary course of business that are
at prices and on terms and conditions not less favorable to the Loan Parties or
such Subsidiary than could be obtained on an arm's-length basis from unrelated
third parties, and (b) transactions between or among the Loan Parties not
involving any other Affiliate.
SECTION 6.8 RESTRICTIVE AGREEMENTS. The Loan Parties will not, and will
not permit any Subsidiary to, directly or indirectly, enter into, incur or
permit to exist any agreement or other arrangement that prohibits, restricts or
imposes any condition upon (a) the ability of the Loan Parties or any Subsidiary
to create, incur or permit to exist any Lien upon any of its property or assets
or (b) the ability of any Subsidiary to pay dividends or other distributions
with respect to any shares of its capital stock or to make or repay loans or
advances to the Loan Parties or any other Subsidiary or to guarantee
Indebtedness of the Loan Parties or any other Subsidiary, PROVIDED that (i) the
foregoing shall not apply to restrictions and conditions imposed by law or by
any Loan Document, (ii) clause (a) of the foregoing shall not apply to
restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such
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Indebtedness and (iii) clause (a) of the foregoing shall not apply to customary
provisions in leases restricting the assignment or subleasing thereof.
SECTION 6.9 AMENDMENT OF MATERIAL DOCUMENTS. The Loan Parties will not,
and will not permit any Subsidiary to, amend, modify or waive any of its rights
under (a) its certificate of incorporation, by-laws or other organizational
documents, (b) any leases or subleases relating to real estate, including,
without limitation, the Real Estate, (c) the Indenture, or (d) any other
instruments, documents or agreements, in each case to the extent that such
amendment, modification or waiver would be adverse to the interests of the
Lenders.
SECTION 6.10 ADDITIONAL SUBSIDIARIES. The Loan Parties will not, and
will not permit any Subsidiary to, create any additional Subsidiary unless the
requirements of Section 5.12 are satisfied contemporaneously therewith.
SECTION 6.11 FINANCIAL COVENANTS.
(a) If a Covenant Compliance Event shall occur, the Loan Parties shall
maintain Consolidated Net Worth at least equal to the amounts set forth on
Schedule 6.11 hereto as of the end of each of the Loan Parties' fiscal months,
commencing with the fiscal month ending immediately prior to the date of the
Covenant Compliance Event. Compliance with such Consolidated Net Worth covenant
shall thereafter be required for such period as is provided in the definition of
"Covenant Compliance Event".
(b) The Loan Parties shall not incur Capital Expenditures in any fiscal
year in an amount in excess of the sum of (i) $50,000,000.00, plus (ii)
commencing with the fiscal year beginning February 3, 2002 and for each fiscal
year thereafter, that amount by which Capital Expenditures in the immediately
preceding fiscal year(s) (on a cumulative basis) were less than $50,000,000.00,
provided that in no event shall Capital Expenditures exceed $80,000,000.00 in
any fiscal year. In calculating the Loan Parties' compliance with this Section
6.11, there shall be excluded any Capital Expenditures for the acquisition of
the real and personal property subject to the Existing Synthetic Lease.
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.1 If any of the following events ("EVENTS OF DEFAULT") shall
occur:
(a) the Loan Parties shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any L/C Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;
(b) the Loan Parties shall fail to pay any interest on any Loan or any
fee or any other amount (other than an amount referred to in clause (a) of this
Article) payable under this Agreement or any other Loan Document, when and as
the same shall become due and payable;
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(c) any representation or warranty made or deemed made by or on behalf
of any Loan Party in or in connection with any Loan Document or any amendment or
modification thereof or waiver thereunder, or in any report, certificate,
financial statement or other document furnished pursuant to or in connection
with any Loan Document or any amendment or modification thereof or waiver
thereunder, shall prove to have been incorrect in any material respect when made
or deemed made;
(d) the Loan Parties shall fail to observe or perform any covenant,
condition or agreement contained in Sections 2.21, 5.01(f), 5.07, 5.09, or 5.11,
or in Article VI;
(e) any Loan Party shall fail to observe or perform any covenant,
condition or agreement contained in any Loan Document (other than those
specified in clause (a), (b), (c), or (d) of this Article), and such failure
shall continue unremedied for a period of 10 days after notice thereof from the
Administrative Agent to the Lead Borrower (which notice will be given at the
request of any Lender);
(f) any Loan Party shall fail to make any payment (whether of principal
or interest and regardless of amount) in respect of any Material Indebtedness
when and as the same shall become due and payable (after giving effect to the
expiration of any grace or cure period set forth therein);
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables or
permits (with or without the giving of notice, the lapse of time or both) the
holder or holders of any such Material Indebtedness or any trustee or agent on
its or their behalf to cause any such Material Indebtedness to become due, or to
require the prepayment, repurchase, redemption or defeasance thereof, prior to
its scheduled maturity;
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other relief
in respect of any Loan Party or its debts, or of a substantial part of its
assets, under any federal or state bankruptcy, insolvency, receivership or
similar law now or hereafter in effect or (ii) the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for any Loan
Party or for a substantial part of its assets, and, in any such case, such
proceeding or petition shall continue undismissed for 30 days or an order or
decree approving or ordering any of the foregoing shall be entered;
(i) any Loan Party shall (i) voluntarily commence any proceeding or
file any petition seeking liquidation, reorganization or other relief under any
federal or state bankruptcy, insolvency, receivership or similar law now or
hereafter in effect, (ii) consent to the institution of, or fail to contest in a
timely and appropriate manner, any proceeding or petition described in clause
(h) of this Article, (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official for
any Loan Party or for a substantial part of its assets, (iv) file an answer
admitting the material allegations of a petition filed against it in
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any such proceeding, (v) make a general assignment for the benefit of creditors
or (vi) take any action for the purpose of effecting any of the foregoing;
(j) any Loan Party shall become unable, admit in writing its inability
or fail generally to pay its debts as they become due;
(k) one or more judgments for the payment of money in an aggregate
amount in excess of $2,000,000.00 shall be rendered against any Loan Party or
any combination thereof and the same shall remain undischarged for a period of
30 consecutive days during which execution shall not be effectively stayed, or
any action shall be legally taken by a judgment creditor to attach or levy upon
any material assets of any Loan Party to enforce any such judgment;
(l) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in liability of the Loan
Parties in an aggregate amount exceeding $2,000,000.00;
(m) (i) any challenge by or on behalf of any Loan Party to the validity
of any Loan Document or the applicability or enforceability of any Loan Document
strictly in accordance with the subject Loan Document's terms or which seeks to
void, avoid, limit, or otherwise adversely affect any security interest created
by or in any Loan Document or any payment made pursuant thereto.
(ii) any challenge by or on behalf of any other Person to the
validity of any Loan Document or the applicability or enforceability of any Loan
Document strictly in accordance with the subject Loan Document's terms or which
seeks to void, avoid, limit, or otherwise adversely affect any security interest
created by or in any Loan Document or any payment made pursuant thereto, in each
case, as to which an order or judgment has been entered adverse to the Agents
and the Lenders.
(iii) any Lien purported to be created under any Security Document
shall cease to be, or shall be asserted by any Loan Party not to be, a valid and
perfected Lien on any Collateral, with the priority required by the applicable
Security Document, except as a result of the sale or other disposition of the
applicable Collateral in a transaction permitted under the Loan Documents;
(n) a Change in Control shall occur;
(o) the occurrence of any uninsured loss to any material portion of the
Collateral;
(p) the indictment of, or institution of any legal process or
proceeding against, any Loan Party, under any federal, state, municipal, and
other civil or criminal statute, rule, regulation, order, or other requirement
having the force of law where the relief, penalties, or remedies sought or
available include the forfeiture of any material property of any Loan Party
and/or the imposition of any stay or other order, the effect of which could
reasonably be to
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restrain in any material way the conduct by the Loan Parties, taken as a whole,
of their business in the ordinary course;
(q) the determination by any Borrower, whether by vote of such
Borrower's board of directors or otherwise to: suspend the operation of such
Borrower's business in the ordinary course, liquidate all or a material portion
of such Borrower's assets or store locations, or employ an agent or other third
party to conduct any so-called store closing, store liquidation or
"Going-Out-Of-Business" sales; or
then, and in every such event (other than an event with respect to any Loan
Party described in clause (h) or (i) of this Article), and at any time
thereafter during the continuance of such event, the Administrative Agent may,
and at the request of the Required Lenders shall, by notice to the Lead
Borrower, take either or both of the following actions, at the same or different
times: (i) terminate the Commitments, and thereupon the Commitments shall
terminate immediately, and (ii) declare the Loans then outstanding to be due and
payable in whole (or in part, in which case any principal not so declared to be
due and payable may thereafter be declared to be due and payable), and thereupon
the principal of the Loans so declared to be due and payable, together with
accrued interest thereon and all fees and other obligations of the Borrowers
accrued hereunder, shall become due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Loan Parties; and in case of any event with respect to any
Loan Party described in clause (h) or (i) of this Article, the Commitments shall
automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations of the
Borrowers accrued hereunder, shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Loan Parties.
SECTION 7.2 WHEN CONTINUING.
For all purposes under this Agreement, each Default and Event of
Default that has occurred shall be deemed to be continuing at all times
thereafter unless it either (a) is cured or corrected to the reasonable written
satisfaction of the Lenders in accordance with Section 9.02, or (b) is waived in
writing by the Lenders in accordance with Section 9.02.
SECTION 7.3 REMEDIES ON DEFAULT
In case any one or more of the Events of Default shall have occurred
and be continuing, and whether or not the maturity of the Loans shall have been
accelerated pursuant hereto, the Administrative Agent may proceed to protect and
enforce its rights and remedies under this Agreement, the Notes or any of the
other Loan Documents by suit in equity, action at law or other appropriate
proceeding, whether for the specific performance of any covenant or agreement
contained in this Agreement and the other Loan Documents or any instrument
pursuant to which the Obligations are evidenced, and, if such amount shall have
become due, by declaration or otherwise, proceed to enforce the payment thereof
or any other legal or equitable right of the Agents or the Lenders. No remedy
herein is intended to be exclusive of any other remedy and each and every remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or any
other provision of law.
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SECTION 7.4 APPLICATION OF PROCEEDS
After the occurrence of an Event of Default and acceleration of the
Obligations, all proceeds realized from any Loan Party or on account of any
Collateral or, without limiting the foregoing, on account of any Prepayment
Event shall be applied in the manner set forth in Section 6.02 of the Security
Agreement. All amounts required to be applied to Loans hereunder (other than
Swingline Loans) shall be applied ratably in accordance with each Lender's
Commitment Percentage.
ARTICLE VIII
THE AGENTS
SECTION 8.1 ADMINISTRATION BY ADMINISTRATIVE AGENT.
The general administration of the Loan Documents shall be by the
Administrative Agent. The Lenders, the Collateral Agent and the Issuing Bank
each hereby irrevocably authorizes the Administrative Agent (i) to enter into
the Loan Documents to which it is a party and (ii) at its discretion, to take or
refrain from taking such actions as agent on its behalf and to exercise or
refrain from exercising such powers under the Loan Documents and the Notes as
are delegated by the terms hereof or thereof, as appropriate, together with all
powers reasonably incidental thereto. The Administrative Agent shall have no
duties or responsibilities except as set forth in this Agreement and the
remaining Loan Documents.
SECTION 8.2 THE COLLATERAL AGENT.
Each Lender, the Administrative Agent and the Issuing Bank hereby
irrevocably (i) designate FRF as Collateral Agent under this Agreement and the
other Loan Documents, (ii) authorize the Collateral Agent to enter into the
Collateral Documents and the other Loan Documents to which it is a party and to
perform its duties and obligations thereunder and (iii) agree and consent to all
of the provisions of the Security Documents. All Collateral shall be held or
administered by the Collateral Agent (or its duly-appointed agent) for its
benefit and for the ratable benefit of the other Secured Parties. Any proceeds
received by the Collateral Agent from the foreclosure, sale, lease or other
disposition of any of the Collateral and any other proceeds received pursuant to
the terms of the Security Documents or the other Loan Documents shall be paid
over to the Administrative Agent for application as provided in Sections 2.18,
2.22, or 7.04, as applicable.
SECTION 8.3 SHARING OF EXCESS PAYMENTS.
Each of the Lenders, the Agents and the Issuing Bank agrees that if it
shall, through the exercise of a right of banker's lien, setoff or counterclaim
against the Loan Parties, including, but not limited to, a secured claim under
Section 506 of the Bankruptcy Code or other security or interest arising from,
or in lieu of, such secured claim and received by such Lender, any Agent or the
Issuing Bank under any applicable bankruptcy, insolvency or other similar law,
or otherwise, obtain payment in respect of the Obligations owed it (an "EXCESS
PAYMENT") as a result of which such Lender, such Agent or the Issuing Bank has
received payment of any Loans or other
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Obligations outstanding to it in excess of the amount that it would have
received if all payments at any time applied to the Loans and other Obligations
had been applied in the order of priority set forth in Section 2.22, then such
Lender, Agent or the Issuing Bank shall promptly purchase at par (and shall be
deemed to have thereupon purchased) from the other Lenders, such Agent and the
Issuing Bank, as applicable, a participation in the Loans and Obligations
outstanding to such other Persons, in an amount determined by the Administrative
Agent in good faith as the amount necessary to ensure that the economic benefit
of such excess payment is reallocated in such manner as to cause such excess
payment and all other payments at any time applied to the Loans and other
Obligations to be effectively applied in the order of priority set forth in
Section 2.22 PRO RATA in proportion to its Commitment; PROVIDED, that if any
such excess payment is thereafter recovered or otherwise set aside such purchase
of participations shall be correspondingly rescinded (without interest). The
Loan Parties expressly consent to the foregoing arrangements and agrees that any
Lender, any Agent or the Issuing Bank holding (or deemed to be holding) a
participation in any Loan or other Obligation may exercise any and all rights of
banker's lien, setoff or counterclaim with respect to any and all moneys owing
by such Loan Party to such Lender, such Agent or the Issuing Bank as fully as if
such Lender, Agent or the Issuing Bank held a Note and was the original obligee
thereon, in the amount of such participation.
SECTION 8.4 AGREEMENT OF REQUIRED LENDERS.
(i) Upon any occasion requiring or permitting an approval, consent,
waiver, election or other action on the part of only the Required Lenders,
action shall be taken by the Agents for and on behalf or for the benefit of all
Lenders upon the direction of the Required Lenders, and any such action shall be
binding on all Lenders, and (ii) upon any occasion requiring or permitting an
approval, consent, waiver, election or other action on the part of the Required
Supermajority Lenders, action shall be taken by the Agents for and on behalf or
for the benefit of all Lenders upon the direction of the Required Supermajority
Lenders and any such action shall be binding on all Lenders. No amendment,
modification, consent, or waiver shall be effective except in accordance with
the provisions of Section 9.02.
(ii) Upon the occurrence of an Event of Default, the Agents shall
(subject to the provisions of Section 9.02) take such action with respect
thereto as may be reasonably directed by the Required Lenders; PROVIDED THAT
unless and until the Agents shall have received such directions, the Agents may
(but shall not be obligated to) take such action as it shall deem advisable in
the best interests of the Lenders. In no event shall the Agents be required to
comply with any such directions to the extent that the Agents believe that the
Agents' compliance with such directions would be unlawful.
SECTION 8.5 LIABILITY OF AGENTS.
(i) Each of the Agents, when acting on behalf of the Lenders and the
Issuing Bank, may execute any of its respective duties under this Agreement by
or through any of its respective officers, agents and employees, and none of the
Agents nor their respective directors, officers, agents or employees shall be
liable to the Lenders or the Issuing Bank or any of them for any action taken or
omitted to be taken in good faith, or be responsible to the Lenders or the
Issuing Bank or to any of them for the consequences of any oversight or error of
judgment, or for any loss, except to the extent of any liability imposed by law
by reason of such Agent's own gross
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negligence or willful misconduct. The Agents and their respective directors,
officers, agents and employees shall in no event be liable to the Lenders or the
Issuing Bank or to any of them for any action taken or omitted to be taken by
them pursuant to instructions received by them from the Required Lenders, or
Required Supermajority Lenders, as applicable, or in reliance upon the advice of
counsel selected by it. Without limiting the foregoing, none of the Agents, nor
any of their respective directors, officers, employees, or agents shall be
responsible to any Lender or the Issuing Bank for the due execution, validity,
genuineness, effectiveness, sufficiency, or enforceability of, or for any
statement, warranty or representation in, this Agreement, any Loan Document or
any related agreement, document or order, or shall be required to ascertain or
to make any inquiry concerning the performance or observance by any Loan Party
of any of the terms, conditions, covenants, or agreements of this Agreement or
any of the Loan Documents.
(ii) None of the Agents nor any of their respective directors,
officers, employees, or agents shall have any responsibility to the Loan Parties
on account of the failure or delay in performance or breach by any Lender (other
than by the Agent in its capacity as a Lender) or the Issuing Bank of any of
their respective obligations under this Agreement or the Notes or any of the
Loan Documents or in connection herewith or therewith.
(iii) The Administrative Agent and the Collateral Agent, in such
capacities hereunder, shall be entitled to rely on any communication,
instrument, or document reasonably believed by such person to be genuine or
correct and to have been signed or sent by a person or persons believed by such
person to be the proper Person or Persons, and, such Person shall be entitled to
rely on advice of legal counsel, independent public accountants, and other
professional advisers and experts selected by such Person.
SECTION 8.6 REIMBURSEMENT AND INDEMNIFICATION.
Each Lender agrees (i) to reimburse (x) each Agent for such Lender's
Commitment Percentage of any expenses and fees incurred by such Agent for the
benefit of the Lenders or the Issuing Bank under this Agreement, the Notes and
any of the Loan Documents, including, without limitation, counsel fees and
compensation of agents and employees paid for services rendered on behalf of the
Lenders or the Issuing Bank, and any other expense incurred in connection with
the operations or enforcement thereof not reimbursed by the Loan Parties and (y)
each Agent for such Lender's Commitment Percentage of any expenses of such Agent
incurred for the benefit of the Lenders or the Issuing Bank that the Loan
Parties have agreed to reimburse pursuant to Section 9.03 and has failed to so
reimburse and (ii) to indemnify and hold harmless the Agents and any of their
directors, officers, employees, or agents, on demand, in the amount of such
Lender's Commitment Percentage, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against it or any of them in any way relating to or
arising out of this Agreement, the Notes or any of the Loan Documents or any
action taken or omitted by it or any of them under this Agreement, the Notes or
any of the Loan Documents to the extent not reimbursed by the Loan Parties
(except such as shall result from their respective gross negligence or willful
misconduct).
SECTION 8.7 RIGHTS OF AGENTS.
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It is understood and agreed that FRF shall have the same rights and
powers hereunder (including the right to give such instructions) as the other
Lenders and may exercise such rights and powers, as well as its rights and
powers under other agreements and instruments to which it is or may be party,
and engage in other transactions with the Borrowers, as though it were not the
Administrative Agent or the Collateral Agent, respectively, of the Lenders under
this Agreement.
SECTION 8.8 INDEPENDENT LENDERS AND ISSUING BANK.
The Lenders and the Issuing Bank each acknowledge that they have
decided to enter into this Agreement and to make the Loans or issue the Letters
of Credit hereunder based on their own analysis of the transactions contemplated
hereby and of the creditworthiness of the Loan Parties and agrees that the
Agents shall bear no responsibility therefor.
SECTION 8.9 NOTICE OF TRANSFER.
The Agents may deem and treat a Lender party to this Agreement as the
owner of such Lender's portion of the Loans for all purposes, unless and until,
and except to the extent, an Assignment and Acceptance shall have become
effective as set forth in Section 9.05(b).
SECTION 8.10 SUCCESSOR AGENT
Any Agent may resign at any time by giving five (5) Business Days'
written notice thereof to the Lenders, the Issuing Bank, the other Agents and
the Lead Borrower. Upon any such resignation of any Agent, the Required Lenders
shall have the right to appoint a successor Agent, which so long as there is no
Default, or Event of Default, shall be reasonably satisfactory to the Lead
Borrower (whose consent shall not be unreasonably withheld or delayed). If no
successor Agent shall have been so appointed by the Required Lenders and shall
have accepted such appointment, within 30 days after the retiring Agent's giving
of notice of resignation, the retiring Agent may, on behalf of the Lenders, the
other Agents and the Issuing Bank, appoint a successor Agent which shall be (i)
a commercial bank (or affiliate thereof) organized under the laws of the United
States of America or of any State thereof and having a combined capital and
surplus of a least $100,000,000, (ii) or a Lender capable of complying with all
of the duties of such Agent (and the Issuing Bank), hereunder (in the opinion of
the retiring Agent and as certified to the Lenders in writing by such successor
Agent) which, in the case of (i) and (ii) above, so long as there is no Default,
or Event of Default, shall be reasonably satisfactory to the Lead Borrower
(whose consent shall not be unreasonably withheld or delayed). Upon the
acceptance of any appointment as Agent by a successor Agent, such successor
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent and the retiring Agent shall be
discharged from its duties and obligations under this Agreement. After any
retiring Agent's resignation hereunder as such Agent, the provisions of this
Article VIII shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was such Agent under this Agreement.
SECTION 8.11 REPORTS AND FINANCIAL STATEMENTS.
Promptly after receipt thereof from the Borrowers, the Administrative
Agent shall remit to each Lender and the Collateral Agent copies of all
financial statements required to be
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delivered by the Borrowers hereunder and all commercial finance examinations and
appraisals of the Collateral received by the Administrative Agent.
SECTION 8.12 DOCUMENTATION AGENT, CO-AGENTS, SYNDICATION AGENT AND
ARRANGER. Notwithstanding the provisions of this Agreement or any of the other
Loan Documents, the Documentation Agent, the Co-Agents, the Syndication Agent
and, except as provided in the commitment letter for this transaction, the
Arranger shall have no powers, rights, duties, responsibilities or liabilities
with respect to this Agreement and the other Loan Documents.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 NOTICES. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to any Loan Party, to it at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, Attention of ▇▇▇ ▇▇▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇) with a copy to
▇▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇, LLP (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇) Attention of ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, Esquire;
(b) if to the Administrative Agent or the Collateral Agent, or the
Swingline Lender to Fleet Retail Finance Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇ ▇▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇), with
a copy to ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇, LLP, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇);
(c) if to any other Lender, to it at its address (or telecopy number)
set forth on the signature pages hereto or on any Assignment and Acceptance for
such Lender.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 9.2 WAIVERS; AMENDMENTS. (a) No failure or delay by the Agents,
the Issuing Bank or any Lender in exercising any right or power hereunder or
under any other Loan Document shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Agents, the Issuing Bank and the Lenders hereunder and under
the other Loan Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of any Loan
Document or consent to any departure by any Loan Party therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective
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only in the specific instance and for the purpose for which given. Without
limiting the generality of the foregoing, the making of a Loan or issuance of a
Letter of Credit shall not be construed as a waiver of any Default, regardless
of whether the Agents, any Lender or the Issuing Bank may have had notice or
knowledge of such Default at the time.
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except, in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by the Borrowers and the Required Lenders or, in the case of any
other Loan Document, pursuant to an agreement or agreements in writing entered
into by the Agents and the Loan Parties that are parties thereto, in each case
with the consent of the Required Lenders, PROVIDED that no such agreement shall
(i) increase the Commitment of any Lender without the written consent of such
Lender, (ii) reduce the principal amount of any Loan or L/C Disbursement or
reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each Lender affected thereby, (iii) postpone the
scheduled date of payment of the principal amount of any Loan or L/C
Disbursement, or any interest thereon, or any fees payable hereunder, or reduce
the amount of, waive or excuse any such payment, or postpone the scheduled date
of expiration of the Commitments or the Maturity Date, without the written
consent of each Lender affected thereby, (iv) change Sections 2.18, 2.21, or
2.22 or Section 6.2 of the Security Agreement, without the written consent of
each Lender, (v) change any of the provisions of this Section 9.02 (other than
to include additional voting rights for the sole benefit of the holder of any
Indebtedness permitted pursuant to Section 6.01(a)(ix) hereof which becomes a
Lender hereunder) or the definition of the term "Required Lenders" or "Required
Supermajority Lenders" or any other provision of any Loan Document specifying
the number or percentage of Lenders required to waive, amend or modify any
rights thereunder or make any determination or grant any consent thereunder,
without the written consent of each Lender, (vi) release any Loan Party from its
obligations under any Loan Document, or limit its liability in respect of such
Loan Document, without the written consent of each Lender, (vii) except for
sales described in Section 6.05 or as permitted in the Security Documents,
release any material portion of the Collateral from the Liens of the Security
Documents, without the written consent of each Lender, (viii) change the
definition of the term "Borrowing Base" or any component definition thereof if
as a result thereof the amounts available to be borrowed by the Borrowers would
be increased, without the written consent of each Lender, provided that the
foregoing shall not limit the discretion of the Administrative Agent to change,
establish or eliminate any Reserves, (ix) increase the Permitted Overadvance,
without the written consent of each Lender, (x) subordinate the Obligations
hereunder, or the Liens granted hereunder or under the other Loan Documents, to
any other Indebtedness or Lien, as the case may be without the prior written
consent of each Lender, and PROVIDED FURTHER that no such agreement shall amend,
modify or otherwise affect the rights or duties of the Agents or the Issuing
Bank without the prior written consent of the Agents or the Issuing Bank, as the
case may be.
(c) Notwithstanding anything to the contrary contained herein, no
modification, amendment or waiver which increases the maximum amount of the
Swingline Loans to an amount in excess of $25,000,000.00 (or such greater amount
to which such limit has been previously increased in accordance with the
provisions of this Section 9.02(c)) shall be made without the written consent of
the Required Supermajority Lenders.
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(d) Notwithstanding anything to the contrary contained in this Section
9.02, in the event that the Borrowers request that this Agreement or any other
Loan Document be modified, amended or waived in a manner which would require the
consent of the Lenders pursuant to Sections 9.02(b) or 9.02(c) and such
amendment is approved by the Required Lenders, but not by the requisite
percentage of the Lenders, the Borrowers, and the Required Lenders shall be
permitted to amend this Agreement without the consent of the Lender or Lenders
which did not agree to the modification or amendment requested by the Borrowers
(such Lender or Lenders, collectively the "MINORITY LENDERS") to provide for (w)
the termination of the Commitment of each of the Minority Lenders, (x) the
addition to this Agreement of one or more other financial institutions, or an
increase in the Commitment of one or more of the Required Lenders, so that the
aggregate Commitments after giving effect to such amendment shall be in the same
amount as the aggregate Commitments immediately before giving effect to such
amendment, (y) if any Loans are outstanding at the time of such amendment, the
making of such additional Loans by such new or increasing Lender or Lenders, as
the case may be, as may be necessary to repay in full the outstanding Loans
(including principal, interest, and fees) of the Minority Lenders immediately
before giving effect to such amendment and (z) such other modifications to this
Agreement or the Loan Documents as may be appropriate and incidental to the
foregoing.
(e) No notice to or demand on any Loan Party shall entitle any Loan
Party to any other or further notice or demand in the same, similar or other
circumstances. Each holder of a Note shall be bound by any amendment,
modification, waiver or consent authorized as provided herein, whether or not a
Note shall have been marked to indicate such amendment, modification, waiver or
consent and any consent by a Lender, or any holder of a Note, shall bind any
Person subsequently acquiring a Note, whether or not a Note is so marked. No
amendment to this Agreement shall be effective against the Borrowers unless
signed by the Borrowers.
SECTION 9.3 EXPENSES; INDEMNITY; DAMAGE WAIVER. (a) The Loan Parties
shall jointly and severally pay (i) all reasonable out-of-pocket expenses
incurred by the Agents and their Affiliates, including the reasonable fees,
charges and disbursements of counsel for the Agents, outside consultants for the
Agents, appraisers, for commercial finance examinations and environmental site
assessments, in connection with the syndication of the credit facilities
provided for herein, the preparation and administration of the Loan Documents or
any amendments, modifications or waivers of the provisions thereof (whether or
not the transactions contemplated hereby or thereby shall be consummated), (ii)
all reasonable out-of-pocket expenses incurred by the Issuing Bank in connection
with the issuance, amendment, renewal or extension of any Letter of Credit or
any demand for payment thereunder and (iii) all reasonable out-of-pocket
expenses incurred by the Agents, the Issuing Bank or any Lender, including the
reasonable fees, charges and disbursements of any counsel and any outside
consultants for the Agents, the Issuing Bank or any Lender, for appraisers,
commercial finance examinations, and environmental site assessments, in
connection with the enforcement or protection of its rights in connection with
the Loan Documents, including its rights under this Section, or in connection
with the Loans made or Letters of Credit issued hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit; provided that the
Lenders who are not the Agents or the Issuing Bank shall be entitled to
reimbursement for no more than one counsel representing all such Lenders (absent
a conflict of interest in which case the Lenders may engage and be reimbursed
for additional counsel).
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(b) The Loan Parties shall, jointly and severally, indemnify the
Agents, the Issuing Bank and each Lender, and each Related Party of any of the
foregoing Persons (each such Person being called an "INDEMNITEE") against, and
hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the reasonable and documented fees,
charges and disbursements of any counsel for any Indemnitee, incurred by or
asserted against any Indemnitee arising out of, in connection with, or as a
result of (i) the execution or delivery of any Loan Document or any other
agreement or instrument contemplated hereby, the performance by the parties to
the Loan Documents of their respective obligations thereunder or the
consummation of the transactions contemplated by the Loan Documents or any other
transactions contemplated hereby, (ii) any Loan or Letter of Credit or the use
of the proceeds therefrom (including any refusal by the Issuing Bank to honor a
demand for payment under a Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of such Letter
of Credit), (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property currently or formerly owned or operated by any
Loan Party or any of the Subsidiaries, or any Environmental Liability related in
any way to any Loan Party or any of the Subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto, PROVIDED that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses resulted from the gross
negligence or wilful misconduct of such Indemnitee or any Affiliate of such
Indemnitee (or of any officer, director, employee, advisor or agent of such
Indemnitee or any such Indemnitee's Affiliates).
(c) To the extent that any Loan Party fails to pay any amount required
to be paid by it to the Agents or the Issuing Bank under paragraph (a) or (b) of
this Section, each Lender severally agrees to pay to the Agents or the Issuing
Bank, as the case may be, such Lender's pro rata share (determined as of the
time that the applicable unreimbursed expense or indemnity payment is sought) of
such unpaid amount, PROVIDED that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Agents or the Issuing Bank. For purposes hereof, a
Lender's "pro rata share" shall be determined based upon its share of the Total
Commitments at the time.
(d) To the extent permitted by applicable law, no Loan Party shall
assert, and each hereby waives, any claim against any Indemnitee, on any theory
of liability, for special, indirect, consequential or punitive damages (as
opposed to direct or actual damages) arising out of, in connection with, or as a
result of, this Agreement or any agreement or instrument contemplated hereby,
the transactions contemplated by the Loan Documents, any Loan or Letter of
Credit or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable promptly after
written demand therefor.
SECTION 9.4 DESIGNATION OF LEAD BORROWER AS BORROWERS' AGENT.
(a) Each Borrower hereby irrevocably designates and appoints the Lead
Borrower as that Borrower's agent to obtain Loans and Letters of Credit
hereunder, the proceeds of which shall be available to each Borrower for those
uses as those set forth herein. As the disclosed
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principal for its agent, each Borrower shall be obligated to the Agents and each
Lender on account of Loans so made and Letters of Credit so issued hereunder as
if made directly by the Lenders to that Borrower, notwithstanding the manner by
which such Loans and Letters of Credit are recorded on the books and records of
the Lead Borrower and of any Borrower.
(b) Each Borrower recognizes that credit available to it hereunder is
in excess of and on better terms than it otherwise could obtain on and for its
own account and that one of the reasons therefor is its joining in the credit
facility contemplated herein with all other Borrowers. Consequently, each
Borrower hereby assumes and agrees to discharge all Obligations of all other
Borrowers as if the Borrower so assuming were each other Borrower.
(c) The Lead Borrower shall act as a conduit for each Borrower
(including itself, as a "Borrower") on whose behalf the Lead Borrower has
requested a Loan.
(i) The Lead Borrower shall cause the transfer of the proceeds
of each Loan to the (those) Borrower(s) on whose behalf such Loan was
obtained. Neither the Agents nor any Lender shall have any obligation
to see to the application of such proceeds.
(ii) If, for any reason, and at any time during the term of
this Agreement,
(A) any Borrower, including the Lead Borrower, as
agent for the Borrowers, shall be unable to, or prohibited
from carrying out the terms and conditions of this Agreement
(as determined by the Administrative Agent in the
Administrative Agent's sole and absolute discretion); or
(B) the Administrative Agent deems it inexpedient (in
the Administrative Agent's sole and absolute discretion) to
continue making Loans and cause Letters of Credit to be issued
to or for the account of any particular Borrower, or to
channel such Loans and Letters of Credit through the Lead
Borrower,
then the Lenders may make Loans directly to, and cause the issuance of
Letters of Credit directly for the account of such of the Borrowers as
the Administrative Agent determines to be expedient, which Loans may be
made without regard to the procedures otherwise included herein.
(d) In the event that the Administrative Agent determines to forgo the
procedures included herein pursuant to which Loans and Letters of Credit are to
be channeled through the Lead Borrower, then the Administrative Agent may
designate one or more of the Borrowers to fulfill the financial and other
reporting requirements otherwise imposed herein upon the Lead Borrower.
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(e) Each of the Borrowers shall remain liable to the Agents and the
Lenders for the payment and performance of all Obligations (which payment and
performance shall continue to be secured by all Collateral granted by each of
the Borrowers) notwithstanding any determination by the Administrative Agent to
cease making Loans or causing Letters of Credit to be issued to or for the
benefit of any Borrower.
(f) The authority of the Lead Borrower to request Loans on behalf of,
and to bind, the Borrowers, shall continue unless and until the Administrative
Agent acts as provided in subparagraph (c), above, or the Administrative Agent
actually receives
(i) written notice of: (i) the termination of such authority,
and (ii) the subsequent appointment of a successor Lead Borrower, which
notice is signed by the respective Presidents of each Borrower (other
than the President of the Lead Borrower being replaced) then eligible
for borrowing under this Agreement; and
(ii) written notice from such successive Lead Borrower (i)
accepting such appointment; (ii) acknowledging that such removal and
appointment has been effected by the respective Presidents of such
Borrowers eligible for borrowing under this Agreement; and (iii)
acknowledging that from and after the date of such appointment, the
newly appointed Lead Borrower shall be bound by the terms hereof, and
that as used herein, the term "Lead Borrower" shall mean and include
the newly appointed Lead Borrower.
SECTION 9.5 SUCCESSORS AND ASSIGNS. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby (including any
Affiliate of the Issuing Bank that issues any Letter of Credit), except that no
Loan Party may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender (and any such
attempted assignment or transfer without such consent shall be null and void).
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their respective successors and
assigns permitted hereby (including any Affiliate of the Issuing Bank that
issues any Letter of Credit) and, to the extent expressly contemplated hereby,
the Related Parties of each of the Agents, the Issuing Bank and the Lenders) any
legal or equitable right, remedy or claim under or by reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a portion of
its rights and obligations under this Agreement (including all or a portion of
its Commitment and the Loans at the time owing to it), PROVIDED that (i) except
in the case of an assignment to a Lender or an Affiliate of a Lender, each of
the Lead Borrower (but only after the completion of the initial syndication and
if no Default then exists), the Agents and the Issuing Bank must give their
prior written consent to such assignment (which consent shall not be
unreasonably withheld or delayed), (ii) except in the case of an assignment to a
Lender or an Affiliate of a Lender or an assignment of the entire remaining
amount of the assigning Lender's Commitment or Loans, the amount of the
Commitment or Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
$10,000,000 unless the
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Administrative Agent otherwise consents, (iii) each partial assignment shall be
made as an assignment of a proportionate part of all the assigning Lender's
rights and obligations, (iv) the parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Acceptance, and, after
completion of the syndication of the Loans, together with a processing and
recordation fee of $3,500. Subject to acceptance and recording thereof pursuant
to paragraph (d) of this Section, from and after the effective date specified in
each Assignment and Acceptance the assignee thereunder shall be a party hereto
and, to the extent of the interest assigned by such Assignment and Acceptance,
have the rights and obligations of a Lender under this Agreement, and the
assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all of the
assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Section 9.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this paragraph shall
be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (e) of
this Section.
(c) The Administrative Agent, acting for this purpose as an agent of
the Loan Parties, shall maintain at one of its offices in Boston, Massachusetts
a copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans and L/C Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the "REGISTER"). The entries in
the Register shall be conclusive and the Loan Parties, the Administrative Agent,
the Issuing Bank and the Lenders may treat each Person whose name is recorded in
the Register pursuant to the terms hereof as a Lender hereunder for all purposes
of this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Lead Borrower, the Issuing Bank and any Lender,
at any reasonable time and from time to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the processing and recordation
fee referred to in paragraph (b) of this Section and any written consent to such
assignment required by paragraph (b) of this Section, the Administrative Agent
shall accept such Assignment and Acceptance and record the information contained
therein in the Register. No assignment shall be effective for purposes of this
Agreement unless it has been recorded in the Register as provided in this
paragraph.
(e) Any Lender may, without the consent of the Loan Parties, the
Agents, and the Issuing Bank, sell participations to one or more banks or other
entities (a "PARTICIPANT") in all or a portion of such Lender's rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans owing to it), PROVIDED that (i) such Lender's obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Loan Parties, the Agents, the Issuing Bank and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation in the
Commitments, the Loans and the Letters of Credit Outstandings shall provide that
such Lender shall retain the sole right to enforce the Loan Documents and to
approve any amendment, modification or waiver of any provision of the Loan
Documents, PROVIDED that such agreement
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or instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in the
first proviso to Section 9.02(b) that affects such Participant. Subject to
paragraph (f) of this Section, the Loan Parties agree that each Participant
shall be entitled to the benefits of Sections 2.23, 2.25 and 2.26 to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to paragraph (b) of this Section. To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 9.09 as though it
were a Lender, PROVIDED such Participant agrees to be subject to Section 2.25(c)
as though it were a Lender.
(f) A Participant shall not be entitled to receive any greater payment
under Section 2.23 or 2.26 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Lead
Borrower's prior written consent. A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 2.26 unless
(i) the Lead Borrower is notified of the participation sold to such Participant
and such Participant agrees, for the benefit of the Borrowers, to comply with
Section 2.26(f) as though it were a Lender and (ii) such Participant is eligible
for exemption from the withholding tax referred to therein, following compliance
with Section 2.26(f).
(g) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest, PROVIDED that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto.
SECTION 9.6 SURVIVAL. All covenants, agreements, representations and
warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of the Loan Documents and the making of any Loans and issuance of any
Letters of Credit, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that the Agents, the Issuing Bank or any
Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
so long as the Commitments have not expired or terminated. The provisions of
Sections 2.23, 2.26 and 9.03 and Article VIII shall survive and remain in full
force and effect regardless of the consummation of the transactions contemplated
hereby, the repayment of the Loans, the expiration or termination of the Letters
of Credit and the Commitments or the termination of this Agreement or any
provision hereof.
SECTION 9.7 COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This Agreement
may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement, the other
Loan Documents and any separate letter agreements with
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respect to fees payable to the Agents constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Agents and the Lenders and
when the Administrative Agent shall have received counterparts hereof that, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by telecopy shall be effective as delivery
of a manually executed counterpart of this Agreement.
SECTION 9.8 SEVERABILITY. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.9 RIGHT OF SETOFF. If an Event of Default shall have occurred
and be continuing, each Lender and each of its Affiliates is hereby authorized
at any time and from time to time, 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 and other obligations at any time owing
by such Lender or Affiliate to or for the credit or the account of the Loan
Parties against any of and all the obligations of the Loan Parties now or
hereafter existing under this Agreement held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement and
although such obligations may be unmatured. The rights of each Lender under this
Section are in addition to other rights and remedies (including other rights of
setoff) that such Lender may have.
SECTION 9.10 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF
PROCESS.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE COMMONWEALTH OF MASSACHUSETTS.
(b) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement or any other Loan Document will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
SECTION 9.11 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
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FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.12 HEADINGS. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 9.13 INTEREST RATE LIMITATION. Notwithstanding anything herein
to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges and other amounts that are treated as interest
on such Loan under applicable law (collectively the "CHARGES"), shall exceed the
maximum lawful rate (the "MAXIMUM RATE") that may be contracted for, charged,
taken, received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.
SECTION 9.14 ADDITIONAL WAIVERS.
(a) The Obligations are the joint and several obligations of each Loan
Party. To the fullest extent permitted by applicable law, the obligations of
each Loan Party hereunder shall not be affected by (i) the failure of any Agent
or any other Secured Party to assert any claim or demand or to enforce or
exercise any right or remedy against any other Loan Party under the provisions
of this Agreement, any other Loan Document or otherwise, (ii) any rescission,
waiver, amendment or modification of, or any release from any of the terms or
provisions of, this Agreement, any other Loan Document, or any other agreement,
including with respect to any other Borrower of the Obligations under this
Agreement, or (iii) the failure to perfect any security interest in, or the
release of, any of the security held by or on behalf of the Collateral Agent or
any other Secured Party.
(b) The obligations of each Loan Party hereunder shall not be subject
to any reduction, limitation, impairment or termination for any reason (other
than the indefeasible payment in full in cash of the Obligations), including any
claim of waiver, release, surrender, alteration or compromise of any of the
Obligations, and shall not be subject to any defense or set-off, counterclaim,
recoupment or termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of each Loan Party hereunder shall
not be discharged or impaired or otherwise affected by the failure of any Agent
or any other Secured Party to assert any claim or demand or to enforce any
remedy under this Agreement, any other Loan Document or any other
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agreement, by any waiver or modification of any provision of any thereof, by any
default, failure or delay, wilful or otherwise, in the performance of the
Obligations, or by any other act or omission that may or might in any manner or
to any extent vary the risk of any Loan Party or that would otherwise operate as
a discharge of any Loan Party as a matter of law or equity (other than the
indefeasible payment in full in cash of all the Obligations).
(c) To the fullest extent permitted by applicable law, each Loan Party
waives any defense based on or arising out of any defense of any other Loan
Party or the unenforceability of the Obligations or any part thereof from any
cause, or the cessation from any cause of the liability of any other Loan Party,
other than the indefeasible payment in full in cash of all the Obligations. The
Collateral Agent and the other Secured Parties may, at their election, foreclose
on any security held by one or more of them by one or more judicial or
nonjudicial sales, accept an assignment of any such security in lieu of
foreclosure, compromise or adjust any part of the Obligations, make any other
accommodation with any other Loan Party, or exercise any other right or remedy
available to them against any other Loan Party, without affecting or impairing
in any way the liability of any Loan Party hereunder except to the extent that
all the Obligations have been indefeasibly paid in full in cash. Pursuant to
applicable law, each Loan Party waives any defense arising out of any such
election even though such election operates, pursuant to applicable law, to
impair or to extinguish any right of reimbursement or subrogation or other right
or remedy of such Loan Party against any other Loan Party, as the case may be,
or any security.
(d) Upon payment by any Loan Party of any Obligations, all rights of
such Loan Party against any other Loan Party arising as a result thereof by way
of right of subrogation, contribution, reimbursement, indemnity or otherwise
shall in all respects be subordinate and junior in right of payment to the prior
indefeasible payment in full in cash of all the Obligations, as more
particularly set forth in an Indemnity, Subrogation and Contribution Agreement
to be entered into amongst the Loan Parties. In addition, any indebtedness of
any Loan Party now or hereafter held by any other Loan Party is hereby
subordinated in right of payment to the prior payment in full of the
Obligations. None of the Loan Parties will demand, ▇▇▇ for, or otherwise attempt
to collect any such indebtedness. If any amount shall erroneously be paid to any
Loan Party on account of (a) such subrogation, contribution, reimbursement,
indemnity or similar right or (b) any such indebtedness of any Loan Party, such
amount shall be held in trust for the benefit of the Secured Parties and shall
forthwith be paid to the Collateral Agent to be credited against the payment of
the Obligations, whether matured or unmatured, in accordance with the terms of
the Loan Documents.
SECTION 9.15 DESIGNATED SENIOR INDEBTEDNESS. The Obligations shall
constitute Designated Senior Indebtedness for all purposes under the Indenture.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as a sealed instrument as
of the day and year first above written.
▇▇-▇▇▇ STORES, INC.
as Lead Borrower and Borrower
by
---------------------------------------
Name:
Title:
FCA OF OHIO, INC.
as Borrower
by
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Name:
Title:
HOUSE OF FABRICS, INC.
as Borrower
by
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Name:
Title:
▇▇-▇▇▇ STORES SUPPLY CHAIN MANAGEMENT,
INC.
as Borrower
by
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Name:
Title:
86
95
FLEET RETAIL FINANCE INC.,
as Administrative Agent, as Collateral
Agent, as Swingline Lender, and as Lender
By:
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Name:
------------------------------------
Title:
-----------------------------------
Address:
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
FLEET NATIONAL BANK,
as Issuing Bank
By:
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Name:
------------------------------------
Title:
-----------------------------------
Address:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
87
96
CONGRESS FINANCIAL CORPORATION, as
Documentation Agent and Lender
By:
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Name:
------------------------------------
Title:
-----------------------------------
Address:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
GMAC COMMERCIAL CREDIT, LLC
as Co-Agent and Lender
By:
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Name:
------------------------------------
Title:
-----------------------------------
Address:
1290 Avenue of the Americas
3d Floor
New York, New York 10104
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
88
97
NATIONAL CITY COMMERCIAL FINANCE, INC.
as Co-Agent and Lender
By:
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Name:
------------------------------------
Title:
-----------------------------------
Address:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
THE CIT GROUP/BUSINESS CREDIT, INC.
as Co-Agent and Lender
By:
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Name:
------------------------------------
Title:
-----------------------------------
Address:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
89
98
FOOTHILL CAPITAL CORPORATION
as Lender
By:
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Name:
------------------------------------
Title:
-----------------------------------
Address:
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Rina Shinolda
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
THE PROVIDENT BANK
as Lender
By:
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Name:
------------------------------------
Title:
-----------------------------------
Address:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
90