EXHIBIT 10.14
REVOLVING CREDIT AGREEMENT
dated as of August 26, 1997
among
WEINER'S STORES, INC.
AS BORROWER,
-----------
THE FINANCIAL INSTITUTIONS PARTY HERETO,
AS LENDERS,
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and
THE CIT GROUP/BUSINESS CREDIT, INC.,
AS AGENT
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$40,000,000
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Table of Contents
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Section Title Page
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ARTICLE I DEFINITIONS; CONSTRUCTION...........................................1
1.01. Certain Definitions........................................1
1.02. Construction..............................................14
1.03. Accounting Principles.....................................14
ARTICLE II THE CREDITS.......................................................15
2.01. Revolving Credit Loans....................................15
2.02. Notes.....................................................15
2.03. Notice of Borrowing; Making of Loans......................15
2.04. Termination or Reduction of Commitment; Mandatory
Prepayment Optional Prepayment............................17
2.05. Interest Rate.............................................19
2.06. Interest Payment Dates....................................19
2.07. Amortization..............................................19
2.08. Payments..................................................19
2.09. Use of Proceeds...........................................22
2.10. Eurodollar Rate Not Determinable; Illegality or
Impropriety...............................................22
2.11. Reserve Requirements; Capital Adequacy Circumstances......22
2.12. Indemnity.................................................24
2.13. Sharing of Setoffs........................................24
2.14. Continuation and Conversion of Loans......................25
2.15. Taxes.....................................................25
ARTICLE III LETTERS OF CREDIT................................................27
3.01. Letters of Credit.........................................27
3.02. Participations............................................30
ARTICLE IV BORROWING BASE....................................................31
4.01. Condition of Lending and Assisting in Establishing or
Opening Letters of Credit.................................31
4.02. Mandatory Prepayment......................................31
4.03. Rights and Obligations Unconditional......................31
4.04. Borrowing Base Certificate................................31
4.05. General Provisions........................................32
ARTICLE V CONDITIONS OF EFFECTIVENESS, LETTER OF CREDIT ISSUANCE AND
LENDING..................................................32
5.01. Conditions Precedent to Effectiveness.....................32
5.02. Conditions Precedent to Loans and Letters of Credit.......36
ARTICLE VI REPRESENTATIONS AND WARRANTIES....................................38
6.01. Organization, Good Standing, Etc..........................38
6.02. Authorization, Etc........................................38
6.03. Governmental Approvals....................................38
6.04. Enforceability of Loan Documents..........................38
6.05. Subsidiaries..............................................38
Exhibit 10.14 - Page i
6.06. Litigation................................................39
6.07. Financial Condition.......................................39
6.08. Compliance with Law, Etc..................................39
6.09. ERISA.....................................................39
6.10. Taxes, Etc................................................40
6.11. Regulation U..............................................40
6.12. Adverse Agreements, Etc...................................40
6.13. Holding Company and Investment Company Acts...............40
6.14. Permits, Etc..............................................40
6.15. Priority Title............................................40
6.16. Full Disclosure...........................................40
6.17. Operating Lease Obligations...............................41
6.18. Environmental Matters.....................................41
6.19. Schedules.................................................43
6.20. Insurance.................................................43
6.21. Use of Proceeds...........................................43
6.22. Security Document.........................................43
6.23. Financial Accounting Practices, Etc.......................43
6.24. No Material Adverse Effect................................43
6.25. Real Property; Leases.....................................44
6.26. Location of Bank Accounts.................................44
6.27. No Event of Default.......................................44
6.28. Capitalized Leases........................................44
6.29. Tradenames................................................45
6.30. Compliance with Bankruptcy Code...........................45
6.31. Solvency..................................................45
6.32. Inventory.................................................45
6.33. Intellectual Property.....................................45
6.34. Confirmation Order........................................45
6.35. Nature of Business........................................45
ARTICLE VII AFFIRMATIVE COVENANTS............................................46
7.01. Reporting Requirements....................................46
7.02. Compliance with Laws, Etc.................................49
7.03. Preservation of Existence, Etc............................50
7.04. Keeping of Records and Books of Account...................50
7.05. Inspection Rights.........................................50
7.06. Maintenance of Properties, Etc............................50
7.07. Maintenance of Insurance..................................50
7.08. Environmental Indemnity...................................51
7.09. Further Assurances........................................51
7.10. Borrowing Base............................................52
7.11. Change in Collateral; Collateral Records..................52
7.12. Financial Accounting Practices, Etc.......................52
7.13. Cash Management System....................................52
7.14. Compliance with Bankruptcy Documents......................53
7.15. Leases....................................................53
7.16. New Real Estate...........................................54
7.17. Landlord Waivers..........................................54
7.18. Subsidiaries..............................................54
Exhibit 10.14 - Page ii
ARTICLE VIII NEGATIVE COVENANTS..............................................54
8.01. Liens, Etc................................................54
8.02. Indebtedness..............................................55
8.03. Guarantees, Etc...........................................56
8.04 Merger, Consolidation, Sale of Assets, Etc................56
8.05. Change in Nature of Business..............................56
8.06. Loans, Advances and Investments, Etc......................56
8.07 Lease Obligations.........................................57
8.08. Capital Expenditures......................................57
8.09. Dividends, Prepayments, Etc...............................57
8.10. Federal Reserve Regulations...............................57
8.11. Transactions with Affiliates..............................57
8.12. Cumulative FIFO EBITDA....................................58
8.13. Markup and Markdown Policies..............................58
8.14. Environmental.............................................58
8.15. ERISA.....................................................59
8.16. Maintenance of Inventory..................................59
8.17. Plan Documents............................................60
ARTICLE IX DEFAULTS..................................................60
9.01. Events of Default.........................................60
9.02 Consequences of an Event of Default.......................62
9.03. Deposit for Letters of Credit.............................63
9.04 Certain Remedies..........................................63
ARTICLE X MISCELLANEOUS.............................................63
10.01. Holidays..................................................63
10.02. Records...................................................63
10.03. Amendments and Waivers....................................63
10.04. No Implied Waiver; Cumulative Remedies....................64
10.05. Notices...................................................64
10.06 Expenses; Taxes; Attorneys' Fees; Indemnification.........65
10.07. Application...............................................66
10.08. Severability..............................................66
10.09. Governing Law.............................................66
10.10. Prior Understandings......................................66
10.11. Duration; Survival........................................66
10.12. Counterparts..............................................66
10.13. Assignment; Participations................................67
10.14. Successors and Assigns....................................68
10.15. Confidentiality...........................................68
10.16. Waiver of Jury Trial......................................69
10.17. Right of Setoff...........................................69
10.18. Counterparts..............................................69
10.19. Headings..................................................70
10.20. Forum Selection and Consent to Jurisdiction...............70
Exhibit 10.14 - Page iii
ARTICLE XI THE AGENT.................................................70
11.01. Appointment...............................................70
11.02. Nature of Duties..........................................70
11.03. Rights, Exculpation, Etc..................................71
11.04. Reliance..................................................71
11.05. Indemnification...........................................71
11.06. CIT Individually..........................................72
11.07. Successor Agent...........................................72
11.08. Collateral Matters........................................72
Exhibit 10.14 - Page iv
Exhibit A Form of Note
Exhibit B Form of Security Agreement
Exhibit C Form of Letter of Credit Application
Exhibit D Form of Borrowing Base Certificate
Exhibit E Form of Assignment and Acceptance
Exhibit F Credit Card Bank Depository Account Agreement
Exhibit G Form of Depository Account Agreement
Exhibit H Restricted Account Agreement
Exhibit I Form of Pledge and Security Agreement
Exhibit J Form of Subsidiary Guaranty
Schedule 1.01(A) Location of Eligible Inventory
Schedule 1.01(B) Revolving Credit Commitments
Schedule 3.01(C) Existing Letters of Credit
Schedule 5.01(d)(v) Initial Mortgaged Properties
Schedule 6.05 Subsidiaries
Schedule 6.06 Litigation
Schedule 6.09 Employee Plans
Schedule 6.17 Operating Lease Obligations
Schedule 6.18 Environmental Matters
Schedule 6.20 Insurance
Schedule 6.25 Real Property
Schedule 6.26 Bank Accounts
Schedule 6.29 Tradenames
Schedule 8.01 Existing Liens
Schedule 8.02 Indebtedness and Guarantees
Exhibit 10.14 - Page v
REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT, dated as of August 26, 1997,
among WEINER'S STORES, INC., a Delaware corporation (the "Borrower"), the
financial institutions from time to time party hereto (collectively, the
"Lenders" and individually, a "Lender"), and THE CIT GROUP/BUSINESS CREDIT, INC.
("CIT"), as agent for the Lenders (in such capacity, the "Agent").
BACKGROUND
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WHEREAS, on April 12, 1995, the Debtor (as hereinafter
defined) filed a petition for relief under Chapter 11 of the Bankruptcy Code (as
hereinafter defined) in the United States Bankruptcy Court for the District of
Delaware (the "Bankruptcy Court");
WHEREAS, in connection with the Plan of Reorganization (as
hereinafter defined), the Debtor has requested the Agent and the Lenders to
provide the Borrower with a $40 million revolving credit facility, including a
$15 million subfacility for the issuance of letters of credit and, subject to
the terms and conditions set forth herein, the Lenders have agreed to provide
such facility.
In consideration of the mutual covenants herein contained and
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; CONSTRUCTION
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1.01. Certain Definitions. In addition to other words and
terms defined elsewhere in this Agreement, as used herein the following words
and terms shall have the following meanings, respectively, unless the context
hereof otherwise clearly requires:
"Affiliate" of a Person shall mean 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 10% or more of the securities having ordinary voting power
for the election of directors of such Person or (b) direct or cause the
direction of the management and policies of such Person whether by contract or
otherwise; provided, however, that Texas Commerce Bank National Association
shall not be deemed to be an "Affiliate" of the Borrower under clause (a)
hereof.
"Agent Account" shall mean an account in the name of the Agent
designated to the Borrower from time to time into which the Borrower shall make
all payments to the Agent under this Agreement.
"Agent Advances" shall have the meaning given that term in
Section 11.08 hereof.
"Agreement" shall mean this Revolving Credit Agreement as
amended modified, supplemented or restated from time to time.
"Assignment and Acceptance" shall mean an assignment and
acceptance entered into by CIT and an assignee, and accepted by the Agent,
substantially in the form of Exhibit E hereto.
"Availability" shall mean, at any time, the difference between
(i) the lesser of (A) the Borrowing Base and (B) the Current Commitment and (ii)
the sum of (A) the aggregate outstanding principal amount of all Loans and (B)
the Letter of Credit Exposure.
"Bank" shall mean The Chase Manhattan Bank, its successors or
any other bank designated by Borrower to the Agent from time to time that is
reasonably acceptable to the Agent.
"Bankruptcy Code" shall mean Title 11 of the United States
Code, 11 U.S.C. ▇▇.▇▇. 101 et seq., or any similar United States federal or
state law for the relief of debtors, as amended from time to time.
"Bankruptcy Court" shall have the meaning given to that term
in the introductory paragraph to this Agreement.
"Benefit Plan" shall mean a defined benefit plan as defined in
Section 3(35) of ERISA and subject to Title IV of ERISA (other than a
Multiemployer Plan) in respect of which the Borrower or any ERISA Affiliate is
or within the immediately preceding six (6) years was an "employer" as defined
in Section 3(5) of ERISA.
"Board" means the Board of Governors of the Federal Reserve
System of the United States.
"Book Value" shall mean, as to any Inventory in respect of
which such amount is to be determined, the lower of (i) cost (as reflected in
the general ledgers of the Borrower) or (ii) market value (both cost and market
value being determined in accordance with GAAP calculated on the first in first
out basis) excluding adjustments relating to the uniform capitalization of
inventory.
"Borrower" shall have the meaning given that term in the
introductory paragraph to this Agreement.
"Borrower's Account" shall have the meaning given that term
in Section 2.08(a) hereof.
"Borrowing Base" shall mean an amount equal to the difference
between (i) the sum of (A) 60% of the Book Value of Eligible Inventory and (B)
$3,000,000 less (ii) the sum of (A) $1,170,000, provided that the dollar amount
of the $1,170,000 reduction set forth in this subsection (A) shall be decreased
by $10,000 for each landlord waiver delivered to the Agent pursuant to section
7.17 hereof with respect to a retail store location of the Borrower and (B) an
additional $1,000,000, provided that the dollar amount of the $1,000,000
reduction set forth in this subsection (B) shall be decreased by $200,000 for
each credit card depository agreement delivered to the Agent pursuant to Section
7.13 hereof. All such landlord waivers and credit card bank depository
agreements shall be in form and substance satisfactory to the Agent.
"Borrowing Base Certificate" shall have the meaning given that
term in Section 4.04(a) hereof.
"Business Day" shall mean any day other than a Saturday,
Sunday or other day on which banking institutions are authorized or obligated to
close in New York, New York, provided, that with respect to the borrowing,
payment, conversion to or continuation of Eurodollar Loans, Business Day shall
also mean a day on which dealings in Dollars are carried on in an Interbank
Market.
"Capital Expenditures" shall mean, for any period, the sum,
without duplication, of (i) the aggregate amount of all expenditures during such
period which, in accordance with GAAP, is required to be included in property,
plant or equipment or similar fixed asset accounts plus (ii) the entire
principal amount of any debt obligations (including, without limitation,
Capitalized Lease Obligations) assumed in connection with any such expenditures.
Exhibit 10.14 - Page 2
"Capitalized Lease" shall mean any lease which is required
under GAAP to be capitalized on the balance sheet of the lessee.
"Capitalized Lease Obligations" shall mean the aggregate
amount which is required under GAAP to be reported as a liability on the balance
sheet of a Person as lessee under a Capitalized Lease.
"Cash Concentration Account" shall mean the deposit account
maintained by the Borrower at the Cash Concentration Account Bank, which deposit
account shall be under the sole dominion and control of the Agent.
"Cash Concentration Account Bank" shall mean the Texas
Commerce Bank National Association or such other bank as the Borrower may select
with the written approval of the Agent.
"Cash Concentration Account Blockage Date" shall mean the date
on which the Agent, after the occurrence and during the continuance of an Event
of Default, instructs the Cash Concentration Account Bank, pursuant to the
Restricted Account Agreement, to remit all amounts deposited in the Cash
Concentration Account to the Agent Account or as the Agent shall direct.
"CIT" shall have the meaning given that term in the
introductory paragraph to this Agreement.
"Closing Date" shall mean the date on which the conditions set
forth in Section 5.01 hereof shall be satisfied, which shall be no later than
October 31, 1997.
"Code" shall mean the Internal Revenue Code of 1986, as
amended, and any successor statute of similar import, and regulations
thereunder, in each case as in effect from time to time. References to sections
of the Code shall be construed also to refer to any successor sections.
"Collateral" shall mean all of the property (tangible and
intangible) of any Person purported to be subject to the lien or security
interest purported to be created by any Security Document heretofore or
hereafter executed by such Person as security for all or any part of the
Obligations.
"Collateral Property" shall mean any land and/or buildings
owned or leased in their entirety (i.e., under a so-called ground lease or net
lease) by the Borrower or any of its Subsidiaries.
"Confirmation Order" shall mean that certain order of the
Bankruptcy Court, dated August 13, 1997, confirming the Plan of Reorganization,
as the same may be amended from time to time to the extent permitted by Section
8.17 hereof.
"Consolidated Subsidiary" of a Person at any time shall mean
those Subsidiaries or other Affiliates of such Person whose accounts are or
should in accordance with GAAP be consolidated with those of such Person.
"Credit Extension" shall mean (a) the making of any Loan by a
Lender or the Agent on behalf of the Lenders or (b) the issuance, or extension
of the expiration date, of any Letter of Credit which CIT or any Lender assists
the Borrower in opening or establishing.
"Cumulative FIFO EBITDA" shall mean, for each fiscal month in
any fiscal year of the Borrower, the aggregate FIFO EBITDA for the period
beginning on July 26, 1997 and ending at the end of such fiscal month.
Exhibit 10.14 - Page 3
"Current Commitment" shall have the meaning assigned to that
term in Section 2.01 hereof.
"Debtor" shall mean the Borrower prior to its reorganization
at the Effective Time.
"Depository Accounts" shall mean the lock-box or blocked
depository accounts maintained by the Borrower for the collection of the cash of
the Borrower and the proceeds from the sale of the Inventory of the Borrower.
"Depository Accounts Agreements" shall mean each agreement,
substantially in the form of Exhibit G hereto, among a Depository Bank, the
Borrower and the Agent delivered to the Agent pursuant to Section 7.13 hereof,
as each such Agreement may be modified and supplemented and in effect from time
to time.
"Depository Bank" shall mean each financial institution at
which a Depository Account is maintained.
"Designated Borrowing Officer" shall mean ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or
such other officer as shall be designated from time to time in writing by the
Borrower to the Agent.
"Designated Financial Officer" of a Person shall mean the
individual designated from time to time by the Board of Directors or governing
body performing like functions of such Person to be the chief financial officer
or treasurer of such Person (and individuals designated from time to time by the
Board of Directors or governing body performing like functions of such Person to
act in lieu of the chief financial officer or the treasurer).
"Disbursement Account" shall mean the deposit account in the
name of the Borrower maintained at a bank in the United States designated by the
Borrower to the Agent into which there shall be deposited proceeds of Loans and
funds disbursed to the Borrower by the Agent.
"DIP Financing" shall have the meaning assigned to that term
in Section 2.08(g) hereof.
"Disclosure Statement" shall mean the Disclosure Statement
pursuant to Section 1125 of the United States Bankruptcy Code, dated June 26,
1997, with respect to the Plan of Reorganization.
"Dollar," "Dollars" and the symbol "$" shall mean lawful money
of the United States of America.
"Effective Date" shall mean the Effective Date defined in
Section 1.36 of the Plan of Reorganization.
"Effective Time" shall mean the time on the Effective Date at
which the Plan of Reorganization becomes effective in accordance with its terms.
"Eligible Inventory" shall mean finished goods Inventory of
the Borrower which at the time of determination meets all the following
qualifications:
(i) it is lawfully owned by the Borrower and not subject
to any Lien, security interest or prior assignment,
other than the Lien, security interest and assignment
in favor of the Agent that secures the payment of the
Obligations, and it is not held on consignment and
may be lawfully sold;
Exhibit 10.14 - Page 4
(ii) it is (A) located in the Borrower's distribution
center, warehouses or retail locations listed on
Schedule 1.01(A) hereto or (B) located in other
locations in the continental United States as the
Agent shall have approved in writing from time to
time, which approval shall be given upon the Borrower
providing the Agent with evidence, reasonably
satisfactory to the Agent, of (1) the Agent's
perfected, first priority Lien on all Inventory of
the Borrower located in such locations and (2) the
absence of any other Liens on any Inventory of the
Borrower located in such locations;
(iii) it is determined in the reasonable judgment of the
Agent to be, when taken as a whole, substantially
similar in quality and mix to the Inventory
maintained by the Debtor in recent historical
operations prior to the Effective Date; and
(iv) it is Inventory that has been valued after deducting
reserves for (1) markdowns, (2) shrinkage, (3)
lay-a-ways, (4) pack-a-ways, (5) displays and open
stock to the extent such stock is the type of stock
that is customarily sold in the package, (6)
rejected, damaged, aged or otherwise unusable
Inventory and (7) other reserves required by the
Agent in the exercise of its reasonable business
judgment;
provided, that any Inventory in respect of which a Letter of
Credit has been issued at the Borrower's request, payment and
performance of which is guaranteed by a Letter of Credit
Guarantee, shall be deemed "Eligible Inventory" for all
purposes hereof subject to the qualifications set forth in
clauses (iii) and (iv) above.
"Environmental Actions" shall mean any complaint, summons,
citation, notice, directive, order, claim, litigation, investigation, hearing,
proceeding, judgment, letter or other communication from any Governmental
Authority or any third party relating to any Environmental Matter, including,
without limitation, a Release (i) from or onto any of the properties presently
or formerly owned, leased, operated or controlled by the Borrower or its
Subsidiaries or (ii) from or onto any facilities which received Hazardous
Materials from the Borrower or its Subsidiaries, or any violation of any
Environmental Law.
"Environmental Laws" shall mean, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
▇▇.▇▇. 9601 et seq., the Emergency Planning and Community Right-to-Know Act of
1986, 42 U.S.C. ▇▇.▇▇. 11001 et seq., the Resource Conservation and Recovery
Act, 42 U.S.C. ▇▇.▇▇. 6901 et seq., the Toxic Substances Control Act, 15 U.S.C.
▇▇.▇▇. 2601 et seq., the Federal Insecticide, Fungicide, and Rodenticide Act, 7
U.S.C. ▇▇.▇▇. 136 et seq., the Clean Air Act, 42 U.S.C. ▇▇.▇▇. 7401 et. seq.,
the Clean Water Act (Federal Water Pollution Control Act), 33 U.S.C. ▇▇.▇▇. 1251
et seq., the Safe Drinking Water Act, 42 U.S.C. ▇▇.▇▇. 300f et seq., the
Occupational Safety and Health Act, 29 U.S.C. ▇▇.▇▇. 641, et seq., the Hazardous
Materials Transportation Act, 49 U.S.C. ▇▇.▇▇. 1801, et seq., as any of the
above statutes have been or may be amended from time to time, all rules and
regulations promulgated pursuant to any of the above statutes, and any other
foreign, federal, state or local law, statute, ordinance, rule or regulation
governing Environmental Matters, as the same have been or may be amended from
time to time, including any common law cause of action providing any right or
remedy relating to Environmental Matters, and all applicable judicial and
administrative decisions, orders, and decrees relating to Environmental Matters.
"Environmental Liabilities and Costs" shall mean, without
limitation, any actual or potential investigation, cleanup, remediation,
removal, or other response costs (which without limitation shall include costs
to cause the Borrower and its Subsidiaries to come into compliance with
Environmental Laws), expenses (including without limitation fees and
disbursements of consultants, counsel, and other experts in connection with any
environmental investigation, testing, audits or studies, response actions, or
litigation), losses, liabilities or obligations (including without limitation,
liabilities
Exhibit 10.14 - Page 5
or obligations under any lease or other contract), payments, damages (including
without limitation any actual, punitive or consequential damages under any
statutory laws, common law cause of action or contractual obligations or
otherwise, including without limitation damages (a) of third parties for
personal injury or property damage, or (b) to natural resources), civil or
criminal fines or penalties, judgments, and amounts paid in settlement arising
out of or relating to or resulting from any Environmental Matter.
"Environmental Matter" shall mean any matter arising out of,
relating to, or resulting from pollution, contamination, protection of the
environment, human health or safety, health or safety of employees, sanitation,
and any matters relating to Releases or threatened Releases of Hazardous
Materials into the air (indoor and outdoor), surface water, groundwater, soil,
land surface or subsurface, buildings, facilities, real or personal property or
fixtures or otherwise arising out of, relating to, or resulting from the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of Hazardous Materials.
"Environmental Lien" shall mean any Lien in favor of any
Governmental Authority for Environmental Liabilities and Costs.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended, and any successor statute of similar import, and
regulations thereunder, in each case as in effect from, time to time. References
to sections of ERISA shall be construed also to refer to any successor sections.
"ERISA Affiliate" shall mean any (i) corporation which is a
member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as the Borrower, (ii) partnership or other trade or
business (whether or not incorporated) under common control (within the meaning
of Section 414(c) of the Code) with the Borrower, or (iii) member of the same
affiliated service group (within the meaning of Section 414(m) of the Code) as
the Borrower, any corporation described in clause (i) above or any partnership
or trade or business described in clause (ii) above.
"Eurodollar Base Rate" shall mean, with respect to a
Eurodollar Loan for the relevant Interest Period, the rate determined by the
Agent to be the rate at which deposits in Dollars are offered by The Chase
Manhattan Bank to first-class banks in the interbank eurodollar market where the
eurodollar and foreign currency and exchange operations in respect of its
eurodollar loans are then being conducted at approximately 11:00 a.m., New York
City time, two Business Days prior to the first day of such Interest Period, in
the approximate amount of the relevant Eurodollar Loan and having a maturity
equal to such Interest Period.
"Eurodollar Loan" shall mean a Loan bearing interest at the
Eurodollar Rate.
"Eurodollar Rate" means with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the nearest
1/100 of 1%):
Eurodollar Base Rate
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1.00 - Reserve Requirements
"Event of Default" shall mean any of the Events of Default
described in Section 9.01 hereof.
"Fee Letter" shall mean the commitment letter, dated July 9,
1997, between the Borrower and the Agent obligating the Borrower to pay certain
fees to the Agent in connection with
Exhibit 10.14 - Page 6
this Agreement, as such commitment letter may be modified, supplemented or
amended from time to time.
"FIFO EBITDA" shall mean, for any period, the consolidated net
income (or net loss) of the Borrower and its Consolidated Subsidiaries for such
period as determined in accordance with GAAP, plus (i) the sum of, without
duplication the following for the Borrower and its Consolidated Subsidiaries,
(A) depreciation expense, (B) amortization expense net of negative goodwill
amortization, (C) the excess, if any, of gross interest expense for such period
over gross interest income for such period, in each case determined in
accordance with GAAP, (D) total income tax expense, (E) extraordinary or unusual
non-cash losses (provided that such extraordinary or unusual losses, (a) do not
at any time result in a cash outlay by the Borrower or any Consolidated
Subsidiary and (b) do not result from the write down of the Inventory of the
Borrower), which include the cumulative effect on earnings from the adoption of
GAAP pronouncements, and (G) expenses relating to the uniform capitalization of
inventory, less (ii) extraordinary non-cash gains and the income effect of the
uniform capitalization of inventory for the Borrower and its Consolidated
Subsidiaries.
"Final Order" shall mean an order or judgment of the
Bankruptcy Court as entered on the docket that has not been reversed, stayed,
modified or amended, and as to which the time to appeal, petition for
certiorari, or seek reargument or rehearing has expired and as to which no
appeal, reargument, petition for certiorari, or rehearing is pending or as to
which any right to appeal, reargue, petition for certiorari or seek rehearing
has been waived in writing in a manner satisfactory to the Agent or, if an
appeal, reargument, petition for certiorari, or rehearing thereof has been
sought, the order or judgment of the Bankruptcy Court has been affirmed by the
highest court to which the order was appealed or from which the reargument or
rehearing was sought, or certiorari has been denied, the time to take any
further appeal or to seek certiorari or further reargument has expired.
"GAAP" shall mean generally accepted accounting principles as
such principles shall be in effect in the United States at the relevant date.
"Governmental Authority" shall mean any nation or government,
any federal, state, city, town, municipality, county, local or other political
subdivision thereof or thereto and any department, commission, board, bureau,
instrumentality, agency or other entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Guarantee" of or by any Person shall mean any obligation of
such Person guaranteeing any indebtedness of any other Person (the "primary
obligor"), directly or indirectly through an agreement (i) to purchase or pay
(or advance or supply funds for the purchase or payment of) such indebtedness or
to purchase (or to advance or supply funds for the purchase of) any security for
the payment of such Indebtedness, (ii) to purchase property, securities or
services for the purpose of assuring the owner of such Indebtedness against
loss, or (iii) to maintain working capital, equity capital or other financial
statement condition or liquidity of the primary obligor so as to enable the
primary obligor to pay such Indebtedness; provided, however, that the term
Guarantee shall not include endorsements for collection or deposit, in either
case in the ordinary course of business.
"Hazardous Materials" shall mean any pollutants, contaminants,
toxic or hazardous or extremely hazardous substances, materials, wastes,
constituents, compounds, chemicals, natural or man-made elements or forces
(including, without limitation, petroleum or any by-products or fractions
thereof, any form of natural gas, lead, asbestos and asbestos-containing
materials ("ACM"), building construction materials and debris, polychlorinated
biphenyls ("PCBs") and PCB-containing equipment, radon and other radioactive
elements, ionizing radiation, electromagnetic field radiation and other non-
ionizing radiation, infectious, carcinogenic, mutagenic, or etiologic agents,
pesticides, defoliants, explosives, flammables, corrosives and urea formaldehyde
foam insulation) that are regulated by, or may now or in the future form the
basis of liability under, any Environmental Laws.
Exhibit 10.14 - Page 7
"Indebtedness" shall mean as to any Person (i) indebtedness
for borrowed money; (ii) indebtedness for the deferred purchase price of
property or services (other than current trade payables incurred in the ordinary
course of business and payable in accordance with customary practices); (iii)
indebtedness evidenced by bonds, debentures, notes or other similar instruments
(other than performance, surety and appeal or other similar bonds arising in the
ordinary course of business); (iv) obligations and liabilities secured by a Lien
upon property owned by such Person, whether or not owing by such Person and even
though such Person has not assumed or become liable for the payment thereof; (v)
obligations and liabilities directly or indirectly Guaranteed by such Person;
(vi) obligations or liabilities created or arising under any conditional sales
contract or other title retention agreement with respect to property used and/or
acquired by such Person, even though the rights and remedies of the lessor,
seller and/or lender thereunder are limited to repossession of such property;
(vii) Capitalized Lease Obligations; and (viii) all liabilities in respect of
letters of credit, acceptances and similar obligations created for the account
of such Person.
"Indemnified Parties" shall have the meaning given that term
in Section 10.06 hereof.
"Initial Mortgaged Properties" shall have the meaning set
forth in Section 5.01(d)(v) hereto.
"Interest Period" shall mean, with respect to any Eurodollar
Loan, the period commencing on the borrowing date or the date of any
continuation or conversion for such Eurodollar Loan, as the case may be, and
ending one, two or three months thereafter as the Borrower may elect in the
applicable notice given to the Agent pursuant to Section 2.03; provided that (i)
any Interest Period that would otherwise end on a day that is not a Business Day
shall be extended to the next succeeding Business Day, unless such Business Day
falls in another calendar month, in which case such Interest Period shall end on
the next preceding Business Day; (ii) any Interest Period 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 the applicable calendar month; and
(iii) no Interest Period for any Loan shall end after the Termination Date.
Interest shall accrue from and include the first date of an Interest Period, but
exclude the last day of such Interest Period.
"Inventory" shall mean all goods and merchandise of the
Borrower including, but not limited to, all raw materials, work in process,
finished goods, materials and supplies of every nature used or usable in
connection with the shipping, storing, advertising or sale of such goods and
merchandise, whether now owned or hereafter acquired and all such property, the
sale or disposition of which would give rise to accounts receivable or cash;
provided that Inventory shall not include inventory held by the Borrower on
consignment.
"L/C Notice" shall have the meaning given to that term in
Section 3.01(b).
"Lease" shall mean any lease of real property to which the
Borrower is a party as lessee or lessor.
"Lenders" shall have the meaning given that term in the
introductory paragraph to this Agreement.
"Letter of Credit" shall have the meaning given to that term
in Section 3.01(a).
"Letter of Credit Application" shall have the meaning given to
that term in Section 3.01(a) hereof.
"Letter of Credit Cash Collateral Account" shall mean the
deposit account maintained at The Chase Manhattan Bank in New York, Now York or
such other bank as CIT may select, which deposit account shall be under the sole
dominion and control of CIT.
Exhibit 10.14 - Page 8
"Letter of Credit Exposure" shall mean, at any time, the sum
at such time of (a) the aggregate amount of all Unreimbursed Draws under Letters
of Credit (whether or not such Letters of credit are then outstanding) and (b)
the aggregate Undrawn Letter of Credit Availability under all outstanding
Letters of Credit.
"Letter of Credit Fee" shall have the meaning given to that
term in Section 2.08(f) hereof.
"Letter of Credit Guaranty" shall mean the guaranty delivered
by CIT to the Letter of Credit Issuer, guaranteeing the Borrower's reimbursement
obligations under a reimbursement agreement, Letter of Credit Application or
other like document.
"Letter of Credit Issuer" shall mean the issuer of a Letter of
Credit, which issuer shall be either The Chase Manhattan Bank or Dai-Ichi Kangyo
Bank.
"Lien" shall mean any mortgage, deed of trust, pledge, lien,
security interest, charge or other encumbrance or security arrangement of any
nature whatsoever, including but not limited to any conditional sale or title
retention arrangement, and any assignment, deposit arrangement or lease intended
as, or having the effect of, security.
"Loan" or "Loans" shall mean any and all loan or loans
(including Unreimbursed Draws) made by the Lenders or by the Agent on behalf of
the Lenders to the Borrower under this Agreement.
"Loan Documents" shall have the meaning given to that term in
the definition of "Related Documents" set forth in this Section 1.01.
"Majority Lenders" shall mean, at any time, the Agent and
Lenders whose Pro Rata Shares aggregate at least sixty-six and two-thirds
percent (66-2/3%).
"Material Adverse Effect" shall mean a material adverse effect
upon (i) the business, operations, condition (financial or otherwise), or
properties of the Borrower and its Subsidiaries taken as a whole, (ii) the
ability of the Borrower or any Subsidiary to perform its obligations hereunder,
under the Fee Letter or under any other Related Document, (iii) the Lien arising
under the Related Documents on any Collateral, (iv) the legality, validity or
enforceability of this Agreement or any Related Document or the Lien arising
under any Related Document, or (v) the aggregate value of the property included
in the calculations of the Borrowing Base.
"Minority Lenders" shall have the meaning given to that term
in Section 10.03(b).
"Mortgaged Property" means each Collateral Property or Lease
subject to a Mortgage, including the Initial Mortgaged Properties.
"Mortgages" shall mean, collectively, each mortgage, deed of
trust, assignment of rents, security agreement and fixture filing and similar
instrument executed by the Borrower or any Subsidiary in favor of the Agent from
time to time, acting for the benefit of the Lenders, as each mortgage, deed of
trust, assignment of rents, security agreement and fixture filing shall be
modified and supplemented and in effect from time to time.
"Multiemployer Plan" shall mean a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA and subject to Title IV of ERISA which
is, or within the immediately preceding six (6) years was, contributed to by the
Borrower or any ERISA Affiliate.
Exhibit 10.14 - Page 9
"Net Proceeds" shall mean, for any asset sale or disposition,
the amount of cash and other payments received (directly or indirectly) by the
Borrower and/or its Subsidiaries net of reasonable expenses incurred by the
Borrower and/or its Subsidiaries in connection therewith and transfer taxes paid
by the Borrower and/or its Subsidiaries in connection therewith.
"Notes" shall mean the promissory notes of the Borrower
executed and delivered to the Lenders under this Agreement and substantially in
the form of Exhibit A hereto, as modified or restated from time to time and any
promissory note or notes issued in exchange or replacement thereof, including
all extensions, renewals, refinancings or refundings thereof in whole or part.
"Notice of Borrowing" shall have the meaning given to that
term in Section 2.03(a) hereof.
"Obligations" shall mean all indebtedness, obligations and
liabilities of the Borrower and its Subsidiaries to any Lender or the Agent
incurred under or related to this Agreement, the Notes, the Fee Letter or any
other Related Document, whether such indebtedness, obligations or liabilities
are direct or indirect, secured or unsecured, joint or severe, absolute or
contingent, due or to become due, which are described in either of the following
clauses (i) of (ii):
(i) All indebtedness, obligations (including
Reimbursement Obligations) and liabilities of any
nature whatsoever including amounts due under Section
10.06 hereof and similar agreements contained in the
other Related Documents, from time to time arising
under or in connection with or evidenced or secured
by this Agreement, the Notes, the Letters of Credit
or any other Related Document, including but not
limited to the principal amount of Loans outstanding,
together with interest thereon, the amount of the
Letter of Credit Exposure, together with interest
thereon and all expenses, fees and indemnities
hereunder or under any other Related Document.
Without limitation, such amounts include all Loans
and interest thereon and the amount of all Letter of
Credit Exposure whether or not such Loans were made
or any Letters of Credit to which such Letter of
Credit Exposure relates were issued in compliance
with the terms and conditions hereof or in excess of
any Lender's obligation to lend and arrange for the
issuance of Letters of Credit hereunder or any
Lender's obligation to participate therein. If and to
the extent any amounts in any account (including the
Agent Account, the Letter of Credit Cash Collateral
Account, the Depository Accounts, the Cash
Concentration Account or otherwise) constituting
collateral are applied to Obligations hereunder, and
any Lender or the Agent is subsequently obligated to
return or repay any such amounts to any Person for
any reason, the amount so returned or repaid shall be
deemed a Loan hereunder and shall constitute an
Obligation.
(ii) All indebtedness, obligations and liabilities from
time to time arising under or in connection with any
account from time to time maintained by the Borrower
with any Lender or the Agent, including but not
limited to all Reimbursement Obligations, service
charges and interest in connection with any
overdrafts or returned items from time to time
arising in connection with any such account, or
arising under or in connection with any investment
services, cash management services or other services
from time to time performed by any Lender or the
Agent pursuant to or in connection with this
Agreement or any other Related Document.
Exhibit 10.14 - Page 10
"Office", when used in connection with the Agent shall mean
its office located at 1211 Avenue of the Americas, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or
at such other office or offices of the Agent as may be designated in writing
from time to time by the Agent to the Borrower and when used in connection with
the Bank or the Letter of Credit Issuer shall mean the office of such entity
designated in writing from time to time by the Agent to the Borrower. In the
event The Chase Manhattan Bank shall be the Bank or the Letter of Credit Issuer,
the Office for such entity shall until further written notice from the Agent to
the Borrower be its office located at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
"Operating Lease Obligations" shall mean all obligations and
indebtedness of the Borrower and its Subsidiaries in respect of leases of
property (whether real, personal or mixed) other than Capitalized Lease
Obligations.
"Other Taxes" shall have the meaning given to that term in
Section 2.15.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or
any successor thereto.
"Permitted Investments" shall mean (a) direct obligations of
the United States of America or of any agency thereof or obligations guaranteed
as to principal and interest by the United States of America or of any agency
thereof, in either case maturing not more than 90 days from the date of
acquisition thereof by such Person; (b) deposit accounts with or certificates of
deposit and bankers' acceptances issued by any bank or trust company organized
under the laws of the United States of America or any state thereof and having
capital, surplus and undivided profits of at least $500,000,000, maturing not
more than 90 days from the date of acquisition thereof by such Person; (c)
commercial paper rated A-1 or better or P-1 by Standard & Poor's Corporation
("S&P") or ▇▇▇▇▇'▇ Investors Services, Inc. ("Moody's"), respectively, maturing
not more than 90 days from the date of acquisition thereof by such Person; and
(d) Investments in money market funds rated AAAm or AAAm-G by S&P and P-1 by
Moody's.
"Permitted Liens" shall have the meaning given that term in
Section 8.01.
"Person" shall mean an individual, corporation, partnership,
limited liability company, limited liability partnership, trust, unincorporated
association, joint venture, joint-stock company, government (including political
subdivisions), Governmental Authority or agency, or any other entity.
"Pledge Agreement" shall mean the Pledge and Security
Agreement substantially in the form of Exhibit I hereto made by the Borrower in
favor of the Agent, for the benefit of the Lenders, as modified and supplemented
and in effect from time to time.
"Plan" shall mean an employee benefit plan defined in Section
3(3) of ERISA in respect of which the Borrower or any ERISA Affiliate is, or
within the immediately preceding six (6) years was, an "employer" as defined in
Section 3(5) of ERISA.
"Plan of Reorganization" shall mean that certain Amended Plan
of Reorganization under chapter 11 of the United States Bankruptcy Code for
Weiner's Stores, Inc. dated June 24, 1997, as confirmed by the Confirmation
Order, as amended, restated, supplemented or otherwise modified to the extent
permitted by Section 8.17 hereof.
"Potential Default" shall mean any event or condition which,
with notice or passage of time, or any combination of the foregoing, would
constitute an Event of Default.
Exhibit 10.14 - Page 11
"Pledge Agreement" shall mean a Pledge Agreement, in form and
substance satisfactory to the Agent in all respects, executed and delivered to
the Agent pursuant to Section 7.18 hereof by the Borrower upon the creation of
the first Subsidiary created after the date hereof, in favor of the Agent, as
modified and supplemented and in effect from time to time.
"Pro Rata Share" shall mean, with respect to any Lender, a
fraction (expressed as a percentage), the numerator of which shall be the amount
of such Lender's Revolving Credit Commitment and the denominator of which shall
be the aggregate amount of all of the Lenders' Revolving Credit Commitments, as
adjusted from time to time in accordance with the provisions of Section 10.13
hereof, provided that, if the Revolving Credit Commitments have been terminated,
the numerator shall be the unpaid amount of such Lender's Loans and Letter of
Credit Exposure and the denominator shall be the aggregate amount of all of the
Lenders' unpaid Loans and Letter of Credit Exposure.
"Reference Loan" shall mean a Loan bearing interest at the
Regular Rate.
"Reference Rate" shall mean the interest rate per annum
publicly announced from time to time by The Chase Manhattan Bank in New York,
New York as its Reference Rate, such interest rate to change automatically from
time to time effective as of the announced effective date of each change in the
Reference Rate. The Reference Rate is not intended to be the lowest rate of
interest charged by The Chase Manhattan Bank to its borrowers.
"Register" shall have the meaning given that term in Section
10.13(c) hereof.
"Regular Rate" shall mean, for any day, the Reference Rate for
such day plus .375%.
"Reimbursement Obligation" shall mean the obligation of the
Borrower to reimburse CIT or the Lenders for amounts payable by CIT or the
Lenders under a Letter of Credit Guaranty in respect of any drawings made under
any Letter of Credit issued by the Letter of Credit Issuer, together with
interest thereon and all fees and expenses related thereto.
"Related Documents" or "Loan Documents" shall mean this
Agreement, the Notes, the Letters of Credit, each Letter of Credit Application,
the Letter of Credit Guaranty, the Confirmation Order, Fee Letter, the
Depository Account Agreements, the Security Documents, the Restricted Account
Agreement, each notice letter delivered to a Depository Bank or other financial
institution pursuant to Section 5.01(o) hereof and Section 7.13 hereof and the
other documents, instruments and agreements referred to in Section 5.01 hereof,
and all other instruments, agreements and documents from time to time delivered
in connection with or otherwise relating to any Related Document.
"Release" shall mean any past or present releasing, spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting,
depositing, dumping, escaping, leaching or migrating of Hazardous Materials.
"Remedial Action" shall mean all actions necessary to (i)
monitor, assess, evaluate, investigate, clean up, remove or treat any Release or
threatened Release of Hazardous Materials; (ii) prevent, mitigate or minimize
any Release or threatened Release so that the Release or threatened Release does
not migrate or endanger or threaten to endanger public health or welfare or the
environment; (iii) perform any pre-remedial studies and investigations and
post-remedial monitoring and care, or (iv) come into compliance with
Environmental Law.
"Reorganization" shall mean the reorganization of the Debtor
pursuant to the Plan of Reorganization and the Confirmation Order.
Exhibit 10.14 - Page 12
"Reportable Event" shall mean any of the events described in
Section 4043(c) of ERISA (other than events for which the notice requirements
have been waived).
"Reserve Requirements" shall mean, for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the rates (expressed as
a decimal fraction) of reserve requirements in effect on such day (including,
without limitation, basic, supplemental, marginal and emergency reserves under
any regulations of the Board 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 the Board) maintained by a member bank of the Federal Reserve
System. Eurodollar Loans shall be deemed to constitute Eurocurrency Liabilities
and to be subject to such reserve requirements without benefit of or credit for
proration, exceptions or offsets which may be available from time to time to any
Lender or the Affiliate of any Lender under Regulation D.
"Restricted Account Agreement" shall have the meaning given
to that term in Section 7.13.
"Revolving Credit Commitment" shall mean, with respect to each
Lender, the amount set forth on Schedule 1.01(B) to this Agreement or assigned
to such Lender in accordance with Section 10.13, as such amounts may be reduced
from time to time pursuant to the terms of this Agreement, and "Revolving Credit
Commitments" shall, collectively, mean the aggregate amount of the Revolving
Credit Commitments of all the Lenders, the maximum amount of which shall not
exceed $40,000,000.
"Security Agreement" shall mean the Security Agreement,
substantially in the form of Exhibit B hereto, made by the Borrower in favor of
the Agent, for the benefit of the Lenders, as modified and supplemented and in
effect from time to time.
"Security Documents" shall mean, collectively, the Security
Agreement, the Pledge Agreement, each Subsidiary Guaranty, the Mortgages, each
Assignment for Security (Trademarks) and each Assignment for Security (Patents),
substantially in the forms of Exhibits A and B to the Security Agreement,
executed and delivered by the Borrower, each collateral assignment of leases and
rents executed and delivered by the Borrower and/or its Subsidiaries, and all
Uniform Commercial Code financing statements required by this Agreement, the
Security Agreement and the Mortgages to be filed with respect to the security
interests in personal property and fixtures created pursuant to such agreements,
and all other documents and agreements executed and delivered by the Borrower
and/or its Subsidiaries in connection with any of the foregoing documents.
"Settlement Period" shall have the meaning set forth in
Section 2.03 hereof.
"Stated Amount" shall mean, with respect to a Letter of
Credit, the face amount thereof, drawn or undrawn, regardless of the existence
or satisfaction of any conditions or limitations on drawing.
"Subsidiary" shall mean, with respect to any Person, any
corporation, limited or general partnership, limited liability company, limited
liability partnership, trust, association or other business entity of which an
aggregate of 50% or more of the outstanding stock or other interests entitled to
vote in the election of the board of directors of such corporation (irrespective
of whether, at the time, stock of any other class or classes of such corporation
shall have or might have voting power by reason of the happening of any
contingency), managers, trustees or other controlling persons, or an equivalent
controlling interest therein, of such Person is, at the time, directly or
indirectly, owned or controlled by such Person and/or one or more Subsidiaries
of such Person.
Exhibit 10.14 - Page 13
"Subsidiary Guaranty" shall mean each Subsidiary Guaranty,
substantially in the form of Exhibit J hereto, made by the Subsidiaries of the
Borrower existing on the date hereof in favor of the Agent and the Subsidiary
Guaranty, substantially in the form of Exhibit J hereto, executed and delivered
to the Agent pursuant to Section 7.18 hereof by each Subsidiary of the Borrower
created after the date hereof, in each case in favor of the Agent, as modified
and supplemented and in effect from time to time.
"Taxes" shall have the meaning given to that term in Section
2.15.
"Termination Date" shall have the meaning given that term in
Section 2.01(a) hereof.
"Termination Event" shall mean (i) a Reportable Event with
respect to any Benefit Plan; (ii) the withdrawal of the Borrower or any ERISA
Affiliate from a Benefit Plan during a plan year in which the Borrower or any
ERISA Affiliate was a "substantial employer" as defined in Section 4001(a)(2) of
ERISA; (iii) the imposition of an obligation on the Borrower or any ERISA
Affiliate under Section 4041 of ERISA to provide affected parties written notice
of intent to terminate a Benefit Plan in a distress termination described in
Section 4041(c) of ERISA; (iv) the institution by the PBGC of proceedings to
terminate a Benefit Plan; or (v) the partial or complete withdrawal of the
Borrower or any ERISA Affiliate from a Multiemployer Plan.
"Undrawn Letter of Credit Availability" shall mean with
respect to a Letter of Credit, at any time, the maximum amount available to be
drawn under such Letter of Credit at such time, regardless of the existence or
satisfaction of any conditions or limitations on drawing.
"Unreimbursed Draws" shall mean with respect to a Letter of
Credit, at any time, the aggregate amount at such time of all payments made by
the Letter of Credit Issuer or payments made by CIT or the Lenders under a
Letter of Credit Guaranty in respect of such payments under such Letter of
Credit, to the extent not repaid by the Borrower.
"Unused Line Fee" shall have the meaning given to that term in
Section 2.08(e).
"Westview Advertising" shall mean Westview Advertising, Inc.,
a Texas corporation, a wholly-owned Subsidiary of the Borrower, engaged solely
in the business of placing advertisements for the Borrower.
"Westview Facility" shall mean the warehouse, corporate
offices and distribution center of the Borrower located on Westview Drive in
Houston, Texas.
1.02. Construction. Unless the context of this Agreement
otherwise clearly requires, references to the plural include the singular, the
singular the plural and the part the whole and "or" has the inclusive meaning
represented by the phrase "and/or." References in this Agreement to
"determination" by the Agent include good faith estimates by the Agent (in the
case of quantitative determinations) and good faith beliefs by the Agent (in the
case of qualitative determinations). The words "hereof," "herein," "hereunder"
and similar terms in this Agreement refer to this Agreement as a whole and not
to any particular provision of this Agreement. The section and other headings
contained in this Agreement and the Table of Contents preceding this Agreement
are for reference purposes only and shall not control or affect the construction
of this Agreement or the interpretation thereof in any respect. Section,
subsection and exhibit references are to this Agreement unless otherwise
specified.
1.03. Accounting Principles. Except as otherwise provided in
this Agreement, all computations and determinations as to accounting or
financial matters and all financial statements to be delivered pursuant to this
Agreement shall be made and prepared in accordance with GAAP (including
Exhibit 10.14 - Page 14
principles of consolidation where appropriate), and all accounting or financial
terms shall have the meanings ascribed to such terms by GAAP. Notwithstanding
the definition of GAAP contained in this Agreement, no change in GAAP that would
affect the method or calculation of any of the financial covenants, restrictions
or standards or definitions of terms used herein shall be given effect in such
calculations until such financial covenants, restrictions or standards or
definitions are amended in a manner satisfactory to the Borrower and the
Majority Lenders so as to reflect such change in GAAP.
ARTICLE II
THE CREDITS
-----------
2.01. Revolving Credit Loans. (a) The Revolving Credit
Commitment. Subject to the terms and conditions and relying upon the
representations and warranties herein set forth, each Lender severally agrees to
make Loans to the Borrower at any time and from time to time on or after the
date hereof and to, but not including, the Termination Date, in an aggregate
principal amount not exceeding at any one time its Pro Rata share of the Current
Commitment at such time. The Current Commitment at any time shall be equal to
the lesser of (A) $40,000,000, as such amount may have been reduced under
Section 2.04(a) hereof at such time, and (B) the Borrowing Base. No Lender shall
have an obligation to make Loans hereunder or arrange for the issuance of the
date on which the Revolving Credit Commitment is terminated by Borrower pursuant
to Section 2.04 hereof.
(b) Revolving Credit. Within the limits of time
and amount set forth in this Section 2.01, and subject to the provisions of this
Agreement, the Borrower may borrow, repay and reborrow hereunder.
2.02. Notes. The obligation of the Borrower to repay the
unpaid principal amount of the Loans made to it by each Lender and to pay
interest thereon shall be evidenced in part by a Note dated the date of this
Agreement in the principal amount of such Lender's Revolving Credit Commitment
with the blanks appropriately filled in. An executed Note for each Lender shall
be delivered by the Borrower to the Agent on the date of the execution and
delivery of this Agreement.
2.03. Notice of Borrowing; Making of Loans. (a) Whenever the
Borrower desires to borrow, it shall provide notice to the Agent of such
proposed borrowing (a "Notice of Borrowing"), each such notice, to be given (i)
not later than 12:00 noon (New York City time) on the date of such proposed
borrowing, in the case of a borrowing consisting of Reference Loans, or (ii) not
later than 12:00 noon (New York City time) on the third Business Day before the
date of such borrowing, in the case of a borrowing consisting of Eurodollar
Loans, setting forth: (a) the date, which shall be a Business Day, on which such
borrowing is to occur, (b) whether such Loan is requested to be a Reference Loan
or a Eurodollar Loan and, if a Eurodollar Loan, the Interest Period requested
with respect thereto, (c) the principal amount of the Loan being borrowed, and
(d) the account information where such Loan is to be received. Such notice shall
be given by telephone or in writing by a Designated Borrowing Officer, provided
that, if requested by the Agent, any such telephonic notice shall be confirmed
in writing by delivery to the Agent promptly on or before the date on which such
Loan is to be made a notice containing the original or facsimile signature of a
Designated Borrowing Officer. Except for a Notice of Borrowing when the Agent
will fund the related Loan pursuant to Section 2.03(e) hereof, the Agent shall
provide each Lender with prompt notice of each Notice of Borrowing. Except as
otherwise provided in Section 2.03(e), on the date specified in such notice,
each Lender shall, subject to the terms and conditions of this Agreement, make
its Pro Rata Share of such Loan in immediately available funds by wire transfer
to the Agent at its Office not later than 12:30 p.m. (New York City time).
Unless the Agent determines that any applicable conditions in Section 5.02 have
not been satisfied, the Agent shall make the funds so received from the Lenders
available to the Borrower not later than 2:30 p.m. (New York City time), on the
date specified in such notice in immediately available funds by (i) depositing
such proceeds in the Disbursement Account if
Exhibit 10.14 - Page 15
the Disbursement Account is located at the Bank and (ii) initiating a wire
transfer if the Disbursement Account is not located at the Bank.
(b) The Agent and each Lender shall be entitled
to rely conclusively on each Designated Borrowing Officer's authority to request
a Loan on behalf of the Borrower until the Agent receives written notice to the
contrary. The Agent and the Lenders shall have no duty to verify the
authenticity of the signature appearing on any written Notice of Borrowing and,
with respect to an oral request for a Loan, the Agent and the Lenders shall have
no duty to verify the identity of any Person representing himself as a
Designated Borrowing Officer.
(c) The Agent and the Lenders shall not incur
any liability to the Borrower in acting upon any telephonic notice referred to
above which the Agent and the Lenders believe in good faith to have been given
by a Designated Borrowing Officer or for otherwise acting in good faith under
this Section 2.03 and, upon the funding of a Loan by the Lenders (or by the
Agent on behalf of the Lenders) in accordance with this Agreement pursuant to
any such telephonic notice, the Borrower shall have effected a Loan hereunder.
(d) Each Notice of Borrowing pursuant to this
Section 2.03 shall be irrevocable and the Borrower shall be bound to make a
borrowing in accordance therewith. Each Reference Loan shall be in a minimum
amount of $100,000 and in multiples of $100,000 if in excess thereof, and each
Eurodollar Loan shall be in a minimum amount of $1,000,000 and in multiples of
$1,000,000 if in excess thereof. Notwithstanding any other provision of this
Agreement, no more than five separate Interest Periods in respect of Eurodollar
Loans may be outstanding at any one time.
(e) (i) Except as otherwise provided in this
subsection 2.03(e), all Loans under this Agreement shall be made by the Lenders
simultaneously and proportionately to their Pro Rata Shares, it being understood
that no Lender shall be responsible for any default by any other Lender in that
other Lender's obligation to make a Loan requested hereunder nor shall the
Revolving Credit Commitment of any Lender be increased or decreased as a result
of the default by any other Lender in that other Lender's obligation to make a
Loan requested hereunder.
(ii) Notwithstanding any other provision
of this Agreement, and in order to reduce the number of fund transfers among the
Borrower, the Lenders and the Agent, the Borrower, the Lenders and the Agent
agree that the Agent may (but shall not be obligated to), and the Borrower and
the Lenders hereby irrevocably authorize the Agent to, fund, on behalf of the
Lenders, Loans pursuant to subsection 2.01(a), subject to the procedures for
settlement set forth in subsection 2.03(f); provided, however, that (a) the
Agent shall in no event fund such Loans if the Agent shall have received written
notice from the Majority Lenders on the Business Day prior to the day of the
proposed Loan that one or more of the conditions precedent contained in Section
5.02 will not be satisfied on the day of the proposed Loan, and (b) the Agent
shall not otherwise be required to determine that, or take notice whether, the
conditions precedent in Section 5.02 have been satisfied.
(iii) Unless (A) the Agent has notified the
Lenders that the Agent, on behalf of the Lenders, will fund a particular Loan
pursuant to subsection 2.03(e)(ii), or (B) the Agent shall have been notified by
any Lender on the Business Day prior to the day of a proposed Loan that such
Lender does not intend to make available to the Agent such Lender's Pro Rata
Share of the Loan requested on such day, the Agent may assume that such Lender
has made such amount available to the Agent on such day and the Agent, in its
sole discretion, may, but shall not be obligated to, cause a corresponding
amount to be made available to the Borrower on such day. If the Agent makes such
corresponding amount available to the Borrower and such corresponding amount is
not in fact made available to the Agent by such Lender, the Agent shall be
entitled to recover such corresponding amount on demand from such Lender
together with interest thereon, for each day from the date such payment was due
until the date such amount is paid to the Agent, at the customary rate
Exhibit 10.14 - Page 16
set by the Agent for the correction of errors among banks for three Business
Days and thereafter at the Regular Rate. During the period in which such Lender
has not paid such corresponding amount to the Agent, notwithstanding anything to
the contrary contained in this Agreement or any other Related Document, the
amount so advanced by the Agent to the Borrower shall, for all purposes hereof,
be a Loan made by the Agent for its own account. Upon any such failure by a
Lender to pay the Agent, the Agent shall promptly thereafter notify the Borrower
of such failure and the Borrower shall immediately pay such corresponding amount
to the Agent for its own account.
(iv) Nothing in this subsection 2.03(e)
shall be deemed to relieve any Lender from its obligation to fulfill its
Revolving Credit Commitment hereunder or to prejudice any rights that the Agent
or the Borrower may have against any Lender as a result of any default by such
Lender hereunder.
(f) (i) With respect to all periods for
which the Agent has funded Loans pursuant to Subsection 2.03(e), within 15 days
after the last day of each calendar month, or such shorter period as it may from
time to time select (any such month or shorter period being herein called a
"Settlement Period"), the Agent shall notify each Lender of the average daily
unpaid principal amount of the Loans outstanding during such Settlement Period.
In the event that such amount is greater than the average daily unpaid principal
amount of the Loans outstanding during the Settlement Period immediately
preceding such Settlement Period (or, if there has been no preceding Settlement
Period, the amount of the Loans made on the date of such Lender's initial
funding), each Lender shall promptly make available to the Agent its Pro Rata
Share of the difference in immediately available funds. In the event that such
amount is less than such average daily unpaid principal amount, the Agent shall
promptly pay over to each other Lender its Pro Rata Share of the difference in
immediately available funds. In addition, if the Agent shall so request at any
time when a Potential Default or an Event of Default shall have occurred and be
continuing, or any other event shall have occurred as a result of which the
Agent shall determine that it is desirable to present claims against the
Borrower for repayment, each Lender shall promptly remit to the Agent or, as the
case may the be, the Agent shall promptly remit to each Lender, sufficient funds
to adjust the interests of the Lenders in the then outstanding Loans to such an
extent that, after giving effect to such adjustment, each Lender's interest in
the then outstanding Loans will be equal to its Pro Rata Share thereof. The
obligations of each Lender under this subsection 2.03(f) shall be absolute and
unconditional. Each Lender shall only be entitled to receive interest on its Pro
Rata Share of the Loans which have been funded by such Lender.
(ii) In the event that any Lender fails
to make any payment required to be made by it pursuant to subsection 2.03(f)(i),
the Agent shall be entitled to recover such corresponding amount on demand from
such Lender together with interest thereon, for each day from the date such
payment was due until the date such amount is paid to the Agent, at the
customary rate set by the Agent for the correction of errors among banks for
three Business Days and thereafter at the Regular Rate. During the period in
which such Lender has not paid such corresponding amount to the Agent,
notwithstanding anything to the contrary contained in this Agreement or any
other Related Document, the amount so advanced by the Agent to the Borrower
shall, for all purposes hereof, be a Loan made by the Agent for its own account.
Upon any such failure by a Lender to pay the Agent, the Agent shall promptly
thereafter notify the Borrower of such failure and the Borrower shall
immediately pay such corresponding amount to the Agent for its own account.
Nothing in this subsection 2.03(f)(ii) shall be deemed to relieve any Lender
from its obligation to fulfill its Revolving Credit Commitment hereunder or to
prejudice any rights that the Borrower or the Agent may have against any Lender
as a result of any default by such Lender hereunder.
2.04. Termination or Reduction of Commitment; Mandatory
Prepayment; Optional Prepayment. (a) Termination or Reduction of the Commitment.
The Borrower may (i) upon not less than five Business Days' notice to the Agent,
terminate the Revolving Credit Commitments, subject to the early termination
fees provided for in Section 2.08(h) hereof, or (ii) at any time or from time to
Exhibit 10.14 - Page 17
time and without penalty or premium reduce the amount of the Revolving Credit
Commitments of the Lenders, provided that no such termination or reduction shall
be permitted if, after giving effect thereto, the sum of the unpaid principal
amount of all Loans then outstanding plus the principal amount of all Loans not
yet made as to which notice has been given by the Borrower under Section 2.03
hereof plus the Letter of Credit Exposure at such time plus the Stated Amount of
all Letters of Credit not yet issued as to which a request has been made unless
the request is withdrawn and the Letter of Credit is not issued by the Letter of
Credit Issuer under Section 3.01 hereof, would exceed the amount of the
Revolving Credit Commitments then in effect. Any reduction shall be in an amount
which is an integral multiple of $1,000,000. Reduction of the Revolving Credit
Commitments of the Lenders shall be made by providing not less than two Business
Days' written notice (which notice shall be irrevocable) to such effect to the
Agent (which notice the Agent shall promptly transmit to each Lender).
Termination or reductions of the Revolving Credit Commitments of the Lenders are
irrevocable and may not be reinstated. Each such reduction shall reduce the
Revolving Credit Commitment of each Lender proportionately in accordance with
its Pro Rata Share. No termination of the Revolving Credit Commitment shall
relieve or discharge the Borrower of its respective duties, obligations and
covenants under this Agreement and the Related Documents until all Obligations
have been fully and finally discharged and paid, and the Agent's continuing
security interest in the Collateral and the rights and remedies of the Agent and
each Lender hereunder, under the Related Documents and any applicable law, shall
remain in effect until all such Obligations have been fully and finally
discharged and paid.
(b) Mandatory Prepayment. (i) Exceeding
Current Commitment. If at any time the Current Commitment is less than the
aggregate unpaid principal amount of the Loans then outstanding plus the Letter
of Credit Exposure at such time, the Borrower shall prepay an amount of the
Loans not less than the amount of such difference or, if the Loans then
outstanding are less than the amount of such difference, provide cash collateral
to the Agent in an amount equal to 105% of such excess, which cash collateral
shall be deposited and held in the Letter of Credit Cash Collateral Account
until such time as such excess no longer exists. Any such prepayment will not
otherwise reduce the Revolving Credit Commitments of the Lenders. Concurrently
with any notice of reduction of the Revolving Credit Commitments of the Lenders,
the Borrower shall give notice to the Agent of any mandatory prepayment which
notice shall specify a prepayment date no later than the effective date of such
reduction of the Revolving Credit Commitments of the Lenders.
(ii) Asset Sales. Simultaneously with
the consummation of any sale or disposition of assets permitted under Section
8.04(b) hereof, whether by the Borrower or its Subsidiaries, the Borrower shall
prepay the Loans in an aggregate principal amount equal to 100% of the Net
Proceeds of such sale or disposition, other than such sales or dispositions the
Net Proceeds from which do not exceed $50,000 individually or $200,000 in the
aggregate.
(iii) Loss Event. If there shall occur
any Destruction or Taking (as defined in the Mortgages) with respect to any
Mortgaged Property, the Borrower shall promptly repay the Loans in an amount
equal to the net proceeds received by the Borrower or any Subsidiary in respect
of such Destruction or Taking required to be applied to the Loans pursuant to
the terms of the Mortgages.
(iv) Other Mandatory Prepayments. The
Agent may, on the Cash Concentration Account Blockage Date and on each Business
Day thereafter, apply all funds in the Cash Concentration Account to the
payment, in whole or in part, of the Obligations outstanding.
(c) Optional Prepayment. The Borrower may at
any time or from time to time prepay, in whole or in part, any or all Loans then
outstanding. Any such prepayment (i) shall be in an aggregate principal amount
equal to $100,000 or an integral multiple of $100,000, provided that no
Eurodollar Loan shall be prepaid in part.
Exhibit 10.14 - Page 18
(d) Prepayment Penalty. Subject to Section
2.08(h) hereof, all prepayments of Loans under this Section 2.04 shall be
without premium or penalty, except that any prepayment of Eurodollar Loans shall
be subject to the provisions of Section 2.12 hereof.
2.05. Interest Rate. (a) Each Reference Loan shall bear
interest for each day until paid at a rate per annum for each day equal to the
Regular Rate for such day.
(b) Each Eurodollar Loan shall bear interest at
a rate per annum equal to the Eurodollar Rate plus 2.250% for the Interest
Period in effect for such Eurodollar Loan, together with any additional interest
owing pursuant to Section 2.14 hereof.
2.06. Interest Payment Dates. The Borrower shall pay interest
on the unpaid principal amount of each Loan from the date of such Loan until
such principal amount shall be paid in full, which interest shall be payable (i)
if such Loan is a Reference Loan, monthly in arrears on the first Business Day
of each month, commencing September 1, 1997, and (ii) if such Loan is a
Eurodollar Loan on the last day of the Interest Period of such Eurodollar Loan.
After maturity of any principal amount of any Loan (by acceleration, at
scheduled maturity or otherwise), interest on such amount shall be due and
payable on demand.
2.07. Amortization. To the extent not due and payable earlier
pursuant to the terms of this Agreement, the entire unpaid principal amount of
each of the Loans shall be due and payable on the Termination Date.
2.08. Payments. (a) Time, Place and Manner. Except as
otherwise provided in Section 2.04(b) hereof, all payments and prepayments to be
made in respect of principal, interest, commitment fee, facility fee or other
amounts due from the Borrower hereunder, under the Fee Letter, the Notes or any
other Related Document shall be payable at or before 1:00 p.m., New York City
time, on the day when due without presentment, demand, protest or notice of any
kind, all of which are hereby expressly waived. Such payments shall be made to
the Agent for the account of the Agent, CIT or the Lenders, as the case may be,
at the Agent Account in Dollars in funds immediately available at the Bank's
Office without setoff, counterclaim or other deduction of any nature. The Agent
shall maintain a separate loan account (the "Borrower's Account") on its books
in the name of the Borrower in which the Borrower will be charged with Loans
made by the Agent or the Lenders to the Borrower hereunder and with any other
Obligations. The Borrower and the Lenders hereby authorize the Agent to, and the
Agent may, from time to time charge the Borrower's Account with any interest,
fees, expenses and other Obligations that are due and payable under this
Agreement or any Related document. The Borrower and the Lenders confirm that any
charges which the Agent may so make to the Borrower's Account as herein provided
will be made as an accommodation to the Borrower and solely at the Agent's
discretion and shall constitute a Loan to the Borrower funded by the Agent on
behalf of the Lenders and subject to subsections 2.03(e) and 2.03(f) of the
Agreement. Each of the Lenders and the Borrower agrees that the Agent shall have
the right to make such charges regardless of whether any Event of Default or
Potential Default shall have occurred and be continuing or whether any of the
conditions precedent in Section 5.02 have been satisfied. The Borrower's Account
will be credited upon receipt of "good funds" in the Agent Account with all
amounts actually received by the Agent from the Borrower or others for the
account of the Borrower. The Agent shall use reasonable efforts to provide the
Borrower with copies or other evidence of all charges to the Borrower's Account
promptly after such charges are made, provided that the failure to provide such
copies or other evidence to the Borrower shall not relieve the Borrower of any
of its obligations under this Agreement. Interest on all Loans and all fees that
accrue on a per annum basis shall be computed on the basis of the actual number
of days elapsed in the period during which interest or such fee accrues and a
year of 360 days. In computing interest on any Loan, the date of the making of
such Loan shall be included and the date of payment shall be excluded; provided,
however, that if a Loan is repaid on the same day in which it is made, one day's
interest shall be paid on such Loan.
Exhibit 10.14 - Page 19
(b) Periodic Statements. The Agent shall
provide the Lenders and the Borrower promptly after the end of each calendar
month a summary statement (in the form from time to time used by the Agent) of
(A) the opening and closing daily balances in the Borrower's Account during such
month, (B) the amounts and dates of all Loans made during such month, (C) the
amounts and dates of all payments on account of the Loans made during such month
and each Lender's interest in the Loans, (D) the amount of interest accrued on
the Loans during such month, (E) any Letters of Credit issued by the Letter of
Credit Issuer during such month, specifying the Stated Amount thereof, (F) the
amount of charges to the Borrower's Account or Loans to be made during such
month to reimburse CIT, the Lenders or the Letter of Credit Issuer for drawings
made under Letters of Credit or payments made by CIT or the Lenders under the
Letter of Credit Guaranty, and (G) the amount and nature of any charges to the
borrower's Account made during such month on account of interest, fees and
expenses and other Obligations. All entries on any such statement shall, 30 days
after the same is sent, be presumed to be correct and shall constitute prima
facie evidence of the information contained in such statement, subject to the
Borrower's and each Lender's express right to rebut such presumption by
conclusively demonstrating the existence of any error on the part of the Agent.
(c) Apportionment of Payments. Except as
otherwise provided in this subsection, aggregate principal and interest payments
shall be apportioned among all outstanding Loans to which such payments relate
and payments of the fees required to be paid by the borrower under subsections
2.08(e), (f) and (h) shall, as applicable, be apportioned ratably among the
Lenders, in each case according to their Pro Rata Shares. All payments shall be
remitted to the Agent and all such payments and any other amounts, including,
without limitation, proceeds of Collateral received by the Agent from or as to
the Borrower shall be applied subject to the provisions of this Agreement first,
to pay principal of and interest on any Loans funded by the Agent on behalf of
the Lenders and any fees, expense reimbursements or indemnities then due to the
Agent from the Borrower; second, to pay any fees, expense reimbursements or
indemnities then due to the Lenders or the Letter of Credit Issuer hereunder;
third, to pay interest due in respect of Loans and Unreimbursed Draws under
Letters of Credit; and fourth, to pay, prepay or provide case collateral in
respect of principal of Loans and Letter of Credit Exposure. The Agent shall
promptly distribute to each Lender at its primary address or at such other
address as such Lender may designate in writing, such funds as it may be
entitled to receive. The foregoing apportionment of payments is solely for the
purpose of determining the obligations of the Borrower hereunder and,
notwithstanding such apportionment, any Lender may on its books and records
allocate payments received by it in a manner different from that contemplated
hereby. No such different allocation shall alter the rights and obligations of
the Borrower under this Agreement determined in accordance with the
apportionments contemplated by this Section 2.08(c). To the extent that the
Borrower makes a payment or payments to the Agent or the Agent receives any
payment or other amount, which payment(s) or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause then, to the
extent of such payment or proceeds received ,the Obligations or part thereof
intended to be satisfied shall be revived and continue in full force and effect,
as if such payment or proceeds had not been received by the Agent.
(d) Interest Upon Events of Default. To the
extent permitted by law, after there shall have occurred and so long as there is
continuing an Event of Default pursuant to Section 9.01, all principal,
interest, commitment fees, facility fees, indemnities or any other Obligations
of the Borrower hereunder, under the Fee Letter or under any Note or any other
Related Document (and including interest accrued under this subsection 2.08(d))
shall compound on a daily basis as provided in this subsection 2.08(d) and shall
bear interest for each day until paid (before and after judgment), payable on
demand, at a rate per annum of 4.250% above the Eurodollar Rate for such day in
the case of Eurodollar Loans and 2.375% above the Reference Rate for such day in
the case of Reference Loans, such interest rate relating to Reference Loans to
change automatically from time to time effective as of the announced effective
date of each change in the Reference Rate.
Exhibit 10.14 - Page 20
(e) Unused Line Fee. From and after the Closing
Date until the Termination Date, the Borrower shall pay to the Agent, for the
account of each Lender in accordance with such Lender's Pro Rate Share, an
unused line fee (the "Unused Line Fee") accruing at the rate of one-quarter of
one percent (0.25%) per annum, on the excess, if any, of the aggregate Revolving
Credit Commitments over the sum of the Loans and letter of Credit Exposure
outstanding from time to time. All Unused Line Fees shall be payable monthly in
arrears on the first day of each month commencing September 1, 1997.
(f) Letter of Credit Fees. From and after the
Closing Date until the Termination Date, the Borrower shall pay to the Agent,
for the account of each Lender in accordance with such Lender's Pro Rata Share,
a letter of credit fee (the "Letter of Credit Fee") accruing at the rate of one
and one-quarter percent (1.25%) per annum on the average daily Undrawn Letter of
Credit Availability of all Letters of Credit. All Letter of Credit Fees shall be
payable monthly in arrears on the first day of each month commencing September
1, 1997. The Borrower shall also pay the customary letter of credit fees and
charges of he Letter of Credit Issuer for the administration, issuance and
processing of any Letters of Credit issued by the Letter of Credit Issuer.
Promptly following the Agent's receipt of any Letter of Credit Fees described
above, the Agent shall pay to each Lender its Pro Rata Share of an amount equal
to the difference between (A) the amount of the Letter of Credit Fees received
by the Agent and (B) the Letter of Credit Fees payable to the Letter of Credit
Issuer in connection with the issuance of the Letters of Credit.
(g) Administration Fee. The Borrower shall pay
to CIT an annual administration fee of $36,000 payable in advance on the Closing
Date and on each subsequent anniversary of the Closing Date; provided, however,
that a ratable portion of the most recently paid administration fee under that
certain Revolving Credit Agreement, dated as of April 12, 1995, as amended (the
"DIP Financing"), between the Debtor and CIT, shall be credited against the
first Administration Fee due hereunder.
(h) Early Termination Fee. If the Borrower
elects to terminate the Revolving Credit Commitment pursuant to Section 2.04(a)
hereof, or if an Event of Default described in subsections (g) or (h) of Section
9.01 hereof has occurred, or if the Agent elects to declare the Revolving Credit
Commitment terminated pursuant to Section 9.02(a) hereof, in view of the
impracticality and extreme difficulty of ascertaining actual damages and by
mutual agreement of the parties as to a reasonable calculation of the Lenders'
lost profits as a result thereof, the Borrower shall pay to the Agent, for the
account of each Lender in accordance with such Lender's Pro Rata Share, an early
termination fee in an amount set forth below if such termination is effective in
the period indicated:
Amount Period
------ ------
(i) 1.50% of the Revolving Credit any date prior to, and including,
Commitment the date of the first anniversary of
the Effective Date
(ii) 1.00% of the Revolving Credit any date from the date of the first
Commitment anniversary of the Effective Date
to, and including, the date of the
second anniversary of the Effective Date
Exhibit 10.14 - Page 21
(iii) 0.50% of the Revolving Credit any date from the date of the
Commitment second anniversary of the
Effective Date, to, and including,
the date of the third anniversary
of the Effective Date
(i) Fees. The Borrower shall pay to the Agent
the fees set forth in the Fee Letter at the times set forth in the Fee Letter.
All fees required to be paid to the Agent pursuant to the Fee Letter, this
Agreement and any other Related Document shall be paid to the Agent for its own
account as required therein. All fees under this Agreement, the Fee Letter and
the other Related Documents are non-refundable under all circumstances.
2.09. Use of Proceeds. The Borrower hereby covenants,
represents and warrants that the proceeds of the Loans made to it will be used
solely to fund working capital in the ordinary course of the Borrower's business
and for other general corporate purposes.
2.10. Eurodollar Rate Not Determinable; Illegality or
Impropriety. (a) In the event, and on each occasion, that on or before the day
on which the Eurodollar Rate is to be determined for a borrowing that is to
include Eurodollar Loans, the Agent has determined in good faith that, or has
been advised by the Bank that, the Eurodollar Rate cannot be determined for any
reason or the Eurodollar Rate will not adequately and fairly reflect the cost of
maintaining Eurodollar Loans or Dollar deposits in the principal amount of the
applicable Eurodollar Loans are not available in the interbank eurodollar market
where the eurodollar and foreign currency and exchange operations in respect of
the Bank's eurodollar loans are then being conducted, the Agent shall, as soon
as practicable thereafter, give written notice of such determination to the
Borrower and the other Lenders. In the event of any such determination, any
request by the Borrower for a Eurodollar Loan pursuant to Section 2.03 shall,
until the Agent shall have advised the Borrower and the other Lenders that the
circumstances giving rise to such notice no longer exist, be deemed to be a
request for a Reference Loan. Each determination by the Agent hereunder shall be
conclusive and binding absent manifest error.
(b) In the event that it shall be unlawful or
improper for any Lender to make, maintain or fund any Eurodollar Loan as
contemplated by this Agreement, then such Lender shall forthwith give notice
thereof to the Agent and the Borrower describing such illegality or impropriety
in reasonable detail. Effective immediately upon the giving of such notice, the
obligation of such Lender to make Eurodollar Loans shall be suspended for the
duration of such illegality or impropriety and, if and when such illegality or
impropriety ceases to exist, such suspension shall cease, and such Lender shall
notify the Agent and the Borrower. If any such change shall make it unlawful or
improper for any Lender to maintain any outstanding Eurodollar Loan as a
Eurodollar Loan, such Lender shall, upon the happening of such event, notify the
Agent and the Borrower, and the Borrower shall immediately, or if permitted by
applicable law, rule, regulation, order, decree, interpretation, request or
directive, no later than the date permitted thereby, convert each such
Eurodollar Loan into a Reference Loan.
2.11. Reserve Requirements; Capital Adequacy Circumstances.
(a) Notwithstanding any other provision herein, if any change in applicable law
or regulation or in the interpretation or administration thereof by any
Governmental Authority charged with the interpretation or administration thereof
(whether or not having the force of law) shall impose any tax on or change the
basis of taxation of payments to the Letter of Credit Issuer or any Lender or
any Affiliate of a Lender of the principal of or interest on any Eurodollar Loan
made by such Lender or of any amounts payable hereunder (other than taxes
imposed on the overall net income of the Letter of Credit Issuer or such Lender
or such Affiliate by the jurisdiction in which the Letter of Credit Issuer or
such Lender or such Affiliate has its principal office or by any political
subdivision or taxing authority therein), or shall
Exhibit 10.14 - Page 22
impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of or credit
extended by the Letter of Credit Issuer or such Lender or Affiliate of such
Lender (except any such reserve requirement that is reflected in Reserve
Requirements) or shall impose on the Letter of Credit Issuer or such Lender or
such Affiliate any other condition affecting this Agreement or any Eurodollar
Loans made by such Lender or any Letter of Credit, and the result of any of the
foregoing shall be to increase the cost to the Letter of Credit Issuer or such
Lender of making or maintaining any Eurodollar Loan or issuing any Letter of
Credit or to reduce the amount of any sum received or receivable by the Letter
of Credit Issuer or such Lender hereunder (whether of principal, interest or
otherwise) in respect thereof by an amount deemed by the Letter of Credit Issuer
or such Lender to be material, then the Borrower shall pay to the Letter of
Credit Issuer or such Lender such additional amount or amounts as will
compensate the Letter of Credit Issuer or such Lender for such additional costs
incurred or reduction suffered. Any amount or amounts payable by the Borrower to
the Letter of Credit Issuer or any Lender in accordance with the provisions of
this Section 2.11(a) shall be paid by the Borrower to the Letter of Credit
Issuer or such Lender within ten (10) days after receipt by the Borrower from
the Letter of Credit Issuer or such Lender of a statement setting forth in
reasonable detail the amount or amounts due and the basis for the determination
from time to time of such amount or amounts, which statement shall be conclusive
and binding absent manifest error.
(b) If the Letter of Credit Issuer or any Lender
shall have reasonably determined that the adoption of any applicable law, rule
or regulation regarding capital adequacy, or any change therein, or any change
in the interpretation or administration thereof by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Letter of Credit Issuer or by such
Lender (or any lending office of such Lender) or by any Affiliate of such
Lender, as the case may be, with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has the effect of reducing the rate of return on the
Letter of Credit Issuer's or such Lender's capital or on the capital of such
Lender's Affiliate, as the case may be, as a consequence of the Letter of Credit
Issuer's obligations or such Lender's obligations under this Agreement and the
Related Documents to a level below that which the Letter of Credit Issuer or
such Lender or such Lender's Affiliate, as the case may be, could have achieved
but for such adoption, change or compliance (taking into consideration the
Letter of Credit Issuer's or such Lender's policies or such Lender's Affiliate's
policies, as the case may be, with respect to capital adequacy) by an amount
deemed by the Letter of Credit Issuer or such Lender to be material, then, from
time to time, the Borrower shall reimburse the Letter of Credit Issuer or such
Lender for such reduction. Any amount or amounts payable by the Borrower to the
Letter of Credit Issuer or any Lender in accordance with the provisions of this
Section 2.11(b) shall be paid by the Borrower to the Letter of Credit Issuer or
such Lender within ten (10) days after receipt by the Borrower from the Letter
of Credit Issuer or such Lender of a statement setting forth (i) in reasonable
detail the amount or amounts due, (ii) the basis for the determination from time
to time of such amount or amounts, (iii) that such amount(s) have been
determined in good faith, and (iv) that the Letter of Credit Issuer or such
Lender is using reasonable efforts to collect comparable amounts from similarly
situated account parties or borrowers having similar relationships with the
Letter of Credit Issuer or such Lender under documentation which gives the
Letter of Credit Issuer or such Lender substantially the same rights with
respect to such increased costs or reductions or payments made with respect to
capital adequacy requirements or guidelines, as relevant, as set forth in this
Section 2.11, which statement shall be conclusive and binding absent manifest
error.
(c) The Letter of Credit Issuer or any Lender
may demand compensation for any increased costs or reduction in amounts received
or receivable or reduction in return on capital with respect to any period;
provided that the Letter of Credit Issuer or such Lender shall provide to the
Borrower a certificate setting forth the basis on which such demand is made. The
protection of this Section 2.11 shall be available to the Letter of Credit
Issuer or any Lender regardless
Exhibit 10.14 - Page 23
of any possible contention of the invalidity or inapplicability of the law,
rule, regulation, guideline or other change or condition which shall have
occurred or been imposed.
2.12. Indemnity. The Borrower shall indemnify each Lender
against any loss or expense that such Lender actually sustains or incurs
(including, but not limited to, reasonable fees and expenses of counsel) as a
consequence of (a) any failure by the Borrower to fulfill on the date of any
borrowing hereunder the applicable conditions set forth in Article V, (b) any
failure by the Borrower to borrow any Eurodollar Loan hereunder or to convert
any Reference Loan into a Eurodollar Loan after notice of such borrowing or
conversion has been given pursuant to Section 2.03 or Section 2.14, as the case
may be, (c) any payment, prepayment (mandatory or optional) or conversion of a
Eurodollar Loan required by any provision of this Agreement or otherwise made on
a date other than the last day of the Interest Period applicable thereto, (d)
any default in payment or prepayment of the principal amount of any Eurodollar
Loan or any part thereof or interest accrued thereon, as and when due and
payable (at the due date thereof, by notice of prepayment or otherwise), or (e)
the occurrence of any Event of Default, including, in each such case, any loss
(including, without limitation, loss of margin) or reasonable expense sustained
or incurred in liquidating or employing deposits from third parties acquired to
effect or maintain such Loan or any part thereof as a Eurodollar Loan. Such loss
or reasonable expense shall include but not be limited to an amount equal to the
excess, if any, as reasonably determined by such Lender, of (i) its costs of
obtaining the funds for the Loan being paid, prepaid or converted or not
borrowed or converted (based on the Eurodollar Rate applicable thereto) for the
period from the date of such payment, prepayment, conversion or failure to
borrow or convert the last day of the Interest Period for such Loan (or, in the
case of a failure to borrow or convert, the last day of the Interest Period for
such Loan that would have commenced on the date of such failure to borrow or
convert) over (ii) the amount of interest (as reasonably determined by such
Lender) that would be realized by such Lender in re-employing the funds so paid,
prepaid or converted or not borrowed or converted for such Interest Period.
Notwithstanding the foregoing, the Agent will use reasonable efforts to minimize
or reduce any such loss or expense resulting from the mandatory prepayments
required by clause (iii) of Section 2.04(b) of this Agreement by calculating
such loss or expense based upon the net decrease in Eurodollar Loans on a day
after giving effect to all prepayments and all Loans made on such day. A
certificate of any Lender setting forth in reasonable detail any amount or
amounts that such Lender is entitled to receive pursuant to this Section 2.12
and the basis for the determination of such amount or amounts shall be delivered
to the Borrower and shall be conclusive and binding absent manifest error.
2.13. Sharing of Setoffs. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, setoff or counterclaim against
the Borrower or other security or interest arising from, or in lieu of, such
secured claim, received by such lender under any applicable bankruptcy,
insolvency or other similar law or otherwise, or by any other means, obtain
payment (voluntary or involuntary) in respect of any Obligation as a result of
which the aggregate unpaid amount of the Obligations owing to it shall be
proportionately less than the aggregate unpaid amount of the Obligations owing
to any other Lender, it shall simultaneously purchase from such other Lender at
face value a participation in the Obligations owing to such other Lender, so
that the aggregate unpaid amount of the Obligations and participations in
Obligations held by each Lender shall be in the same proportion to the aggregate
unpaid amount of all Obligations owing to such Lender prior to such exercise of
banker's lien, setoff or counterclaim or other event was to the aggregate unpaid
amount of all Obligations outstanding prior to such exercise of banker's lien,
setoff or counterclaim or other event; provided that if any such purchase or
purchases or adjustments shall be made pursuant to this Section 2.13 and the
payment giving rise thereto shall thereafter be recovered, such purchase or
purchases or adjustments shall be rescinded to the extent of such recovery and
the purchase price or prices or adjustments restored without interest. The
Borrower expressly consents to the foregoing arrangements and agrees that any
Lender holding a participation in an Obligation deemed to have been so purchased
may exercise any and all rights of banker's lien, setoff or counterclaim with
respect to
Exhibit 10.14 - Page 24
any and all moneys owing by the Borrower to such Lender by reason thereof as
fully as if such Lender had made a loan directly to the Borrower in the amount
of such participation.
2.14. Continuation and Conversion of Loans. Subject to Section
2.03 and Section 2.10 hereof, the Borrower shall have the right, at any time,
(i) on three (3) Business Days' prior irrevocable written or telecopy notice to
the Agent, to continue any Eurodollar Loan or any portion thereof into a
subsequent Interest Period or to convert any Reference Loan or portion thereof
into a Eurodollar Loan, or (ii) on one (1) Business Day's prior irrevocable
written or telecopy notice to the Agent, to convert any Eurodollar Loan or
portion thereof into a Reference Loan, subject to the following:
(A) in the case of a conversion of a Reference Loan
or portion thereof into a Eurodollar Loan, no Event of Default
or Potential Default shall have occurred and be continuing at
the time of such continuation or conversion;
(B) in the case of a continuation or conversion of
less than all Loans, the aggregate principal amount of any
Eurodollar Loan continued or converted shall not be less than
$1,000,000 and in multiples of $500,000 if in excess thereof;
(C) each conversion shall be effected by the Lenders
by applying the proceeds of the new Loan to the Loan (or
portion thereof) being converted; and accrued interest on the
Loan (or portion thereof) being converted shall be paid by the
Borrower at the time of the conversion;
(D) if the new Loan made in respect of a conversion
shall be a Eurodollar Loan, the first Interest Period with
respect thereto shall commence on the date of conversion;
(E) no portion of any Loan shall be continued or
converted to a Eurodollar Loan with an interest period ending
later than the Termination Date; and
(F) if any conversion of a Eurodollar Loan shall be
effected on a day other than the last day of an Interest
Period, the Borrower shall reimburse each Lender on demand for
any loss incurred or to be incurred by it (including, but not
limited to, reasonable fees and expenses of counsel) in the
reemployment of the funds released by such conversion as
provided in Section 2.12 hereof.
In the event that the Borrower shall not give notice to continue any Eurodollar
Loan into a subsequent Interest Period, such Loan (unless repaid) shall
automatically become a Reference Loan at the expiration of the then current
Interest Period.
2.15. Taxes. (a) All payments made by the Borrower hereunder,
under the Notes or under any Loan Document will be made without setoff,
counterclaim, deduction or other defense. All such payments shall be made free
and clear of and without deduction for any present or future income, franchise,
sales, use, excise, stamp or other taxes, levies, imposts, deductions, charges,
fees, withholdings, restrictions or conditions of any nature now or hereafter
imposed, levied, collected, withheld or assessed by any jurisdiction (whether
pursuant to United States Federal, state, local or foreign law) or by any
political subdivision or taxing authority thereof or therein, and all interest,
penalties or similar liabilities, excluding taxes on or measured by the overall
net income of the Lenders or the Letter of Credit Issuer (such nonexcluded taxes
are hereinafter collectively referred to as the "Taxes"). If the Borrower shall
be required by law to deduct or to withhold any Taxes from or in respect of any
amount payable hereunder, (i) the amount so payable shall be increased to the
extent necessary so that after making all required deductions and withholdings
(including Taxes on amounts
Exhibit 10.14 - Page 25
payable to the Lenders or the Letter of Credit Issuer pursuant to this sentence)
the Lenders or the Letter of Credit Issuer receive an amount equal to the sum
they would have received had no such deductions or withholdings been made, (ii)
the Borrower shall make such deductions or withholdings, and (iii) the Borrower
shall pay the full amount deducted or withheld to the relevant taxation
authority in accordance with applicable law. Whenever any Taxes are payable by
the Borrower, as promptly as possible thereafter, the Borrower shall send the
Lenders, the Letter of Credit Issuer and the Agent an official receipt showing
payment. In addition, the Borrower agrees to pay any present or future taxes,
charges or similar levies which arise from any payment made hereunder or from
the execution, delivery, performance, recordation or filing of, or otherwise
with respect to, this Agreement, the Notes, the Letters of Credit or any other
Loan Document (hereinafter referred to as "Other Taxes").
(b) The Borrower will indemnify the Lenders and
the Letter of Credit Issuer for the amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any jurisdiction on
amounts payable under this Section 2.15) paid by any lender or the Letter of
Credit Issuer and any liability (including penalties, interest and expenses for
nonpayment, late payment or otherwise) arising therefrom or with respect
thereto, whether or not such Taxes or Other Taxes were correctly or legally
asserted. This indemnification shall be paid within 30 days from the date on
which such Lender or such Letter of Credit Issuer makes written demand.
(c) Each Lender which is a foreign person (i.e.,
a Person other than a United States Person for United States Federal income tax
purposes) hereby agrees that:
(i) it shall, no later than the Closing
Date (or, in the case of a Lender which becomes a party hereto pursuant to
Section 10.13 hereof after the Closing Date, the date upon which such Lender
becomes a party hereto) deliver to the Borrower through the Agent:
(A) two accurate and complete
signed originals of Form 4224, or
(B) two accurate and complete
signed originals of Form 1001,
in each case indicating that such Lender is on the date of delivery thereof
entitled to receive payments of principal, interest and fees for the account of
its lending installation under this Agreement free from withholding of United
States Federal income tax;
(ii) if at any time such Lender changes its
lending installation or installations or selects an additional lending
installation it shall, at the same time or reasonably promptly thereafter,
deliver to the Borrower through the Agent in replacement for, or in addition to,
the forms previously delivered by it hereunder;
(A) if such changed or
additional lending installation is located in the United States, two accurate
and complete signed originals of Form 4224, or
(B) otherwise, two accurate and
complete signed originals of Form 1001, in each case indicating that such lender
is on the date of delivery thereof entitled to receive payments of principal,
interest and fees for the account of such changed or additional lending
installation under this Agreement free from withholding of United States Federal
income tax; and
(iii) it shall, promptly upon the Borrower's
reasonable request to that effect, deliver to the Borrower such other forms or
similar documentation as may be required from
Exhibit 10.14 - Page 26
time to time by any applicable law, treaty, rule or regulation in order to
establish such Lender's tax status for withholding purposes.
(d) If the Borrower fails to perform its
obligations under this Section 2.15, the Borrower shall indemnify the Lenders
and the Letter of Credit Issuer for any incremental taxes, interest or penalties
that may become payable as a result of any such failure.
ARTICLE III
LETTERS OF CREDIT
-----------------
3.01. Letters of Credit. (a) General. In order to assist the
Borrower in establishing or opening documentary and standby letters of credit,
which shall not have expiration dates that exceed one year from the date of
issuance (the "Letters of Credit") with the Letter of Credit Issuer, the
Borrower has requested CIT to join in the applications for such Letters of
Credit, and/or guarantee payment or performance of such Letters of Credit and
any drafts or acceptances thereunder through the issuance of a Letter of Credit
Guaranty, thereby lending CIT's credit to the Borrower, and CIT has agreed to do
so. These arrangements shall be handled by CIT subject to the terms and
conditions set forth below. CIT shall have no obligation to arrange for the
issuance of Letters of Credit on or after the Termination Date or which, when
added to the aggregate amount of all outstanding and contemporaneous Loans and
the Letter of Credit Exposure at such time, would cause the amount of all Loans
and the Letter of Credit Exposure at any time to exceed the Current Commitment
at such time. In addition, CIT shall not be required to be the issuer of any
Letter of Credit. The Letter of Credit Issuer shall be a bank mutually
acceptable to CIT and the Borrower. The Borrower will be the account party for
any application for a Letter of Credit, which shall be substantially in the form
of Exhibit C hereto or such other form as may from time to time be approved by
the Letter of Credit Issuer and CIT, and shall be duly completed in a manner
acceptable to CIT, together with such other certificates, documents and other
papers and information as the Letter of Credit Issuer or CIT may request (the
"Letter of Credit Application").
(i) The aggregate Letter of Credit
Exposure shall not exceed $15 million. In addition, the amount, purpose and
extent of the letters of credit and changes or modifications thereof by the
Borrower and/or the Letter of Credit Issuer of the terms and conditions thereof
shall in all respects be subject to the prior approval of CIT in the exercise of
its reasonable discretion; provided, however, that (x) the expiry date of all
Letters of Credit shall be no later than 15 days prior to the Termination Date
unless on or prior to 15 days prior to the Termination Date such Letters of
Credit shall be cash collateralized in an amount equal to at least 105% of the
Stated Amount of such Letters of Credit, (y) the Letters of Credit and all
documentation in connection therewith shall be in form and substance reasonably
satisfactory to CIT and the Letter of Credit Issuer and (z) aggregate Letter of
Credit Exposure in excess of $6,500,000 resulting from the issuance of Letters
of Credit for the benefit of domestic trade creditors in connection with the
purchase of Inventory by the Borrower shall not be permitted.
(ii) The Agent shall have the right,
without notice to the Borrower, to charge the Borrower's Account with the amount
of any and all indebtedness, liability or obligation of any kind (including
indemnification for breakage costs, capital adequacy and reserve requirement
charges) incurred by the Agent, CIT or the Lenders under the Letter of Credit
Guaranty at the earlier of (x) payment by CIT or the Lenders under the Letter of
Credit Guaranty, or (y) with respect to any Letter of Credit which is not cash
collateralized as provided in this Agreement, the occurrence of an Event of
Default. Any amount charged to the Borrower's Account shall be deemed a Loan
hereunder made by the Lenders to the Borrower, funded by the Agent on behalf of
the lenders and subject to subsections 2.03(e) and (f). Any charges, fees,
commissions, costs and expenses charged to CIT for the account of the Borrower
by the Letter of Credit Issuer in connection with or
Exhibit 10.14 - Page 27
arising out of Letters of Credit issued pursuant to this Agreement or out of
transactions relating thereto will be charged to the Borrower's Account in full
when charged to or paid by CIT and any such charges by CIT to the Borrower's
Account shall be conclusive and binding on the Borrower and the Lenders absent
manifest error. Each of the Lenders and the Borrower agree that the Agent shall
have the right to make such charges regardless of whether any Event of Default
or Potential Default shall have occurred and be continuing or whether any of the
conditions precedent in Section 5.02 have been satisfied.
(iii) The Borrower agrees to unconditionally
indemnify the Agent, CIT and each Lender and to hold the Agent, CIT and each
Lender harmless from any and all loss, claim or liability (including, but not
limited to, reasonable fees and expenses of counsel) incurred by the Agent, CIT
or any such Lender arising from any transactions or occurrences relating to
Letters of Credit established or opened for the Borrower's account and any
drafts or acceptance thereunder, and all Obligations thereunder, including any
such loss or claim due to any action taken by the Letter of Credit Issuer, other
than for any such loss, claim or liability arising out of the gross negligence
or willful misconduct of the Agent, CIT or any Lender as determined by a final
judgment of a court of competent jurisdiction. The Borrower further agrees to
hold the Agent, CIT and each Lender harmless from any errors or omissions,
negligence or misconduct by the Letter of Credit Issuer. The Borrower's
unconditional obligation to the Agent, CIT and each Lender hereunder shall not
be modified or diminished for any reason or in any manner whatsoever, other than
as a result of the Agent's, CIT's or such Lender's gross negligence or willful
misconduct as determined by a final judgment of a court of competent
jurisdiction. The Borrower agrees that any charges incurred by CIT for the
Borrower's account by the Letter of Credit Issuer shall be conclusive and
binding on the Borrower absent manifest error and may be charged to the
Borrower's Account.
(iv) None of the Agent, CIT, the Letter of
Credit Issuer or any of the Lenders shall be responsible for the existence,
character, quality, quantity, condition, packing, value or delivery of the goods
purporting to be represented by any documents; any difference or variation in
the character, quality, quantity, condition, packing, value or delivery of the
goods from that expressed in the documents; the validity, sufficiency or
genuineness of any documents or of any endorsements thereof even if such
documents should in fact prove to be in any or all respects invalid,
insufficient, fraudulent or forged; the time, place, manner or order in which
shipment is made; partial or incomplete shipments, or failure or omission to
ship any or all of the goods referred to in the Letters of Credit or documents;
and deviation from instructions; delay, default, or fraud by the shipper and/or
anyone else in connection with any such goods or the shipping thereof; or any
breach of contract between the shipper or vendors and the Borrower. Furthermore,
without being limited by the foregoing, none of the Agent, CIT, the Letter of
Credit Issuer or any of the Lenders shall be responsible for any act or omission
with respect to or in connection with any goods covered by Letters of Credit.
(v) The Borrower agrees that any action
taken by the Agent, CIT or any Lender, if taken in good faith, and any action
taken by the Letter of Credit Issuer, under or in connection with the Letters of
Credit, the guarantees, the drafts or acceptances, or the goods purported to be
represented by any documents, shall be binding on the Borrower (with respect to
the Letter of Credit Issuer, the Agent, CIT and the Lenders) and shall not put
the Agent, CIT or the Lenders in any resulting liability to the Borrower. In
furtherance thereof, CIT shall have the full right and authority to clear and
resolve any questions of non-compliance of documents; to give any instructions
as to acceptance or rejection of any documents or goods; to execute any and all
steamship or airways guaranties (and applications therefore), indemnities or
delivery orders; to grant any extensions of the maturity of, time of payment
for, or time of presentation of, any drafts, acceptances, or documents; and to
agree to any amendments, renewals, extensions, modifications, changes or
cancellations of any of the terms or conditions of any of the applications,
Letters of Credit, drafts or acceptances; all in CIT's sole name, and the Letter
of Credit Issuer shall be entitled to comply with and
Exhibit 10.14 - Page 28
honor any and all such documents or instruments executed by or received solely
from CIT, all without any notice to or any consent from the Borrower.
(vi) Without CIT's express consent and
endorsement in writing, the Borrower agrees: (x) not to execute any applications
for steamship or airway guaranties, indemnities or delivery orders; to grant any
extensions of the maturity of, time of payment for, or time of presentation of,
any drafts, acceptances or documents; or to agree to any amendments, renewals,
extensions, modifications, changes or cancellations of any of the terms or
conditions of any of the applications, Letters of Credit, drafts or acceptances;
and (y) after the occurrence of an Event of Default which is not cured within
any applicable grace period, if any, or waived by the Agent, not to (A) clear
and resolve any questions of non-compliance of documents, or (B) give any
instructions as to acceptances or rejection of any documents or goods.
(vii) The Borrower agrees that any necessary
and material import, export or other license or certificates for the import or
handling of Inventory will have been promptly procured; all foreign and domestic
governmental laws and regulations in regard to the shipment and importation of
Inventory or the financing thereof will have been promptly and fully complied
with, and any certificates in that regard that CIT may at any time reasonably
request will be promptly furnished. In this connection, the Borrower represents
and warrants that all shipments made under any such Letters of Credit are in
accordance with the laws and regulations of the countries in which the shipments
originate and terminate, and are not prohibited by any such laws and
regulations. As between the Borrower, on the one hand, and the Agent, CIT, the
Lenders and the Letter of Credit Issuer, on the other hand, the Borrower assumes
all risk, liability and responsibility for, and agrees to pay and discharge, all
present and future local, state, federal or foreign taxes, duties, or levies. As
between the Borrower, on the one hand, and the Agent, CIT, the Lenders and the
Letter of Credit Issuer, on the other hand, any embargo, restriction, laws,
customs or regulations of any country, state, city, or other political
subdivision, where such Inventory is or may be located, or wherein payments are
to be made, or wherein drafts may be drawn, negotiated, accepted, or paid, shall
be solely the Borrower's risk, liability and responsibility.
(viii) Upon any payments made to the Letter
of Credit Issuer under the Letter of Credit Guaranty, CIT or the Lenders, as the
case may be, shall, without prejudice to its rights under this Agreement
(including that such unreimbursed amounts shall constitute Loans hereunder),
acquire by subrogation, any rights, remedies, duties or obligations granted or
undertaken by the Borrower to the Letter of Credit Issuer in any application for
Letters of Credit, any standing agreement relating to Letters of Credit or
otherwise, all of which shall be deemed to have been granted to the Agent and
apply in all respects to the Agent and shall be in addition to any rights,
remedies, duties or obligations contained herein.
(ix) In the event that the Borrower is
required to provide cash collateral for any Letter of Credit, the Borrower shall
deposit such cash collateral in the Letter of Credit Cash Collateral Account,
which cash collateral shall be held in the Letter of Credit Cash Collateral
Account until all Obligations have been paid in full in cash; provided, that,
when the Borrower elects, and is not required to provide cash collateral for a
Letter of Credit, the cash collateral for such Letter of Credit shall be
returned to the Borrower if at such time (A) an Event of Default or Potential
Default has not occurred and is not continuing and (B) no amounts are available
to be drawn on such Letter of Credit and all Unreimbursed Draws have been paid
in full.
(b) Request for Issuance. The Borrower may from
time to time, upon notice (an "L/C Notice") not later than 12:00 noon, New York
City time, at least three Business Days in advance, request CIT to assist the
Borrower in establishing or opening a Letter of Credit by delivering to the
Agent, with a copy to the Letter of Credit Issuer, a Letter of Credit
Application, together with any necessary related documents. CIT shall not
provide support, pursuant to the Letter
Exhibit 10.14 - Page 29
of Credit Guaranty, if the Agent shall have received written notice from the
Majority Lenders on the Business Day immediately preceding the proposed issuance
day for such Letter of Credit that one or more of the conditions precedent in
Section 5.02 will not have been satisfied on such date, and neither CIT nor the
Agent shall otherwise be required to determine that, or take notice whether, the
conditions precedent set forth in Section 5.02 have been satisfied.
(c) Existing Letters of Credit. Schedule 3.01(
c) hereto contains a description of all letters of credit issued pursuant to the
DIP Financing and outstanding on the Closing Date. Each such letter of credit,
including any extension or renewal thereof (each, as amended from time to time
in accordance with the terms thereof and hereof, an "Existing Letter of Credit")
shall constitute a "Letter of Credit" for all purposes of this Agreement, issued
on the Closing Date.
3.02. Participations. (a) Purchase of Participations.
Immediately upon the issuance by the Letter of Credit Issuer of any Letter of
Credit in accordance with the procedures set forth in Section 3.01, each Lender
(other than CIT) shall be deemed to have irrevocably and unconditionally
purchased and received from CIT, without recourse or warranty, an undivided
interest and participation, to the extent of such Lender's Pro Rata Share, in
all obligations of CIT with respect to such Letter of Credit (including, without
limitation, all Undrawn Letter of Credit Availability and Reimbursement
Obligations of the Borrower with respect thereto pursuant to the Letter of
Credit Guaranty or otherwise).
(b) Sharing of Letter of Credit Payments.
In the event that CIT makes any payment in respect of the Letter of Credit
Guaranty and the Borrower shall not have repaid such amount to the Agent for the
account of CIT, the Agent shall charge the Borrower's Account in the amount of
the Reimbursement Obligation, in accordance with Section 3.01(a)(ii).
(c) Obligations Irrevocable. The obligations of
a Lender to make payments to the Agent for the account of the Agent or CIT with
respect to a Letter of Credit shall be irrevocable, not subject to any
qualification or exception whatsoever and shall be made in accordance with, but
not subject to, the terms and conditions of this Agreement under all
circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability
of this Agreement or any of the other Related Documents;
(ii) the existence of any claim, setoff,
defense or other right which the Borrower may have at any time against a
beneficiary named in a Letter of Credit or any transferee of any Letter of
Credit (or any Person for whom any such transferee may be acting), the Agent,
Letter of Credit Issuer, any Lender, or any other Person, whether in connection
with this Agreement, any Letter of Credit, the transactions contemplated herein
or any unrelated transactions (including any underlying transactions between the
Borrower or any other party and the beneficiary named in any Letter of Credit);
(iii) any draft, certificate or any other
document presented under the 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;
(iv) the surrender or impairment of any
security for the performance or observance of any of the terms of any of the
Related Documents;
(v) any failure by the Agent to provide
any notices required pursuant to this Agreement relating to the Letters of
Credit; or
Exhibit 10.14 - Page 30
(vi) the occurrence of any Event of Default
or Potential Default.
ARTICLE IV
BORROWING BASE
--------------
4.01. Condition of Lending and Assisting in Establishing or
Opening Letters of Credit. CIT and the other Lenders shall have no obligation to
make a Loan or assist in establishing or opening a Letter of Credit to the
extent that the aggregate unpaid principal amount of the Loans plus the Letter
of Credit Exposure exceeds, or after giving effect to a requested Credit
Extension would exceed, the Current Commitment at such time.
4.02. Mandatory Prepayment. Concurrently with the delivery of
any Borrowing Base Certificate, the Borrower shall give notice to the Agent of
any mandatory prepayment pursuant to Section 2.04(b)(i), which notice shall
specify a prepayment date no later than the earlier of the date on which such
Borrowing Base Certificate is given and the date on which such Borrowing Base
Certificate is required to be provided to the Lenders.
4.03. Rights and Obligations Unconditional. Without limitation
of any other provision of this Agreement, the rights of the Agent, CIT and the
Lenders and the obligations of the Borrower under this Article IV are absolute
and unconditional, and the Agent, CIT and the Lenders shall not be deemed to
have waived the condition set forth in Section 4.01 hereof or their right to
payment in accordance with Section 4.02 hereof in any circumstance whatever,
including but not limited to circumstances wherein the Agent or the Lenders
(knowingly or otherwise) make an advance hereunder in excess of the Borrowing
Base.
4.04. Borrowing Base Certificate. (a) By 12:00 noon, New York
City time (i) seven (7) Business Days after the Friday of each week and (ii)
thirty (30) days after the end of each fiscal month (and on any other date on
which the Agent reasonably requests), the Borrower shall furnish to the Agent a
certificate ("Borrowing Base Certificate") substantially in the form attached
hereto as Exhibit D, certified as true and correct by a Designated Financial
Officer, setting forth the Borrowing Base and the other information required
therein as of the Borrower's close of business on the Saturday of the preceding
week (in the case of the weekly Borrowing Base Certificates), or as of
Borrower's close of business on the last day of each fiscal month (in the case
of subsequent monthly Borrowing Base Certificates), in each case together with
such other information with respect to the Inventory of the Borrower as the
Agent may reasonably request. The weekly Borrowing Base Certificate may be
prepared based upon a good faith estimate by the Borrower of its Inventory.
(b) In the event of any dispute about the
eligibility of any asset for inclusion in the Borrowing Base or the valuation
thereof, the Agent's good faith judgment shall control.
(c) The Borrowing Base set forth in a Borrowing
Base Certificate shall be effective from and including the date such Borrowing
Base Certificate is duly received by the Agent to but not including the date on
which a subsequent Borrowing Base Certificate is duly received by the Agent,
unless the Agent disputes the eligibility of any asset for inclusion in the
Borrowing Base or the valuation thereof by notice of such dispute to the
Borrower, in which case the value of such asset shall, at the discretion of the
Borrower, either not be included in the Borrowing Base or be included in the
Borrowing Base with a value reasonably acceptable to the Agent.
(d) Each Borrowing Base Certificate shall be
accompanied by backup schedules showing the derivation thereof and containing
such detail and such other and further information as the Agent may reasonably
request from time to time.
Exhibit 10.14 - Page 31
4.05. General Provisions. Notwithstanding anything to the
contrary in this Article IV, in no event shall any single element of value or
asset be counted twice in determining the Borrowing Base.
ARTICLE V
CONDITIONS OF EFFECTIVENESS, LETTER OF CREDIT
ISSUANCE AND LENDING
---------------------------------------------
5.01. Conditions Precedent to Effectiveness. This Agreement
shall become effective as of the Business Day when each of the following
conditions precedent shall have been satisfied and the obligation of any Lender
to make the initial Loan hereunder or the obligation of CIT or any Lender to
assist the Borrower in obtaining the issuance of the initial Letter of Credit
hereunder shall be subject to the satisfaction of the following conditions
precedent:
(a) Payment of Fees, Etc. The Borrower shall
have paid all fees, costs, expenses and taxes then payable by the Borrower
including, without limitation, those due and payable pursuant to Sections 2.08
and 10.06 hereof. The Borrower shall have paid to counsel to the Agent all fees
and other client charges due to such counsel on the Closing Date.
(b) Representations and Warranties; No Event of
Default. The representations and warranties contained in Article VI of this
Agreement and in each other Loan Document and certificate or other writing
delivered to the Lenders or the Letter of Credit Issuer pursuant hereto or
thereto or prior to the Closing Date shall be correct on and as of the Closing
Date as though made on and as of such date; and no Potential Default or Event of
Default shall have occurred and be continuing on the Closing Date or would
result from this Agreement becoming effective in accordance with its terms.
(c) Legality. The making of the initial Loans
and the issuance of the initial Letter of Credit shall not contravene any law,
rule or regulation applicable to CIT, the Lenders or the Letter of Credit
Issuer.
(d) Delivery of Documents. The Agent shall have
received on or before the Closing Date the following, each in form and substance
satisfactory to the Agent in all respects and, unless indicated otherwise, dated
the Closing Date:
(i) a Note payable to the order of each
Lender, duly executed by the Borrower;
(ii) the Security Agreement, duly executed
by the Borrower together with an Assignment for Security (Trademarks) duly
executed by the Borrower;
(iii) acknowledgment copies of appropriate
financing statements on Form UCC-1, duly executed by the Borrower and duly filed
in such office or offices as may be necessary or, in the opinion of the Agent,
desirable to perfect the security interests purported to be created by the
Security Documents and evidence that all necessary filing fees and taxes or
other expenses related to such filings have been paid in full;
(iv) certified copies of requests for copies
or information on Form UCC-11, listing all effective financing statements which
name as debtor the Borrower, tax liens and judgment liens and which are filed in
the offices referred to in paragraph (iii) above, together with copies of such
financing statements, none of which, except as otherwise agreed to in writing by
the Agent, shall cover any of the Collateral;
Exhibit 10.14 - Page 32
(v) the Mortgages encumbering each
Collateral Property and Lease identified on Schedule 5.01(d)(v) hereto (the
"Initial Mortgaged Properties"), duly executed and delivered by the Borrower in
recordable form (in such number of copies as the Agent shall have requested),
together with a current survey of the Initial Mortgaged Properties and all
improvements thereon and reflecting all easements and encumbrances of record, a
report of title, a policy of title insurance on forms of and issued by a title
company satisfactory to the Agent (the "Title Companies"), subject only to such
exceptions as are satisfactory to the Agent and, to the extent necessary under
applicable law, Uniform Commercial Code financing statements covering fixtures,
in each case appropriately completed and duly executed, for filing in the
appropriate county land office and evidence that the Borrower shall have paid to
the Title Companies all expenses in connection with the issuance of such survey,
title reports and policy of title insurance in addition shall have paid to the
Title Companies an amount equal to the recording and stamp taxes (including
mortgage recording taxes) payable in connection with recording the Mortgages and
other Security Documents in the appropriate county land offices;
(vi) a copy of the resolutions adopted by
the Board of Directors of the Borrower and its Subsidiaries, certified as of the
Closing Date by authorized officers thereof, authorizing (A) in the case of the
Borrower, the borrowings hereunder and the transactions contemplated by the Loan
Documents to which the Borrower is or will be a party, and (B) the execution,
delivery and performance by such Person of each Loan Document and the execution
and delivery of the other documents to be delivered by such Person in connection
therewith;
(vii) a certificate of an authorized
officer of the Borrower and its Subsidiaries, certifying the names and true
signatures of the officers of such Person authorized to sign each Loan Document
to which such Person is or will be a party and the other documents to be
executed and delivered by such Person in connection therewith, together with
evidence of the incumbency of such authorized officers;
(viii) a certificate, dated as of a date not
more than 10 Business Days prior to the Closing Date, of the appropriate
official(s) of the states of incorporation and each state of foreign
qualification of the Borrower and its Subsidiaries, certifying as to the
subsistence in good standing of, and the payment of taxes by, such Person in
such states and listing all charter documents of such Person on file with such
official(s), together with confirmation by telephone or telegram (where
available) on the Closing Date from such official(s) as to such matters;
(ix) a copy of the certificates of
incorporation of the Borrower and its Subsidiaries certified as of a date not
more than 10 days prior to the Closing Date by the appropriate official(s) of
the state of incorporation of each such Person and as of the Closing Date by an
authorized officer of each such Person;
(x) a copy of the by-laws of the
Borrower and its Subsidiaries, certified as of the Closing Date by an authorized
officer of each such Person;
(xi) a favorable opinion of Weil, Gotshal
& ▇▇▇▇▇▇, LLP, counsel to the Borrower and its Subsidiaries, and opinions from
special Louisiana counsel to the Borrower, each in form and substance
satisfactory to the Agent and as to such other matters as the Agent may
reasonably request;
(xii) a certificate of the Designated
Financial Officer of the Borrower, certifying as to the matters set forth in
subsection (b) of this Section 5.01;
(xiii) a copy of the financial statements
of the Borrower referred to in Section 6.07 hereof together with a certificate
of the Designated Financial Officer of the Borrower
Exhibit 10.14 - Page 33
setting forth all existing Indebtedness, guarantees, pending or threatened
litigation or claims and other contingent liabilities of the Borrower and its
Subsidiaries;
(xiv) a Borrowing Base Certificate, current
as of the close of business on the Friday immediately preceding the Closing
Date, certified by the Designated Financial Officer of the Borrower;
(xv) a certificate of insurance evidencing
insurance on the property of the Borrower as is required by Section 7.07 of this
Agreement, naming the Agent as additional insured and loss payee, using a long
form loss payee endorsement, for all insurance maintained by the Borrower and
its Subsidiaries;
(xvi) a certificate of the Designated
Financial Officer of the Borrower setting forth in reasonable detail the
calculations required to establish whether the Borrower is in compliance with
the requirements of each of the financial covenants set forth in Sections 8.12
and 8.16 hereof;
(xvii) a certificate of an authorized
officer of the Borrower certifying the names and true signatures of those
officers of the Borrower that are authorized to provide Notices of Borrowing and
all other notices under this Agreement and the Loan Documents;
(xviii) a certificate of the Designated
Financial Officer of the Borrower certifying that as of the Closing Date, after
giving effect to all payments required to be made by the Plan of Reorganization
on the Effective Date, (A) the Borrower shall have available a positive cash
balance, (B) all other liabilities of the Borrower are current together with
such evidence as the Agent may reasonably request, and (C) no Loans are
outstanding, provided that Letters of Credit may be outstanding;
(xix) a certificate of the Designated
Financial Officer of the Borrower certifying that as of the date which is one
month prior to the Effective Date the Cumulative FIFO EBITDA for the twelve
month period ending on such date was not less than ($6,200,000) together with
calculations demonstrating compliance with this provision;
(xx) a satisfactory legal description of the
Initial Mortgaged Properties;
(xxi)a certificate of the Designated
Financial Officer of the Borrower certifying (A) that attached thereto is a true
and correct copy of each Lease constituting an Initial Mortgaged Property, (B)
whether each Lease has been assumed in accordance with the Plan of
Reorganization, and (C) a rent roll in respect of each space lease or sublease
under which the Borrower or any of its Subsidiaries is the lessor, if any;
(xxii) a Subsidiary Guaranty, duly executed
by each Subsidiary of the Borrower;
(xxiii) a Pledge Agreement, duly executed by
the Borrower, together with the original stock certificates representing all of
the capital stock of the Subsidiaries of the Borrower, accompanied by undated
stock powers executed in blank, all in form and substance satisfactory to the
Agent in all respects; and
(xxiv) such other agreements, instruments,
approvals, opinions and other documents as the Agent may reasonably request.
Exhibit 10.14 - Page 34
(e) Proceedings; Receipt of Documents. All
proceedings in connection with the transactions contemplated by this Agreement
and the Related Documents and all documents incidental thereto, shall be
satisfactory to the Agent and its special counsel, and the Agent and such
special counsel shall have received all such information and such counterpart
originals or certified or other copies of such documents, in form and substance
reasonably satisfactory to the Agent, as the Agent or such special counsel may
reasonably request.
(f) Plan of Reorganization. Subject only to
the initial extension of credit hereunder, all conditions precedent to the
Effective Date and consummation of the Plan of Reorganization shall have been
satisfied. The Reorganization shall have concurrently become effective in
accordance with the Confirmation Order, the Plan of Reorganization and this
Agreement. All parties to the Reorganization shall be ready, willing and able to
consummate the Reorganization to the extent of the transactions required to
occur after the Effective Time.
(g) Reorganization. Subject only to the initial
extension of credit hereunder, the Borrower shall have consummated all
transactions contemplated by the Reorganization to occur on or prior to the
Effective Time.
(h) Adequate Protection Payments. The Borrower
shall have paid or caused to be paid all amounts accrued and unpaid through and
including the Effective Time with respect to any adequate protection provided
under the Bankruptcy Code in accordance with the terms of, and the extent
required by, the Plan of Reorganization.
(i) Performance of Agreements. The Borrower and
its Subsidiaries shall have performed in all material respects all agreements
that the Plan of Reorganization, this Agreement and the other Loan Documents
provide shall be performed by them on or before the Effective Time.
(j) Confirmation Order. The Confirmation Order
shall have become a Final Order and the Agent shall have received a copy thereof
certified by a clerk of the Bankruptcy Court as true, complete and correct and
such order shall be in full force and effect.
(k) Default under Related Documents. The
consummation of the Reorganization has not and will not result in an Event of
Default or a Potential Default.
(l) Governmental Approval. All necessary
governmental and third party approvals required to be obtained by the Borrower
or any of its Subsidiaries, in connection with the Reorganization, have been
obtained and remain in effect, and all applicable waiting periods have expired
without any action being taken by any competent authority which restrains,
prevents, impedes, delays or imposes adverse conditions upon, the consummation
of the Reorganization.
(m) Consummation of the Reorganization.
There exists no judgment, order, injunction or other restraint prohibiting or in
the judgment of the Agent imposing materially adverse condition upon the
consummation of the Reorganization.
(n) Aspects of the Reorganization. The Agent
shall be satisfied, in its sole judgment, with all tax aspects of the
Reorganization, the corporate, capital, legal and management structure of the
Borrower and its Subsidiaries immediately after the Reorganization, all
shareholder agreements and all financing relating to the Reorganization, and
shall be satisfied, in its sole judgment, with the nature and status of all
contractual obligations, securities, labor, tax, ERISA, employee benefit,
environmental, health and safety matters, in each case, involving or affecting
the Borrower or any of its Subsidiaries.
Exhibit 10.14 - Page 35
(o) Cash Management System. The cash management
system of the Borrower shall be satisfactory to the Agent.
(p) Audit. The Agent shall be satisfied (in its
sole discretion) with the results of an audit of the Inventory that has been
conducted by an appraisal firm which is satisfactory to the Agent, in its sole
and absolute discretion, and the Borrower shall have paid all fees and expenses
payable in connection with such audit.
(q) Lien Priority. The Lien in favor of the
Agent pursuant to the Related Documents shall be a valid and perfected first
priority Lien prior to all other Liens on the Collateral, except for Permitted
Liens on any Collateral.
(r) Compliance. The Agent shall have received
evidence reasonably satisfactory to the Agent of the Borrower's compliance with
all environmental Laws, ERISA, tax and labor matters.
(s) Legal Restraints/Litigation. On the Closing
Date, there shall be no (1) litigation, investigation or proceeding (judicial or
administrative) pending or to the best of the Borrower's knowledge after
reasonable inquiry, threatened against the Borrower, or its Subsidiaries, or
their assets, by any agency, division or department of any county, city, state
or federal government challenging the Reorganization, (2) injunction, writ or
restraining order restraining or prohibiting the transactions contemplated
pursuant to the Reorganization or the consummation of the financing arrangements
contemplated by this Agreement, (3) suit, action, investigation or proceeding
(judicial or administrative) pending or, to the knowledge of the Borrower,
threatened against the Borrower, or its Subsidiaries or their assets, which, in
the opinion of the Agent, if adversely determined could have a Material Adverse
Effect, or (4) litigation, investigation or proceeding (judicial or
administrative) pending or, to the best of the Borrower's knowledge after
reasonable inquiry, threatened with respect to the Fee Letter or this Agreement.
(t) Phase I Environmental Site Assessment. The
Agent shall be satisfied (in its sole and absolute discretion) with the results
and scope of a Phase I Environmental Site Assessment of the Westview Facility
conducted by a nationally recognized firm of licensed engineers which is
acceptable to the Agent it its sole and absolute discretion, based upon and in
accordance with ASTM Standard Practice for Environmental Site Assessments E
1527, which assessment shall include, without limitation, a physical onsite
inspection by such firm, as well as a historical review of the use of the
Westview Facility and of the business and operations of the Borrower (including
any former subsidiaries or divisions of the Borrower or any of its Subsidiaries
which have been disposed of prior to the close of such assessment), and the
Borrower shall have paid all fees and expenses payable in connection with such
assessment.
(u) Westview Appraisal. The Agent shall be
satisfied (in its sole and absolute discretion) with the results of an appraisal
of the Westview Facility by an appraisal firm which is satisfactory to the Agent
in its sole and absolute discretion, and the Borrower shall have paid all fees
and expenses payable in connection with such audit.
(v) Field Examination. The Agent shall be
satisfied with the results of a field examination of the Borrower's assets,
business and operations.
5.02. Conditions Precedent to Loans and Letters of Credit. In
addition to the requirements of Section 5.01, the obligation of each Lender to
make any Loan and the obligation of CIT or any Lender to assist the Borrower in
obtaining the issuance of any Letter of Credit is subject to the fulfillment, in
a manner satisfactory to the Agent, of each of the following conditions
precedent:
Exhibit 10.14 - Page 36
(a) Payment of Fees, Etc. The Borrower shall
have paid all fees, costs, expenses and taxes then payable by the Borrower
pursuant to Sections 2.08 and 10.06 hereof.
(b) Representations and Warranties; No Event of
Default. The following statements shall be true, and the submission by the
Borrower to the Agent of a Notice of Borrowing with respect to a Loan and the
Borrower's acceptance of the proceeds of such Loan, or the submission by the
Borrower to the Agent of an L/C Notice with respect to a Letter of Credit and
the issuance of such Letter of Credit shall be deemed to be a representation and
warranty by the Borrower on the date of such Loan and the date of the issuance
of such Letter of Credit that, (i) the representations and warranties contained
in Article VI of this Agreement and in each other Loan Document and certificate
or other writing delivered to the Lenders pursuant hereto on or prior to the
date of such Loan or Letter of Credit are correct on and as of such date as
though made on and as of such date (except for representations and warranties
which relate to a specific date); and (ii) no Potential Default or Event of
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 the Letter of Credit to be
issued on such date.
(c) Legality. The making of such Loan or the
issuance of such Letter of Credit shall not contravene any law, rule or
regulation applicable to CIT, the Agent, the Lenders or the Letter of Credit
Issuer.
(d) Borrowing Notice. The Agent shall have
received a Notice of Borrowing pursuant to Section 2.03 hereof no later than
12:00 noon (New York City time) three Business Days prior to the date of the
proposed borrowing with respect to a Eurodollar Loan or on the date of a
proposed borrowing of a Reference Loan or an L/C Notice and a Letter of Credit
Application pursuant to Section 3.01 hereof not later than 12:00 noon (New York
City time) three Business Days prior to the proposed date of issuance of a
Letter of Credit.
(e) Delivery of Documents. The Agent shall have
received such other agreements, instruments, approvals and other documents ,
each in form and substance satisfactory to the Agent, as the Agent may
reasonably request.
(f) Proceedings; Receipt of Documents. All
proceedings in connection with the making of such Loan or the issuance of such
Letter of Credit and the other transactions contemplated by this Agreement, and
all documents incidental thereto, shall be satisfactory to the Agent and its
special counsel, and the Agent and such special counsel shall have received all
such information and such counterpart originals or certified or other copies of
such document, in form and substance satisfactory to the Agent, as the Agent or
such special counsel may reasonably request.
(g) Commitment. The aggregate unpaid principal
amount of the Loans and the Letter of Credit Exposure shall not exceed, and
giving effect to the requested Credit Extension will not exceed, the Current
Commitment.
(h) Additional Availability. On the earlier of
(i) the date on which the Lenders make the initial Loan under this Agreement or
(ii) the date on which the Borrower obtains the issuance of the initial Letter
of Credit under this Agreement (excluding any Existing Letters of Credit), after
giving effect to all Loans made on such date, the Letters of Credit issued on
such date and all Existing Letters of Credit, the Availability shall not be less
than $15,000,000 and the Borrower shall deliver to the Agent a certificate of
the Designated Financial Officer of the Borrower certifying that the
Availability is not less than $15,000,000 and containing the calculation
thereof.
Any oral or written request by the Borrower for any Credit Extension hereunder
shall constitute a representation and warranty by the Borrower that the
conditions set forth in this Section 5.02 have been satisfied as of the date of
such request. Failure of the Agent to receive notice from the Borrower to the
Exhibit 10.14 - Page 37
contrary before such Credit Extension is made shall constitute a further
representation and warranty by the Borrower that the conditions set forth in
this Section 5.02 have been satisfied as of the date of such Credit Extension.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
------------------------------
The Borrower hereby represents and warrants to the Agent and
the Lenders as follows:
6.01. Organization, Good Standing, Etc. Each of the Borrower
and its Subsidiaries (i) is a corporation duly organized, validly existing and
in good standing under the laws of the state of its organization, (ii) has all
requisite power and authority to conduct its business as now conducted and as
presently contemplated and (in the case of the Borrower) to make the borrowings
hereunder and to consummate the transactions contemplated hereby, and (iii) is
duly qualified to do business and is in good standing in each jurisdiction in
which the character of the properties owned or leased by it or in which the
transaction of its business makes such qualification necessary.
6.02. Authorization, Etc. The execution, delivery and
performance by the Borrower and its Subsidiaries of each Loan Document to which
it is a party, (i) have been duly authorized by all necessary corporate action,
(ii) do not and will not contravene its charter or by-laws, any other applicable
law or any contractual restriction binding on or otherwise affecting it or any
of its properties or result in a default under any agreement or instrument to
which the Borrower or any of its Subsidiaries is a party or by which they or
their respective properties may be subject, (iii) do not and will not result in
or require the creation of any Lien (other than pursuant to any such Loan
Document) upon or with respect to any of its properties, and (iv) do not and
will not result in any suspension, revocation, impairment, forfeiture or
nonrenewal of any permit, license, authorization or approval applicable to its
operations or any of its properties.
6.03. Governmental Approvals. No authorization, consent,
approval license, exemption or other action by, and no registration,
qualification, designation, declaration or filing with, any Governmental
Authority is or will be necessary in connection with the execution and delivery
by the Borrower and its Subsidiaries of each Loan Document to which it is a
party, consummation of the transactions therein contemplated, performance of or
compliance with the terms and conditions thereof or to ensure the legality,
validity, enforceability and admissibility in evidence thereof, except for the
filings and recordings in respect of the Liens created pursuant to the Security
Documents.
6.04. Enforceability of Loan Documents. This Agreement is, and
each other Loan Document to the which the Borrower is or will be a party, when
delivered hereunder, will be, a legal, valid and binding obligation of the
Borrower, enforceable against the Borrower in accordance with its terms. Each
Loan Document to which a Subsidiary of the Borrower is or will be a party, when
delivered hereunder, will be a legal, valid and binding obligation of such
Subsidiary, enforceable against such Subsidiary in accordance with its terms.
6.05. Subsidiaries. Schedule 6.05 hereto is a complete and
correct description of the name, jurisdiction of incorporation and ownership of
the outstanding capital stock of each Subsidiary of the Borrower in existence on
the Closing Date. All shares of such stock owned by the Borrower or one or more
of its Subsidiaries, as indicated in such Schedule, are owned free and clear of
all Liens, except for the Liens in favor of the Agent that secure payment of the
Obligations. There are no options, warrants or other rights to acquire shares of
capital stock of any Subsidiary of the Borrower. The aggregate fair market value
of all assets owned by all Subsidiaries of the Borrower existing on the Closing
Date is not in excess of $500,000.
Exhibit 10.14 - Page 38
6.06. Litigation. Except as set forth on Schedule 6.06 hereto,
there is no pending or, to the knowledge of the Borrower, threatened action,
suit or proceeding affecting the Borrower or any of its Subsidiaries before any
court or other Governmental Authority or any arbitrator in existence on the
Closing Date. There is no pending or threatened action, suit or proceeding
affecting the Borrower or any of its Subsidiaries before any court or other
Governmental Authority or any arbitrator which may have a Material Adverse
Effect.
6.07. Financial Condition. (a) Historical Statements. The
Borrower has heretofore furnished to the Lenders a balance sheet of the Borrower
for the six months ended July 26, 1997 and the related statements of operations
and cash flows for the fiscal year then ended, as examined and reported on by
Deloitte & Touche, independent certified public accountants, and a balance sheet
and related statements of operations and cash flows of the Borrower and it
Consolidated Subsidiaries for and as of the end of the five-month period ending
June 21, 1997, as certified by a Designated Financial Officer. Such financial
statements (in the case of the statements as of January 25, 1997, including the
notes thereto) present fairly, in all material respects, the financial condition
of the Borrower as of the end of such fiscal year and as of the end of such
period and the results of its operations and the cash flows for the fiscal year
then ended, all in conformity with GAAP applied on a basis consistent with that
of the preceding fiscal year, subject (in the case of interim financial
statements) to year-end adjustments. Except as disclosed therein, the Borrower
and its Subsidiaries do not have any material contingent liabilities (including
liabilities for taxes), unusual forward or long term commitments or unrealized
or anticipate losses from unfavorable commitments.
(b) The Borrower has heretofore furnished to the
Lenders pro forma consolidated statements of financial condition and pro forma
consolidated statements of operations of the Borrower and its Consolidated
Subsidiaries as of the dates and for the periods specified therein and such
statements have been prepared in accordance with the standard set forth in
Section 6.16(c) hereof.
(c) The Borrower has heretofore furnished to the
Lenders projections for the period from January 26, 1997, through February 3,
2003 and such projections have been prepared in accordance with the standard set
forth in the second sentence of Section 6.16(a) hereof.
6.08. Compliance with Law, Etc. Each of the Borrower and its
Subsidiaries is not in violation of its charter or by-laws, any law (including
but not limited to violations pertaining to the conduct of its business or the
use, maintenance or operation of the real and personal properties owned or
possessed by it) or any material term of any agreement or instrument binding on
or otherwise affecting it or any of its properties, except for the noncompliance
with any law which could not, in the aggregate for all such noncompliance, have
a Material Adverse Effect.
6.09. ERISA. (i) Each Plan is in substantial compliance with
ERISA and the Code, (ii) no Termination Event has occurred nor is reasonably
expected to occur with respect to any Benefit Plan, (iii) the most recent annual
report (Form 5500 Series) with respect to each Benefit Plan, including Schedule
B (Actuarial Information) thereto, copies of which have been filed with the
Internal Revenue Service and delivered to the Agent, is complete and correct and
fairly presents the funding status of such Benefit Plan, and since the date of
such report there has been no material adverse change in such funding status,
(iv) no Benefit Plan had an accumulated or waived funding deficiency or
permitted decreases which would create a deficiency in its funding standard
account within the meaning of Section 412 of the Code at any time during the
previous 60 months, and (v) no Lien, security interest or other charge or
encumbrance imposed under the Code or ERISA exists or is likely to arise on
account of any Benefit Plan within the meaning of Section 412 of the Code.
Neither the Borrower nor any of its ERISA Affiliates has incurred any withdrawal
liability under ERISA with respect to any Multiemployer Plan, and the Borrower
is not aware of any facts indicating that the Borrower or any of its ERISA
Affiliates may in the future incur any such withdrawal liability. Except as
required by Section 4980B of the Code, neither the Borrower nor any of its ERISA
Affiliates maintains a welfare
Exhibit 10.14 - Page 39
plan (as defined in Section 3(1) of ERISA) which provides benefits or coverage
after a participant's termination of employment. All Plans in existence on the
Closing Date are set forth on Schedule 6.09.
6.10. Taxes, Etc. All tax returns required to be filed by the
Borrower and any of its Subsidiaries have been properly prepared, executed and
filed. All taxes, assessments, fees and other governmental charges upon the
Borrower and its Subsidiaries or upon any of their respective properties,
income, sales or franchises which are shown thereon as due and payable have been
paid, except as otherwise permitted by the Plan of Reorganization and the
Confirmation Order. The reserves and provisions for taxes, if any, on the books
of the Borrower are adequate for all open years and for its current fiscal
period. The Borrower does not know of any proposed additional assessment or
basis for any material assessment for additional taxes (whether or not reserved
against). The federal income tax liabilities of the Borrower and its
Subsidiaries have been finally determined by the Internal Revenue Service, or
the time for audit has expired, for all fiscal periods ending on or prior to
January 28, 1995 all such liabilities (including all deficiencies assessed
following audit) have been satisfied, except as otherwise permitted by the Plan
of Reorganization and the Confirmation Order.
6.11. Regulation U. The Borrower is not and will not be
engaged in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulation U issued by the Board),
and no proceeds of any Loan will be used to purchase or carry any margin stock
or to extend credit to others for the purposes of purchasing or carrying any
margin stock.
6.12. Adverse Agreements, Etc. Neither the Borrower nor any of
its Subsidiaries is a party to any agreement or instrument, or subject to any
charter or other corporate restriction or any judgment, order, regulation,
ruling or other requirement of a court or other Governmental Authority or
regulatory body, which has a Material Adverse Effect, or to the best knowledge
of the Borrower, is reasonably likely to have a Material Adverse Effect.
6.13. Holding Company and Investment Company Acts. Neither the
Borrower nor any of its Subsidiaries is (i) a "holding company" or a "subsidiary
company" of a "holding company" or any "affiliate" of a "holding company", as
such terms are defined in the Public Utility Holding Company Act of 1935, as
amended, or (ii) an "investment company" or an "affiliated person" or "promoter"
of, or "principal underwriter" of or for, an "investment company", as such terms
are defined in the Investment Company Act of 1940, as amended.
6.14. Permits, Etc. The Borrower and its Subsidiaries have all
material permits, licenses, authorizations and approvals required for them
lawfully to own and operate their business.
6.15. Priority Title. Except for (a) Permitted Liens and (b)
any failure arising from any act or omission of the Agent after the Closing Date
with respect to the perfection of the Liens granted under the Security
Documents, the Liens granted under the Security Documents constitute and shall
at all times constitute perfected, first priority Liens on the Collateral and
the Borrower is the sole and absolute owner of the Collateral with full right to
pledge, sell, consign, transfer and create a security interest therein, free and
clear of any and all claims or Liens in favor of others and no Person has any
right of first refusal, option or other preferential right to purchase any
Collateral and the Borrower will at its expense forever warrant and, at the
Agent's request, defend the same from any and all claims and demands of any
other Person other than the Permitted Liens; and the Borrower will not grant,
create or permit to exist, any Lien upon the Collateral, or any proceeds
thereof, in favor or any other Person other than Permitted Liens. The Borrower
and its Subsidiaries have good and marketable title to all of their owned
properties and assets, free and clear of all Liens except Permitted Liens, the
Liens arising under the Related Documents and Liens with respect to Capitalized
Leases.
6.16. Full Disclosure. (a) No representation or warranty
made by the Borrower or its Subsidiaries under this Agreement or any other Loan
Document is false or misleading in any
Exhibit 10.14 - Page 40
material respect and no Loan Document or schedule or exhibit thereto and no
certificate, report, statement or other document or information furnished to the
Agent or the Lenders in connection herewith or therewith or with the
consummation of the transactions contemplated hereby and thereby, contains any
material misstatement of fact or omits to state a material fact or any fact
necessary to make the statements contained herein or therein not misleading. To
the extent the Borrower furnishes any projections of the financial position and
results of operations of the Borrower and its Subsidiaries for, or as at the end
of, certain future periods, such projections were believed at the time furnished
to be reasonable, have been or will have been prepared on a reasonable basis and
in good faith by the Borrower, and have been or will be based on assumptions
believed by the Borrower to be reasonable at the time made and upon the best
information then reasonably available to the Borrower. There is no fact
materially adversely affecting the condition or operations, financial or
otherwise, or the business or prospects of the Borrower or any of its
Subsidiaries which has not been set forth in a footnote included in the
financial statements referred to in Section 6.07(a) hereof or a Schedule hereto.
(b) The Borrower has delivered to each Lender a
true, complete and correct copy of the Disclosure Statement. The Disclosure
Statement, as of the date it was distributed to the creditors, and at the time
of the creditor vote pursuant thereto and at the Effective Time, did not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
(c) The pro forma consolidated statements of
financial condition and pro forma consolidated statements of operations of the
Borrower and its Consolidated Subsidiaries delivered to the Lenders are the
unaudited consolidated financial statements of the Borrower and its Consolidated
Subsidiaries, as of the dates and for the periods specified therein, adjusted to
give effect to the Reorganization, any financing thereof and certain other
events and assumptions as set forth therein. Such pro forma financial statements
(including any related schedules and notes) have been prepared on the basis of
the statements and assumptions set forth in the respective notes thereto
contained in the Disclosure Statement and the projections and assumptions
expressed therein were reasonably based on the information available to the
Borrower at the time so furnished.
(d) The Disclosure Statement complies in all
material respects with all applicable requirements of the Bankruptcy Code and
related rules.
6.17. Operating Lease Obligations. On the Closing Date, the
Borrower and its Subsidiaries do not have any obligations as lessee for the
payment of rent for any real or personal property other than the Operating Lease
Obligations set forth in Schedule 6.17 hereto.
6.18. Environmental Matters. (A) Except as disclosed on
Schedule 6.18:
(i) The Borrower and its Subsidiaries at all
times have been operated, and are, in full compliance with all applicable
Environmental Laws, including all limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and timetables
contained in all applicable Environmental Laws, except to the extent such
failure to comply would not result in a Material Adverse Effect.
(ii) The Borrower and its Subsidiaries have
obtained, and are in compliance with, all permits, licenses, authorizations,
registrations and other governmental consents required by applicable
Environmental Laws ("Environmental Permits"), except to the extent the failure
to so obtain or comply with any such Environmental Permits would not result in a
Material Adverse Effect. All Environmental Permits are in full force and effect,
and the Borrower and its Subsidiaries have made all appropriate filings for
issuance or renewal of such Environmental Permits, except such as would not
result in a Material Adverse Effect.
Exhibit 10.14 - Page 41
(iii) All of the property owned, leased, operated
or controlled by the Borrower or its Subsidiaries are free of any Hazardous
Materials (except those authorized pursuant to and in accordance with
Environmental Permits held by the Borrower or its Subsidiaries) and free of all
contamination arising from, relating to, or resulting from any such Hazardous
Materials, except such as would not result in a Material Adverse Effect.
(iv) There are no pending or, to the knowledge of
the Borrower, threatened Environmental Actions.
(v) There are no past or present conditions,
events, circumstances, facts, activities, practices, incidents, actions,
omissions or plans: (1) that may interfere with or prevent continued compliance
by the Borrower or its Subsidiaries with Environmental Laws and the requirements
of material Environmental Permits, or (2) that may require the Borrower or any
Subsidiary to incur any Environmental Liabilities and Costs, or (3) that may
form the basis of any Environmental Action against or involving the Borrower or
its Subsidiaries, except such as would not result in a Material Adverse Effect.
(vi) There are no underground or aboveground
storage tanks, or related piping, incinerators or surface impoundments at, on,
or about, under or within any property owned, operated, leased or controlled by
Borrower or its Subsidiaries, and any former underground or aboveground storage
tanks, or related piping, incinerators or surface impoundments at, on, or about,
under or within any such property have been removed or closed in accordance with
applicable Environmental Law.
(vii) The Borrower and its Subsidiaries have not
received any notice or other communication that any of them is or may be a
potentially responsible person or otherwise liable in connection with any waste
disposal site allegedly containing any Hazardous Materials, or other location
used for the disposal of any Hazardous Materials, or notice of any failure of
the Borrower or its Subsidiaries to comply with any Environmental Law or the
requirements of any Environmental Permit.
(viii) The Borrower and its Subsidiaries have not
used any waste disposal site, or otherwise disposed of, transported, or arranged
for the transportation of, any Hazardous Materials to any place or location, or
in violation of any Environmental Laws, except such as would not result in a
Material Adverse Effect.
(ix) No Environmental Lien exists, and no
condition exists which could result in the filing of a Environmental Lien,
against any assets, facility, inventory or property owned, leased, operated or
controlled by the Borrower or its Subsidiaries.
(x) There has been no Release or threatened
material Release at any time of any Hazardous Materials at, on, or about, under
or within any real property currently or formerly owned, leased, operated or
controlled by the Borrower or its Subsidiaries or any predecessor of the
Borrower or its Subsidiaries (other than pursuant to and in accordance with
permits held by the Borrower or its Subsidiaries or any such predecessor),
except such as shall not result in a Material Adverse Effect. To the knowledge
of the Borrower and its Subsidiaries, there have been no such Releases of
Hazardous Materials at, on, or about, under, within, or from any property
adjacent to any Mortgaged Property that, through soil, air, surface water or
groundwater migration or contamination, may reasonably have been expected to
have migrated to or under any Mortgaged Property.
(xi) Neither the Borrower nor any Subsidiary has
entered into or agreed to any currently pending or effective judgment, decree or
order by any judicial or administrative tribunal relating to compliance with any
Environmental Law or to Remedial Action, nor has Borrower
Exhibit 10.14 - Page 42
or any Subsidiary been requested or required by any Governmental Authority to
perform any Remedial Action.
(B) To the knowledge of the Borrower and its Subsidiaries, all
environmental investigations, studies, audits or assessments in the possession
or control of the Borrower or any Subsidiary concerning any violation or
potential violation of, or liability or potential liability under, any
Environmental Law relating to any current or prior business, facilities or
properties owned, operated, leased or controlled by the Borrower or any
Subsidiary (or any of their respective predecessors in interest) have been made
available to the Lenders and the Agent.
6.19. Schedules. All of the information which is required to
be scheduled to this Agreement is set forth on the Schedules attached hereto, is
correct and accurate and does not omit to state any information material
thereto.
6.20. Insurance. The Borrower and its Subsidiaries keep their
properties adequately insured and maintain (i) insurance to such extent and
against such risks, including fire, as is customary with companies in the same
or similar businesses, (ii) workmen's compensation insurance in the amount
required by applicable law, (iii) public liability insurance in the amount
customary with companies in the same or similar business against claims for
personal injury or death on properties owned, occupied or controlled by it, and
(iv) such other insurance as may be required by law or by the Loan Documents.
Schedule 6.20 hereto sets forth a list of all insurance maintained by the
Borrower and its Subsidiaries on the Closing Date. All such insurance complies
with the requirements of the Mortgages in respect of the Mortgaged Properties.
6.21. Use Proceeds. The proceeds of the Loans shall be used
for general working capital purposes and for other general corporate purposes.
The Letters of Credit will be used to support insurance policies and customs
bonds, to purchase Inventory in the ordinary course of the Borrower's business
and to secure ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇'▇ employment agreement.
6.22. Security Document. Except for failure arising from any
act or omission by the Agent after the Closing Date with respect to the
perfection of the Liens created under the Security Documents, the Security
Documents create and grant to the Agent, for the benefit of the Lenders, a
legal, valid and perfected first priority Lien on the Collateral purported to be
covered thereby.
6.23. Financial Accounting Practices, Etc.. (a) The Borrower
and its Subsidiaries make and keep books, records and accounts which, in
reasonable detail, accurately and fairly reflect their respective transactions
and dispositions of their respective assets and maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or specific
authorization, (ii) transactions are recorded as necessary (A) to permit
preparation of financial statements in conformity with GAAP except as previously
disclosed to the Agent and (B) to maintain accountability for assets, and (iii)
the recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(b) The Borrower and its Subsidiaries maintain
a system of internal procedures and controls sufficient to provide reasonable
assurance that the information required to be set forth in each Borrowing Base
Certificate (including, without limitation, information relating to the
identification of assets which are Inventory and the valuation thereof) is
accurate.
6.24. No Material Adverse Effect. Since July 26, 1997 there
has not occurred any Material Adverse Effect or any event which could have a
Material Adverse Effect.
Exhibit 10.14 - Page 43
6.25. Real Property; Leases. (a) Schedule 6.25 hereto sets
forth a complete and accurate description and list as of the Closing Date of the
location, by state and street address, of all real property owned and leased by
the Borrower and its Subsidiaries.
(b) As of the Closing Date, the Borrower and its
Subsidiaries have valid leasehold interests in the Leases described in Schedule
6.25 hereto. None of the Leases is subject to any Lien except Liens granted to
the Agent pursuant to the Security Documents and Permitted Liens. Each of the
Borrower and its Subsidiaries have duly effected all recordings, filings and
other actions necessary to perfect the Borrower's and its Subsidiaries' right,
title and interest in and to all Mortgaged Property. Schedule 6.25 sets forth
with respect to each Lease, the commencement date, termination date, renewal
options (if any) and annual base rents. To the best of the Borrower's knowledge
each such Lease is valid and enforceable in accordance with its terms in all
material respects and is in full force and effect. No consent or approval of any
landlord or other third party in connection with the Leases is necessary for the
Borrower or any of its Subsidiaries to enter into and execute the Loan
Documents, except as set forth on Schedule 6.25. Neither the Borrower nor any of
its Subsidiaries or, to the knowledge of the Borrower or any of its
Subsidiaries, any other party to any Lease is in default of its obligations
thereunder and neither the Borrower nor any of its Subsidiaries nor any other
party to any such Lease has at any time delivered or received any notice of
default which remains uncured under any such Lease and, as of the Closing Date,
no event has occurred which, with the giving of notice or the passage of time,
or both, would constitute a default under any such Lease, except for defaults
the consequence of which in the aggregate would have no Material Adverse Effect.
(c) All permits required to have been issued to
the Borrower with respect to the real property owned or leased by the Borrower
or any of its Subsidiaries to enable such property to be lawfully occupied and
used for all of the purposes for which it is currently occupied and used
(separate and apart from any other properties), have been lawfully issued and
are in full force and effect, other than such permits which, if not obtained,
would not have a Material Adverse Effect, and all such real property complies
with all applicable legal and insurance requirements.
(d) Neither the Borrower nor any of its
Subsidiaries has received any notice, nor has any knowledge, of any pending,
threatened or contemplated condemnation proceeding affecting any real property
owned or leased by the Borrower or any Subsidiary.
(e) No portion of any real property owned or
leased by the Borrower or any of its Subsidiaries has suffered any damage by
fire or other casualty loss which has not heretofore been completely repaired
and restored to its condition existing prior to such casualty or which if not
repaired or restored is not reasonably likely to result in a Material Adverse
Effect. Except as disclosed to the Agent in writing, no portion of any of the
real property owned or leased by the Borrower or any its Subsidiaries is located
in a special flood hazard area as designated by any Governmental Authority.
6.26. Location Bank Accounts. Schedule 6.26 hereto sets forth
a complete and accurate list as of the Closing Date of all deposits and other
accounts, including all Depository Accounts, maintained by the Borrower and its
Subsidiaries together with a description thereof (i.e. the bank at which such
deposit or other account is maintained and the account number and the purpose
thereof).
6.27. No Event of Default. No event has occurred and is
continuing and no condition exists which constitutes an Event of Default or
Potential Default. The Borrower is not in violation of any term of its charter
or by-laws.
6.28. Capitalized Leases. As of the Closing Date, Capitalized
Lease Obligations of the Borrower and its Subsidiaries do not exceed $100,000 in
the aggregate.
Exhibit 10.14 - Page 44
6.29. Tradenames. Schedule 6.29 hereto sets forth a complete
and accurate list as of the Closing Date of all tradenames used by the Borrower
and its Subsidiaries.
6.30. Compliance with Bankruptcy Code. The Debtor has complied
in all material respects with the Bankruptcy Code, and all other laws, rules,
regulations, decrees and orders applicable to or arising out of the
Reorganization. All lists of creditors and shareholders, schedules, statements
of affairs and financial reports filed by the Debtor with the Bankruptcy Court
and all representations, warranties or disclosures of the Debtor made in
connection with the Reorganization are complete and accurate in all material
respects. Notice has been given to all holders of Claims and Equity Interests
(as such terms are defined respectively in Sections 1.17 and 1.37 of the Plan of
Reorganization) as required by the Bankruptcy Code and as was directed by the
Bankruptcy Court pursuant to the Order of the Bankruptcy Court, dated June 30,
1997, approving the Disclosure Statement.
6.31. Solvency. After giving effect to the agreements and
transactions that the Plan of Reorganization provides for on the Effective Date:
(i) the fair value of the Borrower's assets exceeds the book value of the
Borrower's liabilities; (ii) the Borrower is generally able to pay its debts as
they become due and payable; and (iii) the Borrower does not have unreasonably
small capital to carry on its business as it is currently conducted.
6.32. Inventory. There is no location at which the Borrower
has any Inventory (except for Inventory in transit) other than (i) those
locations listed on Schedule 1.01A hereto and (ii) any other locations approved
in writing by the Agent pursuant to the definition of "Eligible Inventory".
Schedule 1.01A hereto contains a true, correct and complete list, as of the
Closing Date, of the legal names and addresses of each warehouse at which
Inventory of the Borrower is stored. None of the receipts received by the
Borrower from any warehouse states that the goods covered thereby are to be
delivered to bearer or to the order of a named Person or to a named Person and
such named Person's assigns.
6.33. Intellectual Property. Each of the Borrower and its
Subsidiaries owns or licenses or otherwise has the right to use all material
licenses, permits, patents, patent applications, trademarks, trademark
applications, service marks, trade names, copyrights, copyright applications,
franchises, authorizations and other intellectual property rights that are
necessary for the operations of their businesses and, to the knowledge of the
Borrower or such Subsidiary, without infringement upon or conflict with the
rights of any other Person with respect thereto, except for such infringements
and conflicts which, individually or in the aggregate, could not have a Material
Adverse Effect. To the best knowledge of the Borrower and its Subsidiaries, no
slogan or other advertising device, product, process, method, substance, part or
other material now employed, or now contemplated to be employed, by the Borrower
or any of its Subsidiaries infringes upon or conflicts with any rights owned by
any other Person, and no claim or litigation regarding any of the foregoing is
pending or threatened, except for such infringements and conflicts which could
not have, individually or in the aggregate, a Material Adverse Effect. To the
knowledge of the Borrower and its Subsidiaries, no patent, invention, device,
application, principle or any statute, law, rule, regulation, standard or code
is pending or proposed, which, individually or in the aggregate, could have a
Material Adverse Effect.
6.34. Confirmation Order. The Confirmation Order has not been
reversed, stayed, modified or amended absent the joinder and consent of the
Agent and the Borrower. The Confirmation Order has been entered by the
Bankruptcy Court and is binding and effective on all creditors of the Borrower
existing as of the Effective Date. The Plan of Reorganization has been confirmed
pursuant to the Confirmation Order.
6.35. Nature Business. Neither the Borrower nor any of its
Subsidiaries is engaged in any business other than the operation of stores
selling family apparel, shoes, related accessories and
Exhibit 10.14 - Page 45
other retail items and the support of the Borrower's and such Subsidiaries'
business and operations as presently conducted.
ARTICLE VII
AFFIRMATIVE COVENANTS
---------------------
So long as any principal of or interest on the Loans or the
Reimbursement Obligations or any other Obligations (whether or not due) shall
remain unpaid or the Lenders shall have any Revolving Credit Commitment
hereunder, the Borrower will, unless the Majority Lenders shall otherwise
consent in writing:
7.01. Reporting Requirements. Furnish to the Lenders:
(a) Annual Reports. As soon as practicable and in any
event within 90 days after the close of each fiscal year of the
Borrower, a consolidated statement of operations and cash flows of the
Borrower and its Consolidated Subsidiaries for such fiscal year and a
consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries as of the close of such fiscal year, and notes to each,
all in reasonable detail, setting forth in comparative form the
corresponding figures for the preceding fiscal year, which statements
and balance sheet shall be certified by Deloitte and Touche or other
independent certified public accountants of recognized national
standing selected by the Borrower and reasonably satisfactory to the
Agent. The certificate or report of such accountants shall be without a
"going concern" qualification or like qualification or exception or
qualification arising out of the scope of the audit with respect to
such statements and balance sheet being prepared in compliance with
GAAP and shall in any event contain a written statement of such
accountants substantially to the effect that (i) such accountants
examined such statements and balance sheet in accordance with generally
accepted auditing standards and accordingly made such tests of
accounting records and such other auditing procedures as such
accountants considered necessary in the circumstances and (ii) in the
opinion of such accountants such statements and balance sheet present
fairly, in all material respects, the financial position of the
Borrower and its Consolidated Subsidiaries as of the end of such fiscal
year and the results of its operations and the changes in its financial
position for such fiscal year, in conformity with GAAP applied on a
basis consistent with that of the preceding fiscal year (except for
changes in application in which such accountants concur). A copy of
such certificate or report shall be delivered to the Agent and each
Lender and signed by such independent public accountants. Each set of
statements and balance sheets delivered pursuant to this Section
7.01(a) shall be accompanied by a certificate dated the date of such
statements and balance sheet by the Designated Financial Officer
stating in substance that he has reviewed this Agreement and that in
making the examination necessary for this certification, he did not
become aware of any Event of Default or Potential Default, or if he did
become so aware, such certificate shall state the nature and period of
existence thereof if determinable and (B) a certificate certified by
the Designated Financial Officer of the Borrower stating that the
Borrower has complied with the Cumulative FIFO EBITDA, Capital
Expenditures and Minimum/Maximum Inventory covenants set forth in
Sections 8.12, 8.08 and 8.16, respectively, and a reconciliation
between EBITDA calculated using the last in first out method of
inventory valuation and FIFO EBITDA, in form and substance satisfactory
to the Agent.
(b) Quarterly Reports. As soon as practicable and in
any event within 45 days after the close of each of the first three
fiscal quarters of each of the Borrower's fiscal years, unaudited
consolidated statements of operations and cash flows of the Borrower
and its Consolidated Subsidiaries and a consolidated balance sheet of
the Borrower and its Consolidated Subsidiaries as of the close of such
fiscal quarter, all in reasonable detail setting
Exhibit 10.14 - Page 46
forth in comparative form for the corresponding fiscal quarter for the
preceding fiscal year, and certified by a Designated Financial Officer
of the Borrower as presenting fairly, in all material respects, the
financial position of the Borrower and the Consolidated Subsidiaries as
of the end of such quarter and the results of its operations and the
changes in its financial position for such quarter, in conformity with
GAAP applied in a manner consistent except as otherwise disclosed
therein with that of the most recent audited financial statements
furnished to the Lenders, subject to year-end adjustments. Each set of
statements and balance sheets delivered pursuant to Section 7.01(b)
shall be accompanied by a certificate of a Designated Financial Officer
dated the date of such statements and balance sheet stating that he has
reviewed this Agreement and that to the best of his knowledge he did
not become aware of any Event of Default or Potential Default, or if he
did become so aware, such certificate shall state the nature and period
of existence thereof, if determinable and that the Borrower has
complied with the Cumulative FIFO EBITDA, Capital Expenditures and
Minimum/Maximum Inventory covenants set forth in Sections 8.12, 8.08
and 8.16, respectively, and a reconciliation between EBITDA calculated
using the last in first out method of inventory valuation and FIFO
EBITDA, in form and substance satisfactory to the Agent.
(c) Monthly Reports. As soon as practicable and in
any event within twenty-five days after the end of each month
(including the fiscal month in which this Agreement is executed),
unaudited consolidated statements of operations and cash flows for the
Borrower and its Consolidated Subsidiaries for such fiscal month and
for the period from the beginning of such fiscal year to the end of
such fiscal month, and an unaudited consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries as of the end of such fiscal
month, all in reasonable detail, setting forth in comparative form the
corresponding figures for the same periods during the preceding fiscal
year (except for the balance sheet, which shall set forth in
comparative form the corresponding balance sheet as of the prior fiscal
year end), and accompanied by a certificate of a Designated Financial
Officer of the Borrower stating that (1) such statements present
fairly, in all material respects, the financial position of the
Borrower and its Consolidated Subsidiaries as of the end of such fiscal
month and the results of its operations and cash flows for such fiscal
month, in conformity with GAAP applied in a manner consistent except as
otherwise disclosed therein with that of the most recent adjusted
financial statements furnished to the Lenders, subject to year-end
adjustments, (2) he has reviewed this Agreement and that to the best of
his knowledge he did not become aware of any Event of Default or
Potential Default, or if he did become so aware, such certificate shall
state the nature and period of existence thereof, if determinable and
(3) the Borrower has complied with the Cumulative FIFO EBITDA, Capital
Expenditures, and Minimum/Maximum Inventory covenants set forth in
Sections 8.12, 8.08 and 8.16, respectively.
(d) Other Monthly Reports. As soon as practicable and
in any event within twenty-five days after the end of each fiscal month
(including the fiscal month in which this Agreement is executed), the
Borrower shall furnish to the Lenders a monthly inventory report and a
Borrowing Base Certificate in form and substance reasonably
satisfactory to the Agent and certified by a Designated Financial
Officer of the Borrower, which shall be accompanied by a reconciliation
from the Borrowing Base Certificate delivered by the Borrower to the
Lenders pursuant to paragraph (e) of this Section 7.01.
(e) Weekly Reports. As soon as practicable and in any
event within seven Business Days after the end of each week (including
the week in which this Agreement is executed), weekly sales reports,
weekly inventory report and a Borrowing Base Certificate, each in form
and substance reasonably satisfactory to the Agent and certified by a
Designated Financial Officer of the Borrower.
Exhibit 10.14 - Page 47
(f) Notice of Event of Default or Material Adverse
Change. As soon as possible, and in any event within five Business Days
after the occurrence of a Potential Default or an Event of Default or a
Material Adverse Effect, the written statement of the Designated
Financial Officer of the Borrower, setting forth the details of such
Potential Default or Event of Default, Material Adverse Effect and the
action which the Borrower proposes to take with respect thereto.
(g) Certain Reports. Upon the request of the Agent,
copies of all consultants' reports, investment bankers' reports,
accountants' management letters, business plans and similar documents.
(h) Other Reports and Information. Promptly upon
their becoming available, a copy of (1) all reports, financial
statements or other information delivered by the Borrower to its
shareholders, (2) all reports, proxy statements, financial statements
and other information generally distributed by the Borrower to its
creditors or the financial community in general, and (3) any audit or
other reports submitted to the Borrower any independent accountants in
connection with any annual, interim or special audit of the Borrower.
(i) ERISA Statements. (1) As soon as possible and in
any event (A) no later than the latest date specified in Section 4043
of ERISA and the regulations thereunder for the Borrower or any of its
ERISA Affiliates to notify the PBGC that any Termination Event
described in clause (i) of the definition of Termination Event with
respect to any Benefit Plan has occurred or is about to occur, and (B)
within 10 days after the Borrower or any of its ERISA Affiliates knows
or has reason to know that any other Termination Event with respect to
any Benefit Plan has occurred, or that the Borrower or any of its ERISA
Affiliates has failed to make a required installment to a Benefit Plan
within the meaning of Section 412(m) of the Code, a statement of the
Designated Financial Officer of the Borrower describing such
Termination Event and the action, if any, which the Borrower or such
ERISA Affiliate proposes to take with respect thereto, (2) promptly and
in any event within five Business Days after receipt thereof by the
Borrower or any of its ERISA Affiliates from the PBGC, copies of each
notice received by the Borrower or any of its ERISA Affiliates of the
PBGC's intention to terminate any Benefit Plan or to have a trustee
appointed to administer any Benefit Plan, (3) 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 Benefit Plan and
Multiemployer Plan, (4) promptly and in any event within five Business
Days after receipt thereof by the Borrower or any of its ERISA
Affiliates from a sponsor of a Multiemployer Plan or from the PBGC, a
copy of each notice received by the Borrower or any of its ERISA
Affiliates 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, and (5)
promptly and in any event within 10 days after the Borrower or any
ERISA Affiliate takes action to establish a Plan, a statement of the
Designated Financial Officer of the Borrower describing such employee
benefit plan and a copy of such employee benefit plan.
(j) Within 90 days after the Effective Date, an
"opening" balance sheet of the Borrower and its Consolidated
Subsidiaries certified by the Borrower's Designated Financial Officer.
(k) As soon as possible and in any event no later
than January 15, 1998, a financial plan of the Borrower containing
financial projections for the fiscal year of the Borrower ending
January 30, 1999 prepared by management of the Borrower, in form and
substance satisfactory to the Agent.
Exhibit 10.14 - Page 48
(l) As soon as possible and in any event no later
than January 15, 1999, a financial plan of the Borrower containing
financial projections for the fiscal year of the Borrower ending
January 29, 2000 prepared by management of the Borrower, in form and
substance satisfactory to the Agent.
(m) Promptly after, and in any event within 10 days
after, an officer of the Borrower learns of any of the following,
notice thereof:
(i) the receipt by the Borrower or any
of its Subsidiaries of notification that any real or personal property
of the Borrower or such Subsidiary is subject to any Environmental
Lien;
(ii) notice of violation of any
Environmental Law and notice of the commencement of any judicial or
administrative proceeding or investigation alleging a violation by the
Borrower or any of its Subsidiaries of any Environmental Law;
(iii) notice that Borrower or any
Subsidiary is or may be a potentially responsible person or otherwise
liable in connection with any waste disposal site allegedly containing
any Hazardous Materials, or other location used for the disposal of any
Hazardous Materials; or
(iv) notice from any Governmental
Authority or any third party that the Borrower or any Subsidiary may
be required to undertake Remedial Action.
(n) Promptly after the commencement thereof but in
any event not later than five Business Days after service of process
with respect thereto on, or the obtaining of knowledge thereof by, the
Borrower or any of its Subsidiaries, notice of each action, suit or
proceeding involving the Borrower or any of its Subsidiaries before any
court or other Governmental Authority or other regulatory body or any
arbitrator which could have a Material Adverse Effect.
(o) Promptly after submission to any Governmental
Authority all documents and information furnished to such Governmental
Authority in connection with any investigation of the Borrower or any
of its Subsidiaries other than routine inquiries by such Governmental
Authority.
(p) Promptly upon request, such other information
concerning the condition or operations, financial or otherwise, of the
Borrower or any of its Subsidiaries as the Agent or any Lender from
time to time may reasonably request.
7.02. Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, in all material respects with all applicable laws,
rules, regulations and orders (including, without limitation, compliance in
respect of their businesses, or use, maintenance or operation of real and
personal properties owned or leased by them), such compliance to include,
without limitation, (i) paying before the same become delinquent all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits or upon any of its properties, and (ii) paying all lawful
claims which if unpaid might become a Lien or charge upon any of its properties,
except to the extent contested in good faith by proper proceedings which stay
the imposition of any penalty, fine or Lien resulting from the non-payment
thereof and with respect to which adequate reserves in accordance with GAAP have
been set aside for the payment thereof. The provisions of this Section 7.02 are
subject to any provisions in the Mortgages which may impose additional or
greater obligations on the Borrower and its Subsidiaries.
Exhibit 10.14 - Page 49
7.03. Preservation Existence, Etc. Maintain and preserve, and
cause each of its Subsidiaries to maintain and preserve, its existence, rights
and privileges, and become or remain duly qualified and in good standing in each
jurisdiction in which the character of the properties owned or leased by them or
in which the transaction of their business makes such qualification necessary,
provided that the Borrower may dissolve certain of its Subsidiaries as
contemplated by, and in accordance with, the Plan of Reorganization.
7.04. Keeping of Records and Books of Account. Keep, and cause
each of its Subsidiaries to keep, adequate records and books of account, with
complete entries made in accordance with generally accepted accounting
principles consistently applied.
7.05. Inspection Rights. Permit, and cause each of its
Subsidiaries to permit, the Agent or any Lender, or any agents or
representatives thereof or such professionals or other Persons as the Agent may
designate (i) to examine and inspect the books and records of the Borrower and
its Subsidiaries and take copies and extracts therefrom at reasonable times and
during normal business hours upon the reasonable request of the Agent or any
Lender, (ii) to verify materials, leases, notes, receivables, deposit accounts
and other assets of the Borrower and its Subsidiaries from time to time, and
(iii) to conduct physical Inventory counts and/or valuations at the distribution
center and retail stores of the Borrower.
7.06. Maintenance of Properties, Etc. Maintain and preserve,
and cause each of its Subsidiaries to maintain and preserve, all of their
properties (including all real properties leased or owned by them) which are
necessary or useful in the proper conduct of their business in good working
order and condition, ordinary wear and tear excepted, and comply, and cause each
of its Subsidiaries to comply, at all times with the provisions of all Leases to
which each of them is a party as lessee or under which each of them occupies
property, so as to prevent any loss or forfeiture thereof or thereunder. The
provisions of this Section 7.06 are subject to any provisions in the Mortgages
which may impose additional or greater obligations on the Borrower.
7.07. Maintenance of Insurance. Maintain, and cause each of
its Subsidiaries to maintain, with responsible and reputable insurance companies
or associations insurance (including, without limitation, comprehensive general
liability, hazard, rent and business interruption insurance) with respect to
their properties (including all real properties leased or owned by them) and
business, in such amounts and covering such risks, as is required by any
Governmental Authority or other regulatory body having jurisdiction with respect
thereto or as is carried generally in accordance with sound business practice by
companies in similar businesses similarly situated and in any event in amount,
adequacy and scope reasonably satisfactory to the Agent. All policies covering
the Collateral not subject to any Mortgage are to be made payable to the Agent,
in case of loss, under a standard non-contributory "lender" or "secured party"
clause and are to contain such other provisions as the Agent may require to
fully protect the Agent's interest in the Collateral and to any payments to be
made under such policies. All original policies or true copies thereof are to be
delivered to the Agent, premium prepaid, with the loss payable and additional
insured endorsement in the Agent's favor, and shall provide for not less than
thirty (30) days prior written notice to the Agent of the exercise of any right
of cancellation. At the Borrower's request, or if the Borrower fails to maintain
such insurance, the Agent may arrange for such insurance, but at the Borrower's
expense and without any responsibility on the Agent's part for: obtaining the
insurance, the solvency of the insurance companies, the adequacy of the
coverage, or the collection of claims. Upon the occurrence of an Event of
Default, the Agent shall have the sole right, in the name of the Agent and the
Borrower, to file claims under any insurance policies, to receive, receipt and
give acquittance for any payments that may be payable thereunder, and to execute
any and all endorsements, receipts, releases, assignments, reassignments or
other documents that may be necessary to effect the collection, compromise or
settlement of any claims under any such insurance policies. The provisions of
this Section 7.07 are subject to any provisions in the Mortgages which may
impose additional or greater obligations on the Borrower.
Exhibit 10.14 - Page 50
7.08. Environmental Indemnity. (a) Comply, and cause each of
its Subsidiaries to comply, with all Environmental Laws and provide to the Agent
all documentation in connection with such compliance that the Agent may
reasonably request; and not cause or permit the Collateral or any property or
facility owned, leased, operated or controlled by the Borrower or any of its
Subsidiaries to be used for any activities involving, directly or indirectly,
the use, generation, treatment, storage, release or disposal of any Hazardous
Materials in violation of Environmental Law or in a manner that could result in
Environmental Liabilities and Costs; and take all necessary steps to initiate
and expeditiously complete all Remedial Action to eliminate any such
Environmental Liabilities and Costs. In the event the Borrower fails to comply
with the covenants in the preceding sentence, the Agent may, in addition to any
other applicable remedies set forth herein, at Borrower's sole cost and expense,
cause any Remedial Action to be taken, and the Borrower shall provide to the
Agent access to the Mortgaged Property for such purpose. Any costs or expenses
incurred by the Agent for such purpose shall be immediately due and payable by
the Borrower and shall bear interest at the rate determined pursuant to Section
2.08(d) herein.
(b) The Agent shall have the right at any time
that any Obligations are outstanding, at the sole cost and expense of the
Borrower, to conduct an environmental audit of the Mortgaged Property by such
persons or firms appointed by the Agent, and the Borrower shall cooperate in all
respects in the conduct of such environmental audit, including, without
limitation, by providing access to the Mortgaged Property and to all records
relating thereto. To the extent that any such environmental audit identifies
conditions which violate, or could be expected to give rise to liabilities or
obligations under, Environmental Laws, the Borrower agrees to expeditiously
conduct all Remedial Action necessary to eliminate such conditions.
(c) On behalf of the Borrower and its
Subsidiaries, the Borrower hereby agrees to defend, indemnify, and hold harmless
the Agent, the Lenders and the Letter of Credit Issuer, their employees, agents,
officers, and directors, from and against any Environmental Liabilities and
Costs, including, without limitation, those arising out of (i) any Release or
threatened Release on any property presently or formerly owned, leased, operated
or controlled by the Borrower or any of its Subsidiaries (or their predecessors
in interest or title) or at any disposal facility which received Hazardous
Materials generated by Borrower or any of its Subsidiaries (or their
predecessors in interest or title); (ii) any violation of Environmental Laws;
(iii) any Environmental Actions; (iv) any personal injury (including wrongful
death) or property damage (real or personal) arising out of or related to
exposure to Hazardous Materials used, handled, generated, transported or
disposed of by the Borrower or any of its Subsidiaries (or any predecessor in
interest or title); and/or (v) the breach of any representation or warranty made
by the Borrower in Section 6.18 hereof or the breach of any covenant made by the
Borrower in this Section 7.08, provided that the Borrower shall not have any
liability under this Section 7.08 with respect to any Environmental Liabilities
and Costs finally determined by a court of competent jurisdiction to have been
directly caused by the gross negligence or willful misconduct of the Agent, the
Lenders, the Letter of Credit Issuer or their employees, agents, officers or
directors. This Environmental Indemnity shall survive the repayment of the
Obligations and discharge or release of any security interest granted under the
Loan Documents.
7.09. Further Assurances. Do, execute, acknowledge and
deliver, and cause each of its Subsidiaries to do, execute, acknowledge and
deliver, at the sole cost and expense of the Borrower all such further acts,
deeds, conveyances, mortgages, assignments, estoppel certificates, financing
statements, notices of assignment, transfers and assurances as the Agent may
require from time to time in order (a) to carry out more effectively the
purposes of this Agreement or any other Related Document, (b) to subject to
valid and perfected first priority Liens all the Collateral, (c) to perfect and
maintain the validity, effectiveness and priority of any of the Related
Documents and the Lien intended to be created thereby, and (d) to better assure,
convey, grant, assign, transfer and confirm unto the Agent, the Lenders and the
Letter of Credit Issuer the rights now or hereafter
Exhibit 10.14 - Page 51
intended to be granted to the Agent, the Lenders and the Letter of Credit Issuer
under this Agreement, any Loan Document or any other instrument under which the
Borrower or any Subsidiary may be or may hereafter become bound to convey,
mortgage or assign to the Agent, the Lenders and the Letter of Credit Issuer.
7.10. Borrowing Base. Maintain all Loans and Letters of
Credit in compliance with the then-current Borrowing Base.
7.11. Change in Collateral; Collateral Records. Give the Agent
not less than thirty days' prior written notice of any change in the location of
any Collateral, other than to locations, that as of the date hereof, are known
to the Agent and at which the Agent has filed financing statements and otherwise
fully perfected its Liens thereon. The Borrower shall also advise the Agent
promptly, in sufficient detail, of any material adverse change relating to the
type, quantity or quality of the Collateral or the security interests granted
therein. The Borrower agrees to executes and deliver to the Agent for the
benefit of the Agent from time to time, solely for the Agent's convenience in
maintaining a record of the Collateral, such written statements and schedules as
the Agent may reasonably require, designating, identifying or describing the
Collateral. The Borrower's failure, however, to promptly give the Agent such
statements or schedules shall not affect, diminish, modify or otherwise limit
the Agent's security interest in the Collateral.
7.12. Financial Accounting Practices, Etc. (a) Make and keep
books, records and accounts which, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of assets of the Borrower and its
Subsidiaries and maintain a system of internal accounting controls sufficient to
provide reasonable assurances that (i) transactions are executed in accordance
with management's general or specific authorization, (ii) transactions are
recorded as necessary (A) to permit preparation of financial statements in
conformity with GAAP and (B) to maintain accountability for assets, and (iii)
the recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(b) Maintain a system of internal procedures
and controls sufficient to provide reasonable assurance that the information
required to be set forth in each Borrowing Base Certificate (including, without
limitation, information relating to the identification of assets which are
Eligible Inventory as provided herein and the valuation thereof) is accurate in
all material respects.
7.13. Cash Management System. (a) The Borrower agrees and
covenants to (i) cause all cash and all proceeds from accounts receivable and
the sale of Inventory to be deposited into the Depository Accounts in the
ordinary course of business of the Borrower consistent with past practice, (ii)
cause all remittances on credit card sales to be transferred into the Cash
Concentration Account or a Depository Account on a daily basis, (iii) cause all
funds in the Depository Accounts to be transferred into the Cash Concentration
Account at least three (3) times per week, (iv) take all such actions as the
Agent deems necessary or advisable to send all cash, all proceeds from the sale
of Inventory, all remittances or other proceeds of Collateral to the Cash
Concentration Account, (v) as soon as possible and in no event later than thirty
(30) days following the Closing Date, the Borrower shall enter into a Depository
Account Agreement substantially in the form of Exhibit G hereto with respect to
each Depository Bank listed on Schedule 6.26, and (vi) take such actions as the
Agent deems necessary or advisable to grant to the Agent dominion and control
over the funds in the Cash Concentration Account. With respect to the Cash
Concentration Account, as soon a possible and in no event later than thirty (30)
days following the Closing Date, the Borrower shall deliver to the Agent an
agreement, duly executed by the Borrower and the Cash Concentration Account Bank
substantially in the form of Exhibit H hereto (the "Restricted Account
Agreement"), authorizing and directing the Cash Concentration Account Bank to
remit all amounts deposited in the Cash Concentration Account to the Agent or as
the Agent may direct, subject to this Section 7.13. After the occurrence and
during the continuance of an Event of Default, the Agent may instruct the Cash
Concentration Account Bank to
Exhibit 10.14 - Page 52
send by wire transfer all amounts deposited in the Cash Concentration Account to
the Agent Account or as the Agent shall direct. In the absence of an Event of
Default, the Agent shall direct the Cash Concentration Account Bank to make all
cash in the Cash Concentration Account available to the Borrower for general
corporate purposes in accordance with Section 2.09. The Borrower shall promptly,
and in any event not later than five (5) days after the opening of any such new
account, notify the Agent in writing of the creation of any new Depository
Account and shall at the time of such notice cause each Depository Bank
maintaining a Depository Account to promptly, and in any event within thirty
(30) days after the date of such notice, enter into a Depository Account
Agreement. If the Borrower is unable to obtain a Depository Account Agreement
from any financial institution that receives remittances or other proceeds of
sales of Inventory within such thirty (30) day period, the Borrower shall
promptly thereafter terminate such accounts and establish new accounts at a
financial institution that will enter into a Depository Account Agreement.
(b) As soon as practicable and in any event
within thirty (30) days of the Closing Date, the Borrower shall use its best
efforts (but not requiring any payment to be made by the Borrower) to deliver to
the Agent a credit card bank depository account agreement, substantially in the
form of Exhibit F hereto, duly executed by the Borrower and each of Discover
Card Services Inc. and National Bancard Corporation. The Borrower shall
promptly, and in any event not later than five (5) days after the establishment
of any new credit card relationship, notify the Agent in writing of the creation
of such new relationship and shall use its best efforts (but not requiring any
payment to be made by the Borrower) to deliver to the Agent a credit card bank
depository account agreement, substantially in the form of Exhibit F hereto,
duly executed by the Borrower and such new credit card servicer.
(c) Upon receipt by the Borrower of collections
of cash and any proceeds of the sale of the sale of Inventory, the Borrower
shall immediately deposit all such payments into the Cash Concentration Account
or any Depository Account. The Borrower shall cause all funds in the Depository
Accounts and all remittances or other proceeds of credit card sales to be
promptly transferred from the financial institution that receives such
remittances or other proceeds or from the Depository Accounts to the Cash
Concentration Account.
7.14. Compliance with Bankruptcy Documents. Comply, and will
cause each of its Subsidiaries to comply, at all times with the Plan of
Reorganization, the Confirmation Order and each Related Document.
7.15. Leases. Upon the request of the Agent, provide the Agent
with a copy of each Lease to which the Borrower or any of its Subsidiaries is a
party, whether as lessor or lessee. The Borrower shall, and shall cause each of
its Subsidiaries to, (i) comply in all material aspects with all of their
respective obligations under Leases; (ii) not modify, amend, extend or otherwise
change any of the terms, covenants or conditions of any such Leases if such
modification, amendment, extension or other change could have a Material Adverse
Effect; (iii) upon the request of the Agent, provide the Agent with a copy of
each notice of default under any Lease received by the Borrower or such
Subsidiary immediately upon receipt thereof and deliver to the Agent a copy of
each notice of default sent by the Borrower or such Subsidiary under any Lease
simultaneously with its delivery of such notice under such Lease; (iv) notify
the Agent, not later than 60 days prior to the last date on which the Borrower
or any of its Subsidiaries may exercise any renewal or extension option granted
to the Borrower or such Subsidiary under any Lease, that the Borrower or such
Subsidiary has exercised its right to renew or extend such Lease or not to renew
or extend any such Lease, and, if the Borrower or such Subsidiary intends to
renew such Lease, the terms and conditions of such renewal; and (v) notify the
Agent at least 14 days prior to the date the Borrower or such Subsidiary becomes
liable under any new Lease.
Exhibit 10.14 - Page 53
7.16. New Real Estate. If at any time the Borrower or any of
its Subsidiaries acquires any fee interest in real property not covered by a
Mortgage, the Borrower or such Subsidiary shall promptly execute, deliver and
record or cause such Subsidiary to execute, deliver and record, a first priority
mortgage (subject only to such Liens as may already constitute a Lien against
such real estate prior to the time the Borrower or such Subsidiary acquires such
real estate and not in contemplation of such acquisition) in favor of the Agent
covering such real property interest, in form and substance satisfactory to the
Agent, and provide the Agent with a title insurance policy covering such real
property interest in an amount equal to the purchase price thereof, a current
ALTA survey thereof, a surveyor's certificate and the documents referred to in
clauses (iii), (vi), (xii) and (xxi) of Section 5.01(d) hereof with respect to
such real property interest, each in form and substance satisfactory to the
Agent.
7.17. Landlord Waivers. As soon as practicable and in any
event within sixty (60) days of the Closing Date, the Borrower shall use
reasonable efforts (but not requiring any payment to be made by the Borrower) to
deliver to the Agent a landlord waiver, in form and substance satisfactory to
the Agent, executed by each of the Borrower's landlords.
7.18. Subsidiaries. If a Person shall become a Subsidiary of
the Borrower, the Borrower shall (i) notify the Agent promptly after such Person
becomes a Subsidiary of the Borrower, (ii) promptly, and in any event within ten
(10) Business Days of such Person becoming a Subsidiary, execute and deliver to
the Agent Annex I to the Pledge Agreement, appropriately completed, providing
that all of the outstanding shares of capital stock of such Subsidiary shall be
pledged to the Agent as collateral security for the Obligations, and deliver to
the Agent the certificate(s) representing such capital stock, together with
instruments of assignment and transfer in such form as the Agent may request;
provided, that if such Person is the first Subsidiary of the Borrower, the
Borrower shall also execute and deliver to the Agent a Pledge Agreement in form
and substance satisfactory to the Agent, (iii) promptly, and in any event within
ten (10) Business Days of such Person becoming a Subsidiary, cause such
Subsidiary to execute and deliver a Subsidiary Guaranty in respect of the
Obligations and to deliver proof of corporate action, incumbency of officers,
opinions of counsel and other documents as the Agent may reasonably request, and
(iv) promptly, and in any event within ten (10) Business Days of such Person
becoming a Subsidiary, cause such Subsidiary to make such representations and
warranties to the Lenders and undertake such obligations as the Agent may
reasonably request. Except as permitted by the Related Documents, the Borrower
shall not sell, transfer or otherwise dispose of any shares of stock in any of
its Subsidiaries, nor permit any of its Subsidiaries to issue any shares of
stock of any class whatsoever to any Person (other than to the Borrower). In the
event that any such additional shares of stock shall be issued by any
Subsidiary, the Borrower agrees forthwith to deliver or cause to be delivered to
the Agent pursuant to the Pledge Agreement the certificates evidencing such
shares of stock, accompanied by instruments of assignment and transfer in such
form as the Agent may request and shall take such other action as the Agent
shall request to perfect the security interest created therein pursuant to the
Pledge Agreement.
ARTICLE VIII
NEGATIVE COVENANTS
------------------
So long as any principal of or interest on the Loans or the
Reimbursement Obligations or any Obligations (whether or not due) shall remain
unpaid or any Lender shall have any Revolving Credit Commitment hereunder, the
Borrower will not, without the prior written consent of the Majority Lenders:
8.01. Liens, Etc. Create or suffer to exist, or permit any of
its Subsidiaries to create or suffer to exist, any Lien upon or with respect to
any of their properties, rights or other assets, whether now owned or hereafter
acquired, or assign or otherwise transfer, or permit any of its
Exhibit 10.14 - Page 54
Subsidiaries to assign or otherwise transfer, any right to receive income, other
than the following ("Permitted Liens"):
(a) Liens created pursuant to the Loan
Documents:
(b) Liens existing on the date hereof, as set
forth in Schedule 8.01 hereto, but not the extension of coverage thereof to the
other property or the extension of maturity, refinancing or other modification
of the terms thereof or of the Indebtedness secured thereby;
(c) Liens for taxes, assessments or governmental
charges or levies to the extent that the payment thereof shall not be required
by Section 7.02 hereof and/or any of the Mortgages;
(d) Liens created by operation of law other than
Environmental Liens, such as materialmen's liens, mechanics' liens and other
similar liens, arising in the ordinary course of business which secure amounts
not overdue for a period of more than 60 days or which are being contested in
good faith by appropriate proceedings;
(e) deposits, pledges or liens (other than
liens arising under ERISA) securing (1) obligations incurred in respect of
workers' compensation, unemployment insurance or other forms of governmental
insurance or benefits, (2) the performance of bids, tenders, leases, contracts
(other than for the payment of money) and statutory obligations, or (3)
obligations on surety or appeal bonds, but only to the extent such deposits,
pledges or liens are incurred or otherwise arise in the ordinary course of
business and secure obligations which are not past due;
(f) restrictions on the use of real property and
minor irregularities in the title thereto which do not (1) secure obligations
for the payment of money or (2) materially impair the value of such property or
its use by the Borrower or any of its Subsidiaries in the normal conduct of such
Person's business;
(g) Liens on property to be used by the Borrower
in the ordinary course of its business, securing payment of all or part of the
purchase price thereof, and Liens with respect to equipment leases which
equipment is used by the Borrower in the ordinary course of its business,
provided that the aggregate amount of Indebtedness at any one time outstanding
incurred after the Filing Date and secured by such Liens shall not exceed
$3,000,000, and further provided that such Liens are confined solely to the
property so purchased, leased, improvements thereto and proceeds thereof;
(h) Liens securing Capitalized Leases permitted
by Sections 8.07 and 8.08; and
(i) to the extent the same constitutes Liens,
the interest of the cosigner in Inventory held by the Borrower on consignment.
8.02. Indebtedness. Create, incur or suffer to exist, or
permit any of its Subsidiaries to create, incur or suffer to exist, any
Indebtedness, other than:
(a) Indebtedness created hereunder or under the Notes
or any Letter of Credit;
(b) Indebtedness existing on the date hereof, as set
forth in Schedule 8.02 hereto, but not the extension of maturity,
refinancing or other modification of the terms thereof;
Exhibit 10.14 - Page 55
(c) Indebtedness of the Borrower which is fully
subordinated to the payment of the Obligations on terms fully approved
in writing by the Majority Lenders in their sole and absolute
discretion, provided that such Indebtedness is not secured;
(d) Indebtedness for Capitalized Leases permitted by
Sections 8.07 and 8.08 of this Agreement;
(e) Indebtedness secured by Liens or security
interests permitted by 8.01(g); and
(f) accounts payable and accrued expenses arising out
of transactions (other than borrowings) in the ordinary course of
business.
8.03. Guarantees, Etc. Become liable under any Guarantee
in connection with any Indebtedness of any other Person, other than:
(a) guaranties by endorsement of negotiable
instruments for deposit or collection in the ordinary course of
business; and
(b) guaranties existing on the date hereof, as set
forth in Schedule 8.02 hereto, but not any renewal or other
modification thereof.
8.04 Merger, Consolidation, Sale of Assets, Etc. (a) Merge or
consolidate with any Person, or permit any of its Subsidiaries to merge or
consolidate with any Person; provided, however, that any Subsidiary of the
Borrower may be merged into the Borrower or another such Subsidiary, or may
consolidate with another such Subsidiary, so long as (i) no other provision of
this Agreement would be violated thereby, and (ii) the Borrower gives the Agent
at least 30 days' prior written notice of such merger or consolidation.
(b) Sell, assign, lease or otherwise transfer or
dispose of, or permit any of its Subsidiaries to sell, assign, lease or
otherwise transfer or dispose of, whether in one transaction or in a series of
related transactions, any of its properties, rights or other assets whether now
owned or hereafter acquired to any Person, provided that (i) the Borrower may
sell Inventory in the ordinary course of business, (ii) the Borrower and its
Subsidiaries may dispose of obsolete, worn-out property or excess inventory in
the ordinary course of business, (iii) the Borrower may sell or discount without
recourse its accounts receivable only in connection with the compromise thereof
or the assignment of past due accounts receivable for collection, (iv) the
Borrower may sell Inventory and other assets for fair market value, for cash, in
connection with store closings, provided that the net decrease in retail stores
of the Borrower after giving effect to all stores opened and all stores closed
by the Borrower after the Effective Date shall not exceed ten retail stores, and
(v) the Borrower may sell or otherwise dispose of assets, other than Inventory,
for fair market value, for cash, provided that the Net Proceeds of such
dispositions do not exceed $250,000 in the aggregate.
8.05. Change in Nature of Business. Make, or permit any of its
Subsidiaries to make, any change in the nature of its business as carried on at
the date hereof.
8.06. Loans, Advances and Investments, Etc. Make, or permit
any of its Subsidiaries to make, any loan or advance to any Person or purchase
or otherwise acquire, or permit any of its Subsidiaries to purchase or otherwise
acquire, any capital stock, properties, assets or obligations of, or any
interest in, any Person, other than advances to employees not exceeding $100,000
at any time outstanding. By way of illustration, and without limitation of the
foregoing, it is understood that the Borrower will be deemed to have made an
advance to a Person: (x) to the extent that the Borrower performs any service
for such Person (including but not limited to management
Exhibit 10.14 - Page 56
services), or transfers any property to such Person, and is not reimbursed for
such service or property and (y) to the extent that the Borrower pays any
obligation on behalf of such Person. The amount of such advance shall be deemed
to be the fair value of the services so performed or property so transferred (in
the case of clause (x)) or the amount so paid by the Borrower (in the case of
clause (y)).
The following are excepted from the operation of this Section
8.06.
(a) Permitted Investments; and
(b) investments, loans or advances by the Borrower to
its Subsidiaries, provided that (1) any such Subsidiary has executed
and delivered to the Agent a Subsidiary Guaranty and all of the other
conditions of Section 7.18 have otherwise been satisfied with respect
to such Subsidiary, (2) the aggregate amount of such investments,
loans, or advances to all Subsidiaries (other than Westview
Advertising) shall not exceed $100,000 and (3) the aggregate amount of
such investments, loans, or advances to Westview Advertising shall not
exceed $4,000,000 during any 12-month period.
8.07 Lease Obligations. Create, incur or suffer to exist, or
permit any of its Subsidiaries to create, incur or suffer to exist, any
obligations as lessee (i) for the payment of rent for any real or personal
property in connection with any sale and leaseback transaction, or (ii) for the
payment of rent for any real or personal property under leases or agreements to
lease other than aggregate obligations under Capitalized Leases and Operating
Lease Obligations which would not cause the aggregate amount of all obligations
under Capitalized Leases and Operating Lease Obligations entered into after the
date hereof owing by the Borrower and its Subsidiaries in any 12-month period to
exceed $4,000,000.
8.08. Capital Expenditures. Make or be committed to make, or
permit any of its Subsidiaries to make or be committed to make, any expenditure
(by purchase or capitalized lease) for fixed or capital assets other than
expenditures (including obligations under Capitalized Leases) which would not
cause the aggregate amount of all such expenditures to exceed (i) $7,000,000 for
the fiscal year of the Borrower ending January 31, 1998, January 30, 1999, or
January 29, 2000, respectively, or (ii) $5,000,000 for the period beginning on
January 30, 2000 and ending on August 31, 2000.
8.09. Dividends, Prepayments, Etc. Declare or pay any
dividends, purchase or otherwise acquire for value any of its capital stock now
or hereafter outstanding, return any capital to its stockholders as such, or
make any other payment or distribution of assets to its stockholders as such, or
permit any of its Subsidiaries to do any of the foregoing or to purchase or
otherwise acquire for value any stock of the Borrower or make any payment or
prepayment of principal of, premium, if any, or interest on, or redeem, defease
or otherwise retire, any other Indebtedness of the Borrower before its scheduled
due date.
8.10. Federal Reserve Regulations. Permit any Loan or the
proceeds of any Loan under this Agreement to be used for any purpose which
violates or is inconsistent with the provisions of Regulations G, T, U or X of
the Board of Governors of the Federal Reserve System.
8.11. Transactions with Affiliates. Enter into or be a party
to, or permit any of its Subsidiaries to enter into or be a party to, any
transaction with any Affiliate of the Borrower except as otherwise provided
herein or in the ordinary course of business in a manner and to an extent
consistent with past practice and necessary or desirable for the prudent
operation of its business for fair consideration and on terms no less favorable
to the Borrower or such Subsidiary as are available from unaffiliated third
parties, provided that the amount of such normal and customary operating
expenses shall not exceed $100,000.
Exhibit 10.14 - Page 57
8.12. Cumulative FIFO EBITDA. Permit Cumulative FIFO EBITDA
for any fiscal month of the Borrower set forth below to be less than the amount
specified opposite each such fiscal month.
Month Amount
September, 1997 ($10,235,000)
October, 1997 ($10,115,000)
November, 1997 ($10,729,000)
December, 1997 ($6,935,000)
January, 1998 ($8,651,000)
February, 1998 ($8,676,000)
March, 1998 ($8,235,000)
April, 1998 ($7,483,000)
May, 1998 ($7,383,000)
June, 1998 ($6,900,000)
July, 1998 ($4,100,000)
August, 1998 ($500,000)
September, 1998 ($500,000)
October, 1998 ($500,000)
November, 1998 ($500,000)
December, 1998 ($500,000)
January, 1999 ($500,000)
February, 1999 ($500,000)
March, 1999 ($250,000)
April, 1999 ($250,000)
May, 1999 ($250,000)
June, 1999 ($250,000)
July, 1999 ($250,000)
August, 1999 $0
September, 1999 $1,000,000
October, 1999 $1,250,000
November, 1999 $1,500,000
December, 1999 $1,750,000
January, 2000 $2,000,000
February, 2000 $2,250,000
March, 2000 $2,500,000
April, 2000 $3,000,000
May, 2000 $3,500,000
June, 2000 $4,000,000
July, 2000 $4,500,000
August, 2000 $5,000,000
8.13. Markup and Markdown Policies. Engage in policies or
procedures with respect to markups or markdowns of Inventory which policies and
procedures, including the timing, amount and implementation of such markups and
markdowns, are inconsistent in any material respect with the past practices of
the Borrower absent the prior written consent of the Agent.
8.14. Environmental. Dispose, and shall not permit any
Subsidiary to dispose, of any Hazardous Material by placing it in or on the
ground or waters of any property owned, leased, operated or controlled by the
Borrower or such Subsidiary.
Exhibit 10.14 - Page 58
8.15. ERISA. (a) Engage in any prohibited transaction
described in Section 406 of ERISA or 4975 of the Code for which a statutory or
class exemption is not available or a private exemption has not previously been
obtained from the Department of Labor;
(b) permit, or permit any ERISA Affiliate to
permit, any enforceable Lien from arising under Section 412(n) of the Code;
(c) amend or permit any ERISA Affiliate to amend
any Benefit Plan in a manner that would require security under Section 307 of
ERISA;
(d) request or permit any ERISA Affiliate to
request a waiver of the minimum funding requirements under Section 412 of the
Code in respect of any Benefit Plan; or
(e) adopt any Plan or any amendment to a Plan
the effect of which is to materially increase the "current liability" under the
Plan as defined in section 302(d)(7) of ERISA.
8.16. Maintenance of Inventory. The Borrower shall not
permit the aggregate amount of its Inventory (valued at Book Value) at the end
of each fiscal month set forth below to be more than the amounts specified
opposite each such fiscal month set forth below: Fiscal Month Maximum Amount
August, 1997 $82,000,000
September, 1997 $82,000,000
October, 1997 $82,000,000
November, 1997 $82,000,000
December, 1997 $82,000,000
January, 1998 $82,000,000
February, 1998 $85,000,000
March, 1998 $85,000,000
April, 1998 $85,000,000
May, 1998 $85,000,000
June, 1998 $85,000,000
July, 1998 $85,000,000
August, 1998 $85,000,000
September, 1998 $85,000,000
October, 1998 $85,000,000
November, 1998 $85,000,000
December, 1998 $85,000,000
January, 1999 $85,000,000
February, 1999 $88,000,000
March, 1999 $88,000,000
April, 1999 $88,000,000
May, 1999 $88,000,000
June, 1999 $88,000,000
July, 1999 $88,000,000
August, 1999 $88,000,000
September, 1999 $88,000,000
October, 1999 $88,000,000
November, 1999 $88,000,000
December, 1999 $88,000,000
January, 2000 $88,000,000
February, 2000 $90,000,000
March, 2000 $90,000,000
Exhibit 10.14 - Page 59
April, 2000 $90,000,000
May, 2000 $90,000,000
June, 2000 $90,000,000
July, 2000 $90,000,000
August, 2000 $90,000,000
8.17. Plan Documents. The Borrower shall not permit the Plan
or the Confirmation Order to be amended, restated, supplemented or otherwise
modified in any way which has an effect upon (i) the ability of the Borrower or
any Subsidiary to perform its obligations hereunder, under the Fee Letter or
under any other Related Document, (ii) the Lien arising under the Related
Documents on any Collateral, (iii) the legality, validity or enforceability of
this Agreement or any Related Document or the Lien arising under any Related
Document, or (iv) the aggregate value of the property included in the
calculations of the Borrowing Base, without the prior written consent of the
Agent.
ARTICLE IX
DEFAULTS
----------
9.01. Events of Default. An Event of Default shall mean the
occurrence or existence of one or more of the following events or conditions
(whatever the reason for such Event of Default and whether voluntary,
involuntary or effected by operation of law):
(a) The Borrower shall fail to make any payment of
principal under this Agreement on any Loan or any Reimbursement
Obligation when due; or the Borrower shall fail to pay when due any
other amount payable under this Agreement or any other Related Document
(including but not limited to the making of deposits in the Depository
Accounts, the Cash Concentration Account or the Letter of Credit Cash
Collateral Account), including any interest or fee due hereunder or
under the Fee Letter or any other Related Document and such failure
shall continue unremedied for more than five (5) Business Days; or
(b) Any representation or warranty made by the
Borrower under this Agreement or any other Related Document or any
statement made by the Borrower in any financial statement, certificate,
report or document furnished to the Agent or the Lenders pursuant to or
in connection with this Agreement or any other Related Document, shall
prove to have been false or misleading in any material respect as of
the time when made (including by omission of material information
necessary to make such representation, warranty or statement, in light
of the circumstances under which it was made, not misleading); or
(c) The Borrower shall default in the performance or
observance of any covenant contained in Sections 7.03, 7.07, 7.08,
7.10, 7.11, 7.13 or 7.18 hereof or Article VIII hereof or Section 5 of
the Security Agreement and such default shall have continued unremedied
for a period of five (5) Business Days; or
(d) The Borrower shall default in the performance or
observance of (i) the covenants contained in Section 7.01 (other than
paragraphs (e) and (f) thereof) and such default shall have continued
unremedied for a period of five (5) days, (ii) the covenants contained
in paragraphs (e) and (f) of Section 7.01 and such default shall have
continued unremedied for a period of five (5) Business Days, and (iii)
any other covenant, agreement or duty under this Agreement or any other
Related Document (to the extent not otherwise set forth in this Section
9.01) and such default shall have continued unremedied for a period of
twenty (20) days; or
Exhibit 10.14 - Page 60
(e) There shall have been asserted against the
Borrower or any Subsidiary claims, whether accrued, absolute or
contingent, based on or arising from any Environmental Matter,
including, without limitation, the generation, storage, transport,
handling or disposal of Hazardous Materials by the Borrower or any
Subsidiary, or any predecessor in interest to the Borrower or any
Subsidiary, which claims are reasonably likely to be determined
adversely to the Borrower or any Subsidiary (or any such predecessor in
interest), in an amount in excess of $250,000; or
(f) The Borrower or any Subsidiary shall fail to pay
any principal or interest on any of its Indebtedness (excluding
Indebtedness evidenced by the Notes) in excess of $250,000, or any
interest or premium thereon, when due (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise) and such
failure shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such Indebtedness,
or any other default under any agreement or instrument relating to any
such Indebtedness, or any other event, shall occur and shall continue
after the applicable grace period, if any, specified in such agreement
or instrument, if the effect of such default or event is to accelerate,
or to permit the acceleration of, the maturity of such Indebtedness; or
any such Indebtedness in excess of such amount shall be declared to be
due and payable, or required to be prepaid (other than by a regularly
scheduled required prepayment), prior to the stated maturity thereof;
or
(g) The Borrower or any Subsidiary (i) shall
institute any proceeding or voluntary case seeking to adjudicate it a
bankrupt or insolvent, or seeking dissolution, liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or
composition of it or its debts under any law relating to bankruptcy,
insolvency, reorganization or relief of debtors, or seeking the entry
of any order for relief of debtors, or seeking the entry of an order
for relief or the appointment of a receiver, trustee, custodian or
other similar official for the Borrower or any Subsidiary or for any
substantial part of its property, (ii) shall be generally not paying
its debts as such debts become due, or shall admit in writing its
inability to pay its debts generally, (iii) shall make a general
assignment for the benefit of creditors, or (iv) shall take any action
to authorize or effect any of the actions set forth above in this
subsection (g); or
(h) Any proceeding shall be instituted against the
Borrower or any Subsidiary seeking to adjudicate it a bankrupt or
insolvent, or seeking dissolution, liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief of debtors,
or seeking the entry of an order for relief or the appointment of a
receiver, trustee, custodian or other similar official for the Borrower
or any Subsidiary or for any substantial part of its property, and
either such proceeding shall remain undismissed or unstayed for a
period of 60 days or any of the actions sought in such proceeding
(including, without limitation, the entry of an order for relief
against it or the appointment of a receiver, trustee, custodian or
other similar official for it or for any substantial part of its
property) shall occur; or
(i) Any material provision of any Loan Document shall
at any time for any reason be declared to be null and void, or the
validity or enforceability thereof shall be contested by the Borrower,
or a proceeding shall be commenced by the Borrower, or by any
Governmental Authority or other regulatory body having jurisdiction
over the Borrower, seeking to establish the invalidity or
unenforceability thereof, or the Borrower shall deny in writing that
the Borrower has any liability or obligation purported to be created
under any Loan Document; or
(j) The Security Agreement or any other Security
Document, after delivery thereof pursuant hereto, shall for any reason
fail or cease to create a valid and
Exhibit 10.14 - Page 61
perfected and, except to the extent permitted by the terms hereof or
thereof, first priority Lien on or security interest in any Collateral
purported to be covered thereby; or
(k) One or more judgments or orders (other than a
judgment described in subsections (g) or (h) of this Section 9.01) for
the payment of money exceeding any applicable insurance or bond
coverage by more than $500,000 in the aggregate shall be rendered
against the Borrower or any Subsidiary and either (i) enforcement
proceedings shall have been commenced by any creditor upon any such
judgment or order, or (ii) there shall be any period of 20 consecutive
days during which a stay of enforcement of any such judgment or order,
by reason of a pending appeal or otherwise shall not be in effect; or
(l) The Borrower or any of its ERISA Affiliates shall
have made a complete or partial withdrawal from a Multiemployer Plan,
and, as a result of such complete or partial withdrawal, the Borrower
or such ERISA Affiliate incurs a withdrawal liability in an annual
amount exceeding $250,000; or a Multiemployer Plan enters
reorganization status under Section 4241 of ERISA, and, as a result
thereof, the Borrower's or such ERISA Affiliate's annual contribution
requirement with respect to such Multiemployer Plan increases in an
annual amount exceeding $250,000; or
(m) Any Termination Event with respect to any Benefit
Plan shall have occurred, and, 30 days after notice thereof shall have
been given to the Borrower by the Agent, (i) such Termination Event (if
correctable) shall not have been corrected, and (ii) the then current
value of such Benefit Plan's vested benefits exceeds the then current
value of assets allocable to such benefits in such Benefit Plan by more
than $250,000 (or in the case of a Termination Event involving
liability under Section 515, 4062, 4063, 4064, 4069, 4201 or 4204 of
ERISA, the liability is in excess of such amount); or
(n) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ shall cease to be actively
involved in the management of the Borrower (other than as a result of
the death, incapacity or disability of ▇▇. ▇▇▇▇▇▇) and such Person
shall not have been replaced within 90 days of ▇▇. ▇▇▇▇▇▇ ceasing to be
actively involved in the management of the Borrower with a person
reasonably acceptable to the Agent on terms reasonably acceptable to
the Agent.
9.02 Consequences of an Event of Default. If an Event of
Default shall occur and be continuing or shall exist the Agent may, and upon the
direction of the Majority Lenders, shall by notice to the Borrower,
(a) declare the Revolving Credit Commitment of
each Lender and the Current Commitment terminated, whereupon the Revolving
Credit Commitment of each Lender and the Current Commitment will terminate
immediately and any fees hereunder shall be immediately due and payable without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived, and an action therefor shall immediately accrue; or
(b) declare the unpaid principal amount of the
Notes, interest accrued thereon, the total amount of the Letter of Credit
Exposure that is not cash collateralized in accordance with this agreement and
all other amounts owing by the Borrower hereunder or under the Notes to be
immediately due and payable without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived, and an action
therefor shall immediately accrue; or
(c) give notice to the Borrower of the
occurrence and continuance of an Event of Default; or
Exhibit 10.14 - Page 62
(d) at any time when there are no Loans
outstanding, maintain cash collateral (to the extent the Borrower has or
receives cash) equal to 105% of all outstanding Letters of Credits; or
(e) apply all funds deposited in the Cash
Concentration Account, and in the Letter of Credit Cash Collateral Account to
the payment, in whole or in part, of the Obligations; or
(f) set-off amounts in the Cash Concentration
Account, the Letter of Credit Cash Collateral Account, or any other account
under the dominion and control of the Agent and apply such amounts to the
Obligations of the Borrower hereunder and under the Related Documents;
provided, however, that upon the occurrence of any Event of Default described in
subsections (g) or (h) of Section 9.01, the Loans and all Reimbursement
Obligations, all interest thereon and all other amounts shall become and be
forthwith due and payable, without presentment, demand, protest or further
notice of any kind, all of which are expressly waived by the Borrower.
9.03. Deposit for Letters of Credit. Upon the occurrence of an
Event of Default, the Letter of Credit Issuer may make payment of all or any
part of the Stated Amount of any Letter of Credit to the beneficiary thereof, or
to an account at the Agent designated by the Agent for the purpose of future
payments to be made to such beneficiary, in which event such payment shall be
treated in all respects as a drawing under the Letter of Credit in full
compliance therewith (notwithstanding that the beneficiary shall have failed to
present all or any of the documents or satisfied all or any of the requirements
for a drawing thereunder) and shall result in an Unreimbursed Draw. In addition,
upon demand by the Letter of Credit Issuer after the occurrence of any Event of
Default, the Borrower shall deposit with the Agent for the benefit of the Letter
of Credit Issuer with respect to each Letter of Credit then outstanding cash in
an amount equal to the greatest amount for which such Letter of Credit may be
drawn. Such deposits shall be held by the Agent for the benefit of the Letter of
Credit Issuer in a non-interest bearing cash collateral account as security for,
and to provide for the payment of, the Letter of Credit Exposure.
9.04 Certain Remedies. If an Event of Default occurs, each of
the Agent and the Lenders may exercise all rights and remedies which it may have
hereunder or under any other Related Document or at law or in equity or
otherwise. All such remedies shall be cumulative and not exclusive.
ARTICLE X
MISCELLANEOUS
10.01. Holidays. Except as otherwise provided herein, whenever
any payment or action to be made or taken hereunder or under the Notes shall be
stated to be due on a day which is not a Business Day, such payment or action
shall be made or taken on the next following Business Day and such extension of
time shall be included in computing interest or fees, if any, in connection with
such payment or action.
10.02. Records. The unpaid principal amount of the Notes, the
unpaid interest accrued thereon, the interest rate or rates applicable to such
unpaid principal amount, the duration of such applicability, the Current
Commitment, the Stated Amount of each Letter of Credit, the principal amount of
all Reimbursement Obligations, the Letter of Credit Exposure, and the accrued
and unpaid Agent's fee, Unused Line Fee and Letter of Credit Fees shall at all
times be ascertained from the records of the Agent, which shall be conclusive
and binding absent manifest error.
10.03. Amendments and Waivers. (a) No amendment or
modification of any provision of this Agreement or of any of the Notes or of any
other Related Document shall be effective without the written agreement of the
Majority Lenders and the Borrower and no termination or waiver
Exhibit 10.14 - Page 63
of any provision of this Agreement or of any of the Notes, or consent to any
departure by the Borrower therefrom, shall in any event be effective without the
written concurrence of the Majority Lenders, which the Majority Lenders shall
have the right to grant or withhold at their sole discretion; except that any
amendment, modification, or waiver of (i) any provision of Article II or III
which amendment, modification or waiver increases the Revolving Credit
Commitment of any Lender, changes the principal amount or the final maturity of
the Loans or reduces the interest rate applicable to the Loans or the amount of
the fees payable pursuant hereto, (ii) the definitions of "Termination Date",
"Majority Lenders" and "Pro Rata Shares", (iii) any provision of this Agreement
or any Related Document that would permit Liens on the Collateral or release of
the Collateral (except as set forth in Section 11.08 thereof or except as other
permitted therein) or (iv) the provisions contained in this Section 10.03, shall
be effective only if evidenced by a writing signed by or on behalf of all
Lenders. No amendment, modification, termination, or waiver of any provision of
Article XI or any other provision referring to the Agent shall be effective
without the written concurrence of the Agent. Any waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given. No notice to or demand on the Borrower in any case shall entitle
the Borrower to any other or further notice or demand in similar or other
circumstances. Any amendment, modification, waiver or consent effected in
accordance with this Section 10.03 shall be binding on each Lender, each future
Lender, and, if signed by the Borrower, on the Borrower.
(b) Notwithstanding anything to the contrary
contained in subsection 10.03(a), in the event that the Borrower requests that
this Agreement or any other Related Document be amended or otherwise modified in
a manner which would require the unanimous consent of all of the Lenders and
such amendment or other modification is agreed to by the Majority Lenders, then,
with the consent of the Borrower and the Majority Lenders, the Borrower and the
Majority Lenders may amend this Agreement without the consent of the Lender or
Lenders which did not agree to such amendment or other modification
(collectively the "Minority Lenders") to provide for (w) the termination of the
Revolving Credit Commitment of each of the Minority Lenders, (x) the addition to
this Agreement of one or more other Lenders, or an increase in the Revolving
Credit Commitment of one or more of the Majority Lenders, so that the Revolving
Credit Commitments after giving effect to such amendment shall be in the same
aggregate amount as the Revolving Credit Commitments immediately before giving
effect to such amendment, (y) if any Loans are outstanding at the time of such
amendment, the making of such additional Loans by such new Lenders or Majority
Lenders, as the case may be, as may be necessary to repay in full the
outstanding Loans of the Minority Lenders immediately before giving effect to
such amendment and (z) the payment of all fees and other Obligations payable or
accrued in favor of the Minority Lenders and such other modifications to this
Agreement as the Borrower and the Majority Lenders may determine to be
appropriate.
10.04. No Implied Waiver; Cumulative Remedies. No course of
dealing and no delay or failure of the Lenders or the Agent in exercising any
right, power or privilege under this Agreement, the Notes or any other Related
Document shall affect any other or future exercise thereof or exercise of any
other right, power or privilege; nor shall any single or partial exercise of any
such right, power or privilege or any abandonment or discontinuance of steps to
enforce such a right, power or privilege preclude any further exercise thereof
or of any other right, power or privilege. The rights and remedies of the
Lenders or the Agent under this Agreement, the Notes and the other Related
Documents are cumulative and not exclusive of any rights or remedies which the
Lenders or the Agent have thereunder or at law or in equity or otherwise. The
Lenders or the Agent may exercise their rights and remedies against the Borrower
and the Collateral as the Lenders and the Agent may elect, and regardless of the
existence or adequacy of any other right or remedy.
10.05. Notices. (a) All notices, requests, demands, directions
and other communications (collectively "notices") under the provisions of this
Agreement or the Notes shall be in writing and shall be mailed (by certified
mail, postage prepaid and return receipt requested), telecopied, or delivered
and shall be effective (i) if mailed, three days after being deposited in the
mails, (ii) if
Exhibit 10.14 - Page 64
telecopied, when sent, confirmation received and (iii) if delivered, upon
delivery. All notices shall be sent to the applicable party at the address
stated on the signature page hereof together with, in the case of a letter of
credit request and Letter of Credit Application sent pursuant to Section
3.01(a), a copy to the Agent at the address for the Agent provided on the
signature page hereof, or in accordance with the last unrevoked written
direction from such party to the other parties hereto.
(b) The Lenders and the Agent may rely, and
shall be fully protected in relying, on any notice purportedly made by or on
behalf of the Borrower and the Lenders and the Agent shall have no duty to
verify the identity or authority of any Person giving such notice. The preceding
sentence shall apply to all notices whether or not made in a manner authorized
or required by this Agreement or any other Related Document.
10.06 Expenses; Taxes; Attorneys' Fees; Indemnification.
Without in any way limiting any provision of this Agreement or any provision of
any Related Document, the Borrower agrees to pay or cause to be paid, on demand,
and to save the Agent (and, in the case of clauses (c) through (m) below, the
Lenders) harmless against liability for the payment of, all reasonable
out-of-pocket expenses, regardless of whether the transactions contemplated
hereby are consummated, including but not limited to reasonable fees and
expenses of counsel for the Agent (and, in the case of clauses (c) through (m)
below, the Lenders), accounting, due diligence, periodic field audits,
investigation, monitoring of assets, syndication, miscellaneous disbursements,
examination, travel, lodging and meals, incurred by the Agent (and, in the case
of clauses (e) through (m) below, the Lenders) from time to time arising from or
relating to: (a) the negotiation, preparation, execution, delivery, performance
and administration of this Agreement and the other Related Documents, (b) any
requested amendments, waivers or consents to this Agreement or the other Related
Documents whether or not such documents become effective or are given, (c) the
preservation and protection of any of the Agent's and the Lenders' rights under
this Agreement or the other Related Documents, (d) the defense of any claim or
action asserted or brought against the Agent or the Lenders by any Person that
arises from or relates to this Agreement, any other Related Document, the
Agent's or the Lenders' claims against the Borrower, or any and all matters in
connection therewith, (e) the commencement or defense of, or intervention in,
any court proceeding arising from or related to this Agreement or any other
Related Document, (f) the filing of any petition, complaint, answer, motion or
other pleading by the Agent or the Lenders, or the taking of any action in
respect of the Collateral or other security, in connection with this Agreement
or any other Related Document, (g) the protection, collection, lease, sale,
taking possession of or liquidation of, any Collateral or other security in
connection with this Agreement or any other Related Document, (h) any attempt to
enforce any lien or security interest in any Collateral or other security in
connection with this Agreement or any other Related Document, (i) any attempt to
collect from the Borrower, (j) the receipt of any advice with respect to any of
the foregoing, (k) all Environmental Liabilities and Costs arising from or in
connection with the past, present or future operations of the Borrower or any of
its Subsidiaries involving any damage to real or personal property or natural
resources or harm or injury alleged to have resulted from any Release of
Hazardous Materials on, upon or into such property, (1) any costs or liabilities
incurred in connection with the investigation, removal, cleanup and/or
remediation of any Hazardous Materials present or arising out of the operations
of any facility of the Borrower or any of its Subsidiaries, or (m) any costs or
liabilities incurred in connection with any Environmental Lien. Without
limitation of the foregoing or any other provision of any Related Document: (x)
the Borrower agrees to pay all stamp, document, transfer, recording or filing
taxes or fees (including, without limitation, mortgage recording taxes) and
similar impositions now or hereafter determined by the Agent or any of the
Lenders to be payable in connection with this Agreement or any other Related
Document, and the Borrower agrees to save the Agent and the Lenders harmless
from and against any and all present or future claims, liabilities or losses
with respect to or resulting from any omission to pay or delay in paying any
such taxes, fees or impositions, and (y) if the Borrower fails to perform any
covenant or agreement contained herein or in any other Related Document, the
Agent may itself perform or cause performance of such covenant or agreement, and
the expenses of the Agent incurred in connection therewith shall be reimbursed
on
Exhibit 10.14 - Page 65
demand by the Borrower. The Borrower agrees to indemnify and defend the Agent
and the Lenders and their directors, officers, agents, employees and affiliates
(collectively, the "Indemnified Parties") from, and hold each of them harmless
against, any and all losses, liabilities, claims, damages, costs or expenses of
any nature whatsoever (including reasonable attorneys' fees and expenses and
amounts paid in settlement) incurred by, imposed upon or asserted against any of
them arising out of or by reason of any investigation, litigation or other
proceeding brought or threatened relating to, or otherwise arising out of or
relating to, the execution of this Agreement or any other Related Document, the
transactions contemplated hereby or thereby or any Loan or Proposed Loan or
Letter of Credit or proposed Letter of Credit hereunder (including, but without
limitation, any use made or proposed to be made by the Borrower or any of its
Affiliates of the proceeds of any thereof, or the delivery or use or transfer of
or the payment or failure to pay under any Loan or Letter of Credit) but
excluding any such losses, liabilities, claims, damages, costs or expenses to
the extent determined by a final judgment of a court of competent jurisdiction
to have resulted from the gross negligence or willful misconduct of the
Indemnified Party.
10.07. Application. Except to the extent, if any, expressly
set forth in this Agreement or in the Related Documents, the Agent and the
Lenders shall have the right to apply any payment received or applied by it in
connection with the Obligations to such of the obligations then due and payable
as it may elect.
10.08. Severability. The provisions of this Agreement are
intended to be severable. If any provision of this Agreement shall be held
invalid or unenforceable in whole or in part in any jurisdiction such provision
shall, as to such jurisdiction, be ineffective to the extent of such invalidity
or unenforceability without in any manner affecting the validity or
enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.
10.09. Governing Law. This Agreement and the Notes shall be
deemed to be contracts under the laws of the State of New York, without regard
to choice of law principles, and for all purposes shall be governed by and
construed and enforced in accordance with the laws of said State.
10.10. Prior Understandings. This Agreement supersedes all
prior understandings and agreements, whether written or oral, among the parties
hereto relating to the transactions provided for herein other than the Fee
Letter.
10.11. Duration; Survival. All representations and warranties
of the Borrower contained herein or made in connection herewith shall survive
the making of the Loans and the issuance of any Letter of Credit and shall not
be waived by the execution and delivery of this Agreement, the Notes or any
other Related Document, any investigation by or knowledge of the Agent or the
Lenders, the making of any Loan or the issuance of any Letter of Credit
hereunder, or any other event whatsoever. All covenants and agreements of the
Borrower contained herein shall continue in full force and effect from and after
the date hereof so long as the Borrower may borrow hereunder and until the
Obligations have been paid in full and no Letters of Credit remain outstanding.
Without limitation, it is understood that all obligations of the Borrower to
make payments to or indemnify the Agent the Lenders (including, without
limitation, obligations arising under Section 10.06 hereof) shall survive the
payment in full of the Notes and all Reimbursement Obligations and of all other
obligations of the Borrower thereunder and hereunder, termination of this
Agreement and all other events whatsoever and whether or not any Loans are made
or Letters of Credit issued hereunder.
10.12. Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts each of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute but one and the same instrument.
Exhibit 10.14 - Page 66
10.13. Assignment; Participations. (a) CIT shall have the
right at any time to assign to one or more commercial banks or other financial
institutions (then entitled to receive payments of principal, interest and fees
for the account of its lending office under this Agreement free from withholding
of Federal income tax) a portion of its rights and obligations under this
Agreement (including, without limitation, a portion of its Revolving Credit
Commitment, the Loans owing to it and its rights and obligations as a Lender
with respect to Letters of Credit) and the other Related Documents; provided,
however, that (i) the identity of each such assignee shall be subject to the
consent of the Borrower, which consent shall not be unreasonably withheld or
delayed, unless such assignee is on the list of proposed assignees delivered by
CIT to the Borrower prior to the date hereof the Borrower shall not have
rejected in writing such assignee in which case the consent of the Borrower
shall not be required, (ii) the parties to each such assignment shall execute
and deliver to the Agent, for its acceptance and recording in the Register (as
hereinafter defined), an Assignment and Acceptance, and (iii) after giving
effect to such assignment, CIT's Revolving Credit Commitment shall be at least
equal to the lesser of (1) $20,000,001 and (2) an amount equal to a majority of
the aggregate amount of the Revolving Credit Commitments. Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in each Assignment and Acceptance, (A) the assignee thereunder shall be a party
hereto and to the other Related Documents and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations (including, without limitation, the
obligation to participate in Letters of Credit) of a Lender hereunder and
thereunder and (B) CIT shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement.
(b) By executing and delivering an Assignment
and Acceptance, CIT and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in
such Assignment and Acceptance, CIT makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or any other
Related Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other Related
Document furnished pursuant hereto; (ii) CIT makes no representation or warranty
and assumes no responsibility with respect to the financial condition of the
Borrower or any of its Subsidiaries or the performance or observance by the
Borrower of any of its obligations under this Agreement or any other Related
Document furnished pursuant hereto; (iii) such assignee confirms that it has
received a copy of this Agreement and the other Related Documents, together with
such other documents and information it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance; (iv)
such assignee will, independently and without reliance upon the Agent or any
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement and the other Related Documents; (v) such assignee
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement and the other Related Documents as
are delegated to the Agent by the terms thereof, together with such powers as
are reasonably incidental thereto, and (vi) such assignee agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of this Agreement and the other Related Documents are required to be performed
by it as a Lender.
(c) The Agent shall maintain at its address
referred to on the signature page hereto, a copy of each Assignment and
Acceptance delivered to and accepted by it and a register for the recordation of
the names and addresses of the Lenders and the Revolving Credit Commitment of,
and principal amount of the Loans owing to, each Lender from time to time (the
"Register"). The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrower, the Agent and the Lenders may
treat each Person whose name is recorded in the Register as a Lender hereunder
for all purposes of this Agreement. The Register shall be available for
inspection
Exhibit 10.14 - Page 67
by the Borrower and any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(d) Upon its receipt of an Assignment and
Acceptance executed by an assigning Lender, an assignee Lender, the Agent and
the Borrower, together with the Note subject to such Assignment, the Agent
shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit E hereto, (i) accept such Assignment and
Acceptance, (ii) give prompt notice thereof to the Borrower and (iii) record the
information contained therein in the Register. Within five Business Days after
its receipt of such notice, the Borrower, at its own expense, shall execute and
deliver to the Agent in exchange for the surrendered Note a new Note to the
order of such assignee Lender in an aggregate principal amount equal to the
Revolving Credit Commitment assigned by it pursuant to such Assignment and
Acceptance, and if the assigning Lender has retained any Revolving Credit
Commitment hereunder, a new Note to the order of the assigning Lender in an
aggregate principal amount equal to the Revolving Credit Commitment retained by
it hereunder, in each case prepared by the Agent. Such now Note shall be in an
aggregate principal amount equal to the aggregate principal amount of such
surrendered Note, shall be dated the date of the Agent's acceptance of such
assignment and acceptance and shall otherwise be in substantially the form of
Exhibit A hereto.
(e) Each Lender may sell participations to one
or more banks or other entities in or to all or a portion of its rights and
obligations under this Agreement and the other Related Documents (including,
without limitation, all or a portion of its Revolving Credit Commitment and the
Loans owing to it and its participation in Letters of Credit), provided that (1)
such Lender's obligations under this Agreement (including, without limitation,
its Revolving Credit Commitment hereunder) and the other Related Documents shall
remain unchanged; (2) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, and the Borrower, the
Agent and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement and the other Related Documents; and (3) a participant shall not be
entitled to require such Lender to take or omit to take any action hereunder
except (A) action directly effecting an extension of the maturity dates of the
Loans, or (B) action directly effecting an increase of any of the Revolving
Credit Commitments or principal amounts of Loans or a decrease in the rate of
interest payable on the Loans.
(f) Notwithstanding the foregoing provisions of
this Section 10.13, each Lender may at any time sell, assign, transfer, or
negotiate all or any part of its rights and obligations under this Agreement and
the Related Document to any Affiliate of such Lender.
10.14. Successors and Assigns. This Agreement and the other
Related Documents shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns except that the Borrower may
not assign or transfer any of its rights hereunder or thereunder without the
prior written consent of all of the Lenders.
10.15. Confidentiality. Upon delivering to any Lender or the
Agent, or permitting any Lender or the Agent to inspect, any written information
pursuant to this Agreement or the other Related Documents, each Lender and the
Agent shall treat such information as confidential to the extent such
information is conspicuously marked confidential. Each Lender and the Agent
agrees to hold such information in confidence from the date of disclosure
thereof. Subject to the other provisions of this Section 10.15, each Lender and
the Agent may disclose confidential information to its officers, directors,
employees, attorneys, accountants or other professionals engaged by any Lender
or the Agent only after determining that such third party has been instructed to
hold such information in confidence to the same extent as if it were a Lender.
Notwithstanding the foregoing, the provisions of this Section 10.15 shall not
apply to information within any one of the following categories or any
combination thereof: (i) information the substance of which, at the time of
disclosure by any Lender or the Agent, has been disclosed to or is known to any
creditor (other than information as to which such
Exhibit 10.14 - Page 68
creditor is then under an obligation of nondisclosure), or any Person other than
(A) a director, officer, employee or agent of any of the Borrower or a
professional engaged by the Borrower or (B) a Person who is then under an
obligation of nondisclosure (otherwise than as a consequence of a wrongful act
of any Lender or the Agent), (ii) information which any Lender or the Agent had
in its possession prior to receipt thereof from the disclosing party, or (iii)
information received by any Lender or the Agent from a third party having no
obligations of nondisclosure with respect thereto. Nothing contained in this
Section 10.15 shall prevent any disclosure: (x) believed in good faith by any
Lender or the Agent to be required by any law or guideline or interpretation or
application thereof by any Governmental Authority, arbitrator or grand jury
charged with the interpretation or administration thereof or compliance with any
request or directive of any Governmental Authority, arbitrator or grand jury
(whether or not having the force of law), (y) determined by counsel for any
Lender or the Agent to be necessary or advisable in connection with enforcement
or preservation of rights under or in connection with this Agreement or any
other Related Document or (z) of any information which has been made public by a
Person other than any Lender or the Agent. The Lenders and the Agent shall have
the right to disclose any confidential information described in this Section
10.15 to the Letter of Credit Issuer and to an assignee or prospective assignee
or to a participant or prospective participant in Loans hereunder, provided that
the assigning or selling Lender shall have obtained from such assignee or
prospective assignee or participant or prospective participant an agreement to
hold such information in confidence to the same extent as if it were a Lender.
10.16. Waiver of Jury Trial. BY ITS EXECUTION AND DELIVERY OF
THIS AGREEMENT, THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS AGREEMENT,
THE NOTES OR ANY OTHER RELATED DOCUMENT, ANY OF THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE AGENT, THE LENDERS, OR THE
BORROWER IN CONNECTION HEREWITH OR THEREWITH. THIS PROVISION IS MATERIAL
INDUCEMENT FOR THE AGENT AND THE LENDERS TO ENTER INTO THE AGREEMENT.
10.17. Right of Setoff. Upon the occurrence and during the
continuance of any Event of Default any Lender, the Agent and the Letter of
Credit Issuer may, and is hereby authorized to, at the time from time to time,
without notice to the Borrower (any such notice being expressly waived by the
Borrower) and to the fullest extent permitted by law, set off and apply any and
all deposits (general or special, time or demand, provision or final) at any
time held and other indebtedness at any time owing by such Lender, the Agent or
the Letter of Credit Issuer to or for the credit or the account of the Borrower
against any and all Obligations of the Borrower now or hereafter existing under
the Loan Documents, irrespective of whether or not any Lender, the Agent and the
Letter of Credit Issuer shall have made any demand hereunder or thereunder and
although such Obligations may be contingent or unmatured. Each Lender, the Agent
and the Letter of Credit Issuer agrees promptly to notify the Borrower after any
such setoff and application made by such Lender, the Agent or the Letter of
Credit Issuer; provided, however, that the failure to give such notice shall not
affect the validity of such setoff and application. The rights of each Lender,
the Agent and the Letter of Credit Issuer under this Section 10.17 are in
addition to the other rights and remedies (including, without limitation, other
rights of setoff under applicable law or otherwise) which such Lender, the Agent
or the Letter of Credit Issuer may have.
10.18. Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which shall be deemed to be an original, but all of which taken together
shall constitute one and the same agreement.
Exhibit 10.14 - Page 69
10.19. Headings. Section headings herein are included for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose.
10.20. Forum Selection and Consent to Jurisdiction. Any
litigation based hereon, or arising out of, under or in connection with, this
Agreement or any other Loan Document, or any course of conduct, course of
dealing, statement (whether verbal or written) or action of the Agent, any
Lender, the Agent, the Letter of Credit Issuer or the Borrower may be brought
and maintained exclusively in the courts of the State of Now York or the United
States District Court for the Southern District of New York; provided, however,
that any suit seeking enforcement against any Collateral or other property may
be brought, at the Agent's option, in the courts of any jurisdiction where such
Collateral or other property may be found. The Borrower hereby expressly and
irrevocably submits to the jurisdiction of the courts of the State of New York
and of the United States District Court for the Southern District of New York
for the purpose of any such litigation and irrevocably agrees to be bound by any
judgment rendered thereby in connection with such litigation. The Borrower
further irrevocably consents to the service of process (i) by registered or
certified mail, postage prepaid, to the Borrower at its address for notices
contained in Section 10.05 hereof, such service to become effective five days
after such mailing, or (ii) by personal service within or without the State of
New York. Nothing herein shall affect the right of the Agent, any Lender or the
Letter of Credit Issuer to service of process in any other manner permitted by
law. The Borrower hereby expressly and irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of venue of any such litigation brought in any such court referred to above and
any claim that any such litigation has been brought to an inconvenient forum. To
the extent that the Borrower has or hereafter may acquire any immunity from
jurisdiction of any court or from any legal process (whether through service or
notice, attachment prior to judgment, attachment in aid of execution or
otherwise) with respect to itself or its property, the Borrower hereby
irrevocably waives such immunity in respect of its obligations under this
Agreement and the other Loan Documents.
ARTICLE XI
THE AGENT
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11.01. Appointment. Each Lender designates and appoints CIT as
its Agent under this Agreement and the Related Documents, and each Lender hereby
irrevocably authorizes the Agent to take such action on its behalf under the
provisions of this Agreement and the Related Documents and to exercise such
powers as are set forth herein or therein, together with such other powers as
are reasonably incidental thereto. The Agent agrees to act as such on the
express conditions contained in this Article XI. The provisions of this Article
XI are solely for the benefit of the Agent and the Lenders and the Borrower
shall not have any rights as a third party beneficiary of any of the provisions
hereof (other than as expressly set forth in Section 11.07). In performing its
functions and duties under this Agreement and under the Related Documents, the
Agent shall act solely as agent of the Lenders and does not assume and shall not
be deemed to have assumed any obligations toward or relationship of agency or
trust with or for the Borrower. The Agent may perform any of its duties
hereunder, or under the Related Documents, by or through its agents or
employees.
11.02. Nature of Duties. The Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement or in the
Related Documents. The duties of the Agent shall be mechanical and
administrative in nature. The Agent shall not have by reason of this Agreement
or any Related Document a fiduciary relationship in respect of any Lender.
Nothing in this Agreement or any of the Related Documents, express or implied,
is intended to or shall be construed to impose upon the Agent any obligations in
respect of this Agreement or any of the Related Documents except as expressly
set forth herein or therein. Each Lender shall make its own independent
investigation of the financial condition and affairs of the Borrower in
connection with the making and the continuance of the Loans hereunder and with
the issuance of the Letters of Credit and shall make its own appraisal of
Exhibit 10.14 - Page 70
the creditworthiness of the Borrower, and the Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide any Lender
with any credit or other information with respect thereto, whether coming into
its possession before the initial Credit Extension hereunder or at any time or
times thereafter, provided that, upon the reasonable request of a Lender, the
Agent shall provide to such Lender any documents or reports delivered to the
Agent by the Borrower pursuant to the terms of this Agreement or any Related
Document. If the Agent seeks the consent or approval of the Majority Lenders to
the taking or refraining from taking any action hereunder, the Agent shall send
notice thereof to each Lender. The Agent shall promptly notify each Lender any
time that the Majority Lenders have instructed the Agent to act or refrain from
acting pursuant hereto.
11.03. Rights, Exculpation, Etc. Neither the Agent nor any of
its officers, directors, employees or agents shall be liable to any Lender for
any action taken or omitted by them hereunder or under any of the Related
Documents, or in connection herewith or therewith, except that the Agent shall
be obligated on the terms set forth herein for performance of its express
obligations hereunder and except that no Person shall be relieved of any
liability imposed by law for intentional tort. The Agent shall not be liable for
any apportionment or distribution of payments made by it in good faith pursuant
to Section 2.08(c), and if any such apportionment or distribution is
subsequently determined to have been made in error the sole recourse of any
Lender to whom payment was due but not made, shall be to recover from other
lenders any payment in excess of the amount which they are determined to be
entitled. The Agent shall not be responsible to any Lender for any recitals,
statements, representations or warranties herein or in the Related Documents or
for any execution, effectiveness, genuineness, validity, enforceability,
collectibility, or sufficiency of this Agreement or any of the Related Documents
or the transactions contemplated thereby, or for the financial condition of the
Borrower. The Agent shall not be required to make any inquiry concerning either
the performance or observance of any of the terms, provisions or conditions of
this Agreement or any of the Related Documents or the financial condition of the
Borrower, or the existence or possible existence of any Potential Default or
Event of Default. The Agent may at any time request instructions from the
Lenders with respect to any actions or approvals which by the terms of this
Agreement or of any of the Related Documents the Agent is permitted or required
to take or to grant, and if such instructions are promptly requested, the Agent
shall be absolutely entitled to refrain from taking any action or to withhold
any approval under any of the Related Documents until it shall have received
such instructions from the Majority Lenders. Without limiting the foregoing, no
Lender shall have any right of action whatsoever against the Agent as a result
of the Agent acting or refraining from acting under this Agreement, the Notes or
any of the other Related Documents in accordance with the instructions of the
Majority Lenders.
11.04. Reliance. The Agent shall be entitled to rely upon any
written notices, statements, certificates, orders or other documents or any
telephone message believed by it in good faith to be genuine and correct and to
have been signed, sent or made by the proper Person, and with respect to all
matters pertaining to this Agreement or any of the Related Documents and its
duties hereunder or thereunder, upon advice of counsel selected by it.
11.05. Indemnification. To the extent that the Agent is not
reimbursed and indemnified by the Borrower, the Lenders will reimburse and
indemnify the Agent for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses, advances
or disbursements of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against the Agent in any way relating to or arising out
of this Agreement or any of the Related Documents or any action taken or omitted
by the Agent under this Agreement or any of the Related Documents, in proportion
to each Lender's Pro Rata Share, including, without limitation, advances and
disbursements made pursuant to Section 11.08; provided, however, that no Lender
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses, advances or
disbursements resulting from the Agent's recklessness or willful misconduct.
Exhibit 10.14 - Page 71
The obligations of the Lenders under this Section 11.05 shall survive the
payment in full of the Loans and Reimbursement Obligations and the termination
of this Agreement.
11.06. CIT Individually. With respect to its Pro Rata Share of
the Revolving Credit Commitments hereunder, the Loans made by it and the Note
issued to or held by it, CIT shall have and may exercise the same rights and
powers hereunder and is subject to the same obligations and liabilities as and
to the extent set forth herein for any other Lender or holder of a Note. The
terms "Lenders" or "Majority Lenders" or any similar terms shall, unless the
context clearly otherwise indicates, include CIT in its individual capacity as a
Lender or one of the Majority Lenders. CIT and its Affiliates may accept
deposits from, lend money to, and generally engage in any kind of banking, trust
or other business with the Borrower or any of its Subsidiaries as if it were not
acting as Agent pursuant hereto without any duty to account to the Lenders. The
Lenders acknowledge and agree that Chemical Bank, as the Letter of Credit
Issuer, is an Affiliate of the Agent, and may take actions which are not in the
interests of, or may have an adverse effect on, the Lenders, or may omit to take
actions which would be in the interests of, or would have a favorable effect on,
the Lenders, and the Lenders will not assert any claim against the Agent based
on actions or omissions by the Letter of Credit Issuer and will not assert any
such actions or omissions as a defense or offset to the Lenders' obligations
hereunder.
11.07. Successor Agent. (a) The Agent may resign from the
performance of all its functions and duties hereunder and under the other
Related Documents at any time by giving at least thirty (30) Business Days'
prior written notice to the Borrower and each Lender. Such resignation shall
take effect upon the acceptance by a successor Agent of appointment pursuant to
clauses (b) and (c) below or as otherwise provided below.
(b) Upon any such notice of resignation, the
Majority Lenders shall appoint a successor Agent who shall be reasonably
satisfactory to the Borrower.
(c) If a successor Agent shall not have been so
appointed within said thirty (30) Business Day period, the retiring Agent, with
the consent of the Borrower, shall then appoint a successor Agent who shall
serve as Agent until such time, if any, as the Majority Lenders, with the
consent of the Borrower, appoint a successor Agent as provided above.
11.08. Collateral Matters. (a) The Agent may from time to
time, during the occurrence and continuance of an Event of Default, make such
disbursements and advances ("Agent Advances") which the Agent, in its sole
discretion, deems necessary or desirable to preserve or protect the Collateral
or any portion thereof, to enhance the likelihood or maximize the amount of
repayment by the Borrower of the Loans and other Obligations or to pay any other
amount chargeable to the Borrower pursuant to the terms of this Agreement,
including, without limitation, costs, fees and expenses as described in Section
11.06. The Agent Advances shall be repayable on demand and be secured by the
Collateral. The Agent Advances shall not constitute Loans but shall otherwise
constitute Obligations hereunder. The Agent shall notify each Lender and the
Borrower in writing of each such Agent Advance, which notice shall include a
description of the purpose of such Agent Advance. Without limitation to its
obligations pursuant to Section 11.05, each Lender agrees that it shall make
available to the Agent, upon the Agents' demand, in Dollars in immediately
available funds, the amount equal to such Lender's Pro Rata Share of each such
Agent Advance. If such funds are not made available to the Agent by such Lender
the Agent shall be entitled to recover such funds, on demand from such Lender
together with interest thereon, for each day from the date such payment was due
until the date such amount is paid to the Agent, at the customary rate set by
the Agent for the correction of errors among banks for three Business Days and
thereafter at the Regular Rate.
(b) The Lenders hereby irrevocably authorize the
Agent, at its option and in its discretion, to release any Lien granted to or
held by the Agent upon any Collateral upon termination of the Revolving Credit
Commitments and payment and satisfaction of all Loans,
Exhibit 10.14 - Page 72
Reimbursement Obligations, other Letter of Credit Exposure (whether or not due)
and all other Obligations which have matured and which the Agent has been
notified in writing are then due and payable; or constituting property being
sold or disposed of if the Borrower certifies to the Agent that the sale or
disposition is made in compliance with Section 8.04(b) hereof (and the Agent may
rely conclusively on any such certificate, without further inquiry); or, in the
case of the Mortgaged Properties, the Borrower grants to the Agent for the
benefit of the Lenders a perfected Lien on a substitute Lease reasonably
acceptable to the Agent; or constituting property in which the Borrower owned no
interest at the time the Lien was granted or at any time thereafter; or if
approved, authorized or ratified in writing by the Majority Lenders. Upon
request by the Agent at any time, the Lenders will confirm in writing the
Agent's authority to release particular types or items of Collateral pursuant to
this Section 11.08(b).
(c) Without in any manner limiting the Agent's
authority to act without any specific or further authorization or consent by the
Majority Lenders (as set forth in Section 11.08(b)), each Lender agrees to
confirm in writing, upon request by the Agent, the authority to release
Collateral conferred upon the Agent under Section 11.08(b). So long as no Event
of Default is then continuing, upon receipt by the Agent of confirmation from
the Majority Lenders of its authority to release any particular item or types of
Collateral, and upon at least five (5) Business Days' prior written request by
the Borrower, the Agent shall (and is hereby irrevocably authorized by the
Lenders to) execute such documents as may be necessary to evidence the release
of the Liens granted to the Agent for the benefit of the Lenders upon such
Collateral; provided, however, that (i) the Agent shall not be required to
execute any such document on terms which, in the Agent's opinion, would expose
the Agent to liability or create any obligations or entail any consequence other
than the release of such Liens without recourse or warranty, and (ii) such
release shall not in any manner discharge, affect or impair the Obligations or
any Lien upon (or obligations of the Borrower in respect of) all interests in
the Collateral retained by the Borrower.
(d) The Agent shall have no obligation
whatsoever to any Lenders to assure that the Collateral exists or is owned by
the Borrower or is cared for, protected or insured or has been encumbered or
that the Lien granted to the Agent pursuant to the Security Documents has been
properly or sufficiently or lawfully created, perfected or enforced or is
entitled to any particular priority, or to exercise at all or in any particular
manner or under any duty of care, disclosure or fidelity, or to continue
exercising, any of the rights, authorities and powers granted or available to
the Agent in this Section 11.08 or in any of the Related Documents, it being
understood and agreed that in respect of the Collateral, or any act, omission or
event related thereto, the Agent may act in any manner it may deem appropriate,
in its sole discretion, given the Agent's own interest in the Collateral as one
of the Lenders and that the Agent shall have no duty or liability whatsoever to
any other Lender.
Exhibit 10.14 - Page 73
IN WITNESS WHEREOF, the parties hereto, by their officers
thereunto duly authorized, have executed and delivered this Agreement as of the
date first above written.
BORROWER:
--------
WEINER'S STORES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President & Chief Executive
Officer
Address for Notices:
-------------------
Weiner's Stores, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President and Chief
Financial Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Exhibit 10.14 - Page 74
AGENT AND LENDER:
----------------
THE CIT GROUP/BUSINESS CREDIT, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
Address for Notices:
-------------------
The CIT Group/Business
Credit, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier:(▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Fried, Frank, Harris, ▇▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇ ▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Exhibit 10.14 - Page 75