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Exhibit 10.1
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REVOLVING CREDIT AND TERM LOAN AGREEMENT
among
QUIKSILVER, INC.
and
THE LENDERS PARTIES HERETO
and
UNION BANK OF CALIFORNIA, N.A.,
as Agent and Co-Lead Arranger
and
THE CHASE MANHATTAN BANK,
as Syndication Agent and Co-Lead Arranger
and
FLEET NATIONAL BANK,
as Documentation Agent
October 6, 2000
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TABLE OF CONTENTS
Page
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ARTICLE 1. DEFINITIONS..................................................... 1
1.1 Defined Terms................................................... 1
1.2 Other Definitional Provisions................................... 17
ARTICLE 2. AMOUNT AND TERMS OF LOANS AND LETTERS OF CREDIT; COMMITMENT
AMOUNTS......................................................... 17
2.1 Revolving Loans and Letters of Credit; Revolving Loan
Commitment Amounts.............................................. 17
2.2 Swing Line Loans; Swing Line Commitment......................... 19
2.3 Issuance of Letters of Credit................................... 22
2.4 Term Loans...................................................... 24
2.5 Optional Prepayments; Optional Commitment Reductions............ 25
2.6 Mandatory Prepayments........................................... 26
2.7 Conversion and Continuation Options............................. 27
2.8 Minimum Amounts of Tranches..................................... 27
2.9 Interest Rates and Payment Dates................................ 27
2.10 Computation of Interest and Fees................................ 29
2.11 Inability to Determine Interest Rate............................ 29
2.12 Pro Rata Treatment and Payments................................. 29
2.13 Illegality...................................................... 30
2.14 Increased Costs................................................. 30
2.15 Taxes........................................................... 31
2.16 Indemnity....................................................... 32
2.17 Unused-Commitment Fees.......................................... 32
2.18 Mitigation of Costs............................................. 33
ARTICLE 3. REPRESENTATIONS AND WARRANTIES.................................. 33
3.1 Organization and Good Standing.................................. 33
3.2 Power and Authority............................................. 33
3.3 Validity and Legal Effect....................................... 33
3.4 No Violation of Laws or Agreements.............................. 34
3.5 Title to Assets; Existing Encumbrances.......................... 34
3.6 Taxes and Assessments........................................... 34
3.7 Litigation and Legal Proceedings................................ 34
3.8 Accuracy of Financial Information............................... 34
3.9 Accuracy of Other Information................................... 35
3.10 Compliance with Laws Generally.................................. 35
3.11 ERISA Compliance................................................ 35
3.12 Environmental Compliance........................................ 36
3.13 Federal Regulations............................................. 37
3.14 Fees and Commissions............................................ 37
3.15 Solvency........................................................ 37
3.16 Investment Company Act; Other Regulations....................... 37
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3.17 Nature of Business.............................................. 37
3.18 Ranking of Loans................................................ 37
3.19 Subsidiaries.................................................... 37
ARTICLE 4. CONDITIONS PRECEDENT............................................ 37
4.1 Conditions to Closing Date...................................... 37
4.2 Conditions to Each Loan or Letter of Credit..................... 39
ARTICLE 5. AFFIRMATIVE COVENANTS........................................... 39
5.1 Financial Statements............................................ 39
5.2 Certificates; Other Information................................. 40
5.3 Payment of Obligations.......................................... 41
5.4 Conduct of Business; Maintenance of Existence and Licenses;
Contractual Obligations......................................... 41
5.5 Maintenance of Property; Insurance.............................. 42
5.6 Inspection of Property; Books and Records; Discussions.......... 43
5.7 Environmental Laws.............................................. 43
5.8 Use of Proceeds................................................. 43
5.9 Compliance With Laws, Etc....................................... 44
5.10 Guarantees, Etc................................................. 44
ARTICLE 6. NEGATIVE COVENANTS.............................................. 44
6.1 Financial Condition Covenants................................... 44
6.2 Limitation on Indebtedness...................................... 45
6.3 Limitation on Liens............................................. 45
6.4 Limitation on Fundamental Changes............................... 46
6.5 Limitation on Sale of Assets.................................... 46
6.6 Limitation on Dividends......................................... 47
6.7 Limitation on Investments, Loans and Advances................... 47
6.8 Transactions with Affiliates.................................... 48
6.9 Fiscal Year..................................................... 48
6.10 Sale-Leaseback Transactions..................................... 48
6.11 Unfunded Liabilities............................................ 48
6.12 Hedging Obligations............................................. 48
ARTICLE 7. EVENTS OF DEFAULT............................................... 48
ARTICLE 8. THE AGENT....................................................... 51
8.1 Appointment..................................................... 51
8.2 Delegation of Duties............................................ 51
8.3 Exculpatory Provisions.......................................... 51
8.4 Reliance by the Agent........................................... 52
8.5 Notice of Default............................................... 52
8.6 Non-Reliance on the Agent and Other Lenders..................... 53
8.7 Indemnification................................................. 53
8.8 The Agent in Its Individual Capacity............................ 53
8.9 Successor Agent................................................. 54
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8.10 Syndication Agent and Documentation Agent....................... 54
ARTICLE 9. MISCELLANEOUS................................................... 54
9.1 Amendments and Waivers.......................................... 54
9.2 Notices......................................................... 55
9.3 No Waiver; Cumulative Remedies.................................. 55
9.4 Survival of Representations and Warranties...................... 56
9.5 Payment of Expenses and Taxes................................... 56
9.6 Successors and Assigns; Participations; Purchasing Lenders...... 56
9.7 Adjustments; Setoff............................................. 59
9.8 Counterparts.................................................... 60
9.9 Severability.................................................... 60
9.10 Integration..................................................... 60
9.11 GOVERNING LAW................................................... 60
9.12 Alternative Dispute Resolution.................................. 60
9.13 Acknowledgements................................................ 62
9.14 Intercreditor Agreement......................................... 62
9.15 Headings........................................................ 62
9.16 Copies of Certificates, Etc..................................... 62
9.17 Confidentiality................................................. 62
9.18 Amendment and Restatement....................................... 62
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Exhibits
A Form of Revolving Note
B Form of Swing Line Note
C Form of Assignment and Acceptance
D Form of No Default/Representation Certificate
E Form of Covenant Compliance Certificate
F Form of Continuation Notice
G Forms of Letter of Credit Requests (Commercial Letters of
Credit and Standby Letters of Credit)
H Form of Swing Line Loan Participation Certificate
I Form of Notice of Revolving Borrowing
J Form of Borrowing Base Certificate
K Form of Notice of Swing Line Borrowing
L Form of Term Note
Schedules
2.3 Certain Fees Applicable to Commercial Letters of Credit
3.1 Foreign Qualification Jurisdictions
3.5A Liens Against Assets of Na Pali
3.5B Operating Names/Trade Names
3.7 Litigation
3.19 Subsidiaries
6.2 Existing Indebtedness
6.7 Existing Investments
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REVOLVING CREDIT AND TERM LOAN AGREEMENT
THIS REVOLVING CREDIT AND TERM LOAN AGREEMENT, dated as of October 6,
2000, among (1) QUIKSILVER, INC., a Delaware corporation (the "Borrower"), (2)
the several banks and other financial institutions from time to time parties to
this Agreement (the "Lenders"), (3) UNION BANK OF CALIFORNIA, N.A., as
administrative agent for the Lenders hereunder (in such capacity, the "Agent")
and co-lead arranger, (4) THE CHASE MANHATTAN BANK, as syndication agent and
co-lead arranger (in such capacity, the "Syndication Agent"), and (5) FLEET
NATIONAL BANK, as documentation agent (in such capacity, the "Documentation
Agent").
Recital
The Borrower, certain of the Lenders, the Agent, the Syndication Agent
and the Documentation Agent have entered into a Revolving Credit Agreement dated
as of April 25, 2000, as amended by a First Amendment to Revolving Credit
Agreement dated July 18, 2000 (said Agreement, as so amended, herein called the
"Old Credit Agreement"), pursuant to which such Lenders made up to $100,000,000
of revolving credit available to the Borrower. The parties to the Old Credit
Agreement, together with certain additional lenders, now wish to amend and
restate the Old Credit Agreement for the purpose, among others, of adding a
$25,000,000 term loan facility thereto.
NOW, THEREFORE, in consideration of the promises and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
ARTICLE 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms shall
have the following meanings:
"Accountants": Deloitte & Touche, LLP, or such other firm of independent
certified public accountants of recognized national standing as shall be
selected by the Borrower and satisfactory to the Agent and the Majority Lenders.
"Accounts": the unpaid portion of obligations owing to the Borrower,
payable in Dollars, arising out of the sale of Inventory by the Borrower.
"Acquisitions": any transaction, or any series of transactions,
consummated after the Closing Date, in which the Borrower or any Subsidiary (in
one transaction or in a series of transactions) (a) acquires any business or all
or substantially all of the assets of any Person or any division or business
unit thereof, whether through purchase of assets, merger or otherwise, (b)
directly or indirectly acquires control of at least a majority (in number of
votes) of the securities of a corporation which have ordinary voting power for
the election of directors or (c) directly or indirectly acquires control of a
majority ownership in any partnership or joint venture.
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"Affiliate": as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is controlled by,
or is under common control with, such Person. For purposes of this definition,
"control" of a Person means the power, directly or indirectly, either to (a)
vote securities having 5% or more of the ordinary voting power for the election
of directors (or the equivalent) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"Agent": as defined in the preamble hereto.
"Aggregate Revolving Loan Commitment": the sum of the Revolving Loan
Commitments set forth on the signature pages hereto, or in the Assignment and
Acceptance pursuant to which a Lender becomes a party hereto, as the same may be
adjusted from time to time pursuant to the provisions hereof. The aggregate
amount of the Revolving Loan Commitments as of the Closing Date is $100,000,000.
"Agreement": this Revolving Credit and Term Loan Agreement, as amended,
waived, supplemented or otherwise modified from time to time.
"Applicable Lending Office": for any Lender, its offices for LIBOR
Loans, Base Rate Loans and participations in Letters of Credit, specified below
its signature on the signature pages hereof or in the Assignment and Acceptance
pursuant to which it became a party hereto, any of which offices may, upon 10
days' prior written notice to the Agent and the Borrower, be changed by such
Lender.
"Applicable Revolving Loan Margin": for each Type of Revolving Loan, as
set forth below:
Revolving Loan
Leverage Level LIBOR Margin Base Rate Margin
-------------------------------------- --------------- -----------------
1 ((less than or equal to) 0.75) 1.00% per annum 0
2 (>0.75 (less than or equal to) 1.00) 1.25% per annum 0
3 (>1.00 (less than or equal to) 1.50) 1.50% per annum 0
4 (>1.50 (less than or equal to) 1.75) 1.75% per annum 0
5 (>1.75) 2.00% per annum 0
"Applicable Term Loan Margin": for each Type of Term Loan, as set forth
below:
Term Loan
Leverage Level LIBOR Margin Base Rate Margin
-------------------------------------- --------------- -----------------
1 ((less than or equal to) 0.75) 1.25% per annum 0
2 (>0.75 (less than or equal to) 1.00) 1.50% per annum 0
3 (>1.00 (less than or equal to) 1.50) 1.75% per annum 0
4 (>1.50 (less than or equal to) 1.75) 2.00% per annum 0
5 (>1.75) 2.25% per annum 0
Notwithstanding the foregoing, during the period from and including the Closing
Date to but excluding the fifth day after the day on which the Agent receives
certified financial statements and a Covenant Compliance Certificate in
accordance with Section 5.1(a) for the Borrower's
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fiscal year ending on October 31, 2000, the Applicable Term Loan Margin for
LIBOR Loans shall be 2.00% per annum.
"Asset Disposition": the sale, sale and leaseback, transfer, conveyance,
exchange, long-term lease accorded sales treatment under GAAP or similar
disposition (including by means of a merger, consolidation, amalgamation, joint
venture or other substantive combination) of any of the Properties, business or
assets (other than marketable securities, including "margin stock" within the
meaning of Regulation U, liquid investments and other financial instruments but,
including the assignment of any lease, license or permit relating to the
Properties) of the Borrower or any of its Subsidiaries to any Person or Persons
other than to the Borrower or any of its Subsidiaries; provided, however, that
Asset Dispositions shall not include the sale of Inventory in the ordinary
course of business.
"Assignment and Acceptance": an Assignment and Acceptance substantially
in the form of Exhibit C to this Agreement.
"Available Revolving Loan Commitment": with respect to each Lender on
the date of determination thereof, the amount by which (a) the Revolving Loan
Commitment of such Lender on such date exceeds (b) the principal sum of such
Lender's (i) Revolving Loans outstanding, (ii) Revolving Loan Commitment
Percentage of the aggregate Letter of Credit Amount of all Letters of Credit
outstanding and (iii) Revolving Loan Commitment Percentage of the aggregate
amount of unreimbursed drawings under all Letters of Credit on such date.
"Base Rate": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greater of (a) the Reference
Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on
such day plus 1/2 of 1%. "Reference Rate" shall mean the rate of interest per
annum publicly announced from time to time by Union Bank of California, N.A. as
its "reference rate" in effect at its office in Los Angeles, California.
"Federal Funds Effective Rate" shall mean, for any day, the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the Agent from three
federal funds brokers of recognized standing selected by it. If, for any reason,
the Agent shall have determined (which determination shall be conclusive absent
manifest error) that it is unable to ascertain the Federal Funds Effective Rate
for any reason, including the inability or failure of the Agent to obtain
sufficient quotations in accordance with the terms hereof, the Base Rate shall
be determined without regard to clause (b) of the first sentence of this
definition until the circumstances giving rise to such inability no longer
exist. Any change in the Base Rate due to a change in the Reference Rate or the
Federal Funds Effective Rate shall be effective on the effective date of such
change in the Reference Rate or the Federal Funds Effective Rate, respectively.
"Base Rate Loans": Loans the rate of interest applicable to which is
based upon the Base Rate.
"Borrower": as defined in the preamble hereto.
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"Borrowing Base": as at any date, an amount determined by the Agent by
reference to the most recent Borrowing Base Certificate, which is equal to the
sum of the following, without duplication:
(a) 80% of Eligible Accounts; plus
(b) 40% of Eligible Inventory (provided that such percentage shall
be increased to 50% with respect to any calculation of the Borrowing Base during
the months of November through April of each year); plus
(c) 40% of outstanding and undrawn commercial Letters of Credit
issued hereunder for the account of the Borrower (provided that such percentage
shall be increased to 50% with respect to any calculation of the Borrowing Base
during the months of November through April of each year).
"Borrowing Base Certificate": a certificate executed by a Responsible
Officer of the Borrower substantially in the form of Exhibit J hereto.
"Business Day": a day other than a Saturday, Sunday or other day on
which commercial banks in the State of California are authorized or required by
law to close and which, in the case of a LIBOR Loan, is a Eurodollar Business
Day.
"Capital Expenditures": for any period, collectively, for any Person,
the aggregate of all expenditures which are made during such period (whether
paid in cash or accrued as liabilities), and all contractual commitments for
such expenditures which are entered into during such period (provided that if
any such commitment is included in one fiscal year, the actual payment in a
later fiscal year shall not be included in such later fiscal year), by such
Person, for property, plant or equipment and which would be reflected as
additions to property, plant or equipment on a balance sheet of such Person
prepared in accordance with GAAP (including all Capitalized Lease Obligations).
"Capitalized Lease Obligations": obligations for the payment of rent for
any real or personal property under leases or agreements to lease that, in
accordance with GAAP, have been or should be capitalized on the books of the
lessee and, for purposes hereof, the amount of any such obligation shall be the
capitalized amount thereof determined in accordance with GAAP.
"Capital Stock": any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation), any and
all warrants, options or rights to purchase, or any other securities convertible
into, any of the foregoing.
"Closing Date": the date on which the conditions precedent set forth in
Section 4.1 have been satisfied.
"Code": the Internal Revenue Code of 1986, as amended from time to time.
"Collateral": all of the property (tangible or intangible, but excluding
trademarks, trade names and other intellectual property rights) purported to be
subject to the lien or security interest purported to be created by any security
agreement, pledge agreement, assignment,
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mortgage, deed of trust, or other security document heretofore or hereafter
executed by the Borrower as security for all or part of the Obligations.
"Collateral Documents": the Security Agreement, the Na Pali Security
Agreement, the QAPL Share Mortgage, all notices of security interests in deposit
accounts requested by the Agent pursuant to the Security Agreement, all Form
UCC-1 Financing Statements (including any amendments thereto) filed against the
Borrower and any other documents encumbering the Collateral or evidencing or
perfecting a security interest therein for the benefit of the Lenders.
"Commonly Controlled Entity": as to any Person, an entity, whether or
not incorporated, which is under common control with such Person within the
meaning of Section 4001 of ERISA or is part of a group which includes such
Person and which is treated as a single employer under Section 414 of the Code.
"Consideration": with respect to any Acquisition, the aggregate
consideration, in whatever form (including cash payments, the principal amount
of promissory notes and Indebtedness assumed, and the fair market value of other
property delivered) paid, delivered or assumed by the Borrower or any Subsidiary
for such Acquisition and the expenses associated therewith, including all
brokerage commissions, legal fees and similar expenses.
"Continuation Notice": a request for continuation or conversion of a
Loan as set forth in Section 2.7, substantially in the form of Exhibit F.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Covenant Compliance Certificate": a certificate of the Chief Financial
Officer of the Borrower substantially in the form of Exhibit E hereto.
"Debt Offering": the issuance or sale of any debt securities by the
Borrower or any Domestic Subsidiary.
"Default": any of the events specified in Article 7, whether or not any
requirement for the giving of notice, the lapse of time, or both, or any other
condition, has been satisfied.
"Dollars" and "$": dollars in lawful currency of the United States.
"Domestic Subsidiary": each Subsidiary organized under the laws of the
United States or any state thereof.
"Drawing Lender": as defined in Section 2.3(c).
"EBITDA": for the Borrower and its Subsidiaries on a consolidated basis,
for the fiscal quarter most recently ended and the immediately preceding three
fiscal quarters, Net Income after eliminating extraordinary gains and losses,
plus (i) provisions for income taxes, (ii) depreciation and amortization and
(iii) Interest Expense; provided, however, that calculation of EBITDA shall
include the foregoing with respect to QIPL on a historical basis to the extent
that financial information supporting the same is provided by the Borrower to
the Agent and agreed to by the Agent in the exercise of its reasonable
discretion.
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"Eligible Accounts": those Accounts, (net of (x) finance charges and (y)
the "allowance for doubtful accounts" figure set forth on a consolidated basis
as disclosed on the Borrowing Base Certificate), for which invoices have been
issued and which are due and payable to the Borrower, have been validly assigned
to the Agent for the benefit of the Lenders and strictly comply with all of the
Borrower's warranties and representations to the Agent and the Lenders;
provided, however, that Eligible Accounts shall not include the following: (i)
any Account with respect to which the account debtor is not a legal entity
formed under the laws of, and having its principal place of business in, the
United States or Canada, provided that up to an aggregate of $6,000,000 of such
Accounts at any time shall be included as Eligible Accounts; (ii) any Account
with respect to which the Agent does not hold a perfected first priority Lien;
and (iii) any Account with respect to which the account debtor is a Subsidiary
or an Affiliate of the Borrower.
"Eligible Inventory": the net book value of Inventory owned by the
Borrower (and not by any Subsidiary), such value (a) to be determined on a
first-in first-out basis and at the lower of cost or market in conformity with
GAAP and (b) not to exceed $85,000,000 in the aggregate at any time, provided
that such Inventory (i) is held for sale by the Borrower and is normally and
currently saleable in the ordinary course of the Borrower's business, (ii) is of
good and merchantable quality, free from defects, (iii) is located in the United
States or Canada at locations of which the Agent has been notified in writing or
is in transit to the Borrower (including by ship), and (iv) is subject to a
perfected first-priority Lien in favor of the Agent, except in the case of
Inventory located on a ship and in transit to the Borrower, to the extent, if
any, that such Inventory may not be so subject.
"Environmental Control Statutes": as defined in Section 3.12(a).
"Equity Offering": the sale or issuance (or reissuance) by the Borrower
or any Domestic Subsidiary of any equity interests or beneficial interests
(common stock, preferred stock, partnership interests, member interests or
otherwise) or any options, warrants, convertible securities or other rights to
purchase such equity interests or beneficial interests; provided, however, that
the term "Equity Offering" shall not include any such sale or issuance (or
reissuance) solely to officers, employees, directors and/or consultants of the
Borrower and/or any Subsidiary pursuant to one or more employee stock option or
stock purchase plans.
"ERISA": the Employee Retirement Income Security Act of 1974, as amended
from time to time.
"ERISA Affiliate": as to any Person, each trade or business including
such Person, whether or not incorporated, which together with such Person would
be treated as a single employer under Section 4001(a)(14) of ERISA.
"Eurodollar Business Day": shall mean any day on which banks are open
for dealings in Dollar deposits in the London Inter-bank Market.
"Event of Default": any of the events specified in Article 7, provided
that any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
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"Excluded Taxes": all taxes imposed on or by reference to the net income
of the Agent or any Lender or its Applicable Lending Office by any Governmental
Authority and all franchise taxes, taxes on doing business or taxes measured by
capital or net worth imposed on the Agent or on any Lender or its Applicable
Lending Office by any Governmental Authority.
"Federal Funds Effective Rate": as defined in the definition of "Base
Rate" contained in this Section 1.1.
"Field Exam": an examination of the Borrower's books, records and
accounting procedures conducted by a third-party examiner selected by the Agent.
"Fixed Charge Coverage Ratio": for the Borrower and its Subsidiaries on
a consolidated basis for the fiscal quarter most recently ended and the
immediately preceding three fiscal quarters, the ratio of (a) EBITDA minus (i)
income taxes paid, minus (ii) Capital Expenditures not financed through
long-term debt or long-term Capitalized Lease Obligations to (b) Fixed Charges
for such period.
"Fixed Charges": for the Borrower and its Subsidiaries on a consolidated
basis, the sum of (i) Interest Expense and (ii) regularly scheduled principal
payments due within twelve months on Funded Debt (excluding optional and
mandatory prepayments due under Sections 2.5 and 2.6), including the principal
component of Capitalized Lease Obligations.
"Foreign Subsidiary": each Subsidiary other than a Domestic Subsidiary.
"Funded Debt": the sum of the outstanding principal balance of all
Indebtedness of the Borrower and its Subsidiaries described in clauses (i),
(ii), (iii) and (iv) of the definition of "Indebtedness" set forth herein.
Notwithstanding the foregoing, Funded Debt shall not include trade payables and
accrued expenses incurred by the Borrower and its Subsidiaries in accordance
with customary practices and in the ordinary course of business of the Borrower
and its Subsidiaries.
"GAAP": generally accepted accounting principles in the United States in
effect from time to time. If, at any time, GAAP changes in a manner which will
materially affect the calculations determining compliance by the Borrower with
any of the covenants in Section 6.1, such covenants shall continue to be
calculated in accordance with GAAP in effect prior to such changes in GAAP.
"Governmental Authority": any nation or government, any federal, state
or other political subdivision thereof and any federal, state or local entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guarantee Obligation": as to any Person (the "guaranteeing person"),
any obligation of (a) the guaranteeing person or (b) another Person (including
any bank under any letter of credit) to induce the creation of which the
guaranteeing person has issued a reimbursement, counter-indemnity or similar
obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary obligations")
of any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance
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or supply funds for the purchase or payment of any such primary obligation or to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) 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 (iv) otherwise to assure or hold harmless
the owner of any such primary obligation against loss in respect thereof;
provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lesser of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as determined by the
Borrower in good faith.
"Guarantees": each guarantee made by a Guarantor in favor of the Agent
for the benefit of the Lenders, in form and substance satisfactory to the Agent,
as the same may be amended, modified or restated from time to time in accordance
with the terms hereof.
"Guarantor Collateral": all of the property (tangible or intangible)
purported to be subject to the lien or security interest purported to be created
by any security agreement, pledge agreement, assignment, mortgage, deed of trust
or other security document heretofore or hereafter executed by any Guarantor as
security for all or part of the Obligations or the Guarantees.
"Guarantor Collateral Documents": the Guarantor Security Agreements, all
notices of security interests in deposit accounts requested by the Agent
pursuant to the Guarantor Security Agreements, Form UCC-1 Financing Statements
and amendments thereto and any other document encumbering the Guarantor
Collateral or evidencing or perfecting a security interest therein in favor of
the Agent for the benefit of the Lenders executed by any Guarantor.
"Guarantors": each Subsidiary which executes a Guarantee in favor of the
Agent.
"Guarantor Security Agreements": each security agreement made by a
Subsidiary in favor of the Agent for the benefit of the Lenders in form and
substance satisfactory to the Agent, as the same may be amended, modified or
restated from time to time in accordance with the terms hereof.
"Hedging Agreements": as defined in the definition of "Hedging
Obligations" in this Section 1.1.
"Hedging Obligations": of any Person, any and all obligations of such
Person, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, commodity prices,
exchange rates or forward rates applicable to such party's assets, liabilities
or exchange transactions, including dollar-
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denominated or cross-currency interest rate exchange agreements, forward
currency exchange agreements, interest rate cap or collar protection agreements,
forward rate currency or interest rate options, puts and warrants or any similar
derivative transactions ("Hedging Agreements"), and (ii) any and all
cancellations, buy-backs, reversals, terminations or assignments of any of the
foregoing.
"Indebtedness": of any Person, (i) all indebtedness of such Person for
borrowed money or for the deferred purchase price of property or services
(including, in the case of the Borrower and its Subsidiaries, the deferred
purchase price payable by QAPL to the former shareholders of QIPL for the
acquisition of the stock of QIPL by QAPL), (ii) all obligations of such Person
evidenced by notes, bonds, debentures or other similar instruments, (iii) all
indebtedness created or arising under any conditional-sale or other
title-retention agreement with respect to property acquired by such Person, (iv)
all Capitalized Lease Obligations of such Person, (v) all Hedging Obligations of
such Person, (vi) all obligations, contingent or otherwise, of such Person under
acceptance, letter of credit, airway release, steamship guaranty or similar
facilities, (vii) all Guarantee Obligations of such Person in respect of, and
obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to secure a credit against loss in respect of, indebtedness or
obligations of others of the kinds referred to in clause (i), (ii), (iii), (iv),
(v) or (vi) above and (viii) all liabilities in respect of unfunded vested
benefits under plans covered by Title IV of ERISA.
"Insolvency": with respect to any Multiemployer Plan, the condition that
such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intercreditor Agreement": the Intercreditor Agreement dated as of April
28, 2000 between the Agent, on behalf of the Lenders, on the one hand, and the
Leasehold Improvement Lender, on the other hand, as it may be amended, modified
or restated from time to time.
"Interest Expense": as of any date, for the fiscal quarter most recently
ended and the immediately preceding three fiscal quarters, the difference
between (a) the sum of (i) the amount of all interest on Funded Debt which was
paid, payable and/or accrued for such period and (ii) all commitment, standby
letter of credit, commercial letter of credit or line of credit fees paid,
payable and/or accrued for such period to any lender in exchange for such
lender's commitment to lend and (b) the amount of all noncash interest expense
incurred by the Borrower and its Subsidiaries in connection with the Borrower's
acquisition of QIPL through QAPL.
"Interest Payment Date": (a) as to any Base Rate Loan, the last day of
each January, April, July and October to occur while any such Loan is
outstanding, (b) as to any LIBOR Loan having an Interest Period of three months
or less, the last day of such Interest Period, (c) as to any LIBOR Loan having
an Interest Period longer than three months, each day which is at the end of
each three month-period within such Interest Period after the first day of such
Interest Period and the last day of such Interest Period and (d) for each of
(a), (b) and (c) above, the day on which any such Loan becomes due and payable
in full or is paid or prepaid in full.
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"Interest Period": with respect to any LIBOR Loan:
(a) initially, the period commencing on the borrowing or conversion
date, as the case may be, with respect to such LIBOR Loan and ending one, two,
three or six months thereafter, as selected by the Borrower in its notice of
borrowing or Continuation Notice, as the case may be, given with respect
thereto; and
(b) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such LIBOR Loan and ending one, two,
three or six months thereafter, as selected by the Borrower by irrevocable
notice to the Agent not less than three Eurodollar Business Days prior to the
last day of the then current Interest Period with respect thereto; provided,
however, that, all of the foregoing provisions relating to Interest Periods are
subject to the following:
(i) if any Interest Period pertaining to a LIBOR Loan would
otherwise end on a day that is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless the result of such extension
would be to carry such Interest Period into another calendar month, in which
event such Interest Period shall end on the immediately preceding Business Day;
(ii) any Interest Period for any Loan that would otherwise
extend beyond the date final payment is due on such Loan shall end on the date
of such final payment; and
(iii) any Interest Period pertaining to a LIBOR Loan that begins
on the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month.
"Inventory": that portion of the Borrower's inventory which is finished
goods, raw materials and work in process.
"Lease Expense": for any period, the aggregate minimum rental
obligations payable in respect of such period under leases of real and/or
personal property (net of income from subleases thereof), whether or not such
obligations are reflected as liabilities or commitments on a consolidated
balance sheet or in the notes thereto.
"Leasehold Improvement Lender": Union Bank of California, N.A., in its
individual capacity, as lender of the Leasehold Improvement Loan, and any
successor or assigns thereof.
"Leasehold Improvement Loan": the term loan in the original principal
amount of $12,300,000 made by the Leasehold Improvement Lender to the Borrower
and referred to in the Intercreditor Agreement.
"Lender" or "Lenders": as defined in the preamble hereto and in Section
8.8.
"Letter of Credit": as defined in Section 2.1(a).
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"Letter of Credit Amount": the stated maximum amount available to be
drawn under a particular Letter of Credit, airway release or steamship guaranty,
as such amount may be reduced or reinstated from time to time in accordance with
the terms of such Letter of Credit.
"Letter of Credit Request": a request by the Borrower for the issuance
of a Letter of Credit, on the Agent's standard form of standby or commercial
letter of credit application and agreement, as applicable, the current forms of
which are attached hereto as Exhibit G, and containing terms and conditions
satisfactory to the Agent in its sole discretion.
"LIBOR": with respect to each day during each Interest Period pertaining
to a LIBOR Loan, the rate of interest determined by the Agent to be the rate per
annum at which deposits in dollars would be offered to the Agent by leading
banks in the London Interbank Market at or about 9:00 a.m., Los Angeles time,
two Eurodollar Business Days prior to the beginning of such Interest Period, for
delivery on the first day of such Interest Period for the number of days
comprised therein and in an amount comparable to the amount of its LIBOR Loan to
be outstanding during such Interest Period.
"LIBOR Adjusted Rate": with respect to each day during each Interest
Period pertaining to a LIBOR Loan, a rate per annum determined for such day in
accordance with the following formula (rounded upward to the nearest 1/100th of
1%):
LIBOR
---------------------------------
1.00 - LIBOR Reserve Requirements
"LIBOR Loans": Loans the rate of interest applicable to which is based
upon LIBOR.
"LIBOR Reserve Requirements": for any day as applied to a LIBOR Loan,
the aggregate (without duplication) of the maximum rates (expressed as a decimal
fraction) of reserve requirements in effect on such day (including basic,
supplemental, marginal and emergency reserves under any regulations of the Board
of Governors of the Federal Reserve System or other Governmental Authority
having jurisdiction with respect thereto) dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of such Board) maintained by a member bank of the
Federal Reserve System.
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), or preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever (including any conditional sale or other title retention agreement,
any Capitalized Lease Obligation having substantially the same economic effect
as any of the foregoing, and the filing of any financing statement under the
Uniform Commercial Code or comparable law of any jurisdiction in respect of any
of the foregoing).
"Loan": a Revolving Loan, a Swing Line Loan or a Term Loan.
"Loan Documents": this Agreement, the Notes, any Letter of Credit
Requests that are executed by the Borrower, the Letters of Credit, the
Collateral Documents, the Guarantor Collateral Documents, the Guarantees, the
Intercreditor Agreement, any Hedging Agreements and any other agreement executed
by an Obligor in connection herewith or therewith, including
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UCC-1 Financing Statements and any fee letters, as such agreements and documents
may be amended, supplemented and otherwise modified from time to time in
accordance with the terms hereof.
"Majority Lenders": Lenders with outstanding Loans and/or participations
in outstanding Letters of Credit and/or unreimbursed drawings under Letters of
Credit having an unpaid principal balance equal to or more than 66-2/3% of the
sum of (i) the unpaid principal balance of all Loans outstanding, (ii) the
aggregate Letter of Credit Amount of all Letters of Credit outstanding and (iii)
the aggregate amount of unreimbursed drawings under all Letters of Credit,
excluding from such calculation Lenders which have failed or refused to fund a
Loan or a Letter of Credit drawing (and as to which such failure or refusal is
continuing) when required to do so; provided, however, that, if no such Loans,
Letters of Credit or drawings are outstanding, then "Majority Lenders" shall
mean Lenders having Revolving Loan Commitments equal to or more than 66-2/3% of
the Aggregate Revolving Loan Commitment, excluding from such calculation Lenders
which have failed or refused to fund a Loan or a Letter of Credit drawing (and
as to which such failure or refusal is continuing) when required to do so.
"Margin Stock": as defined in Regulation U.
"Material Adverse Effect": a material adverse effect on (a) the
business, operations, property, condition or prospects (financial or otherwise)
of the Borrower and its Subsidiaries taken as a whole, (b) the ability of the
Borrower, any Material Domestic Subsidiary or any Material Foreign Subsidiary to
perform its respective obligations under the Loan Documents or (c) the validity
or enforceability of the Loan Documents or the rights or remedies of the Agent
and the Lenders hereunder or thereunder.
"Material Domestic Subsidiary": as of any date, a Domestic Subsidiary
that (a) has a net worth (excluding in the determination thereof any
Indebtedness of such Domestic Subsidiary to the Borrower or another Subsidiary)
of at least 5% of the Borrower's consolidated net worth as of the last day of
the most recently ended fiscal quarter of the Borrower, (b) has annual revenue
(or annualized revenue in the case of any Person that has not been a Subsidiary
for a full year) of at least 5% of the Borrower's consolidated revenue for the
12-month period ended as of the most recently ended fiscal quarter of the
Borrower or (c) has annual net income (or annualized net income in the case of
any Person that has not been a Subsidiary for a full year) of at least 5% of the
Borrower's consolidated net income for the 12-month period ended as of the most
recently ended fiscal quarter of the Borrower.
"Material Foreign Subsidiary": a Foreign Subsidiary having at any time a
net worth equal to 10% or more of the Borrower's consolidated net worth.
"Maximum Leverage Ratio": for the Borrower and its Subsidiaries on a
consolidated basis, the ratio of Funded Debt to EBITDA.
"Multiemployer Plan": a plan which is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Na Pali": Na Pali S.A.S., a French corporation and a Subsidiary of the
Borrower.
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"Na Pali Security Agreement": means the Pledge over Financial Instrument
(Share) Account dated as of May 31, 2000 made by the Borrower and Na Pali in
favor of Agent for the benefit of the Lenders, as the same may be amended,
restated or otherwise modified from time to time.
"Net Income": for the Borrower and its Subsidiaries on a consolidated
basis, net income as determined in accordance with GAAP.
"Net Proceeds": With respect to any Equity Offering or Debt Offering by
the Borrower or any Domestic Subsidiary, the net amount equal to the aggregate
amount received in cash (including any cash received by way of deferred payment
pursuant to a note receivable, other noncash consideration or otherwise, but
only as and when such cash is so received) in connection with such Equity
Offering or Debt Offering, minus the reasonable fees, commissions and other
out-of-pocket expenses incurred by the Borrower or such Domestic Subsidiary, as
applicable, in connection with such Equity Offering or Debt Offering (other than
amounts payable to Affiliates of the Person making such Equity Offering or Debt
Offering).
"Note": a Revolving Note, the Swing Line Note or a Term Note, as the
case may be, and "Notes" shall mean the Revolving Notes, the Swing Line Note
and/or the Term Notes, as the case may be.
"Obligations": the unpaid principal of and interest on (including
interest accruing after the maturity of the Revolving Loans, the Swing Line
Loans and the Term Loans and interest accruing on or after the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding, relating to the Borrower, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding and whether
or not at a default rate) the Notes, the obligation to reimburse drawings under
Letters of Credit (including the contingent obligation to reimburse any drawings
under outstanding Letters of Credit), and all other obligations and liabilities
of the Borrower to the Agent and the Lenders, whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, this Agreement,
the Notes, the Letters of Credit, any other Loan Document and any other document
made, delivered or given in connection herewith or therewith, whether on account
of principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses (including all reasonable fees and disbursements of counsel, and the
allocated reasonable cost of internal counsel, to the Agent or the Lenders that
are required to be paid by the Borrower pursuant to the terms of this Agreement)
or otherwise.
"Obligor": the Borrower, each Subsidiary, each Guarantor and any other
Person (other than a Lender) obligated under any Loan Document.
"Old Credit Agreement": as defined in the Recital to this Agreement.
"Organic Documents": relative to any entity, its certificate of
incorporation, articles of incorporation, certificate of formation, certificate
of organization or partnership agreement, and its by-laws, operating agreement
or limited liability company agreement, or the equivalent documents of any
entity.
"Participants": as defined in Section 9.6(b).
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"PBGC": the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA or any successor thereto.
"Person": any individual, firm, partnership, joint venture, corporation,
association, limited liability company, business enterprise trust,
unincorporated organization, government or department or agency thereof or other
entity, whether acting in an individual, fiduciary or other capacity.
"Plan": as to any Person, any plan (other than a Multiemployer Plan)
subject to Title IV of ERISA maintained for employees of such Person or any
ERISA Affiliate of such Person (and any such plan no longer maintained by such
Person or any of such Person's ERISA Affiliates to which such Person or any of
such Person's ERISA Affiliates has made or was required to make any
contributions within any of the five preceding years).
"Prohibited Transaction": with respect to any Plan, a prohibited
transaction (as defined in Section 406 of ERISA) with respect to such Plan.
"Properties": the collective reference to the real and personal property
owned, leased, used, occupied or operated by the Borrower and its Subsidiaries.
"Purchasing Lenders": as defined in Section 9.6(c).
"QAPL": Quiksilver Australia Pty Ltd, a corporation organized under the
laws of the State of Victoria, Australia.
"QAPL Share Mortgage": the Equitable Mortgage of Shares dated August 31,
2000 between the Borrower and the Agent.
"QIPL": Quiksilver International Pty Ltd, a corporation organized under
the laws of the State of Victoria, Australia.
"Register": as defined in Section 9.6(d).
"Regulation D": Regulation D of the Board of Governors of the Federal
Reserve System, as the same is from time to time in effect, and all official
rulings and interpretations thereunder or thereof and any successor regulation
thereto.
"Regulation U": Regulation U of the Board of Governors of the Federal
Reserve System, as the same is from time to time in effect, and all official
rulings and interpretations thereunder or thereof and any successor regulation
thereto.
"Reorganization": with respect to any Multiemployer Plan, the condition
that such plan is in reorganization within the meaning of Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section 4043(b) of
ERISA, other than those events as to which the thirty day notice period is
waived under PBGC regulations.
"Requirement of Law": as to any Person, the Organic Documents of such
Person, and any law, treaty, rule or regulation, determination or policy
statement or interpretation of an
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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": with respect to any Person, the chief executive
officer, the president, the managing member or members (as applicable, with
respect to any limited liability company), any executive vice president, any
senior vice president or any vice president or, with respect to financial
matters, the chief financial officer, the vice president of finance, treasurer
or controller.
"Restricted Payments": as defined in Section 6.6.
"Revolving Borrowing Notice": a notice from the Borrower to the Agent
requesting a borrowing of Revolving Loans, substantially in the form of Exhibit
I hereto.
"Revolving Loan": as defined in Section 2.1(a).
"Revolving Loan Commitment": with respect to each Lender, its
commitment, if any, listed as its "Revolving Loan Commitment" on the signature
pages hereto, or in the Assignment and Acceptance pursuant to which a Lender
becomes a party hereto, to make Revolving Loans and participate in Letters of
Credit hereunder through its Applicable Lending Office, as the same shall be
adjusted from time to time pursuant to this Agreement.
"Revolving Loan Commitment Expiration Date": June 28, 2002 or such
earlier date as the Aggregate Revolving Loan Commitment shall expire (whether by
acceleration, reduction to zero or otherwise).
"Revolving Loan Commitment Percentage": with respect to each Lender, the
percentage equivalent of the ratio which such Lender's Revolving Loan Commitment
bears to the Aggregate Revolving Loan Commitment, as such Lender's Revolving
Loan Commitment and the Aggregate Revolving Loan Commitment may be adjusted from
time to time pursuant to the terms hereof.
"Revolving Loan Leverage Level": if the Maximum Leverage Ratio shall be
less than or equal to 0.75:1, the Revolving Loan Leverage Level shall be 1; if
the Maximum Leverage Ratio shall be greater than 0.75:1 and less than or equal
to 1.00:1, the Revolving Loan Leverage Level shall be 2; if the Maximum Leverage
Ratio shall be greater than 1.00:1 and less than or equal to 1.50:1, the
Revolving Loan Leverage Level shall be 3; if the Maximum Leverage Ratio shall be
greater than 1.50:1 and less than or equal to 1.75:1, the Revolving Loan
Leverage Level shall be 4; and if the Maximum Leverage Ratio shall be greater
than 1.75:1, the Revolving Loan Leverage Level shall be 5.
"Revolving Note": as defined in Section 2.1(c).
"Security Agreement": the Security Agreement dated as of April 28, 2000
made by the Borrower in favor of the Agent, for the benefit of the Lenders, as
the same may be amended, restated or otherwise modified from time to time.
"Single Employer Plan": any Plan which is covered by Title IV of ERISA,
but which is not a Multiemployer Plan.
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"Solvent": when used with respect to any Person, that:
(a) the present fair salable value of such Person's assets is in
excess of the total amount of the probable liability on such Person's
liabilities;
(b) such Person is able to pay its debts as they become due; and
(c) such Person does not have unreasonably small capital to carry on
such Person's business as theretofore operated and all businesses in which such
Person is about to engage.
"Subsidiary": as to any Person at any time of determination, a
corporation, partnership or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries or Subsidiaries, or both, by such Person. Unless
otherwise qualified, all references to a "Subsidiary" or to "Subsidiaries" in
this Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower.
"Swing Line Borrowing Notice": a notice from the Borrower to the Agent
requesting a borrowing of Swing Line Loans, substantially in the form of Exhibit
K hereto.
"Swing Line Commitment": as defined in Section 2.2(a).
"Swing Line Lender": means Union Bank of California, N.A.
"Swing Line Loan Participation Certificate": a certificate executed by
the Swing Line Lender substantially in the form of Exhibit H.
"Swing Line Loans": has the meaning assigned to that term in Section
2.2(a).
"Swing Line Note": has the meaning assigned to that term in Section
2.2(b).
"Taxes": as defined in Section 2.15(a).
"Termination Event": (i) a Reportable Event, (ii) the institution of
proceedings to terminate a Single Employer Plan by the PBGC under Section 4042
of ERISA, (iii) the appointment by the PBGC of a trustee to administer any
Single Employer Plan or (iv) the existence of any other event or condition that
would reasonably be expected to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment by the PBGC of a trustee to
administer, any Single Employer Plan.
"Term Loan": as defined in Section 2.4(a).
"Term Loan Leverage Level": if the Maximum Leverage Ratio shall be less
than or equal to 0.75:1, the Term Loan Leverage Level shall be 1; if the Maximum
Leverage Ratio shall be greater than 0.75:1 and less than or equal to 1.00:1,
the Term Loan Leverage Level shall be 2; if the Maximum Leverage Ratio shall be
greater than 1.00:1 and less than or equal to 1.50:1, the Term Loan Leverage
Level shall be 3; if the Maximum Leverage Ratio shall be greater than
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1.50:1 and less than or equal to 1.75:1, the Term Loan Leverage Level shall be
4; and if the Maximum Leverage Ratio shall be greater than 1.75:1, the Term Loan
Leverage Level shall be 5.
"Term Note" and "Term Notes": as defined in Section 2.4(c).
"Tranche": the collective reference to LIBOR Loans the Interest Periods
with respect to all of which begin on the same date and end on the same later
date (whether or not such LIBOR Loans shall originally have been made on the
same day).
"Transferee": as defined in Section 9.6(f).
"Type": as to any Loan, its nature as a Base Rate Loan or a LIBOR Loan.
1.2 Other Definitional Provisions.
(a) Unless otherwise specified therein, all terms defined in this
Agreement shall have the defined meanings when used in the Notes, any other Loan
Document or any certificate or other document made or delivered pursuant hereto
or thereto.
(b) As used herein, in the Notes, in any other Loan Document, and in
any certificate or other document made or delivered pursuant hereto or thereto,
accounting terms not defined in Section 1.1 and accounting terms partly defined
in Section 1.1, to the extent not defined, shall have the respective meanings
given to them under GAAP.
(c) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified. The words "include," "includes" and "including" shall be
deemed to be followed by the phrase "without limitation".
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
ARTICLE 2. AMOUNT AND TERMS OF LOANS AND LETTERS OF CREDIT; COMMITMENT
AMOUNTS
2.1 Revolving Loans and Letters of Credit; Revolving Loan Commitment
Amounts.
(a) Subject to the terms and conditions hereof, each Lender
severally agrees to (i) make loans on a revolving credit basis through its
Applicable Lending Office to the Borrower from time to time from and including
the Closing Date to but excluding the Revolving Loan Commitment Expiration Date
(each a "Revolving Loan" and, collectively, the "Revolving Loans") in accordance
with the provisions of this Agreement and subject to Section 2.3(c), and (ii)
participate through its Applicable Lending Office in letters of credit, airway
releases and steamship guarantees issued for the account of the Borrower
pursuant to Section 2.3 from time to time from and including the Closing Date to
but excluding the Revolving Loan Commitment Expiration Date (each a "Letter of
Credit" and, collectively, the "Letters of Credit"); provided, however, that (A)
the sum of (1) the aggregate principal amount of all Revolving Loans
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outstanding, (2) the aggregate principal amount of all Swing Line Loans
outstanding, (3) the aggregate Letter of Credit Amount of all Letters of Credit
outstanding and (4) the aggregate amount of unreimbursed drawings under all
Letters of Credit shall not exceed either the Aggregate Revolving Loan
Commitment or the Borrowing Base at any time, (B) the sum of (1) the aggregate
Letter of Credit Amount of all Letters of Credit outstanding and (2) the
aggregate amount of unreimbursed drawings under all Letters of Credit shall not
exceed $60,000,000 at any time and (C) the sum of (1) the aggregate Letter of
Credit Amount of all standby Letters of Credit outstanding and (2) the aggregate
amount of unreimbursed drawings under all standby Letters of Credit shall not
exceed $10,000,000 at any time. Within the limits of each Lender's Revolving
Loan Commitment, the Borrower may borrow, have Letters of Credit issued for the
Borrower's account, prepay Revolving Loans, reborrow Revolving Loans, and have
additional Letters of Credit issued for the Borrower's account after the
expiration of previously issued Letters of Credit. Revolving Loan advances
requested by the Borrower shall be in an aggregate amount of at least $500,000
in the case of Base Rate Loans and in the aggregate amount of $3,000,000 or an
integral multiple of $100,000 in excess thereof in the case of LIBOR Loans.
The principal amount of each (A) Revolving Loan of a Lender and (B)
participation of a Lender in a Letter of Credit shall be in an amount equal to
the product of (i) such Lender's Revolving Loan Commitment Percentage (expressed
as a fraction) and (ii) the total amount of the Revolving Loans or the Letter of
Credit requested by the Borrower in each instance; provided, however, that in no
event shall any Lender be obligated to make a requested Revolving Loan or
participate in a requested Letter of Credit if after giving effect to such
Revolving Loan or such participation the sum of such Lender's (x) Revolving
Loans outstanding, (y) Revolving Loan Commitment Percentage of the aggregate
Letter of Credit Amount of all Letters of Credit outstanding and (z) Revolving
Loan Commitment Percentage of the aggregate amount of unreimbursed drawings
under all Letters of Credit would exceed its Revolving Loan Commitment or if the
amount of such requested Revolving Loan or such Lender's Revolving Loan
Commitment Percentage of such requested Letter of Credit is in excess of such
Lender's Available Revolving Loan Commitment.
(b) Subject to Sections 2.11 and 2.13, the Revolving Loans may from
time to time be (i) LIBOR Loans, (ii) Base Rate Loans or (iii) a combination
thereof, as determined by the Borrower and notified to the Agent in accordance
with either Section 2.1(d) or 2.7. Each Lender may make or maintain its
Revolving Loans or participate in Letters of Credit to or for the account of the
Borrower by or through any Applicable Lending Office.
(c) The Revolving Loans made by each Lender to the Borrower shall be
evidenced by a promissory note of the Borrower, substantially in the form of
Exhibit A (a "Revolving Note"), with appropriate insertions therein as to payee,
date and principal amount, payable to the order of such Lender and representing
the obligation of the Borrower to pay the aggregate unpaid principal amount of
all Revolving Loans made by such Lender to the Borrower pursuant to Section
2.1(a) or 2.3(c), with interest thereon as prescribed in Sections 2.9 and 2.10.
Each Lender is hereby authorized (but not required) to record the date and
amount of each payment or prepayment of principal of its Revolving Loans made to
the Borrower, each continuation thereof, each conversion of all or a portion
thereof to another Type and, in the case of LIBOR Loans, the length of each
Interest Period with respect thereto, in the books and records of such Lender,
and any such recordation shall constitute prima facie evidence of the accuracy
of the information so recorded. The failure of any Lender to make any such
recordation or notation
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in the books and records of the Lender (or any error in such recordation or
notation) shall not affect the obligations of the Borrower hereunder or under
the Revolving Notes. Each Revolving Note shall (i) be dated the effective date
thereof, (ii) provide for the payment of interest in accordance with Sections
2.9 and 2.10 and (iii) be stated to be payable on the Revolving Loan Commitment
Expiration Date.
(d) The Borrower shall give the Agent irrevocable written notice
(which notice must be received by the Agent prior to 10:00 a.m., Los Angeles
time, one Business Day prior to each proposed borrowing date or, if all or any
part of the Revolving Loans are requested to be made as LIBOR Loans, three
Eurodollar Business Days prior to each proposed borrowing date) requesting that
the Lenders make the Revolving Loans on the proposed borrowing date and
specifying (i) the aggregate amount of Revolving Loans requested to be made,
(ii) subject to Section 2.1(b), whether the Revolving Loans are to be LIBOR
Loans, Base Rate Loans or a combination thereof and (iii) if the Revolving Loans
are to be entirely or partly LIBOR Loans, the respective amounts of each such
Type of Revolving Loan and the respective lengths of the initial Interest
Periods therefor. On receipt of such notice, the Agent shall promptly notify
each Lender thereof. On the proposed borrowing date, not later than 12:00 noon,
Los Angeles time, each Lender shall make available to the Agent at its office
specified in Section 9.2 the amount of such Lender's pro rata share of the
aggregate borrowing amount (as determined in accordance with the second
paragraph of Section 2.1(a)) in immediately available funds. The Agent may, in
the absence of notification from any Lender that such Lender has not made its
pro rata share available to the Agent on such date, credit the account of the
Borrower on the books of such office of the Agent with the aggregate amount of
Revolving Loans. If any Lender does not make available to the Agent the amount
required pursuant to this Section 2.1(d), the Agent shall be entitled to recover
such amount on demand from the Lender, together with interest thereon for each
day from the date of non-payment until such amount is paid in full at the
Federal Funds Effective Rate for the first two Business Days and at the Base
Rate thereafter.
(e) Neither the Agent nor any Lender shall be responsible for the
obligation or Available Revolving Loan Commitment of any other Lender hereunder,
nor will the failure of any Lender to comply with the terms of this Agreement
relieve any other Lender or the Borrower of its obligations under this Agreement
and the Revolving Notes.
(f) Subject to Section 2.3(c), the Revolving Loan Commitment of each
Lender and the Aggregate Revolving Loan Commitment shall terminate on the
Revolving Loan Commitment Expiration Date. All outstanding Revolving Loans shall
be due and payable, to the extent not previously paid in accordance with the
terms hereof, on the Revolving Loan Commitment Expiration Date.
2.2 Swing Line Loans; Swing Line Commitment.
(a) Subject to the terms and conditions hereof, the Swing Line
Lender agrees to make loans through its Applicable Lending Office to the
Borrower from time to time from and including the Closing Date to but excluding
the date which is five Business Days prior to the Revolving Loan Commitment
Expiration Date (each a "Swing Line Loan" and, collectively, the "Swing Line
Loans") in an aggregate principal amount not to exceed at any time outstanding
the lesser of (i) $5,000,000 and (ii) the unused portion of the Revolving Loan
Commitment of the Swing Line Lender (the "Swing Line Commitment"). Within the
limits of the Swing Line Commitment, the Borrower may borrow Swing Line Loans,
prepay Swing Line Loans and
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reborrow Swing Line Loans. All outstanding Swing Line Loans shall be due and
payable, to the extent not previously paid in accordance with the terms hereof,
on the Revolving Loan Commitment Expiration Date.
(b) The Swing Line Loans shall be evidenced by a promissory note of
the Borrower substantially in the form of Exhibit B (the "Swing Line Note"),
with appropriate insertions therein as to payee, date and principal amount,
payable to the order of the Swing Line Lender and representing the obligation of
the Borrower to pay the aggregate unpaid principal amount of the Swing Line
Loans, with interest thereon as prescribed in Sections 2.9 and 2.10. The Swing
Line Lender is hereby authorized (but not required) to record the borrowing date
of each Swing Line Loan, the amount thereof and the date and amount of each
payment or prepayment of principal thereof, in the books and records of the
Swing Line Lender, and any such recordation shall constitute prima facie
evidence of the accuracy of the information so recorded. The failure of the
Swing Line Lender to make any such recordation or notation (or any error in such
recordation or notation) shall not affect the obligations of the Borrower
hereunder or under the Swing Line Note. The Swing Line Note shall (x) be dated
the effective date thereof, (y) be stated to mature on the Revolving Loan
Commitment Expiration Date and (z) provide for the payment of interest in
accordance with Sections 2.9 and 2.10.
(c) The Borrower shall give the Agent irrevocable notice (which
notice may be telephonic, to be confirmed promptly in writing), which notice
must be received by the Agent prior to 10:00 a.m., Los Angeles time, on the
requested borrowing date (which shall be a Business Day) specifying the amount
of the requested Swing Line Loan, which shall be in a minimum amount of
$100,000. Written notice of borrowing shall be in the form of Exhibit K attached
hereto. On receipt of such notice, the Agent shall promptly notify the Swing
Line Lender thereof. The proceeds of each Swing Line Loan will then be made
available to the Borrower by the Swing Line Lender by crediting the account of
the Borrower on the books of the Agent at its office specified in Section 9.2.
(d) The Swing Line Lender, at any time in its sole and absolute
discretion, may on behalf of the Borrower (which hereby irrevocably directs the
Swing Line Lender to so act on its behalf) request each Lender to make a
Revolving Loan in an amount equal to such Lender's Revolving Loan Commitment
Percentage of the principal amount of the Swing Line Loans (the "Refunded Swing
Line Loans") outstanding on the date such notice is given. Unless any of the
events described in Section 7(g) shall have occurred (in which event the
procedures of Section 2.2(e) shall apply) and regardless of whether the
conditions precedent set forth in this Agreement to the making of a Revolving
Loan are then satisfied, each Lender shall make the proceeds of its Revolving
Loan available to the Swing Line Lender at its office specified in Section 9.2,
not later than 12:00 noon, Los Angeles time. The proceeds of such Revolving
Loans shall be immediately applied to repay the Refunded Swing Line Loans.
(e) If, prior to refunding a Swing Line Loan with a Revolving Loan
pursuant to Section 2.2(d), one of the events described in Section 7(g) shall
have occurred, then, subject to the provisions of Section 2.2(f), each Lender
will, on the date such Revolving Loan was to have been made, purchase from the
Swing Line Lender an undivided participation interest in the Swing Line Loan in
an amount equal to its Revolving Loan Commitment Percentage of such Swing Line
Loan. Upon request, each Lender will promptly transfer to the Swing Line Lender,
in immediately available funds, the amount of its participation, and upon
receipt thereof the
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Swing Line Lender will deliver to such Lender a Swing Line Loan Participation
Certificate dated the date of receipt of such funds and in such amount.
(f) Each Lender's obligation to make Revolving Loans in accordance
with Section 2.2(d) and to purchase participating interests in accordance with
Section 2.2(e) shall be absolute and unconditional and shall not be affected by
any circumstance, including (A) any setoff, counterclaim, recoupment, defense or
other right which such Lender may have against the Swing Line Lender, the
Borrower or any other Person for any reason whatsoever; (B) the occurrence or
continuance of any Event of Default; (C) any adverse change in the condition
(financial or otherwise) of the Borrower or any other Person; (D) any breach of
this Agreement by the Borrower or any other Person; (E) any inability of the
Borrower to satisfy the conditions precedent to borrowing set forth in this
Agreement on the date upon which such participating interest is to be purchased
or (F) any other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing. If any Lender does not make available to the
Swing Line Lender the amount required pursuant to Section 2.2(d) or (e), as the
case may be, the Swing Line Lender shall be entitled to recover such amount on
demand from such Lender, together with interest thereon for each day from the
date of non-payment until such amount is paid in full at the Federal Funds
Effective Rate for the first two Business Days and at the Base Rate thereafter.
Notwithstanding the foregoing provisions of this Section 2.2(f), no Lender shall
be required to make a Revolving Loan to the Borrower for the purpose of
refunding a Swing Line Loan pursuant to Section 2.2(d) or to purchase a
participating interest in a Swing Line Loan pursuant to Section 2.2(e) if an
Event of Default has occurred and is continuing and, prior to the making by the
Swing Line Lender of such Swing Line Loan, the Swing Line Lender has received
written notice from such Lender specifying that such Event of Default has
occurred and is continuing, describing the nature thereof and stating that, as a
result thereof, such Lender shall cease to make such Refunded Swing Line Loans
and purchase such participating interests, as the case may be; provided,
however, that the obligation of such Lender to make such Refunded Swing Line
Loans and to purchase such participating interests shall be reinstated upon the
earlier to occur of (y) the date upon which such Lender notifies the Swing Line
Lender that its prior notice has been withdrawn and (z) the date upon which the
Event of Default specified in such notice no longer is continuing.
(g) The Swing Line Commitment of the Swing Line Lender shall
terminate on the Revolving Loan Commitment Expiration Date.
(h) Notwithstanding anything in this Section 2.2 to the contrary,
the Swing Line Lender may, in its sole discretion and in lieu of the Swing Line
Loan procedures set forth in this Section 2.2, make available to the Borrower
its "Credit Sweep" program (or another program having comparable features and
procedures) pursuant to which, at the close of business on each Business Day, if
there then would be a debit balance in the Borrower's principal demand deposit
account (No. 450-▇▇▇▇▇▇▇) maintained with the Swing Line Lender, the Swing Line
Lender will credit such demand deposit account in an amount such that, giving
effect thereto, such demand deposit account reflects a credit balance of at
least $0; provided, however, that no such credit shall be in an amount less than
$1. Each such credit shall constitute a Swing Line Loan for all purposes of this
Agreement, but the minimum borrowing requirements, notice of borrowing
requirements and funding procedures of Section 2.2(c) shall not apply thereto.
The Swing Line Lender may, in its sole discretion, terminate availability of
such program to the Borrower, effective (if no Default then exists) upon 30
days' prior written notice to the Borrower or (if a
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Default exists) upon notice to the Borrower. Upon such a termination, the
procedures otherwise applicable to Swing Line Loans in this Section 2.2 shall
again apply.
2.3 Issuance of Letters of Credit.
(a) Subject to the limitations on Letters of Credit set forth in
Section 2.1(a), the Borrower shall be entitled to request the issuance of
standby Letters of Credit and/or commercial Letters of Credit from time to time
from and including the Closing Date to but excluding the date which is two
Business Days prior to the Revolving Loan Commitment Expiration Date, by giving
the Agent a Letter of Credit Request at least three Business Days before the
requested date of issuance of such Letter of Credit (which shall be a Business
Day). Any Letter of Credit Request received by the Agent later than 12:00 noon,
Los Angeles time, shall be deemed to have been received on the next Business
Day. Each Letter of Credit Request shall be made in writing or in an electronic
format approved by the Agent, shall be signed by a Responsible Officer or such
other employee designee as is reflected on the certificate delivered to the
Agent pursuant to Section 4.1, shall be irrevocable and shall be effective upon
receipt by the Agent. Provided that a valid Letter of Credit Request has been
received by the Agent and upon fulfillment of the other applicable conditions
set forth in Section 4.2, the Agent will issue the requested Letter of Credit
from its office specified in Section 9.2. No commercial Letter of Credit shall
in any event have an expiration date later than 120 days after the Revolving
Loan Commitment Expiration Date, and no standby Letter of Credit shall in any
event have an expiration date later than the Revolving Loan Commitment
Expiration Date.
(b) Immediately upon the issuance of each Letter of Credit, the
Agent shall be deemed to have sold and transferred to each Lender, and each
Lender shall be deemed to have purchased and received from the Agent, in each
case irrevocably and without any further action by any party, an undivided
interest and participation in such Letter of Credit, each drawing thereunder and
the obligations of the Borrower under this Agreement in respect thereof in an
amount equal to the product of (i) such Lender's Revolving Loan Commitment
Percentage and (ii) the maximum amount available to be drawn under such Letter
of Credit (assuming compliance with all conditions to drawing). The Agent shall
prepare a monthly (or, if reasonably requested by any Lender, more frequent)
report advising each Lender of the issuance of each Letter of Credit, the Letter
of Credit Amount of such Letter of Credit, any change in the face amount or
expiration date of such Letter of Credit, the cancellation or other termination
of such Letter of Credit and any drawing under such Letter of Credit.
(c) The payment by the Agent of a draft drawn under any Letter of
Credit shall constitute for all purposes of this Agreement the making by the
Agent in its individual capacity as a Lender hereunder (in such capacity, the
"Drawing Lender") of a Base Rate Loan in the amount of such payment (but without
any requirement of compliance with the conditions set forth in Section 4.2). In
the event that any such Loan by the Drawing Lender resulting from a drawing
under any Letter of Credit is not repaid by the Borrower by 11:00 a.m., Los
Angeles time, on the day of payment of such drawing, the Agent shall promptly
notify each other Lender. Each Lender shall, on the day of such notification (or
if such notification is not given by 12:00 noon, Los Angeles time, on such day,
then on the next succeeding Business Day), make a Base Rate Loan, which shall be
used to repay the applicable portion of the Base Rate Loan of the Drawing Lender
with respect to such Letter of Credit drawing, in an amount equal to the amount
of such Lender's participation in such drawing for application to repay the
Drawing Lender (but without any requirement of compliance with the applicable
conditions set forth in Section 4.2)
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and shall deliver to the Agent for the account of the Drawing Lender, on the day
of such notification (or if such notification is not given by 12:00 noon, Los
Angeles time, on such day, then on the next succeeding Business Day) and in
immediately available funds, the amount of such Base Rate Loan. In the event
that any Lender fails to make available to the Agent for the account of the
Drawing Lender the amount of such Base Rate Loan, the Drawing Lender shall be
entitled to recover such amount on demand from such Lender, together with
interest thereon for each day from the date of non-payment until such amount is
paid in full at the Federal Funds Effective Rate for the first two Business Days
and at the Base Rate thereafter.
With respect to any Letter of Credit issued in accordance with the terms
hereof under which a drawing occurs on or after the Revolving Loan Commitment
Expiration Date and is not reimbursed by the Borrower by the time specified
above, (i) the Drawing Lender shall be obligated to make a Base Rate Loan in the
amount of such drawing and (ii) each Lender shall be obligated to make a
Revolving Loan in an amount equal to such Lender's participation in such drawing
for application to repay the Drawing Lender (each such Loan, a "Post-Maturity
Loan"), in each case in accordance with this Section 2.3(c) and notwithstanding
the occurrence of the Revolving Loan Commitment Expiration Date or any other
provision of this Agreement to the contrary. Each Post-Maturity Loan shall be,
for all intents and purposes a Revolving Loan hereunder, provided that such
Post-Maturity Loan shall be due and payable on the day which is two Business
Days after such Loan is made.
(d) The obligations of the Borrower with respect to any Letter of
Credit, any Letter of Credit Request and any other agreement or instrument
relating to any Letter of Credit and any Base Rate Loan made under Section
2.3(c) shall be absolute, unconditional and irrevocable and shall be paid
strictly in accordance with the terms of the aforementioned documents under all
circumstances, including the following:
(i) any lack of validity or enforceability of any Letter of
Credit, this Agreement or any other Loan Document;
(ii) the existence of any claim, setoff, defense or other right
that the Borrower may have at any time against any beneficiary or transferee of
any Letter of Credit (or any Person for whom any such beneficiary or transferee
may be acting), the Agent, any Lender (other than the defense of payment to a
Lender in accordance with the terms of this Agreement) or any other Person,
whether in connection with this Agreement, any other Loan Document, the
transactions contemplated hereby or thereby or any unrelated transaction;
(iii) any statement or other document presented under any Letter
of Credit proving to be forged, fraudulent, invalid or insufficient in any
respect, or any statement therein being untrue or inaccurate in any respect
whatsoever; and
(iv) any exchange, release or non-perfection of any Collateral,
Guarantor Collateral or other collateral, or any release, amendment or waiver of
or consent to departure from any Guarantee, other Loan Document or other
guaranty, for any of the Obligations of the Borrower in respect of the Letters
of Credit.
(e) The Borrower shall pay to the Agent, with respect to each Letter
of Credit issued hereunder, the following fees:
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(i) for each commercial Letter of Credit, for the account of the
Agent, the issuance and amendment fees set forth on Schedule 2.3;
(ii) for each commercial Letter of Credit, for the account of
the Lenders, the negotiation fees set forth on Schedule 2.3;
(iii) for each standby Letter of Credit, for the account of the
Lenders, for the period from and including the day such Letter of Credit is
issued to but excluding the day such Letter of Credit expires, a letter of
credit fee equal to the product of (x) the Applicable Revolving Loan Margin for
LIBOR Loans and (y) the Letter of Credit Amount of such Letter of Credit from
time to time, such letter of credit fee to be payable quarterly in arrears on
the last day of each January, April, July and October and on the expiration date
of such Letter of Credit; and
(iv) with respect to each Letter of Credit issued hereunder, for
the account of Agent, from time to time such additional fees and charges
(including cable charges) as are generally associated with letters of credit, in
accordance with the Agent's standard internal charge guidelines (as such
guidelines may change from time to time) and the related Letter of Credit
Request.
(f) The Borrower agrees to the provisions in the Letter of Credit
Request forms; provided, however, that the terms of the Loan Documents shall
take precedence if there is any inconsistency between the terms of the Loan
Documents and the terms of said forms.
(g) The Borrower assumes all risks of the acts or omissions of any
beneficiary or transferee of any Letter of Credit with respect to its use of
such Letter of Credit. Neither the Agent nor any Lender nor any of their
respective officers or directors shall be liable or responsible for (i) the use
that may be made of any Letter of Credit or any acts or omissions of any
beneficiary or transferee in connection therewith; or (ii) the validity,
sufficiency or genuineness of documents, or of any endorsement thereof, even if
such documents should prove to be in any or all respects invalid, insufficient,
fraudulent or forged. In furtherance and not in limitation of the foregoing, the
Agent may accept any document that appears on its face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary.
2.4 Term Loans.
(a) Subject to the terms and conditions hereof, each Lender agrees
severally to make a single term loan (each a "Term Loan") to the Borrower on the
Closing Date in the amount shown as such Lender's "Term Loan" on the signature
pages hereof, provided that the aggregate amount of the Term Loans shall not
exceed $25,000,000. The Term Loans shall be made initially as LIBOR Loans, upon
notice received by the Agent from the Borrower at least three Eurodollar
Business Days before the day on which the Term Loans are to be made; provided,
however, that, notwithstanding any provisions of this Agreement to the contrary,
during the period from and including the Closing Date to but excluding January
31, 2001, the Term Loans shall bear interest at the rate per annum equal to the
sum of (i) LIBOR for an Interest Period of four months plus (ii) the Applicable
Term Loan Margin. On the proposed borrowing date, not later than 12:00 noon, Los
Angeles time, each Lender shall make available to the Agent at its office
specified in Section 9.2 the amount of such Lender's Term Loan in
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immediately available funds. Amounts borrowed under this Section 2.4(a) and
repaid or prepaid may not be reborrowed.
(b) Subject to Sections 2.11 and 2.13, the Term Loans may from time
to time be (i) LIBOR Loans, (ii) Base Rate Loans or (iii) a combination thereof,
as determined by the Borrower and notified to the Agent in accordance with
either Section 2.4(a) or Section 2.7. Each Lender may make or maintain its Term
Loan to the Borrower by or through any Applicable Lending Office.
(c) The Term Loan made by each Lender to the Borrower shall be
evidenced by a promissory note of the Borrower, substantially in the form of
Exhibit L (a "Term Note"), with appropriate insertions therein as to payee, date
and principal amount, payable to the order of such Lender and representing the
obligation of the Borrower to pay the unpaid principal amount of the Term Loan
made by such Lender to the Borrower, with interest thereon as prescribed in
Sections 2.9 and 2.10. Each Lender is hereby authorized (but not required) to
record the date and amount of each payment or prepayment of principal of its
Term Loan made to the Borrower, each continuation thereof, each conversion of
all or a portion thereof to another Type and, in the case of LIBOR Loans, the
length of each Interest Period with respect thereto, in the books and records of
such Lender, and any such recordation shall constitute prima facie evidence of
the accuracy of the information so recorded. The failure of any Lender to make
any such recordation or notation in the books and records of the Lender (or any
error in such recordation or notation) shall not affect the obligations of the
Borrower hereunder or under the Term Notes. Each Term Note shall (i) be dated
the effective date thereof, (ii) provide for the payment of interest in
accordance with Sections 2.9 and 2.10 and (iii) be stated to be payable in
accordance with the terms of Section 2.4(e).
(d) Neither the Agent nor any Lender shall be responsible for the
obligation of any other Lender to make a Term Loan hereunder, nor will the
failure of any Lender to comply with the terms of this Agreement relieve any
other Lender or the Borrower of its obligations under this Agreement and the
Term Notes.
(e) The Borrower will repay the Term Loans in 16 quarterly
installments of $1,562,500 each, payable on the last Business Day of each
January, April, July and October, commencing on January 31, 2001 and ending on
October 29, 2004.
2.5 Optional Prepayments; Optional Commitment Reductions.
(a) The Borrower may, on the last day of any Interest Period with
respect thereto in the case of any Revolving Loans that are maintained as LIBOR
Loans, or at any time and from time to time in the case of any Revolving Loans
that are maintained as Base Rate Loans, prepay such Revolving Loans and/or
permanently reduce the Aggregate Revolving Loan Commitment, in whole or in part,
without premium or penalty, upon at least three Business Days' irrevocable
written notice in the case of LIBOR Loans and upon at least one Business Day's
irrevocable written notice in the case of Base Rate Loans, from the Borrower to
the Agent, specifying the date and amount of prepayment and/or commitment
reduction, and whether, if a prepayment, the prepayment is of LIBOR Loans, Base
Rate Loans or a combination thereof and, if of a combination thereof, the amount
allocable to each. All prepayments of Revolving Loans under this Section 2.5(a)
shall be applied first to outstanding Swing Line Loans and then to outstanding
Revolving Loans. Upon receipt of any such notice from the Borrower, the Agent
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shall promptly notify each Lender thereof. If any such notice is given, the
amount specified in such notice shall be due and payable by the Borrower on the
date specified therein, together with accrued interest to such date on the
amount prepaid. Partial prepayments of Revolving Loans shall be in the aggregate
principal amount of $500,000 or an integral multiple of $300,000 in excess
thereof.
(b) The Borrower may, on the last day of any Interest Period with
respect thereto in the case of any portion of the Term Loans maintained as LIBOR
Loans, or at any time and from time to time in the case of any portion of the
Term Loans maintained as Base Rate Loans, prepay such portion, in whole or in
part, without premium or penalty, upon at least three Business Days' irrevocable
written notice in the case of LIBOR Loans and upon at least one Business Day's
irrevocable written notice in the case of Base Rate Loans, from the Borrower to
the Agent, specifying the date and amount of prepayment, and whether the
prepayment is of LIBOR Loans, Base Rate Loans or a combination thereof and, if
of a combination thereof, the amount allocable to each. All prepayments of Term
Loans under this Section 2.5(b) shall be applied to the scheduled repayment
installments of the Term Loans in inverse order of maturity. Upon receipt of any
such notice from the Borrower, the Agent shall promptly notify each Lender
thereof. If any such notice is given, the amount specified in such notice shall
be due and payable by the Borrower on the date specified therein, together with
accrued interest to such date on the amount prepaid. Partial prepayments of Term
Loans shall be in the aggregate principal amount of $500,000 or an integral
multiple of $300,000 in excess thereof.
2.6 Mandatory Prepayments.
(a) If at any time the sum of (A) the aggregate principal amount of
all Revolving Loans outstanding, (B) the aggregate principal amount of all Swing
Line Loans outstanding, (C) the aggregate Letter of Credit Amount of all Letters
of Credit outstanding and (D) the aggregate amount of unreimbursed drawings
under all Letters of Credit exceeds the Aggregate Revolving Loan Commitment
and/or the Borrowing Base, then, in either case, the Borrower shall immediately,
without notice or request by the Agent, prepay the Revolving Loans and/or, if
such sum exceeds the Borrowing Base, pledge additional cash collateral to the
Agent to secure reimbursement of amounts available to be drawn under outstanding
Letters of Credit, in an aggregate amount equal to such excess. Each prepayment
of Revolving Loans pursuant to this Section 2.6(a) shall be applied first to
outstanding Swing Line Loans and thereafter to outstanding Revolving Loans.
(b) On the day of receipt by the Borrower or any of its Domestic
Subsidiaries of any Net Proceeds with respect to an Equity Offering, the
Borrower shall prepay the Term Loans and the Leasehold Improvement Loan pro rata
in the aggregate amount equal to 100% of such Net Proceeds. On or prior to the
date of any such Equity Offering, the Borrower will provide to the Agent the
calculations used by the Borrower in determining the amount of any such
prepayment under this Section 2.6(b).
(c) On the day of receipt by the Borrower or any of its Domestic
Subsidiaries of any Net Proceeds with respect to a Debt Offering (which Debt
Offering must be permitted by Section 6.2 or otherwise consented to by the
Majority Lenders in their sole discretion), the Borrower shall prepay the Term
Loans and the Leasehold Improvement Loan pro rata in the aggregate amount equal
to 100% of such Net Proceeds. On or prior to the date of any such Debt
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Offering, the Borrower will provide to the Agent the calculations used by the
Borrower in determining the amount of any such prepayment under this Section
2.6(c).
(d) Each prepayment pursuant to this Section 2.6 shall be
accompanied by payment in full of all accrued interest thereon to and including
the date of such prepayment, together with any additional amounts owing pursuant
to Section 2.16.
2.7 Conversion and Continuation Options.
(a) The Borrower may elect from time to time to convert LIBOR Loans
to Base Rate Loans, by the Borrower giving the Agent at least two Business Days'
prior irrevocable written notice of such election pursuant to a Continuation
Notice, provided that any such conversion of LIBOR Loans may only be made on the
last day of an Interest Period with respect thereto. The Borrower may elect from
time to time to convert Base Rate Loans (other than Swing Line Loans) to LIBOR
Loans by the Borrower giving the Agent at least three Eurodollar Business Days'
prior irrevocable written notice of such election pursuant to a Continuation
Notice. Any such notice of conversion to LIBOR Loans shall specify the length of
the initial Interest Period or Interest Periods therefor. Upon receipt of any
such notice the Agent shall promptly notify each Lender thereof. All or any part
of outstanding LIBOR Loans and Base Rate Loans may be converted as provided
herein, provided that (i) any such conversion may only be made if, after giving
effect thereto, Section 2.8 shall not have been contravened, (ii) no Revolving
Loan may be converted into a LIBOR Loan after the date that is one month prior
to the Revolving Loan Commitment Expiration Date and (iii) the Borrower shall
not have the right to elect to convert to a LIBOR Loan if a Default shall have
occurred and be continuing.
(b) Any LIBOR Loan may be continued as such upon the expiration of
the then current Interest Period with respect thereto by the Borrower giving
notice to the Agent, in accordance with the applicable provisions of the term
"Interest Period" set forth in Section 1.1, of the length of the next Interest
Period to be applicable to such LIBOR Loan; provided, however, that no LIBOR
Loan may be continued as such (i) if, after giving effect thereto, Section 2.8
would be contravened, (ii) after the date that is one month prior to the
Revolving Loan Commitment Expiration Date or (iii) if a Default shall have
occurred and be continuing; and further provided, however, that, if the Borrower
shall fail to give any required notice as described above in this Section or if
such continuation is not permitted pursuant to the preceding proviso, such LIBOR
Loan shall be automatically converted to a Base Rate Loan on the last day of
such then-expiring Interest Period.
2.8 Minimum Amounts of Tranches. All borrowings, conversions and
continuations of LIBOR Loans hereunder and all selections of Interest Periods
hereunder shall be in such amounts and be made pursuant to such elections so
that, after giving effect thereto, the aggregate principal amount of the LIBOR
Loans comprising each Tranche shall be equal to $3,000,000 or a whole multiple
of $100,000 in excess thereof and, in any case, there shall not be more than 8
Tranches.
2.9 Interest Rates and Payment Dates.
(a) Each Revolving Loan maintained as a LIBOR Loan shall bear
interest for each day during each Interest Period with respect thereto at a rate
per annum equal to the LIBOR Adjusted Rate plus the Applicable Revolving Loan
Margin. Each Term Loan or portion thereof
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maintained as a LIBOR Loan shall bear interest for each day during each Interest
Period with respect thereto at a rate per annum equal to the LIBOR Adjusted Rate
plus the Applicable Term Loan Margin.
(b) Each Revolving Loan maintained as a Base Rate Loan shall bear
interest at a rate per annum equal to the Base Rate plus the Applicable
Revolving Loan Margin. Each Term Loan or portion thereof maintained as a Base
Rate Loan shall bear interest at a rate per annum equal to the Base Rate plus
the Applicable Term Loan Margin.
(c) Each Swing Line Loan shall be made and maintained as a Base Rate
Loan, and shall not be converted into any other Type of loan.
(d) If any Event of Default shall have occurred and be continuing,
all amounts outstanding hereunder shall bear interest at a rate per annum which
is the sum of the rate otherwise applicable pursuant to Section 2.9(a), (b) or
(c) plus 2% per annum, from the date of the occurrence of such Event of Default
until such Event of Default is no longer continuing (after as well as before
judgment).
(e) Interest shall be payable in arrears on each Interest Payment
Date; provided, however, that interest accruing pursuant to paragraph (d) of
this Section shall be payable on demand.
(f) For purposes of determining (i) the Applicable Revolving Loan
Margin for Revolving Loans, (ii) the Applicable Revolving Loan Margin for the
standby letter of credit fees referred to in Section 2.3(e)(iii), (iii) the
Applicable Term Loan Margin for Term Loans and (iv) the Maximum Leverage Ratio
for the unused-commitment fees referred to in Section 2.17, interest rates on
the Loans and such fees shall be calculated on the basis of the Maximum Leverage
Ratio set forth in the most recent Covenant Compliance Certificate received by
the Agent in accordance with Section 5.1(a) or (b). For accrued and unpaid
interest and fees only (no changes being made for interest or fee payments
previously made), changes in interest rates on the Loans or in such letter of
credit fees attributable to changes in the Applicable Revolving Loan Margin
(with respect to Revolving Loans and letter of credit fees), changes in the
Applicable Term Loan Margin (with respect to Term Loans) and changes in the
Maximum Leverage Ratio (with respect to unused-commitment fees) caused by
changes in the Maximum Leverage Ratio shall be calculated upon the delivery of a
Covenant Compliance Certificate, and such change shall be effective on Base Rate
Loans, LIBOR Loans and such fees from the day which is five days after receipt
by the Agent of such Covenant Compliance Certificate. If, for any reason, the
Borrower shall fail to deliver a Covenant Compliance Certificate when due in
accordance with Section 5.1(a) or (b), and such failure shall continue for a
period of ten days, the Revolving Loan Leverage Level shall be deemed to be
Revolving Loan Leverage Level 5 (for purposes of determining the Applicable
Revolving Loan Margin on Revolving Loans and Letter of Credit fees), the Term
Loan Leverage Level shall be deemed to be Term Loan Leverage Level 5 (for
purposes of determining the Applicable Term Loan Margin) and the applicable rate
shall be deemed to be the highest rate set forth in Section 2.17 (for purposes
of determining unused-commitment fees), as applicable, in each case retroactive
to the date on which the Borrower should have delivered such Covenant Compliance
Certificate, and shall continue until a Covenant Compliance Certificate
indicating a different Revolving Loan Leverage Level and Term Loan Leverage
Level is delivered to the Agent.
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2.10 Computation of Interest and Fees.
(a) Interest on Loans, unused-commitment fees and all other
Obligations of the Borrower shall be calculated on the basis of a 360-day year
for the actual days elapsed. The Agent shall as soon as practicable notify the
Borrower and the Lenders of each determination of a LIBOR Adjusted Rate. Any
change in the interest rate on a Loan resulting from a change in the Base Rate
or the LIBOR Reserve Requirements shall become effective as of the opening of
business on the day on which such change in the Base Rate is announced or such
change in the LIBOR Reserve Requirements becomes effective, as the case may be.
The Agent shall as soon as practicable notify the Borrower and the Lenders of
the effective date and the amount of each such change in interest rate.
(b) Each determination of an interest rate by the Agent pursuant to
any provision of this Agreement shall be conclusive and binding on the Borrower
and the Lenders in the absence of manifest error.
2.11 Inability to Determine Interest Rate. In the event that, prior to
the first day of any Interest Period, (a) the Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower absent manifest
error) that, by reason of circumstances affecting the relevant market, adequate
and reasonable means do not exist for ascertaining the LIBOR Adjusted Rate for
such Interest Period or (b) the Agent shall have received notice from the
Majority Lenders acting in good faith that the LIBOR Adjusted Rate determined or
to be determined for such Interest Period will not adequately and fairly reflect
the cost to such Lenders (as conclusively certified by such Lenders) of making
or maintaining their affected Loans during such Interest Period, the Agent shall
give telecopy or telephonic notice thereof to the Borrower and the Lenders as
soon as practicable thereafter. If such notice is given, (i) any LIBOR Loans
requested to be made on the first day of such Interest Period shall accrue
interest at the Base Rate, (ii) Loans that were to have been converted on the
first day of such Interest Period to LIBOR Loans shall be continued as Base Rate
Loans and (iii) any outstanding LIBOR Loans shall be converted, on the first day
of such Interest Period, to Base Rate Loans. Until such notice has been
withdrawn by the Agent, no further LIBOR Loans shall be made or continued as
such, nor shall the Borrower have the right to convert Base Rate Loans to LIBOR
Loans.
2.12 Pro Rata Treatment and Payments. Each borrowing by the Borrower
from the Lenders hereunder, and any reduction of the Aggregate Revolving Loan
Commitment, shall be made pro rata according to the respective Revolving Loan
Commitment Percentages of the Lenders. Each payment (including each prepayment)
by the Borrower on account of principal of and interest on the Revolving Loans
shall be made pro rata according to the respective outstanding principal and
interest amounts of the Revolving Loans then held by the Lenders, and each
payment (including each prepayment) by the Borrower on account of principal of
and interest on the Term Loans shall be made pro rata according to the
respective outstanding principal and interest amounts of the Term Loans then
held by the Lenders. All payments (including prepayments) to be made by the
Borrower hereunder and under the Notes, whether on account of principal,
interest, fees or otherwise, shall be made without setoff, deduction or
counterclaim and shall be made prior to 11:00 a.m., Los Angeles time, on the due
date thereof to the Agent, for the account of the applicable Lenders, at the
Agent's office specified in Section 9.2, in Dollars and in immediately available
funds. The Agent shall distribute such payments to the applicable Lenders
promptly upon receipt in like funds as received. If any payment hereunder (other
than payments on the LIBOR Loans) becomes due and payable on a
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day other than a Business Day, such payment shall be extended to the next
succeeding Business Day, and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension. If
any payment on a LIBOR Loan becomes due and payable on a day other than a
Eurodollar Business Day, the maturity thereof shall be extended to the next
succeeding Eurodollar Business Day (and interest shall continue to accrue
thereon at the applicable rate) unless the result of such extension would be to
extend such payment into another calendar month, in which event such payment
shall be made on the immediately preceding Eurodollar Business Day.
2.13 Illegality. Notwithstanding any other provision herein, if any
change after the Closing Date in any Requirement of Law or in the interpretation
or application thereof shall make it unlawful for any Lender or Applicable
Lending Office to make or maintain LIBOR Loans as contemplated by this
Agreement, (a) the commitment of such Lender hereunder to make LIBOR Loans,
continue LIBOR Loans as such and convert Base Rate Loans to LIBOR Loans shall
forthwith be suspended during such period of illegality and (b) the Loans of
such Lender or Applicable Lending Office then outstanding as LIBOR Loans, if
any, shall be converted automatically to Base Rate Loans on the respective last
days of the then current Interest Periods with respect to such Loans or within
such earlier period as required by law. If any such conversion of a LIBOR Loan
occurs on a day which is not the last day of the then current Interest Period
with respect thereto, the Borrower shall pay to such Lender such amounts, if
any, as may be required pursuant to Section 2.16. To the extent that a Lender's
LIBOR Loans have been converted to Base Rate Loans pursuant to this Section
2.13, all payments and prepayments of principal that otherwise would be applied
to such Lender's LIBOR Loans shall be applied instead to its Base Rate Loans.
2.14 Increased Costs.
(a) In the event that any change after the Closing Date in any
Requirement of Law or in the interpretation or application thereof or compliance
by any Lender with any request or directive (whether or not having the force of
law but, if not having the force of law, generally applicable to and complied
with by banks and financial institutions of the same general type as such Lender
in the relevant jurisdiction) from any central bank or other Governmental
Authority made subsequent to the date hereof:
(i) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirements against assets held by, letters
of credit or guarantees issued by, deposits or other liabilities in or for the
account of, advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender or Applicable Lending Office
which is not otherwise included in the determination of the LIBOR Adjusted Rate
hereunder; or
(ii) shall impose on such Lender or Applicable Lending Office
any other condition;
and the result of any of the foregoing is to increase the cost to the Agent of
issuing or maintaining any Letter of Credit by an amount which the Agent deems
to be material, or to such Lender or Applicable Lending Office by an amount
which such Lender deems to be material, of making, converting into, continuing
or maintaining LIBOR Loans, or purchasing or maintaining any participation in a
Letter of Credit, or to reduce any amount receivable hereunder in respect
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thereof, then, in any such case, the Borrower shall immediately pay to the
Agent, for its own account or on behalf of such Lender or Applicable Lending
Office, as applicable, upon the demand of the Agent for itself or at the request
of such Lender, as applicable, any additional amounts necessary to compensate
such Lender or the Agent, as applicable, for such increased cost or reduced
amount receivable. If the Agent, any Lender or any Applicable Lending Office
becomes entitled to claim any additional amounts pursuant to this Section, it
shall promptly notify the Borrower, through the Agent, of the event by reason of
which it has become so entitled. A certificate as to any additional amounts
payable pursuant to this Section submitted by the Agent or such Lender or
Applicable Lending Office, through the Agent, to the Borrower shall be
conclusive evidence of the accuracy of the information so recorded, absent
manifest error. This covenant shall survive the termination of this Agreement,
expiration of the Letters of Credit and the payment of the Notes and all other
amounts payable hereunder.
(b) If, after the Closing Date, the introduction of or any change in
any applicable law, rule, regulation or guideline regarding capital adequacy, or
any change in the interpretation or administration thereof by any Governmental
Authority charged with the interpretation or administration thereof, affects the
amount of capital required or expected to be maintained by any Lender or any
corporation controlling any Lender, and such Lender (taking into consideration
such Lender's or such corporation's policies with respect to capital adequacy)
determines that the amount of capital maintained by such Lender or such
corporation which is attributable to or based upon the Loans, the Letters of
Credit, the Revolving Loan Commitments or this Agreement must be increased as a
consequence of such introduction or change by an amount deemed by such Lender to
be material, then, upon demand of the Agent at the request of such Lender, the
Borrower shall immediately pay to the Agent on behalf of such Lender, additional
amounts sufficient to compensate such Lender or such corporation for the
increased costs to such Lender or corporation of such increased capital. Any
such demand shall be accompanied by a certificate of such Lender setting forth
in reasonable detail the computation of any such increased costs, which
certificate shall be conclusive, absent manifest error. This covenant shall
survive the termination of this Agreement, expiration of the Letters of Credit
and the payment of the Notes and all other amounts payable hereunder.
2.15 Taxes.
(a) All payments made by the Borrower in respect of the Obligations
shall be made free and clear of, and without deduction or withholding for or on
account of, any present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority or any
political subdivision or taxing authority thereof or therein, other than
Excluded Taxes (all such non-Excluded Taxes being hereinafter called "Taxes").
If any Taxes are required to be withheld from any amounts payable to the Agent
or any Lender in respect of the Obligations, the amounts so payable to the Agent
or such Lender shall be increased to the extent necessary to yield to the Agent
or such Lender (after payment of all Taxes) interest or any such other amounts
payable hereunder at the rates or in the amounts specified in this Agreement and
the Notes. The Agent or a Lender, as the case may be, shall deliver to the
Borrower a certificate in good faith setting forth the amount of such Taxes, the
calculation of such Taxes and an explanation of the requirement therefor, all in
reasonable detail, and such certificate shall be conclusive, absent manifest
error. Whenever any Taxes are payable by the Borrower, as promptly as possible
thereafter, the Borrower shall send to the Agent, for its own
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account or for the account of such Lender, as the case may be, a copy of an
original official receipt received by the Borrower showing payment thereof or
such other evidence of payment reasonably satisfactory to the Agent. If the
Borrower fails to pay any Taxes when due to the appropriate taxing authority or
fails to remit to the Agent the required receipts or other required documentary
evidence, the Borrower shall indemnify the Agent and the Lenders for any
incremental taxes, interest or penalties (and related reasonable fees and
expenses of counsel) that may become payable by the Agent or any Lender as a
result of any such failure. The agreements in this Section shall survive the
termination of this Agreement, the expiration of the Letters of Credit and the
payment of the Notes and all other amounts payable hereunder.
(b) Each Lender that is not organized under the laws of the United
States of America or a state thereof agrees that it will deliver to the Borrower
and the Agent (i) two duly completed copies of United States Internal Revenue
Service Form ▇-▇, ▇-▇▇▇▇ ▇▇ ▇-▇▇▇▇ (as applicable to it). Each such Lender also
agrees to deliver to the Borrower and the Agent two further copies of the said
Form ▇-▇, ▇-▇▇▇▇ ▇▇ ▇-▇▇▇▇ (as applicable to it), or successor applicable forms
or other manner of certification, as the case may be, on or before the date that
any such form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form previously delivered by it to the
Borrower and the Agent, and such extensions or renewals thereof as may
reasonably be requested by the Borrower or the Agent, unless in any such case an
event beyond the control of such Lender (including any change in treaty, law or
regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent such Lender from duly completing and delivering any such form with
respect to it and such Lender so advised the Borrower and the Agent. Each such
Lender shall certify, pursuant to such Forms, that it is entitled to receive
payments under this Agreement and the Notes without deduction or withholding of
any United States federal income taxes.
2.16 Indemnity. The Borrower agrees to indemnify each Lender against, to
hold each Lender harmless from, and to pay each Lender within 5 Business Days of
such Lender's demand the amount of, any liability, loss or expense arising from
the reemployment of funds obtained by it or from fees payable to terminate the
deposits from which such funds were obtained (including reasonable fees and
expenses of counsel) which such Lender may sustain or incur as a consequence of
(a) default by the Borrower in payment when due of the principal amount of or
interest on any LIBOR Loan, (b) default by the Borrower in making a borrowing
of, conversion into or continuation of LIBOR Loans after the Borrower has given
a notice requesting the same in accordance with the provisions of this
Agreement, (c) default by the Borrower in making any prepayment after the
Borrower has given a notice thereof in accordance with the provisions of this
Agreement or (d) the making by the Borrower of a prepayment or conversion of
LIBOR Loans on a day which is not the last day of an Interest Period with
respect thereto (including any prepayment required as a result of acceleration
of the Loans under Article 7). A Lender's certificate as to such liability, loss
or expense shall be deemed conclusive, absent manifest error. This covenant
shall survive the termination of this Agreement, the expiration of the Letters
of Credit and the payment of the Notes and all other amounts payable hereunder.
2.17 Unused-Commitment Fees. The Borrower agrees to pay to the Lenders
an unused-commitment fee to be shared pro rata among the Lenders with respect to
the Revolving Loan Commitments for the period from and including the Closing
Date to but excluding the Revolving Loan Commitment Expiration Date, based on
the daily aggregate Available
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Revolving Loan Commitments from time to time in effect and computed at the
applicable per annum rate set forth below:
Revolving Loan
Leverage Level Fee Rate
1 (<0.75) 0.250%
-
2 (>0.75 <1.00) 0.250%
-
3 (>1.00 <1.50) 0.375%
-
4 (>1.50 <1.75) 0.375%
-
5 (>1.75) 0.500%
Such fee shall be payable quarterly in arrears on the last day of each January,
April, July and October and on the Revolving Loan Commitment Expiration Date,
commencing on the first such date to occur after the Closing Date.
2.18 Mitigation of Costs. If any Lender, by changing its Applicable
Lending Office or taking any other reasonable action, so long as making such
change or taking such other action is not disadvantageous to it in any
financial, regulatory or other respect, can mitigate any adverse effect on the
Borrower under Section 2.11, 2.13, 2.14 or 2.15, such Lender shall take such
action.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Agreement and to make the Loans
and participate in the Letters of Credit, and to induce the Agent to issue the
Letters of Credit, the Borrower hereby represents and warrants to the Agent and
each Lender that:
3.1 Organization and Good Standing. The Borrower and each Subsidiary (a)
is duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization, (b) has all requisite power and authority
(corporate, partnership, limited liability company and otherwise) to own its
properties and to conduct its business as now conducted and as currently
proposed to be conducted and (c) is duly qualified to conduct business as a
foreign organization, and is currently in good standing, in each state and other
jurisdiction in which its failure to be so qualified or in good standing could
reasonably be expected to have a Material Adverse Effect. Each state and other
jurisdiction in which the Borrower or any Subsidiary is organized or is
qualified to conduct business is listed on Schedule 3.1.
3.2 Power and Authority. The Borrower has all requisite power and
authority under applicable Requirements of Law to borrow hereunder. The Borrower
and each Subsidiary has all requisite power and authority under applicable
Requirements of Law to execute, deliver and perform the obligations under the
Loan Documents to which it is a party. All actions, waivers and consents
(corporate, regulatory and otherwise) necessary for the Borrower and each
Subsidiary to execute, deliver and perform the Loan Documents to which it is a
party have been taken and/or received.
3.3 Validity and Legal Effect. This Agreement constitutes, and the other
Loan Documents to which the Borrower or any Subsidiary is a party constitute (or
will constitute when executed and delivered), the legal, valid and binding
obligations of the Borrower and each
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Subsidiary enforceable against it in accordance with the terms thereof, except
as enforceability may be limited by bankruptcy, insolvency, moratorium,
reorganization or other similar laws affecting creditors' rights generally or by
equitable principles relating to enforceability.
3.4 No Violation of Laws or Agreements. The execution, delivery and
performance of the Loan Documents (a) will not violate or contravene any
material Requirement of Law, (b) will not result in any material breach or
violation of, or constitute a material default under, any agreement or
instrument by which the Borrower, any Subsidiary or any of its respective
property may be bound, and (c) will not result in or require the creation of any
Lien (other than pursuant to the Loan Documents) upon or with respect to any
properties of the Borrower or any Subsidiary, whether such properties are now
owned or hereafter acquired.
3.5 Title to Assets; Existing Encumbrances. The Borrower and each
Subsidiary have good and marketable title to all Properties purported to be
owned thereby, free and clear of any Liens, except (i) the Liens granted to the
Agent for the benefit of the Lenders under the Loan Documents and (ii) the Liens
against the assets of Na Pali set forth on Schedule 3.5A. The property and
assets of the Borrower and its Subsidiaries are in good order and repair
(ordinary wear and tear excepted) and are fully covered by the insurance
required under the Loan Documents. Neither the Borrower nor any Domestic
Subsidiary has used (or permitted the filing of any financing statement under)
any legal or operating name at any time during the twelve consecutive calendar
months immediately preceding the execution of this Agreement, except as
identified on Schedule 3.5B.
3.6 Taxes and Assessments. The Borrower and each Subsidiary has timely
filed all required tax returns and reports (federal, state and local) or has
properly filed for extensions of the time for the filing thereof. The Borrower
does not have knowledge of any deficiency, penalty or additional assessment due
or appropriate in connection with any such taxes. All taxes (federal, state and
local) imposed upon the Borrower or any Subsidiary or any of its properties,
operations or income have been paid and discharged prior to the date when any
interest or penalty would accrue for the nonpayment thereof, except for those
taxes being contested in good faith by appropriate proceedings diligently
prosecuted and with adequate reserves reflected on the financial statements in
accordance with GAAP. There are no taxes imposed on the Borrower or its
Subsidiaries by any political subdivision or taxing authority due or payable
either on or by virtue of the execution and delivery by the Borrower, the Agent,
or the Lenders of this Agreement or any other Loan Document to which the
Borrower or the Subsidiaries are party, or on any payment to be made by the
Borrower pursuant hereto or thereto.
3.7 Litigation and Legal Proceedings. Except as disclosed on Schedule
3.7, there is no litigation, claim, investigation, administrative proceeding,
labor controversy or similar action that is pending or, to the best of the
Borrower's knowledge, threatened (i) with respect to any Loan Document or the
transactions contemplated thereby or (ii) against the Borrower or any Subsidiary
that, if adversely resolved, could reasonably be expected to have a Material
Adverse Effect.
3.8 Accuracy of Financial Information.
(a) All information previously furnished to the Agent and the
Lenders that was prepared by or on behalf of the Borrower concerning the
financial condition and operations of the Borrower and its Subsidiaries,
including the audited consolidated financial statements of
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the Borrower as of October 31, 1999 for the fiscal year then ended and the
unaudited consolidated financial statements of the Borrower as of July 31, 2000
for the 9-month fiscal period then ended, (A) has been prepared in accordance
with GAAP consistently applied, (B) is true, accurate and complete in all
material respects, (C) fairly presents the financial condition of the
organizations covered thereby as of the dates and for the periods covered
thereby and (D) discloses all material liabilities (contingent and otherwise) of
the Borrower and its Subsidiaries.
(b) Since July 31, 2000 there has been no event or condition
resulting in a Material Adverse Effect.
3.9 Accuracy of Other Information. All information contained in any
material application, schedule, report, certificate, or any other document given
to the Agent or any Lender by the Borrower or any other Person in connection
with the Loan Documents is in all material respects true, accurate and complete,
and no such Person has omitted to state therein (or failed to include in any
such document) any material fact or any fact necessary to make such information
not misleading. All projections given to the Agent or any Lender by the Borrower
or any other Person on behalf of the Borrower have been prepared with a
reasonable basis and in good faith making use of such information as was
available at the date such projection was made. The projections and pro forma
financial information contained in such materials are based upon good faith
estimates and assumptions believed by the Borrower to be reasonable at the time
made and as of the Closing Date, it being recognized that such projections as to
future events are not to be viewed as facts and that actual results during the
period or periods covered by any such projections may differ from the projected
results.
3.10 Compliance with Laws Generally. The Borrower and each Subsidiary is
in compliance in all material respects with all Requirements of Law applicable
to it, its operations and its properties.
3.11 ERISA Compliance.
(a) The Borrower and each Subsidiary is in compliance in all
material respects with all applicable provisions of ERISA, and all rules,
regulations and orders implementing ERISA.
(b) Neither the Borrower, nor any Subsidiary or any ERISA Affiliate
thereof maintains or contributes to (or has maintained or contributed to) any
Multiemployer Plan under which the Borrower, any Subsidiary or any ERISA
Affiliate thereof could have any withdrawal liability.
(c) Neither the Borrower, nor any Subsidiary or any ERISA Affiliate
thereof sponsors or maintains any defined benefit pension plan under which there
is an accumulated funding deficiency within the meaning of Section 412 of the
Code, whether or not waived.
(d) The liability for accrued benefits under each defined benefit
pension plan that will be sponsored or maintained by the Borrower, any
Subsidiary or any ERISA Affiliate thereof (determined on the basis of the
actuarial assumptions utilized by the PBGC) does not exceed the aggregate fair
market value of the assets under each such defined benefit pension plan.
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(e) The aggregate liability of the Borrower, each Subsidiary and
each ERISA Affiliate thereof arising out of or relating to a failure of any
employee benefit plan within the meaning of Section 3(2) of ERISA to comply with
provisions of ERISA or the Code will not have a Material Adverse Effect.
(f) There does not exist any unfunded liability (determined on the
basis of actuarial assumptions utilized by the actuary for the plan in preparing
the most recent annual report) of the Borrower, any Subsidiary or any ERISA
Affiliate thereof under any plan, program or arrangement providing
post-retirement, life or health benefits.
(g) No Reportable Event and no Prohibited Transaction (as defined in
ERISA) has occurred or is occurring with respect to any plan with which the
Borrower or any Subsidiary is associated.
3.12 Environmental Compliance.
(a) The Borrower and each Subsidiary has received all permits and
filed all notifications necessary under and is otherwise in compliance in all
material respects with all national, federal, state and local laws, rules and
regulations, whether domestic or foreign, governing the control, removal,
storage, transportation, spill, release or discharge of hazardous or toxic
wastes, substances and petroleum products, including as provided in the
provisions of and the regulations under (i) the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended by the Superfund
Amendment and Reauthorization Act of 1986, (ii) the Solid Waste Disposal Act,
(iii) the Clean Water Act and the Clean Air Act, (iv) the Hazardous Materials
Transportation Act, (v) the Resource Conservation and Recovery Act of 1976 and
(vi) the Federal Water Pollution Control Act Amendments of 1972 (all of the
foregoing enumerated and non-enumerated statutes, including any applicable state
or local statutes, all as amended, collectively, the "Environmental Control
Statutes").
(b) Neither the Borrower nor any Subsidiary has given any written or
oral notice to the Environmental Protection Agency ("EPA") or any state or local
agency with regard to any actual or imminently threatened removal, storage,
transportation, spill, release or discharge of hazardous or toxic wastes,
substances or petroleum products either (i) on properties owned or leased by the
Borrower or such Subsidiary or (ii) otherwise in connection with the conduct of
its business and operations.
(c) Neither the Borrower nor any Subsidiary has received notice that
it is potentially responsible for costs of clean-up of any actual or imminently
threatened spill, release or discharge of hazardous or toxic wastes or
substances or petroleum products pursuant to any Environmental Control Statute.
(d) No judicial proceedings or governmental or administrative action
is pending, or, to the knowledge of the Borrower, threatened, under any
Environmental Control Statute to which the Borrower or any of its Subsidiaries
is named as a party with respect to the Properties or the business conducted at
the Properties, nor are there any consent decrees or other decrees, consent
orders, administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Control Statute with
respect to the Properties or such business.
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3.13 Federal Regulations. No Letter of Credit and no part of the
proceeds of any Loans are intended to be or will be used, directly or indirectly
for any purpose which violates the provisions of the Regulations of the Board of
Governors of the Federal Reserve System. If requested by any Lender or the
Agent, the Borrower will furnish to the Agent and each Lender a statement to the
foregoing effect in conformity with the requirements of Form U-1 referred to in
Regulation U.
3.14 Fees and Commissions. Except as required by Section 2.17 or the
letter referred to in Section 4.1(e), neither the Borrower nor any Subsidiary
owes or will owe any fees or commissions of any kind in connection with this
Agreement or the transactions contemplated hereby, and the Borrower does not
know of any claim (or any basis for any claim) for any fees or commissions in
connection with this Agreement or such transactions.
3.15 Solvency. Immediately prior to, upon and immediately following the
execution of this Agreement and the funding of the Loans and the issuance of any
Letters of Credit to be funded or issued on the Closing Date, the Borrower, both
individually and together with its Subsidiaries, was, is and will be Solvent.
3.16 Investment Company Act; Other Regulations. Neither the Borrower nor
any Subsidiary is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
3.17 Nature of Business. Neither the Borrower nor any Subsidiary is
engaged in any business other than the ownership and operation of retail apparel
stores, the marketing, advertising and promotion of consumer products, the
design and arrangement of apparel manufacturing and the importing of apparel and
accessories.
3.18 Ranking of Loans. This Agreement and the other Loan Documents to
which the Borrower is a party, when executed, and the Loans, when borrowed are
and will be the direct and general obligations of the Borrower. The Borrower's
obligations hereunder and thereunder rank and will rank at least pari passu in
priority of payment to all other senior Indebtedness of the Borrower.
3.19 Subsidiaries. The Borrower has no Subsidiaries other than those
listed on Schedule 3.19.
ARTICLE 4. CONDITIONS PRECEDENT
4.1 Conditions to Closing Date. The agreement of each Lender to make the
Term Loans and any Revolving Loans requested to be made by it on the Closing
Date and to participate in any Letters of Credit to be issued on the Closing
Date and the agreement of the Agent to issue any Letters of Credit requested to
be issued on the Closing Date are subject to the satisfaction, immediately prior
to or concurrently with the making of such Loans and/or the issuance of and
participation in such Letters of Credit on the Closing Date, of the following
conditions precedent:
(a) Revolving Credit and Term Loan Agreement. The Agent shall have
received this Agreement, duly executed and delivered by the Borrower and the
Lenders.
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(b) Other Loan Documents. The Agent shall have received the Notes
and all UCC-1 Financing Statements and other agreements or instruments required
to create or perfect a security interest in the Collateral executed in
connection herewith, in each case executed and delivered by an officer of the
Borrower.
(c) Corporate Proceedings. The Agent shall have received a copy of
the resolutions of the Board of Directors of the Borrower authorizing (i) the
execution, delivery and performance of the Loan Documents to which it is or will
be a party and (ii) the borrowings contemplated hereunder, certified by the
Secretary or an Assistant Secretary of the Borrower as of the Closing Date,
which certificate states that such resolutions thereby certified have not been
amended, modified, revoked or rescinded and are in full force and effect.
(d) Organic Documents. The Agent shall have received copies of the
Organic Documents of the Borrower, certified as of the Closing Date as complete
and correct copies thereof by the Secretary or an Assistant Secretary of the
Borrower.
(e) Fees and Costs. The Agent shall have received payment of all
fees, costs and expenses, including legal fees (if requested by the Agent) and
the fees set forth in the fee side letter executed by the Borrower and the Agent
in connection herewith, accrued and unpaid and otherwise due and payable on or
before the Closing Date by the Borrower in connection with this Agreement.
(f) Legal Opinion. The Agent shall have received the executed legal
opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP, counsel to the Borrower, in form and substance
satisfactory to the Agent.
(g) Lien Searches. The Agent shall have received such UCC and other
Lien searches as it shall deem necessary.
(h) Good-Standing Certificates. With respect to the Borrower, the
Agent shall have received a certificate, dated a recent date, of the Secretary
of State of the state of formation of such Obligor and each other jurisdiction
where such Obligor is required to be qualified to do business under such
jurisdiction's law, certifying as to the existence and good standing of, and the
payment of taxes by, each Obligor in such state.
(i) No Default/Representations. No Default shall have occurred and
be continuing on the Closing Date or would occur after giving effect to the
Loans requested to be made, or Letters of Credit requested to be issued, on the
Closing Date, and the representations and warranties contained in this Agreement
and each other Loan Document and certificate or other writing delivered to the
Lenders in satisfaction of the conditions set forth in this Section 4.1 prior to
or on the Closing Date shall be correct in all material respects on and as of
the Closing Date, and the Agent shall have received a certificate of the
Borrower to such effect in the form of Exhibit D, dated as of the Closing Date
and executed by a Responsible Officer of the Borrower.
(j) Financial Information. The Agent shall have received (i) a
Borrowing Base Certificate as of August 31, 2000 and (ii) a certificate of the
Chief Financial Officer of the Borrower setting forth the Maximum Leverage Ratio
as of July 31, 2000 (which shall be used in determining the initial Applicable
Revolving Loan Margin and Applicable Term Loan Margin).
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(k) Additional Proceedings. The Agent shall have received such other
approvals, opinions and documents as any Lender, through the Agent, may
reasonably request, and all legal matters incident to the making of such Loans
and issuance of such Letters of Credit shall be satisfactory to the Agent.
4.2 Conditions to Each Loan or Letter of Credit. The agreement of each
Lender to make each Loan, and the agreement of the Agent to issue each Letter of
Credit, requested to be made or issued by it is subject to the satisfaction,
immediately prior to or concurrently with the making of such Loan or the
issuance of such Letter of Credit, of the following conditions precedent:
(a) Representations and Warranties; No Default. The following
statements shall be true, and the Borrower's acceptance of the proceeds of such
Loan or its delivery of an executed Letter of Credit Request shall be deemed to
be a representation and warranty of the Borrower on the date of such Loan or as
of the date of issuance of such Letter of Credit, as applicable, that:
(i) The representations and warranties contained in this
Agreement and in each other Loan Document and certificate or other writing
delivered to the Lenders prior to, on or after the Closing Date pursuant hereto
and on or prior to the date for such Loan or the issuance of such Letter of
Credit are correct on and as of such date in all material respects as though
made on and as of such date except to the extent that such representations and
warranties expressly relate to an earlier date; and
(ii) No Default has occurred and is continuing or would result
from the making of the Loan to be made on such date or the issuance of such
Letter of Credit as of such date.
(b) Legality. The making of such Loan or the issuance of such Letter
of Credit, as applicable, shall not contravene any law, rule or regulation
applicable to any Lender or the Borrower or any other Obligor.
(c) Revolving Borrowing Notice, Swing Line Borrowing Notice, Letter
of Credit Request. The Agent shall have received a Revolving Borrowing Notice,
Swing Line Borrowing Notice or Letter of Credit Request, as applicable, pursuant
to the provisions of this Agreement from the Borrower.
ARTICLE 5. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that from and after the Closing Date, so long
as any Commitment remains in effect, any Note remains outstanding and unpaid,
any other amount is owing to any Lender or the Agent hereunder or any Letter of
Credit remains outstanding:
5.1 Financial Statements.
(a) Within 105 days after the end of each fiscal year, the Borrower
shall deliver to the Lenders a complete set of audited annual consolidated
financial statements of the Borrower and unaudited consolidating financial
statements with respect to the Borrower, its
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Domestic Subsidiaries and Na Pali, including a balance sheet, an income
statement and a cash flow statement (with accompanying notes and schedules) and
a capital expenditure schedule for such fiscal year segmented by domestic and
foreign operations. Such financial statements (i) must be prepared in accordance
with GAAP consistently applied and (ii) must be certified without qualification
by the Accountants. Together with the audited financial statements, the Agent
must also receive (A) a certificate signed by such Accountants, at the time of
the completion of the annual audit, stating that the financial statements fairly
present the consolidated financial condition of the Borrower as of the date
thereof and for the periods covered thereby, (B) a certificate executed by the
Chief Financial Officer of the Borrower certifying that the financial statements
fairly present the financial condition of the Borrower and its Subsidiaries as
of the date thereof and for the period covered thereby and that as of the date
of such certificate such officer has obtained no knowledge of any Default except
as specified in such certificate and (C) a Covenant Compliance Certificate.
(b) Within 60 days after the end of each of the Borrower's first
three fiscal quarters, the Borrower shall deliver to the Lenders the
consolidated financial statements of the Borrower and unaudited consolidating
financial statements with respect to the Borrower, its Domestic Subsidiaries and
Na Pali for such quarter, including a balance sheet, an income statement and a
cash flow statement (with accompanying notes and schedules). Such financial
statements shall be prepared in accordance with GAAP consistently applied.
Together with the quarterly financial statements, the Lenders must also receive
(i) a certificate executed by the Chief Financial Officer of the Borrower (A)
stating that the financial statements fairly present the financial condition of
the Borrower and its Subsidiaries as of the date thereof and for the period
covered thereby and (B) certifying that as of the date of such certificate such
officer has obtained no knowledge of any Default except as specified in such
certificate and (ii) a Covenant Compliance Certificate; and
(c) Within 30 days after the end of each month, the Borrower shall
deliver to the Agent, for distribution to the Lenders, a Borrowing Base
Certificate as of the end of such month.
5.2 Certificates; Other Information. The Borrower shall furnish to the
Agent, for distribution to the Lenders:
(a) within 10 days after the same are filed, copies of all financial
statements and reports which the Borrower or any Subsidiary may make to, or file
with, the Securities and Exchange Commission or any successor Governmental
Authority;
(b) promptly but, in any event, within 10 days after receipt
thereof, copies of all financial reports (including management letters), if any,
submitted to the Borrower or any Subsidiary by the Accountants in connection
with any annual or interim audit of the books thereof;
(c) as soon as possible and in any event within five Business Days
after the occurrence of a Default or, in the good faith determination of a
Responsible Officer of the Borrower, a Material Adverse Effect, the written
statement by a Responsible Officer of the Borrower, setting forth the details of
such Default or Material Adverse Effect and the action which the Borrower
proposes to take with respect thereto;
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(d) (A) as soon as possible and in any event within 30 days after
the Borrower knows or has reason to know that any Termination Event with respect
to any Plan has occurred, a statement of a Responsible Officer of the Borrower
describing such Termination Event and the action, if any, which the Borrower
proposes to take with respect thereto, (B) promptly and in any event within ten
days after receipt thereof by the Borrower or any ERISA Affiliate of the
Borrower from the PBGC, copies of each notice received by the Borrower or such
ERISA Affiliate of the PBGC's intention to terminate any Plan or to have a
trustee appointed to administer any Plan, (C) promptly and in any event within
30 days after the filing thereof with the Internal Revenue Service, copies of
each Schedule B (Actuarial Information) to the annual report (Form 5500 Series)
with respect to each Single Employer Plan maintained for or covering employees
of the Borrower or any Subsidiary if the present value of the accrued benefits
under the Plan exceeds its assets by an amount in excess of $500,000 and (D)
promptly and in any event within ten days after receipt thereof by the Borrower
or any ERISA Affiliate of the Borrower from a sponsor of a Multiemployer Plan or
from the PBGC, a copy of each notice received by the Borrower or such ERISA
Affiliate concerning the imposition or amount of withdrawal liability under
Section 4202 of ERISA or indicating that such Multiemployer Plan may enter
reorganization status under Section 4241 of ERISA;
(e) promptly after the commencement thereof, but in any event not
later than 10 days after service of process with respect thereto on, or the
obtaining of knowledge by, the Borrower or any Subsidiary, notice of (i) each
material action, suit or proceeding before any Governmental Authority and (ii)
any claim under any Environmental Control Statute;
(f) promptly upon any Subsidiary's becoming a Material Domestic
Subsidiary or a Material Foreign Subsidiary, or upon the Borrower's direct or
indirect creation or acquisition of a Material Domestic Subsidiary or a Material
Foreign Subsidiary, notice of the same; and
(g) promptly, such additional financial information as any Lender,
through the Agent, may from time to time reasonably request.
5.3 Payment of Obligations. The Borrower shall, and shall cause each of
its Subsidiaries to, pay, discharge or otherwise satisfy at or before maturity
or before they become delinquent, as the case may be, all its obligations of
whatever nature (including all taxes, assessments, governmental charges and
levies), except where the amount or validity thereof is currently being
contested in good faith by appropriate proceedings and reserves in conformity
with GAAP with respect thereto have been provided on the books of the Borrower
or such Subsidiaries, as the case may be.
5.4 Conduct of Business; Maintenance of Existence and Licenses;
Contractual Obligations. The Borrower shall, and shall cause each of its
Subsidiaries to, (i) continue to engage in business of the same general type as
conducted by the Borrower and such Subsidiaries as of the Closing Date, (ii)
preserve, renew and keep in full force and effect its corporate or other legal
existence, unless the Board of Directors of any Subsidiary other than a Material
Domestic Subsidiary or a Material Foreign Subsidiary determines that the
preservation of its corporate or other legal existence is no longer desirable,
and the loss thereof could not reasonably be expected to have a Material Adverse
Effect, (iii) maintain all rights, registrations, licenses, privileges and
franchises necessary or desirable in the normal conduct of its business, except
to the extent that failure to so maintain would not have a Material Adverse
Effect, and (iv) comply with all
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Contractual Obligations except to the extent that failure to comply therewith
would not have a Material Adverse Effect.
5.5 Maintenance of Property; Insurance. The Borrower shall, and shall
cause each of its Subsidiaries to, keep all property useful or necessary in its
business in good working order and condition (ordinary wear and tear excepted);
maintain with financially sound and reputable insurance companies or
associations insurance on such of its property in at least such amounts and
against such risks as are usually insured against in the same general area by
companies engaged in the same or a similar business; and furnish to the Agent
evidence of the continued effectiveness of such insurance at all times (but with
respect to Foreign Subsidiaries, only upon request by the Agent). All such
policies of insurance on the property of the Borrower and the Domestic
Subsidiaries shall contain an endorsement, in form and substance satisfactory to
the Agent, (i) showing the Agent, on behalf of the Lenders, as additional
insured or loss payee, as appropriate, and (ii) providing that the insurance
companies will give the Agent at least 20 days' prior written notice before any
such policy or policies of insurance shall be materially altered or canceled.
All policies of insurance required to be maintained under this Agreement shall
be in customary form and with insurers reasonably acceptable to the Agent and
all such policies shall be in such amounts as shall be customary for similar
companies in the same or similar business in the same geographical area. The
Borrower shall deliver to the Agent insurance certificates certified by the
Borrower's insurance brokers, as to the existence and effectiveness of each
policy of insurance and evidence of payment of all premiums then due and payable
therefor. In addition, the Borrower shall notify the Agent promptly of any
occurrence causing a material loss of any insured Property and the estimated (or
actual, if available) amount of such loss. In addition, the Borrower shall cause
the insurance policies maintained by it and the Domestic Subsidiaries to be in
conformity with the following:
(i) Each policy for liability insurance shall provide for all
losses to be paid on behalf of the Agent and the Borrower or Domestic Subsidiary
(as the case may be), as their respective interests may appear, and each policy
for property damage insurance shall, to the extent applicable to equipment and
inventory, provide for all losses (except for losses of less than $1,000,000 per
occurrence, which may be paid directly to the Borrower or such Domestic
Subsidiary, as applicable) to be paid directly to the Agent.
(ii) Reimbursement under any liability insurance maintained by
the Borrower or its Subsidiaries pursuant to this Section 5.5 may be paid
directly to the Person who shall have incurred liability covered by such
insurance. In the case of any loss involving damage to equipment or inventory as
to which clause (iii) of this Section 5.5 is not applicable, the Borrower will
make or cause to be made the necessary repairs to or replacements of such
equipment or inventory, and any proceeds of insurance maintained by the Borrower
or its Domestic Subsidiaries pursuant to this Section 5.5 shall be paid by the
insurer or the Agent, as applicable, to the Borrower or the applicable Domestic
Subsidiary, upon presentation of invoices and other evidence of obligations, as
reimbursement for the costs of such repairs or replacements. Any such payment by
the Agent shall not be unreasonably withheld or delayed.
(iii) Upon the occurrence and during the continuance of a
Default, all insurance proceeds in respect of any equipment or inventory shall
be paid to the Agent and applied in repayment of the Loans in such order as the
Agent may reasonably determine, but in any event pro rata among the Lenders.
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5.6 Inspection of Property; Books and Records; Discussions. The Borrower
shall, and shall cause each of its Subsidiaries to, (a) keep proper books of
records and account in which full, true and correct entries in conformity with
GAAP and all material Requirements of Law shall be made of all material dealings
and transactions in relation to its business and activities and (b) upon
reasonable notice and at such reasonable times during usual business hours,
permit representatives of any Lender to visit and inspect any of its properties
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 the
business, operations, properties and financial and other condition of the
Borrower and its Subsidiaries with officers and employees of the Borrower and
its Subsidiaries and with its Accountants, including for the purpose of
conducting Field Exams, which shall be conducted at least annually.
5.7 Environmental Laws. The Borrower shall, and shall cause each of its
Subsidiaries to:
(a) Comply in all material respects with, and ensure compliance by
all tenants and subtenants, if any, with, all applicable Environmental Control
Statutes and obtain and comply in all material respects with any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Control Statutes;
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Control Statutes and promptly comply in all material respects with
all lawful orders and directives of all Governmental Authorities regarding
Environmental Control Statutes except to the extent that the same are being
contested in good faith by appropriate proceedings; and
(c) Defend, indemnify and hold harmless the Agent and the Lenders,
and their respective employees, agents, officers and directors, from and against
any and all claims, demands, penalties, fines, liabilities, settlements,
damages, costs and expenses of whatever kind or nature known or unknown,
contingent or otherwise, arising out of, or in any way relating to the violation
of, noncompliance with or liability under any Environmental Control Statutes
applicable to the operations of the Borrower or any of its Subsidiaries, or the
Borrower's or any of its Subsidiaries' interest in Properties, or any orders,
requirements or demands of Governmental Authorities related thereto, including
attorneys' and consultants' fees, investigation and laboratory fees, response
costs, court costs and litigation expenses, except to the extent that any of the
foregoing arise out of the gross negligence or willful misconduct of the party
seeking indemnification therefor. This indemnity shall continue in full force
and effect regardless of the termination of this Agreement, the expiration of
the Letter of Credit and the payment of the Notes and all other amounts payable
hereunder.
5.8 Use of Proceeds. The Borrower will use the proceeds of the Revolving
Loans and the Swing Line Loans solely to provide funds for working capital,
capital expenditures, acquisitions permitted by Section 6.7(d) and general
corporate purposes of the Borrower and its Domestic Subsidiaries. The Borrower
will use the proceeds of the Term Loans solely to refinance existing
indebtedness under the Old Credit Agreement that was incurred to finance a
portion of the purchase price and related transaction expenses for the
acquisition referred to in Section 6.7(g). Commercial Letters of Credit shall be
used only for the purpose of supporting purchases of inventory by the Borrower
and its Domestic Subsidiaries. Standby Letters of Credit shall be used only to
provide support for direct business activities of the Borrower as agreed to
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by the Agent. Notwithstanding anything herein to the contrary, no Loan or Letter
of Credit shall be used for the purchasing or carrying of any Margin Stock.
5.9 Compliance With Laws, Etc. The Borrower shall comply, and shall
cause each of its Subsidiaries to comply, in all material respects with all
applicable Requirements of Law.
5.10 Guarantees, Etc.
(a) The Borrower will cause each of its Material Domestic
Subsidiaries to execute and deliver to the Agent, promptly upon request thereby,
(i) a Guarantee guaranteeing the Obligations, (ii) a Guarantor Security
Agreement granting to the Agent, for the benefit of the Lenders, a security
interest in the tangible and intangible personal property (excluding trademarks,
trade names and other intellectual- property rights) of such Domestic
Subsidiary, together with appropriate Lien searches requested by the Agent
indicating the Lenders' first priority Lien on such personal property and (iii)
UCC-1 Financing Statements, duly executed by such Subsidiary, in form and
substance satisfactory to the Agent and, in connection with such deliveries,
cause to be delivered to the Agent (A) a favorable written opinion of counsel
satisfactory to the Agent as to such matters relating thereto as any Lender
through the Agent may reasonably request, in form and substance satisfactory to
the Agent, (B) such other agreements, instruments, approvals or other documents
as any Lender through the Agent may reasonably request, and (C) copies of the
organizational documents, resolutions and incumbency certificates of such
Domestic Subsidiary.
(b) The Borrower will, and will cause each Material Foreign
Subsidiary and each Subsidiary holding any equity interest in a Material Foreign
Subsidiary to, deliver to the Agent, promptly upon request thereby, (i) a pledge
of 65% of the equity interests in such Foreign Subsidiary (or such greater
amount of such equity interests as shall not cause the Borrower to incur
material adverse tax consequences under United States tax law), (ii) such
agreements, certificates, filings, notices, consents and other actions as the
Agent may request to evidence and perfect such pledge and (iii) an executed
legal opinion of local counsel to the Borrower, such Foreign Subsidiary and such
Subsidiary in form and substance, and from a firm of attorneys, reasonably
acceptable to the Agent; provided, however, that no such deliveries shall be
required with respect to any Material Foreign Subsidiary which is wholly-owned
by a Foreign Subsidiary with respect to which the Borrower has complied with
this Section 5.10(b).
ARTICLE 6. NEGATIVE COVENANTS
The Borrower hereby agrees that from and after the Closing Date, so long
as any Commitment remains in effect, any Note remains outstanding and unpaid,
any other amount is owing to any Lender or the Agent hereunder or any Letter of
Credit remains outstanding:
6.1 Financial Condition Covenants. The Borrower shall not:
(a) Maximum Leverage Ratio Permit the Maximum Leverage Ratio of the
Borrower and its Subsidiaries on a consolidated basis, as of the end of any
fiscal quarter of the Borrower, to exceed 2.00:1.
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(b) Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage
Ratio of the Borrower and its Subsidiaries on a consolidated basis, as of the
end of any fiscal quarter of the Borrower, to be less than 1.25:1.
(c) Minimum Profitability. Permit, with respect to the Borrower and
its Subsidiaries on a consolidated basis, a net loss to exist for any two
consecutive fiscal quarters of the Borrower.
(d) Commitments and Indebtedness of Na Pali. Permit Na Pali and its
Subsidiaries to have outstanding at any time credit commitments thereto
(including commitments in the form of borrowing commitments, commitments to
issue letters of credit and bank overdraft line commitments), and Indebtedness
resulting therefrom or otherwise, in an aggregate principal amount in excess of
$105,000,000.
6.2 Limitation on Indebtedness. The Borrower shall not create, incur,
assume or suffer to exist any Indebtedness, and shall not permit any of its
Domestic Subsidiaries, QAPL or QIPL to create, incur, assume or suffer to exist
any Indebtedness, except for:
(a) Indebtedness created hereunder and under the other Loan
Documents;
(b) Indebtedness of the Borrower outstanding on the Closing Date and
listed on Schedule 6.2;
(c) Indebtedness (i) evidenced by performance bonds issued in the
ordinary course of business or reimbursement obligations in respect thereof,
provided that such Indebtedness, when combined with Indebtedness permitted by
Section 6.2(h), does not exceed $5,000,000 in aggregate principal amount at any
time outstanding, (ii) evidenced by a letter of credit facility related to
insurance associated with claims for work-related injuries or (iii) for bank
overdrafts incurred in the ordinary course of business that are promptly repaid;
(d) trade credit incurred to acquire goods, supplies and services
incurred in the ordinary and normal course of business;
(e) Lease Expenses;
(f) Indebtedness of the Borrower with respect to the Leasehold
Improvement Loan;
(g) Indebtedness of QAPL to the former shareholders of QIPL for the
deferred purchase price for the acquisition of the shares of QIPL by QAPL, and
Indebtedness of the Borrower in respect of its guaranty of such Indebtedness of
QAPL; and
(h) Indebtedness of the Borrower in addition to the foregoing,
provided that such Indebtedness, when combined with Indebtedness permitted by
Section 6.2(c)(i), does not exceed $5,000,000 in aggregate principal amount at
any time outstanding.
6.3 Limitation on Liens. The Borrower shall not, and shall not permit
any of its Domestic Subsidiaries, QAPL or QIPL to, create, incur, assume or
suffer to exist any Lien upon any of its property, assets or revenues (including
trademarks and copyrights), whether now owned or hereafter acquired, except for:
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(a) Liens created hereunder or under any of the other Loan
Documents;
(b) Liens existing on any Property at the time of its acquisition
and not created in anticipation of such acquisition;
(c) Liens for taxes not yet due or which are being contested in good
faith by appropriate proceedings, provided that adequate reserves with respect
thereto are maintained on the books of the Borrower, its Domestic Subsidiaries,
QAPL or QIPL, as the case may be, in conformity with GAAP or accounting
principles generally accepted in Australia, as applicable;
(d) Liens created by operation of law not securing the payment of
Indebtedness for money borrowed or guaranteed, including carriers',
warehousemen's, mechanics', materialmen's, repairmen's or other like Liens
arising in the ordinary course of business which are not overdue for a period of
more than 45 days or which are being contested in good faith by appropriate
proceedings;
(e) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements;
(f) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature incurred
in the ordinary course of business;
(g) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, would not cause a Material Adverse Effect;
(h) Liens in favor of the Leasehold Improvement Lender securing the
Leasehold Improvement Loan, which Liens are subject to the terms of the
Intercreditor Agreement; and
(i) Liens securing Indebtedness incurred after the date hereof to
purchase, or to finance the purchase of, fixed assets, provided that (i) any
such Lien is limited to the fixed asset or assets acquired or financed, and any
subsequent improvements thereto, and (ii) such Indebtedness is otherwise
permitted under Section 6.2(h).
6.4 Limitation on Fundamental Changes. The Borrower shall not, and shall
not permit any of its Subsidiaries to, enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), except as permitted by Section 5.4, or create or
acquire any Subsidiary, or convey, sell, lease, assign, transfer or otherwise
dispose of all or substantially all of its property, business or assets, except
that the Borrower may consummate Acquisitions permitted by Section 6.7(d).
6.5 Limitation on Sale of Assets. The Borrower shall not, and shall not
permit any of its Subsidiaries to, make any Asset Disposition unless (i) such
Asset Disposition is for fair market value, (ii) the consideration for such
Asset Disposition is all cash, (iii) no Default has occurred and is continuing
or would result from such Asset Disposition and (iv) the
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consideration for such Asset Disposition, when aggregated with the consideration
for all previous Asset Dispositions during the same calendar year, does not
exceed $10,000,000.
6.6 Limitation on Dividends. The Borrower shall not, and shall not
permit any of its Subsidiaries to, (a) if a corporation, declare or pay any
dividend (other than dividends payable solely in common stock of the Borrower or
its Subsidiaries) on, or make any payment on account of, or set apart assets for
a sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any shares of any class of Capital Stock of
the Borrower or its Subsidiaries or any warrants or options to purchase any such
Capital Stock, whether now or hereafter outstanding, and (b) if a partnership or
a limited liability company, make any distribution with respect to the ownership
interests therein, or, in either case, any other distribution in respect
thereof, either directly or indirectly, whether in cash or property or in
obligations of the Borrower or any Subsidiary (such declarations, payments,
setting apart, purchases, redemptions, defeasance, retirements, acquisitions and
distributions being herein called "Restricted Payments"); provided, however,
that (i) the Borrower and its Subsidiaries shall be permitted to make Restricted
Payments so long as no Default has occurred and is continuing (with the
exception that redemptions shall not exceed the sum of $20,000,000 from the
Closing Date to but excluding the Revolving Loan Commitment Expiration Date) and
(ii) the Subsidiaries shall in any case be permitted to pay cash dividends to
the Borrower.
6.7 Limitation on Investments, Loans and Advances. The Borrower shall
not, and shall not permit any of its Subsidiaries to, make any advance, loan,
extension of credit or capital contribution to, or purchase any stock, bonds,
notes, debentures or other securities of or any assets constituting a business
unit of, or make any other investment in (any of the foregoing, an
"investment"), any Person, or otherwise make any Acquisition, except for:
(a) the Borrower's ownership interest in its Subsidiaries;
(b) investments in marketable securities, liquid investments and
other financial instruments that are acquired for investment purposes and may be
readily sold or otherwise liquidated, that have a value which may be readily
established and which are investment grade;
(c) extensions of trade credit in the ordinary course of business;
(d) Acquisitions of Persons or businesses in the same line of
business as that described in Section 3.17, provided that (i) no Default has
occurred and is continuing or would result from the consummation of such
Acquisition (and the Borrower shall have delivered to the Agent a Covenant
Compliance Certificate showing pro forma calculations assuming such Acquisition
had been consummated), (ii) the aggregate Consideration therefor shall not
exceed $10,000,000, (iii) the Agent shall have received, reviewed and approved
all documents requested by the Agent to insure that the Lenders have a first
priority security interest in, and assignment of, all personal property assets
and interests acquired (excluding intellectual property), including consents of
third parties if reasonably requested, and (iv) such Acquisition is not opposed
by the Person to be, or whose business is to be, acquired;
(e) investments existing on the Closing Date and listed on Schedule
6.7;
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(f) loans and advances to officers and employees of the Borrower or
any Subsidiary, provided that such loans and advances do not exceed $1,000,000
in aggregate principal amount at any time outstanding; and
(g) acquisition of all of the shares of capital stock of QIPL by
QAPL.
6.8 Transactions with Affiliates. The Borrower shall not, and shall not
permit any of its Subsidiaries to, enter into any transaction, including any
purchase, sale, lease or exchange of property or the rendering of any service,
with any Affiliate or with any Subsidiary that has not executed a Guarantee and
Guarantor Collateral Documents, unless such transaction is in the ordinary
course of the Borrower's or such Subsidiary's business and is upon terms no less
favorable to the Borrower or such Subsidiary, as the case may be, than it would
obtain in a comparable arm's length transaction with a Person not an Affiliate
or a Subsidiary.
6.9 Fiscal Year. The Borrower shall not permit its fiscal year or the
fiscal year of any of its Subsidiaries to end on a day other than October 31.
6.10 Sale-Leaseback Transactions. The Borrower shall not, and shall not
permit any of its Subsidiaries to, sell, assign or otherwise transfer any of its
Properties, rights or assets (whether now owned or hereafter acquired) to any
Person and thereafter directly or indirectly lease back the same or similar
property for consideration exceeding $5,000,000 in the aggregate in any calendar
year.
6.11 Unfunded Liabilities. The Borrower shall not permit unfunded
liabilities for any and all Plans maintained for or covering employees of the
Borrower or any Subsidiary to exceed $500,000 in the aggregate at any time.
6.12 Hedging Obligations. The Borrower shall not, and shall not permit
any of its Subsidiaries to, enter into any Hedging Arrangement, except that the
Borrower or any Subsidiary may enter into any Hedging Arrangement that (a) is of
a non-speculative nature, (b) is for the purpose of hedging the Borrower's or
such Subsidiary's reasonably estimated interest rate, foreign currency or
commodity exposure and (c) in the case of the Borrower or any Domestic
Subsidiary, is with a Lender.
ARTICLE 7. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal on any Note when
due, or the Borrower shall fail to pay any interest on any Note, any fee
referred to in this Agreement or the letter referred to in Section 4.1(e) or any
other amount payable hereunder when due; or
(b) Any representation or warranty made or deemed made by any
Obligor herein or in any other Loan Document or which is contained in any
certificate, document or financial or other statement furnished at any time
under or in connection with this Agreement or any other Loan Document shall
prove to have been incorrect in any material respect when made or deemed made;
or
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(c) The Borrower shall default in the observance or performance of
any agreement contained in Section 5.2(c), 5.6, 5.8 or 5.10 or in any provision
of Article 6; or
(d) Any Obligor shall default in the observance or performance of
any other material agreement contained in this Agreement or the other Loan
Documents (other than as provided in paragraphs (a) through (c) of this
Section), and such default shall continue unremedied for a period of 30 days
after the earlier of (i) notice thereof from the Agent to the Borrower and (ii)
actual knowledge thereof by a Responsible Officer of such Obligor; or
(e) Any material provision of any Loan Document shall at any time
for any reason be declared null and void, or the validity or enforceability of
any Loan Document shall at any time be contested by any Obligor, or a proceeding
shall be commenced by any Obligor, or by any Governmental Authority or other
Person having jurisdiction over any Obligor, seeking to establish the invalidity
or unenforceability thereof, or any Obligor shall deny that it has any liability
or obligation purported to be created under any Loan Document; or
(f) Any Obligor shall (i) default in any payment of principal or
interest, regardless of the amount, due in respect of any (A) Indebtedness
(other than the Notes), issued under the same indenture or other agreement, if
the original principal amount of Indebtedness covered by such indenture or
agreement is $750,000 or greater or (B) Guarantee Obligation with respect to an
amount of $750,000 or greater, in either case beyond the period of grace, if
any, provided in the instrument or agreement under which such Indebtedness or
Guarantee Obligation was created, whether or not such default has been waived by
the holders of such Indebtedness or Guarantee Obligation; or (ii) default in the
observance or performance of any other material agreement or condition relating
to any such Indebtedness or Guarantee 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, or to permit the holder or holders of such Indebtedness
or beneficiary or beneficiaries of such Guarantee Obligation (or a trustee or
agent on behalf of such holder or holders or beneficiary or beneficiaries) to
cause, with the giving of notice if required, such Indebtedness to become due
prior to its stated maturity or such Guarantee Obligation to become payable or
such Indebtedness to be required to be defeased or purchased; or any "Event of
Default" under the Term Loan Agreement (as defined in the Intercreditor
Agreement) shall occur; provided, however, that any default by an Obligor under
a Guarantee Obligation with respect to a real property lease shall not
constitute a Default under this Section 7(f) if such Obligor is contesting the
validity of such default in good faith by appropriate proceedings, such Obligor
is maintaining reserves in conformity with GAAP with respect thereto and such
default could not reasonably be expected to have a Material Adverse Effect; or
(g) (i) Any Obligor 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 any Obligor shall make a general assignment
for the benefit of its creditors; or (ii) there shall be commenced against any
Obligor 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 or any such
adjudication or
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appointment or (B) remains undismissed, undischarged, unstayed or unbonded for a
period of 60 days; or (iii) there shall be commenced against any Obligor 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 the entry thereof; or (iv) any Obligor 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) any
Obligor shall generally not, or shall be unable to, or shall admit in writing
its inability to, pay its debts as they become due or there shall be a general
assignment for the benefit of creditors; or
(h) (i) Any Person shall engage in any non-exempt "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to any
Plan, (iii) 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 would reasonably be
expected to result in the termination of such Plan for purposes of Title IV of
ERISA, (iv) any Single Employer Plan shall terminate for purposes of Title IV of
ERISA (other than a standard termination) or (v) the Borrower or any Commonly
Controlled Entity would reasonably be expected to incur any liability in
connection with a withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan; and in each case regarding clauses (i) through (v) above,
such event or condition, together with all other such events or conditions, if
any, would reasonably be expected to subject any Obligor to any tax, penalty or
other liabilities in the aggregate to exceed $500,000; or
(i) One or more judgments or decrees shall be entered against any
Obligor involving in the aggregate a liability (not paid or fully covered by
insurance) of $250,000 or more, 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 in any event five days before the date of any sale pursuant
to such judgment or decree; or any non-monetary judgment or order shall be
entered against any Obligor that is reasonably likely to have a Material Adverse
Effect and either (i) enforcement proceedings shall have been commenced by any
Person upon such judgment which has not been stayed pending appeal or (ii) there
shall be any period of 10 consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or otherwise, shall not be
in effect; or
(j) Any material provision of any Loan Document, after delivery
thereof pursuant to the provisions hereof, shall, for any reason, cease to be
valid or enforceable in accordance with its terms, or any security interest
created under any Loan Document shall, for any reason, cease to be a valid and
perfected first-priority Lien (except as permitted by Section 6.3) in any
material portion of the Collateral, the Guarantor Collateral or the property
purported to be covered thereby; or
(k) Any event or condition shall occur which the Majority Lenders
reasonably believe could have a Material Adverse Effect;
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then, and in any such event, (A) if such event is an Event of Default specified
in paragraph (g) above, automatically the Revolving Loan Commitments and the
commitment to issue Letters of Credit shall immediately terminate and the Loans
made to the Borrower hereunder (with accrued interest thereon) and all other
Obligations shall immediately become due and payable and, to the extent any
Letters of Credit are then outstanding, the Borrower shall make a cash
collateral deposit, to be held by the Agent as collateral under the Security
Agreement, in the amount equal to the aggregate Letter of Credit Amount of such
Letters of Credit and (B) if such event is any other Event of Default, with the
consent of the Majority Lenders the Agent may, or upon the request of the
Majority Lenders the Agent shall, take any or all of the following actions: (i)
by notice to the Borrower declare the Revolving Loan Commitments and the
commitment to issue Letters of Credit to be terminated forthwith, whereupon the
Revolving Loan Commitments and the commitment to issue Letters of Credit shall
immediately terminate; and (ii) by notice to the Borrower, declare the Loans
(with accrued interest thereon) and all other Obligations under this Agreement
and the Notes to be due and payable forthwith, whereupon (x) the same shall
immediately become due and payable and (y) to the extent any Letters of Credit
are then outstanding, the Borrower shall make a cash collateral deposit, to be
held by the Agent as collateral under the Security Agreement, in an amount equal
to the aggregate Letter of Credit Amount of the Letters of Credit outstanding.
In all cases, with the consent of the Majority Lenders, the Agent may enforce
any or all of the Liens and security interests and other rights and remedies
created pursuant to any Loan Document or available at law or in equity. Except
as expressly provided above in this Section, presentment, demand, protest and
all other notices of any kind are hereby expressly waived by the Borrower.
ARTICLE 8. THE AGENT
8.1 Appointment. Each Lender hereby irrevocably designates and appoints
Union Bank of California, N.A. as Agent of such Lender under this Agreement and
the other Loan Documents, and each such Lender irrevocably authorizes Union Bank
of California, N.A., as the Agent for such Lender, to take such action on its
behalf under the provisions of this Agreement and the other Loan Documents and
to exercise such powers and perform such duties as are expressly delegated to
the Agent by the terms of this Agreement and the other Loan Documents, together
with such other powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary elsewhere in this Agreement, the Agent shall not have
any duties or responsibilities, except those expressly set forth herein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the Agent.
8.2 Delegation of Duties. The Agent may execute any of its duties under
this Agreement and the other Loan 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.
8.3 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 this Agreement or any
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other Loan Document (except for its or such Person's own gross negligence or
willful misconduct) or (ii) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by the Borrower,
any Subsidiary or any other Obligor or any officer thereof contained in this
Agreement or any other Loan Document 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, this Agreement or any other Loan Document or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or the Notes or any other Loan Document or for any failure of the
Borrower, any Subsidiary or any other Obligor to perform its obligations
hereunder or thereunder. The Agent shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of the Borrower, any
Subsidiary or any other Obligor.
8.4 Reliance by the 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
counsel to the Borrower), the Accountants and 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 this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Majority Lenders or all Lenders, as it
deems appropriate, or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense (except to the extent incurred
as a result of the Agent's gross negligence or willful misconduct) 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 this Agreement and the Notes and the other Loan Documents in
accordance with a request of the Majority Lenders or all Lenders, as may be
required, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the
Notes.
8.5 Notice of Default. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default hereunder unless the Agent has
received notice from a Lender or the Borrower referring to this Agreement,
describing such Default and stating that such notice is a "notice of default".
In the event that the Agent receives such a notice, the Agent shall use its best
efforts to give prompt notice thereof to the Lenders; provided, however, that no
failure or delay by the Agent in giving such notice shall relieve any Lender of
any obligation hereunder or give rise to any liability of the Agent. The Agent
shall take such action with respect to such Default as shall be reasonably
directed by the Majority Lenders or all Lenders as appropriate; provided,
however, 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 as it shall deem advisable in
the best interests of the Lenders or as the Agent shall believe necessary to
protect the Lenders' interests in the Collateral or the Guarantor Collateral.
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8.6 Non-Reliance on the Agent and Other Lenders. Each Lender 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 hereafter taken, including any
review of the affairs of the Borrower, any Subsidiary or any other Obligor,
shall be deemed to constitute any representation or warranty by the Agent to any
Lender. Each Lender represents to the Agent that it has, independently and
without reliance upon the Agent or any other Lender, and based on such documents
and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrower, each Subsidiary and the other
Obligors and made its own decision to make its Loans, and participate in Letters
of Credit, hereunder and enter into this Agreement. Each Lender also represents
that it will, independently and without reliance upon the Agent or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit analysis, appraisals and decisions
in taking or not taking action under this Agreement and the other Loan
Documents, and to make such investigation as it deems necessary to inform itself
as to the business, operations, property, financial and other condition and
creditworthiness of the Borrower, its Subsidiaries and the other Obligors.
Except for notices, reports and other documents expressly required to be
furnished to the Lenders by the Agent hereunder, the Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, condition (financial
or otherwise), prospects or creditworthiness of the Borrower, any Subsidiary or
any other Obligor which may come into the possession of the Agent or any of its
respective officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
8.7 Indemnification. The Lenders agree to indemnify the Agent in its
capacity as such (to the extent not reimbursed by the Borrower, its Subsidiaries
or the other Obligors and without limiting the obligation of such Persons to do
so), ratably according to the respective amounts of their Commitments, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs (including the allocated cost of internal
counsel), expenses or disbursements of any kind whatsoever which may at any time
(including at any time following the payment of the Notes) be imposed on,
incurred by or asserted against the Agent, in its capacity as Agent, but not as
a Lender hereunder, in any way relating to or arising out of this Agreement, any
of the other Loan Documents or any documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or any
action taken or omitted by the Agent under or in connection with any of the
foregoing; provided, however, that no Lender shall be liable for the payment of
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements to the extent
resulting from the Agent's gross negligence or willful misconduct. The
agreements in this Section shall survive the payment of the Notes and all other
amounts payable hereunder and the expiration of the Letters of Credit.
8.8 The 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 Borrower, any Subsidiary and the other Obligors (including the
extension of the Leasehold Improvement Loan to the Borrower) as though the Agent
were not the Agent hereunder and under the other Loan Documents. With respect to
the Agent, the Loans made or renewed and the Letters of Credit issued or
participated in by the Agent, and any Note issued to the Agent shall have the
same rights and powers under this Agreement and the other Loan Documents as any
Lender and
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may exercise the same as though it were not the Agent, and the terms "Lender"
and "Lenders" shall include the Agent in its individual capacity.
8.9 Successor Agent. The Agent may resign as Agent upon 30 days' notice
to the Lenders. If the Agent shall resign as Agent under this Agreement and the
other Loan Documents, then the Majority Lenders shall appoint from among the
Lenders a successor agent for the Lenders, which successor agent shall be
approved by the Borrower (which consent shall not be unreasonably withheld),
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 this Agreement or any holders of the
Notes. After any retiring Agent's resignation as Agent, the provisions of this
Section shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement and the other Loan
Documents. In addition, after the replacement of an Agent hereunder, the
retiring Agent shall remain a party hereto and shall continue to have all the
rights and obligations of an Agent under this Agreement with respect to Letters
of Credit issued by it prior to such replacement, but shall not be required to
issue additional Letters of Credit.
8.10 Syndication Agent and Documentation Agent. Neither the Syndication
Agent, in its capacity as such, nor the Documentation Agent, in its capacity as
such, shall have any rights, powers, duties or obligations under this Agreement
or any of the other Loan Documents.
ARTICLE 9. MISCELLANEOUS
9.1 Amendments and Waivers. Neither this Agreement, any Note, any other
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section. With the
prior written consent of the Majority Lenders and the Borrower (and, in the case
of any Loan Document other than this Agreement, the relevant Obligor), the
Borrower may, from time to time, enter into written amendments, supplements or
modifications hereto and to the Notes and the other Loan Documents for the
purposes of adding any provisions to this Agreement or the Notes or the other
Loan Documents or changing in any manner the rights of the Lenders, the Borrower
or any other Obligor hereunder or thereunder or waiving, on such terms and
conditions as may be specified in such instrument, any of the requirements of
this Agreement or the Notes or the other Loan Documents or any Default and its
consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall (i) (a) reduce the amount or extend the
maturity of any Note or any installment due thereon, or reduce the rate or
extend the time of payment of interest thereon, or reduce the amount or extend
the time of payment of any fee, indemnity or reimbursement payable to any Lender
hereunder, or change the amount of any Lender's Revolving Loan Commitment, or
amend, modify or waive any provision of Section 2.5 or 2.6, in each case without
the written consent of the Lender affected thereby; or (b) amend, modify or
waive any provision of this Section 9.1 or reduce the percentage specified in or
otherwise modify the definition of Majority Lenders, or consent to the
assignment or transfer by any Obligor of any of its rights and obligations under
this Agreement and the other Loan Documents (except as permitted under Section
6.4); or (c) release any Obligor from any liability under its respective Loan
Documents; or (d) release any material portion of the Collateral or any material
portion of
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the Guarantor Collateral, except for any Asset Disposition permitted by this
Agreement or any other Loan Document; or (e) amend, modify or waive, directly or
indirectly, any of the provisions of Section 2.1(e), 2.12, 2.13 or 7(g); or (f)
amend, modify or waive, directly or indirectly, the definition of "Borrowing
Base" in Section 1.1; (g) amend, modify or waive any provision of this Agreement
requiring the consent or approval of all Lenders, in each case set forth in
clauses (i)(b) through (i)(g) above without the written consent of all the
Lenders; or (ii) change the amount of the Swing Line Commitment or amend, modify
or waive any provision of Section 4.2 with respect to the making of a Swing Line
Loan, without the written consent of the Swing Line Lender; or (iii) amend,
modify or waive any provision of Article 8 without the written consent of the
then Agent, or any provision affecting the rights and duties of the Agent as the
issuer of Letters of Credit without the consent of the then Agent. Any such
waiver and any such amendment, supplement or modification shall apply equally to
each of the Lenders and shall be binding upon the Borrower, the other Obligors,
the Lenders, the Agent and all future holders of the Notes. In the case of any
waiver, the Borrower, the other Obligors, the Lenders and the Agent shall be
restored to their former position and rights hereunder and under the outstanding
Notes and any other Loan Documents, and any Default waived shall be deemed to be
cured and not continuing; but no such waiver shall extend to any subsequent or
other Default, or impair any right consequent thereon.
9.2 Notices. All notices, requests and demands or other communications
to or upon the respective parties hereto to be effective shall be in writing
(including by telecopy), and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made when delivered by hand, or 3 days
after being deposited in the United States mail, certified and postage prepaid
and return receipt requested, or, in the case of telecopy notice, when received,
in each case addressed as follows in the case of the Borrower and the Agent, and
as set forth on the signature page hereto, or in the Assignment and Acceptance
pursuant to which a Person becomes a party hereto, in the case of the Lenders,
or to such other address as may be hereafter notified by the respective parties
hereto and any future holders of the Notes:
The Borrower: Quiksilver, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
The Agent: Union Bank of California, N.A., as Agent
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
provided, however, that any notice, request or demand to or upon the Agent or
the Lenders pursuant to Section 2.1, 2.2, 2.3, 2.5 or 2.7 shall not be effective
until received.
9.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay
in exercising, on the part of the Agent or any Lender, any right, remedy, power
or privilege hereunder 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
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privileges herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.
9.4 Survival of Representations and Warranties. All representations and
warranties made hereunder and in any document, certificate or statement
delivered pursuant hereto or in connection herewith shall survive the execution
and delivery of this Agreement and the Notes.
9.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay or
reimburse the Agent for all its reasonable costs and out-of-pocket expenses
(including travel and other expenses incurred by it or its agents in connection
with performing due diligence with regard hereto) incurred in connection with
the development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement and the Notes and the other Loan Documents and
any other documents prepared in connection herewith or therewith, and the
consummation and administration of the transactions contemplated hereby and
thereby, including syndication efforts in connection with this Agreement, the
reasonable fees and disbursements of counsel to the Agent (including the
allocated costs of internal counsel to the Agent) and Field Exams, (b) to pay or
reimburse the Agent and each Lender for all its reasonable costs and
out-of-pocket expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the Notes, the other Loan
Documents and any such other documents or in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement in the
nature of a "work-out" or any insolvency or bankruptcy proceeding, including
reasonable fees and disbursements of legal counsel and financial advisors to the
Agent and each Lender (including the allocated costs of internal counsel to the
Agent), (c) to pay, indemnify and hold harmless each Lender and the Agent from
any and all 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 or administration 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 Agreement, the Notes, the
other Loan Documents and any such other documents and (d) to pay, and indemnify
and hold harmless each Lender and the Agent from and against, any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs (including the allocated cost of internal counsel and the reasonable legal
fees and disbursements of outside counsel to the Lenders and the Agent),
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement, the Notes and the other Loan Documents, the Acquisitions or the use
of the proceeds of the Loans or the Letters of Credit and any such other
documents (all the foregoing, collectively, the "indemnified liabilities"),
provided, however, that the Borrower shall have no obligation hereunder to the
Agent or any Lender with respect to indemnified liabilities arising from the
gross negligence or willful misconduct of the Agent or such Lender. The
agreements in this Section shall survive repayment of the Notes and all other
amounts payable hereunder. The Agent and the Lenders agree to provide reasonable
details and supporting information concerning any costs and expenses required to
be paid by the Borrower pursuant to the terms hereof.
9.6 Successors and Assigns; Participations; Purchasing Lenders.
(a) This Agreement shall be binding upon and inure to the benefit of
the Borrower, the Lenders, the Agent, all future holders of the Notes and their
respective successors
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and assigns, except that the Borrower may not assign, transfer or delegate any
of its rights or obligations under this Agreement without the prior written
consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial banking
or finance business and in accordance with applicable law, at any time sell to
one or more lenders or financial institutions ("Participants") participating
interests in any Loan owing to such Lender, any Letter of Credit participated in
by such Lender, any Note held by such Lender, any Revolving Loan Commitment of
such Lender or any other interest of such Lender hereunder and under the other
Loan Documents; provided, however, that the holder of any such participation,
other than an Affiliate of such Lender, shall not be entitled to require such
Lender to take or omit to take any action hereunder except action directly
affecting the extension of the maturity of any portion of the principal amount
of a Loan or Commitment, the expiration of a Letter of Credit or any portion of
interest or fees related thereto allocated to such participation or a reduction
of the principal amount or principal payment amount of or the rate of interest
payable on the Loans or any fees related thereto or reduction of the amount to
be reimbursed under any Letter of Credit, or a release of any Obligor or any
substantial portion of the Collateral or the Guarantor Collateral or any
increase in participation amounts. In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's obligations under this
Agreement to the other parties to this Agreement shall remain unchanged, such
Lender shall remain solely responsible for the performance thereof, such Lender
shall remain the holder of any such Note and the participant in any such Letter
of Credit for all purposes under this Agreement and the other Loan Documents,
and the Borrower and the Agent shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under this
Agreement and the other Loan Documents. The Borrower agrees that if amounts
outstanding under this Agreement and the Notes are due or unpaid, or shall have
been declared or shall have become due and payable upon the occurrence of an
Event of Default, each Participant shall be deemed to have the right of setoff
in respect of its participating interest in amounts owing under this Agreement
and any Note to the same extent as if the amount continuing of its participating
interest were owing directly to it as a Lender under this Agreement or any Note;
provided, however, that such Participant shall only be entitled to such right of
setoff if it shall have agreed in the agreement pursuant to which it shall have
acquired its participating interest to share with the Lenders the proceeds
thereof as provided in Section 9.7. The Borrower also agrees that each
Participant shall be entitled to the benefits of Sections 2.14, 2.15 and 2.16
with respect to its participation in the Revolving Loan Commitments and the
Loans and the Letters of Credit outstanding from time to time; provided,
however, that no Participant shall be entitled to receive any greater amount
pursuant to such Sections than the transferor Lender would have been entitled to
receive in respect of the amount of the participation transferred by such
transferor Lender to such Participant had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its commercial banking
or finance business and in accordance with applicable law, at any time sell to
any of its Affiliates, to any Lender or any Affiliate thereof or to one or more
additional lenders or financial institutions, which additional lenders or
financial institutions shall be subject to the consent of the Borrower (such
consent not to be unreasonably withheld and not to be required if a Default has
occurred and is continuing) and the Agent (such consent not to be unreasonably
withheld) ("Purchasing Lenders"), all or any part of its rights and obligations
under this Agreement, the Notes and the other Loan Documents pursuant to an
Assignment and Acceptance, executed by such Purchasing Lender and such
transferor Lender and delivered to the Agent for its acceptance
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and recording in the Register (as defined in (d) below); provided, however, that
any such sale must result in the Purchasing Lender having at least $10,000,000
in aggregate amount of obligations (or, if less, the entire remaining amount of
the selling Lender's obligations) under this Agreement, the Notes and the other
Loan Documents. Upon such execution, delivery, acceptance and recording, from
and after the transfer effective date determined pursuant to such Assignment and
Acceptance, (x) the Purchasing Lender thereunder shall be a party hereto and, to
the extent provided in such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder with a Revolving Loan Commitment as set forth
therein, and (y) the transferor Lender thereunder shall, to the extent of such
assigned portion and as provided in such Assignment and Acceptance, be released
from its obligations under this Agreement and the other Loan Documents (and, in
the case of an Assignment and Acceptance covering all or the remaining portion
of a transferor Lender's rights and obligations under this Agreement, such
transferor Lender shall cease to be a party hereto). Such Assignment and
Acceptance shall be deemed to amend this Agreement to the extent, and only to
the extent, necessary to reflect the addition of such Purchasing Lender and the
resulting adjustment of Revolving Loan Commitment Percentages arising from the
purchase by such Purchasing Lender of all or a portion of the rights and
obligations of such transferor Lender under this Agreement, the Notes and the
other Loan Documents. On or prior to the transfer effective date determined
pursuant to such Assignment and Acceptance, the Borrower, at its own expense,
shall execute and deliver to the Agent in exchange for the surrendered Note or
Notes a new Note or Notes to the order of such Purchasing Lender in an amount
equal to the Revolving Loan Commitments assumed by it pursuant to such
Assignment and Acceptance, and if the transferor Lender has retained a Revolving
Loan Commitment hereunder, new Notes to the order of the transferor Lender in an
amount equal to the Revolving Loan Commitments retained by it hereunder. Such
new 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 Lender shall
be returned by the Agent to the Borrower marked "canceled."
(d) The Agent shall maintain at its address referred to in Section
9.2 a copy of each Assignment and Acceptance delivered to it and a register (the
"Register") for the recordation of the names and addresses of the Lenders and
the Revolving Loan Commitments of, and principal amount of the Revolving Loans
owing to, and, if applicable, the Letters of Credit participated in by, each
Lender from time to time. The entries in the Register shall be conclusive, in
the absence of manifest error, and the Borrower, the Agent and the Lenders may
treat each Person whose name is recorded in the Register as the owner of the
Revolving Loans and the participant in the Letters of Credit, if applicable,
recorded therein for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by a
transferor Lender and Purchasing Lender (and, in the case of a Purchasing Lender
that is not then a Lender or an Affiliate thereof, by the Borrower and the
Agent) together with payment to the Agent (except in the case of a Lender
assigning to its Affiliate) of a registration and processing fee of $3,000, the
Agent shall (i) promptly accept such Assignment and Acceptance and (ii) on the
effective date determined pursuant thereto record the information contained
therein in the Register and give notice of such acceptance and recordation to
the Lenders and the Borrower.
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(f) The Borrower authorizes each Lender to disclose to any
Participant or Purchasing Lender (each, a "Transferee") and any prospective
Transferee any and all financial information in such Lender's possession
concerning the Borrower and its Subsidiaries and Affiliates which has been
delivered to such Lender by or on behalf of the Borrower pursuant to this
Agreement or any other Loan Document or which has been delivered to such Lender
by or on behalf of the Borrower in connection with such Lender's credit
evaluation of the Borrower and its Subsidiaries and Affiliates prior to becoming
a party to this Agreement.
(g) If, pursuant to this Section, any interest in this Agreement,
any Letter of Credit 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 Lender shall cause such Transferee, concurrently
with the effectiveness of such transfer, (i) to represent to the transferor
Lender and the Agent (for the benefit of the transferor Lender, the Agent and
the Borrower) that under applicable law and treaties no taxes will be required
to be withheld by the Agent, the Borrower or the transferor Lender with respect
to any payments to be made to such Transferee in respect of the Revolving Loans
or the Letters of Credit, (ii) to furnish to the transferor Lender, the Agent
and the Borrower U.S. Internal Revenue Service Form ▇-▇, ▇-▇▇▇▇ ▇▇ ▇-▇▇▇▇ (as
applicable to it) (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 Lender, the Agent and the
Borrower) to provide the transferor Lender, the Agent and the Borrower a new
Form ▇-▇, ▇-▇▇▇▇ or W-8ECI (as applicable to it) 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.
(h) Nothing herein shall prohibit any Lender from pledging or
assigning any of its rights under its Notes, or, if applicable, its
participation in any Letter of Credit, to any Federal Reserve Bank in accordance
with applicable law.
9.7 Adjustments; Setoff.
(a) If any Lender (a "benefited Lender") shall at any time receive
any payment of all or part of its Revolving Loans, its participations in Letters
of Credit, or interest thereon, or fees, or receive any collateral in respect
thereof (whether voluntarily or involuntarily, by setoff, pursuant to events or
proceedings of the nature referred to in Section 7(g), or otherwise), in a
greater proportion than any such payment to or collateral received by any other
Lender, if any, in respect of such other Lender's Revolving Loans, its
participations in Letters of Credit, or interest thereon, or fees, such
benefited Lender shall purchase for cash from the other Lenders such portion of
each such other Lender's Revolving Loans, participations in Letters of Credit,
or fees, or shall provide such other Lenders with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such
benefited Lender to share the excess payment or benefits of such collateral or
proceeds ratably with each of the Lenders; provided, however, that if all or any
portion of such excess payment or benefits is thereafter recovered from such
benefited Lender, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest. The
Borrower agrees that each Lender so purchasing a portion of another Lender's
Revolving Loans or its participations in Letters of Credit may exercise all
rights of payment (including rights of setoff) with respect to such portion as
fully as if such Lender were the direct holder of such portion.
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(b) In addition to any rights and remedies of the Lenders provided
by law, each Lender shall have the right, exercisable upon the occurrence and
during the continuance of an Event of Default, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the extent
permitted by applicable law, to set off and appropriate and apply against the
Obligations any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such Lender or
any branch or agency thereof or bank controlling such Lender to or for the
credit or the account of the Borrower. Each Lender agrees promptly to notify the
Borrower after any such setoff and application made by such Lender; provided,
however, that the failure to give such notice shall not affect the validity of
such setoff and application.
9.8 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
9.9 Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
9.10 Integration. This Agreement represents the entire agreement of the
Borrower, the Agent and the Lenders with respect to the subject matter hereof,
and there are no promises, undertakings, representations or warranties by the
Agent or any Lender relative to the subject matter hereof not expressly set
forth or referred to herein or in the other Loan Documents.
9.11 GOVERNING LAW. THIS AGREEMENT AND THE NOTES AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
CALIFORNIA (WITHOUT REFERENCE TO ITS CHOICE OF LAW RULES).
9.12 Alternative Dispute Resolution.
(a) Claims Subject to Judicial Reference; Selection of Referee. All
Claims, including any and all questions of law or fact relating thereto, shall,
at the written request of any Party, be determined by Reference. The Parties
shall select a single neutral referee, who shall be a retired state of federal
judge with at least five years of judicial experience in civil matters. In the
event that the Parties cannot agree upon a referee, the referee shall be
appointed by the court. The Parties shall equally bear the fees and expenses of
the referee unless the referee otherwise provides in the statement of decision.
(b) Waiver of Jury Trial. In connection with a Reference or any
other action or proceeding, whether brought in state or federal court, the
Parties hereby expressly,
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intentionally and deliberately waive any right they may otherwise have to trial
by jury of any Claim.
(c) Conduct of Reference. Except as provided in this Section 9.12,
the Reference shall be conducted pursuant to Applicable State Law. The referee
shall determine all issues relating to the applicability, interpretation,
legality and enforceability of this Section 9.12.
(d) Provisional Remedies, Self-Help and Foreclosure. No provision of
this Section 9.12 shall limit the right of any party to (i) exercise self-help
remedies including setoff, (ii) foreclose against or sell any Collateral or
Guarantor Collateral, by power of sale or otherwise or (iii) obtain or oppose
provisional or ancillary remedies from a court of competent jurisdiction before,
after or during the pendency of the Reference. The exercise of, or opposition
to, any such remedy does not waive the right of any Party to Reference pursuant
to this Section 9.12.
(e) Limitation on Damages. In the event that punitive damages are
permitted under Applicable State Law, the amount thereof shall not exceed a sum
equal to three times the amount of actual damages as determined by the referee.
(f) Severability. In the event that any provision of this Section
9.12 is found to be illegal or unenforceable, the remainder of this Section 9.12
shall remain in full force and effect.
(g) Miscellaneous. In the event that multiple Claims are asserted,
some of which are found not subject to this Section 9.12, the Parties agree to
stay the proceedings of the Claims not subject to this Section 9.12 until all
other Claims are resolved in accordance with this Section. In the event that
Claims are asserted against multiple parties, some of whom are not subject to
this Section, the Parties agree to sever the Claims subject to this Section 9.12
and resolve them in accordance with this Section 9.12. In the event of any
challenge to the legality or enforceability of this Section 9.12, the prevailing
Party shall be entitled to recover the costs and expenses, including reasonable
attorneys' fees, incurred by it in connection therewith. Applicable State Law
shall govern the interpretation of this Section 9.12.
(h) Defined Terms. As used in this Section 9.12, the following terms
shall have the respective meanings set forth below:
"Applicable State Law": the law of the State of California; provided,
however, that if any Party seeks to (i) exercise self-help remedies, including
setoff, (ii) foreclose against or sell any Collateral or Guarantor Collateral,
by power of sale or otherwise or (iii) obtain or oppose provisional or ancillary
remedies from a court of competent jurisdiction before, after or during the
pendency of the Reference, the law of the state where such Collateral or
Guarantor Collateral, as the case may be, is located shall govern the exercise
of or opposition to such rights and remedies.
"Claim": any claim, cause of action, action, dispute or controversy
between or among the Parties, whether sounding in contract, tort or otherwise,
which arises out of or relates to: (i) any of the Loan Documents; (ii) any
negotiations or communications relating to any of the Loan Documents, whether or
not incorporated into the Loan Documents or any indebtedness evidenced thereby;
or (iii) any alleged agreements, promises, representations or transactions in
connection therewith.
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"Party": any Obligor, any Lender or the Agent.
"Reference": a judicial reference conducted pursuant to this Section
9.12 in accordance with Applicable State Law, as in effect at the time the
referee is selected pursuant to Section 9.12(a).
9.13 Acknowledgements. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the Notes and the other Loan Documents;
(b) neither the Agent nor any Lender has any fiduciary relationship
to the Borrower solely by virtue of any of the Loan Documents, and the
relationship pursuant to the Loan Documents between the Agent and the Lenders,
on one hand, and the Borrower on the other hand, is solely that of creditor and
debtor; and
(c) no joint venture exists among the Lenders or among the Borrower,
on one hand and the Lenders, on the other hand.
9.14 Intercreditor Agreement. By executing this Agreement as a Lender,
or by becoming a Lender hereunder pursuant to an Assignment and Acceptance, each
Lender hereby agrees to the terms of the Intercreditor Agreement, acknowledges
that certain of its rights hereunder shall be subject thereto, and consents to
the execution thereof by the Agent on behalf of such Lender.
9.15 Headings. Section headings herein are included for convenience of
reference only and shall not constitute a part of this Agreement for any other
purpose.
9.16 Copies of Certificates, Etc. Whenever the Borrower is required to
deliver notices, certificates, opinions, statements or other information
hereunder to the Agent for delivery to any Lender (including under Article 4),
it shall do so in such number of copies as the Agent shall reasonably specify.
9.17 Confidentiality. The Agent and the Lenders shall take normal and
reasonable precautions to maintain the confidentiality of all non-public
information obtained pursuant to the requirements of this Agreement which has
been identified as such by the Borrower, but may, in any event, make disclosures
(i) reasonably required by any bona fide transferee, assignee or participant in
connection with the contemplated transfer or assignment of any Revolving Loan
Commitments or Revolving Loans or participations therein or participations in
Letters of Credit or (ii) as required or requested by any governmental agency or
representative thereof or as required pursuant to legal process or (iii) to its
attorneys and accountants or (iv) as required by law or (v) in connection with
litigation involving any Lender, provided that (a) such transferee, assignee or
participant agrees to comply with the provisions of this Section 9.17 unless
specifically prohibited by applicable law or court order and (b) in no event
shall any Lender be obligated or required to return any materials furnished by
the Borrower or the Subsidiary.
9.18 Amendment and Restatement.
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(a) This Agreement is an amendment and restatement of the Old Credit
Agreement. On and after the effective date of this Agreement, (i) each reference
in the other Loan Documents to "the Credit Agreement," "thereunder," "thereof,"
"therein" or any other expression of like import referring to the Old Credit
Agreement shall mean and be a reference to this Agreement and (ii) all "Loans"
(including "Interest Periods" of outstanding "LIBOR Loans"), "Letters of Credit"
and amounts outstanding under the Old Credit Agreement shall be deemed to be
Loans, Letters of Credit and amounts outstanding under this Agreement.
(b) Except as the Old Credit Agreement is amended and restated
herein and except for the replacement of the "Notes" (other than the "Swing Line
Note") under the Old Credit Agreement with the Notes hereunder, the Loan
Documents shall remain in full force and effect and are hereby ratified and
confirmed. Without limiting the generality of the foregoing, the Collateral
Documents and all of the Collateral described therein do and shall continue to
secure the payment of all of the Obligations.
(c) The execution, delivery and effectiveness of this Agreement
shall not operate as a waiver of any right, power or remedy of the Agent or any
Lender under any of the Loan Documents or constitute a waiver of any provision
of any of the Loan Documents.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
BORROWER
QUIKSILVER, INC.
By: ________________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Financial Officer
AGENT
UNION BANK OF CALIFORNIA, N.A., as Agent
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
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LENDERS
UNION BANK OF CALIFORNIA, N.A.,
as a Lender
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
Revolving Loan Commitment: $26,400,000
(Swing Line Commitment: $ 5,000,000)
Term Loan: $ 6,600,000
Address for Notices
(a) For Credit
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile (▇▇▇) ▇▇▇-▇▇▇▇
(b) For Operations
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Approved Lending Offices
Applicable Lending Office for Base Rate Loans:
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Applicable Lending Office for LIBOR Loans:
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Applicable Lending Office for Participations in
Letters of Credit:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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THE CHASE MANHATTAN BANK, as a Lender
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
Revolving Loan Commitment: $17,600,000
Term Loan: $ 4,400,000
Address for Notices
(a) For Credit
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) For Operations (Other Than Letters of Credit)
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(c) For Letters of Credit
Global Trade Services
4 Chase MetroTech Center 8
Brooklyn, New York 11245
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Approved Lending Offices
Applicable Lending Office for Base Rate Loans:
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Applicable Lending Office for LIBOR Loans:
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
S-3
72
Applicable Lending Office for Participations
in Letters of Credit:
Global Trade Services
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
S-4
73
FLEET NATIONAL BANK
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
Revolving Loan Commitment: $17,600,000
Term Loan: $ 4,400,000
Address for Notices
(a) For Credit
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, MADE 10008F
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Director
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) For Operations
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Approved Lending Offices
Applicable Lending Office for Base Rate Loans:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Applicable Lending Office for LIBOR Loans:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Applicable Lending Office for Participations in
Letters of Credit:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇-▇
▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
Revolving Loan Commitment: $14,000,000
Term Loan: $ 3,500,000
Address for Notices
(a) For Credit
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
Mail Code 1904
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇'▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(a) For Operations
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Approved Lending Offices
Applicable Lending Office for Base Rate Loans:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Applicable Lending Office for LIBOR Loans:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Applicable Lending Office for Participations
in Letters of Credit:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
S-6
75
U.S. BANK NATIONAL ASSOCIATION
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
Revolving Loan Commitment: $10,400,000
Term Loan: $ 2,600,000
Address for Notices
(a) For Credit
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) For Operations
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Approved Lending Offices
Applicable Lending Office for Base Rate Loans:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Applicable Lending Office for LIBOR Loans:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Applicable Lending Office for Participations in
Letters of Credit:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇-▇
▇▇
▇▇▇▇▇▇ DISCOUNT BANK OF NEW YORK
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
Revolving Loan Commitment: $8,000,000
Term Loan: $2,000,000
Address for Notices
(a) For Credit
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) For Operations
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Approved Lending Offices
Applicable Lending Office for Base Rate Loans:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Applicable Lending Office for LIBOR Loans:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Applicable Lending Office for Participations
in Letters of Credit:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
S-8
77
PACIFIC CENTURY BANK, N.A.
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
Revolving Loan Commitment: $6,000,000
Term Loan: $1,500,000
Address for Notices
(a) For Credit
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ or 1252
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) For Operations (Other Than Letters of Credit)
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(c) For Letters of Credit
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Approved Lending Offices
Applicable Lending Office for Base Rate Loans:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Applicable Lending Office for LIBOR Loans:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
S-9
78
Applicable Lending Office for Participations in
Letters
of Credit:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
S-10
79
SCHEDULE 2.3
CERTAIN FEES APPLICABLE TO COMMERCIAL LETTERS OF CREDIT
Issuance of Commercial Letters of Credit:
A fee equal to the greater of (i) 1/12% of the initial Letter of Credit
Amount of the Letter of Credit and (ii) $75, payable upon issuance thereof.
Amendment of Commercial Letters of Credit:
A fee equal to the greater of (i) 1/12% of the Letter of Credit Amount
of the Letter of Credit at the time of amendment and (ii) $60, payable upon each
amendment thereof
Negotiation of Commercial Letters of Credit:
A fee equal to the greater of (i) 1/8% of the amount of the Letter of
Credit negotiated and (ii) $80, payable upon such negotiation
80
SCHEDULE 3.1
FOREIGN QUALIFICATION JURISDICTIONS
None
81
SCHEDULE 3.5A
LIENS AGAINST ASSETS OF NA PALI
France
Banque Nationale de Paris
Societe Generale
Credit Agricole
Banque Populaire du Sud Ouest
Natexis
Indosuez
Bami
Ste Generale Champs Elysee
Ste Generale Rivoli
Italy
Credito Italiano, BPCI
Holland
ING
England
Barclays Bank
Spain
Bankinter
Germany
Dresdner Bank
82
SCHEDULE 3.5B
OPERATING NAMES/TRADE NAMES
None
83
SCHEDULE 3.7
LITIGATION
None
84
SCHEDULE 3.19
SUBSIDIARIES
Domestic Subsidiaries
QS Retail, Inc.
▇▇▇▇▇▇ Manufacturing, Inc.
Mt. Waimea, Inc.
Quiksilver Wetsuits, Inc.
Hawk Designs, Inc.
Foreign Subsidiaries
Quiksilver Australia Pty Ltd
Quiksilver International Pty Ltd
Pavilion Pty Ltd
Na Pali S.A.S.
Freestyle S.A.
Kokolo SARL
Emerald Coast Europe
Infoborn SARL
Cariboo, Eurl
Lanai
Gen X Publishing Ltd.
Molokai Ltd.
Emerald Coast Limited
Kauai GmbH
Sumbawa SL
Haapiti, SRL
85
SCHEDULE 6.2
EXISTING INDEBTEDNESS
None
86
SCHEDULE 6.7
EXISTING INVESTMENTS
None