SECOND AMENDED AND RESTATED
REVOLVING CREDIT AND
GOLD CONSIGNMENT AGREEMENT
DATED AS OF JULY 29, 2003
By and Among
WHITEHALL JEWELLERS, INC.,
THE BANKS
Listed on Schedule 1 hereto,
LASALLE BANK NATIONAL ASSOCIATION,
as Administrative Agent and Collateral Agent,
for the Agents and the Banks
ABN AMRO BANK N.V.,
as Syndication Agent
for the Agents and the Banks
And
JPMORGAN CHASE BANK,
as Documentation Agent
for the Agents and the Banks
TABLE OF CONTENTS
PAGE
1. DEFINITIONS AND RULES OF INTERPRETATION................................................................ 2
1.1 Definitions................................................................................... 2
1.2 Rules of Interpretation....................................................................... 20
2. REVOLVING CREDIT LOANS................................................................................. 21
2.1 Commitment to Lend............................................................................ 21
2.2 Commitment Fee................................................................................ 21
2.3 Reduction of Total Revolver Commitment........................................................ 21
2.4 The Revolving Credit Notes.................................................................... 22
2.5 Interest on Revolving Credit Loans............................................................ 22
2.6 Requests for Revolving Credit Loans; Conversion Options....................................... 22
2.7 Funds for Revolving Credit Loans.............................................................. 22
2.8 Maturity...................................................................................... 22
2.9 Mandatory Repayments of Revolving Credit Loans................................................ 22
2.10 Optional Repayments of Revolving Credit Loans................................................. 22
2.11 Increase in Total Revolver Commitment......................................................... 22
3. LETTERS OF CREDIT...................................................................................... 23
3.1 Letter of Credit Commitments.................................................................. 23
3.1.1 Commitment to Issue Letters of Credit................................................ 23
3.1.2 Letter of Credit Applications........................................................ 24
3.1.3 Terms of Letters of Credit........................................................... 24
3.1.4 Reimbursement Obligations of Banks................................................... 24
3.1.5 Participations of Banks.............................................................. 24
3.2 Reimbursement Obligation of the Borrower...................................................... 24
3.3 Letter of Credit Payments..................................................................... 25
3.4 Obligations Absolute.......................................................................... 26
3.5 Reliance by Issuer............................................................................ 26
3.6 Letter of Credit Fee.......................................................................... 26
4. PURCHASES AND CONSIGNMENTS............................................................................. 27
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(continued)
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4.1 Commitment To Make Purchases and Consignments; Title To Consigned Precious Metal.............. 27
4.2 Consignment Fees.............................................................................. 28
4.3 Requests For Purchases and Consignments....................................................... 29
4.4 Payment on Account Of Repurchase or Redelivery of Consigned Precious Metal.................... 29
4.5 Conversion Options............................................................................ 32
4.6 Funds for Purchases and Consignments.......................................................... 33
4.7 Repurchase at Maturity........................................................................ 33
4.8 True Consignment.............................................................................. 33
5. CERTAIN GENERAL PROVISIONS............................................................................. 33
5.1 Interest on Loans............................................................................. 33
5.2 Borrowing Base and Consignment Limitations.................................................... 34
5.3 Requests for Loans............................................................................ 34
5.4 Conversion Options............................................................................ 35
5.4.1 Conversion to Different Type of Loan................................................. 35
5.4.2 Continuation of Type of Loan......................................................... 35
5.4.3 LIBOR Loans.......................................................................... 35
5.5 Funds for Loans............................................................................... 36
5.5.1 Funding Procedures................................................................... 36
5.5.2 Advances by Applicable Agent......................................................... 36
5.6 Settlements; Failure to Make Funds Available.................................................. 36
5.7 Optional Repayments of Loans.................................................................. 38
5.8 Mandatory Prepayments of Loans and Commitment Reductions...................................... 38
5.8.1 Asset Disposition Prepayment......................................................... 38
5.8.2 New Issuance Prepayment.............................................................. 38
5.8.3 Applications of Mandatory Prepayments................................................ 39
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TABLE OF CONTENTS
(continued)
PAGE
5.9 Repayments of Loans and Repurchases of Consigned Precious Metals Prior to Event of
Default....................................................................................... 39
5.10 Repayments of Loans and Repurchases of Consigned Precious Metals and Distribution of
Collateral Proceeds After Event of Default.................................................... 41
5.11 Arrangement Fee; Agency Fee................................................................... 42
5.12 Upfront Fee................................................................................... 42
5.13 Funds for Payments............................................................................ 42
5.13.1 Payments to Administrative Agent..................................................... 42
5.13.2 No Offset, etc....................................................................... 43
5.14 Computations.................................................................................. 43
5.15 Inability to Determine LIBOR Rate or Consignment Fixed Rate................................... 43
5.16 Illegality of LIBOR Loans or Consignment Fixed Rate Amounts................................... 44
5.17 Additional Costs, etc......................................................................... 44
5.18 Capital Adequacy.............................................................................. 45
5.19 Certificate................................................................................... 46
5.20 Indemnity..................................................................................... 46
5.21 Interest After Default........................................................................ 46
5.22 Performance Adjustments....................................................................... 47
6. COLLATERAL SECURITY.................................................................................... 48
7. REPRESENTATIONS AND WARRANTIES......................................................................... 48
7.1 Corporate Authority........................................................................... 48
7.1.1 Incorporation; Good Standing......................................................... 48
7.1.2 Authorization........................................................................ 48
7.1.3 Enforceability....................................................................... 48
7.2 Governmental Approvals........................................................................ 48
7.3 Title to Properties; Leases................................................................... 48
7.4 Financial Statements and Projections.......................................................... 49
7.4.1 Financial Statements................................................................. 49
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TABLE OF CONTENTS
(continued)
PAGE
7.4.2 Projections.......................................................................... 49
7.5 No Material Changes, etc.; Solvency........................................................... 49
7.5.1 No Material Changes, etc............................................................. 49
7.5.2 Solvency............................................................................. 49
7.6 Franchises, Patents, Copyrights, etc.......................................................... 50
7.7 Litigation.................................................................................... 50
7.8 No Materially Adverse Contracts, etc.......................................................... 50
7.9 Compliance with Other Instruments, Laws, etc.................................................. 50
7.10 Tax Status.................................................................................... 50
7.11 No Event of Default........................................................................... 51
7.12 Holding Company and Investment Company Acts................................................... 51
7.13 Absence of Financing Statements, etc.......................................................... 51
7.14 Perfection of Security Interest............................................................... 51
7.15 Certain Transactions.......................................................................... 51
7.16 Employee Benefit Plans........................................................................ 51
7.16.1 In General........................................................................... 51
7.16.2 Terminability of Welfare Plans....................................................... 52
7.16.3 Guaranteed Pension Plans............................................................. 52
7.16.4 Multiemployer Plans.................................................................. 52
7.17 Regulations U and X........................................................................... 52
7.18 Environmental Compliance...................................................................... 52
7.19 Subsidiaries, etc............................................................................. 54
7.20 Bank Accounts................................................................................. 54
8. AFFIRMATIVE COVENANTS OF THE BORROWER.................................................................. 54
8.1 Punctual Payment.............................................................................. 54
8.2 Maintenance of Office......................................................................... 54
8.3 Records and Accounts.......................................................................... 54
8.4 Financial Statements, Certificates and Information............................................ 55
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TABLE OF CONTENTS
(continued)
PAGE
8.5 Notices....................................................................................... 57
8.5.1 Defaults............................................................................. 57
8.5.2 Environmental Events................................................................. 57
8.5.3 Notification of Claim against Collateral............................................. 57
8.5.4 Notice of Litigation and Judgments................................................... 57
8.6 Corporate Existence; Maintenance of Properties................................................ 58
8.7 Insurance..................................................................................... 58
8.8 Taxes......................................................................................... 59
8.9 Inspection of Properties and Books, etc....................................................... 59
8.9.1 General.............................................................................. 59
8.9.2 Inventory Appraisals................................................................. 59
8.9.3 Appraisals........................................................................... 59
8.9.4 Communications with Accountants...................................................... 60
8.10 Compliance with Laws, Contracts, Licenses, and Permits........................................ 60
8.11 Employee Benefit Plans........................................................................ 60
8.12 Use of Proceeds............................................................................... 60
8.13 Additional Mortgaged Property................................................................. 60
8.14 Bank Accounts................................................................................. 61
8.15 Inventory Restrictions........................................................................ 62
8.16 Private Label Credit Card Program............................................................. 62
8.17 Operating Accounts............................................................................ 62
8.18 Further Assurances............................................................................ 62
8.19 New Subsidiaries.............................................................................. 62
8.20 Landlord Waivers.............................................................................. 63
9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER............................................................. 63
9.1 Restrictions on Indebtedness.................................................................. 63
9.2 Restrictions on Liens......................................................................... 64
9.3 Restrictions on Investments................................................................... 65
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TABLE OF CONTENTS
(continued)
PAGE
9.4 Distributions................................................................................. 66
9.5 Merger, Consolidation; Disposition of Assets; Issuance of Equity Securities................... 66
9.5.1 Mergers and Acquisitions............................................................. 66
9.5.2 Disposition of Assets................................................................ 66
9.6 Sale and Leaseback............................................................................ 67
9.7 Compliance with Environmental Laws............................................................ 67
9.8 Employee Benefit Plans........................................................................ 67
9.9 Bank Accounts................................................................................. 68
9.10 Consignment Transactions...................................................................... 68
9.11 Transactions with Affiliates.................................................................. 68
9.12 Subsidiaries.................................................................................. 68
9.13 Issuance of Equity Securities................................................................. 68
10. FINANCIAL COVENANTS OF THE BORROWER.................................................................... 69
10.1 Fixed Charge Coverage Ratio................................................................... 69
11. CLOSING CONDITIONS..................................................................................... 69
11.1 Loan Documents, etc........................................................................... 69
11.2 Certified Copies of Charter Documents......................................................... 69
11.3 Corporate, Action............................................................................. 69
11.4 Incumbency Certificate........................................................................ 69
11.5 Validity of Liens............................................................................. 70
11.6 Perfection Certificate and UCC Search Results................................................. 70
11.7 Certificates of Insurance..................................................................... 70
11.8 LaSalle Concentration Accounts; Blocked Account Agreements.................................... 70
11.9 Borrowing Base Report; Consigned Precious Metal Report; Monthly Inventory Report.............. 70
11.10 Accounts Payable Aging Report................................................................. 70
11.11 Opinion of Counsel............................................................................ 71
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(continued)
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11.12 Payment of Fees............................................................................... 71
11.13 Terms of Consignment.......................................................................... 71
11.14 Financial Statements.......................................................................... 71
11.15 Consents and Approvals........................................................................ 71
11.16 Capitalization of the Borrower................................................................ 71
12. CONDITIONS TO ALL BORROWINGS........................................................................... 71
12.1 Representations True; No Event of Default..................................................... 71
12.2 No Legal Impediment........................................................................... 71
12.3 Governmental Regulation....................................................................... 72
12.4 Proceedings and Documents..................................................................... 72
12.5 Borrowing Base Report; Consigned Precious Metal Report........................................ 72
13. EVENTS OF DEFAULT; ACCELERATION; ETC................................................................... 72
13.1 Events of Default and Acceleration............................................................ 72
13.2 Termination of Commitments.................................................................... 75
13.3 Remedies...................................................................................... 75
14. SETOFF................................................................................................. 76
15. THE AGENTS............................................................................................. 77
15.1 Authorization................................................................................. 77
15.2 Employees and Agents.......................................................................... 77
15.3 No Liability.................................................................................. 77
15.4 No Representations............................................................................ 78
15.5 Payments...................................................................................... 78
15.5.1 Payments to Agent.................................................................... 78
15.5.2 Distribution by Agent................................................................ 78
15.5.3 Delinquent Banks..................................................................... 78
15.6 Holders of Notes.............................................................................. 79
15.7 Indemnity..................................................................................... 79
15.8 Agents as Banks............................................................................... 79
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TABLE OF CONTENTS
(continued)
PAGE
15.9 Resignation................................................................................... 79
15.10 Notification of Defaults and Events of Default................................................ 80
15.11 Duties in the Case of Enforcement............................................................. 80
16. EXPENSES............................................................................................... 80
17. INDEMNIFICATION........................................................................................ 81
18. SURVIVAL OF COVENANTS, ETC............................................................................. 82
19. ASSIGNMENT AND PARTICIPATION........................................................................... 82
19.1 Conditions to Assignment by Banks............................................................. 82
19.2 Certain Representations and Warranties; Limitations; Covenants................................ 83
19.3 Register...................................................................................... 84
19.4 New Notes..................................................................................... 84
19.5 Participations................................................................................ 84
19.6 Disclosure.................................................................................... 85
19.7 Assignee or Participant Affiliated with the Borrower.......................................... 85
19.8 Miscellaneous Assignment Provisions........................................................... 85
19.9 Assignment by Borrower........................................................................ 86
20. NOTICES, ETC........................................................................................... 86
21. GOVERNING LAW.......................................................................................... 86
22. HEADINGS............................................................................................... 87
23. COUNTERPARTS........................................................................................... 87
24. ENTIRE AGREEMENT, ETC.................................................................................. 87
25. WAIVER OF JURY TRIAL................................................................................... 87
26. CONSENTS, AMENDMENTS, WAIVERS, ETC..................................................................... 88
27. SEVERABILITY........................................................................................... 88
28. TRANSITIONAL ARRANGEMENTS.............................................................................. 89
28.1 Original Credit Agreement Superseded.......................................................... 89
28.2 Return and Cancellation of Notes.............................................................. 89
28.3 Interest and Fees Under Original Credit Agreement............................................. 89
viii
SECOND AMENDED AND RESTATED
REVOLVING CREDIT AND
GOLD CONSIGNMENT AGREEMENT
This SECOND AMENDED AND RESTATED REVOLVING CREDIT AND GOLD CONSIGNMENT
AGREEMENT is made as of July 29, 2003, by and among (a) WHITEHALL JEWELLERS,
INC. (the "Borrower"), a Delaware corporation having its principal place of
business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, formerly
known as Marks Bros. Jewelers; (b) the lending institutions listed on Schedule 1
(collectively, the "Banks"); (c) LASALLE BANK NATIONAL ASSOCIATION, as
administrative agent (in such capacity, the "Administrative Agent") and the
collateral agent (in such capacity, the "Collateral Agent") for the Agents (as
hereinafter defined) and the Banks; (d) ABN AMRO BANK N.V., as syndication agent
for the Agents and the Banks (in such capacity, the "Syndication Agent"); and
(e) JPMORGAN CHASE BANK, as documentation agent for the Agents and the Banks (in
such capacity the "Documentation Agent").
WHEREAS, pursuant to a Revolving Credit, Term Loan and Gold Consignment
Agreement dated as of May 3, 1996 (as amended, modified or restated from time to
time, the "1996 Credit Agreement"), by and among the Borrower, BankBoston, N.A.
as agent, and the banks party thereto from time to time, as amended and restated
by that certain Amended and Restated Revolving Credit, Term Loan and Gold
Consignment Agreement dated as of September 10, 1998 (as was further amended,
restated, supplemented and modified from time to time thereafter, the "Amended
Credit Agreement", and collectively with the 1996 Credit Agreement, the
"Original Credit Agreement"), the banks party thereto made loans and other
extensions of credit available to the Borrower for, among other things, general
corporate and working capital purposes; and
WHEREAS, as of the date hereof, (i) Fleet Capital Corporation (formerly
known as BankBoston, N.A.) has resigned as "Collateral Agent", "Administrative
Agent", and "Syndication Agent", but will continue to remain a party to this
Credit Agreement in its capacity as a Bank listed hereto, (ii) LaSalle Bank
National Association has resigned as "Syndication Agent", and (iii) the Banks
and Borrower desire to appoint LaSalle Bank National Association as successor
"Collateral Agent" and "Administrative Agent" in place of Fleet Capital
Corporation and in connection with such resignation, each Lender and Borrower
hereby agrees to release and discharge Fleet Capital Corporation from all
claims, accounts, actions, proceedings and sums of money (collectively, the
"Claims") that any Lender or Borrower may have against Fleet Capital Corporation
in its capacity as Agent by reason of any act, cause or matter whatsoever up to
and including the Closing Date, excluding any Claims resulting from Fleet
Capital Corporation's gross negligence or willful misconduct;
WHEREAS, the Borrower has requested to amend and restate the Original
Credit Agreement to, among other things, (i) terminate the Term Loan (as defined
in the Original Credit Agreement) and all related provisions thereto, (ii)
reduce the Total Revolver Commitment to $125,000,000 by removing Bank of
America, N.A. as a Bank hereunder, (iii) extend the Maturity Date (as defined
herein) to July 28, 2007, (iv) make modifications to certain financial
covenants, and (v) provide certain other financial accommodations to Borrower;
and
WHEREAS, the Banks are willing to amend and restate the Original Credit
Agreement and to provide such additional financing on the terms and conditions
set forth herein.
NOW THEREFORE, the Borrower, the Banks and the Agents agree that on and
as of the Closing Date (as hereinafter defined) the Original Credit Agreement is
hereby amended and restated in its entirety and shall remain in full force and
effect only as expressly set forth herein.
1. DEFINITIONS AND RULES OF INTERPRETATION.
1.1 Definitions. The following terms shall have the meanings set
forth in this Section 1 or elsewhere in the provisions of this Credit Agreement
referred to below:
ABN. ABN AMRO Bank N.V., a limited liability company organized under
the laws of The Netherlands, in its individual capacity.
Accounts Receivable. All rights of the Borrower to payment for goods
sold, leased or otherwise marketed in the ordinary course of business and all
rights of the Borrower to payment for services rendered in the ordinary course
of business and all sums of money or other proceeds due thereon pursuant to
transactions with Account Debtors, except for that portion of the sum of money
or other proceeds due thereon that relate to sales, use or property taxes in
conjunction with such transactions, recorded on books of account in accordance
with Generally Accepted Accounting Principles.
Administrative Agent's Head Office. The Administrative Agent's head
office located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such
other location as the Administrative Agent may designate from time to time.
Administrative Agent's Special Counsel. Vedder, Price, ▇▇▇▇▇▇▇ &
Kammholz, P.C., or such other counsel as may be approved by the Administrative
Agent.
Affiliate. Any Person that would be considered to be an affiliate of
the Borrower under Rule 144(a) of the Rules and Regulations of the Securities
and Exchange Commission, as in effect on the date hereof, if the Borrower were
issuing securities.
Agents. Collectively, the Administrative Agent, the Syndication Agent
and the Documentation Agent.
Amended Credit Agreement. As defined in the preamble hereto.
Approved Credit Programs. Any non-recourse credit program entered into
by the Borrower with a bank or finance company in order to provide credit to the
Borrower's customers, which program is acceptable to and has been approved by
the Administrative Agent.
Asset Disposition Prepayment. See Section 5.8.1.
Assignment and Acceptance. See Section 19.1.
Balance Sheet Date. January 31, 2003.
2
Banks. Each of the lending institutions listed on Schedule 1 hereto and
any other Person who becomes an assignee of any rights and obligations of a Bank
pursuant to Section 19.
Base Rate. The higher of (i) the annual rate of interest announced from
time to time by LaSalle at its head office in Chicago, Illinois, as its "prime
rate" and (ii) the Federal Funds Effective Rate plus 0.5% per annum. For the
purposes of this definition, "Federal Funds Effective Rate" means, for any day,
the rate set forth in the weekly statistical release designated as H.15(519), or
any successor publication, published by the Federal Reserve Bank of New York
(including any such successor publication, "H.15(519)") on the preceding
Business Day opposite the caption "Federal Funds (Effective)"; or, if for any
relevant day such rate is not so published on any such preceding Business Day,
the rate for such day will be the arithmetic mean as determined by the
Administrative Agent of the rates for the last transaction in overnight Federal
funds arranged prior to 9:00 a.m. (New York, New York time) on that day by each
of three leading brokers of Federal funds transactions in New York, New York
selected by the Administrative Agent.
Base Rate Loans. That portion of all Revolving Credit Loans bearing
interest calculated by reference to the Base Rate.
Blocked Account Agreement. Each Blocked Account Agreement entered into
by the Borrower, the Administrative Agent and a depository institution
satisfactory to the Administrative Agent, which shall be in form and substance
acceptable to the Administration Agent.
Borrower. As defined in the preamble hereto.
Borrower's Precious Metal. Precious Metal owned by the Borrower and
which qualifies as Eligible Inventory, excluding Consigned Precious Metal and
Precious Metal otherwise held by the Borrower on consignment other than pursuant
to the Gold Facility.
Borrowing Availability. For any period of determination, an amount
equal to (a) the lesser of (i) the Total Revolver Commitment and (ii) the
Borrowing Base, minus (b) the Outstanding Facility Amounts.
Borrowing Base. At the relevant time of reference thereto, an amount
determined by the Administrative Agent by reference to the most recent Borrowing
Base Report delivered to the Banks and the Agents pursuant to Section 10.4(f),
which is equal to (a) the lesser of (i) sixty-five percent (65%) of the net book
value (determined on an average cost basis at lower of cost or market) of
Eligible Inventory and (ii) the sum of (A) sixty percent (60%) of the net book
value (determined on an average cost basis at lower of cost or market) of
Eligible Inventory minus the Fair Market Value of Precious Metal contained in
Eligible Inventory, plus (B) 90% of the Fair Market Value of the Precious Metal
contained in Eligible Inventory, minus (b) the Inventory Shrink Reserve; plus
(c) 85% of Eligible Accounts Receivable. The Administrative Agent may, in its
discretion, from time to time, upon five (5) days' prior notice to the Borrower,
(y) reduce the lending formula with respect to Eligible Accounts Receivable to
the extent that the Administrative Agent determines that: (i) the dilution with
respect of the Accounts Receivable for any period has increased in any material
respect or may be reasonably anticipated to increase
3
in any material respect above historical levels, or (ii) the general
creditworthiness of Account Debtors or other obligors of the Borrower has
declined or (z) reduce the lending formula(s) with respect to Eligible Inventory
to the extent that the Administrative Agent determines that: (i) the number of
days of the turnover of the Inventory of the Borrower for any period has changed
in any material adverse respect, (ii) the liquidation value of the Eligible
Inventory, or any category thereof, has decreased, or (iii) the nature and
quality of the Inventory of the Borrower has deteriorated in any material
respect or the mix of such Inventory has changed materially. In determining
whether to reduce the lending formula(s), the Administrative Agent may consider
events, conditions, contingencies or risks which are also considered in
determining Eligible Accounts Receivable, Eligible Inventory or in establishing
the Reserves. In determining whether and how much to reduce the lending formula
as provided above, the Administrative Agent shall do so in accordance with its
reasonable credit judgment which shall be exercised in a manner that is not
arbitrary or capricious and is consistent with the standards of eligibility and
credit judgment applied by the Administrative Agent to other borrowers in the
Borrower's business.
Borrowing Base Report. A Borrowing Base Report signed by the
Controller, Senior Vice President of Finance or other principal financial or
accounting officer of the Borrower and in substantially the form of Exhibit A
hereto.
Business Day. Any day, other than a Saturday or Sunday, on which
banking institutions in Chicago, Illinois are open for the transaction of
banking business and, in the case of LIBOR Loans, also a day which is a LIBOR
Business Day.
Capital Assets. Fixed and/or capital assets, both tangible (such as
land, buildings, fixtures, samples, tools and die, software, software
development, machinery and equipment) and intangible (such as software, patents,
copyrights, trademarks, franchises and good will); provided that Capital Assets
shall not include any item customarily charged directly to expense or
depreciated over a useful life of twelve (12) months or less in accordance with
Generally Accepted Accounting Principles.
Capital Expenditures. Amounts paid or indebtedness incurred by the
Borrower or any of its Subsidiaries in connection with the purchase or lease by
the Borrower or any of its Subsidiaries of Capital Assets that would be required
to be capitalized and shown on the balance sheet of such Person in accordance
with Generally Accepted Accounting Principles.
Capitalized Leases. Leases under which the Borrower or any of its
Subsidiaries is the lessee or obligor, the discounted future rental payment
obligations under which are required to be capitalized on the balance sheet of
the lessee or obligor in accordance with Generally Accepted Accounting
Principles.
Cash Collateral Agreement. Any Cash Collateral Agreement to be entered
into between the Borrower and the Collateral Agent pursuant to Section 5.9(c)
hereof.
CERCLA. See Section 7.18.
Closing Date. The first date on which the conditions set forth in
Section 14 have been satisfied and any Revolving Credit Loans are to be made,
any Purchases and Consignments are to be made or any Letter of Credit is to be
issued hereunder.
4
Code. The Internal Revenue Code of 1986, as amended.
Collateral. All of the property, rights and interests of the Borrower
that are or are intended to be subject to the security interests created by the
Security Documents.
Collateral Agent. LaSalle, in its capacity as collateral agent for the
benefit of Banks and the Agents under and with respect to the Security
Documents.
Commitment. With respect to each Bank, the amount set forth on Schedule
1 hereto as the amount of such Bank's commitment to make Revolving Credit Loans
to, and to participate in the making of Purchases and Consignments to, and the
issuance, extension and renewal of Letters of Credit for the account of, the
Borrower, as the same may be reduced from time to time; or if such commitment is
terminated pursuant to the provisions hereof, zero.
Commitment Fee Rate. At all times from the Closing Date through the
first Performance Adjustment Date, one quarter of one percent (1/4%), and
thereafter, the percentage determined by reference to the provisions of Section
5.22.
Commitment Percentage. With respect to each Bank, the percentage set
forth on Schedule 1 hereto as such Bank's percentage of the aggregate
Commitments of all of the Banks.
Commitment Reduction Amount. See Section 2.3.1.
Concentration Accounts. See Section 8.14(a).
Concentration Bank. Fleet National Bank, Bank of America, N.A. or any
other depository institution which receives deposits directly, or indirectly (as
a result of interim concentration of depository accounts), from the retail
stores of the Borrower and its Subsidiaries.
Consigned Precious Metal. Precious Metal (a) located at Permitted
Inventory Locations, (b) subject to a Purchase and Consignment and consigned by
the Banks to the Borrower pursuant to the terms of this Credit Agreement and (c)
for which the Gold Fronting Bank has not received payment or which has not been
Redelivered to the Administrative Agent.
Consigned Precious Metal Report. A Consigned Precious Metal Report
signed by the Controller, Senior Vice President of Finance or the principal
financial or accounting officer of the Borrower and in substantially the form of
Exhibit B hereto.
Consignment Advance Rate Percentage. Ninety percent (90%).
Consignment Base Rate. On any date of determination, the rate per annum
as from time to time specified by the Gold Fronting Bank.
Consignment Base Rate Amounts. Consigned Precious Metal which is
accruing a Consignment Fee calculated by reference to the Consignment Base Rate.
5
Consignment Conversion Request. A notice given by the Borrower to the
Administrative Agent and the Gold Fronting Bank of the Borrower's election to
convert or continue Consigned Precious Metals in accordance with Section 4.5.
Consignment Dollar Cap. As defined in the definition of Consignment
Limit.
Consignment Fees. Consignment fees on Consigned Precious Metal at the
rates set forth in Section 4.2.
Consignment Fixed Rate. With respect to any Interest Period, the amount
equal to (a) the greater of (i) the LIBOR Rate applicable to Revolving Credit
Loans for such Interest Period minus the average of rates quoted to the Gold
Fronting Bank as the London Interbank Bullion Rates as displayed on ▇▇▇▇▇▇'▇
gold loan screen or, if ▇▇▇▇▇▇'▇ gold loan screen is not available, as set by
the Gold Fronting Bank, for Precious Metal forwards for such period and (ii)
zero (0), plus (b) the LIBOR Applicable Margin.
Consignment Fixed Rate Amounts. Consigned Precious Metal which is
accruing a Consignment Fee calculated by reference to the Consignment Fixed
Rate.
Consignment Limit. Either (a) 115,000 ▇▇▇▇ ounces of Precious Metal
(the "Consignment Ounce Cap") or (b) Consigned Precious Metal having a Fair
Market Value equal to $40,000,000.00 (the "Consignment Dollar Cap").
Consignment Ounce Cap. As defined in the definition of Consignment
Limit.
Consolidated or consolidated. With reference to any term defined
herein, shall mean that term as applied to the accounts of the Borrower and its
Subsidiaries, consolidated in accordance with Generally Accepted Accounting
Principles.
Consolidated Cash Interest Expense. With respect to the Borrower and
its Subsidiaries and any particular fiscal period, the amount of Consolidated
Total Interest Expense which is paid or due to be paid in cash during such
period.
Consolidated EBITDA. With respect to the Borrower and its Subsidiaries
and any particular fiscal period, the consolidated earnings (or loss) from
operations of the Borrower and its Subsidiaries for such period, after
eliminating therefrom all extraordinary nonrecurring items of income (including
gains on the sale of assets and earnings from the sale of discontinued business
lines), and after all expenses and other proper charges but before payment or
provision for (a) any income taxes, interest expenses or Consignment Fees for
such period, (b) depreciation for such period, (c) amortization for such period,
and (d) all other noncash charges for such period, all determined in accordance
with Generally Accepted Accounting Principles.
Consolidated Minimum Store Rent. With respect to any fiscal period, the
aggregate amount of obligations of the Borrower and its Subsidiaries during such
period to make direct or indirect payment, whether as rent or otherwise, for
fixed or minimum rentals in respect of any leased retail store locations,
calculated in a manner consistent with that reflected in the Borrower's audited
financial statements for the year ended on the Balance Sheet Date.
6
Consolidated Total Funded Debt. With respect to any fiscal period an
amount equal to the average aggregate principal amount outstanding during such
period in respect of all Indebtedness of the Borrower and its Subsidiaries
pursuant to any agreement or instrument to which the Borrower or any of its
Subsidiaries is a party relating to the borrowing of money or the obtaining of
credit (including, without limitation, Obligations under this Credit Agreement)
or in respect of Capitalized Leases.
Consolidated Total Interest Expense. For any period, the aggregate
amount of interest required to be paid or accrued by the Borrower and its
Subsidiaries during such period on all Indebtedness of the Borrower and its
Subsidiaries outstanding during all or any part of such period, whether such
interest was or is required to be reflected as an item of expense or
capitalized, including payments consisting of interest in respect of Capitalized
Leases and including commitment fees, agency fees, facility fees, Consignment
Fees, balance deficiency fees and similar fees or expenses in connection with
the borrowing of money.
Conversion Request. A notice given by the Borrower to the
Administrative Agent of the Borrower's election to convert or continue a Loan in
accordance with Sections 2.6 and 5.4.
Credit Agreement. This Second Amended and Restated Revolving Credit and
Gold Consignment Agreement, including the Schedules and Exhibits hereto, as may
be amended, modified or restated from time to time.
Default. See Section 13.1.
Delinquent Bank. See Section 15.5.3.
Distribution. The declaration or payment of any dividend on or in
respect of any shares of any class of capital stock of the Borrower, other than
dividends payable solely in shares of common stock of the Borrower; the
purchase, redemption, or other retirement of any shares of any class of capital
stock of the Borrower, directly or indirectly through a Subsidiary of the
Borrower or otherwise; the return of capital by the Borrower to its shareholders
as such; or any other distribution on or in respect of any shares of any class
of capital stock of the Borrower.
Dollars or $. Dollars in lawful currency of the United States of
America.
Domestic Lending Office. Initially, the office of each Bank designated
as such in Schedule 1 hereto; thereafter, such other office of such Bank, if
any, located within the United States that will be making or maintaining Base
Rate Loans.
Drawdown Date. The date on which any Loan is made or is to be made, and
the date on which any Loan is converted or continued in accordance with Sections
2.6 or 5.4.
Eligible Assignee. Any of (i) a commercial bank or finance company
organized under the laws of the United States, or any State thereof or the
District of Columbia, and having total assets in excess of $1,000,000,000; (ii)
a savings and loan association or savings bank organized under the laws of the
United States, or any State thereof or the District of Columbia, and having a
net worth of at least $100,000,000, calculated in accordance with Generally
Accepted Accounting Principles; (iii) a commercial bank organized under the laws
of any other country
7
which is a member of the Organization for Economic Cooperation and Development
(the "OECD"), or a political subdivision of any such country, and having total
assets in excess of $1,000,000,000, provided that such bank is acting through a
branch or agency located in the country in which it is organized or another
country which is also a member of the OECD; (iv) the central bank of any country
which is a member of the OECD; and (v) if, but only if, any Event of Default has
occurred and is continuing, any other bank, insurance company, commercial
finance company or other financial institution or other Person approved by the
Administrative Agent and the Gold Fronting Bank, such approval not to be
unreasonably withheld.
Eligible Accounts Receivable. The aggregate of the unpaid portions of
Accounts Receivable (net of any credits, rebates, offsets, holdbacks or other
adjustments or commissions payable to third parties that are adjustments to such
Accounts Receivable) which are generated in connection with Approved Credit
Programs entered into by the Borrower (i) that the Borrower reasonably and in
good faith determines to be collectible; (ii) that are with account debtors that
(A) are not Affiliates of the Borrower, (B) are not insolvent or involved in any
case or proceeding, whether voluntary or involuntary, under any bankruptcy,
reorganization, arrangement, insolvency, adjustment of debt, dissolution,
liquidation or similar law of any jurisdiction and (C) are, in the
Administrative Agent's reasonable judgment, creditworthy; (iii) that are in
payment of obligations that have been fully performed and are not subject to
dispute or any other similar claims that would reduce the cash amount payable
therefor; (iv) that are not subject to any pledge, security interest or other
lien or encumbrance other than those created by the Loan Documents; (v) in which
the Collateral Agent has a valid and perfected first priority security interest;
(vi) that call for payment not faster than fourteen (14) days past the date that
the account debtor has received the application documents; (vii) that are not
outstanding for more than forty-five (45) days past the date of sale of the
underlying goods; (viii) that are not due from an account debtor located in
Indiana, Minnesota or New Jersey unless the Borrower (A) has received a
certificate of authority to do business and is in good standing in such state or
(B) has filed a notice of business activities report with the appropriate office
or agency of such state for the current year; (ix) that are payable in Dollars;
(x) that are not payable from an office outside of the United States; and (xi)
that are not secured by a letter of credit unless the Collateral Agent has a
prior, perfected security interest in such letter of credit.
Eligible Inventory. With respect to the Borrower, finished goods,
Precious Metal and precious stone (whether or not placed in findings) inventory
owned by the Borrower or consigned pursuant to this Credit Agreement, including
inventory on layaway for customers up to a maximum amount of layaway inventory
not in excess of ten percent (10%) of the total amount of the net book value
(determined on an average cost basis at lower of cost or market) of the
Borrower's inventory; provided that Eligible Inventory shall not include any
inventory (i) held on consignment (other than inventory consigned pursuant to
the Gold Facility), or not otherwise owned by the Borrower, or of a type no
longer sold by the Borrower, (ii) which is damaged or not immediately saleable
or subject to any legal encumbrance other than Permitted Liens, (iii) which is
not in the possession of the Borrower unless it is in transit from one Permitted
Inventory Location within the United States of America to another Permitted
Inventory Location within the United States of America, (iv) as to which
appropriate Uniform Commercial Code financing statements showing the Borrower as
debtor and the Collateral Agent as secured party have not been filed in the
proper filing office or offices in order to perfect the Collateral Agent's
security interest therein, (v) which has been shipped to a customer of the
8
Borrower regardless of whether such shipment is on a consignment basis, (vi)
which is not either (A) located at a Permitted Inventory Location within the
United States of America or (B) in transit from one Permitted Inventory Location
within the United States of America to another Permitted Inventory Location
within the United States of America, or (vii) which the Administrative Agent
reasonably deems to be obsolete or not marketable.
Employee Benefit Plan. Any employee benefit plan within the meaning of
Section 3(3) of ERISA maintained of contributed to by the Borrower or any ERISA
Affiliate, other than a Multiemployer Plan.
Environmental Laws. See Section 7.18(a).
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA Affiliate. Any Person which is treated as a single employer with
the Borrower under Section 414 of the Code.
ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of Section 4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of notice has not been
waived.
Event of Default. See Section 13.1.
Extension of Credit. The making of any Loan or Purchase and Consignment
or the issuance, extension or renewal of any Letter of Credit.
Fair Market Value. On any day, with respect to the calculation of the
Dollar value of Precious Metal, the Second London Gold Fixing for such day times
the number of ounces of Precious Metal for which such Dollar value is being
calculated. If no such price is available for a particular day, the Fair Market
Value for such day shall be the price for the immediately preceding day for
which such price is available. In the event that the London Bullion Brokers
shall discontinue or alter its usual practice of quoting a price in Dollars for
gold, the Fair Market Value for such day shall be the Gold Fronting Bank's Spot
Value for that day.
Fee Letter. The fee letter referred to in Section 5.11.
Fleet. Fleet Capital Corporation.
Fleet Letters of Credit. The following three (3) Letters of Credit
issued by Fleet National Bank for the benefit of the Borrower in the name of the
following beneficiaries: (i) GE Capital Card Co. in the stated amount of
$750,000, (ii) Employers Insurance in the stated amount of $364,000, and (iii)
Atlantic Mutual Insurance in the amount of $330,000.
Foreign Subsidiary. See Section 8.19.
FRB. The Board of Governors of the Federal Reserve System or any
Successor thereto.
9
Generally Accepted Accounting Principles. (i) When used in Section 10,
whether directly or indirectly through reference to a capitalized term used
therein, means (A) principles that are consistent with the principles
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors, in effect for the fiscal year ended on the Balance Sheet Date, and
(B) to the extent consistent with such principles, the accounting practice of
the Borrower reflected in its financial statements for the year ended on the
Balance Sheet Date; provided, however, that if any change in such principles
promulgated by the Financial Accounting Standards Board and its predecessors
following the Balance Sheet Date would affect (or would result in a change in
the method of calculation of) any of the covenants set forth in Section 10 or
any definition related thereto, then the Borrower, the Agents and the Banks will
negotiate in good faith to amend all such covenants and definitions as would be
affected by such changes in such principles to the extent necessary to maintain
the economic terms of such covenants as in effect under this Credit Agreement
immediately prior to giving effect to such changes in such principles, provided
further that until the amendment of such covenants and definitions shall have
been agreed upon by the Borrower, the Agents and the Required Banks, the
covenants and definitions in effect immediately prior to such amendment shall
remain in effect and any determination of compliance with any covenant set forth
in Section 10 shall be construed in accordance with Generally Accepted
Accounting Principles as in effect immediately prior to such amendment and
consistently applied, and (ii) when used in general, other than as provided
above, means principles that are (A) consistent with the principles promulgated
or adopted by the Financial Accounting Standards Board and its predecessors, as
in effect from time to time, and (B) consistently applied with past financial
statements of the Borrower adopting the same principles, provided that in each
case referred to in this definition of "Generally Accepted Accounting
Principles" a certified public accountant would, insofar as the use of such
accounting principles is pertinent, be in a position to deliver an unqualified
opinion (other than a qualification regarding changes in Generally Accepted
Accounting Principles) as to financial statements in which such principles have
been properly applied.
Gold Drawdown Date. The date on which any Purchase and Consignment is
made or is to be made.
Gold Facility. The Gold Fronting Bank's commitment to make Purchases
and Consignments.
Gold Fronting Bank. ABN.
Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of Section 3(2) of ERISA maintained or contributed to by the Borrower or
any ERISA Affiliate the benefits of which are guaranteed on termination in full
or in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.
Guarantors. WH Inc. of Illinois, an Illinois corporation, and any other
Person who becomes a direct or indirect Subsidiary of the Borrower after the
Closing Date.
Guaranty. Each Guaranty Agreement executed by each Guarantor in favor
of the Collateral Agent, substantially in the form of Exhibit C, as each may be
amended, modified or restated from time to time.
10
Hazardous Substances. See Section 7.18(b).
Headquarters Landlord Consent. The Landlord Consent and Waiver, dated
or to be dated on or prior to the Closing Date, given by the lessor with respect
to the Borrower's leased real property located in Chicago, Illinois at which the
Borrower maintains its headquarters and central warehouse, such Headquarters
Landlord Consent being in form and substance satisfactory to the Banks and the
Agents.
Indebtedness. As to any Person and whether recourse is secured by or is
otherwise available against all or only a portion of the assets of such Person
and whether or not contingent, but without duplication:
(i) every obligation of such Person for money borrowed,
(ii) every obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments, including obligations
incurred in connection with the acquisition of property, assets or
businesses,
(iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar
facilities issued for the account of such Person,
(iv) every obligation of such Person issued or assumed as
the deferred purchase price of property or services (including
securities repurchase agreements but excluding trade accounts payable
or accrued liabilities arising in the ordinary course of business which
are not overdue or which are being contested in good faith),
(v) every obligation of such Person under any Capitalized
Lease,
(vi) every obligation of such Person under any lease
(generally referred to as being a "synthetic lease") treated as an
operating lease under Generally Accepted Accounting Principles and as a
loan or financing for United States income tax purposes and pursuant to
which the lessee retains economic risk with respect to the value of the
residual interest in the leased property,
(vii) all sales by such Person of (A) accounts or general
intangibles for money due or to become due, (B) chattel paper,
instruments or documents creating or evidencing a right to payment of
money or (C) other receivables (collectively "receivables"), whether
pursuant to a purchase facility or otherwise, other than in connection
with the disposition of the business operations of such Person relating
thereto or a disposition of defaulted receivables for collection and
not as a financing arrangement, and together with any obligation of
such Person to pay any discount, interest, fees, indemnities,
penalties, recourse, expenses or other amounts in connection therewith,
(viii) every obligation of such Person (an "equity related
purchase obligation") to purchase, redeem, retire or otherwise acquire
for value any shares of capital stock of any class issued by such
Person, any warrants, options or other rights to
11
acquire any such shares, or any rights measured by the value of such
shares, warrants, options or other rights,
(ix) every obligation of such Person under any forward
contract, futures contract, swap, option or other financing agreement
or arrangement (including, without limitation, caps, floors, collars
and similar agreements), the value of which is dependent upon interest
rates, currency exchange rates, commodities or other indices,
(x) every obligation in respect of Indebtedness of any
other entity (including any partnership in which such Person is a
general partner) to the extent that such Person is liable therefor as a
result of such Person's ownership interest in or other relationship
with such entity, except to the extent that the terms of such
Indebtedness provide that such Person is not liable therefor and such
terms are enforceable under applicable law,
(xi) every obligation, contingent or otherwise, of such
Person guaranteeing, or having the economic effect of guarantying or
otherwise acting as surety for, any obligation of a type described in
any of clauses (i) through (x) (the "primary obligation") of another
Person (the "primary obligor"), in any manner, whether directly or
indirectly, and including, without limitation, any obligation of such
Person (A) to purchase or pay (or advance or supply funds for the
purchase of) any security for the payment of such primary obligation,
(B) to purchase property, securities or services for the purpose of
assuring the payment of such primary obligation, or (C) to maintain
working capital, equity capital or other financial statement condition
or liquidity of the primary obligor so as to enable the primary obligor
to pay such primary obligation.
The "amount" or "principal amount" of any Indebtedness at any time of
determination represented by (w) any Indebtedness, issued at a price that is
less than the principal amount at maturity thereof, shall be the amount of the
liability in respect thereof determined in accordance with Generally Accepted
Accounting Principles, (x) any Capitalized Lease shall be the principal
component of the aggregate of the rentals obligation under such Capitalized
Lease payable over the term thereof that is not subject to termination by the
lessee, (y) any sale of receivables shall be the amount of unrecovered capital
or principal investment of the purchaser (other than the Borrower or any of its
wholly-owned Subsidiaries) thereof, excluding amounts representative of yield or
interest earned on such investment, and (z) any equity related purchase
obligation shall be the maximum fixed redemption or purchase price thereof
inclusive of any accrued and unpaid dividends to be comprised in such redemption
or purchase price.
Indentures. The Indentures dated as of April 15, 1996 between the
Borrower and Norwest Bank Minnesota, National Association, as trustee.
Interest Payment Date. (i) As to any Base Rate Loan, the last day of
any calendar month which includes the Drawdown Date thereof; and (ii) as to any
LIBOR Loan in respect of which the Interest Period is (A) 3 months or less, the
last day of such Interest Period and (B) more than 3 months, the date that is 3
months from the first day of such Interest Period and, in addition, the last day
of such Interest Period.
12
Interest Period. With respect to each Loan or Consignment Fixed Rate
Amount, (a) initially, the period commencing on the Drawdown Date of such Loan
(or, as the case may be, the Gold Drawdown Date of the Purchases and
Consignments with respect to such Consignment Fixed Rate Amounts) and ending on
the last day of one of the periods set forth below, as selected by the Borrower
in a Loan Request (or, as the case may be, Purchase and Consignment Request with
respect to Consignment Fixed Rate Amounts) (i) for any Base Rate Loan, the
calendar month; and (ii) for any LIBOR Loan or Consignment Fixed Rate ▇▇▇▇▇▇, ▇,
2, 3 or 6 months; and (b) thereafter, each period commencing on the last day of
the next preceding Interest Period applicable to such Loan or Consignment Fixed
Rate Amount and ending on the last day of one of the periods set forth above, as
selected by the Borrower in a Conversion Request or Consignment Conversion
Request; provided that all of the foregoing provisions relating to Interest
Periods are subject to the following:
(A) if any Interest Period with respect to a
LIBOR Loan or Consignment Fixed Rate Amount would otherwise
end on a day that is not a LIBOR Business Day, that Interest
Period shall be extended to the next succeeding LIBOR Business
Day unless the result of such extension would be to carry such
Interest Period into another calendar month, in which event
such Interest Period shall end on the immediately preceding
LIBOR Business Day;
(B) if any Interest Period with respect to a
Base Rate Loan would end on a day that is not a Business Day,
that Interest Period shall end on the next succeeding Business
Day;
(C) if the Borrower shall fail to give notice as
provided in Sections 2.6 or 5.4, the Borrower shall be deemed
to have requested a conversion of the affected LIBOR Loan or
Consignment Fixed Rate Amount to a Base Rate Loan or
Consignment Base Rate Amount, as applicable, on the last day
of the then current Interest Period with respect thereto;
(D) any Interest Period relating to any LIBOR
Loan or Consignment Fixed Rate Amount that begins on the last
LIBOR Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the
last LIBOR Business Day of a calendar month; and
(E) any Interest Period relating to any LIBOR
Loan or Consignment Fixed Rate Amount that would otherwise
extend beyond the Maturity Date shall end on the Maturity
Date.
Inventory Shrink Reserve. As of any date, the product of (a) the amount
of Eligible Inventory as of such date times (b) 1.4%, as such amount may be
adjusted from time to time, on five (5) days' prior written notice given by the
Administrative Agent to the Borrower, as the Administrative Agent, in its
reasonable discretion consistent with its usual business practices and policies,
shall determine.
13
Investments. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person. In determining the aggregate
amount of Investments outstanding at any particular time: (i) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (ii) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(iii) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (iv) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise, except that
accrued interest included as provided in the foregoing clause (ii) may be
deducted when paid; and (v) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.
Landlord Waiver. Collectively, (i) an amendment to each "Landlord
Waiver" delivered pursuant to, and as defined in, the Original Credit Agreement,
in form and substance acceptable to Administrative Agent in its sole discretion,
and (ii) with respect to each location not covered by such "Landlord Waiver",
each other waiver from the lessor or sublessor of property leased by the
Borrower as lessee, in substantially the form of Exhibit D.
Issuing Bank. See Section 3.1.1.
LaSalle. LaSalle Bank National Association, a national banking
association, in its individual capacity.
Letter of Credit. See Section 3.1.1.
Letter of Credit Application. See Section 3.1.1.
Letter of Credit Fee. See Section 3.6.
Letter of Credit Participation. See Section 3.1.4.
LIBOR Applicable Margin. At all times from the Closing Date through the
second Performance Adjustment Date occurring on October 31, 2003, one and one
half percent (1.50%), and thereafter, the percentage determined by reference to
the provisions of Section 5.22.
LIBOR Business Day. Any day, other than a Saturday or Sunday, on which
commercial banks are open for international business (including dealings in
Dollar deposits) in New York, New York, London or such other eurodollar
interbank market as may be selected by the Administrative Agent, in its sole
discretion acting in good faith.
LIBOR Lending Office. Initially, the office of each Bank designated as
such in Schedule 1 hereto; thereafter, such other office of such Bank, if any,
that shall be making or maintaining LIBOR Loans.
14
LIBOR Loans. Revolving Credit Loans bearing interest calculated by
reference to the LIBOR Rate plus the LIBOR Applicable Margin in effect from time
to time.
LIBOR Rate. means, with respect to any LIBOR Loan for any Interest
Period, a rate per annum determined pursuant to the following formula:
LIBOR Rate = Rate
----
1-LIBOR Reserve
Percentage
For purposes of this definition, (a) "Rate" means a rate per annum equal to the
offered rate for deposits in Dollars for a period equal or comparable to such
Interest Period which appears on the Bloomberg Financial Markets System as of
11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period, and (b) "LIBOR Reserve Percentage" means a percentage
(expressed as a decimal) equal to the daily average during such Interest Period
of the percentage in effect on each day of such Interest Period, as prescribed
by the FRB, for determining the aggregate maximum reserve requirements
applicable to "Eurocurrency Liabilities" pursuant to Regulation D or any other
then applicable regulation of the FRB which prescribes reserve requirements
applicable to "Eurocurrency Liabilities" as presently defined in Regulation D.
The LIBOR Rate shall be adjusted automatically on and as of the effective date
of any change in the Rate.
Loan Documents. This Credit Agreement, the Notes, the Letter of Credit
Applications, the Letters of Credit, the Fee Letter and the Security Documents.
Loan Request. See Section 5.3(a).
Loans. The Revolving Credit Loans.
Mandatory Prepayments. See Section 5.8.4.
Maturity Date. July 28, 2007.
Maximum Drawing Amount. The maximum aggregate amount that the
beneficiaries may at any time draw under outstanding Letters of Credit, as such
aggregate amount may be reduced from time to time pursuant to the terms of the
Letters of Credit.
Monthly Inventory Report. A Monthly Inventory Report signed by the
Controller, Senior Vice President of Finance or principal financial or
accounting officer of the Borrower in substantially the form and Exhibit E
hereto.
Multiemployer Plan. Any multiemployer plan within the meaning of
Section 3(37) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate.
Net Proceeds. With respect to any sale or other disposition of any
asset by any Person or any issuance of Indebtedness or equity securities of such
Person, the excess of (i) the gross cash proceeds received by such Person from
such sale or disposition or, as the case may be, such issuance, plus, as and
when received, all cash payments received subsequent to such sale or
15
disposition or such issuance representing (A) any deferred purchase price
therefor or (B) any cash proceeds from the sale or other disposition of any cash
equivalents (or any deferred purchase price obligations) received therefor over
(ii) the sum of (A) a reasonable reserve for any liabilities payable incident to
such sale or disposition or such issuance, (B) reasonable direct costs and
expenses incurred by such Person in connection with such sale or disposition or
such issuance (including, without limitation, reasonable brokerage, legal,
investment banking, accounting, consulting, survey, title and recording fees and
commissions), (C) all payments actually made on any Indebtedness (other than the
Obligations) or other obligations which are secured by any assets subject to
such sale or disposition which are required to be repaid out of the proceeds
from such transaction and (D) actual tax payments made or to be made in
connection therewith.
New Issuance Prepayment. See Section 5.8.2.
Notes. The Revolving Credit Notes.
Obligations. All indebtedness, obligations and liabilities of any of
the Borrower and its Subsidiaries to any of the Banks and the Agents,
individually or collectively, existing on the date of this Credit Agreement or
arising thereafter, direct or indirect, joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise, arising or
incurred under this Credit Agreement or any of the other Loan Documents or in
respect of any of the Loans or Purchases and Consignments made or Reimbursement
Obligations incurred or cash management services provided or any of the Notes,
Letter of Credit Application, Letter of Credit or other instruments or documents
at any time evidencing any thereof.
Operating Accounts. See Section 5.3(b).
Original Credit Agreement. As defined in the preamble hereto.
Outstanding. With respect to the Loans, the aggregate unpaid principal
thereof as of any date of determination; with respect to Purchases and
Consignments, the aggregate Fair Market Value or number of ▇▇▇▇ ounces of
Consigned Precious Metal which, as of any date of determination, has not been
paid for by the Borrower or Redelivered.
Outstanding Facility Amounts. The sum of (a) the outstanding amount of
the Revolving Credit Loans (after giving effect to all amounts requested) plus
(b) the Fair Market Value of Consigned Precious Metal (after giving effect to
all Purchases and Consignments requested) plus (c) the Maximum Drawing Amount
and all Reimbursement Obligations.
Patent, Trademark and License Assignment. The Amended and Restated
Patent, Trademark and License Assignment of even date herewith made by the
Borrower in favor of the Collateral Agent as may be amended, modified or
restated from time to time.
PBGC. The Pension Benefit Guaranty Corporation created by Section 4002
of ERISA and any successor entity or entities having similar responsibilities.
16
Perfection Certificate. The Perfection Certificate dated as of July 29,
2003 executed by Borrower in favor of Administrative Agent.
Performance Adjustment. See Section 5.22.
Performance Adjustment Date. See Section 5.22.
Permitted Inventory Locations. The retail stores and distribution
centers of the Borrower and its Subsidiaries located in the United States of
America and listed on Schedule 2 hereto, as such Schedule 2 may be supplemented
from time to time in accordance with the provisions of Section 8.4(i).
Permitted Liens. Liens, security interests and other encumbrances
permitted by Section 9.2.
Person. Any individual, corporation, partnership, limited liability
company, trust, unincorporated association, business, or other legal entity, and
any government or any governmental agency or political subdivision thereof.
Pledge Agreement. Each Pledge Agreement executed by each Subsidiary of
the Borrower in favor of the Collateral Agent, substantially in the form of
Exhibit F, as each may be amended, modified or restated from time to time.
Precious Metal. Gold measured in ▇▇▇▇ ounces having a fineness of not
less than .9995, without regard to whether such gold is alloyed or unalloyed, in
bullion form or contained in or processed into other materials which contain
elements other than gold.
Purchase and Consignment. Purchases and consignments of the Borrower's
Precious Metal made or to be made by the Banks pursuant to Section 4.1(a).
Purchase and Consignment Request. See Section 4.3.
Purchase Price. See Section 4.1(b).
Real Estate. All real property at any time owned or leased (as lessee
or sublessee) by the Borrower or any of its Subsidiaries.
Record. The grid attached to a Note, or the continuation of such grid,
or any other similar record, including computer records, maintained by any Bank
with respect to any Loan referred to in such Note.
Redeliver(ed) or Redelivery. The delivery by the Borrower to the
Administrative Agent's Head Office, at the Borrower's sole risk and expense, of
Precious Metal in bullion form of a type and quality which is acceptable to the
Administrative Agent.
Register. See Section 19.3.
Reimbursement Obligation. The Borrower's obligation to reimburse the
Administrative Agent, Fleet and the Banks on account of any drawing under any
Letter of Credit.
17
Required Banks. As of any date, the Banks (other than Delinquent Banks)
whose aggregate Commitments together constitute at least sixty-six and
two-thirds percent (66 2/3%) of the Total Commitment.
Reserves. As determined by the Administrative Agent in accordance with
its reasonable credit judgment which credit judgment shall be exercised in a
manner that is not arbitrary or capricious and is consistent with the standards
of eligibility and credit judgment applied by the Administrative Agent to its
other borrowers, such amounts as the Administrative Agent may from time to time
establish and revise (a) to reflect events, conditions, contingencies or risks
of which the officers of the Administrative Agent principally responsible for
this credit did not have actual knowledge as of the Closing Date which do or may
(i) adversely affect either (A) any Collateral, the rights of the Collateral
Agent, any of the other Agents or any of the Banks in any Collateral or its
value or (B) the security interest and other rights of the Collateral Agent, any
of the other Agents or any of the Banks in the Collateral (including the
enforceability, perfection and priority thereof) or (ii) adversely affect in any
material respect the assets (other than any Collateral) or business or financial
condition of the Borrower or any of its Subsidiaries or (b) to reflect the
belief of the Administrative Agent that any Borrowing Base Report or other
collateral report or financial information furnished by or on behalf of the
Borrower to any of the Agents or any of the Banks is or may have been
incomplete, inaccurate or misleading in any material respect.
Revolving Credit Loans. Revolving credit loans made or to be made by
the Banks to the Borrower pursuant to Section 2.
Revolving Credit Note Record. A Record with respect to a Revolving
Credit Note.
Revolving Credit Notes. See Section 2.4.
Security Agreement. The Second Amended and Restated Security Agreement
of even date herewith, between the Borrower and the Collateral Agent, as may be
amended, modified or restated from time to time, together with each other
Security Agreement executed by each Guarantor in favor of the Collateral Agent
substantially in the form of Exhibit G.
Security Documents. The Security Agreement, the Landlord Waivers, the
Headquarters Landlord Consent, the Patent Trademark and License Assignment, the
Cash Collateral Agreement, each Guaranty, each Pledge Agreement, and all Blocked
Account Agreements, as each may be amended, modified or restated from time to
time.
Settlement. The making of, or receiving of payments, in immediately
available funds, by the Banks, to the extent necessary to cause each Bank's
actual share of the outstanding amount of Revolving Credit Loans (after giving
effect to any Loan Request) to be equal to each Bank's Commitment Percentage of
the outstanding amount of such Revolving Credit Loans (after giving effect to
any Loan Request), in any case where, prior to such event or action, the actual
share is not so equal.
Settlement Amount. See Section 5.6(a).
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Settlement Date. (a) The Drawdown Date relating to any Loan Request,
(b) Friday of each week, or if Friday is not a Business Day, the Business Day
immediately following such Friday, (c) the Business Day immediately following
any Agent becoming aware of the existence of an Event of Default, (d) any
Business Day on which the amount of Revolving Credit Loans outstanding from any
Bank plus such Bank's Commitment Percentage of the sum of the Fair Market Value
of Consigned Precious Metal plus the Maximum Drawing Amount and any
Reimbursement Obligations is equal to or greater than such Bank's Commitment
Percentage of the Total Revolver Commitment, (e) the Business Day immediately
following any Business Day on which the amount of Loans outstanding increases or
decreases by more than $5,000,000 as compared to the previous Settlement Date,
(f) any day on which any conversion of a Base Rate Loan to a LIBOR Loan occurs,
or (g) any Business Day on which (i) the amount of outstanding Revolving Credit
Loans decreases and (ii) the amount of the Administrative Agent's Loans
outstanding equals Zero Dollars ($0).
Settling Bank. See Section 5.6(a).
Specified Lease. A lease by the Borrower as lessee of Real Estate at
which Eligible Inventory is held and as to which at any time either (a) the
Borrower and the Agents have not received a Landlord Waiver or (b) the
Administrative Agent has not received evidence, in form and substance
satisfactory to the Administrative Agent, that, based upon then existing law (as
determined by the Administrative Agent in the exercise of its reasonable
discretion and on the advice of counsel), the landlord of such property would
not have a lien on inventory superior to the security interest granted under the
Security Agreement, securing rent obligations more than thirty (30) days past
due or securing future rent obligations accruing after the Closing Date.
Spot Value. At any time, with respect to the calculation of the Dollar
value of Precious Metal, (a) in all cases in which the Borrower is purchasing
Precious Metal or in which the value of Consigned Precious Metal for purposes of
the Consignment Limit is being calculated, the Gold Fronting Bank's "ask" spot
quotation for Precious Metal at such time times the number of ounces of such
Precious Metal and (b) in all cases in which the Gold Fronting Bank is
purchasing Precious Metal, the Gold Fronting Bank's "bid" spot quotation for
Precious Metal at such time times the number of ounces of such Precious Metal.
Standby Letter of Credit Fee Rate. The percentage determined by
reference to the provisions of Section 5.22
Store Accounts. Depository accounts in depository institutions for, or
on behalf of, the Borrower or any of its Subsidiaries and listed on Schedule
7.20 hereto (as such may be amended from time to time in accordance with
Section 10.10 hereof).
Subsidiary. Any corporation, association, trust, or other business
entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a majority (by number
of votes) of the outstanding Voting Stock.
Syndication Agent. ABN AMRO Bank N.V. acting as syndication agent for
the Agents and the Banks.
Total Commitment. The Total Revolver Commitment.
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Total Revolver Commitment. The sum of the Commitments of the Banks, as
in effect from time to time, such amount being equal to $125,000,000 as of the
Closing Date.
Type. As to any Revolving Credit Loan its nature as a Base Rate Loan or
a LIBOR Loan.
Uniform Customs. With respect to any Letter of Credit, the Uniform
Customs and Practice for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500 or any successor version thereto adopted
by the Administrative Agent in the ordinary course of its business as a letter
of credit issuer and in effect at the time of issuance of such Letter of Credit.
Voting Stock. Stock or similar interests, of any class or classes
(however designated), the holders of which are at the time entitled, as such
holders, to vote for the election of a majority of the directors (or persons
performing similar functions) of the corporation, association, trust or other
business entity involved, whether or not the right so to vote exists by reason
of the happening of a contingency.
1.2 Rules of Interpretation.
(a) A reference to any document or agreement shall
include such document or agreement as amended, modified or supplemented from
time to time in accordance with its terms and the terms of this Credit
Agreement.
(b) The singular includes the plural and the plural
includes the singular.
(c) A reference to any law includes any amendment or
modification to such law.
(d) A reference to any Person includes its permitted
successors and permitted assigns.
(e) Accounting terms not otherwise defined herein have
the meanings assigned to them by Generally Accepted Accounting Principles
applied on a consistent basis by the accounting entity to which they refer.
(f) The words "include", "includes" and "including" are
not limiting.
(g) All terms not specifically defined herein or by
Generally Accepted Accounting Principles, which terms are defined in the Uniform
Commercial Code as in effect in the State of Illinois, as in effect from time to
time, have the meanings assigned to them therein.
(h) Reference to a particular "Section" refers to that
section of this Credit Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words
of like import shall refer to this Credit Agreement as a whole and not to any
particular section or subdivision of this Credit Agreement.
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2. REVOLVING CREDIT LOANS.
2.1 Commitment to Lend. Subject to the terms and conditions set
forth in this Credit Agreement, each of the Banks severally agrees to lend to
the Borrower and the Borrower may borrow, repay, and reborrow from time to time
between the Closing Date and the Maturity Date upon notice by the Borrower to
the Administrative Agent given in accordance with Section 5.3, such sums as are
requested by the Borrower up to a maximum aggregate amount outstanding (after
giving effect to all amounts requested) at any one time equal to such Bank's
Commitment minus such Bank's Commitment Percentage of the sum of (a) the Fair
Market Value of Consigned Precious Metal, and (b) the Maximum Drawing Amount and
all Reimbursement Obligations, provided that the sum of the outstanding amount
of the Revolving Credit Loans (after giving effect to all amounts requested)
plus the Fair Market Value of Consigned Precious Metal plus the Maximum Drawing
Amount and all Reimbursement Obligations shall not at any time exceed the lesser
of (i) the Total Revolver Commitment and (ii) the Borrowing Base. The Revolving
Credit Loans shall be made pro rata in accordance with each Bank's Commitment
Percentage. Each request for a Revolving Credit Loan hereunder shall constitute
a representation and warranty by the Borrower that the conditions set forth in
Section 11 and Section 12, in the case of the initial Revolving Credit Loans to
be made on the Closing Date, and Section 12, in the case of all other Revolving
Credit Loans, have been satisfied on the date of such request.
2.2 Commitment Fee. The Borrower agrees to pay to the
Administrative Agent for the accounts of the Banks in accordance with their
respective Commitment Percentages a commitment fee calculated at the Commitment
Fee Rate on the average daily amount during each calendar quarter or portion
thereof from the Closing Date to the Maturity Date by which the Total Revolver
Commitment minus the Fair Market Value of Consigned Precious Metal minus the sum
of the Maximum Drawing Amount and all Reimbursement Obligations exceeds the
outstanding amount of Revolving Credit Loans during such calendar quarter. The
commitment fee shall be payable quarterly in arrears on the last Business Day of
each calendar quarter commencing on the first such date following the date
hereof, with a final payment on the Maturity Date or any earlier date on which
the Commitments shall terminate.
2.3 Reduction of Total Revolver Commitment. The Borrower shall
have the right at any time and from time to time upon five (5) Business Days
prior written notice to the Administrative Agent to reduce by $1,000,000.00 or
an integral multiple thereof or terminate entirely the Total Revolver
Commitment, whereupon the Commitments of the Banks shall be reduced pro rata in
accordance with their respective Commitment Percentages of the amount specified
in such notice or, as the case may be, terminated. Promptly after receiving any
notice of the Borrower delivered pursuant to this Section 2.3, the
Administrative Agent will notify the Banks of the substance thereof. Upon the
effective date of any such reduction or termination, the Borrower shall pay to
the Administrative Agent for the respective accounts of the Banks the full
amount of any commitment fee then accrued on the amount of the reduction. The
Total Revolver Commitment shall never be reduced pursuant to this Section 2.3.2
to an amount less than the sum of (a) the outstanding amount of the Revolving
Credit Loans, (b) the Fair Market Value of Consigned Precious Metal, and (c) the
Maximum Drawing Amount and all Reimbursement Obligations. No reduction or
termination of the Commitments may be reinstated.
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2.4 The Revolving Credit Notes. The Revolving Credit Loans shall
be evidenced by separate promissory notes of the Borrower in substantially the
form of Exhibit H hereto (each a "Revolving Credit Note"), dated as of the
Closing Date and completed with appropriate insertions. One Revolving Credit
Note shall be payable to the order of each Bank in a principal amount equal to
such Bank's Commitment or, if less, the outstanding amount of all Revolving
Credit Loans made by such Bank, plus interest accrued thereon, as set forth
below. The Borrower irrevocably authorizes each Bank to make or cause to be
made, at or about the time of the Drawdown Date of any Revolving Credit Loan or
at the time of receipt of any payment of principal on such Bank's Revolving
Credit Note, an appropriate notation on such Bank's Revolving Credit Note Record
reflecting the making of such Revolving Credit Loan or (as the case may be) the
receipt of such payment. The outstanding amount of the Revolving Credit Loans
set forth on such Bank's Revolving Credit Note Record shall be prima facie
evidence of the principal amount thereof owing and unpaid to such Bank, but the
failure to record, or any error in so recording, any such amount on such Bank's
Revolving Credit Note Record shall not limit or otherwise affect the obligations
of the Borrower hereunder or under any Revolving Credit Note to make payments of
principal of or interest on any Revolving Credit Note when due.
2.5 Interest on Revolving Credit Loans. Except as otherwise
provided in Section 5.21, the Revolving Credit Loans shall bear interest in
accordance with the provisions of Section 5.1 hereof.
2.6 Requests for Revolving Credit Loans; Conversion Options. The
Borrower shall request Revolving Credit Loans by providing to the Administrative
Agent Loan Requests for Revolving Credit Loans in accordance with the
requirements of Section 5.3(a) hereof. The Administrative Agent may, in its sole
discretion and without conferring with the Banks, make Revolving Credit Loans to
the Borrower in accordance with the provisions of Section 5.3(b) hereof. The
Borrower shall be permitted to convert Revolving Credit Loans to Revolving
Credit Loans of different Types in accordance with the provisions of Section 5.4
hereof.
2.7 Funds for Revolving Credit Loans. The provisions of Section
5.5 and Section 5.6 with respect to the funding procedures and Settlement
procedures for the Loans shall apply to the Revolving Credit Loans.
2.8 Maturity. The Borrower promises to pay on the Maturity Date,
and there shall become absolutely due and payable on the Maturity Date, all of
the Revolving Credit Loans outstanding on such date, together with any and all
accrued and unpaid interest thereon.
2.9 Mandatory Repayments of Revolving Credit Loans. The Borrower
shall immediately repay the outstanding Revolving Credit Loans as required by
and in accordance with the provisions of Sections 5.8 and 5.9(b) hereof.
2.10 Optional Repayments of Revolving Credit Loans. The Borrower
shall have the right, at its election, to repay the outstanding Revolving Credit
Loans in accordance with the provisions of Section 7.7 hereof.
2.11 Increase in Total Revolver Commitment. Borrower may, in a
writing delivered to the Agents at any time but not later than ninety (90) days
prior to the Maturity Date, request
22
Agents, and the Agents will use commercially reasonable efforts to arrange an
increase in the Total Revolver Commitment to a total of One Hundred Thirty-Five
Million Dollars ($135,000,000) (including the $125,000,000 in aggregate
Commitments on the Closing Date), through the placement of additional
Commitments with one or more commercial banks or other financial institutions
acceptable to the Agents and the Borrower (except that no consent of Borrower
shall be required with respect to any increase in the Commitment of an existing
Bank or its Affiliate) that become Banks hereunder (each an "Additional Bank").
Each Additional Bank shall execute and deliver to Administrative Agent a joinder
agreement in form and substance satisfactory to Administrative Agent that
specifies, among other things, such Additional Bank's Commitment, Commitment
Percentage and Applicable Lending Office. From and after the date that such
Additional Bank executes and delivers to Administrative Agent such joinder
agreement and satisfies any other conditions set forth in such joinder
agreement, such Additional Bank shall become a "Bank" hereunder and shall have
all of the rights and obligations of a Bank hereunder. With each joinder
agreement, Agent will distribute to Borrower and each Bank an amended and
restated Schedule 1 setting forth the Commitments and Commitment Percentages of
the Banks as of the date of, and giving effect to, such joinder agreement;
without any further action such Schedule 1 shall amend and restate the previous
Schedule 1 in its entirety and from and after the date of such joinder
agreement, any reference herein or in any Loan Document to Schedule 1 shall be
deemed to be a reference to such amended and restated Schedule 1. Borrower
understands and agrees that: (a) the Agents may elect not to pursue an increase
in the Total Revolver Commitment to the extent that an increase would not be
feasible in light of relevant financial market conditions at such time, (b) the
Agents may discontinue their syndication efforts to increase the Total Revolver
Commitment due to a lack of response from the relevant financial markets at such
time for such increase and neither any Agent nor any Bank nor any of their
respective Affiliates shall have any liability to Borrower or any other Person
whatsoever for the success or lack of success of any such syndication, and (c)
no Bank's Commitment shall be increased without the written consent of such
Bank.
3. LETTERS OF CREDIT.
3.1 Letter of Credit Commitments.
3.1.1 Commitment to Issue Letters of Credit. Subject to the
terms and conditions hereof and the execution and delivery by the Borrower of
the Master Letter of Credit Agreement of even date herewith between LaSalle and
Borrower and such other documents as are customarily required by LaSalle based
on LaSalle's customary form (collectively, the "Letter of Credit Application"),
LaSalle on behalf of the Banks and in reliance upon the agreement of the Banks
set forth in Section 5.1.4 and upon the representations and warranties of the
Borrower contained herein, agrees, in its individual capacity, to issue, extend
and renew for the account of the Borrower one or more standby or documentary
letters of credit in such form as may be requested from time to time by the
Borrower and agreed to by LaSalle, and Fleet agrees to continue to be the
issuing Bank, on behalf of each of the Banks with respect to each of the Fleet
Letters of Credit (each letter of credit issued by LaSalle and the Fleet Letters
of Credit are collectively referred to as the "Letters of Credit"); provided,
however, that, after giving effect to such request, (a) the sum of the aggregate
Maximum Drawing Amount and all Reimbursement Obligations shall not exceed
$15,000,000.00 at any one time and (b) the sum of (i) the Maximum Drawing Amount
on all Letters of Credit, (ii) all Reimbursement Obligations, (iii) the amount
of
23
all Revolving Credit Loans outstanding, and (iii) the Fair Market Value of
Consigned Precious Metals shall not exceed the lesser of (A) the Total Revolver
Commitment and (B) the Borrowing Base. For purposes of Letters of Credit subject
to the terms of this Credit Agreement, LaSalle and Fleet are collectively
referred to as the "Issuing Banks". Notwithstanding the foregoing, LaSalle shall
have no obligation to issue any Letter of Credit to support or secure any
Indebtedness of the Borrower or any of its Subsidiaries to the extent that such
Indebtedness was incurred prior to the proposed issuance date of such Letter of
Credit, unless in any such case the Borrower demonstrates to the satisfaction of
LaSalle that (x) such prior incurred Indebtedness were then fully secured by a
prior perfected and unavoidable security interest in collateral provided by the
Borrower or such Subsidiary to the proposed beneficiary of such Letter of Credit
or (y) such prior incurred Indebtedness was then secured or supported by a
letter of credit issued for the account of the Borrower or such Subsidiary and
the reimbursement obligation with respect to such letter of credit was fully
secured by a prior perfected and unavoidable security interest in collateral
provided to the issuer of such letter of credit by the Borrower or such
Subsidiary.
3.1.2 Letter of Credit Applications. Each Letter of Credit
Application shall be completed to the satisfaction of LaSalle. In the event that
any provision of any Letter of Credit Application shall be inconsistent with any
provision of this Credit Agreement, then the provisions of this Credit Agreement
shall, to the extent of any such inconsistency, govern.
3.1.3 Terms of Letters of Credit. Each Letter of Credit
issued, extended or renewed hereunder shall, among other things, (a) provide for
the payment of sight drafts for honor thereunder when presented in accordance
with the terms thereof and when accompanied by the documents described therein,
and (b) have an expiry date (i) no later than the date which is twenty-five (25)
days (or, if the Letter of Credit is confirmed by a confirmer or otherwise
provides for one or more nominated persons, forty-five (45) days) prior to the
Maturity Date, (ii) no more than one (1) year from the issue date thereof with
respect to standby Letters of Credit, and (iii) no more than one hundred twenty
(120) days from the issue date thereof with respect to documentary Letters of
Credit. Each Letter of Credit so issued, extended or renewed shall be subject to
the Uniform Customs.
3.1.4 Reimbursement Obligations of Banks. Each Bank
severally agrees that it shall be absolutely liable, without regard to the
occurrence of any Default or Event of Default or any other condition precedent
whatsoever, to the extent of such Bank's Commitment Percentage, to reimburse the
each Issuing Bank on demand for the amount of each draft paid by each Issuing
Bank under each Letter of Credit to the extent that such amount is not
reimbursed by the Borrower pursuant to Section 3.2 (such agreement for a Bank
being called herein the "Letter of Credit Participation" of such Bank).
3.1.5 Participations of Banks. Each such payment made by a
Bank shall be treated as the purchase by such Bank of a participating interest
in the Borrower's Reimbursement Obligation under Section 3.2 in an amount equal
to such payment. Each Bank shall share in accordance with its participating
interest in any interest which accrues pursuant to Section 3.2.
3.2 Reimbursement Obligation of the Borrower. In order to induce
(i) LaSalle to issue, extend and renew each Letter of Credit, (ii) Fleet to
continue to front the Fleet Letters of
24
Credit, and (iii) the Banks to participate therein, the Borrower hereby agrees
to reimburse or pay to the Administrative Agent, for the account of the Banks or
each Issuing Bank for the account of such Issuing Bank (as the case may be),
with respect to each Letter of Credit issued, extended or renewed by any Issuing
Bank hereunder,
(a) except as otherwise expressly provided in Section
3.2(b) and (c), on each date that any draft presented under such Letter of
Credit is honored an Issuing Bank, or an Issuing Bank otherwise makes a payment
with respect thereto, (i) the amount paid by the Issuing Bank under or with
respect to such Letter of Credit, and (ii) the amount of any taxes, fees,
charges or other costs and expenses whatsoever incurred by the Issuing Bank or
any Bank in connection with any payment made by the Issuing Bank or any Bank
under, or with respect to, such Letter of Credit,
(b) upon the reduction (but not termination) of the Total
Revolver Commitment to an amount less than the Maximum Drawing Amount, an amount
equal to such difference, which amount shall be held by the Administrative Agent
for the benefit of the Banks and the Administrative Agent as cash collateral for
all Reimbursement Obligations, and
(c) upon the termination of the Total Revolver
Commitment, or the acceleration of the Reimbursement Obligations with respect to
all Letters of Credit in accordance with Section 13, an amount equal to the then
Maximum Drawing Amount on all Letters of Credit, which amount shall be held by
Administrative Agent as cash collateral for all Reimbursement Obligations.
Each such payment shall be made to the Administrative Agent at the
Administrative Agent's Head Office in immediately available funds. Interest on
any and all amounts remaining unpaid by the Borrower under this Section 3.2 at
any time from the date such amounts become due and payable (whether as stated in
this Section 3.2, by acceleration or otherwise) until payment in full (whether
before or after judgment) shall be payable on demand at the rate specified in
Section 5.21 for overdue principal on the Revolving Credit Loans.
3.3 Letter of Credit Payments. If any draft shall be presented or
other demand for payment shall be made under any Letter of Credit, the Issuing
Bank shall notify the Borrower and Administrative Agent of the date and amount
of the draft presented or demand for payment and of the date and time when it
expects to pay such draft or honor such demand for payment. If the Borrower
fails to reimburse the Issuing Bank as provided in Section 3.2 on or before the
date that such draft is paid or other payment is made by the Issuing Bank, the
Administrative Agent may at any time thereafter notify the Banks of the amount
of any such Reimbursement Obligation. No later than 2:00 p.m. (Chicago time) on
the Business Day next following the receipt of such notice, each Bank shall make
available to the Administrative Agent, at its Head Office, in immediately
available funds, such Bank's Commitment Percentage of such Reimbursement
Obligation, together with an amount equal to the product of (i) the average,
computed for the period referred to in clause (iii) below, of the weighted
average interest rate paid by the Issuing Bank for federal funds acquired by the
Issuing Bank during each day included in such period, times (ii) the amount
equal to such Bank's Commitment Percentage of such Reimbursement Obligation,
times (iii) a fraction, the numerator of which is the number of days that elapse
from and including the date the Issuing Bank paid the draft presented for honor
or otherwise made
25
payment to the date on which such Bank's Commitment Percentage of such
Reimbursement Obligation shall become immediately available to the Issuing Bank,
and the denominator of which is 360. The responsibility of the Issuing Bank to
the Borrower and the Banks shall be only to determine that the documents
(including each draft) delivered under each Letter of Credit in connection with
such presentment shall be in conformity in all material respects with such
Letter of Credit.
3.4 Obligations Absolute. The Borrower's obligations under this
Section 3 shall be absolute and unconditional under any and all circumstances
and irrespective of the occurrence of any Default or Event of Default or any
condition precedent whatsoever or any setoff, counterclaim or defense to payment
which the Borrower may have or have had against the Administrative Agent, any
Issuing Bank, any Bank or any beneficiary of a Letter of Credit. The Borrower
further agrees with the Administrative Agent, each Issuing Bank and the Banks
that the Administrative Agent, each Issuing Bank and the Banks shall not be
responsible for, and the Borrower's Reimbursement Obligations under Section 3.2
shall not be affected by, among other things, the validity or genuineness of
documents or of any endorsements thereon, even if such documents should in fact
prove to be in any or all respects invalid, fraudulent or forged, or any dispute
between or among the Borrower, the beneficiary of any Letter of Credit or any
financing institution or other party to which any Letter of Credit or may be
transferred or any claims or defenses whatsoever of the Borrower against the
beneficiary of any Letter of Credit or any such transferee. The Administrative
Agent, each Issuing Bank and the Banks shall not be liable for any error,
omission, interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Letter of Credit.
The Borrower agrees that any action taken or omitted by the Administrative
Agent, any Issuing Bank or any Bank under or in connection with each Letter of
Credit and the related drafts and documents, if done in good faith, shall be
binding upon the Borrower and shall not result in any liability on the part of
the Administrative Agent, any Issuing Bank or any Bank to the Borrower.
3.5 Reliance by Issuer. To the extent not inconsistent with
Section 3.4, each Issuing Bank shall be entitled to rely, and shall be fully
protected in relying upon, any Letter of Credit, draft, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy,
telex or teletype message, statement, order or other document believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel, independent
accountants and other experts selected by the Administrative Agent or any
Issuing Bank. The Administrative Agent and each Issuing Bank shall be fully
justified in failing or refusing to take any action under this Credit Agreement
unless it shall first have received such advice or concurrence of the Required
Banks as it reasonably deems appropriate or it shall first be indemnified to its
reasonable satisfaction by the Banks against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any such
action. The Administrative Agent and each Issuing Bank shall in all cases be
fully protected in acting, or in refraining from acting, under this Credit
Agreement in accordance with a request of the Required Banks, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
the Banks and all future holders of the Revolving Credit Notes or of a Letter of
Credit Participation.
3.6 Letter of Credit Fee. The Borrower shall pay to the
Administrative Agent a fee (in each case, a "Letter of Credit Fee") in respect
of Letters of Credit on the average daily
26
Maximum Drawing Amount at a rate per annum equal to (a) with respect to each
standby Letter of Credit, the Standby Letter of Credit Fee Rate per annum from
time to time and (b) with respect to each documentary Letter of Credit, the
LIBOR Applicable Margin per annum from time to time applicable to Revolving
Credit Loans minus 1/2%, such Letter of Credit Fees being payable quarterly in
arrears on the last Business Day of each calendar quarter and on the Maturity
Date. A portion of such Letter of Credit Fees equal to (i) 1/4% per annum of the
average daily Maximum Drawing Amount under all Fleet Letters of Credit shall be
payable to Fleet for its own account, and (ii) 1/4% per annum of the average
daily Maximum Drawing Amount under all Letters of Credit other than the Fleet
Letters of Credit shall be payable to LaSalle for its own account. The remainder
of such Letter of Credit Fees shall be payable to the Administrative Agent for
the ratable accounts of the Banks in accordance with their respective Commitment
Percentages. The Borrower shall also pay to each Issuing Bank, at such time or
times as such charges are customarily made by each Issuing Bank, the Issuing
Bank's customary issuance fees or amendment fees, as the case may be, and each
Issuing Bank's customary time negotiation fees per document examination or other
administrative fees.
4. PURCHASES AND CONSIGNMENTS.
4.1 Commitment To Make Purchases and Consignments; Title To
Consigned Precious Metal.
(a) Subject to the terms and conditions set forth in this
Credit Agreement, the Gold Fronting Bank agrees, at the option of the Borrower,
to purchase from and consign to the Borrower (a "Purchase and Consignment") from
time to time between the Closing Date and the Maturity Date upon notice by the
Borrower to the Administrative Agent given in accordance with Section 4.3, such
amounts of the Borrower's Precious Metal as are requested by the Borrower up to
a maximum aggregate amount of Consigned Precious Metal outstanding (after giving
effect to all amounts requested) having a Fair Market Value equal to (i) the sum
of the Commitments of the Banks, minus, (ii) sum of the outstanding amount of
the Revolving Credit Loans plus the Maximum Drawing Amount and all Reimbursement
Obligations; provided that the sum of the outstanding amount of ▇▇▇▇ ounces or,
as the case may be, Fair Market Value of Consigned Precious Metal which the
Borrower requests that the Gold Fronting Bank purchase, when added to the amount
of ▇▇▇▇ ounces or, as the case may be, the Fair Market Value of Consigned
Precious Metal outstanding, shall not exceed the Consignment Ounce Cap, in the
case of amounts of ▇▇▇▇ ounces of Consigned Precious Metal, or the Consignment
Dollar Cap, in the case of the Fair Market Value of Consigned Precious Metal.
(b) The purchase price (the "Purchase Price") paid by the
Gold Fronting Bank, for Consigned Precious Metal in respect of each Purchase and
Consignment shall be the Fair Market Value of Precious Metal two (2) Business
Days prior to the Gold Drawdown Date of any Purchase and Consignment, plus the
applicable premium set by the Gold Fronting Bank (which premium shall in no
event exceed $0.75 per ▇▇▇▇ ounce). Each request for a Purchase and Consignment
hereunder shall constitute a representation and warranty by the Borrower that
the conditions set forth in Section 11 and Section 12, in the case of the
initial Purchase and Consignment to be made on the Closing Date, and Section 12,
in the case of all other Purchases and Consignments, have been satisfied on the
date of such request.
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(c) Upon each Purchase and Consignment, the Gold Fronting
Bank shall take title to such Borrower's Precious Metal. Thereafter, title to
such Precious Metal shall remain in the Gold Fronting Bank and shall not vest in
the Borrower until the Administrative Agent has received payment for such
Consigned Precious Metal in accordance with the requirements of Section 4.4 or
Section 4.7, as applicable. Following each Purchase and Consignment, the
Borrower shall bear the entire risk of loss, theft, damage or destruction of the
Consigned Precious Metal from any cause whatsoever, whether or not insured, and
the Borrower agrees to hold the Consigned Precious Metal in trust for the Gold
Fronting Bank, and to indemnify and hold harmless the Gold Fronting Bank against
any and all liabilities, damages, losses, costs, expenses, suits, claims,
demands or judgments of any nature (including, without limitation, attorneys'
fees and expenses) arising from or connected with any loss, theft, damage or
destruction of the Consigned Precious Metal.
(d) The Borrower irrevocably authorizes the
Administrative Agent and the Gold Fronting Bank, at or about the time of the
Gold Drawdown Date of any Purchase and Consignment or at the time of any payment
or Redelivery with respect to Consigned Precious Metal, to make an appropriate
notation in the records of the Administrative Agent or the Gold Fronting Bank
customarily maintained by the Administrative Agent or the Gold Fronting Bank
reflecting the making of such Purchase and Consignment or the receipt of such
payment or Redelivery. The outstanding amount of Consigned Precious Metal set
forth in the records of the Administrative Agent or the Gold Fronting Bank
customarily maintained by the Administrative Agent or the Gold Fronting Bank
shall be prima facie evidence of the amount thereof owing and unpaid or not
Redelivered, but the failure to record or any error in so recording any such
amount in the records of the Administrative Agent or the Gold Fronting Bank
shall not limit or otherwise affect the obligations of the Borrower hereunder to
make payments or Redeliveries in accordance with the terms hereof.
4.2 Consignment Fees. Except as otherwise provided in Section
5.21, with respect to Consigned Precious Metal, the Borrower agrees to pay to
the Administrative Agent, for the accounts of Administrative Agent and the Banks
to be allocated among them as set forth below, a consignment fee (the
"Consignment Fee") equal to:
(a) for each day with respect to Consignment Base Rate
Amounts, the product of the Consignment Base Rate times a fraction, the
numerator of which is one (1) and the denominator of which is three hundred and
sixty (360) times the Fair Market Value (as of such date) of Consigned Precious
Metal outstanding on such day which are Consignment Base Rate Amounts; and
(b) for each day during each Interest Period with respect
to Consignment Fixed Rate Amounts, the product of the Consignment Fixed Rate
applicable to such Interest Period times a fraction, the numerator of which is
one (1) and the denominator of which is three hundred and sixty (360) times the
Fair Market Value (as of such date) of Consigned Precious Metal outstanding for
such Interest Period which are Consignment Fixed Rate Amounts.
The Consignment Fee for each day shall be allocated as follows: (i) for the
account of the Banks in accordance with their respective Commitment Percentages,
that portion of the Consignment Fee for such day equal to the product of (A) the
LIBOR Applicable Margin applicable to
28
Revolving Credit Loans minus one-eighth of one percent (1/8%) times a fraction,
the numerator of which is one (1) and the denominator of which is three hundred
and sixty (360) times the Fair Market Value (as of such date) of Consigned
Precious Metal outstanding on such day and (ii) for the account of the Gold
Fronting Bank, the remainder of the Consignment Fee for such day. The
Consignment Fee with respect to Consignment Base Rate Amounts shall be payable
monthly in arrears on the last Business Day of each calendar month, commencing
on the first such date following the Closing Date, with a final payment on the
Maturity Date or any earlier date on which the Commitments shall terminate. The
Consignment Fee with respect to Consignment Fixed Rate Amounts shall be payable
as to any Consignment Fixed Rate Amounts in respect of which the applicable
Interest Period is (i) 3 months or less, on the last day of such interest period
and (ii) more than 3 months, on the date that is 3 months from the first day of
such Interest Period and, in addition, on the last day of such Interest Period.
4.3 Requests For Purchases and Consignments. The Borrower shall
give to the Administrative Agent and the Gold Fronting Bank written notice in
the form of Exhibit I hereto (or telephonic notice confirmed in a writing in the
form of Exhibit I hereto) of each Purchase and Consignment requested hereunder
(a "Purchase and Consignment Request") no later than 2:00 p.m. (New York, New
York time) three (3) Business Days prior to the proposed Gold Drawdown Date of
any Consignment Base Rate Amount or Consignment Fixed Rate Amount. Each such
notice shall specify (a) the number of ▇▇▇▇ ounces of Borrower's Precious Metal
to be purchased and consigned, (b) the proposed Gold Drawdown Date of such
Purchase and Consignment, (c) whether such Purchase and Consignment is to be a
Consignment Fixed Rate Amount or a Consignment Base Rate Amount, and (d) if such
Purchase and Consignment is to be a Consignment Fixed Rate Amount, the Interest
Period applicable to such Purchase and Consignment. Promptly upon receipt of any
such Purchase and Consignment Request, the Administrative Agent shall notify
each of the Banks thereof. Each Purchase and Consignment Request shall be
irrevocable and binding on the Borrower and shall obligate the Borrower to sell
and take on consignment such Borrower's Precious Metal on the proposed Gold
Drawdown Date. Each Purchase and Consignment Request for Consignment Base Rate
Amounts and Consignment Fixed Rate Amounts shall be in a minimum aggregate
amount of five thousand (5,000) ▇▇▇▇ ounces or an integral multiple of one
hundred (100) in excess thereof.
4.4 Payment on Account Of Repurchase or Redelivery of Consigned
Precious Metal.
(a) Upon the occurrence of an Event of Default (other
than an Event of Default described in Section 13.1(g) or (h), with respect to
which applicable law prohibits the following actions from being taken, and,
then, only as and to the extent expressly prohibited by applicable law) and upon
notice from the Administrative Agent to the Borrower, unless the Borrower shall,
on the date of dispatch of such notice, immediately Redeliver to the
Administrative Agent for the accounts of the Banks an amount of Borrower's
Precious Metal (measured in ▇▇▇▇ ounces) equal to all outstanding Consigned
Precious Metal, the Borrower shall be deemed to have purchased from the
Administrative Agent, on the date of dispatch of such notice, all outstanding
Consigned Precious Metal at the then applicable Spot Value thereof plus the
premium per ▇▇▇▇ ounce set by the Gold Fronting Bank, and the Administrative
Agent, on behalf of the Banks based on their respective Commitment Percentages,
notwithstanding the borrowing limitations set forth in Section 2.1, shall
simultaneously be deemed to have made Revolving Credit Loans to the Borrower in
amounts equal to the Spot Value of Consigned Precious Metal plus the premium per
▇▇▇▇ ounce
29
set by the Gold Fronting Bank (which premium shall in no event exceed $0.75 per
▇▇▇▇ ounce), such Revolving Credit Loans to be made pro rata based upon each
Bank's Commitment Percentage. Such Revolving Credit Loans deemed to have been
made by the Administrative Agent shall be treated as Revolving Credit Loans made
pursuant to Section 5.3(b) hereof for all purposes under this Credit Agreement
(including, without limitation, the provisions of Section 5.6 hereof relating to
Settlements).
(b) If, on any date, either the Fair Market Value of
Consigned Precious Metal shall exceed the Consignment Dollar Cap or, after
giving effect to any repayment in full of the Revolving Credit Loans pursuant to
Section 2.9, the Fair Market Value of Consigned Precious Metal exceeds the
Borrowing Base minus the Maximum Drawing Amount and all Reimbursement
Obligations, the Administrative Agent shall calculate the amount of Consigned
Precious Metal (measured in ▇▇▇▇ ounces and calculated by reference to the Fair
Market Value thereof on the date of determination) of such excess, the Borrower
shall either (i) pay to the Administrative Agent an amount in Dollars equal to
the Fair Market Value (on the Business Day following the date of determination)
of such excess plus the premium per ▇▇▇▇ ounce set by the Gold Fronting Bank of
such excess, and the Administrative Agent shall be deemed to have sold to the
Borrower an amount of Consigned Precious Metal having a Fair Market Value equal
to such excess, or (ii) Redeliver to the Administrative Agent for the accounts
of the Gold Fronting Bank Consigned Precious Metal in quantities (measured in
▇▇▇▇ ounces) having a Fair Market Value equal to such excess. If, on any date of
determination, the number of ▇▇▇▇ ounces of Consigned Precious Metal shall
exceed the Consignment Ounce Cap, the Borrower shall either (i) repurchase from
the Administrative Agent such excess at the Fair Market Value thereof on the
Business Day following the date of determination, plus the premium per ▇▇▇▇
ounce set by the Gold Fronting Bank (which premium shall in no event exceed
$0.75 per ▇▇▇▇ ounce), or (ii) Redeliver to the Administrative Agent Consigned
Precious Metal in quantities (measured in ▇▇▇▇ ounces) equal to such excess. If,
on any date of determination, the Fair Market Value of Consigned Precious Metal
exceeds the Consignment Advance Rate Percentage multiplied by the Fair Market
Value of the sum of (A) Consigned Precious Metal plus (B) Borrower's Precious
Metal, the Borrower shall pay to the Administrative Agent an amount in Dollars
equal to the Fair Market Value (on the Business Day following the date of
determination) of such excess plus the premium per ▇▇▇▇ ounce set by the Gold
Fronting Bank (which premium shall in no event exceed $0.75 per ▇▇▇▇ ounce) of
such excess, and the Administrative Agent shall be deemed to have sold to the
Borrower an amount of Consigned Precious Metal equal to such excess.
(c) In connection with any sale of Consigned Precious
Metal by the Borrower (other than as part of a Purchase and Consignment pursuant
to the terms hereof), the Borrower shall immediately either (i) pay to the
Administrative Agent for the account of the Gold Fronting Bank an amount in
Dollars equal to the Fair Market Value (on the Business Day following the date
of such sale) of such Consigned Precious Metal plus the premium per ▇▇▇▇ ounce
set by the Gold Fronting Bank (which premium shall in no event exceed $0.75 per
▇▇▇▇ ounce) of such sold Consigned Precious Metal, (ii) Redeliver to the
Administrative Agent for the account of the Gold Fronting Bank an amount of
Borrower's Precious Metal (measured in ▇▇▇▇ ounces) equal to such sold Consigned
Precious Metal, or (iii) Redeliver to the Administrative Agent for the account
of the Gold Fronting Bank, so long as no Event of Default has occurred and is
continuing, additional Precious Metal (which Redelivery, if the Borrower shall
not have purchased such sold Consigned Precious Metal pursuant to clause (i)
hereof or Redelivered Borrower's Precious
30
Metal pursuant to clause (ii) hereof, shall be automatic upon such sale) which
shall constitute Consigned Precious Metal in quantities equal to any Consigned
Precious Metal sold. At all times following the occurrence and during the
continuance of an Event of Default, upon any sale by the Borrower of Precious
Metal which prior to the Borrower's purchase thereof pursuant to Section 4.4(a)
constituted Consigned Precious Metal, the Borrower shall hold the proceeds of
such sale in trust for the Administrative Agent, on behalf of the Banks, and
shall immediately deliver to the Administrative Agent the proceeds of such sale
to be applied to the Obligations in accordance with Section 5.10 hereof. Prior
to the occurrence of an Event of Default and absent other instruction by the
Borrower, the Administrative Agent shall apply Dollar amounts received to
reduction of Consigned Precious Metal, for application first to Consignment Base
Rate Amounts and then to Consignment Fixed Rate Amounts.
(d) At any time before the Maturity Date, the Borrower
may, at its election, purchase any or all Consigned Precious Metal from the
Administrative Agent in whole or in part, without penalty, provided that any
full or partial repurchase of the outstanding amount of Consignment Fixed Rate
Amounts of Consigned Precious Metal pursuant to this Section 4.4(d) may be made
only on the last day of the Interest Period relating thereto. The Borrower shall
give the Administrative Agent, no later than 2:00 p.m., New York, New York time,
three (3) Business Days' prior written notice of any proposed repurchase of
Consigned Precious Metal specifying the amount of Consigned Precious Metal to be
so repurchased and the proposed date of repurchase, which notice shall be
irrevocable and binding on the Borrower and shall obligate the Borrower to
repurchase such Consigned Precious Metal on the proposed date of repurchase.
Each such repurchase of Consignment Base Rate Amounts shall be in a minimum
amount of five thousand (5,000) ▇▇▇▇ ounces or an integral multiple of one
hundred (100) in excess thereof, with accrued Consignment Fees on the
Consignment Base Rate Amounts so purchased being due on the earliest to occur of
a Default or Event of Default and the first day of the calendar month following
the calendar month in which such purchase is made, and each such purchase of
Consignment Fixed Rate Amounts shall be in a minimum amount of five thousand
(5,000) ▇▇▇▇ ounces or an integral multiple of one hundred (100) ▇▇▇▇ ounces in
excess thereof and shall be accompanied by a payment of all accrued but unpaid
Consignment Fees on the amount so purchased. Each such repurchase shall be at a
price equal to, (i) the sum of (A) the Fair Market Value of Precious Metal two
Business Days prior to the date of the Borrower's purchase of Consigned Precious
Metal, plus (B) the premium per ▇▇▇▇ ounce set by the Gold Fronting Bank (which
premium shall in no event exceed $0.75 per ▇▇▇▇ ounce) of Precious Metal being
repurchased, and, prior to the occurrence of an Event of Default, shall be
applied to effect a reduction of Consigned Precious Metal, for application first
to Consignment Base Rate Amounts and then to Consignment Fixed Rate Amounts;
provided, however, that, in lieu of paying in Dollars the Fair Market Value of
such Consigned Precious Metal, the Borrower may, at its option, Redeliver to the
Administrative Agent for the account of the Gold Fronting Bank Borrower's
Precious Metal in an amount (measured in ▇▇▇▇ ounces) equal to the amount of
Consigned Precious Metal being purchased.
(e) All purchases of Consignment Fixed Rate Amounts prior
to the end of an Interest Period shall obligate the Borrower to pay any breakage
costs associated with such Consignment Fixed Rate Amounts in accordance with
Section 5.20 hereof.
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4.5 Conversion Options.
(a) The Borrower may elect from time to time to have the
Consignment Fee applicable to portions of Consigned Precious Metal outstanding
calculated based upon either the Consignment Base Rate or Consignment Fixed
Rate, provided that (i) with respect to any such conversion of Consigned
Precious Metal, the Borrower shall give the Administrative Agent, no later than
2:00 p.m. (New York, New York time), at least three (3) LIBOR Business Days'
prior written notice of such election; and (ii) with respect to any such
conversion of a Consignment Fixed Rate Amount into a Consignment Base Rate
Amount or another Consignment Fixed Rate Amount, such conversion shall only be
made on the last day of the Interest Period with respect thereto. All or any
part of outstanding Consigned Precious Metal may be converted into a Consignment
Fixed Rate Amount or Consignment Base Rate Amount as provided herein, provided
that any partial conversion of Consignment Base Rate Amounts shall be for
Precious Metal in a minimum amount at least equal to five thousand (5,000) ▇▇▇▇
ounces or an integral multiple of one hundred (100) in excess thereof and any
partial conversion of Consignment Fixed Rate Amounts shall be for Precious Metal
in an amount equal to five thousand (5,000) ▇▇▇▇ ounces or an integral multiple
of one hundred (100) in excess thereof. Each conversion request relating to the
conversion of Consigned Precious Metal to a Consignment Fixed Rate Amount shall
be irrevocable by the Borrower.
(b) Prior to the occurrence of a Default or an Event of
Default, Consigned Precious Metal may be continued as Consignment Fixed Rate
Amounts upon the expiration of an Interest Period with respect thereto by
compliance by the Borrower with the notice provisions contained in Section
4.5(a). In the event that the Borrower fails to provide any such notice with
respect to the continuation of any Consignment Fixed Rate Amounts as such, then
such Consignment Fixed Rate Amounts shall be automatically converted to
Consignment Base Rate Amounts on the last day of such Interest Period.
(c) Any conversion to or from Consignment Fixed Rate
Amounts shall be in such amounts and be made pursuant to such elections so that,
after giving effect thereto, the aggregate principal amount of all Consignment
Fixed Rate Amounts having the same Interest Period shall not be less than five
thousand (5,000) ▇▇▇▇ ounces or a whole multiple of one hundred (100) ▇▇▇▇
ounces in excess thereof.
32
4.6 Funds for Purchases and Consignments. Not later than 10:00
a.m. (Chicago time) on the proposed Gold Drawdown Date of any Purchase and
Consignment, the Gold Fronting Bank will make available to the Administrative
Agent, at the Administrative Agent's Head Office, in immediately available
funds, an amount in Dollars equal to the Purchase Price for the Precious Metal
to be purchased and consigned pursuant to such Purchase and Consignment. Upon
receipt from the Gold Fronting Bank of such amount, and upon receipt of the
documents required by Sections 11 and 12 and the satisfaction of the other
conditions set forth therein, to the extent applicable, the Administrative Agent
will make available to the Borrower the Purchase Price for such Purchase and
Consignment made available to the Administrative Agent by the Gold Fronting Bank
and, at such time, the Administrative Agent shall be deemed to have taken title
to such Borrower's Precious Metal.
4.7 Repurchase at Maturity. The Borrower promises to (a) purchase
from the Gold Fronting Bank all Consigned Precious Metal on the Maturity Date,
and there shall become absolutely due and payable on the Maturity Date an amount
in Dollars equal to the Fair Market Value two Business Days prior to the
Maturity Date of the outstanding amount of Consigned Precious Metal (measured in
▇▇▇▇ ounces) plus the premium per ▇▇▇▇ ounce set by the Gold Fronting Bank,
together with any and all accrued and unpaid Consignment Fees and other amounts
accrued thereon, or (b) Redeliver to the Gold Fronting Bank in an amount
(measured in ▇▇▇▇ ounces) equal to all Consigned Precious Metal outstanding,
together with payment of all other amounts owed under the Gold Facility.
4.8 True Consignment. This Credit Agreement is intended to be a
true consignment agreement, where, following a Purchase and Consignment, the
Gold Fronting Bank takes title to the Consigned Precious Metal until sold by the
Borrower. If, notwithstanding the foregoing sentence, it is determined for any
reason that the consignment created hereby is one intended as security or that
the consignment is a sale or return or other sale, the Consigned Precious Metal
shall constitute Collateral under the terms of the Security Agreement, and the
terms of the Security Agreement shall govern the Banks' security interest
therein.
5. CERTAIN GENERAL PROVISIONS.
5.1 Interest on Loans. Except as otherwise provided in Section
5.21,
(a) Each Base Rate Loan shall bear interest for the
period commencing with the Drawdown Date thereof and ending on the last day of
the Interest Period with respect thereto at a rate per annum equal to the Base
Rate.
(b) Each LIBOR Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of the
Interest Period with respect thereto at a rate per annum equal to the sum of (i)
the LIBOR Rate plus (ii) the LIBOR Applicable Margin.
(c) The Borrower promises to pay interest on each Loan in
arrears on each Interest Payment Date with respect thereto.
33
5.2 Borrowing Base and Consignment Limitations.
(a) The Banks shall have no obligation to make any
Extension of Credit if, at any time the Outstanding Facility Amounts, after
giving effect to such Extension of Credit, would exceed the Borrowing Base. The
Borrowing Base shall be determined by the Administrative Agent by reference to
the most recent Borrowing Base Report delivered on a timely basis to the
Administrative Agent in accordance with Section 8.4(f).
(b) The Gold Fronting Bank shall not have any obligation
to make any Purchase and Consignments if, at any time, the Fair Market Value of
Consigned Precious Metal (after giving effect to all amounts requested) exceeds
the Consignment Advance Rate Percentage multiplied by the Fair Market Value of
the sum of (i) Consigned Precious Metal plus (ii) Borrower's Precious Metal. The
amounts of Consigned Precious Metal and of Borrower's Precious Metal shall be
determined by the Agents by reference to the most recent Consigned Precious
Metal Report delivered on a timely basis to the Administrative Agent in
accordance with Section 8.4(f).
5.3 Requests for Loans.
(a) The Borrower shall give to the Administrative Agent
written notice in the form of Exhibit J hereto (or telephonic notice confirmed
in a writing in the form of Exhibit J hereto) of each Loan requested hereunder
(a "Loan Request") no later than (i) (1) Business Day prior to the proposed
Drawdown Date of any Base Rate Loan and (ii) three (3) LIBOR Business Days prior
to the proposed Drawdown Date of any LIBOR Loan. Each such notice shall specify
(A) the principal amount of the Loan requested, (B) the proposed Drawdown Date
of such Loan, (C) the Interest Period for such Loan, and (D) the Type of such
Loan. Promptly upon receipt of any such notice, the Administrative Agent shall
notify each of the Banks thereof. Each Loan Request shall be irrevocable and
binding on the Borrower and shall obligate the Borrower to accept the Loan
requested from the Banks on the proposed Drawdown Date. Each Loan Request for a
Base Rate Loan shall be in a minimum aggregate amount of $250,000.00 or an
integral multiple thereof, and each Loan Request for a LIBOR Loan shall be in a
minimum aggregate amount of $250,000.00 or an integral multiple of $50,000.00 in
excess thereof.
(b) Notwithstanding the notice and minimum amount
requirements set forth in Section 5.3(a) but otherwise in accordance with the
terms and conditions of this Credit Agreement, the Administrative Agent may, in
its sole discretion and without conferring with the Banks, make Revolving Credit
Loans to the Borrower (i) by entry of credits to the Borrower's operating
account(s) (the "Operating Accounts") of Borrower maintained with the
Administrative Agent to cover checks or other charges which the Borrower has
drawn or made against such account, (ii) in payment of any other amounts due and
payable by the Borrower hereunder, including, without limitation, any amounts
owed in connection with the purchase of Consigned Precious Metal pursuant to
Section 4.4(a) (the Borrower hereby consenting to the automatic making of such
Loans by the Administrative Agent in payment of any such amounts), or (iii) in
an amount as otherwise requested by the Borrower. The Borrower hereby requests
and authorizes the Administrative Agent to make from time to time such Revolving
Credit Loans by means of appropriate entries of such credits sufficient to cover
checks and other charges then presented. The Borrower acknowledges and agrees
that the making of such Loans shall, in each case, be
34
subject in all respects to the provisions of this Credit Agreement as if they
were Loans covered by a Loan Request including, without limitation, the
limitations set forth in Section 2.1 and the requirements that the applicable
provisions of Section 13 (in the case of Loans made on the Closing Date) and
Section 12 be satisfied. All actions taken by the Administrative Agent pursuant
to the provisions of this Section 5.3(b) shall be conclusive and binding on the
Borrower absent such Agent's gross negligence or willful misconduct. Loans made
pursuant to this Section 5.3(b) shall be Base Rate Loans until converted in
accordance with the provisions of the Credit Agreement and, prior to a
Settlement, such interest shall be for the account of the Administrative Agent.
5.4 Conversion Options.
5.4.1 Conversion to Different Type of Loan. The Borrower
may elect from time to time to convert any outstanding Loan to a Loan of another
Type, provided that (a) with respect to any such conversion of a Loan to a Base
Rate Loan, the Borrower shall give the Administrative Agent at least one (1)
Business Day's prior written notice of such election; (b) with respect to any
such conversion of a Base Rate Loan to a LIBOR Loan, the Borrower shall give the
Administrative Agent at least three (3) LIBOR Business Days' prior written
notice of such election; (c) with respect to any such conversion of a LIBOR Loan
into a Base Rate Loan, such conversion shall only be made on the last day of the
Interest Period with respect thereto, and (d) no Loan may be converted into a
LIBOR Loan when any Default or Event of Default has occurred and is continuing.
On the date on which such conversion is being made each Bank shall take such
action, if any, as is necessary to transfer its Commitment Percentage of such
Loans to its Domestic Lending Office or its LIBOR Lending Office, as the case
may be. All or any part of outstanding Loans of any Type may be converted into a
Loan of another Type as provided herein, provided that (y) any partial
conversion of any Loan to a Base Rate Loan shall be in an aggregate principal
amount of $50,000.00 or an integral multiple thereof and (z) any partial
conversion of any Loan to a LIBOR Loan shall be in an aggregate principal amount
of $250,000.00 or a whole multiple of $50,000.00 in excess thereof. Each
Conversion Request relating to the conversion of a Loan to a LIBOR Loan shall be
irrevocable by the Borrower.
5.4.2 Continuation of Type of Loan. Any Loan of any Type
may be continued as a Loan of the same Type upon the expiration of an Interest
Period with respect thereto by compliance by the Borrower with the notice
provisions contained in Section 5.4.1; provided that no LIBOR Loan may be
continued as such when any Default or Event of Default has occurred and is
continuing, but shall be automatically converted to a Base Rate Loan on the last
day of the first Interest Period relating thereto ending during the continuance
of any Default or Event of Default of which officers of the Administrative Agent
active upon the Borrower's account have actual knowledge. In the event that the
Borrower fails to provide any such notice with respect to the continuation of
any LIBOR Loan as such, then such LIBOR Loan shall be automatically converted to
a Base Rate Loan on the last day of the first Interest Period relating thereto.
The Administrative Agent shall notify the Banks promptly when any such automatic
conversion contemplated by this Section 5.4.2 is scheduled to occur.
5.4.3 LIBOR Loans. Any conversion to or from LIBOR Loans
shall be in such amounts and be made pursuant to such elections so that, after
giving effect thereto, the aggregate principal amount of all LIBOR Loans having
the same Interest Period shall not be less than
35
$250,000.00 or a whole multiple of $50,000.00 in excess thereof. At no time
shall there be more than five (5) LIBOR Loans outstanding.
5.5 Funds for Loans.
5.5.1 Funding Procedures. Not later than 11:00 a.m.
(Chicago time) on the proposed Drawdown Date of any Loans, each of the Banks
will make available to the Administrative Agent, at its Head Office, in
immediately available funds, the amount of such Bank's Commitment Percentage of
the amount of the requested Loans. Upon receipt from each Bank of such amount,
and upon receipt of the documents required by Sections 11 and 12 and the
satisfaction of the other conditions set forth therein, to the extent
applicable, the Administrative Agent will make available to the Borrower the
aggregate amount of such Loans made available to the Administrative Agent by the
Banks. The failure or refusal of any Bank to make available to the
Administrative Agent at the aforesaid time and place on any Drawdown Date the
amount of its Commitment Percentage of the requested Loans shall not relieve any
other Bank from its several obligation hereunder to make available to the
Administrative Agent the amount of such other Bank's Commitment Percentage of
any requested Loans.
5.5.2 Advances by Applicable Agent. The Administrative
Agent may, unless notified to the contrary by any Bank prior to a Drawdown Date
of any Loans, assume that such Bank has made available to the Administrative
Agent on such Drawdown Date the amount of such Bank's Commitment Percentage of
the Loans to be made on such Drawdown Date, and the Administrative Agent may
(but it shall not be required to), in reliance upon such assumption, make
available to the Borrower a corresponding amount. If any Bank makes available to
the Administrative Agent such amount on a date after such Drawdown Date, such
Bank shall pay to the Administrative Agent on demand an amount equal to the
product of (i) the average computed for the period referred to in clause (iii)
below, of the weighted average interest rate paid by the Administrative Agent
for federal funds acquired by the Administrative Agent during each day included
in such period, times (ii) the amount of such Bank's Commitment Percentage of
such Loans, times (iii) a fraction, the numerator of which is the number of days
that elapse from and including such Drawdown Date to the date on which the
amount of such Bank's Commitment Percentage of such Loans shall become
immediately available to the Administrative Agent, and the denominator of which
is 365. A statement of the Administrative Agent submitted to such Bank with
respect to any amounts owing under this paragraph shall be prima facie evidence
of the amount due and owing to the Administrative Agent by such Bank. If the
amount of such Bank's Commitment Percentage of such Loans is not made available
to the Administrative Agent by such Bank within three (3) Business Days
following such Drawdown Date, the Administrative Agent shall be entitled to
recover such amount from the Borrower on demand, with interest thereon at the
rate per annum applicable to the Loans made on such Drawdown Date.
5.6 Settlements; Failure to Make Funds Available.
(a) On each Settlement Date, the Administrative Agent
shall, not later than 11:00 a.m. (Chicago time), give telephonic or facsimile
notice (i) to the Banks and the Borrower of the respective outstanding amount of
Loans made by the Administrative Agent on behalf of the Banks from the
immediately preceding Settlement Date through the close of business on the
36
prior day and the amount of any LIBOR Loans to be made (following the giving of
notice pursuant to Section 5.3(a)(ii)) on such date pursuant to a Loan Request
and (ii) to the Banks of the amount (a "Settlement Amount") that each Bank (the
"Settling Bank") shall pay to effect a Settlement of any Loan. A statement of
the Administrative Agent submitted to the Banks and the Borrower or to the Banks
with respect to any amounts owing under this Section 5.6 shall be prima facie
evidence of the amount due and owing. The Settling Bank shall, not later than
2:00 p.m. (Chicago time) on such Settlement Date, effect a wire transfer of
immediately available funds to the Administrative Agent in the amount of the
Settlement Amount. All funds advanced by any Bank as a Settling Bank pursuant to
this Section 5.6 shall for all purposes be treated as a Loan made by such
Settling Bank to the Borrower and all funds received by any Bank pursuant to
this Section 5.6 shall for all purposes be treated as repayment of amounts owed
with respect to Loans made by such Bank. In the event that any bankruptcy,
reorganization, liquidation, receivership or similar cases or proceedings in
which the Borrower is a debtor prevent a Settling Bank from making any Loan to
effect a Settlement as contemplated hereby, such Settling Bank will make such
disposition and arrangements with the other Banks with respect to such Loans,
either by way of purchase of participations, distribution, pro tanto assignment
of claims, subrogation or otherwise as shall result in each Bank's share of the
outstanding Revolving Credit Loans being equal, as nearly as may be, to such
Bank's Commitment Percentage of the outstanding amount of the Revolving Credit
Loans.
(b) The Administrative Agent may, unless notified to the
contrary by any Bank prior to a Settlement Date, assume that such Bank has made
or will make available to the Administrative Agent on such Settlement Date the
amount of such Bank's Settlement Amount, and the Administrative Agent may (but
it shall not be required to), in reliance upon such assumption, make available
to the Borrower a corresponding amount. If any Bank makes available to the
Administrative Agent such amount on a date after such Settlement Date, such Bank
shall pay to the Administrative Agent on demand an amount equal to the product
of (i) the average computed for the period referred to in clause (iii) below, of
the weighted average interest rate paid by the Administrative Agent for federal
funds acquired by such Administrative Agent during each day included in such
period, times (ii) the amount of such Settlement Amount, times (iii) a fraction,
the numerator of which is the number of days that elapse from and including such
Settlement Date to the date on which the amount of such Settlement Amount shall
become immediately available to such Administrative Agent, and the denominator
of which is 360. A statement of the Administrative Agent submitted to such Bank
with respect to any amounts owing under this paragraph shall be prima facie
evidence of the amount due and owing to the Administrative Agent by such Bank.
If such Bank's Settlement Amount is not made available to the Administrative
Agent by such Bank within three (3) Business Days following such Settlement
Date, the Administrative Agent shall be entitled to recover such amount from the
Borrower on demand, with interest thereon at the rate per annum applicable to
the Revolving Credit Loans as of such Settlement Date.
(c) The failure or refusal of any Bank to make available
to the Administrative Agent at the aforesaid time and place on any Settlement
Date the amount of its Settlement Amount (i) shall not relieve any other Bank
from its several obligations hereunder to make available to the Administrative
Agent the amount of such other Bank's Settlement Amount and (ii) shall not
impose upon such other Bank any liability with respect to such failure or
refusal or otherwise increase the Commitment of such other Bank.
37
5.7 Optional Repayments of Loans.
(a) The Borrower shall have the right, at its election,
to repay the outstanding amount of any Loan, as a whole or in part, at any time
without penalty or premium, provided that any full or partial prepayment of the
outstanding amount of any LIBOR Loans pursuant to this Section 5.7 may be made
only on the last day of the Interest Period relating thereto. The Borrower shall
give the Administrative Agent, no later than 10:00 a.m., New York, New York
time, at least three (3) Business Days prior written notice of any proposed
prepayment pursuant to this Section 5.7 of Base Rate Loans, and four (4) LIBOR
Business Days notice of any proposed prepayment pursuant to this Section 5.7 of
LIBOR Loans, in each case specifying the proposed date of prepayment of Loans,
the nature of the Loan as a Revolving Credit Loan and the principal amount to be
prepaid. Each such partial prepayment of the Loans shall be in a minimum amount
of $500,000.00 or an integral multiple of $100,000.00 in excess thereof, shall
be accompanied by the payment of accrued interest on the principal prepaid to
the date of prepayment and shall be applied, in the absence of instruction by
the Borrower, first to the principal of Base Rate Loans and then to the
principal of LIBOR Loans. Each partial prepayment of Loans shall be allocated
among the Banks, in proportion, as nearly as practicable, to the respective
unpaid principal amount of each Bank's Notes, with adjustments to the extent
practicable to equalize any prior repayments not exactly in proportion.
(b) Notwithstanding the notice and minimum amount
requirements set forth in Section 5.7(a) but otherwise in accordance with the
terms and conditions of this Credit Agreement, the Administrative Agent may, in
its sole discretion at the Borrower's request, apply amounts held in any deposit
account maintained by Borrower with Administrative Agent in payment of any Loans
made to the Borrower by the Administrative Agent pursuant to Section 5.3(b)
hereof, subject to the procedures for Settlement set forth in Section 5.6.
5.8 Mandatory Prepayments of Loans and Commitment Reductions.
5.8.1 Asset Disposition Prepayment. The Borrower shall pay
to the Administrative Agent, for the accounts of the Banks (each, an "Asset
Disposition Prepayment"), within thirty (30) days after the completion by the
Borrower of any asset dispositions pursuant to Section 9.5.2(d), an amount equal
to one hundred percent (100%) of the Net Proceeds received by the Borrower in
connection with such asset disposition solely to the extent that the aggregate
amount of Net Proceeds received by the Borrower shall exceed, for all such asset
dispositions undertaken pursuant to Section 9.5.2(d) during any fiscal year of
the Borrower, $250,000.
5.8.2 New Issuance Prepayment. The Borrower shall pay to
the Agent, for the accounts of the Banks (each, a "New Issuance Prepayment"),
within ten (10) days after the completion by the Borrower of any issuance of (i)
Indebtedness permitted pursuant to Section 9.1(i) hereof or (ii) equity
securities of the Borrower or any of its Subsidiaries, including, without
limitation, any issuance of warrants, options or subscription rights (other than
issuances of common stock to employees of the Borrower), permitted pursuant to
Section 9.13 hereof, an amount equal to fifty percent 50% of the Net Proceeds
received by the Borrower in connection with any such issuance.
38
5.8.3 Applications of Mandatory Prepayments. Each Asset
Disposition Prepayment or New Issuance Prepayment (collectively, "Mandatory
Prepayments") received by the Administrative Agent shall be applied to the
Obligations as follows:
(i) first, to pay all amounts then due and
payable under this Credit Agreement;
(ii) second, to prepay the Revolving Credit Loans
which are Base Rate Loans, plus all accrued and unpaid interest
thereon;
(iii) third, to prepay the Revolving Credit Loans
which are LIBOR Loans, plus all accrued and unpaid interest thereon;
(iv) fourth, to repurchase Consigned Precious
Metal for application to Consignment Base Rate Amounts, plus all
accrued and unpaid Consignment Fees thereon;
(v) fifth, to repurchase Consigned Precious
Metal for application to Consignment Fixed Rate Amounts, plus all
accrued and unpaid Consignment Fees thereon;
(vi) sixth, to cash collateralize all
Reimbursement Obligations;
(vii) seventh, to prepay all other Obligations due
and owing to the Banks; and
(viii) eighth, to the Borrower's Operating
Accounts.
5.9 Repayments of Loans and Repurchases of Consigned Precious
Metals Prior to Event of Default.
(a) Prior to the occurrence of an Event of Default, (i)
all funds and cash proceeds in the form of money, checks and like items received
in the Concentration Accounts as contemplated by Section 8.14 shall be credited,
on the same Business Day on which the Administrative Agent determines that good
collected funds have been received, and, prior to the receipt of good collected
funds, on a provisional basis until final receipt of good collected funds, to
the Obligations or to the Operating Accounts as contemplated by Section 5.9(c),
(ii) all funds and cash proceeds in the form of a wire transfer received in the
Concentration Accounts as contemplated by Section 8.14 shall be credited on the
same Business Day as the Administrative Agent's receipt of such amounts (or on
such later date as the Administrative Agent determines that good collected funds
have been received), to the Obligations or to the Operating Accounts as
contemplated by Section 5.9(c), and (iii) all funds and cash proceeds in the
form of an automated clearing house transfer received in the Concentration
Accounts as contemplated by Section 8.14 shall be credited on the next Business
Day following the Administrative Agent's receipt of such amounts (or on such
later date as the Administrative Agent determines that good collected funds have
been received), to the Obligations or to the Operating Accounts as contemplated
by Section 5.9(c). For purposes of the foregoing provisions of this Section
5.9(a), the Administrative Agent shall not be deemed to have received any such
cash proceeds on any day unless received by the Administrative Agent before
39
12:00 p.m. (Chicago time) on such day. The Borrower further acknowledges and
agrees that any such provisional credit or credit in respect of wire transfers
shall be subject to reversal if final collection in good funds of the related
item is not received by the Administrative Agent in accordance with the
Administrative Agent's customary procedures and practices for collecting
provisional or wire transfer items.
(b) If at any time (i) the Outstanding Facility Amounts
exceed the Borrowing Base or (ii) the Fair Market Value of Consigned Precious
Metal exceeds the Consignment Advance Rate Percentage multiplied by the Fair
Market Value of the sum of (A) Consigned Precious Metal plus (B) Borrower's
Precious Metal, the Borrower shall immediately pay the amount of such excess to
the Agents for the respective accounts of the Banks for application prior to the
occurrence of an Event of Default in accordance with Section 5.9(c)(i) and (ii),
respectively.
(c) Prior to the occurrence of an Event of Default, (i)
all funds transferred to the Concentration Accounts and any amounts required to
be repaid pursuant to Section 5.9(b)(i) shall be applied to the Obligations as
follows:
(A) first, to pay amounts then due and
payable under this Credit Agreement;
(B) second, to reduce Revolving Credit
Loans which are Base Rate Loans;
(C) third, to reduce Revolving Credit
Loans which are LIBOR Loans;
(D) fourth, to repurchase Consigned
Precious Metal for application to Consignment Base Rate
Amounts, plus all accrued and unpaid Consignment Fees thereon;
(E) fifth, to repurchase Consigned
Precious Metal for application to Consignment Fixed Rate
Amounts, plus all accrued and unpaid Consignment Fees thereon;
(F) sixth, but only in the case of a
required repayment pursuant to Section 5.9(b)(i), to cash
collateralize all Reimbursement Obligations;
(G) seventh, to all other Obligations
due and owing to the Banks; and
(H) eighth, to the Borrower's Operating
Accounts; and
(ii) any amounts required to be repaid pursuant
to Section 5.9(b)(ii) shall be applied to the Obligations as follows:
(A) first, to repurchase Consigned
Precious Metal for application to Consignment Base Rate
Amounts, plus all accrued and unpaid Consignment Fees thereon;
40
(B) second, to repurchase Consigned
Precious Metal for application to Consignment Fixed Rate
Amounts, plus all accrued and unpaid Consignment Fees thereon;
and
(C) third, to the Borrower's Operating
Accounts.
All prepayments of LIBOR Loans or Consignment Fixed Rate Amounts prior
to the end of an Interest Period shall obligate the Borrower to pay any
breakage costs associated with such LIBOR Loans or Consignment Fixed
Rate Amounts in accordance with Section 5.20 hereof. Prior to the
occurrence of an Event of Default, the Borrower may elect to avoid such
breakage costs by providing to the Administrative Agent cash in an
amount sufficient to cash collateralize such LIBOR Loans or Consignment
Fixed Rate Amounts, but in no event shall the Borrower be deemed to
have paid such LIBOR Loans or Consignment Fixed Rate Amounts until such
cash has been paid to the Administrative Agent for application to such
LIBOR Loans or Consignment Fixed Rate Amounts. The Administrative Agent
may elect to cause such cash collateral to be deposited into either (A)
a cash collateral account pursuant to the terms of a Cash Collateral
Agreement entered into by the Borrower and the Administrative Agent, in
form and substance acceptable to Administrative Agent, at the time of
such deposit and such other documents or filings at the time requested
by the Collateral Agent in connection with such deposit or (B) the
Borrower's Operating Accounts. All prepayments of the Loans pursuant to
this Section 5.9(c) shall be allocated among the Banks making such
Loans, in proportion, as nearly as practicable, to the respective
unpaid principal amount of such Loans outstanding, with adjustments to
the extent practicable to equalize any prior payments or repayments not
exactly in proportion.
5.10 Repayments of Loans and Repurchases of Consigned Precious
Metals and Distribution of Collateral Proceeds After Event of Default. In the
event that following the occurrence and during the continuance of an Event of
Default, the Collateral Agent, any other Agent or any Bank, as the case may be,
receives any monies, whether pursuant to Section 4.4(c), Section 8.14 or Section
13.4 or otherwise with respect to the realization upon any of the Collateral,
such monies shall be distributed for application as follows (the Borrower hereby
authorizing and consenting to such application):
(a) First, to the payment of, or (as the case may be) the
reimbursement of the Agents for or in respect of all reasonable costs, expenses,
disbursements and losses which shall have been incurred or sustained by the
Agents in connection with the collection of such monies by the Agents, for the
exercise, protection or enforcement by the Collateral Agent of all or any of the
rights, remedies, powers and privileges of the Collateral Agent, for the benefit
of the Agents and the Banks, under this Credit Agreement or any of the other
Loan Documents or in respect of the Collateral or in support of any provision of
adequate indemnity to the Agents against any taxes or liens which by law shall
have, or may have, priority over the rights of the Agents to such monies;
(b) Second, to repay the Revolving Credit Loans which are
Base Rate Loans, plus all accrued and unpaid interest thereon;
41
(c) Third, to repay the Revolving Credit Loans which are
LIBOR Loans, plus all accrued and unpaid interest thereon;
(d) Fourth, to repurchase Consigned Precious Metal for
application to Consignment Base Rate Amounts, plus all accrued and unpaid
Consignment Fees thereon;
(e) Fifth, to repurchase Consigned Precious Metal for
application to Consignment Fixed Rate Amounts, plus all accrued and unpaid
Consignment Fees thereon;
(f) Sixth, to cash collateralize all Reimbursement
Obligations;
(g) Seventh, to repay all other Obligations owing to the
Agents and the Banks; and
(h) Eighth, upon payment and satisfaction in full or
other provisions for payment in full satisfactory to each of the Banks and the
Agents of all of the Obligations, to the payment of any unpaid obligations
required to be paid pursuant to Section 9-615(a) of the Uniform Commercial Code
of the State of Illinois; and
(i) Ninth, the excess, if any, shall be returned to the
Borrower or to such other Persons as are entitled thereto.
All distributions in respect of (i) such Obligations shall be made pari
passu among Obligations with respect to the Agents' fees payable pursuant to
Section 5.12, and all other Obligations and (ii) Obligations owing to the Banks
with respect to each type of Obligation such as interest, principal, fees and
expenses, shall be made among the Banks pro rata, in accordance with their
respective Commitment Percentages; and provided, further, that the Agents may in
their discretion make proper allowance to take into account any Obligations not
then due and payable.
5.11 Arrangement Fee; Agency Fee. The Borrower agrees to pay to the
Administrative Agent and the Syndication Agent an arrangement fee and an annual
agency fee according to the terms of a separate fee letter entered into on or
prior to the Closing Date among the Borrower, the Administrative Agent and the
Syndication Agent.
5.12 Upfront Fee. The Borrower shall pay to the Administrative
Agent, for the benefit of the Banks, an upfront fee in the amount of the product
of one-half of one percent (0.50%) times the Total Revolving Commitment.
5.13 Funds for Payments.
5.13.1 Payments to Administrative Agent. Each Redelivery and
all payments of principal, interest, Reimbursement Obligations, commitment fees,
Letter of Credit Fees, Consignment Fees and any other amounts due hereunder or
under any of the other Loan Documents shall be made to the Administrative Agent,
for the respective accounts of the Banks and the Administrative Agent, at the
Administrative Agent's Head Office or at such other location in the Chicago,
Illinois, area that the Administrative Agent may from time to time designate, in
each case in immediately available funds in Dollars.
42
5.13.2 No Offset, etc. All payments by the Borrower
hereunder and under any of the other Loan Documents shall be made without setoff
or counterclaim and free and clear of and without deduction for any taxes,
levies, imposts, duties, charges, fees, deductions, withholdings, compulsory
loans, restrictions or conditions of any nature now or hereafter imposed or
levied by any jurisdiction or any political subdivision thereof or taxing or
other authority therein unless the Borrower is compelled by law to make such
deduction or withholding. If any such obligation is imposed upon the Borrower
with respect to any amount payable by it hereunder or under any of the other
Loan Documents, the Borrower will pay to the Administrative Agent, for the
account of the Banks or (as the case may be) the Agents, on the date on which
such amount is due and payable hereunder or under such other Loan Document, such
additional amount in Dollars as shall be necessary to enable the Banks or the
Agents to receive the same net amount which the Banks or the Agents would have
received on such due date had no such obligation been imposed upon the Borrower.
The Borrower will deliver promptly to the Agents certificates or other valid
vouchers for all taxes or other charges deducted from or paid with respect to
payments made by the Borrower hereunder or under such other Loan Document.
5.14 Computations. All computations of interest on the Loans and of
commitment fees, Letter of Credit Fees, Consignment Fees or other fees shall,
unless otherwise expressly provided herein, be based on a 360-day year and paid
for the actual number of days elapsed; provided that computations of interest on
Base Rate Loans shall be calculated for actual days elapsed on the basis of a
365/366-day year. Except as otherwise provided in the definition of the term
"Interest Period" with respect to LIBOR Loans and Consignment Fixed Rate
Amounts, whenever a payment hereunder or under any of the other Loan Documents
becomes due on a day that is not a Business Day, the due date for such payment
shall be extended to the next succeeding Business Day, and interest shall accrue
during such extension. The outstanding amount of the Loans and Consigned
Precious Metal as reflected on the Revolving Credit Note Records and the other
records maintained by the Agents and each Bank from time to time shall be
considered correct and binding on the Borrower unless within five (5) Business
Days after receipt of any notice by any of the Agents or the Banks of such
outstanding amount, such Agent or such Bank shall notify the Borrower to the
contrary.
5.15 Inability to Determine LIBOR Rate or Consignment Fixed Rate.
In the event, prior to the commencement of any Interest Period relating to any
LIBOR Loan or Consignment Fixed Rate Amount, the Administrative Agent or Gold
Fronting Bank shall determine in good faith that adequate and reasonable methods
do not exist for ascertaining (a) the LIBOR Rate that would otherwise determine
the rate of interest to be applicable to any LIBOR Loan during any Interest
Period or (b) the LIBOR Rate or the rate that would otherwise determine the rate
of interest to be applicable to any Consignment Fixed Rate Amount during any
Interest Period, the Administrative Agent or Gold Fronting Bank shall forthwith
give notice of such determination and the basis therefor (which shall be
conclusive and binding on the Borrower and the Banks) to the Borrower and the
Banks. In such event (x) any Loan Request or Conversion Request with respect to
LIBOR Loans or Purchase and Consignment Request with respect to Consignment
Fixed Rate Amounts shall be automatically withdrawn and, shall be deemed a
request for Base Rate Loans or Consignment Base Rate Amounts, as applicable, (y)
each LIBOR Loan or Consignment Fixed Rate Amount, as applicable, will
automatically, on the last day of the then current Interest Period relating
thereto, become a Base Rate Loan or Consignment Base Rate Amount, as applicable
and (z) the obligations of the Banks to make LIBOR Loans or
43
Consignment Fixed Rate Amounts shall be suspended until the Administrative Agent
or Gold Fronting Bank determines that the circumstances giving rise to such
suspension no longer exist, whereupon the Administrative Agent or Gold Fronting
Bank shall so notify the Borrower and the Banks.
5.16 Illegality of LIBOR Loans or Consignment Fixed Rate Amounts.
(a) Notwithstanding any other provisions herein, if any
present or future law, regulation, treaty or directive or in the interpretation
or application thereof shall make it unlawful for any Bank to make or maintain
LIBOR Loans, such Bank shall forthwith give notice of such circumstances to the
Borrower and the other Banks and thereupon (i) the commitment of such Bank to
make LIBOR Loans or convert Loans of another Type to LIBOR Loans shall forthwith
be suspended and (ii) such Bank's Loans then outstanding as LIBOR Loans, if any,
shall be converted automatically to Base Rate Loans on the last day of each
Interest Period applicable to such LIBOR Loans or within such earlier period as
may be required by law. The Borrower hereby agrees promptly to pay the
Administrative Agent, for the account of such Bank, upon demand by such Bank,
any additional amounts necessary to compensate such Bank for any reasonable
costs incurred by such Bank in making any conversion in accordance with this
Section 6.15, including any interest or fees payable by such Bank to lenders of
funds obtained by it in order to make or maintain its LIBOR Loans hereunder.
(b) Notwithstanding any other provisions herein, if any
present or future law, regulation, treaty or directive or in the interpretation
or application thereof shall make it unlawful for any Bank to make or maintain
Consignment Fixed Rate Amounts, such Bank shall forthwith give notice of such
circumstances to the Borrower and the other Banks and thereupon (i) the
commitment of such Bank to make Consignment Fixed Rate Amounts or convert
Consigned Precious Metal into Consignment Fixed Rate Amounts shall forthwith be
suspended, and (ii) such Bank's Consigned Precious Metal then outstanding as
Consignment Fixed Rate Amounts, if any, shall be converted automatically to
Consignment Base Rate Amounts on the last day of each Interest Period applicable
to such Consignment Fixed Rate Amounts or within such earlier period as may be
required by law. The Borrower hereby agrees promptly to pay the Administrative
Agent, for the account of such Bank, upon demand by such Bank, any additional
amounts necessary to compensate such Bank for any reasonable costs incurred by
such Bank in making any conversion in accordance with this Section 5.16,
including any interest or fees payable by such Bank to lenders of funds obtained
by it in order to make or maintain its Consignment Fixed Rate Amounts hereunder.
5.17 Additional Costs, etc. If any present or future applicable
law, which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to any Bank or Agent by any central bank or other fiscal,
monetary or other authority (whether or not having the force of law), shall:
(a) subject any Bank or Agent to any tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature with respect to this
Credit Agreement, the other Loan
44
Documents, any Letters of Credit, such Bank's Commitment, the Purchases and
Consignments or the Loans (other than taxes based upon or measured by the income
or profits of such Bank or Agent), or
(b) materially change the basis of taxation (except for
changes in taxes on income or profits) of payments to any Bank of the principal
of or the interest on any Loans or any other amounts payable to any Bank or
Agent under this Credit Agreement or any of the other Loan Documents, or
(c) impose or increase or render applicable (other than
to the extent specifically provided for elsewhere in this Credit Agreement) any
special deposit, reserve, assessment, liquidity, capital adequacy or other
similar requirements (whether or not having the force of law) against assets
held by, or deposits in or for the account of, or loans by, or letters of credit
issued by, or commitments of an office of any Bank, or
(d) impose on any Bank or Agent any other conditions or
requirements with respect to this Credit Agreement, the other Loan Documents,
any Letters of Credit, the Loans, the Purchases and Consignments, such Bank's
Commitment, or any class of loans, letters of credit or commitments of which any
of the Loans, Purchases and Consignments or such Bank's Commitment forms a part,
and the result of any of the foregoing is
(i) to increase the cost to any Bank of making,
funding, issuing, renewing, extending or maintaining any of the Loans,
any Purchase and Consignment or such Bank's Commitment or any Letter of
Credit, or
(ii) to reduce the amount of principal, interest,
Reimbursement Obligation or other amount payable to such Bank or Agent
hereunder on account of such Bank's Commitment, any Letter of Credit,
any Purchase and Consignment or any of the Loans, or
(iii) to require such Bank or Agent to make any
payment or to forego any interest or Reimbursement Obligation or other
sum payable hereunder, the amount of which payment or foregone interest
or Reimbursement Obligation or other sum is calculated by reference to
the gross amount of any sum receivable or deemed received by such Bank
or Agent from the Borrower hereunder,
then, and in each such case, the Borrower will, upon demand made by such Bank or
(as the case may be) such Agent at any time and from time to time and as often
as the occasion therefor may arise, pay to such Bank or such Agent such
additional amounts as will be sufficient to compensate such Bank or such Agent
for such additional cost, reduction, payment or foregone interest or
Reimbursement Obligation or other sum.
5.18 Capital Adequacy. If after the date hereof any Bank or the
Administrative Agent or Gold Fronting Bank determines that (a) the adoption of
or change in any law, governmental rule, regulation, policy, guideline or
directive (whether or not having the force of law) regarding capital
requirements for banks or bank holding companies or any change in the
interpretation or application thereof by a court or governmental authority with
appropriate jurisdiction, or (b) compliance by such Bank or such Agent or any
corporation controlling such Bank or such
45
Agent with any law, governmental rule, regulation, policy, guideline or
directive (whether or not having the force of law) of any such entity regarding
capital adequacy, has the effect of reducing the return on such Bank's or such
Agent's commitment with respect to any Loans or any Purchases and Consignments
to a level below that which such Bank or such Agent could have achieved but for
such adoption, change or compliance (taking into consideration such Bank's or
such Agent's then existing policies with respect to capital adequacy and
assuming full utilization of such entity's capital) by any amount deemed by such
Bank or (as the case may be) such Agent to be material, then such Bank or such
Agent may notify the Borrower of such fact. To the extent that the amount of
such reduction in the return on capital is not reflected in the Base Rate or the
amount of Consignment Fees, as applicable, the Borrower agrees to pay such Bank
or (as the case may be) such Agent for the amount of such reduction in the
return on capital as and when such reduction is determined upon presentation by
such Bank or (as the case may be) such Agent of a certificate in accordance with
Section 5.19 hereof. Each Bank shall allocate such cost increases among its
customers in good faith and on an equitable basis.
5.19 Certificate. A certificate setting forth any additional
amounts payable pursuant to Sections 5.17 or 5.18 and a brief explanation of
such amounts which are due, submitted by any Bank or Agent to the Borrower,
shall be conclusive, absent manifest error, that such amounts are due and owing.
5.20 Indemnity. The Borrower agrees to indemnify each Bank and to
hold each Bank harmless from and against any loss, cost or expense (including
loss of anticipated profits) that such Bank may sustain or incur as a
consequence of (i) default by the Borrower in payment of the principal amount of
or any interest on any LIBOR Loans as and when due and payable, including any
such loss or expense arising from interest or fees payable by such Bank to
lenders of funds obtained by it in order to maintain its LIBOR Loans, (ii)
default by the Borrower in making a borrowing or conversion after the Borrower
has given (or is deemed to have given) a Loan Request or Conversion Request
relating thereto in accordance with Sections 2.6, 5.3 or 5.4, (iii) the making
of any payment of a LIBOR Loan or the making of any conversion of any such Loan
to a Base Rate Loan on a day that is not the last day of the applicable Interest
Period with respect thereto, including interest or fees payable by such Bank to
lenders of funds obtained by it in order to maintain any such Loans; (iv)
default by the Borrower in making a Purchase and Consignment, including a
Purchase and Consignment as a Consignment Fixed Rate Amount, or a conversion
after the Borrower has given (or is deemed to have given) a Purchase and
Consignment Request or a conversion request relating thereto in accordance with
Section 4.3 or Section 4.5 or (v) the making of any payment of a Consignment
Fixed Rate Amount or the making of any conversion of any such Consignment Fixed
Rate Amount to a Consignment Base Rate Amount on a day that is not the last day
of the applicable Interest Period with respect thereto, including interest or
fees payable by such Bank to lenders of funds obtained by it in order to
maintain any such Purchases and Consignments.
5.21 Interest After Default. During the continuance of a Default or
an Event of Default, (a) the principal of the Loans, whether or not due, the
Fair Market Value of Consigned Precious Metal, whether or not due to be
purchased or Redelivered by the Borrower in accordance with the requirements of
Section 4.4, and (to the extent permitted by applicable law) interest on the
Loans and Consignment Fees shall bear interest, compounded monthly and payable
on demand, at a rate per annum equal to two percent (2%) above the rate of
interest or, as the case
46
may be, Consignment Fee rate otherwise applicable thereto pursuant to Section
5.1 or, as the case may be, Section 4.2 until such amounts have been paid in
full (after as well as before judgment), and (b) all other amounts payable
hereunder or under any of the other Loan Documents shall bear interest at a rate
per annum equal to two percent (2%) above the Base Rate until such amounts shall
be paid in full (after as well as before judgment).
5.22 Performance Adjustments. Based upon, and following receipt by
the Banks of (a) (i) with respect to the first three fiscal quarters of each
fiscal year, the Borrower's quarterly unaudited consolidated financial
statements pursuant to Section 8.4(b) and (ii) with respect to the last fiscal
quarter of each fiscal year, the Borrowers' annual audited consolidated
financial statements pursuant to Section 8.4(a), and (b) a certificate of the
chief financial officer of the Borrower setting forth calculations of the
financial information set forth below, (the Borrower also hereby agreeing to
provide to the Administrative Agent, simultaneously with the delivery of such
certificate, telephonic notice of any Performance Adjustments based upon such
calculations), the LIBOR Applicable Margin, the Commitment Fee Rate and the
Standby Letter of Credit Fee Rate shall be subject to possible adjustment in
accordance with the provisions of this paragraph (each such adjustment, a
"Performance Adjustment"). Performance Adjustments shall be effective (the date
of the effectiveness of any Performance Adjustment, a "Performance Adjustment
Date") with respect to adjustments to the LIBOR Applicable Margin, the
Commitment Fee Rate and the Standby Letter of Credit Fee Rate, three (3)
Business Days following receipt by the Administrative Agent of (y) (i) with
respect to the first three fiscal quarters of each fiscal year, the Borrower's
quarterly unaudited consolidated financial statements pursuant to Section 8.4(b)
and (ii) with respect to the last fiscal quarter of each fiscal year, the
Borrower's annual audited consolidated financial statements pursuant to Section
8.4(a), and (z) a certificate of the chief financial officer of the Borrower
setting forth calculations of the financial information set forth below (the
Borrower also hereby agreeing to provide to the Administrative Agent,
simultaneously with the delivery of such certificate, telephonic notice of any
Performance Adjustments based upon such calculations). The LIBOR Applicable
Margin, the Commitment Fee Rate, and the Standby Letter of Credit Fee Rate with
respect to any period following any Performance Adjustment Date until the next
succeeding Performance Adjustment Date shall be as set forth in the table below
on the line furthest down in such table with respect to which the Borrower's
ratio of (A) Consolidated Total Funded Debt during the period of four
consecutive fiscal quarters most recently ended prior to such possible
Performance Adjustment Date to (B) Consolidated EBITDA for such period, shall be
less than the ratio set forth on such line in such table:
LIBOR
APPLICABLE
MARGIN FOR STANDBY LETTER
RATIO OF TOTAL FUNDED REVOLVING COMMITMENT OF CREDIT FEE
DEBT TO EBITDA CREDIT LOANS FEE RATE RATE
------------------------------- ------------ ---------- --------------
greater than 3.75:1.00 2.000% 0.375% 2.000%
Less than or equal to 3.75:1.00 1.500% 0.250% 1.500%
but greater than 3:00:1.00
Less than or equal to 3.00:1.00 1.250% 0.250% 1.250%
47
6. COLLATERAL SECURITY.
The Obligations shall be secured by a perfected first priority security
interest (subject only to Permitted Liens entitled to priority under applicable
law) in all of the assets of the Borrower, whether now owned or hereafter
acquired, pursuant to the terms of the Security Documents to which the Borrower
is a party.
7. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants to the Banks and the Agents as
follows:
7.1 Corporate Authority.
7.1.1 Incorporation; Good Standing. Each of the Borrower
and its Subsidiaries (i) is a corporation duly organized, validly existing and
in good standing under the laws of its state of incorporation, (ii) has all
requisite corporate power to own its property and conduct its business as now
conducted and as presently contemplated, and (iii) is in good standing as a
foreign corporation and is duly authorized to do business in each jurisdiction
where such qualification is necessary except where a failure to be so qualified
would not have a materially adverse effect on the business, assets or financial
condition of the Borrower or such Subsidiary.
7.1.2 Authorization. The execution, delivery and
performance of this Credit Agreement and the other Loan Documents to which the
Borrower or any of its Subsidiaries is or is to become a party and the
transactions contemplated hereby and thereby (i) are within the corporate
authority of such Person, (ii) have been duly authorized by all necessary
corporate proceedings, (iii) do not conflict with or result in any breach or
contravention of any provision of law, statute, rule or regulation to which the
Borrower or any of its Subsidiaries is subject or any judgment, order, writ,
injunction, license or permit applicable to the Borrower or any of its
Subsidiaries and (iv) do not conflict with any provision of the corporate
charter or bylaws of, or any agreement or other instrument binding upon, the
Borrower or any of its Subsidiaries.
7.1.3 Enforceability. The execution and delivery of this
Credit Agreement and the other Loan Documents to which the Borrower or any of
its Subsidiaries is or is to become a party will result in valid and legally
binding obligations of such Person enforceable against it in accordance with the
respective terms and provisions hereof and thereof, except as enforceability is
limited by bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or affecting generally the enforcement of creditors' rights and
except to the extent that availability of the remedy of specific performance or
injunctive relief is subject to the discretion of the court before which any
proceeding therefor may be brought.
7.2 Governmental Approvals. The execution, delivery and
performance by the Borrower and any of its Subsidiaries of this Credit Agreement
and the other Loan Documents to which the Borrower or any of its Subsidiaries is
or is to become a party and the transactions contemplated hereby and thereby do
not require the approval or consent of, or filing with, any governmental agency
or authority other than those already obtained.
7.3 Title to Properties; Leases. Except as indicated on Schedule
7.3 hereto, the Borrower and its Subsidiaries own all of the assets reflected in
the consolidated balance sheet of
48
the Borrower and its Subsidiaries as at the Balance Sheet Date or acquired since
that date (except property and assets sold or otherwise disposed of in the
ordinary course of business since that date), subject to no rights of others,
including any mortgages, leases, conditional sales agreements, title retention
agreements, liens or other encumbrances except Permitted Liens.
7.4 Financial Statements and Projections.
7.4.1 Financial Statements. There has been furnished to
each of the Banks a consolidated balance sheet of the Borrower and its
Subsidiaries as at the Balance Sheet Date, and a consolidated statement of
income of the Borrower and its Subsidiaries for the fiscal year then ended,
certified by PricewaterhouseCoopers LLP. Such balance sheets and statement of
income have been prepared in accordance with Generally Accepted Accounting
Principles and fairly present the financial condition of the Borrower as at the
close of business on the date thereof and the results of operations for the
fiscal year then ended. There are no contingent liabilities of the Borrower or
any of its Subsidiaries as of such date involving material amounts, known to the
officers of the Borrower, which were not disclosed in such balance sheets and
the notes related thereto.
7.4.2 Projections. The projections of the annual operating
budgets of the Borrower and its Subsidiaries on a consolidated basis, balance
sheets and cash flow statements for the 2003 to 2007 fiscal years, copies of
which have been delivered to each Bank, are based on a variety of assumptions
with respect to general economic, financial and market conditions used in
formulating such projections which are believed by the Borrower to be reasonable
as of the date of such projections but that are inherently subject to
significant economic and competitive uncertainties, all of which are difficult
to predict and many of which are beyond the control of the Borrower. To the
knowledge of the Borrower or any of its Subsidiaries, as of the Closing Date no
facts exist that (individually or in the aggregate) would result in any material
change in any of such projections. The projections have been prepared on the
basis of the assumptions stated therein and reflect the reasonable estimates of
the Borrower and its Subsidiaries of the results of operations and other
information projected therein.
7.5 No Material Changes, etc.; Solvency.
7.5.1 No Material Changes, etc. Since the Balance Sheet
Date, there has occurred no materially adverse change in the financial condition
or business of the Borrower and its Subsidiaries as shown on or reflected in the
consolidated balance sheet of the Borrower and its Subsidiaries as at the
Balance Sheet Date, or the consolidated statement of income for the fiscal year
then ended, other than changes in the ordinary course of business that have not
had any materially adverse effect either individually or in the aggregate on the
business or financial condition of the Borrower or any of its Subsidiaries.
Since the Balance Sheet Date, the Borrower has not made any Distribution.
7.5.2 Solvency. Both before and after giving effect to the
transactions contemplated by this Credit Agreement and the other Loan Documents,
the Borrower and its Subsidiaries on a consolidated basis are Solvent. As used
herein, "Solvent" shall mean that the Borrower and its Subsidiaries (i) have
assets having a fair value in excess of their liabilities, (ii) have assets
having a fair value in excess of the amount required to pay their liabilities on
49
existing debts as such debts become absolute and matured, and (iii) have, and
expect to continue to have, access to adequate capital for the conduct of their
business and the ability to pay their debts from time to time incurred in
connection with the operation of their business as such debts mature.
7.6 Franchises, Patents, Copyrights, etc. Each of the Borrower and
its Subsidiaries possesses all franchises, patents, copyrights, trademarks,
trade names, licenses and permits, and rights in respect of the foregoing,
adequate for the conduct of its business substantially as now conducted without
known conflict with any rights of others.
7.7 Litigation. Except as set forth in Schedule 7.7 hereto, there
are no actions, suits, proceedings or investigations of any kind pending or
threatened against the Borrower or any of its Subsidiaries before any court,
tribunal or administrative agency or board that, if adversely determined, might,
either in any case or in the aggregate, reasonably be expected to materially
adversely affect the properties, assets, financial condition or business of the
Borrower and its Subsidiaries or materially impair the right of the Borrower and
its Subsidiaries, considered as a whole, to carry on business substantially as
now conducted by them, or result in any substantial liability not adequately
covered by insurance, or for which adequate reserves are not maintained on the
consolidated balance sheet of the Borrower and its Subsidiaries, or which
question the validity of this Credit Agreement or any of the other Loan
Documents, or might impair or prevent any action taken or to be taken pursuant
hereto or thereto.
7.8 No Materially Adverse Contracts, etc. Neither the Borrower nor
any of its Subsidiaries is subject to any charter, corporate or other legal
restriction, or any judgment, decree, order, rule or regulation that has or is
expected in the future to have a materially adverse effect on the business,
assets or financial condition of the Borrower or any of its Subsidiaries.
Neither the Borrower nor any of its Subsidiaries is a party to any contract or
agreement that has or is expected, in the judgment of the Borrower's officers,
to have any materially adverse effect on the business of the Borrower or any of
its Subsidiaries.
7.9 Compliance with Other Instruments, Laws, etc. Neither the
Borrower nor any of its Subsidiaries is in violation of any provision of its
charter documents, bylaws, or any agreement or instrument to which it may be
subject or by which it or any of its properties may be bound or any decree,
order, judgment, statute, license, rule or regulation, in any of the foregoing
cases in a manner that could reasonably be expected to result in the imposition
of substantial penalties or materially and adversely affect the financial
condition, properties or business of the Borrower or any of its Subsidiaries.
7.10 Tax Status. The Borrower and its Subsidiaries (a) have made or
filed all federal and state income and sales and all other material tax returns,
reports and declarations required by any jurisdiction to which any of them is
subject, (b) have paid all taxes and other governmental assessments and charges
shown or determined to be due on such returns, reports and declarations, except
those being contested in good faith and by appropriate proceedings and (c) have
set aside on their books provisions reasonably adequate for the payment of all
taxes for periods subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes in any material amount claimed to
be due by the taxing authority of any jurisdiction, and the officers of the
Borrower know of no basis for any such claim.
50
7.11 No Event of Default. No Default or Event of Default has
occurred and is continuing.
7.12 Holding Company and Investment Company Acts. Neither the
Borrower nor any of its Subsidiaries is a "holding company", or a "subsidiary
company" of a "holding company", or an affiliate" of a "holding company", as
such terms are defined in the Public Utility Holding Company Act of 1935; nor is
it an "investment company", or an "affiliated company" or a "principal
underwriter" of an "investment company", as such terms are defined in the
Investment Company Act of 1940.
7.13 Absence of Financing Statements, etc. Except with respect to
Permitted Liens, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or recorded with any
filing records, registry or other public office, that purports to cover, affect
or give notice of any present or possible future lien on, or security interest
in, any assets or property of the Borrower or any of its Subsidiaries or any
rights relating thereto.
7.14 Perfection of Security Interest. All filings, assignments,
pledges and deposits of documents or instruments have been made and all other
actions have been taken that are necessary or advisable, under applicable law,
to establish and perfect the Collateral Agent's security interest in the
Collateral. The Collateral and the Collateral Agent's rights with respect to the
Collateral are not subject to any setoff, claims, withholdings or other
defenses. The Borrower is the owner of the Collateral free from any lien,
security interest, encumbrance and any other claim or demand, except for
Permitted Liens.
7.15 Certain Transactions. Except as set forth on Schedule 7.15
hereto and except for arm's length transactions pursuant to which the Borrower
or any of its Subsidiaries makes payments in the ordinary course of business
upon terms no less favorable than the Borrower or such Subsidiary could obtain
from third parties, none of the officers, directors, or employees of the
Borrower or any of its Subsidiaries is presently a party to any transaction with
the Borrower or any of its Subsidiaries (other than for services as employees,
officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real
or personal property to or from, or otherwise requiring payments to or from any
officer, director or such employee or, to the knowledge of the Borrower, any
corporation, partnership, trust or other entity in which any officer, director,
or any such employee has a substantial interest or is an officer, director,
trustee or partner.
7.16 Employee Benefit Plans.
7.16.1 In General. Each Employee Benefit Plan has been
maintained and operated in compliance in all material respects with the
provisions of ERISA and, to the extent applicable, the Code, including but not
limited to the provisions thereunder respecting prohibited transactions. The
Borrower has heretofore delivered to the Agents the most recently completed
annual report, Form 5500, with all required attachments, and actuarial statement
required to be submitted under Section 103(d) of ERISA, with respect to each
Guaranteed Pension Plan.
51
7.16.2 Terminability of Welfare Plans. Under each Employee
Benefit Plan which is an employee welfare benefit plan within the meaning of
Section 3(1) or Section 3(2)(B) of ERISA, no benefits are payable to employees
(or their dependents) after termination of employment (except as required by
Title I, Part 6 of ERISA). The Borrower or an ERISA Affiliate, as appropriate,
may terminate each such Plan at any time (or at any time subsequent to the
expiration of any applicable bargaining agreement) in the discretion of the
Borrower or such ERISA Affiliate without liability to any Person.
7.16.3 Guaranteed Pension Plans. Each contribution required
to be made to a Guaranteed Pension Plan, whether required to be made to avoid
the incurrence of an accumulated funding deficiency, the notice or lien
provisions of Section 302(f) of ERISA, or otherwise, has been timely made. No
waiver of an accumulated funding deficiency or extension of amortization periods
has been received with respect to any Guaranteed Pension Plan. No liability to
the PBGC (other than required insurance premiums, all of which have been paid)
has been incurred by the Borrower or any ERISA Affiliate with respect to any
Guaranteed Pension Plan and there has not been any ERISA Reportable Event, or
any other event or condition which presents a material risk of termination of
any Guaranteed Pension Plan by the PBGC. Based on the latest valuation of each
Guaranteed Pension Plan (which in each case occurred within twelve months of the
date of this representation), and on the actuarial methods and assumptions
employed for that valuation, the aggregate benefit liabilities of all such
Guaranteed Pension Plans within the meaning of Section 4001 of ERISA did not
exceed the aggregate value of the assets of all such Guaranteed Pension Plans,
disregarding for this purpose the benefit liabilities and assets of any
Guaranteed Pension Plan with assets in excess of benefit liabilities, by more
than $500,000.00.
7.16.4 Multiemployer Plans. Neither the Borrower nor any
ERISA Affiliate has incurred any material liability (including secondary
liability) to any Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan under Section 4201 of ERISA or as a
result of a sale of assets described in Section 4204 of ERISA. Neither the
Borrower nor any ERISA Affiliate has been notified that any Multiemployer Plan
is in reorganization or insolvent under and within the meaning of Section 4241
or Section 4245 of ERISA or is at risk of entering reorganization or becoming
insolvent, or that any Multiemployer Plan intends to terminate or has been
terminated under Section 4041A of ERISA.
7.17 Regulations U and X. The proceeds of the Loans and the
Purchases and Consignments shall be used to refinance the existing Indebtedness
of the Borrower under the Original Credit Agreement and for working capital and
general corporate purposes. The Borrower will obtain Letters of Credit solely
for working capital and general corporate purposes. No portion of any Loan or
proceeds from any Purchase and Consignment is to be used, and no portion of any
Letter of Credit is to be obtained, for the purpose of purchasing or carrying
any "margin security" or "margin stock" as such terms are used in Regulations U
and X of the Board of Governors of the Federal Reserve System, 12 C.F.R. Parts
221 and 224.
7.18 Environmental Compliance. The Borrower has taken all necessary
steps to investigate the past and present condition and usage of the Real Estate
and the operations conducted thereon and, based upon such diligent
investigation, has determined that:
52
(a) none of the Borrower, its Subsidiaries or any
operator of the Real Estate or any operations thereon is in violation, or
alleged violation, of any judgment, decree, order, law, license, rule or
regulation pertaining to environmental matters, including without limitation,
those arising under the Resource Conservation and Recovery Act ("RCRA"), the
Comprehensive Environmental Response, Compensation and Liability Act of 1980 as
amended ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986
("▇▇▇▇"), the Federal Clean Water Act, the Federal Clean Air Act, the Toxic
Substances Control Act, or any state or local statute, regulation, ordinance,
order or decree relating to health, safety or the environment (hereinafter
"Environmental Laws"), which violation would reasonably be expected to have a
material adverse effect on the environment or the business, assets or financial
condition of the Borrower or any of its Subsidiaries;
(b) neither the Borrower nor any of its Subsidiaries has
received notice from any third party including, without limitation, any federal,
state or local governmental authority, (i) that any one of them has been
identified by the United States Environmental Protection Agency ("EPA") as a
potentially responsible party under CERCLA with respect to a site listed on the
National Priorities List, 40 C.F.R. Part ▇▇▇ ▇▇▇▇▇▇▇▇ ▇; (ii) that any hazardous
waste, as defined by 42 U.S.C. Section 6903(5), any hazardous substances as
defined by 42 U.S.C. Section 9601(14), any pollutant or contaminant as defined
by 42 U.S.C. Section 9601(33) and any toxic substances, oil or hazardous
materials or other chemicals or substances regulated by any Environmental Laws
("Hazardous Substances") which any one of them has generated, transported or
disposed of has been found at any site at which a federal, state or local agency
or other third party has conducted or has ordered that any Borrower or any of
its Subsidiaries conduct a remedial investigation, removal or other response
action pursuant to any Environmental Law; or (iii) that it is or shall be a
named party to any claim, action, cause of action, complaint, or legal or
administrative proceeding (in each case, contingent or otherwise) arising out of
any third party's incurrence of costs, expenses, losses or damages of any kind
whatsoever in connection with the release of Hazardous Substances;
(c) except as set forth on Schedule 7.18 attached hereto:
(i) no portion of the Real Estate has been used for the handling, processing,
storage or disposal of Hazardous Substances except in accordance with applicable
Environmental Laws; and no underground tank or other underground storage
receptacle for Hazardous Substances is located on any portion of the Real
Estate; (ii) in the course of any activities conducted by the Borrower, its
Subsidiaries or operators of its properties, no Hazardous Substances have been
generated or are being used on the Real Estate except in accordance with
applicable Environmental Laws; (iii) there have been no releases (i.e. any past
or present releasing, spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, disposing or dumping) or threatened releases
of Hazardous Substances on, upon, into or from the properties of the Borrower or
its Subsidiaries, which releases would have a material adverse effect on the
value of any of the Real Estate or adjacent properties or the environment; (iv)
to the best of the Borrower's knowledge, there have been no releases on, upon,
from or into any real property in the vicinity of any of the Real Estate which,
through soil or groundwater contamination, may have come to be located on, and
which would have a material adverse effect on the value of, the Real Estate; and
(v) in addition, any Hazardous Substances that have been generated on any of the
Real Estate have been transported offsite only by carriers having an
identification number issued by the EPA, treated or disposed of only by
treatment or disposal facilities maintaining valid permits as required under
applicable
53
Environmental Laws, which transporters and facilities have been and are, to the
best of the Borrower's knowledge, operating in compliance with such permits and
applicable Environmental Laws; and
(d) None of the Borrower and its Subsidiaries or any of
the Real Estate is subject to any applicable environmental law requiring the
performance of Hazardous Substances site assessments, or the removal or
remediation of Hazardous Substances, or the giving of notice to any governmental
agency or the recording or delivery to other Persons of an environmental
disclosure document or statement by virtue of the transactions set forth herein
and contemplated hereby, or as a condition to the effectiveness of any other
transactions contemplated hereby.
7.19 Subsidiaries, etc. Except as set forth on Schedule 7.19
hereto, the Borrower has no Subsidiaries. Except as set forth on Schedule 7.19
hereto, neither the Borrower nor any Subsidiary of the Borrower is engaged in
any joint venture or partnership with any other Person.
7.20 Bank Accounts. Schedule 7.20 (as such may be amended from time
to time in accordance with Section 9.9 hereof) sets forth the account numbers
and location of all bank accounts of the Borrower or any of its Subsidiaries.
8. AFFIRMATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Loan,
Reimbursement Obligation, Letter of Credit, amount of Consigned Precious Metal
or Note is outstanding or any Bank has any obligation to make any Loans, any
Gold Fronting Bank has any obligation to make any Purchases and Consignments or
the Administrative Agent has any obligation to issue, extend or renew any
Letters of Credit:
8.1 Punctual Payment. The Borrower will duly and punctually pay,
purchase or Redeliver, or cause to be paid, purchased or Redelivered, the
principal and interest on the Loans, all Consigned Precious Metal, all
Reimbursement Obligations, the Letter of Credit Fees, the commitment fees, the
Consignment Fees, the Agents' fee and all other amounts provided for in this
Credit Agreement and the other Loan Documents to which the Borrower or any of
its Subsidiaries is a party, all in accordance with the terms of this Credit
Agreement and such other Loan Documents.
8.2 Maintenance of Office. The Borrower will maintain its chief
executive office in Chicago, Illinois, or at such other place in the United
States of America as the Borrower shall designate upon written notice to the
Agents, where notices, presentations and demands to or upon the Borrower in
respect of the Loan Documents to which the Borrower is a party may be given or
made.
8.3 Records and Accounts. The Borrower will (a) keep, and cause
each of its Subsidiaries to keep, true and accurate records and books of account
in which full, true and correct entries will be made in accordance with
Generally Accepted Accounting Principles and (b) maintain adequate accounts and
reserves for all taxes (including income taxes), depreciation, depletion,
obsolescence and amortization of its properties and the properties of its
Subsidiaries, contingencies, and other reserves in accordance with Generally
Accepted Accounting Principles.
54
8.4 Financial Statements, Certificates and Information. The
Borrower will deliver to each of the Banks:
(a) as soon as practicable, but in any event not later
than ninety (90) days after the end of each fiscal year of the Borrower, the
consolidated balance sheet of the Borrower and its Subsidiaries and the
consolidating balance sheet of the Borrower and its Subsidiaries, each as at the
end of such year, and the related consolidated statement of income and
consolidated statement of cash flow and consolidating statement of income and
consolidating statement of cash flow for such year, each setting forth in
comparative form the figures for the previous fiscal year and all such
consolidated and consolidating statements to be in reasonable detail, prepared
in accordance with Generally Accepted Accounting Principles, and certified
without qualification by PricewaterhouseCoopers LLP or by another "big four"
certified public accounting firm or by other independent certified public
accountants satisfactory to the Administrative Agent, together with a written
statement from such accountants to the effect that they have read a copy of this
Credit Agreement, and that, in making the examination necessary to said
certification, they have obtained no knowledge of any Default or Event of
Default, or, if such accountants shall have obtained knowledge of any then
existing Default or Event of Default they shall disclose in such statement any
such Default or Event of Default; provided that such accountants shall not be
liable to the Banks for failure to obtain knowledge of any Default or Event of
Default;
(b) as soon as practicable, but in any event not later
than forty-five (45) days after the end of each of the fiscal quarters of the
Borrower, copies of the unaudited consolidated balance sheet of the Borrower and
its Subsidiaries and the unaudited consolidating balance sheet of the Borrower
and its Subsidiaries, each as at the end of such quarter, and the related
consolidated statement of income and consolidated statement of cash flow and
consolidating statement of income and consolidating statement of cash flow for
the portion of the Borrower's fiscal year then elapsed, all in reasonable detail
and prepared in accordance with Generally Accepted Accounting Principles,
together with a certification by the principal financial or accounting officer
of the Borrower that the information contained in such financial statements
fairly presents the financial position of the Borrower and its Subsidiaries on
the date thereof (subject to year-end adjustments);
(c) as soon as practicable, but in any event within
thirty (30) days after the end of each month in each fiscal year of the
Borrower, unaudited monthly consolidated financial statements of the Borrower
and its Subsidiaries for such month and unaudited monthly consolidating
financial statements of the Borrower and its Subsidiaries for such month, each
prepared in accordance with Generally Accepted Accounting Principles, together
with a certification by the Controller, Senior Vice President of Finance or
other principal financial or accounting officer of the Borrower that the
information contained in such financial statements fairly presents the financial
condition of the Borrower and its Subsidiaries on the date thereof (subject to
quarterly and year-end adjustments);
(d) simultaneously with the delivery of the financial
statements referred to in subsections (a) and (b) above, a statement certified
by the principal financial or accounting officer of the Borrower in
substantially the form of Exhibit K hereto, setting forth in reasonable detail
computations evidencing compliance with the covenants contained in Section 10
and (if
55
applicable) reconciliations to reflect changes in Generally Accepted Accounting
Principles since the Balance Sheet Date;
(e) contemporaneously with the filing or mailing thereof,
copies of all material of a financial nature filed with the Securities and
Exchange Commission or sent to the stockholders of the Borrower;
(f) within ten (10) Business Days after the end of each
calendar month or at such earlier time as the Administrative Agent may
reasonably request (i) a Borrowing Base Report setting forth the Borrowing Base
as at the end of such calendar month or other date so requested by the
Administrative Agent, (ii) a Consigned Precious Metal Report setting forth (1)
the amount of Consigned Precious Metal and Borrower's Precious Metal as of the
end of such calendar month or other date so requested by the Administrative
Agent, and (2) a calculation of the Consignment Advance Rate Percentage
multiplied by the Fair Market Value of the sum of (y) Borrower's Precious Metal
plus (z) Consigned Precious Metal as of the end of such calendar month or other
date so requested by the Agents, and (iii) a Monthly Inventory Report, in each
case together with supporting schedules and documentation, with each such
Borrowing Base Report and Consigned Precious Metal Report to be accompanied by a
certification by the Controller, Senior Vice President of Finance or the
principal financial or accounting officer of the Borrower that the information
contained therein is true and accurate in all respects;
(g) within thirty (30) Business Days after the end of
each calendar month, an accounts payable aging report;
(h) on or prior to April 30 of each calendar year,
projections of the Borrower and its Subsidiaries updating those projections
delivered to the Banks and referred to in Section 8.4.2 or, if applicable,
updating any later such projections delivered in response to a request pursuant
to this Section 9.4(h);
(i) within thirty (30) days of the end of each fiscal
quarter, a report setting forth in reasonable detail all Capital Expenditures
that each of the Borrower and its Subsidiaries has become legally obligated to
make, including, without limitation, in respect of new leases, purchase
contracts and construction contracts entered into in connection with new or
existing retail stores or distribution centers, during the next twelve
(12)-month period;
(j) prior to the opening by the Borrower of any new
retail store or distribution center at which Eligible Inventory is to be
located, a supplement to Schedule 2 hereto in the form of Exhibit L hereto,
listing any additions or deletions to the list of retail stores and distribution
centers of the Borrower and its Subsidiaries located in the United States, which
supplement, together with Schedule 2 hereto and any prior supplements, shall be
deemed to constitute Schedule 2 for all purposes of this Credit Agreement;
(k) within forty-five (45) days after the completion of
each of the Borrower's semi-annual central warehouse inventory counts (which
inventory counts may be observed by the Agents or by an independent party
acceptable to the Agents) (i) a report with respect to the results of such
inventory count and (ii) a report with respect to the results of the Borrower's
56
inventory counts with respect to its retail store locations conducted since the
last such report delivered to the Agents and the Banks, each in form and detail
satisfactory to the Agents and the Banks; and
(l) from time to time such other financial data and
information (including accountants and management letters) as any Agent or any
Bank may reasonably request.
8.5 Notices.
8.5.1 Defaults. The Borrower will promptly notify the
Administrative Agent and each of the Banks in writing of the occurrence of any
Default or Event of Default. If any Person shall give any notice or take any
other action in respect of a claimed default (whether or not constituting an
Event of Default) under this Credit Agreement or any other note, evidence of
indebtedness, indenture or other obligation to which or with respect to which
the Borrower or any of its Subsidiaries is a party or obligor, whether as
principal, guarantor, surety or otherwise, the Borrower shall forthwith give
written notice thereof to each of the Agents and each of the Banks, describing
the notice or action and the nature of the claimed default.
8.5.2 Environmental Events. The Borrower will promptly give
notice to the Administrative Agent and each of the Banks (a) of any violation of
any Environmental Law that the Borrower or any of its Subsidiaries reports in
writing or is reportable by such Person in writing (or for which any written
report supplemental to any oral report is made) to any federal, state or local
environmental agency and (b) upon becoming aware thereof, of any inquiry,
proceeding, investigation, or other action, including a notice from any agency
of potential environmental liability, of any federal, state or local
environmental agency or board, that has the potential to materially affect the
assets, liabilities, financial conditions or operations of the Borrower or any
of its Subsidiaries, or the Collateral Agent's mortgages, deeds of trust or
security interests pursuant to the Security Documents.
8.5.3 Notification of Claim against Collateral. The
Borrower will, immediately upon becoming aware thereof, notify the
Administrative Agent and each of the Banks in writing of any setoff, claims
(including, with respect to the Real Estate, environmental claims), withholdings
or other defenses to which any of the Collateral, or the Collateral Agent's
rights with respect to the Collateral, are subject. The Borrower will,
immediately upon becoming aware thereof, notify the Administrative Agent and
each of the Banks in writing of any proposed sale or transfer of any Permitted
Inventory Location by the owner thereof.
8.5.4 Notice of Litigation and Judgments. The Borrower
will, and will cause each of its Subsidiaries to, give notice to the
Administrative Agent and each of the Banks in writing within fifteen (15) days
of becoming aware of any litigation or proceedings threatened in writing or any
pending litigation and proceedings affecting the Borrower or any of its
Subsidiaries or to which the Borrower or any of its Subsidiaries is or becomes a
party involving an uninsured claim against the Borrower or any of its
Subsidiaries that could reasonably be expected to have a materially adverse
effect on the Borrower or any of its Subsidiaries and stating the nature and
status of such litigation or proceedings. The Borrower will, and will cause each
of its Subsidiaries to, give notice to the Administrative Agent and each of the
Banks, in writing, in form and detail satisfactory to the Administrative Agent,
within ten (10) days of any
57
judgment not covered by insurance, final or otherwise, against the Borrower or
any of its Subsidiaries in an amount in excess of $500,000.00.
8.6 Corporate Existence; Maintenance of Properties.
(a) The Borrower will do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence,
rights and franchises and those of its Subsidiaries and will not, and will not
cause or permit any of its Subsidiaries to, convert to any other entity.
(b) The Borrower (i) will cause all of its properties and
those of its Subsidiaries used or useful in the conduct of its business or the
business of its Subsidiaries to be maintained and kept in good condition, repair
and working order and supplied with all necessary equipment, (ii) will cause to
be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Borrower may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times, and (iii) will, and will cause each of
its Subsidiaries to, continue to engage primarily in the businesses now
conducted by them; provided that nothing in this Section8.6 shall prevent the
Borrower from discontinuing the operation and maintenance of any of its
properties or any of those of its Subsidiaries if such discontinuance is, in the
judgment of the Borrower, desirable in the conduct of its or their business and
that do not in the aggregate materially adversely affect the business of the
Borrower and its Subsidiaries on a consolidated basis.
8.7 Insurance.
(a) The Borrower will, and will cause each of its
Subsidiaries to, maintain with financially sound and reputable insurers
insurance with respect to its properties and business against such casualties
and contingencies as shall be in accordance with the general practices of
businesses engaged in similar activities in similar geographic areas and in
amounts, containing such terms, in such forms and for such periods as may be
reasonable and prudent and in accordance with the terms of the Security
Agreement.
(b) Contemporaneously with the execution of this Credit
Agreement, and within fifteen (15) days of any date when any additional or
replacement insurance coverage is obtained, the Borrower shall, and will cause
each of its Subsidiaries to, deliver to the Administrative Agent true copies of
certificates of insurance with respect to such additional insurance or
replacement policies and, upon request and to the extent not previously
delivered to the Administrative Agent, copies of the original insurance policies
evidencing such additional or replacement insurance, which certificates and
policies (i) in the case of property and casualty policies, shall contain an
endorsement or rider naming the Collateral Agent, for the benefit of the Agents
and the Banks, as a mortgagee, loss payee and additional insured, and (ii) in
the case of liability policies, shall contain an endorsement or rider naming the
Collateral Agent, for the benefit of the Agents and the Banks, as an additional
insured, with each such policy providing that such insurance shall not be
canceled or amended without thirty (30) days prior written notice to the
Collateral Agent.
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8.8 Taxes. The Borrower will, and will cause each of its
Subsidiaries to, duly pay and discharge, or cause to be paid and discharged,
before the same shall become overdue, all taxes, assessments and other
governmental charges imposed upon it and its real properties, sales and
activities, or any part thereof, or upon the income or profits therefrom, as
well as all claims for labor, materials, or supplies that if unpaid might by law
become a lien or charge upon any of its property; provided that any such tax,
assessment, charge, levy or claim need not be paid if the validity or amount
thereof shall currently be contested in good faith by appropriate proceedings
and if the Borrower or such Subsidiary shall have set aside on its books
adequate reserves with respect thereto; and provided further that the Borrower
and each Subsidiary of the Borrower will pay all such taxes, assessments,
charges, levies or claims forthwith upon the commencement of proceedings to
foreclose any lien that may have attached as security therefor.
8.9 Inspection of Properties and Books, etc.
8.9.1 General. The Borrower shall permit the Banks, through
the Agents or any of the Banks' other designated representatives, to visit and
inspect any of the properties of the Borrower or any of its Subsidiaries, to
examine the books of account of the Borrower and its Subsidiaries (and to make
copies thereof and extracts therefrom), to discuss the affairs, finances and
accounts of the Borrower and its Subsidiaries with, and to be advised as to the
same by, its and their officers, and to conduct examinations and verifications
of the components of the Borrowing Base, the other assets of the Borrower and
its Subsidiaries and all systems and procedures of the Borrower and its
Subsidiaries, including those relating to cash management and those relating to
gold tracking and valuation, all at such reasonable times and intervals as
either of the Agents or any Bank may reasonably request.
8.9.2 Inventory Appraisals. No more frequently than once
each calendar year, or more frequently as determined by the Agents if an Event
of Default shall have occurred and be continuing, upon the request of the
Agents, at the expense of the Borrower but subject to the limitations set forth
in Section 16, the Borrower will obtain and deliver to the Administrative Agent
a report of an independent collateral auditor or appraiser satisfactory to the
Administrative Agent (which may be affiliated with one of the Banks) with
respect to the inventory components included in the Borrowing Base and the
amounts of Borrower's Precious Metal and Consigned Precious Metal held by the
Borrower, which report shall indicate (a) whether or not the information set
forth in the Borrowing Base Report and the Consigned Precious Metal Report most
recently delivered is accurate and complete in all material respects based upon
a review by such auditors of the inventory (including verification as to the
value, location and respective types) or (b) in the case of an appraisal report
by a collateral appraiser, shall state the then current fair market value,
orderly liquidation and forced liquidation values of all or any portion of the
inventory owned by the Borrower and its Subsidiaries and of the Borrower's
Precious Metal and Consigned Precious Metal.
8.9.3 Appraisals. If an Event of Default shall have
occurred and be continuing, upon the request of the Administrative Agent, the
Borrower will obtain and deliver to the Administrative Agent appraisal reports
in form and substance and from appraisers satisfactory to the Administrative
Agent, stating (i) the then current fair market, orderly liquidation and forced
liquidation values of all or any portion of the equipment or real estate owned
by the Borrower or
59
any of its Subsidiaries and (ii) the then current business value of each of the
Borrower and its Subsidiaries. All such appraisals shall be conducted and made
at the expense of the Borrower.
8.9.4 Communications with Accountants. The Borrower
authorizes the Agents and, if accompanied by the Agents, the Banks to
communicate directly with the Borrower's independent certified public
accountants and authorizes such accountants to disclose to the Agents and the
Banks any and all financial statements and other supporting financial documents
and schedules including copies of any management letter with respect to the
business, financial condition and other affairs of the Borrower or any of its
Subsidiaries. At the request of the Agents, the Borrower shall deliver a letter
addressed to such accountants instructing them to comply with the provisions of
this Section 8.9.4
8.10 Compliance with Laws, Contracts, Licenses, and Permits. The
Borrower will, and will cause each of its Subsidiaries to, comply with (a) the
applicable laws and regulations wherever its business is conducted, including
all Environmental Laws, except where the failure to so comply would not
reasonably be expected to have a materially adverse effect either individually
or in the aggregate upon the business, assets or financial condition of the
Borrower or any of its Subsidiaries, (b) the provisions of its charter documents
and by-laws, (c) all agreements and instruments by which it or any of its
properties may be bound, except where the failure to so comply would not
reasonably be expected to have a materially adverse effect either individually
or in the aggregate upon the business, assets or financial condition of the
Borrower or any of its Subsidiaries, and (d) all applicable decrees, orders, and
judgments. If any authorization, consent, approval, permit or license from any
officer, agency or instrumentality of any government shall become necessary or
required in order that the Borrower or any of its Subsidiaries may fulfill any
of its obligations hereunder or any of the other Loan Documents to which the
Borrower or such Subsidiary is a party, the Borrower will, or (as the case may
be) will cause such Subsidiary to, immediately take or cause to be taken all
reasonable steps within the power of the Borrower or such Subsidiary to obtain
such authorization, consent, approval, permit or license and furnish the Agents
and the Banks with evidence thereof.
8.11 Employee Benefit Plans. The Borrower will (a) promptly upon
filing the same with the Department of Labor or Internal Revenue Service upon
request of the Agents, furnish to each of the Agents a copy of the most recent
actuarial statement required to be submitted under Section 103(d) of ERISA and
Annual Report, Form 5500, with all required attachments, in respect of each
Guaranteed Pension Plan and (b) promptly upon receipt or dispatch, furnish to
each of the Agents any notice, report or demand sent or received in respect of a
Guaranteed Pension Plan under Sections 302, 4041, 4042, 4043, 4063, 4066 and
4068 of ERISA, or in respect of a Multiemployer Plan, under Sections 4041A,
4202, 4219, 4242, or 4245 of ERISA.
8.12 Use of Proceeds. The Borrower will use the proceeds of the
Loans and the Purchases and Consignments solely for refinancing the existing
Indebtedness of the Borrower under the Original Credit Agreement and for working
capital and general corporate purposes. The Borrower will obtain Letters of
Credit solely for working capital and general corporate purposes.
8.13 Additional Mortgaged Property. If, after the Closing Date, the
Borrower or any of its Subsidiaries acquires or leases for a term in excess of
five (5) years real estate used as a
60
manufacturing or warehouse facility, the Borrower shall notify the Agents
promptly thereof, and upon the request of the Lenders, the Borrower shall, or
shall cause such Subsidiary to, forthwith deliver to the Collateral Agent a
fully executed mortgage or deed of trust over such real estate, in form and
substance satisfactory to the Agents, together with title insurance policies,
surveys, evidences of insurances with the Collateral Agent named as loss payee
and additional insured, legal opinions and other documents and certificates with
respect to such real estate as shall be reasonably satisfactory to the Agents.
The Borrower further agrees that, following the taking of such actions with
respect to such real estate, the Collateral Agent shall have for the benefit of
the Banks and the Agents a valid and enforceable first priority mortgage or deed
of trust over such real estate, free and clear of all defects and encumbrances
except for Permitted Liens.
8.14 Bank Accounts.
(a) On or prior to the Closing Date, the Borrower will,
and will cause each of its Subsidiaries to, (i) establish depository accounts
(the "Concentration Accounts") under the control of the Administrative Agent for
the benefit of the Banks and the Agents, in the name of the Borrower, (ii)
direct all depository institutions with Store Accounts to cause all funds in
excess of $1,000 held in each such Store Account to be transferred no less
frequently than twice each week, and in any event within one Business Day
following any day during which the Borrower has knowledge that the amounts in
any such Store Account are in excess $10,000, to, and only to Concentration
Banks, (iii) direct all Concentration Banks (other than LaSalle) to cause all
funds of the Borrower and its Subsidiaries held in such Concentration Banks to
be transferred daily to, and only to, the Concentration Account maintained at
LaSalle or such other location as the Administrative Agent shall designate, (iv)
cause all proceeds of Accounts Receivable of the Borrower to be deposited only
into depository accounts with financial institutions which have entered into
blocked account agreements, in form and substance acceptable to Administrative
Agent (each a "Blocked Account Agreement"), and (v) except for amounts in any
Store Account which are less than $1,000, at all times ensure that, within five
(5) days following the Borrower's or any of its Subsidiaries' receipt of any
cash or cash equivalents or any other proceeds of Collateral, all such amounts
shall have been deposited in the Blocked Accounts.
(b) The Borrower will, and will cause each of its
Subsidiaries to use its commercially reasonable best efforts to obtain Blocked
Account Agreements (whereby such depository institution shall, among other
things, waive any right to set-off, other than for service charges and returns
incurred in connection therewith) from each depository institution at which a
Store Account is located. Notwithstanding the foregoing, to the extent Borrower
or any Subsidiary of Borrower shall fail to obtain a Blocked Account Agreement
as provided herein within 120 days of the Closing Date, Borrower or such
Subsidiary, as applicable, shall move such account, within 30 days of request by
the Administrative Agent, to a financial institution which has executed a
Blocked Account Agreement in the event that the total funds on deposit in any
such account shall exceed $10,000 at any time.
(c) The Borrower hereby agrees that all amounts belonging
to the Borrower and received by the Administrative Agent in the Concentration
Accounts will be the sole and exclusive property of the Collateral Agent, for
the accounts of the Banks and the Agents, to be
61
applied in accordance with (i) Section 5.9(c) prior to the occurrence of an
Event of Default, and (ii) Section 5.10 after the occurrence and during the
continuance of a Default or an Event of Default.
8.15 Inventory Restrictions. The Borrower shall cause, and shall
cause each of its Subsidiaries to cause, Consigned Precious Metal and all
Eligible Inventory to be located at all times solely at Permitted Inventory
Locations, and to be sold or otherwise disposed of in the ordinary course of the
Borrower's or such Subsidiary's business, consistent with past practices or as
required pursuant to the terms of this Credit Agreement.
8.16 Private Label Credit Card Program. The Borrower will maintain
in effect at all times credit programs provided by Persons other than the
Borrower and its Subsidiaries which (a) are non-recourse to the Borrower and its
Subsidiaries and (b) during any period of four consecutive fiscal quarters of
the Borrower, are used to finance not less than twenty percent (20%) of the
Borrower's gross sales during such period of four consecutive fiscal quarters.
8.17 Operating Accounts. The Borrower will maintain all of its
operating accounts (other than Store Accounts subject to a Blocked Account
Agreement) with LaSalle.
8.18 Further Assurances. The Borrower will, and will cause each of
its Subsidiaries to, cooperate with the Banks and the Agents and execute such
further instruments and documents as any of the Banks or the Agents shall
reasonably request to carry out to their satisfaction the transactions
contemplated by this Credit Agreement and the other Loan Documents.
8.19 New Subsidiaries. The Borrower shall, immediately upon any
Investment in a new Subsidiary permitted by Section 9.3(f) hereof, pledge to the
Collateral Agent, for the benefit of the Banks and the Agents, the capital stock
of each new Subsidiary in which the Borrower invests pursuant to a stock pledge
agreement in form and substance satisfactory to the Agents and the Banks, and
such new Subsidiary shall grant to the Collateral Agent a perfected first
priority security interest (subject only to Permitted Liens entitled to priority
under applicable law) in all of its personal property assets (with such
exceptions are as acceptable to the Required Banks) pursuant to an instrument of
adherence to the Security Agreement in form and substance satisfactory to the
Agents and the Banks. In addition, the Borrower shall immediately upon such
Investment, revise Schedule 7.19 hereto to reflect the acquisition of each new
Subsidiary. Each new Subsidiary in which the Borrower invests shall, immediately
upon such Investment, execute and deliver to the Collateral Agent, for the
benefit of the Banks and the Agents, a guaranty of the payment and performance
of all of the Obligations, in form and substance satisfactory to the Agents and
the Banks, together with acceptable security documents including without
limitation, the aforementioned instrument of adherence to the Security
Agreement, legal opinions, and other documents and instruments necessary to
demonstrate the due authorization, execution and delivery by such new Subsidiary
of such guaranty and such security documents and to perfect the Collateral
Agent's security interest in all of such new Subsidiary's assets, including (a)
the resolutions of the Board of Directors or equivalent body of such new
Subsidiary and the charter and by-laws (or the equivalent thereof) of such new
Subsidiary, certified by an officer of such new Subsidiary, (b) a good standing
certificate of such new Subsidiary in its jurisdiction of incorporation, (c) a
certificate of the Secretary or an Assistant Secretary of such new Subsidiary
certifying the names and true signatures of the officers of such new Subsidiary
authorized to sign
62
such guaranty and such security documents, (d) UCC-1 financing statements, and
(e) such other documents as the Collateral Agent may reasonably request. Upon
delivery of the aforementioned documents, such new Subsidiary shall become a
guarantor of the Obligations hereunder and, except as otherwise agreed to by the
Required Banks, shall comply with and be bound by all of the terms and
conditions of the Loan Documents as a Subsidiary of the Borrower thereunder, and
the Borrower shall cause such new Subsidiary to take all actions which it would
have been required to make or take had it been a Subsidiary of the Borrower on
the Closing Date, including making all representations and warranties as a
guarantor under each of the Loan Documents. Notwithstanding anything contained
in this Section 8.19 to the contrary and to the extent permitted pursuant to
Section 9.12, no Subsidiary which is incorporated or organized outside the
United States of America (a "Foreign Subsidiary") shall be required hereunder to
execute or deliver a guaranty or security agreement or otherwise pledge, or
grant a security interest in, any of its assets, and the Borrower and any
Subsidiary shall not be required to pledge more than sixty-five percent (65%) of
the outstanding capital stock, or other equity interest, of any Foreign
Subsidiary, in each case to the extent such guaranty, security agreement, pledge
or grant would cause a deemed repatriation of the accumulated earnings and
profits of such Foreign Subsidiary to its parent.
8.20 Landlord Waivers. The Borrower shall exercise commercially
reasonable best efforts to obtain Landlord Waivers with respect to all Permitted
Inventory Locations that are subject to Specified Leases, including, without
limitation, Landlord Waivers in connection with leases extended, renegotiated or
entered into after the Closing Date. Notwithstanding the foregoing, in the event
the Borrower fails to deliver a Landlord Waiver for any Permitted Inventory
Location within 180 days of the Closing Date, the Administrative Agent may
establish Reserves against the Borrowing Base in an amount equal to the value of
such Inventory at such Permitted Inventory Location, in its sole discretion.
9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Loan,
Reimbursement Obligation, Letter of Credit, amount of Consigned Precious Metal
or Note is outstanding or any Bank has any obligation to make any Loans, any
Gold Fronting Bank has any obligation to make any Purchases and Consignments or
the Administrative Agent has any obligation to issue, extend or renew any
Letters of Credit:
9.1 Restrictions on Indebtedness. The Borrower will not, and will
not permit any of its Subsidiaries to, create, incur, assume, guarantee or be or
remain liable, contingently or otherwise, with respect to any Indebtedness other
than:
(a) Indebtedness to the Banks and the Agents arising
under any of the Loan Documents;
(b) current liabilities of the Borrower or such
Subsidiary incurred in the ordinary course of business not incurred through (i)
the borrowing of money, or (ii) the obtaining of credit except for credit on an
open account basis customarily extended and in fact extended in connection with
normal purchases of goods and services;
63
(c) Indebtedness in respect of taxes, assessments,
governmental charges or levies and claims for labor, materials and supplies to
the extent that payment therefor shall not at the time be required to be made in
accordance with the provisions of Section 8.8;
(d) Indebtedness in respect of judgments or awards that
have been in force for less than the applicable period for taking an appeal so
long as execution is not levied thereunder or in respect of which the Borrower
or such Subsidiary shall at the time in good faith be prosecuting an appeal or
proceedings for review and in respect of which a stay of execution shall have
been obtained pending such appeal or review;
(e) endorsements for collection, deposit or negotiation
and warranties of products or services, in each case incurred in the ordinary
course of business;
(f) Indebtedness existing on the date hereof and listed
and described on Schedule 9.1 hereto;
(g) Indebtedness owed by the Borrower or any of its
Subsidiaries to trade vendors, in the amount of the cost to the Borrower or such
Subsidiary of inventory held on consignment from such trade vendors; and
(h) Indebtedness of the Borrower and its Subsidiaries
other than that permitted elsewhere in this Section 9.1 in an aggregate
principal amount not to exceed $2,000,000 at any time outstanding; provided that
(i) the Net Proceeds from such Indebtedness are applied in accordance with
Section 5.8 hereof and (ii) no Default or Event of Default has occurred and is
continuing at the time such Indebtedness is incurred and none would exist after
giving effect thereto;
provided, however, the Borrower will not, and will not permit any of its
Subsidiaries to, engage in any form of "off balance sheet" financing, including,
without limitation, the lease of any assets by the Borrower or any of its
Subsidiaries as lessee under any synthetic lease referred to in clause (vi) of
the above definition of the term "Indebtedness."
9.2 Restrictions on Liens. The Borrower will not, and will not
permit any of its Subsidiaries to, (i) create or incur or suffer to be created
or incurred or to exist any lien, encumbrance, mortgage, pledge, charge,
restriction or other security interest of any kind upon any of its property or
assets of any character whether now owned or hereafter acquired, or upon the
income or profits therefrom; (ii) transfer any of such property or assets or the
income or profits therefrom for the purpose of subjecting the same to the
payment of Indebtedness or performance of any other obligation in priority to
payment of its general creditors; (iii) acquire, or agree or have an option to
acquire, any property or assets upon conditional sale or other title retention
or purchase money security agreement, device or arrangement; (iv) suffer to
exist for a period of more than thirty (30) days after the same shall have been
incurred any Indebtedness or claim or demand against it that if unpaid might by
law or upon bankruptcy or insolvency, or otherwise, be given any priority
whatsoever over its general creditors; or (v) sell, assign, pledge or otherwise
transfer any accounts, contract rights, general intangibles, chattel paper or
instruments, with or without recourse; provided that the Borrower and any
Subsidiary of the Borrower may create or incur or suffer to be created or
incurred or to exist (the "Permitted Liens"):
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(a) liens in favor of the Borrower on all or part of the
assets of Subsidiaries of the Borrower securing Indebtedness owing by
Subsidiaries of the Borrower to the Borrower;
(b) liens to secure taxes, assessments and other
government charges in respect of obligations not overdue or liens on properties
to secure claims for labor, material or supplies in respect of obligations not
overdue;
(c) deposits or pledges made in connection with, or to
secure payment of, workmen's compensation, unemployment insurance, old age
pensions or other social security obligations;
(d) liens on properties in respect of judgments or
awards, the Indebtedness with respect to which is permitted by Section 9.1(d);
(e) liens of carriers, warehousemen, mechanics and
materialmen, and other like liens on properties, in existence less than 120 days
from the date of creation thereof in respect of obligations not overdue;
(f) encumbrances on Real Estate consisting of easements,
rights of way, zoning restrictions, restrictions on the use of real property and
defects and irregularities in the title thereto, landlord's or lessor's liens
under leases to which the Borrower or a Subsidiary of the Borrower is a party,
and other minor liens or encumbrances none of which in the opinion of the
Borrower interferes materially with the use of the property affected in the
ordinary conduct of the business of the Borrower and its Subsidiaries, which
defects do not individually or in the aggregate have a materially adverse effect
on the business of the Borrower individually or of the Borrower and its
Subsidiaries on a consolidated basis;
(g) liens existing on the date hereof and listed on
Schedule 9.2 hereto;
(h) purchase money security interests in or purchase
money mortgages on real or personal property acquired after the date hereof to
secure purchase money Indebtedness in an amount permitted by Section 9.1(h),
incurred in connection with the acquisition of such property, which security
interests or mortgages cover only the real or personal property so acquired;
(i) liens in favor of the Collateral Agent, for the
benefit of the Banks and the Agents, under the Loan Documents; and
(j) liens on inventory and proceeds thereof (up to the
cost thereof to the Borrower or such Subsidiary) held on consignment from trade
vendors securing obligations to return or pay the purchase price of such
inventory.
9.3 Restrictions on Investments. The Borrower will not, and will
not permit any of its Subsidiaries to, make or permit to exist or to remain
outstanding any Investment except Investments in:
(a) marketable direct or guaranteed obligations of the
United States of America that mature within one (1) year from the date of
purchase by the Borrower or such Subsidiary;
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(b) demand deposits, certificates of deposit, bankers
acceptances and time deposits of United States banks having total assets in
excess of $1,000,000,000;
(c) securities commonly known as "commercial paper"
issued by a corporation organized and existing under the laws of the United
States of America or any state thereof that at the time of purchase have been
rated and the ratings for which are not less than "P 1" if rated by ▇▇▇▇▇'▇
Investors Services, Inc., and not less than "A 1" if rated by Standard and
Poor's;
(d) Investments existing on the date hereof and listed on
Schedule 9.3 hereto;
(e) Investments consisting of loans, advances or
guaranties to or for the benefit of employees in the ordinary course of business
not to exceed $250,000.00 in the aggregate at any time outstanding;
(f) Investments to the extent permitted under Section
9.4; and
(g) Investments by the Borrower in acquiring Indebtedness
arising under the Indentures in an aggregate principal amount not to exceed
$750,000 for all such purchases;
provided, however, that, with the exception of demand deposits referred to in
Section 9.3(b) and loans and advances referred to in Section 9.3(e), such
Investments will be considered Investments permitted by this Section 9.3 only if
all actions have been taken to the satisfaction of the Agents to provide to the
Collateral Agent, for the benefit of the Banks and the Agents, a first priority
perfected security interest in all of such Investments free of all encumbrances
other than Permitted Liens.
9.4 Distributions. The Borrower will not make any Distributions,
except for repurchases of any of the Borrower's common stock; provided that such
repurchases shall only be permitted so long as no Default or Event of Default
has occurred or is continuing or would result after giving effect to such
repurchase.
9.5 Merger, Consolidation; Disposition of Assets; Issuance of
Equity Securities.
9.5.1 Mergers and Acquisitions. The Borrower will not, and
will not permit any of its Subsidiaries to, become a party to any merger or
consolidation, or agree to or effect any asset acquisition or stock acquisition
(other than the acquisition of assets in the ordinary course of business
consistent with past practices) except the merger or consolidation of one or
more of the Subsidiaries of the Borrower with and into the Borrower, or the
merger or consolidation of two or more Subsidiaries of the Borrower. The
Borrower will not, and will not permit any of its Subsidiaries to, agree to or
effect any asset acquisition or stock acquisition without the prior written
consent of the Required Banks.
9.5.2 Disposition of Assets. The Borrower will not, and
will not permit any of its Subsidiaries to, become a party to or agree to or
effect any disposition of assets, other than the disposition of (a) inventory in
the ordinary course of business, consistent with past practices, (b) inventory,
equipment, fixtures and leasehold interests of the Borrower in connection with
the sale by the Borrower in the ordinary course of business of any retail store
locations, (c) obsolete equipment in connection with the replacement thereof
provided that such assets shall not have an
66
aggregate value in excess of $750,000.00 for all such sales occurring in any
fiscal year, (d) retail installment sales accounts so long as such sales (i) are
without recourse to the Borrower, (ii) are for cash in an amount equal to not
less than 80% of the amount of such accounts, (iii) are done within one month of
the creation of such accounts, and (iv) are otherwise consistent with past
practices of the Borrower, (e) other assets pursuant to sale transactions or
sale and leaseback transactions provided that (i) the Borrower receives cash
proceeds from such transactions equal to the fair market value of such assets,
(ii) the Net Proceeds from such transactions are applied in accordance with
Section 5.8 hereof and (iii) no Default or Event of Default has occurred and is
continuing at the time any such transaction is consummated and none would exist
after giving effect thereto, and (f) notwithstanding anything to the contrary
contained elsewhere in any Loan Documents, non-exclusive licenses of
intellectual property including trademarks and tradenames, and outside of the
United States, exclusive licenses of such intellectual property.
9.6 Sale and Leaseback. The Borrower will not, and will not permit
any of its Subsidiaries to, enter into any arrangement, directly or indirectly,
whereby the Borrower or any Subsidiary of the Borrower shall sell or transfer
any property owned by it in order then or thereafter to lease such property or
lease other property that the Borrower or any Subsidiary of the Borrower intends
to use for substantially the same purpose as the property being sold or
transferred.
9.7 Compliance with Environmental Laws. The Borrower will not, and
will not permit any of its Subsidiaries to, (a) use any of the Real Estate or
any portion thereof for the handling, processing, storage or disposal of
Hazardous Substances, (b) cause or permit to be located on any of the Real
Estate any underground tank or other underground storage receptacle for
Hazardous Substances, (c) generate any Hazardous Substances on any of the Real
Estate, (d) conduct any activity at any Real Estate or use any Real Estate in
any manner so as to cause a release (i.e. releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
disposing or dumping) or threatened release of Hazardous Substances on, upon or
into the Real Estate or (e) otherwise conduct any activity at any Real Estate or
use any Real Estate in any manner that would violate any Environmental Law or
bring such Real Estate in violation of any Environmental Law, where, in the case
of any such violation described in this clause (e), such violation could
reasonably be expected to have a materially adverse effect, either individually
or in the aggregate, upon the business, assets or financial condition of the
Borrower or any of its Subsidiaries.
9.8 Employee Benefit Plans. Neither the Borrower nor any ERISA
Affiliate will
(a) engage in any non-exempt "prohibited transaction"
within the meaning of Section 406 of ERISA or Section 4975 of the Code which
could reasonably be expected to result in a material liability for the Borrower
or any of its Subsidiaries; or
(b) permit any Guaranteed Pension Plan to incur an
"accumulated funding deficiency", as such term is defined in Section 302 of
ERISA, whether or not such deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension Plan to
an extent which, or terminate any Guaranteed Pension Plan in a manner which,
could reasonably be expected to
67
result in the imposition of a lien or encumbrance on the assets of the Borrower
or any of its Subsidiaries pursuant to Section 302(f) or Section 4068 of ERISA;
or
(d) permit or take any action which would result in the
aggregate benefit liabilities (with the meaning of Section 4001 of ERISA) of all
Guaranteed Pension Plans exceeding the value of the aggregate assets of such
Plans, disregarding for this purpose the benefit liabilities and assets of any
such Plan with assets in excess of benefit liabilities, by more than the amount
set forth in Section 7.16.3.
9.9 Bank Accounts. The Borrower will not, and will not permit any
of its Subsidiaries to, (a) establish any bank accounts, including, without
limitation, any deposit accounts, other than those listed on Schedule 7.20 (as
such may be amended from time to time to include those depository institutions
acceptable to the Administrative Agent which have executed and delivered Blocked
Account Agreements substantially in the form of Exhibit M hereto) without the
Agents' prior written consent, (b) violate directly or indirectly any bank
agency or lock box agreement in favor of the Collateral Agent for the benefit of
the Banks and the Agents with respect to such account.
9.10 Consignment Transactions. Except pursuant to this Credit
Agreement, the Borrower will not, nor will the Borrower permit or suffer any of
its Subsidiaries to, enter into any consignment transactions, including
consignments of Precious Metal; provided, that the Borrower or its Subsidiaries
may enter into arrangements for consignments of inventory from vendors in the
ordinary course of business, consistent with past practices.
9.11 Transactions with Affiliates. Except for transactions which
are described on Schedule 7.15 hereto, the Borrower will not, nor will the
Borrower permit or suffer any of its Subsidiaries to, conduct any transactions
among themselves or with any Affiliates of the Borrower, other than transactions
in the ordinary course of the Borrower's or such Subsidiary's business,
consistent with past practices, and upon terms not materially less favorable to
such Borrower or Subsidiary than it could obtain in a comparable arm's-length
transaction with a party other than the Borrower, such Subsidiary or such
Affiliate.
9.12 Subsidiaries. The Borrower will not create any Foreign
Subsidiary without the prior written consent of the Administrative Agent. Other
than Whitehall ▇▇▇▇▇▇▇▇.▇▇▇, LLC, which is a dormant Subsidiary, the Borrower
will not create any Subsidiaries unless the Borrower and such Subsidiary
complies with Section 8.19. The Borrower will not permit Whitehall ▇▇▇▇▇▇▇▇.▇▇▇,
LLC to conduct any operations or own any assets until such Subsidiary complies
with Section 8.19.
9.13 Issuance of Equity Securities. The Borrower will not, and will
not permit any of its Subsidiaries to, issue any equity securities, including,
without limitation, any issuance of warrants, options or subscription rights,
unless (i) the Borrower receives solely cash proceeds from each such issuance,
(ii) the Net Proceeds from such issuance are applied in accordance with Section
5.8 hereof and (iii) no Default or Event of Default has occurred and is
continuing at the time any such issuance is consummated and none would exist
after giving effect thereto.
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10. FINANCIAL COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Loan,
Reimbursement Obligation, Letter of Credit, amount of Consigned Precious Metal
or Note is outstanding or any Bank has any obligation to make any Loans, any
Gold Fronting Bank has any obligation to make any Purchases and Consignments or
the Administrative Agent has any obligation to issue, extend or renew any
Letters of Credit:
10.1 Fixed Charge Coverage Ratio. To the extent that the Borrower
has Borrowing Availability of less than $10,000,000, the Borrower will not
permit, for any period of four consecutive fiscal quarters, the ratio of (a) the
sum of (i) Consolidated EBITDA for such period plus (ii) Consolidated Minimum
Store Rent for such period to (b) the sum of (i) Consolidated Minimum Store Rent
for such period plus (ii) Consolidated Cash Interest Expense for such period, to
be less than 1.25:1.00 measured at the end of each calendar quarter.
11. CLOSING CONDITIONS.
The effectiveness of this Credit Agreement and the obligations of the
Banks to make the initial Revolving Credit Loans, of the Gold Fronting Bank to
make the initial Purchases and Consignments and to issue any initial Letters of
Credit shall, except as otherwise agreed to in the Post Closing Matters
Agreement of even date herewith between Administrative Agent and Borrower, be
subject to the satisfaction of the following conditions precedent:
11.1 Loan Documents, etc. Each of the Loan Documents shall have
been duly executed and delivered by the respective parties thereto, shall be in
full force and effect and shall be in form and substance satisfactory to each of
the Banks. Each Bank shall have received a fully executed copy of each such
document.
11.2 Certified Copies of Charter Documents. Each of the Banks shall
have received from the Borrower and each of its Subsidiaries a copy, certified
by a duly authorized officer of such Person to be true and complete on the
Closing Date, of each of (a) its charter or other incorporation documents as in
effect on such date of certification, and (b) its by-laws as in effect on such
date.
11.3 Corporate, Action. All corporate action necessary for the
valid execution, delivery and performance by the Borrower and each of its
Subsidiaries of this Credit Agreement and the other Loan Documents to which it
is or is to become a party shall have been duly and effectively taken, and
evidence thereof satisfactory to the Banks shall have been provided to each of
the Banks.
11.4 Incumbency Certificate. Each of the Banks shall have received
from the Borrower and each of its Subsidiaries an incumbency certificate, dated
as of the Closing Date, signed by a duly authorized officer of the Borrower or
such Subsidiary, and giving the name and bearing a specimen signature of each
individual who shall be authorized: (a) to sign, in the name and on behalf of
each of the Borrower of such Subsidiary, each of the Loan Documents to which the
Borrower or such Subsidiary is or is to become a party; (b) in the case of the
Borrower, to make Loan Requests, Purchase and Consignment Requests, Conversion
Requests and
69
Consignment Conversion Requests and to apply for Letters of Credit; and (c) to
give notices and to take other action on its behalf under the Loan Documents.
11.5 Validity of Liens. The Security Documents shall be effective
to create in favor of the Collateral Agent a legal, valid and enforceable first
(except for Permitted Liens entitled to priority under applicable law) security
interest in and lien upon the Collateral. All filings, recordings, deliveries of
instruments and other actions necessary or desirable in the opinion of the
Agents to protect and preserve such security interests shall have been duly
effected including, without limitation, all notices required to be filed under
Section 9-324(b) of the Uniform Commercial Code in effect in the State of
Illinois or any then applicable jurisdiction. The Collateral Agent shall have
received evidence thereof in form and substance satisfactory to the Agents and
the Banks.
11.6 Perfection Certificate and UCC Search Results. The Collateral
Agent shall have received from the Borrower a completed and fully executed
Perfection Certificate and the results of current UCC searches with respect to
the Collateral, indicating no liens other than Permitted Liens and otherwise in
form and substance satisfactory to the Agents and the Banks. The Agents shall
have received and shall be satisfied with the form and substance of all
consignment financing statements filed or to be filed on behalf of trade vendors
as consignors.
11.7 Certificates of Insurance. The Agents shall have received (a)
a certificate of insurance from an independent insurance broker dated as of the
Closing Date, identifying insurers, types of insurance, insurance limits, and
policy terms, and otherwise describing the insurance obtained in accordance with
the provisions of the Security Agreement and (b) certified copies of all
policies evidencing such insurance (or certificates therefore signed by the
insurer or an agent authorized to bind the insurer).
11.8 LaSalle Concentration Accounts; Blocked Account Agreements.
The Borrower shall have established the Concentration Accounts, and the Agents
shall have received a Blocked Account Agreement, in form and substance
satisfactory to the Administrative Agent, from (a) each Concentration Bank
(other than LaSalle) and (b) each other bank at which the Borrower maintains
depository accounts into which proceeds of Accounts Receivable of the Borrower
are deposited, in each case concerning the Collateral Agent's interest for the
benefit of the Banks and the Agents, in the depository accounts maintained by
the Borrower with such Concentration Banks or, as the case may be, such other
banks.
11.9 Borrowing Base Report; Consigned Precious Metal Report;
Monthly Inventory Report. The Agents shall have received from the Borrower the
initial Borrowing Base Report, the initial Consigned Precious Metal Report, and
the initial Monthly Inventory Report, in each case prepared on the basis of the
best available data, each dated as of the Closing Date.
11.10 Accounts Payable Aging Report. The Agents shall have received
from the Borrower the most recent accounts payable aging report of the Borrower
dated as of a date which shall be no more than fifteen (15) days prior to the
Closing Date and the Borrower shall have notified the Agents in writing on the
Closing Date of any material deviation from the accounts payable values
reflected in such accounts payable aging report and shall have provided the
Agents with such supplementary documentation as the Agents may reasonably
request.
70
11.11 Opinion of Counsel. Each of the Banks and the Agents shall
have received a favorable legal opinion addressed to the Banks and the Agents,
dated as of the Closing Date, in form and substance satisfactory to the Banks
and the Agents, from Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP, counsel to the Borrower and
its Subsidiaries.
11.12 Payment of Fees. The Borrower shall have paid to the Banks or
the Agents, as appropriate, the upfront fee, the arrangement fee, the Agents'
fee pursuant to Sections 5.11 and 5.12 and all other amounts due and payable
under this Agreement.
11.13 Terms of Consignment. Each of the Agents and each of the Banks
shall be satisfied with the terms of all consignment, leasing, "lay away" and
purchase and sale arrangements of the Borrower and each of its Subsidiaries.
11.14 Financial Statements. The Agents and the Banks shall have
received the financial statements required to be delivered to them by Section
7.4.
11.15 Consents and Approvals. The Agents shall have received
evidence that there shall have been obtained by all of the parties to the
transactions contemplated hereby, and shall be in full force and effect all
regulatory, creditor, lessor and other third party consents and approvals
necessary to complete the transactions contemplated hereby.
11.16 Capitalization of the Borrower. The Agents shall have reviewed
all of the documents relating to the capitalization of the Borrower, which
documents and capitalization shall be in form and substance satisfactory to each
of the Agents.
12. CONDITIONS TO ALL BORROWINGS.
The obligations of the Banks to make any Loans, including the initial
Revolving Credit Loans, of the Gold Fronting Bank to make any Purchases and
Consignments, including the initial Purchases and Consignments, and to issue,
extend or renew any Letter of Credit, in each case whether on or after the
Closing Date, shall also be subject to the satisfaction of the following
conditions precedent:
12.1 Representations True; No Event of Default. Each of the
representations and warranties of any of the Borrower and its Subsidiaries
contained in this Credit Agreement, the other Loan Documents or in any document
or instrument delivered pursuant to or in connection with this Credit Agreement
shall be true as of the date as of which they were made and shall also be true
at and as of the time of the making of such Loan or Purchase and Consignment or
the issuance, extension or renewal of such Letter of Credit, with the same
effect as if made at and as of that time (except to the extent of changes
resulting from transactions contemplated or permitted by this Credit Agreement
and the other Loan Documents and changes occurring in the ordinary course of
business that singly or in the aggregate are not materially adverse, and to the
extent that such representations and warranties relate expressly to an earlier
date) and no Default or Event of Default shall have occurred and be continuing.
12.2 No Legal Impediment. No change shall have occurred in any law
or regulations thereunder or interpretations thereof that in the reasonable
opinion of any Bank would make it illegal for such Bank to make such Loan or
Purchase and Consignment or to participate in the
71
issuance, extension or renewal of such Letter of Credit or in the reasonable
opinion of the Administrative Agent would make it illegal for the Administrative
Agent to issue, extend or renew such Letter of Credit.
12.3 Governmental Regulation. Each Bank shall have received such
statements in substance and form reasonably satisfactory to such Bank as such
Bank shall require for the purpose of compliance with any applicable regulations
of the Comptroller of the Currency or the Board of Governors of the Federal
Reserve System.
12.4 Proceedings and Documents. All proceedings in connection with
the transactions contemplated by this Credit Agreement, the other Loan Documents
and all other documents incident thereto shall be satisfactory in substance and
in form to the Banks and to the Agents and the Administrative Agent's Special
Counsel, and the Banks, the Agents and such counsel shall have received all
information and such counterpart originals or certified or other copies of such
documents as the Agents or such Banks may reasonably request.
12.5 Borrowing Base Report; Consigned Precious Metal Report. The
Agents and the Banks shall have received the most recent Borrowing Base Report
required to be delivered to the Agents and the Banks in accordance with Section
8.4(f) and the most recent Consigned Precious Metal Report required to be
delivered to the Agents and the Banks in accordance with Section 8.4(f), and if
requested by the Administrative Agent, a Borrowing Base Report or, as the case
may be, a Consigned Precious Metal Report, dated within five (5) days of the
Drawdown Date or, as the case may be, the Gold Drawdown Date of such Loan or
such Purchase and Consignment or of the date of issuance, extension or renewal
of such Letter of Credit.
13. EVENTS OF DEFAULT; ACCELERATION; ETC.
13.1 Events of Default and Acceleration. If any of the following
events ("Events of Default" or, if the giving of notice or the lapse of time or
both is required, then, prior to such notice or lapse of time, "Defaults") shall
occur:
(a) the Borrower shall fail to pay any principal of the
Loans or any Reimbursement Obligation or fail to purchase and pay for or
Redeliver Consigned Precious Metal when the same shall become due and payable or
required, whether at the stated date of maturity or any accelerated date of
maturity or at any other date fixed for payment or Redelivery;
(b) the Borrower or any of its Subsidiaries (i) shall
fail to pay any interest on the Loans or Consignment Fees on Consigned Precious
Metal (A) within one (1) day following the date when the same shall become due
and payable, other than at the stated date of maturity or any accelerated date
of maturity or (B) when the same shall become due and payable at the stated date
of maturity or any accelerated date of maturity or (ii) shall fail to pay the
commitment fees, any Letter of Credit Fee, the Agents' fee, or other sums due
hereunder or under any of the other Loan Documents, when the same shall become
due and payable, whether at the stated date of maturity or any accelerated date
of maturity or at any other date fixed for payment;
(c) the Borrower shall fail to comply with any of its
covenants contained in Section 8 (other than Sections 8.6(b), 8.13 and 8.17), 9
or 10;
72
(d) the Borrower or any of its Subsidiaries shall fail to
perform any term, covenant or agreement contained herein or in any of the other
Loan Documents (other than those specified elsewhere in this Section 13.1) for
fifteen (15) days after written notice of such failure has been given to the
Borrower by the Administrative Agent;
(e) any representation or warranty of the Borrower or any
of its Subsidiaries in this Credit Agreement or any of the other Loan Documents
or in any other document or instrument delivered pursuant to or in connection
with this Credit Agreement shall prove to have been false in any material
respect upon the date when made or deemed to have been made or repeated;
(f) the Borrower or any of its Subsidiaries shall (i)
fail to pay at maturity, or within any applicable period of grace, any
obligation for borrowed money or credit received or in respect of any
Capitalized Leases, in each case under this clause (B) in excess of
$1,000,000.00, or (ii) fail to observe or perform any material term, covenant or
agreement contained in any agreement by which it is bound, evidencing or
securing borrowed money or credit received or in respect of any Capitalized
Leases, in each case under this clause (B) in excess of $1,000,000.00, for such
period of time as would permit (assuming the giving of appropriate notice if
required) the holder or holders thereof or of any obligations issued thereunder
to accelerate the maturity thereof;
(g) the Borrower or any of its Subsidiaries shall make an
assignment for the benefit of creditors, or admit in writing its inability to
pay or generally fail to pay its debts as they mature or become due, or shall
petition or apply for the appointment of a trustee or other custodian,
liquidator or receiver of the Borrower or any of its Subsidiaries or of any
substantial part of the assets of the Borrower or any of its Subsidiaries or
shall commence any case or other proceeding relating to the Borrower or any of
its Subsidiaries under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar law of any
jurisdiction, now or hereafter in effect, or shall take any action to authorize
or in furtherance of any of the foregoing, or if any such petition or
application shall be filed or any such case or other proceeding shall be
commenced against the Borrower or any of its Subsidiaries and the Borrower or
any of its Subsidiaries shall indicate its approval thereof, consent thereto or
acquiescence therein or such petition or application shall not have been
dismissed within forty-five (45) days following the filing thereof;
(h) a decree or order is entered appointing any such
trustee, custodian, liquidator or receiver or adjudicating the Borrower or any
of its Subsidiaries bankrupt or insolvent, or approving a petition in any such
case or other proceeding, or a decree or order for relief is entered in respect
of the Borrower or any Subsidiary of the Borrower in an involuntary case under
federal bankruptcy laws as now or hereafter constituted;
(i) there shall remain in force, undischarged,
unsatisfied and unstayed, for more than thirty (30) days, whether or not
consecutive, any final judgment against the Borrower or any of its Subsidiaries
that, with other outstanding final judgments, undischarged, against the Borrower
or any of its Subsidiaries exceeds in the aggregate $1,500,000.00;
73
(j) if any of the Loan Documents shall be canceled,
terminated, revoked or rescinded or the Collateral Agent's security interests,
mortgages or liens in a substantial portion of the Collateral shall cease to be
perfected, or shall cease to have the priority contemplated by the Security
Documents, in each case otherwise than in accordance with the terms thereof or
with the express prior written agreement, consent or approval of the Banks, or
any action at law, suit or in equity or other legal proceeding to cancel, revoke
or rescind any of the Loan Documents shall be commenced by or on behalf of the
Borrower or any of its Subsidiaries party thereto or any of their respective
stockholders, or any court or any other governmental or regulatory authority or
agency of competent jurisdiction shall make a determination that, or issue a
judgment, order, decree or ruling to the effect that, any one or more of the
Loan Documents is illegal, invalid or unenforceable in accordance with the terms
thereof;
(k) with respect to any Guaranteed Pension Plan, an ERISA
Reportable Event shall have occurred and the Required Banks shall have
determined in their reasonable discretion that such event reasonably could be
expected to result in liability of the Borrower or any of its Subsidiaries to
the PBGC or such Guaranteed Pension Plan in an aggregate amount exceeding
$1,500,000.00 and such event in the circumstances occurring reasonably could
constitute grounds for the termination of such Guaranteed Pension Plan by the
PBGC or for the appointment by the appropriate United States District Court of a
trustee to administer such Guaranteed Pension Plan; or a trustee shall have been
appointed by the United States District Court to administer such Plan; or the
PBGC shall have instituted proceedings to terminate such Guaranteed Pension
Plan;
(l) the Borrower or any of its Subsidiaries shall be
enjoined, restrained or in any way prevented by the order of any court or any
administrative or regulatory agency from conducting any material part of its
business and such order shall continue in effect for more than thirty (30) days;
(m) there shall occur any material damage to, or loss,
theft or destruction of, any Collateral, whether or not insured, or any strike,
lockout, labor dispute, embargo, condemnation, act of God or public enemy, or
other casualty, which in any such case causes, for more than ten (10)
consecutive days, the cessation or substantial curtailment of revenue producing
activities at retail locations of the Borrower or any of its Subsidiaries
constituting twenty-five percent (25%) or more of the Borrower's and its
Subsidiaries retail locations if such event or circumstance is not covered by
business interruption insurance;
(n) there shall occur the loss, suspension or revocation
of, or failure to renew, any license or permit now held or hereafter acquired by
the Borrower or any of its Subsidiaries if such loss, suspension, revocation or
failure to renew would have a material adverse effect on the business or
financial condition of the Borrower or such Subsidiary;
(o) the Borrower or any of its Subsidiaries shall be
indicted for a state or federal crime, or any civil or criminal action shall
otherwise have been brought against the Borrower or any of its Subsidiaries, a
punishment for which in any such case could include the forfeiture of any assets
of the Borrower or such Subsidiary included in the Borrowing Base or any assets
of the Borrower or such Subsidiary not included in the Borrowing Base but having
a fair market value in excess of $1,500,000.00; or
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(p) any person or group of persons (within the meaning of
Section 13 or 14 of the Securities Exchange Act of 1934, as amended) shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated by
the Securities and Exchange Commission under said Act) of 30% or more of the
outstanding shares of common stock of the Borrower; or, during any period of
twelve consecutive calendar months, individuals who were directors of the
Borrower on the first day of such period shall cease to constitute a majority of
the board of directors of the Borrower;
then, and in any such event (i) the Borrower shall purchase all Consigned
Precious Metal in accordance with the provisions of Section 4.4 hereof and (ii)
so long as the same may be continuing, the Agents may, and upon the request of
the Required Banks shall, by notice in writing to the Borrower declare all
amounts owing with respect to this Credit Agreement, the Notes and the other
Loan Documents and all Reimbursement Obligations to be, and they shall thereupon
forthwith become, immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby expressly waived by
the Borrower; provided that in the event of any Event of Default specified in
Sections 13.1(g) or 13.1(h), all such amounts shall become immediately due and
payable automatically and without any requirement of notice from the Agents or
any Bank.
13.2 Termination of Commitments. If any one or more of the Events
of Default specified in Section 13.1(g) or Section 13.1(h) shall occur, any
unused portion of the credit hereunder shall forthwith terminate and each of the
Banks shall be relieved of all further obligations to make Loans (other than
pursuant to Section 4.4 hereof) to the Borrower, the Gold Fronting Bank shall be
relieved of all further obligations to make Purchases and Consignments to the
Borrower and the Administrative Agent shall be relieved of all further
obligations to issue, extend or renew Letters of Credit. If any other Event of
Default shall have occurred and be continuing, or if on any Drawdown Date, Gold
Drawdown Date or other date for issuing, extending or renewing any Letter of
Credit the conditions precedent to the making of the Loans to be made on such
Drawdown Date, to the making of the Purchases and Consignments to be made on
such Gold Drawdown Date, or (as the case may be) to issuing, extending or
renewing such Letter of Credit on such other date are not satisfied, the Agents
may and, upon the request of the Required Banks, shall, by notice to the
Borrower, terminate the unused portion of the credit hereunder, and upon such
notice being given such unused portion of the credit hereunder shall terminate
immediately and each of the Banks shall be relieved of all further obligations
to make Loans (other than pursuant to Section 4.4 hereof), the Gold Fronting
Bank shall be relieved of all further obligations to make Purchases and
Consignments to the Borrower and the Administrative Agent shall be relieved of
all further obligations to issue, extend or renew Letters of Credit. No
termination of the credit hereunder shall relieve the Borrower or any of its
Subsidiaries of any of the Obligations.
13.3 Remedies. In case any one or more of the Events of Default
shall have occurred and be continuing, and whether or not the Banks shall have
accelerated the maturity of the Loans pursuant to Section 13.1, each Bank, if
owed any amount with respect to the Loans, Purchases and Consignments or the
Reimbursement Obligations, may, with the consent of the Required Banks but not
otherwise, proceed to protect and enforce its rights by suit in equity, action
at law or other appropriate proceeding, whether for the specific performance of
any covenant or agreement contained in this Credit Agreement and the other Loan
Documents or any instrument pursuant to
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which the Obligations to such Bank are evidenced, including as permitted by
applicable law the obtaining of the ex parte appointment of a receiver, and, if
such amount shall have become due, by declaration or otherwise, proceed to
enforce the payment thereof or any other legal or equitable right of such Bank.
No remedy herein conferred upon any Bank or the Agents or the holder of any Note
or of any rights in the Consigned Precious Metal or the purchaser of any Letter
of Credit Participation is intended to be exclusive of any other remedy and each
and every remedy shall be cumulative and shall be in addition to every other
remedy given hereunder or now or hereafter existing at law or in equity or by
statute or any other provision of law.
14. SETOFF.
Regardless of the adequacy of any collateral, during the continuance of
any Event of Default, any deposits or other sums credited by or due from any of
the Banks to the Borrower and any securities or other property of the Borrower
in the possession of any Bank may be applied to or set off by such Bank against
the payment of Obligations and any and all other liabilities, direct, or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, of the Borrower to such Bank. Each of the Banks agrees with
each other Bank that (a) if an amount to be set off is to be applied to
Indebtedness of the Borrower to such Bank, other than Indebtedness evidenced by
the Notes held by such Bank or constituting Reimbursement Obligations owed to,
or, as the case may be, constituting obligations in respect of Consigned
Precious Metal owed to, such Bank, such amount shall be applied ratably to such
other Indebtedness and to the Indebtedness evidenced by all such Notes held by
such Bank or constituting Reimbursement Obligations owed to, or, as the case may
be, constituting obligations in respect of Consigned Precious Metal owed to,
such Bank, and (b) if such Bank shall receive from the Borrower, whether by
voluntary payment, exercise of the right of setoff, counterclaim, cross action,
enforcement of the claim evidenced by the Notes held by, or constituting
Reimbursement Obligations owed to, or, as the case may be, constituting
obligations in respect of Consigned Precious Metal owed to, such Bank by
proceedings against the Borrower at law or in equity or by proof thereof in
bankruptcy, reorganization, liquidation, receivership or similar proceedings, or
otherwise, and shall retain and apply to the payment of the Note or Notes held
by, or Reimbursement Obligations owed to, or, as the case may be, constituting
obligations in respect of Consigned Precious Metal owed to, such Bank any amount
in excess of its ratable portion of the payments received by all of the Banks
with respect to the Notes held by, and Reimbursement Obligations owed to, or, as
the case may be, constituting obligations in respect of Consigned Precious Metal
owed to, all of the Banks, such Bank will make such disposition and arrangements
with the other Banks with respect to such excess, either by way of distribution,
pro tanto assignment of claims, subrogation or otherwise as shall result in each
Bank receiving in respect of the Notes held by it or Reimbursement obligations
owed it, or, as the case may be, obligations in respect of Consigned Precious
Metal owed to it, its proportionate payment as contemplated by this Credit
Agreement; provided that if all or any part of such excess payment is thereafter
recovered from such Bank, such disposition and arrangements shall be rescinded
and the amount restored to the extent of such recovery, but without interest.
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15. THE AGENTS.
15.1 Authorization.
(a) Each of the Agents is authorized to take such action
on behalf of each of the Banks and to exercise all such powers as are hereunder
and under any of the other Loan Documents and any related documents delegated to
such Agent, together with such powers as are reasonably incident thereto,
provided that no duties or responsibilities not expressly assumed herein or
therein shall be implied to have been assumed by the Agents.
(b) The relationship between the Agents and each of the
Banks is that of an independent contractor. The use of the terms "Agent" and
"Collateral Agent" is for convenience only and is used to describe, as a form of
convention, the independent contractual relationship between the Agents and each
of the Banks. Nothing contained in this Credit Agreement nor the other Loan
Documents shall be construed to create an agency, trust or other fiduciary
relationship between the Agents and any of the Banks.
(c) As independent contractors empowered by the Banks to
exercise certain rights and perform certain duties and responsibilities
hereunder and under the other Loan Documents, each of the Agents is nevertheless
a "representative" of the Banks, as that term is defined in Article 1 of the
Uniform Commercial Code, for purposes of actions for the benefit of the Banks
and the Agents with respect to all collateral security and guaranties
contemplated by the Loan Documents. Such actions include the designation of the
Collateral Agent as "secured party", "mortgagee" or the like on all financing
statements and other documents and instruments, whether recorded or otherwise,
relating to the attachment, perfection, priority or enforcement of any security
interests, mortgages or deeds of trust in collateral security intended to secure
the payment or performance of any of the Obligations, all for the benefit of the
Banks and the Agents.
15.2 Employees and Agents. The Agents may exercise their powers and
execute its duties by or through employees or agents and shall be entitled to
take, and to rely on, advice of counsel concerning all matters pertaining to its
rights and duties under this Credit Agreement and the other Loan Documents. The
Agents may utilize the services of such Persons as the Agents in their sole
discretion may reasonably determine, and all reasonable fees and expenses of any
such Persons shall be paid by the Borrower.
15.3 No Liability. Neither the Agents nor any of their
shareholders, directors, officers or employees nor any other Person assisting
them in their duties nor any agent or employee thereof, shall be liable for any
waiver, consent or approval given or any action taken, or omitted to be taken,
in good faith by them hereunder or under any of the other Loan Documents, or in
connection herewith or therewith, or be responsible for the consequences of any
oversight or error of judgment whatsoever, except that the Agents or such other
Person, as the case may be, may be liable for losses due to its willful
misconduct or gross negligence; provided, however, that any Persons hired by
Agents in a professional capacity shall conduct their duties in accordance with
such professional standards accepted within such profession or industry.
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15.4 No Representations. The Agents shall not be responsible for
the execution or validity or enforceability of this Credit Agreement, the Notes,
the Letters of Credit, any of the other Loan Documents or any instrument at any
time constituting, or intended to constitute, collateral security for the Notes
or the obligations in respect of Consigned Precious Metal, or for the value of
any such collateral security or for the validity, enforceability or
collectability of any such amounts owing with respect to the Notes or the
obligations in respect of Consigned Precious Metal, or for any recitals or
statements, warranties or representations made herein or in any of the other
Loan Documents or in any certificate or instrument hereafter furnished to it by
or on behalf of the Borrower or any of its Subsidiaries, or be bound to
ascertain or inquire as to the performance or observance of any of the terms,
conditions, covenants or agreements herein or in any instrument at any time
constituting, or intended to constitute, collateral security for the Notes or
the obligations in respect of Consigned Precious Metal or to inspect any of the
properties, books or records of the Borrower or any of its Subsidiaries. The
Agents shall not be bound to ascertain whether any notice, consent, waiver or
request delivered to it by the Borrower or any holder of any of the Notes or of
any right in respect of Consigned Precious Metal shall have been duly authorized
or is true, accurate and complete. The Agents have not made nor do they now make
any representations or warranties, express or implied, nor do they assume any
liability to the Banks, with respect to the credit worthiness or financial
conditions of the Borrower or any of its Subsidiaries. Each Bank acknowledges
that it has, independently and without reliance upon either of the Agents or any
other Bank, and based upon such information and documents as it has deemed
appropriate, made its own credit analysis and decision to enter into this Credit
Agreement.
15.5 Payments.
15.5.1 Payments to Agent. A payment or Redelivery by the
Borrower to the Administrative Agent hereunder or any of the other Loan
Documents for the account of any Bank shall constitute a payment or, as
applicable, Redelivery to such Bank. Each of the Agents agrees promptly to
distribute to each Bank such Bank's pro rata share of payments received by such
Agent for the account of the such Banks except as otherwise expressly provided
herein or in any of the other Loan Documents.
15.5.2 Distribution by Agent. If in the opinion of either of
the Agents the distribution of any amount received by it in such capacity
hereunder, under the Notes or under any of the other Loan Documents might
involve it in liability, it may refrain from making distribution until its right
to make distribution shall have been adjudicated by a court of competent
jurisdiction. If a court of competent jurisdiction shall adjudge that any amount
received and distributed by either of the Agents is to be repaid, each Person to
whom any such distribution shall have been made shall either repay to such Agent
its proportionate share of the amount so adjudged to be repaid or shall pay over
the same in such manner and to such Persons as shall be determined by such
court.
15.5.3 Delinquent Banks. Notwithstanding anything to the
contrary contained in this Credit Agreement or any of the other Loan Documents,
any Bank that fails (i) to make available to the Administrative Agent its pro
rata share of any Loan or Purchase and Consignment or to purchase any Letter of
Credit Participation or (ii) to comply with the provisions of Section 15 with
respect to making dispositions and arrangements with the other Banks,
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where such Bank's share of any payment received, whether by setoff or otherwise,
is in excess of its pro rata share of such payments due and payable to all of
the Banks, in each case as, when and to the full extent required by the
provisions of this Credit Agreement, shall be deemed delinquent (a "Delinquent
Bank") and shall be deemed a Delinquent Bank until such time as such delinquency
is satisfied. A Delinquent Bank shall be deemed to have assigned any and all
payments due to it from the Borrower, whether on account of outstanding Loans,
Consigned Precious Metal, Reimbursement Obligations, interest, Consignment Fees,
other fees or otherwise, to the remaining nondelinquent Banks or Gold Fronting
Bank, as applicable, for application to, and reduction of, their respective pro
rata shares of all outstanding Loans and Reimbursement Obligations or, as
applicable, Consigned Precious Metal. The Delinquent Bank hereby authorizes the
Administrative Agent to distribute such payments to the nondelinquent Banks or
Gold Fronting Bank, as applicable, in proportion to their respective pro rata
shares of all outstanding Loans and Reimbursement Obligations or, as applicable,
Consigned Precious Metal. A Delinquent Bank shall be deemed to have satisfied in
full a delinquency when and if, as a result of application of the assigned
payments to all outstanding Loans and Reimbursement Obligations or, as
applicable, Consigned Precious Metal, of the nondelinquent Banks or Gold
Fronting Bank, as applicable, the Banks' respective pro rata shares of all
outstanding Loans and Reimbursement Obligations or, as applicable, the Gold
Fronting Bank's respective pro rata shares of Consigned Precious Metal have
returned to those in effect immediately prior to such delinquency and without
giving effect to the nonpayment causing such delinquency.
15.6 Holders of Notes. The Agents may deem and treat the payee of
any Note or the purchaser of any Letter of Credit Participation as the absolute
owner or purchaser thereof for all purposes hereof until it shall have been
furnished in writing with a different name by such payee or by a subsequent
holder, assignee or transferee.
15.7 Indemnity. The Banks ratably agree hereby to indemnify and
hold harmless each of the Agents (including, without limitation, the
Administrative Agent acting in its capacity as the Collateral Agent) from and
against any and all claims, actions and suits (whether groundless or otherwise),
losses (excluding any credit loss of any Lender), damages, costs, expenses
(including any expenses for which such Agent has not been reimbursed by the
Borrower as required by Section 16), and liabilities of every nature and
character arising out of or related to this Credit Agreement, the Notes, or any
of the other Loan Documents or the transactions contemplated or evidenced hereby
or thereby, or such Agent's actions taken hereunder or thereunder, except to the
extent that any of the same shall be directly caused by such Agent's willful
misconduct or gross negligence.
15.8 Agents as Banks. In their individual capacities, each of the
Agents shall have the same obligations and the same rights, powers and
privileges in respect to its Commitment and the Loans made by it, and as the
holder of any of the Notes or of any obligations in respect of Consigned
Precious Metal and as the purchaser of any Letter of Credit Participations, as
it would have were it not also an Agent.
15.9 Resignation. Any of the Agents may resign at any time by
giving sixty (60) days' prior written notice thereof to the Banks and the
Borrower. Upon any such resignation, the Required Banks shall have the right to
appoint a successor Agent. Unless a Default or an Event of Default shall have
occurred and be continuing, such successor Agent shall be reasonably
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acceptable to the Borrower. If no successor Agent shall have been so appointed
by the Required Banks and shall have accepted such appointment within thirty
(30) days after the retiring Agent's giving of notice of resignation, then the
retiring Agent may, on behalf of the Banks, appoint a successor Agent, which
shall be a financial institution having a rating of not less than A or its
equivalent by Standard & Poor's, a division of McGraw Hill, Inc. Upon the
acceptance of any appointment as an Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation, the provisions of this Credit Agreement and the
other Loan Documents shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as Agent.
15.10 Notification of Defaults and Events of Default. Each Bank
hereby agrees that, upon learning of the existence of a Default or an Event of
Default, it shall promptly notify the Agents thereof. The Agents hereby agree
that upon receipt of any notice under this Section 15.10 they shall promptly
notify the other Banks of the existence of such Default or Event of Default.
15.11 Duties in the Case of Enforcement. In case one of more Events
of Default have occurred and shall be continuing, and whether or not
acceleration of the Obligations shall have occurred, the Collateral Agent shall,
if (a) so requested by the Required Banks and (b) the Banks have provided to the
Collateral Agent such additional indemnities and assurances against expenses and
liabilities as the Collateral Agent may reasonably request, proceed to enforce
the provisions of the Security Documents authorizing the sale or other
disposition of all or any part of the Collateral and exercise all or any such
other legal and equitable and other rights or remedies as it may have in respect
of such Collateral. The Required Banks may direct the Collateral Agent in
writing as to the method and the extent of any such sale or other disposition,
the Banks hereby agreeing to indemnify and hold the Collateral Agent, harmless
from all liabilities incurred in respect of all actions taken or omitted in
accordance with such directions, provided that the Collateral Agent need not
comply with any such direction to the extent that the Collateral Agent
reasonably believes the Collateral Agent's compliance with such direction to be
unlawful or commercially unreasonable in any applicable jurisdiction.
16. EXPENSES.
The Borrower agrees to pay (a) the reasonable costs of producing and
reproducing this Credit Agreement, the other Loan Documents and the other
agreements and instruments mentioned herein, (b) any taxes (including taxes
incurred in connection with the purchase, consignment and repurchase of
Consigned Precious Metal and including any interest and penalties in respect
thereto) payable by any of the Agents or any of the Banks (other than taxes
based upon any Agent's or any Bank's net income) on or with respect to the
transactions contemplated by this Credit Agreement (the Borrower hereby agreeing
to indemnify each of the Agents and each Bank with respect thereto), (c) the
reasonable fees, expenses and disbursements of the Administrative Agent's
Special Counsel or any local counsel to the Agents incurred in connection with
the preparation, administration or interpretation of the Loan Documents and
other instruments mentioned herein, each closing hereunder, and amendments,
modifications, approvals, consents or waivers hereto or hereunder, (d) the fees,
expenses and disbursements of each of the Agents incurred by such Agent in
connection with the preparation, administration or
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interpretation of the Loan Documents and other instruments mentioned herein,
including all title insurance premiums and surveyor, engineering and appraisal
charges, (e) any fees, costs, expenses and bank charges, including bank charges
for returned checks, incurred by the Agents or any Bank in establishing,
maintaining or handling agency accounts, lock box accounts and other accounts
for the collection of any of the Collateral; (f) all reasonable out-of pocket
expenses incurred by the Agents, or, after the occurrence and during the
continuance of a Default or an Event of Default, any Bank, in connection with
periodic field examinations, fixed asset appraisals, environmental review,
monitoring of Collateral and other assets, sale of Precious Metal Redelivered by
the Borrower and otherwise in maintaining and monitoring the transactions
contemplated hereby, and in each case in accordance with the terms of this
Credit Agreement (provided, however, until an Event of Default shall have
occurred and be continuing, the Borrower shall only be required to pay for one
(1) field examination and one (1) fixed asset appraisal in each calendar year);
(g) all reasonable out-of-pocket expenses (including without limitation
reasonable attorneys' fees and costs, which attorneys may be employees of any
Bank or any of the Agents, and reasonable consulting, accounting, appraisal,
investment banking and similar professional fees and charges) incurred by any
Bank or any Agent in connection with (i) the enforcement of or preservation of
rights under any of the Loan Documents against the Borrower or any of its
Subsidiaries or the administration thereof after the occurrence of a Default or
Event of Default and (ii) any litigation, proceeding or dispute whether arising
hereunder or otherwise, in any way related to any Bank's or any Agent's
relationship with the Borrower or any of its Subsidiaries and (h) all reasonable
fees, expenses and disbursements of the Agents incurred in connection with UCC
searches, UCC filings or mortgage recordings. The covenants of this Section 18
shall survive payment or satisfaction of all other Obligations.
17. INDEMNIFICATION.
The Borrower agrees to indemnify and hold harmless each of the Agents
and the Banks from and against any and all claims, actions and suits whether
groundless or otherwise, and from and against any and all liabilities, losses,
damages and expenses of every nature and character arising out of this Credit
Agreement or any of the other Loan Documents or the transactions contemplated
hereby including, without limitation, (a) any actual or proposed use by the
Borrower or any of its Subsidiaries of the proceeds of any of the Loans,
Purchases and Consignments or Letters of Credit, (b) the reversal or withdrawal
of any provisional credits granted by the Administrative Agent upon the transfer
of funds to the Concentration Account(s) from bank agency or lock box accounts
or in connection with the provisional honoring of checks or other items, (c) any
actual or alleged infringement of any patent, copyright, trademark, service ▇▇▇▇
or similar right of the Borrower or any of its Subsidiaries comprised in the
Collateral, (d) the Borrower or any of its Subsidiaries entering into or
performing this Credit Agreement or any of the other Loan Documents, (e) with
respect to the Borrower and its Subsidiaries and their respective properties and
assets, the violation of any Environmental Law, the presence, disposal, escape,
seepage, leakage, spillage, discharge, emission, release or threatened release
of any Hazardous Substances or any action, suit, proceeding or investigation
brought or threatened with respect to any Hazardous Substances (including, but
not limited to, claims with respect to wrongful death, personal injury or damage
to property), or (f) any sales, use, transfer, documentary and stamp taxes (but
excluding any taxes based upon or measured by the income or profits of any Bank
or any Agent) and any recording and filing fees paid by the Agents or the Banks
and which arise by reason of the transactions contemplated hereby, by the
Purchases and
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Consignments or by any of the Loan Documents, in each case including, without
limitation, the reasonable fees and disbursements of counsel and allocated costs
of internal counsel incurred in connection with any such investigation,
litigation or other proceeding. In litigation, or the preparation therefor, the
Banks and the Agents shall be entitled to select their own counsel and, in
addition to the foregoing indemnity, the Borrower agrees to pay promptly the
reasonable fees and expenses of such counsel. If, and to the extent that the
obligations of the Borrower under this Section 19 are unenforceable for any
reason, the Borrower hereby agrees to make the maximum contribution to the
payment in satisfaction of such obligations which is permissible under
applicable law. The covenants contained in this Section 17 shall survive payment
or satisfaction in full of all other Obligations.
18. SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made herein,
in the Notes, in any of the other Loan Documents or in any documents or other
papers delivered by or on behalf of the Borrower or any of its Subsidiaries
pursuant hereto shall be deemed to have been relied upon by the Banks and each
of the Agents, notwithstanding any investigation heretofore or hereafter made by
any of them, and shall survive the making by the Banks or the Administrative
Agent of any of the Loans or Purchases and Consignments and the issuance,
extension or renewal of any Letters of Credit, as herein contemplated, and shall
continue in full force and effect so long as any Letter of Credit or any amount
due under this Credit Agreement or the Notes or any of the other Loan Documents
remains outstanding or any Bank has any obligation to make any Loans or the
Administrative Agent has any obligation to make any Purchases and Consignments
or issue, extend or renew any Letter of Credit, and for such further time as may
be otherwise expressly specified in this Credit Agreement. All statements
contained in any certificate or other paper delivered to any Bank or any of the
Agents at any time by or on behalf of the Borrower or any of its Subsidiaries
pursuant hereto or in connection with the transactions contemplated hereby shall
constitute representations and warranties by the Borrower or such Subsidiary
hereunder.
19. ASSIGNMENT AND PARTICIPATION.
19.1 Conditions to Assignment by Banks. Except as provided herein,
each Bank may assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Credit Agreement (including all or
a portion of its Commitment Percentage and Commitment, and the same portion of
the Loans at the time owing to it, the Notes held by it and its participating
interest in the risk relating to any Consigned Precious Metals and Letters of
Credit); provided that (a) each of the Agents, the Gold Fronting Bank and,
unless a Default or an Event of Default shall have occurred and be continuing,
the Borrower, shall have given its prior written consent to such assignment,
which consent, in the case of the Borrower, will not be unreasonably withheld,
(b) each such assignment shall be of a constant, and not a varying, percentage
of all the assigning Bank's rights and obligations hereunder, (c) each
assignment shall be in an amount that is at least equal to $5,000,000, and (d)
the parties to such assignment shall execute and deliver to the Agents, for
recording in the Register (as hereinafter defined), an Assignment and
Acceptance, substantially in the form of Exhibit N hereto (an "Assignment and
Acceptance"), together with any Notes subject to such assignment. Upon such
execution, delivery, acceptance and recording, from and after the effective date
specified in each
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Assignment and Acceptance, which effective date shall be at least five (5)
Business Days after the execution thereof, (i) the assignee thereunder shall be
a party hereto and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Bank hereunder, and (ii) the assigning Bank
shall, to the extent provided in such assignment and upon payment to the Agents
of the registration fee referred to in Section 19.3, be released from its
obligations under this Credit Agreement. Notwithstanding the foregoing, no
consent shall be required hereunder for any assignment resulting from the
acquisition of any Bank by another financial institution.
19.2 Certain Representations and Warranties; Limitations;
Covenants. By executing and delivering an Assignment and Acceptance, the parties
to the assignment thereunder confirm to and agree with each other and the other
parties hereto as follows:
(a) other than the representation and warranty that it is
the legal and beneficial owner of the interest being assigned thereby free and
clear of any adverse claim, the assigning Bank makes no representation or
warranty, express or implied, and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Credit Agreement, the other Loan
Documents or any other instrument or document furnished pursuant hereto or the
attachment, perfection or priority of any security interest or mortgage;
(b) the assigning Bank makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Borrower and its Subsidiaries or any other Person primarily or
secondarily liable in respect of any of the Obligations, or the performance or
observance by the Borrower and its Subsidiaries or any other Person primarily or
secondarily liable in respect of any of the Obligations of any of their
obligations under this Credit Agreement or any of the other Loan Documents or
any other instrument or document furnished pursuant hereto or thereto;
(c) such assignee confirms that it has received a copy of
this Credit Agreement, together with copies of the most recent financial
statements referred to in Section 7.4 and Section 10.4 and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance;
(d) such assignee will, independently and without
reliance upon the assigning Bank, the Agents or any other Bank and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this Credit
Agreement;
(e) such assignee represents and warrants that it is an
Eligible Assignee;
(f) such assignee appoints and authorizes the Agents to
take such action as agents on its behalf and to exercise such powers under this
Credit Agreement and the other Loan Documents as are delegated to the Agents by
the terms hereof or thereof, together with such powers as are reasonably
incidental thereto;
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(g) such assignee agrees that it will perform in
accordance with their terms all of the obligations that by the terms of this
Credit Agreement are required to be performed by it as a Bank;
(h) such assignee represents and warrants that it is
legally authorized to enter into such Assignment and Acceptance; and
(i) if applicable, such assignee acknowledges that it has
made arrangements with the assigning Bank satisfactory to such assignee with
respect to its pro rata share of Letter of Credit Fees in respect of outstanding
Letters of Credit.
19.3 Register. The Agents shall maintain a copy of each Assignment
and Acceptance delivered to them and a register or similar list (the "Register")
for the recordation of the names and addresses of the Banks and as applicable,
the Commitment Percentage or the Commitment Percentage of, and principal amount
of the Loans, owing to, Purchases and Consignments made by, and Letter of Credit
Participations purchased by, the Banks from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Agents and the Banks may treat each Person whose name is recorded
in the Register as a Bank hereunder for all purposes of this Credit Agreement.
The Register shall be available for inspection by the Borrower and the Banks at
any reasonable time and from time to time upon reasonable prior notice. Upon
each such recordation, the assignee Bank agrees to pay to the Administrative
Agent a registration fee in the sum of $3,500.
19.4 New Notes. Upon their receipt of an Assignment and Acceptance
executed by the parties to such assignment, together with each Note subject to
such assignment, the Agents shall (a) record the information contained therein
in the Register, and (b) give prompt notice thereof to the Borrower and the
Banks (other than the assigning Bank). Within five (5) Business Days after
receipt of such notice, the Borrower, at its own expense, shall execute and
deliver to the Agents, in exchange for each surrendered Note, a new Note or
Notes to the order of such Eligible Assignee in an amount equal to the amount
assumed by such Eligible Assignee pursuant to such Assignment and Acceptance
and, if the assigning Bank has retained some portion of its obligations
hereunder, a new Note or Notes to the order of the assigning Bank in an amount
equal to the amount retained by it hereunder. Such new Notes shall provide that
they are replacements for the surrendered Notes, shall be in an aggregate
principal amount equal to the aggregate principal amount of the surrendered
Notes, shall be dated the effective date of such Assignment and Acceptance and
shall otherwise be substantially in the form of the assigned Notes. Within five
(5) days of issuance of any new Notes pursuant to this Section 19.4, the
Borrower shall deliver an opinion of counsel, addressed to the Banks and the
Agents, relating to the due authorization, execution and delivery of such new
Notes and the legality, validity and binding effect thereof, in form and
substance satisfactory to the Banks. The surrendered Notes shall be canceled and
returned to the Borrower.
19.5 Participations. Each Bank may sell participations to one or
more banks or other entities in all or a portion of such Bank's rights and
obligations under this Credit Agreement and the other Loan Documents; provided
that (a) each such participation shall be in an amount of not less than
$5,000,000.00, (b) any such sale or participation shall not affect the rights
and duties of the selling Bank hereunder to the Borrower and (c) the only rights
granted to the participant
84
pursuant to such participation arrangements with respect to waivers, amendments
or modifications of the Loan Documents shall be the rights to approve waivers,
amendments or modifications that would reduce the principal of or the interest
rate on any Loans, reduce the Fair Market Value of Consigned Precious Metal or
Consignment Fees, extend the term or increase the amount of the Commitment of
such Bank as it relates to such participant, reduce the amount of any commitment
fees or Letter of Credit Fees to which such participant is entitled or extend
any regularly scheduled payment date for principal or interest or any scheduled
payment or Redelivery date for Consigned Precious Metal or Consignment Fees.
19.6 Disclosure. The Borrower agrees that, in addition to
disclosures made in accordance with standard and customary banking practices,
any Bank may disclose information obtained by such Bank pursuant to this Credit
Agreement to assignees or participants and potential assignees or participants
hereunder; provided that such assignees or participants or potential assignees
or participants shall agree (a) to treat in confidence such information unless
it otherwise becomes public knowledge, (b) not to disclose such information to a
third party, except as required by law or legal process, and (c) not to make use
of such information for purposes of transactions unrelated to such contemplated
assignment or participation.
19.7 Assignee or Participant Affiliated with the Borrower. If any
assignee Bank is an Affiliate of the Borrower, then any such assignee Bank shall
have no right to vote as a Bank hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or other modifications to any of the Loan Documents or
for purposes of making requests to the Agents pursuant to Section 13.1 or
Section 13.2, and the determination of the Required Banks shall for all purposes
of this Credit Agreement and the other Loan Documents be made without regard to
such assignee Bank's interest in any of the Loans. If any Bank sells a
participating interest in any of the Loans, Consigned Precious Metal or
Reimbursement Obligations to a participant, and such participant is the Borrower
or an Affiliate of the Borrower, then such transferor Bank shall promptly notify
the Agents of the sale of such participation. A transferor Bank shall have no
right to vote as a Bank hereunder or under any of the other Loan Documents for
purposes of granting consents or waivers or for purposes of agreeing to
amendments or modifications to any of the Loan Documents or for purposes of
making requests to the Agents pursuant to Section 13.1 or Section 13.2 to the
extent that such participation is beneficially owned by the Borrower or any
Affiliate of the Borrower, and the determination of the Required Banks shall for
all purposes of this Credit Agreement and the other Loan Documents be made
without regard to the interest of such transferor Bank in the Loans, Consigned
Precious Metal or Reimbursement Obligations to the extent of such participation.
19.8 Miscellaneous Assignment Provisions. Any assigning Bank shall
retain its rights to be indemnified pursuant to Section 16 with respect to any
claims or actions arising prior to the date of such assignment. If any assignee
Bank is not incorporated under the laws of the United States of America or any
state thereof, it shall, prior to the date on which any interest or fees are
payable hereunder or under any of the other Loan Documents for its account,
deliver to the Borrower and the Agents certification as to its exemption from
deduction or withholding of any United States federal income taxes. Anything
contained in this Section 19 to the contrary notwithstanding, any Bank may at
any time pledge all or any portion of its interest and rights under this Credit
Agreement (including all or any portion of its Notes) to any of the twelve
Federal Reserve Banks organized under Section 4 of the Federal Reserve Act, 12
U.S.C. Section 341. No such
85
pledge or the enforcement thereof shall release the pledgor Bank from its
obligations hereunder or under any of the other Loan Documents.
19.9 Assignment by Borrower. The Borrower shall not assign or
transfer any of its rights or obligations under any of the Loan Documents
without the prior written consent of each of the Banks.
20. NOTICES, ETC.
Except as otherwise expressly provided in this Credit Agreement, all
notices and other communications made or required to be given pursuant to this
Credit Agreement or the Notes or any Letter of Credit Applications shall be in
writing and shall be delivered in hand, mailed by United States registered or
certified first class mail, postage prepaid, sent by overnight courier, or sent
by telegraph, telecopy, facsimile or telex and confirmed by delivery via courier
or postal service, addressed as follows:
(a) if to the Borrower, at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇ ▇▇▇▇▇▇, Chief Financial
Officer, or at such other address for notice as the Borrower shall last have
furnished in writing to the Person giving the notice;
(b) if to the Administrative Agent, the Collateral Agent,
or LaSalle, at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, First Vice President, or such other address for notice as the
Administrative Agent, the Collateral Agent, or, as the case may be, LaSalle
shall last have furnished in writing to the Person giving the notice;
(c) if to ABN AMRO Bank N.V., individually or in its
capacity as Syndication Agent, at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, or such other address for notice as it
shall last have furnished in writing to the Person giving the notice; and
(d) if to any Bank, at such Bank's address set forth on
Schedule 1 hereto, or such other address for notice as such Bank shall have last
furnished in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or made and to
have become effective (i) if delivered by hand, overnight courier or facsimile
to a responsible officer of the party to which it is directed, at the time of
the receipt thereof by such officer or the sending of such facsimile and (ii) if
sent by registered or certified first-class mail, postage prepaid, on the third
Business Day following the mailing thereof.
21. GOVERNING LAW.
THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE
STATE OF ILLINOIS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF SAID STATE OF ILLINOIS (EXCLUDING THE LAWS APPLICABLE TO
CONFLICTS OR CHOICE OF LAW). THE BORROWER
86
AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF ILLINOIS OR
ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION
OF SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE
BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN SECTION 22. THE BORROWER HEREBY
WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH
SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.
22. HEADINGS.
The captions in this Credit Agreement are for convenience of reference
only and shall not define or limit the provisions hereof.
23. COUNTERPARTS.
This Credit Agreement and any amendment hereof may be executed in
several counterparts and by each party on a separate counterpart, each of which
when executed and delivered shall be an original, and all of which together
shall constitute one instrument. In proving this Credit Agreement it shall not
be necessary to produce or account for more than one such counterpart signed by
the party against whom enforcement is sought.
24. ENTIRE AGREEMENT, ETC.
The Loan Documents and any other documents executed in connection
herewith or therewith express the entire understanding of the parties with
respect to the transactions contemplated hereby. Neither this Credit Agreement
nor any term hereof may be changed, waived, discharged or terminated, except as
provided in Section 26.
25. WAIVER OF JURY TRIAL.
THE BORROWER, EACH AGENT AND EACH BANK HEREBY WAIVES ITS RIGHT TO A
JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS CREDIT AGREEMENT, THE NOTES OR ANY OF THE OTHER LOAN
DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE
OF WHICH RIGHTS AND OBLIGATIONS. EXCEPT AS PROHIBITED BY LAW, THE BORROWER, EACH
AGENT AND EACH BANK HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN
ANY LITIGATION REFERRED TO IN THE PRECEDING SENTENCE ANY SPECIAL, EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO,
ACTUAL DAMAGES. THE BORROWER (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY BANK OR EITHER OF THE AGENTS HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH BANK OR SUCH AGENT WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVERS AND (B) ACKNOWLEDGES THAT THE AGENTS AND
THE BANKS HAVE BEEN INDUCED TO ENTER INTO THIS CREDIT
87
AGREEMENT, THE OTHER LOAN DOCUMENTS TO WHICH IT IS A PARTY BY, AMONG OTHER
THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED HEREIN.
26. CONSENTS, AMENDMENTS, WAIVERS, ETC.
Any consent or approval required or permitted by this Credit Agreement
to be given by all of the Banks may be given, and any term of this Credit
Agreement, the other Loan Documents or any other instrument related hereto or
mentioned herein may be amended, and the performance or observance by the
Borrower or any of its Subsidiaries of any terms of this Credit Agreement, the
other Loan Documents or such other instrument or the continuance of any Default
or Event of Default may be waived (either generally or in a particular instance
and either retroactively or prospectively) with, but only with, the written
consent of the Borrower and the written consent of the Required Banks.
Notwithstanding the foregoing (a) without the written consent of the Borrower
and the written consent of each Bank affected thereby, the rate of interest on
the Notes (other than interest accruing pursuant to Section 5.21 followinG the
effective date of any waiver by the Required Banks of the Default or Event of
Default relating thereto) may not be decreased, the definition of Maturity Date
may not be changed, no rates of interest may be decreased, the basis for
calculation of Consignment Fees may not be decreased, the amounts of the
Commitments of the Banks may not be increased, the amounts of the commitment
fees and the Letter of Credit Fees (including those payable for the
Administrative Agent's own account) hereunder may not be decreased, and the
advance rates set forth in the definition of Borrowing Base and the Consignment
Limit and the Consignment Advance Rate Percentage may not be increased; (b) the
definition of Required Banks may not be amended without the written consent of
all of the Banks; (c) the amount of the Agents' fees and Section 15 may not be
amended without the written consent of each of the Agents; (d) Section 5.10 may
not be amenDed without the written consent of all of the Banks; (e) all or
substantially all of the Collateral may not be released without the written
consent of all of the Banks and (f) there can be no reduction in the amount, or
extension of the maturity date, of any of the Obligations (other than as a
result of any permitted prepayments made hereunder) without the consent of all
of the Banks (other than Delinquent Banks). No waiver shall extend to or affect
any obligation not expressly waived or impair any right consequent thereon. No
course of dealing or delay or omission on the part of either of the Agents or
any Bank in exercising any right shall operate as a waiver thereof or otherwise
be prejudicial thereto. No notice to or demand upon the Borrower shall entitle
the Borrower to other or further notice or demand in similar or other
circumstances.
27. SEVERABILITY.
The provisions of this Credit Agreement are severable and if any one
clause or provision hereof shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction, and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Credit Agreement in any jurisdiction.
88
28. TRANSITIONAL ARRANGEMENTS.
28.1 Original Credit Agreement Superseded. This Credit Agreement
shall on the Closing Date supersede the Original Credit Agreement in its
entirety, except as provided in this Section 28. On the Closing Date, the rights
and obligations of the parties evidenceD by the Original Credit Agreement shall
be evidenced by this Credit Agreement and the other Loan Documents, the
"Revolving Credit Loans" as defined in the Original Credit Agreement shall be
converted to Revolving Credit Loans as defined herein, and the "Purchases and
Consignments" as defined in the Original Credit Agreement shall be converted to
"Purchases and Consignments" as defined herein. The Banks and the Gold Fronting
Bank shall make such payments, if any, as may be required among them such that
their respective interests in the converted Revolving Credit Loans hereunder and
in the converted Purchases and Consignments hereunder are in accordance with
their respective Commitment Percentages and Gold Commitment Percentages,
respectively.
28.2 Return and Cancellation of Notes. As soon as reasonably
practicable after its receipt of its Notes hereunder on the Closing Date, the
Banks will promptly return to the Borrower, marked "Substituted" or "Canceled,"
as the case may be, any promissory notes of the Borrower held by the Banks
pursuant to the Original Credit Agreement.
28.3 Interest and Fees Under Original Credit Agreement. All
interest and fees and expenses, if any, owing or accruing under or in respect of
the Original Credit Agreement through the Closing Date shall be calculated as of
the Closing Date (prorated in the case of any fractional periods), and shall be
paid on the Closing Date.
[SIGNATURE PAGES FOLLOW]
89
(SIGNATURE PAGE TO SECOND AMENDED AND RESTATED
REVOLVING CREDIT AND GOLD CONSIGNMENT AGREEMENT)
IN WITNESS WHEREOF, the undersigned have duly executed this Second
Amended and Restated Revolving Credit and Gold Consignment Agreement as of the
date first set forth above.
BORROWER:
WHITEHALL JEWELLERS, INC.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President
(SIGNATURE PAGE TO SECOND AMENDED AND RESTATED
REVOLVING CREDIT AND GOLD CONSIGNMENT AGREEMENT)
ADMINISTRATIVE AGENT:
LASALLE BANK NATIONAL
ASSOCIATION, individually and as
Administrative Agent and as Collateral Agent
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: First Vice President
(SIGNATURE PAGE TO SECOND AMENDED AND RESTATED
REVOLVING CREDIT AND GOLD CONSIGNMENT AGREEMENT)
DOCUMENTATION AGENT:
JPMORGAN CHASE BANK, individually
and as Documentation Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
(SIGNATURE PAGE TO SECOND AMENDED AND RESTATED
REVOLVING CREDIT AND GOLD CONSIGNMENT AGREEMENT)
SYNDICATION AGENT:
ABN AMRO BANK N.V., individually and
as Syndication Agent
By: /s/ ▇▇▇▇▇▇▇ SARFETY
----------------------------------------
Name: ▇▇▇▇▇▇▇ Sarfety
Title: Vice President
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
(SIGNATURE PAGE TO SECOND AMENDED AND RESTATED
REVOLVING CREDIT AND GOLD CONSIGNMENT AGREEMENT)
BANK:
FLEET CAPITAL CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President
(SIGNATURE PAGE TO SECOND AMENDED AND RESTATED
REVOLVING CREDIT AND GOLD CONSIGNMENT AGREEMENT)
BANK:
SOVEREIGN BANK,
a Federal Savings Bank
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
EXHIBIT H
FORM OF
SECOND AMENDED AND RESTATED
REVOLVING CREDIT NOTE
$25,000,000 July 29, 2003
FOR VALUE RECEIVED, the undersigned WHITEHALL JEWELLERS, INC. (f/k/a
Marks Bros. Jewelers, Inc.), a Delaware corporation (the "Borrower"), hereby
promises to pay to the order of [_______________] (the "Bank") at the
Administrative Agent's Head Office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇:
(a) prior to or on the Maturity Date the principal amount
of Twenty Five Million Dollars ($25,000,000) or, if less, the aggregate
unpaid principal amount of Revolving Credit Loans advanced by the Bank
to the Borrower pursuant to the Second Amended and Restated Revolving
Credit and Gold Consignment Agreement of even date herewith (as amended
and in effect from time to time, the "Credit Agreement"), among the
Borrower, the Bank and the other parties thereto;
(b) the principal outstanding hereunder from time to time
at the times provided in the Credit Agreement; and
(c) interest on the principal balance hereof from time to
time outstanding from the Closing Date under the Credit Agreement
through and including the maturity date hereof at the times and at the
rate provided in the Credit Agreement.
This Note evidences borrowings under and has been issued by the
Borrower in accordance with the terms of the Credit Agreement. This Note amends
and restates that certain Amended and Restated Revolving Credit Note dated as of
[_______________] in the maximum principal amount of [$_____________] (the
"Prior Note") issued to the Bank and is issued in partial substitution therefor,
and does not and shall not be deemed to constitute a novation therefor. Such
Prior Note shall be of no further force and effect upon the execution of this
Note; provided, however, that the outstanding amount of principal and interest
under the Prior Note as of the date of this Note is hereby deemed indebtedness
evidenced by this Note and incorporated herein by this reference. The Bank and
any holder hereof is entitled to the benefits of the Credit Agreement, the
Security Documents and the other Loan Documents, and may enforce the agreements
of the Borrower contained therein, and any holder hereof may exercise the
respective remedies provided for thereby or otherwise available in respect
thereof, all in accordance with the respective terms thereof. All capitalized
terms used in this Note and not otherwise defined herein shall have the same
meanings herein as in the Credit Agreement.
The Borrower irrevocably authorizes the Bank to make or cause to be
made, at or about the time of the Drawdown Date of any Revolving Credit Loan or
at the time of receipt of any payment of principal of this Note, an appropriate
notation on the grid attached to this Note, or the continuation of such grid, or
any other similar record, including computer records, reflecting the making of
such Revolving Credit Loan or (as the case may be) the receipt of such payment.
The
outstanding amount of the Revolving Credit Loans set forth on the grid attached
to this Note, or the continuation of such grid, or any other similar record,
including computer records, maintained by the Bank with respect to any Revolving
Credit Loans shall be prima facie evidence of the principal amount thereof owing
and unpaid to the Bank, but the failure to record, or any error in so recording,
any such amount on any such grid, continuation or other record shall not limit
or otherwise affect the obligation of the Borrower hereunder or under the Credit
Agreement to make payments of principal of and interest on this Note when due.
The Borrower has the right in certain circumstances and the obligation
under certain other circumstances to prepay the whole or part of the principal
of this Note on the terms and conditions specified in the Credit Agreement.
If any one or more of the Events of Default shall occur, the entire
unpaid principal amount of this Note and all of the unpaid interest accrued
thereon may become or be declared due and payable in the manner and with the
effect provided in the Credit Agreement.
No delay or omission on the part of the Bank or any holder hereof in
exercising any right hereunder shall operate as a waiver of such right or of any
other rights of the Bank or such holder, nor shall any delay, omission or waiver
on any one occasion be deemed a bar or waiver of the same or any other right on
any further occasion.
The Borrower and every endorser and guarantor of this Note or the
obligation represented hereby waives presentment, demand, notice, protest and
all other demands and notices in connection with the delivery, acceptance,
performance, default or enforcement of this Note, and assents to any extension
or postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of collateral and to the addition or release
of any other party or person primarily or secondarily liable.
THIS NOTE AND THE OBLIGATIONS OF THE BORROWER HEREUNDER SHALL FOR ALL
PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF
ILLINOIS (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE
BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS NOTE MAY BE BROUGHT IN
THE COURTS OF THE STATE OF ILLINOIS OR ANY FEDERAL COURT SITTING THEREIN AND
CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND THE SERVICE OF
PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESS
SPECIFIED IN SECTION 20 OF THE CREDIT AGREEMENT. THE BORROWER HEREBY WAIVES ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY
SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.
3
IN WITNESS WHEREOF, the undersigned has caused this Second Amended and
Restated Revolving Credit Note to be signed in its corporate name by its duly
authorized officer as of the day and year first above written.
WHITEHALL JEWELLERS, INC. (f/k/a
Marks Bros. Jewelers, Inc.)
By: ________________________________________
Name: _________________________________
Title: ________________________________
4
Amount of Balance of
Amount Principal Paid Principal Notation
Date of Loan or Prepaid Unpaid Made By:
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SCHEDULE 1
Commitment Percentages, Lending Offices and Notice Address
Banks and their respective Commitment Percentage of the Total Revolver
Commitment are as follows:
---------------------------------------------------------------------------------------------------------------------
COMMITMENT PERCENTAGE
BANK TOTAL COMMITMENT (PRO RATA SHARE)
---------------------------------------------------------------------------------------------------------------------
LaSalle Bank National Association $ 25,000,000 20.000000000%
------------------------------------------------ --------------------------------- ----------------------------------
ABN AMRO Bank N.V. $ 25,000,000 20.000000000%
------------------------------------------------ --------------------------------- ----------------------------------
JPMorgan Chase Bank $ 25,000,000 20.000000000%
------------------------------------------------ --------------------------------- ----------------------------------
Fleet Capital Corporation $ 25,000,000 20.000000000%
------------------------------------------------ --------------------------------- ----------------------------------
Sovereign Bank, a Federal Savings Bank $ 25,000,000 20.000000000%
------------------------------------------------ --------------------------------- ----------------------------------
TOTALS $125,000,000 100%
------------------------------------------------ --------------------------------- ----------------------------------
Banks and their respective Address for Notices are as follows:
BANK
LaSalle Bank National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
ABN AMRO Bank N.V.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
JPMorgan Chase Bank
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Fleet Capital Corporation
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P.O. Box 1641
Waukesha, Wisconsin
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Sovereign Bank, a Federal Savings Bank
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