4.1(d)** Amended and Restated Credit Agreement dated December 13, 2000
among the Registrant, Fleet Retail Financial Inc, and Bank of America,
N.A. as agents and the lendors set forth therein.
AMENDED AND RESTATED CREDIT AGREEMENT
$251,650,000
Among
WICKES INC. (formerly Wickes Lumber Company) (the "Borrower"),
as Borrower
EACH OF THE FINANCIAL INSTITUTIONS
INITIALLY A SIGNATORY HERETO,
TOGETHER WITH THOSE ASSIGNEES
PURSUANT TO SECTION 11.6 HEREOF ("Lenders"),
as Lenders
FLEET RETAIL FINANCE INC.
as Administrative Agent (the "Agent")
FLEET NATIONAL BANK
as Issuing Bank
and
BANK OF AMERICA, N.A., (the "Documentation Agent")
as Documentation Agent
Dated as of December 13, 2000
TABLE OF CONTENTS
Page
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ARTICLE 1...............................................................................................DEFINITIONS 1
1.1 General Definitions.............................................................................1
1.2 Accounting Terms and Determinations............................................................20
1.3 Other Defined Terms............................................................................20
ARTICLE 2...........................................................................................REVOLVING LOANS 20
2.1 Revolving Commitments..........................................................................20
2.2 Borrowing of Revolving Loans...................................................................21
2.3 Settlement of Lender Advances and Repayments...................................................23
2.4 Periodic Settlement of Agent Advances and Repayments...........................................23
2.5 Defaulting Lenders.............................................................................24
2.6 Mandatory Payments; Reduction of Commitments...................................................25
2.7 Maintenance of Loan Account; Statements of Account.............................................25
2.8 Payment Procedures.............................................................................26
2.9 Collection of Accounts.........................................................................26
2.10 Application of Payments........................................................................26
ARTICLE 3.........................................................................................LETTERS OF CREDIT 27
3.1 Issuance of Letters of Credit..................................................................27
3.2 Terms of Letters of Credit.....................................................................28
3.3 Revolving Lenders' Participation...............................................................28
3.4 Notice of Issuance.............................................................................28
3.5 Payment of Amounts Drawn Under Letters of Credit...............................................29
3.6 Payment by Revolving Lenders...................................................................29
3.7 Nature of Issuing Bank's Duties................................................................29
3.8 Obligations Absolute...........................................................................30
ARTICLE 4............................................................................................The Term Loans 31
4.1 Commitment to Make Term Loan...................................................................31
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4.2 Term Notes.....................................................................................31
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4.3 Repayment of Term Loan.........................................................................31
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4.4 Mandatory Prepayments..........................................................................32
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4.5 Optional Prepayments of Term Loans.............................................................33
ARTICLE 5...............................................................................INTEREST, FEES AND EXPENSES 33
5.1 Interest on Base Rate Loans....................................................................33
5.2 Interest on Eurodollar Rate Loans..............................................................34
5.3 Interest After Event of Default................................................................36
5.4 Reimbursement of Expenses......................................................................36
5.5 Unused Line Fee................................................................................36
5.6 Letter of Credit Fees..........................................................................36
5.7 Special Provisions Relating to Eurodollar Rate Loans...........................................37
5.8 Indemnification in Certain Events..............................................................40
5.9 Net Payments...................................................................................41
5.10 Affected Lenders...............................................................................42
5.11 Sharing of Payments............................................................................43
5.12 Calculations...................................................................................43
ARTICLE 6......................................................................................CONDITIONS PRECEDENT 44
6.1 Conditions Precedent to Effectiveness..........................................................44
6.2 Conditions Precedent to Effectiveness and to Each Revolving Loan and Letter of Credit..........45
ARTICLE 7............................................................................REPRESENTATIONS AND WARRANTIES 46
7.1 Organization and Qualification.................................................................46
7.2 Authority......................................................................................46
7.3 Enforceability.................................................................................46
7.4 No Conflict....................................................................................46
7.5 Consents and Filings...........................................................................47
7.6 Financial Data.................................................................................47
7.7 Subsidiaries...................................................................................47
7.8 No Judgment or Litigation......................................................................47
7.9 No Defaults....................................................................................48
7.10 Labor Matters..................................................................................48
7.11 Compliance with Law............................................................................48
7.12 ERISA..........................................................................................48
7.13 Compliance with Environmental Laws.............................................................49
7.14 Intellectual Property..........................................................................49
7.15 Licenses and Permits...........................................................................50
7.16 Title to Property..............................................................................50
7.17 Investment Company.............................................................................50
7.18 Taxes and Tax Returns..........................................................................50
7.19 Material Contracts.............................................................................51
7.20 Affiliate Transactions.........................................................................51
7.21 Accuracy and Completeness of Information.......................................................51
7.22 Recording Taxes................................................................................52
7.23 Solvency.......................................................................................52
7.24 No Change......................................................................................52
ARTICLE 8.....................................................................................AFFIRMATIVE COVENANTS 52
8.1 Financial Reporting............................................................................52
8.2 Collateral Reporting...........................................................................54
8.3 Notification Requirements......................................................................55
8.4 Corporate Existence............................................................................57
8.5 ERISA..........................................................................................58
8.6 Environmental and Other Matters................................................................58
8.7 Insurance; Casualty Loss.......................................................................58
8.8 Taxes..........................................................................................59
8.9 Compliance With Laws...........................................................................59
8.10 Use of Proceeds................................................................................60
8.11 Fiscal Year....................................................................................60
8.12 Intellectual Property..........................................................................60
8.13 Maintenance of Property........................................................................60
8.14 Books and Records; Inspections; Field Audits...................................................60
8.15 Further Assurances.............................................................................61
8.16 Secured Interest Rate Agreements...............................................................61
ARTICLE 9........................................................................................NEGATIVE COVENANTS 62
9.1 Unused Availability............................................................................62
9.2 Minimum Consolidated Net Worth.................................................................62
9.3 Capital Expenditures...........................................................................62
9.4 Additional Indebtedness........................................................................63
9.5 Liens..........................................................................................63
9.6 Sale of Assets.................................................................................65
9.7 Corporate Changes..............................................................................65
9.8 Guaranties.....................................................................................65
9.9 Restricted Payments............................................................................65
9.10 Investments....................................................................................66
9.11 Affiliate Transactions.........................................................................67
9.12 Prohibited Transactions Under ERISA............................................................67
9.13 Additional Bank Accounts.......................................................................68
9.14 Excess Cash....................................................................................69
9.15 Material Amendments of Material Contracts......................................................69
9.16 Additional Negative Pledges....................................................................69
9.17 Additional Subsidiaries; Acquisitions..........................................................69
9.18 Hedging Transactions...........................................................................71
9.19 Activities of Subsidiaries.....................................................................71
ARTICLE 10...........................................................................EVENTS OF DEFAULT AND REMEDIES 72
10.1 Events of Default..............................................................................72
10.2 Acceleration and Cash Collateralization........................................................73
10.3 Rescission of Acceleration.....................................................................73
10.4 Remedies.......................................................................................74
10.5 Right of Setoff................................................................................74
10.6 License for Use of Software and Other Intellectual Property....................................75
10.7 Deficiencies; Remedies Cumulative..............................................................75
ARTICLE 11................................................................................................THE AGENT 75
11.1 Appointment of Agent...........................................................................75
11.2 Nature of Duties of Agent, Documentation Agent and Syndication Agent...........................75
11.3 Lack of Reliance on Agent......................................................................76
11.4 Certain Rights of the Agent....................................................................76
11.5 Reliance by Agent..............................................................................76
11.6 Indemnification of Agent.......................................................................77
11.7 The Agent in its Individual Capacity...........................................................77
11.8 Holders of Notes...............................................................................77
11.9 Successor Agent................................................................................77
11.10 Collateral Matters.............................................................................78
11.11 Actions with Respect to Defaults...............................................................79
11.12 Delivery of Information........................................................................79
11.13 Syndication Agent..............................................................................80
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11.14 No Liability for Interest Rate Agreements or Lumber Hedging Agreements.........................80
ARTICLE 12............................................................................................MISCELLANEOUS 80
12.1 SUBMISSION TO JURISDICTION; WAIVERS............................................................80
12.2 Designated Senior Debt.........................................................................81
12.3 GOVERNING LAW..................................................................................81
12.4 Delays; Partial Exercise of Remedies...........................................................81
12.5 Notices........................................................................................81
12.6 Assignability..................................................................................82
12.7 Confidentiality................................................................................84
12.8 Indemnification................................................................................85
12.9 Entire Agreement; Successors and Assigns.......................................................85
12.10 Amendments and Waivers.........................................................................85
12.11 Nonliability of Agent and Lenders..............................................................86
12.12 Independent Nature of Lenders' Rights..........................................................86
12.13 Counterparts...................................................................................86
12.14 Effectiveness..................................................................................87
12.15 Severability...................................................................................87
12.16 Headings Descriptive...........................................................................87
12.17 Maximum Rate...................................................................................87
12.18 JURY TRIAL.....................................................................................88
ANNEX, EXHIBITS AND SCHEDULES
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Annex I Lenders and Commitment Amounts
Exhibit A Form of Revolving Note
Exhibit B Form of Term Note
Exhibit C Form of Compliance Certificate
Exhibit D Form of Borrowing Base Certificate
Exhibit E Form of Collateral Access Agreement
Exhibit F Form of Notice of Borrowing
Exhibit G Form of Assignment and Assumption Agreement
Exhibit H Form of Notice of Continuation
Exhibit I Form of Notice of Conversion
Exhibit J Authorized Officers
Exhibit K Blocked Account Agreement
Exhibit L Concentration Account Agreement
Schedule A Closing Documents List
Schedule B Disclosure Schedule
THIS AMENDED AND RESTATED CREDIT AGREEMENT (the "Credit Agreement") is
entered into as of December 13, 2000 among WICKES INC. (formerly Wickes Lumber
Company), a Delaware corporation (and any permitted successor or assign, the
"Borrower"), and each of those financial institutions identified as Lenders on
Annex I hereto (together with each of their successors and assigns, referred to
individually as a "Lender" and collectively as the "Lenders"), FLEET RETAIL
FINANCE INC., acting as agent for the Lenders in the manner and to the extent
described in Article 11 hereof (in such capacity, the "Agent"), BANK OF AMERICA,
N.A. (f/k/a Nationsbank, N.A.), as Documentation Agent (the "Documentation
Agent"), and FLEET NATIONAL BANK (f/k/a BankBoston, N.A.), as issuer of letters
of credit (in such capacity, the "Issuing Bank").
W I T N E S S E T H
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WHEREAS, on February 19, 1999, the Borrower, the Lenders, BankBoston, N.A.,
as Agent and Issuing Bank, BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Inc. and the
Documentation Agent entered into a certain Credit Agreement (as amended and in
effect, the "Existing Agreement"), pursuant to which, among other things, the
Lenders agreed to make Revolving Loans to the Borrower and the Issuing Bank
agreed to issue Letters of Credit for the account of the Borrower; and
WHEREAS, Fleet Retail Finance Inc. is the successor to BankBoston, N.A., as
Agent; and
WHEREAS, the Borrower has requested that the Agent, the Documentation
Agent, the Lenders, and the Issuing Bank amend the Existing Agreement in certain
respects in order, among other things, to provide a term loan to the Borrower
and the Agent, the Documentation Agent, the Lenders, and the Issuing Bank are
willing to do so on the terms set forth herein; and
WHEREAS, the parties hereto desire to amend and restate the Existing
Agreement in its entirety.
NOW, THEREFORE, the Borrower, the Lenders, the Issuing Bank, the
Documentation Agent, and the Agent hereby agree as follows:
ARTICLE 1. DEFINITIONS
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1.1 General Definitions.
As used herein, the following terms shall have the meanings herein
specified (to be equally applicable to both the singular and plural forms of the
terms defined):
Accounts shall mean "Accounts" as defined in the Security Agreement.
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Acquisition shall mean (a) the acquisition of all or substantially all of
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the assets of a Person, or of all or substantially all of any business or
division of a Person, (b) the acquisition of in excess of 50% of the capital
stock, partnership interests, membership interests or equity of any Person or
(c) a merger or consolidation or any other combination with another Person.
Adjusted Eurodollar Rate shall mean, with respect to each Interest Period
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for any Eurodollar Rate Loan, the rate obtained by dividing (i) the Eurodollar
Rate for such Interest Period by (ii) a percentage equal to 1 minus the stated
maximum rate (stated as a decimal) of all reserves, if any, required to be
maintained against "Eurocurrency liabilities" as specified in Regulation D (or
against any other category of liabilities which includes deposits by reference
to which the interest rate on Eurodollar Rate Loans is determined or any
category of extensions of credit or other assets which includes loans by a
non-United States office of any Lender to United States residents).
Adjusted Interest Expense shall mean Interest Expense, excluding interest
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which is paid in kind or is otherwise not paid or payable in cash.
Affiliate shall mean, with respect to any Person, any Person which directly
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or indirectly controls, is controlled by, or is under common control with, such
Person or any Subsidiary of such Person or any Person who is a director or
officer of such Person or any Subsidiary of such Person. For purposes of this
definition, "control" shall mean the possession, directly or indirectly, of the
power to (i) vote ten percent (10%) or more of the securities having ordinary
voting power for the election of directors of such Person or (ii) direct or
cause the direction of management and policies of a business, whether through
the ownership of voting securities, by contract or otherwise and either alone or
in conjunction with others or any group. Notwithstanding the foregoing, neither
the Agent, the Issuing Bank, nor any Lender shall be deemed to be an Affiliate
of the Borrower by reason of the relationship created by the Credit Documents.
Affiliate Transaction shall have the meaning given to such term in Section
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9.11 hereof.
Agent shall mean FRF as provided in the preamble to this Credit Agreement
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or any successor to FRF.
Agent Advance shall mean a Revolving Loan made by the Agent to the Borrower
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pursuant to Section 2.2 hereof.
Agent's Fee Letter shall mean that certain letter dated December 29, 1998
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between BankBoston, N.A. and the Borrower providing for the payment of certain
fees in connection with the Existing Agreement, as the Existing Credit Agreement
has been amended by, and in connection with, this Credit Agreement.
Amendment Fee Letter shall mean that certain letter dated November 13, 2000
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between the Agent and the Borrower providing for the payment of certain fees in
connection with the amendment and restatement of the Existing Agreement.
Applicable Lending Office shall mean, with respect to each Lender, such
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Lender's Eurodollar Lending Office in the case of a Eurodollar Rate Loan, and
such Lender's Domestic Lending Office in the case of a Base Rate Loan.
Asset Sale shall mean any sale, lease, conveyance, transfer or other
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disposition by the Borrower or or any of its Subsidiaries (including by way of
merger, consolidation or a sale-leaseback transaction) in any transaction, or
group of transactions that are part of a common plan, of any assets (other than
sales and other dispositions permitted pursuant to Section 9.6 hereof).
Assignment and Assumption Agreement shall mean an assignment and assumption
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agreement entered into by an assigning Lender and an assignee Lender, and
accepted by the Agent, in accordance with Section 12.6, substantially in the
form of Exhibit G.
Auditors shall mean a nationally-recognized firm of independent public
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accountants selected by the Borrower and satisfactory to the Agent in its sole
discretion. For purposes of this Credit Agreement, the Borrower's current firm
of independent public accountants, Deloitte & Touche, LLP, shall be deemed to be
satisfactory to the Agent.
Base Rate shall mean the higher of (a) the rate which Fleet announces from
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time to time at its head office in Boston, Massachusetts, as its "base rate",
and (b) one-half of one percent (0.50%) above the Federal Funds Rate. The Base
Rate is a reference rate and does not necessarily represent the lowest or best
rate actually charged to any customer. Fleet and each of the Lenders may make
commercial loans or other loans at rates of interest at, above or below the Base
Rate.
Base Rate Loan shall mean a Revolving Loan that bears interest as provided
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in Section 5.1 or a Term Loan that bears interest as provided in Section 5.7(c)
hereof.
Base Rate Spread shall have the meaning given to such term in Section 5.1
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hereof.
Benefit Plan shall mean a defined benefit plan as defined in Section 3(3)
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of ERISA (other than a Multiemployer Plan) for which the Borrower, any
Subsidiary or any ERISA Affiliate is, or within the immediately preceding six
(6) years was, an "employer" as defined in Section 3(5) of ERISA.
Blocked Account shall have the meaning given to such term in Section 2.9
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hereof.
Blocked Account Agreement shall have the meaning given to such term in
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Section 2.9 hereof.
Blocked Account Bank shall have the meaning given to such term in Section
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2.9 hereof.
Borrower shall mean Wickes Inc., a Delaware corporation and any permitted
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successor or assign.
Borrowing shall mean a borrowing of Loans of the same Type on the same day.
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Borrowing Base shall have the meaning given to such term in Section 2.1
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hereof.
Borrowing Base Certificate shall have the meaning given to such term in
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Section 8.2 hereof.
Business Day shall mean any day on which banking institutions in Boston,
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Massachusetts and Chicago, Illinois, are open for the transaction of banking
business and, in the case of Eurodollar Rate Loans, also a day which is a
Eurodollar Business Day.
Capital Expenditures shall mean, for any period, the sum of (a) all
---------------------
expenditures capitalized for financial statement purposes plus, without
-----
duplication, (b) the entire principal amount of any debt (including obligations
under capitalized leases) assumed or incurred in connection with any such
expenditures; provided that "Capital Expenditures" shall in no event include any
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portion of the purchase price paid in connection with the acquisition of any
Person (including through the purchase of a majority of the capital stock or
other ownership interests of such Person or through merger or consolidation) to
the extent allocable to property, plant or equipment. Notwithstanding the
foregoing, "Capital Expenditures" shall not include insurance proceeds from a
Casualty Loss applied to the repair or replacement of the property affected by
such Casualty Loss.
Cash Equivalents shall mean any of the following, so long as the Agent has
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a perfected security interest therein: (i) securities issued, guarantied or
insured by the United States or any of its agencies with maturities of not more
than one year from the date acquired; (ii) certificates of deposit with
maturities of not more than one year from the date acquired issued by a U.S.
federal or state chartered commercial bank of recognized standing, which has
capital and unimpaired surplus in excess of $200,000,000 and which bank or its
holding company has a short-term commercial paper rating of at least A-1 or the
equivalent by Standard & Poor's Corporation and at least P-1 or the equivalent
by ▇▇▇▇▇'▇ Investors Services, Inc.; (iii) reverse repurchase agreements with
terms of not more than seven (7) days from the date acquired, for securities of
the type described in (i) above and entered into only with commercial banks
having the qualifications described in (ii) above; (iv) commercial paper, other
than commercial paper issued by the Borrower or any of its Affiliates, issued by
any Person incorporated under the laws of the United States or any state thereof
and rated at least A-1 or the equivalent thereof by Standard & Poor's
Corporation or at least P-1 or the equivalent thereof by ▇▇▇▇▇'▇ Investors
Service, Inc., in each case with maturities of not more than one year from the
date acquired; and (v) investments in money market funds registered under the
Investment Company Act of 1940, as amended, which have net assets of at least
$200,000,000 and at least eighty-five percent (85%) of whose assets consist of
securities and other obligations of the type described in clauses (i) through
(iv) above.
Casualty Loss shall have the meaning given to such term in Section 8.7
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hereof.
Change of Control shall mean the occurrence of one or more of the following
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events: (i) any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all or substantially all of the assets of the
Borrower to any Person or group of related Persons (a "Group") for purposes of
Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), together with any Affiliates thereof, other than pursuant to a
transaction the sole purpose and effect of which is to change the Borrower's
jurisdiction of incorporation to another state within the United States; (ii)
the approval by the holders of capital stock of the Borrower of any plan or
proposal for the liquidation or dissolution of the Borrower; or (iii) the
acquisition in one or more transactions of beneficial ownership (within the
meaning of Rule 13d-3 under the Exchange Act) by any Person or Group (other than
Riverside Group, Inc. or its Affiliates (collectively, "Riverside")) of any
securities of the Borrower such that, as a result of such acquisition, such
Person or Group beneficially owns (within the meaning of Rule 13d-3 under the
Exchange Act), directly or indirectly, at least thirty percent (30%) of the
Borrower's then outstanding voting securities entitled to vote on a regular
basis for a majority of the Board of Directors or other equivalent governing
body thereof, unless at such times Riverside beneficially owns an amount of
voting securities greater than the amount so held by such Person or Group.
Closing Date shall mean December 13, 2000.
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Closing Documents List shall mean the Closing Documents List attached
------------------------
hereto as Schedule A.
Code shall have the meaning given to such term in Section 1.3.
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Collateral shall mean any and all assets and rights and interests in or to
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property of the Borrower pledged from time to time as security for the
Obligations whether now owned or hereafter acquired, including, without
limitation, all of the Accounts, Inventory, and Intangibles of the Borrower and
Real Estate owned by (but not leased to) the Borrower.
Collateral Access Agreements shall mean any landlord waivers, mortgagee
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waivers, bailee letters or any similar acknowledgment agreements of any
warehouseman or processor in possession of Inventory, in each case similar in
substance to Exhibit E, or as otherwise required by the Agent or the Majority
Lenders.
Collateral Documents shall mean all contracts, instruments and other
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documents now or hereafter executed and delivered in connection with this Credit
Agreement, pursuant to which mortgages, liens and/or security interests are
granted to the Agent in the Collateral for the benefit of the Lenders and the
Issuing Bank.
Collections shall mean all cash, funds, checks, notes, instruments and any
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other form of remittance tendered by account debtors in payment of Accounts.
Commitment of any Lender shall mean the aggregate of such Lender's
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Revolving Commitment and Term Loan Commitment.
Commitment Percentage of any Lender shall mean at any time the percentage
----------------------
obtained by dividing its Commitment at such time by the Total Commitments at
such time.
Concentration Account Agreement shall have the meaning given to such term
---------------------------------
in Section 2.9 hereof.
Consolidated Entity shall mean the Borrower and each of its Subsidiaries
--------------------
which would be consolidated with the Borrower for purposes of financial
reporting.
Consolidated Net Income shall mean for any period the consolidated net
------------------------
income of the Consolidated Entity for such period.
Consolidated Net Worth shall mean the excess of the consolidated assets of
----------------------
the Consolidated Entity over the consolidated liabilities of the Consolidated
Entity, minus any non-cash gains included in the calculation of Consolidated Net
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Income in any fiscal year beginning with the fiscal year ending December 30,
2000, plus any non-cash losses included in the calculation of Consolidated Net
----
Income in any fiscal year beginning with the fiscal year ending December 30,
2000.
Contingency Account shall have the meaning given to such term in Section
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9.13 hereof.
Contingent Obligation of any Person shall mean any direct or indirect
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guaranty or other contractual obligation, contingent or otherwise, of such
Person with respect to any Indebtedness or other obligation or liability of
another, including any such Indebtedness, obligation or liability directly or
indirectly guaranteed, endorsed (other than for collection or deposit in the
ordinary course of business), co-made or discounted or sold with recourse by
such Person, or in respect of which such Person is otherwise directly or
indirectly liable, including any contractual obligations (contingent or
otherwise) arising through any agreement to purchase, repurchase, or otherwise
acquire such Indebtedness, obligation or liability or any security therefor, or
to provide funds for the payment or discharge thereof (whether in the form of
loans, advances, stock purchases, capital contributions or otherwise), or to
maintain solvency, assets, level of income, or other financial condition, or to
make payment other than for value received.
Covered Taxes shall have the meaning given to such term in Section 5.9(a)
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hereof.
Credit Agreement shall mean this credit agreement, as the same may be
-----------------
modified, amended, extended, restated or supplemented from time to time.
Credit Documents shall mean, collectively, this Credit Agreement, the
-----------------
Revolving Notes, the Term Notes, the Letters of Credit, each of the Collateral
Documents and all other documents, agreements, instruments, opinions and
certificates, now or hereafter executed and delivered in connection herewith or
therewith, as the same may be modified, amended, extended, restated or
supplemented from time to time.
Credit Parties shall mean, collectively, the Borrower and any other parties
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(other than the Lenders, the Agent, the Documentation Agent and the Issuing
Bank) to the Credit Documents (other than the Collateral Access Agreements, the
Blocked Account Agreements and the opinions).
Default shall mean an event, condition or default which with the giving of
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notice, the passage of time or both would be an Event of Default.
Defaulting Lender shall have the meaning given to such term in Section 2.5
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hereof.
Disbursement Account shall have the meaning given to such term in Section
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2.2(c) hereof.
Disbursement Account Bank shall have the meaning given to such term in
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Section 2.2(c) hereof.
Documentation Agent shall mean Bank of America, N.A., as provided in the
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preamble to this Credit Agreement.
DOL shall mean the United States Department of Labor and any successor
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department or agency.
Dollars and the sign $ shall each mean freely transferable lawful money of
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the United States.
Domestic Lending Office shall mean, with respect to any Lender, the office
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of such Lender specified as its "Domestic Lending office" opposite its name on
Annex I hereto, as such annex may be amended from time to time.
EBITDA shall mean, in any fiscal period, the Consolidated Net Income (other
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than extraordinary items of the Consolidated Entity for such period), (i) plus
the amount of all Interest Expense, income tax expense, depreciation and
amortization, including amortization of any goodwill or other intangibles for
such period, (ii) plus losses and minus gains (to the extent not duplicative)
attributable to any fixed asset sales occurring during such period, (iii) plus
all non-recurring and extraordinary expenses of the Consolidated Entity
occurring during such period as reasonably determined by the Agent, and (iv)
plus or minus (as the case may be) any other non-cash charges which have been
subtracted or added, as the case may be, in calculating Consolidated Net Income
for such period.
Eligible Accounts Receivable shall mean Accounts of the Borrower payable in
----------------------------
Dollars and deemed by the Agent in its Permitted Discretion to be eligible for
inclusion in the calculation of the Borrowing Base. In determining the amount to
be so included, the face amount of such Accounts shall be reduced by the amount
of all returns, discounts, claims, credits, charges, or other allowances and by
the aggregate amount of all reserves, limits and deductions provided for in this
definition and elsewhere in this Credit Agreement. Unless otherwise approved in
writing by the Agent, no Account shall be deemed to be an Eligible Account
Receivable if:
(a) the Account arises out of a sale made by the Borrower to an Affiliate;
or
(b) the Account is unpaid more than thirty (30) days after the original
payment due date; provided, however, that the aggregate amount of all
--------- --------
invoices providing for payment in the second or third month following
the month of purchases relating to such invoices that may constitute
Eligible Accounts Receivable shall not exceed twenty percent (20%) of
total Eligible Accounts Receivable at any one time; provided, further,
--------- --------
that any Account that is unpaid more than one hundred twenty (120)
days following the date of purchase shall in no event be an Eligible
Accounts Receivable; or
(c) the Account is owing by an account debtor (or any Affiliate thereof)
with respect to which twenty percent (20%) or more, in face amount, of
all Accounts from such account debtor (or any Affiliate thereof) are
unpaid more than sixty (60) days past the original payment due date;
or
(d) (i) the account debtor is also a creditor of the Borrower, (ii) the
account debtor has disputed its liability on, or the account debtor
has made any claim with respect to, such Account or any other Account
due from such account debtor to the Borrower, which has not been
resolved or (iii) the Account otherwise is or may become subject to
any right of setoff by the account debtor; provided, that any Account
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deemed ineligible pursuant to this clause (d) shall only be ineligible
to the extent of the amount owed by the Borrower to the account
debtor, the amount of such dispute or claim, or the amount of such
setoff, as applicable; or
(e) the account debtor has commenced a voluntary case under the federal
bankruptcy laws, as now constituted or hereafter amended, or made an
assignment for the benefit of creditors, or a decree or order for
relief has been entered by a court having jurisdiction over the
account debtor in an involuntary case under the federal bankruptcy
laws, as now constituted or hereafter amended, or any other petition
or other application for relief under the federal bankruptcy laws has
been filed by or against the account debtor, or the account debtor has
filed a certificate of dissolution under applicable state law or shall
be liquidated, dissolved or wound-up, or shall authorize or commence
any action or proceeding for dissolution, winding-up or liquidation,
or the account debtor has failed, suspended business, declared itself
to be insolvent, is generally not paying its debts as they become due
or has consented to or suffered a receiver, trustee, liquidator or
custodian to be appointed for it or for all or a significant portion
of its assets or affairs, unless the payment of Accounts from such
account debtor is secured in a manner satisfactory to the Agent or, if
the Account from such account debtor arises subsequent to a decree or
order for relief with respect to such account debtor under the federal
bankruptcy laws, as now or hereafter in effect, the Agent shall have
determined that the timely payment and collection of such Account will
not be impaired; or
(f) the sale is to an account debtor outside of the continental United
States or Canada (other than the Province of Quebec), unless the
account debtor thereon has supplied the Borrower with an irrevocable
letter of credit in form and substance satisfactory to the Agent,
issued by a financial institution satisfactory to the Agent and which
has been duly transferred to the Agent (together with sufficient
documentation to permit direct draws by the Agent); or
(g) the sale to the account debtor is on a ▇▇▇▇-and-hold, guarantied sale,
sale-and-return, sale on approval or consignment basis or made
pursuant to any other written agreement providing for repurchase or
return; or
(h) the Agent determines in its Permitted Discretion that collection of
such Account is uncertain or that such Account may not be paid by
reason of the account debtor's financial inability to pay; or
(i) the account debtor is the United States of America or any department,
agency or instrumentality thereof, unless the Borrower duly assigns
its rights to payment of such Account to the Agent pursuant to the
Assignment of Claims Act of 1940, as amended (31 ▇.▇.▇.▇▇. 3727 et
seq.); or
(j) the goods giving rise to such Account have not been shipped and
delivered to and accepted by the account debtor or the services giving
rise to such Account have not been performed by the Borrower and
accepted by the account debtor or the Account otherwise does not
represent a final sale; or
(k) the Account does not comply with all applicable legal requirements,
including, where applicable, the Federal Consumer Credit Protection
Act, the Federal Truth in Lending Act and Regulation Z of the Board of
Governors of the Federal Reserve System, in each case as amended; or
(l) the Agent does not have a valid and perfected first priority security
interest in such Account or the Account does not otherwise conform to
the representations and warranties contained in the Credit Agreement
or the other Credit Documents; or
(m) the Account is subject to any security deposit, progress payment or
other similar advance made by or for the benefit of the applicable
account debtor; or
(n) a portion of such Account is subject to any retainage or similar
amount that the account debtor may hold back or retain pending
approval of the Borrower's performance or any other contingency, but
solely to the extent of such portion; or
(o) a portion of such Account consists of finance or delinquency charges,
but solely to the extent of such portion; or
(p) the Account is subject to any reserve established by the Borrower, but
solely to the extent of such reserve.
Eligible Inventory shall mean items of Inventory of the Borrower held for
-------------------
sale in the ordinary course (but not packing or shipping materials or
maintenance supplies) deemed by the Agent in its Permitted Discretion to be
eligible for inclusion in the calculation of the Borrowing Base. In determining
the amount to be so included, the amount of such Inventory shall be valued at
the lower of cost or market on a basis consistent with the Borrower's current
and historical accounting practice or as otherwise acceptable to the Agent.
Unless otherwise approved in writing by the Agent, Inventory shall not be deemed
Eligible Inventory if:
(a) it is not owned solely by the Borrower or the Borrower does not have
good, valid and marketable title thereto; or
(b) it is not located on property owned or leased by the Borrower or in a
contract warehouse or other third party location, subject in each case
to a Collateral Access Agreement executed by the lessor, the contract
warehouseman or the other third party, as the case may be (together
with any related filings or notices required by the Agent), and
segregated or otherwise separately identifiable from goods of others,
if any, stored on the premises; or
(c) it is not subject to a perfected first priority Lien in favor of the
Agent, except for Liens for unpaid rent or normal and customary
warehousing and common carrier charges not more than thirty (30) days
past due; or
(d) it is not located in the continental United States or Canada (other
than Quebec); or
(e) it is goods returned or rejected by the Borrower's customers or goods
in transit to third parties (other than to warehouse sites covered by
Collateral Access Agreements); or
(f) it is work in process to the extent that such work in process at any
time exceeds $2,000,000; or
(g) it is obsolete or slow moving, or does not otherwise conform to the
representations and warranties contained in the Credit Documents; or
(h) it is held by the Borrower on consignment; or
(i) it consists of tools or other property held for rental to other
Persons.
Eligible Real Estate shall mean Real Estate owned by (but not leased to)
---------------------
the Borrower in fee simple title, but only to the extent that with respect to
any specific parcel of Real Estate:
(a) Mortgages are filed with respect to such parcel of Real Estate, the
Agent's mortgage and security interests in such parcel of Real Estate
have been perfected and the Agent has a perfected first-priority lien
in such parcel of Real Estate for the benefit of the Lenders; and
(b) Such parcel of Real Estate has been appraised by a third party
appraiser acceptable to the Agent and title insurance, environmental
studies, and other real estate requirements, as reasonably determined
by the Agent, have been satisfied, including, but not limited to,
those items required by FIRREA; and
(c) The Borrower is in compliance with the representations, warranties and
covenants set forth in the Mortgage relating to such parcel of Real
Estate, unless the Agent, in its discretion, otherwise determines to
waive this requirement in the determination of Eligible Real Estate;
and
(d) The fair market value of such parcel of Real Estate is greater than or
equal to $750,000.00, provided that parcels of Real Estate (i)
individually having a Fair Market Value less than $750,000.00 but
greater than $500,000.00, and (ii) having an aggregate loan value
(determined using 60% of such Fair Market Value) not to exceed
$7,000,000.00, and (iii) which meet all of the other criteria for
Eligible Real Estate shall be deemed Eligible Real Estate.
Equipment shall have the meaning provided in the Code as in effect on the
---------
date hereof.
ERISA shall mean the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time, and any successor statute thereto and all final or
temporary regulations promulgated thereunder and published and generally
applicable rulings entitled to precedential effect.
ERISA Affiliate shall mean any entity required at any relevant time to be
----------------
aggregated with the Borrower or any Subsidiary under Sections 414(b), (c), (m)
or (o) of the Internal Revenue Code.
Eurodollar Business Day shall mean any Business Day on which commercial
------------------------
banks are open for international business (including dealings in Dollar
deposits) in London or such other eurodollar interbank market as may be selected
by the Agent in its sole discretion acting in good faith.
Eurodollar Lending Office shall mean, with respect to any Lender, the
---------------------------
office of such Lender specified as its "Eurodollar Lending Office" opposite its
name on Annex I, as such annex may be amended from time to time (or, if no such
office is specified, its Domestic Lending office), or such other office or
Affiliate of such Lender as such Lender may from time to time specify to the
Borrower and the Agent.
Eurodollar Rate shall mean, with respect to the Interest Period for each
----------------
Eurodollar Rate Loan comprising part of the same Borrowing, an interest rate per
annum equal to the rate (rounded upward to the nearest whole multiple of
one-sixteenth (1/16) of one percent (1.00%) per annum, if such rate is not such
a multiple) of the offered quotation, if any, to first class banks in the
Eurodollar market by Fleet for U.S. dollar deposits of amounts in immediately
available funds comparable to the principal amount of the Eurodollar Rate Loan
for which the Eurodollar Rate is being determined with maturities comparable to
the Interest Period for which such Eurodollar Rate will apply as of
approximately 10:00 A.M. Boston time two (2) Eurodollar Business Days prior to
the commencement of such Interest Period.
Eurodollar Rate Loan shall mean a Revolving Loan or a Term Loan that bears
---------------------
interest as provided in Section 5.2 hereof.
Eurodollar Rate Spread shall have the meaning given to such term in Section
----------------------
5.2 hereof.
Event(s) of Default shall have the meaning provided for in Article 10 of
-------------------
this Credit Agreement.
Existing Advances shall mean the loans, investments and advances between
------------------
the Borrower and its Subsidiaries in existence as of the Closing Date and
described on Schedule B hereto.
Existing Agreement shall have the meaning provided in the recitals hereto.
------------------
Expenses shall mean all present and future expenses incurred by or on
--------
behalf of the Agent and the Syndication Agent in connection with the Existing
Agreement, the Credit Agreement, any other Credit Document or otherwise related
hereto or thereto, whether incurred heretofore or hereafter, which expenses
shall include, without being limited to, the cost of record searches, the fees
and expenses of attorneys (including the allocated cost of internal counsel) and
paralegals, all costs and expenses incurred by the Agent in opening bank
accounts and lockboxes, depositing checks, receiving and transferring funds
(whether pursuant to the automated clearing house or otherwise), and any charges
imposed on the Agent due to insufficient funds of deposited checks and the
Agent's standard fee relating thereto, collateral examination fees and expenses,
fees and expenses of accountants, appraisers or other consultants, experts or
advisors employed or retained by the Agent, fees and expenses incurred by the
Agent and the Syndication Agent in connection with the assignments of or sales
of participations in the Loans, fees and taxes relative to the filing of
financing statements, costs of preparing and recording Collateral Documents, all
expenses, costs and fees set forth in Article 5 of this Credit Agreement, all
other fees and expenses required to be paid pursuant to the Agent's Fee Letter,
the Amendment Fee Letter, and all fees and expenses incurred in connection with
releasing Collateral and the amendment, enforcement or termination of any of the
Credit Documents.
Expiration Date shall mean June 30, 2005.
---------------
FRF shall mean Fleet Retail Finance Inc., a Delaware corporation.
---
Fair Market Value means, as to any parcel of Real Estate, the price at
------------------
which a willing seller would sell and a willing buyer would buy such Real Estate
in an arm's-length transaction, having reference to all relevant factors
including but not limited to prices paid for comparable properties, cash flow,
earnings, and prospects for future earnings and cash flow, as determined in
accordance with an appraisal acceptable to the Agent, which appraisal shall
assume, among other things, a marketing time of not greater than twelve (12)
months.
Fairness Conditions shall have the meaning given to such term in Section
--------------------
9.11 hereof.
Federal Funds Rate shall mean, for any period, a fluctuating interest rate
------------------
per annum equal, for each day during such period, to the weighted average of the
rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal Funds brokers of
recognized standing selected by it.
Fees shall mean, collectively, the Unused Line Fee, the Letter of Credit
----
Fees, the Issuing Bank Fees, fees charged from time to time by Fleet for
maintaining the Fleet Account and other accounts for the Borrower, and the other
fees provided for in the Agent's Fee Letter, the Amendment Fee Letter or
otherwise payable to the Agent, the Syndication Agent, the Issuing Bank or the
Lenders.
Financial Statements shall mean the consolidated (and, if requested,
---------------------
consolidating) balance sheets, statements of operations, statements of cash
flows and statements of changes in stockholders' equity/deficit of the Borrower
for the period specified.
Fleet shall mean Fleet National Bank, a bank organized under the laws of
-----
the United States of America.
Fleet Account shall have the meaning given to such term in Section 2.9
--------------
hereof.
Foreign Lender shall mean any Lender organized under the laws of a
---------------
jurisdiction outside of the United States.
Funding Bank shall have the meaning given to such term in Section 5.8
-------------
hereof.
GAAP shall mean generally accepted accounting principles in the United
----
States as in effect from time to time.
GLC shall mean GLC Division, Inc., a Delaware corporation and a
---
wholly-owned Subsidiary of the Borrower.
Governing Documents shall mean, as to any Person, the certificate or
--------------------
articles of incorporation and by-laws or other organizational or governing
documents of such Person.
Governmental Authority shall mean any nation or government, any state or
-----------------------
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
Highest Lawful Rate shall mean, at any given time during which any
---------------------
obligations shall be outstanding hereunder, the maximum non-usurious interest
rate, if any, that at any time or from time to time may be contracted for,
taken, reserved, charged or received on the Obligations owing under this Credit
Agreement, under the laws of the Commonwealth of Massachusetts (or the law of
any other jurisdiction whose laws may be mandatorily applicable notwithstanding
other provisions of this Credit Agreement and the other Credit Documents), in
any case after taking into account, to the extent permitted by applicable law,
any and all relevant payments or charges under this Credit Agreement and any
other Credit Documents executed in connection herewith, and any available
exemptions, exceptions and exclusions.
Indebtedness shall mean, with respect to any Person, (a) all indebtedness
------------
of such Person for borrowed money or for the deferred purchase price of property
or services (other than trade liabilities incurred in the ordinary course of
business and payable in accordance with customary practices) or which is
evidenced by a note, bond, debenture or similar instrument, (b) all obligations
of such Person under capital leases, (c) all obligations of such Person in
respect of letters of credit, banker's acceptances or similar obligations issued
or created for the account of such Person, (d) liabilities arising under
Interest Rate Agreements and Lumber Hedging Agreements of such Person, (e) all
Contingent Obligations of such Person and (f) all liabilities secured by any
Lien on any property owned by such Person even though such Person has not
assumed or otherwise become liable for the payment thereof.
Indenture shall mean the Indenture with respect to the Senior Subordinated
---------
Notes, dated as of October 15, 1993, between the Borrower and Marine Midland
Bank, N.A., as trustee, as amended, supplemented or otherwise modified from time
to time with the prior written consent of the Majority Lenders.
Initial Closing Date shall mean February 19, 1999.
--------------------
Intangibles shall mean "Intangibles" as defined in the Security Agreement.
-----------
Interest Coverage Ratio shall mean, with respect to any period, the ratio
------------------------
of EBITDA for such period to Adjusted Interest Expense of the Consolidated
Entity for such period.
Interest Expense shall mean, with respect to any Person, the aggregate
-----------------
consolidated interest expense of such Person in respect of Indebtedness
determined on a consolidated basis, including, without limitation, amortization
of original issue discount on any Indebtedness and of all fees payable in
connection with the incurrence of such Indebtedness (to the extent included in
interest expense), the interest portion of any deferred payment obligation and
the interest component of any capital lease obligations.
Interest Period shall mean for any Eurodollar Rate Loan the period
----------------
commencing on the date of such Borrowing and ending on the last day of the
period selected by the Borrower pursuant to the provisions below. The duration
of each such Interest Period shall be one, two, three or six months or, with
respect to the Term Loans only, twelve months, in each case as the Borrower may,
in an appropriate Notice of Borrowing, Notice of Continuation or Notice of
Conversion, select; provided, however, that the Borrower may not select any
--------- --------
Interest Period that ends after the Expiration Date. Whenever the last day of
any Interest Period would otherwise occur on a day other than a Business Day,
the last day of such Interest Period shall be extended to occur on the next
succeeding Business Day, provided that if such extension would cause the last
--------
day of such Interest Period to occur in the next following calendar month, the
last day of such Interest Period shall occur on the next preceding Business Day.
Interest Rate Agreement shall mean any interest rate protection agreement,
-----------------------
interest rate future, interest rate option, interest rate swap, interest rate
cap or other interest rate hedge or arrangement under which the Borrower or any
Subsidiary is a party or beneficiary.
Internal Revenue Code shall mean the Internal Revenue Code of 1986, as
-----------------------
amended from time to time, and any successor statute thereto and all final or
temporary rules and regulations promulgated thereunder and published, generally
applicable rulings entitled to precedential effect to the extent such rules,
regulations or rulings are effective and applicable hereto.
Internal Revenue Service or IRS shall mean the United States Internal
----------------------------------
Revenue Service and any successor agency.
Inventory shall mean "Inventory" as defined in the Security Agreement.
---------
Investment shall mean all expenditures made and all liabilities incurred
----------
(contingently or otherwise) for or in connection with the acquisition of stock
(or other equity interests) or Indebtedness of, or for loans, advances, capital
contributions or transfers of property to, or in respect of any guaranties (or
other commitments as described under Indebtedness) of obligations of, any
Person. In determining the aggregate amount of Investments outstanding at any
particular time, (i) the amount of any Investment represented by a guaranty
shall be taken at not less than the principal amount of the obligations
guarantied and still outstanding; (ii) there shall be deducted in respect of
each such Investment any amount received as a return of capital (but only by
repurchase, redemption, retirement, repayment, liquidating dividend or
liquidating distribution); (iii) there shall not be deducted in respect of any
Investment any amounts received as earnings on such Investment, whether as
dividends, interest or otherwise; and (iv) there shall not be deducted from the
aggregate amount of Investments any decrease in the market value thereof.
Issuing Bank shall mean Fleet or any Lender that is acceptable to the Agent
------------
which has agreed to issue a Letter of Credit for the account of the Borrower
under this Credit Agreement.
Issuing Bank Fees shall have the meaning given to such term in Section 5.6
-----------------
hereof.
Lender and Lenders shall have the respective meanings provided in the
------ -------
preamble to this Credit Agreement and shall include Revolving Lenders and Term
Lenders.
Lender Advance shall mean a Revolving Loan made by the Revolving Lenders to
--------------
the Borrower pursuant to Section 2.2 hereof.
Letter of Credit Fee Percentage shall have the meaning given to such
-------------------------------
term in Section 5.6 hereof.
Letter of Credit Fees shall mean the fees payable to the Agent for the
----------------------
benefit of the Agent and the Revolving Lenders by the Borrower under and
pursuant to Section 5.6 hereof.
Letter of Credit Obligations shall mean, at any time, the sum of (i) the
-----------------------------
aggregate undrawn amount of all Letters of Credit outstanding at such time, plus
----
(ii) the aggregate amount of all drawings under Letters of Credit for which the
Issuing Bank has not at such time been reimbursed, plus (iii) the aggregate
----
amount of all payments made by each Revolving Lender to the Issuing Bank with
respect to such Revolving Lender's participation in Letters of Credit as
provided in Section 3.3 hereof for which the Borrower has not at such time
reimbursed the Revolving Lenders, whether by way of a Revolving Loan or
otherwise.
Letter of Credit Request shall have the meaning given to such term in
--------------------------
Section 3.4 hereof.
Letters of Credit shall mean all letters of credit (whether documentary or
-----------------
stand-by and whether for the purchase of inventory, equipment or otherwise)
issued for the account of the Borrower pursuant to Article 3 hereof and all
amendments, renewals, extensions or replacements thereof.
Lien(s) shall mean any lien, claim, charge, pledge, security interest, deed
-------
of trust, mortgage, other encumbrance or other arrangement having the practical
effect of the foregoing or other preferential arrangement of any other kind and
shall include the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement.
Loan Account shall have the meaning given to such term in Section 2.7
-------------
hereof.
Loans shall mean, collectively, the Revolving Loans and the Term Loans.
-----
LTC shall mean Lumber Trademark Company, an Illinois corporation and a
---
wholly-owned Subsidiary of the Borrower.
LTC Sublicense Agreement shall mean that certain Amended and Restated
--------------------------
Trademark Sublicense Agreement, dated as of March 18, 1994, between the Borrower
and LTC, together with the replacement license agreement referred to on Schedule
--------
B, in each case as such agreement may be amended from time to time with the
-
consent of the Agent.
Lumber Hedging Account shall mean an account maintained by the Borrower and
----------------------
approved by the Agent at an appropriate financial institution in connection with
the purchase by the Borrower of Lumber Hedging Agreements.
Lumber Hedging Agreement shall mean any lumber futures contract or similar
-------------------------
agreement or arrangement entered into by the Borrower as traded on the Chicago
Mercantile Exchange or any comparable exchanges, designed to protect the
Borrower against fluctuations in the price of lumber actually used in the
ordinary course of the Borrower's business.
Maintenance Capital Expenditures shall mean, for any period, the sum of all
--------------------------------
Capital Expenditures made by the Borrower for (i) the maintenance and repair of
any property, facilities or equipment and (ii) the replacement of any obsolete
property, facilities or equipment.
Majority Lenders shall mean, at any time, those Lenders (i) then owed or
-----------------
holding in the aggregate at least fifty-one percent (51%) of the Commitments or
(ii) if the Commitments are terminated, those Lenders then owed or holding in
the aggregate at least fifty-one percent (51%) of the outstanding principal
amount of the Loans (or if the Revolving Commitments are terminated and no
Revolving Loans are outstanding, those Lenders then holding at least fifty-one
percent (51%) of the aggregate participation interests in Letters of Credit then
outstanding and (B) fifty-one percent (51%) of the outstanding principal amount
of the Term Loans).
Material Adverse Effect shall mean a material adverse effect on (i) the
-------------------------
business, prospects, operations, results of operations, assets, liabilities or
condition (financial or otherwise) of any Credit Party, (ii) any Credit Party's
ability to perform its obligations under the Credit Documents to which it is a
party, or (iii) the rights and remedies of the Agent, the Issuing Bank or the
Lenders under any Credit Document.
Material Contract shall mean any contract (including, without limitation,
-----------------
the Indenture, the LTC Sublicense Agreement or other arrangement (other than the
Credit Documents), whether written or oral, to which the Borrower or any of the
Subsidiaries is a party as to which the breach, nonperformance, cancellation or
failure to renew by any party thereto could have a Material Adverse Effect.
Mortgage(s) means the Mortgages, Security Agreements and Assignments,
-----------
reasonably satisfactory in form and substance to the Agent between the Person
owning the Real Estate encumbered thereby and the Agent for the benefit of the
Lenders.
Multiemployer Plan shall mean a "multiemployer plan" as defined in Section
------------------
4001(a)(3) of ERISA and (i) which is, or within the immediately preceding six
(6) years was, contributed to by the Borrower, any Subsidiary or any ERISA
Affiliate or (ii) with respect to which the Borrower or any Subsidiary may incur
any liability.
Net Cash Proceeds shall mean, with respect to any sale or other disposition
-----------------
of assets, the total cash proceeds received in connection therewith less all
advisory fees, legal costs, closing costs, commissions and other out-of-pocket
expenses reasonably incurred in connection therewith.
Notes shall mean, collectively, the Revolving Notes and the Term Notes.
-----
Notice of Borrowing shall have the meaning given to such term in Section
--------------------
2.2 hereof.
Notice of Continuation shall have the meaning given to such term in Section
----------------------
5.7(a) hereof.
Notice of Conversion shall have the meaning given to such term in Section
---------------------
5.7(b) hereof.
Obligations shall mean the unpaid principal of and interest on (including
-----------
interest accruing on or after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Borrower, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding) the Revolving Loans, the Term Loans, any
reimbursement obligation or indemnity of the Borrower on account of Letters of
Credit (including obligations to Revolving Lenders as participants in the letter
of credit exposure of the Issuing Bank under Section 3.3 hereof) or any
accommodation extended with respect to applications for Letters of Credit, the
Fees, the Expenses, any payment obligation of the Borrower to Fleet or any other
Lender in connection with any Secured Interest Rate Agreement (whether such
obligation arises under Section 8.16 hereof, the agreement governing such
Secured Interest Rate Agreement or otherwise) and all other obligations and
liabilities of the Borrower to the Agent, the Syndication Agent, the Issuing
Bank or to the Lenders, whether direct or indirect, absolute or contingent, due
or to become due, or now existing or hereafter incurred, which may arise under,
out of, or in connection with, the Credit Agreement, the Notes, any other Credit
Document and any other document made, delivered or given in connection herewith
or therewith, and each other obligation and liability, whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, whether on account of principal, interest, fees,
indemnities, costs or expenses (including, without limitation, all fees and
disbursements of counsel to the Agent, the Syndication Agent, the Issuing Bank
or to the Lenders and all obligations incurred by the Agent or any of its
Affiliates in connection with automated clearinghouse transfers) that are
required to be paid by the Borrower to the Lenders, the Agent, the Syndication
Agent or the Issuing Bank pursuant to the terms of the Credit Agreement or any
of the other Credit Documents.
Offer to Purchase shall mean an offer by the Borrower to purchase any and
-----------------
all Senior Subordinated Notes on substantially the terms set forth in Attachment
1 to Schedule B.
PBGC shall mean the Pension Benefit Guaranty Corporation and any Person
----
succeeding to the functions thereof.
Permitted Discretion shall mean the Agent's judgment exercised in good
---------------------
faith based upon its consideration of any factor which the Agent believes in
good faith: (i) will or could materially adversely affect the value of any
Collateral, the enforceability or priority of the Agent's Liens thereon or the
amount which the Agent and the Lenders would be likely to receive (after giving
consideration to delays in payment and costs of enforcement) in the liquidation
of such Collateral; (ii) suggests that any collateral report or financial
information delivered to the Agent by any Person on behalf of the Borrower is
incomplete, inaccurate or misleading in any material respect; (iii) materially
increases the likelihood of a bankruptcy, reorganization or other insolvency
proceeding involving the Borrower or any of its Subsidiaries or any of the
Collateral, or (iv) creates or reasonably could be expected to create a Default
or Event of Default. In exercising such judgment, the Agent may consider such
factors already included in or tested by the definition of Eligible Accounts
Receivable or Eligible Inventory, as well as any of the following: (i) the
financial and business climate of the Borrower's industry and general
macroeconomic conditions, (ii) changes in collection history and dilution with
respect to the Accounts, (iii) changes in demand for, and pricing of, Inventory,
(iv) changes in any concentration of risk with respect to Accounts and
Inventory, (v) changes in turnover statistics with respect to Inventory and/or
Accounts, including actual versus historical and projected, and (vi) any other
factors that change the credit risk of lending to the Borrower on the security
of the Accounts and Inventory. The burden of establishing lack of good faith
hereunder shall be on the Borrower.
Person shall mean any individual, sole proprietorship, partnership, limited
------
liability company, joint venture, trust, unincorporated organization,
association, corporation, institution, entity, party or government (including
any division, agency or department thereof), and, as applicable, the successors,
heirs and assigns of each.
Plan shall mean any employee benefit plan, program or arrangement, whether
----
oral or written, maintained or contributed to by the Borrower or any Subsidiary,
or with respect to which the Borrower or any Subsidiary may incur liability.
Pledge Agreement shall mean that certain Pledge Agreement, dated as of the
----------------
Initial Closing Date, pursuant to which the Borrower pledged to the Agent all of
the issued and outstanding shares of capital stock of GLC, Wickes International
Holding Corporation and LTC owned by the Borrower as security for the
Obligations, as the same has been, or may be, amended, restated, supplemented or
otherwise modified from time to time.
Proportionate Share shall mean, with respect to any Revolving Lender, (i) a
-------------------
fraction (expressed as a percentage), the numerator of which shall be the amount
of such Revolving Lender's Revolving Commitment and the denominator of which
shall be the Revolving Commitments of all Revolving Lenders or, (ii) if the
Revolving Commitments are terminated, a fraction the numerator of which shall be
the principal amount of such Revolving Lender's Revolving Loans outstanding and
the denominator of which shall be the aggregate principal amount of all
Revolving Loans of all Revolving Lenders then outstanding, or (iii) if the
Revolving Commitments are terminated and no Revolving Loans are outstanding, a
fraction the numerator of which shall be such Revolving Lender's aggregate
participation interests, pursuant to Section 3.3, in the Letters of Credit then
outstanding and the denominator of which shall be the Letter of Credit
Obligations.
Purchase Money Liens shall mean liens on any item of Equipment acquired
---------------
after the Initial Closing Date, provided that: (i) each such lien shall attach
--------
only to the property to be acquired; (ii) a description is furnished to the
Agent for any property so acquired, the purchase price of which is greater than
$250,000; and (iii) the debt incurred in connection with such acquisitions shall
not exceed the amount of the purchase price of such items of Equipment then
being financed.
Real Estate shall mean all real property owned or leased by the Borrower,
-----------
together with all fixtures, improvements and other structures thereon.
Reduced Rate shall have the meaning given to such term in Section 5.9(b)
-------------
hereof, relating to backup withholding tax.
Register shall have the meaning given to such term in Section 12.6(e)
--------
hereof.
Regulation D shall mean Regulation D of the Board of Governors of the
-------------
Federal Reserve System as from time to time in effect and any successor thereto.
Reportable Event shall mean any of the events described in Section 4043
----------------
of ERISA and the regulations thereunder.
Required Available Amount means (a) $15,000,000 at any time the sum of the
--------------------------
amount of Revolving Loans plus Letter of Credit Obligations is equal to or less
than $160,000,000, and (b) $20,000,000 at any time the sum of the amount of
Revolving Loans plus Letter of Credit Obligations is greater than $160,000,000.
Requirement of Law shall mean, as to any Person, the Governing Documents of
------------------
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
Retiree Health Plan shall mean an "employee welfare benefit plan" within
--------------------
the meaning of Section 3(l) of ERISA that provides benefits to persons after
termination of employment, other than as required by Section 601 of ERISA.
Revolving Commitment" shall mean, with respect to each Revolving Lender,
---------------------
the commitment of such Revolving Lender hereunder set forth as its Revolving
Commitment opposite its name on Annex I hereto or as may subsequently be set
forth in the Register from time to time, as the same may be reduced from time to
time pursuant to Section 2.6.
"Revolving Lender" shall mean each Lender having a Revolving Commitment as
------------------
set forth on Annex I hereto or in the Assignment and Acceptance by which it
becomes a Lender.
Revolving Loans shall have the meaning given to such term in Section 2.1
----------------
hereof, any of which Revolving Loans may be a Eurodollar Rate Loan or a Base
Rate Loan.
Revolving Note shall mean a promissory note of the Borrower payable to
--------------
the order of any Revolving Lender, in the form of Exhibit A, evidencing the
aggregate Indebtedness of the Borrower to such Revolving Lender resulting from
the Revolving Loans made by such Revolving Lender or acquired by such Revolving
Lender pursuant to Section 12.6 hereof, as the same may from time to time be
amended, restated, supplemented or otherwise modified.
Security Agreement shall mean the Security Agreement, dated the Initial
-------------------
Closing Date, between the Agent and the Borrower, as such agreement has been, or
may be, amended, restated, supplemented or otherwise modified from time to time.
Secured Interest Rate Agreement shall mean an Interest Rate Agreement (i)
--------------------------------
between the Borrower and (A) any Lender or (B) any Affiliate of any Lender;
provided, that, in the case of this clause (B), each Lender has agreed to
indemnify its Affiliates from any losses incurred due to the failure of the
Borrower to pay any amounts owed to such Affiliate in connection with such
Interest Rate Agreement, and (ii) that, in the Permitted Discretion of the
Agent, is intended to protect the Borrower from fluctuations in interest rates
and is otherwise satisfactory to the Agent.
Senior Subordinated Notes shall mean the Borrower's 11-5/8% Senior
----------------------------
Subordinated Notes due 2003, issued pursuant to the Indenture, as amended,
supplemented or otherwise modified from time to time as permitted hereby or with
the prior written consent of the Majority Lenders.
Settlement Date shall have the meaning given to such term in Section 2.4
----------------
hereof.
Subsidiary shall mean as to any Person, a corporation, partnership or other
----------
entity of which shares of stock or other ownership interests having ordinary
voting power (other than stock or such other ownership interests having such
power only by reason of the happening of a contingency) to elect a majority of
the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise qualified, all references to a "Subsidiary" or
to "Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries
of the Borrower.
Supplemental Indenture shall have the meaning given such term in the Offer
-----------------------
to Purchase.
Syndication Agent shall mean Fleet Securities, Inc.
-----------------
Term Loan Commitment shall mean, with respect to each Lender, the
----------------------
commitment of such Lender hereunder set forth as its Term Loan Commitment
opposite its name on Annex I hereto or as may subsequently be set forth in a
register maintained by the Agent from time to time.
Term Loan Commitment Percentage shall mean at any time, with respect to
---------------------------------
each Lender, the percentage obtained by dividing its Term Loan Commitment at
such time by all Term Loan Commitments at such time.
Term Lender shall mean each Lender having a Term Loan Commitment as set
-----------
forth on Annex I hereto or in the Assignment and Acceptance by which it becomes
a Lender.
Term Loans shall mean all loans at any time made by any Term Lender
-----------
pursuant to Section 4.1 hereof.
Term Note shall mean a promissory note of the Borrower payable to the order
---------
of any Term Lender, in the form of Exhibit B, evidencing the aggregate
Indebtedness of the Borrower to such Term Lender resulting from the Term Loans
made by such Term Lender or acquired by such Lender pursuant to Section 12.6
hereof, as the same may from time to time be amended, restated, supplemented or
otherwise modified.
Termination Event shall mean (i) a Reportable Event with respect to any
------------------
Benefit Plan or Multiemployer Plan; (ii) the withdrawal of the Borrower, any
Subsidiary or any ERISA Affiliate from a Benefit Plan during a plan year in
which such entity was a "substantial employer" as defined in Section 4001(a)(2)
of ERISA; (iii) the providing of notice of intent to terminate a Benefit Plan in
a distress termination described in Section 4041(c) of ERISA; (iv) the
institution by the PBGC of proceedings to terminate a Benefit Plan or
Multiemployer Plan; (v) any event or condition (a) which might constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Benefit Plan or Multiemployer Plan, or (b) that
may result in termination of a Multiemployer Plan pursuant to Section 4041A of
ERISA; or (vi) the partial or complete withdrawal within the meaning of Sections
4203 and 4205 of ERISA, of the Borrower, any Subsidiary or any ERISA Affiliate
from a Multiemployer Plan.
Total Commitments shall mean the Commitments of all the Lenders.
-----------------
Type shall mean, in reference to a Revolving Loan or a Term Loan, as
----
applicable, that it is a Eurodollar Rate Loan or a Base Rate Loan.
Unused Availability shall mean, on any date, the Borrowing Base, less the
--------------------
sum of (i) the Letter of Credit Obligations on such date and (ii) the aggregate
outstanding principal balance of the Revolving Loans on such date.
Unused Line Fee shall have the meaning given to such term in Section 5.5
----------------
hereof.
1.2 Accounting Terms and Determinations.
Unless otherwise defined or specified herein, all accounting terms used in
this Credit Agreement shall be construed in accordance with GAAP, applied on a
basis consistent in all material respects with the Financial Statements
delivered to the Agent on or before the Closing Date. All accounting
determinations for purposes of determining compliance with Sections 9.1, 9.2 and
9.3 hereof shall be made in accordance with GAAP as in effect on the Closing
Date and applied on a basis consistent in all material respects with the audited
Financial Statements delivered to the Agent on or before the Closing Date. The
Financial Statements required to be delivered hereunder from and after the
Effective Date, and all financial records, shall be maintained in accordance
with GAAP. If GAAP shall change from the basis used in preparing the audited
Financial Statements delivered to the Agent on or before the Closing Date, the
certificates required to be delivered pursuant to Section 8.1 demonstrating
compliance with the covenants contained herein shall, at the election of the
Borrower or upon the request of the Majority Lenders, include calculations
setting forth the adjustments necessary to demonstrate how the Borrower is in
compliance with the financial covenants based upon GAAP as in effect on the
Closing Date.
1.3 Other Defined Terms.
Terms not otherwise defined herein which are defined in the Uniform
Commercial Code as in effect in the Commonwealth of Massachusetts (the "Code")
shall have the meanings given them in the Code. The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Credit Agreement shall
refer to this Credit Agreement as a whole and not to any particular provision of
this Credit Agreement, and references to Article, Section, Annex, Schedule,
Exhibit and like references are references to this Credit Agreement unless
otherwise specified.
ARTICLE 2. REVOLVING LOANS
--------------------------
2.1 Revolving Commitments.
Subject to the terms and conditions set forth in this Credit Agreement, on
and after the Closing Date and to and excluding the Expiration Date, each
Revolving Lender severally agrees to make loans and advances to the Borrower
("Revolving Loans") in an amount not to exceed at any time its Proportionate
Share of the lesser of the Revolving Commitments of all Revolving Lenders and
the Borrowing Base minus, in each case, the then outstanding Letter of Credit
Obligations. "Borrowing Base" shall mean the sum of:
(A) eighty-five percent (85%) of Eligible Accounts Receivable, plus
----
(B) sixty percent (60%) of Eligible Inventory, minus
-----
(C) the aggregate amount of reserves, if any, established by the
Agent;
provided that until the earlier of payment in full of all obligations under the
-------------
Indenture and the Senior Subordinated Notes or the amendment of the Indenture by
the Supplemental Indenture, the sum of the outstanding principal balance of the
Loans and the outstanding Letter of Credit Obligations shall not exceed the
aggregate of (i) an amount equal to ninety-five percent (95%) of the net book
value of the Borrower's Accounts and seventy-five percent (75%) of the net book
value of the Borrower's Inventory, plus (ii) $10,000,000.00.
The Agent, in the exercise of its Permitted Discretion, may (i) establish and
increase or decrease reserves against Eligible Accounts Receivable and Eligible
Inventory, (ii) reduce the advance rates provided for in this definition, or
restore such advance rates to any level equal to or below the advance rates in
effect as of the date of this Credit Agreement, and (iii) impose additional
restrictions (or eliminate such additional restrictions) to the standards of
eligibility set forth in the definitions of "Eligible Accounts Receivable" and
"Eligible Inventory." The reserves against Eligible Accounts Receivable and
Eligible Inventory will be adjusted monthly, or at more frequent intervals as
determined by the Agent. Revolving Loans may be repaid and reborrowed. Without
limiting the foregoing, the reserves established by the Agent as of the Closing
Date are an environmental reserve and a sales tax reserve.
2.2 Borrowing of Revolving Loans.
It is contemplated that Revolving Loans will be made available to the
Borrower by the Revolving Lenders ("Lender Advances") and, in the circumstances
described in Section 2.2(b), from the Agent acting on behalf of the Revolving
Lenders ("Agent Advances"). The Borrower hereby agrees to execute and deliver to
each Revolving Lender a Revolving Note in the form of Exhibit A to evidence the
Revolving Loans made to the Borrower by such Revolving Lender.
(a) Lender Advances of Revolving Loans. Subject to the determination by
------------------------------------
the Agent and the Revolving Lenders that the conditions for Borrowing
contained in Section 6.2 are satisfied, upon notice from the Borrower
to the Agent ("Notice of Borrowing"), Lender Advances of Revolving
Loans shall be made to the extent of each Revolving Lender's
Proportionate Share of the requested Borrowing; provided that in no
event will any Revolving Lender be obligated to have Revolving Loans
outstanding in excess of such Revolving Lender's Commitment less such
Revolving Lender's Proportionate Share of outstanding Letter of Credit
Obligations. The Notice of Borrowing shall specify whether the
requested Borrowing is of Base Rate Loans or Eurodollar Rate Loans.
(b) Agent Advances of Revolving Loans. The Agent is authorized by the
------------------------------------
Revolving Lenders, but is not obligated, to make AgentAdvances
consisting only of Base Rate Loans (i) upon a Notice of Borrowing
received by the Agent, or (ii) upon advice received by the Agent on a
Business Day from the Disbursement Account Bank of the face amount of
checks drawn on the Disbursement Account, which have been or will be
presented for payment on that day minus the amount of funds then
-----
available in the Disbursement Account, pursuant to Section 2.2(c), or
(iii) to fund the Borrower's wire transfer requirements. Agent
Advances (together with all other Revolving Loans and all Letter of
Credit Obligations outstanding) may not at any time exceed the amount
available for borrowing under Section 2.1. Agent Advances shall be
subject to periodic settlement, which shall be no less frequently than
weekly, with the Revolving Lenders under Section 2.4. Agent Advances
of Base Rate Loans may be made only in the following circumstances:
(i) For administrative convenience, the Agent may, but is not
obligated to, make Agent Advances in reliance upon the Borrower's
actual or deemed representations under Section 6.2 that the
conditions for borrowing are satisfied.
(ii) If the conditions for borrowing under Section 6.2 cannot be
fulfilled, the Borrower shall in its Notice of Borrowing or
otherwise give immediate notice thereof to the Agent, with a copy
to each of the Revolving Lenders, and the Agent may, but is not
obligated to, continue to make Agent Advances for fifteen (15)
Business Days from the date the Agent first receives such notice,
or until sooner instructed by the Majority Lenders to cease;
provided that the Agent provides the Revolving Lenders promptly
--------
with a copy of such Notice of Borrowing or other notice delivered
by the Borrower to the Agent of the Borrower's failure to satisfy
the conditions for borrowing under Section 6.2.
(c) Disbursement of Revolving Loans. Revolving Loans, whether made as
----------------------------------
Lender Advances or Agent Advances, subject to the terms and conditions
of this Credit Agreement, will be made as follows:
(i) The Borrower has informed the Agent that it has decided to open
an account (the "Disbursement Account") with Fleet (the
"Disbursement Account Bank") for the purpose of paying trade
payables and other operating expenses. The Agent is authorized to
transmit proceeds of Revolving Loans upon advice received by the
Agent from the Disbursement Account Bank, as described in Section
2.2(b), directly to the Disbursement Account. In the absence of
contrary instructions from the Borrower, such advice from the
Disbursement Account Bank will be deemed a sufficient Notice of
Borrowing for an Agent Advance of Base Rate Loans.
(ii) It is contemplated that Revolving Loans be made available to fund
the Borrower's Letter of Credit Obligations, as described in
Section 3.5, and such Revolving Loans may be made available by
the Agent directly to the Issuing Bank upon notice from the
Issuing Bank of unfunded Letter of Credit Obligations.
(iii)The Agent will make requested Revolving Loans available as
instructed in a Notice of Borrowing, and in the absence of such
instructions, shall transmit the proceeds of such requested
Revolving Loans directly to the Disbursement Account.
(d) Notices of Borrowing; Minimum Amounts. Notice of Borrowing for (i)
-----------------------------------------
Lender Advances of Base Rate Loans shall be given not later than Noon
Boston time on the same Business Day of the proposed Borrowing and
(ii) Agent Advances of Base Rate Loans shall be given not later than
3:00 P.M. Boston time on the same Business Day of the proposed
Borrowing. Notice of Borrowing for Eurodollar Rate Loans shall be
given not later than 5:00 P.M. Boston time on the third Business Day
prior to the proposed Borrowing.
(i) Notices of Borrowing may be given under this Section by telephone
or facsimile transmission, and, if by telephone, promptly
confirmed in writing substantially in the form of Exhibit F. Once
given, a Notice of Borrowing is irrevocable by and binding on the
Borrower.
(ii) The Borrower shall specify in each Notice of Borrowing whether
the conditions for the requested Borrowing are satisfied and
whether the requested Borrowing is of Base Rate Loans or
Eurodollar Rate Loans. The Borrower may request one or more
Borrowings on the same Business Day. Each such Borrowing shall,
unless otherwise specifically provided herein, consist entirely
of Revolving Loans of the same Type and, if such Borrowing is to
consist of Eurodollar Rate Loans, shall be in an aggregate amount
for all Revolving Lenders of not less than $1,000,000 or an
integral multiple of $100,000 in excess thereof. The right of the
Borrower to choose Eurodollar Rate Loans is subject to the
provisions of Section 5.7.
(iii)On or prior to the Closing Date, the Borrower will provide to
the Agent a list, with specimen signatures, of officers
authorized to request Revolving Loans, substantially in the form
attached as Exhibit J to this Credit Agreement. The Agent is
entitled to rely upon such list until it is replaced by the
Borrower. The Agent shall have no duty to verify the authenticity
of the signature appearing on any Notice of Borrowing or other
writing delivered hereunder and, with respect to an oral request
for Revolving Loans, the Agent shall have no duty to verify the
identity of any individual representing himself as one of the
officers authorized to make such request on behalf of the
Borrower. Neither the Agent nor any of the Revolving Lenders
shall incur any liability to the Borrower as a result of acting
upon any telephonic notice the Agent believes in good faith to
have been given by a duly authorized officer or other individual
authorized to request Revolving Loans on behalf of the Borrower
or for otherwise acting in good faith.
2.3 Settlement of Lender Advances and Repayments.
The Agent shall give each Revolving Lender prompt notice by telephone or
facsimile transmission of a Notice of Borrowing that requests Lender Advances of
Revolving Loans. No later than 3:00 P.M. Boston time on the date designated for
the Borrowing, each Revolving Lender, for the account of its Applicable Lending
Office, shall make available to the Agent at the Agent's address its
Proportionate Share of such Borrowing in immediately available funds. Unless the
Agent receives contrary written notice prior to the date of any such Borrowing
of Revolving Loans, it is entitled to assume that each Revolving Lender will
make available its Proportionate Share of the Borrowing and in reliance upon
that assumption, but without any obligation to do so, may advance such
Proportionate Share on behalf of the Revolving Lender.
2.4 Periodic Settlement of Agent Advances and Repayments.
(a) The Settlement Date. The amount of Revolving Loans and the amount of
---------------------
each Revolving Lender's Proportionate Share of Revolving Loans shall
be computed weekly (or more frequently in the Agent's discretion) and
shall be adjusted upward or downward based on all Revolving Loans
(including Agent Advances) and repayments of Revolving Loans received
by the Agent as of 5:00 P.M. Boston time on the last Business Day of
the period specified by the Agent (such date, the "Settlement Date").
(b) Summary Statements; Settlements. The Agent shall deliver to each of
----------------------------------
the Revolving Lenders promptly after the Settlement Date a summary
statement of the amount of outstanding Revolving Loans (including
Agent Advances) for the period and the amount of repayments received
for the period. As reflected on the summary statement: (i) the Agent
shall transfer to each Revolving Lender its allocated share of
interest and Unused Line Fee and its Proportionate Share of
repayments; and (ii) each Revolving Lender shall transfer to the Agent
(as provided below), or the Agent shall promptly transfer to each
Revolving Lender, such amounts as are necessary to insure that, after
giving effect to all such transfers, the amount of Revolving Loans
made by each Revolving Lender shall be equal to such Revolving
Lender's Proportionate Share of the aggregate amount of Revolving
Loans outstanding as of such Settlement Date. If the summary statement
requires transfers to be made to the Agent by the Revolving Lenders
and is received prior to 12:00 Noon Boston time on a Business Day,
such transfers shall be made in immediately available funds no later
than 3:00 P.M. Boston time that day; and, if received after 12:00 Noon
Boston time, then no later than 3:00 P.M. Boston time on the next
Business Day. The obligation of each Revolving Lender to transfer such
funds is irrevocable, unconditional and without recourse to or
warranty by the Agent.
(c) Distribution of Interest and Unused Line Fees. Interest on the
----------------------------------------------------
Revolving Loans (including Agent Advances) together with the amount of
the Unused Line Fee, shall be allocated by the Agent to each Revolving
Lender in accordance with the Proportionate Share of Revolving Loans
actually funded by and repaid to each Revolving Lender, and shall
accrue from and including the date such Revolving Loans are so
advanced and to but excluding the date such Revolving Loans are either
repaid by the Borrower or actually settled under this Section.
Promptly after the end of each month (or, with respect to interest on
Eurodollar Rate Loans, promptly after such interest is received by the
Agent), the Agent shall distribute to each Revolving Lender its
allocated share of the interest and the Unused Line Fee accrued during
that month.
2.5 Defaulting Lenders.
(a) A Revolving Lender who fails to pay the Agent its Proportionate Share
of any Revolving Loans (including Agent Advances) made available by
the Agent on such Revolving Lender's behalf, or who fails to pay any
other amount owing by it to the Agent, is a "Defaulting Lender." The
Agent may recover all such amounts owing by a Defaulting Lender on
demand. If the Defaulting Lender does not pay such amounts on the
Agent's demand, the Agent shall promptly notify the Borrower and the
Borrower shall pay such amounts within five (5) Business Days. In
addition, the Defaulting Lender or the Borrower shall pay the Agent
interest on such amount for each day from the date it was made
available by the Agent to the Borrower to the date it is recovered by
the Agent at a rate per annum equal to (x) the overnight Federal Funds
Rate, if paid by the Defaulting Lender, or (y) the then applicable
rate of interest calculated under Section 5.1 for Revolving Loans, if
paid by the Borrower; plus, in each case, the Expenses and losses, if
-----
any, incurred as a result of the Defaulting Lender's failure to
perform its obligations.
(b) The failure of any Revolving Lender to fund its Proportionate Share of
any Revolving Loan (including Agent Advances) shall not relieve any
other Revolving Lender of its obligation to fund its Proportionate
Share of such Revolving Loan. Conversely, no Revolving Lender shall be
responsible for the failure of another Revolving Lender to fund its
Proportionate Share of a Revolving Loan.
(c) The Agent shall not be obligated to transfer to a Defaulting Lender
any payments made by the Borrower to the Agent (including, without
limitation, with respect to the Revolving Loans and the Term Loans)
for the Defaulting Lender's benefit; nor shall a Defaulting Lender be
entitled to the sharing of any payments hereunder. Amounts payable to
a Defaulting Lender shall instead be paid to or retained by the Agent.
The Agent may hold and, in its discretion, re-lend to the Borrower the
amount of all such payments received or retained by it for the account
of such Defaulting Lender. For purposes of voting or consenting to
matters with respect to the Credit Documents, such Defaulting Lender
shall be deemed not to be a "Revolving Lender" and such Revolving
Lender's Commitment shall be deemed to be zero (0). The operation of
this Section shall not be construed to increase or otherwise affect
the Revolving Commitment of any Revolving Lender, or relieve or excuse
the performance by the Borrower of its duties and obligations
hereunder.
2.6 Mandatory Payments; Reduction of Commitments.
(a) The aggregate balance of Revolving Loans and all Letter of Credit
Obligations outstanding at any time in excess of the lesser of the
--------------
aggregate of the Revolving Commitments of all Revolving Lenders and
the Borrowing Base shall be immediately due and payable without the
necessity of any demand.
(b) On the Expiration Date, the Revolving Commitment of each Revolving
Lender shall automatically reduce to zero and may not be reinstated.
Upon seven (7) days' notice to the Agent and each Revolving Lender,
the Borrower may reduce or terminate the unused portion of the
Revolving Commitments at any time and from time to time in whole or in
part. Each such reduction of the Revolving Commitments must be in an
amount not less than $1,000,000 (and in increments of $500,000
thereafter) and shall reduce the Revolving Commitment of each
Revolving Lender by each such Revolving Lender's Proportionate Share
of the reduction. Once reduced, no portion of the Revolving
Commitments may be reinstated.
2.7 Maintenance of Loan Account; Statements of Account.
The Agent shall maintain an account on its books in the name of the
Borrower (the "Loan Account") in which the Borrower will be charged with all
loans and advances made by the Lenders to the Borrower or for the Borrower's
account, including the Revolving Loans, and all Letter of Credit Obligations,
the Fees, the Expenses and any other Obligations (other than the Term Loans).
The Loan Account will be credited with all amounts received by the Agent from
the Borrower or from others for the Borrower's account, including all amounts
received in the Fleet Account from the Blocked Account Banks. After the end of
each month, the Agent shall send the Borrower a statement accounting for the
charges, loans, advances and other transactions occurring among and between the
Agent, the Lenders and the Borrower during that month. The monthly statements
shall, absent manifest error, be an account stated, which is final, conclusive
and binding on the Borrower.
2.8 Payment Procedures.
Payments of interest, Fees and Expenses shall be made not later than 2:00
P.M. Boston time on the day when due, in immediately available Dollars, to the
Agent at its address set forth in Section 12.5 hereof. The Borrower hereby
authorizes the Agent to charge the Loan Account with the amount of all payments
to be made hereunder and under the other Credit Documents, including all Fees
and Expenses and payments on account of the Term Loans, as and when such
payments become due. The Borrower's obligations to the Lenders with respect to
such payments shall be discharged by making such payments to the Agent pursuant
to this Section or by charging the Loan Account.
2.9 Collection of Accounts.
(a) All Collections and other amounts received by the Borrower from any
account debtor, in addition to all other cash received from any other
source (including, without limitation, upon sales of Collateral or
other property permitted hereunder (unless remitted directly to the
Agent)), shall upon receipt be deposited into an account (each, a
"Blocked Account") opened by the Borrower at a financial institution
selected by the Borrower and acceptable to the Agent (each, a "Blocked
Account Bank"). The Borrower shall use its best efforts to cause each
Blocked Account Bank to enter into an agreement with the Borrower and
the Agent substantially in the form of Exhibit K to this Credit
Agreement (each, a "Blocked Account Agreement"), provided that, with
--------
respect to any Blocked Account not subject to a Blocked Account
Agreement, the Agent may require the Borrower to close such Blocked
Account and have all funds therein transferred to the Fleet Account
and all future Collections which would otherwise be deposited in such
Blocked Account deposited in another Blocked Account which is subject
to a Blocked Account Agreement. Deposits in each Blocked Account shall
be transferred via the automated clearing house system each Business
Day into an account (the "Fleet Account") maintained by the Agent at
Fleet and established pursuant to a concentration account agreement
entered into among the Borrower, the Agent and Fleet substantially in
the form of Exhibit L to the this Credit Agreement (the "Concentration
Account Agreement"). Where applicable, such transfers shall be subject
to the terms and conditions of the relevant Blocked Account Agreement.
The Borrower shall accurately report all amounts deposited in the
Blocked Accounts to ensure the proper transfer of funds as set forth
above.
(b) The Borrower may request that the Agent close Blocked Accounts and/or
open new Blocked Accounts (or, in either case, permit the Borrower to
do so), subject to the execution and delivery to the Agent of
appropriate Blocked Account Agreements (unless expressly waived by the
Agent) consistent with the provisions of this Section 2.9 and
otherwise satisfactory to the Agent.
2.10 Application of Payments.
All amounts received in the Fleet Account from the Blocked Account Banks
shall be credited to the Loan Account. If an Event of Default has occurred and
is continuing, all amounts received by the Agent in the Fleet Account or
otherwise shall be applied in the following order: first, to the payment of any
-----
Fees, Expenses or other Obligations (exclusive of principal and interest) due
and payable to the Agent under any of the Credit Documents or otherwise,
including amounts advanced by the Agent on behalf of the Lenders pursuant to
Section 2.4(b); second, to the payment of any Fees, Expenses or other
------
Obligations due and payable to the Issuing Bank under any of the Credit
Documents; third, to the ratable payment of any Fees, Expenses or other
-----
Obligations due and payable to the Syndication Agent or the Lenders under any of
the Credit Documents other than those obligations specifically referred to in
this Section 2.10; fourth, to the ratable payment of interest due on the Loans;
------
fifth, to the ratable payment of all principal due on the Loans and Obligations
-----
in an amount not exceeding $5,000,000 owing under or in connection with the
Secured Interest Rate Agreements; and sixth, the payment of Obligations owing
-----
under or in connection with the Secured Interest Rate Agreements in an amount in
excess of $5,000,000. Any payment received hereunder as a distribution in any
proceeding referred to in Section 10.1(f) shall, unless paid with respect to
amounts specifically owing to the Agent, the Syndication Agent or the Issuing
Bank, be distributed and applied to the payment of the amounts due hereunder and
under the Notes ratably in accordance with such amounts (or, if a court of
competent jurisdiction shall otherwise specify, as specified by such court).
ARTICLE 3. LETTERS OF CREDIT
----------------------------
3.1 Issuance of Letters of Credit.
Subject to the terms and conditions of this Credit Agreement, on and after
the Initial Closing Date and to and including the thirtieth (30th) day prior to
the Expiration Date, the Issuing Bank shall issue Letters of Credit hereunder at
the request of the Borrower and for its account, as more specifically described
below. The Issuing Bank shall not issue any Letter of Credit for the account of
the Borrower if at the time of such requested issuance:
(a) The face amount of such requested Letter of Credit, when added to the
Letter of Credit Obligations then outstanding, would cause the Letter
of Credit Obligations to exceed (i) $30,000,000 or, (ii) when added to
the aggregate amount of Revolving Loans and all Letter of Credit
Obligations then outstanding would cause the sum of the aggregate
amount of Revolving Loans and Letter of Credit obligations then
outstanding to exceed the lesser of (x) the aggregate Revolving
Commitments of all Revolving Lenders and (y) the Borrowing Base then
in effect;
(b) Any order, judgment or decree of any Governmental Authority or
arbitrator shall purport by its terms to enjoin or restrain the
Issuing Bank from issuing such Letter of Credit or any Requirement of
Law applicable to the Agent or the Issuing Bank or any request or
directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over the Agent or the Issuing
Bank shall prohibit, or request that the Agent or the Issuing Bank
refrain from, the issuance of letters of credit generally or such
Letter of Credit in particular or shall impose upon the Agent or the
Issuing Bank with respect to such Letter of Credit any restriction or
reserve or capital requirement (for which the Agent or the Issuing
Bank is not otherwise compensated) not in effect as of the Closing
Date, or any unreimbursed loss, cost or expense which was not
applicable, in effect or known to the Agent or the Issuing Bank as of
the Closing Date and which the Agent or the Issuing Bank deems in good
faith to be material to it; or
(c) A default of any Lender's obligations to fund under Section 3.5
exists, or any Lender is a Defaulting Lender under Section 2.5, unless
the Agent and the Issuing Bank have entered into satisfactory
arrangements with the Borrower to eliminate the Agent's and the
Issuing Bank's risk with respect to such Lender, including cash
collateralization of such Lender's Proportionate Share of the Letter
of Credit Obligations.
3.2 Terms of Letters of Credit.
The Letters of Credit shall be in a form customarily issued by the Issuing
Bank or in such other form as has been approved by the Issuing Bank. At the time
of issuance, the amount and the terms and conditions of each Letter of Credit,
and of any drafts or acceptances thereunder, shall be subject to approval by the
Agent and the Borrower. In no event may the term of any standby Letter of Credit
issued hereunder exceed 360 days nor the term of any documentary Letter of
Credit exceed 120 days, and all Letters of Credit issued hereunder shall expire
no later than the date that is five (5) Business Days prior to the Expiration
Date. Any Letter of Credit containing an automatic renewal provision shall also
contain a provision pursuant to which, notwithstanding any other provisions
thereof, it shall expire no later than the date that is five (5) days prior to
the Expiration Date.
3.3 Revolving Lenders' Participation.
Immediately upon issuance or amendment by the Issuing Bank of any Letter of
Credit in accordance with the procedures set forth in Section 3.1, each
Revolving Lender shall be deemed to have irrevocably and unconditionally
purchased and received from the Issuing Bank, without recourse or warranty, an
undivided interest and participation to the extent of such Revolving Lender's
Proportionate Share (based upon its Revolving Commitment) in the liability with
respect to such Letter of Credit (including, without limitation, all obligations
of the Borrower with respect thereto, other than amounts owing to the Issuing
Bank consisting of Issuing Bank Fees) and any security therefor or guaranty
pertaining thereto.
3.4 Notice of Issuance.
Whenever the Borrower desires the issuance of a Letter of Credit, the
Borrower shall deliver to the Agent a written notice no later than 1:00 P.M.
Boston time at least five (5) Business Days (or such shorter period as may be
agreed to by the Issuing Bank) in advance of the proposed date of issuance,
which written notice shall be in such form as may be required from time to time
by the Agent and the Issuing Bank (a "Letter of Credit Request"). The
transmittal by the Borrower of each Letter of Credit Request shall be deemed to
be a representation and warranty by the Borrower that the Letter of Credit may
be issued in accordance with and will not violate any of the requirements of
Section 3.1. Prior to the date of issuance of each Letter of Credit, the
Borrower shall provide to the Agent a precise description of the documents and
the text of any certificate to be presented by the beneficiary of such Letter of
Credit which if presented by such beneficiary on or prior to the expiration date
of the Letter of Credit would require the Issuing Bank to make payment under the
Letter of Credit. The Issuing Bank, in its reasonable judgment, may require
changes in any such documents and certificates. No Letter of Credit shall
require payment against a conforming draft to be made thereunder prior to the
second Business Day (under the laws of the jurisdiction of the Issuing Bank)
after the date on which such draft is presented, together with all documents
and/or certificates required to be presented in connection therewith under the
terms of the applicable Letter of Credit. A Letter of Credit Request may be
given in writing or electronically and, if requested by the Agent, with prompt
confirmation in writing. Any electronic Letter of Credit Request shall be deemed
to have been prepared by, or under the supervision of the chief financial
officer of the Borrower. The Agent shall promptly provide the aforementioned
Letter of Credit Request, document description and proposed text of
certification to the Issuing Bank.
3.5 Payment of Amounts Drawn Under Letters of Credit.
In the event of any drawing under any Letter of Credit by the beneficiary
thereof, the Issuing Bank shall notify the Agent, which shall notify the
Borrower of such draw, not later than 11:00 A.M. Boston time on the Business Day
immediately prior to the date on which the Issuing Bank intends to honor such
drawing. The Borrower will be deemed to have concurrently given a Notice of
Borrowing to the Agent for Revolving Loans in the amount of and at the time of
such drawing. Subject to satisfaction or waiver of the applicable conditions
specified in Article 6 hereof and the other terms and conditions of Borrowings
contained herein, the Revolving Lenders shall be obligated to, on the date of
such drawing, make Revolving Loans in the amount of such drawing, the proceeds
of which shall be applied directly by the Agent to reimburse the Issuing Bank
for the amount of such drawing or payment. If for any reason, proceeds of such
Revolving Loans are not received by the Issuing Bank on such date in an amount
equal to the amount of such drawing, the Borrower shall be obligated to and
shall reimburse the Issuing Bank, on the Business Day (under the laws of the
jurisdiction of the Issuing Bank) immediately following the date of such
drawing, in an amount in immediately available funds equal to the excess of the
amount of such drawing over the amount of such Revolving Loans, if any, which
are so received, plus accrued interest on such amount at the rate set forth in
Section 5.1 hereof.
3.6 Payment by Revolving Lenders.
To the extent that Revolving Loans are not made in an amount sufficient to
reimburse the Issuing Bank in full for the amount of any draw, the Agent shall
promptly notify each Revolving Lender of the unreimbursed amount of such drawing
and of such Revolving Lender's respective participation therein. Each Revolving
Lender shall make available to the Agent for the benefit of the Issuing Bank an
amount equal to such Revolving Lender's respective participation in immediately
available funds, not later than 1:00 P.M. Boston time on the Business Day (under
the laws of the jurisdiction of the Issuing Bank) after the date notified by the
Agent. In the event that any Revolving Lender fails to make available to the
Agent the amount of such Revolving Lender's participation in such Letter of
Credit as provided in this Section 3.6, the Issuing Bank shall be entitled to
recover such amount on demand from such Revolving Lender together with interest
at the Federal Funds Rate for the first three (3) Business Days while such
amount remains unpaid and thereafter at the Base Rate. The Agent shall
distribute to each other Revolving Lender which has paid all amounts payable by
it under this Section 3.6 with respect to any Letter of Credit issued by the
Issuing Bank such other Revolving Lender's Proportionate Share of all payments
subsequently received by the Agent from the Borrower in reimbursement of
drawings honored by the Issuing Bank under such Letter of Credit when such
payments are received.
3.7 Nature of Issuing Bank's Duties.
In determining whether to pay under any Letter of Credit, the Issuing Bank
shall be responsible only to determine that the documents and certificates
required to be delivered under that Letter of Credit have been delivered and
that they comply on their face with the requirements of that Letter of Credit.
As between the Borrower, the Issuing Bank and each other Lender, the Borrower
assumes all risks of the acts and omissions of the Issuing Bank (except to the
extent that it is finally judicially determined that such acts or omissions were
the result of the Issuing Bank's gross negligence or willful misconduct), or
misuse of the Letters of Credit by the respective beneficiaries of such Letters
of Credit. In furtherance and not in limitation of the foregoing, neither the
Issuing Bank, the Agent nor any of the other Lenders shall be responsible (i)
for the validity, sufficiency, accuracy, genuineness or legal effects of any
document submitted by any party in connection with the application for and
issuance of or any drawing honored under such Letters of Credit even if it
should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged, (ii) for 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) for failure of the beneficiary of any such Letter of Credit to
strictly comply with conditions required in order to draw upon such Letter of
Credit, (iv) for errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex, telecopy or
otherwise, whether or not they be in cipher, (v) for errors in interpretation of
technical terms, (vi) for 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) for the misapplication by the
beneficiary of any such Letter of Credit of the proceeds of any drawing honored
under such Letter of Credit, and (viii) for any consequences arising from causes
beyond the control of the Issuing Bank, the Agent or the other Lenders. None of
the above shall affect, impair, or prevent the vesting of any of the Issuing
Bank's rights or powers hereunder. Any action taken or omitted to be taken by
the Issuing Bank under or in connection with any Letter of Credit, if taken or
omitted in the absence of gross negligence or willful misconduct, shall not
create for the Issuing Bank any liability to the Borrower, the Agent or any
Lender.
3.8 Obligations Absolute.
The obligations of the Borrower to reimburse the Issuing Bank for
drawings honored under the Letters of Credit and the obligations of the
Revolving Lenders under Section 3.6 hereof shall be unconditional and
irrevocable and shall be paid strictly in accordance with the terms of this
Credit Agreement under all circumstances including, without limitation, the
following circumstances:
(a) any lack of validity or enforceability of any Letter of Credit;
(b) the existence of any claim, set-off, defense or other right which the
Borrower or any Affiliate of the Borrower may have at any time against
a beneficiary or any transferee of any Letter of Credit (or any
Persons or entities for whom any such beneficiary or transferee may be
acting), the Issuing Bank, any Lender or any other Person, whether in
connection with this Credit Agreement, the transactions contemplated
herein or any unrelated transaction;
(c) any draft, demand, certificate or any other documents 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;
(d) the surrender or impairment of any security for the performance or
observance of any of the terms of any of the Credit Documents;
(e) payment by the Issuing 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;
(f) failure of any drawing under a Letter of Credit or any non-application
or misapplication by the beneficiary of the proceeds of any drawing;
or
(g) the fact that a Default or an Event of Default shall have occurred and
be continuing;
provided, however, that the Borrower shall have no obligation to reimburse the
-------- -------
Issuing Bank, and the Revolving Lenders shall have no obligation under Section
3.6 hereof, in the event of the Issuing Bank's willful misconduct or gross
negligence in determining whether documents presented under the Letter of Credit
comply with the terms of such Letter of Credit.
ARTICLE 4. The Term Loans
-------------------------
4.1 Commitment to Make Term Loan.
-----------------------------
Subject to the terms and conditions set forth in this Agreement, the
Borrower shall borrow on the Closing Date a sum equal to $51,650,000 (the "Term
Loan"). Each of the Term Loan Lenders severally (and not jointly) agrees to lend
to the Borrower that Lender's Term Loan Commitment Percentage of the Term Loan.
4.2 Term Notes.
-----------
The Term Loans shall be evidenced by separate Term Notes of the Borrower,
dated as of the Closing Date and completed with appropriate insertions. Each
Term Loan Lender shall receive a Term Note in the principal amount equal to such
Term Loan Lender's Term Loan Commitment.
4.3 Repayment of Term Loan.
-----------------------
The outstanding principal balance of the Term Loan shall be payable in
consecutive quarterly installments the first of which shall be due on the 31st
day of March, 2001, and the subsequent of which shall be due on the last day of
each June, September, December, and March thereafter. The quarterly installments
shall be in the following amounts for the following periods:
Payment Dates Quarterly Principal Payment
------------- ---------------------------
March 31, 2001 through and including $2,113,000
December 31, 2001
March 31, 2002 through and including $2,348,000
December 31, 2002
March 31, 2003 through and including $3,052,000
December 31, 2003
March 31, 2004 through and including $3,052,000
December 31, 2004
March 31, 2005 $4,695,000
In all events and under all circumstances, unless sooner paid or accelerated,
the then unpaid principal balance of the Term Loan and all accrued and unpaid
interest thereon shall be due and payable on the Expiration Date.
4.4 Mandatory Prepayments.
----------------------
In addition to the principal reductions required pursuant to Sections 2.6
and 4.3 hereof, the Borrower shall pay, and there shall become due and payable,
as a prepayment in respect of the Obligations the following:
(a) If the Borrower or any of its Subsidiaries receives after the Initial
Closing Date any proceeds from the issuance of common stock (other
than stock issued to the Borrower or any of its Subsidiaries),
preferred stock, partnership or other similar interests or equity or
securities convertible into equity, the Borrower shall pay to the
Agent, as and when received by the Borrower or such Subsidiary and as
a mandatory prepayment a sum equal to fifty percent (50%) of the Net
Cash Proceeds thereof. The mandatory prepayment contained in this
clause (a) shall not constitute a consent by the Lenders to the
issuance of any securities otherwise prohibited by this Agreement.
(b) If the Borrower or any of its Subsidiaries receives after the Initial
Closing Date any proceeds from any Asset Sale (other than as set forth
in Section 9.6(i), (ii), (iii) and (iv) hereof), the Borrower shall
pay to the Agent, as and when received by the Borrower or such
Subsidiary and as a mandatory prepayment a sum equal to one hundred
percent (100%) of the Net Cash Proceeds thereof. The mandatory
prepayment contained in this clause (b) shall not constitute a consent
by the Lenders to any Asset Sale otherwise prohibited by this
Agreement.
(c) If the Borrower or any of its Subsidiaries receives after the Initial
Closing Date any proceeds from any Casualty Loss which the Agent
requires be utilized to repay the Obligations in accordance with the
provisions of Section 8.7 hereof, the Borrower shall pay to the Agent,
as and when received by the Borrower or such Subsidiary and as a
mandatory prepayment a sum equal to one hundred percent (100%) of the
proceeds thereof,
(d) If the Borrower or any of its Subsidiaries receives after the Initial
Closing Date any proceeds from the incurrence of any Indebtedness for
borrowed money other than as permitted by Section 9.4, the Borrower
shall pay to the Agent, as and when received by the Borrower or such
Subsidiary and as a mandatory prepayment a sum equal to one hundred
percent (100%) of the Net Cash Proceeds thereof. The mandatory
prepayment contained in this clause (d) shall not constitute a consent
by the Lenders to the incurrence of any Indebtedness otherwise
prohibited by this Agreement.
(e) The outstanding principal balance of the Term Loans shall at no time
exceed sixty per cent (60%) of the Fair Market Value of Eligible Real
Estate. If the principal balance of the Term Loans exceeds such
percentage, the Borrower, within three (3) days after notice from the
Agent, shall repay the Term Loans in such amount as may be necessary
so that such percentage is not exceeded.
(f) The amounts so prepaid pursuant to this Section 4.4 shall be applied
FIRST, to the principal balance of the Term Loans, in inverse order of
-----
maturity, until Term Loans have been paid in full; SECOND, to the
------
Revolving Loans (with a like reduction in the Revolving Commitments)
until the Revolving Loans have been paid in full, and THIRD, to all
other Obligations in such order and manner as the Agent shall
determine in its discretion. Each such prepayment shall be applied, in
the absence of instruction by the Borrower, first to the principal of
Base Rate Loans and then to the principal of Eurodollar Rate Loans
(together with any amounts due under Section 5.7(d) hereof). To the
extent that no Event of Default is then occurring, any prepayment to
be applied to any Eurodollar Rate Loans which would require the
payment of any additional amounts pursuant to Section 5.7(d) hereof,
the Agent shall hold such funds in a depository account with the Agent
as cash collateral, to be applied to the applicable Loan on the last
day of the applicable Interest Period. Any portion of the Obligations
which is prepaid may not be reborrowed. Any prepayment shall not
postpone the time for, or reduce the amount of, any subsequent payment
on account of the Obligations. The acceptance by the Lenders of any
prepayments required hereunder shall not be deemed to constitute a
waiver of any Default or Event of Default arising from the
consummation of any transaction which is otherwise prohibited
hereunder.
4.5 Optional Prepayments of Term Loans.
Subject to the provisions of Section 5.7(d), the Borrower shall have the
right, at its election, to repay the outstanding amount of the Term Loans, as a
whole or in part, at any time without penalty or premium; provided that the full
--------
or partial prepayment of the outstanding amount of any Eurodollar Rate Loans
pursuant to this Section may be made only on the last day of the Interest Period
relating thereto. The Borrower shall give the Agent, no later than 10:00 a.m.,
Boston time, at least three (3) Business Days' prior written notice of any
proposed repayment pursuant to this Section 4.5 of Eurodollar Loans, specifying
the proposed date of payment of such Loans and the principal amount to be paid.
Each such partial prepayment of any of the Term Loans shall be in the minimum
amount of $1,000,000.00, shall be accompanied by the payment of accrued interest
on the principal repaid to the date of payment and shall be applied, in the
absence of instruction by the Borrower, first to the principal of Base Rate
Loans and then to the principal of Eurodollar Rate Loans in inverse order of
maturity. No prepayment hereunder shall postpone the date for, or reduce the
amount of, any subsequent payment under the Term Loans. Any Term Loans which are
prepaid may not be reborrowed.
ARTICLE 5. INTEREST, FEES AND EXPENSES
--------------------------------------
5.1 Interest on Base Rate Loans.
Subject to the provisions of Section 5.3 hereof, interest on Base Rate Loans
which are Revolving Loans shall be payable monthly on the last day of each month
at an interest rate per annum equal to the Base Rate plus the Base Rate Spread.
The "Base Rate Spread" shall be equal to the percentage per annum set forth
below in that Level in which both (a) the Interest Coverage Ratio maintained by
the Consolidated Entity for the Consolidated Entity's most recently ended four
full fiscal quarters for which Financial Statements of the Consolidated Entity
have been delivered to the Agent pursuant to Section 8.1(a) or 8.1(c), as
applicable, is attained, and (b) average Unused Availability for the most recent
three month period based upon Borrowing Base Certificates which have been
delivered to the Agent pursuant to Section 8.2(a) is attained:
Level Unused Availability Ratio Base Rate Spread
----- ------------------- ----- ----------------
I $35,000,000.00 2.25 to 1.00 0%
II $30,000,000.00 1.75 to 1.00 0.25%
III Not Applicable 1.50 to 1.00 0.50%
IV Not Applicable _1.50 to 1.00 0.75%
The Base Rate Spread shall be that level in which both performance criteria are
met; if only one of the tests in any Level is met, the Base Rate Spread shall be
that set forth in the next higher level in which such criteria are satisfied
(with Level IV being the highest level and Level I the lowest). In the event of
any change in the Base Rate, the rate hereunder shall change, effective as of
the day the Base Rate changes. In the event of any change in the Interest
Coverage Ratio of the Consolidated Entity or average Unused Availability as a
result of which the Base Rate Spread will change, such change shall be
effective, (x) if the change is the result of a change in the Interest Coverage
Ratio, as of the first day of the first calendar month beginning after the date
on which the most recent Financial Statements of the Consolidated Entity were
delivered to the Agent pursuant to Section 8.1(a) or 8.1(c), as applicable, or
if such Financial Statements were not delivered on a timely basis, on the day
following the ultimate delivery thereof, or (y) if the change is the result of a
change in average Unused Availability, as of the first day of the week beginning
after the date on which a Borrowing Base Certificate has been delivered to the
Agent pursuant to Section 8.2(a), or if such Borrowing Base Certificate was not
delivered on a timely basis, on the day following the ultimate delivery thereof.
Each determination by the Agent of an interest rate hereunder shall be
conclusive and binding for all purposes, absent manifest error. Notwithstanding
anything to the contrary herein contained, the Base Rate Spread shall be
initially established at 0.50% and shall remain at that rate through December
31, 2001, except that if the Interest Coverage Ratio is ever less than 1.50 to
1.00 during such time, the Base Rate Spread shall increase to 0.75% until the
date that such Interest Coverage Ratio exceeds 1.50 to 1.00 (at which time the
Base Rate Spread shall revert to 0.50%).
5.2 Interest on Eurodollar Rate Loans.
(a) Subject to the provisions of Section 5.3 hereof, interest on
Eurodollar Rate Loans shall be payable monthly on the last day of each
month and on the last day of each Interest Period with respect to each
Eurodollar Rate Loan, at the date of conversion of such Eurodollar
Rate Loan (or a portion thereof) to a Base Rate Loan and at maturity
of such Eurodollar Rate Loan.
(b) Interest on Eurodollar Rate Loans which constitute Revolving Loans
shall accrue and be paid at an interest rate per annum during the
Interest Period for such Eurodollar Rate Loan equal to the Adjusted
Eurodollar Rate for the Interest Period in effect for such Eurodollar
Rate Loan plus the Eurodollar Rate Spread. The "Eurodollar Rate
Spread" shall be equal to the percentage per annum set forth below in
that Level in which both (a) the Interest Coverage Ratio maintained by
the Consolidated Entity for the Consolidated Entity's most recently
ended four full fiscal quarters for which Financial Statements of the
Consolidated Entity have been delivered to the Agent pursuant to
Section 8.1(a) or 8.1(c), as applicable, is attained, and (b) average
Unused Availability for the most recent three month period based upon
Borrowing Base Certificates which have been delivered to the Agent
pursuant to Section 8.2(a) is attained, as calculated on the date two
(2) Business Days prior to the commencement of the applicable Interest
Period:
Level Unused Availability Ratio Eurodollar Rate Spread
----- ------------------- ----- ----------------------
I $35,000,000.00 2.25 to 1.00 2.00%
II $30,000,000.00 1.75 to 1.00 2.25%
III Not Applicable 1.50 to 1.00 2.50%
IV Not Applicable _1.50 to 1.00 2.75%
The Eurodollar Rate Spread shall be that level in which both performance
criteria are met; if only one of the tests in any Level is met, the Eurodollar
Rate Spread shall be that set forth in the next higher level in which such
criteria are satisfied (with Level IV being the highest level and Level I the
lowest) After maturity of any Eurodollar Rate Loan (whether by acceleration or
otherwise), interest with respect to such Eurodollar Rate Loan shall be payable
upon demand. In the event of any change in the Interest Coverage Ratio of the
Consolidated Entity or average Unused Availability as a result of which the Base
Rate Spread will change, such change shall be effective, (x) if the change is
the result of a change in the Interest Coverage Ratio, as of the first day of
the first calendar month beginning after the date on which the most recent
Financial Statements of the Consolidated Entity were delivered to the Agent
pursuant to Section 8.1(a) or 8.1(c), as applicable, or if such Financial
Statements were not delivered on a timely basis, on the day following the
ultimate delivery thereof, or (y) if the change is the result of a change in
average Unused Availability, as of the first day of the week beginning after the
date on which the most recent Borrowing Base Certificate has been delivered to
the Agent pursuant to Section 8.2(a), or if such Borrowing Base Certificate was
not delivered on a timely basis, on the day following the ultimate delivery
thereof. The Agent upon determining the Adjusted Eurodollar Rate for any
Interest Period shall promptly notify the Borrower and the Lenders by telephone
(confirmed promptly in writing) or in writing thereof. Each determination by the
Agent of an interest rate hereunder shall be conclusive and binding for all
purposes, absent manifest error. Notwithstanding anything to the contrary herein
contained, the Eurodollar Rate Spread shall be initially established at 2.50%
and shall remain at that rate through December 31, 2001, except that if the
Interest Coverage Ratio is ever less than 1.50 to 1.00 during such time, the
Eurodollar Rate Spread shall increase to 2.75% until the date that such Interest
Coverage Ratio exceeds 1.50 to 1.00 (at which time the Eurodollar Rate Spread
shall revert to 2.50%).
(c) Interest on Eurodollar Rate Loans which constitute Term Loans shall
accrue and be paid at an interest rate per annum during the Interest
Period for such Eurodollar Rate Loan equal to the Adjusted Eurodollar
Rate for the Interest Period in effect for such Eurodollar Rate Loan
plus three percent (3%).
----
5.3 Interest After Event of Default.
Following the occurrence and during the continuance of an Event of Default
interest on the Loans shall be payable on demand and interest shall accrue at a
rate per annum equal to the rate at which the Loans are bearing interest
pursuant to Sections 5.1 and 5.2, above or, if applicable with respect to the
Term Loans, Section 5.7(c) below, plus two percent (2.00%) per annum. In the
event of any change in said applicable interest rate, the rate hereunder shall
change, effective as of the day the applicable interest rate changes, so as to
remain two percent (2.00%) per annum above the then applicable interest rate.
5.4 Reimbursement of Expenses.
(a) The Borrower shall promptly reimburse the Agent and the Syndication
Agent for all Expenses of the Agent and the Syndication Agent as the
same are incurred by the Agent and the Syndication Agent and upon
receipt of invoices therefor and, if requested by the Borrower, such
reasonable backup materials and information as the Borrower shall
reasonably request.
(b) After the occurrence and during the continuance of a Default, the
Borrower shall promptly reimburse the Agent and the Lenders for all
costs, fees and expenses incurred by each of them in connection with
any workout, restructuring, renegotiation or refinancing of the Loans
and the other Obligations under the Credit Agreement and the other
Credit Documents.
5.5 Unused Line Fee.
Promptly following the last Business Day of each calendar month hereafter
and on the Expiration Date, the Borrower shall pay to the Agent for the pro rata
benefit of each of the Revolving Lenders a non-refundable fee equal to the
weighted average amount during such month by which the aggregate Revolving
Commitments of all Revolving Lenders exceed the sum of (a) the aggregate face
amount of outstanding Letters of Credit and (b) the aggregate outstanding
principal balance of the Revolving Loans, multiplied by three-eighths of one
percent (0.375%) per annum (the "Unused Line Fee").
5.6 Letter of Credit Fees.
(a) Promptly following the last Business Day of each calendar quarter
hereafter and on the Expiration Date, the Borrower shall pay to the
Agent for the pro rata benefit of the Revolving Lenders a
non-refundable fee (the "Letter of Credit Fee"), in an amount equal to
the Letter of Credit Fee Percentage of the daily weighted average
amount of outstanding Letter of Credit Obligations during the
immediately preceding quarter. The "Letter of Credit Fee Percentage"
shall be equal to the percentage per annum set forth below in that
Level in which both (a) the Interest Coverage Ratio maintained by the
Consolidated Entity for the Consolidated Entity's most recently ended
four full fiscal quarters for which Financial Statements of the
Consolidated Entity have been delivered to the Agent pursuant to
Section 8.1(a) or 8.1(c), as applicable, is attained, and (b) average
Unused Availability for the most recent three month period based upon
Borrowing Base Certificates which have been delivered to the Agent
pursuant to Section 8.2(a) is attained:
Level Unused Availability Ratio Letter of Credit Fee Percentage
----- ------------------- ----- -------------------------------
I $35,000,000.00 2.25 to 1.00 2.00%
II $30,000,000.00 1.75 to 1.00 2.25%
III Not Applicable _1.50 to 1.00
2.50%
IV Not Applicable 1.50 to 1.00 2.75%
The Letter of Credit Fee Percentage shall be that level in which both
performance criteria are met; if only one of the tests in any Level is met, the
Letter of Credit Fee Percentage shall be that set forth in the next higher level
in which such criteria are satisfied (with Level IV being the highest level and
Level I the lowest). In the event of any change in the Interest Coverage Ratio
of the Consolidated Entity or average Unused Availability as a result of which
the Letter of Credit Fee Percentage will change, such change shall be effective,
(x) if the change is the result of a change in the Interest Coverage Ratio, as
of the first day of the first calendar month beginning after the date on which
the most recent Financial Statements of the Consolidated Entity were delivered
to the Agent pursuant to Section 8.1(a) or 8.1(c), as applicable, or if such
Financial Statements were not delivered on a timely basis, on the day following
the ultimate delivery thereof, or (y) if the change is the result of a change in
average Unused Availability, as of the first day of the week beginning after the
date on which a Borrowing Base Certificate has been delivered to the Agent
pursuant to Section 8.2(a), or if such Borrowing Base Certificate was not
delivered on a timely basis, on the day following the ultimate delivery thereof.
In addition, prior to the issuance of each Letter of Credit, the Borrower will
pay to the Issuing Bank a fronting fee (the "Issuing Bank Fee") equal to
one-quarter of one percent (0.25%) times the maximum amount that may be drawn
under such Letter of Credit (calculated on a per annum basis for the term of
such Letter of Credit). Each determination by the Agent of Letter of Credit Fees
and Issuing Bank Fees hereunder shall be conclusive and binding for all
purposes, absent manifest error. Notwithstanding anything to the contrary herein
contained, the Letter of Credit Fee Percentage shall be initially established at
2.50% and shall remain at that rate through December 31, 2001, except that if
the Interest Coverage Ratio is ever less than 1.50 to 1.00 during such time, the
Letter of Credit Fee Percentage shall increase to 2.75% until the date that such
Interest Coverage Ratio exceeds 1.50 to 1.00 (at which time the Letter of Credit
Fee Percentage shall revert to 2.50%).
(b) Letter of Credit Fees on Letter of Credit Obligations outstanding as
of the date an Event of Default occurs, and at all times thereafter
until the earlier of the date upon which (i) all Obligations have been
paid and satisfied in full or (ii) such Event of Default shall no
longer be continuing, shall be payable on demand at a rate equal to
the rate at which the Letter of Credit Fees are charged pursuant to
Section 5.6(a) above, plus two percent (2.00%).
5.7 Special Provisions Relating to Eurodollar Rate Loans.
(a) Continuation. With respect to any Borrowing consisting of Eurodollar
------------
Rate Loans, the Borrower may (so long as no Default or Event of
Default has occurred and is continuing), subject to the provisions of
Section 5.7(c), elect to maintain such Borrowing or any portion
thereof as consisting of Eurodollar Rate Loans by selecting a new
Interest Period for such Borrowing, which new Interest Period shall
commence on the last day of the immediately preceding Interest Period.
Each selection of a new Interest Period shall be made by notice given
not later than 12:00 P.M. Boston time on the third Business Day prior
to the date of any such continuation relating to Eurodollar Rate
Loans, by the Borrower to the Agent. Such notice by the Borrower of a
continuation (a "Notice of Continuation") shall be by telephone or
facsimile transmission, and if by telephone, promptly confirmed in
writing substantially in the form of Exhibit H, in each case
specifying (i) the date of such continuation, (ii) the Type of Loans
subject to such continuation, (iii) the aggregate amount of Loans
subject to such continuation and (iv) the duration of the selected
Interest Period. The Borrower may elect to maintain more than one
Borrowing consisting of Eurodollar Rate Loans by combining such
Borrowings into one Borrowing and selecting a new Interest Period
pursuant to this Section 5.7(a); provided, however, that each of the
-------- -------
Borrowings so combined shall consist of Loans having Interest Periods
ending on the same date. If the Borrower shall fail to select a new
Interest Period for any Borrowing consisting of Eurodollar Rate Loans
in accordance with this Section 5.7(a), such Loans will automatically,
on the last day of the then existing Interest Period therefor, convert
into Base Rate Loans in the case of Revolving Loans or into Eurodollar
Rate Loans with a one month Interest Period in the case of Term Loans.
The Agent shall give each Lender prompt notice by telephone or
facsimile transmission of each Notice of Continuation.
(b) Conversion. The Borrower may on any Business Day (so long as no
----------
Default or Event of Default has occurred and is continuing), upon
notice (each such notice, a "Notice of Conversion") given to the
Agent, and subject to the provisions of Section 5.7(c), convert the
entire amount of or a portion of all Loans of one Type comprising the
same Borrowing into Loans of another Type; provided, however, that any
-------- -------
conversion of any Eurodollar Rate Loans into Loans of another Type
shall be made on, and only on, the last day of an Interest Period for
such Eurodollar Rate Loans; and provided further that Term Loans may
----------------------
not be converted into Base Rate Loans except pursuant to Section
5.7(c)(iv). Each such Notice of Conversion shall be given not later
than 12:00 P.M. Boston time on the Business Day prior to the date of
any proposed conversion into Base Rate Loans and on the third Business
Day prior to the date of any proposed conversion into Eurodollar Rate
Loans. Subject to the restrictions specified above, each Notice of
Conversion shall be by telephone or facsimile transmission, and if by
telephone, promptly confirmed in writing substantially in the form of
Exhibit I, in each case specifying (i) the requested date of such
conversion, (ii) the Type of Loans to be converted, (iii) the portion
of such Type of Revolving Loan or Term Loan to be converted, (iv) the
Type of Revolving Loan or Term Loan such Loans are to be converted
into and (v) if such conversion is into Eurodollar Rate Loans, the
duration of the Interest Period of such Revolving Loan or Term Loan.
Each conversion shall be in an aggregate amount for the Loans of all
Lenders of not less than $1,000,000 or an integral multiple of
$100,000 in excess thereof. The Borrower may elect to convert the
entire amount of or a portion of all Loans of one Type comprising more
than one Borrowing into Loans of another Type by combining such
Borrowings into one Borrowing consisting of Loans of another Type;
provided, however, that if the Borrowings so combined consist of
-------- -------
Eurodollar Rate Loans, such Loans shall have Interest Periods ending
on the same date.
(c) Certain Limitations on Eurodollar Rate Loans. The right of the
-------------------------------------------------
Borrower to maintain, select, continue or convert Eurodollar Rate
Loans shall be limited as follows:
(i) If the Agent determines that adequate and fair means do not exist
for ascertaining the Eurodollar Rate for Eurodollar Rate Loans
comprising any requested Borrowing, continuation or conversion,
the right of the Borrower to select or maintain Eurodollar Rate
Loans for such Borrowing or any subsequent Borrowing shall be
suspended until the Agent shall notify the Borrower and the
Lenders that the circumstances causing such suspension no longer
exist, and each Revolving Loan and Term Loan comprising such
Borrowing shall be made as a Base Rate Loan.
(ii) If the Majority Lenders shall, at least one Business Day before
the date of any requested Borrowing, continuation or conversion,
notify the Agent that the Eurodollar Rate for Loans comprising
such Borrowing will not adequately reflect the cost to such
Lenders of making or funding their respective Loans for such
Borrowing, the right of the Borrower to select Eurodollar Rate
Loans for such Borrowing shall be suspended until the Agent shall
notify the Borrower and the Lenders that the circumstances
causing such suspension no longer exist, and each Revolving Loan
or Term Loan comprising such Borrowing shall be made as a Base
Rate Loan.
(iii)If at any time any Lender determines (which determination shall,
absent manifest error, be conclusive and binding on all parties)
that the making, continuation or conversion of any Revolving Loan
or Term Loan as a Eurodollar Rate Loan has become unlawful or
impermissible by reason of compliance by that Lender with any
law, governmental rule, regulation or order of any Governmental
Authority (whether or not having the force of law or would result
in costs or penalties), then, and in any such event, such Lender
may give notice of that determination in writing, to the Borrower
and the Agent and the Agent shall promptly transmit the notice to
each other Lender. Until such Lender gives notice otherwise, the
right of the Borrower to select Eurodollar Rate Loans from that
Lender shall be suspended and each Eurodollar Rate Loan
outstanding from that Lender shall automatically and immediately
convert to a Base Rate Loan.
(iv) In the event that any of the circumstances described in Sections
5.7(c)(i) through (iii) apply or the Borrower is otherwise not
entitled to select Eurodollar Rate Loans hereunder, the Term
Loans shall bear interest at the per annum rate equal to the Base
Rate plus one percent (1%).
(v) The Borrower may not select an Interest Period for a Term Loan
which is a Eurodollar Rate Loan, which Interest Period extends
beyond any date established for a quarterly principal payment of
the Term Loan pursuant to Section 4.3 hereof, unless other Term
Loan Borrowings in an amount at least equal to the required
payment have Interest Periods which expire prior to the date
established for each such quarterly principal payment of the Term
Loan.
(vi) There shall not be outstanding at any one time more than an
aggregate of twelve (12) Revolving Loans or three (3) Term Loans
which consist of Eurodollar Rate Loans.
(d) Compensation.
-------------
(i) Each Notice of Continuation and Notice of Conversion shall be
irrevocable by and binding on the Borrower. In the case of any
Borrowing, continuation or conversion that the related Notice of
Borrowing, Notice of Continuation or Notice of Conversion
specifies is to be comprised of Eurodollar Rate Loans, the
Borrower shall indemnify each Lender against any loss, cost or
expense incurred by such Lender as a result of any failure to
fulfill, on or before the date for such Borrowing, continuation
or conversion specified in such Notice of Borrowing, Notice of
Continuation or Notice of Conversion, the applicable conditions
set forth in Article 6, including, without limitation, any loss
(excluding loss of anticipated profits), cost or expense incurred
by reason of the liquidation or re-employment of deposits or
other funds acquired by such Lender to fund the Revolving Loan or
Term Loan to be made by such Lender as part of such Borrowing,
continuation or conversion.
(ii) If any payment of principal of, or conversion or continuation of,
any Eurodollar Rate Loan is made other than on the last day of
the Interest Period for such Loan as a result of a payment,
prepayment, conversion or continuation of such Loan or
acceleration of the maturity of the Notes pursuant to Article 10
hereof or for any other reason, the Borrower shall, upon demand
by any Lender (with a copy of such demand to the Agent), pay to
the Agent for the account of such Lender any amounts required to
compensate such Lender for any additional losses, costs or
expenses which it may reasonably incur as a result of such
payment, including, without limitation, any loss (including loss
of anticipated profits), cost or expense incurred by reason of
the liquidation or re-employment of deposits or other funds
acquired by any Lender to fund or maintain such Loan.
(iii)Calculation of all amounts payable to a Lender under this
Section 5.7(d) shall be made as though such Lender elected to
fund all Eurodollar Rate Loans by purchasing U.S. dollar deposits
in its Eurodollar Lending Office's interbank eurodollar market.
5.8 Indemnification in Certain Events.
If after the Initial Closing Date, either (i) any change in or in the
interpretation of any law or regulation is introduced, including, without
limitation, with respect to reserve requirements, applicable to the Agent, any
of the Lenders or any banking or financial institution from whom any of the
Lenders borrows funds or obtains credit (a "Funding Bank"), or (ii) the Agent, a
Funding Bank or any of the Lenders complies with any future guideline or request
from any central bank or other Governmental Authority or (iii) the Agent, a
Funding Bank or any of the Lenders determines that the adoption of any
applicable law, rule or regulation regarding capital adequacy, or any change
therein, or any change in the interpretation or administration thereof by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof has or would have the effect described
below, or the Agent, a Funding Bank or any of the Lenders complies with any
request or directive regarding capital adequacy (whether or not having the force
of law) of any such authority, central bank or comparable agency, and in the
case of any event set forth in this clause (iii), such adoption, change or
compliance has or would have the direct or indirect effect of reducing the rate
of return on any of the Lenders' capital as a consequence of its obligations
hereunder to a level below that which such Lender could have achieved but for
such adoption, change or compliance (taking into consideration the Agent's or
any applicable Funding Bank's or Lender's policies as the case may be with
respect to capital adequacy) by an amount deemed by such Lender to be material,
and any of the foregoing events described in clauses (i), (ii) or (iii)
increases the cost to the Agent, the Issuing Bank or any of the Lenders of (A)
funding or maintaining the Total Commitments or (B) issuing, making or
maintaining any Letter of Credit or of purchasing or maintaining any
participation therein, or reduces the amount receivable in respect thereof by
the Agent, the Issuing Bank or any Lender, then the Borrower shall upon demand
by the Agent, pay to the Agent, for the account of each applicable Lender or, as
applicable, the Issuing Bank or a Funding Bank, additional amounts sufficient to
indemnify the Lenders against such increase in cost or reduction in amount
receivable. A certificate as to the amount of such increased cost and setting
forth in reasonable detail the calculation thereof shall be submitted to the
Borrower by the Agent, or the applicable Lender, Issuing Bank or Funding Bank,
and shall be conclusive absent manifest error.
5.9 Net Payments.
(a) All payments by the Borrower hereunder to or for the benefit of any
Lender, the Issuing Bank, the Syndication Agent or the Agent shall be
made without setoff, counterclaim or other defense. Except as provided
in Section 5.9(b), all such payments will be made free and clear of,
and without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments, or other charges of
whatever nature now or hereafter imposed by any jurisdiction or by any
political subdivision or taxing authority thereof or therein with
respect to such payments (but excluding any tax imposed on or measured
by the net income or profits of the Lender, the Issuing Bank, the
Syndication Agent or the Agent, as the case may be, pursuant to the
laws of the jurisdictions in which any of them is domiciled) together
with all interest, penalties or similar liabilities with respect
thereto (collectively, "Covered Taxes"). If the Borrower shall be
required by law to deduct any Covered Taxes from any sum payable
hereunder to any Lender, the Issuing Bank, the Syndication Agent or
the Agent, (A) the sum payable shall be increased as may be necessary
so that after making all required deductions of Covered Taxes
(including deductions of Covered Taxes applicable to additional sums
payable under this Section 5.9) such Lender, the Issuing Bank, the
Syndication Agent or the Agent, as the case may be, receives an amount
equal to the sum it would have received had no such deductions been
made, (B) the Borrower shall make such deductions and (C) the Borrower
shall pay the full amount so deducted to the relevant taxation
authority or other authority in accordance with applicable law. The
Borrower shall furnish to the Agent within forty-five (45) days after
the date the payment of any Covered Taxes is due certified copies of
tax receipts evidencing such payment by the Borrower. The Borrower
agrees to indemnify and hold harmless the Lender, the Issuing Bank,
the Syndication Agent and the Agent and reimburse each of them, as the
case may be, for the amount of any Covered Taxes so levied or imposed
and paid by them.
(b) Each Foreign Lender shall deliver to the Agent and the Borrower (i)
two valid, duly completed copies of IRS Form 1001 or 4224 or successor
applicable form, as the case may be, and any other required form,
certifying in each case that such Foreign Lender is entitled to
receive payments under this Credit Agreement, the Revolving Notes or
the Term Notes payable to it without deduction or withholding of any
United States federal income taxes or with such withholding imposed at
a reduced rate (the "Reduced Rate"), and (ii) a valid, duly completed
IRS Form W-8 or W-9 or successor applicable form, as the case may be,
to establish an exemption from United States backup withholding tax.
Each such Foreign Lender shall also deliver to the Agent and the
Borrower two further copies of said Form 1001 or 4224 and W-8 or W-9,
or successor applicable forms, or other manner of required
certification, as the case may be, on or before the date that any such
form expires or becomes obsolete or otherwise is required to be
resubmitted as a condition to obtaining an exemption from a required
withholding of United States federal income tax or entitlement to
having such withholding imposed at the Reduced Rate or after the
occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrower and the Agent, and such
extensions or renewals thereof as may reasonably be requested by the
Borrower and the Agent, certifying (i) in the case of a Form 1001 or
4224 that such Foreign Lender is entitled to receive payments under
this Credit Agreement, the Revolving Notes or the Term Notes payable
to it without deduction or withholding of any United States federal
income taxes, unless in any such case any change in a tax treaty to
which the United States is a party, or any change in law or regulation
of the United States or official interpretation thereof has occurred
after the Initial Closing Date and prior to the date on which any such
delivery would otherwise be required that renders all such forms
inapplicable or that would prevent such Foreign Lender from duly
completing and delivering any such form with respect to it, and such
Foreign Lender advises the Borrower and the Agent that it is not
capable of receiving payments without any deduction or withholding at
the Reduced Rate, or (ii) in the case of a Form W-8 or W-9,
establishing an exemption from United States backup withholding tax.
5.10 Affected Lenders.
If the Borrower is obligated to pay to any Lender any amount under Sections
5.8 or 5.9 hereof or if any Lender is a Defaulting Lender, the Borrower may, if
no Default or Event of Default then exists, replace such Lender with another
lender acceptable to the Agent, and such Lender hereby agrees to be so replaced
subject to the following:
(a) The obligations of the Borrower hereunder to the Lender to be replaced
(including such increased or additional costs incurred from the date
of notice to the Borrower of such increase or additional costs through
the date such Lender is replaced hereunder) shall be paid in full to
such Lender concurrently with such replacement;
(b) The replacement Lender shall be a bank or other financial institution
that is not subject to such increased costs which caused the
Borrower's election to replace any Lender hereunder, and each such
replacement Lender shall execute and deliver to the Agent such
documentation satisfactory to the Agent pursuant to which such
replacement Lender is to become a party hereto, conforming to the
provisions of Section 12.6 hereof, with a Commitment equal to that of
the Lender being replaced and shall make Loans in the aggregate
principal amount equal to the aggregate outstanding principal amount
of the Loans of the Lender being replaced (or that would be
outstanding if such Lender were not a Defaulting Lender);
(c) Upon such execution of such documents referred to in clause (b) and
repayment of the amounts referred to in clause (a), the replacement
lender shall be a "Lender" with a Commitment as specified hereinabove
and the Lender being replaced shall cease to be a "Lender" hereunder,
except with respect to indemnification provisions under this Credit
Agreement, which shall survive as to such replaced Lender;
(d) The Agent shall reasonably cooperate in effectuating the replacement
of any Lender under this Section 5.10, but at no time shall the Agent
be obligated to initiate any such replacement;
(e) Any Lender replaced under this Section 5.10 shall be replaced at the
Borrower's sole cost and expense and at no cost or expense to the
Agent or any of the Lenders; and
(f) If Borrower proposes to replace any Lender pursuant to this Section
5.10 because the Lender seeks reimbursement under either Section 5.8
or 5.9, then it must also replace any other Lender who seeks similar
levels of reimbursement (as a percentage of such Lender's Commitment)
under such Sections.
5.11 Sharing of Payments.
If any Lender shall obtain any payment (whether voluntary, involuntary,
through the exercise of any right of set-off or otherwise) on account of the
Loans made by it or its participation in the Letter of Credit obligations in
excess of its Commitment Percentage of payments on account of the Loans, or
Letter of Credit Obligations obtained by all the Lenders, such Lender shall
forthwith purchase from the other Lenders such participations in the Loans made
by them or in their participation in Letters of Credit as shall be necessary to
cause such purchasing Lender to share the excess payment ratably with each of
them; provided, however, that if all or any portion of such excess payment is
-------- -------
thereafter recovered from such purchasing Lender, such purchase from each Lender
shall be rescinded and each such Lender shall repay to the purchasing Lender the
purchase price to the extent of such recovery together with an amount equal to
such Lender's ratable share (according to the proportion of (i) the amount of
such Lender's required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect to the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 5.11 may, to the fullest extent permitted by law,
exercise all of its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation.
5.12 Calculations.
All calculations of (a) interest hereunder and (b) fees, including, without
limitation, Unused Line Fees, Letter of Credit Fees and Issuing Bank Fees shall
be made by the Agent, on the basis of a year of 360 days, except (i) in the case
of Base Rate Loans and (ii) if such computation would cause the
interest and fees chargeable hereunder to exceed the Highest Lawful Rate, in
which cases calculations shall be made by the Agent on the basis of a year of
365/366 days, in each case to the extent applicable for the actual number of
days elapsed (including the first day but excluding the last day) occurring in
the period for which such interest or fees are payable. Each determination by
the Agent of an interest rate or payment hereunder shall be conclusive and
binding for all purposes, absent manifest error.
ARTICLE 6. CONDITIONS PRECEDENT
-------------------------------
6.1 Conditions Precedent to Effectiveness.
This Credit Agreement shall be effective upon the satisfaction of the
following conditions precedent and the conditions set forth in Section 6.2:
(a) Closing Documents List. The Agent, on behalf of the Lenders, shall
------------------------
have received duly executed originals of each of the agreements,
opinions, reports, approvals, consents, certificates and other
documents set forth on the Closing Documents List attached hereto as
Schedule A.
(b) Material Adverse Change. (i) No change, occurrence, event or
-------------------------
development or event involving a prospective change that is reasonably
likely to have a Material Adverse Effect shall have occurred and be
continuing, (ii) there shall not have occurred a substantial
impairment of the financial markets generally that is reasonably
likely to materially and adversely affect the transactions
contemplated hereby, in each case as determined by the Agent and each
Lender in its sole discretion, and (iii) there shall not have occurred
a change in any law or regulation (or the implementation of any law or
regulation) affecting any of the Lenders that is reasonably likely to
materially increase the cost and expense to such Lender of acting as a
Lender hereunder.
(c) Fees and Expenses. The Agent and each of the Lenders shall have
------------------
received payment in full (or an irrevocable authorization to pay such
Fees or Expenses and other fees and expenses out of the proceeds of
the Revolving Loans) of (i) those Fees and Expenses referred to in the
Agent's Fee Letter, in the Amendment Fee Letter and in Article 5
hereof payable to them on or before the Closing Date, and (ii) an
amendment fee payable to each Revolving Lender in an amount equal to
one eighth of one percent (0.125%) of their respective Revolving
Commitments.
(d) Unused Availability. The Borrowing Base Certificate delivered at the
-------------------
time of closing shall demonstrate that Unused Availability on the
Closing Date, after giving effect to any Revolving Loans then
outstanding or to be made and Letters of Credit then outstanding or to
be issued on such date, shall be at least equal to the Required
Available Amount.
(e) Consents and Approvals. Except for (i) the filing of Uniform
------------------------
Commercial Code financing statements and recordation of Mortgages,
(ii) consents or authorizations which have been obtained or filings
which have been made, and which in either case are in full force and
effect or (iii) consents or authorizations the failure to obtain or
filings the failure to make could not reasonably be expected to have a
Material Adverse Effect, no consent or authorization of, permit from,
filing with or other act by or in respect of, any Governmental
Authority or any other Person shall be required in connection with the
borrowings hereunder, the grant of the Liens pursuant to the Credit
Documents, or the continuing operations of the Borrower, the
enforcement of the Agent's or the Lenders' rights under the Credit
Documents, or with the execution, delivery, performance, validity or
enforceability of this Credit Agreement, the Revolving Notes, the Term
Notes, the other Credit Documents, the Indenture or any other
documents executed in connection herewith or therewith.
(f) Material Litigation. No material litigation shall have been instituted
-------------------
against the Borrower, and no material litigation shall have been
instituted by any Person (including, but not limited to, the Borrower)
relating to the transactions contemplated by the Credit Agreement.
(g) Existing Indebtedness. The terms and conditions of any Indebtedness
----------------------
(including, without limitation, maturities, interest rates, prepayment
and redemption requirements, covenants, defaults, remedies, security
provisions and subordination provisions) of the Borrower to remain
outstanding after the Closing Date shall be satisfactory to the
Lenders in all respects, and the Lenders shall be satisfied that the
Borrower is not subject to any material contractual obligations or
other restrictions that would be violated by the transactions
contemplated by this Credit Agreement, the other Credit Documents or
the Indenture.
(h) Validity of Liens. The Collateral Documents shall be effective to
-----------------
create in favor of the Agent for the benefit of the Lenders legal,
valid and enforceable first (except for Liens permitted under Section
9.5 hereof which are entitled to priority under applicable law)
security and mortgage interests in the Collateral. All filings,
recordings, deliveries of instruments and other actions necessary or
desirable in the opinion of the Agent to protect and preserve such
security and mortgage interests shall have been duly effected. The
Agent shall have received evidence thereof in form and substance
satisfactory to the Agent.
(i) Additional Documents. The Borrower shall have executed and delivered
---------------------
to the Agent and the Lenders all documents which the Agent or any
Lender determines are reasonably necessary to consummate the
transactions contemplated hereby.
6.2 Conditions Precedent to Effectiveness and to Each Revolving Loan and
Letter of Credit.
The occurrence of the Closing Date and the obligation to make any Revolving
Loan or Term Loan or to issue any Letter of Credit on any date, shall be subject
to the condition precedent that, both before and after giving effect thereto
and, in the case of Revolving Loans, to the application of the proceeds
therefrom, the following statements shall be true to the satisfaction of the
Agent (and each request for a borrowing of a Revolving Loan or Term Loan or
request for a Letter of Credit, and the acceptance by the Borrower of the
proceeds of such Revolving Loan or Term Loan or issuance of such Letter of
Credit, shall constitute a representation and warranty by the Borrower to the
Lenders that on the date of such Revolving Loan or Term Loan or issuance of such
Letter of Credit before and after giving effect thereto and to the application
of the proceeds therefrom such statements are true):
(a) All representations and warranties contained in this Credit Agreement
and the other Credit Documents shall be true and correct in all
material respects on and as of the date of such Notice of Borrowing or
Letter of Credit Request as if then made, other than representations
and warranties that relate solely to an earlier date;
(b) No Default or Event of Default shall have occurred and be continuing,
or would result from the making of the requested Revolving Loan or the
issuance of the requested Letter of Credit; and
(c) No event has occurred which has had or could reasonably be expected to
have a Material Adverse Effect.
ARTICLE 7. REPRESENTATIONS AND WARRANTIES
-----------------------------------------
To induce the Agent, the Lenders and the Issuing Bank to enter into this
Credit Agreement and to make available the credit facilities contemplated
hereby, the Borrower, with respect to itself and each of its Subsidiaries,
hereby represents and warrants to the Agent, the Lenders and the Issuing Bank as
follows:
7.1 Organization and Qualification.
The Borrower and each of its Subsidiaries (i) is a corporation duly
organized, validly existing and in good standing under the laws of the state of
its incorporation, (ii) has the power and authority to own its properties and
assets and to transact the businesses in which it presently is, or proposes to
be, engaged and (iii) is duly qualified and is authorized to do business and is
in good standing in each jurisdiction where it presently is, or proposes to be,
engaged in business and where the failure to be so qualified and authorized
could have a Material Adverse Effect. Schedule B lists all jurisdictions in
----------
which the Borrower and its Subsidiaries are qualified to do business as foreign
corporations as of the Closing Date.
7.2 Authority.
The Borrower and each of its Subsidiaries has the requisite corporate power
and authority to execute, deliver and perform each of the Credit Documents to
which it is a party. All corporate action necessary for the execution, delivery
and performance of any of the Credit Documents by the Borrower and its
Subsidiaries has been taken.
7.3 Enforceability.
This Credit Agreement and each Credit Document is the legal, valid and
binding obligation of the Borrower or of any Subsidiary of the Borrower which is
a party thereto, enforceable in accordance with its terms, except as may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting creditors' rights and by general principles of equity.
7.4 No Conflict.
The execution, delivery and performance of each Credit Document by the
Borrower or any of its Subsidiaries are not in contravention of any Requirement
of Law or any indenture, contract, lease, agreement, instrument or other
commitment to which it is a party or by which it or any of its properties are
bound and will not, except as contemplated herein, result in the imposition of
any Liens upon any of their respective properties.
7.5 Consents and Filings.
No consent, authorization, permit or filing is required in connection with
the execution, delivery and performance of this Credit Agreement or any Credit
Document by the Borrower and its Subsidiaries, or the continuing operations of
the Borrower and its Subsidiaries, except (i) those that have been obtained or
made and (ii) filings necessary to create, perfect or retain the perfection of
Liens against the Collateral.
7.6 Financial Data.
The Borrower has furnished to the Lenders the following Financial
Statements, which have been prepared in accordance with GAAP (except, in the
case of (ii) below, with respect to footnotes) consistently applied throughout
the periods involved: (i) balance sheets as of, and statements of operations,
shareholder's equity and cash flows for the fiscal year ended December 25, 1999
audited by independent certified public accountants, and accompanied by an
unqualified opinion thereof and (ii) unaudited balance sheets as of, and
unaudited statements of operations, shareholder's equity and cash flows for the
nine month period ending September 30, 2000. Since the date of these Financial
Statements, there have been no adverse changes in the condition, financial or
otherwise, of the Borrower as shown on the balance sheet of the Borrower
described above, other than changes in the ordinary course of business. In
addition, the Borrower has furnished to the Lenders certain financial data which
include projections. The assumptions upon which the projections were based were
reasonable at the time such projections were prepared and are reasonable as of
the Closing Date, and such projections were prepared by the Borrower in good
faith.
7.7 Subsidiaries.
The only direct or indirect Subsidiaries of the Borrower as of the Closing
Date are those listed on Schedule B. The Borrower is the record and beneficial
----------
owner of all of the shares of capital stock of each of the Subsidiaries listed
on Schedule B. There are no proxies, irrevocable or otherwise, with respect to
----------
such shares, and no equity securities of any of the Subsidiaries are or may
become required to be issued by reason of any options, warrants, scrip, rights
to subscribe to, calls or commitments of any character whatsoever relating to,
or securities or rights convertible into or exchangeable for, shares of any
capital stock of any Subsidiary, and there are no contracts, commitments,
understandings or arrangements by which any Subsidiary is or may become bound to
issue additional shares of its capital stock or securities convertible into or
exchangeable for such shares. All of such shares so owned by the Borrower are
owned by it free and clear of any Liens.
7.8 No Judgment or Litigation.
Except as set forth on Schedule B, no judgments, orders, writs or decrees
----------
are outstanding against the Borrower or any of the Subsidiaries nor is there now
pending or, to the best of the Borrower's knowledge after diligent inquiry,
threatened any litigation, contested claim, investigation, arbitration, or
governmental proceeding by or against the Borrower or any of the Subsidiaries,
in any case which could have a Material Adverse Effect.
7.9 No Defaults.
Neither the Borrower nor any of the Subsidiaries is in default under any
term of any Material Contract. The Borrower knows of no dispute regarding any
Material Contract.
7.10 Labor Matters.
(a) There are no controversies pending or, to the best of the Borrower's
knowledge after diligent inquiry, threatened between the Borrower or
any of the Subsidiaries and any of their respective employees which,
in any case, could have a Material Adverse Effect.
(b) Neither the Borrower nor any of the Subsidiaries is engaged in any
unfair labor practice which could have a Material Adverse Effect.
There is (i) no unfair labor practice complaint pending against the
Borrower or any of the Subsidiaries or, to the best knowledge of the
Borrower, threatened against any of them, before the National Labor
Relations Board, and no grievance or significant arbitration
proceeding arising out of or under collective bargaining agreements is
so pending against the Borrower or any of the Subsidiaries or, to the
best knowledge of the Borrower, threatened against any of them, (ii)
no strike, labor dispute, slowdown or stoppage pending against either
of the Borrower or any of the Subsidiaries or, to the best knowledge
of the Borrower, threatened against any of them and (iii) no union
representation question with respect to the employees of the Borrower
or any Subsidiaries and no union organizing activities.
7.11 Compliance with Law.
Neither the Borrower nor any of the Subsidiaries has violated or failed to
comply with any Requirement of Law or any requirement of any self regulatory
organization which could reasonably be expected to have a Material Adverse
Effect.
7.12 ERISA.
None of the Borrower, any Subsidiary and any ERISA Affiliate maintains or
contributes to any Plan other than those listed on Schedule B. Each Plan has
-----------
been and is being maintained and funded in accordance with its terms and in
compliance with all provisions of ERISA and the Code applicable thereto. The
Borrower, each of the Subsidiaries and each ERISA Affiliate have fulfilled all
obligations related to the minimum funding standards of ERISA and the Internal
Revenue Code for each Plan, are in compliance with the currently applicable
provisions of ERISA and of the Internal Revenue Code and have not incurred any
liability (other than routine liability for premiums) under Title IV of ERISA.
No Termination Event has occurred nor has any other event occurred that may
result in a Termination Event. No event or events have occurred in connection
with which the Borrower, any of the Subsidiaries, any ERISA Affiliate, any
fiduciary of a Plan or any Plan, directly or indirectly, could be subject to any
liability, individually or in the aggregate, under ERISA, the Internal Revenue
Code or any other Requirement of Law or under any agreement, instrument,
statute, rule of law or regulation pursuant to or under which any such entity
has agreed to indemnify or is required to indemnify any person against liability
incurred under, or for a violation or failure to satisfy the requirements of,
any such statute, regulation or order. The Borrower has delivered or caused to
be delivered to the Agent: (i) a copy of each Plan (or, where any such plan is
not in writing, a complete description thereof) (and, if applicable, related
trust agreements or other funding instruments) and all amendments thereto, all
written interpretations thereof and written descriptions thereof that have been
distributed to employees or former employees of the Borrower or the
Subsidiaries; (ii) the most recent determination letter issued by the Internal
Revenue Service with respect to each Plan; (iii) for the three most recent plan
years, Annual Reports on Form 5500 Series required to be filed with any
governmental agency for each Plan; (iv) all actuarial reports prepared for the
last three plan years for each Plan; (v) a listing of all Multiemployer Plans,
with the aggregate amount of the most recent annual contributions required to be
made by the Borrower or any ERISA Affiliate to each such plan and copies of the
collective bargaining agreements requiring such contributions; (vi) any
information that has been provided to the Borrower or any ERISA Affiliate
regarding withdrawal liability under any Multiemployer Plan; and (vii) the
aggregate amount of the most recent annual payments made to former employees of
the Borrower or any ERISA Affiliate under any Retiree Health Plan.
7.13 Compliance with Environmental Laws.
(i) The operations of the Borrower and each of the Subsidiaries are not in
violation of any applicable federal, state or local environmental,
health and safety statutes, regulations, directions, ordinances,
criteria and guidelines; (ii) the Borrower has not received notice
that any of the operations of the Borrower or any of the Subsidiaries
is the subject of any judicial or administrative proceeding alleging
the violation of any federal, state or local environmental, health or
safety statute, regulation, direction, ordinance, criteria or
guideline; (iii) none of the operations of the Borrower or any of the
Subsidiaries is the subject of any federal, state or local
investigation involving allegations or potential allegations that the
Borrower or any of the Subsidiaries disposed of any hazardous or toxic
waste, substance or constituent or other pollutant, contaminant or
substance (including, without limitation, petroleum) at any site that
may require remedial action, or any federal, state or local
investigation evaluating whether any remedial action is needed to
respond to a release or threatened release of any hazardous or toxic
waste, substance or constituent, or other pollutant, contaminant or
substance (including, without limitation, petroleum) into the
environment; (iv) neither the Borrower nor any of the Subsidiaries
have filed any notice under any federal, state or local law indicating
past or present treatment, storage or disposal of a hazardous waste or
reporting a spill or release or threatened release of a hazardous or
toxic waste, substance or constituent, or other pollutant, contaminant
or substance (including, without limitation, petroleum) into the
environment; and (v) neither the Borrower nor any of the Subsidiaries
has any contingent liability of which the Borrower has knowledge or
reasonably should have knowledge in connection with any release or
threatened release of any hazardous or toxic waste, substance or
constituent, or other pollutant, contaminant or substance (including,
without limitation, petroleum) into the environment, nor has the
Borrower or any of the Subsidiaries received any notice, letter or
other indication of potential liability arising from the disposal of
any hazardous or toxic waste, substance or constituent or other
pollutant, contaminant or substance (including, without limitation,
petroleum) into the environment which, in any such case referred to in
this Section 7.13 or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.
7.14 Intellectual Property.
The Borrower possesses or has the legal right to use such assets, licenses,
patents, patent applications, copyrights, service marks, trademarks (including,
without limitation, the "'W' and design") and trade names as are necessary or
advisable to continue to conduct its present and proposed business activities
and such assets, licenses, patents, patent applications, copyrights, service
marks, trademarks and trade names are valid and in full force and effect. The
Borrower does not own any federally registered patents, copyrights, service
marks, trademarks or tradenames, other than as set forth in Schedule B hereto.
----------
7.15 Licenses and Permits.
The Borrower and each of the Subsidiaries have obtained and hold in full
force and effect, all franchises, licenses, leases, permits, certificates,
authorizations, qualifications, easements, rights of way and other rights and
approvals which are necessary or advisable for the operation of its businesses
as presently conducted and as proposed to be conducted, except those with
respect to which the failure to so obtain and hold would not have a Material
Adverse Effect. Neither of the Borrower nor any of the Subsidiaries is in
violation of the terms of any such franchise, license, lease, permit,
certificate, authorization, qualification, easement, right of way, right or
approval.
7.16 Title to Property.
All Real Estate is identified on Schedule B. The Borrower has good and
-----------
marketable title in fee simple to, or a valid leasehold interest in, all its
Real Estate, and good title to all its other property, and none of such property
is subject to any Lien except as permitted by Section 9.5.
7.17 Investment Company.
Neither the Borrower nor any of the Subsidiaries is (i) an investment
company (nor as of the Closing Date is the Borrower or any of its Subsidiaries
controlled by an investment company) within the meaning of the Investment
Company Act of 1940, as amended, (ii) a holding company or a Subsidiary company
of a holding company, or an Affiliate of a holding company or of a Subsidiary
company of a holding company, within the meaning of the Public Utility Holding
Company Act of 1935, as amended, or (iii) subject to any other law which
purports to regulate or restrict its ability to borrow money or to consummate
the transactions contemplated by this Credit Agreement or the other Credit
Documents or to perform its obligations hereunder or thereunder.
7.18 Taxes and Tax Returns.
(a) Except as set forth on Schedule B, the Borrower and the Subsidiaries
----------
(and any affiliated group of which the Borrower or any of the
Subsidiaries are now or have been members) has timely filed (inclusive
of any permitted extensions) with the appropriate taxing authorities
all returns (including, without limitation, information returns) in
respect of taxes required to be filed through the Closing Date and
will timely file (inclusive of any permitted extensions) any such
returns required to be filed on and after the Closing Date. The
information filed is complete and accurate in all material respects.
All deductions taken by the Borrower as reflected in such income tax
returns have been taken in accordance with applicable laws and
regulations, except deductions that may have been disallowed but are
being challenged in good faith and for which adequate reserves have
been made in accordance with GAAP. Except as specified in Schedule B,
----------
neither the Borrower nor any of the Subsidiaries, nor any group of
which the Borrower or any of the Subsidiaries are now or were members,
have requested any extension of time within which to file returns
(including without limitation information returns) in respect of any
taxes.
(b) All taxes, assessments, fees and other governmental charges in respect
of periods beginning prior to the Closing Date, have been timely paid,
or will be timely paid, or an adequate reserve has been established
therefor, as set forth in Schedule B or in the Financial Statements,
----------
and neither the Borrower nor any of the Subsidiaries has any liability
for taxes in excess of the amounts so paid or reserves so established.
(c) Except as set forth in Schedule B, no deficiencies for taxes have been
----------
claimed, proposed or assessed by any taxing or other Governmental
Authority against the Borrower or any of their Subsidiaries and no tax
liens have been filed. Except as set forth in Schedule B, there are no
----------
pending or, to the best of the Borrower's knowledge, threatened
audits, investigations or claims for or relating to any liability in
respect of taxes, and there are no matters under discussion with any
governmental authorities with respect to taxes which are likely to
result in a material additional liability for taxes. Either the
federal income tax returns of the Borrower have been audited by the
Internal Revenue Service and such audits have been closed, or the
period during which any assessments may be made by the Internal
Revenue Service has expired without waiver or extension, for all years
up to and including the fiscal year ended 1992. Except as set forth in
Schedule B, no extension of a statute of limitations relating to
-----------
taxes, assessments, fees or other governmental charges is in effect
with respect to the Borrower or the Subsidiaries.
(d) Except as set forth on Schedule B, neither the Borrower nor any of its
----------
Subsidiaries has any obligation under any written or oral tax sharing
agreement or agreement regarding payments in lieu of taxes.
7.19 Material Contracts.
Schedule B contains a true, correct and complete list of all the Material
----------
Contracts currently in effect on the Closing Date. None of the Material
Contracts (other than the Credit Documents) contains any burdensome restrictions
on the Borrower or any of its Subsidiaries or any of their respective
properties. All of the Material Contracts are in full force and effect, and no
defaults currently exist thereunder.
7.20 Affiliate Transactions.
Except as set forth on Schedule B, neither the Borrower nor any Subsidiary
----------
is a party to or bound by any agreement or arrangement (whether oral or written)
to which any Affiliate of the Borrower or any Subsidiary is a party except (i)
in the ordinary course of and pursuant to the reasonable requirements of the
Borrower's or such Subsidiary's business and (ii) upon fair and reasonable terms
no less favorable to the Borrower and such Subsidiary than it could obtain in a
comparable arm's-length transaction with an unaffiliated Person.
7.21 Accuracy and Completeness of Information.
All factual information furnished by or on behalf of the Borrower or any of
the Subsidiaries in writing to the Agent, any Lender or the Auditors for
purposes of or in connection with this Credit Agreement or any Credit Documents,
or any transaction contemplated hereby or thereby is or will be true and
accurate in all material respects on the date as of which such information is
dated or certified and not incomplete by omitting to state any material fact
necessary to make such information not misleading at such time.
7.22 Recording Taxes.
All mortgage recording taxes, recording fees and other charges payable in
connection with the filing and recording of the Credit Documents have either
been paid in full by the Borrower or arrangements for the payment of such
amounts satisfactory to the Agent shall have been made.
7.23 Solvency.
The fair saleable value of the assets of the Borrower exceeds all its
probable liabilities, including those incurred or to be incurred pursuant to
this Credit Agreement, the other Credit Documents, the Senior Subordinated Notes
and the Indenture. The Borrower (i) does not have unreasonably small capital in
relation to the business in which it is or proposes to be engaged and (ii) has
not incurred, and does not believe that it will incur, after giving effect to
the transactions contemplated by this Credit Agreement, debts beyond its ability
to pay as such debts become due.
7.24 No Change.
There has been no development or event nor any prospective development or
event, which has had or could reasonably be expected to have a Material Adverse
Effect.
ARTICLE 8. AFFIRMATIVE COVENANTS
--------------------------------
Until termination of this Credit Agreement and payment and satisfaction of
all obligations due hereunder:
8.1 Financial Reporting.
The Borrower shall timely deliver to each Lender the following information:
(a) Annual Financial Statements. As soon as available, but not later than
---------------------------
ninety (90) days after each fiscal year end: (i) the annual audited
Financial Statements of the Consolidated Entity; (ii) a comparison in
reasonable detail to the prior year audited Financial Statements;
(iii) the Auditors' unqualified opinion, "Management Letter" and
statement indicating that the Auditors have not obtained knowledge of
the existence of any Default or Event of Default during their audit;
(iv) a narrative discussion of the consolidated financial condition
and results of operations and the consolidated liquidity and capital
resources of the Consolidated Entity for such fiscal year, prepared by
the chief financial officer of the Borrower; and (v) a compliance
certificate substantially in the form of Exhibit C with an attached
schedule of calculations (A) demonstrating compliance with the
financial covenants set forth in Sections 9.1, 9.2 and 9.3 and (B)
setting forth the Interest Coverage Ratio of the Consolidated Entity
for the most recently completed four full fiscal quarters of the
Consolidated Entity. To the extent that the Borrower's annual report
on Form 10-K contains any of the foregoing items, the Lenders will
accept the Borrower's Form 10-K in lieu of such items.
(b) Projections. Not later than forty-five (45) days after each fiscal
-----------
year end, monthly projections of Borrower's financial condition and
results of operations for the next succeeding fiscal year, together
with annual projections for the next two succeeding fiscal years, in
each case containing projected consolidating balance sheets,
statements of operations, statements of cash flows and statements of
changes in shareholders equity, together with a statement in
reasonable detail setting forth the assumptions upon which such
projections are based.
(c) Quarterly Financial Statements. As soon as available, but not later
-------------------------------
than forty-five (45) days after the end of each of the first three
fiscal quarters: (i) Financial Statements of the Consolidated Entity
as of the fiscal quarter then ended, and for the fiscal year to date;
(ii) a comparison in reasonable detail to the Financial Statements for
the corresponding periods of the prior fiscal year; (iii) the
certification of the chief executive officer or chief financial
officer of the Borrower that such Financial Statements have been
prepared in accordance with GAAP (other than with respect to footnotes
and subject to year-end audit adjustments); (iv) a narrative
discussion of the consolidated financial condition and results of
operations and the consolidated liquidity and capital resources of the
Consolidated Entity for such fiscal quarter and fiscal year to date,
prepared by the chief financial officer of the Borrower; and (v) a
compliance certificate substantially in the form of Exhibit C with an
attached schedule of calculations (A) demonstrating compliance with
the financial covenants set forth in Sections 9.1, 9.2 and 9.3 and (B)
setting forth the Interest Coverage Ratio of the Consolidated Entity
for the most recently completed four full fiscal quarters of the
Consolidated Entity. To the extent that the Borrower's quarterly
report on Form 10-Q contains any of the foregoing items, the Lenders
will accept the Borrower's Form 10-Q in lieu of such items.
(d) Monthly Financial Statements. As soon as available, but not later than
----------------------------
thirty (30) days after the end of each of the fiscal months of
January, February, April, May, July, August, October and November and
within forty-five (45) days after the end of each of the fiscal months
of March, June, September and December: (i) a balance sheet for the
Consolidated Entity as at the end of such month and for the fiscal
year to date and statements of operations and cash flows for such
month and for the fiscal year to date; (ii) a comparison to the
balance sheet, statement of operations and statement of cash flows for
the same periods in the prior year; (iii) a certification by the chief
executive officer or chief financial officer of the Borrower that such
balance sheet, statement of operations and statement of cash flows
have been prepared in accordance with GAAP (other than with respect to
footnotes and subject to year-end audit adjustments); and (iv) a
compliance certificate substantially in the form of Exhibit C with an
attached schedule of calculations demonstrating compliance with the
financial covenants set forth in Sections 9.1, 9.2 and 9.3.
(e) Monthly Comparison to Prior Projections. As soon as available, but not
---------------------------------------
later than thirty (30) days after the end of each of the fiscal months
of January, February, April, May, July, August, October and November
and within forty-five (45) days after the end of each of the fiscal
months of March, June, September and December, a comparison of actual
results of operations, cash flow and capital expenditures for the
Borrower for such month and for the period from the beginning of the
current fiscal year through the end of such month with amounts
previously projected for those periods (see Section 8.1(b)) and with
actual results for corresponding periods in the previous fiscal year.
(f) Tax Returns. A copy of the state and federal income tax returns of the
-----------
Borrower and each of its Subsidiaries within thirty (30) days after
they are filed with the appropriate taxing authorities, if and when
requested by any Lender.
(g) Public Filings. Promptly upon the earlier of the mailing or filing
---------------
thereof, copies of all ▇▇-▇▇, ▇▇-▇▇, ▇-▇▇, proxy statements, annual
reports, quarterly reports, registration statements and any other
filings or other communications made by the Borrower to holders of its
publicly traded securities or the Securities Exchange Commission from
time to time pursuant to the Securities Exchange Act of 1934, as
amended, or the Securities Act of 1933, as amended.
8.2 Collateral Reporting.
The Borrower shall timely deliver to the Agent (and each Lender in the case
of Borrowing Base Certificates required to be delivered pursuant to clause
(a)(i)(1) below) the following certificates and reports:
(a) Weekly Borrowing Base Certificates.
----------------------------------
(i) Weekly, before 12:00 noon Boston time on the second Business Day
of each week, and at any other time requested by the Agent, (1) a
borrowing base certificate (the "Borrowing Base Certificate"),
which shall be: (A) completed substantially in the form of
Exhibit D, detailing the Borrower's Eligible Accounts Receivable
and Eligible Inventory as of each Friday of the immediately
preceding week (or as of such other date as the Agent may
request), (B) prepared by or under the supervision of the
Borrower's chief executive officer or chief financial officer and
certified by such officer subject only to adjustment upon
completion of the normal year-end audit of physical inventory and
(C) attached to such additional schedules and other information
as the Agent may request; and (2) (X) an Accounts Receivable
reconciliation report (beginning balance plus sales minus
collections minus credits plus or minus adjustments), (Y) a
report detailing Inventory balances by category and (Z) an
accounts payable balance and book overdraft report, in each case
as of Saturday of the immediately preceding week. The Agent may,
but shall not be obligated to, rely on each Borrowing Base
Certificate and any other schedules or reports in determining the
eligibility of Accounts and Inventory.
(ii) Monthly, before 12:00 noon Boston time on the ninth Business Day
of each fiscal month, and at any other time requested by the
Agent, (1) a Borrowing Base Certificate which shall be: (A)
completed substantially in the form of Exhibit D, detailing (x)
the Borrower's Eligible Accounts Receivable and Eligible
Inventory as of the last day of the immediately preceding fiscal
month (the "Monthly Report") and (y) the Borrower's Eligible
Accounts Receivable and Eligible Inventory as of the last day of
the immediately preceding fiscal month, (B) prepared by or under
the supervision of the Borrower's chief executive officer or
chief financial officer and certified by such officer subject
only to adjustment upon completion of the normal year-end audit
of physical inventory, and (C) attached to such additional
schedules and other information as the Agent may request
(including, without limitation, an accounts receivable agings
report for the prior fiscal month); and (2) (W) an Accounts
Receivable summary agings report by location, (X) an Accounts
Receivable summary agings report for the Borrower's top twenty
customer accounts, (Y) a report of Inventory balances by location
(including third party locations) and (Z) an accounts payable
agings report (when available from the Borrower's computerized
recordkeeping system), in each case as of the last day of the
immediately preceding fiscal month. The Agent may, but shall not
be obligated to, rely on each Borrowing Base Certificate and any
other schedules or reports in determining the eligibility of
Accounts and Inventory.
(b) Further Assurances. When requested by the Agent (or by a Lender
-------------------
through the Agent), any further information regarding the Collateral,
business affairs and financial condition of the Borrower or any of its
Subsidiaries.
8.3 Notification Requirements.
The Borrower shall timely give the Agent and each of the Lenders the
following notices:
(a) Notice of Defaults. Promptly, and in any event within two (2) Business
------------------
Days after becoming aware of the occurrence of a Default or Event of
Default, a certificate of the chief executive officer or chief
financial officer of the Borrower specifying the nature thereof and
the Borrower's proposed response thereto, each in reasonable detail.
(b) Proceedings or Adverse Changes. Promptly, and in any event within five
------------------------------
(5) Business Days after the Borrower becomes aware of (i) any
proceeding being instituted or threatened to be instituted by or
against the Borrower or any of its Subsidiaries in any federal, state,
local or foreign court or before any commission or other regulatory
body (federal, state, local or foreign), (ii) any order, judgment or
decree in excess of $1,000,000 being entered against the Borrower or
any of its Subsidiaries or any of their respective properties or
assets or (iii) any actual or prospective change, development or event
which, in any such case, has had or could reasonably be expected to
have a Material Adverse Effect, a written statement describing such
proceeding, order, judgment, decree, change, development or event and
any action being taken with respect thereto by the Borrower or any
such Subsidiary.
(c) ERISA Notices.
-------------
(i) within ten (10) days after the Borrower, any Subsidiary or any
ERISA Affiliate knows or has reason to know that a Termination
Event has occurred, a written statement of the chief financial
officer of the Borrower describing such Termination Event and the
action, if any, which the Borrower or other such entities have
taken, are taking or propose to take with respect thereto, and
when known, any action taken or threatened by the Internal
Revenue Service, DOL or PBGC with respect thereto;
(ii) within ten (10) days after the Borrower, any Subsidiary or any
ERISA Affiliate knows or has reason to know that a prohibited
transaction (as defined in Sections 406 of ERISA and 4975 of the
Internal Revenue Code) has occurred, a statement of the chief
financial officer of the Borrower describing such transaction and
the action which the Borrower or other such entities have taken,
are taking or propose to take with respect thereto;
(iii)within thirty (30) days after the filing thereof with the DOL,
Internal Revenue Service or PBGC, copies of each annual report
(form 5500 series), including Schedule 3 thereto, filed with
respect to each Benefit Plan;
(iv) within thirty (30) days after receipt by the Borrower, any
Subsidiary or any ERISA Affiliate of each actuarial report for
any Benefit Plan or Multiemployer Plan and each annual report for
any Multiemployer Plan, copies of each such report;
(v) within three (3) days after the filing thereof with the Internal
Revenue Service, a copy of each funding waiver request filed with
respect to any Benefit Plan and all communications received by
the Borrower, any Subsidiary or any ERISA Affiliate with respect
to such request;
(vi) within ten (10) days upon the occurrence thereof, notification of
any increase in the benefits of any existing Plan or the
establishment of any new Plan or the commencement of
contributions to any Plan to which the Borrower, any Subsidiary
or any ERISA Affiliate was not previously contributing;
(vii)within three (3) days after receipt by the Borrower, any
Subsidiary or any ERISA Affiliate of the PBGC's intention to
terminate a Benefit Plan or to have a trustee appointed to
administer a Benefit Plan, copies of each such notice;
(viii) within ten (10) days after receipt by the Borrower, any
Subsidiary or any ERISA Affiliate of any favorable or unfavorable
determination letter from the Internal Revenue Service regarding
the qualification of a Plan under Section 401(a) of the Internal
Revenue Code, copies of each such letter;
(ix) within ten (10) days after receipt by the Borrower, any
Subsidiary or any ERISA Affiliate of a notice regarding the
imposition of withdrawal liability, copies of each such notice;
(x) within ten (10) days after the Borrower, any Subsidiary or any
ERISA Affiliate fail to make a required installment or any other
required payment under Section 412 of the Internal Revenue Code
on or before the due date for such installment or payment, a
notification of such failure; and
(xi) within three (3) days after the Borrower, any Subsidiary or any
ERISA Affiliate knows (a) a Multiemployer Plan has been
terminated, (b) the administrator or plan sponsor of a
Multiemployer Plan intends to terminate a Multiemployer Plan, or
(c) the PBGC has instituted or will institute proceedings under
Section 4042 of ERISA to terminate a Multiemployer Plan, a
written statement setting forth any such event or information.
For purposes of this Section 8.3(c), the Borrower, any Subsidiary and any
ERISA Affiliate shall be deemed to know all facts known by the
administrator of any Plan of which such entity is the plan sponsor.
(d) Environmental and Health and Safety Notices; Violations of Law.
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Promptly, and in any event within ten (10) Business Days after receipt
by the Borrower or any of its Subsidiaries of any formal or informal
notice, complaint or order alleging actual or prospective violation of
any environmental, health or safety Requirement of Law or any other
Requirement of Law which could have a Material Adverse Effect, or
alleging responsibility for a cleanup, a copy of such notice,
complaint, or order and a written statement describing any action
being taken with respect thereto by the Borrower or any such
Subsidiary.
(e) Material Contracts. Promptly, and in any event within ten (10)
Business Days after any Material Contract of the Borrower or any of
its Subsidiaries is terminated or amended or any new Material Contract
is entered into, a written statement describing such event, with
copies of amendments or new contracts, and an explanation of any
actions being taken with respect thereto.
(f) Interest Rate Agreements and Lumber Hedging Agreements. The Borrower
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shall provide the Agent, (i) promptly, and in any event within five
(5) Business Days after a default by any party under any Interest Rate
Agreement or Lumber Hedging Agreement, with a written statement
describing such default and an explanation of any actions being taken
with respect thereto, and (ii) with such other information regarding
any Interest Rate Agreements or Lumber Hedging Agreements as the Agent
may reasonably request.
8.4 Corporate Existence.
The Borrower shall, and shall cause each of the Subsidiaries to, (i)
maintain its corporate existence (except that Subsidiaries may merge with each
other and with the Borrower (provided that the Borrower is the surviving
entity)) with the prior written consent of the Agent, maintain in full force and
effect all licenses, bonds, franchises, leases, trademarks and qualifications to
do business, and all patents, contracts and other rights necessary or advisable
to the profitable conduct of their businesses, (ii) continue in, and limit their
operations to, the same general lines of business as presently conducted by it
and (iii) comply with all Requirements of Law, except those Requirements of Law
the failure to so comply with would not have a Material Adverse Effect.
8.5 ERISA.
The Borrower shall establish, maintain and operate all Plans to comply in
all material respects with the provisions of ERISA, Internal Revenue Code, and
all other Requirements of Law, other than to the extent that Borrower is in good
faith contesting by appropriate proceedings the validity or application of any
such provision, law, rule, regulation or interpretation.
8.6 Environmental and Other Matters.
(a) The Borrower and its Subsidiaries will conduct their businesses so as
to comply in all material respects with all applicable federal, state
or local environmental laws, regulations, directions, ordinances,
criteria and guidelines, including, without limitation, environmental,
land use, occupational safety or health laws, regulations, directions,
ordinances, criteria, guidelines, requirements or permits in all
jurisdictions in which any of them is or may at any time be doing
business, except to the extent that the Borrower or any of the
Subsidiaries are contesting, in good faith by appropriate legal
proceedings, any such law, regulation, direction, ordinance, criteria,
guideline, or interpretation thereof or application thereof; provided,
--------
further, that the Borrower and each of the Subsidiaries shall comply
-------
with the order of any court or other Governmental Authority relating
to such laws unless the Borrower or the Subsidiaries shall currently
be prosecuting an appeal or proceedings for review and shall have
secured a stay of enforcement or execution postponing enforcement or
execution pending such appeal or proceedings for review. The Borrower
shall promptly take all actions necessary to prevent the imposition of
any Liens on any of its properties arising out of or related to any
environmental matters. At the request of the Agent, and at the sole
cost and expense of the Borrower, the Borrower shall provide the Agent
with any additional information or reports relating to environmental
matters and any potential related liability resulting therefrom as the
Agent may reasonably request. In addition, the Borrower shall provide
the Agent, at the Borrower's sole cost and expense, with copies of any
environmental audits, surveys or reports conducted in connection with
the purchase or sale by the Borrower of any real property.
(b) On or before December 13, 2001, the Borrower shall implement an
environmental management system program reasonably acceptable to the
Agent. Such program shall include, without limitation, procedures
reasonably acceptable to the Agent for the handling and control of
asbestos, above ground storage tanks, and drums containing oil,
gasoline and other hazardous substances. The Borrower shall, from time
to time, execute such agreements, documents and certifications with
respect to such program as the Agent may reasonably require.
8.7 Insurance; Casualty Loss.
The Borrower agrees to maintain, and to cause each of the Subsidiaries to
maintain, public liability insurance, third party property damage insurance and
casualty insurance on the Collateral under such policies of insurance, with such
insurance companies, in such amounts and covering such risks as are at all times
satisfactory to the Agent in its commercially reasonable judgment. All liability
policies of the Borrower and its Subsidiaries are to name the Agent as an
additional insured and all casualty policies covering the Collateral are to name
the Agent as the loss payee in case of loss and are to contain such other
provisions as the Agent may reasonably require to fully protect the Agent's
interest in the Collateral and to any payments to be made under such policies.
The Borrower shall provide written notice to the Lenders of the occurrence of
any of the following events within five (5) Business Days after the occurrence
of such event: any asset or property owned or used by the Borrower or any of the
Subsidiaries is (i) damaged or destroyed, or suffers any other loss, or (ii)
condemned, confiscated or otherwise taken, in whole or in part, or the use
thereof is otherwise diminished so as to render impracticable or unreasonable
the use of such asset or property for the purposes to which such asset or
property were used immediately prior to such condemnation, confiscation or
taking, by exercise of the powers of condemnation or eminent domain or
otherwise, and in either case the amount of the damage, destruction, loss or
diminution in value in excess of $1,000,000 (or with respect to Eligible Real
Estate, as set forth in the applicable Mortgage relating thereto) (collectively,
a "Casualty Loss"; provided, however, that for purposes of the definition of
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Capital Expenditures only, "Casualty Loss" shall mean any of the foregoing
regardless of the amount of the damage, destruction, loss or diminution in
value). The Borrower shall diligently file and prosecute its claim or claims for
any award or payment in connection with a Casualty Loss. In the event of a
Casualty Loss, the Borrower shall pay to the Agent, promptly upon receipt
thereof, any and all insurance proceeds and payments received by the Borrower or
any of the Subsidiaries on account of damage, destruction, loss, condemnation or
eminent domain proceedings. The Agent may, at its election and in its sole
discretion, either (a) apply the proceeds realized from Casualty Losses to
payment of accrued and unpaid interest or outstanding principal under the Loans
in accordance with the provisions of Section 4.4 hereo, or if an Event of
Default then exists, in such order and manner as the Agent may determine, or (b)
pay such proceeds to the Borrower to be used to repair, replace or rebuild the
asset or property or portion thereof that was the subject of the Casualty Loss.
After the occurrence and during the continuance of an Event of Default, (i) no
settlement on account of any such Casualty Loss shall be made without the
consent of the Majority Lenders and (ii) the Agent may participate in any such
proceedings and the Borrower shall deliver to the Agent such documents as may be
requested by the Agent to permit such participation and shall consult with the
Agent, its attorneys and agents in the making and prosecution of such claim or
claims. The Borrower hereby irrevocably authorizes and appoints the Agent its
attorney-in-fact, after the occurrence and continuance of an Event of Default,
to collect and receive for any such award or payment and to file and prosecute
such claim or claims, which power of attorney shall be irrevocable and shall be
deemed to be coupled with an interest, and the Borrower shall, upon demand of
the Agent, make, execute and deliver any and all assignments and other
instruments sufficient for the purpose of assigning any such award or payment to
the Agent for the benefit of the Lenders, free and clear of any encumbrances of
any kind or nature whatsoever.
8.8 Taxes.
The Borrower agrees to pay, when due, and to cause each of the Subsidiaries
to pay when due, all taxes lawfully levied or assessed against the Borrower, any
Subsidiary or any of the Collateral before any penalty or interest accrues
thereon; provided, however, that, unless such taxes have become a federal tax or
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ERISA Lien on any of the assets of the Borrower or any Subsidiary, no such tax
need be paid if the same is being contested, in good faith, by appropriate
proceedings promptly instituted and diligently conducted and if an adequate
reserve or other appropriate provision shall have been made therefor as required
in order to be in conformity with GAAP.
8.9 Compliance With Laws.
The Borrower agrees to comply, and to cause each of the Subsidiaries to
comply, with all Requirements of Law applicable to the Collateral or any part
thereof, or to the operation of its business, unless (a) the Borrower contests
any such Requirements of Law in a reasonable manner and in good faith or (b) any
such non-compliance would not have a Material Adverse Effect.
8.10 Use of Proceeds.
The Loans made to the Borrower hereunder shall be used by the Borrower
solely (i) to repay outstanding Indebtedness of the Borrower on account of the
Senior Subordinated Notes pursuant to the Offer to Purchase, (ii) for working
capital, general business and capital expenditure requirements of the Borrower,
including, without limitation, payment of Letter of Credit Obligations, (iii) to
the limited extent contemplated by Section 9.17 hereof, (iv) to pay Fees and
Expenses, and (v) to fund up to $10,000,000.00 of repurchases of the Borrower's
common stock. The Borrower shall not use any portion of the proceeds of any such
Loans for the purpose of purchasing or carrying any "margin stock" (as defined
in Regulations T and U of the Board of Governors of the Federal Reserve System)
in any manner which violates the provisions of Regulation T, U or X of said
Board of Governors or for any other purpose in violation of any applicable
statute or regulation, or of the terms and conditions of this Credit Agreement.
8.11 Fiscal Year.
The Borrower agrees to maintain its fiscal year as a year ending on the
last Saturday in December unless required by law, in which case the Borrower
will give the Agent at least thirty (30) days prior written notice thereof.
8.12 Intellectual Property.
The Borrower shall do and cause to be done all things necessary to preserve
and keep in full force and effect all registrations of patents, copyrights,
trademarks, service marks and other marks, trade names or other trade rights
that are necessary for the operation of the business of the Borrower (including,
without limitation, the "'W' and design" and "Wickes" trademarks).
8.13 Maintenance of Property.
The Borrower agrees to keep, and to cause each of the Subsidiaries to keep,
all property useful and necessary to its respective businesses in good working
order and condition (ordinary wear and tear excepted) in accordance with their
past operating practices and not to commit or suffer any waste with respect to
any of its properties.
8.14 Books and Records; Inspections; Field Audits; Appraisals; Physical
Inventories.
(a) The Borrower shall maintain books and records pertaining to the
Collateral in such detail, form and scope as is consistent with good
business practice, and agrees that such books and records will reflect
the Lenders' interest in its Accounts. The Agent or its agents may
(or, if requested by the Majority Lenders, shall) enter upon the
premises of the Borrower at any time and from time to time, during
normal business hours and upon reasonable notice under the
circumstances, and at any time at all on and after the occurrence of
an Event of Default which continues beyond the expiration of any grace
or cure period applicable thereto, and which has not otherwise been
waived, for the purposes of (i) inspecting and verifying the
Collateral, (ii) inspecting and/or copying (at the Borrower's expense)
any and all records pertaining thereto, and (iii) discussing the
affairs, finances and business of the Borrower with any officers,
employees and directors of the Borrower or with the Auditors. Without
limiting the foregoing, the Agent (or its agents) may enter upon the
premises of the Borrower (and representatives of the Lenders shall be
permitted to accompany the Agent or its agents), during normal
business hours and upon reasonable notice under the circumstances, no
less frequently than (x) three times per year, for the purposes of
conducting field examinations of the Collateral (provided that the
Agent, in its reasonable discretion, if any Event of Default exists,
may cause such additional field examinations to be taken as the Agent
reasonably determines (each, at the expense of the Borrower)), and (y)
one time per year, for the purposes of conducting appraisals of the
Borrower's Inventory (provided that the Agent, in its reasonable
discretion, if any Event of Default exists, may cause such additional
such appraisals to be taken as the Agent reasonably determines (each,
at the expense of the Borrower)), and (z) at such reasonable intervals
as the Agent may determined to conduct appraisals of the other
Collateral.
(b) The Agent, at the expense of the Borrower, may participate in and/or
observe each physical count and/or inventory of so much of the
Collateral as consists of Inventory which is undertaken on behalf of
the Borrower. The Borrower, at its own expense, shall cause not less
than one (1) physical inventory to be undertaken in each twelve (12)
month period during which this Credit Agreement is in effect conducted
by such inventory takers as may be reasonably satisfactory to the
Agent and following such procedures as may be reasonably satisfactory
to the Agent. The Borrower shall provide the Agent with a copy of the
preliminary results of each such physical inventory within ten (10)
days following the completion of such inventory. The Borrower, within
thirty (30) days following the completion of such physical inventory,
shall provide the Agent with a reconciliation of the results of each
such physical inventory and shall post such results to the Borrower's
stock ledger and, as applicable to the Borrower's other financial
books and records. The Agent, in its reasonable discretion, if any
Event of Default exists, may cause such additional inventories to be
taken as the Agent reasonably determines (each, at the expense of the
Borrower).
8.15 Further Assurances.
The Borrower shall take, and shall cause each of the Subsidiaries to take,
all such further actions and execute all such further documents and instruments
as the Agent may at any time reasonably determine in its sole discretion to be
necessary or desirable to further carry out and consummate the transactions
contemplated by the Credit Documents, to cause the execution, delivery and
performance of the Credit Documents to be duly authorized and to perfect or
protect the Liens (and the priority status thereof) of the Agent on the
Collateral.
8.16 Secured Interest Rate Agreements.
To the extent any Lender reimburses any of its Affiliates for the failure
of the Borrower to pay any amounts owed to such Affiliate in connection with any
Secured Interest Rate Agreement, the Borrower shall promptly pay such Lender
such reimbursed amount and such reimbursed amount shall be an Obligation of the
Borrower hereunder until paid in full.
ARTICLE 9. NEGATIVE COVENANTS
-----------------------------
Until termination of the Credit Agreement and payment and satisfaction of
all Obligations due hereunder, the Borrower agrees that:
9.1 Unused Availability.
The Borrower shall not permit Unused Availability (as reflected in the
Borrowing Base Certificate most recently delivered from time to time hereunder)
to be less than the Required Available Amount at any time that the most recently
delivered quarterly Financial Statements show the Interest Coverage Ratio was
greater than or equal to 1.25 to 1.00 for the four consecutive fiscal quarters
ended on the date of such Financial Statements, and the Borrower shall not
permit Unused Availability (as reflected on the Borrowing Base Certificate most
recently delivered from time to time hereunder) to be less than $25,000,000 at
any time that the most recently delivered quarterly Financial Statements show
the Interest Coverage Ratio was less than 1.25 to 1.00 for the four consecutive
fiscal quarters ended on the date of such Financial Statements.
9.2 Minimum Consolidated Net Worth.
The Borrower shall not permit Consolidated Net Worth to be less than the
following amounts as of the end of each applicable fiscal quarter set forth
below:
Fiscal Quarter Ending On or About Minimum Consolidated Net Worth
--------------------------------- ------------------------------
December 31, 2000 $25,100,000
March 31, 2001 $23,200,000
June 30, 2001 $25,500,000
September 30, 2001 $28,400,000
December 31, 2001 $27,800,000
March 31, 2002 $26,500,000
June 30, 2002 $29,600,000
September 30, 2002 $33,500,000
December 31, 2002 $33,700,000
March 31, 2003 and each quarter end thereafter The sum of (x) $33,700,000, plus (y) the Borrower's
Consolidated Net Income (calculated on a cumulative
basis) for each quarter ending after December 31,
2002, but in no event less than zero
9.3 Capital Expenditures.
The Borrower shall not make payments for Capital Expenditures in excess of
$9,000,000 during any fiscal year. To the extent that the Borrower does not use
all or any portion of the amounts allowed for payments for Capital Expenditures
under this Section 9.3 during any fiscal year, it may be carried forward to the
immediately following fiscal year and used for Capital Expenditures during such
immediately following fiscal year. The Borrower shall not make any Capital
Expenditures that are not reasonably related to the businesses conducted on the
Closing Date by the Borrower.
9.4 Additional Indebtedness.
The Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, incur, create, assume or suffer to exist any
Indebtedness other than:
(a) Indebtedness arising under this Credit Agreement and the other Credit
Documents;
(b) Indebtedness under the Senior Subordinated Notes and the Indenture;
(c) Indebtedness under Interest Rate Agreements and Lumber Hedging
Agreements, in each case the terms and conditions of which are
satisfactory to the Agent, including, with respect to each Lumber
Hedging Agreement, the matching of term and notional amount thereof
with an actual written price/purchase commitment entered into between
Borrower and one of its customers; provided that the number of Lumber
--------
Hedging Agreements outstanding at any one time shall not exceed 160;
(d) Indebtedness described on Schedule B and any refinancing of such
-----------
Indebtedness; provided that the aggregate principal amount of such
--------
Indebtedness is not increased and such refinancing is on terms and
conditions no more restrictive than the terms and conditions of the
Indebtedness being refinanced;
(e) Indebtedness incurred or assumed in connection with Acquisitions
permitted by Section 9.17 in amounts and on terms acceptable to the
Agent; and
(f) other Indebtedness not to exceed $7,500,000 in the aggregate
outstanding at any one time, such Indebtedness to be from parties and
to have terms and conditions satisfactory to the Agent.
9.5 Liens.
The Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, mortgage, assign, pledge, transfer, create, incur,
assume, suffer to exist or otherwise permit any Lien or judgment (whether as a
result of a purchase money or title retention transaction, or other security
interest, or otherwise) to exist on any of its property, assets, revenues or
goods, whether real, personal or mixed, whether now owned or hereafter acquired,
except for:
(a) Liens granted to the Agent by the Borrower pursuant to any Credit
Document;
(b) Liens listed on Schedule B;
----------
(c) Purchase Money Liens;
(d) Pre-existing Liens on fixed assets acquired pursuant to Section 9.17
hereof, so long as such Liens attach only to the specific assets so
acquired;
(e) Liens of warehousemen, mechanics, materialmen, workers, repairmen,
common carriers, landlords and other similar Liens arising by
operation of law or otherwise for amounts that are not yet due and
payable or which are being diligently contested in good faith by the
Borrower by appropriate proceedings;
(f) Attachment or judgment Liens individually or in the aggregate not in
excess of $1,000,000 (exclusive of (i) any amounts that are duly
bonded to the reasonable satisfaction of the Agent or (ii) any amount
adequately covered by insurance as to which the insurance company has
not disclaimed or disputed in writing its obligations for coverage);
(g) Liens for taxes, assessments or other governmental charges not yet due
and payable or which are being diligently contested in good faith by
the Borrower by appropriate proceedings, provided that in any such
--------
case an adequate reserve is being maintained by the Borrower for the
payment of same;
(h) Deposits or pledges to secure obligations under workmen's
compensation, social security or similar laws, or under unemployment
insurance not to exceed an aggregate of $1,000,000 outstanding at any
one time;
(i) Deposits or pledges to secure bids, tenders, contracts (other than
contracts for the payment of money), leases, statutory obligations,
surety and appeal bonds, utility payments and other obligations of
like nature arising in the ordinary course of business not to exceed
an aggregate of $2,000,000 outstanding at any one time;
(j) Easements, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary course of business which, in the aggregate,
are not substantial in amount and which do not materially detract from
the value of the property subject thereto or materially interfere with
the ordinary conduct of the business of the Borrower or any
Subsidiary;
(k) Liens on cash or securities maintained in any Lumber Hedging Account
in favor of the financial institution at which such account is
maintained; provided that the amount of such cash and the market value
--------
of such securities are acceptable to the Agent;
(l) Extensions and renewals of the foregoing permitted Liens; provided
--------
that the aggregate amount secured by such extended or renewed Liens is
not increased and such extended or renewed Liens are on terms and
conditions no more restrictive than the terms and conditions of the
Liens being extended or renewed; and
9.6 Sale of Assets.
The Borrower shall not, and shall not permit any of its Subsidiaries to,
without the prior consent of the Agent, directly or indirectly, sell, lease,
assign, transfer or otherwise dispose of any assets other than (i) Inventory in
the ordinary course of business, (ii) individual items of property with a fair
market value of less than $500,000 in the aggregate during any fiscal year,
(iii) obsolete or worn out property disposed of in the ordinary course of
business, and (iv) real property (other than Eligible Real Estate) which is no
longer needed in the Borrower's business, so long as, with respect to
subsections (ii), (iii) and (iv) above, (a) all such dispositions are for fair
value, (b) all cash received for all such dispositions is used to repay the
Loans, and (c) the aggregate consideration for such dispositions is paid in full
in cash at the time of disposition; provided that, with respect to any such
--------
disposition of assets otherwise permitted hereunder, the Borrower may receive a
promissory note from the purchaser thereof in an amount equal to no greater than
twenty percent (20%) of the aggregate consideration for such disposition so long
as (x) such promissory note has a final maturity date no greater than two years
from the date of such disposition, (y) each such promissory note is pledged to
the Agent as additional security for the repayment of the Obligations, and (z)
the outstanding aggregate principal amount of all such promissory notes received
by the Borrower pursuant to this Section 9.6 does not at any time exceed
$1,000,000.
9.7 Corporate Changes.
The Borrower, shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, merge, consolidate or otherwise alter or modify the
Borrower's or any Subsidiary's Governing Documents (unless such alteration or
modification would not have a Material Adverse Effect), corporate names, mailing
addresses, principal places of business, structure, status or existence, or
enter into or engage in any operation or activity materially different from that
presently being conducted by the Borrower or Subsidiary; provided that, with the
--------
consent of the Agent (who shall notify each Lender), any Subsidiary may be
merged or consolidated with or into the Borrower (provided that the Borrower
shall be the continuing or surviving corporation) or any wholly-owned
Subsidiary.
9.8 Guaranties.
The Borrower shall not, and shall not permit any of its Subsidiaries to,
incur any Contingent Obligations or, without limiting the foregoing, directly or
indirectly, assume, guaranty, endorse, or otherwise become liable upon the
obligations of any other Person, including, without limitation, any Subsidiary
or Affiliate of the Borrower, except (i) by the endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business, (ii) by the giving of indemnities in connection with the
sale of Inventory or other asset dispositions permitted hereunder and (iii) in
connection with the incurrence of Indebtedness permitted to be incurred pursuant
to Section 9.4 hereof.
9.9 Restricted Payments.
The Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, (a) declare or pay any dividend (other than dividends
payable solely in common stock of the Borrower) on, or make any payment on
account of, or set apart assets for a sinking or other analogous fund for, the
purchase, redemption, defeasance, retirement or other acquisition of, any shares
of any class of capital stock of the Borrower or any of its Subsidiaries or any
warrants, options or rights to purchase any such capital stock, whether now or
hereafter outstanding, or make any other distribution in respect thereof, either
directly or indirectly, whether in cash or property or in obligations of the
Borrower or any of its Subsidiaries except that any Subsidiary may declare and
pay dividends to the Borrower or any other wholly-owned Subsidiary; or (b) make
any optional payment or prepayment on or redemption (including, without
limitation, by making payments to a sinking or analogous fund) or repurchase of
any Indebtedness (other than Indebtedness pursuant to this Credit Agreement or,
as long as no Default exists or would arise after giving effect to such payment
or repurchase, the Senior Subordinated Notes); provided that any Subsidiary may
--------
make payments on account of Indebtedness owing to the Borrower or any other
Subsidiary; or (c) during the continuance of any Event of Default, make any
payment to an Affiliate (other than salary, other employment compensation or
wages owing to such Affiliate) with respect to management, consulting or other
like fees. Notwithstanding the foregoing, the Borrower
(x) may make any optional payment or prepayment on or redemption
(including, without limitation, by making payments to a sinking or
analogous fund) or repurchase of the Senior Subordinated Notes as long
as (1) no Default or Event of Default then exists or would arise after
giving effect to such payment, prepayment or redemption, and (2) prior
to and after giving effect to such payment, prepayment or redemption,
Unused Availability is at least (A) $25,000,000 at any time the sum of
the amount of Revolving Loans plus Letter of Credit Obligations is
equal to or less than $160,000,000, and (B) $30,000,000 at any time
the sum of the amount of Revolving Loans plus Letter of Credit
Obligations is greater than $160,000,000; and
(y) subject to the first proviso hereto, shall repay the Senior
Subordinated Notes on or before June 30, 2003 on terms set forth in
the Offer to Purchase or otherwise acceptable to the Agent, provided
that if a Default or Event of Default then exists or would arise after
giving effect to such repayment or if prior to and after giving effect
to such repayment, Unused Availability is not at least (A) $25,000,000
at any time the sum of the amount of Revolving Loans plus Letter of
Credit Obligations is equal to or less than $160,000,000, and (b)
$30,000,000 at any time the sum of the amount of Revolving Loans plus
Letter of Credit Obligations is greater than $160,000,000, the
Borrower may not so repay such Senior Subordinated Notes, provided
further that the failure of the Borrower to repay the Senior
Subordinated Notes by June 30, 2003 shall constitute an Event of
Default notwithstanding that such failure may be due to the Borrower's
inability to satisfy the terms of the first proviso hereto.
9.10 Investments.
The Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, make any Investment in any Person, whether in cash,
securities, or other property of any kind including, without limitation, any
Subsidiary or Affiliate of the Borrower, other than:
(a) Advances or loans made in the ordinary course of business to employees
of the Borrower or its Subsidiaries for travel, entertainment,
relocation and similar expenses not to exceed $750,000 in the
aggregate outstanding at any one time;
(b) Existing Advances;
(c) Cash Equivalents;
(d) Interest-bearing demand or time deposits (including certificates of
deposit) which are insured by the Federal Deposit Insurance
Corporation ("FDIC") or a similar federal insurance program; provided,
--------
however, that the Borrower may, in the ordinary course of its
-------
business, maintain in its disbursement accounts from time to time
amounts in excess of then applicable FDIC or other program insurance
limits;
(e) Promissory notes received by the Borrower as provided in Section 9.6;
(f) Such other Investments not to exceed $2,500,000 in the aggregate at
any time outstanding as the Agent may approve in writing in its sole
discretion;
(g) To the extent permitted under Section 9.17(c) hereof; and
(h) Charged-back Accounts pertaining to goods returned or rejected by a
customer, which Accounts are acquired by the Borrower to the extent
required by the Borrower's Credit Card Plan Agreement with National
City Bank, Columbus or any other credit card agreements.
9.11 Affiliate Transactions.
(a) The Borrower shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, enter into any transaction not described
on Schedule B with (including, without limitation, the purchase, sale
or exchange of property or the rendering of any service to) any
Subsidiary or Affiliate of the Borrower ("Affiliate Transaction")
except in the ordinary course of and pursuant to the reasonable
requirements of the Borrower's or such Subsidiary's business, as the
case may be, and upon fair and reasonable terms no less favorable to
the Borrower or such Subsidiary than could be obtained in a comparable
arm's-length transaction with an unaffiliated Person (the "Fairness
Conditions").
(b) Notwithstanding Section 9.11(a) above, the Borrower shall not, and
shall not permit any of its Subsidiaries to, enter into Affiliate
Transactions with aggregate consideration in excess of $250,000 in any
fiscal year unless a majority of the members of the Board of Directors
of the Borrower who are not officers, employees or Affiliates of the
Borrower or any of its Subsidiaries shall have determined, prior to
the time the Borrower or such Subsidiary, as the case may be, enters
into such Affiliate Transactions, that such Affiliate Transactions
satisfy the Fairness Conditions and such determination is evidenced by
a resolution of the Board of Directors or a committee thereof;
provided that, the Borrower shall not, and shall not permit any of its
--------
Subsidiaries to, enter into Affiliate Transactions with aggregate
consideration in excess of $500,000 in any fiscal year unless, in
addition to the requirements set forth above, the Borrower delivers to
the Agent, at least thirty (30) days prior to the time the Borrower or
such Subsidiary enters into such Affiliate Transactions, a detailed
summary of all material terms, provisions and conditions thereof.
9.12 Prohibited Transactions Under ERISA.
The Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly:
(a) Engage, or permit any ERISA Affiliate to engage in any prohibited
transaction which could result in a civil penalty or excise tax
described in Sections 406 of ERISA or 4975 of the Internal Revenue
Code for which a statutory or class exemption is not available or a
private exemption has not been previously obtained from the DOL;
(b) permit to exist with respect to any Benefit Plan any accumulated
funding deficiency (as defined in Sections 302 of ERISA and 412 of the
Internal Revenue Code), whether or not waived;
(c) fail, or permit any ERISA Affiliate to fail, to pay timely required
contributions or annual installments due with respect to any waived
funding deficiency to any Benefit Plan;
(d) terminate, or permit any ERISA Affiliate to terminate, any Benefit
Plan where such event would result in any liability of the Borrower,
any Subsidiary or any ERISA Affiliate under Title IV of ERISA;
(e) fail, or permit any ERISA Affiliate to fail, to make any required
contribution or payment to any Multiemployer Plan;
(f) fail, or permit any ERISA Affiliate to fail, to pay any required
installment or any other payment required under Section 412 of the
Internal Revenue Code on or before the due date for such installment
or other payment;
(g) amend, or permit any ERISA Affiliate to amend, a Plan resulting in an
increase in current liability for the plan year such that either of
the Borrower, any Subsidiary or any ERISA Affiliate is required to
provide security to such Plan under Section 401(a)(29) of the Internal
Revenue Code;
(h) withdraw, or permit any ERISA Affiliate to withdraw, from any
Multiemployer Plan where such withdrawal may result in any liability
of any such entity under Title IV of ERISA; or
(i) allow any representation made in Section 7.12 to be untrue at any time
during the term of this Credit Agreement.
9.13 Additional Bank Accounts.
The Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, open, maintain or otherwise have any checking, savings
or other accounts at any bank or other financial institution, or any other
account where money is or may be deposited or maintained with any Person, other
than the Disbursement Account, Lumber Hedging Accounts and the Blocked Accounts
and other accounts set forth on Schedule B. Notwithstanding the foregoing, until
----------
such time as the Agent otherwise directs, the Borrower may open and maintain an
additional bank account (the "Contingency Account") to be used exclusively for
funding the emergency cash needs of its facilities; provided that (i) no single
--------
facility receive in excess of $1,000 from the Contingency Account in any given
month and (ii) no group of facilities receive in excess of $10,000 in the
aggregate from the Contingency Account in any given month.
9.14 Excess Cash.
The Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, maintain in the aggregate in all of the checking,
savings or other accounts (other than the Disbursement Account, the Blocked
Accounts, the Fleet Account, Lumber Hedging Accounts and the payroll accounts)
of the Borrower or elsewhere, total cash balances and Investments permitted by
Section 9.10 hereof in excess of $150,000 at any time during which any Loans are
outstanding hereunder, of which amount no more than $5,000 may be maintained in
the Contingency Account at any time.
9.15 Material Amendments of Material Contracts.
Except for the Supplemental Indenture pursuant to the Offer to Purchase,
the Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, without the prior written consent of the Majority
Lenders, amend, modify, cancel or terminate or permit the amendment,
modification, cancellation or termination of, the Indenture, the Senior
Subordinated Notes, or any other Material Contract, unless, with respect to such
other Material Contracts only, such amendment, modification, cancellation or
termination would not have a Material Adverse Effect.
9.16 Additional Negative Pledges.
Except to the extent contained in documentation governing Indebtedness
assumed in connection with an Acquisition permitted hereby, the Borrower shall
not, and shall not permit any of its Subsidiaries to, directly or indirectly,
create or otherwise cause or suffer to exist or become effective, or permit any
of the Subsidiaries to create or otherwise cause or suffer to exist or become
effective, directly or indirectly, (i) any prohibition or restriction (including
any agreement to provide equal and ratable security to any other Person in the
event a Lien is granted to or for the benefit of the Agent and the Lenders) on
the creation or existence of any Lien upon any assets of the Borrower or the
Subsidiaries or (ii) any contractual obligation which may restrict or inhibit
the Agent's rights or ability to sell or otherwise dispose of the Collateral or
any part thereof after the occurrence of an Event of Default.
9.17 Additional Subsidiaries; Acquisitions.
(a) The Borrower shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, form or acquire any new Subsidiaries.
(b) The Borrower shall not, and shall not permit any of its Subsidiaries
to make any Acquisitions except as permitted by Section 9.17(c)
hereof.
(c) Notwithstanding Section 9.17(a) and 9.17(b) hereof, but subject to all
of the other provisions of this Credit Agreement and the other Credit
Documents, the Borrower may from time to time make Acquisitions if:
(i) The Agent shall have received (A) such duly executed and
delivered agreements, instruments and documents as the Agent
shall request in order to create in favor of the Agent a security
interest in the types of property in which a security interest
has been granted to the Agent under the Security Agreement so
acquired to secure the Obligations, and (B) such lien searches
relating to the property being acquired as the Agent shall
request;
(ii) If such Acquisition is an Acquisition of stock or other equity
interests in a Person, (A) the Borrower acquires one hundred
percent (100%) of the stock and other equity interests of such
Person and (B) such Person is merged with and into the Borrower
or liquidated immediately upon the consummation of such
Acquisition with the Borrower being the sole surviving Person;
(iii)At the time of such Acquisition, no Default and no Event of
Default exists, or would exist upon the consummation thereof;
(iv) The Borrower has demonstrated in writing to the satisfaction of
the Agent that the business to be acquired has had positive
EBITDA (adjusted to give effect for the Borrower's business plan
for such business as reasonably approved by the Agent) for the
period of four (4) fiscal quarters then most recently ended;
(v) The Borrower has demonstrated in writing to the satisfaction of
the Agent that following the consummation of the Acquisition the
Borrower will be in pro forma compliance with Sections 9.1 and
9.2;
(vi) The Borrower has completed its due diligence review of the
business to be acquired;
(vii)The Borrower shall have received the Majority Lenders' prior
written consent if the Total Consideration for such Acquisition
or series of related Acquisitions is or could be in excess of
$15,000,000;
(viii) The Revolving Loans made for the purpose of funding
Acquisitions in the then current calendar year will not exceed
$30,000,000 after giving effect to such Acquisition;
(ix) The board of directors or shareholders, or in the case of a
Person that is not a corporation, a corresponding governing body,
of the Person whose stock or assets are being acquired has
approved the Acquisition.
(x) The structure of the Acquisition, including any seller notes and
all other assumed debt is on terms acceptable to the Agent;
(xi) The assets so acquired are located in the United States or Canada
(other than the Province of Quebec) or, if such acquisition is
structured as a purchase of stock, the Person so acquired is
organized under the laws of a state in the United States, and the
assets owned by such Person are located in the United States or
Canada (other than the Province of Quebec);
(xii)The Borrower updates the schedules hereto and to each of the
other Loan Documents, as applicable, provided, in no event may
--------
any schedule be updated in a manner that would reflect or
evidence a Default or Event of Default;
(xiii) The target of the Acquisition is engaged in a line of business
that is reasonably related to the Borrower's line of business as
presently conducted by the Borrower; and
(xiv)such other conditions as the Agent reasonably requests are
satisfied.
"Total Consideration" means the total consideration paid with respect to
any Acquisition, including without limitation, (v) all payments made in cash and
property, (w) the amount paid or to be paid pursuant to non-compete agreements,
so-called earn-out agreements and consulting agreements, (x) the amount of debt
and other liabilities assumed and/or incurred (including in the case of an
acquisition of stock or other equity interests, the amount of debt and other
liabilities of the Person to be acquired), (y) anticipated capital expenditures
related to an Acquisition and identified to the Agent prior to the consummation
of such Acquisition and (z) the amount of all transaction fees.
To the extent that assets acquired by the Borrower pursuant to this Section
9.17(c) would otherwise consist of or include Eligible Accounts or Eligible
Inventory, the dollar amount of such Eligible Accounts and Eligible Inventory
(after application of applicable advance rates) will be included in calculating
the Borrowing Base only following the satisfactory completion of an examination
by the Agent.
9.18 Hedging Transactions.
The Borrower shall not, and shall not permit any of its Subsidiaries to,
engage in any speculative hedging or similar transactions (other than Interest
Rate Agreements and Lumber Hedging Agreements, to the extent otherwise permitted
hereunder).
9.19 Activities of Subsidiaries.
(a) LTC. The Borrower shall not permit LTC to engage in any business or
---
activity (including, without limitation, the incurrence of
Indebtedness or trade liabilities) with any Person (other than the
Borrower in connection with the LTC Sublicense Agreement).
Notwithstanding Section 9.10(f), Borrower shall not make any
Investment on or after the Initial Closing Date in LTC.
(b) GLC. The Borrower shall not permit GLC to engage in any business or
---
activity (including, without limitation, the incurrence of any
Indebtedness or trade liabilities) other than the ownership and
operation of building material supply centers (and activities
reasonably related thereto). Notwithstanding Section 9.10(f), Borrower
shall not make any Investment on or after the Initial Closing Date in
GLC.
(c) Wickes International. The Borrower shall not permit Wickes
----------------------
International Holding Corporation to engage in any business or
activity (including, without limitation, the incurrence of
Indebtedness or trade liabilities) with any Person (other than the
ownership of the Investment in Riverside International Corporation
that is outstanding on the Initial Closing Date). Notwithstanding
Section 9.10(f), Borrower shall not make any Investment on or after
the Initial Closing Date in Wickes International Holding Corporation
or any Person that is now or hereafter becomes a Subsidiary of Wickes
International Holding Corporation.
ARTICLE 10. EVENTS OF DEFAULT AND REMEDIES
------------------------------------------
10.1 Events of Default.
The occurrence of any of the following events shall constitute an Event of
Default hereunder:
(a) failure of the Borrower to pay (i) any interest, Fees, Expenses or
other Obligations (other than principal) within three (3) Business
Days of when due, in each case whether at stated maturity, by
acceleration, or otherwise, or (ii) any principal when due, whether at
stated maturity, by acceleration or otherwise;
(b) failure of the Borrower to perform, comply with or observe any term,
covenant or agreement applicable to it contained in the Pledge
Agreement, the Security Agreement, in any other Collateral Documents,
or in Sections 8.1(a), 8.1(c), 8.1(d), 8.2(a), 8.3, 8.4, 8.7 or 8.10
or Article 9 hereof;
(c) any representation or warranty made or deemed to be made by the
Borrower in this Credit Agreement or in any other Credit Document (and
in any statement or certificate given in writing under this Credit
Agreement or any other Credit Document), shall be false or misleading
in any material respect when made or deemed to be made;
(d) failure of the Borrower to comply with any provisions contained in
this Credit Agreement or any other Credit Document, other than as set
forth in Section 10.1(a), 10.1(b) and 10.1(c) hereof, and such failure
shall continue without cure for a period of thirty (30) consecutive
days after notice thereof is given to the Borrower by the Agent or the
Majority Lenders;
(e) dissolution, liquidation, winding up or cessation of the Borrower's
businesses, or the failure of the Borrower to meet its debts as they
mature, or the calling of one or more meetings of the Borrower's major
creditors for purposes of obtaining a moratorium on payment or a
compromise of the Borrower's debts;
(f) the insolvency of any Credit Party or the commencement by or against
any Credit Party of any bankruptcy, insolvency, arrangement,
reorganization, receivership or similar proceedings under any federal
or state law and, in the event any such proceeding is commenced
against a Credit Party, such proceeding is not dismissed within thirty
(30) days;
(g) the occurrence of a Change of Control;
(h) the occurrence of a default or event of default (in each case which
shall continue beyond the expiration of any applicable grace periods)
which permits, or could permit, the acceleration of the maturity of
any note, agreement or instrument evidencing any other Indebtedness of
the Borrower or any of the Subsidiaries, and the aggregate principal
amount of all such Indebtedness with respect to which a default or an
event of default has occurred, or the maturity of which is permitted
to be accelerated, exceeds $2,500,000; or
(i) any material covenant, agreement or obligation of any party contained
in or evidenced by any of the Credit Documents shall cease to be
enforceable in accordance with its terms, or any party (other than the
Agent, the Syndication Agent or the Lenders) to any Credit Document
shall deny or disaffirm, its obligations under any of the Credit
Documents, or any Credit Document shall be cancelled, terminated,
revoked or rescinded without the express prior written consent of the
Agent, or any action or proceeding shall have been commenced by any
Person (other than the Agent, the Syndication Agent or any Lender)
seeking to cancel, revoke, rescind or disaffirm the obligations of any
party to any Credit Document, or any court or other Governmental
Authority shall issue a judgment, order, decree or ruling to the
effect that any of the obligations of any party to any Credit Document
are illegal, invalid or unenforceable.
10.2 Acceleration and Cash Collateralization.
Upon the occurrence and during the continuance of an Event of Default, the
Agent may take any or all of the following actions, without prejudice to the
rights of the Agent or any Lender to enforce its claims against the Borrower:
(a) Acceleration. Upon the written request of the Majority Lenders, and by
------------
delivery of written notice to the Borrower from the Agent, all
Obligations shall be declared to be immediately due and payable
(except with respect to any Event of Default set forth in Section
10.1(f) hereof, in which case all Obligations shall automatically
become immediately due and payable without the necessity of any
request of the Majority Lenders or notice or other demand to the
Borrower) without presentment, demand, protest or any other action or
obligation of the Agent or any Lender.
(b) Termination of Commitments. Upon the written request of the Majority
---------------------------
Lenders, and by delivery of written notice to the Borrower from the
Agent, the Commitments of all the Lenders shall be immediately
terminated.
(c) Cash Collateralization. On demand of the Agent or the Majority Lenders
----------------------
the Borrower shall immediately deposit with the Agent for each Letter
of Credit then outstanding, cash or Cash Equivalents in an amount
equal to one hundred ten percent (110%) of the greatest amount
drawable thereunder.
10.3 Rescission of Acceleration.
After acceleration of the maturity of the Loans, if the Borrower pays all
accrued interest and all principal due (other than by reason of the
acceleration) and all Defaults and Events of Default are otherwise waived in
accordance with Section 12.10, the Majority Lenders may elect in their sole
discretion, to rescind the acceleration and return any cash collateral. (This
Section is intended only to bind all of the Lenders to a decision of the
Majority Lenders and not to confer any right on the Borrower, even if the
described conditions for the Majority Lenders' election may be met.)
10.4 Remedies.
Upon the occurrence and during the continuance of an Event of Default, the
Agent may do any or all of the following:
(a) remove all documents, instruments, files and records (including the
copying of any computer records) relating to the Accounts or use (at
the expense of the Borrower) such supplies or space of the Borrower at
the Borrower's place of business necessary to properly administer and
collect the Accounts thereon;
(b) accelerate or extend the time of payment, compromise, issue credits,
or bring suit on the Accounts (in the name of the Borrower or the
Lenders) and otherwise administer and collect the Accounts;
(c) sell, assign and deliver the Accounts and any returned, reclaimed or
repossessed merchandise, with or without advertisement, at public or
private sale, for cash, on credit or otherwise; and
(d) foreclose the security interests created pursuant to the Credit
Documents by any available judicial or non-judicial procedure, and
take possession of any or all of the Collateral without judicial
process and enter any premises where any Collateral may be located for
the purpose of taking possession of or removing the same.
Any Lender may bid or become a purchaser at any sale, free from any right of
redemption, which right is expressly waived by the Borrower. If notice of
intended disposition of any Collateral is required by law, it is agreed that
five (5) Business Days notice shall constitute reasonable notification. The
Borrower will assemble the Collateral and make it available to the Agent at such
locations as the Agent may specify, whether at the premises of the Borrower or
elsewhere, and will make available to the Agent the premises and facilities of
the Borrower for the purpose of the Agent's taking possession of, removing or
putting the Collateral in saleable form.
10.5 Right of Setoff.
In addition to and not in limitation of all rights of offset that any
Lender or the Issuing Bank may have under applicable law, upon the occurrence of
any Event of Default, and whether or not any Lender or the Issuing Bank has made
any demand or the obligations of any Credit Party have matured, each Lender and
the Issuing Bank shall have the right to appropriate and apply to the payment of
the Obligations of such Credit Party all deposits and other obligations then or
thereafter owing by such Lender or the Issuing Bank to such Credit Party. Each
Lender or the Issuing Bank exercising such rights shall notify the Agent thereof
and any amount received as a result of the exercise of such rights shall be
shared in accordance with Section 5.11.
10.6 License for Use of Software and Other Intellectual Property.
Unless expressly prohibited by the licensor thereof, if any, the Agent is
hereby granted a license to use all computer software programs, data bases,
processes and materials used by the Borrower in connection with its businesses
or in connection with the Collateral. The Agent agrees not to use any such
license prior to the occurrence of an Event of Default without giving the
Borrower prior notice.
10.7 Deficiencies; Remedies Cumulative.
The cash proceeds resulting from the Agent's exercise of any of the
foregoing rights shall be applied by the Agent and the Lenders in accordance
with Section 2.10. The Borrower shall remain liable to the Agent and the Lenders
for any deficiencies, and the Agent and the Lenders in turn agree to remit to
the Borrower or its successors or assigns, any surplus resulting therefrom. The
foregoing remedies are not intended to be exhaustive and the full or partial
exercise of any of them shall not preclude the full or partial exercise of any
other available remedy under the Credit Agreement, under any other Credit
Document, at equity or at law.
ARTICLE 11. THE AGENT
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11.1 Appointment of Agent.
(a) Each Lender hereby designates FRF as Agent to act as herein specified.
Each Lender hereby irrevocably authorizes, and each holder of any
Revolving Note or Term Note or participation in any Letter of Credit
by the acceptance of a Revolving Note, a Term Note, or participation
shall be deemed irrevocably to authorize, the Agent to take such
action on its behalf under the provisions of this Credit Agreement,
the Revolving Notes and the Term Notes and any other instruments and
agreements referred to herein and to exercise such powers and to
perform such duties hereunder and thereunder as are specifically
delegated to or required of the Agent by the terms hereof and thereof
and such other powers as are reasonably incidental thereto. The Agent
shall hold all Collateral and all payments of principal, interest,
Fees, charges and Expenses received pursuant to this Credit Agreement
or any other Credit Document for the benefit of the Lenders to be
distributed as provided herein. The Agent may perform any of its
duties hereunder by or through its agents or employees.
(b) The provisions of this Article 11 are solely for the benefit of the
Agent and the Lenders, and none of the Credit Parties shall have any
rights as a third party beneficiary of any of the provisions hereof
(other than Section 11.9). In performing its functions and duties
under this Agreement, the Agent shall act solely as agent of the
Lenders 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 Credit Party.
11.2 Nature of Duties of Agent, Documentation Agent and Syndication Agent.
(a) The Agent shall have no duties or responsibilities except those
expressly set forth in this Credit Agreement and the other Credit
Documents. Neither the Agent nor any of its officers, directors,
employees or agents shall be liable for any action taken or omitted by
it as such hereunder or in connection herewith, unless caused by its
or their gross negligence or willful misconduct. The duties of the
Agent shall be mechanical and administrative in nature; the Agent
shall not have by reason of this Credit Agreement or the other Credit
Documents a fiduciary relationship in respect of any Lender; and
nothing in this Credit Agreement or the other Credit Documents,
expressed or implied, is intended to or shall be so construed as to
impose upon the Agent any obligations in respect of this Credit
Agreement or the other Credit Documents except as expressly set forth
herein or therein.
(b) Neither the Documentation Agent nor the Syndication Agent will have
any duties, obligations, rights or remedies under this Credit
Agreement or any of the other Credit Documents by virtue of its being
named as documentation agent or syndication agent hereunder.
11.3 Lack of Reliance on Agent.
(a) Independently and without reliance upon the Agent, each Lender, to the
extent it deems appropriate, has made and shall continue to make (i)
its own independent investigation of the financial or other condition
and affairs of each Credit Party in connection with the taking or not
taking of any action in connection herewith and (ii) its own appraisal
of the creditworthiness of each Credit Party, and, except as expressly
provided in this Agreement, the Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide
any Lender with any credit or other information with respect thereto,
whether coming into its possession before the making of the Loans or
at any time or times thereafter.
(b) The Agent shall not be responsible to any Lender for any recitals,
statements, information, representations or warranties herein or in
any document, certificate or other writing delivered in connection
herewith or for the execution, effectiveness, genuineness, validity,
enforceability, collectibility, priority or sufficiency of this Credit
Agreement, the Revolving Notes or the Term Notes or the financial or
other condition of any Credit Party. The Agent shall not be required
to make any inquiry concerning either the performance or observance of
any of the terms, provisions or conditions of this Credit Agreement,
the Revolving Notes, the Term Notes or the financial condition of any
Credit Party, or the existence or possible existence of any Default or
Event of Default, unless specifically requested to do so in writing by
any Lender.
11.4 Certain Rights of the Agent.
The Agent shall have the right to request instructions from the Majority
Lenders at any time. If the Agent shall request instructions from the Majority
Lenders with respect to any act or action (including the failure to act) in
connection with this Credit Agreement, the Agent shall be entitled to refrain
from such act or taking such action unless and until the Agent shall have
received instructions from the Majority Lenders, and the Agent shall not incur
liability to any Person by reason of so refraining. Without limiting the
foregoing, no Lender shall have any right of action whatsoever against the Agent
as a result of the Agent acting or refraining from acting hereunder in
accordance with the instructions of the Majority Lenders.
11.5 Reliance by Agent.
The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, statement, certificate,
telex, teletype or telecopier message, cablegram, radiogram, order or other
documentary, teletransmission or telephone message believed by it to be genuine
and correct and to have been signed, sent or made by the proper person. The
Agent may consult with legal counsel (including counsel for the Borrower with
respect to matters concerning the Borrower), independent public accountants
(including the Borrower's independent public accountants) and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken by it in good faith in accordance with the advice of, or information
provided by, such counsel, accountants or experts.
11.6 Indemnification of Agent.
To the extent the Agent is not reimbursed and indemnified by the Borrower,
each Lender will reimburse and indemnify the Agent, in proportion to its
respective Commitment, for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including counsel fees and disbursements) or disbursements of any kind or
nature whatsoever (including all Expenses) which may be imposed on, incurred by
or asserted against the Agent in performing its duties hereunder, in any way
relating to or arising out of this Agreement, provided that, no Lender shall be
--------
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Agent's gross negligence or willful misconduct.
11.7 The Agent in its Individual Capacity.
With respect to its obligation to lend under this Credit Agreement, the
Loans made by it and the Notes issued to it, and its participation in Letters of
Credit issued hereunder, the Agent shall have the same rights and powers
hereunder as any other Lender or holder of a Revolving Note, Term Note, or
participation interests and may exercise the same as though it was not
performing the duties specified herein; and the terms "Lenders," "Majority
Lenders," "holders of Revolving Notes," "holders of Term Notes" or any similar
terms shall, unless the context clearly otherwise indicates, include the Agent
in its individual capacity. The Agent may accept deposits from, lend money to,
acquire equity interests in, and generally engage in any kind of banking, trust,
financial advisory or other business with the Borrower or any Affiliate of the
Borrower as if it were not performing the duties specified herein, and may
accept fees and other consideration from the Borrower for services in connection
with this Credit Agreement and otherwise without having to account for the same
to the Lenders.
11.8 Holders of Notes.
The Agent may deem and treat the payee of any Revolving Note or Term Note
as the owner thereof for all purposes hereof unless and until a written notice
of the assignment or transfer thereof shall have been filed with the 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 Note
or Term Note, shall be conclusive and binding on any subsequent holder,
transferee or assignee of such Revolving Note or Term Note or of any Revolving
Note or Term Note issued in exchange therefor.
11.9 Successor Agent.
(a) The Agent may, upon five (5) Business Days' written notice to the
Lenders and the Borrower, resign at any time (effective upon the
appointment of a
successor Agent pursuant to the provisions of this Section 11.9). Such
resignation of the Agent shall also operate as a resignation of Fleet as Issuing
Bank. Upon any such resignation, the Majority Lenders shall have the right, upon
five (5) days' notice and approval by the Borrower (which approval shall not be
unreasonably withheld), to appoint a successor Agent which shall also serve as
successor Issuing Bank. If no successor Agent (i) shall have been so appointed
by the Majority Lenders, and (ii) shall have accepted such appointment, within
thirty (30) days after the retiring Agent's giving of notice of resignation,
then, upon five (5) days' notice, the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent, which shall also serve as successor Issuing
Bank.
(b) Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of
the retiring Agent, and the retiring Agent shall be discharged from
its duties and obligations under this Credit Agreement. After any
retiring Agent's resignation hereunder as Agent, the provisions of
this Article 11 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Credit
Agreement.
(c) In the event of a material breach by the Agent of its duties
hereunder, the Agent may be removed by the Majority Lenders (other
than the Agent in its individual capacity and without giving effect to
any Loans or Commitments made by the Agent in its individual capacity)
for cause and the provisions of this Section 11.9 shall apply to the
appointment of a successor Agent. Removal of FRF as Agent shall also
operate as a removal of Fleet as Issuing Bank.
11.10 Collateral Matters.
(a) Each Lender authorizes and directs the Agent to enter into the
Collateral Documents for the benefit of the Lenders. Each Lender
hereby agrees, and each holder of any Revolving Note and Term Note by
the acceptance thereof will be deemed to agree, that, except as
otherwise set forth herein, any action taken by the Majority Lenders
in accordance with the provisions of this Credit Agreement or the
Collateral Documents, and the exercise by the Majority Lenders of the
powers set forth herein or therein, together with such other powers as
are reasonably incidental thereto, shall be authorized and binding
upon all of the Lenders. The Agent is hereby authorized on behalf of
all of the Lenders, without the necessity of any notice to or further
consent from any Lender, from time to time prior to an Event of
Default, to take any action with respect to any Collateral or
Collateral Documents which may be necessary to perfect and maintain
perfected the security interest in and liens upon the Collateral
granted pursuant to the Collateral Documents.
(b) The Lenders hereby authorize the Agent, at its option and in its
discretion, to release any Lien granted to or held by the Agent upon
any Collateral (i) upon termination of the Commitments of all Lenders
and payment and satisfaction of all of the Obligations at any time
arising under or in respect of this Credit Agreement or the Credit
Documents or the transactions contemplated hereby or thereby, (ii)
constituting property being sold or disposed of if the Borrower
certifies to the Agent that the sale or disposition is made in
compliance with Section 9.6 hereof (and the Agent may rely
conclusively on any such certificate, without further inquiry) or
(iii) if approved, authorized or ratified in writing by the Majority
Lenders, unless such release is required to be approved by all of the
Lenders hereunder. Upon request by the Agent at any time, the Lenders
will confirm in writing the Agent's authority to release particular
types or items of Collateral pursuant to this Section 11.10.
(c) Upon any sale and transfer of Collateral which is expressly permitted
pursuant to the terms of this Credit Agreement, or consented to in
writing by the Majority Lenders or all of the Lenders, as applicable,
and upon at least five (5) Business Days' prior written request by the
Borrower, the Agent shall (and is hereby irrevocably authorized by the
Lenders to) execute such documents as may be necessary to evidence the
release of the Liens granted to the Agent for the benefit of the
Lenders herein or pursuant hereto upon the Collateral that was sold or
transferred; provided that (i) the Agent shall not be required to
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execute any such document on terms which, in the Agent's opinion,
would expose the Agent to liability or create any obligation or entail
any consequence other than the release of such Liens without recourse
or warranty and (ii) such release shall not in any manner discharge,
affect or impair the Obligations or any Liens upon (or obligations of
the Borrower or any Subsidiary in respect of) all interests retained
by the Borrower or any Subsidiary, including (without limitation) the
proceeds of the sale, all of which shall continue to constitute part
of the Collateral. In the event of any sale or transfer of Collateral,
or any foreclosure with respect to any of the Collateral, the Agent
shall be authorized to deduct all of the Expenses reasonably incurred
by the Agent from the proceeds of any such sale, transfer or
foreclosure.
(d) The Agent shall have no obligation whatsoever to the Lenders or to any
other Person to assure that the Collateral exists or is owned by the
Borrower or any Subsidiary or is cared for, protected or insured or
that the Liens granted to the Agent herein or pursuant hereto have
been properly or sufficiently or lawfully created, perfected,
protected or enforced or are entitled to any particular priority, or
to exercise or to continue exercising at all or in any manner or under
any duty of care, disclosure or fidelity any of the rights,
authorities and powers granted or available to the Agent in this
Section 11.10 or in any of the Collateral Documents, it being
understood and agreed that in respect of the Collateral, or any act,
omission or event related thereto, the Agent may act in any manner it
may deem appropriate, in its sole discretion, given the Agent's own
interest in the Collateral as one of the Lenders and that the Agent
shall have no duty or liability whatsoever to the Lenders, except for
its gross negligence or willful misconduct.
11.11 Actions with Respect to Defaults.
In addition to the Agent's right to take actions on its own accord as
permitted under this Credit Agreement and the other Credit Documents, the Agent
shall take such action with respect to a Default or Event of Default as shall be
directed by the Majority Lenders; provided that until the Agent shall have
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received such directions, the Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable and in the best interests of the
Lenders.
11.12 Delivery of Information.
The Agent shall not be required to deliver to any Lender originals or
copies of any documents, instruments, notices, communications or other
information received by the Agent from the Borrower, any Subsidiary, the
Majority Lenders, any Lender or any other Person under or in connection with
this Credit Agreement or any other Credit Document except (i) as specifically
provided in this Credit Agreement or any other Credit Document and (ii) as
specifically requested from time to time in writing by any Lender with respect
to a specific document, instrument, notice or other written communication
received by and in the possession of the Agent at the time of receipt of such
request and then only in accordance with such specific request.
11.13 Syndication Agent.
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The Borrower, the Agent, the Issuing Bank and each Lender acknowledge that
the Syndication Agent has no obligations hereunder and shall not be responsible
for or accountable to any other party hereto for any
action or failure to act hereunder.
11.14 No Liability for Interest Rate Agreements or Lumber Hedging
Agreements.
In no event shall the Agent have any liability to the Borrower or any
Lender for any losses incurred under or in connection with any Interest Rate
Agreement or Lumber Hedging Agreement.
ARTICLE 12. MISCELLANEOUS
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12.1 SUBMISSION TO JURISDICTION; WAIVERS.
THE BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS TO WHICH IT
IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN
RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE
COURTS OF THE COMMONWEALTH OF MASSACHUSETTS, THE COURTS OF THE UNITED
STATES OF AMERICA FOR THE DISTRICT OF MASSACHUSETTS AND APPELLATE
COURTS FROM ANY THEREOF;
(b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH
COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO
THE VENUE OF ANY SUCH ACTION OR PROCEEDING BEING BROUGHT IN AN
INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE
EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR
ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO THE
BORROWER AT ITS ADDRESS SET FORTH IN SECTION 12.5 OR AT SUCH OTHER
ADDRESS OF WHICH THE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO;
(d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT
TO ▇▇▇ IN ANY OTHER JURISDICTION;
(e) WAIVES THE RIGHT TO ASSERT ANY SETOFF, COUNTERCLAIM OR CROSS-CLAIM IN
RESPECT OF, AND ALL STATUTES OF LIMITATIONS WHICH MAY BE RELEVANT TO,
SUCH ACTION OR PROCEEDING; AND
(f) WAIVES DUE DILIGENCE, DEMAND, PRESENTMENT AND PROTEST AND ANY NOTICES
THEREOF AS WELL AS NOTICE OF NONPAYMENT.
12.2 Designated Senior Debt.
For purposes of the Indenture, the Obligations are hereby designated by the
Borrower as "Designated Senior Debt".
12.3 GOVERNING LAW.
THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS CREDIT AGREEMENT SHALL
BE GOVERNED BY THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
12.4 Delays; Partial Exercise of Remedies.
No delay or omission of the Agent, the Issuing Bank or the Lenders to
exercise any right or remedy hereunder, whether before or after the happening of
any Event of Default, shall impair any such right or shall operate as a waiver
thereof or as a waiver of any such Event of Default. No single or partial
exercise by the Agent, the Issuing Bank or the Lenders of any right or remedy
shall preclude any other or further exercise thereof, or preclude any other
right or remedy.
12.5 Notices.
Except as otherwise provided herein, all notices and correspondences
hereunder shall be in writing and sent by certified or registered mail, return
receipt requested, or by overnight delivery service, with all charges prepaid,
if to the Agent or the Issuing Bank, then to Fleet Retail Finance Inc., ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇, if to any Lender,
then to such Lender's address for notice set forth on Annex I, and if to the
Borrower, then to the Borrower at ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: Chief Financial Officer, with a copy to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ or by facsimile transmission,
promptly confirmed in writing sent by first class mail, if to the Agent, the or
the Issuing Bank, at (▇▇▇) ▇▇▇-▇▇▇▇, if to any Lender, then to such Lender's
facsimile number set forth on Annex I, and if to the Borrower at (▇▇▇) ▇▇▇-▇▇▇▇,
with a copy to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ at (▇▇▇) ▇▇▇-▇▇▇▇,
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, or, in any such case, to another location
designated in accordance with this Section 12.5. All such notices and
correspondence shall be deemed given (i) if sent by certified or registered mail
or by overnight delivery service, when received at the above stated addresses or
when delivery is refused and (ii) if sent by facsimile transmission, when
receipt of such transmission is acknowledged.
12.6 Assignability.
(a) The Borrower shall not have the right to assign or delegate this
Credit Agreement or any interest therein except with the prior written
consent of the Agent and each Lender.
(b) Any Lender may make, carry or transfer Loans at, to or for the account
of, any of its branch offices or the office of an Affiliate of such
Lender except to the extent such transfer would result in increased
costs to the Borrower.
(c) A Lender may, with the consent of the Agent and, prior to the
occurrence of an Event of Default, with the consent of the Borrower
(which may not be unreasonably withheld), assign to one or more banks
or other financial institutions all or a portion of its rights and
obligations under this Credit Agreement and the Notes; provided that
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(i) for each such assignment, the parties thereto shall execute and
deliver to the Agent, for its acceptance and recording in the Register
(as defined below), an Assignment and Assumption Agreement, together
with the Notes subject to such assignment and a processing and
recordation fee of $3,500, (ii) no such assignment shall be for less
than $10,000,000 of a Lender's Commitment or, if less, the entire
amount of such Lender's Commitment and (iii) any assignment must
assign the same percentage of both the Lender's Revolving Commitment
and Term Loan Commitment, and (iv) the consent of the Agent and the
Borrower shall not be required in connection with an assignment to an
Affiliate. Upon execution and delivery of the Assignment and
Assumption Agreement to the Agent, from and after the date specified
as the effective date in the Assignment and Assumption Agreement, (x)
the assignee thereunder shall be a party hereto, and, to the extent
that rights and obligations hereunder have been assigned to it
pursuant to such Assignment and Assumption Agreement, such assignee
shall have the rights and obligations of a Lender hereunder and (y)
the assignor thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such
Assignment and Assumption Agreement, relinquish its rights (other than
any rights it may have pursuant to Section 12.8 hereof which will
survive) and be released from its obligations under this Credit
Agreement (and, in the case of an Assignment and Assumption Agreement
covering all or the remaining portion of an assigning Lender's rights
and obligations under this Credit Agreement, such Lender shall cease
to be a party hereto).
(d) By executing and delivering an Assignment and Assumption Agreement,
the assignee thereunder confirms and agrees as follows: (i) other than
as provided in such Assignment and Assumption Agreement, the assigning
Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or the
execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Credit Agreement, the Revolving Notes,
the Term Notes, or any other instrument or document furnished pursuant
hereto, (ii) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition
of the Borrower or any other Credit Parties or the performance or
observance by the Borrower or any other Credit Parties of any of its
obligations under this Credit Agreement or any other instrument or
document furnished pursuant hereto, (iii) such assignee confirms that
it has received a copy of this Credit Agreement, together with copies
of the Financial Statements referred to in Section 8.1 hereof and such
other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into such Assignment and
Assumption Agreement, (iv) such assignee will, independently and
without reliance upon the Agent, such assigning Lender or any other
Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Credit Agreement, (v) such
assignee appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers under this Credit
Agreement as are delegated to the Agent by the terms hereof, together
with such powers as are reasonably incidental thereto and (vi) such
assignee agrees that it will perform in accordance with their terms
all of the obligations which by the terms of this Credit Agreement are
required to be performed by it as a Lender.
(e) The Agent shall maintain at its address referred to in Section 11.5
hereof a copy of each Assignment and Assumption Agreement delivered to
and accepted by it and a register for the recordation of the names and
addresses of the Lenders and the Revolving Commitment and Term Loan
Commitment of, and principal amount of the Loans owing to, each Lender
from time to time (the "Register"). The entries in the Register shall
be conclusive and binding for all purposes, absent manifest error, and
the Borrower, the Agent and the Lenders may treat each Person whose
name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register and copies of each Assignment
and Assumption shall be available for inspection by the Borrower or
any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(f) Upon its receipt of an Assignment and Assumption Agreement executed by
an assigning Lender, together with the Revolving Note or Term Note
subject to such assignment, the Agent shall, if such Assignment and
Assumption Agreement has been completed and is in substantially the
form of Exhibit G hereto, (i) accept such Assignment and Assumption
Agreement, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the Borrower. Within
five (5) Business Days after its receipt of such notice, the Borrower
shall execute and deliver to the Agent in exchange for the surrendered
Revolving Note or Term Note a new Revolving Note and Term Note to the
order of the assignee in an amount equal to the Revolving Credit
Commitment and Term Loan Commitment assumed by it pursuant to such
Assignment and Assumption Agreement and, if the assigning Lender has
retained a Revolving Commitment or Term Loan Commitment hereunder, a
new Revolving Note and Term Note to the order of the assigning Lender
in an amount equal to the Revolving Commitment or Term Loan Commitment
retained by it hereunder. Such new Revolving Note or Term Note shall
re-evidence the Indebtedness outstanding under the old Revolving Note
or Term Note and shall be in an aggregate principal amount equal to
the aggregate principal amount of such surrendered Revolving Note or
Term Note, and shall otherwise be in substantially the form of the
Revolving Note or Term Note subject to such assignments.
(g) Each Lender may sell participations (without the consent of the Agent,
the Borrower or any other Lender) to one or more parties in or to all
or a portion of its rights and obligations under this Credit Agreement
(including, without limitation, all or a portion of its Revolving
Commitment, Term Loan Commitment, the Loans owing to it and the
Revolving Note or Term Note held by it); provided that (i) such
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Lender's obligations under this Credit Agreement (including, without
limitation, its Commitment to the Borrower hereunder) shall remain
unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, (iii)
such Lender shall remain the holder of any such Revolving Note and
Term Note for all purposes of this Credit Agreement, (iv) the
Borrower, the Agent, and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's
rights and obligations under this Credit Agreement and (v) such Lender
shall not transfer, grant, assign or sell any participation under
which the participant shall have rights to approve any amendment or
waiver of this Credit Agreement except to the extent such amendment or
waiver would (A) extend the final maturity date or the date for the
payments of any installment of fees or principal or interest of any
Loans, or Letter of Credit reimbursement obligations in which such
participant is participating, (B) reduce the amount of any installment
of principal of the Loans, or Letter of Credit reimbursement
obligations in which such participant is participating, (C) reduce the
interest rate applicable to the Loans, or Letter of Credit
reimbursement obligations in which such participant is participating,
or (D) reduce any Fees payable hereunder.
(h) Each Lender agrees that, without the prior written consent of the
Borrower and the Agent, it will not make any assignment hereunder in
any manner or under any circumstances that would require registration
or qualification of, or filings in respect of, any Revolving Loan,
Revolving Note, Term Loan, Term Note, or other obligation under the
securities laws of the United States of America or of any
jurisdiction.
(i) In connection with the efforts of any Lender to assign its rights or
obligations or to participate interests, such Lender may disclose any
information in its possession regarding the Borrower and its
Subsidiaries.
12.7 Confidentiality.
Each Lender agrees that it will use its reasonable best efforts not to
disclose without the prior consent of the Borrower (other than to its
Affiliates, employees, auditors, or counsel, or to another Lender if the
disclosing Lender or such disclosing Lender's holding or parent company in its
sole discretion determines that any such party should have access to such
information) any information with respect to the Borrower or any of its
Subsidiaries, which is furnished pursuant to this Credit Agreement and which is
designated by the Borrower to the Lenders in writing as confidential, provided,
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that any Lender may disclose any such information (a) as has become generally
available to the public, (b) as may be required or appropriate in any report,
statement or testimony submitted to any Governmental Authority having or
claiming to have jurisdiction over such Lender, (c) as may be required or
appropriate in response to any summons or subpoena or in connection with any
litigation, (d) in order to comply with any Requirement of Law, and (e) to any
prospective or actual transferee or participant in connection with any
contemplated transfer or participation of any of the Notes, the Revolving
Commitment or the Term Loan Commitment or any interest therein by such Lender.
12.8 Indemnification.
The Borrower shall and hereby agrees to indemnify, defend and hold harmless
the Agent, the Syndication Agent, the Issuing Bank and each of the Lenders and
their respective directors, officers, agents, employees and counsel from and
against (a) any and all losses, claims, damages, liabilities, deficiencies,
judgments or expenses incurred by any of them (except to the extent that it is
finally judicially determined to have resulted from their own gross negligence
or willful misconduct) arising out of or by reason of any litigation,
investigations, claims or proceedings which arise out of or are in any way
related to (i) this Credit Agreement or the transactions contemplated hereby,
(ii) the issuance of the Letters of Credit, (iii) the failure of the Issuing
Bank to honor a drawing under any 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, (iv) any actual or proposed use by
the Borrower of the proceeds of the Revolving Loans or the Term Loans, or (v)
the Agent's, the Issuing Bank's or the Lenders', entering into this Credit
Agreement, the other Credit Documents or any other agreements and documents
relating hereto, including, without limitation, amounts paid in settlement,
court costs and the fees and disbursements of counsel incurred in connection
with any such litigation, investigation, claim or proceeding or any advice
rendered in connection with any of the foregoing and (b) any such losses,
claims, damages, liabilities, deficiencies, judgments or expenses incurred in
connection with any remedial or other action taken by the Borrower or any of the
Lenders in connection with compliance by the Borrower or any of the
Subsidiaries, or any of their respective properties, with any federal, state or
local environmental laws, acts, rules, regulations, orders, directions,
ordinances, criteria or guidelines. If and to the extent that the obligations of
the Borrower hereunder are unenforceable for any reason, the Borrower hereby
agrees to make the maximum contribution to the payment and satisfaction of such
Obligations which is permissible under applicable law. The Borrower's
Obligations hereunder shall survive any termination of this Credit Agreement and
the other Credit Documents and the payment in full of the obligations, and are
in addition to, and not in substitution of, any other of their Obligations set
forth in this Credit Agreement. In addition, the Borrower shall, upon demand,
pay to the Agent and any Lender all costs and expenses (including the reasonable
fees and disbursements of counsel and other professionals) paid or incurred by
the Agent or such Lender in (i) enforcing or defending its rights under or in
respect of this Credit Agreement, the other Credit Documents or any other
document or instrument now or hereafter executed and delivered in connection
herewith (provided, that such indemnification shall not apply if the Agent and
the Lenders are determined to have acted in gross negligence or with willful
misconduct), (ii) in collecting the Revolving Loans, (iii) in foreclosing or
otherwise collecting upon the Collateral or any part thereof and (iv) obtaining
any legal, accounting or other advice in connection with any of the foregoing.
12.9 Entire Agreement; Successors and Assigns.
This Credit Agreement and the other Credit Documents constitute the entire
agreement among the Borrower, the Agent, the Syndication Agent and the Lenders,
supersedes any prior agreements among them, and shall bind and benefit the
Borrower and the Lenders and their respective successors and permitted assigns.
12.10 Amendments and Waivers.
No amendment or waiver of any provision of this Credit Agreement, any part
of Schedule B, or any other Credit Document shall be effective unless in writing
and signed by the Majority Lenders (or by the Agent on their behalf), except
that:
(a) the consent of all the Lenders is required to (i) increase the Total
Commitments, the Commitment of any Lender or the advance rates set
forth in Section 2.1, (ii) reduce the principal of, or interest on,
the Revolving Notes, the Term Notes, any Letter of Credit
reimbursement obligations or any Fees hereunder (other than Fees that
are exclusively for the account of the Agent or the Issuing Bank),
(iii) postpone any date fixed for any payment in respect of principal
of, or interest on, the Revolving Notes, the Term Notes, any Letter of
Credit reimbursement obligations or any Fees hereunder, (iv) change
the percentage of the Commitments, or any minimum requirement
necessary for the Lenders or the Majority Lenders to take any action
hereunder, (v) amend or waive this Section 12.11(a), or change the
definitions of Majority Lenders, (vi) amend the "Unused Availability"
levels set forth in Section 9.1 or Section 9.9, or (vii) except as
otherwise expressly provided in this Credit Agreement, and other than
in connection with the financing, refinancing, sale or other
disposition of any asset of the Borrower permitted under this Credit
Agreement, release any Liens in favor of the Lenders on a substantial
portion of the Collateral (which for purposes hereof shall mean
Collateral having a book value of more than $5,000,000); and
(b) the consent of the Agent or the Issuing Bank, as the case may be,
shall be required for any amendment, waiver or consent affecting the
rights or duties of the Agent or the Issuing Bank under any Credit
Document, in addition to the consent of the Lenders otherwise required
by this section.
Notwithstanding any of the foregoing to the contrary, the consent of the
Borrower shall not be required for any amendment, modification or waiver of the
provisions of Article 11 (other than Section 11.9). The Borrower and the Lenders
hereby authorize the Agent to modify (i) this Credit Agreement by unilaterally
amending or supplementing Annex I to reflect assignments of the Commitments and
(ii) any of the Collateral Documents by unilaterally amending or supplementing
any of the schedules thereto to reflect any addition to, or change in the status
of, any of the collateral expressly permitted thereunder. If the Agent seeks the
consent of a Lender under this Section 12.10 or any consent or approval of any
Lender under any other provision hereof or of any other Credit Document and such
Lender does not respond within ten (10) days, such failure to respond shall
constitute such Lender's consent or approval.
12.11 Nonliability of Agent and Lenders.
The relationship between the Borrower and the Lenders, and the Agent shall
be solely that of borrower and lender. Neither the Agent or any Lender shall
have any fiduciary responsibilities to the Borrower. Neither the Agent or any
Lender undertakes any responsibility to the Borrower to review or inform the
Borrower of any matter in connection with any phase of the Borrower's business
or operations.
12.12 Independent Nature of Lenders' Rights.
The amounts payable at any time hereunder to each Lender under such
Lender's Revolving Note or Notes and Term Note or Notes shall be a separate and
independent debt.
12.13 Counterparts.
This Credit Agreement may be executed in any number of counterparts and by
the different parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.
12.14 Effectiveness.
This Credit Agreement shall become effective on the date on which all of
the parties hereto shall have signed a copy hereof (whether the same or
different copies) and shall have delivered the same to the Agent or, in the case
of the Lenders, shall have given to the Agent written, telecopied or telex
notice (actually received) at such office that the same has been signed and
mailed to it.
12.15 Severability.
In case any provision in or obligation under this Credit Agreement or the
Revolving Notes or the other Credit Documents shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.
12.16 Headings Descriptive.
The headings of the several sections and subsections of this Credit
Agreement, and the Table of Contents, are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of this
Credit Agreement.
12.17 Maximum Rate.
Notwithstanding anything to the contrary contained elsewhere in this Credit
Agreement or in any other Credit Document, the Borrower, the Agent and the
Lenders hereby agree that all agreements among them under this Credit Agreement
and the other Credit Documents, whether now existing or hereafter arising and
whether written or oral, are expressly limited so that in no contingency or
event whatsoever shall the amount paid, or agreed to be paid, to the Agent or
any Lender for the use, forbearance, or detention of the money loaned to the
Borrower and evidenced hereby or thereby or for the performance or payment of
any covenant or obligation contained herein or therein, exceed the Highest
Lawful Rate. If due to any circumstance whatsoever, fulfillment of any
provisions of this Credit Agreement or any of the other Credit Documents at the
time performance of such provision shall be due shall exceed the Highest Lawful
Rate, then, automatically, the obligation to be fulfilled shall be modified or
reduced to the extent necessary to limit such interest to the Highest Lawful
Rate, and if from any such circumstance any Lender should ever receive anything
of value deemed interest by applicable law which would exceed the Highest Lawful
Rate, such excessive interest shall be applied to the reduction of the principal
amount then outstanding hereunder or on account of any other then outstanding
obligations and not to the payment of interest, or if such excessive interest
exceeds the principal unpaid balance then outstanding hereunder and such other
then outstanding obligations, such excess shall be refunded to the Borrower. All
sums paid or agreed to be paid to the Agent or any Lender for the use,
forbearance, or detention of the obligations and other Indebtedness of the
Borrower to the Agent or any Lender shall, to the extent permitted by applicable
law, be amortized, prorated, allocated and spread throughout the full term of
such Indebtedness until payment in full so that the actual rate of interest on
account of all such Indebtedness does not exceed the Highest Lawful Rate
throughout the entire term of such Indebtedness. The terms and provisions of
this Section shall control every other provision of this Credit Agreement and
all agreements among the Borrower, the Agent and the Lenders.
12.18 JURY TRIAL.
THE BORROWER, THE AGENT, THE SYNDICATION AGENT, THE ISSUING BANK AND THE
---------------------------------------------------------------------------
LENDERS EACH HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
--------------------------------------------------------------------------------
PROCEEDING ARISING OUT OF THIS CREDIT AGREEMENT, THE CREDIT DOCUMENTS OR ANY
--------------------------------------------------------------------------------
OTHER AGREEMENTS OR TRANSACTIONS RELATED HERETO OR THERETO.
-----------------------------------------------------------
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the parties hereto have caused this Credit
Agreement to be executed and delivered by their proper and duly authorized
officers as of the date set forth above.
BORROWER:
---------
WICKES INC., a Delaware corporation
By _________________________________
Its ________________________________
AGENT:
------
FLEET RETAIL FINANCE INC., as Agent
By _________________________________
Its ________________________________
DOCUMENTATION AGENT:
--------------------
BANK OF AMERICA, N.A., as
Documentation Agent
By _________________________________
Its ________________________________
ISSUING BANK:
-------------
FLEET NATIONAL BANK
By _________________________________
Its ________________________________
LENDERS:
--------
FLEET RETAIL FINANCE INC.
By _________________________________
Its ________________________________
FOOTHILL CAPITAL CORPORATION
By _________________________________
Its ________________________________
BANK OF AMERICA, N.A.
By _________________________________
Its ________________________________
LASALLE BANK NATIONAL ASSOCIATION
By _________________________________
Its ________________________________
THE CIT GROUP/BUSINESS CREDIT, INC.
By _________________________________
Its ________________________________
CONGRESS FINANCIAL CORPORATION (CENTRAL)
By _________________________________
Its ________________________________
AMERICAN NATIONAL BANK AND
TRUST COMPANY OF CHICAGO
By _________________________________
Its _________________________________
ANNEX I
-------
LENDERS AND COMMITMENT AMOUNTS
------------------------------
Name and Address of Lender Revolving Commitment Term Loan Commitment
-------------------- --------------------
FLEET RETAIL FINANCE INC. $62,875,826.15 $16,237,682.10
Domestic Lending Office:
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Eurodollar Lending Office:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Address for Notices:
Fleet Retail Finance Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
FOOTHILL CAPITAL CORPORATION Revolving Commitment Term Loan Commitment
-------------------- --------------------
$23,842,638.59 $6,157,361.41
Domestic Lending Office:
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Eurodollar Lending Office:
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Address for Notices:
Foothill Capital Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
BANK OF AMERICA, N.A. (formerly Revolving Commitment Term Loan Commitment
-------------------- --------------------
Nationsbank, N.A.) $33,332,000.00 $8,607,989.00
Domestic Lending Office:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Eurodollar Lending Office:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Address for Notices:
Bank of America, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
LASALLE BANK NATIONAL
ASSOCIATION Revolving Commitment Term Loan Commitment
-------------------- --------------------
(formerly LaSalle National Bank) $19,206,834.89 $4,960,165.11
Domestic Lending Office:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Eurodollar Lending Office:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Address for Notices:
LaSalle Bank National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
THE CIT GROUP/BUSINESS
CREDIT, INC. Revolving Commitment Term Loan Commitment
-------------------- --------------------
$19,206,834.89 $4,960,165.11
Domestic Lending Office:
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Eurodollar Lending Office:
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Address for Notices:
The CIT Group/Business Credit, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
CONGRESS FINANCIAL
CORPORATION (CENTRAL) Revolving Commitment Term Loan Commitment
-------------------- --------------------
$21,667,000.00 $5,595,502.75
Domestic Lending Office:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Eurodollar Lending Office:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Address for Notices:
Congress Financial Corporation (Central)
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
AMERICAN NATIONAL BANK AND
TRUST COMPANY OF CHICAGO Revolving Commitment Term Loan Commitment
-------------------- --------------------
$19,868,865.49 $5,131,134.51
Domestic Lending Office:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Eurodollar Lending Office:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Address for Notices:
American National Bank and Trust Company of Chicago
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Total Commitments: $251,650,000.00
EXHIBIT A
---------
FORM OF AMENDED AND RESTATED REVOLVING NOTE
-------------------------------------------
$___________
FOR VALUE RECEIVED, the undersigned, WICKES INC., a Delaware corporation
("Borrower"), promises to pay to the order of [Payee Lender] (the "Lender") c/o
FLEET RETAIL FINANCE INC, as Agent for the Lenders, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, in lawful money of the United States of America and in
immediately available funds, the principal amount of __________________ Dollars
($____________), or such lesser amount as may then constitute the unpaid
aggregate principal amount of the Revolving Loans on the Expiration Date.
Borrower further agrees to pay interest at said office, in like money, on
the unpaid principal amount owing hereunder from time to time from the date
hereof on the dates and at the rate specified in Article 5 of the Credit
Agreement (as defined below).
If any payment on this promissory note becomes due and payable on a day
other than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day, and with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension.
This promissory note is one of the Revolving Notes referred to in the
Amended and Restated Credit Agreement, dated as of December 13, 2000 (as
amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among Borrower, the Lender, certain other financial
institutions parties thereto, Fleet Retail Finance Inc. as agent ("Agent"),
Fleet National Bank, as issuing bank, and Bank of America, N.A., as
documentation agent, and is subject to, and entitled to, all provisions and
benefits thereof and is subject to optional and mandatory prepayment in whole or
in part as provided therein. Capitalized terms used herein without definition
shall have the meanings given to such terms in the Credit Agreement. The Credit
Agreement, among other things, provides [after giving effect to the Assignment
-------------------------------------
and Assumption Agreement executed by the Lender and [name of assigning Lender]
--------------------------------------------------------------------------------
as of date hereof]1 for the making of Revolving Loans by the Lender to Borrower
-----------------
from time to time in an aggregate amount not to exceed at any time outstanding
the U.S. dollar amount first above mentioned.
Upon the occurrence of any one or more of the Events of Default specified
in the Credit Agreement which have not been waived in accordance with the terms
of the Credit Agreement, the Agent shall, upon the written request of the
Majority Lenders, and by delivery of written notice to Borrower from the Agent,
take any or all of the following actions, without prejudice to the rights of the
Agent, the Lender or any holder of this Note to enforce its claims against
Borrower: (a) declare all Obligations due hereunder to be immediately due and
payable (except with respect to any Event of Default set forth in Section
10.1(f) of the Credit Agreement, in which case all Obligations due hereunder
shall automatically become immediately due and payable without the necessity of
any notice or other demand) without presentment, demand, protest or any other
action or obligation of the Lender; (b) immediately terminate the Credit
Agreement and the Commitments thereunder.
This promissory note is secured by the Collateral Documents [and
---
re-evidences the indebtedness outstanding on the date hereof with respect to the
--------------------------------------------------------------------------------
Revolving Loans which indebtedness has been assigned to the Lender pursuant to
--------------------------------------------------------------------------------
Section 11.6 of the Credit Agreement].2
------------------------------------
Borrower hereby waives presentment, demand, protest and notice of any kind.
No failure to exercise, and no delay in exercising any rights hereunder on the
part of the holder hereof shall operate as a waiver of such rights.
THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS PROMISSORY NOTE SHALL
BE GOVERNED BY THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.
WICKES INC.
By _________________________________
Title ______________________________
603963.8
EXHIBIT B
---------
FOR M OF TERM NOTE
------------------
$____________
FOR VALUE RECEIVED, the undersigned, WICKES INC., a Delaware corporation
("Borrower"), promises to pay to the order of______________ (the "Lender") c/o
FLEET RETAIL FINANCE INC, as Agent for the Lenders, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, in lawful money of the United States of America and in
immediately available funds, the principal amount of __________________ Dollars
($____________), or such lesser amount as may then constitute the unpaid
aggregate principal amount of the Term Loans on the Expiration Date.
Borrower further agrees to pay interest at said office, in like money,
on the unpaid principal amount owing hereunder from time to time from the date
hereof on the dates and at the rate specified in Article 5 of the Credit
Agreement (as defined below).
If any payment on this promissory note becomes due and payable on a day
other than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day, and with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension.
This promissory note is one of the Term Notes referred to in the Amended
and Restated Credit Agreement, dated as of December 13, 2000 (as amended,
restated, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among Borrower, the Lender, certain other financial institutions
parties thereto, Fleet Retail Finance Inc. as agent ("Agent"), Fleet National
Bank, as issuing bank, and Bank of America, N.A., as documentation agent, and is
subject to, and entitled to, all provisions and benefits thereof and is subject
to optional and mandatory prepayment in whole or in part as provided therein.
Capitalized terms used herein without definition shall have the meanings given
to such terms in the Credit Agreement. The Credit Agreement, among other things,
provides for the making of Term Loans by the Lender to Borrower from time to
time in an aggregate amount not to exceed at any time outstanding the U.S.
dollar amount first above mentioned.
Upon the occurrence of any one or more of the Events of Default specified
in the Credit Agreement which have not been waived in accordance with the terms
of the Credit Agreement, the Agent shall, upon the written request of the
Majority Lenders, and by delivery of written notice to Borrower from the Agent,
take any or all of the following actions, without prejudice to the rights of the
Agent, the Lender or any holder of this Note to enforce its claims against
Borrower: (a) declare all Obligations due hereunder to be immediately due and
payable (except with respect to any Event of Default set forth in Section
10.1(f) of the Credit Agreement, in which case all Obligations due hereunder
shall automatically become immediately due and payable without the necessity of
any notice or other demand) without presentment, demand, protest or any other
action or obligation of the Lender; (b) immediately terminate the Credit
Agreement and the Commitments thereunder.
This promissory note is secured by the Collateral Documents.
Borrower hereby waives presentment, demand, protest and notice of any kind.
No failure to exercise, and no delay in exercising any rights hereunder on the
part of the holder hereof shall operate as a waiver of such rights.
THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS PROMISSORY NOTE SHALL
BE GOVERNED BY THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.
WICKES INC.
By _________________________________
Title ______________________________
EXHIBIT C
---------
FORM OF COMPLIANCE CERTIFICATE
------------------------------
[Letterhead of Borrower]
-----------------, ------
Fleet Retail Finance Inc., as Agent
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
I hereby certify to you as follows:
(a) I am the duly elected [Title] of Wickes Inc., a Delaware corporation
("Borrower"). Capitalized but undefined terms used in this Certificate
shall have the meanings assigned to them in the Amended and Restated
Credit Agreement (the "Credit Agreement") dated as of December 13,
2000 among the Borrower, the financial institutions parties thereto,
Fleet Retail Finance Inc., as Agent, Fleet National Bank, as Issuing
Bank, and Bank of America, N.A., as Documentation Agent.
(b) I have reviewed the terms of the Credit Agreement, and have made, or
have caused to be made under my supervision, a review in reasonable
detail of the transactions and the condition of the Borrower during
the immediately preceding [year/quarter/month].
(c) The review described in paragraph (b) above did not disclose the
existence during or at the end of such [year/quarter/month], and I
have no knowledge of the existence as of the date hereof, of any
condition or event which constitutes a Default or an Event of Default,
except as set forth on Attachment 1 to this Certificate.3
(d) I certify that based on my review described in paragraph (b) above as
of the end of such [year/quarter/month], (i) the Interest Coverage
Ratio was _______ to _______, (ii) Consolidated Net Worth was
$___________, and (iii) Capital Expenditures for the fiscal year to
such date were $___________.
(e) I further certify that, based on the review described in paragraph (b)
above, neither the Borrower nor any of the Subsidiaries at any time
during or at the end of such [year/quarter/month], except as
specifically described in Attachment 2 to this Certificate4 did any of
the following:
(i) Changed its respective corporate name, or transacted business
under any trade name, style, or fictitious name, other than those
previously described to you and set forth in the Credit
Agreement.
(ii) Changed the location of its chief executive office, or changed
the location of or disposed of any of its assets (other than as
specifically permitted by the Credit Agreement to the sale of
inventory in the ordinary course of its business), or established
any new asset locations.
(iii) Changed its capital structure.
(iv) Materially changed the terms upon which it sells goods (including
sales on consignment) or provides services, nor has any material
vendor or trade supplier to the Borrower during or at the end of
such [year/quarter/month] decreased the terms upon which it
supplies goods to the Borrower.
(v) Permitted or suffered to exist any Liens or encumbrances on any
of its properties, whether real or personal, other than as
specifically permitted in the Credit Agreement.
(vi) Received any notices of any kind from any federal, state or
local agency, tribunal or other authority regulating or having
responsibility for any environmental matters.
(vii)Became aware of, obtained knowledge of, or received notification
of, any breach or violation of any material covenant contained in
any instrument or agreement in respect of indebtedness for money
borrowed by the Borrower or any of the Subsidiaries.
THE FOREGOING CERTIFICATIONS are made and delivered this ____ day of
___________, ____.
WICKES INC.
By _________________________________
Title ______________________________
EXHIBIT D
---------
FORM OF BORROWING BASE CERTIFICATE
----------------------------------
OFFICER'S CERTIFICATE CERTIFYING BORROWING BASE CERTIFICATE
-----------------------------------------------------------
I, ______________________, in my capacity as ____________________ of WICKES
INC., a Delaware corporation (the "Borrower"), hereby certify in connection with
the Amended and Restated Credit Agreement (the "Credit Agreement"), dated as of
December 13, 2000, among the Borrower, Fleet Retail Finance Inc.(the "Agent"),
Bank of America, N.A., as documentation agent, the lenders party thereto and the
Issuing Bank (as defined therein) that I am the duly elected
_________________________ of the Borrower and that the information and each
calculation set forth in the attached Borrowing Base Certificate are, to the
best of my knowledge, true, correct and complete (subject to year-end audit
adjustments) as of the date hereof and are calculated in accordance with the
Credit Agreement. Unless otherwise defined herein, all terms used herein shall
have the meanings ascribed to them in the Credit Agreement.
Executed this ____ day of
________________, ____ WICKES INC.
By _________________________________
Title _______________________________
WICKES, INC.
BORROWING BASE CERTIFICATE
AS OF _______________, _____
Accounts of the Borrower payable in Dollars, less the face amount of all
returns, discounts, claims, credits, charges, or other allowances and less the
aggregate amount of all reserves, limits and deductions provided elsewhere in
the Credit Agreement
$______________
Less:
(a) Accounts arising out of sales made by the Borrower to an Affiliate;
$_______________
(b) Accounts which are unpaid more than thirty (30) days after the original
payment due date; provided, however, that the aggregate amount of all
--------- --------
invoices providing for payment in the second or third month following the
month of purchases relating to such invoices that may constitute Eligible
Accounts Receivable shall not exceed twenty percent (20%) of total Eligible
Accounts Receivable at any one time; provided, further, that any Account
--------- --------
that is unpaid more than one hundred twenty (120) days following the date
of purchase shall in no event be an Eligible Accounts Receivable;
$______________
(c) Accounts which are owing by an account debtor (or any Affiliate thereof)
with respect to which twenty percent (20%) or more, in face amount, of all
Accounts from such account debtor (or any Affiliate thereof) are unpaid
more than sixty (60) days past the original payment due date;
$______________
(d) Accounts for which the account debtor is also a creditor of the Borrower,
(ii) the account debtor has disputed its liability on, or the account
debtor has made any claim with respect to, such Account or any other
Account due from such account debtor to the Borrower, which has not been
resolved or (iii) Accounts which otherwise are or may become subject to any
right of setoff by the account debtor; provided, that any Account deemed
--------
ineligible pursuant to this clause (d) shall only be ineligible to the
extent of the amount owed by the Borrower to the account debtor, the amount
of such dispute or claim, or the amount of such setoff, as applicable;
$______________
(e) Accounts for which the account debtor has commenced a voluntary case under
the federal bankruptcy laws, as now constituted or hereafter amended, or
made an assignment for the benefit of creditors, or a decree or order for
relief has been entered by a court having jurisdiction over the account
debtor in an involuntary case under the federal bankruptcy laws, as now
constituted or hereafter amended, or any other petition or other
application for relief under the federal bankruptcy laws has been filed by
or against the account debtor, or Accounts for which the account debtor has
filed a certificate of dissolution under applicable state law or shall be
liquidated, dissolved or wound-up, or shall authorize or commence any
action or proceeding for dissolution, winding-up or liquidation, or the
account debtor has failed, suspended business, declared itself to be
insolvent, is generally not paying its debts as they become due or has
consented to or suffered a receiver, trustee, liquidator or custodian to be
appointed for it or for all or a significant portion of its assets or
affairs, unless the payment of Accounts from such account debtor is secured
in a manner satisfactory to the Agent or, if the Accounts from such account
debtor arose subsequent to a decree or order for relief with respect to
such account debtor under the federal bankruptcy laws, as now or hereafter
in effect, the Agent shall have determined that the timely payment and
collection of such Accounts will not be impaired; $______________
(f) Accounts for which the sale is to an account debtor outside of the
continental United States or Canada (other than the Province of Quebec),
unless the account debtor thereon has supplied the Borrower with an
irrevocable letter of credit in form and substance satisfactory to the
Agent, issued by a financial institution satisfactory to the Agent and
which has been duly transferred to the Agent (together with sufficient
documentation to permit direct draws by the Agent); $______________
(g) Accounts for which the sale to the account debtor is on a ▇▇▇▇-and-hold,
guarantied sale, sale-and-return, sale on approval or consignment basis or
made pursuant to any other written agreement providing for repurchase or
return; $______________
(h) Accounts for which the Agent determines in its Permitted Discretion that
collection of such Accounts is uncertain or that such Accounts may not be
paid by reason of the account debtor's financial inability to pay;
$______________
(i) Accounts for which the account debtor is the United States of America or
any department, agency or instrumentality thereof, unless the Borrower duly
assigns its rights to payment of such Accounts to the Agent pursuant to the
Assignment of Claims Act of 1940, as amended (31 U.S.C. ss. 3727 et seq.);
$______________
(j) Accounts for which the goods giving rise to such Accounts have not been
shipped and delivered to and accepted by the account debtor or the services
giving rise to such Accounts have not been performed by the Borrower and
accepted by the account debtor or the Account otherwise does not represent
a final sale; $______________
(k) Accounts that do not comply with any applicable legal requirements,
including, where applicable, the Federal Consumer Credit Protection Act,
the Federal Truth in Lending Act and Regulation Z of the Board of Governors
of the Federal Reserve System, in each case as amended; $______________
(l) Accounts in which the Agent does not have a valid and perfected first
priority security interest or Accounts that do not otherwise conform to the
representations and warranties contained in the Credit Agreement or the
other Credit Documents; $_______________
(m) Accounts subject to any security deposit, progress payment or other similar
advance made by or for the benefit of the applicable account debtor;
$______________
(n) the portion of any Accounts that are subject to any retainage or similar
amount that the account debtor may hold back or retain pending approval of
the Borrower's performance or any other contingency, but solely to the
extent of such portion; $_______________
(o) the portion of any Accounts that consist of finance or delinquency charges,
but solely to the extent of such portion; $______________
(p) Accounts subject to any reserve established by the Borrower, but solely to
the extent of such reserve $______________
Eligible Accounts Receivable $______________
$===============
Inventory of the Borrower held for sale in the ordinary course (but not packing
or shipping materials or maintenance supplies), valued at the lower of cost or
market on a basis consistent with the Borrower's current and historical
accounting practice or as otherwise acceptable to the Agent $_______________
Less:
(a) Inventory not owned solely by the Borrower or the Borrower does not have
good, valid and marketable title thereto; $_______________
(b) Inventory not located on property owned or leased by the Borrower or in a
contract warehouse or other third party location, subject in each case to a
Collateral Access Agreement executed by the lessor, the contract
warehouseman or the other third party, as the case may be (together with
any related filings or notices required by the Agent), and segregated or
otherwise separately identifiable from goods of others, if any, stored on
the premises; $_______________
(c) Inventory not subject to a perfected first priority Lien in favor of the
Agent, except for Liens for unpaid rent or normal and customary warehousing
and common carrier charges not more than thirty (30) days past due;
$_______________
(d) Inventory not located in the continental United States or Canada (other
than Quebec); $_______________
(e) Inventory consisting of goods returned or rejected by the Borrower's
customers or goods in transit to third parties (other than to warehouse
sites covered by Collateral Access Agreements); $_______________
(f) Inventory consisting of work in process to the extent that such work in
process at any time exceeds $2,000,000; $_______________
(g) Inventory that is obsolete or slow moving, or does not otherwise conform to
the representations and warranties contained in the Credit Documents;
$_______________
(h) Inventory held by the Borrower on consignment; or $_______________
(i) Inventory consisting of tools or other property held for rental to other
Persons $_______________
Eligible Inventory $===============
EXHIBIT E
---------
FORM OF COLLATERAL ACCESS AGREEMENT
-----------------------------------
FLEET RETAIL FINANCE INC.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
To be delivered to the Landlord
signatory below
Re: Financing of Wickes Inc.
Ladies and Gentlemen:
We have been asked by Wickes Inc. (the "Company") to act as agent for a
syndicate of lenders under certain revolving credit and term loan facilities
provided to the Company. The revolving credit and term loan facilities are
secured by certain assets of the Company, including the Company's Inventory (as
defined below). We understand that the Company leases certain real property (the
"Facility") from you pursuant to a lease agreement (the "Agreement"). The
address of the Facility is:
------------------------------------
------------------------------------
------------------------------------
------------------------------------
------------------------------------
In connection with loans made or to be made to the Company, the lenders
will be lending, in part, against the value of the Company's inventory (the
"Company's Inventory"), including that portion of the Company's Inventory now or
in the future located at the Facility. Therefore, we will be making customary
Uniform Commercial Code filings on behalf of the lenders with respect to the
Company's Inventory located at the Facility. In addition, we request your
acknowledgment, and cooperation, for preserving and enforcing the lenders'
security interests. In order to expedite the consummation of the proposed credit
facilities, we would appreciate your signing and returning the enclosed copy of
this letter to us, at the following address:
Fleet Retail Finance Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
By signing and returning the enclosed copy of this letter you confirm and
acknowledge the following matters to us:
1. You will allow us, or our auditors or our other designees, reasonable
access to the Facility in order to inspect the Company's Inventory and
verify the amount. In addition, if we elect to remove the Company's
Inventory from the Facility ourselves, you will grant us access to the
Facility at reasonable times to do so.
2. In the event that the Company defaults in its obligations under the
Agreement and/or you terminate the Agreement for any reason, including
a default by the Company, you will notify us in writing of this fact
prior to your retaking possession of the Facility and you will allow
us to either (i) undertake to cure any and all defaults under the
Agreement and assume the Company's obligations under the Agreement, or
(ii) enter the facility in order to remove the Company's Inventory,
provided that we pay you reasonable rent relating to the storage of
the Company's Inventory at the Facility for the period from when we
enter the Facility until we remove the Company's Inventory from the
Facility. In any case, you confirm and acknowledge to us that you do
not have any claim to or lien upon any of the Company's Inventory.
We would appreciate your confirming to us your agreement to the foregoing
provisions of this letter by signing and returning to us the enclosed additional
copy of this letter to the address shown above.
[THIS SPACE INTENTIONALLY BLANK]
Although the Company is not a party to this agreement, it has signed below
to indicate its acknowledgment of and agreement to the provisions of this
letter.
Very truly yours,
FLEET RETAIL FINANCE INC.
as Agent
By _________________________________
Name _______________________________
Title ______________________________
ACKNOWLEDGED AND AGREED:
[LANDLORD]
By _________________________________
Name _______________________________
Title ______________________________
Landlord Name: _____________________
Address: ___________________________
ACKNOWLEDGED AND AGREED:
WICKES INC.
By _________________________________
Name _______________________________
Title ______________________________
EXHIBIT F
---------
FORM OF NOTICE OF BORROWING
---------------------------
------------------, ----
Fleet Retail Finance Inc., as Agent
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
The undersigned, Wickes Inc., a Delaware corporation ("Borrower"), refers
to the Amended and Restated Credit Agreement, dated as of December 13, 2000,
among Borrower, certain financial institutions parties thereto, Fleet Retail
Finance Inc. as agent, Fleet National Bank, as issuing bank, and Bank of
America, N.A., as documentation agent (the "Credit Agreement"). Capitalized
terms used herein shall have the meanings given in the Credit Agreement.
The Borrower hereby gives you irrevocable notice of its request for a
borrowing of a Revolving Loan under the Credit Agreement (the "Proposed
Borrowing") as follows:
(i) The requested date of the Proposed Borrowing is ___________,
200__.
(ii) The Type of Loans comprising the Proposed Borrowing are:
Base Rate Loans in the amount of $______________; or
Eurodollar Rate Loans having an Interest Period of _______
months in the amount of $_____________.
(iii) The account at which proceeds of the Proposed Borrowing are to
be made available is as follows:
------------------------------
------------------------------
------------------------------
------------------------------
------------------------------
The undersigned hereby certifies that, except as described in Attachment I
hereto in connection with a Proposed Borrowing of Agent Advances under Section
2.2(b)(ii), the following statements are true on the date hereof, and will be
true on the date of the Proposed Borrowing:
(A) the representations and warranties contained in the Credit Agreement
and in each other document executed in connection therewith are true
and correct in all material respects before and after giving effect to
the Proposed Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date, except to the extent
that such representations and warranties expressly relate solely to an
earlier date (in which case such representations and warranties shall
have been true and accurate on and as of such earlier date);
(B) no event has occurred and is continuing, or would result from such
Proposed Borrowing or from the application of the proceeds therefrom,
which constitutes a Default or an Event of Default;
(C) no event has occurred which has had or could reasonably be expected to
have a Material Adverse Effect;
(D) all of the other conditions to the Proposed Borrowing set forth in
Article 5 of the Credit Agreement have been fulfilled; and
(E) the Proposed Borrowing satisfies all limitations set forth in the
Credit Agreement (including, without limitation, availability under
the Borrowing Base).
If notice of this Proposed Borrowing has been given previously by
telephone, this notice should be considered a written confirmation.
WICKES INC.
By _________________________________
Name _______________________________
Title ______________________________
EXHIBIT G
---------
FORM OF
-------
ASSIGNMENT AND ASSUMPTION AGREEMENT
-----------------------------------
This ASSIGNMENT AND ASSUMPTION AGREEMENT (the "Assignment and Assumption")
is to be effectuated by the completion and execution of the Assignment Execution
Form attached hereto. A copy of the terms of the Assignment and Assumption does
not need to be physically attached to the Assignment Execution Form, but rather
these terms are incorporated therein by reference. Terms defined in the
Assignment Execution Form (or in the Credit Agreement described therein) are
used herein as therein defined.
The Assignor and the Assignee agree as follows:
1. Assignment; Effect of Certain Dates.
------------------------------------
For value received, without recourse, representation or warranty (except as
expressly set forth herein) the Assignor sells and assigns to the Assignee, and
the Assignee purchases and assumes from the Assignor, all of the Assignor's
right, title and interest in and to, and all of the Assignor's obligations with
respect to, the Assigned Share under the Credit Agreement. On the date the Agent
has confirmed by telecopy to the Assignor that the Agent has received a fully
completed Assignment Execution Form signed by the Assignor and the Assignee (the
"Contract Date"), the obligations of the Assignor and the Assignee hereunder
shall be irrevocable as between themselves unless and until a party whose
consent hereto is required by the Credit Agreement (a "Required Party") gives
written notice (as provided in this paragraph) to the Assignor that such
Required Party's consent will not be given. Upon its receipt of a fully
completed Assignment Execution Form signed by the Assignor and the Assignee, the
Agent will send a copy of such Assignment Execution Form to each Required Party,
and will request each Required Party either (i) to execute the Assignment
Execution Form and redeliver it to the Agent or (ii) to notify the Agent in
writing that it will not execute the Assignment Execution Form, in either case
prior to 12:00 noon (Boston time) on the Business Day which is two (2) Business
Days prior to the Settlement Date (as defined in Section 9 hereof). Any Required
Party which has not delivered to the Agent an executed Assignment Execution Form
by such time will be deemed not to have consented to the Assignment Execution
Form and this Assignment and Assumption will thereupon be null and void; in
addition, the Agent will promptly notify the Assignor and the Assignee if it has
received a notice from a Required Party that such Required Party's consent will
not be given, and this Assignment and Assumption will thereafter be null and
void. Once a Required Party has evidenced its consent by delivery to the Agent
of its executed Assignment Execution Form, such consent may not be withdrawn,
and upon execution and delivery by all Required Parties, it is irrevocably
agreed that this Assignment and Assumption will become effective on the
Settlement Date and the Agent will change its books and records to reflect this
Assignment and Assumption. No (i) failure of any party to settle on the
Settlement Date any amount owed hereunder, (ii) dispute respecting settlement,
or (iii) bankruptcy, insolvency or other condition whatsoever respecting any
person shall in any way impair, reduce or otherwise affect the transfer of the
Assigned Share to the Assignee, and the release of the Assignor, as contemplated
by this Assignment and Assumption.
2. Rights and Obligations of Assignee; Release of Assignor.
--------------------------------------------------------
From and after the Settlement Date, the Assignee shall be entitled to all
rights, powers and privileges of, and shall perform all of the duties and
obligations of, the Assignor under the Credit Agreement and all related
documents, to the extent of the Assigned Share, including without limitation (i)
the right to receive all payments in respect of the Assigned Share which are
unpaid on the Settlement Date or become payable from and after the Settlement
Date, whether on account of principal, interest, fees, indemnities, increased
costs, additional amounts or otherwise, (ii) the right to vote and to instruct
the Agent under the Credit Agreement to the extent of the Assigned Share, (iii)
the right to set off and to appropriate and apply deposits of the Borrower (and
any other obligor) as set forth in the Credit Agreement or any related document,
(iv) the right to receive notices, requests, demands and other communications
from the Agent, the Borrower and/or any other party required to give notices,
requests, demands or other communications, (v) the obligation to fund all
payments required to be made by a lender holding the Assigned Share [and (vi)
-------
the obligation to provide to the Agent any withholding tax forms and other
--------------------------------------------------------------------------------
information prescribed by the Internal Revenue Service of the United States
--------------------------------------------------------------------------------
certifying as to the Assignee's status for purposes of determining exemption
--------------------------------------------------------------------------------
from United States withholding taxes with respect to all payments to be made to
--------------------------------------------------------------------------------
the Assignee under the Credit Agreement or such other documents as are necessary
--------------------------------------------------------------------------------
to indicate that all such payments are subject to such rates at a rate reduced
--------------------------------------------------------------------------------
by an applicable tax treaty.]5 The Assignor will deliver to the Assignee any
-------------------------------
notice of borrowing received by the Assignor on or after the Contract Date but
before the Settlement Date if the borrowing date specified in such notice is on
or after the Settlement Date. From and after the Settlement Date, the Assignor
shall be released from all duties and obligations under the Credit Agreement and
all related documents to the extent of the Assigned Share.
3. Representations and Warranties of Assignor.
-------------------------------------------
The Assignor (a) represents and warrants that it is the legal and
beneficial owner of the Assigned Share, and that such Assigned Share is free and
clear of any adverse claim; and (b) except for the representations and
warranties in subclause (a) above and in Section 4 below, makes no
representation or warranty and assumes no responsibility whatsoever regarding
the assignment affected hereby, including, without limitation, with respect to
any statements, warranties or representations made in or in connection with the
Credit Agreement or any other instrument or document furnished pursuant thereto
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Agreement or any other instrument or document furnished
pursuant thereto, or the financial condition of the Borrower, any guarantor or
any other person, or the performance or observance by the Borrower or any
guarantor or any other party of any of its obligations under the Credit
Agreement or any other instrument or document furnished pursuant thereto.
4. Mutual Representations and Warranties.
--------------------------------------
Each of the Assignor and the Assignee represents and warrants to the other
party as of the Contract Date and the Settlement Date as follows:
(a) it is duly organized and validly existing and has full power and
authority, and has taken or will take all action necessary, to
execute and deliver the Assignment Execution Form and to fulfill
its obligations under, and to consummate the transactions
contemplated by, this Assignment and Assumption;
(b) the making and performance by it of this Assignment and
Assumption do not and will not violate any law or regulation of
the jurisdiction of its incorporation or any other law or
regulation applicable to it; provided that neither party makes
any representation or warranty respecting the Securities Act of
1933, as amended;
(c) the Assignment Execution Form has been duly executed and
delivered by it and constitutes its legal, valid and binding
obligation, enforceable in accordance with its terms, except as
limited by (i) bankruptcy, insolvency or similar laws affecting
the enforcement of creditors rights generally and (ii) general
equitable principles; and
(d) all approvals, authorizations or other actions by, or filings
with, any governmental authority, if any, necessary for the
validity or enforceability of its obligations under this
Assignment and Assumption have been obtained or taken, as the
case may be.
5. Representations and Warranties of Assignee.
-------------------------------------------
(a) The Assignee (i) confirms that it has received a copy of the
Credit Agreement, any amendments or waivers thereto and other
instruments or documents furnished pursuant thereto, and any
related documents, which have in each case been requested by it,
together with copies of any financial statements requested by it,
and that it has, independently and without reliance on the
Assignor, the Agent or any other lender and based on such
documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Assignment
and Assumption; (ii) agrees that it will, independently and
without reliance upon the Assignor, the Agent or any other lender
and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Credit
Agreement and any other instruments or documents furnished
pursuant thereto, and any related documents; (iii) represents
that it is eligible to become an assignee of the Assigned Share
pursuant to the terms, if any, of the Credit Agreement which
limit assignees to persons having specified characteristics or
falling within certain classes; and (iv) appoints the Agent to
act in the capacity set forth in the Credit Agreement.
(b) If the Assignee is a person subject to the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), the Assignee
represents and warrants that the execution, delivery and
performance of this Assignment and Assumption, and the purchase
of the Assigned Share, will not involve any prohibited
transaction within the meaning of Section 406 of ERISA or Section
4975 of the Internal Revenue Code of 1986, as amended (the
"Code"), other than a prohibited transaction which is covered by
a currently effective class exemption granted by the U.S.
Department of Labor pursuant to Section 408(a) of ERISA and
Section 4975(c)(2) of the Code.
6. Single Net Payment.
-------------------
Unless the Assignor and Assignee agree otherwise, on the Settlement Date a
single, net, final payment shall be made, which shall be in an amount mutually
agreed upon by the Assignor and the Assignee, taking into account the then
outstanding principal amount, if any, of the Assigned Share, any fees payable to
or by the Assignee, and all accrued fees, interest and other amounts payable
under the Credit Agreement or any related documents.
7. Governing Law.
--------------
THIS ASSIGNMENT AND ASSUMPTION SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE COMMONWEALTH OF MASSACHUSETTS, WITHOUT
REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
8. Counterparts; Amendments; Binding Effect.
-----------------------------------------
The Assignment Execution Form may be executed in any number of counterparts
and by different parties in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute but one and the same instrument. The terms hereof may not be amended
or modified except in a writing executed by the Assignor, the Assignee and, in
the case of any change other than a change in the Settlement Date, all Required
Parties. Any change in the Settlement Date to an earlier date than that
specified on the Assignment Execution Form shall require the consent of the
Agent and any Required Party. The terms hereof shall bind and inure to the
benefit of and be enforceable by the parties executing (or deemed to have
consented to) the Assignment Execution Form and their respective successors and
permitted assigns.
9. Schedule of Dates.
-----------------
Unless otherwise agreed to by the parties and specified on the Assignment
Execution Form, the following schedule will apply, as appropriate:
Consent of Borrower Consent of Agent
and/or Other Parties Required Only Required
----------------------------- -------------
Contract Date Date Agent acknowledges receipt (by facsimile Date Agent acknowledges receipt (by
transmission) of executed Assignment Form by facsimile transmission) of executed
both Assignor and Assignee Assignment Execution Form by both
Assignor and Assignee
Settlement Date 5 Business Days after Contract Date 3 Business Days after Contract Date
10. Waiver of Jury Trial.
---------------------
THE ASSIGNOR AND THE ASSIGNEE EACH HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED UPON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS ASSIGNMENT AND
ASSUMPTION, OR THE ACTIONS OF EITHER OF THEM IN THE PERFORMANCE OR ENFORCEMENT
THEREOF.
11. Effectiveness of Notices.
-------------------------
Notices required to be given and other documents required to be delivered
pursuant to the terms hereof shall be deemed given or delivered when actually
received unless sent by facsimile transmission, in which case such notice or
other document shall be deemed given or delivered when sent (as established by
sender's facsimile transmission machine printout or similar mechanical record).
[ASSIGNMENT EXECUTION FORM FOLLOWS]
ASSIGNMENT EXECUTION FORM
-------------------------
This Assignment Execution Form incorporates by reference all of the terms
and conditions of the Assignment and Assumption Agreement which is attached as
an Exhibit to the Credit Agreement described below. By executing this Assignment
Execution Form, and pursuant to the terms of such Assignment and Assumption
Agreement, the Assignor sells and assigns to the Assignee, and the Assignee
purchases and assumes from the Assignor, in each case without recourse,
representation or warranty (except as set forth in the Assignment and Assumption
Agreement), all of the Assignor's right, title and interest in and to, and all
of the Assignor's obligations with respect to, the Assigned Share (as calculated
herein), and the Assignor is released from such obligations. The terms of the
Assignment and Assumption Agreement do not need to be physically attached to
this Assignment Execution Form.
1. Credit Agreement:
Title: Amended and Restated Credit Agreement
Date: December 13, 2000
Name of Borrower: Wickes Inc.
Name of Agent: Fleet Retail Finance Inc.
2. Name of Assignor:
3. Name and Notice Address/Facsimile of Assignee:
4. Contract Date: ________________, ____. _______________ Agent's
Confirmation of Receipt.
(The Agent must enter the date of delivery to it of this Assignment
Execution Form, executed by Assignor and Assignee, and MUST INITIAL AND RETURN A
COPY OF THIS PAGE TO ASSIGNOR.)
5. Settlement Date: ________________, ____.
(Select the date payment is to be made; unless a different date is written
here, the Settlement Date will be 3 Business Days (5 Business Days if Borrower
and/or other parties' consent is required) after the Contract Date.) The
Settlement Date may not be earlier than the date specified in the preceding
sentence unless the Required Parties and the Agent consent in writing to such
earlier date.)
Schedule I
----------
Attached to Assignment
----------------------
Execution Form executed
-----------------------
by _______________________, as Assignor
and __________________________, as Assignee
Percentage of Total Commitment (including both Revolving Commitment and Term _____%
Loan Commitment) to be assumed by Assignee (the "Assigned Share")
Principal Amount to be paid for Assigned Share $______________
[Portion of Interest to be retained by Assignor _____ of 1% per annum]
[Portion of _________________ Fee to be retained by Assignor _____ of 1% per annum]
[Upfront Fee to be paid to Assignee $_______________]
Processing and Recordation Fee to be paid by Assignee $_______________
Any portion of interest or fees retained by the Assignor will be payable by
the Assignee to the Assignor on the day on which the applicable interest and
fees are paid under the Credit Agreement. The Assignee shall not be relieved of
its obligation to pay such amounts if the Assignee transfers the Assigned Share
to another party unless the Assignor executes an agreement specifically
releasing the Assignee from its obligations hereunder.
ASSIGNOR:
By _________________________________
Name _______________________________
Title ______________________________
ASSIGNEE:
By _________________________________
Name _______________________________
Title ______________________________
Consent of Borrower (if required)
WICKES INC.
By _________________________________
Name _______________________________
Title ________________________________
EXHIBIT H
---------
FORM OF NOTICE OF CONTINUATION
------------------------------
------------------, ----
Fleet Retail Finance Inc., as Agent
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
The undersigned, Wickes Inc., a Delaware corporation ("Borrower"), refers
to the Amended and Restated Credit Agreement, dated as of December 13, 2000,
among Borrower, certain financial institutions parties thereto, Fleet Retail
Finance Inc., as agent, Fleet National Bank, as issuing bank, and Bank of
America, N.A., as documentation agent (the "Credit Agreement"). Capitalized
terms used herein shall have the meanings given in the Credit Agreement.
The Borrower hereby gives you irrevocable notice that it requests a
Continuation of Eurodollar Rate Loans under the Credit Agreement (the "Proposed
Continuation") as follows:
(i) The amount of Eurodollar Rate Loans, the last day of each current
Interest Period and proposed new Interest Period for each
Eurodollar Rate Loan covered by this request are as follows:
Date of Proposed Proposed New
Revolving or Term Loan Amount of Loan Continuation Interest Period
---------------------- -------------- ------------ ---------------
(ii) The aggregate amount of Eurodollar Rate Loans subject to such
Continuation is $_______________.
The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the Proposed Continuation:
(A) the representations and warranties contained in the Credit Agreement
and in each other document executed in connection therewith are true
and correct in all material respects before and after giving effect to
the Proposed Continuation, as though made on and as of such date,
except to the extent that such representations and warranties
expressly relate solely to an earlier date (in which case such
representations and warranties shall have been true and accurate on
and as of such earlier date);
(B) no event has occurred and is continuing, or would result from such
Proposed Continuation, which constitutes a Default or an Event of
Default;
(C) no event has occurred which has had or could reasonably be expected to
have a Material Adverse Effect; and
(D) the Proposed Continuation satisfies all conditions and limitations set
forth in the Credit Agreement (including, without limitation,
availability under the Borrowing Base).
If notice of this Proposed Continuation has been given previously by
telephone, then this notice should be considered a written confirmation.
WICKES INC.
By _________________________________
Name _______________________________
Title ______________________________
EXHIBIT I
---------
FORM OF NOTICE OF CONVERSION
----------------------------
------------------, ----
Fleet Retail Finance, Inc., as Agent
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
The undersigned, Wickes Inc., a Delaware corporation ("Borrower"), refers
to the Amended and Restated Credit Agreement, dated as of December 13, 2000,
among Borrower, certain financial institutions parties thereto, Fleet Retail
Finance Inc., as agent, Fleet National Bank, as issuing bank, and Bank of
America, N.A., as documentation agent (the "Credit Agreement"). Capitalized
terms used herein shall have the meanings given such terms in the Credit
Agreement.
The Borrower hereby gives you irrevocable notice that it requests a
Conversion of Loans of one Type into Loans of another Type under the Credit
Agreement (a "Proposed Conversion") as follows:
Conversion of Eurodollar Rate Loans to Base Rate Loans
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The amount of Loans and the last day of the current Interest Period for
Eurodollar Rate Loans for which Borrower requests Conversion to Base Rate Loans
are as follows:
Revolving or Term Loan Amount of Loan End of Current Interest Period
---------------------- -------------- ------------------------------
Conversion of Base Rate Loans to Eurodollar Rate Loans
------------------------------------------------------
The amount of Loans, the date of the Proposed Conversion, and the proposed
Interest Period for each Base Rate Loan for which the Borrower requests
Conversion to a Eurodollar Rate Loan are as follows:
Revolving or Term Loan Amount of Loan Date of Proposed Conversion Proposed
---------------------- -------------- ---------------------------- ---------
New Interest Period
-------------------
The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the Proposed Borrowing:
(A) the representations and warranties contained in the Credit Agreement
and in each other document executed in connection therewith are true
and correct in all material respects before and after giving effect to
the Proposed Conversion, as though made on and as of such date, except
to the extent that such representations and warranties expressly
relate solely to an earlier date (in which case such representations
and warranties shall have been true and accurate on and as of such
earlier date);
(B) no event has occurred and is continuing, or would result from such
Proposed Conversion, which constitutes a Default or an Event of
Default; and
(C) no event has occurred which has had or could reasonably be expected to
have a Material Adverse Effect;
(D) the Proposed Conversion satisfies all conditions and limitations set
forth in the Credit Agreement.
If notice of this Proposed Conversion has been given previously by
telephone, then this notice should be considered a written confirmation.
WICKES INC.
By _________________________________
Name _______________________________
Title ______________________________
EXHIBIT J
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AUTHORIZED OFFICERS
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Reference is made to the Amended and Restated Credit Agreement dated as of
December 13, 2000 among Wickes Inc., certain financial institutions parties
thereto, Fleet Retail Finance Inc., as agent, Fleet National Bank, as issuing
bank, and Bank of America, N.A., as documentation agent, (the "Credit
Agreement").
The following is a list of officers of Wickes Inc. that are authorized to
request Revolving Loans under the Credit Agreement, together with a specimen
signature of each such officer:
Name Signature Title
---- --------- -----
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ President - Finance
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ President
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Assistant Secretary
Very truly yours,
WICKES INC.
By _________________________________
Name _______________________________
Title ______________________________
EXHIBIT K
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BLOCKED ACCOUNT AGREEMENT
-------------------------
See Attached
EXHIBIT L
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CONCENTRATION ACCOUNT AGREEMENT
-------------------------------
See Attached
SCHEDULE A
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Closing Documents List
----------------------
See Attached
SCHEDULE B
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Disclosure Schedule
-------------------
See Attached
603963.8
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1 To be used for replacement Revolving Notes.
2 To be used for replacement Revolving Notes.
3 Attachment 1 must describe in detail the nature of the condition or event, the
period during which it has existed and the action the Borrower proposes to take
or has taken with respect thereto.
4 Attachment 2 must describe in detail theexceptions, if any, to the statements
contained in paragraphs (e)(i) through (e)(vii) of the Certificate.
5 If the Assignee is organized under the laws of a jurisdiction outside the US