1
EXHIBIT 10(d)
$600,000,000 REVOLVING CREDIT FACILITY
AMENDED AND RESTATED CREDIT AGREEMENT
by and among
CONSOLIDATED STORES CORPORATION, an Ohio corporation, as Borrower
and
THE BANKS PARTY HERETO
and
THE BANK OF NEW YORK, As Syndication Agent and Managing Agent
and
NATIONAL CITY BANK OF COLUMBUS, As Administrative Agent and Managing Agent
and
PNC BANK, OHIO, NATIONAL ASSOCIATION, As Arranger, Documentation Agent and
Managing Agent
and
BANK ONE, COLUMBUS, N.A., as Managing Agent
and
NATIONAL CITY BANK, as Managing Agent
DATED AS OF MAY 3, 1996
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EXHIBIT 10(d)
1. CERTAIN DEFINITIONS .......................................................................2
1.1 Certain Definitions ..........................................................2
1.2 Construction ................................................................17
1.2.1 Number: Inclusion ................................................18
1.2.2 Determination ....................................................18
1.2.3 Documentation Agent's Discretion and Consent .....................18
1.2.4 Documents Taken as a Whole .......................................18
1.2.5 Headings .........................................................18
1.2.6 Implied References to this Agreement .............................18
1.2.7 Persons ..........................................................18
1.2.8 Modifications to Documents .......................................19
1.2.9 From, To and Through .............................................19
1.2.10 Shall; Will ......................................................19
1.2.11 Operative Date ...................................................19
1.3 Accounting Principles .......................................................19
2. REVOLVING CREDIT FACILITY ................................................................19
2.1 Revolving Credit Commitments ................................................19
2.2 Nature of Banks' Obligations with Respect to Revolving Credit Loans .........20
2.3 Commitment Fees .............................................................20
2.4 Reduction of Revolving Credit Commitments ...................................21
2.4.1 Voluntary Reduction of Revolving Credit Commitments ..............21
2.4.2 Mandatory Reduction of Revolving Credit Commitments ..............22
2.5 Revolving Credit Loan Requests ..............................................22
2.6 Making Revolving Credit Loans ...............................................23
2.7 Revolving Credit Notes ......................................................23
2.8 Use of Proceeds .............................................................23
2.9 Letters of Credit Subfacility ...............................................24
2.9.1 Issuance of Letters of Credit ....................................24
2.9.2 Participations ...................................................25
2.9.3 Letter of Credit Fees ............................................25
2.9.4 Disbursements, Reimbursement .....................................28
2.9.5 Documentation ....................................................29
2.9.6 Determinations to Honor Drawing Requests .........................30
2.9.7 Nature of Participation and Reimbursement Obligations ............30
2.9.8 Indemnity ........................................................31
2.9.9 Liability for Acts and Omissions .................................32
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EXHIBIT 10(d)
2.10 Swing Loans .................................................................33
2.10.1 Swing Loan Commitment ............................................33
2.10.2 Swing Loan Requests ..............................................33
2.10.3 Making of Swing Loans ............................................33
2.10.4 Swing Note .......................................................33
2.10.5 Repayment of Swing Loans with Revolving Credit
Loans Borrowings..................................................34
3. INTEREST RATES............................................................................34
3.1 Interest Rate Options .......................................................34
3.1.1 Revolving Credit Interest Rate Options .............................35
3.2 Interest Period .............................................................36
3.2.1 Ending Date and Business Day. ....................................36
3.2.2 Amount of Borrowing Tranche ......................................36
3.2.3 Termination Before Expiration Date ...............................36
3.2.4 Renewals .........................................................37
3.3 Interest After Default ......................................................37
3.3.1 Letters of Credit Fees, Interest Rate ............................37
3.3.2 Other Obligations ................................................37
3.3.3 Acknowledgment ...................................................37
3.4 Euro-Rate Unascertainable ...................................................37
3.4.1 Unascertainable ..................................................37
3.4.2 Illegality; Increased Costs; Deposits Not Available ..............38
3.4.3 Administrative Agent's and Bank's Rights .........................38
3.5 Selection of Interest Rate Options ..........................................39
4.PAYMENTS...................................................................................39
4.1 Payments ....................................................................39
4.2 Pro Rata Treatment of Banks .................................................40
4.3 Interest Payment Dates ......................................................40
4.4 Voluntary Prepayments .......................................................40
4.4.1 Right to Prepay ..................................................40
4.5 Mandatory Prepayments .......................................................42
4.5.1 Sale of Assets ...................................................42
4.5.2 Payment to Reduce Revolving Credit Loans Made Pursuant
to Section 2.9.4 .................................................42
4.5.3 Payment to Reduce Revolving Credit Loans if Revolving Credit
Commitments are Reduced Pursuant to Section 2.4.2 ................42
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EXHIBIT 10(d)
4.5.4 Application Among Interest Rate Options ..........................42
4.6 Additional Compensation in Certain Circumstances ............................43
4.6.1 Increased Costs or Reduced Return Resulting From
Taxes, Reserves, Capital Adequacy Requirements,
Expenses, Etc.....................................................43
4.6.2 Indemnity ........................................................44
5. REPRESENTATIONS AND WARRANTIES............................................................45
5.1 Representations and Warranties ..............................................45
5.1.1 Organization and Qualification ...................................45
5.1.2 Capitalization and Ownership .....................................45
5.1.3 Subsidiary Matters ...............................................45
5.1.4 Power and Authority ..............................................46
5.1.5 Validity and Binding Effect ......................................46
5.1.6 No Conflict ......................................................46
5.1.7 Litigation .......................................................46
5.1.8 Title to Properties ..............................................47
5.1.9 Financial Statements .............................................47
5.1.10 Margin Stock .....................................................48
5.1.11 Full Disclosure ..................................................48
5.1.12 Taxes ............................................................49
5.1.13 Consents and Approvals ...........................................49
5.1.14 No Event of Default; Compliance with Instruments .................49
5.1.15 Patents, Trademarks, Copyrights, Licenses, Etc. ..................49
5.1.16 Insurance ........................................................50
5.1.17 Compliance with Laws. ............................................50
5.1.18 Material Contracts ...............................................50
5.1.19 Investment Companies .............................................50
5.1.20 Plans and Benefit Arrangements ...................................50
5.1.21 Employment Matters ...............................................52
5.1.22 Environmental Matters ............................................53
5.1.23 Senior Debt Status ...............................................55
5.1.24 Acquisition ......................................................55
5.2 Subsidiaries Other than Material Subsidiaries ...............................55
5.3 Updates to Schedules ........................................................56
6. CONDITIONS OF LENDING.....................................................................56
6.1 First Revolving Credit Loans ................................................56
6.1.1 Officer's Certificate ............................................56
6.1.2 Secretary's Certificate ..........................................57
6.1.3 Delivery of Loan Documents .......................................57
6.1.4 Opinion of Counsel ...............................................57
6.1.5 Legal Details ....................................................58
6.1.6 Payment of Fees ..................................................58
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EXHIBIT 10(d)
6.1.7 Consents .........................................................58
6.1.8 Officer's Certificate Regarding MACs .............................58
6.1.9 No Violation of Laws .............................................58
6.1.10 No Actions or Proceedings ........................................58
6.1.11 Insurance Policies; Certificates of Insurance ....................59
6.1.12 Termination of Existing Bank Facility ............................59
6.2 Each Additional Revolving Credit Loan .......................................59
6.3 Syndication .................................................................59
6.3.1 Syndication Representation and Warranties ........................59
6.3.2 Syndication Documents ............................................60
7. COVENANTS ................................................................................60
7.1 Affirmative Covenants .......................................................60
7.1.1 Preservation of Existence, Etc. ..................................60
7.1.2 Payment of Liabilities, Including Taxes, Etc. ....................61
7.1.3 Maintenance of Insurance .........................................61
7.1.4 Maintenance of Properties and Leases .............................61
7.1.5 Maintenance of Patents, Trademarks, Etc. .........................61
7.1.6 Visitation Rights ................................................62
7.1.7 Keeping of Records and Books of Account ..........................62
7.1.8 Plans and Benefit Arrangements ...................................62
7.1.9 Compliance with Laws .............................................62
7.1.10 Use of Proceeds ..................................................63
7.1.11 Subordination of Intercompany Loans ..............................63
7.2 Negative Covenants. .........................................................63
7.2.1 Indebtedness. ....................................................63
7.2.2 Liens ............................................................64
7.2.3 Guaranties .......................................................64
7.2.4 Loans and Investments ............................................64
7.2.5 Dividends and Related Distributions ..............................65
7.2.6 Liquidations, Mergers, Consolidations, Acquisitions ..............65
7.2.7 Dispositions of Assets or Subsidiaries ...........................66
7.2.8 Affiliate Transactions ...........................................67
7.2.9 Subsidiaries, Partnerships and Joint Ventures ....................67
7.2.10 Continuation of or Change in Business ............................67
7.2.11 Plans and Benefit Arrangements ...................................68
7.2.12 Fiscal Year ......................................................69
7.2.13 Issuance of Stock ................................................69
7.2.14 Changes in Organizational Documents ..............................69
7.2.15 Capital Expenditures and Leases ..................................69
7.2.16 Minimum Fixed Charge Coverage Ratio ..............................70
7.2.17 Total Indebtedness to Total Capitalization Ratio .................71
7.2.18 Minimum Tangible Net Worth .......................................72
7.2.19 Minimum Working Capital Ratio ....................................72
7.2.20 Amendments to Certain Documents ..................................72
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EXHIBIT 10(d)
7.2.21 Outstanding Revolving Credit Loans ...............................72
7.2.22 No Prepayment of Subordinated Debt ...............................73
7.2.23 Inventory Purchases ..............................................73
7.3 Reporting Requirements ......................................................73
7.3.1 Quarterly Financial Statements ...................................73
7.3.2 Annual Financial Statements ......................................73
7.3.3 Certificate of the Borrower ......................................74
7.3.4 Notice of Default ................................................74
7.3.5 Notice of Litigation .............................................75
7.3.6 Certain Events ...................................................75
7.3.7 Budgets, Forecasts, Other Reports and Information ................75
7.3.8 Notices Regarding Plans and Benefit Arrangements .................76
8. DEFAULT...................................................................................78
8.1 Events of Default. ..........................................................78
8.1.1 Payments Under Loan Documents ....................................78
8.1.2 Breach of Warranty ...............................................78
8.1.3 Breach of Negative Covenants .....................................78
8.1.4 Breach of Other Covenants ........................................78
8.1.5 Defaults in Other Agreements or Indebtedness .....................79
8.1.6 Final Judgments or Orders ........................................79
8.1.7 Loan Document Unenforceable ......................................79
8.1.8 Notice of Lien or Assessment .....................................79
8.1.9 Insolvency .......................................................80
8.1.10 Events Relating to Plans and Benefit Arrangements ................80
8.1.11 Cessation of Business ............................................80
8.1.12 Change of Control ................................................81
8.1.13 Involuntary Proceedings ..........................................81
8.1.14 Voluntary Proceedings ............................................81
8.2 Consequences of Event of Default ............................................82
8.2.1 Events of Default Other Than Bankruptcy, Insolvency or
Reorganization Proceedings........................................82
8.2.2 Bankruptcy, Insolvency or Reorganization Proceedings .............82
8.2.3 Set-off ..........................................................82
8.2.4 Suits, Actions, Proceedings ......................................83
8.2.5 Application of Proceeds ..........................................83
8.2.6 Other Rights and Remedies ........................................84
8.3 Notice of Sale ..............................................................84
9. THE MANAGING AGENTS ......................................................................84
9.1 Appointment .................................................................84
9.2 Delegation of Duties. .......................................................85
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EXHIBIT 10(d)
9.3 Nature of Duties; Independent Credit Investigation ..........................85
9.4 Actions in Discretion of Documentation Agent and Administrative
Agent; Instructions from the Banks ..........................................86
9.5 Reimbursement and Indemnification of Administrative Agent
and Documentation Agent by the Borrower .....................................86
9.6 Exculpatory Provisions ......................................................87
9.7 Reimbursement and Indemnification by Banks of the
Documentation Agent, the Managing Agents the Syndication on
Agent and the Administrative Agent ..........................................87
9.8 Reliance by Documentation Agent, Administrative Agent,
Managing Agents and Syndication Agent .......................................88
9.9 Notice of Default ...........................................................88
9.10 Notices .....................................................................89
9.11 Banks in Their Individual Capacities ........................................89
9.12 Holders of Revolving Credit Notes ...........................................89
9.13 Equalization of Banks .......................................................89
9.14 Successor Administrative and Documentation Agents ...........................90
9.15 Other Fees ..................................................................91
9.16 Availability of Funds .......................................................91
9.17 Calculations ................................................................91
9.18 Beneficiaries ...............................................................91
9.19 Absence of Duties of Managing Agents and Syndication Agent ..................92
10. MISCELLANEOUS ...........................................................................92
10.1 Modifications, Amendments or Waivers ........................................92
10.1.1 Increase of Revolving Credit Commitment; Extension
or Expiration Date................................................92
10.1.2 Extension of Payment; Reduction of Principal Interest
or Fees; Modification of Terms of Payment.........................92
10.1.3 Release of Guarantor .............................................92
10.1.4 Miscellaneous ....................................................93
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EXHIBIT 10(d)
10.2 No Implied Waivers; Cumulative Remedies; Writing Required ...................93
10.3 Reimbursement and Indemnification of Banks by the Borrower; Taxes ...........93
10.4 Holidays ....................................................................94
10.5 Funding by Branch, Subsidiary or Affiliate ..................................94
10.5.1 Notional Funding .................................................94
10.5.2 Actual Funding ...................................................95
10.6 Notices. ....................................................................95
10.7 Severability ................................................................96
10.8 Governing Law. ..............................................................96
10.9 Prior Understanding .........................................................96
10.10 Duration; Survival ..........................................................96
10.11 Successors and Assigns ......................................................97
10.12 Confidentiality .............................................................98
10.13 Counterparts ................................................................98
10.14 Documentation Agent's or Bank's Consent .....................................98
10.15 Exceptions ..................................................................98
10.16 CONSENT TO FORUM; WAIVER OF JURY TRIAL ......................................99
10.17 Tax Withholding Clause. . ...................................................99
10.18 Joinder of Guarantors .......................................................100
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EXHIBIT 10(d)
LIST OF SCHEDULES AND EXHIBITS
SCHEDULE
SCHEDULE 1.1(B) - COMMITMENTS OF BANKS
SCHEDULE 1.1(P) - PERMITTED LIENS
SCHEDULE 2.9.1 - ROLLOVER LCS
SCHEDULE 5.1.1 - SUBSIDIARIES
SCHEDULE 5.1.3 - SUBSIDIARY MATTERS
SCHEDULE 5.1.13 - CONSENTS AND APPROVALS
SCHEDULE 5.1.18 - MATERIAL CONTRACTS
SCHEDULE 5.1.20 - EMPLOYEE BENEFIT PLAN DISCLOSURES
SCHEDULE 5.1.22 - ENVIRONMENTAL DISCLOSURES
SCHEDULE 7.2.1 - EXISTING INDEBTEDNESS
SCHEDULE 7.2.4 - LOANS AND INVESTMENTS
EXHIBITS
EXHIBIT 1.1(A) - FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT 1.1(G)(2) - FORM OF MASTER GUARANTY AGREEMENT
EXHIBIT 1.1(I)(1) - FORM OF INTERCOMPANY NOTE
EXHIBIT 1.1(I)(2) - FORM OF MASTER INTERCOMPANY SUBORDINATION AGREEMENT
EXHIBIT 1.1(R) - FORM OF REVOLVING CREDIT NOTE
EXHIBIT 1.1(S)(1) - FORM OF SWING LOAN NOTE
EXHIBIT 2.5 - FORM OF LOAN REQUEST
EXHIBIT 2.10.5 - FORM OF SWING LOAN REQUEST
EXHIBIT 6.1.4 - OPINION OF COUNSEL
EXHIBIT 7.3.3 - FORM OF COMPLIANCE CERTIFICATE
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EXHIBIT 10(d)
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT is dated as of May 3, 1996 and is
made by and among CONSOLIDATED STORES CORPORATION, an Ohio corporation (the
"Borrower"), the BANKS (as hereinafter defined), and THE BANK OF NEW YORK, in
its capacity as Syndication Agent and as Managing Agent, NATIONAL CITY BANK OF
COLUMBUS, in its capacity as Administrative Agent ("Administrative Agent") and
as Managing Agent, PNC BANK, OHIO, NATIONAL ASSOCIATION, in its capacity as
Arranger, as Documentation Agent (the "Documentation Agent") and as Managing
Agent, BANK ONE, COLUMBUS, N.A., in its capacity as Managing Agent, and NATIONAL
CITY BANK in its capacity as Managing Agent.
WITNESSETH:
WHEREAS, the Borrower had requested a revolving credit facility in an
aggregate principal amount of $600,000,000; and
WHEREAS, the Banks which executed a Credit Agreement dated as of May 3,
1996 provided a revolving credit facility not to exceed $600,000,000; and
WHEREAS, such revolving credit facility was used to fund a portion of
the Borrower's acquisition of ▇▇▇-Bee Center, Inc., which acquisition was
consummated on May 5, 1996, and for certain other general corporate purposes
(including working capital);
WHEREAS, the May 3, 1996 revolving credit facility anticipated that the
Borrower would sell in an underwritten public offering at least $100,000,000 of
its common stock to the public and the Borrower has completed an underwritten
public offering of approximately $200,000,000 of its common stock;
WHEREAS, the May 3, 1996 revolving credit facility anticipated that the
Managing Agents would syndicate a substantial portion of their commitments to
other banks and the Managing Agents have completed such syndication; and
WHEREAS, the Banks are willing to provide a credit facility in an
aggregate principal amount of $600,000,000 upon the terms and conditions
hereinafter set forth;
NOW, THEREFORE, the parties hereto, in consideration of their mutual
covenants and agreements hereinafter set forth and intending to be legally bound
hereby, covenant and agree as follows:
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1. CERTAIN DEFINITIONS
-------------------
1.1 Certain Definitions.
--------------------
In addition to words and terms defined elsewhere in this Agreement, the
following words and terms shall have the following meanings, respectively,
unless the context hereof clearly requires otherwise:
ACQUISITION shall mean the acquisition on May 5, 1996 (the
"Acquisition Date") of 100% of the common stock of ▇▇▇-Bee Center, Inc. by the
Borrower from Melville Corporation pursuant to that certain Stock Purchase
Agreement (the "Stock Purchase Agreement") dated as of March 25, 1996, as
amended as of May 3, 1996, between the Company and Melville Corporation.
ACQUISITION DATE shall have the meaning assigned to that term in
the definition of the term "Acquisition".
ADMINISTRATIVE AGENT shall mean National City Bank of Columbus, in
its capacity as Administrative Agent and its successors and assigns.
ADMINISTRATIVE AGENT'S FEE shall have the meaning assigned to that
term in Section 9.15.
AFFILIATE as to any Person shall mean any other Person (i) which
directly or indirectly controls, is controlled by, or is under common control
with such Person, (ii) which beneficially owns or holds 15% or more of any class
of the voting or other equity interests of such Person, or (iii) 15% or more of
any class of voting or other equity interests of which is beneficially owned or
held, directly or indirectly, by such Person. Control, as used in this
definition, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities, by contract or otherwise, including
the power to elect a majority of the directors or trustees of a corporation or
trust, as the case may be.
AGREEMENT shall mean this Amended and Restated Credit Agreement,
as the same may be supplemented or amended from time to time, including all
schedules and exhibits.
ANNUAL STATEMENTS shall have the meaning assigned to that term in
Section 5.1.9(i).
APPLICABLE DOCUMENTARY ACCEPTED TIME DRAFT LC PERCENTAGE shall
have the meaning assigned to that term in Section 2.9.3.1..
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APPLICABLE DOCUMENTARY LC PERCENTAGE shall have the meaning
assigned to that term in Section 2.9.3.1..
APPLICABLE STANDBY LC PERCENTAGE shall have the meaning assigned
to that term in Section 2.9.3.2.
ASSIGNMENT AND ASSUMPTION AGREEMENT shall mean an Assignment and
Assumption Agreement by and among a Purchasing Bank, a Transferor Bank and the
Administrative Agent on behalf of the other Banks, substantially in the form of
EXHIBIT 1.1(A).
AUTHORIZED OFFICER shall mean those individuals, designated by
written notice to the Administrative Agent from the Borrower, authorized to
execute notices, reports and other documents on behalf of the Loan Parties
required hereunder. The Borrower may amend such list of individuals from time to
time by giving written notice of such amendment to the Administrative Agent.
BANKS shall mean the financial institutions named on SCHEDULE
1.1(B) and their respective successors and assigns as permitted hereunder, each
of which is referred to herein as a "Bank".
BASE RATE shall mean the greater of (i) the interest rate per
annum announced from time to time by National City Bank at its Principal Office
as its then prime rate, which rate may not be the lowest rate then being charged
commercial borrowers by National City Bank, or (ii) the Federal Funds Effective
Rate plus 1/2% per annum.
BASE TANGIBLE NET WORTH shall mean the sum of (i) $350,000,000
plus 50% of net income of the Company and its Subsidiaries for each fiscal
quarter in which net income was earned (as opposed to a net loss) from and after
February 3, 1996, through the date of determination as determined and
consolidated in accordance with GAAP and (ii) the net cash proceeds from the
sale of any capital stock or other equity interest of the Company less any sums
paid or owing by the Company since the date hereof with respect to the
redemption, repurchase or other retirement or cancellation of any of its capital
stock or other equity interests.
BENEFIT ARRANGEMENT shall mean at any time an "employee benefit
plan," within the meaning of Section 3(3) of ERISA, which is neither a Plan nor
a Multiemployer Plan and which is maintained, sponsored or otherwise contributed
to by any member of the ERISA Group.
BORROWER shall mean Consolidated Stores Corporation, a corporation
organized and existing under the laws of the State of Ohio.
BORROWING DATE shall mean, with respect to any Revolving Credit
Loan, the date for the making thereof or the renewal or conversion thereof at or
to the same or a different Interest Rate Option, which shall be a Business Day.
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BORROWING TRANCHE shall mean specified portions of Revolving
Credit Loans outstanding as follows: (i) any Revolving Credit Loans to which a
Revolving Credit Euro-Rate Option applies under the applicable Loan Request by
the Borrower and which have the same Interest Period shall constitute one
Borrowing Tranche, and (ii) all Revolving Credit Loans to which a Revolving
Credit Base Rate Option applies shall constitute one Borrowing Tranche.
BUSINESS DAY shall mean any day other than a Saturday or Sunday or
a legal holiday on which commercial banks are authorized or required to be
closed for business in Columbus, Ohio or New York, New York, and, if the
applicable Business Day relates to any Revolving Credit Loan to which the
Revolving Credit Euro-Rate Option applies, such day must also be a day on which
dealings in Dollar deposits are carried on in the London interbank market.
CAPITALIZED LEASE shall mean any lease of Property by a Person as
lessee which is a capital lease in accordance with GAAP. CLOSING DATE shall mean
May 3, 1996. The closing shall take place at 10:00 a.m., Pittsburgh time, on the
Closing Date at the offices of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Professional Corporation,
Pittsburgh, Pennsylvania, or at such other time and place as the parties agree.
COMMITMENT FEE shall have the meaning assigned to that term in
Section 2.3.
COMPANY shall mean Consolidated Stores Corporation, a Delaware
corporation, which beneficially owns directly or indirectly all of the capital
stock of the Borrower and its Subsidiaries.
CONSOLIDATED CAPITAL EXPENDITURES means, for any period, the
aggregate of all expenditures (whether paid in cash or accrued as liabilities
and including that portion of Capitalized Leases which is capitalized on a
consolidated balance sheet of the Company and its Subsidiaries) by the Company
and its Subsidiaries during that period that, in conformity with GAAP, are
required to be included in or reflected in the property, plant or equipment or
similar fixed asset accounts reflected on a consolidated balance sheet of the
Company and its Subsidiaries.
CONSOLIDATED EBIT for any period of determination shall mean an
amount equal to (A) the sum of (i) the net income for such period plus (ii)
interest expense in respect of Indebtedness to the extent deducted in
determining net income for such period ("Interest Expense"), plus (iii) the
provision for taxes for such period based on income or profits to the extent
such income or profits were included in computing net income for such period,
minus (B) all extraordinary income and gains to net income to the extent
included in net income for such period, in each case of the Company and its
Subsidiaries for such period determined on a consolidated basis in accordance
with GAAP.
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CONSOLIDATED INTEREST EXPENSE for any period of determination
shall be equal to the Interest Expense of the Company and its Subsidiaries as
determined in subclause (ii) of clause (A) of the definition of the term
"Consolidated EBIT" for such period on a consolidated basis in accordance with
GAAP.
CONSOLIDATED MATURING RENTALS shall mean the aggregate rental
amounts payable by the Company and its Subsidiaries for the most recent four (4)
full consecutive fiscal quarters immediately preceding the date of determination
under any lease of Property having a remaining term (including any required
renewals or any renewals at the option of the lessor or lessee) of less than one
year (but does not include any amounts payable under Capitalized Leases),
determined in accordance with GAAP.
CONSOLIDATED RENTALS shall mean the aggregate rental amounts
payable by the Company and its Subsidiaries for the most recent four (4) full
consecutive fiscal quarters immediately preceding the date of determination
under any lease of Property having a remaining term (including any required
renewals or any renewals at the option of the lessor or lessee) of one year or
more (but does not include any amounts payable under Capitalized Leases),
determined in accordance with GAAP.
CONSOLIDATED TANGIBLE NET WORTH shall mean as of any date of
determination total stockholders' equity less intangible assets of the Company
and its Subsidiaries as of such date determined and consolidated in accordance
with GAAP.
DOCUMENTARY LETTER OF CREDIT shall have the meaning assigned to
that term in Section 2.9.1.
DOCUMENTARY LETTER OF CREDIT OUTSTANDINGS shall mean at any time
the sum of (i) the aggregate undrawn face amount of outstanding Documentary
Letters of Credit (which excludes Documentary Letter of Credit of (Time Draft)
Outstandings) and (ii) without duplication, the aggregate amount of all unpaid
and outstanding Reimbursement Obligations relating to Documentary Letters of
Credit.
DOCUMENTARY LETTER OF CREDIT (TIME DRAFT) OUTSTANDINGS shall mean
at any time the aggregate face amount of all drafts outstanding under any
Documentary Letters of Credit which the applicable Issuing Letter of Credit Bank
has accepted for payment, but has not yet paid, because such drafts are payable
at a later date that has not yet occurred.
DOCUMENTATION AGENT shall mean PNC Bank, Ohio, National
Association, and its successors and assigns, in its capacity as Documentation
Agent.
DOLLAR, DOLLARS, U.S. DOLLARS and the symbol $ shall mean lawful
money of the United States of America.
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ENVIRONMENTAL COMPLAINT shall mean any written complaint setting
forth a cause of action for personal or property damage or natural resource
damage or equitable relief, order, notice of violation, citation, request for
information issued pursuant to any Environmental Laws by an Official Body,
subpoena or other written notice of any type relating to, arising out of, or
issued pursuant, to any of the Environmental Laws or any Environmental
Conditions, as the case may be.
ENVIRONMENTAL CONDITIONS shall mean any conditions of the
environment, including the workplace, the ocean, natural resources (including
flora or fauna), soil, surface water, groundwater, any actual or potential
drinking water supply sources, substrata or the ambient air, relating to or
arising out of, or caused by, the use, handling, storage, treatment, recycling,
generation, transportation, release, spilling, leaking, pumping, emptying,
discharging, injecting, escaping, leaching, disposal, dumping, threatened
release or other management or mismanagement of Regulated Substances resulting
from the use of, or operations on, any Property.
ENVIRONMENTAL LAWS shall mean all federal, state, local and
foreign Laws and regulations, including permits, licenses, authorizations,
bonds, orders, judgments, and consent decrees issued, or entered into, pursuant
thereto, relating to pollution or protection of human health or the environment
or employee safety in the workplace.
ERISA shall mean the Employee Retirement Income Security Act of
1974, as the same may be amended or supplemented from time to time, and any
successor statute of similar import, and the rules and regulations thereunder,
as from time to time in effect.
ERISA GROUP shall mean, at any time, the Company and all members
of a controlled group of corporations and all trades or businesses (whether or
not incorporated) under common control and all other entities which, together
with the Borrower, are treated as a single employer under Section 414 of the
Internal Revenue Code.
EURO-RATE shall mean with respect to the Revolving Credit Loans
comprising any Borrowing Tranche to which the Revolving Credit Euro-Rate Option
applies for any Interest Period, the interest rate per annum determined by the
Administrative Agent by dividing (the resulting quotient rounded upward to the
nearest 1/16 of 1% per annum) (i) the rate of interest determined by the
Administrative Agent in accordance with its usual procedures (which
determination shall be conclusive absent manifest error) to be the average of
the London interbank offered rates set forth on the "LIBO" page of the Reuters
Monitor Money Rate Service (or appropriate successor) or, if Reuters or its
successor ceases to provide such quotes, a comparable replacement determined by
the Administrative Agent, at approximately 11:00 a.m. London time two (2)
Business Days prior to the first day of such Interest Period for an amount
comparable to such Borrowing Tranche and having a maturity comparable to such
Interest Period by (ii) a number equal to 1.00 minus the Euro-Rate Reserve
Percentage. The Euro-Rate may also be expressed by the following formula:
-6-
16
Average of London interbank offered rates
on LIBO page of Reuters Monitor Money
Euro-Rate = RATE SERVICE OR APPROPRIATE SUCCESSOR
-------------------------------------
1.00 - Euro-Rate Reserve Percentage
The Euro-Rate shall be adjusted with respect to any Revolving Credit Euro-Rate
Option outstanding on the effective date of any change in the Euro-Rate Reserve
Percentage as of such effective date. The Administrative Agent shall give prompt
notice to the Borrower of the Euro-Rate as determined or adjusted in accordance
herewith, which determination shall be conclusive absent manifest error.
EURO-RATE RESERVE PERCENTAGE shall mean the maximum percentage
(expressed as a decimal rounded upward to the nearest 1/100 of 1%) as determined
by the Managing Agents which is in effect during any relevant period, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the reserve requirements (including supplemental,
marginal and emergency reserve requirements) with respect to eurocurrency
funding (currently referred to as "Eurocurrency Liabilities") of a member bank
in such System.
EVENT OF DEFAULT shall mean any of the events described in Section
8.1.
EXECUTIVE OFFICER shall mean as to any designated Person a natural
Person who constitutes an executive officer of such designated Person for
purposes of item 401(b) of Regulation S-K promulgated under the Securities Act
of 1933 and the Securities Exchange Act of 1934.
EXISTING BANK FACILITY shall have the meaning ascribed thereto in
Section 2.8.
EXPIRATION DATE shall mean May 3, 1999.
FEDERAL FUNDS EFFECTIVE RATE for any day shall mean the rate per
annum (based on a year of 360 days and actual days elapsed and rounded upward to
the nearest 1/100 of 1%) announced by the Federal Reserve Bank of New York (or
any successor) on such day as being the weighted average of the rates on
overnight federal funds transactions arranged by federal funds brokers on the
previous trading day, as computed and announced by such Federal Reserve Bank (or
any successor) in substantially the same manner as such Federal Reserve Bank
computes and announces the weighted average it refers to as the "Federal Funds
Effective Rate" as of the date of this Agreement; PROVIDED, if such Federal
Reserve Bank (or its successor) does not announce such rate on any day, the
"Federal Funds Effective Rate" for such day shall be the Federal Funds Effective
Rate for the last day of which such rate was announced.
FINANCIAL PROJECTIONS shall have the meaning assigned to that term
in Section 5.1.9(ii).
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FIXED CHARGE COVERAGE RATIO shall mean on any date of
determination, the ratio of (i) the sum of (a) Consolidated EBIT for the most
recent four (4) full consecutive fiscal quarters immediately preceding the date
of determination plus (b) Consolidated Rentals plus (c) Consolidated Maturing
Rentals, to (ii) Fixed Charges.
FIXED CHARGES shall mean for any period of determination the sum
of (i) Consolidated Interest Expense for the most recent four (4) full
consecutive fiscal quarters immediately preceding the date of determination plus
(ii) Consolidated Rentals plus (iii) Consolidated Maturing Rentals.
GAAP shall mean generally accepted accounting principles as are in
effect from time to time, subject to the provisions of Section 1.3, and applied
on a consistent basis both as to classification of items and amounts.
GOVERNMENTAL ACTS shall have the meaning assigned to that term in
Section 2.9.8.
GUARANTOR shall mean each of the Company and the Subsidiaries of
the Company which is designated as a "Guarantor" on the signature page to the
Master Guaranty Agreement and each other Subsidiary of the Company which joins
the Master Guaranty Agreement and the other Loan Documents as a Guarantor after
the date hereof pursuant to Section 10.18.
GUARANTOR JOINDER shall mean a joinder to the Master Guaranty
Agreement as provided in the Master Guaranty Agreement.
GUARANTY of any Person shall mean any obligation of such Person
guaranteeing or in effect guaranteeing any liability or obligation of any other
Person in any manner, whether directly or indirectly, including any agreement to
indemnify or hold harmless any other Person, any performance bond or other
suretyship arrangement and any other form of assurance against loss, except
endorsement of negotiable or other instruments for deposit or collection in the
ordinary course of business.
HISTORICAL STATEMENTS shall have the meaning assigned to that term
in Section 5.1.9(i).
INDEBTEDNESS shall mean, as to any Person at any time, any and all
indebtedness, obligations or liabilities (whether matured or unmatured,
liquidated or unliquidated, direct or indirect, absolute or contingent, or joint
or several) of such Person for or in respect of: (i) borrowed money, (ii)
amounts raised under or liabilities in respect of any note purchase or
acceptance credit facility, (iii) reimbursement obligations (contingent or
otherwise) under any letter of credit, currency swap agreement, interest rate
swap, cap, collar or floor agreement or other interest rate management device,
(iv) any other transaction (including forward sale or purchase agreements,
capitalized leases (but not operating leases) and conditional sales agreements)
-8-
18
having the commercial effect of a borrowing of money entered into by such Person
to finance its operations or capital requirements (but not including trade
payables, trade credits and accrued expenses incurred in the ordinary course of
business which are not represented by a promissory note or other evidence of
indebtedness and which are not more than thirty (30) days past due), or (v) any
Guaranty of Indebtedness for borrowed money. For purposes only of determining
the ratio of total indebtedness to total capitalization in Section 7.2.17, the
Seller Note shall be excluded from the term "Indebtedness" used in such section.
INTERCOMPANY LOANS shall mean loans made by one Loan Party to one
or more other Loan Parties or their Subsidiaries and, in the case of loans
between the Borrower and the Material Subsidiaries, evidenced by intercompany
notes (the "Intercompany Notes") in the form attached hereto as Exhibit
1.1(I)(1).
INTERCOMPANY NOTES shall have the meaning assigned to that term in
the definition of the term "Intercompany Loans".
INTEREST PAYMENT DATE shall mean each date specified for the
payment of interest in Section 4.3.
INTEREST PERIOD shall have the meaning assigned to such term in
Section 3.2.
INTEREST RATE OPTION shall mean any Revolving Credit Euro-Rate
Option or Revolving Credit Base Rate Option.
INTERNAL REVENUE CODE shall mean the Internal Revenue Code of
1986, as the same may be amended or supplemented from time to time, and any
successor statute of similar import, and the rules and regulations thereunder,
as from time to time in effect.
ISSUING LETTER OF CREDIT BANK shall mean with respect to a Letter
of Credit either The Bank of New York (or an Affiliate of The Bank of New York)
or National City Bank of Columbus (or an Affiliate of National City Bank of
Columbus) which has issued that Letter of Credit pursuant to Section 2.9.
LABOR CONTRACTS shall mean all employment agreements, employment
contracts, collective bargaining agreements and other agreements among any Loan
Party or Subsidiary of a Loan Party and its employees.
LAW shall mean any law (including common law), constitution,
statute, treaty, regulation, rule, ordinance, opinion, release, ruling, order,
injunction, writ, decree or award of any Official Body.
LETTER OF CREDIT shall have the meaning assigned to that term in
Section 2.9.1.
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LETTER OF CREDIT OUTSTANDINGS shall mean at any time the sum of
(i) the Documentary Letter of Credit Outstandings, (ii) the Standby Letter of
Credit Outstandings, (iii) the Documentary Letter of Credit (Time Draft)
Outstandings and (iv) without duplication, the aggregate amount of all unpaid
and outstanding Reimbursement Obligations.
LETTERS OF CREDIT FEES shall have the meaning assigned to that
term in Section 2.9.3.
LIEN shall mean any mortgage, deed of trust, pledge, lien,
security interest, charge or other encumbrance or security arrangement of any
nature whatsoever, whether voluntarily or involuntarily given, including any
conditional sale or title retention arrangement, and any assignment, deposit
arrangement or lease intended as, or having the effect of, security and any
filed financing statement or other notice of any of the foregoing (whether or
not a lien or other encumbrance is created or exists at the time of the filing).
LOAN DOCUMENTS shall mean this Agreement, the Master Guaranty
Agreement, the Master Intercompany Subordination Agreement, the Revolving Credit
Notes, and any other instruments, certificates or documents delivered or
contemplated to be delivered hereunder or thereunder or in connection herewith
or therewith, as the same may be supplemented or amended from time to time in
accordance herewith or therewith, and LOAN DOCUMENT shall mean any of the Loan
Documents.
LOAN PARTIES shall mean the Borrower and the Guarantors.
LOAN REQUEST shall have the meaning ascribed thereto in
Section 2.5.
MANAGING AGENTS shall mean all of the financial institutions
identified as a Managing Agent on the first page hereof, each of which is
referred to herein as a "Managing Agent", and their successors and assigns, in
their capacity as Managing Agents.
MASTER GUARANTY AGREEMENT shall mean the Master Guaranty and
Suretyship Agreement in substantially the form of EXHIBIT 1.1(G)(2) executed and
delivered by the Company and the other Guarantors to the Administrative Agent
for the benefit of the Banks.
MASTER INTERCOMPANY SUBORDINATION AGREEMENT shall mean a
subordination agreement among the Loan Parties in the form attached hereto as
EXHIBIT 1.1(I)(2).
MATERIAL ADVERSE CHANGE shall mean any set of circumstances or
events which (a) has or could reasonably be expected to have any material
adverse effect whatsoever upon the validity or enforceability of this Agreement
or any other Loan Document, (b) is or could reasonably be expected to be
material and adverse to the business, properties, assets, financial condition,
results of operations or prospects of the Loan Parties and their Subsidiaries
taken as a whole, (c) impairs materially or could reasonably be expected to
impair materially the ability of the Loan Parties and their Subsidiaries taken
as a whole to duly and punctually pay or
-10-
20
perform their Indebtedness, or (d) impairs materially or could reasonably be
expected to impair materially the ability of the Documentation Agent or any of
the Banks, to the extent permitted, to enforce their legal remedies pursuant to
this Agreement or any other Loan Document.
MATERIAL SUBSIDIARY shall mean any of ▇ ▇ ▇▇▇▇ Company, an Ohio
corporation, CSIC Venture, Inc., a Delaware corporation, K.B. Consolidated,
Inc., an Ohio corporation, ▇▇▇-Bee Center, Inc., a California corporation, and
any Subsidiary of the Borrower (other than ▇▇ ▇▇▇-Bee, Inc. or ▇▇▇-Bee Toy &
Hobby Shops, Inc.) having at least 10% of the total consolidated assets of the
Company and its Subsidiaries or at least 10% of the total consolidated revenues
of the Company and its Subsidiaries for the 12-month period ending on the last
day of the most recent fiscal quarter of the Company.
MONTH, with respect to an Interest Period under the Revolving
Credit Euro-Rate Option, shall mean the interval between the days in consecutive
calendar months numerically corresponding to the first day of such Interest
Period. If any Euro-Rate Interest Period begins on a day of a calendar month for
which there is no numerically corresponding day in the month in which such
Interest Period is to end, the final month of such Interest Period shall be
deemed to end on the last Business Day of such final month.
MULTIEMPLOYER PLAN shall mean any employee benefit plan which is a
"multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA and to
which the Borrower or any member of the ERISA Group is then making or accruing
an obligation to make contributions or, within the preceding five plan years,
has made or had an obligation to make such contributions.
MULTIPLE EMPLOYER PLAN shall mean a Plan which has two or more
contributing sponsors (including the Borrower or any member of the ERISA Group)
at least two of whom are not under common control, as such a plan is described
in Sections 4063 and 4064 of ERISA.
NOTICES shall have the meaning assigned to that term in Section
10.6.
OBLIGATION shall mean any obligation or liability of any of the
Loan Parties to the Documentation Agent, the Syndication Agent, the
Administrative Agent, the Managing Agents, the Issuing Letter of Credit Banks or
any of the Banks, howsoever created, arising or evidenced, whether direct or
indirect, absolute or contingent, now or hereafter existing, or due or to become
due, under or in connection with this Agreement, the Revolving Credit Notes, the
Letters of Credit or any other Loan Document.
OFFICIAL BODY shall mean any national, federal, state, local or
other government or political subdivision or any agency, authority, bureau,
central bank, commission, department or instrumentality of either, or any court,
tribunal, grand jury or arbitrator, in each case whether foreign or domestic.
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PBGC shall mean the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA or any successor
thereto.
PERMITTED INVESTMENTS shall mean:
(i) direct obligations of the United States of America or any
agency or instrumentality thereof or obligations backed by the full faith and
credit of the United States of America maturing in twelve (12) months or less
from the date of acquisition;
(ii) commercial paper maturing in 180 days or less rated not lower
than A-1 by Standard & Poor's Ratings Services, a division of The McGraw Hill
Companies, Inc. or P-1 by ▇▇▇▇▇'▇ Investors Service, Inc. on the date of
acquisition; and
(iii) demand deposits, time deposits or certificates of deposit
maturing within one year in commercial banks whose obligations are rated A-1, A
or the equivalent or better by Standard & Poor's Ratings Services, a division of
The McGraw Hill Companies, Inc. on the date of acquisition.
PERMITTED LIENS shall mean:
(i) Liens for taxes, assessments, or similar charges, incurred
in the ordinary course of business and which are not yet
due and payable;
(ii) Pledges or deposits made in the ordinary course of
business to secure payment of workmen's compensation, or
to participate in any fund in connection with workmen's
compensation, unemployment insurance, old-age pensions or
other social security programs;
(iii) Liens of mechanics, materialmen, warehousemen, carriers,
or other like Liens, securing obligations incurred in the
ordinary course of business that are not yet due and
payable and Liens of landlords securing obligations to pay
lease payments that are not yet due and payable or in
default;
(iv) Good-faith pledges or deposits made in the ordinary course
of business to secure performance of bids, tenders,
contracts (other than for the repayment of borrowed money)
or leases, not in excess of the aggregate amount due
thereunder, or to secure statutory obligations, or surety,
appeal, indemnity, performance or other similar bonds
required in the ordinary course of business;
(v) Encumbrances consisting of zoning restrictions, easements
or other restrictions on the use of real property, none of
which materially impairs the use of such property or the
value thereof, and none of which is violated in any
material respect by existing or proposed structures or
land use;
-12-
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(vi) Liens and security interests in favor of the
Administrative Agent for the benefit of the Banks or any
Issuing Letter of Credit Bank in the application for a
Letter of Credit;
(vii) Liens on property leased by any Loan Party or Subsidiary
of a Loan Party or other interest or title of the lessor
under capital and operating leases not otherwise
prohibited by Section 7.2.15 securing obligations of such
Loan Party or Subsidiary to the lessor under such leases;
(viii) Any Lien existing on the date of this Agreement and
described on SCHEDULE 1.1(P), PROVIDED that the principal
amount secured thereby is not hereafter increased
(although it may be refinanced), and no additional assets
become subject to such Lien;
(ix) Purchase Money Security Interests to the extent that (X)
such Purchase Money Security Interests attach to inventory
purchased in the ordinary course of business pursuant to
customary payment terms and are not perfected by the
filing of financing statements or other public filings or
(Y) the aggregate amount of loans and deferred payments
secured by Purchase Money Security Interests not described
in the foregoing clause (X) do not exceed at any one time
outstanding $10,000,000 (excluding for the purpose of this
computation any loans or deferred payments secured by
Liens described on SCHEDULE 1.1(P));
(x) Liens relating to the licensing by Borrower, the other
Loan Parties or their Subsidiaries of intellectual
property;
(xi) Liens relating to a sublease entered into by a Loan Party
or its Subsidiary;
(xii) The following, (A) if the validity or amount thereof is
being contested in good faith by appropriate and lawful
proceedings diligently conducted so long as levy and
execution thereon have been stayed and continue to be
stayed or (B) if a final judgment is entered and such
judgment is discharged within thirty (30) days of entry or
(C) if payments thereof are covered in full (subject to
customary deductibles) by an insurance company of
reputable standing which insurance company has
acknowledged that the applicable policy applies to the
following and is not reserving any right to contest
applicability, and in any case they do not in the
aggregate, materially impair the ability of any Loan Party
to perform its Obligations hereunder or under the other
Loan Documents:
(1) Claims or Liens for taxes, assessments or charges by the
United States, or any department, agency or instrumentality
thereof, or by any state, county, municipal or other
governmental agency, including the PBGC, due and payable and
subject to interest or penalty, PROVIDED that the applicable
Loan Party maintains such reserves or other appropriate
provisions as shall be required by GAAP and pays all such
taxes, assessments or charges forthwith upon the commencement
of proceedings to foreclose any such Lien;
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(2) Claims, Liens or encumbrances upon, and defects of title to,
real or personal property, including any attachment of personal
or real property or other legal process prior to adjudication
of a dispute on the merits; and
(3) Claims or Liens of mechanics, materialmen, warehousemen,
carriers, or other statutory nonconsensual Liens; and
(xiii) additional Liens securing Indebtedness not to exceed
$10,000,000.
PERSON shall mean any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization, joint
venture, limited liability company, government or political subdivision or
agency thereof, or any other entity.
PLAN shall mean at any time an employee pension benefit plan
(including a Multiple Employer Plan, but not a Multiemployer Plan) which is
covered by Title IV of ERISA or is subject to the minimum funding standards
under Section 412 of the Internal Revenue Code and either (i) is maintained by
any member of the ERISA Group for employees of any member of the ERISA Group or
(ii) has at any time within the preceding five years been maintained by any
entity which was at such time a member of the ERISA Group for employees of any
entity which was at such time a member of the ERISA Group.
PNC BANK shall mean PNC Bank, Ohio, National Association, its
successors and assigns.
POTENTIAL DEFAULT shall mean any event or condition which with
notice, passage of time or a determination by the Managing Agents or the
Required Banks, or any combination of the foregoing, would constitute an Event
of Default.
PRINCIPAL OFFICE shall mean the main banking office of the
Administrative Agent in Columbus, Ohio or the main banking office of a Managing
Agent at the address shown on the signature page hereto, as the case may be.
PROHIBITED TRANSACTION shall mean any prohibited transaction as
defined in Section 4975 of the Internal Revenue Code or Section 406 of ERISA for
which neither an individual nor a class exemption has been issued by the United
States Department of Labor.
PROPERTY shall mean all real property, both owned and leased, of
any Loan Party or Subsidiary of a Loan Party.
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PURCHASE MONEY SECURITY INTEREST shall mean Liens upon real or
personal property securing loans to any Loan Party or Subsidiary of a Loan Party
or deferred payments by such Loan Party or Subsidiary for the purchase of such
property.
PURCHASING BANK shall mean a Bank which becomes a party to this
Agreement by executing an Assignment and Assumption Agreement. RATABLE SHARE
shall mean the proportion that a Bank's Revolving Credit Commitment bears to the
Revolving Credit Commitments of all of the Banks.
REGULATED SUBSTANCES shall mean any substance including any solid,
liquid, semisolid, gaseous, thermal, thoriated or radioactive material, refuse,
garbage, wastes, chemicals, petroleum products, by-products and coproducts,
impurities, dust, scrap, and heavy metals defined as a "hazardous substance,"
"pollutant," "pollution," "contaminant," "hazardous or toxic substance,"
"extremely hazardous substance," "toxic chemical," "toxic waste," "hazardous
waste," "industrial waste," "residual waste," "solid waste," "municipal waste,"
"mixed waste," "infectious waste," "chemotherapeutic waste," "medical waste," or
"regulated substance" or any related materials, substances or wastes as now or
hereafter defined pursuant to any Environmental Laws, ordinances, rules,
regulations or other directives of any Official Body, the generation,
manufacture, extraction, processing, distribution, treatment, storage, disposal,
transport, recycling, reclamation, use, reuse, spilling, leaking, dumping,
injection, pumping, leaching, emptying, discharge, escape, release or other
management or mismanagement of which is regulated by the Environmental Laws.
REGULATION U shall mean Regulation U, T, G or X as promulgated by
the Board of Governors of the Federal Reserve System, as amended from time to
time.
REIMBURSEMENT OBLIGATION shall have the meaning assigned to such
term in Section 2.9.4.
REPORTABLE EVENT shall mean a reportable event described in
Section 4043 of ERISA and regulations thereunder with respect to a Plan or
Multiemployer Plan.
REQUIRED BANKS shall mean (i) prior to the termination of the
Revolving Credit Commitments, Banks whose Revolving Credit Commitments aggregate
at least 66 2/3% of the Revolving Credit Commitments of all of the Banks, and
(ii) after the termination of the Revolving Credit Commitments, Banks whose
outstanding Revolving Credit Loans and Ratable Share (as determined pursuant to
Section 2.9.2) in the face amount of outstanding Letters of Credit and
Reimbursement Obligations aggregate at least 66 2/3% of the total principal
amount of the Revolving Credit Loans and the face amount of Letters of Credit
and Reimbursement Obligations outstanding hereunder.
REVOLVING CREDIT BASE RATE OPTION shall mean the option of the
Borrower to have Revolving Credit Loans bear interest at the rate and under the
terms and conditions set forth in Section 3.1.1(i).
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REVOLVING CREDIT COMMITMENT shall mean, as to any Bank at any time the
amount initially set forth opposite its name on SCHEDULE 1.1(B) in the column
labeled "Revolving Credit Commitment" and thereafter on Schedule I to the most
recent Assignment and Assumption Agreement, as the same may have been reduced
in accordance with Section 2.4 and REVOLVING CREDIT COMMITMENTS shall mean the
aggregate Revolving Credit Commitments of all of the Banks.
REVOLVING CREDIT EURO-RATE OPTION shall mean the option of the
Borrower to have Revolving Credit Loans bear interest at the rate and under the
terms and conditions set forth in Section 3.1.1(ii).
REVOLVING CREDIT EURO-RATE SPREAD shall have the meaning given to
such term in Section 3.1.1(ii).
REVOLVING CREDIT LOANS shall mean collectively and REVOLVING
CREDIT LOAN shall mean separately all loans or any loan made by the Banks or one
of the Banks to the Borrower pursuant to Section 2.1 or 2.9.4.
REVOLVING CREDIT NOTES shall mean collectively and REVOLVING
CREDIT NOTE shall mean separately all the Revolving Credit Notes of the Borrower
in the form attached hereto as EXHIBIT 1.1(R) evidencing the Revolving Credit
Loans together with all amendments, extensions, renewals, replacements,
refinancings or refundings thereof in whole or in part.
REVOLVING FACILITY USAGE shall mean at any time the sum of the
Revolving Credit Loans outstanding, the Swing Loans outstanding and the Letter
of Credit Outstandings.
ROLLOVER LCS shall mean those letters of credit identified on
Schedule hereof which were issued by the Issuing Letter of Credit Banks prior to
the date hereof upon the application of the Borrower or one of its Subsidiaries.
SELLER NOTE shall mean the senior subordinated term note or notes
originally issued to Melville Corporation in the principal amount of
$100,000,000 pursuant to that certain Indenture dated May 5, 1996 and any
replacement note or notes for such note or notes including notes which may be
issued to transferees of holders thereof.
SETTLEMENT DATE shall have the meaning assigned thereto in
Section 2.10.5.
SHARES shall have the meaning assigned to that term in
Section 5.1.2.
STANDBY LETTER OF CREDIT shall have the meaning assigned to that
term in Section 2.9.1.
STANDBY LETTER OF CREDIT OUTSTANDINGS shall mean at any time the
sum of (i) the aggregate undrawn face amount of outstanding Standby Letters of
Credit and (ii) without duplication, the aggregate amount of all unpaid and
outstanding Reimbursement Obligations relating to Standby Letters of Credit.
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SUBSIDIARY of any Person at any time shall mean (i) any
corporation or trust of which 50% or more (by number of shares or number of
votes) of the outstanding capital stock or shares of beneficial interest
normally entitled to vote for the election of one or more directors or trustees
(regardless of any contingency which does or may suspend or dilute the voting
rights) is at such time owned directly or indirectly by such Person or one or
more of such Person's Subsidiaries, or any partnership of which such Person is a
general partner or of which 50% or more of the partnership interests is at the
time directly or indirectly owned by such Person or one or more of such Person's
Subsidiaries, or (ii) any corporation, trust, partnership or other entity which
is controlled or capable of being controlled by such Person and/or one or more
of such Person's Subsidiaries.
SUBSIDIARY SHARES shall have the meaning assigned to that term in
Section 5.1.3.
SWING LENDER shall mean National City Bank of Columbus.
SWING LOAN COMMITMENT shall mean the Swing Lender's commitment to
make Swing Loans to the Borrower pursuant to Section 2.10 in an aggregate
principal amount up to but not in excess of $30,000,000.
SWING NOTE shall mean the Swing Note of the Borrower in the form
of EXHIBIT 1.1(S)(1) evidencing the Swing Loans, together with all amendments,
extensions, renewals, replacements, refinancings or refundings thereof in whole
or in part.
SWING LOAN REQUEST shall mean a request for Swing Loans made in
accordance with Section 2.10.
SWING LOANS shall mean collectively and SWING LOAN shall mean
separately all Swing Loans or any Swing Loan made by the Swing Lender to the
Borrower pursuant to Section.
SYNDICATION AGENT shall mean The Bank of New York in its capacity
as Syndication Agent.
SYNDICATION DATE shall mean June 28, 1996.
TRANSFEROR BANK shall mean the selling Bank pursuant to an
Assignment and Assumption Agreement.
1.2 CONSTRUCTION.
-------------
Unless the context of this Agreement otherwise clearly requires, the following
rules of construction shall apply to this Agreement and each of the other Loan
Documents:
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1.2.1 NUMBER; INCLUSION.
------------------
References to the plural include the singular, the plural, the
part and the whole; "or" has the inclusive meaning represented by the phrase
"and/or," and "including" has the meaning represented by the phrase "including
without limitation";
1.2.2 DETERMINATION.
--------------
References to "determination" of or by the Administrative Agent
or the Banks shall be deemed to include good-faith estimates by the
Administrative Agent or the Banks (in the case of quantitative determinations)
and good-faith beliefs by the Administrative Agent or the Banks (in the case of
qualitative determinations) and such determination shall be conclusive absent
manifest error;
1.2.3 DOCUMENTATION AGENT'S DISCRETION AND CONSENT.
---------------------------------------------
Whenever the Documentation Agent or the Banks are granted the
right herein to act in its or their sole discretion or to grant or withhold
consent such right shall be exercised in good-faith;
1.2.4 DOCUMENTS TAKEN AS A WHOLE.
---------------------------
The words "hereof," "herein," "hereunder," "hereto" and similar
terms in this Agreement or any other Loan Document refer to this Agreement or
such other Loan Document as a whole and not to any particular provision of this
Agreement or such other Loan Document;
1.2.5 HEADINGS.
---------
The section and other headings contained in this Agreement or
such other Loan Document and the Table of Contents (if any) preceding this
Agreement or such other Loan Document are for reference purposes only and shall
not control or affect the construction of this Agreement or such other Loan
Document or the interpretation thereof in any respect;
1.2.6 IMPLIED REFERENCES TO THIS AGREEMENT.
-------------------------------------
Article, section, subsection, clause, schedule and exhibit
references are to this Agreement or such other Loan Document, as the case may
be, unless otherwise specified;
1.2.7 PERSONS.
--------
Reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and assigns are permitted
by this Agreement or such other Loan Document, as the case may be, and
reference to a Person in a particular capacity excludes such Person in any
other capacity;
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1.2.8 MODIFICATIONS TO DOCUMENTS.
---------------------------
Reference to any agreement (including this Agreement and any other Loan Document
together with the schedules and exhibits hereto or thereto), document or
instrument means such agreement, document or instrument as amended, modified,
replaced, substituted for, superseded or restated;
1.2.9 FROM, TO AND THROUGH.
---------------------
Relative to the determination of any period of time, "from" means "from and
including," "to" means "to but excluding," and "through" means "through and
including"; and
1.2.10 SHALL; WILL.
------------
References to "shall" and "will" are intended to have the same
meaning.
1.2.11 OPERATIVE DATE.
---------------
All references herein to representations, warranties and
information being as of the date hereof or the Closing Date shall be as of May
3, 1996 (or for representations, warranties and information relating to the
Acquisition and the Subsidiaries acquired thereby, as of May 5, 1996).
1.3 ACCOUNTING PRINCIPLES.
----------------------
Except as otherwise provided in this Agreement, all computations
and determinations as to accounting or financial matters and all financial
statements to be delivered pursuant to this Agreement shall be made and prepared
in accordance with GAAP (including principles of consolidation where
appropriate), and all accounting or financial terms shall have the meanings
ascribed to such terms by GAAP. In the event that on or after the date hereof, a
material change occurs in GAAP, the Banks and the Borrower will consult in good
faith regarding whether such change in GAAP affects any financial covenants
contained herein that should be adjusted due to such change in GAAP.
2. REVOLVING CREDIT FACILITY
-------------------------
2.1 REVOLVING CREDIT COMMITMENTS.
Subject to the terms and conditions hereof and relying upon the representations
and warranties herein set forth, each Bank severally agrees to make Revolving
Credit Loans to the Borrower at any time or from time to time on or after the
date hereof to the Expiration Date in an aggregate principal amount not to
exceed at any one time such Bank's Revolving Credit Commitment minus such Bank's
Ratable Share of the Letter of Credit Outstandings. Within such limits of time
and amount and subject to the other provisions of this Agreement, the Borrower
may borrow, repay and reborrow pursuant to this Section 2.1; provided that in no
event shall (i) the Revolving Credit Loans exceed, at any one time, the sum of
$450,000,000 plus the amounts, if any, advanced by the Banks to all Issuing
Letter of Credit Banks with respect to disbursements under Letters of Credit
that have not been reimbursed by the Borrower as required by Section 2.9.4 or
(ii) the Revolving Facility Usage exceed, at any one time, the Revolving Credit
Commitments.
-19-
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2.2 NATURE OF BANKS' OBLIGATIONS WITH RESPECT TO REVOLVING CREDIT LOANS.
--------------------------------------------------------------------
Each Bank shall be obligated to participate in each request for Revolving Credit
Loans pursuant to Section in accordance with its Ratable Share. The aggregate of
each Bank's Revolving Credit Loans outstanding hereunder to the Borrower at any
time shall never exceed its Revolving Credit Commitment minus its Ratable Share
of the Letter of Credit Outstandings. The obligations of each Bank hereunder are
several. The failure of any Bank to perform its obligations hereunder shall not
affect the Obligations of the Borrower to any other party nor shall any other
party be liable for the failure of such Bank to perform its obligations
hereunder. The Banks shall have no obligation to make Revolving Credit Loans
hereunder on or after the Expiration Date.
2.3 COMMITMENT FEES.
----------------
Accruing from the date hereof until the Expiration Date, the Borrower agrees to
pay to the Administrative Agent for the account of each Bank, as consideration
for such Bank's Revolving Credit Commitment hereunder, a nonrefundable
commitment fee (the "Commitment Fee") equal to a percentage per annum (the
"Applicable Commitment Percentage") (computed on the basis of a year of 365 or
366 days, as the case may be, and actual days elapsed) times the average daily
difference between (i) the amount of such Bank's Revolving Credit Commitment as
the same may be constituted from time to time, and (ii) the sum of such Bank's
Revolving Credit Loans outstanding plus its Ratable Share of Letters of Credit
Outstanding. The Applicable Commitment Percentage shall be determined based upon
the Fixed Charge Coverage Ratio as follows:
FIXED CHARGE COVERAGE RATIO APPLICABLE COMMITMENT PERCENTAGE (RATE PER ANNUM)
--------------------------- -------------------------------------------------
greater than or equal to 2.20 to 1.00 0.175%
greater than or equal to 2.05 to 1.00 but less than 0.200%
2.20 to 1.00
greater than or equal to 1.90 to 1.00 but less than 0.225%
2.05 to 1.00
greater than or equal to 1.75 to 1.00 but less than 0.250%
1.90 to 1.00
less than 1.75 to 1.00 0.375%
All Commitment Fees shall be payable quarterly in arrears on the first Business
Day of each March, June, September and December after the date hereof and on the
Expiration Date or upon acceleration of the Revolving Credit Notes.
Until the Borrower shall have delivered to the Administrative Agent a Compliance
Certificate covering the four fiscal periods ending on the Saturday nearest
April 30, 1997, the Fixed Charge Coverage Ratio shall be deemed to be 1.75 to
1.00. For each fiscal quarter subsequent to May 3, 1997, the Fixed Charge
Coverage Ratio shall be computed based on the Compliance Certificate for such
quarter. Any change in the Fixed Charge Coverage Ratio (and the Applicable
Commitment Percentage) shall be effective on the date on which the Compliance
Certificate evidencing the computation of such Fixed Charge Coverage Ratio is
delivered to the Administrative Agent; provided, however, that if the Compliance
Certificate evidencing the computation of the Fixed Charge Coverage Ratio is not
delivered on the date on which such Compliance Certificate is due to be
delivered under Section, the Fixed Charge Cov-
-20-
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erage Ratio on and after the date on which such Compliance Certificate is due to
be delivered under Section 7.3.3 and until the date on which such Compliance
Certificate is delivered to the Administrative Agent shall be deemed to be less
than 1.75 to 1.00 and the Applicable Commitment Percentage for such period
computed accordingly.
2.4 REDUCTION OF REVOLVING CREDIT COMMITMENTS.
------------------------------------------
2.4.1 VOLUNTARY REDUCTION OF REVOLVING CREDIT COMMITMENTS.
----------------------------------------------------
The Borrower shall have the right at any time and from time to time upon not
less than three (3) Business Days' prior written notice to the Banks to
permanently reduce, in whole multiples of $10,000,000, or terminate the
Revolving Credit Commitments without penalty or premium, except as hereinafter
set forth, provided that any such reduction or termination shall be accompanied
by (a) the payment in full of any Commitment Fee then accrued on the amount of
such reduction or termination and (b) prepayment of the Revolving Credit Notes,
together with the full amount of interest accrued on the principal sum to be
prepaid (and all amounts referred to in Section 4.6 ) and the Borrower shall
deposit in a non-interest bearing account (provided that with the consent of the
Issuing Letter of Credit Banks and the Administrative Agent, such consent not to
be unreasonably withheld, such account may be an interest bearing account) with
the Administrative Agent, as cash collateral for its Obligations in respect of
the Letters of Credit and related applications and agreements, an amount equal
to the maximum amount currently or at any time thereafter available to be drawn
on all outstanding Letters of Credit, and the Borrower hereby pledges to the
Administrative Agent and the Banks, and grants to the Administrative Agent and
the Banks a security interest in, all such cash as security for such
Obligations, to the extent that the Revolving Facility Usage then exceeds the
Revolving Credit Commitments as so reduced or terminated. From time to time the
Administrative Agent shall return to the Borrower any excess of the amount held
in such account over the amount by which the Revolving Facility Usage then
exceeds the Revolving Credit Commitments. From the effective date of any such
reduction or termination, the obligations of Borrower to pay the Commitment Fee
pursuant to Section 2.3 shall correspondingly be reduced or cease.
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2.4.2 MANDATORY REDUCTION OF REVOLVING CREDIT COMMITMENTS.
----------------------------------------------------
The Revolving Credit Commitments shall be permanently reduced, with respect to
sales, transfers or leases permitted to be made pursuant to Section 7.2.7(iv),
to the extent that the aggregate after-tax net cash proceeds (including without
limitation cash, as and when collected, pursuant to any notes or other
securities received as consideration for such sale, transfer or lease), as
reasonably estimated by the Borrower, of all such sales, transfers or leases on
and after the date hereof are in excess of $25,000,000 and each Bank's Revolving
Credit Commitment shall be reduced by its Ratable Share of each such reduction
in the Revolving Credit Commitments.
2.5 REVOLVING CREDIT LOAN REQUESTS.
-------------------------------
Except as otherwise provided herein, the Borrower may from time to time prior
to the Expiration Date request the Banks to make Revolving Credit Loans, or
renew or convert the Interest Rate Option applicable to existing Revolving
Credit Loans pursuant to Section 3.2, by delivering to the Administrative
Agent, not later than 2:00 p.m., Columbus, Ohio time, (i) three (3) Business
Days prior to the proposed Borrowing Date with respect to the making of
Revolving Credit Loans to which the Revolving Credit Euro-Rate Option applies
or the conversion to or the renewal of the Revolving Credit Euro-Rate Option
for any Revolving Credit Loans; and (ii) one (1) Business Day prior to either
the proposed Borrowing Date with respect to the making of a Revolving Credit
Loan to which the Revolving Credit Base Rate Option applies or the last day of
the preceding Interest Period with respect to the conversion to the Revolving
Credit Base Rate Option for any Revolving Credit Loan, of a duly completed
request therefor substantially in the form of EXHIBIT 2.5 or a request by
telephone immediately confirmed in writing by letter, facsimile or telex in
such form (each, a "Loan Request"), it being understood that the
Administrative Agent may rely on the authority of any individual making such a
telephonic request without the necessity of receipt of such written
confirmation. Each Loan Request shall be irrevocable and shall specify (i) the
proposed Borrowing Date; (ii) the aggregate amount of the proposed Revolving
Credit Loans comprising each Borrowing Tranche, which shall be in integral
multiples of $1,000,000 and not less than $5,000,000 for each Borrowing Tranche
to which the Revolving Credit Euro-Rate Option applies and not less than the
lesser of $5,000,000 or the maximum amount available for Borrowing Tranches to
which the Revolving Credit Base Rate Option applies; (iii) whether the
Revolving Credit Euro-Rate Option or Revolving Credit Base Rate Option shall
apply to the proposed Revolving Credit Loans comprising the applicable
Borrowing Tranche; and (iv) in the case of a Borrowing Tranche to which the
Revolving Credit Euro-Rate Option applies, an appropriate Interest Period for
the proposed Revolving Credit Loans comprising such Borrowing Tranche.
-22-
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2.6 MAKING REVOLVING CREDIT LOANS.
------------------------------
The Administrative Agent shall, promptly after receipt by it of a Loan Request
pursuant to Section 2.5, notify the Banks of its receipt of the related Loan
Request specifying: (i) the proposed Borrowing Date of such Revolving Credit
Loans; (ii) the amount and type of each such Revolving Credit Loan and the
applicable Interest Period (if any); and (iii) the apportionment among the Banks
of such Revolving Credit Loans as determined by the Administrative Agent in
accordance with Section 2.2. Each Bank shall remit the principal amount of each
Revolving Credit Loan to the Administrative Agent such that the Administrative
Agent is able to, and the Administrative Agent shall, to the extent the Banks
have made funds available to it for such purpose, fund such Revolving Credit
Loans to the Borrower in Dollars and immediately available funds at the
Principal Office prior to 2:00 p.m., Columbus, Ohio time, on the applicable
Borrowing Date, PROVIDED that if the Administrative Agent assumes pursuant to
Section 9.16 that a Bank will make available to the Administrative Agent such
Bank's portion of a Revolving Credit Loan and such Bank fails to remit such
funds to the Administrative Agent in a timely manner, the Administrative Agent
may elect in its sole discretion to fund with its own funds the Revolving Credit
Loans of such Bank on such Borrowing Date, and such Bank shall be subject to the
repayment obligation in Section 9.16.
2.7 REVOLVING CREDIT NOTES.
-----------------------
The Obligation of the Borrower to repay the aggregate unpaid principal amount of
the Revolving Credit Loans made to it by each Bank, together with interest
thereon, shall be evidenced by a Revolving Credit Note payable to the order of
such Bank in a face amount equal to the Revolving Credit Commitment of such
Bank.
2.8 USE OF PROCEEDS.
----------------
The proceeds of the Revolving Credit Loans made on the Closing Date and on the
Acquisition Date were used to finance a portion of the Acquisition, to retire
the 10.50% senior notes issued pursuant to the several Note Purchase Agreements
dated August 1, 1987, to repay all Indebtedness owing pursuant to that certain
Credit Agreement dated May 27, 1994 among the Borrower, ▇.▇. ▇▇▇▇ Company and
certain financial institutions described therein (collectively the "Existing
Bank Facility") and for working capital and similar general corporate purposes.
The proceeds from Revolving Credit Loans made after the Acquisition Date shall
be used for working capital and similar general corporate purposes, but shall
not be used, directly or indirectly, to repay, purchase or otherwise retire or
to redeem, repurchase or otherwise acquire any capital stock of the Company.
Letters of Credit shall be used for commercial purposes of the Borrower and its
Subsidiaries in the ordinary course of business for the purchase of goods and
services and to assure the Borrower's or its Subsidiaries' performance of
workmen's compensation or liability or of refund, warranty, or other obligations
incurred in the ordinary course of business of the Borrower or its Subsidiaries.
-23-
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2.9 LETTERS OF CREDIT SUBFACILITY.
------------------------------
2.9.1 ISSUANCE OF LETTERS OF CREDIT.
------------------------------
Borrower or a Material Subsidiary may request the issuance of (or modification
of any issued) commercial letters of credit in connection with the Borrower's or
Subsidiary of the Borrower's purchase of goods and services (each a "Documentary
Letter of Credit") and standby letters of credit for the benefit of workmen's
compensation or liability insurers, state and federal agencies to assure
compliance with applicable Laws and other Persons in support of refund, warranty
or other obligations of the Borrower or a Subsidiary of the Borrower (each a
"Standby Letter of Credit" and together with Documentary Letters of Credit
referred to as "Letters of Credit" in the aggregate or individually as a "Letter
of Credit") on behalf of itself or another Loan Party by delivering by no later
than 10:00 a.m., Columbus, Ohio time, two (2) Business Days in the case of a
Documentary Letter of Credit and three (3) Business Days in case of a Standby
Letter of Credit prior to the requested date of issuance of such Letter of
Credit to the applicable Issuing Letter of Credit Bank with a copy to the
Administrative Agent a written notice specifying the proposed beneficiary, date
of issuance and expiry date for such Letter of Credit or modification to an
existing Letter of Credit and the nature of the transactions to be supported
thereby. Subject to the terms and conditions hereof and to the execution of a
completed application and agreement for letters of credit in such form as the
applicable Issuing Letter of Credit Bank may specify from time to time and in
reliance on the agreements of the Banks set forth in this Section 2.9, such
Issuing Letter of Credit Bank will issue a Letter of Credit provided that each
Letter of Credit shall (A) have a maximum maturity of 364 days from the date of
issuance, (B) in no event expire later than five Business Days prior to the
Expiration Date and provided further that in no event shall (i) the Letter of
Credit Outstandings exceed, at any one time, $200,000,000 or (ii) the Revolving
Facility Usage exceed, at any one time, the Revolving Credit Commitments. Each
of the Rollover LCs listed on SCHEDULE 2.9.1 shall be deemed to have been issued
hereunder on the Closing Date by the applicable Issuing Letter of Credit Bank
upon the request of the Borrower or a Material Subsidiary as indicated on
SCHEDULE 2.9.1 as a Documentary Letter of Credit or Standby Letter of Credit, as
the case may be, and shall be deemed to be a Letter of Credit for all purposes
of this Agreement. In the event of any conflict between the terms of this
Agreement and the terms of any Issuing Letter of Credit Bank's application and
agreement for letters of credit, the terms of this Agreement shall control
(provided that terms of any Issuing Letter of Credit Bank's application and
agreement for letters of credit which are in addition to those contained herein
and which do not expressly conflict with the terms contained herein shall not be
deemed to be in conflict with this Agreement).
-24-
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2.9.2 PARTICIPATIONS.
---------------
Immediately upon issuance of each Letter of Credit, and without further action,
each Bank shall be deemed to, and hereby agrees that it shall, have irrevocably
purchased for such Bank's own account and risk from the applicable Issuing
Letter of Credit Bank an individual participation interest in such Letter of
Credit and drawings thereunder in an amount equal to such Bank's Ratable Share
of the maximum amount which is or at any time may become available to be drawn
thereunder, and each Bank shall be responsible to reimburse such Issuing Letter
of Credit Bank immediately for its Ratable Share of any disbursement under any
Letter of Credit which has not been reimbursed by Borrower in accordance with
Section 2.9.4 by making its Ratable Share of the Revolving Credit Loans referred
to in Section 2.9.4 available to such Issuing Letter of Credit Bank. Upon the
request of any Bank and no less frequently than once in each calendar month, the
Administrative Agent shall notify each Bank of the amount of such Bank's
participation in Letters of Credit.
2.9.3 LETTER OF CREDIT FEES.
----------------------
The Borrower shall pay to the Administrative Agent for the ratable account of
the Banks (a) fees ("Documentary Letters of Credit Fees") with respect to
Documentary Letters of Credit and (b) fees ("Standby Letters of Credit Fees")
with respect to Standby Letters of Credit, in each case in the amounts set forth
in Sections 2.9.3.1 and 2.9.3.2 (as the same may be increased as provided in
Section 3.3). All Documentary Letters of Credit Fees and Standby Letters of
Credit Fees (collectively, "Letters of Credit Fees") shall be payable quarterly
in arrears commencing with the first Business Day of each March, June, September
and December following issuance of each Letter of Credit and on the earlier of
the Expiration Date or the acceleration of the Revolving Credit Notes.
2.9.3.1 DOCUMENTARY LETTER OF CREDIT FEES.
----------------------------------
Documentary Letters of Credit Fees on Documentary Letters of Credit shall be
determined by that percentage per annum set forth in the following table which
is applicable to the Fixed Charge Coverage Ratio then in effect (the "Applicable
Documentary LC Percentage") (computed on the basis of a year of 365 or 366 days,
as the case may be, and actual days elapsed) times the average daily Documentary
Letter of Credit Outstandings. The Applicable Documentary LC Percentage shall be
determined as follows:
FIXED CHARGE COVERAGE RATIO APPLICABLE DOCUMENTARY LC PERCENTAGE (RATE PER
--------------------------- ----------------------------------------------
ANNUM)
------
greater than or equal to 2.20 to 1.00 0.250%
greater than or equal to 2.05 to 1.00 but less than 0.3125%
2.20 to 1.00
greater than or equal to 1.90 to 1.00 but less than 0.375%
2.05 to 1.00
greater than or equal to 1.75 to 1.00 but less than 0.500%
1.90 to 1.00
less than 1.75 to 1.00 0.625%
-25-
35
The Company shall also pay Documentary Letters of Credit Fees in respect of
Documentary Letter of Credit (Time Draft) Outstandings determined by that
percentage per annum set forth in the following table which is applicable to the
Fixed Charge Coverage Ratio then in effect (the "Applicable Documentary Accepted
Time Draft LC Percentage") (computed on the basis of a year of 365 or 366 days,
as the case may be, and actual days elapsed) times the average daily Documentary
Letter of Credit (Time Draft) Outstandings. The Applicable Documentary Accepted
Time Draft LC Percentage shall be determined as follows:
FIXED CHARGE COVERAGE RATIO APPLICABLE DOCUMENTARY ACCEPTED TIME DRAFT LC
--------------------------- ---------------------------------------------
PERCENTAGE (RATE PER ANNUM)
---------------------------
greater than or equal to 2.20 to 1.00 0.500%
greater than or equal to 2.05 to 1.00 but less than 2.20 0.625%
to 1.00
greater than or equal to 1.90 to 1.00 but less than 2.05 0.750%
to 1.00
greater than or equal to 1.75 to 1.00 but less than 1.90 1.000%
to 1.00
less than 1.75 to 1.00 1.250%
Until the Borrower shall have delivered to the Administrative Agent a Compliance
Certificate covering the four fiscal periods ending on the Saturday nearest
April 30, 1997, the Fixed Charge Coverage Ratio shall be deemed to be 1.75 to
1.00. For each fiscal quarter subsequent to May 3, 1997, the Fixed Charge
Coverage Ratio shall be computed based on the Compliance Certificate for such
quarter. Any change in the Fixed Charge Coverage Ratio (and the Applicable
Documentary LC Percentage and the Applicable Documentary Accepted Time Draft LC
Percentage) shall be effective on the date on which the Compliance Certificate
evidencing the computation of such Fixed Charge Coverage Ratio is delivered to
the Administrative Agent; provided, however, that if the Compliance Certificate
evidencing the computation of the Fixed Charge Coverage Ratio is not delivered
on the date on which such Compliance Certificate is due to be delivered under
Section 7.3.3, the Fixed Charge Coverage Ratio on and after the date on which
such Compliance Certificate is due to be delivered under Section 7.3.3 and until
the date on which such Compliance Certificate is delivered to the Administrative
Agent shall be deemed to be less than 1.75 to 1.00 and the Applicable
Documentary LC Percentage and the Applicable Documentary Accepted Time Draft LC
Percentage for such period computed accordingly.
The Borrower shall also pay to the applicable Issuing Letter of Credit Bank for
its sole account (i) a fronting fee as determined by such Issuing Letter of
Credit Bank and the Borrower and (ii) such Issuing Letter of Credit Bank's then
in effect customary issuance fees and administrative expense payable with
respect to its Documentary Letters of Credit as such Issuing Letter of Credit
Bank may generally charge or incur from time to time in connection with the
issuance, maintenance, modification (if any), assignment or transfer (if any),
negotiation, and administration of commercial letters of credit, payable at such
times as such Issuing Letter of Credit Bank may specify.
2.9.3.2 STANDBY LETTER OF CREDIT FEES.
------------------------------
Standby Letters of Credit Fees shall be determined by that percentage per annum
set forth in the following table which is applicable to the Fixed Charge
Coverage Ratio then in effect (the "Applicable Standby LC Percentage") (computed
on the basis of a year of 365 or 366 days, as the case may be, and actual days
elapsed) times the aver-
-26-
36
age daily Standby Letter of Credit Outstandings. The Applicable Standby LC
Percentage shall be determined as follows:
FIXED CHARGE COVERAGE RATIO APPLICABLE STANDBY LC PERCENTAGE (RATE
--------------------------- --------------------------------------
PER ANNUM)
----------
greater than or equal to 2.20 to 1.00 0.500%
greater than or equal to 2.05 to 1.00 but less than 2.20 0.625%
to 1.00
greater than or equal to 1.90 to 1.00 but less than 2.05 0.750%
to 1.00
greater than or equal to 1.75 to 1.00 but less than 1.90 1.000%
to 1.00
less than 1.75 to 1.00 1.250%
Until the Borrower shall have delivered to the Administrative Agent a Compliance
Certificate covering the four fiscal periods ending on the Saturday nearest
April 30, 1997, the Fixed Charge Coverage Ratio shall be deemed to be 1.75 to
1.00. For each fiscal quarter subsequent to May 3, 1997, the Fixed Charge
Coverage Ratio shall be computed based on the Compliance Certificate for such
quarter. Any change in the Fixed Charge Coverage Ratio (and the Applicable
Standby LC Percentage) shall be effective on the date on which the Compliance
Certificate evidencing the computation of such Fixed Charge Coverage Ratio is
delivered to the Administrative Agent; provided, however, that if the Compliance
Certificate evidencing the computation of the Fixed Charge Coverage Ratio is not
delivered on the date on which such Compliance Certificate is due to be
delivered under Section 7.3.3, the Fixed Charge Coverage Ratio on and after the
date on which such Compliance Certificate is due to be delivered under Section
7.3.3 and until the date on which such Compliance Certificate is delivered to
the Administrative Agent shall be deemed to be less than 1.75 to 1.00 and the
Applicable Standby LC Percentage for such period computed accordingly.
The Borrower shall also pay to the applicable Issuing Letter of Credit Bank for
its sole account (i) a fronting fee as determined by such Issuing Letter of
Credit Bank and the Borrower and (ii) such Issuing Letter of Credit Bank's then
in effect customary issuance fees and administrative expense payable with
respect to its Standby Letters of Credit as such Issuing Letter of Credit Bank
may generally charge or incur from time to time in connection with the issuance,
maintenance, modification (if any), assignment or transfer (if any),
negotiation, and administration of standby letters of credit payable at such
times as such Issuing Letter of Credit Bank may specify.
-27-
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2.9.4 DISBURSEMENTS, REIMBURSEMENT.
-----------------------------
Borrower shall be obligated immediately to reimburse the applicable Issuing
Letter of Credit Bank (each a "Reimbursement Obligation") for all amounts which
such Issuing Letter of Credit Bank is required to pay pursuant to the Letters of
Credit issued by such Issuing Letter of Credit Bank on or before the date on
which the applicable Issuing Letter of Credit Bank is required to make payment
with respect to a draft presented thereunder; provided, however, that a
Reimbursement Obligation with respect to a Documentary Letter of Credit time
draft which has been accepted for payment by an Issuing Letter of Credit Bank
shall not arise until the date on which the applicable Issuing Letter of Credit
Bank is obligated to make a payment with respect to such draft which it has
accepted for payment. The applicable Issuing Letter of Credit Bank will promptly
notify (A) the Borrower of each demand or presentment for payment or draft
accepted for payment or other drawing under each Letter of Credit issued by such
Issuing Letter of Credit Bank, and (B) the Administrative Agent of the amount
required to be paid by such Issuing Letter of Credit Bank pursuant to each such
Letter of Credit. The Administrative Agent shall promptly notify each Bank of
the amount required to be paid by such Bank as a result of a drawing upon such
Letter of Credit if the applicable Issuing Letter of Credit Bank shall have
notified the Administrative Agent that the Borrower has not timely reimbursed
such Issuing Letter of Credit Bank for such draw. If such notice is received by
a Bank before 1:00 p.m., Columbus, Ohio time, such Bank shall deliver such
Bank's Ratable Share of such payment in immediately available funds to the
Administrative Agent on that Business Day. If such notice is received by a Bank
after 1:00 p.m., Columbus, Ohio time, such Bank shall before 10:00 a.m.,
Columbus, Ohio time, on the next succeeding Business Day deliver to the
Administrative Agent such Bank's Ratable Share of such payment as a Revolving
Credit Loan from such Bank in immediately available funds. Upon receipt of each
Bank's Ratable Share of such payment, the Administrative Agent shall immediately
deliver such Bank's Ratable Share of such payment to the applicable Issuing
Letter of Credit Bank.
-28-
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2.9.5 DOCUMENTATION.
--------------
Each Loan Party agrees to be bound by the terms of each Issuing Letter of Credit
Bank's application and agreement for letters of credit and each Issuing Letter
of Credit Bank 's written regulations and customary practices relating to
letters of credit, though such interpretation may be different from such Loan
Party's own. In the event of a conflict between such application or agreement
and this Agreement, this Agreement shall govern (provided that terms of any
Issuing Letter of Credit Bank's application and agreement for letters of credit
which are in addition to those contained herein and which do not expressly
conflict with the terms contained herein shall be deemed not to be in conflict
with this Agreement). It is understood and agreed that, except in the case of
gross negligence or willful misconduct, the applicable Issuing Letter of Credit
Bank shall not be liable for any error, negligence and/or mistakes, whether of
omission or commission, in following any Loan Party's instructions or those
contained in the Letters of Credit issued by such Issuing Letter of Credit Bank
or any modifications, amendments or supplements thereto.
-29-
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2.9.6 DETERMINATIONS TO HONOR DRAWING REQUESTS.
-----------------------------------------
In determining whether to honor any request for drawing under any Letter of
Credit by the beneficiary thereof, the applicable Issuing Letter of Credit Bank
shall be responsible only to determine that the documents and certificates
required to be delivered under such Letter of Credit have been delivered and
that they appear to comply on their face with the requirements of such Letter of
Credit.
2.9.7 NATURE OF PARTICIPATION AND REIMBURSEMENT OBLIGATIONS.
------------------------------------------------------
The obligation of the Banks to participate in Letters of Credit pursuant to
Section 2.9.2 and the obligation of the Banks pursuant to Section 2.9.4 to fund
Revolving Credit Loans upon a draw under a Letter of Credit or to acquire
participations in Letters of Credit and the Obligations of the Borrower to
reimburse the applicable Issuing Letter of Credit Bank upon a draw under any
Letter of Credit pursuant to Section 2.9 shall be absolute unconditional and
irrevocable, and shall be performed strictly in accordance with the terms of
such sections under all circumstances, including the following circumstances:
(i) the failure of any Loan Party or any other Person to comply with
the conditions set forth in Sections 2.1, 2.5, 2.6 or 6.2 or as
otherwise set forth in this Agreement for the making of a
Revolving Credit Loan, it being acknowledged that such
conditions are not required for the making of a Revolving Credit
Loan under Section 2.9.4;
(i) any lack of validity or enforceability of any Letter of Credit;
(ii) the existence of any claim, set-off, defense or other right
which any Loan Party or any Bank may have at any time against a
beneficiary or any transferee of any Letter of Credit (or any
Persons for whom any such transferee may be acting), such
Issuing Letter of Credit Bank or any Bank or any other Person or
whether in connection with this Agreement, the transactions
contemplated herein or any unrelated transaction (including any
underlying transaction between any Loan Party or Subsidiaries of
a Loan Party and the beneficiary for which any Letter of Credit
was procured);
(iii) any draft, demand, certificate or other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect even if such Issuing Letter
of Credit Bank has been notified thereof;
(iv) payment by such Issuing Letter of Credit Bank under any Letter
of Credit against presentation of a demand, draft or certificate
or other document which does not comply with the terms of such
Letter of Credit;
(v) any adverse change in the business, operations, properties,
assets, condition (financial or otherwise) or prospects of any
Loan Party or Subsidiaries of a Loan Party;
(vi) any breach of this Agreement or any other Loan Document by any
party thereto;
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(viii) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing;
(ix) the fact that an Event of Default or a Potential Default shall
have occurred and be continuing; and
(x) the fact that the Expiration Date shall have passed or this
Agreement or the Revolving Credit Commitments hereunder shall
have been terminated.
2.9.8 INDEMNITY.
----------
In addition to amounts payable as provided in Section 9.5, the Borrower hereby
agrees to pay and to protect, indemnify and save harmless each Issuing Letter of
Credit Bank from and against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable fees, expenses and
disbursements of counsel and allocated costs of internal counsel) which such
Issuing Letter of Credit Bank may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Letter of Credit, other than as a
result of (A) the gross negligence or willful misconduct of such Issuing Letter
of Credit Bank as determined by a final judgment of a court of competent
jurisdiction or (B) subject to the following clause (ii), the wrongful dishonor
by such Issuing Letter of Credit Bank of a proper demand for payment made under
any Letter of Credit or (ii) the failure of such Issuing Letter of Credit Bank
to honor a drawing under any such Letter of Credit as a result of any act or
omission, whether rightful or wrongful, of any present or future de jure or de
facto government or governmental authority (all such acts or omissions herein
called "Governmental Acts").
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2.9.9 LIABILITY FOR ACTS AND OMISSIONS.
---------------------------------
As between any Loan Party and each Issuing Letter of Credit Bank, such Loan
Party assumes all risks of the acts and omissions of, or misuse of the Letters
of Credit by, the respective beneficiaries of the Letters of Credit. In
furtherance and not in limitation of the foregoing, the applicable Issuing
Letter of Credit Bank shall not be responsible for: (i) the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document submitted by
any party in connection with the application for an issuance of any Letter of
Credit issued by such Issuing Letter of Credit Bank, even if it should in fact
prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent
or forged (even if such Issuing Letter of Credit Bank shall have been notified
thereof); (ii) the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any such Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or in part, which
may prove to be invalid or ineffective for any reason; (iii) failure of the
beneficiary of any such Letter of Credit to comply fully with any conditions
required in order to draw upon such Letter of Credit; (iv) errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex or otherwise, whether or not they be in cipher; (v)
errors in interpretation of technical terms; (vi) any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any such Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; or (viii) any consequences arising
from causes beyond the control of such Issuing Letter of Credit Bank, including
any Governmental Acts, and none of the above shall affect or impair, or prevent
the vesting of, any of such Issuing Letter of Credit Bank's rights or powers
hereunder.
In furtherance and extension and not in limitation of the specific
provisions set forth above, any action taken or omitted by any Issuing Letter of
Credit Bank under or in connection with the Letters of Credit issued by it or
any documents and certificates delivered thereunder, if taken or omitted in good
faith, shall not put such Issuing Letter of Credit Bank under any resulting
liability to the Borrower or any Banks.
The Banks and any Loan Party may not commence a proceeding against any Issuing
Letter of Credit Bank for wrongful disbursement under a Letter of Credit issued
by such Issuing Letter of Credit Bank as a result of acts or omissions
constituting gross negligence or willful misconduct of such Issuing Letter of
Credit Bank, until the Banks have made and the Borrower has repaid the Revolving
Credit Loans described in Section 2.9.4; provided, however, that nothing in this
Section 2.9 shall adversely affect the right of any Loan Party, after such
payment, to commence any proceeding against such Issuing Letter of Credit Bank
for any breach of its obligations hereunder.
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2.10 SWING LOANS.
------------
2.10.1 SWING LOAN COMMITMENT.
----------------------
Subject to the terms and conditions hereof and relying upon the representations
and warranties herein set forth, and in order to facilitate loans and repayments
in amounts of $30,000,000 or less, the Swing Lender may, at its option,
cancelable at any time for any reason whatsoever, make swing loans (the "Swing
Loans") to the Borrower at any time or from time to time after the date hereof
to, but not including, the Expiration Date, in an aggregate principal amount up
to the Swing Loan Commitment, subject to reduction as provided herein and to be
made in accordance with the following provisions. The Swing Lender may in its
discretion make Swing Loans provided that the aggregate principal amount of the
Swing Loans and the Revolving Credit Loans of all of the Banks at any one time
outstanding plus the Letter of Credit Outstandings shall not exceed the
Revolving Credit Commitments. Within such limits of time and amount and subject
to the other provisions of this Agreement, the Borrower may borrow, repay and
reborrow pursuant to this Section 2.10.
2.10.2 SWING LOAN REQUESTS.
--------------------
Except as otherwise provided herein, the Borrower may from time to time prior to
the Expiration Date request the Swing Lender to make Swing Loans by delivery to
the Swing Lender not later than 12:00 p.m. Columbus, Ohio time on the proposed
Borrowing Date of a duly completed request therefor substantially in the form of
EXHIBIT 2.10.2 hereto or a request by telephone immediately confirmed in writing
by letter, facsimile or telex (each, a "Swing Loan Request"), it being
understood that the Swing Lender may rely on the authority of any individual
making such a telephonic request without the necessity of receipt of such
written confirmation. Each Swing Loan Request shall be irrevocable and shall
specify the proposed Borrowing Date and the principal amount of such Swing Loan,
which shall be not less than $100,000 and in integral multiples of $100,000.
2.10.3 MAKING OF SWING LOANS.
----------------------
So long as the Swing Lender elects to make Swing Loans, the Swing Lender shall,
after receipt by it of a Swing Loan Request pursuant to Section 2.10.2, fund a
Swing Loan to the Borrower in U.S. Dollars and immediately available funds at
its Principal Office prior to 2:00 p.m. Columbus, Ohio time on the related
Borrowing Date.
2.10.4 SWING NOTE.
-----------
The obligation of the Borrower to repay the unpaid principal amount of the Swing
Loans made to it by the Swing Lender together with interest thereon shall be
evidenced by a demand promissory note of the Borrower in substantially the form
attached hereto as EXHIBIT 1.1(S) payable to the order of the Swing Lender in a
face amount equal to the Swing Loan Commitment.
2.10.5 REPAYMENT OF SWING LOANS WITH REVOLVING CREDIT LOANS BORROWINGS.
----------------------------------------------------------------
The Swing Lender may at its option, exercisable at any time for any reason
whatsoever, and shall no later than the fifth (5th) Business Day following the
making of a Swing Loan if the outstanding Swing Loans exceed $15,000,000 on such
date (a "Settlement Date"), demand repayment of all Swing Loans (or at the Swing
Lender's option, such portion of the outstanding Swing Loans which results in
the aggregate of such Swing Loans not exceeding $15,000,000), and each Bank
shall make a Revolving Credit Loan in an amount equal to such Bank's Ratable
Share of the aggregate principal amount of the outstanding Swing Loans for which
repayment is demanded, plus, if the Swing Lender so requests, accrued interest
thereon, provided that no Bank shall be obligated in any event to make
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Revolving Credit Loans in excess of its Revolving Credit Commitment less its
Ratable Share of Letter of Credit Outstandings. In that event, such Revolving
Credit Loans shall bear interest at the Base Rate Option and shall be deemed to
have been properly requested in accordance with Section 2.5 without regard to
any of the requirements of that provision. The Swing Lender shall provide notice
to the Administrative Agent (which may be a telephonic or written notice by
letter, facsimile or telex) that such Revolving Credit Loans are to be made
under this Section 2.10.5; the Administrative Agent shall then provide notice to
the Banks (which may be a telephonic or written notice by letter, facsimile or
telex) that such Revolving Credit Loans are to be made under this Section 2.10.5
and of the apportionment among the Banks, the Banks shall be unconditionally
obligated to fund such Revolving Credit Loans (whether or not the conditions
specified in Section 6.2 are then satisfied, including, without limitation, the
existence or continuance of any Event of Default) by the time the Administrative
Agent so requests, which shall not be earlier than 2:00 p.m. Columbus, Ohio,
time on the Business Day next succeeding the date the Banks receive such notice
from the Administrative Agent; and the Administrative Agent shall promptly
deliver the funds it receives from the Banks to the Swing Lender.
3. INTEREST RATES
--------------
3.1 INTEREST RATE OPTIONS.
----------------------
The Borrower shall pay interest in respect of the outstanding unpaid principal
amount of the Revolving Credit Loans as selected by it from the Revolving Credit
Base Rate Option or Revolving Credit Euro-Rate Option set forth below applicable
to the Revolving Credit Loans, it being understood that, subject to the
provisions of this Agreement, the Borrower may select different Interest Rate
Options and different Interest Periods to apply simultaneously to the Revolving
Credit Loans comprising different Borrowing Tranches and may convert to or renew
one or more Interest Rate Options with respect to all or any portion of the
Revolving Credit Loans comprising any Borrowing Tranche, PROVIDED that there
shall not be at any one time outstanding more than eight (8) Borrowing Tranches
in the aggregate among all the Revolving Credit Loans. If at any time the
designated rate applicable to any Revolving Credit Loan made by any Bank exceeds
such Bank's highest lawful rate, the rate of interest on such Bank's Revolving
Credit Loan shall be limited to such Bank's highest lawful rate.
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3.1.1 REVOLVING CREDIT INTEREST RATE OPTIONS.
---------------------------------------
The Borrower shall have the right to select from the following Interest Rate
Options applicable to the Revolving Credit Loans:
(i) REVOLVING CREDIT BASE RATE OPTION: A fluctuating rate per annum
(computed on the basis of a year of 365 or 366 days, as the case
may be, and actual days elapsed) equal to the Base Rate, such
interest rate to change automatically from time to time
effective as of the effective date of each change in the Base
Rate;
(i) REVOLVING CREDIT EURO-RATE OPTION: A rate per annum (computed on
the basis of a year of 360 days and actual days elapsed) equal
to the Euro-Rate plus a percentage rate per annum (the
"Revolving Credit Euro-Rate Spread") based on the Fixed Charge
Coverage Ratio, determined as follows:
FIXED CHARGE COVERAGE RATIO REVOLVING CREDIT EURO-RATE SPREAD
--------------------------- ---------------------------------
greater than or equal to 2.20 to 1.00 0.500%
greater than or equal to 2.05 to 1.00 but less than 2.20 0.625%
to 1.00
greater than or equal to 1.90 to 1.00 but less than 2.05 0.750%
to 1.00
greater than or equal to 1.75 to 1.00 but less than 1.90 1.000%
to 1.00
less than 1.75 to 1.00 1.250%
Until the Borrower shall have delivered to the Administrative Agent a Compliance
Certificate covering the four fiscal periods ending on the Saturday nearest
April 30, 1997, the Fixed Charge Coverage Ratio shall be deemed to be 1.75 to
1.00. For each fiscal quarter subsequent to May 3, 1997, the Fixed Charge
Coverage Ratio shall be computed based on the Compliance Certificate for such
quarter. Any change in the Fixed Charge Coverage Ratio (and the applicable
Revolving Credit Euro-Rate Spread) shall be effective on the date on which the
Compliance Certificate evidencing the computation of such Fixed Charge Coverage
Ratio is delivered to the Administrative Agent; provided, however, that if the
Compliance Certificate evidencing the computation of the Fixed Charge Coverage
Ratio is not delivered on the date on which such Compliance Certificate is due
to be delivered under Section 7.3.3, the Fixed Charge Coverage Ratio on and
after the date on which such Compliance Certificate is due to be delivered under
Section 7.3.3 and until the date on which such Compliance Certificate is
delivered to the Administrative Agent shall be deemed to be less than 1.75 to
1.00 and the applicable Revolving Credit Euro-Rate Spread for such period
computed accordingly.
Swing Loans shall bear interest in accordance with Section 3.1.1(i) [Revolving
Credit Base Rate Option] except to the extent that the Swing Lender agrees in
writing to a different rate of interest; provided, however, that any Swing Loans
with respect to which the Swing Lender demands payment pursuant to Section
2.10.5 shall bear interest on
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and after such demand for payment in accordance with Section 3.1.1(i) [Revolving
Credit Base Rate Option] notwithstanding any other interest rate agreed to by
the Administrative Agent.
3.2 INTEREST PERIODS.
-----------------
At any time when the Borrower shall select, convert to or renew a Revolving
Credit Euro-Rate Option, the Borrower shall notify the Administrative Agent
thereof at least three (3) Business Days prior to the effective date of such
Revolving Credit Euro-Rate Option by delivering a Loan Request. Such notice
shall specify an interest period (the "Interest Period") during which such
Interest Rate Option shall apply, such Interest Period to be one, two, three or
six Months, PROVIDED, that:
3.2.1 ENDING DATE AND BUSINESS DAY.
-----------------------------
Any Interest Period which would otherwise end on a date which is not a Business
Day shall be extended to the next succeeding Business Day unless such Business
Day falls in the next calendar month, in which case such Interest Period shall
end on the next preceding Business Day;
3.2.2 AMOUNT OF BORROWING TRANCHE.
----------------------------
Each Borrowing Tranche of a Revolving Credit Loan to which the Revolving Credit
Euro-Rate Option applies shall be in integral multiples of $1,000,000 and not
less than $5,000,000;
3.2.3 TERMINATION BEFORE EXPIRATION DATE.
-----------------------------------
The Borrower shall not select, convert to or renew an Interest Period for any
portion of the Revolving Credit Loans that would end after the Expiration Date;
and
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3.2.4 RENEWALS.
---------
In the case of the renewal of a Revolving Credit Euro-Rate Option at the end of
an Interest Period, the first day of the new Interest Period shall be the last
day of the preceding Interest Period, without duplication in payment of interest
for such day.
3.3 INTEREST AFTER DEFAULT.
-----------------------
To the extent permitted by Law, upon the occurrence of an Event of Default and
until such time such Event of Default shall have been cured or waived:
3.3.1 LETTERS OF CREDIT FEES, INTEREST RATE.
--------------------------------------
The Letters of Credit Fees and the rate of interest for each Revolving Credit
Loan otherwise applicable pursuant to Section 2.9 or Section 3.1, respectively,
shall be increased by 2.0% per annum;
3.3.2 OTHER OBLIGATIONS.
------------------
Each other Obligation hereunder if not paid when due shall bear interest at a
rate per annum equal to the sum of the rate of interest applicable under the
Revolving Credit Base Rate Option plus an additional 2.0% per annum from the
time such Obligation becomes due and payable and until it is paid in full; and
3.3 ACKNOWLEDGMENT.
---------------
The Borrower acknowledges that the increased rates referred to in this Section
3.3 reflect, among other things, the fact that such Revolving Credit Loans or
other amounts have become a substantially greater risk given their default
status and that the Banks are entitled to additional compensation for such risk.
All such interest shall be payable by Borrower upon demand by the Administrative
Agent.
3.4 EURO-RATE UNASCERTAINABLE.
--------------------------
3.4.1 UNASCERTAINABLE.
----------------
If on any date on which a Euro-Rate would otherwise be determined, the
Administrative Agent shall have determined that:
(i) adequate and reasonable means do not exist for ascertaining such
Euro-Rate, or
(ii) a contingency has occurred which materially and adversely affects
the London interbank eurodollar market relating to the Euro-Rate,
then the Administrative Agent shall have the rights specified in
Section 3.4.3.
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3.4.2 ILLEGALITY; INCREASED COSTS; DEPOSITS NOT AVAILABLE.
----------------------------------------------------
If at any time any Bank shall have determined that:
(i) the making, maintenance or funding of any Revolving Credit Loan to
which a Revolving Credit Euro-Rate Option applies has been made
impracticable or unlawful by compliance by such Bank in good faith
with any Law or any interpretation or application thereof by any
Official Body or with any request or directive of any Official
Body (whether or not having the force of Law), or
(ii) such Revolving Credit Euro-Rate Option will not adequately and
fairly reflect the cost to such Bank of the establishment or
maintenance of any such Revolving Credit Loan, or
(iii) after making all reasonable efforts, deposits of the relevant
amount in Dollars for the relevant Interest Period for a Revolving
Credit Loan to which a Revolving Credit Euro-Rate Option applies,
are not available to such Bank with respect to such Revolving
Credit Loan in the London interbank market,
then such Bank shall have the rights specified in Section 3.4.3.
3.4.3 ADMINISTRATIVE AGENT'S AND BANK'S RIGHTS.
-----------------------------------------
In the case of any event specified in Section 3.4.1, the Administrative Agent
shall promptly so notify the Banks and the Borrower thereof, and in the case of
a determination specified in Section 3.4.2, such Bank shall promptly so notify
the Administrative Agent and endorse a certificate to such notice as to the
specific circumstances of such notice, and the Administrative Agent shall
promptly send copies of such notice and certificate to the other Banks and the
Borrower. Upon such date as shall be specified in such notice (which shall not
be earlier than the date such notice is given) the obligation of (A) the Banks,
in the case of such notice given by the Administrative Agent in respect of
Section 3.4.1, or (B) such Bank, in the case of such notice given by such Bank
in respect of Section 3.4.2, to allow the Borrower to select, convert to or
renew a Revolving Credit Euro-Rate Option shall be suspended until the
Administrative Agent shall have later notified the Borrower, or such Bank shall
have later notified the Administrative Agent, of the Administrative Agent's or
such Bank's, as the case may be, determination that the circumstances giving
rise to such previous determination no longer exist. If at any time the
Administrative Agent makes a determination under Section 3.4.1 and the Borrower
has previously notified the Administrative Agent of its selection of, conversion
to or renewal of a Revolving Credit Euro-Rate Option and such Interest Rate
Option has not yet gone into effect, such notification shall be deemed to
provide for selection of, conversion to or renewal of the Revolving Credit Base
Rate Option otherwise available with respect to the affected Revolving Credit
Loans. If any Bank notifies the Administrative Agent of a determination under
Section 3.4.2, the Borrower shall, subject to the Borrower's indemnification
Obligations under Section 4.6.2, as to any Revolving Credit Loan of such Bank to
which a Revolving Credit Euro-Rate Option applies, on the date specified in such
notice convert such Revolving Credit Loan to the Revolving Credit Base Rate
Option otherwise available with respect to such Revolving Credit Loan. Absent
due notice from the Borrower of conversion, such Revolving Credit Loan shall
automatically be converted to the Revolving Credit Base Rate Option otherwise
available with respect to such Revolving Credit Loan upon such specified date.
Upon any such conversion, the Borrower shall have the right to prepay Revolving
Credit Loans in the amount of such Revolving Credit Loan on the date of such
conversion without providing the notice otherwise required by Section 4.4.1.
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3.5.1 SELECTION OF INTEREST RATE OPTIONS.
-----------------------------------
If the Borrower fails to select a new Interest Period to apply to any Borrowing
Tranche to which a Revolving Credit Euro-Rate Option applies at the expiration
of an existing Interest Period applicable to such Borrowing Tranche in
accordance with the provisions of Section 3.2, the Borrower shall be deemed to
have converted such Borrowing Tranche to the Revolving Credit Base Rate Option
commencing upon the last day of such Interest Period.
4. PAYMENTS
--------
4.1 PAYMENTS.
---------
All payments and prepayments to be made in respect of principal, interest,
Commitment Fees, Letters of Credit Fees, the Administrative Agent's Fee, or
other amounts due from the Borrower hereunder (other than the fees and expenses
referenced in Section 2.9.3.1 and Section 2.9.3.2 which are to be paid to the
Issuing Letter of Credit Bank as provided in such sections and the fees and
expenses referenced in Section 9.15, each of which shall be paid in accordance
with such sections) shall be payable prior to 11:00 a.m., Columbus, Ohio time,
on the date when due without presentment, demand, protest or notice of any
kind, all of which are hereby expressly waived by the Borrower, and without
set-off, counterclaim or other deduction of any nature, and an action therefor
shall immediately accrue. Payments of principal and interest on Revolving
Credit Loans and of Commitment Fees and Letters of Credit Fees shall be made to
the Administrative Agent at the Principal Office for the ratable accounts of
the Banks in Dollars and in immediately available funds, and the Administrative
Agent shall promptly distribute such amounts to the Banks in immediately
available funds. The Administrative Agent's and each Bank's statement of
account, ledger or other relevant record shall, in the absence of manifest
error, be conclusive as the statement of the amount of principal of and
interest on the Revolving Credit Loans and other amounts owing under this
Agreement and shall be deemed an "account stated."
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4.2 PRO RATA TREATMENT OF BANKS.
----------------------------
Each borrowing of a Revolving Credit Loan shall be allocated to each Bank
according to its Ratable Share, and each selection of, conversion to or renewal
of any Interest Rate Option and each payment or prepayment by the Borrower with
respect to principal, interest, Commitment Fees, Letters of Credit Fees, or
other fees (except for the Administrative Agent's Fee and any Issuing Letter of
Credit Bank's fees) or amounts due from the Borrower hereunder to the Banks with
respect to the Revolving Credit Loans, shall (except as provided in Section
3.4.2 [Illegality, Increased Costs; Deposits not Available], 4.4 [Voluntary
Prepayments] or 4.6 [Additional Compensation in Certain Circumstances]) be made
in proportion to the applicable Revolving Credit Loans outstanding from each
Bank and, if no such Revolving Credit Loans are then outstanding, in proportion
to the Ratable Share of each Bank.
4.3 INTEREST PAYMENT DATES.
-----------------------
Interest on Revolving Credit Loans to which the Revolving Credit Base Rate
Option applies and on Swing Loans shall be due and payable in arrears on the
first Business Day of each March, June, September and December after the date
hereof and on the Expiration Date or upon acceleration of the Revolving Credit
Notes. Interest on Revolving Credit Loans to which the Revolving Credit
Euro-Rate Option applies shall be due and payable on the last day of each
Interest Period for those Revolving Credit Loans and, if any such Interest
Period is longer than three Months, also on the last day of every third Month
during such Interest Period. Without limitation on Section 4.4.1 interest on
mandatory prepayments of principal under Section 4.5 shall be due on the date
such mandatory prepayment is due. Interest on the principal amount of each
Revolving Credit Loan or other monetary Obligation shall be due and payable on
demand after such principal amount or other monetary Obligation becomes due and
payable (whether on the stated maturity date, upon acceleration or otherwise).
4.4 VOLUNTARY PREPAYMENTS.
----------------------
4.4.1 RIGHT TO PREPAY.
----------------
The Borrower shall have the right at its option from time to time to prepay the
Revolving Credit Loans and Swing Loans in whole or part without premium or
penalty (except as provided in Section 4.6) at any time with respect to any
Revolving Credit Loan to which the Revolving Credit Base Rate Option applies or
with respect to any Swing Loan,
(i) on the last day of the applicable Interest Period with respect to
Revolving Credit Loans to which a Revolving Credit Euro-Rate
Option applies, and
(ii) on the date specified in a notice by any Bank pursuant to Section
3.4.3 [Euro-Rate Unascertainable] with respect to any Revolving
Credit Loan to which a Revolving Credit Euro-Rate Option applies.
Whenever the Borrower desires to prepay any part of the Revolving Credit Loans,
it shall provide a prepayment notice to the Administrative Agent not later than
noon, Columbus, Ohio time on the Business Day prior to the date of prepayment of
Revolving Credit Loans setting forth the following information (provided no
notice from Borrower is required pursuant to subsection (iii) above):
(x) the date, which shall be a Business Day, on which the proposed
prepayment is to be made;
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(y) a statement indicating the application of the prepayment to the
Revolving Credit Loans or Swing Loans; and
(z) the total principal amount of such prepayment, which shall not be
less than $1,000,000.
All prepayment notices shall be irrevocable. The principal amount of the
Revolving Credit Loans and Swing Loans for which a prepayment notice is given,
together with interest on such principal amount except with respect to Revolving
Credit Loans to which the Revolving Credit Base Rate Option applies, shall be
due and payable on the date specified in such prepayment notice as the date on
which the proposed prepayment is to be made. If the Borrower prepays a Revolving
Credit Loan pursuant to this section or prepays a Revolving Credit Loan pursuant
to Section 4.5 but fails to specify the applicable Borrowing Tranche which the
Borrower is prepaying, the prepayment shall be applied first to Revolving Credit
Loans to which the Revolving Credit Base Rate Option applies, then to Revolving
Credit Loans to which the Revolving Credit Euro-Rate Option applies. Any
prepayment hereunder shall be subject to the Borrower's Obligation to indemnify
the Banks under Section 4.6.2.
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4.5 MANDATORY PREPAYMENTS.
----------------------
4.5.1 SALE OF ASSETS.
---------------
Within five (5) Business Days of any sale of assets authorized by Section
7.2.7(iv), the Borrower shall make a mandatory prepayment of principal on the
Revolving Credit Loans (together with accrued interest on such principal amount)
equal to the lesser of (i) the extent that the aggregate after-tax net cash
proceeds (including without limitation cash, as and when collected, pursuant to
any notes or other securities received as consideration for such sale, transfer
or lease), as reasonably estimated by the Borrower, of all such sales, transfers
or leases on and after the date hereof are in excess of $25,000,000 or (ii) the
amount of the outstanding Revolving Credit Loans;
4.5.2 PAYMENT TO REDUCE REVOLVING CREDIT LOANS MADE PURSUANT TO SECTION 2.9.4
-----------------------------------------------------------------------
In the event that the Banks have made Revolving Credit Loans to reimburse an
Issuing Letter of Credit Bank with respect to disbursements under Letters of
Credit that have not been reimbursed by the Borrower pursuant to Section 2.9.4
and the then Revolving Credit Loans exceed the lesser of (i) $450,000,000 or
(ii) the Revolving Credit Commitments, the Borrower shall immediately pay to the
Banks an amount which would reduce the Revolving Credit Loans to an amount which
does not exceed the lesser of (i) $450,000,000 or (ii) the Revolving Credit
Commitments. There shall be no reduction in the Revolving Credit Commitments in
connection with these prepayments;
4.5.3 PAYMENT TO REDUCE REVOLVING CREDIT LOANS IF REVOLVING CREDIT
------------------------------------------------------------
COMMITMENTS ARE REDUCED PURSUANT TO SECTION 2.4.2
-------------------------------------------------
In the event that the Revolving Credit Commitments are permanently reduced
pursuant to Section 2.4.2, the Borrower shall immediately make a mandatory
prepayment of principal on the Revolving Credit Loans to the extent that the
Revolving Facility Usage exceeds the sum of the Revolving Credit Commitments
plus any cash held by the Administrative Agent pursuant to Section 2.4.1; and
4.5.4 APPLICATION AMONG INTEREST RATE OPTIONS.
----------------------------------------
Unless the Borrower otherwise specifies in writing to the Administrative Agent
prior to or simultaneously with such prepayment (in which case the funds shall
be so applied) all prepayments required pursuant to this Section shall first be
applied among the Interest Rate Options to the principal amount of the
Revolving Credit Loans subject to the Revolving Credit Base Rate Option, and
then to Revolving Credit Loans subject to a Revolving Credit Euro-Rate Option.
In accordance with Section 4.6.2, the Borrower shall indemnify the Banks
for any loss or expense, including loss of margin, incurred with respect to any
such prepayments applied against Revolving Credit Loans subject to a Revolving
Credit Euro-Rate Option on any day other than the last day of the applicable
Interest Period.
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4.6 ADDITIONAL COMPENSATION IN CERTAIN CIRCUMSTANCES.
-------------------------------------------------
4.6.1 INCREASED COSTS OR REDUCED RETURN RESULTING FROM TAXES, RESERVES, CAPITAL
-------------------------------------------------------------------------
ADEQUACY REQUIREMENTS, EXPENSES, ETC.
-------------------------------------
If any Law, guideline or interpretation or any change in any Law, guideline or
interpretation or application thereof by any Official Body charged with the
interpretation or administration thereof or compliance with any request or
directive (whether or not having the force of Law) of any central bank or other
Official Body:
(i) subjects any Bank to any tax or changes the basis of taxation
with respect to this Agreement, the Revolving Credit Notes, the
Revolving Credit Loans or payments by the Borrower of principal,
interest, Commitment Fees, or other amounts due from the Borrower
hereunder or under the Revolving Credit Notes (except for taxes on
the overall net income of such Bank),
(ii) imposes, modifies or deems applicable any reserve, special deposit
or similar requirement against credits or commitments to extend
credit extended by, or assets (funded or contingent) of, deposits
with or for the account of, or other acquisitions of funds by, any
Bank, or
(iii) imposes, modifies or deems applicable any capital adequacy or
similar requirement (A) against assets (funded or contingent) of,
or letters of credit, other credits or commitments to extend
credit extended by, any Bank, or (B) otherwise applicable to the
obligations of any Bank under this Agreement, and the result of
any of the foregoing is to increase the cost to, reduce the income
receivable by, or impose any expense (including loss of margin)
upon any Bank with respect to this Agreement, the Revolving Credit
Notes or the making, maintenance or funding of any part of the
Revolving Credit Loans (or, in the case of any capital adequacy or
similar requirement, to have the effect of reducing the rate of
return on any Bank's capital, taking into consideration such
Bank's customary policies with respect to capital adequacy) by an
amount which such Bank in its sole discretion deems to be
material, such Bank shall from time to time notify the Borrower
and the Administrative Agent of the amount determined in good
faith (using any averaging and attribution methods employed in
good faith and shall be binding upon the parties absent manifest
error) by such Bank to be necessary to compensate such Bank for
such increase in cost, reduction of income or additional expense
or reduced rates of return. Such notice shall set forth in
reasonable detail the basis for such determination. Such amount
shall be due and payable by the Borrower to such Bank ten (10)
Business Days after such notice is given.
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4.6.2 INDEMNITY.
----------
In addition to the compensation required by Section 4.6.1, the Borrower shall
indemnify each Bank against all liabilities, losses or expenses (including loss
of margin, any loss or expense incurred in liquidating or employing deposits
from third parties and any loss or expense incurred in connection with funds
acquired by a Bank to fund or maintain Revolving Credit Loans subject to a
Revolving Credit Euro-Rate Option) which such Bank sustains or incurs as a
consequence of any
(i) payment, prepayment, conversion or renewal of any Revolving Credit
Loan to which a Revolving Credit Euro-Rate Option applies on a day
other than the last day of the corresponding Interest Period
(whether or not such payment or prepayment is mandatory, voluntary
or automatic and whether or not such payment or prepayment is then
due),
(ii) attempt by the Borrower to revoke (expressly, by later
inconsistent notices or otherwise) in whole or part any Loan
Requests under Section 2.5 or any notice relating to prepayments
under Section 4.4, or
(iii) default by the Borrower in the performance or observance of any
covenant or condition contained in this Agreement or any other
Loan Document, including any failure of the Borrower to pay when
due (by acceleration or otherwise) any principal, interest,
Commitment Fee or any other amount due hereunder. If any Bank
sustains or incurs any such loss or expense, it shall from time to
time notify the Borrower of the amount determined in good faith by
such Bank (which determination may include such assumptions,
allocations of costs and expenses and averaging or attribution
methods as such Bank shall deem reasonable and shall be binding on
the parties absent manifest error) to be necessary to indemnify
such Bank for such loss or expense. Such notice shall set forth in
reasonable detail the basis for such determination. Such amount
shall be due and payable by the Borrower to such Bank ten (10)
Business Days after such notice is given.
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5. REPRESENTATIONS AND WARRANTIES
------------------------------
5.1 REPRESENTATIONS AND WARRANTIES.
-------------------------------
The Borrower represents and warrants to the Documentation Agent, the
Administrative Agent, the Syndication Agent, the Managing Agents, the Issuing
Letter of Credit Banks and each of the Banks as follows:
5.1.1 ORGANIZATION AND QUALIFICATION.
-------------------------------
Each Loan Party and each Subsidiary of any Loan Party is a corporation or
partnership, duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization. Each Loan Party and each Subsidiary of
any Loan Party has the lawful power to own or lease its properties and to engage
in the business it presently conducts or proposes to conduct. Each Loan Party
and each Subsidiary of any Loan Party is listed on SCHEDULE 5.1.1 and duly
licensed or qualified and in good standing in each jurisdiction where the
property owned or leased by it or the nature of the business transacted by it or
both makes such licensing or qualification necessary (except where the failure
to be so licensed or qualified would not constitute a Material Adverse Change),
and upon request of the Administrative Agent, the Borrower will promptly furnish
a written list of every jurisdiction where each Subsidiary and Loan Party is so
qualified.
5.1.2 CAPITALIZATION AND OWNERSHIP.
-----------------------------
The authorized capital stock of the Company consists of 90 million authorized
shares of voting common stock, 48,044,742 of which were outstanding as of April
12, 1996 (referred to herein as the "Shares"); 8 million authorized shares of
non-voting common stock, none of which are outstanding; and 2 million authorized
shares of preferred stock, none of which are outstanding. All of the Shares have
been validly issued and are fully paid and nonassessable.
5.1.3 SUBSIDIARY MATTERS.
-------------------
Other than as set forth on SCHEDULE 5.1.3, each of the Company's Subsidiaries is
directly or indirectly wholly owned by the Company and all of the issued and
outstanding shares of capital stock of each such Subsidiary (referred to herein
as the "Subsidiary Shares") are owned free and clear in each case of any Lien.
All Subsidiary Shares have been validly issued, and all Subsidiary Shares are
fully paid and nonassessable. There are no options, warrants or other rights
outstanding to purchase any Subsidiary Shares except as indicated on SCHEDULE
5.1.3.
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5.1.4. POWER AND AUTHORITY.
--------------------
Each Loan Party has full power to enter into, execute, deliver and carry out
this Agreement and the other Loan Documents to which it is a party, to incur the
Indebtedness contemplated by the Loan Documents and to perform its Obligations
under the Loan Documents to which it is a party, and all such actions have been
duly authorized by all necessary proceedings on its part.
5.1.5 VALIDITY AND BINDING EFFECT.
----------------------------
This Agreement has been duly and validly executed and delivered
by each Loan Party, and each other Loan Document which any Loan Party is
required to execute and deliver on or after the date hereof will have been duly
executed and delivered by such Loan Party on the required date of delivery of
such Loan Document. This Agreement and each other Loan Document constitutes, or
will constitute, legal, valid and binding obligations of each Loan Party which
is or will be a party thereto on and after its date of delivery thereof,
enforceable against such Loan Party in accordance with its terms, except to the
extent that enforceability of any such Loan Document may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforceability of creditors' rights generally or limiting the
right of specific performance.
5.1.6 NO CONFLICT.
------------
Neither the execution and delivery of this Agreement or the other Loan Documents
by any Loan Party nor the consummation of the transactions herein or therein
contemplated or compliance with the terms and provisions hereof or thereof by
any of them will conflict with, constitute a default under or result in any
breach of (i) the terms and conditions of the certificate of incorporation,
bylaws or other organizational documents of any Loan Party or (ii) any Law or
any material agreement or instrument or order, writ, judgment, injunction or
decree to which any Loan Party or any of its Subsidiaries is a party or by which
it or any of its Subsidiaries is bound or to which it or any of its Subsidiaries
is subject, or result in the creation or enforcement of any Lien whatsoever upon
any property (now or hereafter acquired) of any Loan Party or any of its
Subsidiaries (other than Liens granted under the Loan Documents).
5.1.7 LITIGATION.
-----------
There are no actions, suits, proceedings or investigations pending or, to the
knowledge of any Loan Party, threatened against such Loan Party or any
Subsidiary of any Loan Party at law or equity before any Official Body which
individually or in the aggregate may result in any Material Adverse Change. None
of the Loan Parties or any Subsidiaries of any Loan Party is in violation of any
order, writ, injunction or any decree of any Official Body which may result in
any Material Adverse Change.
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5.1.8 TITLE TO PROPERTIES.
--------------------
Each Loan Party and each Subsidiary of any Loan Party has good and marketable
title to or a valid leasehold interest in all material properties, assets and
other rights which it purports to own or lease or which are reflected as owned
or leased on its books and records, free and clear of all Liens except Permitted
Liens, and subject to the terms and conditions of the applicable leases. All
material leases of property are in full force and effect without the necessity
for any consent which has not previously been obtained upon consummation of the
transactions contemplated hereby.
5.1.9 FINANCIAL STATEMENTS.
---------------------
(i) HISTORICAL STATEMENTS. The Company has delivered to the
Administrative Agent copies of its audited consolidated year-end
financial statements for and as of the end of the three fiscal
years ended February 3, 1996 (the "Annual Statements" and the
Annual Statements are sometimes collectively referred to as the
"Historical Statements"). The Historical Statements were compiled
from the books and records maintained by the Company's management,
are correct and complete and fairly represent the consolidated
financial condition of the Company and its Subsidiaries as of
their dates and the results of operations for the fiscal periods
then ended and have been prepared in accordance with GAAP
consistently applied;
(ii) FINANCIAL PROJECTIONS. The Company has delivered to the
Administrative Agent financial projections of the Company and its
Subsidiaries for fiscal years 1997, 1998 and 1999 derived from
various assumptions of the Company's management (the "Financial
Projections"). The Financial Projections reflect the reasonable
expectations of the Company's management as of the Closing Date in
light of the history of the business, present and foreseeable
conditions and intentions of the Company's management, all based
on the assumptions thereto. The Financial Projections accurately
reflect the liabilities of the Company and its Subsidiaries
incurred pursuant to the Loan Documents upon consummation of the
transactions contemplated hereby as of the Closing Date; and
(iii) ACCURACY OF FINANCIAL STATEMENTS. Neither the Company nor any
Subsidiary of the Company has as of the date of the Historical
Statements any material liabilities, contingent or otherwise, or
forward or long-term commitments that are not disclosed in the
Historical Statements or in the notes thereto, and except as
disclosed therein there are no unrealized or anticipated losses
from any commitments of the Company or any Subsidiary of the
Company which may cause a Material Adverse Change. Since February
3, 1996, no Material Adverse Change has occurred.
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5.1.10 MARGIN STOCK.
-------------
None of the Loan Parties or any Subsidiaries of any Loan Party engages or
intends to engage principally, or as one of its important activities, in the
business of extending credit for the purpose, immediately, incidentally or
ultimately, of purchasing or carrying margin stock (within the meaning of
Regulation U). No part of the proceeds of any Revolving Credit Loan or issued
Letter of Credit has been or will be used, immediately, incidentally or
ultimately, to purchase or carry any margin stock or to extend credit to others
for the purpose of purchasing or carrying any margin stock or to refund
Indebtedness originally incurred for such purpose, or for any purpose which
entails a violation of or which is inconsistent with the provisions of the
regulations of the Board of Governors of the Federal Reserve System. None of the
Loan Parties or any Subsidiary of any Loan Party holds or intends to hold margin
stock in such amounts that more than 25% of the reasonable value of the assets
of any Loan Party or Subsidiary of any Loan Party are or will be represented by
margin stock.
5.1.11 FULL DISCLOSURE.
----------------
Neither this Agreement nor any other Loan Document, nor any certificate,
statement, agreement or other documents furnished to the Documentation Agent,
the Administrative Agent, the Syndication Agent, the Managing Agents, the
Issuing Letter of Credit Banks or any Bank in connection herewith or therewith,
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained herein and therein, in
light of the circumstances under which they were made, not misleading. There is
no fact known to any Loan Party which materially adversely affects the business,
property, assets, financial condition, results of operations or prospects of any
Loan Party or Subsidiary of any Loan Party which has not been set forth in this
Agreement or in the certificates, statements, agreements or other documents
furnished in writing to the Documentation Agent, the Administrative Agent, the
Syndication Agent, the Managing Agents, the Issuing Letter of Credit Banks and
the Banks prior to or at the date hereof in connection with the transactions
contemplated hereby.
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5.1.12 TAXES.
------
All federal, state, local and other tax returns required to have been filed with
respect to each Loan Party and each Subsidiary of any Loan Party have been
filed, and payment or adequate provision has been made for the payment of all
taxes, fees, assessments and other governmental charges shown to be owing
pursuant to said returns or to assessments received, except to the extent that
such taxes, fees, assessments and other charges are being contested in good
faith by appropriate proceedings diligently conducted and for which such
reserves or other appropriate provisions, if any, as shall be required by GAAP
shall have been made. There are no agreements or waivers extending the statutory
period of limitations applicable to any federal income tax return of any Loan
Party or Subsidiary of any Loan Party for any period.
5.1.13 CONSENTS AND APPROVALS.
-----------------------
No consent, approval, exemption, order or authorization of, or a registration or
filing with, any Official Body or any other Person is required by any Law or any
agreement in connection with the execution, delivery and carrying out of this
Agreement and the other Loan Documents by any Loan Party, except as listed on
SCHEDULE 5.1.13, all of which shall have been obtained or made on or prior to
the Closing Date except as otherwise indicated on SCHEDULE 5.1.13.
5.1.14 NO EVENT OF DEFAULT; COMPLIANCE WITH INSTRUMENTS.
-------------------------------------------------
No event has occurred and is continuing and no condition exists now or will
exist after giving effect to and as a result of the extensions of credit to be
made on the Closing Date under the Loan Documents which constitutes an Event of
Default or Potential Default. None of the Loan Parties or any Subsidiaries of
any Loan Party is in violation of (i) any term of its certificate of
incorporation, bylaws, or other organizational documents or (ii) any material
agreement or instrument to which it is a party or by which it or any of its
properties may be subject or bound where such violation would constitute a
Material Adverse Change.
5.1.15 PATENTS, TRADEMARKS, COPYRIGHTS, LICENSES, ETC.
-----------------------------------------------
A Loan Party or a Subsidiary of a Loan Party owns or possesses all the material
patents, trademarks, service marks, trade names, copyrights, licenses,
registrations, franchises, permits and rights necessary to own and operate its
properties and to carry on its business as presently conducted and planned to be
conducted by the Borrower and its Subsidiaries taken as a whole, without known
conflict by, or with the rights of, others.
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5.1.16 INSURANCE.
----------
The Borrower has delivered to the Administrative Agent a true and correct
listing of the property and general liability insurance of the Borrower. No
notice has been given or claim made and no grounds exist to cancel or avoid any
of such policies or bonds or to reduce the coverage provided thereby. Such
policies and bonds provide adequate coverage from reputable and financially
sound insurers in amounts sufficient to insure the assets and risks of each Loan
Party and each Subsidiary of any Loan Party in accordance with prudent business
practice in the industry of the Loan Parties and their Subsidiaries.
5.1.17 COMPLIANCE WITH LAWS.
---------------------
The Loan Parties and their Subsidiaries are in compliance in all material
respects with all applicable Laws (other than Environmental Laws which are
specifically addressed in Section 5.1.22) in all jurisdictions in which any Loan
Party or Subsidiary of any Loan Party is presently or currently anticipates it
will be doing business except where the failure to do so would not constitute a
Material Adverse Change.
5.1.18 MATERIAL CONTRACTS.
-------------------
SCHEDULE 5.1.18 lists all material contracts relating to the business operations
of each Loan Party and each Subsidiary of any Loan Party, including all employee
benefit plans and Labor Contracts. All such material contracts are valid,
binding and enforceable upon such Loan Party or Subsidiary and each of the other
parties thereto in accordance with their respective terms, and there is no
default thereunder, to the Loan Parties' knowledge, with respect to parties
other than such Loan Party or Subsidiary. For purposes of this Section 5.1.18
the term "material contracts" shall mean those contracts or other agreements
which the Company would be required to file with the Securities and Exchange
Commission pursuant to item 601(a)(10) of Regulation S-K promulgated under the
Securities Act of 1933 and the Securities Exchange Act of 1934.
5.1.19 INVESTMENT COMPANIES.
---------------------
None of the Loan Parties or any Subsidiaries of any Loan Party is an "investment
company" registered or required to be registered under the Investment Company
Act of 1940 or under the "control" of an "investment company" as such terms are
defined in the Investment Company Act of 1940 and shall not become such an
"investment company" or under such "control".
5.1.20 PLANS AND BENEFIT ARRANGEMENTS.
-------------------------------
Except as set forth on SCHEDULE 5.1.20:
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(i) The Company and each other member of the ERISA Group are in
compliance in all material respects with any applicable provisions
of ERISA with respect to all Benefit Arrangements, Plans and
Multiemployer Plans. There has been no Prohibited Transaction with
respect to any Benefit Arrangement or any Plan or, to the best
knowledge of the Company, with respect to any Multiemployer Plan
or Multiple Employer Plan, which could result in any material
liability of the Company or any other member of the ERISA Group.
The Company and all other members of the ERISA Group have made
when due any and all payments required to be made under any
agreement relating to a Multiemployer Plan or a Multiple Employer
Plan or any Law pertaining thereto. With respect to each Plan and
Multiemployer Plan, the Company and each other member of the ERISA
Group (i) have fulfilled in all material respects their
obligations under the minimum funding standards of ERISA, (ii)
have not incurred any liability to the PBGC, and (iii) have not
had asserted against them any penalty for failure to fulfill the
minimum funding requirements of ERISA;
(ii) To the best of each Loan Parties' knowledge, each Multiemployer
Plan and Multiple Employer Plan is able to pay benefits
thereunder when due;
(iii) Neither the Company nor any other member of the ERISA Group has
instituted or intends to institute proceedings to terminate any
Plan;
(iv) No event requiring notice to the PBGC under Section 302(f)(4)(A)
of ERISA has occurred or is reasonably expected to occur with
respect to any Plan, and no amendment with respect to which
security is required under Section 307 of ERISA has been made or
is reasonably expected to be made to any Plan;
(v) The aggregate accumulated benefit obligations determined in
accordance with GAAP as of the end of the most recent calendar
year for all Plans does not exceed by more than $8 million the
fair market value of all assets of the Plans;
(vi) Neither the Company nor any other member of the ERISA Group has
incurred or reasonably expects to incur any material withdrawal
liability under ERISA to any Multiemployer Plan or Multiple
Employer Plan. Neither the Company nor any other member of the
ERISA Group has been notified by any Multiemployer Plan or
Multiple Employer Plan that such Multiemployer Plan or Multiple
Employer Plan has been terminated within the meaning of Title IV
of ERISA and, to the best knowledge of the Company, no
Multiemployer Plan or Multiple Employer Plan is reasonably
expected to be reorganized or terminated, within the meaning of
Title IV of ERISA;
(vii) To the extent that any Benefit Arrangement is insured, the Company
and all other members of the ERISA Group have paid when due all
premiums required to be paid for all periods through the Closing
Date. To the extent that any Benefit Arrangement is funded other
than with insurance, the Company and all other members of the
ERISA Group have made when due all contributions required to be
paid for all periods through the Closing Date; and
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(viii) All Plans, Benefit Arrangements and Multiemployer Plans have been
administered in accordance with their terms and applicable Law.
5.1.21 EMPLOYMENT MATTERS.
-------------------
Each of the Loan Parties and each of their Subsidiaries is in compliance with
the Labor Contracts and all applicable federal, state and local labor and
employment Laws including those related to equal employment opportunity and
affirmative action, labor relations, minimum wage, overtime, child labor,
medical insurance continuation, worker adjustment and relocation notices,
immigration controls and worker and unemployment compensation, where the failure
to comply would constitute a Material Adverse Change. There are no outstanding
grievances, arbitration awards or appeals therefrom arising out of the Labor
Contracts or current or threatened strikes, picketing, handbilling or other work
stoppages or slowdowns at facilities of any of the Loan Parties or any of their
Subsidiaries which in any case would constitute a Material Adverse Change.
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5.1.22 ENVIRONMENTAL MATTERS.
----------------------
Except as disclosed on SCHEDULE 5.1.22:
(i) Except for notices which could reasonably relate to a Material
Adverse Change, none of the Loan Parties or any Subsidiaries of
any Loan Party has received any Environmental Complaint from any
Official Body or private Person alleging that such Loan Party or
Subsidiary or any prior or subsequent owner of any Property is a
potentially responsible party under the Comprehensive
Environmental Response, Compensation and Liability Act, 42
▇.▇.▇.▇▇. 9601, ET SEQ., and none of the Loan Parties has any
reason to believe that such an Environmental Complaint might be
received. There are no pending or, to any Loan Party's knowledge,
threatened Environmental Complaints relating to any Loan Party or
any Subsidiary of any Loan Party or, to any Loan Party's
knowledge, any prior or subsequent owner of any Property
pertaining to, or arising out of, any Environmental Conditions
which could reasonably result in a Material Adverse Change,
(ii) Except for Environmental Conditions, violations or failures which
individually and in the aggregate are not reasonably likely to
result in a Material Adverse Change, there are no circumstances
at, on or under any Property that constitute a breach of or
non-compliance with any of the Environmental Laws, and there are
no past or present Environmental Conditions at, on or under any
Property or, to any Loan Party's knowledge, at, on or under
adjacent property, that prevent compliance with the Environmental
Laws at any Property,
(iii) Neither any Property nor any structures, improvements, equipment,
fixtures, activities or facilities thereon or thereunder contain
or use Regulated Substances, except in compliance with
Environmental Laws, which could reasonably result in a Material
Adverse Change. There are no processes, facilities, operations,
equipment or other activities at, on or under any Property, or, to
any Loan Party's knowledge, at, on or under adjacent property,
that currently result in the release or threatened release of
Regulated Substances onto any Property, except to the extent that
such releases or threatened releases are not a breach of or
otherwise not a violation of the Environmental Laws or are not
likely to result in a Material Adverse Change,
(iv) There are no aboveground storage tanks, underground storage tanks
or underground piping associated with such tanks, used for the
management of Regulated Substances at, on or under any Property
that (a) do not have, to the extent required by Environmental
Laws, a full operational secondary containment system in place,
and (b) are not otherwise in compliance with all Environmental
Laws, except in any case where such would not result in a Material
Adverse Change. There are no abandoned underground storage tanks
or underground piping associated with such tanks, previously used
for the management of Regulated Substances at, on or under any
Property that have not either been closed in place in accordance
with Environmental Laws or removed in compliance with all
applicable
-53-
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Environmental Laws and no contamination associated with the use of
such tanks exists on any Property that is not in compliance with
Environmental Laws, except in any case where such would not result
in a Material Adverse Change,
(v) The applicable Loan Party or a Subsidiary of a Loan Party has all
permits, licenses, authorizations, plans and approvals necessary
under the Environmental Laws for the conduct of the business of
the Borrower and its Subsidiaries taken as a whole, except in any
case where the failure to so have would not result in a Material
Adverse Change. Each Loan Party and each Subsidiary of a Loan
Party has submitted all notices, reports and other filings
required by the Environmental Laws to be submitted to an Official
Body which pertain to past and current operations on any Property,
except in any case where the failure to so submit would not result
in a Material Adverse Change, and
(vi) Except for violations which individually and in the aggregate are
not likely to result in a Material Adverse Change, all past and
present on-site generation, storage, processing, treatment,
recycling, reclamation, disposal or other use or management of
Regulated Substances at, on, or under any Property and all
off-site transportation, storage, processing, treatment,
recycling, reclamation, disposal or other use or management of
Regulated Substances have been done in accordance with the
Environmental Law.
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5.1.23 SENIOR DEBT STATUS.
-------------------
The Obligations of each Loan Party under this Agreement, the Revolving Credit
Notes, the Master Guaranty Agreement and each of the other Loan Documents to
which it is a party do rank and will rank at least PARI PASSU in priority of
payment with all other Indebtedness of such Loan Party except Indebtedness of
such Loan Party to the extent secured by Permitted Liens and will rank senior in
priority of payment to the Seller Note. There is no Lien upon or with respect to
any of the properties or income of any Loan Party or Subsidiary of any Loan
Party which secures indebtedness or other obligations of any Person except for
Permitted Liens.
5.1.24 ACQUISITION.
------------
The Acquisition closed on May 5, 1996 pursuant to and in accordance with the
terms and conditions of the Stock Purchase Agreement with no amendment or
modification having been made to or term or condition waived in the
Stock Purchase Agreement, except for minor matters reasonably needed to
consummate the Acquisition and the Seller Note was issued.
5.2 SUBSIDIARIES OTHER THAN MATERIAL SUBSIDIARIES.
----------------------------------------------
The breach of any of the representations and warranties contained in Section 5.1
with respect to a Subsidiary of the Borrower other than a Material Subsidiary
shall not be deemed to breach such representation or warranty unless such breach
constitutes a Material Adverse Change.
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5.3 UPDATES TO SCHEDULES.
---------------------
Should any of the information or disclosures provided on any of the Schedules
attached hereto become outdated or incorrect in any material respect, the
applicable Loan Parties shall promptly provide to the Managing Agents in writing
with such revisions or updates to such Schedule as may be necessary or
appropriate to update or correct same; PROVIDED, however, that no Schedule shall
be deemed to have been amended, modified or superseded by any such correction or
update (other than the amendments and updates contained in the Schedules
delivered on the Closing Date), nor shall any breach of warranty or
representation resulting from the inaccuracy or incompleteness of any such
Schedule be deemed to have been cured thereby, unless and until the Required
Banks, in their sole and absolute discretion, shall have accepted in writing
such revisions or updates to such Schedule, which decision to accept or not must
be communicated to the Borrower promptly.
6. CONDITIONS OF LENDING
---------------------
The obligation of each Bank to make Revolving Credit Loans and of the Issuing
Letter of Credit Banks to issue Letters of Credit hereunder is subject to the
performance by each of the Loan Parties of its Obligations to be performed
hereunder at or prior to the making of any such Revolving Credit Loans or
issuance of such Letters of Credit and to the satisfaction of the following
further conditions:
6.1 FIRST REVOLVING CREDIT LOANS.
-----------------------------
On the Closing Date:
6.1.1 OFFICER'S CERTIFICATE.
----------------------
The representations and warranties of each of the Loan Parties contained in
Article and in each of the other Loan Documents shall be true and accurate on
and as of the Closing Date with the same effect as though such representations
and warranties had been made on and as of such date (except representations and
warranties which relate solely to an earlier date or time, which representations
and warranties shall be true and correct on and as of the specific dates or
times referred to therein), and each of the Loan Parties shall have performed
and complied with all covenants and conditions hereof and thereof, no Event of
Default or Potential Default shall have occurred and be continuing or shall
exist; and there shall be delivered to the Administrative Agent for the benefit
of each Bank a certificate of the Borrower, the Company and each of the Material
Subsidiaries, dated the Closing Date and signed by the Chief Executive Officer,
President or Chief Financial Officer of such Person, to each such effect.
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6.1.2 SECRETARY'S CERTIFICATE.
------------------------
There shall be delivered to the Administrative Agent for the benefit of each
Bank a certificate dated the Closing Date and signed by the Secretary or an
Assistant Secretary of each of the Company, the Borrower and each Material
Subsidiary, certifying as appropriate as to:
(i) all action taken by such Loan Party in connection with this
Agreement and the other Loan Documents;
(ii) the names of the officer or officers authorized to sign this
Agreement and the other Loan Documents and the true signatures of
such officer or officers and specifying the Authorized Officers
permitted to act on behalf of such Loan Party for purposes of this
Agreement and the true signatures of such officers, on which the
Administrative Agent and each Bank may conclusively rely; and
(iii) copies of its organizational documents, including its certificate
of incorporation and bylaws as in effect on the Closing Date
certified by the appropriate state official where such documents
are filed in a state office together with certificates from the
appropriate state officials as to the continued existence and good
standing of such Loan Party in each state where organized or
qualified to do business.
6.1.3 DELIVERY OF LOAN DOCUMENTS.
---------------------------
The Loan Documents shall been executed and delivered to the Administrative Agent
for the benefit of the Banks.
6.1.4 OPINION OF COUNSEL.
-------------------
There shall be delivered to the Administrative Agent for the benefit of each
Bank a written opinion of Benesch, Friedlander, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ P.L.L. and of
▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq. counsel for the Loan Parties (who may rely on the opinions
of such other counsel as may be acceptable to the Administrative Agent), dated
the Closing Date and in form and substance satisfactory to the Managing Agents
and their counsel as to the matters set forth in Exhibit 6.1.4.
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6.1.5 LEGAL DETAILS.
--------------
All legal details and proceedings in connection with the transactions
contemplated by this Agreement and the other Loan Documents shall be in form and
substance satisfactory to the Managing Agents and their counsel, and the
Managing Agents shall have received all such other counterpart originals or
certified or other copies of such documents and proceedings in connection with
such transactions, in form and substance satisfactory to the Managing Agents and
said counsel, as the any of the Managing Agents or said counsel may reasonably
request.
6.1.6 PAYMENT OF FEES.
----------------
The Borrower shall have paid or caused to be paid to the Administrative Agent
for itself and for the account of the Banks to the extent not previously paid
all commitment and other fees accrued through the Closing Date and the costs and
expenses for which the Documentation Agent, the Administrative Agent and the
Banks are entitled to be reimbursed.
6.1.7 CONSENTS.
---------
All material consents required to effectuate the transactions contemplated
hereby as set forth on SCHEDULE 5.1.13 shall have been obtained.
6.1.8 OFFICER'S CERTIFICATE REGARDING MACS.
-------------------------------------
Since February 3, 1996 (i) no Material Adverse Change shall have occurred and
(ii) there shall have been no material change in the management of the Company
or the Borrower (except as disclosed to the Banks in a writing referencing this
provision); and there shall have been delivered to the Administrative Agent for
the benefit of each Bank a certificate dated the Closing Date and signed by the
Chief Executive Officer, President or Chief Financial Officer of the Borrower
and the Company to each such effect.
6.1.9 NO VIOLATION OF LAWS.
---------------------
The making of the Revolving Credit Loans and issuance of the Letters of Credit
shall not contravene any Law applicable to any Loan Party or any of the Banks.
6.1.10 NO ACTIONS OR PROCEEDINGS.
--------------------------
No action, proceeding, investigation, regulation or legislation shall have been
instituted, threatened or proposed before any court, governmental agency or
legislative body to enjoin, restrain or prohibit, or to obtain damages in
respect of, this Agreement, the other Loan Documents or the consummation of the
transactions contemplated hereby or thereby or which, in the Managing Agents'
sole discretion, would make it inadvisable to consummate the transactions
contemplated by this Agreement or any of the other Loan Documents.
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6.1.11 INSURANCE POLICIES; CERTIFICATES OF INSURANCE.
----------------------------------------------
The Borrower shall have delivered to the Administrative Agent upon its request
evidence acceptable to the Administrative Agent that adequate insurance in
compliance with Section 7.1.3 is in full force and effect and that all premiums
then due thereon have been paid, together with if requested by the
Administrative Agent a certified copy of each Loan Party's casualty insurance
policy or policies.
6.1.12 TERMINATION OF EXISTING BANK FACILITY.
--------------------------------------
The Borrower shall have terminated the Existing Bank Facility and paid all
amounts owed thereunder.
6.2 EACH ADDITIONAL REVOLVING CREDIT LOAN.
At the time of making any Revolving Credit Loans or Swing Loans or issuance of
any Letters of Credit other than Revolving Credit Loans made or Letters of
Credit deemed issued on the Closing Date and after giving effect to the proposed
extensions of credit: the representations and warranties of the Loan Parties
contained in Article 5 and in the other Loan Documents shall be true on and as
of the date of such additional Revolving Credit Loan or Swing Loan or Letter of
Credit with the same effect as though such representations and warranties had
been made on and as of such date (except representations and warranties which
expressly relate solely to an earlier date or time, which representations and
warranties shall be true and correct on and as of the specific dates or times
referred to therein) and the Loan Parties shall have performed and complied with
all covenants and conditions hereof; no Event of Default or Potential Default
shall have occurred and be continuing or shall exist; the making of the
Revolving Credit Loans or Swing Loans or issuance of such Letter of Credit shall
not contravene any Law applicable to any Loan Party or Subsidiary of any Loan
Party or any of the Banks; and the Borrower shall have delivered to the
Administrative Agent or the Issuing Letter of Credit Bank, a duly executed and
completed Loan Request or application for a Letter of Credit as the case may be.
6.3 SYNDICATION.
------------
6.3.1 SYNDICATION REPRESENTATION AND WARRANTIES.
------------------------------------------
On the Syndication Date, the representations and warranties of the Loan Parties
contained in Article 5 and in the other Loan Documents shall be true on and as
of such date with the same effect as though such representations and warranties
had been made on and as of such date (except representations and warranties
which expressly relate solely to an earlier date or time, which representations
and warranties shall be true and correct on and as of the specific dates
or times referred to therein) and the Loan Parties shall have performed and
complied with all covenants and conditions hereof; and no Event of Default or
Potential Default shall have occurred and be continuing or shall exist.
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6.3.2 SYNDICATION DOCUMENTS.
----------------------
On the Syndication Date, the Borrower shall deliver to the Administrative Agent
for the benefit of the Banks (a) an Officer's Certificate dated as of the
Syndication Date with respect to the matters set forth in Section 6.3.1 and
Section 6.1.8(i), (b) a Secretary's Certificate dated as of the Syndication Date
with respect to the matters set forth in Section 6.1.2(i) and 6.1.2(ii) and that
there have been no changes in the charter documents or bylaws of the Borrower or
any Material Subsidiary since the Closing Date, (c) Revolving Credit Notes dated
as of the Syndication Date which give effect to the syndication on the
Syndication Date of the Revolving Credit Commitments of the Banks which executed
the initial Credit Agreement dated as of May 3, 1996 in exchange for the
original Revolving Credit Notes issued to such Banks on May 3, 1996, (d) written
opinions of the counsel to the Borrower identified in Section 6.1.4 with respect
to such matters as the Documentation Agent may request and (e) acknowledgments
dated as of the Syndication Date to the Master Guaranty Agreement and the Master
Intercompany Subordination Agreement in form and substance satisfactory to the
Documentation Agent.
7. COVENANTS
---------
7.1 AFFIRMATIVE COVENANTS.
----------------------
The Borrower covenants and agrees that until payment in full of the Revolving
Credit Loans and Reimbursement Obligations and interest thereon, expiration or
termination of all Letters of Credit, satisfaction of all of the Loan Parties'
other Obligations under the Loan Documents and termination of the Revolving
Credit Commitments, the Loan Parties shall comply at all times with the
following affirmative covenants:
7.1.1 PRESERVATION OF EXISTENCE, ETC.
The Company, the Borrower and, except as permitted by Section 7.2.6, each
Material Subsidiary shall maintain its corporate existence and its license or
qualification and good standing in each jurisdiction in which its ownership or
lease of property or the nature of its business makes such license or
qualification necessary, except where the failure to be so licensed or qualified
would not result in a Material Adverse Change.
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7.1.2 PAYMENT OF LIABILITIES, INCLUDING TAXES, ETC.
---------------------------------------------
Each Loan Party shall, and shall cause each of its Subsidiaries to, duly pay and
discharge all liabilities to which it is subject or which are asserted against
it, promptly as and when the same shall become due and payable, including all
taxes, assessments and governmental charges upon it or any of its properties,
assets, income or profits, prior to the date on which penalties attach thereto,
except to the extent that such liabilities, including taxes, assessments or
charges, are being contested in good faith and by appropriate and lawful
proceedings diligently conducted and for which such reserve or other appropriate
provisions, if any, as shall be required by GAAP shall have been made, but only
to the extent that failure to discharge any such liabilities would not result in
any additional liability which would adversely affect to a material extent the
financial condition of the Loan Parties and their Subsidiaries taken as a whole,
PROVIDED that the Loan Parties and their Subsidiaries will pay all such
liabilities forthwith upon the commencement of proceedings to foreclose any Lien
which may have attached as security therefor unless and as long as such
proceedings are stayed.
7.1.3 MAINTENANCE OF INSURANCE.
-------------------------
Each Loan Party shall, and shall cause each of its Subsidiaries to, insure its
properties and assets against loss or damage by fire and such other insurable
hazards as such assets are commonly insured (including fire, extended coverage,
property damage, workers' compensation, public liability and business
interruption insurance) and against other risks (including errors and omissions)
in such amounts as similar properties and assets are insured by prudent
companies in similar circumstances carrying on similar businesses, and with
reputable and financially sound insurers, including self-insurance to the extent
customary, all as reasonably determined by the Documentation Agent. At the
request of the Administrative Agent, the Loan Parties shall deliver to the
Administrative Agent (x) on the Closing Date and annually thereafter an original
certificate of insurance signed by the Loan Parties' independent insurance
broker describing and certifying as to the existence of the insurance required
to be maintained by this Agreement and the other Loan Documents, and (y) from
time to time a summary schedule indicating all insurance then in force with
respect to each of the Loan Parties.
7.1.4 MAINTENANCE OF PROPERTIES AND LEASES.
-------------------------------------
Each Loan Party shall, and shall cause each of its Subsidiaries to, maintain in
good repair, working order and condition (ordinary wear and tear excepted) in
accordance with the general practice of other businesses of similar character
and size, all of those material properties necessary to its business, and from
time to time, such Loan Party or such Subsidiary will make or cause to be made
all appropriate repairs, renewals or replacements thereof.
7.1.5 MAINTENANCE OF PATENTS, TRADEMARKS, ETC.
----------------------------------------
Each Loan Party shall, and shall cause each of its Subsidiaries to, maintain in
full force and effect all patents, trademarks, service marks, trade names,
copyrights, licenses, franchises, permits and other authorizations necessary for
the ownership and operation of its properties and business if the failure so to
maintain the same would constitute a Material Adverse Change.
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7.1.6 VISITATION RIGHTS.
------------------
Each Loan Party shall, and shall cause each of its Subsidiaries to, permit any
of the officers or authorized employees or representatives of the Documentation
Agent, the Administrative Agent or any of the Banks to visit and inspect any of
its properties and to examine and make excerpts from its books and records and
discuss its business affairs, finances and accounts with its officers, all in
such detail and at such times and as often as any of the Banks may reasonably
request, PROVIDED that each Bank shall provide the Borrower and the
Administrative Agent with reasonable notice prior to any visit or inspection.
7.1.7 KEEPING OF RECORDS AND BOOKS OF ACCOUNT.
----------------------------------------
The Company shall, and shall cause each Subsidiary of the Company including the
Borrower to, maintain and keep proper books and records which enable the Company
and its Subsidiaries to issue financial statements in accordance with GAAP and
as otherwise required by applicable Laws of any Official Body having
jurisdiction over the Company or any Subsidiary of the Company, and in which
full, true and correct entries shall be made in all material respects of all its
dealings and business and financial affairs.
7.1.8 PLANS AND BENEFIT ARRANGEMENTS.
-------------------------------
The Company shall, and shall cause each other member of the ERISA Group to,
comply with ERISA, the Internal Revenue Code and other applicable Laws
applicable to Plans and Benefit Arrangements except where such failure, alone or
in conjunction with any other failure, would not result in a Material Adverse
Change. Without limiting the generality of the foregoing, the Company shall
cause all of its Plans and all Plans maintained by any other member of the ERISA
Group to be funded in accordance with the minimum funding requirements of ERISA
and shall make, and cause each other member of the ERISA Group to make, in a
timely manner, all contributions due to Plans, Benefit Arrangements and
Multiemployer Plans.
7.1.9 COMPLIANCE WITH LAWS.
---------------------
Each Loan Party shall, and shall cause each of its Subsidiaries to, comply with
all applicable Laws, including all Environmental Laws, in all respects, PROVIDED
that it shall not be deemed to be a violation of this Section 7.1.9 if any
failure to comply with any Law would not result in fines, penalties, remediation
costs, other similar liabilities or injunctive relief which in the aggregate
would constitute a Material Adverse Change.
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7.1.10 USE OF PROCEEDS.
----------------
The Borrower will use the Letters of Credit and the proceeds of the Revolving
Credit Loans only for lawful purposes in accordance with Section 2.8 and such
uses shall not contravene any applicable Law or any other provision hereof.
7.1.11 SUBORDINATION OF INTERCOMPANY LOANS.
------------------------------------
Each Loan Party shall cause any Intercompany Loans owed by any Loan Party to any
other Loan Party or Subsidiary of a Loan Party to be subordinated pursuant to
the terms of the Master Intercompany Subordination Agreement.
7.2 NEGATIVE COVENANTS.
-------------------
The Borrower covenants and agrees that until payment in full of the Revolving
Credit Loans and Reimbursement Obligations and interest thereon, expiration or
termination of all Letters of Credit, satisfaction of all of the Loan Parties'
other Obligations hereunder and termination of the Revolving Credit Commitments,
the Loan Parties shall comply with the following negative covenants:
7.2.1 INDEBTEDNESS.
-------------
Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, at any time create, incur, assume or suffer to exist any
Indebtedness, except: Indebtedness under the Loan Documents;
(i) existing Indebtedness as set forth on SCHEDULE 7.2.1 (including
any extensions or renewals thereof, PROVIDED there is no increase
in the amount thereof or imposition of additional material
obligations therein unless otherwise specified on SCHEDULE 7.2.1;
(ii) capitalized and operating leases as and to the extent not
prohibited by Section 7.2.15;
(iii) Indebtedness which is subordinated in accordance with the
provisions of Section 7.1.11;
(iv) Indebtedness secured by Purchase Money Security Interests not
exceeding $10,000,000;
(v) Indebtedness of a Loan Party to another Loan Party; the Seller
Note;
(vi) Indebtedness permitted under Section 7.2.3; and
(vii) any other Indebtedness (excluding Indebtedness relating to
documentary letters of credit) not referenced above which does not
exceed in the aggregate at any one time outstanding in any
calendar year (a) $35,000,000 during the period commencing on
January 1 and ending on September 1 of such calendar year and
during the period commencing December 1 and ending on December 31
of such cal-
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endar year and (b) $50,000,000 during the period commencing on
September 1 and ending on December 1 of such calendar year.
7.2.2 LIENS.
------
Each of the Loan Parties shall not, and shall not permit any of its Subsidiaries
to, (i) at any time create, incur, assume or suffer to exist any Lien on any of
its property or assets, tangible or intangible, now owned or hereafter acquired,
or agree or become liable to do so, except Permitted Liens or (ii) at any time
agree, directly or indirectly, with respect to any asset material to the
Borrower and its Subsidiaries taken as a whole to any restriction (including
without limitation on the foregoing any requirement to grant a third Person a
Lien in the event that the Banks are granted a Lien) on the granting or
conveying of Liens to the Banks.
7.2.3 GUARANTIES.
-----------
Each of the Loan Parties shall not, and shall not permit any of its Subsidiaries
to, at any time, directly or indirectly, become or be liable in respect of any
Guaranty, or assume, guarantee, become surety for, endorse or otherwise agree,
become or remain directly or contingently liable upon or with respect to any
obligation or liability of any other Person, except for Guaranties of
Indebtedness of the Loan Parties permitted hereunder; provided, however, that no
Subsidiary of the Borrower shall guaranty the Seller Note or any obligations to
Melville Corporation arising in connection with the Acquisition.
7.2.4 LOANS AND INVESTMENTS.
----------------------
Each of the Loan Parties shall not, and shall not permit any of its
Subsidiaries to, at any time make or suffer to remain outstanding any loan or
advance to, or purchase, acquire or own any stock, bonds, notes or securities
of, or any partnership interest (whether general or limited) in, or any other
investment or interest in, or make any capital contribution to, any other
Person, or agree, become or remain liable to do any of the foregoing, except as
set forth on SCHEDULE 7.2.4 and:
(i) trade credit extended on usual and customary terms in the
ordinary course of business;
(ii) advances to employees to meet expenses incurred by such employees
in the ordinary course of business;
(iii) Permitted Investments;
(iv) loans, advances and investments in other Loan Parties and
Subsidiaries of Loan Parties;
(v) Indebtedness permitted by Section 7.2.1, liquidations, mergers,
consolidations and acquisitions permitted by Section 7.2.6, and
capital expenditures permitted by Section 7.2.15; and
(vi) Investments other than those set forth hereinabove not to exceed
$10,000,000.
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7.2.5 DIVIDENDS AND RELATED DISTRIBUTIONS.
------------------------------------
Except as provided herein, each of the Loan Parties shall not, and shall not
permit any of its Subsidiaries to, make or pay, or agree to become or remain
liable to make or pay, any dividend or other distribution of any nature (whether
in cash, property, securities or otherwise) on account of or in respect of its
shares of capital stock or partnership interests on account of the purchase,
redemption, retirement or acquisition of its shares of capital stock (or
warrants, options or rights therefor) or partnership interests, except dividends
or other distributions payable to another Loan Party. The Company may declare
and pay dividends on its capital stock which are payable solely in shares of its
capital stock or other equity interests of the Company. The Company may make
purchases and redemptions of its capital stock pursuant to existing plans
provided that the aggregate of all such purchases does not exceed $10,000,000.
7.2.6 LIQUIDATIONS, MERGERS, CONSOLIDATIONS, ACQUISITIONS.
----------------------------------------------------
Except as permitted by Section 7.2.7 each of the Loan Parties shall not, and
shall not permit any of the Company, the Borrower and the Material Subsidiaries
to, dissolve, liquidate or wind-up its affairs, or become a party to any merger
or consolidation, or acquire by purchase, lease or otherwise all or
substantially all of the assets or capital stock of any other Person; PROVIDED
that any Loan Party other than the Borrower and the Company may consolidate,
liquidate, dissolve or merge into, or acquire, another Loan Party which is
wholly-owned, directly or indirectly, by the Company; and PROVIDED FURTHER that
any Loan Party may acquire by merger, purchase or otherwise all or substantially
all of the assets of any other Person or any division or subsidiary which
constitutes a "reportable industry segment" or "class of similar products" of an
industry segment (as such terms are defined in Item 101(c) of Regulation S-K
promulgated under the Securities Act of 1933 and the Securities Exchange Act of
1934) of such other Person if (a) after giving effect to such acquisition, the
aggregate of the purchase prices for all acquisitions permitted pursuant to this
clause shall not exceed $50,000,000 (with respect to any non-cash consideration
paid by a Loan Party, the value reasonably assigned to such consideration on the
books of such Loan Party shall be used for purposes of this calculation), (b)
the Borrower is in compliance with all of the provisions of this Agreement
immediately prior to such acquisition and after giving effect to such
acquisition the Borrower will be in compliance with all of the provisions of
this Agreement and (c) with respect to any acquisition of capital stock of
another Person, within 90 days of such acquisition of any capital stock of
another Person, all outstanding shares of capital stock of such Person are
acquired by one or more Loan Parties and no rights to acquire shares of such
capital stock shall be held by any person other than a Loan Party and, if such
other Person becomes a Subsidiary of the Borrower, it joins in the Master
Guaranty Agreement in accordance with Section 10.18.
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7.2.7 DISPOSITIONS OF ASSETS OR SUBSIDIARIES.
---------------------------------------
Each of the Loan Parties shall not, and shall not permit any of its Subsidiaries
to, sell, convey, assign, lease, abandon or otherwise transfer or dispose of,
voluntarily or involuntarily, any of its properties or assets, tangible or
intangible (including sale, assignment, discount or other disposition of
accounts, contract rights, chattel paper, equipment or general intangibles with
or without recourse or of capital stock, shares of beneficial interest or
partnership interests of a Subsidiary of such Loan Party), except:
(i) transactions involving the sale of inventory in the ordinary
course of business;
(ii) any sale, transfer or lease of assets in the ordinary course of
business which are no longer necessary or required in the conduct
of such Loan Party's or such Subsidiary's business;
(iii) any sale, transfer or lease of assets by any wholly owned
Subsidiary of such Loan Party to another Loan Party;
(iv) any sale, transfer or lease of assets, other than those
specifically excepted pursuant to clauses (i) through above or
clauses (v) and (vi) below, provided that the aggregate
after-tax net cash proceeds (including without limitation cash,
as and when collected, pursuant to any notes or other securities
received as consideration for such sale, transfer or lease) of
all such sales, transfers or leases on and after the date hereof
(as reasonably estimated by the Borrower) in excess of
$25,000,000 shall be applied as a mandatory prepayment of the
Revolving Credit Loans in accordance with the provisions of
Section 4.5.1;
(v) any sale or transfer by the Company of the capital stock or other
equity interests of the Company; and
(vi) cash payments pursuant to transactions not prohibited hereunder.
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7.2.8 AFFILIATE TRANSACTIONS.
-----------------------
Each of the Loan Parties shall not, and shall not permit any of its Subsidiaries
to, enter into or carry out any transaction with any of its Affiliates
(including purchasing property or services from or selling property or services
to any Affiliate of any Loan Party or other Person other than a Loan Party)
unless such transaction is not otherwise prohibited by this Agreement, is
entered into in the ordinary course of business upon fair and reasonable
arm's-length terms and conditions (including without limitation employment
arrangements with any Executive Officer of the Borrower and its Subsidiaries)
which are fully disclosed to the Administrative Agent and is in accordance with
all applicable Law.
7.2.9 SUBSIDIARIES, PARTNERSHIPS AND JOINT VENTURES.
----------------------------------------------
Each of the Loan Parties shall not, and shall not permit any of its Subsidiaries
to, own or create directly or indirectly any Subsidiaries other than (i) any
Subsidiary which has joined this Agreement as Guarantor on the Closing Date; and
(ii) any Subsidiary acquired or formed after the Closing Date which joins this
Agreement as a Guarantor pursuant to Section 10.18. Each of the Loan Parties
shall not become or agree to become a general or limited partner in any general
or limited partnership or a joint venturer in any joint venture other than (i)
solely with other Loan Parties; (ii) as permitted by Section 7.2.4; (iii) for
the acquisition of inventory; and (iv) for transactions which when aggregated do
not exceed $10,000,000, except that the Loan Parties may be general or limited
partners in other Loan Parties.
7.2.10 CONTINUATION OF OR CHANGE IN BUSINESS.
--------------------------------------
Each of the Company and the Borrower shall not, and shall not permit any of its
Subsidiaries to, engage in any business other than wholesale and retail sale of
general merchandise, substantially as conducted and operated by the Company, the
Borrower and their Subsidiaries and as conducted and operated by ▇▇▇-Bee Center,
Inc. and its Subsidiaries, during the present fiscal year.
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7.2.11 PLANS AND BENEFIT ARRANGEMENTS.
-------------------------------
Each of the Loan Parties shall not, and shall not permit any of its Subsidiaries
to:
(i) fail to satisfy the minimum funding requirements of ERISA and the
Internal Revenue Code with respect to any Plan where such would
result in a Material Adverse Change;
(ii) request a minimum funding waiver from the Internal Revenue
Service with respect to any Plan;
(iii) engage in a Prohibited Transaction with any Plan, Benefit
Arrangement or Multiemployer Plan which, alone or in conjunction
with any other circumstances or set of circumstances resulting in
liability under ERISA, would constitute a Material Adverse
Change;
(iv) permit, as of the end of any calendar year, the aggregate
accumulated benefit obligations determined in accordance with
GAAP for all Plans to exceed by more than $8 million the fair
market value of all assets of the Plans;
(v) fail to make when due any contribution to any Multiemployer Plan
that the Borrower or any member of the ERISA Group may be
required to make under any agreement relating to such
Multiemployer Plan, or any Law pertaining thereto where such
would result in a Material Adverse Change;
(vi) withdraw (completely or partially) from any Multiemployer Plan or
withdraw (or be deemed under Section 4062(e) of ERISA to
withdraw) from any Multiple Employer Plan, where any such
withdrawal is likely to result in a material liability of the
Borrower or any member of the ERISA Group; terminate, or
institute proceedings to terminate, any Plan, where such
termination is likely to result in a material liability to the
Borrower or any member of the ERISA Group;
(vii) make any amendment to any Plan with respect to which security is
required under Section 307 of ERISA; or
(viii) fail to give any and all notices and make all disclosures and
governmental filings required under ERISA or the Internal Revenue
Code, where such failure is likely to result in a Material
Adverse Change.
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7.2.12 FISCAL YEAR.
------------
The Company shall not, and shall not permit any Subsidiary of the Company to,
change its fiscal year from the fifty-two/fifty-three week fiscal year beginning
on the Sunday closest to February 1, and ending on the Saturday closest to
February 1 of each year.
7.2.13 ISSUANCE OF STOCK.
------------------
Each of the Loan Parties shall not, and shall not permit any of its Subsidiaries
to, issue any additional shares of its capital stock or any options, warrants or
other rights in respect thereof other than to another Loan Party or Subsidiary
of a Loan Party; provided, however, that nothing contained herein shall prohibit
the Company from issuing shares of its capital stock or other equity interests
of the Company.
7.2.14 CHANGES IN ORGANIZATIONAL DOCUMENTS.
------------------------------------
Except as permitted by Section 7.2.6, each of the Loan Parties shall not, and
shall not permit any of its Subsidiaries to, amend in any respect its
certificate of incorporation (including any provisions or resolutions relating
to capital stock), by-laws or other organizational documents without providing
at least five (5) calendar days' prior written notice to the Administrative
Agent and the Banks and, in the event such change would be adverse to the Banks
as determined by the Required Banks in their sole discretion, obtaining the
prior written consent of the Required Banks.
7.2.15 CAPITAL EXPENDITURES AND LEASES.
--------------------------------
Each of the Loan Parties shall not, and shall not permit any of its Subsidiaries
to, make any payments or incur any obligation on account of the purchase or
lease of any assets which if purchased would constitute fixed assets or which if
leased would constitute a capitalized lease under GAAP if the aggregate of such
payments and incurred obligations together with all other similar payments and
incurred obligations made during such period would exceed the amount set forth
below for such period:
Period Maximum Consolidated Capital
------ ----------------------------
Expenditures
------------
May 3, 1996 to February $110,000,000
1, 1997
Fiscal Year ending $100,000,000
January 31, 1998 and each
fiscal year thereafter
To the extent that the Consolidated Capital Expenditures for any given period
are less than the maximum amount permitted for such period, the next succeeding
period's maximum Consolidated Capital Expenditures shall be increased by such
difference.
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7.2.16 MINIMUM FIXED CHARGE COVERAGE RATIO.
------------------------------------
The Loan Parties shall not permit at any time the Fixed Charge Coverage Ratio,
calculated as of the end of each fiscal quarter ending nearest the date set
forth below to be less than the following minimum Fixed Charge Coverage Ratio:
Fiscal Quarter Ending Nearest: Minimum Fixed Charge Coverage
------------------------------ Ratio
-----
July 31, 1996 1.25
October 31, 1996 1.25
January 31, 1997 1.50
April 30, 1997 1.50
July 31, 1997 1.50
October 31, 1997 1.50
January 31, 1998 1.60
April 30, 1998 1.60
July 31, 1998 1.60
October 31, 1998 1.60
All Quarters subsequent to October 31, 1.70
1998
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7.2.17 TOTAL INDEBTEDNESS TO TOTAL CAPITALIZATION RATIO.
-------------------------------------------------
The Loan Parties shall not permit at any time the ratio of (i) the sum of (A)
Indebtedness of the Company and its Subsidiaries determined and consolidated in
accordance with GAAP plus (B) the product of four times the Consolidated
Rentals, to (ii) the sum of (A) Indebtedness of the Company and its Subsidiaries
determined and consolidated in accordance with GAAP plus (B) the product of four
times the Consolidated Rentals plus (C) the stockholders equity of the Company
and its Subsidiaries determined and consolidated in accordance with GAAP, to be
greater than the following maximum permitted percentage:
Fiscal Quarter Ending Nearest: Maximum Permitted
------------------------------ Percentage
----------
July 31, 1996 67.5%
October 31, 1996 72.5%
January 31, 1997 62.5%
April 30, 1997 67.5%
July 31, 1997 70.0%
October 31, 1997 72.5%
January 31, 1998 60.0%
April 30, 1998 65.0%
July 31, 1998 67.5%
October 31, 1998 70.0%
All Quarters subsequent to October 31, 1998 57.5%
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7.2.18 MINIMUM TANGIBLE NET WORTH.
---------------------------
The Loan Parties shall not permit at any time Consolidated Tangible Net Worth to
be less than the Base Tangible Net Worth.
7.2.19 MINIMUM WORKING CAPITAL RATIO.
------------------------------
The Loan Parties shall not permit at the end of any fiscal quarter of the
Company the ratio of (i) the sum of Company's and its Subsidiaries' (A) cash and
cash equivalents, (B) accounts receivable net of bad debt reserves plus (C)
inventory net of any reserves, in each case as determined and consolidated in
accordance with GAAP, to (ii) the sum of (A) the Revolving Credit Loans plus (B)
the Swing Loans plus (C) the Company's and its Subsidiaries' accounts payable as
determined and consolidated in accordance with GAAP plus (D) the Company's and
its Subsidiaries other current liabilities as determined and consolidated in
accordance with GAAP, to be less than 1.15 to 1.00.
7.2.20 AMENDMENTS TO CERTAIN DOCUMENTS.
--------------------------------
The Loan Parties shall not permit, without the prior written consent of the
Required Banks, any amendment, waiver or modification to the Stock Purchase
Agreement, the Seller Note and the indenture pursuant to which the Seller Note
is issued, or any other document or instrument delivered in connection with any
of the foregoing except for amendments, waivers or modifications to provisions
other than those which subordinate the Seller Note to the Obligations and which
amendments, waivers or modifications do not change or otherwise affect the terms
of such agreements or instruments in a material manner.
7.2.21 OUTSTANDING REVOLVING CREDIT LOANS.
-----------------------------------
The Loan Parties shall not permit the Revolving Credit Loans to exceed
$75,000,000 for not less than thirty (30) consecutive calendar days during the
period commencing with December 1 of each calendar year and ending on February 1
of the succeeding calendar year.
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7.2.22 NO PREPAYMENT OF SUBORDINATED DEBT.
-----------------------------------
The Loan Parties shall not permit the payment, directly or indirectly (including
without limitation on the foregoing any purchase of one or more of the notes
issued thereunder or any interest or participation in any such notes), of any
principal of the Seller Note (provided that this provision shall not prohibit
transfers by any holder or holders of the Seller Note to Persons other than the
Company and direct or indirect Subsidiaries of the Company).
7.2.23 INVENTORY PURCHASES.
--------------------
The Loan Parties shall not permit (i) any material amount of inventory to be
purchased by any Person other than the Borrower and the Material Subsidiaries or
(ii) any Loan Party or any Subsidiary of a Loan Party, other than the Borrower
and the Material Subsidiaries, to be obligated directly or indirectly to any
Person other than a Loan Party with respect to any material amount of purchased
inventory.
7.3 REPORTING REQUIREMENTS.
-----------------------
The Borrower covenants and agrees that until payment in full of the Revolving
Credit Loans and Reimbursement Obligations and interest thereon, expiration or
termination of all Letters of Credit, satisfaction of all of the Loan Parties'
other Obligations hereunder and under the other Loan Documents and termination
of the Revolving Credit Commitments, the Loan Parties will furnish or cause to
be furnished to the Administrative Agent and each of the Banks:
7.3.1 QUARTERLY FINANCIAL STATEMENTS.
-------------------------------
As soon as available and in any event within forty-five (45) calendar days after
the end of each of the first three fiscal quarters in each fiscal year,
financial statements of the Company, consisting of a consolidated and
consolidating balance sheet as of the end of such fiscal quarter and related
consolidated and consolidating statements of income, stockholders' equity and
cash flows for the fiscal quarter then ended and the fiscal year through that
date, all in reasonable detail and certified (subject to normal year-end audit
adjustments) by the Chief Executive Officer, President or Chief Financial
Officer of the Borrower as having been prepared in accordance with GAAP and as
to fairness of presentation, consistently applied, and setting forth in
comparative form the respective financial statements for the corresponding date
and period in the previous fiscal year. Wherever referenced in this Section 7,
the term "consolidating" is limited to consolidating information on a basis
consistent with current accounting practices of the Company.
7.3.2 ANNUAL FINANCIAL STATEMENTS.
----------------------------
As soon as available and in any event within ninety (90) days after the end of
each fiscal year of the Company, consolidated and consolidating financial
statements of the Company consisting of a consolidated and consolidating balance
sheet as of the end of such fiscal year, and related consolidated and
consolidating statements of income, stockholders' equity and cash flows for the
fiscal year then ended, all in reasonable detail and setting forth in
comparative form the financial statements as of the end of and for the preceding
fiscal year, and with respect to the consolidated statements, certified by
independent certified public accountants of nationally recognized standing
satisfactory to the Administrative Agent. The certificate or report of
accountants shall be free of qualifications (other than any consistency
qualification that may result from a change in the method used to prepare the
financial statements as to which such accountants concur) and shall not indicate
the occurrence or existence of any event, condition or contingency which would
materially impair the prospect of payment or performance of any covenant,
agreement or duty of
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any Loan Party under any of the Loan Documents, together with a letter of such
accountants substantially to the effect that, based upon their ordinary and
customary examination of the affairs of the Company, performed in connection
with the preparation of such consolidated financial statements, and in
accordance with generally accepted auditing standards, they are not aware of the
existence of any condition or event which constitutes an Event of Default or
Potential Default or, if they are aware of such condition or event, stating the
nature thereof and confirming the Borrower's calculations with respect to the
certificate to be delivered pursuant to Section 7.3.3 with respect to such
financial statements.
7.3.3 CERTIFICATE OF THE BORROWER.
----------------------------
Concurrently with the financial statements of the Company furnished to the
Administrative Agent and to the Banks pursuant to Sections 7.3.1 and 7.3.2, a
certificate of the Borrower and the Company signed by the Chief Executive
Officer, President or Chief Financial Officer of the Borrower and the Company,
in the form of EXHIBIT 7.3.3, to the effect that, except as described pursuant
to Section 7.3.4, (i) the representations and warranties contained in Article 5
and in the other Loan Documents are true on and as of the date of such
certificate with the same effect as though such representations and warranties
had been made on and as of such date (except representations and warranties
which expressly relate solely to an earlier date or time) and the Loan Parties
have performed and complied with all covenants and conditions hereof, (ii) no
Event of Default or Potential Default exists and is continuing on the date of
such certificate and (iii) containing calculations in sufficient detail to
demonstrate compliance as of the date of such financial statements with all
financial covenants contained in Section 7.2 and to compute the Fixed Charge
Coverage Ratio.
7.3.4 NOTICE OF DEFAULT.
------------------
Promptly after any officer of any Loan Party has learned of the occurrence of an
Event of Default or Potential Default, a certificate signed by the Chief
Executive Officer, President or Chief Financial Officer of such Loan Party
setting forth the details of such Event of Default or Potential Default and the
action which the such Loan Party proposes to take with respect thereto.
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7.3.5 NOTICE OF LITIGATION.
---------------------
Promptly after the commencement thereof, notice of all actions, suits,
proceedings or investigations before or by any Official Body or any other Person
against any Loan Party or Subsidiary of any Loan Party which involve a claim or
series of uninsured claims (provided that a claim shall be deemed to be
uninsured unless the insurance company is a reputable insurance company and has
acknowledged that the claim is covered by the applicable insurance policy
without any reservation to challenge the applicability thereof) in excess of
$10,000,000 or which if adversely determined would constitute a Material Adverse
Change.
7.3.6 CERTAIN EVENTS.
---------------
Written notice:
(i) at least five (5) Business Days prior thereto, with respect to
any proposed sale or transfer of assets pursuant to Section
7.2.7(iv) which exceed $25 million, and
(ii) within the time limits set forth in Section 7.2.14, any amendment
to the organizational documents of any Loan Party.
7.3.7 BUDGETS, FORECASTS, OTHER REPORTS AND INFORMATION.
--------------------------------------------------
Promptly upon their becoming available to any Loan Party:
(i) the consolidated annual budget of the Company, to be supplied not
later than the earlier of (i) ninety (90) days following the end
of each fiscal year or (ii) two (2) Business Days following the
date on which the Board of Directors of the Company approves such
annual budget;
(ii) any reports including management letters submitted to the Company
or the Borrower by independent accountants in connection with any
annual, interim or special audit;
(iii) any reports, notices or proxy statements generally distributed by
the Company to its stockholders on a date no later than the date
supplied to such stockholders; regular or periodic reports,
including Forms 10-K, 10-Q and 8-K, registration statements and
prospectuses, as may be filed by the Company with the Securities
and Exchange Commission;
(iv) a copy of any order in any proceeding to which the Company, the
Borrower or any of its Subsidiaries is a party issued by any
Official Body; and
(v) such other reports and information as any of the Banks may from
time to time reasonably request. The Loan Parties shall also
notify the Banks promptly of the enactment or adoption of any Law
which may result in a Material Adverse Change.
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7.3.8 NOTICES REGARDING PLANS AND BENEFIT ARRANGEMENTS.
-------------------------------------------------
7.3.8.1 CERTAIN EVENTS.
---------------
Promptly upon becoming aware of the occurrence thereof, notice (including the
nature of the event and, when known, any action taken or threatened by the
Internal Revenue Service or the PBGC with respect thereto) of:
(i) any Reportable Event with respect to the Company or any other
member of the ERISA Group (regardless of whether the obligation
to report said Reportable Event to the PBGC has been waived),
(ii) any Prohibited Transaction which could subject the Company or any
other member of the ERISA Group to a civil penalty assessed
pursuant to Section 502(i) of ERISA or a tax imposed by Section
4975 of the Internal Revenue Code in connection with any Plan,
any Benefit Arrangement or any trust created thereunder,
(iii) any assertion of material withdrawal liability with respect to
any Multiemployer Plan,
(iv) any partial or complete withdrawal from a Multiemployer Plan by
the Company or any other member of the ERISA Group under Title IV
of ERISA (or assertion thereof), where such withdrawal is likely
to result in material withdrawal liability, any cessation of
operations (by the Company or any other member of the ERISA
Group) at a facility in the circumstances described in Section
4063(e) of ERISA,
(v) withdrawal by the Company or any other member of the ERISA Group
from a Multiple Employer Plan,
(vi) a failure by the Company or any other member of the ERISA Group
to make a payment to a Plan required to avoid imposition of a
Lien under Section 302(f) of ERISA,
(vii) the adoption of an amendment to a Plan requiring the provision of
security to such Plan pursuant to Section 307 of ERISA, or
(viii) any change in the actuarial assumptions or funding methods used
for any Plan, where the effect of such change is to materially
increase or materially reduce the unfunded benefit liability or
obligation to make periodic contributions.
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7.3.8.2 NOTICES OF INVOLUNTARY TERMINATION AND ANNUAL REPORTS.
------------------------------------------------------
Promptly after receipt thereof, copies of (a) all notices received by the
Company or any other member of the ERISA Group of the PBGC's intent to
terminate any Plan administered or maintained by the Company or any member of
the ERISA Group, or to have a trustee appointed to administer any such Plan;
and (b) at the request of the Administrative Agent or any Bank each annual
report (IRS Form 5500 series) and all accompanying schedules, the most recent
actuarial reports, the most recent financial information concerning the
financial status of each Plan administered or maintained by the Company or any
other member of the ERISA Group, and schedules showing the amounts contributed
to each such Plan by or on behalf of the Company or any other member of the
ERISA Group in which any of their personnel participate or from which such
personnel may derive a benefit, and each Schedule B (Actuarial Information) to
the annual report filed by the Company or any other member of the ERISA Group
with the Internal Revenue Service with respect to each such Plan.
7.3.8.3 NOTICE OF VOLUNTARY TERMINATION.
--------------------------------
Promptly upon the filing thereof, copies of any Form 5310, or any successor or
equivalent form to Form 5310, filed with the PBGC in connection with the
termination of any Plan.
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8. DEFAULT
-------
8.1 EVENTS OF DEFAULT.
------------------
An Event of Default shall mean the occurrence or existence of any one or more of
the following events or conditions (whatever the reason therefor and whether
voluntary, involuntary or effected by operation of Law):
8.1.1 PAYMENTS UNDER LOAN DOCUMENTS.
------------------------------
The Borrower shall fail to pay when due any principal of any Revolving Credit
Loan (including scheduled installments, mandatory prepayments or the payment due
at maturity) or any Reimbursement Obligations or shall fail to pay within three
(3) Business Days when due any interest on any Revolving Credit Loan or on any
Reimbursement Obligations or any other amount owing hereunder or under the other
Loan Documents after such principal, interest or other amount becomes due in
accordance with the terms hereof or thereof;
8.1.2 BREACH OF WARRANTY.
-------------------
Any representation or warranty made or deemed made at any time by any of the
Loan Parties herein or by any of the Loan Parties in any other Loan Document, or
in any certificate, other instrument or statement furnished pursuant to the
provisions hereof or thereof, shall prove to have been false or misleading in
any material respect as of the time it was made or deemed made or furnished;
8.1.3 BREACH OF NEGATIVE COVENANTS.
-----------------------------
Any of the Loan Parties shall default in the observance or performance of any
covenant contained in Section 7.2;
8.1.4 BREACH OF OTHER COVENANTS.
--------------------------
Any of the Loan Parties shall default in the observance or performance of any
other covenant, condition or provision hereof or of any other Loan Document and
such default shall continue unremedied for a period of ten (10) Business Days
after any Executive Officer of the Borrower or the Company becomes aware of the
occurrence thereof (such grace period to be applicable only in the event such
default can be remedied by corrective action of the Loan Parties as determined
by the Managing Agents in their sole discretion);
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8.1.5 DEFAULTS IN OTHER AGREEMENTS OR INDEBTEDNESS.
---------------------------------------------
If a breach, default or event of default shall occur at any time under the terms
of any other agreement involving borrowed money or the extension of credit or
any other Indebtedness under which any Loan Party or Subsidiary of any Loan
Party may be obligated as a borrower or guarantor in excess of $10,000,000 in
the aggregate and such breach, default or event of default consists of the
failure to pay (beyond any period of grace permitted with respect thereto,
whether waived or not) any indebtedness when due (whether at stated maturity, by
acceleration or otherwise) or such breach or default permits or causes the
acceleration of any indebtedness (whether or not such right shall have been
waived) or the termination of any commitment to lend;
8.1.6 FINAL JUDGMENTS OR ORDERS.
--------------------------
Any final judgments or orders for the payment of money in excess of $10,000,000
in the aggregate shall be entered against any Loan Party by a court having
jurisdiction in the premises, which judgment either (i) is not discharged,
vacated, bonded or stayed pending appeal within a period of sixty (60) days from
the date of entry, or (ii) is not fully insured (provided that a judgment shall
be deemed to be uninsured unless the insurance company is a reputable insurance
company and has acknowledged that the judgment is covered by the applicable
insurance policy without any reservation to challenge the applicability thereof)
or any Loan Parties' or any of their Subsidiaries' assets having a value on the
Company's books in excess of $10,000,000 are attached, seized, levied upon or
subjected to a writ or distress warrant; or such come within the possession of
any receiver, trustee, custodian or assignee for the benefit of creditors and
the same is not cured within sixty (60) days thereafter;
8.1.7 LOAN DOCUMENT UNENFORCEABLE.
----------------------------
Any of the Loan Documents shall cease to be legal, valid and binding agreements
enforceable against the party executing the same or such party's successors and
assigns (as permitted under the Loan Documents) in accordance with the
respective terms thereof or shall in any way be terminated (except in accordance
with its terms) or become or be declared ineffective or inoperative or shall in
any way be challenged or contested;
8.1.8 NOTICE OF LIEN OR ASSESSMENT.
-----------------------------
A notice of Lien or assessment in excess of $10,000,000 which is not a Permitted
Lien is filed of record with respect to all or any part of any of the Loan
Parties' or any of their Subsidiaries' assets by the United States, or any
department, agency or instrumentality thereof, or by any state, county,
municipal or other governmental agency, including the PBGC, or if any taxes or
debts owing at any time or times hereafter to any one of these becomes payable
and the same is not paid within sixty (60) days after the same becomes payable
(unless the validity or amount thereof is being contested in good faith by
appropriate and lawful proceedings diligently conducted so long as levy and
execution thereon have been stayed and continue to be stayed);
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8.1.9 INSOLVENCY.
-----------
The Company, the Borrower, any Material Subsidiary, or one or more other
Subsidiaries of the Borrower which individually or in the aggregate represent
more than five percent (5%) of the book value of the consolidated assets of the
Borrower and its Subsidiaries, ceases to be able to pay its debts as they become
due or admits in writing its inability to pay its debts as they mature;
8.1.9 EVENTS RELATING TO PLANS AND BENEFIT ARRANGEMENTS.
--------------------------------------------------
Any of the following occurs: (i) any Reportable Event, which the Documentation
Agent and the Administrative Agent determine in good faith constitutes grounds
for the termination of any Plan by the PBGC or the appointment of a trustee to
administer or liquidate any Plan, shall have occurred and be continuing; (ii)
proceedings shall have been instituted or other action taken to terminate any
Plan, or a termination notice shall have been filed with respect to any Plan;
(iii) a trustee shall be appointed to administer or liquidate any Plan; (iv) the
PBGC shall give notice of its intent to institute proceedings to terminate any
Plan or Plans or to appoint a trustee to administer or liquidate any Plan; and,
in the case of the occurrence of (i), (ii), (iii) or (iv) above, the
Administrative Agent determines in good faith that the amount of the Company's
liability is likely to exceed 10% of its Consolidated Tangible Net Worth; (v)
the Company or any member of the ERISA Group shall fail to make any
contributions when due to a Plan or a Multiemployer Plan; (vi) the Company or
any other member of the ERISA Group shall make any amendment to a Plan with
respect to which security is required under Section 307 of ERISA; (vii) the
Company or any other member of the ERISA Group shall withdraw completely or
partially from a Multiemployer Plan; (viii) the Company or any other member of
the ERISA Group shall withdraw (or shall be deemed under Section 4062(e) of
ERISA to withdraw) from a Multiple Employer Plan; or (ix) any applicable Law is
adopted, changed or interpreted by any Official Body with respect to or
otherwise affecting one or more Plans, Multiemployer Plans or Benefit
Arrangements and, with respect to any of the events specified in (v), (vi),
(vii), (viii) or (ix), the Documentation Agent and the Administrative Agent
determine in good faith that any such occurrence would be reasonably likely to
materially and adversely affect the total enterprise represented by the Company
and the other members of the ERISA Group;
8.1.11 CESSATION OF BUSINESS.
----------------------
Any of the Company, the Borrower, (except as permitted by Section 7.2.6 or
Section 7.2.7) any Material Subsidiary, or (except as permitted by Section 7.2.6
or Section 7.2.7) one or more other Subsidiaries of the Borrower which
individually or in the aggregate represent more than five percent (5%) of the
book value of the consolidated assets of the Borrower and its Subsidiaries,
ceases to conduct its business as contemplated or such Loan Party is enjoined,
restrained or in any way prevented by court order from conducting all or any
material part of its business and such injunction, restraint or other preventive
order is not dismissed within thirty (30) days after the entry thereof;
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8.1.12 CHANGE OF CONTROL.
------------------
(i) Any person or group of persons (within the meaning of Section 13(a) or 14(a)
of the Securities Exchange Act of 1934, as amended) shall have acquired
beneficial ownership of (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under said Act) 33.33% or more of the voting
capital stock of the Company; or (ii) within a period of twelve (12) consecutive
calendar months, individuals who were directors on the board of directors of the
Company on the first day of such period together with any directors whose
election by such board of directors or whose nomination for election by the
shareholders was approved by a vote of the majority of the directors then in
office shall cease to constitute a majority of the board of directors of the
Company;
8.1.13 INVOLUNTARY PROCEEDINGS.
------------------------
A proceeding shall have been instituted in a court having jurisdiction in the
premises seeking a decree or order for relief in respect of any the Company, the
Borrower, any Material Subsidiary, or any other Subsidiary the result of which
proceeding against such other Subsidiary would be a Material Adverse Change, in
an involuntary case under any applicable bankruptcy, insolvency, reorganization
or other similar law now or hereafter in effect, or for the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator
(or similar official) of any Loan Party or any Subsidiary of any Loan Party for
any substantial part of its property, or for the winding-up or liquidation of
its affairs, and such proceeding shall remain undismissed or unstayed and in
effect for a period of sixty (60) consecutive days or such court shall enter a
decree or order granting any of the relief sought in such proceeding; or
8.1.14 VOLUNTARY PROCEEDINGS.
----------------------
Any of the Company, the Borrower, any Material Subsidiary or any other
Subsidiary the result of which voluntary case by such other Subsidiary would be
a Material Adverse Change, shall commence a voluntary case under any applicable
bankruptcy, insolvency, reorganization or other similar law now or hereafter in
effect, shall consent to the entry of an order for relief in an involuntary case
under any such law, or shall consent to the appointment or taking possession by
a receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator
(or other similar official) of itself or for any substantial part of its
property or shall make a general assignment for the benefit of creditors, or
shall fail generally to pay its debts as they become due, or shall take any
action in furtherance of any of the foregoing.
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8.2 CONSEQUENCES OF EVENT OF DEFAULT.
---------------------------------
8.2.1 EVENTS OF DEFAULT OTHER THAN BANKRUPTCY, INSOLVENCY OR REORGANIZATION
---------------------------------------------------------------------
PROCEEDINGS.
------------
If an Event of Default specified under Sections 8.1.1 through 8.1.12 shall occur
and be continuing, the Banks and the Administrative Agent shall be under no
further obligation to make Revolving Credit Loans or issue Letters of Credit, as
the case may be, no Swing Loans shall be made, and the Administrative Agent may,
and upon the request of the Required Banks, shall (i) by written notice to the
Borrower, declare the unpaid principal amount of the Revolving Credit Notes, the
Swing Note and all Reimbursement Obligations then outstanding and all interest
accrued thereon, any unpaid fees and all other Indebtedness of the Borrower to
the Banks hereunder and thereunder to be forthwith due and payable, and the same
shall thereupon become and be immediately due and payable to the Administrative
Agent for the benefit of each Bank without presentment, demand, protest or any
other notice of any kind, all of which are hereby expressly waived, and (ii)
require the Borrower to, and the Borrower shall thereupon, deposit in a
non-interest bearing account with the Administrative Agent, as cash collateral
for its Obligations under the Loan Documents, an amount equal to the maximum
amount currently or at any time thereafter available to be drawn on all
outstanding Letters of Credit, and the Borrower hereby pledges to the
Administrative Agent and the Banks, and grants to the Administrative Agent and
the Banks a security interest in, all such cash as security for such
Obligations. Upon the curing of all existing Events of Default to the
satisfaction of the Required Banks, the Administrative Agent shall return such
cash collateral to the Borrower;
8.2.2 BANKRUPTCY, INSOLVENCY OR REORGANIZATION PROCEEDINGS.
-----------------------------------------------------
If an Event of Default specified under Section 8.1.13 or 8.1.14 shall occur, the
Banks shall make no Revolving Credit Loans hereunder and the Swing Lender shall
make no Swing Loans hereunder and the unpaid principal amount of the Revolving
Credit Notes, the Swing Note and all Reimbursement Obligations then outstanding
and all interest accrued thereon, any unpaid fees and all other Indebtedness of
the Borrower to the Banks hereunder and thereunder shall be immediately due and
payable, without presentment, demand, protest or notice of any kind, all of
which are hereby expressly waived;
8.2.3 SET-OFF.
--------
If an Event of Default shall occur and be continuing, any Bank to whom any
Obligation is owed by any Loan Party hereunder or under any other Loan Document
or any participant of such Bank which has agreed in writing to be bound by the
provisions of Section 9.13 and any branch, Subsidiary or Affiliate of such Bank
or participant anywhere in the world shall have the right, subject to the
approval of the Required Banks, in addition to all other rights and remedies
available to it, without notice to such Loan Party, to set off against and apply
to the then unpaid balance of all the Revolving Credit Loans and all other
Obligations of the Borrower and the other Loan Parties hereunder or under any
other Loan Document any debt owing to, and any other funds held in any manner
for the account of, the Borrower or such other Loan Party by such Bank or
participant or by such branch, Subsidiary or Affiliate, including all funds in
all deposit accounts (whether time or demand, general or special, provisionally
credited or finally credited, or otherwise) now or hereafter maintained by the
Borrower or such other Loan Party for its own account (but not including funds
held in custodian or trust accounts) with such Bank or participant or such
branch, Subsidiary or Affiliate. Such right shall exist whether or not any Bank
or the Administrative Agent shall have made any demand under this Agreement or
any other Loan Document, whether or not such debt owing to or funds held for the
account of the Borrower or such other Loan Party is or are matured or unmatured
and regardless of the existence or adequacy of any collateral, any Guaranty or
any other security, right or remedy available to any Bank or the Administrative
Agent;
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8.2.4 SUITS, ACTIONS, PROCEEDINGS.
----------------------------
If an Event of Default shall occur and be continuing, and whether or not the
Administrative Agent shall have accelerated the maturity of Revolving Credit
Loans pursuant to any of the foregoing provisions of this Section 8.2, the
Administrative Agent or any Bank, with the approval of the Required Banks, if
owed any amount with respect to the Revolving Credit Notes, may proceed to
protect and enforce its rights by suit in equity, action at law and/or other
appropriate proceeding, whether for the specific performance of any covenant or
agreement contained in this Agreement or the Revolving Credit Notes, 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 the Administrative Agent or such Bank;
8.2.5 APPLICATION OF PROCEEDS.
------------------------
From and after the date on which the Administrative Agent has taken
any action pursuant to this Section 8.2 and until all Obligations of the Loan
Parties have been paid in full, any and all proceeds received by the
Administrative Agent from any sale or other disposition of any collateral, or
any part thereof, the exercise of any other remedy by the Administrative Agent,
shall be applied as follows:
(i) first, to reimburse the Administrative Agent and the Banks for
out-of-pocket costs, expenses and disbursements, including
reasonable attorneys' and paralegals' fees and legal expenses,
incurred by the Administrative Agent or the Banks in connection
with realizing on any collateral or collection of any Obligations
of any of the Loan Parties under any of the Loan Documents,
including advances made by the Banks or any one of them or the
Administrative Agent for the reasonable maintenance,
preservation, protection or enforcement of, or realization upon,
any collateral, including advances for taxes, insurance, repairs
and the like and reasonable expenses incurred to sell or
otherwise realize on, or prepare for sale or other realization
on, any of any collateral;
(ii) second, to the repayment of all Indebtedness then due and unpaid
of the Loan Parties to the Banks incurred under this Agreement or
any of the other Loan Documents, whether of principal, interest,
fees, expenses or otherwise, in such manner as the Managing
Agents may determine in their discretion; and
(iii) the balance, if any, to the Borrower or as required by Law.
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8.2.6 OTHER RIGHTS AND REMEDIES.
--------------------------
The Administrative Agent may, and upon the request of the Required Banks shall,
exercise all post-default rights granted to the Administrative Agent and the
Banks under the Loan Documents or applicable Law.
8.3 NOTICE OF SALE.
---------------
Any notice required to be given by the Administrative Agent of a sale, lease, or
other disposition of the any collateral or any intended action by the
Administrative Agent, if given ten (10) days prior to such proposed action,
shall constitute commercially reasonable and fair notice thereof to the
Borrower.
9. THE MANAGING AGENTS
-------------------
9.1 APPOINTMENT.
------------
Each Bank hereby irrevocably designates, appoints and authorizes PNC Bank to act
as Documentation Agent and National City Bank of Columbus to act as
Administrative Agent for such Bank under this Agreement and to execute and
deliver or accept on behalf of each of the Banks the other Loan Documents. Each
Bank hereby irrevocably authorizes, and each holder of any Revolving Credit Note
by the acceptance of a Revolving Credit Note shall be deemed irrevocably to
authorize, the Documentation Agent and the Administrative Agent to take such
action on its behalf under the provisions of this Agreement and the other Loan
Documents and any other instruments and agreements referred to herein, and to
exercise such powers and to perform such duties hereunder as are specifically
delegated to or required of the Documentation Agent or the Administrative Agent
by the terms hereof, together with such powers as are reasonably incidental
thereto. PNC Bank, agrees to act as the Documentation Agent and National City
Bank of Columbus agrees to act as the Administrative Agent on behalf of the
Banks to the extent provided in this Agreement.
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9.2 DELEGATION OF DUTIES.
---------------------
The Documentation Agent and the Administrative Agent may perform any of their
respective duties hereunder by or through agents or employees (PROVIDED such
delegation does not constitute a relinquishment of its duties as Documentation
Agent or Administrative Agent, respectively) and, subject to Sections 9.5 and
9.6, shall be entitled to engage and pay for the advice or services of any
attorneys, accountants or other experts concerning all matters pertaining to its
duties hereunder and to rely upon any advice so obtained.
9.3 NATURE OF DUTIES; INDEPENDENT CREDIT INVESTIGATION.
---------------------------------------------------
The Documentation Agent, the Administrative Agent, the Managing Agents and the
Syndication Agent shall have no duties or responsibilities except those
expressly set forth in this Agreement and no implied covenants, functions,
responsibilities, duties, obligations, or liabilities shall be read into this
Agreement or otherwise exist. The duties of the Administrative Agent shall be
mechanical and administrative in nature. The Documentation Agent, the
Administrative Agent, the Managing Agents and the Syndication Agent shall not
have by reason of this Agreement a fiduciary or trust relationship in respect of
any Bank; and nothing in this Agreement, expressed or implied, is intended to or
shall be so construed as to impose upon the Documentation Agent, the
Administrative Agent, the Managing Agents or the Syndication Agent any
obligations in respect of this Agreement except as expressly set forth herein.
Each Bank expressly acknowledges (i) that the Documentation Agent, the
Administrative Agent, the Managing Agents and the Syndication Agent have not
made any representations or warranties to it and that no act by the
Documentation Agent, any Managing Agent, the Syndication Agent or the
Administrative Agent hereafter taken, including any review of the affairs of any
of the Loan Parties, shall be deemed to constitute any representation or
warranty by the Documentation Agent, any Managing Agent, the Syndication Agent
or the Administrative Agent to any Bank; (ii) that it has made and will continue
to make, without reliance upon the Documentation Agent, the Administrative
Agent, the Managing Agents and the Syndication Agent, its own independent
investigation of the financial condition and affairs and its own appraisal of
the creditworthiness of each of the Loan Parties in connection with this
Agreement and the making and continuance of the Revolving Credit Loans
hereunder; and (iii) except as expressly provided herein, that the Documentation
Agent, the Managing Agents, the Syndication Agent and the Administrative Agent
shall have no duty or responsibility, either initially or on a continuing basis,
to provide any Bank with any credit or other information with respect thereto,
whether coming into its possession before the making of any Revolving Credit
Loan or at any time or times thereafter.
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9.4 ACTIONS IN DISCRETION OF DOCUMENTATION AGENT AND ADMINISTRATIVE AGENT;
----------------------------------------------------------------------
INSTRUCTIONS FROM THE BANKS.
----------------------------
The Documentation Agent and the Administrative Agent each agrees, upon the
written request of the Required Banks, to take or refrain from taking any action
of the type specified as being within the Documentation Agent's or the
Administrative Agent's rights, powers or discretion herein, PROVIDED that the
Documentation Agent or Administrative Agent shall not be required to take any
action which exposes the Documentation Agent or the Administrative Agent to
personal liability or which is contrary to this Agreement or any other Loan
Document or applicable Law. In the absence of a request by the Required Banks,
the Documentation Agent or the Administrative Agent shall have authority, in its
sole discretion, to take or not to take any such action, unless this Agreement
specifically requires the consent of the Required Banks or all of the Banks. Any
action taken or failure to act pursuant to such instructions or discretion shall
be binding on the Banks, subject to Section 9.6. Subject to the provisions of
Section 9.6, no Bank shall have any right of action whatsoever against the
Administrative Agent as a result of the Documentation Agent or the
Administrative Agent acting or refraining from acting hereunder in accordance
with the instructions of the Required Banks, or in the absence of such
instructions, in the absolute discretion of the Documentation Agent or the
Administrative Agent.
9.5 REIMBURSEMENT AND INDEMNIFICATION OF ADMINISTRATIVE AGENT AND DOCUMENTATION
---------------------------------------------------------------------------
AGENT BY THE BORROWER.
----------------------
The Borrower unconditionally agrees to pay or reimburse the Administrative Agent
and Documentation Agent and save the Administrative Agent and Documentation
Agent harmless against (a) liability for the payment of all reasonable
out-of-pocket costs, expenses and disbursements, including fees and expenses of
counsel, appraisers and environmental consultants, incurred by the
Administrative Agent and Documentation Agent (i) in connection with the
development, negotiation, preparation, printing, execution, administration,
syndication, interpretation and performance of this Agreement and the other Loan
Documents, (ii) relating to any requested amendments, waivers or consents
pursuant to the provisions hereof, (iii) in connection with the enforcement of
this Agreement or any other Loan Document or collection of amounts due hereunder
or thereunder or the proof and allowability of any claim arising under this
Agreement or any other Loan Document, whether in bankruptcy or receivership
proceedings or otherwise, and (iv) in any workout or restructuring or in
connection with the protection, preservation, exercise or enforcement of any of
the terms hereof or of any rights hereunder or under any other Loan Document or
in connection with any foreclosure, collection or bankruptcy proceedings, and
(b) all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against the
Administrative Agent, in its capacity as such, the Documentation Agent, in its
capacity as such, in any way relating to or arising out of this Agreement or any
other Loan Documents or any action taken or omitted by the Documentation Agent
or the Administrative Agent hereunder or thereunder, PROVIDED that the Borrower
shall not be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
if the same results from the Documentation Agent's or Administrative Agent's
gross negligence or willful misconduct, or if the Borrower was not given notice
of the subject claim and the opportunity to participate in the defense thereof,
at its expense (except that the Borrower shall remain liable to the extent such
failure to give notice does not result in a loss to the Borrower), or if the
same results from a compromise or settlement agreement entered into without the
consent of the Borrower, which shall not be unreasonably withheld. In addition,
the Borrower agrees to reimburse and pay all reasonable out-of-pocket expenses
of the Administrative Agent's regular employees and agents engaged to perform
audits of the Loan Parties' books, records and business properties.
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9.6 EXCULPATORY PROVISIONS.
-----------------------
None of the Documentation Agent, the Administrative Agent, any Managing Agent,
the Syndication Agent or any Issuing Letter of Credit Bank or any of their
respective directors, officers, employees, agents, attorneys or Affiliates shall
(a) be liable to any Bank for any action taken or omitted to be taken by it or
them hereunder, or in connection herewith including pursuant to any Loan
Document, unless caused by its or its respective directors, officers, employees,
agents, attorneys or Affiliates own gross negligence or willful misconduct, (b)
be responsible in any manner to any of the Banks for the effectiveness,
enforceability, genuineness, validity or due execution of this Agreement or any
other Loan Documents or for any recital, representation, warranty, document,
certificate, report or statement herein or made or furnished under or in
connection with this Agreement or any other Loan Documents, or (c) be under any
obligation to any of the Banks to ascertain or to inquire as to the performance
or observance of any of the terms, covenants or conditions hereof or thereof on
the part of the Loan Parties, or the financial condition of the Loan Parties, or
the existence or possible existence of any Event of Default or Potential
Default. None of the Documentation Agent, the Administrative Agent, any Managing
Agent, the Syndication Agent or Issuing Letter of Credit Bank or any Bank or any
of their respective directors, officers, employees, agents, attorneys or
Affiliates shall be liable to any of the Loan Parties for consequential damages
resulting from any breach of contract, tort or other wrong in connection with
the negotiation, documentation, administration or collection of the Revolving
Credit Loans or any of the Loan Documents.
9.7 REIMBURSEMENT AND INDEMNIFICATION BY BANKS OF THE DOCUMENTATION AGENT, THE
--------------------------------------------------------------------------
MANAGING AGENTS, THE SYNDICATION AGENT AND THE ADMINISTRATIVE AGENT.
--------------------------------------------------------------------
Each Bank agrees to reimburse and indemnify the Documentation Agent, the
Administrative Agent, any Managing Agent, the Syndication Agent and any Issuing
Letter of Credit Bank (to the extent not reimbursed by the Borrower and without
limiting the Obligation of the Borrower to do so) in proportion to its Ratable
Share from and against all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against the
Documentation Agent, the Administrative Agent, any Managing Agent, the
Syndication Agent or any Issuing Letter of Credit Bank in its capacity as such,
in any way relating to or arising out of this Agreement or any other Loan
Documents or any action taken or omitted by the Documentation Agent, the
Administrative Agent, a Managing Agent, the Syndication Agent or any Issuing
Letter of Credit Bank hereunder or thereunder, PROVIDED that no Bank shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements (a) if
the same results from the Documentation Agent's, Administrative Agent's, any
Managing Agent's, the Syndication Agent's or any Issuing Letter of Credit Bank's
gross negligence or willful misconduct, or (b) if such Bank was not given notice
of the subject claim and the opportunity to participate in the defense thereof,
at its expense (except that such Bank shall remain liable to the extent such
failure to give notice does not result in a loss to the Bank), or (c) if the
same results from a compromise and settlement agreement entered into without the
consent of such Bank, which shall not be unreasonably withheld. In addition,
each Bank agrees promptly upon demand to reimburse the Administrative Agent (to
the extent not reimbursed by the Borrower and without limiting the Obligation of
the Borrower to do so) in proportion to its Ratable Share for all amounts due
and payable by the Borrower to the Administrative Agent in connection with the
Administrative Agent's periodic audit of the Loan Parties' books, records and
business properties.
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9.8 RELIANCE BY DOCUMENTATION AGENT, ADMINISTRATIVE AGENT, MANAGING AGENTS AND
--------------------------------------------------------------------------
SYNDICATION AGENT.
------------------
The Documentation Agent, the Administrative Agent, the Managing Agents, the
Syndication Agent and the Issuing Letter of Credit Banks shall be entitled to
rely upon any writing, telegram, telex or teletype message, resolution, notice,
consent, certificate, letter, cablegram, statement, order or other document or
conversation by telephone or otherwise believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person or Persons, and upon
the advice and opinions of counsel and other professional advisers selected by
the Administrative Agent. The Documentation Agent, the Administrative Agent, the
Managing Agents, the Syndication Agent and the Issuing Letter of Credit Banks
shall be fully justified in failing or refusing to take any action hereunder
unless it shall first be indemnified to its satisfaction by the Banks against
any and all liability and expense (other than a liability or expense relating to
gross negligence or willful misconduct) which may be incurred by it by reason of
taking or continuing to take any such action.
9.9 NOTICE OF DEFAULT.
------------------
The Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of any Potential Default or Event of Default unless the
Administrative Agent has received written notice from a Bank or the Borrower
referring to this Agreement, describing such Potential Default or Event of
Default and stating that such notice is a "notice of default."
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9.10 NOTICES.
--------
The Administrative Agent and the Documentation Agent shall promptly send to each
Bank a copy of all notices and other documents received from the Borrower
pursuant to the provisions of this Agreement or the other Loan Documents
promptly upon receipt thereof. The Administrative Agent shall promptly notify
the Borrower and the other Banks of each change in the Base Rate and the
effective date thereof.
9.11 BANKS IN THEIR INDIVIDUAL CAPACITIES.
-------------------------------------
With respect to their Revolving Credit Commitments and the Revolving Credit
Loans made by them, the Documentation Agent and the Administrative Agent shall
have the same rights and powers hereunder as any other Bank and may exercise the
same as though it were not the Documentation Agent or the Administrative Agent,
and the term "Banks" shall, unless the context otherwise indicates, include the
Documentation Agent and the Administrative Agent in their individual capacity.
The Documentation Agent and its Affiliates, the Administrative Agent and its
Affiliates and each of the Banks and their respective Affiliates may, without
liability to account, except as prohibited herein, make loans to, accept
deposits from, discount drafts for, act as trustee under indentures of, and
generally engage in any kind of banking or trust business with, the Loan Parties
and their Affiliates, in the case of the Documentation Agent, as though it were
not acting as Documentation Agent hereunder and in the case of each Bank, as
though such Bank were not a Bank hereunder.
9.12 HOLDERS OF REVOLVING CREDIT NOTES.
----------------------------------
The Administrative Agent may deem and treat any payee of any Revolving Credit
Note as the owner thereof for all purposes hereof unless and until written
notice of the assignment or transfer thereof shall have been filed with the
Administrative Agent. Any request, authority or consent of any Person who at the
time of making such request or giving such authority or consent is the holder of
any Revolving Credit Note shall be conclusive and binding on any subsequent
holder, transferee or assignee of such Revolving Credit Note or of any Revolving
Credit Note or Revolving Credit Notes issued in exchange therefor.
9.13 EQUALIZATION OF BANKS.
----------------------
The Banks and the holders of any participations in any Revolving Credit Notes
agree among themselves that, with respect to all amounts received by any Bank or
any such holder for application on any Obligation hereunder or under any
Revolving Credit Note or under any such participation, whether received by
voluntary payment, by realization upon security, by the exercise of the right of
set-off or banker's lien, by counterclaim or by any other non-pro rata source,
equitable adjustment will be made in the manner stated in the following sentence
so that, in effect, all such excess amounts will be shared ratably among the
Banks and such holders in proportion to their interests in payments under the
Revolving Credit Notes, except as otherwise provided in Sections 3.4.2 or 4.6.1.
The Banks or any such holder receiving any such amount shall purchase for cash
from each of the other Banks an interest in such Bank's Revolving Credit Loans
in such amount as shall result in a ratable participation by the Banks and each
such holder in the aggregate unpaid amount under the Revolving Credit Notes,
PROVIDED that if all or any portion of such excess amount is thereafter
recovered from the Bank or the holder making such purchase, such purchase shall
be rescinded and the purchase price restored to the extent of such recovery,
together with interest or other amounts, if any, required by law (including
court order) to be paid by the Bank or the holder making such purchase.
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9.14 SUCCESSOR ADMINISTRATIVE AND DOCUMENTATION AGENTS.
--------------------------------------------------
The Administrative Agent (i) may resign as Administrative Agent or (ii) shall
resign if such resignation is requested by the Required Banks (if the
Administrative Agent is a Bank, the Administrative Agent's Revolving Credit
Loans and its Revolving Credit Commitment shall be considered in determining
whether the Required Banks have requested such resignation), in either case of
(i) or (ii) by giving not less than thirty (30) days' prior written notice to
the Borrower. The Documentation Agent may resign as Documentation Agent. If the
Administrative Agent or Documentation Agent shall resign under this Agreement,
then subject to the consent of the Borrower (which consent shall not be
unreasonably withheld and which consent shall not be required during any period
in which an Event of Default exists) either (a) the Required Banks shall appoint
from among the Banks a successor administrative agent or documentation agent for
the Banks, or (b) if a successor agent shall not be so appointed and approved
within the thirty (30) day period following the Administrative Agent's notice or
the Documentation Agent's notice to the Banks of its resignation, then the
Administrative Agent or the Documentation Agent, as the case may be, shall
appoint a successor administrative agent or documentation agent, as the case may
be, who shall serve as Administrative Agent or Documentation Agent until such
time as the Required Banks appoint a successor administrative agent or
documentation agent. Upon its appointment, such successor administrative agent
or documentation agent shall succeed to the rights, powers and duties of the
Administrative Agent or the Documentation Agent, as the case may be, and the
term "Administrative Agent" or "Documentation Agent" shall mean such successor
effective upon its appointment, and the former Administrative Agent's or
Documentation Agent's rights, powers and duties as Administrative Agent or
Documentation Agent, as the case may be, shall be terminated without any other
or further act or deed on the part of such former Administrative Agent or
Documentation Agent or any of the parties to this Agreement. After the
resignation of any Administrative Agent or Documentation Agent hereunder, the
provisions of this Article shall inure to the benefit of such former
Administrative Agent or Documentation Agent and such former Administrative Agent
or Documentation Agent shall not by reason of such resignation be deemed to be
released from liability for any actions taken or not taken by it while it was an
Administrative Agent or Documentation Agent under this Agreement.
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9.15 OTHER FEES.
-----------
The Borrower shall pay to the Administrative Agent the administrative fees due
pursuant to that certain commitment letter dated March 25, 1996 among the
Borrower and the various Agents at the times set forth in such letter.
9.16 AVAILABILITY OF FUNDS.
----------------------
Unless the Administrative Agent shall have been notified by a Bank prior to the
date upon which a Revolving Credit Loan is to be made that such Bank does not
intend to make available to the Administrative Agent such Bank's portion of such
Revolving Credit Loan, the Administrative Agent may assume that such Bank has
made or will make such proceeds available to the Administrative Agent on such
date and the Administrative Agent may, in reliance upon such assumption (but
shall not be required to), make available to the Borrower a corresponding
amount. If such corresponding amount is not in fact made available to the
Administrative Agent by such Bank, the Administrative Agent shall be entitled to
recover such amount on demand from such Bank (or, if such Bank fails to pay such
amount forthwith upon such demand from the Borrower) together with interest
thereon, in respect of each day during the period commencing on the date such
amount was made available to the Borrower and ending on the date the
Administrative Agent recovers such amount, at a rate per annum equal to the
Federal Funds Effective Rate.
9.17 CALCULATIONS.
-------------
In the absence of gross negligence or willful misconduct, the Administrative
Agent shall not be liable for any error in computing the amount payable to any
Bank whether in respect of the Revolving Credit Loans, fees or any other amounts
due to the Banks under this Agreement. In the event an error in computing any
amount payable to any Bank is made, the Administrative Agent, the Borrower and
each affected Bank shall, forthwith upon discovery of such error, make such
adjustments as shall be required to correct such error, and any compensation
therefor will be calculated at the Federal Funds Effective Rate.
9.18 BENEFICIARIES.
--------------
Except as expressly provided herein, the provisions of this Article are solely
for the benefit of the Documentation Agent, the Administrative Agent, the
Managing Agents, the Syndication Agent and the Banks, and the Loan Parties shall
not have any rights to rely on or enforce any of the provisions hereof. In
performing its functions and duties under this Agreement, the Administrative
Agent shall act solely as agent of the Banks and does not assume and shall not
be deemed to have assumed any obligation toward or relationship of agency or
trust with or for any of the Loan Parties.
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9.19 ABSENCE OF DUTIES OF MANAGING AGENTS AND SYNDICATION AGENT.
-----------------------------------------------------------
The Managing Agents and the Syndication Agent shall have no obligations or
duties under this Agreement.
10. MISCELLANEOUS
-------------
10.1 MODIFICATIONS, AMENDMENTS OR WAIVERS.
-------------------------------------
With the written consent of the Required Banks, the Administrative Agent, acting
on behalf of all the Banks, and the Borrower, on behalf of the Loan Parties, may
from time to time enter into written agreements amending or changing any
provision of this Agreement or any other Loan Document or the rights of the
Banks or the Loan Parties hereunder or thereunder, or may grant written waivers
or consents to a departure from the due performance of the Obligations of the
Loan Parties hereunder or thereunder; provided, however, that the written
consent of the Required Banks shall not be required with respect to the joinder
of additional Loan Parties pursuant to Section 10.18. Any such agreement, waiver
or consent made with such written consent shall be effective to bind all the
Banks and the Loan Parties; PROVIDED, that, without the written consent of all
the Banks, no such agreement, waiver or consent may be made which will:
10.1.1 INCREASE OF REVOLVING CREDIT COMMITMENT; EXTENSION OR EXPIRATION DATE.
----------------------------------------------------------------------
Increase the amount of the Revolving Credit Commitment of any Bank hereunder or
extend the Expiration Date;
10.1.2 EXTENSION OF PAYMENT; REDUCTION OF PRINCIPAL INTEREST OR FEES;
--------------------------------------------------------------
MODIFICATION OF TERMS OF PAYMENT.
---------------------------------
Whether or not any Revolving Credit Loans are outstanding, extend the time for
payment of principal or interest of any Revolving Credit Loan, the Commitment
Fee or any other fee payable to any Bank, or reduce the principal amount of or
the rate of interest borne by any Revolving Credit Loan or reduce the Commitment
Fee or any other fee payable to any Bank, or otherwise affect the terms of
payment of the principal of or interest of any Revolving Credit Loan, the
Commitment Fee or any other fee payable to any Bank;
10.1.3 RELEASE OF GUARANTOR.
---------------------
Release the Company or any Material Subsidiary from its Obligations under the
Master Guaranty Agreement or any other security for any of the Loan Parties'
Obligations; or
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10.1.4 MISCELLANEOUS
-------------
Amend Sections 4.2 [Pro Rata Treatment of Banks], 9.6 [Exculpatory Provisions]
or 9.13 [Equalization of Banks] or this Section 10.1, alter any provision
regarding the pro rata treatment of the Banks, change the definition of Required
Banks, or change any requirement providing for the Banks or the Required Banks
to authorize the taking of any action hereunder.
No agreement, waiver or consent which would modify the interests, rights or
obligations of the Documentation Agent in its capacity as Documentation Agent,
of the Administrative Agent in its capacity as Administrative Agent or of an
Issuing Letter of Credit Bank in its capacity as the issuer of Letters of Credit
shall be effective without the written consent of the Documentation Agent, the
Administrative Agent or such Issuing Letter of Credit Bank, respectively.
10.2 NO IMPLIED WAIVERS; CUMULATIVE REMEDIES; WRITING REQUIRED.
----------------------------------------------------------
No course of dealing and no delay or failure of the Documentation Agent, the
Administrative Agent or any Bank in exercising any right, power, remedy or
privilege under this Agreement or any other Loan Document shall affect any other
or future exercise thereof or operate as a waiver thereof, nor shall any single
or partial exercise thereof or any abandonment or discontinuance of steps to
enforce such a right, power, remedy or privilege preclude any further exercise
thereof or of any other right, power, remedy or privilege. The rights and
remedies of the Documentation Agent, the Administrative Agent, the Syndication
Agent, the Managing Agents, the Issuing Letter of Credit Banks and the Banks
under this Agreement and any other Loan Documents are cumulative and not
exclusive of any rights or remedies which they would otherwise have. Any waiver,
permit, consent or approval of any kind or character on the part of any Bank of
any breach or default under this Agreement or any such waiver of any provision
or condition of this Agreement must be in writing and shall be effective only to
the extent specifically set forth in such writing.
10.3 REIMBURSEMENT AND INDEMNIFICATION OF BANKS BY THE BORROWER; TAXES.
------------------------------------------------------------------
The Borrower agrees unconditionally upon demand to pay or reimburse to each Bank
(other than the Administrative Agent and the Documentation Agent, as to which
the Borrower's Obligations are set forth in Section 9.5) and to save such Bank
harmless against (i) liability for the payment of all reasonable out-of-pocket
costs, expenses and disbursements (including fees and expenses of counsel for
each Bank except with respect to (a) and (b) below), incurred by such Bank (a)
in connection with the administration and interpretation of this Agreement, and
other instruments and documents to be delivered hereunder, (b) relating to any
amendments, waivers or consents pursuant to the provisions hereof, (c) in
connection with the enforcement of this Agreement or any other Loan Document, or
collection of amounts due hereunder or thereunder or the proof and allowability
of any claim arising under this Agreement or any other Loan Document, whether in
bankruptcy or receivership proceedings or otherwise, and (d) in any workout or
restructuring or in connection with the protection, preservation, exercise or
enforcement of any of the terms hereof or of any rights hereunder or under any
other Loan Document or in connection with any foreclosure, collection or
bankruptcy proceedings, or (ii) all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by or asserted
against such Bank, in its capacity as such, in any way relating to or arising
out of this Agreement (including without limitation Section 4.6.2) or any other
Loan Documents or any action taken or omitted by such Bank hereunder or
thereunder, PROVIDED that the Borrower shall not be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements (A) if the same results from such Bank's
gross negligence or willful misconduct, or (B) if the Borrower was not given
notice of the subject claim and the opportunity to participate in the defense
thereof, at its expense (except that the Borrower shall remain liable to the
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extent such failure to give notice does not result in a loss to the Borrower),
or (C) if the same results from a compromise or settlement agreement entered
into without the consent of the Borrower, which shall not be unreasonably
withheld. The Banks will attempt to minimize the fees and expenses of legal
counsel for the Banks which are subject to reimbursement by the Borrower
hereunder by considering the usage of one law firm to represent the Banks and
the Administrative Agent if appropriate under the circumstances. The Borrower
agrees unconditionally to pay all stamp, documentary, transfer, recording or
filing taxes or fees and similar impositions now or hereafter determined by the
Administrative Agent or any Bank to be payable in connection with this Agreement
or any other Loan Document, and the Borrower agrees unconditionally to save the
Administrative Agent and the Banks harmless from and against any and all present
or future claims, liabilities or losses with respect to or resulting from any
omission to pay or delay in paying any such taxes, fees or impositions.
10.4 HOLIDAYS.
---------
Whenever any payment or action to be made or taken hereunder shall be stated to
be due on a day which is not a Business Day, such payment or action shall be
made or taken on the next following Business Day (except as provided in Section
3.2.1 with respect to Interest Periods under the Revolving Credit Euro-Rate
Option), and such extension of time shall be included in computing interest or
fees, if any, in connection with such payment or action.
10.5 FUNDING BY BRANCH, SUBSIDIARY OR AFFILIATE.
-------------------------------------------
10.5.1 NOTIONAL FUNDING.
-----------------
Each Bank shall have the right from time to time, without notice to the
Borrower, to deem any branch, Subsidiary or Affiliate (which for the purposes of
this Section 10.5 shall mean any corporation or association which is directly or
indirectly controlled by or is under direct or indirect common control with any
corporation or association which directly or indirectly controls such Bank) of
such Bank to have made, maintained or funded any Revolving Credit Loan to which
the Revolving Credit Euro-Rate Option applies at any time, PROVIDED that
immediately following (on the assumption that a payment were then due from the
Borrower to such other office), and as a result of such change, the Borrower
would not be under any greater financial obligation pursuant to Section than it
would have been in the absence of such change. Notional funding offices may be
selected by each Bank without regard to such Bank's actual methods of making,
maintaining or funding the Revolving Credit Loans or any sources of funding
actually used by or available to such Bank; and
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10.5.2 ACTUAL FUNDING.
---------------
Each Bank shall have the right from time to time to make or maintain any
Revolving Credit Loan by arranging for a branch, Subsidiary or Affiliate of such
Bank to make or maintain such Revolving Credit Loan subject to the last sentence
of this Section 10.5.2. If any Bank causes a branch, Subsidiary or Affiliate to
make or maintain any part of the Revolving Credit Loans hereunder, all terms and
conditions of this Agreement shall, except where the context clearly requires
otherwise, be applicable to such part of the Revolving Credit Loans to the same
extent as if such Revolving Credit Loans were made or maintained by such Bank,
but in no event shall any Bank's use of such a branch, Subsidiary or Affiliate
to make or maintain any part of the Revolving Credit Loans hereunder cause such
Bank or such branch, Subsidiary or Affiliate to incur any cost or expenses
payable by the Borrower hereunder or require the Borrower to pay any other
compensation to any Bank (including any expenses incurred or payable pursuant to
Section 4.6) which would otherwise not be incurred.
10.6 NOTICES.
--------
All notices, requests, demands, directions and other communications (as used in
this Section 10.6, collectively referred to as "notices") given to or made upon
any party hereto under the provisions of this Agreement shall be by telephone
or in writing (including telex or facsimile communication) unless otherwise
expressly permitted hereunder and shall be delivered or sent by telex or
facsimile to the respective parties at the addresses and numbers set forth
under their respective names on the signature pages hereof or in accordance
with any subsequent unrevoked written direction from any party to the others.
All notices shall, except as otherwise expressly herein provided, be
effective (a) in the case of telex or facsimile, when received, (b) in the case
of hand-delivered notice, when hand-delivered, (c) in the case of telephone,
when telephoned, PROVIDED, however, that in order to be effective, telephonic
notices must be confirmed in writing no later than the next day by letter,
facsimile or telex, (d) if given by mail, four (4) days after such
communication is deposited in the mail with first-class postage prepaid, return
receipt requested, and (e) if given by any other means (including by air
courier), when delivered; PROVIDED, that notices to the Administrative Agent
shall not be effective until received. Any Bank giving any notice to any Loan
Party shall simultaneously send a copy thereof to the Administrative Agent, and
the Administrative Agent shall promptly notify the other Banks of the receipt
by it of any such notice.
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10.7 SEVERABILITY.
------------------
The provisions of this Agreement are intended to be severable. If any provision
of this Agreement shall be held invalid or unenforceable in whole or in part in
any jurisdiction, such provision shall, as to such jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without in any manner
affecting the validity or enforceability thereof in any other jurisdiction or
the remaining provisions hereof in any jurisdiction.
10.8 GOVERNING LAW.
--------------
Each Letter of Credit and Section 2.9 shall be subject to the Uniform Customs
and Practice for Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No. 500, as the same may be revised or amended from time to
time, and to the extent not inconsistent therewith, the internal laws of the New
York without regard to its conflict of laws principles and the balance of this
Agreement shall be deemed to be a contract under the Laws of the Ohio and for
all purposes shall be governed by and construed and enforced in accordance with
the internal laws of the State of Ohio without regard to its conflict of laws
principles.
10.9 PRIOR UNDERSTANDING.
--------------------
This Agreement and the other documents and instruments executed in connection
herewith supersede all prior understandings and agreements, whether written or
oral, between the parties hereto and thereto relating to the transactions
provided for herein and therein, including any prior confidentiality agreements
and commitments.
10.10 DURATION; SURVIVAL.
-------------------
All representations and warranties of the Loan Parties contained herein or made
in connection herewith shall survive the making of Revolving Credit Loans and
issuance of Letters of Credit and shall not be waived by the execution and
delivery of this Agreement, any investigation by the Administrative Agent, the
Documentation Agent, the Syndication Agent, the Managing Agents, the Issuing
Letter of Credit Banks or the Banks, the making of Revolving Credit Loans,
issuance of Letters of Credit, or payment in full of the Revolving Credit Loans.
All covenants and agreements of the Loan Parties contained in Sections 7.1, 7.2
and 7.3 shall continue in full force and effect from and after the date hereof
so long as the Borrower may borrow or request Letters of Credit hereunder and
until termination of the Revolving Credit Commitments, repayment of all
Revolving Credit Loans and expiration or termination of all Letters of Credit.
All covenants and agreements of the Borrower contained herein relating to the
payment of principal, interest, premiums, additional compensation or expenses
and indemnification, including those set forth in the Revolving Credit Notes,
Article 4 and Sections 9.5, 9.7 and 10.3, shall survive payment in full of the
Revolving Credit Loans, expiration or termination of the Letters of Credit and
termination of the Revolving Credit Commitments.
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10.11 SUCCESSORS AND ASSIGNS.
-----------------------
This Agreement shall be binding upon and shall inure to the benefit of the
Banks, the Documentation Agent, the Administrative Agent, the Syndication
Agent, the Managing Agents, the Issuing Letter of Credit Banks, the Loan
Parties and their respective successors and assigns, except that none of the
Loan Parties may assign or transfer any of its rights and Obligations hereunder
or any interest herein without consent of all Banks. Each Bank may, at its own
cost, make assignments of all or any part of its Revolving Credit Commitment
and Revolving Credit Loans and its Ratable Share of Letter of Credit
Outstandings to one or more banks or other entities, subject to the consent of
the Borrower (which consent shall not be required during any period in which an
Event of Default exists), the Issuing Letter of Credit Banks and the
Administrative Agent with respect to any assignee, such consents not to be
unreasonably withheld, and PROVIDED that assignments may not be made in amounts
less than $10,000,000. Each Bank may, at its own cost, grant participations in
all or any part of its Revolving Credit Commitment and the Revolving Credit
Loans made by it and of its Ratable Share of Letter of Credit Outstandings to
one or more banks or other entities, without the consent of any party hereto.
In the case of an assignment, upon receipt by the Administrative Agent of the
Assignment and Assumption Agreement, the assignee shall have, to the extent of
such assignment (unless otherwise provided therein), the same rights, benefits
and obligations as it would have if it had been a signatory Bank hereunder, the
Revolving Credit Commitments in Section 2.1 shall be adjusted accordingly, and
upon surrender of any Revolving Credit Note subject to such assignment, the
Borrower shall execute and deliver a new Revolving Credit Note to the assignee
in an amount equal to the amount of the Revolving Credit Commitment assumed by
it and a new Revolving Credit Note to the assigning Bank in an amount equal to
the Revolving Credit Commitment retained by it hereunder. Any assigning Bank
shall pay to the Administrative Agent a service fee in the amount of $3,500 for
each assignment, which amount shall not be subject to reimbursement or
indemnification by the Borrower. In the case of a participation, the
participant shall only have the rights specified in Section 8.2.3 (the
participant's rights against such Bank in respect of such participation to be
those set forth in the agreement executed by such Bank in favor of the
participant relating thereto and not to include any voting rights except with
respect to changes of the type referenced in Sections 10.1.1, 10.1.2, and
10.1.3), all of such Bank's obligations under this Agreement or any other Loan
Document shall remain unchanged, and all amounts payable by any Loan Party
hereunder or thereunder shall be determined as if such Bank had not sold such
participation. Any assignee or participant which is not incorporated under the
Laws of the United States of America or a state thereof shall deliver to the
Borrower and the Administrative Agent the form of certificate described in
Section 10.17 relating to federal income tax withholding. Each Bank may furnish
any publicly available information concerning any Loan Party or its
Subsidiaries and any other information concerning any Loan Party or its
Subsidiaries in the possession of such Bank from time to time to assignees and
participants (including prospective assignees or participants), PROVIDED that
such assignees and participants agree to be bound by the provisions of Section
10.12.
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10.12 CONFIDENTIALITY.
----------------
The Documentation Agent, the Administrative Agent and the Banks each agree to
keep confidential all information obtained from any Loan Party or its
Subsidiaries which is nonpublic and confidential or proprietary in nature
(including any information the Borrower specifically designates as
confidential), except as provided below, and to use such information only in
connection with their respective capacities under this Agreement and for the
purposes contemplated hereby. The Documentation Agent, the Administrative Agent
and the Banks shall be permitted to disclose such information (i) to outside
legal counsel, accountants and other professional advisors who need to know such
information in connection with the administration and enforcement of this
Agreement and who are notified that the information is to be treated as
confidential, (ii) to assignees and participants as contemplated by Section
10.11, (iii) to the extent requested by any bank regulatory authority or, with
notice to the Borrower if not prohibited, as otherwise required by applicable
Law or by any subpoena or similar legal process, or in connection with any
investigation or proceeding arising out of the transactions contemplated by this
Agreement, (iv) if it becomes publicly available other than as a result of a
breach of this Agreement or becomes available from a source not known to be
subject to confidentiality restrictions, (v) if the Borrower shall have
consented to such disclosure, or (vi) after notice to the Borrower unless the
Borrower is an adverse party in such litigation, in connection with any
litigation to which any Bank is a party the subject matter of which involves
this Agreement or is deemed necessary upon the advice of legal counsel of such
Bank by such Bank in any defense of such litigation.
10.13 COUNTERPARTS.
-------------
This Agreement may be executed by different parties hereto on any number of
separate counterparts, including facsimiles, each of which, when so executed and
delivered, shall be an original, and all such counterparts shall together
constitute one and the same instrument.
10.14 DOCUMENTATION AGENT'S OR BANK'S CONSENT.
----------------------------------------
Whenever the Documentation Agent's, the Administrative Agent's any Managing
Agent's, the Syndication Agent's, any Issuing Letter of Credit Bank's or any
Bank's consent is required to be obtained under this Agreement or any of the
other Loan Documents as a condition to any action, inaction, condition or event,
the Documentation Agent, the Administrative Agent each Managing Agent, the
Syndication Agent, each Issuing Letter of Credit Bank and each Bank shall be
authorized to give or withhold such consent in its sole and absolute discretion
and to condition its consent upon the giving of additional collateral, the
payment of money or any other matter.
10.15 EXCEPTIONS.
-----------
The representations, warranties and covenants contained herein shall be
independent of each other, and no exception to any representation, warranty or
covenant shall be deemed to be an exception to any other representation,
warranty or covenant contained herein unless expressly provided, nor shall any
such exceptions be deemed to permit any action or omission that would be in
contravention of applicable Law.
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10.16 CONSENT TO FORUM; WAIVER OF JURY TRIAL.
---------------------------------------
EACH LOAN PARTY HEREBY IRREVOCABLY CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF
THE COURT OF COMMON PLEAS OF FRANKLIN COUNTY AND THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF OHIO, AND WAIVES PERSONAL SERVICE OF ANY AND
ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY
CERTIFIED OR REGISTERED MAIL DIRECTED TO SUCH LOAN PARTY AT THE ADDRESSES
PROVIDED FOR IN SECTION 10.6 AND SERVICE SO MADE SHALL BE DEEMED TO BE
COMPLETED UPON ACTUAL RECEIPT THEREOF. EACH LOAN PARTY WAIVES ANY OBJECTION TO
JURISDICTION AND VENUE OF ANY ACTION INSTITUTED AGAINST IT AS PROVIDED HEREIN
AND AGREES NOT TO ASSERT ANY DEFENSE BASED ON LACK OF JURISDICTION OR VENUE OR
INCONVENIENT FORUM. EACH LOAN PARTY, THE ADMINISTRATIVE AGENT AND THE BANKS
HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF
ANY KIND ARISING OUT OF OR RELATED TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT
OR THE COLLATERAL TO THE FULL EXTENT PERMITTED BY LAW.
10.17 TAX WITHHOLDING CLAUSE.
-----------------------
Each Bank or assignee or participant of a Bank that is not incorporated under
the Laws of the United States of America or a state thereof agrees that it will
deliver to each of the Borrower and the Administrative Agent two (2) duly
completed copies of the following: (i) Internal Revenue Service Form W-9, 4224
or 1001, or other applicable form prescribed by the Internal Revenue Service,
certifying that such Bank, assignee or participant is entitled to receive
payments under this Agreement and the other Loan Documents without deduction or
withholding of any United States federal income taxes, or is subject to such tax
at a reduced rate under an applicable tax treaty, or (ii) Internal Revenue
Service Form W-8 or other applicable form or a certificate of such Bank,
assignee or participant indicating that no such exemption or reduced rate is
allowable with respect to such payments. Each Bank, assignee or participant
required to deliver to the Borrower and the Documentation Agent a form or
certificate pursuant to the preceding sentence shall deliver such form or
certificate as follows: (A) each Bank which is a party hereto on the Closing
Date shall deliver such form or certificate at least five (5) Business Days
prior to the first date on which any interest or fees are payable by the
Borrower hereunder for the account of such Bank; (B) each assignee or
participant shall deliver such form or certificate at least five (5) Business
Days before the effective date of such assignment or participation (unless the
Documentation Agent in its sole discretion shall permit such assignee or
participant to deliver such form or certificate less than five (5) Business Days
before such date in which case it shall be due on the date specified by the
Documentation Agent). Each Bank, assignee or participant which so delivers a
Form W-8, W-9, 4224 or 1001 further undertakes to deliver to each of the
Borrower and the Documentation Agent two (2) additional copies of such form (or
a successor form) on or before the date that such form expires or becomes
obsolete or after the occurrence of any event requiring a change in the most
recent form so delivered by it, and such amendments thereto or extensions or
renewals thereof as may be reasonably requested by the Borrower or the
Documentation Agent, either certifying that such Bank, assignee or participant
is entitled to receive payments under this Agreement and the other Loan
Documents without deduction or withholding of any United States federal income
taxes or is subject to such tax at a reduced rate under an applicable tax treaty
or stating that no such exemption or reduced rate is allowable. The
Documentation Agent shall be entitled to withhold United States federal income
taxes at the full withholding rate unless the Bank, assignee or participant
establishes an exemption or that it is subject to a reduced rate as established
pursuant to the above provisions.
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10.18 JOINDER OF GUARANTORS.
----------------------
Any Subsidiary of the Borrower which is required to join the Master Guaranty
Agreement pursuant to Section 7.2.9 shall execute and deliver to the
Documentation Agent a signature page to the Master Guaranty Agreement and to the
Master Intercompany Subordination Agreement. The Loan Parties shall deliver such
Guarantor Joinder to the Documentation Agent within five (5) Business Days after
the date of the filing of such Subsidiary's articles of incorporation if the
Subsidiary is a corporation, the date of the filing of its certificate of
limited partnership if it is a limited partnership or the date of its
organization if it is an entity other than a limited partnership or corporation
or, if acquired, the date of acquisition.
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IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly
authorized, have executed this Agreement as of the day and year first above
written.
ATTEST: CONSOLIDATED STORES CORPORATION,
Borrower
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President and
Chief Financial Officer
[Seal] Address for Notices:
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
NATIONAL CITY BANK OF COLUMBUS,
as Administrative Agent, as
Managing Agent and as a Bank
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
Address for Notices:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
-101-
111
NATIONAL CITY BANK, as Managing Agent and as a
Bank
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Address for Notices:
National City Bank
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ #▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
BANK ONE, COLUMBUS, N.A., as Managing Agent and
as a Bank
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
Address for Notices:
Bank One, Columbus, NA
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
-102-
112
PNC BANK, OHIO, NATIONAL ASSOCIATION, as
Documentation Agent,
Managing Agent and as a Bank
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
Address for Notices:
National Corp. Banking
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
THE BANK OF NEW YORK, as Syndication Agent,
as Managing Agent and as a Bank
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
Address for Notices:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
-103-