EXHIBIT 10.1
C R E D I T A G R E E M E N T
by and between
CATHERINES, INC.
CATHERINES STORES CORPORATION
and their subsidiaries
as Borrowers
and
AMSOUTH BANK
and
HIBERNIA NATIONAL BANK
as Banks
and
AMSOUTH BANK
as Agent
Dated: July 31, 2000
CREDIT AGREEMENT
THIS CREDIT AGREEMENT (the "Credit Agreement"), dated as of
July 31, 2000, is made by and among CATHERINES, INC., a Delaware
corporation (the "Company"), CATHERINES STORES CORPORATION, a
Tennessee corporation ("CSC") and the other entities identified
on Exhibit "A" attached hereto and incorporated herein by
reference together with any other Person which subsequently
executes and delivers any amendment hereto or Assumption
Agreement in such capacity being collectively referred to herein
as the "Borrowers" and individually, a "Borrower") and AMSOUTH
BANK ("AmSouth"), individually and in its capacity as agent for
the Banks, defined below (together with any of its successors in
such capacity, the "Agent") and HIBERNIA NATIONAL BANK, a
national banking association ("Hibernia"); (together with any
other Person which subsequently executes and delivers any
amendment or Commitment Assignment hereto in such capacity and
each of their permitted successors and assigns shall be referred
to collectively as the "Banks" and each individually shall be
referred to as a "Bank").
W I T N E S S E T H:
Borrowers have requested Banks extend a letter of credit
facility and certain loans to the Borrowers from time to time and
the Banks are willing to extend such letter of credit facility
and to make such loans upon the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the mutual agreements
and covenants contained in this Credit Agreement and for good and
valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
SECTION I. DEFINITIONS
1.1 Defined Terms. As used herein the following terms
shall have the following meanings:
"Affiliate" of a Person (the "Primary Person") shall mean
(a) any Person which, directly or indirectly, is in control of,
is controlled by, or is under common control with, the Primary
Person or (b) any Person who is a director or officer (i) of the
Primary Person, (ii) of any Subsidiary of the Primary Person or
(iii) of any Person described in clause (a) above. For purposes
of this definition, control of a Person shall mean the power,
directly or indirectly, (i) to vote 10% or more of the securities
having ordinary voting power for the election of directors of
such Person or (ii) to direct or cause the direction of the
management and policies of such Person whether by contract or
otherwise.
"Agent" shall mean AmSouth in its capacity as agent for the
Banks or any successor agent.
"AmSouth Rate" shall mean the greater of (i) the rate of
interest publicly announced by AmSouth from time to time as its
Base Rate and (ii) 2% per annum above the rate set forth opposite
the caption "Federal Funds (Effective)" in the weekly statistical
release designated by "H.15(519)", or any successor publication,
published by the Board of Governors of the Federal Reserve
System.
"Asset Sale" shall mean any sale, sale-leaseback, or other
disposition by the Borrowers or any of their Subsidiaries of any
of their property or assets, including the stock of any of their
Subsidiaries (except sales and dispositions permitted by
paragraphs (a) through (i) of subsection 9.5 and by Section 8).
"Assumption Agreement" shall mean the assumption agreement
in the form of Exhibit "B".
"Available Letter of Credit Commitment" as to any Bank at a
particular date, shall mean an amount equal to the amount of such
Bank's Letter of Credit Commitment at such time less such Bank's
L/C Exposure; collectively, as to all the Banks, the "Available
Letter of Credit Commitments."
"Base Rate" shall mean the reference or base rate
established by AmSouth from time to time and utilized in
contracting for interest on its variable rate loans that do not
utilize an externally established reference rate. The Base Rate
is one of several interest rate indices employed by AmSouth. The
Borrowers acknowledge that AmSouth has made, and may hereafter
make, loans bearing interest at rates which are lower and higher
than the Base Rate.
"Basic Documents" shall mean, collectively, this Credit
Agreement (including all schedules and exhibits hereto), the
Security Documents, the Letter of Credit Notes, the Swingline
Note, the Parent Guaranty and any other document, instrument or
agreement executed in connection with this Credit Agreement or
hereafter executed and delivered by the Parent or any Borrower to
the Agent or the Banks and any amendments or supplements to any
such documents or agreements.
"Borrowers" shall mean, collectively, those entities listed
on Exhibit "A" hereto, each New Subsidiary created pursuant to
Section 8 of this Credit Agreement, and any and all other Persons
which, pursuant to an amendment to this Credit Agreement or
pursuant to the execution of an Assumption Agreement, may
hereafter become Borrowers, individually, a "Borrower".
"Borrowing Date" shall mean (a) any Business Day on which an
automatic funding occurs or is specified in a notice pursuant to
subsection 4.1 of this Credit Agreement as a date on which the
Banks and/or the Swingline Lender make Loans under this Credit
Agreement, or (b) any Business Day on which a Borrower, in a
notice pursuant to Section 3, requests the Issuing Bank to issue
a Letter of Credit under this Credit Agreement.
"Business Day" shall mean a day other than a Saturday,
Sunday or other day on which commercial banks in Memphis,
Tennessee, are authorized or required by law to close.
"Capital Expenditures" for any period, shall mean all
amounts that would, in accordance with GAAP, be set forth as
capital expenditures (exclusive of any amount attributable to
capitalized interest) on the consolidated statement of changes in
cash flows of the Borrowers, or other similar consolidated
statement of the Borrowers.
"Cash Equivalents" shall mean, individually and
collectively, (a) cash, (b) securities with maturities of one
year or less from the date of acquisition thereof issued or fully
guaranteed or insured by the United States Government or any
agency thereof, (c) certificates of deposit and eurodollar time
deposits with maturities of one year or less from the date of
acquisition thereof and overnight bank deposits with any
commercial bank having capital and surplus in excess of
$500,000,000, (d) repurchase obligations or any commercial bank
satisfying the requirements of clause (b) of this definition,
having a term of not more than 30 days with respect to securities
issued or fully guaranteed or insured by the United States
Government, (e) commercial paper of a domestic issuer rated at
least A-2 by Standard and Poor's Rating Group ("S&P") or P-2 by
▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's"), (f) securities with
maturities of one year or less from the date of acquisition
thereof issued or fully guaranteed by any state, commonwealth or
territory or the United States, by any political subdivision or
taxing authority of any such state, commonwealth or territory or
by any foreign government, the securities of which state,
commonwealth, territory, political subdivision, taxing authority
or foreign government (as the case may be) are rated at least A
by S&P or A by Moody's, (g) securities with maturities of one
year or less from the date of acquisition thereof backed by
standby letters of credit issued by any commercial bank
satisfying the requirements of clause (c) of this definition or
(h) shares of money market mutual or similar funds which invest
exclusively in assets satisfying the requirements of clauses (a)
through (f) of this definition.
"Change in Law" shall mean, with respect to any Bank, the
adoption of any law, rule, regulation, policy, guideline or
directive (whether or not having the force of law) or any change
therein or in the interpretation or application thereof by any
Governmental Authority having jurisdiction over such Bank, in
each case after the date hereof.
"Change of Control" shall mean any direct or indirect
acquisition by any Person whether singly or in concert with one
or more Persons, of 40% or more, on a fully diluted basis, of the
outstanding Parent Common Stock, or if any Borrower ceases to be
a direct or indirect Subsidiary of Parent.
"Closing Date" shall mean the date upon which all the
conditions in subsection 5.1 have been satisfied, which the
parties have scheduled to occur on July 31, 2000.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, or any successor statute, and the
regulations promulgated thereunder from time to time.
"Collateral" shall mean the property, real and personal,
tangible and intangible, and the proceeds thereof, which are
subject from time to time to the Liens purported to be created by
the Security Documents.
"Commission" shall mean the Securities and Exchange
Commission.
"Commitment Assignment" shall mean the assignment
substantially in the form of Exhibit "C".
"Commitment Percentage" shall mean, with respect to any
Bank, its existing Letter of Credit Commitment Percentage or its
Swingline Loan Commitment Percentage, as the context may require.
"Commitments" shall be the collective reference to the
Letter of Credit Commitments and the Swingline Commitment;
individually, a "Commitment."
"Commitment Transfer" shall mean an assignment or transfer
pursuant to subsection 12.3 hereof and evidenced by a Commitment
Assignment.
"Commonly Controlled Entity" shall mean an entity, whether
or not incorporated, which is under common control with a
Borrower within the meaning of Section 414(b) or (c) of the Code.
"Company" shall have the meaning specified in the preamble
of this Credit Agreement, its successors and assigns, as
permitted in this Credit Agreement.
"Consolidated Adjusted Operating Profit" shall mean, for any
period, the Net Income for such period, plus, without duplication
and to the extent reflected as a charge in the statement of such
consolidated Net Income for such period, the sum of (i) taxes
measured by income, (ii) interest expense, (iii) depreciation and
amortization expense, and (iv) operating lease expense.
"Consolidated Current Assets" at a particular date, shall
mean all amounts which would, in conformity with GAAP, be
included under current assets on a consolidated balance sheet of
the Borrowers as at such date.
"Consolidated Current Liabilities" at a particular date,
shall mean all amounts which would, in conformity with GAAP, be
included under current liabilities on a consolidated balance
sheet of the Borrowers as at such date, but in any event
including, all L/C Obligations and Swingline Loans at such date.
"Consolidated Tangible Net Worth" at a particular date,
shall mean the sum of the capital stock and paid-in surplus, plus
retained earnings (or minus accumulated deficit) of the Borrowers
on a consolidated basis minus intangible assets (including
without limitation, franchises, patents and patent applications,
trademarks and brand names, goodwill, research and development
expenses, unamortized debt discount and expense and all write-ups
in the book value of any asset).
"Consolidated Working Capital" at a particular date, shall
mean the excess, if any, of Consolidated Current Assets over
Consolidated Current Liabilities at such date.
"Contingent Obligation" as to any Person, shall mean any
obligation of such Person guaranteeing or in effect guaranteeing
any Indebtedness, leases, dividends or other obligations
("primary obligations") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of such Person
(whether or not contingent) (a) to purchase any such primary
obligation or any property constituting direct or indirect
security therefor, (b) to advance or supply funds (i) for the
purchase or payment of any such primary obligation or (ii) to
maintain working capital or equity capital of the primary obligor
or otherwise to maintain the net worth or solvency of the primary
obligor, (c) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such
primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (d) otherwise to assure or
hold harmless the owner of such primary obligation against loss
in respect thereof; provided, however, that the term Contingent
Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable amount (based on the
maximum reasonably anticipated net liability in respect thereof
as determined by such Person in good faith) of the primary
obligation or portion thereof in respect of which such Contingent
Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated net liability in respect thereof (assuming
such Person is required to perform thereunder) as determined by
such Person in good faith.
"Contractual Obligation" as to any Person, shall mean any
provision of any security issued by such Person or of any
agreement, instrument or undertaking to which such Person is a
party or by which it or any of its property is bound.
"Credit Agreement" shall mean this Credit Agreement, as the
same may from time to time be amended, supplemented or otherwise
modified. The Credit Agreement may sometimes be referred to
herein as the "Agreement".
"Default" shall mean any event specified in Section 10,
whether or not any requirement for the giving of notice, the
lapse of time, or both, has been satisfied.
"Defaulting Bank" shall mean any Bank which fails or refuses
to perform its obligations under this Credit Agreement within the
time period specified for performance of such obligation, or if
no time frame is specified, if such failure or refusal continues
for a period of five (5) Business Days after written notice from
Agent, provided that if such Bank cures such failure or refusal,
such Bank shall cease to be a Defaulting Bank.
"Dollars" and "$" shall mean dollars in lawful currency of
the United States of America.
"Environmental Law" means any and all federal, state, local
or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, and requirements of any Governmental
Authority having jurisdiction over any Borrower or their
respective assets, and regulating or imposing liability or
standards of conduct concerning protection of human health or the
environment, as now or may at any time hereafter be in effect, in
each case to the extent the foregoing are applicable to such
Borrower or its assets or properties.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended and regulations promulgated thereunder
from time to time.
"Event of Default" shall mean any of the events specified in
Section 10, provided that any requirement for the giving of
notice, the lapse of time, or both, has been satisfied.
"FDIC" shall mean the Federal Deposit Insurance Corporation
or any successor thereto.
"Financing Lease" shall mean any lease of property, real or
personal, the obligations under which are capitalized on a
consolidated balance sheet of the Borrowers.
"Fiscal Year" shall mean the fiscal year of each of the
Borrowers, as applicable, which in each case shall end on the
Saturday closest to January 31 of each year.
"Fixed Charge Coverage Ratio" shall mean as of any period of
determination a fraction (x) the numerator of which is the
Consolidated Adjusted Operating Profit for such period and (y)
the denominator of which is interest expense for such period plus
current maturities of long term debt plus current maturities of
Financing Leases according to GAAP plus operating lease expense.
"GAAP" shall mean generally accepted accounting principles
in the United States of America in effect from time to time,
provided that for purposes of subsections 9.7, 9.8, 9.9, and 9.10
and the terms used therein which are defined "in accordance with
GAAP", "GAAP" shall mean generally accepted accounting principles
in the United States of America as in effect on the date hereof.
"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.
"Guaranties" shall mean the Parent Guaranty and any other
Guaranty executed by any other Person in connection with the
Credit Agreement, as the same may from time to time, be amended
supplemented or otherwise modified.
"Indebtedness" of a Person, at a particular date, shall
mean, without duplication, (a) all indebtedness of such Person
for borrowed money or for the deferred purchase price of
property, (b) the face amount of all letters of credit issued for
the account of such Person and, without duplication, all
outstanding drafts drawn thereunder and any unpaid reimbursement
obligation or indemnity with respect thereto, (c) all liabilities
secured by any Lien on any property owned by such Person, to the
extent attributable to such Person's interest in such property,
even though such Person has not assumed or become liable for the
payment thereof, (d) all liabilities of such Person under
Financing Leases and (e) all indebtedness of such Person arising
under acceptance facilities; but excluding trade and other
accounts and accrued expenses payable in the ordinary course of
business and accrued reserves with respect to expenses arising in
the ordinary course of business.
"Insolvency" as to any Multiemployer Plan, shall be in the
condition such that such Plan is insolvent within the meaning of
such term as used in Section 4245 of ERISA.
"Insolvent" shall mean pertaining to a condition of
Insolvency.
"Inter-Company Indebtedness" shall mean Indebtedness of the
Parent or one or more of the Borrowers owed solely to the Parent,
any Subsidiary of the Parent or one or more other Borrowers.
"Interest Payment Date" shall mean in the case of the
Swingline Loans, the fifteenth day of each month and on the date
of payment (including prepayment) in full of the Swingline Loans.
"Inventory" shall mean all inventory, wherever located, now
owned or hereafter acquired by any Borrower or in which any
Borrower now has or hereafter acquires any right, title or
interest, including, without limitation, all goods and other
personal property now or hereafter owned by any Borrower which
are held for sale or lease or are furnished or are to be
furnished under a contract of service or which constitute raw
materials, work in process or materials used or finished goods,
including, but not limited to, all inventory as defined in
Section 9-109(4) of the UCC.
"Inventory Valuation" shall mean any audit of Net
Recoverable Liquidation Value of Inventory required to be
furnished to the Agent pursuant to Subsection 7.11.
"Issuing Bank" shall mean AmSouth.
"L/C Application" shall mean a Trade L/C Application or a
Standby L/C Application.
"L/C Exposure" at a particular date, shall mean the sum of
(a) the aggregate maximum amount available to be drawn under all
issued and outstanding Letters of Credit at such date and (b) the
aggregate unreimbursed amounts drawn under Letters of Credit at
such date.
"L/C Obligations" shall mean the obligations of the
Borrowers to reimburse the Issuing Bank for any payments made by
the Issuing Bank under any Letter of Credit that have not been
reimbursed by the Borrowers pursuant to paragraph (a) of
subsection 3.4.
"L/C Participating Interest" shall mean an undivided
participating interest in the face amount of each issued and
outstanding Letter of Credit and the L/C Application relating
thereto.
"Letter of Credit" shall mean a Trade L/C or a Standby L/C.
"Letter of Credit Commitment" shall mean, as to any Bank,
its obligation to purchase its L/C Participating Interest in any
Letters of Credit, as the same may be reduced from time to time
pursuant to subsection 4.6, collectively, as to all the Banks,
the "Letter of Credit Commitments."
"Letter of Credit Commitment Percentage" shall mean, as to
any Bank, the percentage set forth opposite such Bank's name
under such heading on Schedule 1.1.
"Letter of Credit Commitment Period" shall mean the period
from and including the Closing Date to but not including the
Letter of Credit Termination Date.
"Letter of Credit Facility" shall mean the aggregate
$15,000,000.00 letter of credit facility to be evidenced by
Letters of Credit issued by the Banks pursuant to the terms of
this Credit Agreement.
"Letter of Credit Note" and "Letter of Credit Notes" shall
have the meanings specified in subsection 3.1(c).
"Letter of Credit Termination Date" shall mean the earlier
of (i) June 29, 2001 or (ii) such date as the Letter of Credit
Commitment shall terminate hereunder.
"Lien" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, security interest, lien, charge or
encumbrance, or preference, priority or other security agreement
or preferential arrangement in respect of any asset of the
Borrowers of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention
agreement, any Financing Lease having substantially the same
economic effect as any of the foregoing, and the filing of, or
agreement to give, any financing statement under the Commercial
Code or comparable law of any jurisdiction).
"Loan Exposure" at a particular date, shall mean the
aggregate principal amount of the L/C Exposure and Swingline
Loans outstanding at such date.
"Loans" shall mean, collectively, the Swingline Loans.
"Material Adverse Event" means a condition or occurrence or
event which in the Banks' reasonable judgment materially
adversely affects the Collateral taken as a whole or the
consolidated assets, business operations or financial condition
of the Borrowers, taken as a whole, or of the Parent and its
Subsidiaries, taken as a whole.
"Material Borrowers" mean the Company, CSC, each Borrower
which owns or operates ten (10) or more Stores and each Borrower
which does not own or operate any stores with assets of
$3,000,000 or more, individually, "Material Borrower".
"Materials of Environmental Concern" means any gasoline or
petroleum (including crude oil or any fraction thereof) or
petroleum products or any hazardous or toxic substances,
materials or wastes, defined or regulated as such in or under any
Environmental Law, including, without limitation, asbestos,
radon, polychlorinated biphenyls and urea-formaldehyde
insulation.
"Multiemployer Plan" shall mean a Plan which is a
multiemployer plan as defined in Section 4001(a)(3) of ERISA.
"Net Income" for any period, shall mean the consolidated net
income of the Borrowers for such period, determined in accordance
with GAAP (but excluding any extraordinary gains attributable to
such period).
"Net Loss" for any Fiscal Year, shall mean the consolidated
negative net income of the Borrowers for such period, determined
in accordance with GAAP (but excluding any extraordinary gains
and extraordinary losses attributable to such period).
"Net Proceeds" shall mean with respect to the sale of any
asset by the Borrowers or any of their Subsidiaries (other than
Inventory sold in the ordinary course of business) the excess, if
any, of (a) the sum received in connection with such sale,
whether or not such sum is in whole or in part cash, less (b) the
sum of (i) the principal amount of any Indebtedness which is
secured by any such asset and which is required to be repaid in
connection with the sale thereof (other than Indebtedness
hereunder), (ii) the out-of-pocket expenses incurred by the
Borrowers or any of their Subsidiaries in connection with such
sale and (iii) provision for taxes attributable to such sale (as
estimated by the Borrowers or any of their Subsidiaries in good
faith).
"Net Recoverable Liquidation Value" shall mean the net
recoverable liquidation value of the Inventory as determined by
the Inventory Valuation to be performed pursuant to Section 7.11.
"Nonmaterial Borrowers" shall mean each Borrower which owns
or operates fewer than ten (10) Stores and each Borrower which
does not own or operate any Stores with assets of less than
$3,000,000, individually, a "Nonmaterial Borrower".
"Notes" shall mean, collectively, the Letter of Credit Notes
and the Swingline Note.
"Operating Account" shall mean the Borrowers' checking and
depository account established with the Swingline Lender which is
used by the Borrowers for working capital purposes.
"Parent" shall mean Charming Shoppes, Inc., a Pennsylvania
corporation, its successors and assigns, as permitted in this
Credit Agreement.
"Parent Common Stock" shall mean, collectively, the Common
Stock, $.01 par value, of the Parent, as amended, supplemented or
otherwise modified from time to time.
"Parent Guaranty" shall mean the guaranty agreement of even
date entered into by the Parent in favor of the Banks, as the
same may be amended, supplemented or otherwise modified.
"Participating Bank" shall mean any Bank (other than
AmSouth) with respect to its L/C Participating Interest in each
Letter of Credit.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title I. of ERISA.
"Permitted Liens" shall mean, collectively, the Liens
described in subsection 9.2.
"Person" shall mean and include an individual, a
partnership, a corporation, a business trust, a joint stock
company, a trust, an unincorporated association, a joint venture
or other entity or a Governmental Authority.
"Plan" at any particular time, shall mean any employee
benefit plan which is covered by ERISA and in respect of which a
Borrower or a Commonly Controlled Entity is (or, if such plan
were terminated at such time, would under Section 4069 of ERISA
be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Proceeds" shall have the meaning specified in the UCC and,
in any event, shall include, but not be limited to, (a) any and
all proceeds of the insurance, indemnity, warranty or guaranty
payable to the Borrowers from time to time with respect to any
of the Collateral, (b) any and all payments (in any form
whatsoever) made or due and payable to the Borrowers from time
to time in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the
Collateral by any governmental body, authority, bureau or agency
(or any Person acting under color of Governmental Authority) and
(c) any and all other amounts from time to time paid or payable
under or in connection with any of the Collateral.
"Purchasing Banks" shall have the meaning specified in
subsection 12.2 of this Credit Agreement.
"Register" shall have the meaning specified in subsection
12.3 of this Credit Agreement.
"Reimbursement Obligation" shall mean the obligation of the
Borrower to reimburse the Issuing Bank for any amounts described
in subsection 3.4.
"Related Document" shall mean any agreement, certificate,
document or instrument relating to a Letter of Credit.
"Reorganization" as to any Multiemployer Plan, shall mean
the condition that such Plan is in reorganization as such term is
used in Section 4241 of ERISA.
"Reportable Event" shall mean any of the events set forth in
Section 4043 (b) of ERISA, other than those events as to which
the thirty-day period is waived under subsections .13, .14, .16,
.18, .19 or .20 of PBGC Reg. 2615.
"Reporting Accountants" shall have the meaning specified in
paragraph (a) of subsection 7.1.
"Required Banks" at a particular time, the holders of at
least 100% of the aggregate outstanding principal amount of the
Notes and L/C Exposure, or, if no amounts are outstanding under
the Commitments, Banks having at least 100% of the aggregate
amount of the Commitments.
"Requirement of Law" as to any Person, shall mean the
Certificate of Incorporation and Bylaws or other organizational
or governing documents of such Person, and any law, treaty, rule
or regulation, or final 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.
"Responsible Officer" shall mean, as to the corporate
Borrowers, any of their respective Presidents, Chief Executive
Officers, Executive Vice Presidents and Chief Financial Officers
or Executive Vice Presidents and Secretaries or Vice Presidents
and Treasurers, and as to the partnership Borrowers, the
President, Chief Executive Officer, Executive Vice President and
Chief Financial Officer or Executive Vice President and Secretary
or Vice President and Treasurers of their respective corporate
general partners.
"Sale and Leaseback" shall mean any arrangement with any
Person whereby a Borrower shall sell or transfer any property,
real or personal, whether now owned or hereafter acquired and
thereafter rent or lease such property or other property.
"Security Agreements" shall mean any security agreement
executed by a Borrower in connection with the Credit Agreement,
as the same may, from time to time be amended, supplemented or
otherwise modified.
"Security Documents" shall mean the Security Agreements, the
Guaranties, and any other collateral security documents from time
to time executed and delivered in connection herewith or
therewith.
"Single Employer Plan" shall mean any Plan which is covered
by Title IV of ERISA, but which is not a Multiemployer Plan.
"Standby L/C" shall mean an irrevocable letter of credit
under which the Issuing Bank agrees to make payments in Dollars
for the account of a Borrower, on behalf of a Borrower in respect
of obligations of a Borrower incurred pursuant to contracts made
or performances undertaken or to be undertaken or matters
relating to which a Borrower is or proposes to become a party in
the ordinary course of such business, including, without limiting
the foregoing, for insurance purposes or in respect of advance
payments or bid or performance bonds.
"Standby L/C Application" shall be as defined in subsection
3.1.
"Store Locations" shall mean the store locations listed on
Schedule 1.2, individually, a "Store Location" or a "Store".
"Store Closing Report" shall mean the report required to be
furnished to the Agent pursuant to paragraph (d) of subsection
7.2.
"Subsidiary" of a Person shall mean (a) a corporation of
which shares of stock of each class having ordinary voting power
(other than stock 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 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 or by one or more Subsidiaries of such
Person or by such Person and one or more Subsidiaries of such
Person or (b) a partnership, the general partnership of which is
owned by such Person or by one or more subsidiaries of such
Person or by such Person and one or more subsidiaries of such
Person.
"Swingline Commitment" means the obligation of the Swingline
Lender to make Swingline Loans to the Borrowers pursuant to
subsection 2.1 of this Credit Agreement in an aggregate principal
amount at any time outstanding up to the Swingline Committed
Amount, as such amounts may be reduced from time to time in
accordance with the provisions hereof.
"Swingline Committed Amount" means the amount of the
Swingline Lender's Swingline Commitment as specified in
subsection 2.1 of this Credit Agreement.
"Swingline Lender" means AmSouth, in its capacity as such,
together with its successors and assigns.
"Swingline Loans" means swingline revolving loans made by
the Swingline Lender pursuant to the provisions of subsection 2.1
of this Credit Agreement, individually, a "Swingline Loan".
"Swingline Loan Commitment Percentage" shall mean, as to any
Bank, the percentage set forth opposite such Bank's name under
such heading on Schedule 1.1 hereof.
"Swingline Loan Termination Date" shall mean the earlier of
(i) June 29, 2001 or (ii) such date as the Swingline Commitment
shall terminate hereunder.
"Swingline Note" means the promissory note dated July 31,
2000, executed by the Borrowers in favor of the Swingline Lender
evidencing the Swingline Loans provided pursuant to subsection
2.1 of the Credit Agreement as such promissory note may be
amended, modified, supplemented, extended, renewed or replaced
from time to time.
"Syndicate Purchasing Banks" shall be as defined in
subsection 12.2.
"Trade L/C" shall mean a commercial documentary letter of
credit, payable in Dollars and issued by the Issuing Bank for the
account of a Borrower for the purchase of materials, goods or
services in the ordinary course of business.
"Trade L/C Application" shall be as defined in subsection
3.1.
"Transferee" shall have the meaning specified in subsection
12.5.
"UCC" shall mean the Uniform Commercial Code as from time to
time in effect in the State of Tennessee.
1.2 Accounting Terms. As used in this Credit Agreement,
the Letter of Credit Notes, the Swingline Note, or any
certificate, report or other document made or delivered pursuant
to this Credit Agreement, accounting terms not defined in
subsection 1.1 and accounting terms partly defined in said
subsection 1.1 to the extent not defined, shall have the
respective meanings given to them under GAAP.
1.3 Other Definitional Provisions.
(a) Unless otherwise defined therein, all terms defined in
this Credit Agreement shall have the defined meanings when used
in the Letter of Credit Notes, the Swingline Note or any
certificate, report or other document made or delivered pursuant
to this Credit Agreement.
(b) 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 Section, subsection,
Schedule and Exhibit references are to this Credit Agreement,
unless otherwise specified. Defined terms used in the singular
may also refer to the plural of such term when used in this
Credit Agreement, and the use of defined terms in the plural form
may also refer to the singular use of such term.
SECTION 2. AMOUNTS AND TERMS OF SWINGLINE COMMITMENT
2.1 Swingline Loan
(a) Swingline Loan Commitment and Swingline Loans. Subject
to the terms and conditions of this subsection 2.1 and in
reliance upon the representations and warranties set forth
herein, the Swingline Lender, in its individual capacity, agrees
to make revolving credit loans (each a "Swingline Loan" and,
collectively, the "Swingline Loans") to the Borrowers from time
to time from the date of this Credit Agreement until the
Swingline Loan Termination Date, provided further, that the
aggregate principal amount of Swingline Loans outstanding at any
one time shall not exceed Five Million Dollars ($5,000,000.00)
(the "Swingline Committed Amount"). During such period,
Swingline Loans may be prepaid or repaid and reborrowed in
accordance with the provisions hereof.
(b) Swingline Note. The Swingline Loans made by the
Swingline Lender shall be evidenced by a promissory note of the
Borrowers in the original amount of the Swingline Committed
Amount. The Swingline Lender is hereby authorized to record the
date and amount of each Swingline Loan made by the Swingline
Lender, and the date and amount of each payment or prepayment of
principal thereof and any such recordation shall constitute prima
facie evidence of the accuracy of the information so recorded.
The Swingline Note shall be dated the date of the Credit
Agreement and be stated to mature on the Swingline Loan
Termination Date.
(c) Obligations of Other Banks with Respect to Swingline Loans.
At any time, upon request of the Swingline Lender made to all the
Banks, each Bank irrevocably agrees to purchase its prorata share
(based on such Bank's Letter of Credit Commitment Percentage) of
any Swingline Loan made by the Swingline Lender regardless of
whether the conditions for disbursement are satisfied at the time
of such purchase, including the existence of a Default or an
Event of Default hereunder provided no Bank's Total Exposure
shall exceed its Commitment. Such purchase shall take place on
the date of the request by Swingline Lender so long as such
request is made by noon (Memphis time), otherwise on the Business
Day following such request. All requests for purchase shall be
in writing. From and after the date it is so purchased, each
such Swingline Loan shall, to the extent purchased, (i) be
treated as a Swingline Loan made by the purchasing Banks and not
by the Swingline Lender for all purposes under this Credit
Agreement and the payment of the purchase price by a Bank shall
be deemed to be the making of a Swingline Loan by such Bank and
shall constitute outstanding principal under the Swingline Note.
All interest accruing on or attributable to such Swingline Loan
for the period prior to the date of such purchase shall be paid
when due by the Borrower to the Swingline Lender and all such
amounts accruing on or attributable to such Loans for the period
from and after the date of such purchase shall be paid when due
by the Borrower to the Agent for the benefit of the purchasing
Banks. If prior to purchasing its pro rata share of a Swingline
Loan one of the events described in Section 10(h) shall have
occurred and such event prevents the consummation of the purchase
contemplated by preceding provisions, each Bank will purchase an
undivided participating interest in the outstanding Swingline
Loan in an amount equal to its pro rata share. From and after
the date of each Bank's purchase of its participating interest in
a Swingline Loan, if the Swingline Lender receives any payment on
account thereof, the Swingline Lender will distribute to such
Bank its participating interest in such amount (appropriately
adjusted, in the case of interest payments, to reflect the period
of time during which such Bank's participating interest was
outstanding and funded); provided, however, that in the event
that such payment was received by the Swingline Lender and is
required to be returned to the Borrowers, each Bank will return
to the Swingline Lender any portion thereof previously
distributed by the Swingline Lender to it. If any Bank fails to
so purchase its pro rata share of any Swingline Loan, such Bank
shall be deemed to be a Defaulting Bank hereunder.
2.2 Optional Prepayments The Borrowers may, at its
option, at any one time or from time to time, prepay the Loans in
whole or in part, upon at least one Business Day's prior notice
to the Agent. Such notice shall be irrevocable, and the payment
amount specified in such notice shall be due and payable on the
date specified. Upon receipt of such notice the Agent shall
promptly notify each Bank thereof.
2.3 Requirements of Law.
(a) In the event that any Change in Law with respect to any
Bank shall, in the reasonable opinion of such Bank, require that
any Commitment of such Bank be treated as an asset or otherwise
be included for purposes of calculating the appropriate amount of
capital to be maintained by such Bank or any corporation
controlling such Bank, and such Change in Law shall have the
effect of reducing the rate of return on such Bank's or such
corporation's capital, as the case may be, as a consequence of
such Bank's obligations hereunder to a level below that which
such Bank or such corporation, as the case may be, could have
achieved but for such Change in Law (taking into account such
Bank's or such corporation's policies, as the case may be, with
respect to capital adequacy) by an amount reasonably deemed by
such Bank to be material, then from time to time following notice
by such Bank to the Borrowers of such Change in Law as provided
in paragraph (b) of this subsection 2.3, within 15 days after
demand by such Bank, the Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank or such
corporation, as the case may be, for such reduction, provided
that other borrowers of such Bank with credit facilities
comparable to the credit facilities provided pursuant to this
Credit Agreement are similarly impacted.
(b) If any Bank becomes entitled to claim any additional
amounts pursuant to this subsection 2.3, it shall promptly notify
the Borrowers through the Agent of the event by reason of which
it has become so entitled. Each Bank agrees that, upon the
occurrence of any event giving rise to the operation of paragraph
(a) of this subsection 2.3 with respect to such Bank, it will, to
the extent permitted by law or by the relevant Governmental
Authority, endeavor in good faith to avoid or minimize the
increase in costs or reduction in payments resulting from such
event; provided, however, that such avoidance or minimization can
be made in such a manner that such Bank, in its reasonable
determination, suffers no economic, legal or regulatory
disadvantage. If any Bank has notified the Borrower through the
Agent of any increased costs pursuant to paragraph (a) of this
subsection 2.3, the Borrowers at any time thereafter may, upon at
least five Business Days' notice to the Agent which shall
promptly notify the Banks thereof, and reduce or terminate such
Bank's Commitment in accordance with subsection 4.6.
(c) Each Bank (i) represents to the Borrowers (for the
benefit of the Borrowers and the Agent) that under applicable law
and treaties no taxes are required to be withheld by the
Borrowers, the Agent or such Bank with respect to any payments to
be made to such Bank in respect of the Loans or the L/C
Participating Interests, (ii) agrees to furnish to the Borrowers
(with a copy to the Agent) either U.S. Internal Revenue Service
Form 4224 or U.S. Internal Revenue Service Form 1001 (wherein
such Bank claims entitlement to complete exemption from U.S.
federal withholding tax on all interest payments hereunder) and
(iii) agrees (for the benefit of the Borrowers and the Agent) to
provide the Borrowers (with a copy to the Agent) a new Form 4224
or Form 1001 upon the expiration or obsolescence of any
previously delivered form and comparable statements in accordance
with applicable U.S. laws and regulations and amendments duly
executed and completed by such Bank, and to comply from time to
time with all applicable U.S. laws and regulations with regard to
such withholding tax exemption. Notwithstanding any provision of
subsection 2.3 to the contrary, the Borrowers shall have no
obligation to pay any amount to or for the account of any Bank on
account of any taxes pursuant to this subsection 2.3 to the
extent that such amount results from (i) the failure of any Bank
to comply with its obligations pursuant to this subsection 2.3 or
(ii) any representation or warranty made or deemed to be made by
any Bank pursuant to this subsection 2.3(c) proving to have been
incorrect, false or misleading in any material respect when so
made or deemed to be made.
(d) A certificate in reasonable detail as to any amounts
submitted by such Bank through the Agent to the Borrowers shall
be conclusive in the absence of manifest error. The covenants
contained in this subsection 2.3 shall survive the termination of
this Credit Agreement and payment of the outstanding Notes.
2.4 Use of Proceeds. The Borrower shall use all the
proceeds of the Swingline Loans for the short term working
capital requirements of the Borrowers arising in the ordinary
course of business.
SECTION 3. LETTER OF CREDIT FACILITY
3.1 Issuance of Letters of Credit.
(a) Subject to the terms and conditions hereof, the Issuing
Bank, on behalf of the Banks, and in reliance on the agreement of
the Banks set forth in subsection 3.10, agrees to issue for the
account of the Borrowers, from time to time during the Letter of
Credit Commitment Period, Letters of Credit. A Borrower may from
time to time request the Issuing Bank to issue a Trade L/C or a
Standby L/C by delivering to the Issuing Bank at its address
specified in subsection 13.2, a letter of credit application in
the Issuing Bank's then customary form for Trade L/Cs (a "Trade
L/C Application") or an application in the Issuing Bank's
customary form for Standby L/Cs (a "Standby L/C Application")
completed to the satisfaction of the Issuing Bank, together with
such other certificates, documents and other papers and
information as the Issuing Bank may reasonably request.
(b) Each Letter of Credit issued hereunder shall, among
other things, (i) be in such form requested by such Borrower as
shall be acceptable to the Issuing Bank in its reasonable
discretion, (ii) as to Trade L/C's, have an expiry date not later
than 150 days after the date of issuance of such Trade L/C, (iii)
as to Standby L/Cs, have an expiry date not later than one year
after the date of issuance of such Standby L/C and (iv) as to
both Trade L/C's and Standby L/C's have an expiry date not later
than the Letter of Credit Termination Date. Each L/C Application
and each Letter of Credit shall be subject to the Uniform Customs
and Practice for Documentary Credit (1983 Revisions),
International Chamber of Commerce Publication No. 400 and
subsequent revisions thereof approved by a Congress of such
Chamber, and if requested by the Issuing Bank, Article V of the
UCC and, to the extent not inconsistent therewith, the laws of
the State of Tennessee. The aggregate amount of Standby L/Cs
issued hereunder at any time may not exceed $500,000.00.
(c) The obligation of the Borrowers to reimburse the Banks
for any payments made under the Letter of Credit Facility is
evidenced by promissory notes executed by the Borrowers in the
original amount of the Letter of Credit Commitment (individually,
a "Letter of Credit"; collectively, "Letter of Credit Notes").
3.2 Participating Interests. Effective in the case of each
Letter of Credit as of the date of the opening thereof, the
Issuing Bank agrees to allot and does allot, to itself and each
other Bank, and each Bank severally and irrevocably agrees to
take and does take in such Letter of Credit and the related L/C
Application, an L/C Participating Interest in a percentage equal
to such Bank's Letter of Credit Commitment Percentage.
3.3 Procedure for Opening Letters of Credit. The Issuing
Bank will notify each Bank after the end of each calendar month
of any L/C Applications received by the Issuing Bank from the
Borrowers during such month. Upon receipt of any L/C Application
from a Borrower, the Issuing Bank will process such L/C
Application, and the other certificates, documents and other
papers delivered to the Issuing Bank in connection therewith, in
accordance with its customary procedures and, subject to the
terms and conditions hereof, shall promptly open such Letter of
Credit by issuing the original of such Letter of Credit to the
beneficiary thereof and by furnishing a copy thereof to the
requesting Borrower and, after the end of the calendar month in
which such Letter of Credit was opened, to the other Banks,
provided that no such Letter of Credit shall be issued if, after
given effect thereto, the L/C Exposure would exceed the Letter of
Credit Commitment.
3.4 Payments in Respect of Letters of Credit.
(a) The Borrowers agree forthwith upon demand by the Issuing
Bank and otherwise in accordance with the terms of the L/C
Application relating thereto, (i) to reimburse the Issuing Bank
for any payment made by the Issuing Bank under any Letter of
Credit and (ii) to pay interest on any unreimbursed portion of
any such payment from the date of such payment until
reimbursement in full thereof at a rate per annum equal to
(A) prior to the date which is one Business Day after the day on
which the Issuing Bank demands reimbursement from the Borrowers
for such payment, at the AmSouth Rate and (B) on such date and
thereafter, three and one-half percent (3.5%) per annum above the
AmSouth Rate.
(b) In the event that the Issuing Bank makes a payment
under any Letter of Credit and is not reimbursed in full therefor
forthwith upon demand of the Issuing Bank, and otherwise in
accordance with the terms of the L/C Application relating to such
Letter of Credit, the Issuing Bank will promptly notify each
other Bank. Forthwith upon its receipt of any such notice, each
other Bank will transfer to the Issuing Bank, in immediately
available funds, an amount equal to such other Bank's pro rata
share of the L/C Obligation arising from such unreimbursed
payment.
(c) Whenever, at any time after the Issuing Bank has made a
payment under any Letter of Credit and has received from any
other Bank such other Bank's pro rata share of the L/C Obligation
arising therefrom, the Issuing Bank receives any reimbursement on
account of such L/C Obligation or any payment of interest on
account thereof, the Issuing Bank will distribute to such other
Bank its pro rata share thereof in like funds as received;
provided however, that in the event that the receipt by the
Issuing Bank of such reimbursement or such payment of interest
(as the case may be) is required to be returned, such other Bank
will return to the Issuing Bank any portion thereof previously
distributed by the Issuing Bank to it in like funds as such
reimbursement or payment is required to be returned by the
Issuing Bank.
3.5 Letter of Credit Fees.
(a) In lieu of any Letter of Credit commissions and fees
provided for in any L/C Application relating to Standby L/Cs
(other than standard issuance, amendment and negotiation fees
customarily charged by AmSouth), the Borrowers agree to pay the
Agent for the account of the Issuing Bank and the Participating
Banks, with respect to each Standby L/C, a non-refundable Standby
L/C fee equal to one and one quarter percent (1.25%) of the
amount available to be drawn under each Standby L/C. Said fee
shall be payable on the date of issuance of such Standby L/C, and
calculated on the basis of a 360-day year for actual days elapsed
from the date of issuance to the expiration date of such Standby
L/C.
(b) In lieu of any Letter of Credit commissions and fees
provided for in any L/C Application relating to Trade L/Cs, the
Borrowers agree to pay the Agent for the account of the Issuing
Bank and the Participating Banks, with respect to each Trade L/C,
a Trade L/C examination fee of one quarter of one percent (.25%)
of the face amount of each Trade L/C, payable when presented for
payment. After Default, the Agent will disburse any Trade L/C
fees received pursuant to this subsection 3.5 to the respective
Banks promptly following the end of the calendar month in which
such Trade L/C fees were received.
(c) In lieu of any Letter of Credit commissions and fees
provided for in any L/C Application relating to Trade L/Cs, the
Borrowers agree to pay AmSouth, for its own separate account,
with respect to each Trade L/C, issuance and amendment fees in
accordance with the following table:
Opening Swift/Telex
Issuance $27.50 $20.00
Amendments $22.50 $12.50
(d) For purposes of any payment of fees required pursuant
to this subsection 3.5, the Agent agrees to provide to the
Borrowers a statement of any such fees to be so paid; provided
that the failure by the Agent to provide the Borrowers with any
such invoice shall not relieve the Borrowers of their obligation
to pay such fees.
3.6 Letter of Credit Reserves.
(a) If any Change in Law shall either (i) impose, modify,
deem or make applicable any reserve, special deposit, assessment
or similar requirement against letters of credit issued by the
Issuing Bank or (ii) impose on the Issuing Bank any other
condition regarding this Credit Agreement or any Letter of
Credit, and the result of any event referred to in clause (i) or
(ii) above shall be to increase the cost of the Issuing Bank
issuing or maintaining any Letter of Credit (which increase in
cost shall be the result of the Issuing Bank's reasonable
allocation of the aggregate of such cost increases resulting from
such events), then, upon demand by the Issuing Bank, the
Borrowers shall immediately pay to the Issuing Bank, from time to
time as specified by the Issuing Bank, additional amounts which
shall be sufficient to compensate the Issuing Bank for such
increased cost, together with interest on each such amount from
the date demanded until payment in full thereof at a rate per
annum equal to the AmSouth Rate, provided that other borrowers
of such Bank with credit facilities comparable to the credit
facilities provided pursuant to this Credit Agreement are
similarly impacted. A certificate, setting forth in reasonable
detail the calculation of the amounts involved, submitted by the
Issuing Bank to the Borrowers concurrently with any such demand
by the Issuing Bank, shall be conclusive, absent manifest error,
as to the amount thereof.
(b) In the event that any Change in Law with respect to the
Issuing Bank shall, in the reasonable opinion of the Issuing
Bank, require that any obligation under any Letter of Credit be
treated as an asset or otherwise be included for purposes of
calculating the appropriate amount of capital to be maintained by
the Issuing Bank or any corporation controlling the Issuing Bank,
and such Change in Law shall have the effect of reducing the rate
of return on the Issuing Bank's or such corporation's capital, as
the case may be, as a consequence of the Issuing Bank's
obligations under such Letter of Credit to a level below that
which the Issuing Bank or such corporation, as the case may be,
could have achieved but for such Change in Law (taking into
account the Issuing Bank's or such corporation's policies, as the
case may be, with respect to capital adequacy) by an amount
deemed by the Issuing Bank to be material, then from time to time
following notice by the Issuing Bank to the Borrowers of such
Change in Law, within 15 days after demand by the Issuing Bank,
the Borrowers shall pay to the Issuing Bank such additional
amount or amounts as will compensate the Issuing Bank or such
corporation, as the case may be, for such reduction provided that
other borrowers of such Issuing Bank with a letter of credit
facility comparable to the Letter of Credit Facility provided
pursuant to this Credit Agreement are similarly impacted. The
Issuing Bank agrees that, upon the occurrence of any event giving
rise to the operation of paragraph (a) or (b) of this subsection
3.6 with respect to such Issuing Bank, it will, to the extent
permitted by law or by the relevant Governmental Authority,
endeavor in good faith to avoid or minimize the increase in costs
or reduction in payments resulting from such event; provided,
however, that such avoidance or minimization can be made in such
a manner that such Issuing Bank, in its reasonable determination,
suffers no economic, legal or regulatory disadvantage. If the
Issuing Bank becomes entitled to claim any additional amounts
pursuant to this subsection 3.6(b), it shall promptly notify the
Borrowers of the event by reason of which it has become so
entitled. A certificate, in reasonable detail setting forth the
calculation of the amounts involved, submitted by the Issuing
Bank to the Borrowers concurrently with any such demand by the
Issuing Bank, shall be conclusive, absent manifest error, as to
the amount thereof.
(c) The Borrowers and each Participating Bank agrees that
(i) the provisions of the foregoing paragraphs (a) and (b) and
(ii) the provisions of each L/C Application providing for
reimbursement or payment to the Issuing Bank in the event of the
imposition or implementation of, or increase in, any reserve,
special deposit, capital adequacy or similar requirement in
respect of the Letter of Credit relating thereto, shall apply
equally to each Participating Bank in respect of its L/C
Participating Interest in such Letter of Credit, as if the
references in such paragraphs and provisions referred to, where
applicable, such Participating Bank or any corporation
controlling such Participating Bank.
3.7 Further Assurances. The Borrowers hereby agree, from
time to time, to do and perform any and all acts and to execute
any and all further instruments reasonably requested by the
Issuing Bank more fully to effect the purposes of this Credit
Agreement and the issuance of Letters of Credit hereunder.
3.8 Obligations Absolute. The payment obligations of the
Borrowers under this Credit Agreement with respect to the Letters
of Credit 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) the existence of any claim, set-off, defense or other
right which any Borrower may have at any time against any
beneficiary, or any transferee, of any Letter of Credit (or any
Persons for whom any such beneficiary or any such transferee may
be acting), the Issuing Bank, the Agent or any Bank, or any other
Person, whether in connection with this Credit Agreement, the
Related Documents, any Basic Documents, the transactions
contemplated herein, or any unrelated transaction;
(b) any statement or any other document presented under any
Letter of Credit proving to be forged, fraudulent or invalid or
any statement therein being untrue or inaccurate in any respect,
except for any such circumstances or happening constituting gross
negligence or willful misconduct on the part of the Issuing Bank;
(c) payment by the Issuing Bank under any Letter of Credit
against presentation of a draft or certificate which does not
comply with the terms of such Letter of Credit or is insufficient
in any respect, except where such payment constitutes gross
negligence or wilful misconduct on the part of the Issuing Bank;
or
(d) any other circumstances or happening whatsoever,
whether or not similar to any of the foregoing, except for any
such circumstances or happening constituting gross negligence or
willful misconduct on the part of the Issuing Bank.
3.9 Assignments. No Participating Bank's participation in
any Letter of Credit or any of its rights or duties hereunder
shall be subdivided, assigned or transferred (other than in
connection with a transfer of part or all of such Participating
Bank's Letter of Credit Commitment in accordance with Section 12)
without the prior written consent of the Issuing Bank, which
consent will not be unreasonably withheld. Such consent may be
given or withheld without the consent or agreement of any other
Participating Bank.
3.10 Participations. Each Bank's obligation to purchase
participating interests pursuant to subsection 3.2 shall be
absolute and unconditional and shall not be affected by any
circumstance, including, without limitation, (i) any set-off,
counterclaim, recoupment, defense or other right which such Bank
may have against the Issuing Bank, the Borrowers or any other
Person for any reason whatsoever; (ii) the occurrence or
continuance of an Event of Default; (iii) any adverse change in
the condition (financial or otherwise) of the Borrowers; (iv) any
breach of this Credit Agreement by the Borrowers or any other
Bank; or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.
SECTION 4. INTEREST RATE PROVISIONS; FEES; PAYMENTS
4.1 Procedure for Borrowing.
(a) Swingline Loans shall be made available to the Borrowers
by the Swingline Lender's crediting the Operating Account. Said
crediting shall be made automatically as the Borrowers' Operating
Account falls below a zero balance (the "Zero Account Balance").
Any funds in the Operating Account in excess of the Zero Account
Balance shall be applied first, to repay any outstanding interest
on the Swingline Loans and second, to prepay any outstanding
principal under the Swingline Loans. Notwithstanding the
foregoing, Swingline Lender shall have the right, in its
reasonable discretion and upon written notice to the Borrowers,
to terminate the automatic feature of the borrowings under the
Swingline Loans and to require the Borrowers to thereafter
provide notice to Swingline Lender prior to such borrowings, such
notice to be made in accordance with Swingline Lender's
instructions.
(b) Swingline Loans shall bear interest on the unpaid
principal amount thereof at a variable rate per annum equal to
the AmSouth Rate. Accrued interest on such principal as shall be
outstanding from time to time shall be due and payable on a
monthly basis on each Interest Payment Date and the entire
outstanding principal shall be due and payable on the Swingline
Loan Termination Date. Additional payments of principal and
interest shall be made pursuant to the terms of subsection 4.1(a)
hereof.
4.2 Interest Rates and Payment Dates.
(a) Swingline Loans shall bear interest for the period from
and including the date such Loans are made to, but excluding, the
maturity date thereof on the unpaid principal amount thereof at a
rate per annum equal to the AmSouth Rate.
(b) If all or a portion of the principal amount of any of
the Swingline Loans shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise) then any such
overdue principal amount shall, without limiting the rights of
the Banks under Section 10, bear interest at a rate per annum
which is 3.5% above the AmSouth Rate from the date of such non-
payment until paid in full (including interest after judgment as
well as before judgment).
(c) Interest shall be payable in arrears on each Interest
Payment Date.
4.3 Computation of Interest and Fees.
(a) Interest and fees (except fees pursuant to subsections
3.5(b) and 4.5(b) or as otherwise set forth herein) shall be
calculated on the basis of a 360 day year, as applicable for the
actual days elapsed. Any change in the interest rate on the
Loans resulting from a change in the AmSouth Rate shall become
effective, without notice, as of the opening of business on the
day on which such change in the AmSouth Rate shall become
effective.
(b) Each determination of an interest rate by the Banks
pursuant to any provision of this Credit Agreement shall be
conclusive and binding on the Borrowers and the Banks in the
absence of manifest error.
4.4 Pro Rata Treatment and Payments.
(a) Each borrowing of Loans by the Borrowers from the Banks
and any reduction of the Commitments of the Banks hereunder shall
be made pro rata according to the relevant Commitment Percentages
of the Banks.
(b)(i) Except for payments (including prepayments) to be
made by the Borrowers to the Swingline Lender on account of
principal, interest and fees due under the Swingline Loans, all
payments (including prepayments) to be made by the Borrowers on
account of principal, interest and fees shall be made to the
Agent for the account of the Banks at the Agent's office located
at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, in
lawful money of the United States of America and in immediately
available funds. The Agent shall promptly distribute such
payments upon receipt in like funds as received (except the fee
payable pursuant to subsection 4.5(b)); (ii) all payments
(including prepayments) to be made by the Borrowers to the
Swingline Lender on account of principal, interest and fees due
under the Swingline Loans shall be made to the Swingline Lender
for the individual benefit of the Swingline Lender at the
Swingline Lender's office located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, in lawful money of the United
States of America and in immediately available funds.
(c) Unless the Agent shall have been notified in writing by
any Bank prior to a Borrowing Date that such Bank will not make
the amount which would constitute its Commitment Percentage of
the borrowing on such date available to the Agent, the Agent may
assume that such Bank has made such amount available to the Agent
on such Borrowing Date and the Agent may, in reliance upon such
assumption, make a corresponding amount available to the
Borrower. If such amount is made available to the Agent by such
Bank on a date after such Borrowing Date, such Bank shall pay to
the Agent on demand an amount equal to the product of (i) the
daily average Federal funds rate during such period as quoted by
the Agent, times (ii) the amount of such Bank's Commitment
Percentage of such borrowing, times (iii) a fraction the
numerator of which is the number of days that elapse from and
including such Borrowing Date to the date on which such Bank's
Commitment Percentage of such borrowing shall have become
immediately available to the Agent and the denominator of which
is 360, as applicable. A certificate of the Agent submitted to
any Bank with respect to any amounts owing under this subsection
4.4(c) shall be conclusive, absent manifest error. If such
Bank's Commitment Percentage of such borrowing is not in fact
made available to the Agent by such Bank within three Business
Days after such Borrowing Date, the Agent shall be entitled to
recover such amount with interest thereon at the rate per annum
equal to the AmSouth Rate, on demand, from the Borrowers, without
prejudice to any rights which the Borrower or the Agent may have
against such Bank hereunder. Nothing contained in this
subsection 4.4(c) shall relieve any Bank which has failed to make
available its ratable portion of any borrowing hereunder from its
obligation to do so in accordance with the terms hereof.
(d) The failure of any Bank to make the Loan to be made by
it on any Borrowing Date shall not relieve any other Bank of its
obligation, if any, hereunder to make its Loan on such Borrowing
Date, but no Bank shall be responsible for the failure of any
other Bank to make the Loan to be made by such other Bank on such
Borrowing Date.
4.5 Fees.
(a) Quarterly Commitment Fees. The Borrowers agree to pay
to the Agent (i) for the account of each Bank a commitment fee
from and including the Closing Date to but not including the
Letter of Credit Termination Date, computed at the rate of 1/4
of 1% per annum on the average daily amount of the Available
Letter of Credit Commitment of such Bank, such fee to be payable
quarterly in arrears and on the Letter of Credit Termination
Date, or such earlier date as the Letter of Credit Commitments
shall terminate as provided herein, and the accrual of such fee
shall commence on the Closing Date, and (ii) for the account of
the Swingline Lender, a commitment fee from and including the
Closing Date to but not including the last day of the Swingline
Loan Termination Date, computed at the rate of 1/4 of 1% per
annum of the Swingline Loan Commitment, such fee to be payable
quarterly in arrears and on the last day of the Swingline Loan
Termination Date, or such earlier date as the Swingline Loan
Commitment shall terminate as provided herein, and the accrual of
such fee shall commence on the Closing Date.
(b) Agent's Fee. The Borrowers shall pay to the Agent for
its own benefit an agent's fee in an amount and upon terms set
forth in the Agent's fee letter dated June 30, 2000, between
the Borrowers and AmSouth.
(c) Upfront Fee. The Borrowers have paid to the Agent an
upfront fee of $25,000.00 for the ratable benefit of the Banks.
4.6 Changes of Commitment Amounts/Prepayment
(a) The Borrowers shall have the right, upon not less than
three Business Days' notice to the Agent, to terminate or, from
time to time, proportionately reduce the unused portions of the
Letter of Credit Commitments. To the extent, if any, that the
L/C Exposure exceeds the amount of the Letter of Credit
Commitments as then reduced, the Borrowers shall be required to
make a prepayment equal to the excess amount, the proceeds of
which shall be applied first, to payment of L/C Obligations, and
last, to cash collateralize any outstanding Letters of Credit on
terms reasonably satisfactory to the Required Banks. Any
complete termination of the Letter of Credit Commitment shall be
accompanied by prepayment in full of the L/C Obligations and by
cash collateralization of any outstanding Letters of Credit on
terms reasonably satisfactory to the Agent. Upon the complete
termination of the Letter of Credit Commitments, any Letter of
Credit then outstanding which has been so fully cash
collateralized shall no longer be considered a "Letter of Credit"
as defined in subsection 1.1 and (i) if such Letter of Credit is
a Standby L/C, then fees will be due in an amount equal to one
and one-quarter percent (1.25%) per annum on the amount available
to be drawn under each such Standby L/C and (ii) any L/C
Participating Interests heretofore granted by the Issuing Bank to
the Banks in such Letter of Credit shall be deemed terminated.
With respect to Letters of Credit, "fully cash collateralized"
shall mean that the contingent obligation of the Borrowers to
reimburse the Issuing Bank for any subsequent drawings thereafter
made shall be fully secured beforehand by cash collateral
specifically held by the Agent for such purposes in an amount
equal to the undrawn amount of such Letter of Credit or otherwise
be secured in a manner acceptable to the Issuing Bank. Any
partial reduction of the Letter of Credit Commitments shall be in
an amount of $1,000,000 or a whole multiple of $500,000 in excess
thereof and shall in each case reduce permanently the Commitments
so affected. Any complete termination of the Swingline Loan
Commitment shall be accompanied by a prepayment in full of the
outstanding Swingline Commitment Loans.
(b) Once terminated or reduced the Commitments so affected
may not be reinstated.
(c) Any prepayments or reduction in Commitments may be made
by the Borrowers without premium or penalty.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions Precedent to this Credit Agreement. The
terms and provisions of this Credit Agreement shall not become
effective until the Closing Date. Accordingly, until the Closing
Date, the Commitments, as defined in this Credit Agreement, shall
not be in effect and the Banks shall not be obligated to make any
Loans or issue any Letters of Credit hereunder until the Closing
Date occurs. The obligation of the Banks to make the Loans or
issue Letters of Credit pursuant to the terms and conditions of
this Credit Agreement shall be subject to the fulfillment of the
following conditions to the satisfaction of the Agent:
(a) Credit Agreement and Notes. Each Bank shall have
received an original of this Credit Agreement duly executed by a
duly authorized officer of each of the Borrowers and a Letter of
Credit Note, duly executed by a duly authorized officer of each
of the Borrowers, each conforming to the requirements hereof.
AmSouth shall have received an original of the Swingline Note,
duly executed by a duly authorized officer of each of the
Borrowers.
(b) Legal Opinions of Counsel to the Borrowers and the
Parent. Each Bank shall have received a counterpart of an
opinion, dated the Closing Date, of Waring ▇▇▇, PLC, counsel to
the Borrowers and the Parent.
(c) Corporate Proceedings. Each Bank shall have received a
copy of the resolutions of the Boards of Directors of the
corporate Borrowers and Parent authorizing (i) the execution,
delivery and performance of each of the Basic Documents to which
it is a party, (ii) the borrowings and applications for Letters
of Credit provided for herein and (iii) the granting by Borrowers
of the security interests granted by them pursuant to the
Security Documents, all as certified by the Secretary or
Assistant Secretary of the Parent and the relevant Borrower as of
the Closing Date, which certificate shall state that the
resolutions thereby certified have not been amended, modified,
revoked or rescinded as of the Closing Date.
(d) Incumbency Certificates. Each Bank shall have received
a counterpart of a certificate of the Secretary or an Assistant
Secretary of the Parent and the relevant Borrowers dated the
Closing Date, as to the incumbency and signature of the officer
or officers signing each of the Basic Documents to which it is a
party and any other certificate or other document to be delivered
pursuant thereto, together with evidence of the incumbency of
such Secretary or Assistant Secretary.
(e) Corporate Documents. Each Bank shall have received
(i) a copy of the Certificate of Incorporation of the Parent and
each of the corporate Borrowers certified by the Secretary of
State of the state of its incorporation and (ii) a copy of the
Bylaws (as amended through the Closing Date) of the Parent and
each of the corporate Borrowers, certified by a respective
Secretary or Assistant Secretary of the Parent and each of the
corporate Borrowers.
(f) Partnership Documents. Each Bank shall have received
(i) a copy of the Certificate of Limited Partnership of each
limited partnership Borrower certified by the Secretary of State
of the state of its formation, (ii) a copy of the Agreement of
Limited Partnership of each limited partnership Borrower,
certified by such Borrower's general partner; (iii) a copy of the
Partnership Agreement of each general partnership Borrower,
certified by a general partner.
(g) Collateral Security. Each Bank shall have received a
counterpart of each of the following documents, each duly
executed and delivered by the applicable party thereto and each
of which shall be in full force and effect:
(i) the Security Agreements; and
(ii) the Guaranties.
(h) Consents, Licenses, Approvals, etc. Each Bank shall
have received, together with executed certificates, true copies
(in each case certified as to authenticity on such date by a duly
authorized officer of the applicable Borrowers and Parent of all
documents and instruments, including, in the reasonable judgment
of the Borrowers and Parent and the Agent, all material consents
(including, without limitation, all material landlord consents),
authorizations and filings licenses and approvals, if any,
required in connection with the execution, delivery and
performance by the Parent and the applicable Borrowers and the
validity and enforceability of, this Credit Agreement, the Notes
and the other Basic Documents, and such licenses and approvals
shall be in full force and effect.
(i) No Legal Restraints. There shall be no litigation,
inquiry, injunction, restraining order, investigation or
proceeding of or before any Governmental Authority (including any
proposed statute, rule or regulation) pending or, to the best
knowledge of the Borrowers threatened against the Parent or any
Borrower or any of their respective properties or revenues with
respect to the Basic Documents or any of the transactions
contemplated hereby or thereby. There shall be no injunction,
writ, preliminary restraining order or any order of any nature
issued by any Governmental Authority directing that any of the
transactions provided for herein, in the Notes, in any of the
other Basic Documents not be consummated as herein or therein
provided which, if adversely determined, would constitute a
Material Adverse Event.
(j) Fees. All fees required to be paid on or prior to the
Closing Date shall have been paid.
(k) Representations and Warranties. The representations,
warranties and disclosure made by the Borrowers in this Credit
Agreement or made by any of the Borrowers or the Parent in any
Basic Document, certificate, document or financial or other
statement furnished in connection herewith or therewith, shall be
true and correct in all material respects on and as of the
Closing Date with the same effect as if made on such date.
(l) Evidence of Insurance. The Agent shall have received
evidence satisfactory to it that the Borrowers have obtained all
policies of insurance required pursuant to subsection 7.6 and
pursuant to any of the Security Documents.
(m) UCC Filings. Documents (including, without limitation,
financing statements) required under any of the Security
Documents in order to create in favor of Agent, a perfected
security interest in the Collateral with respect to which a
security interest may be perfected by a filing under the UCC
shall have been executed and delivered to the Agent. UCC
Financing Statements shall be filed in the locations set forth on
Schedule 5.1(m) and Borrowers shall pay all necessary filing fees
and all taxes or other expenses related to such filings. Agent
shall have the right to file UCC financing statements in all
other jurisdictions upon its reasonable determination that such
filing is necessary to protect the Banks' interest in the
Collateral and Borrowers shall pay all necessary filing fees and
all taxes or other expenses related to such filings.
(n) Lien Search. The Agent shall have received the results
of recent lien searches in the jurisdictions listed on Schedule
5.1(n) and the results of such search shall reveal no Liens on
any assets of the Borrowers, except for Permitted Liens, and
other Liens approved by the Banks.
(o) Good Standing Certificates. The Agent shall have
received copies of certificates dated as of a recent date from
the Secretary of State or other appropriate authority of such
jurisdiction, evidencing the good standing of the Borrowers and
the Parent in the states identified on Schedule 5.1(o).
(p) No Default or Event of Default. No Default or Event of
Default shall have occurred and be continuing on the Closing Date
or after giving effect to the Loans to be made on such date. No
event of default (or condition which would constitute an event of
default with the giving of notice, the lapse of time, or both)
under material (in the reasonable opinion of the Required Banks)
contracts of the Borrowers and the Parent such as, but not
limited to, agreements with respect to capital stock, financing
documents and lease agreements shall have occurred and be
continuing on the Closing Date if such default would constitute a
Material Adverse Event.
(q) Material Adverse Change. For the period from the date
of execution of this Credit Agreement to the Closing Date, there
shall have been (i) no material adverse change in the business,
operations, properties, assets or financial condition of the
Borrowers taken as a whole or of the Parent and its Subsidiaries
taken as a whole and (ii) no occurrence or event which shall have
a material adverse effect on the rights and remedies of the Banks
or on the ability of the Borrowers taken as a whole and the
Parent and its Subsidiaries taken as a whole to perform their
respective obligations to the Banks. The Banks shall not have
become aware of any undisclosed materially adverse information
with respect to (i) the business, operations, properties, assets
or financial condition of the Parent and its Subsidiaries taken
as a whole or of the Borrowers taken as a whole, (ii) the ability
of the Borrowers and the Parent to perform their respective
obligations under the Basic Documents or (iii) the rights and
remedies of the Banks under the Basic Documents.
(r) Change in Market. As of the Closing Date, there shall
have been no material adverse change in the market for syndicated
bank credit facilities similar in nature to the transactions
described herein or a material disruption of, or a material
adverse change in, financial, banking or capital market
conditions.
(s) Inter-Company Indebtedness. With respect to the Inter-
Company Indebtedness described in subsection 9.1(f)(iii), the
Agent shall have received (i) the original note evidencing the
Inter-Company Indebtedness duly executed by an officer of the
Company and endorsed by the holder of the note to the Agent for
the ratable benefit of the Banks, to be held as security for the
Loans; (ii) the original security agreement encumbering the
Inventory of the Company, duly executed by an officer of the
Company and assigned to the Agent for the ratable benefit of the
Banks as security for the Loans; and (iii) a subordination
agreement duly executed by the Company, CSC and Catherines of
Nevada, Inc., all of which in the sole discretion of the Agent
and the Banks are acceptable to the Agent and the Banks.
(t) Additional Matters. All corporate and other
proceedings (and all documents referred to herein and not
appearing as exhibits hereto) in connection with the transactions
contemplated by this Credit Agreement, the Letter of Credit
Notes, the Swingline Note and the other Basic Documents shall be
reasonably satisfactory in form and substance to the Banks and
their respective counsel.
5.2 Conditions to Each Loan and Each Letter of Credit. The
obligation of the Banks to make any Loans requested to be made by
them on any date in accordance with and pursuant to the terms and
conditions of this Credit Agreement, and the obligation of the
Issuing Bank to issue any Letter of Credit requested to be opened
on any date in accordance with and pursuant to the terms and
conditions of this Credit Agreement, is subject to the
satisfaction of the following conditions as of the date such Loan
or Letter of Credit is requested to be made or issued, as the
case may be:
(a) Representations and Warranties. Each of the
representations and warranties made by the Borrowers and the
Parent, in or pursuant to the Basic Documents shall be true and
correct in all material respects on and as of such date as if
made on and as of such date.
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to
the Loans or the Letters of Credit requested to be made or
issued, as the case may be, on such date.
(c) Additional Matters. Each borrowing and each L/C
Application by the Borrowers hereunder shall constitute a
representation and warranty by the Borrowers as of the date of
such borrowing or issuance of such Letter of Credit that the
conditions contained in this subsection 5.2 have been satisfied.
(d) Parent Guaranty. No Event of Default, as defined in
the Parent Guaranty, shall have occurred and be continuing on
such date under the terms of the Parent Guaranty.
SECTION 6. REPRESENTATIONS AND WARRANTIES
In order to induce the Banks to enter into this Credit
Agreement and to make the Loans and issue the Letters of Credit,
the Borrowers hereby represent and warrant to each Bank that:
6.1 Financial Condition.
(a) The audited consolidated balance sheet of the Parent and
its Subsidiaries as of January 29, 2000, and the related
consolidated statements of common stockholders' equity and cash
flows and the consolidated statement of income and retained
earnings of the Parent and its Subsidiaries and the unaudited
consolidated balance sheet of the Parent and its Subsidiaries as
of April 29, 2000, and the related consolidated statements of
stockholders' equity and cash flows and the consolidated
statement of income and retained earnings of the Parent and its
Subsidiaries, together with the notes to such financial
statements, copies of each of which have heretofore been
furnished to each Bank, have been prepared in conformity with
GAAP consistently applied (except in each case as described in
the notes thereto) and on that basis fairly present the financial
condition and results of operations of the Parent and its
Subsidiaries as of and for the periods indicated.
(b Since April 29, 2000, there has been no material
adverse change in the business, operations, property, assets or
financial condition of the Borrowers taken as a whole or of the
Parent and its Subsidiaries taken as a whole and neither the
Parent nor any of the Borrowers has, since April 29, 2000,
incurred any material obligation, contingent or otherwise, which
constitutes a Material Adverse Event.
6.2 Entity Existence; Compliance with Law.
(a) Each of the corporate Borrowers (i) is duly
organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation, (ii) has the corporate
power and authority and the legal right to own or lease and
operate its property, and to conduct the business in which it is
currently engaged, (iii) is duly qualified as a foreign
corporation and in good standing under the laws of each
jurisdiction where failure to so qualify and remain in good
standing would constitute a Material Adverse Event and (iv) is in
compliance with all Requirements of Law where the failure to
comply would constitute a Material Adverse Event .
(b) Each of the partnership Borrowers (i) is duly
organized, validly existing and in good standing under the laws
of the jurisdiction of its formation, (ii) has the partnership
power and authority and the legal right to own or lease and
operate its property, and to conduct the business in which it is
currently engaged, (iii) is duly qualified as a foreign limited
partnership and in good standing under the laws of each
jurisdiction where failure so to qualify and remain in good
standing would constitute a Material Adverse Event and (iv) is
in compliance with all Requirements of Law where the failure to
so comply would constitute a Material Adverse Event.
6.3 Entity Power; Authorization; Enforceable Obligations.
(a) Each of the corporate Borrowers has the corporate power
and authority and each of the partnership Borrowers has the
partnership power and authority, to make, deliver and perform all
of its obligations in connection with this Credit Agreement, the
Notes and the other Basic Documents to which it is a party, and
each Borrower has the corporate power and authority to borrow
hereunder and to request the issuance of Letters of Credit
hereunder; each Borrower has taken all necessary corporate or
partnership action to authorize the borrowings and the issuance
of Letters of Credit on the terms and conditions of this Credit
Agreement and the Notes, and to authorize the execution, delivery
and performance by it of this Credit Agreement, the Notes and the
other Basic Documents to which it is a party. No consent or
authorization of, filing with, or other act by or in respect of,
any other Person is required in connection with the borrowings
hereunder, the issuance of Letters of Credit or with the
execution, delivery or performance by the Borrowers or the
validity of or enforceability against the Borrowers, of this
Credit Agreement or the other Basic Documents to which each is a
party (except such filings as are necessary in connection with
the perfection of the Liens created by such documents, which
filings have been duly made and/or obtained and are in full force
and effect). Each of this Credit Agreement, each Note and each
Basic Document to which each Borrower is a party has been duly
executed and delivered on behalf of each such Borrower. Each of
this Credit Agreement, each Note and each other Basic Document to
which each Borrower is a party constitutes a legal, valid and
binding obligation of each such Borrower, enforceable against the
Borrowers in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, moratorium
or other similar laws affecting creditors' rights generally, and
except as enforceability may be limited by general principles of
equity (whether considered in a suit at law or in equity).
6.4 No Legal Bar. The execution, delivery and performance
by each of the Borrowers, of this Credit Agreement, the Notes and
each other Basic Document to which it is a party and the
borrowing contemplated by this Credit Agreement and the Notes do
not and will not violate any Requirement of Law or any
Contractual Obligation applicable to or binding upon the
applicable Borrower or any of their properties or assets where
violation would constitute a Material Adverse Event or result in
the creation or imposition of any Lien on any such properties or
assets pursuant to the provisions of any Requirement of Law or
any Contractual Obligations other than the Lien of the Security
Documents.
6.5 No Material Litigation. Except as set forth in
Schedule 6.5 hereto, no litigation, investigation or proceeding
of or before any arbitrator or Governmental Authority in excess
of $1,000,000.00 is pending or, to the knowledge of the
Borrowers, threatened by or against any of the Borrowers or
against any of their properties or revenues.
6.6 No Default. None of the Borrowers is in default in the
payment or performance of any of their Contractual Obligations in
any respect which would result in a Material Adverse Event, and
no Default or Event of Default has occurred and is continuing
which would result in a Material Adverse Event. None of the
Borrowers is in default in any respect that is material to such
Borrower under any order, award or decree of any Governmental
Authority or arbitrator binding upon or affecting them or by
which any of their properties or assets may be bound or affected
which would result in a Material Adverse Event.
6.7 Ownership of Property; Liens. On the date hereof, each
of the Borrowers has good record title in fee simple to, or valid
and subsisting leasehold interests in, all its real property,
except as set forth on Schedule 6.7 hereto, and good title to or
valid and subsisting leasehold interests in all its other
property, and none of such property is subject to any Lien,
except for Permitted Liens and other Liens approved by the Banks.
6.8 Patents, Copyrights, Permits and Trademarks. Each of
the Borrowers owns, or has a valid license in, all material
domestic and foreign letters patent, patents, patent
applications, patent and know-how licenses, inventions,
technology, permits, trademark registrations and applications,
trademarks, trade names, trade secrets, service marks,
copyrights, product designs, applications, formulae, processes
and the industrial property rights ("proprietary rights") used in
the operation of its businesses in the manner in which they are
currently being conducted and planned to be conducted. None of
the Borrowers is aware of any material existing or threatened
infringement or misappropriation of any proprietary rights of
others by the Borrowers or of any proprietary rights of the
Borrowers by others which would result in a Material Adverse
Event.
6.9 No Burdensome Restrictions. No Contractual Obligation
of any of the Borrowers constitutes a Material Adverse Event.
6.10 Margin Regulations. None of the Borrowers are
engaged, nor will they engage, principally or as one of their
important activities, in the business of extending credit for the
purpose of "purchasing" or "carrying" any "margin stock" within
the respective meanings of each of the quoted terms under
Regulation U or Regulation G of the Board of Governors of the
Federal Reserve System as now and from time to time hereafter in
effect. No part of the proceeds of any Loan will be used for
"purchasing" or "carrying" "margin stock" as defined in
Regulation U of such Board of Governors.
6.11 Investment Company Act. None of the Borrowers is an
"investment company" registered or required to be registered
under the Investment Company Act of 1940, as amended, nor is it
controlled by such a company.
6.12 Disclosure. No statement or other form of disclosure
or representation and warranty made by the Borrowers in this
Credit Agreement or in any other Basic Document to which it is a
party, or in any financial statement, report, certificate or any
other document furnished in connection herewith or therewith
contains any materially untrue statement of a material fact or
omits to state any material fact necessary to make the statements
herein or therein not misleading. There is no fact known to any
of the Borrowers that has not been disclosed to each Bank in
writing prior to the date of this Credit Agreement with respect
to the transactions contemplated by this Credit Agreement and the
other Basic Documents which constitute a Material Adverse Event.
6.13 The Security Documents. The provisions of the
Security Agreements are effective to create in favor of the Agent
for the benefit of the Banks, a legal, valid and enforceable
security interest in all rights, title and interests of the
Borrowers in the collateral described therein; when financing
statements have been filed in the offices in the jurisdictions
listed in Schedule 5.1(m) hereto and when the Security Agreements
have been filed in the United States Patent and Trademark Office,
the Security Agreements shall constitute a fully perfected first
Lien on, and security interest in, all rights, title and
interests of the Borrowers in the Collateral described therein to
the extent the filing of financing statements under the Uniform
Commercial Code and the filing of the Security Agreement in the
United States Patent and Trademark Office are permissible methods
of perfection of security interests in the collateral described
therein in each such jurisdiction, subject to no prior Liens,
except for Permitted Liens and other Liens approved by the Banks.
6.14 ERISA. No Reportable Event that may result in a
liability that would have a material adverse effect on the
business, operations, property, assets or financial condition of
the Borrowers has occurred since December 10, 1987 with respect
to any Plan, and each Plan has complied and has been administered
in all material respects, in accordance with applicable
provisions of ERISA and the Code; provided, however, for the
period preceding December 10, 1987, to the best knowledge of the
Borrowers no Reportable Event that may result in a Material
Adverse Event has occurred with respect to any Plan, and each
Plan has complied and been administered in all material respects,
in accordance with the applicable provisions of ERISA and the
Code. The present value of all accrued benefits under each
Single Employer Plan maintained by the Borrowers or any Commonly
Controlled Entity (based on those assumptions used to fund such
Plan) did not, as of the last annual valuation date applicable
thereto, exceed the value of the assets of such Plan allocable to
such accrued benefits by more than $100,000. No Borrower or any
Commonly Controlled Entity has during the immediately preceding
six-year period had a complete or partial withdrawal from any
Multi-employer Plan that has resulted or could result in any
material adverse effect to the business, operations, property,
assets or financial condition of any Borrower or any Commonly
Controlled Entity, and the liability to which any Borrower or any
Commonly Controlled Entity would become subject under ERISA if
such Borrower or any Commonly Controlled Entity were to withdraw
completely from all Multi-employer Plans as of the most recent
valuation date applicable thereto is not in excess of $100,000.
No Borrower or any Commonly Controlled Entity has received notice
that any Multi-employer Plan is in Reorganization or is Insolvent
or, to the best knowledge of each Borrower, is any such Multi-
employer Plan in Reorganization or Insolvent nor, to the best
knowledge of each Borrower, is any such Reorganization or
Insolvency reasonably likely to occur. The present value
(determined using actuarial and other assumptions which are
reasonable in respect of the benefits provided and the employees
participating) of the liability of any Borrower for post-
retirement benefits to be provided to its current and former
employees under Plans which are welfare benefit plans (as defined
in Section 3(1) of ERISA) does not, in the aggregate, exceed the
assets under all such Plans allocable to such benefits by an
amount in excess of $1,000,000.
6.15 Subsidiaries. The only Subsidiaries of the Company
and CSC which are not Borrowers as of the effective date of this
Credit Agreement are the Persons set forth on Schedule 6.15
hereto. These Subsidiaries will be added as Borrowers within a
reasonable period of time following the Closing Date.
6.16 Environmental Matters. Except as disclosed in
Schedule 6.16, each of the following representations and
warranties is true and correct in all material respects to the
extent that the facts and circumstances giving rise to any such
failure to be so true and correct, in the aggregate, could not
reasonably be expected to constitute a Material Adverse Event.
(a) To the knowledge of the Borrowers, none of the
properties owned by any of the Borrowers contains any Materials
of Environmental Concern in amounts or concentrations which
constitute a violation of, or could reasonably give rise to
liability under, Environmental Laws.
(b) No Borrower has received any written notice alleging
that any or all of the properties of such Borrower are not in
compliance with all applicable Environmental Laws. Further, no
Borrower has received any written notice alleging the existence
of any contamination at or under such properties in amounts or
concentrations which constitute a violation of any Environmental
Law, or any violation of any Environmental Law with respect to
such properties for which a Borrower is or could be liable.
(c) No Borrower has received any written notice of non-
compliance, liability or potential liability regarding
Environmental Laws with regard to any of the properties of such
Borrower nor does any Borrower have knowledge that any such
notice will be received or is being threatened.
(d) To the knowledge of the Borrowers during the ownership
of the properties by any or all of the Borrowers, Materials of
Environmental Concern have not been transported or disposed of
from the properties of any Borrower in violation of, or in a
manner or to a location which could reasonably give rise to
liability of any Borrower under Environmental Laws, nor during
the ownership of the properties by any or all of Borrowers have
any Materials of Environmental Concern been generated, treated,
stored or disposed of at, on or under any of such properties in
violation of, or in a manner that could give rise to liability of
any Borrower under any applicable Environmental Laws.
(e) No judicial proceedings or governmental or
administrative action is pending, or, to the knowledge of the
Borrowers, threatened, under any Environmental Law to which any
Borrower is named as a party with respect to the properties of
such entity, nor are there any consent decrees or other decrees,
consent orders, administrative order or other orders, or other
administrative or judicial requirements outstanding under any
Environmental Law with respect to such properties for which any
Borrower is or could be liable.
(f) To the knowledge of the Borrowers during the ownership
of the properties by any or all of the Borrowers, there has been
no release or threat of release of Materials of Environmental
Concern at or from the properties of any Borrower or arising from
or related to the operations of such entity in connection with
the properties in violation of or in amounts or in a manner that
could give rise to liability under Environmental Laws.
6.17 Solvency.
(a) Immediately after the Closing Date and immediately
following the making of each Loan and after giving effect to the
application of the proceeds of such Loans, (i) the fair value of
the assets of each of the Company, CSC and the consolidated group
of Material Borrowers taken as a whole, at a fair valuation, will
exceed the debts and liabilities, subordinated, contingent or
otherwise of such Company, CSC and such consolidated group of
Material Borrowers taken as a whole; (ii) the present fair
saleable value of the properties and assets of each of the
Company, CSC and the consolidated group of Material Borrowers
will be greater than the amount that will be required to pay the
probable liability of such Company, CSC and such consolidated
group of Material Borrowers on their debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other
liabilities become absolute and matured; (iii) each of the
Company, CSC and the consolidated group of Material Borrowers
will be able to pay its debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become
absolute and matured; and (iv) each of the Company, CSC and such
consolidated group of Material Borrowers will not have
unreasonably small capital with which to conduct the businesses
in which it is engaged as such businesses are now conducted and
are proposed to be conducted after the date hereof.
(b) None of the Company, CSC and the consolidated group of
Material Borrowers, intends to incur debts beyond its ability to
pay such debts as they mature, taking into account the timing of
and amounts of cash to be received by it and the timing of the
amounts of cash to be payable on or in respect of its
Indebtedness.
SECTION 7. AFFIRMATIVE COVENANTS
Each of the Borrowers hereby agrees that, so long as the
Commitments remain in effect, any Note remains outstanding and
unpaid, any Letter of Credit remains issued and outstanding or
any other amount is owing to any Bank or the Agent hereunder or
under any other Basic Document, it shall:
7.1 Financial Statements. Furnish or cause the Parent to
furnish, to each Bank:
(a as soon as available, but in any event within 90 days
after the end of each Fiscal Year of the Parent, (i) a copy of
the audited consolidated balance sheets of the Parent and its
Subsidiaries as at the end of such Fiscal Year, and the related
consolidated statements of common stockholders' equity and cash
flows and the consolidated statement of income and retained
earnings of the Parent and its Subsidiaries for such Fiscal Year,
setting forth in each case, in comparative form the corresponding
figures for the previous year or portion thereof, all in
reasonable detail, certified for all Fiscal Years commencing with
the Fiscal Year ending February 3, 2001, without a "going
concern" or like qualification or exception, or qualification
arising out of the scope of the audit, by ▇▇▇▇▇▇ & ▇▇▇▇▇ or other
independent certified public accountants of nationally recognized
standing reasonably acceptable to the Banks (such accountants
being called herein, the "Reporting Accountants") and (ii) a copy
of the unaudited consolidated balance sheet of the Borrowers and
their Subsidiaries as at the end of such Fiscal Year, and the
related consolidated statements of its common stockholders'
equity and cash flows and the consolidated statement of income
and retained earnings of the Borrowers and its Subsidiaries for
such Fiscal Year, setting forth in each case, in comparable form
the corresponding figures for the previous year or portion
thereof, certified by Responsible Officers of the Borrowers and
their Subsidiaries;
(b as soon as available, but in any event within 45 days
after the end of each of the first three quarterly periods of
each Fiscal Year of the Parent, or if an extension has been
granted by the Commission for the filing by the Parent of its
quarterly report on Form 10-Q, then by the earlier of the date
such Form 10-Q is actually filed and the last day of such
extended time period, a copy of the unaudited consolidated
balance sheets of the Borrowers and their Subsidiaries as at the
end of each such quarter and the related unaudited consolidated
statements of stockholders' equity and cash flows and the
consolidated statement of operations and retained earnings of the
Borrowers and their Subsidiaries for such quarterly period and
the portion of the Fiscal Year through such date, setting forth
in each case in comparative form the figures for the previous
year, certified by Responsible Officers of the Borrowers and
their Subsidiaries (subject to normal year-end audit
adjustments); and
(c as soon as practicable, and in any event within 30 days
after the end of each fiscal month (other than any fiscal month
ending on the last day of any fiscal quarter) of each year, a
copy of the unaudited consolidated balance sheets of the
Borrowers and their Subsidiaries as at the end of such month and
the related unaudited consolidated statements of stockholders'
equity and cash flows and the consolidated statement of income
and retained earnings of the Borrowers and their Subsidiaries for
such month and the portion of the Fiscal Year of the Borrowers
through the end of such month, such financial statements to be
certified by Responsible Officers of the Borrowers.
All such financial statements shall be complete and correct
in all material respects (subject, in the case of interim
statements, to normal year-end audit adjustments) and shall be
prepared in reasonable detail and in accordance with GAAP applied
consistently throughout the periods reflected therein (except as
concurred in by such Reporting Accountants or Responsible
Officer, as the case may be, and disclosed therein).
7.2 Certificates; Reports and Other Information. Furnish,
or cause the Parent to furnish, to each Bank:
(a concurrently with the delivery of the financial
statements referred to in subsection 7.1(a) a letter from the
Reporting Accountants stating that, in making the examination
necessary to express their opinion on such financial statements,
no knowledge was obtained of any Default or Event of Default
under subsections 9.7 through 9.10, except as specified in such
letter;
(b concurrently with the delivery of the financial
statements referred to in subsections 7.1(a) through (c), a
certificate of the chief financial officers of the reporting
parties specified in subsections 7.1(a) through (c) (i) stating
that, to the best of such officers' knowledge, each reporting
party, during such period has observed or performed all its
covenants and other agreements contained in this Credit Agreement
and the Security Documents to be observed or performed by it, and
that such officers have obtained no knowledge of any Default or
Event of Default (not theretofore reported and cured or duly
waived), except as specified in such certificate, (ii) stating,
to the best of such officers' knowledge, that all such financial
statements are complete and correct in all material respects and
have been prepared in reasonable detail and in accordance with
GAAP applied consistently throughout the periods reflected
therein (except as disclosed therein) and (iii) in the case of
the consolidated financial statements of the Borrowers and their
Subsidiaries referred to in subsections 7.1(a) and (b), showing
in detail the calculations supporting such statements in clause
(i) in this subsection 7.2(b) in respect of subsections 9.7
through 9.10;
(c promptly upon receipt thereof, copies of all final
reports submitted to the Borrowers by Reporting Accountants or
other independent certified public accountants in connection with
each annual, interim or special financial audit of the books of
the Borrowers and their Subsidiaries made by such accountants;
(d promptly upon their becoming available, copies of all
financial statements, reports, notices and proxy statements sent
by the Parent to its security holders (or, if made available
generally by the Parent to their security holders, shall make
such statements, reports and notices available to each Bank on
the same basis) and shall furnish to each Bank copies of all
regular and periodic reports and all final registration
statements and final prospectuses, if any, filed by the Parent
with any securities exchange or with the Commission or any
Governmental Authority succeeding to any of its functions;
(e not more than 60 days before the beginning of each
Fiscal Year of the Parent, (i) a copy of the projections by the
Parent of the consolidated operating budget and cash flow of the
Parent and its Subsidiaries for such Fiscal Year, such
projections to be in form reasonably satisfactory to the Banks
and accompanied by a certificate of the chief financial officer
of the Parent to the effect that such projections have been
prepared on the basis of sound financial planning practice and
that such officer has no reason to question the reasonableness of
any material assumptions on which such projections were prepared;
and (ii) a copy of such projections, statements and balance
sheets as to the Borrowers and their Subsidiaries;
(f concurrently with the delivery of the financial
statements referred to in subsections 7.1(a) through (c) a
monthly financial report as to the Borrowers and their
Subsidiaries in form and content satisfactory to Agent;
(g as soon as practicable and in any event, within 45 days
following the end of each fiscal quarter a report which details
the status of Store closings, including a comparison of actual
and projected Store closing expenses (a "Store Closing Report")
in form and content satisfactory to Agent; and
(h promptly, such additional financial and other
information (including, without limitation, more frequent cash
flow projections) as any Bank may from time to time reasonably
request.
7.3 Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity (subject, where applicable, to
specified grace periods) all its obligations, including taxes,
and liabilities of whatever nature, except when the amount or
validity thereof is currently being contested in good faith by
appropriate proceedings.
7.4 Conduct of Business and Maintenance of Existence.
Continue to engage in business of the same general type as now
conducted by it, and preserve, renew and keep in full force and
effect its corporate existence and take all reasonable action to
maintain all rights, privileges and franchises necessary in the
normal conduct of its business, except a Nonmaterial Borrower may
dissolve and except as otherwise permitted by subsection 9.4; and
comply with all applicable Requirements of Law, except to the
extent that the failure to comply therewith would not constitute
a Material Adverse Event.
7.5 Maintenance of Property. Keep all property which is
useful and necessary in its business in good working order and
condition (ordinary wear and tear excepted).
7.6 Insurance.
(a Maintain with financially sound and reputable insurance
companies (i) insurance on all its material property in such
amounts and against such risks as are reasonably satisfactory to
the Banks, and (ii) "all-risk" insurance against loss or damage
to all its assets, in such form and with such insurance companies
as shall reasonably be satisfactory to the Banks; provided that
the amount of such insurance in effect from time to time shall in
no event be less than the replacement value of its assets.
(b Maintain general public liability insurance in such
amounts, in such form and with such insurance companies as shall
reasonably be satisfactory to the Banks.
(c Cause (i) all liability insurance policies to name the
Agent as an additional insured, (ii) all property loss or damage
insurance policies with respect to any assets to contain a loss
payable clause in favor of the Agent providing that any payment
with respect to a loss in excess of $3,000,000 shall be paid
jointly to the Agent and the applicable Borrower and, unless a
Default or an Event of Default shall have occurred and be
continuing, any payment with respect to a loss of $3,000,000 or
less shall be paid to the applicable Borrower, (iii) all
insurance policies to provide that no cancellation, reduction in
amount or material change in coverage thereof shall be effective
until at least 30 days after receipt by the Agent of written
notice thereof, (iv) all insurance policies to insure the
interests of the Banks regardless of any breach of or violation
by any Borrower or any other Person of any warranties,
declarations or conditions contained therein, (v) all insurance
policies to provide that the Banks shall have no obligation or
liability for premiums, commissions, assessments or calls in
connection with such insurance or in connection with any
representation or warranty made by any Borrower or any other
Person in connection with obtaining of such insurance, (vi) all
applicable insurance policies to contain such other provisions as
are set forth in the relevant Security Documents.
(d Thirty days prior to the expiration date of each policy
maintained hereunder, the Borrowers shall either (i) deliver to
each Bank copies of the renewals of the insurance policies (in
each case, with a certified true and correct copy of such policy
by the insurer named therein) maintained by the Borrowers as
required by this subsection 7.6 or (ii) notify each Bank of the
policies which have not been renewed.
7.7 Inspection of Property; Books and Records; Discussions.
Keep proper books of record and account in which entries in
conformity with GAAP and all Requirements of Law shall be made of
all dealings and transactions in relation to its business and
activities; and permit representatives of any Bank to visit and
inspect any of its properties during normal business hours with
reasonable notice and examine and make abstracts from any of its
books and records at any reasonable time and as often as may
reasonably be desired, and to discuss its business, operations,
properties, assets and financial and other condition with its
officers and employees and with its Reporting Accountants and
other independent certified public accountants; provided, that,
information obtained pursuant to the above shall be subject to
the confidentiality provisions of subsection 12.5 hereof.
7.8 Notices. Promptly give notice to the Agent and each
Bank:
(a of the occurrence of any Default or Event of Default:
(b of any (i) default or event of default under any
instrument or other material agreement, or (ii) litigation,
investigation or proceeding which may exist at any time with any
Governmental Authority, which, if in the case of (i) or (ii) if
adversely determined, would constitute a Material Adverse Event;
(c of all litigation or proceedings (i) which involve
uninsured liability in excess of $1,000,000 (in the aggregate)
which, if adversely determined, would constitute a Material
Adverse Event, (ii) in which injunctive or similar relief is
sought which if obtained would constitute a Material Adverse
Event, or (iii) which questions the validity or enforceability of
any Basic Document which in any such case, if adversely
determined, would constitute a Material Adverse Event; and
(d of the following events, as soon as practicable, and in
any event within 30 days, after it knows or has reason to know of
the following events: (i) the occurrence or expected occurrence
of any Reportable Event with respect to any Plan or any
withdrawal from, or the termination, Reorganization or Insolvency
of, any Multi-employer Plan or (ii) the institution of
proceedings or the taking of any other action by the PBGC, any
Borrower or any Commonly Controlled Entity, or any Multi-
employer Plan with respect to the withdrawal from, or the
termination, Reorganization or Insolvency of, any Single Employer
Plan or Multi-employer Plan, and in addition to such notice,
shall deliver to the Agent and each Bank a certificate of its
chief financial officer setting forth the details thereof and the
action that the Borrower or the Commonly Controlled Entity
proposes to take with respect thereto.
Each notice pursuant to this subsection shall be accompanied
by a statement of the chief executive officer or chief financial
officer of the Borrower setting forth details of the occurrence
referred to therein and stating what action the Borrower
proposes to take with respect thereto.
7.9 Maintenance of Liens of the Security Documents.
Promptly upon the reasonable request of any Bank at the
Borrower's expense, execute, acknowledge and deliver, or cause
the execution, acknowledgment and delivery of, and thereafter
register, file or record, or cause to be registered, filed or
recorded, in an appropriate governmental office, any document or
instrument supplemental to or confirmatory of the Security
Documents or otherwise necessary or desirable for the creation
and/or perfection of the Liens on all assets which constitute
Collateral (other than real property assets) now owned or
hereafter acquired, of the Borrowers provided such Bank has
reasonably determined that such action is necessary to protect
the Banks' interest in the Collateral.
As of the Closing Date, the Banks have agreed that the
financing statements being filed in the State of Tennessee shall
only secure the obligations arising under the Swingline Note in
order to minimize the indebtedness tax required to be paid in
Tennessee. However, the Banks reserve the right to require
supplemental filings and the payment of additional indebtedness
in the event of the Banks' reasonable determination said filings
or payment is necessary to protect its security interest in the
Collateral.
7.10 Security Documents. Upon the creation or acquisition
of any Subsidiary of the Borrowers after the date hereof such
Borrower immediately shall cause each such Subsidiary to execute
and deliver an Assumption Agreement and such other Security
Documents as the Agent may require.
7.11 Inventory Valuation. The Agent shall have the right
at any time and from time to time to require the Borrowers to
obtain and deliver to Agent an audit of the Net Recoverable
Liquidation Value of Inventory performed by independent auditors
selected by the Agent (the "Inventory Valuation"). The Borrowers
shall bear the costs and expenses of one Inventory Valuation
during any twelve (12) month period. If the costs and expenses
of any Inventory Valuation exceed $20,000, the excess shall be
paid by the Banks on a ratable basis. Inventory Valuations
conducted more frequently than annually shall be at the expense
of the Banks on a ratable basis. Notwithstanding the foregoing,
any Inventory Valuation conducted at a time when there exists an
Event of Default shall be at the Borrowers' sole cost and expense
and shall not be deemed to be the one Inventory Valuation for
which the Borrowers are obligated to pay during a twelve month
period.
7.12 Further Assurances. At any time and from time to
time, upon the Agent's request and at the expense of the
Borrowers, the Borrowers will promptly and duly execute and
deliver or cause to be executed and delivered any and all further
instruments and documents and take such further action as the
Agent may reasonably request to effect the purpose of the
Security Documents, including (without limitation) the filing of
any financing or continuation statements under the Uniform
Commercial Code in effect in any jurisdiction in order to place
on the public records notice of the effect of the Security
Documents.
SECTION 8. FORMATION OF NEW SUBSIDIARIES.
Each Bank and the Agent hereby agree to the following
notwithstanding anything in the Credit Agreement or other Basic
Documents to the contrary: the Borrowers may form one or more
new Subsidiaries (a "New Subsidiary") and transfer, assign and
convey assets into such New Subsidiary; provided, that promptly
following such transaction (i) Agent shall receive written notice
of the formation of such New Subsidiary together with a copy of
organizational documents duly filed in the State of its
formation; (ii) such New Subsidiary becomes a party to the Credit
Agreement by the execution of an Assumption Agreement, and has
executed such documents (including, without limitation, security
agreements and financing statements) in order to create in favor
of the Agent for the ratable benefit of the Banks, a perfected
security interest in the Collateral transferred to such New
Subsidiary; (iii) such other requirements reasonably requested by
the Agent and the Banks; and (iv) the Borrowers shall reimburse
the Agent and the Banks for all reasonable expenses incurred by
the Agent and the Banks in connection with the foregoing,
including reasonable attorneys' fees and expenses.
SECTION 9. NEGATIVE COVENANTS
Each of the Borrowers hereby agrees that, so long as the
Commitments remain in effect, any Notes remain outstanding and
unpaid, any Letter of Credit remains issued and outstanding or
any other amount is owing to the Agent or any Bank hereunder or
under any other Basic Document, it shall not, directly or
indirectly, and shall not permit any of its Subsidiaries to:
9.1 Indebtedness. Create, incur, assume or suffer to exist
any Indebtedness, except:
(a) Indebtedness in respect of the Loans, the Notes, the
Letters of Credit and all other obligations of the Borrowers
under this Credit Agreement;
(b) Indebtedness in favor of National Bank of Commerce more
particularly described on Schedule 9.1(b) (the "NBC
Indebtedness") and certain other Indebtedness outstanding on the
Closing Date as listed on Schedule 9.1(b);
(c) Indebtedness in an aggregate amount equal to the amount
by which the Commitments have been permanently reduced pursuant
to Section 4.6 of this Credit Agreement, provided that such
Indebtedness shall contain provisions in respect of
subordination, amortization, rate of interest and acceleration of
the due date of such Indebtedness prior to its stated maturity
which, in the reasonable discretion of the Agent and the Banks,
are acceptable in form and substance to the Agent and the Banks;
(d) Indebtedness as incurred or assumed by the Borrowers
(i) in connection with any Financing Lease entered into after the
Closing Date, (ii) in connection with any Sale and Leaseback
transaction and (iii) as to the Borrowers, to pay all or any part
of the purchase price of property acquired after the Closing
Date, not to exceed the purchase price of the property so
acquired; provided that the aggregate amount of all such
Indebtedness at any one time outstanding (excluding the NBC
Indebtedness) shall not exceed (x) $10,000,000 less
(y) Indebtedness (excluding the NBC Indebtedness) permitted by
subsections 9.1(b) and 9.1(e);
(e) Indebtedness incurred by the Borrowers after the
Closing Date (i) under unsecured lines of credit with any Person,
(ii) under demand and other short-term promissory notes payable
to or to the order of any Person, (iii) in connection with any
Sale and Leaseback transactions, and (iv) in connection with any
Financing Lease entered into after the Closing Date, provided
that, except in the case of Inter-Company Indebtedness, the
aggregate principal amount (excluding the NBC Indebtedness)
shall not exceed (x) $10,000,000 less (y) Indebtedness (excluding
the NBC Indebtedness) permitted by subsections 9.1(b) and 9.1(d)
hereof.
(f) Inter-Company Indebtedness, including without
limitation, (i) Indebtedness incurred by any Borrower (each, a
"borrowing Borrower") under an unsecured loan or advance from any
Affiliate which loan or advance is used by the borrowing Borrower
to purchase Inventory, fixtures, fittings and other items
required for the operation of a retail Store from an Affiliate,
(ii) Indebtedness created by the purchase, sale, lease, license
or exchange of property or the rendering of any service by a
Borrower to any other Borrower, provided such transactions are
not otherwise prohibited under the Credit Agreement and are, in
the ordinary course of business and are upon fair and reasonable
terms no less favorable to the Borrowers or any Affiliate than it
would obtain in a comparable arms length transaction with a
Person not an Affiliate, and (iii) the Inter-Company Indebtedness
more particularly described on Schedule 9.1(f), provided that
such Indebtedness shall contain provisions in respect of
subordination, amortization, rate of interest and acceleration of
the due date of such Indebtedness prior to it stated maturity
date which, in the reasonable discretion of the Agent and the
Banks, are acceptable in form and substance to the Agent and the
Banks, and provided further such Indebtedness is pledged as
security for the Loans under such terms acceptable to the Agent
and the Banks.
(g) Indebtedness incurred pursuant to a transaction with
Affiliates or among Borrowers permitted under Section 9.13 which
are unsecured or which are secured by Liens permitted under
Section 9.2(l).
9.2 Limitation on Liens. Create, incur, assume or suffer
to exist any Lien or negative pledge (or similar agreement) upon
or with respect to any of its property, assets, income or
profits, whether now owned or hereafter acquired, except:
(a) Liens for taxes, assessments, charges or other
governmental levies not yet due or as to which the period of
grace (not to exceed 60 days), if any, related thereto has not
expired or which are being contested in good faith and by
appropriate proceedings, if adequate reserves with respect
thereto are maintained on the books of the Parent and its
Subsidiaries, in accordance with GAAP;
(b) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other like Liens arising in the
ordinary course of business (i) which are not overdue for a
period of more than 60 days or (ii) which are being contested in
good faith and by appropriate proceedings;
(c) pledges or deposits in connection with workmen's
compensation, unemployment insurance and other social security
legislation, or to secure the performance of statutory
obligations, appeal or similar bonds, leases and trade contracts
(exclusive of obligations for the payment of borrowed money);
(d) Liens in favor of the Banks pursuant to the Security
Documents;
(e) Liens securing Indebtedness permitted by subsection
9.1(d), provided that any such Lien shall be confined solely to
the item or items of property acquired with the proceeds of such
Indebtedness or which is or are the subject of a Financing Lease
permitted by said subsection;
(f) Liens on property of any Borrower created solely for
the purpose of securing Indebtedness permitted by subsection
9.1(d), incurred to finance or refinance the purchase price of
property; provided that no such Lien shall extend to or cover
other property of any Borrower other than the respective property
so acquired, and the principal amount of Indebtedness secured by
any such Lien shall at no time exceed the original purchase price
of such property;
(g) Liens in existence on the Closing Date, which Liens are
listed on Schedule 9.2(g);
(h) rights of setoff in favor of banks arising in the
ordinary course of business of the Borrowers;
(i) any Lien constituting a renewal or continuation of any
Lien permitted by this subsection 9.2, but only, in the case of
each such renewal or continuation, to the extent that the
principal amount of Indebtedness secured by such Lien does not
exceed the principal amount of such Indebtedness so secured at
the time of the renewal or continuation, and that such Lien is
limited to all or a part of the property that secured the Lien
renewed or continued;
(j) Liens on the Inventory of the Company created solely for
the purpose of securing the Inter-Company Indebtedness permitted
by subsection 9.1(f)(iii); provided that such Lien shall not be
perfected by the filing of financing statements and shall be
acceptable in form and substance to the Agent and the Banks;
(k) other Liens incidental to the conduct of its business
or the ownership of the property which are not incurred in
connection with borrowed money and which do not in the aggregate
materially detract from the value of its property or materially
impair the use thereof in the operation of its business and
which, in any event, do not secure obligations in excess of
$1,000,000 in the aggregate; and
(l) Liens created by a Borrower in favor of an Affiliate or
another Borrower to secure Indebtedness permitted under Section
9.1(g) and which Liens are subordinated in favor of and assigned
to the Banks.
9.3 Limitation on Contingent Obligations. Create, incur,
assume or suffer to exist any Contingent Obligation, except
Contingent Obligations in existence on the Closing Date and
listed on Schedule 9.3, but in no event to include any extensions
or renewals thereof.
9.4 Prohibition on Fundamental Changes. Except for (i)
mergers or consolidations of Borrowers with other Borrowers, and
(ii) the dissolution of a Nonmaterial Borrower, enter into any
transaction of acquisition or merger or consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer
any liquidation or dissolution), or make any material change in
the present method of conducting business or engage in any type
of business other than of the same general type now conducted by
the Borrowers.
9.5 Prohibition on Sale of Assets. Convey, sell, lease,
assign, transfer or otherwise dispose of any of its property,
business or assets (including, without limitation, tax benefits,
receivables and leasehold interests), whether now owned or
hereafter acquired, except (a) the sale or other disposition of
any tangible property that, in its reasonable judgment, has
become uneconomic, obsolete or worn out, and which is disposed of
in the ordinary course of business, (b) the sale of Inventory in
the ordinary course of business, (c) the sale or other
disposition of any property in connection with the permanent
closing of any Store, (d) the sale or other disposition of assets
in one or a series of related transactions, other than Inventory
, sold in arms length transactions for a fair market price,
(e) other sales and dispositions which are approved in writing by
the Required Banks, (f) transactions described in Section 8, (g)
transactions with Affiliates or among Borrowers permitted under
subsection 9.13, (h) the sale of receivables to ▇▇▇▇▇▇ State Bank
(or to a replacement therefor and (i) the sale or other
disposition of assets to a Subsidiary of the Parent in connection
with the conversion of a Store owned and/or operated by a
Borrower to a "Fashion Bug" store, provided, that no more than
ten (10) such Stores in the aggregate shall be so converted in a
Fiscal Year.)
9.6 Limitation on Investments, Loans and Advances. Except
as otherwise permitted in this Agreement, make or suffer to exist
any advances or loans to, or investments (by way of transfers of
property, contributions to capital, acquisitions of stock,
securities or evidences of indebtedness or otherwise) in, any
other Person, except that:
(a) the Borrowers may acquire and hold Cash Equivalents:
(b) the Borrowers may make advances to their employees for
travel or relocation, provided that all such advances are in the
ordinary course of business, and further provided that the
aggregate outstanding amount of all such advances shall at no
time exceed $200,000.
(c) Any Borrower may make loans and advances to any other
Borrower in amounts necessary for such Borrower's reasonable
operating expenses incurred in the ordinary course of business;
(d) the Company may make payments to the Parent with
respect to any Fiscal Year pursuant to any tax sharing agreement
in a dollar amount equivalent to the tax the Company would pay
for such Fiscal Year if it paid tax on a stand-alone basis;
provided, however, that no such payments may be made by the
Company if (i) the Parent, on a consolidated basis, has no tax
liability for such year, or (ii) if a Default or Event of Default
occurs under Section 10(a), Section 10(h) or as a result of
failure to comply with subsections 9.7 through 9.10; and
(e) the Borrowers may make investments in long term publicly
traded investments (those greater than twelve (12) months in
duration) in United States Government obligations or United
States traded securities rated at least AA by Standard & Poor's
Corporation or Aa by ▇▇▇▇▇'▇ Investors Service, Inc.
9.7 Consolidated Working Capital. Permit Consolidated
Working Capital of the Borrowers and their Subsidiaries, at any
time, to be less than $15,000,000.
9.8 Consolidated Tangible Net Worth. Permit Consolidated
Tangible Net Worth of the Borrowers as of the Closing Date and on
the last day of any month to be less than $50,000,000 (the
"Minimum Consolidated Tangible Net Worth Requirement"). Such
Minimum Consolidated Tangible Net Worth Requirement shall be
increased at the end of each fiscal quarter thereafter by adding
(if applicable) to the preceding fiscal quarter's Minimum
Consolidated Tangible Net Worth Requirement twenty-five percent
(25%) of Net Income for such fiscal quarter.
9.9 Capital Expenditures. Permit Capital Expenditures to
exceed an aggregate of $13,000,000 per Fiscal Year increasing
annually in an amount equal to 50% of the prior year's Net
Income.
9.10 Fixed Charge Coverage Ratio. Permit the Fixed Charge
Coverage Ratio, in each case for the period of four (4)
consecutive fiscal quarters ending on the last day of each fiscal
quarter to be less than 1.30 to 1.0.
9.11 Entity Documents. Amend its Certificate of
Incorporation or its partnership agreement, as in effect on the
Closing Date, in any respect without the prior written consent of
the Agent and the Banks.
9.12 Limitation on Dividends. Declare any cash dividends
on any shares of any class of stock of the Borrowers or make any
payment on account of, or set apart assets for a sinking or other
analogous fund for, the purchase, redemption, retirement or other
acquisition of any shares of any class of stock of the Borrowers,
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 Borrowers;
except that the Borrower may pay dividends to the Parent on a
quarterly basis, provided that, after such dividend payment is
made, the Borrowers shall maintain cash balance greater than
$10,000,000.00 (including Cash Equivalents and other investments
permitted under this Credit Agreement), provided that no Default
or Event of Default exists.
9.13 Transactions with Affiliates or Among Borrowers.
Enter into any transaction, including, without limitation, any
purchase, sale, lease or exchange of property or the rendering of
any service, with any Affiliate unless (a) such transactions
(i) are not otherwise prohibited under this Credit Agreement and
(ii) are in the ordinary course of business and are upon fair and
reasonable terms no less favorable to the Borrowers than it would
obtain in a comparable arm's length transaction with a Person not
an Affiliate, (b) such transactions, including without limitation
any purchase, sale, lease, license or exchange of property are
between or among Borrowers in the ordinary course of business, or
in a customary parent/subsidiary relationship, or (c) any such
transaction is a loan to an employee permitted under Section
9.6(b), or (d) such transaction involves the sale of or the
disposition of assets from a Borrower to a Subsidiary of the
Parent in connection with the conversion of a Store owned and/or
operated by a Borrower to a "Fashion Bug" store, provided, no
more than ten (10) such transactions in the aggregate shall occur
in a Fiscal Year.
9.14 Fiscal Year. Change the Fiscal Year of any Borrower.
SECTION 10. EVENTS OF DEFAULT
Upon the occurrence and continuance of any of the following
events:
(a) The Borrower shall fail to pay (i) any principal
of any Loan, when due in accordance with the terms hereof or
of the respective Note or (ii) any interest on any Note or
any fee or other amount payable hereunder within five days
after any such interest, fee or other amount becomes due; or
(b) Any representation or warranty or statement that
is material in the reasonable judgment of the Required Banks
and made or deemed made by the Borrowers in this Credit
Agreement or in any other Basic Document to which it is a
party or which is contained in any certificate, document or
financial or other statement furnished at any time under or
in connection herewith or therewith shall prove to have been
incorrect in any material respect on or as of the date made
or deemed made and constitutes a Material Adverse Event; or
(c) The Borrowers shall default in the observance or
performance of any covenant or agreement contained in
subsections 9.7 through 9.10 of this Credit Agreement or the
Parent shall default in the observance or performance of the
covenants contained in Section 8(a) of the Parent Guaranty;
or
(d) The Parent or Borrowers, as applicable, shall
default in the observance or performance of any other
covenant or agreement contained in this Credit Agreement or
any other Basic Document which is not specified in clauses
(a) through (c) above or in clause (e) below, and such
default shall continue unremedied for a period of 30 days
after the Parent or the Borrowers, as applicable, becomes
aware, or should reasonably have become aware, of such
default; provided, that, (i) a Borrower's failure to deliver
to the Banks the financial information enumerated in Section
7 hereof shall not be deemed an Event of Default until 15
days have elapsed from notice of nondelivery from the Agent
or any Bank and (ii) a Borrower's failure to deliver to the
Banks any other report, document or instrument required to
be delivered under this Credit Agreement shall not be deemed
an Event of Default unless the information contained in such
report, document or instrument reflects the occurrence of a
Material Adverse Event; or
(e) Any Security Document shall cease, for any
reason, to be in full force and effect or the Borrowers
shall so assert in writing; or any Security Document shall
cease to be effective to ▇▇▇▇▇ ▇ ▇▇▇▇ on the collateral
described therein with the priority purported to be created
thereby, except in each case as a result of the Agent's
determination not to file financing statements or Agent's
gross negligence in failing to retain possession of any
Collateral or failure to file any continuation statement
with respect to the Collateral; or
(f) A Change of Control shall occur; or
(g) Any Borrower shall (i) default in any payment of
principal of or interest on any Indebtedness (other than
Indebtedness hereunder), or in the payment of any matured
Contingent Obligation beyond the period of grace (not to
exceed 60 days), if any, provided in the instrument or
agreement under which such Indebtedness or Contingent
Obligation was created, and the aggregate amount of all such
payment defaults at any one time outstanding is equal to or
in excess of $5,000,000; or (ii) default in the observance
or performance of any agreement or condition relating to any
such Indebtedness or Contingent Obligation or contained in
any instrument or agreement evidencing, securing or relating
thereto or any other event shall occur or condition exist,
the effect of which default or other event or condition is
to cause any such Indebtedness to become due prior to its
stated maturity (any applicable grace period having expired)
and such default shall continue unremedied for a period of
30 days after such Borrower becomes aware of such default
unless such Borrower provides the Agent with evidence that
the holder or holders of such Indebtedness or beneficiary or
beneficiaries (or a trustee or agent on behalf of such
holder or holders or beneficiary or beneficiaries) have
waived the default; or
(h)(i) The Parent or any Borrower shall commence any
case, proceeding or other action (A) under any existing or
future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief
of debtors, seeking to have an order for relief entered with
respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts,
or (B) seeking appointment of a receiver, trustee, custodian
or other similar official for it or for all or any
substantial part of its assets, or the Parent or any
Borrower shall make a general assignment for the benefit of
its creditors; or (ii) there shall be commenced against the
Parent or any Borrower any case, proceeding or other action
of a nature referred to in clause (i) above which
(A) results in the entry of an order for relief of any
adjudication or appointment or (B) remains undismissed,
undischarged, unstayed or unbonded for a period of 45 days;
or (iii) there shall be commenced against the Parent or any
Borrower any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or
similar process against all or any substantial part of its
assets which results in the entry of an order for any such
relief which shall not have been vacated, discharged, stayed
or bonded pending appeal within 60 days from entry thereof;
or (iv) the Parent or any Borrower shall take any action
in furtherance of, or indicating its consent to, approval
of, or acquiescence in, any of the acts set forth in clause
(i), (ii) or (iii) above; or (v) the Parent or any Borrower
shall generally not pay its debts as they become due, except
for events set forth in clauses (i) through (v) which occur
in connection with the permanent closing of a Store,
provided no more than ten (10) such events in the aggregate
shall occur per Fiscal Year without the prior written
consent of the Banks; or
(i)(A) Any Person shall engage in any nonexempt
"prohibited transaction" (as defined in Section 406 of ERISA
or Section 4975 of the Code) involving any Plan, (B) any
"accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect
to any Plan, (C) a Reportable Event shall occur with respect
to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or
to terminate, any Single Employer Plan, which Reportable
Event or commencement of proceedings or appointment of a
trustee is, in the reasonable opinion of the Agent, likely
to result in the termination of such Plan for purposes of
Title IV of ERISA, (D) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (E) any
Borrower or any Commonly Controlled Entity shall, or is, in
the reasonable opinion of the Agent, likely to, incur any
liability in connection with a withdrawal from, or the
Insolvency or Reorganization of, a Multi-employer Plan or
(F) any other event or condition shall occur or exist with
respect to a Plan; and in each case in clauses (A) through
(F) above, such event or condition, together with all other
such events or conditions, if any, could in the reasonable
judgment of the Agent subject any Borrower to any tax,
penalty or other liabilities in the aggregate material in
relation to the business, operations, property, assets or
financial or other condition of any Borrowers and their
Subsidiaries taken as a whole; or
(j) One or more judgments or decrees shall be entered
against any Borrower involving in the aggregate a liability
(to the extent not paid or covered in whole or in part by
insurance) of more than $1,000,000 and all such judgments or
decrees shall not have been vacated, discharged, stayed or
bonded pending appeal within 60 days from the entry thereof;
or
(k) Failure to remediate within the time period
required by law or governmental order (or within a
reasonable time in light of the nature of the problem if no
specific time period is so established) environmental
problems in violation of applicable law related to the
properties owned by any Borrower and such failure
constitutes a Material Adverse Event; or
(l) An Event of Default, as defined in the Congress
Credit Facility, shall occur which is not waived by Congress
Financial Corporation;
then, and in any such event, (a) if such event is an Event of
Default specified in clause (i) or (ii) of paragraph (h) above
with respect to any Borrower, automatically the Commitments
shall terminate and the Loans and the Reimbursement Obligations
(with accrued interest thereon) and all other amounts owing under
this Credit Agreement and the Notes shall immediately become due
and payable, and (b) if such event is any other Event of Default,
either or both of the following actions may be taken: (i) with
the consent of the Required Banks, the Agent may, or upon the
request of the Required Banks, the Agent shall, by notice to the
Borrowers declare the Commitments and the Issuing Bank's
obligation to open Letters of Credit to be terminated forthwith,
whereupon the Commitments and such obligations shall immediately
terminate (and the Issuing Bank shall issue no further Letters of
Credit hereunder); and (ii) with the consent of the Required
Banks, the Agent may, or upon the request of the Required Banks,
the Agent shall, by notice of default to the Borrowers, declare
the Loans and the Reimbursement Obligations (with accrued
interest thereon) and all other amounts owing under this Credit
Agreement and the Notes to be due and payable forthwith,
whereupon the same shall immediately become due and payable. If
all Reimbursement Obligations have become due and payable the
Borrowers shall immediately deposit with the Issuing Bank on
behalf of the Banks an amount equal to the aggregate maximum
potential Reimbursement Obligations under all issued and
unexpired Letters of Credit. The Issuing Bank shall apply such
amount to that portion of the Reimbursement Obligations which
have become fixed under such Letters of Credit and shall return
any remaining balance of such amount to the Borrowers upon the
expiration of all such Letters of Credit. All payments made by
the Borrowers under this Section 10 shall be applied in
accordance with subsection 4.4. Without limiting the effect of
any of the foregoing, upon the occurrence of any Event of
Default, the Agent and/or the Banks may exercise any and all
remedies and other rights provided pursuant to this Credit
Agreement and the Security Documents. Except as expressly
provided above in this Section 10, presentment, demand, protest
and all other notices of any kind whatsoever (including, without
limitation, notice of intent to accelerate the maturity of any
obligations of the Borrowers hereunder or notice of acceleration
of any such obligations) are hereby expressly waived by the
Borrowers.
SECTION 11 THE AGENT
11.1 Appointment. Each Bank hereby irrevocably designates
and appoints AmSouth as Agent for such Bank under the Credit
Agreement and the Security Documents and each such Bank
irrevocably authorizes AmSouth, as agent for such Bank, (AmSouth
in such capacity being hereinafter called the "Agent") to take
such action on its behalf under the provisions of the Credit
Agreement and the Security Documents and to exercise such powers
and perform such duties as are expressly delegated to the Agent
by the terms of the Credit Agreement and the Security Documents
together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere
in the Credit Agreement or in any of the Security Documents, the
Agent shall not have any duties or responsibilities, except those
expressly set forth in the Credit Agreement, or any fiduciary
relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be
read into the Credit Agreement or any of the Security Documents
or otherwise exist against the Agent.
11.2 Delegation of Duties. The Agent may execute any of
its duties under the Credit Agreement or any of the Security
Documents by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining
to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
11.3 Exculpatory Provisions. Neither the Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (i) liable for any action lawfully taken or
omitted to be taken by it or such Person under or in connection
with the Credit Agreement or any of the Security Documents
(except for its or such Person's own gross negligence or willful
misconduct), or (ii) responsible in any manner to any Bank for
any recitals, statements, representations or warranties made by
the Borrowers or any officers thereof contained in the Credit
Agreement or in any of the Security Documents, or in any
certificate, report, statement or other document referred to or
provided for in, or received by the Agent under or in connection
with, the Credit Agreement or any of the Security Documents or
for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of the Credit Agreement or any of
the Security Documents or the Notes or for any failure of any
Borrower to perform its obligations hereunder. The Agent shall
not be under any obligation to any Bank to ascertain or to
inquire as to the observance or performance of any of the
agreements contained in, or conditions of, the Credit Agreement
or any of the Security Documents, or to inspect the properties,
books or records of any Borrower.
11.4 Reliance by Agent. The Agent shall be entitled to
rely, and shall be fully protected in relying, upon any Note,
writing, resolution, notice, consent, certificate, affidavit,
letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it
to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to the
Borrowers), independent accountants and other experts selected by
the Agent. The Agent may deem and treat the payee of any Note as
the owner thereof for all purposes, unless a written notice of
assignment, negotiation or transfer thereof shall have been filed
with the Agent. The Agent shall be fully justified in failing or
refusing to take any action under the Credit Agreement or any of
the Security Documents unless it shall first receive such advice
or concurrence of the Banks as it deems appropriate or it shall
first be indemnified to its satisfaction by the Banks against any
and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The
Agent shall in all cases be fully protected in acting, or in
refraining from acting, under the Credit Agreement, the Security
Documents and the Notes in accordance with a request of the
Banks, and such request and any action taken or failure to act
pursuant thereto shall be binding upon the Banks and all future
holders of the Notes.
11.5 Notice of Default. The Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or
Event of Default under the Credit Agreement, unless the Agent has
received notice from a Bank or any Borrower referring to the
Credit Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default." In the event
that the Agent receives such a notice, the Agent shall give
notice thereof to the Banks. The Agent shall take such action
with respect to such Default or Event of Default as shall be
reasonably directed by the Banks; provided that unless and until
the Agent shall have 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 in the best interests of the
Banks.
11.6 Non-Reliance on Agent and Other Banks. Each Bank expressly
acknowledges that neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates has
made any representations or warranties to it and that no act by
the Agent hereinafter taken, including any review of the affairs
of the Borrowers, shall be deemed to constitute any
representation or warranty by the Agent to any Bank. Each Bank
represents to the Agent that it has, independently and without
reliance upon the Agent or any other Bank, and based on such
documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, operations,
property, assets, financial and other condition and
creditworthiness of the Borrowers and made its own decision to
make its Loans hereunder and enter into the Credit Agreement.
Each Bank also represents that it will, independently and without
reliance upon the Agent or any other Bank, and based on such
documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and
decisions in taking or not taking action under the Credit
Agreement and the Security Documents, and to make such
investigation as it deems necessary to inform itself as to the
business, operations, property, assets, financial and other
condition and creditworthiness of the Borrowers. Except for
notices, reports and other documents expressly required to be
furnished to the Banks by the Agent under the Credit Agreement,
the Agent shall not have any duty or responsibility to provide
any Bank with any credit or other information concerning the
business, operations, property, assets, financial and other
condition or creditworthiness of the Borrowers which may come
into the possession of the Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates.
11.7 Indemnification. The Banks agree to indemnify the
Agent in its capacity as such, and its officers, directors,
employees, agents, attorneys-in-fact, Affiliates and attorneys
(to the extent not reimbursed by the Borrowers and without
limiting the obligation of the Borrowers to do so), ratably
according to their Commitment Percentages, from and against any
and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of
any kind whatsoever which may at any time (including without
limitation at any time following the payment of the Notes) be
imposed on, incurred by or asserted against the Agent in any way
relating to or arising out of the Credit Agreement or any
documents contemplated by or referred to herein or the
transactions contemplated hereby or any action taken or omitted
by the Agent under or in connection with any of the foregoing;
provided that no Bank shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from the Agent's gross negligence
or willful misconduct. The agreements in this subsection shall
survive the payment of the Notes and all other amounts payable
under the Credit Agreement.
11.8 Agent in Its Individual Capacity. The Agent and its
Affiliates may make loans to, accept deposits from and generally
engage in any kind of business with the Borrowers or any of their
Subsidiaries as though the Agent were not the Agent under the
Credit Agreement.
11.9 Successor Agent. The Agent may resign as Agent upon 20
days' notice to the Banks and the Borrowers. If the Agent shall
resign as Agent under the Credit Agreement or the Security
Documents, then the Required Banks shall have the right, upon
five (5) days notice to the Borrowers, to appoint a successor
agent for the Banks, whereupon such successor agent shall succeed
to the rights, powers and duties of the Agent, and the term
"Agent" shall mean such successor agent effective upon its
appointment, and the former Agent's rights, powers and duties as
Agent shall be terminated, without any other or further act or
deed on the part of such former Agent or any of the parties to
the Credit Agreement or any such security document or any holders
of the Notes. After any retiring Agent's resignation hereunder
as Agent, the provisions hereof shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Agent
under the Credit Agreement. If no successor Agent shall have
been so appointed by the Required Banks, or if no successor Agent
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 to the Borrowers, the retiring Agent
may, on behalf of the Banks, appoint a successor Agent, which
shall be a commercial bank organized under the laws of the United
States of America and having a combined capital and surplus of at
least Five Hundred Million Dollars ($500,000,000).
11.10 Defaulting Banks. At such time as a Bank becomes
a Defaulting Bank, such Defaulting Bank's right to vote on
matters which are subject to the consent or approval of the
Required Banks shall be immediately suspended until such time as
the Bank is no longer a Defaulting Bank. If a Defaulting Bank
has failed to fund its Commitment Percentage of any Loan and
until such time as such Defaulting Bank subsequently funds its
Commitment Percentage of such Loan, all sums owing to such
Defaulting Bank hereunder shall be subordinated in right of
payment, in full of all principal of, interest on and fees
related to the Loans funded by the other Banks in connection with
any such Loan in which a Defaulting Bank has not funded its
Commitment Percentages (such principal, interest and fees being
referred to as "Senior Loans" for purposes of this Subsection
11.10). All amounts paid by the Borrowers and otherwise due to
be applied to sums due such Defaulting Bank pursuant to the terms
hereof shall be distributed by the Agent to the other Banks in
accordance with their respective Commitment Percentages
(recalculated hereof to exclude the Defaulting Bank) until all
Senior Loans have been paid in full. At that point the
Defaulting Bank shall no longer be deemed a Defaulting Bank.
After the Senior Loans have been paid in full equitable
adjustments will be made in connection with future payments by
the Borrower to the extent a portion of a Senior Loans had been
repaid with amounts that otherwise would have been distributed to
a Defaulting Bank but for the operations of this Section 11.0.
This provision governs only the relationship among the Agent,
each Defaulting Bank and the other Banks, nothing hereunder shall
limit the obligation of the Borrowers to repay all Loans in
accordance with the terms of this Credit Agreement. The
provisions of this subsection 11.10 shall apply and be effective
regardless of whether a Default or Event of Default occurs and is
continuing, and notwithstanding (i) any other provision of this
Credit Agreement to the contrary, (ii) any instructions of the
Borrowers as to their desired application of payments or (iii)
the suspension of such Defaulting Bank=s right to vote on matters
as provided above.
SECTION 12. BENEFIT OF AGREEMENT; ASSIGNMENT; PARTICIPATIONS.
12.1 Successors and Assigns. This Credit Agreement shall
be binding upon and inure to the benefit of the Borrowers, the
Banks and the Agent, all future holders of the Notes and their
respective successors and assigns, except that the Borrowers may
not assign or transfer any of their rights or obligations under
this Credit Agreement without the prior written consent of each
Bank.
12.2 Purchasing Banks. Any Bank may, in the ordinary course
of its commercial banking or lending business and in accordance
with applicable law, (i) at any time sell all or any part of its
rights and obligations under this Credit Agreement and the Notes
to any Bank or any Affiliate thereof (the "Syndicate Purchasing
Banks"), provided that, in the event of a sale of less than all
of such rights and obligations, such assigning Bank after any
such sale to any other Bank or any Affiliate of such Bank shall
retain Commitments and/or Loans and L/C Participating Interests
aggregating at least $5,000,000 of the aggregate Commitments (or
such lesser amount as the Agent may determine), and, (ii) with
the consent of the Borrowers and the Agent (which in each case
shall not be unreasonably withheld) sell to one or more
additional banks or financial institutions (together with
Syndicate Purchasing-Banks, the "Purchasing Banks"), all or any
part of its rights and obligations under this Credit Agreement
and the Notes, pursuant to a Commitment Assignment, executed by
such Purchasing Bank, such transferor Bank (and, in the case of a
Purchasing Bank that is not then a Bank or an Affiliate thereof,
by the Borrowers and the Agent), and delivered to the Agent for
its acceptance and recording in the Register (as defined below);
provided that (A) each such sale pursuant to clause (ii) of this
subsection 12.2 shall be in an amount of $5,000,000 of the
aggregate Commitments or more and (B) in the event of a sale of
less than all of such rights and obligations, such Bank after any
such sale shall retain a Commitment and/or Loans aggregating at
least $5,000,000 of the aggregate Commitments. Upon such
execution, delivery, acceptance and recording, from and after the
Transfer Effective Date as defined in the Commitment Assignment
determined pursuant to such Commitment Assignment, (x) the
Purchasing Bank thereunder shall be a party hereto and, to the
extent provided in such Commitment Assignment, have the rights
and obligations of a Bank hereunder with a Commitment as set
forth therein, and (y) the transferor Bank thereunder shall, to
the extent of the interest transferred, as reflected in such
Commitment Assignment, be released from its obligations under
this Credit Agreement (and, in the case of a Commitment
Assignment covering all or the remaining portion of a transferor
Bank's rights and obligations under this Credit Agreement, such
transferor Bank shall cease to be a party hereto). Such
Commitment Assignment shall be deemed to amend this Credit
Agreement to the extent, and only to the extent, necessary to
reflect the addition of such Purchasing Bank and the resulting
adjustment of Commitment Percentages arising from the purchase by
such Purchasing Bank of all or a portion of the rights and
obligations of such transferor Bank under this Credit Agreement
and the Notes. On or prior to the Transfer Effective Date
determined pursuant to such Commitment Assignment, the Borrower,
at its own expense, shall execute and deliver to the Agent in
exchange for the surrendered Notes amended and restated Notes to
the order of such Purchasing Bank in an amount equal to the
Commitments assumed by it pursuant to such Commitment Assignment
and, if the transferor Bank has retained any Commitments
hereunder, amended and restated Notes to the order of the
transferor Bank in an amount equal to the Commitments retained by
it hereunder. Such amended and restated Notes shall be dated the
Closing Date and shall otherwise be in the form of the Notes
replaced thereby. The Notes surrendered by the transferor Bank
for transfer and replacement shall be returned by the Agent to
the Borrowers marked "replaced and cancelable."
12.3 Register. The Agent shall maintain at its address
referred to in subsection 14.2 a copy of each Commitment
Assignment delivered to it and a register (the "Register") for
the recordation of the names and addresses of the Banks and the
Commitment of, the principal amount of any Swingline Loans owing
to, and, if such Bank has any Letter of Credit Commitment, the
L/C Participating Interests of, each Bank from time to time. The
entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrowers, the Parent, the Agent and the
Banks may treat each Person whose name is recorded in the
Register as the owner of the Loan or L/C participating Interest
recorded therein for all purposes of this Credit Agreement. The
Register shall be available for inspection by the Borrowers, the
Parent or any Bank at any reasonable time and from time to time
upon reasonable prior notice.
12.4 Processing Fee. Upon its receipt of a Commitment
Assignment executed by a transferor Bank and a Purchasing Bank
(and, in the case of a Purchasing Bank that is not then a Bank or
an Affiliate thereof, by the Borrowers and the Agent), together
with payment by the transferor Bank or the Purchasing Bank to the
Agent of a registration and processing fee of $3,500, the Agent
shall (i) promptly accept such Commitment Assignment and (ii) on
the Transfer Effective Date determined pursuant thereto record
the information contained therein in the Register and give notice
of such acceptance and recordation to the Banks and the
Borrowers.
12.5 Dissemination of Information. The Banks agree that
they will use reasonable efforts to protect the confidentiality
of any confidential information concerning the Borrowers and
their Affiliates. Notwithstanding the foregoing, the Borrowers
authorize each Bank to disclose to any Purchasing Bank (each, a
"Transferee") and any prospective Transferee any and all
financial information in such Bank's possession concerning the
Borrowers and their Affiliates which has been delivered to such
Bank by or on behalf of the Borrowers pursuant to this Credit
Agreement or which has been delivered to such Bank by or on
behalf of the Borrowers in connection with such Bank's credit
evaluation of the Borrowers and their Affiliates prior to
becoming a party to this Credit Agreement, provided, that any
such Transferee or prospective Transferee agrees for itself and
its Affiliates to use reasonable efforts to protect the
confidentiality of any confidential information supplied by a
Bank or the Borrowers concerning the Borrowers and their
Affiliates.
12.6 Obligations of Transferor Bank. If, pursuant to this
Section 12, any interest in this Credit Agreement or any Note is
transferred to any Transferee which is organized under the laws
of any jurisdiction other than the United States or any State
thereof, the transferor Bank shall cause such Transferee,
concurrently with the effectiveness of such transfer, (i) to
represent to the transferor Bank (for the benefit of the
transferor Bank, the Agent and the Borrowers) that under
applicable law and treaties no taxes will be required to be
withheld by the Agent, the Borrowers or the transferor Bank with
respect to any payments to be made to such Transferee in respect
of the Loans or L/C Participating Interests, (ii) to furnish to
the transferor Bank (and, in the case of any Purchasing Bank
registered in the Register, the Agent and the Borrowers) either
U.S. Internal Revenue Service Form 4224 or U.S. Internal Revenue
Service Form 1001 (wherein such Transferee claims entitlement to
complete exemption from U.S. federal withholding tax on all
interest payments hereunder) and (iii) to agree (for the benefit
of the transferor Bank, the Agent and the Borrowers) to provide
the transferor Bank (and, in the case of any Purchasing Bank
registered in the Register, the Agent and the Borrowers) a new
Form 4224 or Form 1001 upon the expiration or obsolescence of any
previously delivered form and comparable statements in accordance
with applicable U.S. laws and regulations and amendments duly
executed and completed by such Transferee, and to comply from
time to time with all applicable U.S. laws and regulations with
regard to such withholding tax exemption.
12.7 Replacement Banks. The Borrowers agree to assist the
Agent in locating replacement lenders for any Bank that advises
the Agent it seeks to sell all or a portion of its Loans and will
prepare an information package for delivery to potential
replacement lenders. The Borrowers agree they will be
responsible for the contents of the information package and prior
to dissemination by the Agent of the information package, the
Borrowers agree to enter into a letter agreement with the Agent
whereby (i) the Borrowers will give assurances that the
information package (other than portions thereof provided by the
Agent) does not knowingly contain any material untrue statement
or omission (other than any such untrue statement or omission
subsequently corrected prior to the date of any reliance
thereon), (ii) the Borrowers will agree to supplement the
information package from time to time as necessary until
completion of the replacement so that the representation and
warranty described in the foregoing clause (i) remains correct
and (iii) the Borrowers will agree to indemnify the Agent in the
event it incurs any liability or expense because the
representation and warranty described in the foregoing clause
(i) is untrue or alleged to be untrue. The Borrowers will use
their best efforts to make appropriate officers and
representatives of the Borrowers available to participate in one
or more information meetings for potential replacement lenders at
such times and places as the Agent shall reasonably request.
12.8 Federal Reserve Bank. Nothing herein shall prohibit
any Bank from pledging or assigning any Note to any Federal
Reserve Bank in accordance with applicable law.
12.9 Adjustments. If any Bank (a "benefitted Bank") shall
at any time receive any payment of all or part of its Loans, or
interest thereon, or receive any collateral in respect thereof
(whether voluntarily or involuntarily, by set-off, pursuant to
events or proceedings of the nature referred to in clause (h) of
Section 10, or otherwise) in a greater proportion than any such
payment to and collateral received by any other Bank, if any, in
respect of such other Bank's Loans, or interest thereon, and such
greater proportionate payment or receipt of collateral is not
expressly permitted hereunder, such benefited Bank shall purchase
for cash from the other Banks such portion of each such other
Bank's Loans, or shall provide such other Bank with the benefits
of any such collateral, or the proceeds thereof, as shall be
necessary to cause such benefited Bank to share the excess
payment or benefits of such collateral or proceeds ratably with
each of the Banks; provided, however, that if all or any portion
of such excess payment or benefits is thereafter recovered from
such benefited Bank, such purchase shall be rescinded, and the
purchase price and benefits returned, to the extent of such
recovery, but without interest. The Borrowers agree that each
Bank so purchasing a portion of another Bank's Loans may exercise
all rights of payment (including, without limitation, rights of
set-off) with respect to such portion as fully as if such Bank
were the direct holder of such portion.
SECTION 13 MISCELLANEOUS
13.1 Amendments and Waivers. Neither this Credit
Agreement, the Notes, any other Basic Document nor any terms
hereof or thereof may be amended, waived, discharged or
terminated unless such amendment, waiver, discharge or
termination is in writing signed by the Borrowers and the
Required Banks; provided, however, that no such waiver and no
such amendment, supplement or modification shall (a) reduce the
amount or extend the maturity of any Note, or reduce the rate or
extend the time of payment of interest thereon, or reduce any fee
payable to any Bank hereunder, or change the amount of any Bank's
Commitment, in each case without the consent of the Bank affected
thereby, or (b) amend, modify or waive any provision of this
subsection or reduce the percentage specified in the definition
of Required Banks, or consent to the assignment or transfer by
the Borrowers of any of its rights and obligations under the
Basic Documents or expressly release all or any portion of the
Collateral, or increase the aggregate amount of the Commitments,
or amend or modify any covenant contained in subsections 9.7,
9.8, 9.9, 9.10 or 9.14 hereof, in each case without the written
consent of all of the Banks and provided, further, that no
amendment, waiver or consent shall, unless in writing signed by
the Agent in addition to the Banks required above to take such
action, affect the rights or duties of the Agent under any of the
Basic Documents. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the
Banks and shall be binding upon the Parent, Borrowers, the
Banks and all future holders of the Notes. In the case of any
waiver, the Parent, Borrowers and the Banks shall be restored to
their former positions and rights hereunder and under the
outstanding Notes and the other Basic Documents, and any Default
or Event of Default waived shall be deemed to be cured; but no
such waiver shall extend to any subsequent or other Default or
Event of Default, or impair any right consequent thereon.
13.2 Notices. All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing
(excluding facsimile transmission) and, unless otherwise
expressly provided herein, shall be deemed to have been duly
given or made when delivered by hand, or three Business Days
after being deposited in the mail, postage prepaid, addressed as
follows, or to such other address as may be hereafter notified by
the respective parties hereto and any future holder of a Note:
The Borrowers: c/o Catherines, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇
ATTN: Legal Dept. and Chief
Financial Officer
AmSouth, Agent or AmSouth Bank
The Issuing Bank: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. Tutor
with a copy to: AmSouth Bank
Corporate Finance Division
AmSouth Center
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, PLLC
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ or
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
Hibernia: Hibernia National Bank
National Accounts Department
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
provided that any notice, request or demand to or upon any Bank
pursuant to subsections 2.2, 2.3(b), 4.1, and 4.6 shall not be
effective until received.
13.3 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of any Bank, any
right, remedy, power or privilege hereunder, or under any other
Basic Document shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein
provided and provided in the other Basic Documents are cumulative
and not exclusive of any rights, remedies, powers and privileges
provided by law.
13.4 Survival of Representations, Warranties and Covenants.
All representations and warranties made hereunder and in any
document, certificate or statement delivered pursuant hereto or
in connection herewith shall survive until the payment in full of
all amounts due under or in connection with the Basic Documents.
13.5 Payment of Expenses and Taxes. The Borrowers agree
(a) to pay or reimburse the Agent for reasonable out-of-pocket
costs and expenses incurred by any Bank in connection with the
development, preparation and execution of, and any amendment,
supplement or modification to, or extension or waiver of this
Credit Agreement, the Basic Documents and any other documents
prepared in connection therewith, and the consummation of the
transactions contemplated hereby and thereby, including, without
limitation, the reasonable fees and disbursements of counsel
(including local counsel and patent and trademark counsel) to the
Agent incurred in connection with the foregoing and in connection
with legal advice rendered with respect to this Credit Agreement,
and the Basic Documents, (b) to pay or reimburse the Agent and
each Bank for all their respective costs and expenses incurred in
connection with, and to pay, indemnify, and hold the Agent, each
Bank and their respective officers, directors, employees, agents,
Affiliates, attorneys-in-fact and attorneys harmless from and
against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever arising out of or
in connection with, the enforcement or preservation of any rights
under the Basic Documents and any such other documents,
including, without limitation, reasonable fees and disbursements
of counsel to the Agent and of counsel to each of the Banks,
(c) to pay, indemnify, and to hold the Agent and each Bank
harmless from, any and all broker's fees, recording and filing
fees and any and all liabilities with respect to, or resulting
from any delay in paying, stamp, excise and other taxes, if any,
which may be payable or determined to be payable in connection
with the execution and delivery of, or consummation of any of the
transactions contemplated by, or any amendment, supplement or
modification of, or any waiver or consent under or in respect of,
this Credit Agreement, the Notes, the other Basic Documents and
any such other documents, and (d) to pay, indemnify, and hold the
Agent, each Bank and their respective officers, directors,
employees, agents, attorneys-in-fact, Affiliates and attorneys
harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature
whatsoever arising out of or in connection with the making of
the Loans, the taking of security interests under the Security
Documents or the use of the proceeds of the Loans (all the
foregoing, collectively, the "indemnified liabilities"), provided
that the Borrowers shall have no obligation hereunder with
respect to indemnified liabilities arising from (i) the gross
negligence or willful misconduct of the Agent or any Bank, or
(ii) legal proceedings commenced against the Agent or any Bank by
any security holder or creditor of the Agent or any Bank arising
out of and based upon rights afforded any such security holder or
creditor solely in its capacity as such, or (iii) legal
proceedings commenced against the Agent or any Bank by any other
Bank or by any Transferee. The Credit Agreements in this
subsection shall survive repayment of the Notes and all other
amounts payable hereunder.
13.6 Merger. This Credit Agreement with Schedules and
Exhibits, and with the documents, instruments and agreements
referred to herein or therein embodies the entire understanding
and agreement among the parties hereto and supersedes all prior
negotiations, agreements and understandings relating to the
subject matter hereof. There exist no other agreements or
understandings among the Banks and the Borrowers or other party,
explicit or implied, with respect to the subject matter hereof.
Each party acknowledges and agrees that this Credit Agreement is
fully integrated and not in need of parol evidence in order to
reflect the intentions of the parties, and that the parties
intend the literal words of this Credit Agreement to govern the
transactions described herein, and for all prior negotiations,
drafts and other extraneous communications to have no
significance or evidentiary effect whatsoever.
13.7 Effectiveness. The Credit Agreement shall become
effective upon the satisfaction of the conditions precedent
enumerated in subsection 5.1 hereof.
13.8 Governing Law; No Third Party Rights. THIS Credit
Agreement, THE NOTES IN FAVOR OF THE BANKS AND THE RIGHTS AND
DUTIES OF THE PARTIES UNDER THIS Credit Agreement SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF TENNESSEE.
13.9 Submission to Jurisdiction: Waivers. Each of the
Borrowers hereby irrevocably and unconditionally:
(i) submits for itself and its property in any legal
action or proceeding relating to this Credit Agreement and
the other Basic 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 State of Tennessee, the courts of the United
States of America for the Western District of Tennessee, and
appellate courts from any thereof;
(ii) 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 in any such court or that such action or
proceeding was brought in an inconvenient court and agrees
not to plead or claim the same;
(iii) 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;
(iv) 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: and
(v) agrees that a final judgment in such action or
proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any manner
provided by law.
(b) The Borrowers, the Agent and the Banks hereby
irrevocably and unconditionally waive trial by jury in any legal
action or proceeding relating to this Credit Agreement or any
other Basic Document to which it is a party and for any
counterclaim herein or therein.
13.10 Counterparts. This Credit Agreement may be executed
by one or more of the parties to this Credit Agreement on any
number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same
instrument.
13.11 Obligations of Banks Several. No Bank shall be
obligated to make the Loans of any other Bank hereunder. The
obligation of each Bank to make its Loans hereunder shall be
subject to the condition that each other Bank shall have made the
Loans to be made by it on such date.
IN WITNESS WHEREOF, the parties hereto have caused this
Credit Agreement to be duly executed and delivered by their
proper and duly authorized officers as of the day and year first
above written.
BORROWERS:
CATHERINES, INC.
By:_____________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President
CATHERINES STORES CORPORATION CATHERINES PARTNERS-
TEXAS, L.P.
By: CATHERINES STORES OF
TEXAS, INC., its general
partner
By:___________________________ By:___________________________
Name: ▇▇▇▇ ▇.▇▇▇▇▇▇▇ Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President Title: Executive Vice President
CATHERINES OF CALIFORNIA, INC. CATHERINES OF PENNSYLVANIA, INC.
By:___________________________ By:___________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President Title: Executive Vice President
CATHERINES PARTNERS-WASHINGTON,
G.P., a Washington general
partnership
CATHERINES OF NEVADA, INC.
By: CATHERINES, INC., its
managing general partner
By:____________________________ By:_________________________
Name: ▇▇▇▇ ▇.▇▇▇▇▇▇▇ Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President Title: Executive Vice President
CATHERINES STORES OF TEXAS, INC. CATHERINES PARTNERS - INDIANA, LLP
By:_____________________________ By: CATHERINES OF INDIANA, INC.,
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Managing Partner
Title: Executive Vice President
By:
________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President
CATHERINES STORES OF INDIANA, INC.
By:_____________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President
BANKS:
AMSOUTH BANK HIBERNIA NATIONAL BANK
By:____________________________ By:______________________________
Name:__________________________ Name:____ _______________________
Title:_________________________ Title:___________________________
EXHIBIT "A"
TO
CREDIT AGREEMENT
Borrowers:
CATHERINES, INC., a Delaware corporation
CATHERINES STORES CORPORATION, a Tennessee corporation
CATHERINES OF PENNSYLVANIA, INC., a Tennessee corporation
CATHERINES OF CALIFORNIA, INC., a California corporation
CATHERINES PARTNERS - TEXAS, L.P., a Tennessee limited partnership
CATHERINES OF NEVADA, INC., a Nevada corporation
CATHERINES PARTNERS - WASHINGTON, G.P., a Washington general partnership
CATHERINES STORES OF TEXAS, INC., a Texas corporation
CATHERINES STORES OF INDIANA, INC., an Indiana corporation
CATHERINES STORES - INDIANA, LLP, a Tennessee limited liability partnership
EXHIBIT "B"
to
CREDIT AGREEMENT
ASSUMPTION AGREEMENT
THIS ASSUMPTION AGREEMENT is made and entered into effective
as of the _______ day of _____________, _________, by
[New Subsidiary Name] , a [entity/jurisdiction] ,
("New Subsidiary") in favor of AmSouth Bank ("AmSouth")
individually and in its capacity as agent for the Banks defined
below (together with any of its successors in such capacity, the
"Agent") and HIBERNIA NATIONAL BANK ("Hibernia") (together with
their permitted successors and assigns referred to collectively
as the "Banks" and each individually referred to as a "Bank").
RECITALS
The Banks have extended certain credit facilities to
Catherines, Inc., Catherines Stores Corporation and their
subsidiaries (collectively, the "Borrowers" and individually, a
"Borrower") pursuant to the terms of that certain Credit
Agreement dated as of ______________, 2000 (as the same may from
time to time have been or shall be amended, supplemented or
otherwise modified, the "Credit Agreement").
Section 8 of the Credit Agreement permits the formation of
new subsidiaries of Borrowers and the transfer of assets to such
new subsidiaries subject to the provisions thereof.
New Subsidiary has been formed and desires to become a
"borrower" under the Credit Agreement by the execution of this
Assumption Agreement.
All capitalized terms used but not defined herein shall have
the meanings given them in the Credit Agreement.
NOW, THEREFORE, FOR VALUABLE CONSIDERATION, the receipt and
sufficiency of which are hereby acknowledged, New Subsidiary
agrees as follows:
1. Joinder in Credit Agreement. New Subsidiary hereby
joins in the Credit Agreement as a "Borrower". Each and every
reference in the Credit Agreement to a "borrower" shall be deemed
to include New Subsidiary.
2. Assumption of Borrower Obligations. New Subsidiary
hereby assumes and agrees to pay all of the obligations as a
"Borrower" under the Credit Agreement, including without
limitation, the Notes, and agrees to be bound by the terms,
conditions, covenants and other provisions of the Credit
Agreement.
3. Representations and Warranties. All of the
representations and warranties contained in the Credit Agreement
are hereby made by Borrower effective as of the date hereof.
4. Delivery of Additional Documentation. Simultaneously
herewith New Subsidiary has delivered to the Agent the following:
(a) A copy of the organizational documents of New
Subsidiary filed in the State of its formation;
(b) A copy of the resolutions adopted by New Subsidiary
authorizing the execution of this Assumption Agreement and all
other documents executed in connection herewith;
(c) A Security Agreement in the form executed by the other
Borrowers dated as of July 31, 2000;
(d) Financing statements sufficient for filing in the
appropriate jurisdictions necessary to perfect the Banks'
security interest in the Collateral; and
(e) Such other documents as Banks may reasonably request.
5. Fees. New Subsidiary shall reimburse the Agent and the
Banks for all reasonable expenses incurred by the Agent and the
Banks in connection with the foregoing, including reasonable
attorneys' fees and expenses.
6. Notices. New Subsidiary"s address for notice purposes
shall be:
c/o Catherines, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Legal Dept. and Chief Financial Officer
IN WITNESS WHEREOF, New Subsidiary has caused this
Assumption Agreement to be duly executed by its proper and duly
authorized officer as of the day and year first above written.
[NEW SUBSIDIARY]
By:_____________________________
Name:___________________________
Title:____________________________
EXHIBIT "C"
to
CREDIT AGREEMENT
COMMITMENT ASSIGNMENT
COMMITMENT ASSIGNMENT dated as of the date set forth in Item
l of Schedule I hereto, among the Transferor Bank set forth in
Item 2 of Schedule I hereto (the "Transferor Bank"), each
Purchasing Bank set forth in Item 3 of Schedule I hereto (each, a
"Purchasing Bank"), and AMSOUTH BANK, as agent for the Banks
under the Credit Agreement described below, in such capacity,
"Agent".
W I T N E S S E T H :
WHEREAS, this Commitment Assignment is being executed and
delivered in accordance with subsection 12.2 of the Credit
Agreement, dated as of July 31, 2000, as amended, among
Catherines, Inc. (the "Company), Catherines Stores Corporation
and the other entities described therein as "Borrowers", AmSouth
Bank and Hibernia National Bank (as from time to time amended,
supplemented or otherwise modified in accordance with the terms
thereof, the "Credit Agreement"); terms defined therein being
used herein as therein defined; and
WHEREAS, the Transferor Bank is selling and assigning to
each Purchasing Bank, rights, obligations and commitments under
the Credit Agreement and in and to the Collateral;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. The Transferor Bank hereby sells, assigns, transfers and
conveys to Agent, for the benefit of Banks, all its rights, title
and interests in the Security Documents and in and to the
Collateral, said Transferor Bank's interest in the Commitments
being $_________________.
2. Upon receipt by Agent of five counterparts of this
Commitment Assignment, to each of which is attached a fully
completed Schedule I and Schedule II, and each of which has been
executed by the Transferor Bank, each Purchasing Bank (and any
other person required by the Credit Agreement to execute this
Commitment Assignment), Agent will transmit to the Company, the
Transferor Bank and each Purchasing Bank a Transfer Effective
Notice, substantially in the form of Schedule III to this
Commitment Assignment (a "Transfer Effective Notice"). Such
Transfer Effective Notice shall set forth, inter alia, the date
on which the transfer effected by this Commitment Assignment
shall become effective (the "Transfer Effective Date").
3. At or before 12:00 noon, local time of the Transferor
Bank, on the Transfer Effective Date, each Purchasing Bank shall
pay to the Transferor Bank, in immediately available funds, an
amount equal to the purchase price, as agreed between the
Transferor Bank and such Purchasing Bank (the "Purchase Price"),
of the portion being purchased by such Purchasing Bank, such
Purchasing Bank's "Purchased Percentage" of the outstanding
Loans, L/C Participating Interests and other amounts owing to the
Transferor Bank under the Credit Agreement and the Notes.
Effective upon receipt by the Transferor Bank of the Purchase
Price from a Purchasing Bank, the Transferor Bank hereby
irrevocably sells, assigns and transfers to such Purchasing Bank,
without recourse, representation or warranty, and each Purchasing
Bank hereby irrevocably purchases, takes and assumes from the
Transferor Bank, such Purchasing Bank's Purchased Percentage of
the Commitments and the presently outstanding Loans, L/C
Participating Interests and other amounts owing to the Transferor
Bank under the Credit Agreement and the Notes together with all
instruments, documents and collateral security pertaining
thereto.
4. The Transferor Bank has made arrangements with each
Purchasing Bank with respect to (i) the portion, if any, to be
paid, and the date or dates for payment, by the Transferor Bank
to such Purchasing Bank of any fees heretofore received by the
Transferor Bank pursuant to the Credit Agreement prior to the
Transfer Effective Date and (ii) the portion, if any, to be paid,
and the date or dates for payment, by such Purchasing Bank to the
Transferor Bank of fees or interest received by such Purchasing
Bank pursuant to the Credit Agreement from and after the Transfer
Effective Date.
5. A. All principal payments that would otherwise be
payable from and after the Transfer Effective Date to or for the
account of the Transferor Bank pursuant to the Credit Agreement
and the Notes shall, instead, be payable to or for the account of
the Transferor Bank and the Purchasing Banks, as the case may be,
in accordance with their respective interests as reflected in
this Commitment Assignment.
B. All interest, fees and other amounts that would
otherwise accrue for the account of the Transferor Bank from and
after the Transfer Effective Date pursuant to the Credit
Agreement and the Notes shall, instead, accrue for the account
of, and be payable to, the Transferor Bank and the Purchasing
Banks, as the case may be, in accordance with their respective
interests as reflected in this Commitment Assignment. In the
event that any amount of interest, fees or other amounts accruing
prior to the Transfer Effective Date was included in the Purchase
Price paid by any Purchasing Bank, the Transferor Bank and each
Purchasing Bank will make appropriate arrangements for payment by
the Transferor Bank to such Purchasing Bank of such amount upon
receipt thereof from the Company.
6. On or prior to the Transfer Effective Date, the
Transferor Bank will deliver to Agent its Note or Notes.
7. Concurrently with the execution and delivery hereof,
the Transferor Bank will provide to each Purchasing Bank (if it
is not already a Bank party to the Credit Agreement) conformed
copies of all documents delivered to such Transferor Bank on the
Closing Date in satisfaction of the conditions precedent set
forth in the Credit Agreement.
8. Each of the parties to this Commitment Assignment
agrees that at any time and from time to time upon the written
request of any other party, it will execute and deliver such
further documents and do such further acts and things as such
other party may reasonably request in order to effect the
purposes of this Commitment Assignment.
9. By executing and delivering this Commitment Assignment,
the Transferor Bank and each Purchasing Bank confirm to and agree
with each other and the Agent and the Banks as follows: (i)
other than the representation and warranty that it is the legal
and beneficial owner of the interest being assigned hereby free
and clear of any adverse claim, the Transferor Bank makes no
representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in
or in connection with the Credit Agreement or the execution,
legality, validity, enforceability, genuineness, sufficiency or
value of the Credit Agreement, the Notes or any other instrument
or document furnished pursuant thereto; (ii) the Transferor Bank
makes no representation or warranty and assumes no responsibility
with respect to the financial condition of the Credit Parties or
the performance or observance by the Credit Parties of any of
their obligations under the Agreement, the Notes or any other
instrument or document furnished pursuant hereto; (iii) each
Purchasing Bank confirms that it has received a copy of the
Credit Agreement, together with copies of the financial
statements delivered pursuant to the Credit Agreement, if any,
and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter
into this Commitment Assignment; (iv) each Purchasing Bank will,
independently and without reliance upon Agent, the Transferor
Bank or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action
under the Credit Agreement; and (v) each Purchasing Bank agrees
that it will perform in accordance with their terms all of the
obligations which by the terms of the Credit Agreement are
required to be performed by it as a Bank.
10. Each party hereto represents and warrants to and agrees
with Agent that it is aware of and will comply with the provision
of subsections 12.5 and 12.6 of the Credit Agreement.
11. Schedule II hereof sets forth the revised Commitments
and Commitment Percentages of the Transferor Bank and each
Purchasing Bank as well as administrative information with
respect to each Purchasing Bank.
12. Amendments and Waivers. None of the terms of this
Commitment Assignment may be amended, waived, discharged or
terminated unless such amendment, waiver, discharge or
termination is in writing signed by the Company and the
Purchasing Bank.
13. This Commitment Assignment shall be governed by, and
construed in accordance with, the laws of the State of Tennessee.
14. This Commitment Assignment may be executed by one or
more of the parties to this Commitment Assignment on any number
of separate counterparts, and all of said counterparts taken
together shall be deemed to constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Commitment Assignment to be executed by their respective duly
authorized officers on Schedule I hereto as of the date set forth
in Item 1 of Schedule I hereto.
SCHEDULE I TO COMMITMENT ASSIGNMENT
COMPLETION OF INFORMATION AND SIGNATURES
FOR COMMITMENT ASSIGNMENT
Re: Credit Agreement, dated July 31, 2000, among
Catherines, Inc., Catherines Stores Corporation and the other
entities described as "Borrowers' in the Credit Agreement,
AmSouth Bank and Hibernia National Bank.
Item 1 Date of Commitment Assignment: ____________________
Item 2 (Transferor Bank): ____________________
Item 3 (Purchasing Banks): ____________________
____________________
Item 4 (Signatures of Parties ____________________
to Commitment Assignment) as Transferor Bank
By:
Name:_________________________
Title:________________________
___________________________
as a Purchasing Bank
By:
Name:_________________________
Title:________________________
_____________________________,
as a Purchasing Bank
By:
Name:_________________________
Title:________________________
CONSENTED TO AND ACKNOWLEDGED:
CATHERINES, INC.
By:
Name:__________________________________
Title
CATHERINES STORES CORPORATION
By:
Name:___________________________________
Title
SIGNATURES OF OTHER BORROWERS TO BE INSERTED
AMSOUTH BANK, as Agent
By:
Name:___________________________________
Title:
ACCEPTED FOR RECORDATION IN REGISTER:
AMSOUTH BANK, as Agent
By:
Name:__________________________________
Title:
SCHEDULE II TO COMMITMENT ASSIGNMENT
LIST OF LENDING OFFICES, ADDRESSES
FOR NOTICES AND COMMITMENT AMOUNTS
The Revised Commitments shall hereafter be as set forth
below:
Letter of Swingline
Letter of Credit Swingline Loan
Credit Commitment Loan Commitment
Bank Commitment Percentage Commitment Percentage Commitment
__________ $__________ _____% $_________ ___% $__________
__________ $__________ _____% $_________ ___% $__________
Address for Notice:
__________________________
__________________________
__________________________
__________________________
__________________________
__________________________
__________________________
__________________________
SCHEDULE III TO COMMITMENT ASSIGNMENT
FORM OF TRANSFER EFFECTIVE NOTICE
To: Catherines, Inc., Catherines Stores Corporation and the
other entities described as "Borrowers" in the Credit
Agreement and AmSouth Bank and Hibernia National Bank
The undersigned, as Agent under the Credit Agreement,
dated July 31, 2000, as amended, among Catherines, Inc.,
Catherines Stores Corporation and the other entities described as
"Borrowers" in the Credit Agreement, AmSouth Bank and Hibernia
National Bank acknowledges receipt of five executed counterparts
of a completed Commitment Assignment, as described in Schedule I
hereto. Terms defined in such Commitment Assignment are used
herein as therein defined.
1. Pursuant to such Commitment Assignment, you are advised
that the Transfer Effective Date will be __________________.
2. Pursuant to such Commitment Assignment, the Transferor
Bank is required to deliver to the Agent on or before the
Transfer Effective Date its Notes.
3. Pursuant to such Commitment Assignment, each Purchasing
Bank is required to pay its Purchase Price to the Transferor Bank
at or before 12:00 Noon on the Transfer Effective Date in
immediately available funds.
Very truly yours,
AMSOUTH BANK as Agent
By:
Name:____________________________
Title:
Schedule 1.1
Commitments
Letter of Swingline
Letter of Credit Swingline Loan
Credit Commitment Loan Commitment
Bank Commitment Percentage Commitment Percentage Commitment
AmSouth
Bank $10,000,000 66.67% $5,000,000 100% $15,000,000
Hibernia
National
Bank $5,000,000 33.33% -0- -0- $5,000,000
SCHEDULE 5.1(M)
FILING LOCATIONS
STATE FILING OFFICE DEBTOR
CA Secretary of Catherines, Inc.
State
Catherines of
California, Inc.
Catherines, a trade
name of Catherines,
Inc.
Catherine's Plus
Sizes, a trade name
of Catherines, Inc.
PS Plus Sizes . . .
Plus Savings, a
trade name of
Catherines, Inc.
PS Plus Sizes, a
trade name of
Catherines, Inc.
Plus Sizes, a trade
name of Catherines,
Inc.
GA Clerk of Catherines, Inc.
Superior Court
of ▇▇▇▇▇▇
County
Catherine's, a trade
name of Catherines,
Inc.
Added Dimensions,
trade name of
Catherines, Inc.
Catherine's Plus
Sizes, a trade name
of Catherines, Inc.
IL Secretary of Catherines, Inc.
State
Catherine's, a trade
name of Catherines,
Inc.
Plus Sizes, a trade
name of Catherines,
Inc.
PS Plus Sizes, a
trade name of
Catherines, Inc.
PS Plus Sizes . . .
Plus Savings, a
trade name of
Catherines, Inc.
The Answer, a trade
name of Catherines,
Inc.
Catherine's Plus
Sizes, a trade name
of Catherines, Inc.
IN Secretary of Catherines, Inc.
State
Catherine's, a trade
name of Catherines,
Inc.
Catherine's Plus
Sizes, a trade name
of Catherines, Inc.
Added Dimensions, a
trade name of
Catherines, Inc.
Catherines Stores of
Indiana, Inc.
PS Plus Sizes, a
trade name of
Catherines, Inc.
P.S. Plus Sizes . .
. Plus Savings, a
trade name of
Catherines, Inc.
Plus Sizes, a trade
name of Catherines,
Inc.
Catherines Partners
- Indiana, LLP
MI Secretary of Catherines, Inc.
State
Catherine's, a trade
name of Catherines,
Inc.
Catherine's Plus
Sizes, a trade name
of Catherines, Inc.
Added Dimensions, a
trade name of
Catherines, Inc.
PS Plus Sizes, a
trade name of
Catherines, Inc.
PS Plus Sizes . . .
Plus Savings, a
trade name of
Catherines, Inc.
Plus Sizes, a trade
name of Catherines,
Inc.
The Answer, a trade
name of Catherines,
Inc.
NC Secretary of Catherines, Inc.
State
Catherine's, a trade
name of Catherines,
Inc.
Catherine's Plus
Sizes, a trade name
of Catherines, Inc.
Added Dimensions, a
trade name of
Catherines, Inc.
OH Secretary of Catherines, Inc.
State
Catherine's, a trade
name of Catherines,
Inc.
Catherine's Plus
Sizes, a trade name
of Catherines, Inc.
Added Dimensions, a
trade name of
Catherines, Inc.
Plus Sizes, a trade
name of Catherines,
Inc.
PS Plus Sizes, a
trade name of
Catherines, Inc.
PS Plus Sizes . . .
Plus Savings, a
trade name of
Catherines, Inc.
TN Secretary of Catherines, Inc.
State
Catherines Stores
Corporation
Catherines of
Pennsylvania, Inc.
Catherines Partners
- Texas, L.P.
Catherine's, a trade
name of Catherines,
Inc.
Catherine's Plus
Sizes, a trade name
of Catherines, Inc.
Added Dimensions, a
trade name of
Catherines, Inc.
The Answer, a trade
name of Catherines,
Inc.
Plus Sizes, a trade
name of Catherines,
Inc.
PS Plus Sizes, a
trade name of
Catherines, Inc.
PS Plus Sizes . . .
Plus Savings, a
trade name of
Catherines, Inc.
TX Secretary of Catherines, Inc.
State
Catherines, a trade
name of Catherines,
Inc.
Catherine's Plus
Sizes, a trade name
of Catherines, Inc.
Added Dimensions, a
trade name of
Catherines, Inc.
Plus Sizes, a trade
name of Catherines,
Inc.
PS Plus Sizes, a
trade name of
Catherines, Inc.
PS Plus Sizes . . .
Plus Savings, a
trade name of
Catherines, Inc.
Catherines Stores of
Texas, Inc.
____________________
Catherines Partners
- Texas, L.P.
VA State Catherines, Inc.
Corporate
Commission
Catherines, a trade
name of Catherines,
Inc.
Plus Sizes, a trade
name of Catherines,
Inc.
PS Plus Sizes, a
trade name of
Catherines, Inc.
PS Plus Sizes . . .
Plus Savings, a
trade name of
Catherines, Inc.
Added Dimensions, a
trade name of
Catherines, Inc.
Catherines Plus
Sizes, a trade name
of Catherines, Inc.
The Answer, a trade
name of Catherines,
Inc.
Schedule 5.1(n)
Jurisdictions of Lien Searches
Schedule 6.5
Material Litigation
None.
Schedule 6.7
Exceptions to Ownership of Property
None.
Schedule 6.16
Environmental Matters
None.