EXHIBIT 10.27
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CREDIT AGREEMENT
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among
THE FINISH LINE, INC.,
the LENDERS Signatory Hereto
and
NBD BANK, N.A., as Agent
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Dated as of July 10, 1998
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TABLE OF CONTENTS
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SECTION 1 Definitions............................................................................... -1-
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1.1. Defined Terms............................................................................. -1-
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1.2. Rules of Construction..................................................................... -16-
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1.3. Accounting Terms.......................................................................... -16-
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SECTION 2 The Credits............................................................................... -16-
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2.1. Commitments............................................................................... -16-
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2.1.1. Revolving Loans.................................................................. -16-
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2.1.2. Swingline........................................................................ -16-
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2.2. Required Payments: Termination............................................................ -17-
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2.3. Ratable Loans/Mandatory Funding........................................................... -17-
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2.4. Types of Advances......................................................................... -17-
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2.4.1 Revolving Loans................................................................... -17-
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2.4.2 Swingline......................................................................... -18-
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2.5. Facility Fee; Reductions in Revolving Loan Commitment..................................... -18-
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2.6. Minimum Amount of Each Advance............................................................ -18-
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2.6.1 Revolving Loans................................................................... -18-
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2.6.2 Swingline......................................................................... -18-
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2.7. Optional Principal Payments............................................................... -18-
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2.7.1 Revolving Loans................................................................... -18-
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2.7.2. Swingline......................................................................... -19-
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2.8. Method of Selecting Types and Interest Periods for New Advances........................... -19-
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2.8.1. Revolving Loans.................................................................. -19-
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2.8.2. Swingline........................................................................ -19-
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2.9. Conversion and Continuation of Outstanding Advances....................................... -20-
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2.10. Changes in Interest Rate, etc............................................................. -20-
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2.11. Rates Applicable After Default............................................................ -20-
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2.12. Method of Payment......................................................................... -21-
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2.13. Notes; Telephonic Notices................................................................. -21-
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2.14. Interest Payment Dates; Interest and Fee Basis............................................ -22-
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2.15. Notification of Advances, Interest Rates, Prepayments
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and Commitment Reductions................................................................. -22-
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2.16. Lending Installations..................................................................... -22-
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2.17. Non-Receipt of Funds by the Agent......................................................... -22-
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2.18. Issuance of Letters of Credit............................................................. -23-
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2.19. Letters of Credit Participation........................................................... -24-
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2.20. Compensation for Letters of Credit........................................................ -25-
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2.20.1. Letter of Credit Fee............................................................. -25-
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2.20.2. Additional Letter of Credit Fees................................................. -25-
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2.20.3. Manner of Payment................................................................ -25-
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2.21. Reimbursement of Letters of Credit........................................................ -25-
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2.22 Use of Proceeds........................................................................... -27-
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SECTION 3 YIELD PROTECTION; TAXES................................................................... -27-
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3.1. Yield Protection.......................................................................... -27-
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3.2. Changes in Capital Adequacy Regulations................................................... -28-
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3.3. Availability of Types of Advances......................................................... -28-
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3.4. Funding Indemnification................................................................... -28-
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3.5. Taxes..................................................................................... -28-
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3.6. Lender Statements; Survival of Indemnity.................................................. -30-
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SECTION 4 CONDITIONS PRECEDENT...................................................................... -30-
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4.1. Initial Advance........................................................................... -30-
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4.2. Each Advance.............................................................................. -32-
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SECTION 5 REPRESENTATIONS AND WARRANTIES............................................................ -32-
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5.1. Corporate Existence and Standing.......................................................... -32-
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5.2. Authorization and Validity................................................................ -32-
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5.3. No Conflict; Government Consent........................................................... -32-
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5.4. Financial Statements...................................................................... -33-
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5.5. No Material Adverse Change................................................................ -33-
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5.6. Taxes..................................................................................... -33-
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5.7. Litigation and Contingent Obligations..................................................... -33-
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5.8. Subsidiaries.............................................................................. -33-
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5.9. ERISA..................................................................................... -34-
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5.10. Accuracy of Information................................................................... -34-
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5.11. Regulation U.............................................................................. -34-
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5.12. Material Agreements....................................................................... -34-
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5.13. Compliance With Laws...................................................................... -34-
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5.14. Ownership of Properties................................................................... -34-
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5.15. Plan Assets; Prohibited Transactions...................................................... -34-
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5.16. Environmental Matters..................................................................... -35-
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5.17. Investment Company Act.................................................................... -35-
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5.18. Public Utility Holding Company Act........................................................ -35-
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5.19. Insurance................................................................................. -35-
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5.20. Solvency.................................................................................. -35-
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5.21. Year 2000 Issues.......................................................................... -36-
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SECTION 6 COVENANTS................................................................................. -36-
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6.1. Financial Reporting....................................................................... -36-
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6.2. Use of Proceeds........................................................................... -37-
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6.3. Notice of Default......................................................................... -38-
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6.4. Conduct of Business....................................................................... -38-
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6.5. Taxes..................................................................................... -38-
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6.6. Insurance................................................................................. -38-
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6.7. Compliance with Laws...................................................................... -38-
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6.8. Maintenance of Properties................................................................. -38-
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6.9. Inspection................................................................................ -38-
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6.10. Dividends................................................................................. -39-
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6.11. Merger.................................................................................... -39-
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6.12. Sale of Assets............................................................................ -39-
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6.13. Investments and Acquisitions.............................................................. -39-
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6.14. Liens..................................................................................... -41-
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6.15. Indebtedness.............................................................................. -42-
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6.16. Fixed Charge Coverage Ratio............................................................... -43-
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6.17. Consolidated Tangible Net Worth........................................................... -43-
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6.18. Leverage Ratio............................................................................ -43-
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6.19. Sale and Leaseback........................................................................ -43-
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6.20. Restrictive Agreements.................................................................... -43-
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6.21. New Guarantors............................................................................ -43-
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6.22. Affiliates................................................................................ -44-
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6.23. Accounting Policies....................................................................... -44-
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6.24. Subordinated Indebtedness................................................................. -44-
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SECTION 7 DEFAULTS.................................................................................. -45-
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SECTION 8 ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES............................................ -47-
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8.1. Acceleration.............................................................................. -47-
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8.2. Amendments................................................................................ -47-
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8.3. Preservation of Rights.................................................................... -48-
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SECTION 9 GENERAL PROVISIONS........................................................................ -48-
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9.1. Survival of Representations............................................................... -48-
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9.2. Governmental Regulation................................................................... -48-
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9.3. Headings.................................................................................. -49-
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9.4. Entire Agreement.......................................................................... -49-
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9.5. Several Obligations; Benefits of this Agreement........................................... -49-
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9.6. Expenses; Indemnification................................................................. -49-
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9.7. Numbers of Documents...................................................................... -50-
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9.8. Severability of Provisions................................................................ -50-
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9.9. Relationship of Parties; Mutual Release of Consequential Damages.......................... -50-
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9.10. Confidentiality........................................................................... -50-
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9.11. Nonreliance............................................................................... -50-
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SECTION 10 THE AGENT................................................................................. -50-
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10.1. Appointment; Nature of Relationship....................................................... -50-
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10.2. Powers.................................................................................... -51-
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10.3. General Immunity.......................................................................... -51-
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10.4. No Responsibility for Loans, Recitals, etc................................................ -52-
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10.5. Action on Instructions of Lenders......................................................... -52-
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10.6. Employment of Agents and Counsel.......................................................... -52-
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10.7. Reliance on Documents; Counsel............................................................ -52-
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10.8. Agent's Reimbursement and Indemnification................................................. -52-
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10.9. Notice of Default......................................................................... -53-
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10.10. Rights as a Lender........................................................................ -53-
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10.11. Lender Credit Decision.................................................................... -53-
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10.12. Successor Agent........................................................................... -53-
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10.13. Agent's Fee............................................................................... -54-
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10.14. Delegation to Affiliates.................................................................. -54-
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SECTION 11 SET OFF; RATABLE PAYMENTS................................................................. -54-
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11.1. Set off................................................................................... -54-
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11.2. Ratable Payments.......................................................................... -54-
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SECTION 12 BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS......................................... -55-
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12.1. Successors and Assigns.................................................................... -55-
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12.2. Participations............................................................................ -55-
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12.2.1 Permitted Participants; Effect................................................... -55-
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12.2.2. Voting Rights.................................................................... -56-
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12.2.3. Benefit of Set off............................................................... -56-
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12.3. Assignments............................................................................... -56-
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12.3.1. Permitted Assignments............................................................ -56-
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12.3.2. Effect; Effective Date........................................................... -57-
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12.4. Dissemination of Information.............................................................. -57-
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12.5. Tax Treatment............................................................................. -57-
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12.6. Replacement of Lenders.................................................................... -57-
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SECTION 13 NOTICES................................................................................... -58-
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13.1. Notices................................................................................... -58-
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13.2. Change of Address......................................................................... -58-
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SECTION 14 COUNTERPARTS.............................................................................. -58-
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SECTION 15 CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.............................. -59-
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15.1. CHOICE OF LAW............................................................................. -59-
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15.2. CONSENT TO JURISDICTION................................................................... -59-
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15.3. WAIVER OF JURY TRIAL...................................................................... -59-
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Schedule 1 - Lenders
Schedule 5.7 - Litigation and Contingent Obligations
Schedule 5.8 - Subsidiaries
Schedule 6.13 - Other Existing Investments
Schedule 6.14 - Liens
Exhibit A - Form of Revolving Credit Note
Exhibit B - Credit Note (Swingline)
Exhibit C - Compliance Certificate
Exhibit D - Guaranty
Exhibit E - Assignment Agreement
Exhibit F - Written Money Transfer Instructions
Exhibit G - Form of Independent Auditor's Report
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CREDIT AGREEMENT
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THIS CREDIT AGREEMENT, dated as of the 10th day of July, 1998, is among THE
FINISH LINE, INC., a Delaware corporation ("Borrower"), the Lenders party hereto
from time to time as listed on Schedule 1 hereto, and NBD BANK, N.A., a national
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banking association, as agent for the Lenders hereunder (in such capacity, the
"Agent"). The parties hereto agree as follows:
SECTION 1
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DEFINITIONS
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1.1. Defined Terms. As used herein:
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"Acquisition" means any transaction, or any series of related transactions,
consummated on or after the date of this Agreement, by which Borrower or any of
its Subsidiaries (a) acquires any going business or all or substantially all of
the assets of any Person, or division thereof, whether through purchase of
assets, merger or otherwise, or (b) directly or indirectly acquires (in one
transaction or as the most recent transaction in a series of transactions) at
least a majority (in number of votes) of the securities of a corporation which
have ordinary voting power for the election of directors (other than securities
having such power only by reason of the happening of a contingency) or a
majority (by percentage or voting power) of the outstanding ownership interests
of a partnership or limited liability company.
"Advance" means a borrowing hereunder (or conversion or continuation
thereof) consisting of the aggregate amount of the several Loans made on the
same Borrowing Date (or date of conversion or continuation) by the Lenders to
Borrower of the same Type.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns ten
percent (10%) or more of any class of voting securities (or other ownership
interests) of the controlled Person or possesses, directly or indirectly, the
power to direct or cause the direction of the management or policies of the
controlled Person, whether through ownership of stock, by contract or otherwise.
"Agent" means NBD Bank, N.A., in its capacity as contractual representative
of the Lenders hereunder, and not in its individual capacity as a Lender, and
any successor Agent appointed pursuant to this Agreement.
"Agreement" means this Credit Agreement, as it may be amended or modified
and in effect from time to time.
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the greater of (a) the Prime Rate for such day, or (b) the sum of the
Federal Funds Effective Rate for such day plus One-Half of One Percent (1/2%).
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"ABR Advance" means an Advance which bears interest at the Alternate Base
Rate.
"Applicable Facility Fee" means the per annum fee payable to the Agent for
the pro rata benefit of the Lenders as determined pursuant to Section 2.5, which
shall be based on the Fixed Charge Coverage Ratio and determined by reference to
the following table:
Fixed Charge Coverage Ratio Applicable Facility Fee
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Greater than But less than
or equal to -------------
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Level 1 3.0 to 1.0 --- 0.09%
▇▇▇▇▇ ▇ 2.25 to 1.0 3.0 to 1.0 0.10%
▇▇▇▇▇ ▇ 2.0 to 1.0 2.25 to 1.0 0.125%
▇▇▇▇▇ ▇ 1.75 to 1.0 2.0 to 1.0 0.15%
▇▇▇▇▇ ▇ 1.50 to 1.0 1.75 to 1.0 0.20%
The Applicable Facility Fee for Level 2 shall initially apply and shall be
subject to adjustment quarterly (upwards or downwards, as appropriate) based on
the Fixed Charge Coverage Ratio in accordance with the table set forth above.
The Fixed Charge Coverage Ratio shall be determined by the Agent (which
determination if made in good faith shall be conclusive absent manifest error)
based on the Financial Statements. The adjustment, if any, to the Applicable
Facility Fee shall be effective beginning on the fifth (5th) Business Day after
the delivery of such Financial Statements. In the event that Borrower shall at
any time fail to furnish to the Agent in timely fashion the Financial Statements
required to be delivered pursuant to Section 6.1, together with the Compliance
Certificate to be delivered with respect thereto, the Applicable Facility Fee
for Level 5 shall apply until the fifth (5th) Business Day after such Financial
Statements and Compliance Certificate are so delivered. In no event shall the
Applicable Facility Fee be adjusted downward if there exists a Default on the
date on which such downward adjustment would otherwise become effective until
such time as the Default has been cured, waived or ceases to exist. The
provisions of this definition are not intended to, and shall not be construed
to, authorize any violation by Borrower of any financial covenant contained in
this Agreement.
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"Applicable Margin" means the incremental margin to be paid by Borrower on
Loans hereunder and on Letters of Credit issued hereunder, which margin shall be
based on the Fixed Charge Coverage Ratio and determined by reference to the
following table:
Fixed Charge Coverage Ratio Applicable Margin
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Greater than Letters
or equal to Less than LIBOR Loans of Credit
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Level 1 3.0 to 1.0 --- .26% .26%
▇▇▇▇▇ ▇ 2.25 to 1.0 3.0 to 1.0 .275% .275%
▇▇▇▇▇ ▇ 2.0 to 1.0 2.25 to 1.0 .325% .325%
▇▇▇▇▇ ▇ 1.75 to 1.0 2.0 to 1.0 .475% .475%
▇▇▇▇▇ ▇ 1.50 to 1.0 1.75 to 1.0 .80% .80%
The Applicable Margin for Level 2 shall initially apply and shall be subject to
adjustment quarterly (upwards or downwards, as appropriate) based on the Fixed
Charge Coverage Ratio in accordance with the table set forth above. The Fixed
Charge Coverage Ratio shall be determined by the Agent (which determination if
made in good faith shall be conclusive absent manifest error) based on the
Financial Statements. The adjustment, if any, to the Applicable Margin shall be
effective beginning on the fifth (5th) Business Day after the delivery of such
Financial Statements. In the event that Borrower shall at any time fail to
furnish to the Agent in timely fashion the Financial Statements required to be
delivered pursuant to Section 6.1, together with the Compliance Certificate to
be delivered with respect thereto, the Applicable Margin for Level 5 shall apply
until the fifth (5th) Business Day after such Financial Statements and
Compliance Certificate are so delivered. In no event shall the Applicable
Margin be adjusted downward if there exists a Default on the date on which such
downward adjustment would otherwise become effective until such time as the
Default has been cured, waived or ceases to exist. The provisions of this
definition are not intended to, and shall not be construed to, authorize any
violation by Borrower of any financial covenant contained in this Agreement.
"Arranger" means First Chicago Capital Markets, Inc., a Delaware
corporation, and its successors.
"Authorized Officer" means the President or any Senior Vice President or
such other officer of Borrower whose authority to perform acts to be performed
only by an Authorized Officer under the terms of this Agreement is evidenced by
a written authorization signed by an Authorized Officer or by a certified copy
of an appropriate resolution of the Board of Directors of Borrower.
"Borrower" means The Finish Line, Inc., a Delaware corporation.
"Borrowing Date" means a date on which an Advance is made hereunder.
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"Borrowing Notice" shall have the meaning ascribed thereto in Section
2.8.1.
"Business Day" means (a) with respect to any borrowing, payment or rate
selection of LIBOR Advances, a day (other than a Saturday or Sunday) on which
each Lender is open for the conduct of substantially all of its commercial
lending activities and on which dealings in United States dollars are carried on
in the London interbank market, and (b) for all other purposes, a day (other
than a Saturday or Sunday) on which each Lender is open for the conduct of
substantially all of its commercial lending activities.
"Capital Expenditures" means, without duplication, any expenditures for any
purchase or other acquisition of any asset which would be classified as a fixed
or capital asset on a consolidated balance sheet of Borrower and its
Subsidiaries prepared in accordance with GAAP.
"Capitalized Lease" means any lease of Property which would be capitalized
on a balance sheet of a Person prepared in accordance with GAAP.
"Capitalized Lease Obligations" means the amount of the obligations of a
Person under Capitalized Leases which would be shown as a liability on a balance
sheet of a Person prepared in accordance with GAAP.
"Change" shall have the meaning ascribed thereto in Section 3.2.
"Change in Control" means (a) one or more of the existing owners of the
class B stock of Borrower (including a "Permitted Transferee" (as defined in
Borrower's Restated Certificate of Incorporation in effect as of the date
hereof) of such existing owners) fail to own, in the aggregate, more than fifty-
one percent (51%) of the total voting rights of Borrower, or (b) the occurrence
during any period of twelve (12) consecutive months, commencing before or after
the date of this Agreement, pursuant to which individuals who on the first day
of such period were directors of Borrower (together with any replacement or
additional directors who were nominated or elected by a majority of directors
then in office) cease to constitute a majority of the Board of Directors of
Borrower.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Commitment" means, for each Lender, such Lender's Revolving Loan
Commitment and such other commitments that may be provided in this Agreement or
as set forth in any Notice of Assignment relating to any assignment that has
become effective pursuant to Section 12.3.2, as such amount may be modified from
time to time pursuant to the terms hereof.
"Compliance Certificate" means a Compliance Certificate, in the form of
Exhibit C hereto, duly executed by the chief executive officer or chief
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financial officer of Borrower.
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"Condemnation" shall have the meaning ascribed thereto in Section 7.8.
"Consolidated Interest Expense" means, for any period, the consolidated
gross interest expense of Borrower and its Subsidiaries, determined on a
consolidated basis and as shown on the Financial Statements.
"Consolidated Net Income" means, for any period, the consolidated net
income (or loss) of Borrower and its Subsidiaries after deductions for income
taxes, determined on a consolidated basis in accordance with GAAP and as shown
on the Financial Statements.
"Consolidated Net Worth" means the excess of Borrower's Consolidated Total
Assets over Borrower's Consolidated Total Liabilities.
"Consolidated Tangible Net Worth" means, on any date of determination, the
amount by which (a) Consolidated Net Worth exceeds (b) the sum of (i) all assets
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of Borrower and its Subsidiaries which would be classified as intangible assets
under GAAP, including without limitation, goodwill (whether representing the
excess of cost over book value of assets acquired or otherwise), patents,
trademarks, trade names, copyrights, franchises, operating permits, unamortized
debt discount and expense, organization costs, and research and development
costs, (ii) treasury stock, (iii) securities not constituting marketable
securities, (iv) cash set apart and held in a sinking or other similar fund
established for the purpose of redemption or other retirement of capital stock,
(v) to the extent not otherwise deducted, reserves for depreciation, depletion,
obsolescence and/or amortization of properties and all other reserves or
appropriations of retained earnings which, in accordance with GAAP, should be
established in connection with the business conducted by Borrower, and (vi) any
revaluation or other write-up in book value of assets subsequent to the date
hereof (but only to the extent not permitted under GAAP).
"Consolidated Total Assets" means the total assets of Borrower and its
Subsidiaries, determined on a consolidated basis in accordance with GAAP and as
shown on the Financial Statements.
"Consolidated Total Liabilities" means the total liabilities of Borrower
and its Subsidiaries, determined on a consolidated basis in accordance with GAAP
and as shown on the Financial Statements.
"Conversion/Continuation Notice" shall have a meaning ascribed thereto in
Section 2.9.
"Controlled Group" means all members of a controlled group of corporations
or other business entities and all trades or businesses (whether or not
incorporated) under common control which, together with Borrower or any of its
Subsidiaries, are treated as a single employer under Section 414 of the Code.
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"Credit Note" means the Credit Note (Swingline), in substantially the form
of Exhibit B hereto, duly executed by Borrower to NBD to evidence Advances under
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the Swingline, including any amendment, modification, renewal, extension or
replacement thereof.
"Default" means an event described in Section 7.
"EBIT" means, with respect to Borrower and its Subsidiaries determined on a
consolidated basis for any specified period, the sum of (a) Consolidated Net
Income, plus (b) to the extent deducted in determining Consolidated Net Income,
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income taxes paid or accrued, minus (c) to the extent included in Consolidated
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Net Income, extraordinary gains, plus (d) to the extent deducted in determining
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Consolidated Net Income, extraordinary losses, plus (e) Consolidated Interest
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Expense.
"Eligible Assignee" means a commercial bank, financial institution or other
"accredited investor," as defined in Regulation D of the Securities Act of 1933,
as amended, and the rules and regulations promulgated thereunder.
"Environmental Laws" means all provisions of laws, statutes, ordinances,
rules, regulations, permits, licenses, judgments, writs, injunctions, decrees,
orders, awards and standards promulgated by any Governmental Authority
concerning the protection of, or regulation of the discharge of substances into,
the environment or concerning the health or safety of persons with respect to
environmental hazards, and includes, without limitation, the Hazardous Materials
Transportation Act, 42 U.S.C. (S)1801 et seq., the Comprehensive Environmental
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Response, Compensation and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986, 42 U.S.C. (S)(S)9601 et seq., the
Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery
Act of 1976 and the Solid and Hazardous Waste Amendments of 1984, 42 U.S.C.
(S)(S)6901 et seq., the Federal Water Pollution Control Act, as amended by the
Clean Water Act of 1977, 33 U.S.C. (S)(S)1251 et seq., the Clean Air Act of
1966, as amended, 42 U.S.C. (S)(S)7401 et seq., the Toxic Substances Control Act
of 1976, 15 U.S.C. (S)(S)2601 et seq., the Federal Insecticide, Fungicide, and
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇ ▇.▇.▇. (▇)▇▇▇▇ et seq., the Occupational Safety and Health
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Act of 1970, as amended, 29 U.S.C. (S)(S)651 et seq., the Emergency Planning and
Community Right-to-Know Act of 1986, 42 U.S.C. (S)(S)11001 et seq., the National
Environmental Policy Act of 1975, 42 U.S.C. (S)(S)4321 et seq., the Safe
Drinking Water Act of 1974, as amended, 42 U.S.C. (S)(S)300(f) et seq., and any
similar or implementing state law, and all amendments, rules, and regulations
promulgated thereunder.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"ERISA Affiliate" means any trade or business, whether or not incorporated,
which together with Borrower would be treated as a single employer under ERISA.
"Excluded Taxes" means, in the case of each Lender or applicable Lending
Installation and the Agent, (a) federal taxes imposed on its overall net income,
and (b) other taxes imposed on its overall net income, and franchise taxes
imposed on it, by (i) the jurisdiction under the laws of which
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such Lender or the Agent is incorporated or organized, (ii) the jurisdiction in
which the Agent's or such Lender's principal executive office or such Lender's
applicable Lending Installation is located, or (iii) a jurisdiction imposing
such taxes as a result of a former connection between the Agent, such Lender or
such Lender's applicable Lending Installation and such jurisdiction.
"Facilities" means the Revolving Loans, the Swingline, the Letters of
Credit, and any other credit facility provided by the Lenders from time to time
pursuant to this Agreement.
"Facility Termination Date" means July 10, 2003.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m.
(Indianapolis time) on such day on such transactions received by the Agent from
three (3) Federal funds brokers of recognized standing selected by the Agent in
its sole discretion.
"Fee Letter" means that certain letter agreement issued by the Agent and
the Arranger dated July 10, 1998, and accepted by Borrower on July 10, 1998.
"Financial Contract" of a Person means (a) any exchange-traded or over-the-
counter futures, commodity, forward, swap or option contract or other financial
instrument with similar characteristics, (b) any agreements, devices or
arrangements providing for payments related to fluctuations of interest rates,
exchange rates or forward rates, including, but not limited to, interest rate
exchange agreements, forward currency exchange agreements, interest rate cap or
collar protection agreements, forward rate currency or interest rate options, or
(c) to the extent not otherwise included in the foregoing, any Rate Hedging
Agreement.
"Financial Statements" means, as the context may require, (a) the
consolidated and consolidating balance sheets of Borrower and its Subsidiaries
as of February 28, 1998 and their consolidated and consolidating statements of
income and retained earnings and consolidated statement of cash flows for the
periods then ended, and (b) the consolidated and consolidating financial
statements of Borrower and its Subsidiaries furnished from time to time pursuant
to Section 6.1; in all cases, together with any accompanying notes thereto, and
any other documents or data furnished in connection therewith.
"Fixed Charge Coverage Ratio" means, as of the last day of any fiscal
quarter of Borrower, with respect to Borrower and its Subsidiaries determined on
a consolidated basis, the ratio of (a) the sum of (i) EBIT for the four (4)
consecutive fiscal quarters ending on the date of determination, plus (ii)
----
Rentals, to (b) the sum of (i) Consolidated Interest Expense for the four (4)
--
consecutive fiscal
-7-
quarters ending on the date of determination, plus (ii) Rentals, all as
----
determined by reference to the Financial Statements.
"GAAP" means generally accepted accounting principles in the United States
of America in effect from time to time as promulgated by the Financial Standards
Accounting Board and recognized and interpreted by the American Institute of
Certified Public Accountants.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof, and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of, or pertaining to,
government, including, without limiting the generality of the foregoing, any
agency, body, commission, court or department thereof, whether federal, state,
local or foreign.
"Guarantors" means, jointly and severally, Spike's Holding, Inc., a
Delaware corporation and any U.S. domestic Subsidiaries of Borrower that become
Guarantors pursuant to Section 6.21.
"Guaranty" means each Subsidiary Guaranty, in substantially the form of
Exhibit D hereto, duly executed by each of the Guarantors to the Lenders in
---------
connection with the Obligations, including any modification or replacement
thereof.
"Hazardous Materials" means asbestos, polychlorinated biphenyls and
petroleum products and any other regulated, hazardous or toxic materials, wastes
and substances which are regulated, defined, determined or identified as such in
any Environmental Laws (whether now existing or hereafter enacted or
promulgated).
"Indebtedness" of a Person means such Person's (a) obligations for borrowed
money, (b) obligations representing the deferred purchase price of Property or
services, (c) obligations, whether or not assumed, secured by Liens or payable
pursuant to an agreement out of the proceeds from the sale of Property now or
hereafter owned or acquired by such Person, (d) obligations which are evidenced
by notes, acceptances, or other instruments, (e) Capitalized Lease Obligations,
(f) indebtedness or other obligations of any other Person for borrowed money or
for the deferred purchase price of property or services, the payment or
collection of which the subject Person has guaranteed (except by reason of
endorsement for collection in the ordinary course of business) or in respect of
which the subject Person is liable, contingently or otherwise, including,
without limitation, liability by way of agreement to provide funds for payment,
to supply funds to or otherwise to invest in such other Person, or otherwise to
assure a creditor against loss, (g) reimbursement or other obligations in
connection with letters of credit, (h) obligations in connection with Sale and
Leaseback Transactions, (i) Net ▇▇▇▇-To-Market Exposure of Rate Hedging
Agreements or other Financial Contracts, and (j) any obligation that may be
quantified arising with respect to any other transaction which is the functional
equivalent of, or takes the place of, borrowing, but which would not constitute
a liability on a balance sheet of such Person prepared in accordance with GAAP;
provided, that Indebtedness shall not be deemed to include (i) rental expense
under any Operating Lease, (ii) accounts payable arising in the ordinary course
of such Person's business payable on terms customary
-8-
in the trade, or (iii) any equity security that is not convertible into
Indebtedness (including preferred stock that is not convertible into
Indebtedness).
"Interest Period" means a LIBOR Interest Period and/or a Negotiated Rate
Interest Period, as the context requires.
"Investment" of a Person means any loan, advance (other than commission,
travel and similar advances to officers and employees made in the ordinary
course of business), extension of credit (other than accounts receivable arising
in the ordinary course of business on terms customary in the trade) or
contribution of capital by such Person; stocks, bonds, mutual funds, partnership
interests, notes, debentures or other securities owned by such Person; any
deposit accounts and certificates of deposit owned by such Person; and
structured notes, derivative financial instruments and other similar instruments
or contracts owned by such Person.
"Lenders" means the financial institutions listed on Schedule 1 of this
----------
Agreement and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender or the Agent, the
office, branch, subsidiary or affiliate of such Lender or the Agent listed on
the signature pages hereof or on a Schedule hereto or otherwise selected by such
Lender or the Agent pursuant to Section 2.16.
"Letter of Credit Application" means an Application for Standby Letter of
Credit in the form prescribed by NBD, duly executed by Borrower in favor of NBD,
from time to time, to govern a Letter of Credit issued pursuant to this
Agreement, as any such Letter of Credit Application may be amended from time to
time.
"Letters of Credit" means standby letters of credit now or hereafter issued
by NBD from time to time at the request of, and for the account of, Borrower
issued pursuant to this Agreement.
"Leverage Ratio" means, with respect to Borrower and its Subsidiaries
determined on a consolidated basis as of the last day of any fiscal quarter of
Borrower, the ratio of (a) the sum of (i) Indebtedness, plus (ii) six (6) times
----
Rentals, to (b) the sum of (i) Consolidated Net Worth, plus (ii) Indebtedness,
-- ----
plus (iii) six (6) times Rentals, all as determined by reference to the
---- -----
Financial Statements.
"LIBOR" means, with respect to a LIBOR Advance for the relevant LIBOR
Interest Period, the sum of (a) the quotient of (i) the LIBO Base Rate
applicable to such LIBOR Interest Period, divided by (ii) one minus the Reserve
------- -- -----
Requirement (expressed as a decimal), if any, applicable to such LIBOR Interest
Period, plus (b) the Applicable Margin. The LIBOR shall be rounded to the next
----
higher multiple of 1/16 of 1% if the foregoing sum is not such a multiple.
"LIBOR Advance" means an Advance which bears interest by reference to the
LIBOR.
-9-
"LIBO Base Rate" means, with respect to a LIBOR Advance for the relevant
LIBOR Interest Period, the rate determined by the Agent to be the rate at which
NBD offers to place deposits in U.S. dollars with first-class banks in the
London interbank market at approximately 11:00 a.m. (London time) two (2)
Business Days prior to the first day of such LIBOR Interest Period, in the
approximate amount of NBD's relevant LIBOR Loan and having a maturity
approximately equal to such LIBOR Interest Period.
"LIBOR Interest Period" means, with respect to a LIBOR Advance, a period of
one (1), two (2), three (3) or six (6) months commencing on a Business Day
selected by Borrower pursuant to this Agreement. Such LIBOR Interest Period
shall end on the day which corresponds numerically to such date one (1), two
(2), three (3) or six (6) months thereafter, provided, however, that if there is
-------- -------
no such numerically corresponding day in such next, second (2nd), third (3rd) or
sixth (6th) succeeding month, such LIBOR Interest Period shall end on the last
Business Day of such next, second (2nd), third (3rd) or sixth (6th) succeeding
month. If a LIBOR Interest Period would otherwise end on a day which is not a
Business Day, such LIBOR Interest Period shall end on the next succeeding
Business Day, provided, however, that if said next succeeding Business Day falls
-------- -------
in a new calendar month, such LIBOR Interest Period shall end on the immediately
preceding Business Day. Not more than six (6) LIBOR Interest Periods may be
selected at any one time to apply to outstanding Advances.
"LIBOR Loan" means a Loan which bears interest by reference to the LIBOR.
"Lien" means any lien (statutory or other), security interest, mortgage,
pledge, hypothecation, assignment, deposit arrangement, encumbrance or
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including, without limitation, the interest of a
vendor or lessor under any conditional sale, Capitalized Lease or other title
retention agreement).
"Loan Documents" means this Agreement, the Notes, each Guaranty, any Letter
of Credit Applications, and any other documents or instruments now or hereafter
executed and delivered by or on behalf of Borrower to any Lender or the Agent to
evidence or govern the Obligations.
"Loan" means, with respect to a Lender, such Lender's loan made pursuant to
Section 2 (or any conversion or continuation thereof).
"Mandatory Funding" shall have the meaning ascribed thereto in Section 2.3.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, financial condition or Properties of Borrower and its
Subsidiaries taken as a whole, (b) the ability of Borrower to perform
Obligations under the Loan Documents, (c) the validity or enforceability of any
of the Loan Documents or any material provision thereof or any transaction
contemplated thereby, or (d) the rights and remedies of the Lenders and the
Agent under any of the Loan Documents.
-10-
"Material Indebtedness" shall have the meaning ascribed thereto in Section
7.5.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which Borrower or any member of
the Controlled Group is a party to which more than one employer is obligated to
make contributions.
"NBD" means NBD Bank, N.A., a national banking association, having its
principal offices in Indianapolis, Indiana, in its individual capacity, and its
successors.
"Negotiated Rate" shall mean, with respect to Advances under the Swingline
not constituting ABR Advances, the interest rate mutually agreed upon between
NBD and Borrower and as described in the Fee Letter to be applicable to
Negotiated Rate Advances pursuant to Section 2.4.2.
"Negotiated Rate Advance" means an Advance which bears interest by
reference to a Negotiated Rate.
"Negotiated Rate Interest Period" shall mean, with respect to any
Negotiated Rate Advance, the period commencing on the day such Negotiated Rate
Advance is made and ending on such day thereafter, as mutually agreed upon
between Borrower and NBD, provided that (a) no Negotiated Rate Interest Period
shall exceed thirty (30) days; (b) each Negotiated Rate Interest Period which
would otherwise end on a day which is not a Business Day shall be extended to
the next succeeding Business Day, provided, however, if the next succeeding
-------- -------
Business Day would extend the Negotiated Rate Interest Period beyond thirty (30)
days, then the next preceding Business Day; and (c) no Negotiated Rate Interest
Period may be agreed upon that extends beyond the Facility Termination Date.
"Net ▇▇▇▇-to-Market Exposure" of a Person means, as of any date of
determination, the excess (if any) of all unrealized losses over all unrealized
profits of such Person arising from Rate Hedging Agreements. "Unrealized
losses" means the fair market value of the cost to such Person of replacing such
Rate Hedging Agreement as of the date of determination (assuming the Rate
Hedging Agreement were to be terminated as of that date), and "unrealized
profits" means the fair market value of the gain to such Person of replacing
such Rate Hedging Agreement as of the date of determination (assuming such Rate
Hedging Agreement were to be terminated as of that date).
"Non-U.S. Lender" shall have the meaning ascribed in Section 3.5(d).
"Notes" means, collectively, the Revolving Credit Notes and the Credit
Note.
"Notice of Assignment" shall have the meaning ascribed in Section 12.3.2.
"Obligations" means all unpaid principal of and accrued and unpaid interest
on the Loans, actual and contingent reimbursement obligations under the Letters
of Credit, all commitment and facility fees, Agent fees, Letter of Credit fees,
all other obligations, indemnities, reimbursements and
-11-
liabilities of Borrower to the Lenders or to any Lender or to the Agent or any
indemnified party hereunder in connection with the Facilities of every type and
description, direct or indirect, absolute or contingent, due or to become due,
now existing or hereafter arising, or otherwise arising under the Loan Documents
whether or not contemplated by Borrower or the Lenders as of the date hereof,
including, without limitation, all reasonable costs of collection and
enforcement of any and all thereof, including reasonable attorneys' fees.
"Operating Lease" of a Person means any lease of Property (other than a
Capitalized Lease) by such Person as lessee.
"Other Taxes" shall have the meaning ascribed in Section 3.5(b).
"Payment Date" means the last day of each August, November, February and
May.
"Participants" shall have the meaning ascribed thereto in Section 12.2.1.
"PBGC" means the Pension Benefit Guaranty Corporation established pursuant
to ERISA, or any successor thereto.
"Person" means any natural person, corporation, firm, joint venture,
general or limited partnership, limited liability company, association,
enterprise, trust or other entity or organization, or any government or
political subdivision or any agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title IV
of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which Borrower or any member of the Controlled Group may have any
liability, including, without limitation, The Finish Line, Inc. Profit Sharing
Plan.
"Prime Rate" means the variable per annum rate of interest established and
quoted by NBD from time to time as its "prime rate," as adjusted on the
effective date of each change in such established and quoted rate, provided that
--------
such prime rate shall not necessarily be representative of the rate of interest
actually charged by NBD on any loan or class of loans.
"Pro Rata Share" means, as to any Lender, when used with reference to an
aggregate or total amount, an amount equal to the product of (a) such aggregate
or total amount, multiplied by (b) a fraction, the numerator of which shall be
---------- --
the sum of such Lender's Revolving Loan Commitment (or, if the Revolving Loan
Commitments have been terminated, the sum of such Lender's outstanding Revolving
Loan and share of the face amount of outstanding Letters of Credit) and the
denominator of which shall be the sum of the total Revolving Loan Commitments
(or, if the Revolving Loan Commitments have been terminated, the sum of the
total outstanding Revolving Loan Advances and the aggregate face amount of
outstanding Letters of Credit).
-12-
"Property" of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased or
operated by such Person.
"Purchasers" shall have the meaning ascribed in Section 12.3.1.
"Rate Hedging Agreement" means an agreement, device or arrangement
providing for payments which are related to fluctuations of interest rates,
exchange rates or forward rates, including, but not limited to, dollar-
denominated or cross-currency interest rate exchange agreements, forward
currency exchange agreements, interest rate cap or collar protection agreements,
forward rate currency or interest rate options, puts and warrants.
"Rate Hedging Obligations" of a Person means any and all obligations of
such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (a) any and all Rate
Hedging Agreements, and (b) any and all cancellations, buy backs, reversals,
terminations or assignments of any Rate Hedging Agreement.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.
"Rentals" means, as of the last day of any fiscal quarter of Borrower, with
respect to Borrower and its Subsidiaries determined on a consolidated basis, the
aggregate amount of rental expense (as determined in accordance with GAAP) under
any Operating Lease (including, without limitation, base rent, overage rent and
step rent)for the four (4) consecutive fiscal quarters ending on the date of
determination.
"Replaced Lender" and "Replacement Lender" shall have the respective
meanings ascribed thereto in Section 12.6.
"Reportable Event" means a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within thirty (30)
days of the occurrence of such event, provided, however, that a failure to meet
-------- -------
the minimum funding standard of Section 412 of the Code and of Section 302 of
ERISA shall be a Reportable Event regardless of the issuance of any such waiver
of the notice requirement in accordance with either Section 4043(a) of ERISA or
Section 412(d) of the Code.
-13-
"Required Lenders" means Lenders in the aggregate having at least fifty-one
percent (51%) of the Revolving Loan Commitments, or if the Revolving Loan
Commitments have been terminated, the outstanding Advances.
"Reserve Requirement" means, for any LIBOR Loan for any LIBOR Interest
Period therefor, the maximum aggregate reserve requirement (including all basic,
supplemental, marginal and other reserves) which is imposed under Regulation D
on "Eurocurrency liabilities" (as such term is used in Regulation D).
"Revolving Loan" means, with respect to a Lender, such Lender's portion of
the outstanding Revolving Loan Advances made by such Lender to Borrower pursuant
to its respective Revolving Loan Commitment, including any extensions or
renewals thereof.
"Revolving Loan Advances" means an Advance under the Revolving Loan
Commitment.
"Revolving Loan Commitment" means, for each Lender, the obligation of such
Lender to make Revolving Loans not exceeding the amount set forth opposite such
Lender's name on Schedule 1 hereto as such Lender's Revolving Loan Commitment or
----------
as set forth in any Notice of Assignment relating to any assignment that has
become effective pursuant to Section 12.3.2, as such amount may be modified from
time to time pursuant to the terms hereof, and "Revolving Loan Commitments"
means the sum of the Lenders' Revolving Loan Commitments.
"Revolving Credit Notes" means the Revolving Credit Notes, each
substantially in the form of Exhibit A hereto, duly executed by Borrower to the
----------
respective Lenders to evidence the Revolving Loans, including any and all
renewals, extensions, replacements and modifications thereof.
"Risk-Based Capital Guidelines" shall have the meaning ascribed thereto in
Section 3.2.
"Sale and Leaseback Transaction" means any sale or other transfer of
Property by any Person with the intent to lease such Property as lessee.
"Single Employer Plan" means a Plan maintained by Borrower or any member of
the Controlled Group for employees of Borrower or any member of the Controlled
Group.
"Subordinated Indebtedness" means Indebtedness of Borrower to a Wholly-
Owned Subsidiary of Borrower which is subordinated to the payment of the
Obligations pursuant to the Guaranty and any other Indebtedness of Borrower the
payment of which is subordinated to payment of the Obligations to the written
satisfaction of the Required Lenders.
"Subsidiary" of a Person means (a) any corporation more than fifty percent
(50%) of the outstanding securities having ordinary voting power of which shall
at the time be owned or controlled, directly or indirectly, by such Person or by
one or more of its Subsidiaries or by such Person and one or more of its
Subsidiaries, (b) any partnership, limited liability company, association,
-14-
joint venture or similar business organization more than fifty percent (50%) of
the ownership interests having ordinary voting power of which shall at the time
be so owned or controlled. Unless otherwise expressly provided, all references
herein to a "Subsidiary" shall mean a Subsidiary of Borrower, or (c) any other
corporation, partnership, limited liability company, association, joint venture
or similar business organization that may have its financial statements
consolidated with Borrower's financial statements in accordance with GAAP.
"Substantial Portion" means, with respect to the Property of Borrower and
its Subsidiaries, Property which represents more than ten percent (10%) of the
Consolidated Total Assets as shown in the Financial Statements as at the end of
the most recently completed fiscal quarter.
"Swingline" means the unsecured cash management line of credit in the
maximum principal amount of Ten Million Dollars ($10,000,000) provided by NBD to
Borrower, governed by this Agreement, including any renewal or extension
thereof.
"Swingline Advances" means Advances under the Swingline.
"Taxes" means any and all present or future taxes, duties, levies, imposts,
deductions, charges or withholdings, and any and all liabilities with respect to
the foregoing, but excluding Excluded Taxes.
---------
"Transferee" shall have the meaning ascribed thereto in Section 12.4.
"Type" means, with respect to any Advance, its nature as an ABR Advance,
LIBOR Advance or Negotiated Rate Advance.
"Unfunded Liabilities" means the amount (if any) by which the present value
of all vested and unvested accrued benefits under all Single Employer Plans
exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans using PBGC actuarial assumptions for single employer plan terminations.
"Unmatured Default" means an event which but for the lapse of time or the
giving of notice, or both, would constitute a Default.
"Wholly-Owned Subsidiary" of a Person means (a) any Subsidiary all of the
outstanding voting securities of which shall at the time be owned or controlled,
directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries
of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of
such Person, or (b) any partnership, limited liability company, association,
joint venture or similar business organization one hundred percent (100%) of the
ownership interests having ordinary voting power of which shall at the time be
so owned or controlled.
-15-
"Year 2000 Issues" means the anticipated costs, problems and uncertainties
associated with the inability of certain computer applications to effectively
handle data including dates on and after January 1, 2000, as it affects the
business, operations, and financial condition of the Borrower, or the Borrower
and its Subsidiaries.
1.2. Rules of Construction. The foregoing definitions shall be equally
---------------------
applicable to both the singular and plural forms of the defined terms and shall
be construed accordingly. Use of the terms "herein," "hereof" and "hereunder"
shall be deemed references to this Agreement in its entirety and not to the
Section clause in which such term appears. References to "Sections" and
"subsections" shall be to Sections and subsections, respectively, of this
Agreement unless otherwise specifically provided.
1.3. Accounting Terms. All accounting terms not specifically defined
----------------
herein shall be construed in accordance with GAAP consistent with those applied
in the preparation of the Financial Statements.
SECTION 2
---------
THE CREDITS
-----------
2.1. Commitments.
-----------
2.1.1. Revolving Loans. Subject to the terms and conditions of this
---------------
Agreement and prior to the Facility Termination Date, each Lender severally
agrees, on the terms and conditions set forth in this Agreement, to make
Revolving Loans to Borrower from time to time in amounts not to exceed in the
aggregate at any one time outstanding the amount of its Revolving Loan
Commitment. No requested Revolving Loan Advance shall cause the aggregate
outstanding principal balance of the Revolving Loan Advances plus the aggregate
----
outstanding principal balance of the Swingline Advances plus outstanding Letters
----
of Credit and unreimbursed drawings thereunder to exceed the Revolving Loan
Commitments. Subject to the terms of this Agreement, Borrower may borrow, repay
and reborrow such available amount under the Revolving Loan Commitments at any
time prior to the Facility Termination Date. The Revolving Loan Commitments to
lend hereunder shall expire on the Facility Termination Date. The Revolving
Loans made by the Lenders pursuant hereto shall be evidenced by the Revolving
Credit Notes.
2.1.2. Swingline. Subject to the terms and conditions of this
---------
Agreement and prior to the Facility Termination Date, NBD shall make the
Swingline available to Borrower in a maximum principal amount equal to the
lesser of (a) the unborrowed portion of its Revolving Loan Commitment, or (b)
Ten Million Dollars ($10,000,000). No requested Advance shall cause the
aggregate outstanding principal balance of the Swingline Advances to exceed Ten
Million Dollars ($10,000,000) and no requested Advance shall cause the aggregate
outstanding principal balance of the Swingline Advances plus the aggregate
----
outstanding principal balance of the Revolving Loan
-16-
Advances plus outstanding Letters of Credit and unreimbursed drawings thereunder
----
to exceed the Revolving Loan Commitments. Subject to the terms of this
Agreement, Borrower may borrow, prepay and reborrow such available amount under
the Swingline at any time prior to the Facility Termination Date. NBD's
commitment to make Swingline Advances hereunder shall expire on the Facility
Termination Date. Advances under the Swingline shall be evidenced by the Credit
Note.
2.2. Required Payments: Termination. Any outstanding Advances and all
------------------------------
other unpaid Obligations shall be paid in full by Borrower on the Facility
Termination Date.
2.3. Ratable Loans/Mandatory Funding. With respect to the Revolving Loan
-------------------------------
Commitments, each Advance thereunder shall consist of Revolving Loans made from
the several Lenders in accordance with their respective Pro Rata Share. On any
Business Day, NBD may, in its sole discretion, give notice to the Lenders that
the outstanding principal balance of the Swingline shall be funded with a
Revolving Loan Advance (provided that such notice shall be deemed to have been
--------
automatically given upon the occurrence of a Default under Section 7.6 or 7.7),
in which case an Advance under the Revolving Loan Commitments constituting an
ABR Advance (each such Advance being referred to herein as a "Mandatory
Funding") shall be made on the immediately succeeding Business Day by all
Lenders according to each Lender's Pro Rata Share of the Revolving Loan
Commitments, and the proceeds thereof shall be applied directly to NBD to repay
such outstanding Swingline Advances. Each Lender hereby irrevocably agrees to
make such Revolving Loans, pursuant to each Mandatory Funding in the amount and
in the manner specified in the preceding sentence and on the date specified to
it by NBD notwithstanding: (a) that the amount of the Mandatory Funding may not
comply with the minimum amount for a borrowing specified in Section 2.6; (b)
whether any conditions specified in Section 4 are then satisfied; (c) the date
of such Mandatory Funding; and (d) any reduction in the total Revolving Loan
Commitment after any such Advances under the Swingline were made. In the event
that any Mandatory Funding cannot for any reason be made on the date otherwise
required above (including, without limitation, as a result of the commencement
of a proceeding under the Bankruptcy Code in respect of Borrower), each Lender
hereby agrees that it shall forthwith purchase from NBD (without recourse or
warranty) such assignment of the outstanding Advances under the Swingline as
shall be necessary to cause such Lenders to share in such Advances ratably based
upon their respective Revolving Loan Commitments, provided that all interest
--------
payable on such Advances shall be for the account of NBD until the date the
respective assignment is purchased and, to the extent attributable to the
purchased assignment, shall be payable to the Lender purchasing same from and
after such date of purchase.
2.4. Types of Advances.
-----------------
2.4.1 Revolving Loans. The Advances under the Revolving Loans may be
---------------
ABR Advances or LIBOR Advances, or a combination thereof, selected by
Borrower in accordance with Sections 2.8.1 and 2.9.
-17-
2.4.2 Swingline. The Advances under the Swingline may be ABR
---------
Advances or Negotiated Rate Advances, or a combination thereof, selected by
Borrower in accordance with Section 2.8.2.
2.5. Facility Fee; Reductions in Revolving Loan Commitment. Borrower
-----------------------------------------------------
agrees to pay to the Agent, for the account of each Lender in accordance with
their Pro Rata Shares, a non-refundable facility fee accruing at the rate of the
Applicable Facility Fee per annum from and after the date hereof until the
earlier of the Facility Termination Date or the date the Commitments are
terminated pursuant to the terms hereof on the aggregate amount of the Revolving
Loan Commitments in effect from time to time. Such facility fees shall be
payable in advance (a) for the period from the date hereof to August 31, 1998,
payable on the date hereof, and (b) thereafter quarterly in advance on each
Payment Date commencing August 31, 1998. Such facility fees shall not be or
refundable for any reason, including, without limitation, any subsequent
reduction of the Revolving Loan Commitments after the due date of such facility
fees. Borrower may permanently reduce the Revolving Loan Commitments in whole,
or in part ratably among the Lenders in integral multiples of Five Million
Dollars ($5,000,000), upon at least three (3) Business Days' written notice to
the Agent, which notice shall specify the amount of any such reduction,
provided, however, that the amount of the Revolving Loan Commitments may not be
-------- -------
reduced below the aggregate principal amount of the outstanding Revolving Loan
Advances plus the aggregate principal amount of the outstanding Swingline
----
Advances plus the amount of any outstanding Letters of Credit and unreimbursed
----
drawings thereunder.
2.6. Minimum Amount of Each Advance.
------------------------------
2.6.1 Revolving Loans. Except for a Mandatory Funding, each
---------------
Revolving Loan Advance shall be in the minimum amount of Three Million Dollars
($3,000,000) (and in multiples of One Million Dollars ($1,000,000) if in excess
thereof), provided, however, that any ABR Advance may be in the amount of the
-------- -------
unused Revolving Loan Commitments.
2.6.2 Swingline. Each Swingline Advance shall be in the minimum
---------
amount of One Hundred Thousand Dollars ($100,000) (and in multiples of One
Hundred Thousand Dollars ($100,000) if in excess thereof).
2.7. Optional Principal Payments.
---------------------------
2.7.1 Revolving Loans. Except as provided in, and subject to,
---------------
Section 3.4 with respect to LIBOR Advances, Borrower may from time to time, (a)
upon one Business Day notice to the Agent, without penalty or premium, prepay in
full all outstanding Revolving Loan Advances constituting ABR Advances and, if
paid on the last day of the applicable LIBOR Interest Period, LIBOR Advances,
or, prepay in partial prepayment in a minimum aggregate amount of Three Million
Dollars ($3,000,000) or any integral multiple of One Million Dollars
($1,000,000) in excess thereof, any portion of the outstanding Revolving Loan
Advances constituting ABR Advances or, if paid on the last day of the applicable
LIBOR Interest Period, LIBOR Advances, and (b) upon three Business
-18-
Days notice to the Agent, without penalty or premium, prepay in full all
outstanding Revolving Loan Advances constituting LIBOR Advances if paid on any
day other than the last day of the applicable LIBOR Interest Period, or, prepay
in partial prepayment in a minimum aggregate amount of Three Million Dollars
($3,000,000) or any integral multiple of One Million Dollars ($1,000,000) in
excess thereof, any portion of the outstanding Revolving Loan Advances
constituting LIBOR Advances if paid on any day other than the last day of the
applicable LIBOR Interest Period.
2.7.2. Swingline. Borrower may from time to time prepay, without
---------
penalty or premium, all outstanding ABR Advances under the Swingline, or, in the
minimum amount of One Hundred Thousand Dollars ($100,000) or any integral
multiple of One Hundred Thousand Dollars ($100,000) in excess thereof, any
portion of the outstanding ABR Advances under the Swingline. A Negotiated Rate
Advance may not be prepaid prior to the last day of the applicable Negotiated
Rate Interest Period except for a prepayment funded by a Mandatory Funding.
2.8. Method of Selecting Types and Interest Periods for New Advances.
---------------------------------------------------------------
2.8.1. Revolving Loans. With respect to Revolving Loans (other than
---------------
a Mandatory Funding), Borrower shall give the Agent irrevocable notice (a
"Borrowing Notice") not later than 10:00 a.m. (Indianapolis time) on the
Borrowing Date for each ABR Advance and three (3) Business Days before the
Borrowing Date for each LIBOR Advance, specifying:
(a) the Borrowing Date, which shall be a Business Day, of such Advance,
(b) the aggregate amount of such Advance, and
(c) the Type of Advance selected and, in the case of a LIBOR Advance, the
duration of the LIBOR Interest Period applicable thereto.
The Agent shall notify the Lenders of Borrower's intent to borrow by
12:00 p.m. (Indianapolis time) on the date it receives a timely Borrowing Notice
from Borrower. Not later than 2:00 p.m. (Indianapolis time) on each Borrowing
Date, each Lender shall make available its Revolving Loan or Revolving Loans, in
funds immediately available in Indianapolis to the Agent at its address
specified pursuant to Section 13. The Agent will make the funds so received
from the Lenders available to Borrower by deposit to the account of Borrower
with NBD.
2.8.2. Swingline. As Borrower desires to obtain Advances under the
---------
Swingline hereunder, Borrower shall give the Agent and NBD a Borrowing Notice by
not later than noon (Indianapolis time), on the Borrowing Date, specifying: (a)
the Borrowing Date, which shall be a Business Day, of such Advance, and (b) the
aggregate amount of such Advance. Each Advance under the Swingline shall bear
interest at the Alternate Base Rate, unless Borrower and NBD agree to a
Negotiated Rate for a Negotiated Rate Interest Period. Subject to the borrowing
limitations set forth in Section 2.1.2, by 2:00 p.m. (Indianapolis time) on each
such Borrowing Date, NBD agrees
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to make its Advance under the Swingline to Borrower by deposit to the account of
Borrower with NBD.
2.9. Conversion and Continuation of Outstanding Advances. With respect to
---------------------------------------------------
the Revolving Loans, ABR Advances shall continue as ABR Advances unless
converted into LIBOR Advances pursuant to this Section 2.9 or repaid in
accordance with Section 2.7. Each LIBOR Advance shall continue as a LIBOR
Advance until the end of the then applicable LIBOR Interest Period therefor, at
which time such LIBOR Advance shall be automatically converted into an ABR
Advance unless such LIBOR Advance is or was repaid in accordance with Section
2.7 or Borrower shall have given the Agent a Conversion/Continuation Notice
requesting that, at the end of such LIBOR Interest Period, such LIBOR Advance
continue as a LIBOR Advance for the same or another LIBOR Interest Period.
Subject to the terms of Section 2.6, Borrower may elect from time to time to
convert all or any part of an ABR Advance under the Revolving Loan Commitment
into a LIBOR Advance. Borrower shall give the Agent irrevocable notice (a
"Conversion/Continuation Notice") of each conversion of an ABR Advance into a
LIBOR Advance or continuation of a LIBOR Advance not later than 10:00 a.m.
(Indianapolis time) at least three (3) Business Days prior to the date of the
requested conversion or continuation, specifying:
(a) the requested date, which shall be a Business Day, of such conversion
or continuation,
(b) the aggregate amount and Type of the Advance which is to be converted
or continued, and
(c) the amount of such Advance which is to be converted into or continued
as a LIBOR Advance and the duration of the LIBOR Interest Period
applicable thereto.
2.10. Changes in Interest Rate, etc. Each ABR Advance shall bear interest
------------------------------
on the outstanding principal amount thereof, for each day from and including the
date such Advance is made to but excluding the date it becomes due at a rate per
annum equal to the Alternate Base Rate for such day. Changes in the rate of
interest on that portion of any Advance maintained as an ABR Advance will take
effect simultaneously with each change in the Alternate Base Rate. Each LIBOR
Advance and Negotiated Rate Advance shall bear interest on the outstanding
principal amount thereof from and including the first day of the Interest Period
applicable thereto to (but not including) the last day of such Interest Period
at the interest rate determined as applicable to such LIBOR Advance or such
Negotiated Rate Advance, as applicable. No Interest Period may end after the
Facility Termination Date.
2.11. Rates Applicable After Default. Notwithstanding anything to the
------------------------------
contrary contained in Section 2.8 or 2.9, during the continuance of a Default,
the Required Lenders may, at their option, by notice to Borrower and the Agent
(which notice may be revoked at the option of the Required Lenders
notwithstanding any provision of Section 8.2 requiring unanimous consent of the
Lenders to changes in interest rates), declare that no Advance may be made as,
converted into or continued as a LIBOR Advance. If any Advance is not paid at
maturity, whether by acceleration or otherwise,
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or during the continuance of a Default, the Required Lenders may, at their
option, by written notice to Borrower and the Agent (which notice may be revoked
at the option of the Required Lenders notwithstanding any provision of Section
8.2 requiring unanimous consent of the Lenders to changes in interest rates),
declare that (a) each LIBOR Advance shall bear interest for the remainder of the
applicable LIBOR Interest Period at the rate otherwise applicable to such LIBOR
Interest Period plus Two Percent (2%) per annum, and (b) each ABR Advance shall
bear interest at a rate per annum equal to the otherwise applicable rate plus
----
Two Percent (2%) per annum, provided that, during the continuance of a Default
under Section 7.6 or 7.7, the interest rates set forth in clauses (a) and (b)
above shall be applicable to all Advances without any election or action on the
part of the Agent or any Lender. If any Advance under the Swingline is not paid
at maturity, whether by acceleration or otherwise, or during the continuance of
a Default, NBD may, at its option, by written notice to Borrower and the Agent
(which notice may be revoked at its option notwithstanding any provision of
Section 8.2 requiring unanimous consent of the Lenders to changes in interest
rates), declare that each Swingline Advance shall bear interest at a rate per
annum equal to the otherwise applicable rate plus Two Percent (2%) per annum.
----
2.12. Method of Payment. All payments of the Obligations hereunder shall
-----------------
be made, without set off, deduction, or counterclaim, in immediately available
funds to the Agent at the Agent's address specified pursuant to Section 13, or
at any other Lending Installation of the Agent specified in writing by the Agent
to Borrower, by noon (local time) on the date when due and shall be applied
ratably by the Agent among the Lenders in accordance with the outstanding
principal amounts of the Facilities held by them. Each payment delivered to the
Agent for the account of any Lender shall be delivered promptly by the Agent to
such Lender in the same type of funds that the Agent received at its address
specified pursuant to Section 13 or at any Lending Installation specified in a
notice received by the Agent from such Lender. The Agent is hereby authorized
to charge the account of Borrower maintained with NBD for each payment of
principal, interest and fees if such payment is not made within three (3) days
of the date it becomes due hereunder.
2.13. Notes; Telephonic Notices. Each Lender is hereby authorized to
-------------------------
record the principal amount of each of its Loans and each repayment on any
schedule attached to its Note, provided, however, that neither the failure to so
-------- -------
record nor any error in such recordation shall affect Borrower's obligations
under such Note. Borrower hereby authorizes the Lenders and the Agent to
extend, convert or continue Advances, effect selections of Types of Advances and
to transfer funds based on telephonic notices made by an Authorized Officer.
The Agent may rely, without further inquiry, on all such requests which shall
have been received by it in good faith by anyone reasonably believed to be an
Authorized Officer. Borrower agrees to deliver promptly to the Agent a written
confirmation, if such confirmation is requested by the Agent or any Lender, of
each telephonic notice signed by an Authorized Officer. If the written
confirmation differs in any material respect from the action taken by the Agent
and the Lenders, the records of the Agent and the Lenders shall govern absent
manifest error. Unless the Agent receives written instructions signed by an
Authorized Officer to the contrary, all Advances shall be credited to Borrower's
account with the Agent.
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2.14. Interest Payment Dates; Interest and Fee Basis. Interest accrued on
----------------------------------------------
each ABR Advance constituting a Revolving Loan Advance shall be payable on each
Payment Date, commencing with the first such date to occur after the date
hereof, on any date on which such Advance is prepaid, whether due to
acceleration or otherwise, and at maturity. Interest accrued on each LIBOR
Advance shall be payable on the last day of its applicable LIBOR Interest
Period, or any date on which the LIBOR Advance is prepaid, whether by
acceleration or otherwise, and at maturity. Interest accrued on each LIBOR
Advance having a LIBOR Interest Period longer than three (3) months shall also
be payable on the last day of each three (3) month interval during such LIBOR
Interest Period. Interest and facility fees shall be calculated for actual
days elapsed on the basis of a 360-day year. Interest accrued on each Swingline
Advance shall be payable on the last day of each calendar month, commencing with
the first such date to occur after the date hereof, and at maturity. Interest
shall be payable for the day an Advance is made but not for the day of any
payment on the amount paid if payment is received prior to noon (local time) at
the place of payment. If any payment of principal of or interest on an Advance
shall become due on a day which is not a Business Day, such payment shall be
made on the next succeeding Business Day and, in the case of a principal
payment, such extension of time shall be included in computing interest in
connection with such payment.
2.15. Notification of Advances, Interest Rates, Prepayments and Commitment
--------------------------------------------------------------------
Reductions. Promptly after receipt thereof, the Agent will notify each Lender
----------
of the contents of each Revolving Loan Commitment reduction notice, Borrowing
Notice with respect to Revolving Loans, Conversion/Continuation Notice, and
repayment notice received by it hereunder. The Agent will notify each Lender of
the interest rate applicable to each LIBOR Advance promptly upon determination
of such interest rate and will give each Lender prompt notice of each change in
the Alternate Base Rate.
2.16. Lending Installations. Each Lender may book its Loans at any
---------------------
Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to any
such Lending Installation and the Loans and the Notes shall be deemed held by
each Lender for the benefit of such Lending Installation. Each Lender may, by
written notice to the Agent and Borrower, designate replacement or additional
Lending Installations through which Loans will be made by it and for whose
account Loan payments are to be made.
2.17. Non-Receipt of Funds by the Agent. Unless Borrower or a Lender, as
---------------------------------
the case may be, notifies the Agent prior to the date on which it is scheduled
to make payment to the Agent of (a) in the case of a Lender, the proceeds of a
Loan, or (b) in the case of Borrower, a payment of principal, interest or fees
to the Agent for the account of the Lenders, that it does not intend to make
such payment, the Agent may assume that such payment has been made. The Agent
may, but shall not be obligated to, make the amount of such payment available to
the intended recipient in reliance upon such assumption. If such Lender or
Borrower, as the case may be, has not in fact made such payment to the Agent,
the recipient of such payment shall, on demand by the Agent, repay to the Agent
the amount so made available together with interest thereon in respect of each
day during the period commencing on the date such amount was so made available
by the Agent until the date the Agent recovers such amount at a rate per annum
equal to (i) in the case of payment by a Lender, the
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Federal Funds Effective Rate for each such day, or (ii) in the case of payment
by Borrower, the interest rate applicable to the relevant Loan.
2.18. Issuance of Letters of Credit. Subject to the terms and conditions
-----------------------------
hereof, NBD agrees, upon proper submission of a Letter of Credit Application by
Borrower, to issue on behalf of the Lenders from time to time prior to the
Facility Termination Date, Letters of Credit for the account of Borrower. The
Letters of Credit shall have an expiration date not later than four (4) days
before the expiration of the Facility Termination Date. The aggregate of the
Letters of Credit outstanding plus the aggregate amount of unreimbursed drawings
----
under the Letters of Credit shall not exceed the lesser of (a) Ten Million
Dollars ($10,000,000), or (b) the Revolving Loan Commitments less outstanding
----
Revolving Loan Advances less outstanding Swingline Advances. The amount of any
----
Letter of Credit outstanding at any time for all purposes hereof shall be the
maximum amount which could be drawn thereunder under any circumstances from and
after the date of determination. Each Letter of Credit issued pursuant to this
Agreement and each unreimbursed drawing thereunder shall count against and
reduce the Revolving Loan Commitments by the amount of such Letter of Credit
outstanding and each unreimbursed drawing thereunder unless and until such
Letter of Credit expires by its terms or otherwise terminates or the amount of a
drawing thereunder is reimbursed, in which event the Revolving Loan Commitments
shall be reinstated by the amount of such Letter of Credit or the amount of such
reimbursement, as the case may be. Each such Letter of Credit shall be issued
pursuant to a Letter of Credit Application and shall conform to the general
requirements of NBD for the issuance of such credits, as to form and substance,
shall be subject to the Uniform Customs and Practices for Documentary Credits
(1993 Revision), International Chamber of Commerce Publication No. 500 and shall
be a letter of credit which NBD may lawfully issue. If and to the extent a
drawing is at any time made under any Letter of Credit, NBD shall give notice on
the day of such drawing to Borrower, the Agent and the other Lenders of such
drawing and Borrower agrees to pay to NBD immediately and unconditionally upon
demand for reimbursement, in lawful money of the United States, an amount equal
to each amount which shall be so drawn, together with interest from the date of
such drawing to and including the date such payment is reimbursed to NBD or
converted to Revolving Loans as provided herein at a variable rate per annum
equal to the Alternate Base Rate. All such interest shall be calculated on the
basis that an entire year's interest is earned in three hundred sixty (360)
days. In the event that a drawing under any Letter of Credit is not reimbursed
by Borrower by 11:00 A.M. (Indianapolis time) on the first Business Day after
such notice to Borrower, NBD shall promptly notify the Agent and the other
Lenders by 12:00 noon (Indianapolis time) that Advances under the Revolving Loan
Commitments are required to reimburse NBD. Borrower hereby irrevocably
authorizes the Lenders to refinance, without notice to Borrower, the
reimbursement Obligation of Borrower arising out of any such drawing under any
Letter of Credit into Revolving Loans, evidenced by the Revolving Credit Notes
and for all purposes under, on and subject to the terms and conditions of this
Agreement, but without regard to the conditions precedent to making an Advance
under the Revolving Loan Commitments or to any requirement of this Agreement
that each Revolving Loan be in a minimum amount or multiple, provided, however,
-------- -------
that an Advance under the Revolving Loan Commitments in spite of Borrower's
failure to satisfy any conditions precedent to making an Advance shall not
constitute a waiver of any Default by the Lenders. This Agreement shall
supersede any terms of any Letter of Credit Applications or other documents
which are
-23-
irreconcilably inconsistent with the terms hereof or thereof. By 2:00 P.M.
(Indianapolis time) on the date the Lenders have received notice that Advances
under the Revolving Loan Commitments are required to reimburse NBD for draws
under the Letters of Credit, each Lender severally agrees to make its portion of
the Revolving Loan then being made by making available to the Agent, either by
wire transfer to the Agent's main office in Indianapolis, Indiana, or by deposit
to any correspondent account which the Agent may maintain with that Lender, the
amount to be advanced by such Lender. By 2:30 P.M. (Indianapolis time) on such
date, the Agent shall reimburse NBD, but only from funds received by the Agent,
the amount paid on Letters of Credit that date, either by wire transfer or by
deposit to NBD's correspondent account with the Agent (or as otherwise agreed
between NBD and the Agent).
2.19. Letters of Credit Participation. For administrative convenience,
-------------------------------
NBD shall issue the Letters of Credit for the account of Borrower pursuant to
the arrangements set forth herein, and the outstanding portion of each Letter of
Credit shall be deemed to utilize a Pro Rata Share of the Revolving Loan
Commitment of each Lender. Each Lender severally agrees to participate in each
Letter of Credit according to its Pro Rata Share of the Revolving Loan
Commitments. Each Lender's participation shall be funded by funding its Pro
Rata Share of the Revolving Loan Commitments upon any drawing under any Letter
of Credit not reimbursed the same day as a drawing thereunder by Borrower by
2:00 P.M. (Indianapolis time) by making such funds available to the Agent in
accordance with Sections 2.8.1 and 2.18; and thereupon, each such Lender shall
be entitled to, and NBD or the Agent, as applicable, shall remit to each such
Lender, their respective Pro Rata Share of any amounts (including any interest
thereon) received by NBD or the Agent, as applicable, in reimbursement of such
drawing. NBD shall furnish to such Lenders, each time any Letter of Credit
either is issued or drawn under (whether in whole or in part), (a) a
participation certificate showing the aggregate amount of NBD's Letters of
Credit issued and unexpired or unfunded and the amount of their respective Pro
Rata Share thereof, and (b) such other information with respect to the Letters
of Credit as any Lender may reasonably request from time to time. The
obligations of the Lenders to fund their respective Pro Rata Share of a
Revolving Loan for reimbursement of a draw under a Letter of Credit shall be
irrevocable and not subject to counterclaim, set-off or other defense or any
other qualification or exception whatsoever and shall be made in accordance with
the terms and conditions of this Agreement under all circumstances, including,
without limitation, any of the following circumstances (other than in the case
of gross negligence or wilful misconduct of NBD):
(a) Any lack of validity or enforceability of this Agreement or any of
the other Loan Documents;
(b) The existence of any claim, set-off, defense or other right which
Borrower may have at any time against a beneficiary named in the Letter of
Credit, any transferee of the Letter of Credit (or any Person for whom any
such transferee may be acting), the Agent, NBD as the Letter of Credit
issuer, any Lender, or other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated herein or
any unrelated transactions (including any underlying transaction between
Borrower and the beneficiary named in any such Letter of Credit);
-24-
(c) Any draft, certificate or other document presented under the
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;
(d) The surrender or impairment of any security for the performance or
observance of any of the terms of any of the Loan Documents; or
(e) The occurrence of any Default or Unmatured Default.
2.20. Compensation for Letters of Credit.
----------------------------------
2.20.1. Letter of Credit Fee. Borrower shall pay to NBD, for the
--------------------
ratable benefit of the Lenders in accordance with their Revolving Loan
Commitments, a Letter of Credit fee at a per annum rate equal to the
Applicable Margin of each Letter of Credit outstanding hereunder, such fee
to be calculated on the basis of a three hundred sixty (360) day year and
to be paid annually in advance upon the issuance of such Letter of Credit
and on each anniversary date thereafter. If any payment of a Letter of
Credit fee shall become due on a day that is not a Business Day, such
payment shall be made on the next succeeding Business Day.
2.20.2. Additional Letter of Credit Fees. In addition to the
--------------------------------
foregoing Letter of Credit fees, Borrower shall pay to NBD, for NBD's own
account, NBD's reasonable and customary costs of issuing, servicing and
negotiating draws under letters of credit.
2.20.3. Manner of Payment. Borrower authorizes NBD to collect all
-----------------
such fees by deducting the amount thereof from the deposit account of
Borrower if such fees are not paid within three (3) days of their
respective due date.
2.21. Reimbursement of Letters of Credit. The obligation of Borrower to
----------------------------------
reimburse any drawing under any Letter of Credit shall be absolute,
unconditional and irrevocable and shall be paid and performed strictly in
accordance with the terms of this Agreement under all circumstances, including,
without limitation, the following, other than in the case of gross negligence or
willful misconduct of the Agent or a Lender:
(a) Any lack of validity or enforceability of any Letter of Credit, or
any Loan Document;
(b) Any amendment or waiver of or consent to departure from the terms
of any Letter of Credit, or any Loan Document;
(c) The existence of any claim, set-off, defense or other right which
Borrower may have at any time against the beneficiary or any Letter of
Credit, any transferee of any
-25-
Letter of Credit, the Lenders or any other Person, whether in connection
with the Loan Documents, such Letter of Credit, or any unrelated
transaction;
(d) Any statement, draft 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
whatsoever;
(e) The surrender or impairment of any security for the performance
or observance of the terms of the Loan Documents or such Letter of Credit;
or
(f) Any circumstance, happening or admission whatsoever, whether or
not similar to any of the foregoing, including, without limitation, those
matters described below.
Except as expressly set forth herein, Borrower assumes all risks for the acts,
omissions, or misrepresentations of the parties benefitted by any Letter of
Credit. Neither NBD nor any of its Affiliates or correspondents shall be
responsible for (a) the validity, sufficiency, truthfulness or genuineness of
any document required to draw under the Letters of Credit even if such document
should in fact prove to be in any or all respects invalid, insufficient,
fraudulent or forged, (b) the failure of any draft to bear reference or adequate
reference to such Letter of Credit or failure of any Person to note the amount
of any draft on such Letter of Credit or to surrender or take up such Letter of
Credit, or (c) errors, omissions, interruptions, or delays in transmission or
delivery of any messages or documents, provided, however, that Borrower shall
-------- -------
have a claim against NBD, and NBD shall be liable to Borrower, to the extent of
any compensatory, as opposed to consequential, damages suffered by Borrower
which Borrower proves were caused by (i) NBD's failure to act in good faith or
to observe general banking usage in connection with the Letter of Credit or
failure to examine documents presented under such Letter of Credit with care to
determine whether they comply with the terms of such Letter of Credit (it being
understood that Bank assumes no liability or responsibility for the genuineness,
falsification or effect of any document which appears on such examination to be
regular on its face) or (ii) the gross negligence or willful misconduct of NBD.
Without limiting the generality of the foregoing, Borrower agrees that any
action taken by NBD or any of its Affiliates or correspondents under or in
connection with any Letter of Credit, if taken in good faith and without gross
negligence, shall be binding upon Borrower and shall not put NBD or any such
Affiliates or correspondents under any such resulting liability to Borrower.
NBD shall not be liable for action or failure to take action under or in
connection with any Letter of Credit except for any such action or failure to
take action which constitutes gross negligence or wilful misconduct. NBD shall
not be liable for consequential damages in connection with any Letter of Credit.
NBD is expressly hereby authorized to honor any request for payment which is
made under or in compliance with the terms of any Letter of Credit without
regard to, and without any duty on its part to inquire into, the existence of
any disputes or controversies between Borrower and any beneficiary of any Letter
of Credit or any other Person or into respective rights, duties or liabilities
of any of them or whether any facts or occurrences represented in any of the
documents presented under any Letter of Credit are true and correct. No Person,
other than the parties hereto, shall have any rights of any nature under this
Agreement or by reason hereof. In no event shall NBD's reliance and payment
against documents
-26-
presented under a Letter of Credit appearing on its face to substantially comply
with the terms thereof be deemed to constitute gross negligence or wilful
misconduct.
2.22 Use of Proceeds. The proceeds of Advances under the Revolving Loans
---------------
and the Swingline shall be used for lawful corporate purposes not prohibited by
this Agreement.
SECTION 3
---------
YIELD PROTECTION; TAXES
-----------------------
3.1. Yield Protection. If, on or after the date of this Agreement, the
----------------
adoption of any law or any governmental or quasi-governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law), or any
change in the interpretation or administration thereof by any governmental or
quasi-governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender or
applicable Lending Installation with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency:
(a) subjects any Lender or any applicable Lending Installation to any
Taxes, or changes the basis of taxation of payments (other than with
respect to Excluded Taxes) to any Lender in respect of its LIBOR Loans, or
(b) imposes or increases or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any Lender or
any applicable Lending Installation (other than reserves and assessments
taken into account in determining the interest rate applicable to LIBOR
Advances), or
(c) imposes any other condition the result of which is to increase the
cost to any Lender or any applicable Lending Installation of making,
funding or maintaining its LIBOR Loans or reduces any amount receivable by
any Lender or any applicable Lending Installation in connection with its
LIBOR Loans, or requires any Lender or any applicable Lending Installation
to make any payment calculated by reference to the amount of LIBOR Loans
held or interest received by it, by an amount deemed material by such
Lender, and the result of any of the foregoing is to increase the cost to
such Lender or applicable Lending Installation or making or maintaining its
LIBOR Loans or Commitment or to reduce the return received by such Lender
or applicable Lending Installation in connection with such LIBOR Loans or
Commitment, then, within fifteen (15) days of demand by such Lender,
Borrower shall pay such Lender such additional amount or amounts as will
compensate such Lender for such increased cost or reduction in amount
received.
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3.2. Changes in Capital Adequacy Regulations. If a Lender determines the
---------------------------------------
amount of capital required or expected to be maintained by such Lender, any
Lending Installation of such Lender or any corporation controlling such Lender
is increased as a result of a Change, then, within fifteen (15) days of written
demand by such Lender, Borrower shall pay such Lender the amount necessary to
compensate for any shortfall in the rate of return on the portion of such
increased capital which such Lender reasonably determines is attributable to
this Agreement, its Loans or its Commitment to make Loans hereunder (after
taking into account such Lender's policies as to capital adequacy). "Change"
means (a) any change after the date of this Agreement in the Risk-Based Capital
Guidelines, or (b) any adoption of or change in any other law, governmental or
quasi-governmental rule, regulation, policy, guideline, interpretation, or
directive (whether or not having the force of law) after the date of this
Agreement which affects the amount of capital required or expected to be
maintained by any Lender or any Lending Installation or any corporation
controlling any Lender. "Risk-Based Capital Guidelines" means (i) the risk-
based capital guidelines in effect in the United States on the date of this
Agreement, including transition rules, and (ii) the corresponding capital
regulations promulgated by regulatory authorities outside the United States
implementing the July 1988 report of the Basle Committee on Banking Regulation
and Supervisory Practices Entitled "International Convergence of Capital
Measurements and Capital Standards," including transition rules, and any
amendments to such regulations adopted prior to the date of this Agreement.
3.3. Availability of Types of Advances. If any Lender reasonably
---------------------------------
determines that maintenance of its LIBOR Loans at a suitable Lending
Installation would violate any applicable law, rule, regulation, or directive,
whether or not having the force of law, or if the Required Lenders reasonably
determine that (a) deposits of a type and maturity appropriate to match fund
LIBOR Advances are not available, or (b) the interest rate applicable to a Type
of LIBOR Advance does not accurately reflect the cost of making or maintaining
such LIBOR Advance, then the Agent shall suspend the availability of the
affected Type of LIBOR Advances of the affected Lender or Lenders, as the case
may be, and require those LIBOR Advances of the affected Type to be repaid or,
at Borrower's option, converted to another Type of Advance, subject to the
payment of any funding indemnification amounts required by Section 3.4.
3.4. Funding Indemnification. If any payment (whether mandatory or
-----------------------
optional) of a LIBOR Advance occurs on a date which is not the last day of the
applicable LIBOR Interest Period, whether because of acceleration, prepayment or
otherwise, or a LIBOR Advance is not made on the date specified by Borrower for
any reason other than default by the Lenders, Borrower will indemnify each
Lender for any loss or cost incurred by it resulting therefrom, including,
without limitation, any loss or cost in liquidating or employing deposits
acquired to fund or maintain the LIBOR Advance.
3.5. Taxes. (a) All payments by Borrower to or for the account of any
-----
Lender or the Agent hereunder or under any Note shall be made free and clear of
and without deduction for any and all Taxes. If Borrower shall be required by
law to deduct any Taxes from or in respect of any sum payable hereunder to any
Lender or the Agent, (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 3.5) such Lender or the Agent (as the
case may be) receives an amount equal to
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the sum it would have received had no such deductions been made, (ii) Borrower
shall make such deductions, (iii) Borrower shall pay the full amount deducted to
the relevant authority in accordance with applicable law, and (iv) Borrower
shall furnish to the Agent the original copy of a receipt evidencing payment
thereof within thirty (30) days after such payment is made.
(b) In addition, Borrower hereby agrees to pay any present or future stamp
or documentary taxes and any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or under any Note or from the
execution or delivery of, or otherwise with respect to, this Agreement or any
Note ("Other Taxes").
(c) Borrower hereby agrees to indemnify the Agent and each Lender for the
full amount of Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed on amounts payable under this Section 3.5) paid by the Agent
or such Lender and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto. Payments due under this
indemnification shall be made within thirty (30) days of the date the Agent or
such Lender makes demand therefor pursuant to Section 3.6.
(d) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof (each a "Non-U.S. Lender") agrees that it
will, not less than ten (10) Business Days after the date of this Agreement, (i)
deliver to each of Borrower and the Agent two duly completed copies of United
States Internal Revenue Service Form 1001 or 4224, certifying in either case
that such Lender is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes, and (ii)
deliver to each of Borrower and the Agent a United States Internal Revenue Form
W-8 or W-9, as the case may be, and certify that it is entitled to an exemption
from United States backup withholding tax. Each Non-U.S. Lender further
undertakes to deliver to each of Borrower and the Agent (x) renewals or
additional copies of such form (or any successor form) on or before the date
that such form expires or becomes obsolete, and (y) after the occurrence of any
event requiring a change in the most recent forms so delivered by it, such
additional forms or amendments thereto as may be reasonably requested by
Borrower or the Agent. All forms or amendments described in the preceding
sentence shall certify that such Lender is entitled to receive payments under
this Agreement without deduction or withholding of any United States federal
income taxes, unless an event (including without limitation any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form or amendment with respect to it and such Lender advises Borrower and the
Agent that it is not capable of receiving payments without any deduction or
withholding of United States federal income tax.
(e) For any period during which a Non-U.S. Lender has failed to provide
Borrower with an appropriate form pursuant to clause (d) above, such Non-U.S.
Lender shall not be entitled to indemnification under this Section 3.5 with
respect to Taxes imposed by the United States; provided that, should a Non-U.S.
Lender which is otherwise exempt from or subject to a reduced rate of
withholding tax become subject to Taxes because of its failure to deliver a form
required under clause
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(d) above, Borrower shall take such steps as such Non-U.S. Lender shall
reasonably request to assist such Non-U.S. Lender to recover such Taxes.
(f) Any Lender that is entitled to an exemption from or reduction of
withholding tax with respect to payments under this Agreement or any Note
pursuant to the law of any relevant jurisdiction or any treaty shall deliver to
Borrower (with a copy to the Agent), at the time or times prescribed by
applicable law, such properly completed and executed documentation prescribed by
applicable law as will permit such payments to be made without withholding or at
a reduced rate.
3.6. Lender Statements; Survival of Indemnity. To the extent reasonably
----------------------------------------
possible, each Lender shall designate an alternate Lending Installation with
respect to its Revolving Loans to reduce any liability of Borrower to such
Lender under Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of a Type
of Advance under Section 3.3, so long as such designation is not, in the
reasonable judgment of such Lender, disadvantageous to such Lender. Each Lender
shall deliver a written statement of such Lender to Borrower (with a copy to the
Agent) as to the amount due, if any, under Sections 3.1, 3.2, 3.4 or 3.5. Such
written statement shall set forth in reasonable detail the calculations upon
which such Lender determined such amount and shall be final, conclusive and
binding on Borrower in the absence of manifest error. Such written statement
shall be sent by a Lender within ninety (90) days after such Lender could
reasonably calculate the amount due under Sections 3.1, 3.2, 3.4 or 3.5;
provided, however, that if a Lender fails to send such written statement within
such ninety (90) day period, such Lender shall not be prohibited or restricted
from collecting, and Borrower shall indemnify such Lender for, amounts due in
respect of Sections 3.1,3.2, 3.4 or 3.5 for periods from and after the date
ninety (90) days prior to the date that such Lender sends such written
statement, but not for any prior periods. Determination of amounts payable
under such Sections in connection with a Revolving Loan shall be calculated as
though each Lender funded its Revolving Loan through the purchase of a deposit
of the type and maturity corresponding to the deposit used as a reference in
determining the applicable rate to such Loan, whether in fact that is the case
or not. Unless otherwise provided herein, the amount specified in the written
statement of any Lender shall be payable on demand after receipt by Borrower of
such written statement. The obligations of Borrower under Sections 3.1, 3.2,
3.4 and 3.5 shall survive payment of the Obligations and termination of this
Agreement.
SECTION 4
---------
CONDITIONS PRECEDENT
--------------------
4.1. Initial Advance. The Lenders shall not be required to make the
---------------
initial Advance hereunder and NBD shall not be obligated to issue any Letter of
Credit unless Borrower has furnished to the Agent, with sufficient copies for
the Lenders, the following:
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(a) Copies of the certificate or articles of incorporation of Borrower
and each Guarantor, together with all amendments, and a certificate of good
standing or existence, both certified by the appropriate governmental
officer in its jurisdiction of incorporation.
(b) Copies, certified by the Secretary or Assistant Secretary of
Borrower and each Guarantor, of its by-laws and of its Board of Directors'
resolutions (and resolutions of other bodies, if any are reasonably deemed
necessary by counsel for any Lender) authorizing the execution of the Loan
Documents.
(c) An incumbency certificate, executed by the Secretary or Assistant
Secretary of Borrower and each Guarantor, which shall identify by name and
title and bear the signature of the officers of Borrower and each Guarantor
authorized to sign the Loan Documents and to make borrowings hereunder,
upon which certificate the Agent and the Lenders shall be entitled to rely
until informed in writing of any change by Borrower or such Guarantor, as
applicable.
(d) A certificate, signed by the chief financial officer of
Borrower, stating that on the initial Borrowing Date no Default or
Unmatured Default has occurred and is continuing.
(e) A written opinion of Borrower's and Guarantor's counsel,
addressed to the Agent in the form approved by the Lenders.
(f) Notes payable to the order of each of the Lenders.
(g) Written money transfer instructions, in substantially the form
of Exhibit F hereto, addressed to the Agent and signed by an Authorized
---------
Officer, together with such other related money transfer authorizations as
the Agent may have reasonably requested.
(h) The Guaranty, duly executed by each Guarantor.
(i) Satisfactory return after search in accordance with the Uniform
Commercial Code from the states of Indiana, Illinois and Ohio.
(j) The insurance certificate described in Section 5.19.
(k) An executed and completed Compliance Certificate.
(l) The facility fees due and payable in accordance with the Fee
Letter.
(m) Concurrently with the initial Advance under the Facilities,
Borrower shall have prepaid and repaid all outstanding obligations under
that certain Credit Agreement dated as of July 20, 1995, as amended,
between Borrower and the Agent, and any existing commitments of the Agent
shall have been terminated to the satisfaction of the Agent.
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(n) Such other documents as the Agent or its counsel may have
reasonably requested.
4.2. Each Advance. The Lenders shall not be required to make any Advance
------------
(other than an Advance that, after giving effect thereto and to the application
of the proceeds thereof, does not increase the aggregate amount of outstanding
Advances), and NBD shall not be obligated to issue a Letter of Credit, unless on
the applicable Borrowing Date or the proposed date of issuance of a Letter of
Credit, as the case may be:
(a) There exists no Default or Unmatured Default and no Default or
Unmatured Default would result from the making of a requested Advance.
(b) The representations and warranties contained in Section 5 are true
and correct as of such Borrowing Date except to the extent any such
representation or warranty is stated to relate solely to an earlier date,
in which case such representation or warranty shall be true and correct on
and as of such earlier date.
Each Borrowing Notice with respect to each such Advance shall constitute a
representation and warranty by Borrower that the conditions contained in
Sections 4.2(a) and (b) have been satisfied.
SECTION 5
---------
REPRESENTATIONS AND WARRANTIES
------------------------------
Borrower represents and warrants to the Lenders that:
5.1. Corporate Existence and Standing. Each of Borrower and its
--------------------------------
Subsidiaries is a corporation duly incorporated, validly existing and, if
applicable, in good standing under the laws of its jurisdiction of incorporation
and has all requisite authority to conduct its business in each jurisdiction in
which its business is conducted.
5.2. Authorization and Validity. Borrower has the corporate power and
--------------------------
authority and legal right to execute and deliver the Loan Documents and to
perform its obligations thereunder. The execution and delivery by Borrower of
the Loan Documents and the performance of its obligations thereunder have been
duly authorized by proper corporate proceedings, and the Loan Documents
constitute legal, valid and binding obligations of Borrower enforceable against
Borrower in accordance with their terms, except as enforceability may be limited
by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally or by general principles of equity.
5.3. No Conflict; Government Consent. Neither the execution and delivery
-------------------------------
by Borrower of the Loan Documents, nor the consummation of the transactions
therein contemplated, nor
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compliance with the provisions thereof will violate any law, rule, regulation,
order, writ, judgment, injunction, decree or award binding on Borrower or any of
its Subsidiaries or Borrower's or any Subsidiary's articles of incorporation or
by-laws or the provisions of any material indenture, instrument or agreement to
which Borrower or any of its Subsidiaries is a party or is subject, or by which
it, or its Property, is bound, or conflict with or constitute a default
thereunder, or result in the creation or imposition of any Lien in, of or on the
Property of Borrower or a Subsidiary pursuant to the terms of any such
indenture, instrument or agreement. No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, or other action in respect of any governmental or public body or
authority, or any subdivision thereof, is required to authorize, or is required
in connection with the execution, delivery and performance of, or the legality,
validity, binding effect or enforceability of, any of the Loan Documents.
5.4. Financial Statements. The Financial Statements heretofore delivered
--------------------
to the Lenders were prepared in accordance with GAAP in effect on the dates such
statements were prepared and fairly present in all material respects the
consolidated financial condition and operations of Borrower and its Subsidiaries
at such dates and the consolidated results of their operations for the periods
then ended.
5.5. No Material Adverse Change. Since February 28, 1998, there has been
--------------------------
no change in the business, Property, condition (financial or otherwise) or
results of operations of Borrower and its Subsidiaries which could reasonably be
expected to have a Material Adverse Effect.
5.6. Taxes. Borrower and its Subsidiaries have filed all United States
-----
federal tax returns and all other tax returns which are required to be filed and
have paid all taxes due pursuant to said returns or pursuant to any assessment
received by Borrower or any of its Subsidiaries, except such taxes, if any, as
are being contested in good faith and as to which adequate reserves have been
provided in accordance with GAAP. The United States income tax returns of
Borrower and its Subsidiaries have been audited by the Internal Revenue Service
through the fiscal year ended December, 1995. No tax liens have been filed and
no claims are being asserted with respect to any such taxes which could
reasonably be expected to have a Material Adverse Effect. The charges, accruals
and reserves on the books of Borrower and its Subsidiaries in respect of any
taxes or other governmental charges are adequate in all material respects.
5.7. Litigation and Contingent Obligations. Except as set forth on
-------------------------------------
Schedule 5.7 hereto, no litigation, arbitration, governmental investigation,
------------
proceeding or inquiry pending or, to the knowledge of any of their officers,
threatened against or affecting Borrower or any of its Subsidiaries could
reasonably be expected to have a Material Adverse Effect or seeks to prevent,
enjoin or delay the making of the Loans or Advances. Except as set forth on
Schedule 5.7 hereto, Borrower has no material contingent obligations not
------------
provided for or disclosed in the Financial Statements.
5.8. Subsidiaries. Schedule 5.8 hereto contains an accurate list of all
------------ ------------
Subsidiaries of Borrower as of the date of this Agreement, setting forth their
respective jurisdictions of incorporation and the percentage of their respective
capital stock owned by Borrower or other Subsidiaries. All
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of the issued and outstanding shares of capital stock of such Subsidiaries have
been duly authorized and issued and are fully paid and non-assessable.
5.9. ERISA. Each Plan complies in all material respects with all
-----
applicable requirements of law and regulations, no Reportable Event has occurred
with respect to any Plan, neither Borrower nor any other members of the
Controlled Group has withdrawn from any Plan or initiated steps to do so, and no
steps have been taken to reorganize or terminate any Plan, except with respect
to each of the foregoing for noncompliance, occurrences, withdrawal, initiation
or steps that could not reasonably be expected to have a Material Adverse
Effect.
5.10. Accuracy of Information. No information, exhibit or report
-----------------------
furnished by Borrower or any of its Subsidiaries to the Agent or to any Lender
in connection with the negotiation of, or compliance with, the Loan Documents
contained any material misstatement of fact or omitted to state a material fact
necessary to make the statements contained therein not misleading.
5.11. Regulation U. Margin stock (as defined in Regulation U) constitutes
------------
less than twenty-five percent (25%) of those assets of Borrower and its
Subsidiaries which are subject to any limitation on sale, pledge, or other
restriction hereunder.
5.12. Material Agreements. Neither Borrower nor any Subsidiary is a party
-------------------
to any agreement or instrument or subject to any charter or other corporate
restriction the performance of or compliance with which could reasonably be
expected to have a Material Adverse Effect. Neither Borrower nor any Subsidiary
is in default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in (a) any agreement to which it
is a party, which default could reasonably be expected to have a Material
Adverse Effect, or (b) any agreement or instrument evidencing or governing
Indebtedness exceeding Ten Million Dollars ($10,000,000).
5.13. Compliance With Laws. Borrower and its Subsidiaries are in
--------------------
compliance with all applicable statutes, rules, regulations, orders and
restrictions of any domestic or foreign government or any instrumentality or
agency thereof, having jurisdiction over the conduct of their respective
businesses or the ownership of their respective Property if failure to comply
could reasonably be expected to have a Material Adverse Effect.
5.14. Ownership of Properties. Borrower and its Subsidiaries will have
-----------------------
good title, free of all Liens other than those permitted by Section 6.14, to all
of the Property and assets reflected in the Financial Statements as owned by it,
except for Property disposed of since the date of the Financial Statements in
the ordinary course of business.
5.15. Plan Assets; Prohibited Transactions. Borrower is not an entity
------------------------------------
deemed to hold "plan assets" within the meaning of 29 C.F.R. (S) 2510.3-101 of
an employee benefit plan (as defined in Section 3(3) of ERISA) which is subject
to Title I of ERISA or any plan (within the meaning of Section 4975 of the
Code); and neither the execution of this Agreement and the making of Loans
-34-
hereunder do not give rise to a prohibited transaction within the meaning of
Section 406 of ERISA or Section 4975 of the Code.
5.16. Environmental Matters. In the ordinary course of its business,
---------------------
Borrower considers the effect of Environmental Laws on the business of Borrower
and its Subsidiaries, in the course of which it identifies and evaluates
potential risks and liabilities accruing to Borrower due to Environmental Laws.
On the basis of this consideration, Borrower and its Subsidiaries are in
compliance with all Environmental Laws, non-compliance with which, singly or in
the aggregate, could reasonably be expected to have a Material Adverse Effect.
Neither Borrower nor any Subsidiary has received any notice to the effect that
its operations are not in material compliance with any of the requirements of
applicable Environmental Laws or are the subject of any federal or state
investigation evaluating whether any remedial action is needed to respond to a
release of any toxic or hazardous waste or substance into the environment, which
non-compliance or remedial action could reasonably be expected to have a
Material Adverse Effect.
5.17. Investment Company Act. Neither Borrower nor any Subsidiary thereof
----------------------
is an "investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
5.18. Public Utility Holding Company Act. Neither Borrower nor any
----------------------------------
Subsidiary is a "holding company" or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
5.19. Insurance. The certificate signed by the President or Chief
---------
Financial Officer of Borrower, that attests to the existence and adequacy of,
and summarizes, the property and casualty insurance program carried by Borrower
with respect to itself and its Subsidiaries and that has been furnished by
Borrower to the Agent and the Lenders, is complete and accurate. This summary
includes the insurer's or insurers' name(s), policy number(s), expiration
date(s), amount(s) of coverage, type(s) of coverage, exclusion(s), and
deductibles. This summary also includes similar information, and describes any
reserves, relating to any self-insurance program that is in effect.
5.20. Solvency. (a) Immediately following the making of each Loan, and
--------
after giving effect to the application of the proceeds of such Loans, (i) the
fair value of the assets of Borrower and its Subsidiaries on a consolidated
basis, at a fair valuation, will exceed the debts and liabilities, subordinated,
contingent or otherwise, of Borrower and its Subsidiaries on a consolidated
basis; (ii) the present fair saleable value of the Property of Borrower and its
Subsidiaries on a consolidated basis will be greater than the amount that will
be required to pay the probable liability of Borrower and its Subsidiaries on a
consolidated basis on their debts and other liabilities, subordinated,
contingent or otherwise, as such debts and other liabilities become absolute and
matured; (iii) Borrower and its Subsidiaries on a consolidated basis will be
able to pay their debts and liabilities, subordinated, contingent or otherwise,
as such debts and liabilities become absolute and matured; and (iv) Borrower and
its Subsidiaries on a consolidated basis will not have unreasonably small
capital with which to
-35-
conduct the businesses in which they are engaged as such businesses are now
conducted and are proposed to be conducted after the date thereof.
(b) Borrower does not intend to, or intend to permit any of its
Subsidiaries to, and does not believe that it or any of its Subsidiaries will,
incur debts beyond its ability to pay such debts as they mature, taking into
account the timing of and amounts of cash to be received by it or any such
Subsidiary and the timing of the amounts of cash to be payable on or in respect
of its Indebtedness or the Indebtedness of any such Subsidiary.
5.21. Year 2000 Issues. Borrower on behalf of itself and its Subsidiaries
----------------
has made a full and complete assessment of the Year 2000 Issues and has a
realistic and achievable program for remediating the Year 2000 Issues on a
timely basis. Based on this assessment and program, Borrower does not
reasonably anticipate any Material Adverse Effect as a result of Year 2000
Issues. To Borrower's actual knowledge, Borrower does not reasonably anticipate
any Material Adverse Effect as a result of Year 2000 Issues that affect
Borrower's and its Subsidiaries' customers, suppliers and vendors.
SECTION 6
---------
COVENANTS
---------
During the term of this Agreement and until the Obligations have been fully
performed and paid in full, and so long as any Commitment is outstanding, unless
the Required Lenders shall otherwise consent in writing:
6.1. Financial Reporting. Borrower will maintain, for itself and each
-------------------
Subsidiary, a system of accounting established and administered in accordance
with GAAP, and furnish to the Lenders:
(a) Within ninety (90) days after the close of each of its fiscal
years, financial statements of Borrower and its Subsidiaries certified by a
firm of independent certified public accountants acceptable to the Lenders,
prepared in accordance with GAAP on a consolidated and consolidating basis
(consolidating statements need not be certified by such accountants) for
itself and its Subsidiaries, including balance sheets as of the end of such
period, related statements of income and retained earnings and a
consolidated statement of cash flows, accompanied by (i) the unqualified
opinion of such accountants that such consolidated financial statements
present fairly, in all material respects, the consolidated financial
position of Borrower and its Subsidiaries as of the date thereof and the
results of their consolidated operations and their cash flows for the
fiscal year then ended, and (ii) a certificate of said accountants that, in
the course of their examination necessary for the issuance of their opinion
on the consolidated financial statements, they have obtained no knowledge
of any Default or Unmatured Default, or if, in the opinion of such
accountants, any Default or Unmatured
-36-
Default shall exist, stating the nature and status thereof, which
certificate shall be in substantially the form of Exhibit G hereto.
---------
(b) Within forty-five (45) days after the close of the first three (3)
quarterly periods of each of its fiscal years, for itself and the
Subsidiaries, consolidated and consolidating unaudited balance sheets as at
the close of each such period and consolidated and consolidating statements
of income and retained earnings and a consolidated statement of cash flows
for the period from the beginning of such fiscal year to the end of such
quarter, all certified by its chief financial officer.
(c) Together with the financial statements required under Sections
6.1(a) and (b), a compliance certificate in substantially the form of
Exhibit C hereto signed by its chief financial officer showing the
---------
calculations necessary to determine compliance with this Agreement and
stating that no Default or Unmatured Default exists, or if any Default or
Unmatured Default exists, stating the nature and status thereof.
(d) As soon as possible and in any event within ten (10) days after
Borrower knows that any Reportable Event has occurred with respect to any
Plan which could reasonably be expected to have a Material Adverse Effect,
a statement, signed by the chief financial officer of Borrower, describing
such Reportable Event and the action which Borrower proposes to take with
respect thereto.
(e) As soon as possible and in any event within ten (10) days after
receipt by Borrower, a copy of (i) any notice or claim to the effect that
Borrower or any of its Subsidiaries is or may be liable to any Person as a
result of the release by Borrower, any of its Subsidiaries, or any other
Person of any toxic or hazardous waste or substance into the environment,
and (ii) any notice alleging any violation of any federal, state or local
environmental, health or safety law or regulation by Borrower or any of its
Subsidiaries, which, in either case, could, singly or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
(f) Promptly upon the furnishing thereof to the shareholders of
Borrower, copies of all financial statements, reports and proxy statements
so furnished.
(g) Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular reports which
Borrower or any of its Subsidiaries files with the Securities and Exchange
Commission.
(h) Such other information (including non-financial information) as
the Agent or any Lender may from time to time reasonably request.
6.2. Use of Proceeds. Borrower will, and will cause each Subsidiary to,
---------------
use the proceeds of the Facilities solely for the purposes herein described.
Borrower will not, nor will it permit any
-37-
Subsidiary to, use any of the proceeds of the Advances to purchase or carry any
"margin stock" (as defined in Regulation U). Further, no part of the proceeds of
the Facilities will be used for any purpose that violates the provisions of
Regulations G, T, U or X of the Board of Governors.
6.3. Notice of Default. Borrower will, and will cause each Subsidiary to,
-----------------
give prompt notice in writing to the Lenders of the occurrence of any Default or
Unmatured Default known to Borrower and of any other development, financial or
otherwise, known to Borrower which is reasonably likely to have a Material
Adverse Effect.
6.4. Conduct of Business. Borrower will, and will cause each Subsidiary
-------------------
to, carry on and conduct its business in substantially the same manner and in
substantially the same fields of enterprise as it is presently conducted and in
fields of enterprise reasonably related thereto and do all things necessary to
remain duly incorporated, validly existing and, if applicable, in good standing
as a domestic corporation in its jurisdiction of incorporation and maintain all
requisite authority to conduct its business in each jurisdiction in which the
failure to maintain such requisite authority could reasonably be expected to
have a Material Adverse Effect.
6.5. Taxes. Borrower will, and will cause each Subsidiary to, timely file
-----
complete and correct United States federal and applicable foreign, state and
local tax returns required by law and pay when due all taxes, assessments and
governmental charges and levies upon it or its income, profits or Property,
except those which are being contested in good faith by appropriate proceedings
and with respect to which adequate reserves have been set aside in accordance
with GAAP.
6.6. Insurance. Borrower will, and will cause each Subsidiary to, maintain
---------
with financially sound and reputable insurance companies insurance on all their
Property in such amounts and covering such risks as is consistent with sound
business practice, and Borrower will furnish to the Agent upon request full
information as to the insurance carried.
6.7. Compliance with Laws. Borrower will, and will cause each Subsidiary
--------------------
to, comply with all laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject, non-compliance with
which, singly or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
6.8. Maintenance of Properties. Borrower will, and will cause each
-------------------------
Subsidiary to, do all things necessary to maintain, preserve, protect and keep
its Property in good repair, working order and condition, and make all necessary
and proper repairs, renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times.
6.9. Inspection. Borrower will, and will cause each Subsidiary to, permit
----------
the Agent and the Lenders, by their respective representatives and agents,
during normal business hours and upon reasonable notice, to inspect any of the
Property, corporate books and financial records of Borrower and each Subsidiary,
to examine and make copies of the books of accounts and other financial records
of Borrower and each Subsidiary, and to discuss the affairs, finances and
accounts of Borrower and
-38-
each Subsidiary with, and to be advised as to the same by, their respective
officers at such reasonable times and intervals as the Lenders may designate.
6.10. Dividends. At any time there then exists a Default or Unmatured
---------
Default or if a Default or Unmatured Default would be occasioned thereby, (a)
Borrower will not, nor will it permit any Subsidiary to, declare or pay any
dividends or make any distributions on its capital stock (other than dividends
payable in its own capital stock and except that any Subsidiary may declare and
pay dividends or make distributions to Borrower), and (b) Borrower will not, nor
will it permit any Subsidiary to, redeem, repurchase or otherwise acquire or
retire any of its outstanding capital stock from any Person other than Borrower.
6.11. Merger. Borrower will not, nor will it permit any Subsidiary to,
------
merge or consolidate with or into any other Person, except (a) that a Subsidiary
may merge into Borrower or a Wholly-Owned Subsidiary, and (b) as permitted in
Section 6.13.
6.12. Sale of Assets. Borrower will not, nor will it permit any
--------------
Subsidiary to, lease, sell or otherwise dispose of its Property, or discount,
with or without recourse, any of its accounts or notes receivable, except:
(a) Sales of inventory and discounts of its accounts receivable in the
ordinary course of business.
(b) Sale and Leaseback Transactions as permitted by Section 6.19.
(c) Leases, sales or other dispositions of its Property (exclusive of
Sale and Leaseback Transactions) that, together with all other Property of
Borrower and its Subsidiaries previously leased, sold or disposed of (other
than inventory in the ordinary course of business) as permitted by this
Section during the twelve-month period ending with the month in which any
such lease, sale or other disposition occurs, do not constitute a
Substantial Portion of the Property of Borrower and its Subsidiaries.
(d) Leases, sales or other dispositions of its Property (exclusive of
Sale and Leaseback Transactions) that exceed the limitation set forth in
Section 6.12(c) above; provided, that (i) there then exists no Default or
Unmatured Default and Borrower provides the Agent a satisfactory pro forma
Compliance Certificate showing compliance with all financial covenants, and
(ii) the aggregate Revolving Loan Commitments are reduced in accordance
with Section 2.5 by an amount at least equal to the amount of such excess.
6.13. Investments and Acquisitions. Borrower will not, nor will it permit
----------------------------
any Subsidiary to, make or suffer to exist any Investments (including without
limitation, loans and advances to, and other Investments in, Subsidiaries), or
commitments therefor, or create any Subsidiary or become or remain a partner in
any partnership or joint venture, or make any Acquisition of any Person, except:
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(a) Short-term obligations of, or fully guaranteed by, the United
States of America.
(b) Commercial paper rated A-1 or better by Standard and Poor's
Ratings Services, a division of McGraw Hill Companies, Inc. or P-1 or
better by ▇▇▇▇▇'▇ Investors Service, Inc.
(c) Demand deposit accounts maintained in the ordinary course of
business.
(d) Certificates of deposit maturing within one hundred eighty (180)
days issued by and time deposits maturing within one hundred eighty (180)
days with commercial banks (whether domestic or foreign) having capital and
surplus in excess of One Hundred Million Dollars ($100,000,000).
(e) Short-term tax exempt securities rated BBB or better by S&P or
Baa2 or better by Moody's.
(f) Existing Investments in Subsidiaries and other Investments in
existence on the date hereof and described on Schedule 6.13 hereto.
-------------
(g) Other Investments (valued at cost) not exceeding seven and one-
half percent (7-1/2%) of Consolidated Tangible Net Worth in the aggregate
outstanding at any one time.
(h) Borrower and its Subsidiaries may (i) create Subsidiaries having
no material assets or operations, solely for the purpose of facilitating an
Acquisition permitted hereunder, (ii) create (but not acquire except
pursuant to Section 6.13(i) and (j)) Subsidiaries in substantially the same
field of enterprise or in a reasonably related field of enterprise as
currently conducted by Borrower and its Subsidiaries as determined in the
reasonable judgment of the Agent, and (iii) create or acquire Subsidiaries
pursuant to an Acquisition permitted pursuant to Section 6.13(i) and (j).
(i) Acquisitions, provided (i) no Default or Unmatured Default has
occurred and is continuing at the time of such Acquisition or will result
or occur after consummation of such Acquisition, (ii) the entity or
business acquired is in substantially the same field of enterprise or in a
reasonably related field of enterprise as currently conducted by Borrower
and its Subsidiaries as determined in the reasonable judgment of the Agent
(including, without limitation, retail apparel enterprises, retail athletic
related enterprises and retail footwear enterprises), (iii) the total
purchase price (including the assumption of liabilities pursuant thereto)
for all Acquisitions permitted pursuant to this Section 6.13(i) (including
after giving effect to the subject Acquisition) consummated in any fiscal
year of Borrower does not exceed Ten Million Dollars ($10,000,000), and
(iv) in the event of a merger to which Borrower is a party, Borrower is the
surviving entity.
-40-
(j) Acquisitions that exceed or would exceed the purchase price
limitations contained in Section 6.13(i)(iii), provided (i) no Default or
Unmatured Default has occurred and is continuing at the time of such
Acquisition, (ii) Borrower provides written evidence satisfactory to the
Agent (which written evidence shall be promptly furnished by the Agent to
the Lenders) that it is in compliance with the covenants contained in
Section 6 both immediately before and after giving effect to consummation
of the Acquisition, and further provides a satisfactory pro forma
Compliance Certificate showing compliance with all financial covenants on a
consolidated basis for Borrower, its Subsidiaries and the target business
or entity to be acquired for the preceding 12-month period based solely on
historical results, but after giving effect to the proposed terms of the
Acquisition, (iii) the entity or business acquired is in substantially the
same field of enterprise or in a reasonably related field of enterprise as
currently conducted by Borrower and its Subsidiaries as determined in the
reasonable judgment of the Agent (including, without limitation, retail
apparel enterprises, retail athletic related enterprises and retail
footwear enterprises), which determination by the Agent shall be made
within five (5) Business Days after the Agent has received the information
described in sub-paragraph (ii) above and a brief written description of
the proposed Acquisition in reasonable detail, and (iv) in the event of a
merger to which Borrower is a party, Borrower is the surviving entity.
(k) Acquisitions that are not otherwise permitted pursuant to Sections
6.13(i)(ii) or (j)(iii), provided (i) no Default or Unmatured Default has
occurred and is continuing at the time of such Acquisition or will result
or occur after consummation of such Acquisition, (ii) the total purchase
price (including the assumption of liabilities pursuant thereto) for all
Acquisitions permitted pursuant to this Section 6.13(k) (including after
giving effect to the subject Acquisition) consummated in any fiscal year of
Borrower does not exceed Ten Million Dollars ($10,000,000) and (iii) in the
event of a merger to which Borrower is a party, Borrower is the surviving
entity.
Nothing contained in this Section 6.13 shall be deemed to restrict the
Investments of any Plan.
6.14. Liens. Borrower will not, nor will it permit any Subsidiary to,
-----
create, incur, or suffer to exist any Lien in, of or on the Property of Borrower
or any of its Subsidiaries, except:
(a) Liens for taxes, assessments or governmental charges or levies on
its Property if the same shall not at the time be delinquent or thereafter
can be paid without penalty, or are being contested in good faith and by
appropriate proceedings.
(b) Liens imposed by law, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the ordinary course of
business which secure payment of obligations not more than sixty (60) days
past due, or are being contested in good faith by appropriate proceedings.
-41-
(c) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or other
social security or retirement benefits, or similar legislation.
(d) Utility easements, building restrictions and such other
encumbrances or charges against real property as are of a nature generally
existing with respect to properties of a similar character and which do not
in any material way affect the marketability of the same or interfere with
the use thereof in the business of Borrower or the Subsidiaries.
(e) Liens securing aggregate outstanding Indebtedness of Borrower and
its Subsidiaries not exceeding at any time an amount equal to five percent
(5%) of Borrower's Consolidated Total Assets.
(f) Purchase money Liens upon Property (other than current assets)
created in the ordinary course of business encumbering only such Property
acquired and the proceeds thereof, and securing only the purchase price
thereof.
(g) Purchase money Liens upon inventory created in the ordinary course
of business encumbering only such inventory acquired and the Proceeds
thereof, and securing only the purchase price thereof, provided, that the
aggregate amount of such inventory subject to Liens at any time does not
exceed ten percent (10%) of the consolidated inventory of Borrower and its
Subsidiaries and the Indebtedness secured by such inventory is not
outstanding more than ninety (90) days.
(h) Liens existing on the date hereof and described in Schedule 6.14
-------------
hereto, including any extensions, renewals, replacements and modifications
not increasing the principal balance of the Indebtedness secured thereby.
(i) Liens assumed by Borrower securing Indebtedness assumed by
Borrower in connection with an Acquisition as permitted by Section 6.13 and
6.11.
(j) Liens arising from judgments in circumstances not constituting a
Default under Section 7.9.
(k) Any extensions, renewals, replacements and modifications of the
foregoing permitted Liens (other than the Liens permitted pursuant to
Section 6.14(g)) so long as the principal balance of the Indebtedness
secured thereby is not increased.
6.15. Indebtedness. Borrower will not, nor will it permit any Subsidiary
------------
to, create, incur or suffer to exist any Indebtedness except: (a) Indebtedness
to the Lenders pursuant to the Loan Documents, (b) that in existence on the date
hereof and disclosed in the Financial Statements, including any extensions,
renewals, replacements and modifications not increasing the principal balance
thereof, (c) Indebtedness of Borrower and its Subsidiaries secured by a Lien
permitted under
-42-
Section 6.14, (d) Subordinated Indebtedness of Borrower to any Wholly-Owned
Subsidiary of Borrower that is a guarantor of the Obligations, (e) Indebtedness
of a Subsidiary to Borrower permitted pursuant to Section 6.13, (f) unsecured
Indebtedness of Borrower and its Subsidiaries not exceeding in the aggregate ten
percent (10%) of Borrower's Consolidated Total Assets outstanding at any time,
and (g) except as otherwise provided herein, any extensions, renewals,
replacements and modifications of the foregoing permitted Indebtedness not
increasing the principal balance thereof.
6.16. Fixed Charge Coverage Ratio. Borrower will maintain a Fixed Charge
---------------------------
Coverage Ratio of not less than 1.50 to 1.0 as of the last day of each fiscal
quarter of Borrower.
6.17. Consolidated Tangible Net Worth. Borrower will at all times
-------------------------------
maintain its Consolidated Tangible Net Worth at not less than One Hundred Fifty-
Eight Million Dollars ($158,000,000) as of February 28, 1998, and thereafter
increasing effective as of the last day of each fiscal quarter of Borrower by an
amount equal to (a) fifty percent (50%) of Consolidated Net Income (without
reduction for any net losses) for such fiscal quarter, plus (b) eighty percent
----
(80%) of the proceeds (net of reasonable and customary brokerage commissions,
underwriting fees and discounts, and legal fees, finder's fees and other similar
fees and commissions incurred in connection therewith) received in such quarter
from any equity offerings (whether private or public) which adds to
stockholder's equity (exclusive of proceeds received with respect to the
issuance or exercise of any warrants, rights or options to acquire shares of
capital stock).
6.18. Leverage Ratio. Borrower will maintain its Leverage Ratio of not
--------------
greater than .63 to 1.0 at all times.
6.19. Sale and Leaseback. Borrower will not, nor will it permit any
------------------
Subsidiary to, enter into any Sale and Leaseback Transaction which, when
combined with all other Sale and Leaseback Transactions entered into by Borrower
and its Subsidiaries at any one time, would result in the aggregate sale
proceeds to exceed a Substantial Portion.
6.20. Restrictive Agreements. Borrower will not, nor will it permit any
----------------------
Subsidiary to, enter into any agreement prohibiting (a) the creation or
assumption of any Lien upon its Property, except for provisions contained in
documents evidencing Liens permitted under Sections 6.14(e), (f), (g), (h) and
(i) that restrict the ability to further encumber the Property secured thereby,
(b) the ability of Borrower to amend or otherwise modify this Agreement or any
other Loan Document, or (c) the ability of any Subsidiary to make any payments,
directly or indirectly, to Borrower by way of dividends, advances, repayments of
loans or advances, reimbursements of management and other intercompany charges,
expenses and accruals or other returns on investments, or any other agreement or
arrangement which restricts the ability of any such Subsidiary to make any
payment, directly or indirectly, to Borrower.
6.21. New Guarantors. Borrower will cause each new Subsidiary (other than
--------------
a Subsidiary organized or incorporated outside the United States of America),
whether hereafter created or acquired by Borrower or a Subsidiary pursuant to
Section 6.13, to execute and deliver to the Agent
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a Guaranty. Such Guaranty shall be executed and delivered within thirty (30)
days of the initial capitalization or Acquisition of such Subsidiary but in any
event not later than the date Borrower obtains an Advance hereunder to be used
in connection with, or related to, such capitalization or Acquisition or
otherwise used in connection with such new Subsidiary's business. With delivery
to the Agent of such Guaranty, Borrower shall also furnish, or cause to be
furnished, to the Agent (a) copies of the certificate or articles of
incorporation of such Guarantor, together with all amendments, and a certificate
of good standing or existence, both certified by the appropriate governmental
officer in its jurisdiction of incorporation; (b) copies, certified by the
Secretary or Assistant Secretary of such Guarantor, of its by-laws and of its
Board of Directors' resolutions (and resolutions of other bodies, if any are
reasonably deemed necessary by counsel for any Lender) authorizing the execution
of the Guaranty; (c) an incumbency certificate, executed by the Secretary or
Assistant Secretary of such Guarantor, which shall identify by name and title
and bear the signature of the officers of such Guarantor authorized to sign the
Guaranty; and (d) a favorable written opinion of such Guarantor's counsel,
addressed to the Agent in a form acceptable to the Agent, opining (i) as to such
Guarantor's existence, (ii) as to such Guarantor's authorization to execute the
Guaranty, (iii) as to the enforceability of the Guaranty, and (iv) that the
execution and performance of the Guaranty will not conflict with or result in a
breach under any material contract, indenture, instrument or other agreement by
which such Guarantor is bound or to which it is party.
6.22. Affiliates. Except for agreements and transactions with Spike's
----------
Holding, Inc., Borrower will not, and will not permit any Subsidiary to, enter
into any transaction (including, without limitation, the purchase or sale of any
Property or service) with, or make any payment or transfer to, any Affiliate
except in the ordinary course of business and pursuant to the reasonable
requirements of Borrower's or such Subsidiary's business and upon fair and
reasonable terms no less favorable to Borrower or such Subsidiary than Borrower
or such Subsidiary would obtain in a comparable arms-length transaction.
6.23. Accounting Policies. Borrower will not, and will not permit any
-------------------
Subsidiary to, change its fiscal year or any of its significant accounting
policies, except to the extent necessary to comply with GAAP.
6.24. Subordinated Indebtedness. Borrower will not, and will not permit
-------------------------
any Subsidiary to, make any amendment or modification to any indenture, note or
other agreement evidencing or governing any Subordinated Indebtedness without
the written consent of the Agent, or directly or indirectly voluntarily prepay,
defease or in substance defease, purchase, redeem, retire or otherwise acquire,
any Subordinated Indebtedness.
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SECTION 7
---------
DEFAULTS
--------
The occurrence of any one or more of the following events shall constitute
a Default:
7.1. Any representation or warranty made or deemed made by or on behalf of
Borrower or any of its Subsidiaries to the Lenders or the Agent under or in
connection with this Agreement, any Loan, or any certificate or information
delivered in connection with this Agreement or any other Loan Document shall be
materially false on the date as of which made.
7.2. Nonpayment of principal of any Loan when due, or nonpayment of
interest upon any Loan or of any facility fee or other obligations under any of
the Loan Documents within five (5) Business Days after the same becomes due.
7.3. The breach by Borrower of any of the terms or provisions of Section
6.1(d)-(h), 6.2, 6.3, 6.10, 6.11, 6.12, 6.13, 6.14, 6.15, 6.16, 6.17, 6.18,
6.19, 6.20, 6.21, 6.22, 6.23 or 6.24; or the breach by Borrower of Section
6.1(a), (b) or (c) which is not remedied within five (5) days of the breach
thereof.
7.4. The breach by Borrower (other than a breach which constitutes a
Default under Section 7.1, 7.2 or 7.3) of any of the terms or provisions of this
Agreement which is not remedied within thirty (30) days after written notice
from the Agent or any Lender.
7.5. Failure of Borrower or any of its Subsidiaries to pay when due (after
giving effect to any grace periods) any Indebtedness having an outstanding
principal balance, singly or in the aggregate, in excess of Ten Million Dollars
($10,000,000) ("Material Indebtedness"); or the breach by Borrower or any of its
Subsidiaries of any term, provision or condition contained in any agreement
under which any such Material Indebtedness was created or is governed, which
constitutes a default thereunder, or any other event shall occur or condition
exist, the effect of which is to cause, or to permit the holder or holders of
such Material Indebtedness to cause, such Material Indebtedness to become due
prior to its stated maturity; or any Material Indebtedness of Borrower or any of
its Subsidiaries shall be declared to be due and payable or required to be
prepaid or repurchased (other than by a regularly scheduled payment) prior to
the stated maturity thereof; or Borrower or any of its Subsidiaries shall not
pay, or admit in writing its inability to pay, its debts generally as they
become due.
7.6. Borrower or any of its Subsidiaries shall (a) have an order for relief
entered with respect to it under the Federal bankruptcy laws as now or hereafter
in effect, (b) make an assignment for the benefit of creditors, (c) apply for,
seek, consent to, or acquiesce in, the appointment of a receiver, custodian,
trustee, examiner, liquidator or similar official for it or any Substantial
Portion of its Property, (d) institute any proceeding seeking an order for
relief under the Federal bankruptcy
-45-
laws as now or hereafter in effect or seeking to adjudicate it a bankrupt or
insolvent, or seeking dissolution, winding up, liquidation, reorganization,
arrangement, adjustment or composition of it or its debts under any law relating
to bankruptcy, insolvency or reorganization or relief of debtors or fail to file
an answer or other pleading denying the material allegations of any such
proceeding filed against it, (e) take any corporate action to authorize or
effect any of the foregoing actions set forth in this Section 7.6, or (f) fail
to contest in good faith any appointment or proceeding described in Section 7.7.
7.7. Without the application, approval or consent of Borrower or any of its
Subsidiaries, a receiver, trustee, examiner, liquidator or similar official
shall be appointed for Borrower or any of its Subsidiaries or any Substantial
Portion of its Property, or a proceeding described in Section 7.6(d) shall be
instituted against Borrower or any of its Subsidiaries and such appointment
continues undischarged or such proceeding continues undismissed or unstayed for
a period of forty-five (45) consecutive days.
7.8. Any court, government or governmental agency shall condemn, seize or
otherwise appropriate, or take custody or control of (each a "Condemnation"),
all or any portion of the Property of Borrower and its Subsidiaries which, when
taken together with all other Property of Borrower and its Subsidiaries so
condemned, seized, appropriated, or taken custody or control of, during the
twelve-month period ending with the month in which any such Condemnation occurs,
constitutes a Substantial Portion.
7.9. Borrower or any of its Subsidiaries shall fail within thirty (30) days
to pay, bond or otherwise discharge any judgment or order for the payment of
money in excess of Ten Million Dollars ($10,000,000), which is not stayed on
appeal or otherwise being appropriately contested in good faith.
7.10. The Unfunded Liabilities of all Single Employer Plans shall exceed
in the aggregate Ten Million Dollars ($10,000,000), or any Reportable Event
shall occur in connection with any Plan which could reasonably be expected to
have a Material Adverse Effect.
7.11. Borrower or any other member of the Controlled Group shall have been
notified by the sponsor of a Multiemployer Plan that it has incurred withdrawal
liability to such Multiemployer Plan in an amount which, when aggregated with
all other amounts required to be paid to Multiemployer Plans by Borrower or any
other member of the Controlled Group as withdrawal liability (determined as of
the date of such notification), exceeds Ten Million Dollars ($10,000,000).
7.12. Borrower or any other member of the Controlled Group shall have been
notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is
in reorganization or is being terminated, within the meaning of Title IV of
ERISA, and such reorganization or termination could reasonably be expected to
have a Material Adverse Effect.
7.13. Any Change in Control shall occur.
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7.14. The occurrence of any "default", as defined in any Loan Document
(other than this Agreement) or the breach of any of the terms or provisions of
any Loan Document (other than this Agreement), which default or breach continues
beyond any period of grace therein provided.
7.15. Any Guaranty shall fail to remain in full force or effect or any
action shall be taken to discontinue or to assert the invalidity or
unenforceability of any Guaranty, or any Guarantor shall fail to comply with any
of the terms or provisions of any Guaranty to which it is a party, or any
Guarantor shall deny that it has any further liability under any Guaranty to
which it is a party, or shall give notice to such effect.
SECTION 8
---------
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
----------------------------------------------
8.1. Acceleration. If any Default described in Section 7.6 or 7.7 occurs
------------
with respect to Borrower, the obligations of the Lenders to make Loans hereunder
shall automatically terminate and the Obligations shall immediately become due
and payable without any election or action on the part of the Agent or any
Lender. If any other Default occurs, the Required Lenders (or the Agent with
the consent of the Required Lenders) may terminate or suspend the obligations of
the Lenders to make Loans hereunder, or declare the Obligations to be due and
payable, or both, whereupon the Obligations shall become immediately due and
payable, without presentment, demand, protest or notice of any kind, all of
which Borrower hereby expressly waives.
If, within thirty (30) days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Loans
hereunder as a result of any Default (other than any Default as described in
Section 7.6 or 7.7 with respect to Borrower) and before any judgment or decree
for the payment of the Obligations due shall have been obtained or entered, the
Required Lenders (in their sole discretion) shall so direct, the Agent shall, by
notice to Borrower, rescind and annul such acceleration and/or termination.
8.2. Amendments. Subject to the provisions of this Section 8, the Required
----------
Lenders (or the Agent with the consent in writing of the Required Lenders) and
Borrower may enter into agreements supplemental hereto for the purpose of adding
or modifying any provisions of the Loan Documents or changing in any manner the
rights of the Lenders or Borrower hereunder or waiving any Default hereunder,
provided, however, that no such supplemental agreement shall, without the
-------- -------
consent of each Lender affected thereby:
(a) Extend the maturity of any Loan or Note or forgive all or any
portion of the principal amount thereof, or reduce the rate or extend the
time of payment of interest or fees thereon.
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(b) Reduce the percentage specified in the definition of Required
Lenders.
(c) Extend the Facility Termination Date or reduce the amount or
extend the payment date for, the mandatory payments required under Section
2.2, or increase the amount of the Commitment of any Lender hereunder, or
permit Borrower to assign its rights under this Agreement.
(d) Amend this Section 8.2.
(e) Release any Guarantor of any Advance.
No amendment of any provision of this Agreement relating to the Agent shall be
effective without the written consent of the Agent. The Agent may waive payment
of the fee required under Section 12.3.2 without obtaining the consent of any
other party to this Agreement.
8.3. Preservation of Rights. No delay or omission of the Lenders or the
----------------------
Agent to exercise any right under the Loan Documents shall impair such right or
be construed to be a waiver of any Default or an acquiescence therein, and the
making of a Loan notwithstanding the existence of a Default or the inability of
Borrower to satisfy the conditions precedent to such Loan shall not constitute
any waiver or acquiescence. Any single or partial exercise of any such right
shall not preclude other or further exercise thereof or the exercise of any
other right, and no waiver, amendment or other variation of the terms,
conditions or provisions of the Loan Documents whatsoever shall be valid unless
in writing signed by the Required Lenders or each of the affected Lenders as
required pursuant to Section 8.2, and then only to the extent in such writing
specifically set forth. All remedies contained in the Loan Documents or by law
afforded shall be cumulative and all shall be available to the Agent and the
Lenders until the Obligations have been paid in full.
SECTION 9
---------
GENERAL PROVISIONS
------------------
9.1. Survival of Representations. All representations and warranties of
---------------------------
Borrower contained in this Agreement shall survive delivery of the Notes and the
making of the Loans herein contemplated until full, final and irrevocable
payment and satisfaction of the Obligations (except as otherwise expressly
provided herein).
9.2. Governmental Regulation. Anything contained in this Agreement to the
-----------------------
contrary notwithstanding, no Lender shall be obligated to extend credit to
Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
-48-
9.3. Headings. Section headings in the Loan Documents are for convenience
--------
of reference only, and shall not govern the interpretation of any of the
provisions of the Loan Documents.
9.4. Entire Agreement. The Loan Documents embody the entire agreement and
----------------
understanding among Borrower, the Agent and the Lenders and supersede all prior
agreements and understandings among Borrower, the Agent and the Lenders relating
to the subject matter thereof.
9.5. Several Obligations; Benefits of this Agreement. The respective
-----------------------------------------------
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other (except to the extent to which the
Agent is authorized to act as such). The failure of any Lender to perform any
of its obligations hereunder shall not relieve any other Lender from any of its
obligations hereunder. This Agreement shall not be construed so as to confer
any right or benefit upon any Person other than the parties to this Agreement
and their respective successors and assigns, provided, however, that the parties
-------- -------
hereto expressly agree that the Arranger shall enjoy the benefits of the
provisions of Sections 9.6, 9.9 and 10.11 to the extent specifically set forth
therein and shall have the right to enforce such provisions on its own behalf
and in its own name to the same extent as if it were a party to this Agreement.
9.6. Expenses; Indemnification. Borrower shall reimburse the Agent and the
-------------------------
Arranger for any reasonable costs, internal charges and out-of-pocket expenses
(including reasonable attorneys' fees and time charges of attorneys for the
Agent, which attorneys may be employees of the Agent or the Arranger) paid or
incurred by the Agent or the Arranger in connection with the preparation,
negotiation, execution, delivery, syndication, review, amendment, modification,
and administration of the Facilities and/or the Loan Documents. Borrower also
agrees to reimburse the Agent, the Arranger and the Lenders for any costs,
internal charges and out-of-pocket expenses (including reasonable attorneys'
fees and time charges of attorneys for the Agent, the Arranger and the Lenders,
which attorneys may be employees of the Agent, the Arranger or the Lenders) paid
or incurred by the Agent, the Arranger or any Lender in connection with the
collection and enforcement of the Loan Documents. Notwithstanding the
foregoing, Borrower shall not be required to reimburse the Agent, the Arranger
or any Lender for both of such Person's outside attorneys' fees and time charges
of attorneys that are employees of such Person to the extent such fees are
incurred in connection with the same services rendered for such Person.
Expenses being reimbursed by Borrower under this Section include, without
limitation, reasonable costs and expenses incurred in connection with audit and
inspection reports prepared by, and/or furnished to, the Lenders pursuant to the
terms of this Agreement. Borrower further agrees to indemnify the Agent, the
Arranger and each Lender, its directors, officers and employees against all
losses, claims, damages, penalties, judgments, liabilities and expenses
(including, without limitation, all expenses of litigation or preparation
therefor whether or not the Agent, the Arranger or any Lender is a party
thereto) which any of them may pay or incur arising out of or relating to this
Agreement, the other Loan Documents, the transactions contemplated hereby or the
direct or indirect application or proposed application of the proceeds of any
Loan hereunder except to the extent that they are determined by a court of
competent jurisdiction in a final and non-appealable order to have resulted from
the gross negligence or willful misconduct of the
-49-
party seeking indemnification. The obligations of Borrower under this Section
shall survive the termination of this Agreement.
9.7. Numbers of Documents. All statements, notices, closing documents, and
--------------------
requests hereunder shall be furnished to the Agent with sufficient counterparts
so that the Agent may furnish one to each of the Lenders.
9.8. Severability of Provisions. Any provision in any Loan Document that
--------------------------
is held to be inoperative, unenforceable, or invalid in any jurisdiction shall,
as to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
9.9. Relationship of Parties; Mutual Release of Consequential Damages. The
----------------------------------------------------------------
relationship between Borrower and the Lenders and the Agent shall be solely that
of borrower and lender. Neither the Agent, the Arranger nor any Lender shall
have any fiduciary responsibilities to Borrower. Neither the Agent, the
Arranger nor any Lender undertakes any responsibility to Borrower to review or
inform Borrower of any matter in connection with any phase of Borrower's
business or operations. Neither the Agent, the Arranger, any Lender nor
Borrower shall have any liability with respect to, and Borrower, each Lender,
the Arranger and the Agent hereby waives, releases and agrees not to ▇▇▇ for,
any special or consequential damages suffered by it in connection with, arising
out of, or in any way related to the Loan Documents or the transactions
contemplated thereby.
9.10. Confidentiality. The Agent and each Lender agrees to hold any
---------------
confidential information which it may receive from Borrower pursuant to this
Agreement in confidence, except for (a) confidential disclosure to its
Affiliates and to other Lenders and their respective Affiliates, (b)
confidential disclosure to legal counsel, accountants, and other professional
advisors to that Lender or to a Transferee, (c) required disclosure to
regulatory officials, (d) disclosure to any Person as required by law,
regulation, or legal process, (e) required disclosure to any Person in
connection with any legal proceeding to which that Lender is a party, and (f)
disclosure as permitted by Section 12.4.
9.11. Nonreliance. Each Lender hereby represents that it is not relying
-----------
on or looking to any margin stock (as defined in Regulation U of the Board of
Governors of the Federal Reserve System) for the repayment of the Loans provided
for herein.
SECTION 10
----------
THE AGENT
---------
10.1. Appointment; Nature of Relationship. NBD Bank, N.A. is hereby
-----------------------------------
appointed by each of the Lenders as its contractual representative (herein
referred to as the "Agent") hereunder and
-50-
under each other Loan Document, and each of the Lenders irrevocably authorizes
the Agent to act as the contractual representative of such Lender with the
rights and duties expressly set forth herein and in the other Loan Documents.
The Agent agrees to act as such contractual representative upon the express
conditions contained in this Section 10. Notwithstanding the use of the defined
term "Agent," it is expressly understood and agreed that the Agent shall not
have any fiduciary responsibilities to any Lender by reason of this Agreement or
any other Loan Document and that the Agent is merely acting as the
representative of the Lenders with only those duties as are expressly set forth
in this Agreement and the other Loan Documents. In its capacity as the Lenders'
contractual representative, the Agent (a) does not hereby assume any fiduciary
duties to any of the Lenders, (b) is a "representative" of the Lenders within
the meaning of Section 9-105 of the Uniform Commercial Code, and (c) is acting
as an independent contractor, the rights and duties of which are limited to
those expressly set forth in this Agreement and the other Loan Documents. Each
of the Lenders hereby agrees to assert no claim against the Agent on any agency
theory or any other theory of liability for breach of fiduciary duty, all of
which claims each Lender hereby waives.
10.2. Powers. The Agent shall have and may exercise such powers under the
------
Loan Documents as are specifically delegated to the Agent by the terms of each
thereof, together with such powers as are reasonably incidental thereto. The
Agent shall have no implied duties to the Lenders, or any obligation to the
Lenders to take any action thereunder except any action specifically provided by
the Loan Documents to be taken by the Agent.
10.3. General Immunity. Neither the Agent nor any of its directors,
----------------
officers, agents or employees shall be liable to Borrower, the Lenders or any
Lender for any action taken or omitted to be taken by it or them hereunder or
under any other Loan Document or in connection herewith or therewith except to
the extent such action or inaction is determined in a final non-appealable
judgment by a court of competent jurisdiction to have arisen from the gross
negligence or willful misconduct of such Person.
10.4. No Responsibility for Loans, Recitals, etc. Neither the Agent nor
-------------------------------------------
any of its directors, officers, agents or employees shall be responsible for or
have any duty to ascertain, inquire into, or verify (a) any statement, warranty
or representation made in connection with any Loan Document or any borrowing
hereunder, (b) the performance or observance of any of the covenants or
agreements of any obligor under any Loan Document, including, without
limitation, any agreement by an obligor to furnish information directly to each
Lender, (c) the satisfaction of any condition specified in Section 4, except
receipt of items required to be delivered solely to the Agent, (d) the existence
or possible existence of any Default or Unmatured Default; (e) the validity,
enforceability, effectiveness, sufficiency or genuineness of any Loan Document
or any other instrument or writing furnished in connection therewith; (f) the
value, sufficiency, creation, perfection or priority of any Lien in any
collateral security; or (g) the financial condition of Borrower or any guarantor
of any of the Obligations or of any of Borrower's or any such guarantor's
respective Subsidiaries. The Agent shall have no duty to disclose to the
Lenders information that is not required to be furnished by Borrower to the
Agent at such time, but is voluntarily furnished by Borrower to the Agent
(either in its capacity as Agent or in its individual capacity), provided,
--------
however, upon a Lender's request for information
-------
-51-
furnished by Borrower to the Agent in its capacity as Agent hereunder, the Agent
shall provide a copy of such information promptly to such Lender.
10.5. Action on Instructions of Lenders. The Agent shall in all cases be
---------------------------------
fully protected in acting, or in refraining from acting, hereunder and under any
other Loan Document in accordance with written instructions signed by the
Required Lenders or by each of the affected Lenders pursuant to Section 8.2, and
such instructions and any action taken or failure to act pursuant thereto shall
be binding on all of the Lenders and on all holders of Notes. The Lenders
hereby acknowledge that the Agent shall be under no duty to take any
discretionary action permitted to be taken by it pursuant to the provisions of
this Agreement or any other Loan Document unless it shall be requested in
writing to do so by the Required Lenders or by each of the affected Lenders
pursuant to Section 8.2, as applicable. The Agent shall be fully justified in
failing or refusing to take any action hereunder and under any other Loan
Document unless it shall first be indemnified to its satisfaction by the Lenders
pro rata against any and all liability, cost and expense that it may incur by
reason of taking or continuing to take any such action.
10.6. Employment of Agents and Counsel. The Agent may execute any of its
--------------------------------
duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning the contractual arrangement between the Agent and the Lenders
and all matters pertaining to the Agent's duties hereunder and under any other
Loan Document.
10.7. Reliance on Documents; Counsel. The Agent shall be entitled to rely
------------------------------
upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document reasonably believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and, in respect
to legal matters, upon the opinion of counsel selected by the Agent, which
counsel may be employees of the Agent.
10.8. Agent's Reimbursement and Indemnification. The Lenders agree to
-----------------------------------------
reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (or, if the Commitments have been terminated, in proportion to their
Commitments immediately prior to such termination) (a) for any amounts not
reimbursed by Borrower for which the Agent is entitled to reimbursement by
Borrower under the Loan Documents, (b) for any other expenses incurred by the
Agent on behalf of the Lenders, in connection with the preparation, execution,
delivery, administration and enforcement of the Facilities and/or Loan Documents
(including, without limitation, for any expenses incurred by the Agent in
connection with any dispute between the Agent and any Lender or between two or
more of the Lenders), and (c) for any liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever which may be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of the Facilities
and/or the Loan Documents or any other document delivered in connection
therewith or the transactions contemplated thereby (including, without
limitation, for any such amounts incurred by or asserted
-52-
against the Agent in connection with any dispute between the Agent and any
Lender or between two or more of the Lenders), or the enforcement of any of the
terms thereof or of any such other documents, provided that no Lender shall be
liable for any of the foregoing to the extent any of the foregoing is found in a
final non-appealable judgment by a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of the Agent. The
obligations of the Lenders under this Section 10.8 shall survive payment of the
Obligations and termination of this Agreement.
10.9. Notice of Default. The Agent shall not be deemed to have knowledge
-----------------
or notice of the occurrence of any Default or Unmatured Default hereunder unless
the Agent has received written notice from a Lender or Borrower referring to
this Agreement describing such Default or Unmatured Default and stating that
such notice is a "notice of default". In the event that the Agent receives such
a notice, the Agent shall give prompt notice thereof to the Lenders.
10.10. Rights as a Lender. In the event the Agent is a Lender, the Agent
------------------
shall have the same rights and powers hereunder and under any other Loan
Document as any Lender and may exercise the same as though it were not the
Agent, and the term "Lender" or "Lenders" shall, at any time when the Agent is a
Lender, unless the context otherwise indicates, include the Agent in its
individual capacity. The Agent and its Affiliates may accept deposits from,
lend money to, and generally engage in any kind of trust, debt, equity or other
transaction, in addition to those contemplated by this Agreement or any other
Loan Document, with Borrower or any of its Subsidiaries in which Borrower or
such Subsidiary is not restricted hereby from engaging with any other Person.
The Agent, in its individual capacity, is not obligated to remain a Lender.
10.11. Lender Credit Decision. Each Lender acknowledges that it has,
----------------------
independently and without reliance upon the Agent, the Arranger or any other
Lender and based on the Financial Statements and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and the other Loan Documents. Each Lender
also acknowledges that it will, independently and without reliance upon the
Agent, the Arranger or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement and the
other Loan Documents.
10.12. Successor Agent. The Agent may resign at any time by giving
---------------
written notice thereof to the Lenders and Borrower, such resignation to be
effective upon the appointment of a successor Agent or, if no successor Agent
has been appointed, forty-five (45) days after the retiring Agent gives notice
of its intention to resign. The Agent may be removed at any time with or
without cause by written notice received by the Agent from the Required Lenders,
such removal to be effective on the date specified by the Required Lenders.
Upon any such removal, the Required Lenders shall have the right to appoint, on
behalf of Borrower and the Lenders, a successor Agent. If no successor Agent
shall have been so appointed by the Required Lenders within thirty (30) days
after the resigning Agent's giving notice of its intention to resign, then the
resigning Agent may appoint, on behalf of Borrower and the Lenders, a successor
Agent. Notwithstanding the previous sentence, the Agent may at any time without
the consent of Borrower or any Lender, appoint any of its Affiliates which
-53-
is a commercial bank as a successor Agent hereunder. If the Agent has resigned
or been removed and no successor Agent has been appointed, the Lenders may
perform all the duties of the Agent hereunder and Borrower shall make all
payments in respect of the Obligations to the applicable Lender and for all
other purposes shall deal directly with the Lenders. No successor Agent shall be
deemed to be appointed hereunder until such successor Agent has accepted the
appointment. Any such successor Agent shall be a commercial bank having capital
and retained earnings of at least One Hundred Million Dollars ($100,000,000).
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the resigning or removed Agent. Upon
the effectiveness of the resignation or removal of the Agent, the resigning or
removed Agent shall be discharged from its duties and obligations hereunder and
under the Loan Documents. After the effectiveness of the resignation or removal
of an Agent, the provisions of this Section 10 shall continue in effect for the
benefit of such Agent in respect of any actions taken or omitted to be taken by
it while it was acting as the Agent hereunder and under the other Loan
Documents. In the event that there is a successor to the Agent by merger, or the
Agent assigns its duties and obligations to an Affiliate pursuant to this
Section 10.12, then the term "Prime Rate" as used in this Agreement shall mean
the prime rate, base rate or other analogous rate of the new Agent.
10.13. Agent's Fee. Borrower agrees to pay the Agent, for its own
-----------
account, the fees agreed to by Borrower and the Agent pursuant to the Fee
Letter, or as otherwise agreed from time to time by Borrower and the Agent.
10.14. Delegation to Affiliates. Borrower and the Lenders agree that the
------------------------
Agent may delegate any of its duties under this Agreement to any of its
Affiliates. Any such Affiliate (and such Affiliate's directors, officers,
agents and employees) which performs duties in connection with this Agreement
shall be entitled to the same benefits of the indemnification, waiver and other
protective provisions to which the Agent is entitled under Sections 9 and 10.
SECTION 11
----------
SET OFF; RATABLE PAYMENTS
-------------------------
11.1. Set off. In addition to, and without limitation of, any rights of
-------
the Lenders under applicable law, if any Default or Unmatured Default occurs,
any and all deposits (including all account balances, whether provisional or
final and whether or not collected or available) and any other Indebtedness at
any time held or owing by any Lender or any Affiliate of any Lender to or for
the credit or account of Borrower may be offset and applied toward the payment
of the Obligations owing to such Lender, whether or not the Obligations, or any
part hereof, shall then be due.
11.2. Ratable Payments. If any Lender, whether by set off or otherwise,
----------------
has payment made to it upon its Loans (other than payments received pursuant to
Section 3.1, 3.2, 3.4 or 3.5) in a
-54-
greater proportion than that received by any other Lender in terms of its Pro
Rata Share, such Lender agrees, promptly upon demand, to purchase a portion of
the Loans held by the other Lenders so that after such purchase each Lender will
hold its ratable proportion of Loans after taking into effect the aforementioned
payment and purchase. If any Lender, whether in connection with set off or
amounts which might be subject to set off or otherwise, receives collateral or
other protection for its Obligations or such amounts which may be subject to set
off, such Lender agrees, promptly upon demand, to take such action necessary
such that all Lenders share in the benefits of such collateral ratably in
proportion to their Loans. In case any such payment is disturbed by legal
process, or otherwise, appropriate further adjustments shall be made.
SECTION 12
----------
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
-------------------------------------------------
12.1. Successors and Assigns. The terms and provisions of the Loan
----------------------
Documents shall be binding upon and inure to the benefit of Borrower, the
Lenders and the Agent and their respective successors and assigns, except that
(a) Borrower shall not have the right to assign its rights or obligations under
the Loan Documents, and (b) any assignment by any Lender must be made in
compliance with Section 12.3. Notwithstanding clause (b) of this Section, any
Lender may at any time, without the consent of Borrower or the Agent, assign all
or any portion of its rights under this Agreement and any Note to a Federal
Reserve Bank, provided, however, that no such assignment to a Federal Reserve
-------- -------
Bank shall release the transferor Lender from its obligations hereunder. The
Agent may treat the Person which made any Loan or which holds any Note as the
owner thereof for all purposes hereof unless and until such Person complies with
Section 12.3 in the case of an assignment thereof or, in the case of any other
transfer, a written notice of the transfer is filed with the Agent. Any
assignee or transferee of the rights to any Loan or any Note agrees by
acceptance of such transfer or assignment to be bound by all the terms and
provisions of the Loan Documents. Any request, authority or consent of any
Person, who at the time of making such request or giving such authority or
consent is the holder of any Note, shall be conclusive and binding on any
subsequent holder, transferee or assignee of such Note or of any Note or Notes
issued in exchange therefor.
12.2. Participations.
--------------
12.2.1 Permitted Participants; Effect. Any Lender may, in the
------------------------------
ordinary course of its business and in accordance with applicable law, at
any time sell to one or more banks or other entities ("Participants")
participating interests in any Loan owing to such Lender, any Note held by
such Lender, any Commitment of such Lender or any other interest of such
Lender under the Loan Documents. In the event of any such sale by a Lender
of participating interests to a Participant, such Lender's obligations
under the Loan Documents shall remain unchanged, such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, such Lender shall remain the holder of any such Note for
-55-
all purposes under the Loan Documents, all amounts payable by Borrower
under this Agreement shall be determined as if such Lender had not sold
such participating interests, and Borrower and the Agent shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under the Loan Documents.
12.2.2. Voting Rights. Each Lender shall retain the sole right to
-------------
approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other than
any amendment, modification or waiver with respect to any Loan or
Commitment in which such Participant has an interest which forgives
principal, interest or fees or reduces the interest rate or fees payable
with respect to any such Loan or Commitment, extends the Facility
Termination Date, postpones any date fixed for any regularly-scheduled
payment of principal of, or interest or fees on, any such Loan or
Commitment, releases any guarantor of any such Loan or releases all or
substantially all of the collateral, if any, securing any such Loan.
12.2.3. Benefit of Set off. Borrower agrees that each Participant
------------------
shall be deemed to have the right of set off provided in Section 11.1 in
respect of its participating interest in amounts owing under the Loan
Documents to the same extent as if the amount of its participating interest
were owing directly to it as a Lender under the Loan Documents, provided
that each Lender shall retain the right of set off provided in Section 11.1
with respect to the amount of participating interests sold to each
Participant. The Lenders agree to share with each Participant, and each
Participant, by exercising the right of set off provided in Section 11.1,
agrees to share with each Lender, any amount received pursuant to the
exercise of its right of set off, such amounts to be shared in accordance
with Section 11.2 as if each Participant were a Lender.
12.3. Assignments.
-----------
12.3.1. Permitted Assignments. Any Lender may, in the ordinary
---------------------
course of its business and in accordance with applicable law, at any time
assign to one or more Eligible Assignees ("Purchasers") all or any part of
its rights and obligations under the Loan Documents. Any assignment
pursuant to this Section 12.3.1 shall be substantially in the form of
Exhibit E hereto or in such other form as may be agreed to by the parties
---------
thereto. The written consent of Borrower and the Agent shall be required
prior to an assignment becoming effective with respect to a Purchaser which
is not (a) a Lender, (b) an Affiliate of a Lender, which such Affiliate is
organized under the laws of the United States or any state thereof, or (c)
an Affiliate of a Lender, which such Affiliate has a Lending Installation
in the United States, provided, however, that if a Default has occurred and
-------- -------
is continuing, the consent of Borrower shall not be required. Such consents
shall not be unreasonably withheld or delayed. Each such assignment shall
(unless each of Borrower and the Agent otherwise consents) be in an amount
not less than the lesser of (y) Five Million Dollars ($5,000,000), or (z)
the remaining amount of the assigning Lender's Commitment (calculated as of
the date of such assignment).
-56-
12.3.2. Effect; Effective Date. Upon (a) delivery to the Agent of a
----------------------
notice of assignment, substantially in the form of Exhibit I to Exhibit E
--------- ---------
hereto (a "Notice of Assignment"), together with any consents required by
Section 12.3.1, and (b) payment of a Three Thousand Five Hundred Dollar
($3,500) fee to the Agent for processing such assignment, such assignment
shall become effective on the effective date specified in such Notice of
Assignment. The Notice of Assignment shall contain a representation by the
Purchaser to the effect that none of the consideration used to make the
purchase of the Commitment and Loans under the applicable assignment
agreement are "plan assets" as defined under ERISA and that the rights and
interests of the Purchaser in and under the Loan Documents will not be
"plan assets" under ERISA. On and after the effective date of such
assignment, such Purchaser shall for all purposes be a Lender party to this
Agreement and any other Loan Document executed by the Lenders and shall
have all the rights and obligations of a Lender under the Loan Documents,
to the same extent as if it were an original party hereto, and no further
consent or action by Borrower, the Lenders or the Agent shall be required
to release the transferor Lender with respect to the percentage of the
Commitment and Loans assigned to such Purchaser. Upon the consummation of
any assignment to a Purchaser pursuant to this Section 12.3.2, the
transferor Lender, the Agent and Borrower shall make appropriate
arrangements so that replacement Notes are issued to such transferor Lender
and new Notes or, as appropriate, replacement Notes, are issued to such
Purchaser, in each case in principal amounts reflecting their respective
Commitments, as adjusted pursuant to such assignment.
12.4. Dissemination of Information. Subject to Section 9.10, Borrower
----------------------------
authorizes each Lender to disclose to any Participant or Purchaser or any other
Person acquiring an interest in the Loan Documents by operation of law (each a
"Transferee") and any prospective Transferee any and all information in such
Lender's possession concerning the creditworthiness of Borrower and its
Subsidiaries, including, without limitation, any information contained in any
audit and inspection reports; provided that each Transferee and prospective
Transferee agrees to be bound by Section 9.10.
12.5. Tax Treatment. If any interest in any Loan Document is transferred
-------------
to any Transferee which is organized under the laws of any jurisdiction other
than the United States or any State thereof, the transferor Lender shall cause
such Transferee, concurrently with the effectiveness of such transfer, to comply
with the provisions of Section 3.5(d).
12.6. Replacement of Lenders. Upon a Lender charging to Borrower
----------------------
increased costs in excess of those being generally charged by the other Lenders,
Borrower shall have the right, in accordance with the requirements of Section
12.3, if no Default will exist after giving effect to such replacement, to
replace such Lender (the "Replaced Lender") with an Eligible Assignee or
Eligible Assignees (collectively, the "Replacement Lender"), reasonably
acceptable to the Agent, provided that at the time of any replacement pursuant
to this Section, the Replacement Lender shall enter into one or more Assignment
Agreements pursuant to which the Replacement Lender shall acquire all the
Commitments and outstanding Loans of, and in each case participation in Letters
of Credit by, the
-57-
Replaced Lender and, in connection therewith, shall, together with Borrower, pay
to the Replaced Lender in respect thereof an amount equal to the sum of (a) an
amount equal to the principal of, and all accrued interest on, all outstanding
Loans of the Replaced Lender, (b) an amount equal to all accrued, but
theretofore unpaid, fees owing to the Replaced Lender, and (c) all Obligations
of the Borrower owing to the Replaced Lender (other than those specifically
described in clause (a) above in respect of which the assignment purchase price
has been, or is concurrently being, paid) shall be paid in full to such Replaced
Lender concurrently with such replacement.
SECTION 13
----------
NOTICES
-------
13.1. Notices. Except as otherwise permitted by Section 2.13 with respect
-------
to borrowing notices, all notices, requests and other communications to any
party hereunder shall be in writing (including electronic transmission,
facsimile transmission or similar writing) and shall be given to such party: (a)
in the case of Borrower or the Agent, at its address or facsimile number set
forth on the signature pages hereof, (b) in the case of any Lender, at its
address or facsimile number set forth on Schedule 1 hereto, or (c) in the case
----------
of any party, at such other address or facsimile number as such party may
hereafter specify for the purpose by notice to the Agent and Borrower in
accordance with the provisions of this Section 13.1. Each such notice, request
or other communication shall be effective (i) if given by facsimile
transmission, when transmitted to the facsimile number specified in this Section
and confirmation of receipt is received, (ii) if given by mail, 72 hours after
such communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid, or (iii) if given by any other means, when delivered
(or, in the case of electronic transmission, received) at the address specified
in this Section; provided that notices to the Agent under Section 2 shall not be
--------
effective until received.
13.2. Change of Address. Borrower, the Agent and any Lender may each
-----------------
change the address for service of notice upon it by a notice in writing to the
other parties hereto.
SECTION 14
----------
COUNTERPARTS
------------
This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart. This Agreement shall be
effective when it has been executed by Borrower, the
-58-
Agent and the Lenders and each party has notified the Agent by facsimile
transmission or telephone that it has taken such action.
SECTION 15
----------
CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
------------------------------------------------------------
15.1. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
-------------
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF INDIANA, BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
15.2. CONSENT TO JURISDICTION. BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
-----------------------
NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR INDIANA STATE COURT
SITTING IN INDIANAPOLIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO ANY LOAN DOCUMENTS AND BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN
RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO
THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT
SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF
THE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST BORROWER IN THE COURTS OF
ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY BORROWER AGAINST THE AGENT
OR ANY LENDER OR ANY AFFILIATE OF THE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN INDIANAPOLIS, INDIANA.
15.3. WAIVER OF JURY TRIAL. BORROWER, THE AGENT AND EACH LENDER HEREBY
--------------------
WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.
IN WITNESS WHEREOF, Borrower, the Lenders and the Agent have executed this
Agreement as of the date first above written.
-59-
SIGNATURE PAGE OF
THE FINISH LINE, INC.
TO
CREDIT AGREEMENT
THE FINISH LINE, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------
▇▇▇▇ ▇. ▇▇▇▇▇,
Senior Vice President and
General Counsel
Address:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
-60-
SIGNATURE PAGE OF
NBD BANK, N.A.
TO
CREDIT AGREEMENT
NBD BANK, N.A.,
individually and as Agent
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
--------------------------------
Its: Vice President
-------------------------------
Address:
One Indiana Square, Mail Suite ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Skip ▇▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
-61-
SIGNATURE PAGE OF
NATIONAL CITY BANK OF INDIANA
TO
CREDIT AGREEMENT
NATIONAL CITY BANK OF INDIANA
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its: SVP
------------------------------
-62-
SIGNATURE PAGE OF
THE NORTHERN TRUST COMPANY
TO
CREDIT AGREEMENT
THE NORTHERN TRUST COMPANY
By: /s/ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
Its: ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ - Vice President
------------------------------------
-63-
SIGNATURE PAGE OF
SUNTRUST BANK, CENTRAL FLORIDA, N.A.
TO
CREDIT AGREEMENT
SUNTRUST BANK, CENTRAL FLORIDA, N.A.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------
Its: Assistant Vice President
------------------------
-64-
Schedule 1-Lenders
------------------
Lenders
and Addresses Revolving Loan Commitments
------------- --------------------------
NBD Bank, N.A. $30,000,000
One Indiana Square, Mail Suite ▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Skip ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
National City Bank of Indiana $15,000,000
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
The Northern Trust Company $15,000,000
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Sun Trust Bank $15,000,000
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Mail Code 0-1043
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇▇▇ ▇. Black
Fax: ▇▇▇-▇▇▇-▇▇▇▇
-----------
$75,000,000
-65-
Schedule 5.7
------------
Litigation and
Contingent Obligations
----------------------
None
Schedule 5.8
------------
Subsidiaries
------------
Name Jurisdiction Ownership %
---- ------------ -----------
Spike's Holding, Inc. Delaware 100%
Schedule 6.13
-------------
Other Existing Investments
--------------------------
None
Schedule 6.14
-------------
Liens
-----
None