EXHIBIT 10.1
EXECUTION COPY
REVOLVING CREDIT AGREEMENT
among
PIER 1 IMPORTS, INC.,
Borrower
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
Administrative Agent, Arranger, and Sole Book Runner
BANK OF AMERICA, N.A.,
Syndication Agent
and
JPMORGAN CHASE BANK,
Documentation Agent,
and
THE LENDERS NAMED HEREIN,
Lenders
$125,000,000
DATED AS OF AUGUST 22, 2003
TABLE OF CONTENTS
Page
SECTION 1 DEFINITIONS AND TERMS........................................................................... 1
1.1 Definitions...................................................................................... 1
1.2 Number and Gender of Words; Other References.................................................... 16
1.3 Accounting Principles........................................................................... 17
1.4 Currency References............................................................................. 17
SECTION 2 BORROWING PROVISIONS........................................................................... 17
2.1 Revolver Facility............................................................................... 17
2.2 LC Subfacility.................................................................................. 17
2.3 Swing Line Subfacility.......................................................................... 20
2.4 Increase in Revolver Commitment................................................................. 22
2.5 Terminations or Reductions of Commitments....................................................... 22
2.6 Borrowing Procedure............................................................................. 23
SECTION 3 TERMS OF PAYMENT............................................................................... 23
3.1 Loan Accounts, Notes, and Payments.............................................................. 24
3.2 Interest and Principal Payments................................................................. 24
3.3 Prepayments..................................................................................... 25
3.4 Interest Options................................................................................ 25
3.5 Quotation of Rates.............................................................................. 25
3.6 Default Rate.................................................................................... 26
3.7 Interest Recapture.............................................................................. 26
3.8 Interest Calculations........................................................................... 26
3.9 Maximum Rate.................................................................................... 26
3.10 Interest Periods............................................................................... 27
3.11 Conversions.................................................................................... 27
3.12 Order of Application........................................................................... 27
3.13 Sharing of Payments, Etc....................................................................... 28
3.14 Offset......................................................................................... 28
3.15 Booking Borrowings............................................................................. 29
SECTION 4 CHANGE IN CIRCUMSTANCES........................................................................ 29
4.1 Increased Cost and Reduced Return............................................................... 29
4.2 Limitation on Types of Loans.................................................................... 30
4.3 Illegality...................................................................................... 31
4.4 Treatment of Affected Loans..................................................................... 31
4.5 Compensation.................................................................................... 31
4.6 Taxes........................................................................................... 31
SECTION 5 FEES........................................................................................... 33
5.1 Treatment of Fees............................................................................... 33
5.2 Fees of Administrative Agent and Arranger....................................................... 33
5.3 Commitment Fee.................................................................................. 33
5.4 Utilization Fee................................................................................. 34
5.5 LC Fees......................................................................................... 34
SECTION 6. SECURITY; GUARANTIES........................................................................... 34
6.1 Guaranties...................................................................................... 34
6.2 Release of Guaranties........................................................................... 35
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6.3 Control; Limitation of Rights................................................................... 35
SECTION 7 CONDITIONS PRECEDENT........................................................................... 35
7.1 Conditions Precedent to Closing................................................................. 35
7.2 Conditions Precedent to Each Borrowing.......................................................... 35
SECTION 8 REPRESENTATIONS AND WARRANTIES................................................................. 36
8.1 Purpose of Credit Facility...................................................................... 36
8.2 Existence, Good Standing, Authority, and Authorizations......................................... 36
8.3 Subsidiaries; Capital Stock..................................................................... 36
8.4 Authorization and Contravention................................................................. 37
8.5 Binding Effect.................................................................................. 37
8.6 Financial Statements............................................................................ 37
8.7 Litigation, Claims, Investigations.............................................................. 37
8.8 Taxes........................................................................................... 37
8.9 Environmental Matters........................................................................... 37
8.10 Employee Benefit Plans......................................................................... 38
8.11 Properties; Liens.............................................................................. 38
8.12 Government Regulations......................................................................... 38
8.13 Intellectual Property.......................................................................... 38
8.14 Compliance with Laws........................................................................... 38
8.15 Regulation U................................................................................... 39
8.16 Full Disclosure................................................................................ 39
8.17 No Default..................................................................................... 39
8.18 Solvent........................................................................................ 39
8.19 Tax Shelter Regulations........................................................................ 39
8.20 Labor Matters.................................................................................. 39
SECTION 9 COVENANTS...................................................................................... 39
9.1 Use of Proceeds................................................................................. 39
9.2 Books and Records............................................................................... 40
9.3 Items to be Furnished........................................................................... 40
9.4 Inspections..................................................................................... 41
9.5 Taxes........................................................................................... 41
9.6 Payment of Obligations.......................................................................... 41
9.7 Maintenance of Existence, Assets, and Business.................................................. 41
9.8 Insurance....................................................................................... 42
9.9 Preservation and Protection of Rights........................................................... 42
9.10 Employee Benefit Plans......................................................................... 42
9.11 Environmental Laws............................................................................. 42
9.12 Debt and Guaranties............................................................................ 42
9.13 Liens.......................................................................................... 43
9.14 Transactions with Affiliates................................................................... 44
9.15 Compliance with Laws and Documents............................................................. 44
9.16 Fiscal Year and Accounting Methods............................................................. 44
9.17 Government Regulations......................................................................... 44
9.18 Restrictions on Subsidiaries................................................................... 44
9.19 Sale of Assets................................................................................. 45
9.20 Accounts Receivable Financing.................................................................. 45
9.21 Mergers and Dissolutions....................................................................... 45
9.22 Financial Covenants............................................................................ 45
9.23 Additional Guaranties.......................................................................... 45
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9.24 Restricted Investments......................................................................... 46
9.25 Treasury Stock Redemptions..................................................................... 46
9.26 Further Assurances............................................................................. 46
SECTION 10 DEFAULT........................................................................................ 46
10.1 Payment of Obligation.......................................................................... 46
10.2 Covenants...................................................................................... 46
10.3 Debtor Relief.................................................................................. 46
10.4 Judgments and Attachments...................................................................... 47
10.5 Government Action.............................................................................. 47
10.6 Misrepresentation.............................................................................. 47
10.7 Change of Control.............................................................................. 47
10.8 Default Under Other Debt and Agreements........................................................ 47
10.9 Employee Benefit Plans......................................................................... 48
10.10 LCs............................................................................................ 48
10.11 Validity and Enforceability of Loan Documents.................................................. 48
10.12 Dissolution.................................................................................... 48
10.13 Ownership of Loan Parties...................................................................... 48
10.14 SEC Reporting Requirements..................................................................... 48
SECTION 11 RIGHTS AND REMEDIES............................................................................ 48
11.1 Remedies Upon Default.......................................................................... 48
11.2 Loan Party Waivers; No Release................................................................. 49
11.3 Performance by Administrative Agent............................................................ 49
11.4 Delegation of Duties and Rights................................................................ 50
11.5 Not in Control................................................................................. 50
11.6 Course of Dealing.............................................................................. 50
11.7 Cumulative Rights.............................................................................. 50
11.8 Application of Proceeds........................................................................ 50
11.9 Certain Proceedings............................................................................ 50
11.10 Expenditures by Lenders........................................................................ 51
11.11 Indemnification................................................................................ 51
SECTION 12 AGREEMENT AMONG LENDERS........................................................................ 51
12.1 Administrative Agent; LC Issuers............................................................... 51
12.2 Expenses....................................................................................... 53
12.3 Proportionate Absorption of Losses............................................................. 53
12.4 Delegation of Duties; Reliance................................................................. 53
12.5 Limitation of Liability........................................................................ 54
12.6 Default........................................................................................ 55
12.7 Limitation of Liability........................................................................ 56
12.8 Relationship of Lenders........................................................................ 56
12.9 Benefits of Agreement.......................................................................... 56
12.10 Agents......................................................................................... 56
12.11 Obligations Several............................................................................ 57
SECTION 13 MISCELLANEOUS.................................................................................. 57
13.1 Headings....................................................................................... 57
13.2 Nonbusiness Days............................................................................... 57
13.3 Communications; Facsimile Copies............................................................... 57
13.4 Form and Number of Documents................................................................... 58
13.5 Exceptions to Covenants........................................................................ 58
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13.6 Survival....................................................................................... 58
13.7 GOVERNING LAW.................................................................................. 58
13.8 Invalid Provisions............................................................................. 59
13.9 Entirety....................................................................................... 59
13.10 Waiver of Jury Trial........................................................................... 59
13.11 Amendments, Consents, Conflicts, and Waivers................................................... 59
13.12 Multiple Counterparts.......................................................................... 60
13.13 Successors and Assigns; Assignments and Participations......................................... 61
13.14 Discharge Only Upon Payment in Full; Reinstatement in Certain Circumstances.................... 63
13.15 Confidentiality................................................................................ 63
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SCHEDULES AND EXHIBITS
Schedule 1.1 - Fiscal-Month ends
Schedule 2.1 - Lenders and Commitments
Schedule 7.1 - Conditions Precedent to Closing
Schedule 8.3 - Capital Stock and Partnership Interests;
Schedule 9.13 - Existing Liens
Exhibit A-1 - Form of Revolver Note
Exhibit A-2 - Form of Swing Line Note
Exhibit B-1 - Form of Borrowing Notice
Exhibit B-2 - Form of Conversion Notice
Exhibit B-3 - Form of LC Request
Exhibit C - Form of Guaranty
Exhibit D - Form of Compliance Certificate
Exhibit E - Form of Assignment and Acceptance Agreement
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REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT is entered into as of August 22, 2003,
among PIER 1 IMPORTS, INC. a Delaware corporation ("BORROWER"), Lenders
(hereinafter defined), ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION, as Administrative
Agent (hereinafter defined), for itself and the other Lenders, BANK OF AMERICA,
N.A., as Syndication Agent (hereinafter defined), and JPMORGAN CHASE BANK, as
Documentation Agent (hereinafter defined).
RECITALS
Borrower has requested that Lenders extend a revolving credit facility
to Borrower not to exceed a total outstanding principal amount of $125,000,000
(subject to increase pursuant to SECTION 2.4) at any time (with certain
subfacilities for letters of credit and swing-line advances) to be used by
Borrower as provided in SECTION 8.1. Lenders are willing to extend the requested
credit facility on the terms and conditions of this agreement.
ACCORDINGLY, for adequate and sufficient consideration, Borrower,
Lenders, and Agents agree as follows:
SECTION 1 DEFINITIONS AND TERMS.
1.1 DEFINITIONS. As used herein:
ADMINISTRATIVE AGENT means ▇▇▇▇▇ Fargo Bank, National Association, and
its permitted successors or assigns as "Administrative Agent" for Lenders under
the Loan Documents.
ADMINISTRATIVE QUESTIONNAIRE means an Administrative Details Form in a
form supplied by Administrative Agent.
AFFILIATE of any Person means any other Person who directly or
indirectly through one or more intermediaries controls, or is controlled by, or
is under common control with, such Person, and, for purposes of this definition
only, "control," "controlled by," and "under common control with" mean
possession, directly or indirectly, of the power to direct or cause the
direction of management or policies (whether through ownership of voting
securities, by contract, or otherwise). Without limiting the generality of the
foregoing, a Person shall be deemed to be controlled by another Person if such
other Person possesses, directly or indirectly, power to vote 10% or more of the
securities having ordinary voting power for the election of directors, managing
general partners or the equivalent.
AGENTS means, collectively, Administrative Agent, Syndication Agent,
and Documentation Agent.
AGREEMENT means this Revolving Credit Agreement (as the same may
hereafter be amended, modified, supplemented, or restated from time to time).
APPLICABLE LENDING OFFICE means, for each Lender and for each Type of
Borrowing, the office or offices of such Lender described as such in such
Lender's Administrative Questionnaire, or such other office that such Lender (or
an affiliate of such Lender) may from time to time specify to Administrative
Agent and Borrower by written notice in accordance with the terms hereof.
APPLICABLE MARGIN means, from time to time, the following percentage
per annum, based upon the Debt Rating as set forth below:
APPLICABLE MARGIN
--------------------------------------------------------
PRICING
LEVEL FROM
HIGHEST TO DEBT RATINGS COMMITMENT EURODOLLAR RATE
LOWEST S&P/MOODY'S FEE BORROWINGS UTILIZATION FEE
-----------------------------------------------------------------------------------------------
1 BBB+/Baa1 or
better 0.150% 0.500% 0.100%
----------------------------------------------------------------------------------------------
2 BBB/Baa2 0.175% 0.750% 0.100%
----------------------------------------------------------------------------------------------
3 BBB-/Baa3 0.200% 1.000% 0.125%
----------------------------------------------------------------------------------------------
4 BB+/Ba1 0.250% 1.250% 0.125%
----------------------------------------------------------------------------------------------
5 Worse than
BB+/Ba1 or Not
Rated 0.300% 1.500% 0.200%
----------------------------------------------------------------------------------------------
For purposes of the foregoing: (a) if the Debt Rating issued by Moody's and the
Debt Rating issued by S&P shall fall within different Pricing Levels (but not
more than one (1) Pricing Level apart), then the Applicable Margin shall be
determined by reference to the higher Pricing Level (e.g., if the Debt Rating
issued by S&P is in Pricing ▇▇▇▇▇ ▇ and the Debt Rating issued by ▇▇▇▇▇'▇ is in
Pricing ▇▇▇▇▇ ▇, then the Applicable Margin shall be determined by reference to
Pricing Level 1); (b) if the Debt Rating issued by Moody's and the Debt Rating
issued by S&P shall fall within different Pricing Levels (and by more than one
(1) Pricing Level), then the Applicable Margin shall be determined by reference
to the Pricing Level that is one (1) Pricing Level higher than the lower Pricing
Level (e.g., if the Debt Rating issued by S&P is in Pricing ▇▇▇▇▇ ▇ and the Debt
Rating issued by ▇▇▇▇▇'▇ is in Pricing ▇▇▇▇▇ ▇, then the Applicable Margin shall
be determined by reference to Pricing Level 3); and (c) if either Moody's or S&P
no longer publishes ratings and Borrower and Administrative Agent cannot agree
on another ratings agency to replace Moody's or S&P, as the case may be, then
the Debt Rating issued by Moody's or the Debt Rating issued by S&P, as the case
may be, shall be deemed to be "Not Rated."
Initially, the Applicable Margin shall be determined based upon the Debt Rating
specified in the certificate delivered pursuant to SCHEDULE 7.1, ITEM 18.
Thereafter, each change in the Applicable Margin resulting from a publicly
announced change in the Debt Rating shall be effective, in the case of an
upgrade, commencing on the date of delivery by Borrower to Administrative Agent
of notice thereof pursuant to SECTION 9.3(c)(vi) and ending on the date
immediately preceding the effective date of the next such change and, in the
case of a downgrade, commencing on the date of the public announcement thereof
and ending on the date immediately preceding the effective date of the next such
change.
ARRANGER means ▇▇▇▇▇ Fargo Bank, National Association and its
successors and assigns, in its capacity as arranger and sole book manager under
the Loan Documents.
ASSIGNMENT AND ACCEPTANCE is defined in SECTION 13.13(b)(iv).
ATTRIBUTABLE DEBT means, with respect to any Synthetic Lease, as of any
date of determination, the total obligation (discounted to present value at the
rate of interest implicit in the lease included in such transaction) of the
lessee for rental payments (other than amounts required to be paid on account of
property taxes, maintenance, repairs, insurance, assessments, utilities,
operating and labor costs and other items which do not constitute payments for
property rights) during the remaining portion of the term (including extensions
which are at the sole option of the lessor) of the lease included in such
transaction (and in the case of any lease which is terminable by the lessee upon
the payment of a penalty, such rental obligation shall also include the amount
of such penalty, but no rent shall be considered as required to be paid under
such lease subsequent to the first date upon which it may be so terminated).
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AUTHORIZATIONS means all filings, recordings, and registrations with,
and all validations or exemptions, approvals, orders, authorizations, consents,
franchises, licenses, certificates, and permits from, any Governmental
Authority.
BASE RATE means, for any day, the rate per annum equal to the higher of
(a) the Federal Funds Rate for such day plus one-half of one percent (.5%) and
(b) the Prime Rate for such day. Any change in the Base Rate due to a change in
the Prime Rate or the Federal Funds Rate shall be effective on the effective
date of such change in the Prime Rate or the Federal Funds Rate.
BASE RATE BORROWING means a Borrowing bearing interest at the Base
Rate.
BORROWER is defined in the preamble to this Agreement.
BORROWING means any amount disbursed (a) by one or more Lenders under
the Loan Documents (under the Revolver Facility or the Swing Line Subfacility),
whether such amount constitutes an original disbursement of funds, the
continuation of an amount outstanding, or funding under SECTION 2.2(c), or (b)
by any Lender in accordance with, and to satisfy the obligations of any Loan
Party under, any Loan Document.
BORROWING DATE is defined in SECTION 2.8(a).
BORROWING NOTICE means a request for Borrowing made pursuant to SECTION
2.8(a), substantially in the form of EXHIBIT B-1.
BUSINESS DAY means (a) for all purposes, any day other than Saturday,
Sunday, and any other day on which commercial banking institutions are required
or authorized by Law to be closed in Dallas, Texas or New York, New York, and
(b) in addition to the foregoing, in respect of any Eurodollar Rate Borrowing, a
day on which dealings in United States dollars are conducted in the London
interbank market and commercial banks are open for international business in
London.
CAPITAL EXPENDITURES means an expenditure for any fixed asset, or any
improvements or additions thereto, which should be capitalized on a balance
sheet in accordance with GAAP.
CAPITAL LEASE means any capital lease or sublease which should be
capitalized on a balance sheet in accordance with GAAP.
CLOSING DATE means the date upon which this Agreement has been executed
by Borrower, Lenders, and Administrative Agent and all conditions precedent
specified in SECTION 7.1 have been satisfied or waived.
CODE means the Internal Revenue Code of 1986, as amended, together with
the rules and regulations promulgated thereunder.
COMMITMENT FEE is defined in SECTION 5.3.
COMMITMENT PERCENTAGE means, at any date of determination, for any
Lender, the proportion (stated as a percentage) that its Committed Sum bears to
the aggregate Committed Sums of all Lenders.
COMMITTED SUM means for any Lender at any date of determination
occurring prior to the Termination Date, the amount stated beside such Lender's
name on SCHEDULE 2.1 to this Agreement or in the Assignment and Acceptance
pursuant to which such Lender becomes a party hereto, as applicable, as
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such amount may be increased, reduced, or cancelled from time to time in
accordance with the Loan Documents.
COMPANIES means, at any date of determination thereof, Borrower and
each of its direct and indirect Subsidiaries; and COMPANY means, on any date of
determination, Borrower or any of its direct or indirect Subsidiaries.
COMPLIANCE CERTIFICATE means a certificate signed by a Responsible
Officer, substantially in the form of EXHIBIT D.
CONSEQUENTIAL LOSS means any loss or expense which any Lender may
reasonably incur in respect of a Eurodollar Rate Borrowing as a consequence of
any event described in SECTION 4.5.
CONSTITUENT DOCUMENTS means, with respect to any Person, its articles
or certificate of incorporation, bylaws, partnership agreements, organizational
documents, limited liability company agreements, trust agreement, or such other
document as may govern such Person's formation, organization, and management.
CONVERSION NOTICE means a request pursuant to SECTION 3.11,
substantially in the form of EXHIBIT B-2.
CURRENT FINANCIALS means, at the time of any determination thereof, the
more recently delivered to Lenders of either (a) (i) the audited Financial
Statements for the fiscal year ended March 1, 2003, calculated on a consolidated
basis for the Companies; and (ii) the unaudited Financial Statements for the
Fiscal Quarter ended May 31, 2003, calculated on a consolidated basis for the
Companies; or (b) the Financial Statements required to be delivered under
SECTIONS 9.3(a) or 9.3(b), as the case may be, calculated on a consolidated
basis for the Companies.
DEBT means (without duplication), for any Person, the sum of the
following: (a) all obligations for borrowed money; (b) all obligations evidenced
by bonds, debentures, notes, loan agreements, or similar instruments; (c) all
obligations to pay the deferred purchase price of property or services except
trade accounts payable arising in the ordinary course of business; (d) all
direct or contingent obligations in respect of letters of credit (including
standby letters of credit, but expressly excluding all commercial letters of
credit), banker's acceptances, bank guaranties, surety bonds, and similar
instruments; (e) indebtedness that is secured (or for which the holder of the
Debt has an existing right, contingent or otherwise to be so secured) by any
Lien existing on property owned or acquired by any Company, whether or not such
indebtedness shall have been assumed by such Person or is limited in recourse;
(f) obligations of such Person under Capital Leases; (g) Attributable Debt
associated with Synthetic Leases; and (h) any Receivables Financing Amount. For
all purposes hereof, the Debt of any Person shall include the Debt of any
partnership or joint venture (other than a joint venture that is itself a
corporation or limited liability company) in which such Person is a general
partner or a joint venturer, unless such Debt is expressly made non-recourse to
such Person.
DEBT RATING means, as of any date of determination, the most
recently-announced rating as determined by either S&P or ▇▇▇▇▇'▇ (collectively,
the "DEBT RATINGS") assigned to Borrower's non-credit-enhanced, senior unsecured
long-term Debt, regardless of whether all or any part of such Debt has been
issued at the time such rating was issued.
DEBTOR RELIEF LAWS means the Bankruptcy Code of the United States of
America and all other applicable liquidation, conservatorship, bankruptcy,
moratorium, rearrangement, receivership, insolvency, reorganization, fraudulent
transfer or conveyance, suspension of payments, or similar Laws from time to
time in effect affecting the Rights of creditors generally.
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DEFAULT is defined in SECTION 10.
DEFAULTING LENDER means any Lender that (a) has failed to fund any
portion of the Borrowings, participations in LCs, or participations in Swing
Line Borrowings required to be funded by it hereunder within one Business Day of
the date required to be funded by it hereunder, (b) has otherwise failed to pay
over to Administrative Agent or any other Lender any other amount required to be
paid by it hereunder within one Business Day of the date when due, unless the
subject of a good faith dispute, or (c) has been deemed insolvent or become the
subject of a bankruptcy or insolvency proceeding.
DEFAULT RATE means a per annum rate of interest equal from day to day
to the lesser of (a) the sum of the Base Rate plus 2% and (b) the Maximum Rate.
DOCUMENTATION AGENT means JPMorgan Chase Bank, and its permitted
successors and assigns as "Documentation Agent" under the Loan Documents.
DOLLARS and the symbol $ means lawful money of the United States of
America.
DOMESTIC SUBSIDIARY of any Person means a direct or indirect Subsidiary
of such Person that is organized or incorporated under the Laws of a
jurisdiction of the United States, other than a direct or indirect Subsidiary of
a Foreign Subsidiary of such Person.
EBITDA means, for any Person, as calculated at any date of
determination with respect to the most recently ended Rolling Period (unless
otherwise indicated), the sum (without duplication and without giving effect to
any extraordinary losses or gains during such period) of (a) Net Income or
deficit during such period, plus (b) to the extent already deducted in computing
such Net Income, (i) income Tax expense, (ii) Interest Expense during such
period, and (iii) depreciation, depletion, amortization, and other non-cash
expense items during such period. In calculating EBITDA for the Companies for
any period, such calculation shall be adjusted to give effect to any
acquisitions and divestitures of or by the Companies during such period as if
such transactions had occurred on the first day of such period regardless of
whether the effect is positive or negative.
ELIGIBLE ASSIGNEE means (a) a Lender; (b) an Affiliate of a Lender (so
long as such assignment is not made in conjunction with the sale of such
Affiliate); and (c) any other Person approved by (i) Administrative Agent (which
approval will not be unreasonably withheld or delayed by Administrative Agent)
and (ii) unless a Default or Potential Default has occurred and is continuing at
the time any assignment is effected in accordance with SECTION 13.13, Borrower
(which approval shall not be unreasonably withheld or delayed by Borrower and
such approval shall be deemed given by Borrower if no objection is received by
the assigning Lender and Administrative Agent from Borrower within five Business
Days after notice of such proposed assignment has been provided by the assigning
Lender to Borrower); provided, however, that neither Borrower nor any Affiliate
of Borrower shall qualify as an Eligible Assignee.
EMPLOYEE PLAN means an employee pension benefit plan covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of the
Code and established or maintained by any Loan Party, Subsidiary thereof, or
ERISA Affiliate, but not including any Multiemployer Plan.
ENVIRONMENTAL LAW means any applicable Law that relates to (a) the
condition or protection of air, groundwater, surface water, soil, or other
environmental media, (b) the environment, including natural resources or any
activity which affects the environment, (c) the regulation of any pollutants,
contaminants, wastes, substances, and Hazardous Substances, including, without
limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. Section 9601 et seq.)
5
("CERCLA"), the Clean Air Act (42 U.S.C. Section 7401 et seq.), the Federal
Water Pollution Control Act, as amended by the Clean Water Act (33 U.S.C.
Section 1251 et seq.), the Federal Insecticide, Fungicide, and Rodenticide Act
(7 U.S.C. Section 136 et seq.), the Emergency Planning and Community Right to
Know Act of 1986 (42 U.S.C. Section 11001 et seq.), the Hazardous Materials
Transportation Act (49 U.S.C. Section 1801 et seq.), the National Environmental
Policy Act of 1969 (42 U.S.C. Section 4321 et seq.), the Oil Pollution Act (33
U.S.C. Section 2701 et seq.), the Resource Conservation and Recovery Act (42
U.S.C. Section 6901 et seq.), the Rivers and Harbors Act (33 U.S.C. Section 401
et seq.), the Safe Drinking Water Act (42 U.S.C. Section 201 and Section 300f et
seq.), the Solid Waste Disposal Act, as amended by the Resource Conservation and
Recovery Act of 1976 and the Hazardous and Solid Waste Amendments of 1984 (42
U.S.C. Section 6901 et seq.), the Toxic Substances Control Act (15 U.S.C.
Section 2601 et seq.), and analogous state and local Laws, as any of the
foregoing may have been and may be amended or supplemented from time to time,
and any analogous future enacted or adopted Law, or (d) the Release or
threatened Release of Hazardous Substances.
ENVIRONMENTAL LIABILITY means any obligation, liability (including,
without limitation, any strict liability), loss, fine, penalty, charge, Lien,
damage, cost, or expense of any kind to the extent that it results (a) from any
violation of or any obligation or liability under any Environmental Law, (b)
from the presence, Release, or threatened Release of any Hazardous Substance, or
(c) from actual or threatened damages to natural resources.
ENVIRONMENTAL PERMIT means any permit, license, or other Authorization
from any Governmental Authority that is required under any Environmental Law for
the lawful conduct of any business, process, or other activity.
EQUITY ISSUANCE means any issuance on and after the Closing Date by
Borrower of any shares of Stock, other than (a) present and future shares of
Stock issued to employees, directors, or consultants of Borrower under any stock
option plan or other benefit or compensation plans or arrangements of Borrower,
and (b) Stock issued upon the exercise of any warrants or options, so long as,
no Default or Potential Default exists or arises as a result thereof.
ERISA means the Employee Retirement Income Security Act of 1974, as
amended, and the regulations and rulings thereunder.
ERISA AFFILIATE means any company or trade or business (whether or not
incorporated) which, for purposes of Title IV of ERISA, is, or has been within
the past six years, a member of any Company's controlled group or which is, or
has been within the past six years, under common control with any Company within
the meaning of Section 414(b), (c), (m), or (o) of the Code.
ERISA EVENT means any of the following: (a) the occurrence of a
Reportable Event; (b) the application for a minimum funding waiver with respect
to an Employee Plan, or becoming obligated to file with the PBGC a notice of
failure to make a required payment with respect to any Employee Plan; (c) the
provision by the administrator of any Employee Plan of a notice of intent to
terminate such Employee Plan; (d) the withdrawal by any Company or ERISA
Affiliate, in whole or in part, from a Multiemployer Plan; (e) the occurrence of
any condition (under ERISA, the Code, or otherwise) for the imposition of a Lien
in favor of the PBGC on the assets of any Company or ERISA Affiliate; (f) the
adoption of an amendment to an Employee Plan requiring the provision of security
to such Employee Plan; (g) institution by the PBGC of proceedings to terminate
or impose liability in respect of (other than premiums under Section 4007 of
ERISA), any Employee Plan, or the occurrence of any event or condition that
constitutes grounds for termination of, or the appointment of a trustee to
administer, any Employee Plan; (h) institution by the sponsor of a Multiemployer
Plan of proceedings to terminate or reorganize such Multiemployer Plan, or to
impose withdrawal liability on any Company or ERISA Affiliate with respect to
such Multiemployer Plan; (i) the cessation of operations at a facility of any
Company or ERISA Affiliate in the circumstances described in Section 4062(e) of
ERISA; or (j) any Company or ERISA
6
Affiliate has engaged in any "prohibited transaction" (as defined in Section 406
of ERISA or Section 4975 of the Code).
EURODOLLAR RATE" means for any Interest Period with respect to any
Eurodollar Rate Borrowing:
(a) the rate per annum equal to the rate determined by
Administrative Agent to be the offered rate that appears on the page of
the Telerate screen (or any successor thereto) that displays an average
British Bankers Association Interest Settlement Rate for deposits in
Dollars (for delivery on the first day of such Interest Period) with a
term equivalent to such Interest Period, determined as of approximately
11:00 a.m. (London time) two Business Days prior to the first day of
such Interest Period,
(b) if the rate referenced in the preceding CLAUSE (a)
does not appear on such page or service or such page or service shall
not be available, the rate per annum equal to the rate determined by
Administrative Agent to be the offered rate on such other page or other
service that displays an average British Bankers Association Interest
Settlement Rate for deposits in Dollars (for delivery on the first day
of such Interest Period) with a term equivalent to such Interest
Period, determined as of approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period, or
(c) if the rates referenced in the preceding CLAUSES (a)
and (b) are not available, the rate per annum determined by the
Administrative Agent as the rate of interest at which deposits in
Dollars for delivery on the first day of such Interest Period in same
day funds in the approximate amount of the Eurodollar Rate Borrowing
being made, continued or converted by ▇▇▇▇▇ Fargo and with a term
equivalent to such Interest Period would be offered by ▇▇▇▇▇ Fargo to
major banks in the London interbank eurodollar market at their request
at approximately 4:00 p.m. (London time) two Business Days prior to the
first day of such Interest Period.
EURODOLLAR RATE BORROWING means a Borrowing bearing interest at the sum
of the Eurodollar Rate plus the Applicable Margin for Eurodollar Rate
Borrowings.
EXISTING CREDIT AGREEMENT means the Credit Agreement dated November 12,
1998, between Borrower, Bank of America, N.A., and certain lenders party
thereto.
EXCLUDED TAXES has the meaning set forth in SECTION 4.6(a) herein.
EXHIBIT means an exhibit to this Agreement unless otherwise specified.
FEDERAL FUNDS RATE means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) determined (which
determination shall be conclusive and binding, absent manifest error) by
Administrative Agent to be equal to the weighted average of the rates on
overnight Federal funds transactions with member banks of the Federal Reserve
System arranged by Federal funds brokers on such day, as published by the
Federal Reserve Bank of New York on the Business Day next succeeding such day;
provided that (a) if such day is not a Business Day, the Federal Funds Rate for
such day shall be such rate on such transactions on the next preceding Business
Day as so published on the next succeeding Business Day, and (b) if no such rate
is so published on such next succeeding Business Day, the Federal Funds Rate for
such day shall be the average rate charged to Administrative Agent (in its
individual capacity) on such day on such transactions as determined by
Administrative Agent (which determination shall be conclusive and binding,
absent manifest error).
FINANCIAL HEDGE means, for any Company, any present or future, whether
master or single, agreement, document, or instrument providing for, or
constituting an agreement to enter into,
7
(a) commodity hedge, (b) any arrangement for foreign-currency-exchange
protection, and (c) any interest-rate swap, cap, collar, or similar arrangement,
including, without limitation, any "swap agreement" (as defined in 11 U.S.C.
Section 101, as in effect from time to time, or any successor statute).
FINANCIAL STATEMENTS means balance sheets, statements of operations,
and statements of cash flows prepared in accordance with GAAP, which statements
of operations and statements of cash flows shall be in comparative form to the
corresponding period of the preceding fiscal year, and which balance sheets
shall be in comparative form to the prior fiscal year-end figures.
FISCAL MONTH means a period of four or five weeks having seven days in
each week ending on a Saturday and that otherwise approximates a
calendar-monthly period. The fiscal-month ends for 2004 through 2007 are
described on SCHEDULE 1.1. Reference to a Fiscal Month by the name of a calendar
month means the Fiscal Month that encompasses the most of that calendar month
(e.g., the Fiscal Month of August 2004 ends on August 30, 2003).
FISCAL QUARTER means any quarter of a fiscal year ending on the last
day of a Fiscal Month (e.g., the second fiscal quarter in 2004 ends on August
30, 2003). The Fiscal-Quarter ends for 2004 through 2006 are indicated on
SCHEDULE 1.1 by asterisks.
FIXED CHARGE COVERAGE RATIO means, for the Companies on a consolidated
basis and without duplication, at any date of determination, the ratio of: (a)
the sum of (i) EBITDA of the Companies for the most recently ended Rolling
Period, plus Lease Expense of the Companies during such Rolling Period, minus
(ii) the amount paid for Maintenance Capital Expenditures by the Companies
during such Rolling Period to (b) Fixed Charges determined as of such date of
determination.
FIXED CHARGES means, with respect to the Companies on a consolidated
basis and without duplication, the sum of (a) all regularly-scheduled principal
payments with respect to Debt (other than the Principal Debt) required to be
paid within the twelve (12) months following such date of determination, (b)
Lease Expense of the Companies, and (c) cash Interest Expense (each of the
foregoing items (b) and (c) calculated for the most recently ended Rolling
Period).
FOREIGN SUBSIDIARY of any Person means a Subsidiary of such Person that
is organized or incorporated under the Laws of a jurisdiction other than a
jurisdiction of the United States.
GAAP means generally accepted accounting principles of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
the Financial Accounting Standards Board which are applicable from time to time.
GOVERNMENTAL AUTHORITY means any (a) local, state, municipal, or
federal judicial, executive, or legislative instrumentality, (b) private
arbitration board or panel, or (c) central bank.
GOVERNMENT SECURITIES means (to the extent they mature within one year
from the date in question) readily marketable (a) direct full faith and credit
obligations of the United States of America or obligations guaranteed by the
full faith and credit of the United States of America, and (b) obligations of an
agency or instrumentality of, or corporation owned, controlled, or sponsored by,
the United States of America that are generally considered in the securities
industry to be implicit obligations of the United States of America.
GUARANTOR means any Person, including, but not limited to, all Material
Domestic Subsidiaries of Borrower (other than Pier 1 National Bank), who
undertakes to be liable for all or any part of the Obligation by execution of a
Guaranty.
8
GUARANTY means (a) a Guaranty in substantially the form and upon the
terms of EXHIBIT C, executed and delivered by any Person pursuant to the
requirements of the Loan Documents; and (b) any amendments, modifications,
supplements, restatements, ratifications, or reaffirmations of any Guaranty made
in accordance with the Loan Documents.
HAZARDOUS SUBSTANCE means (a) any substance that is designated,
defined, or classified as a hazardous waste, hazardous material, pollutant,
contaminant, or toxic or hazardous substance, or that is otherwise regulated,
under any Environmental Law, including without limitation, any hazardous
substance within the meaning of Section 101(14) of CERCLA, (b) petroleum, oil,
gasoline, natural gas, fuel oil, motor oil, waste oil, diesel fuel, jet fuel,
and other petroleum hydrocarbons, (c) asbestos and asbestos-containing materials
in any form, (d) polychlorinated biphenyls, or (e) urea formaldehyde foam.
HEDGE TERMINATION VALUE means, in respect of any one or more Financial
▇▇▇▇▇▇, after taking into account the effect of any legally enforceable netting
agreement relating to such Financial ▇▇▇▇▇▇, (a) for any date on or after the
date such Financial ▇▇▇▇▇▇ have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in CLAUSE (a), the amount(s) determined as the
▇▇▇▇-to-market value(s) for such Financial ▇▇▇▇▇▇, as determined based upon one
or more mid-market or other readily available quotations provided by any
recognized dealer in such Financial ▇▇▇▇▇▇ (which may include a Lender or any
Affiliate of a Lender).
INTEREST EXPENSE means, for any period of calculation thereof, for any
Person, the aggregate amount of all interest (including commitment fees) on all
Debt of such Person, whether paid in cash or accrued as a liability and payable
in cash during such period (including, without limitation, imputed interest on
Capital Lease obligations and Attributable Debt; the amortization of any
original issue discount on any Debt; net payment obligations under Financial
▇▇▇▇▇▇ of the type described in CLAUSE (c) of the definition of "Financial
Hedge"; and all cash premiums or penalties for the repayment, redemption, or
repurchase of Debt.
INTEREST PERIOD is determined in accordance with SECTION 3.10.
INVESTMENT means, in respect of any Person, any loan, advance,
extension of credit, or capital contribution to that Person, any investment in
that Person, or any purchase or commitment to purchase any Stock or Debt issued
by that Person or substantially all of the assets or a division or other
business unit of that Person.
LAWS means all applicable statutes, laws, treaties, ordinances, tariff
requirements, rules, regulations, orders, writs, injunctions, decrees,
judgments, opinions, or interpretations of any Governmental Authority.
LC means the standby letter(s) of credit issued hereunder in the form
agreed upon among Borrower, the applicable LC Issuer, and the beneficiary
thereof at the time of issuance thereof and participated in by Lenders pursuant
to the terms and conditions of SECTION 2 hereof.
LC AGREEMENT means a letter of credit application and agreement (in
form and substance satisfactory to the applicable LC Issuer) submitted by
Borrower to the applicable LC Issuer for an LC for its own account (and for its
benefit or the benefit of any other Company); provided that this Agreement shall
control any conflict or inconsistency between this Agreement and any such LC
Agreement.
LC EXPOSURE means, at any time and without duplication, the sum of (a)
the aggregate undrawn portion of all uncancelled and unexpired LCs plus (b) the
aggregate unpaid reimbursement obligations of Borrower in respect of drawings of
drafts under any LC.
9
LC ISSUER means with respect to each LC, the Lender that issues such LC
and shall be either (a) ▇▇▇▇▇ Fargo or (b) any other Lender that has agreed in
writing to issue, increase, or extend one or more LCs under this Agreement and
has been approved by Administrative Agent and Borrower; provided that no more
than two Lenders (other than ▇▇▇▇▇ Fargo) may be LC Issuers at any date of
determination. Any Lender may resign as LC Issuer upon giving 30 days prior
written notice to Borrower; provided that such Lender shall continue to be a LC
Issuer for purposes of this Agreement for all LCs issued at the time of such
resignation until such time as such LCs expire or are replaced.
LC REQUEST means a request pursuant to SECTION 2.2(a), substantially in
the form of EXHIBIT B-3.
LC SUBFACILITY means a subfacility of the Revolver Facility for the
issuance of LCs as described in and subject to the limitations of SECTION 2.2,
under which the LC Exposure may never (a) collectively exceed $50,000,000 and
(b) together with the Principal Debt may never exceed the Revolver Commitment.
LEASE EXPENSE means, for any Company, for any period, and without
duplication, lease, rental, and all other payments made in respect of or in
connection with operating leases to the extent deducted in arriving at EBITDA,
regardless of whether the operating lease is a Synthetic Lease.
LENDERS means, on any date of determination, the financial institutions
named on SCHEDULE 2.1 (as the same may be amended from time to time by
Administrative Agent to reflect the addition of new Lenders pursuant to SECTION
2.4 and to reflect the assignments made in accordance with SECTION 13.13(b) of
this Agreement), and subject to the terms and conditions of this Agreement, and
their respective successors and assigns (but not any Participant who is not
otherwise a party to this Agreement).
LEVERAGE RATIO means, with respect to the Companies on a consolidated
basis, at any date of determination thereof, the ratio of (a) the Debt of the
Companies outstanding on such date to (b) EBITDA of the Companies.
LIEN means any lien, mortgage, security interest, pledge, assignment,
charge, title retention agreement, or encumbrance of any kind, and any other
Right of or arrangement with any creditor (other than under or relating to
subordination or other intercreditor arrangements) to have its claim satisfied
out of any property or assets, or the proceeds therefrom, prior to the general
creditors of the owner thereof.
LITIGATION means any action by or before any Governmental Authority.
LOAN ACCOUNT means any record (including, without limitation, the
Register) maintained by any Lender in the ordinary course of business or by
Administrative Agent evidencing the Principal Debt and other Obligation owed to
such Lender.
LOAN DOCUMENTS means (a) this Agreement, the Notes, the Guaranties,
LCs, and LC Agreements, (b) all agreements, documents, or instruments in favor
of Agents or Lenders ever delivered pursuant to this Agreement or otherwise
delivered in connection with all or any part of the Obligation, and (c) any and
all future renewals, extensions, restatements, reaffirmations, or amendments of,
or supplements to, all or any part of the foregoing; provided however, that a
Financial Hedge of any Loan Party with any Lender or any Affiliate thereof shall
not be deemed a Loan Document.
LOAN PARTIES means, on any date of determination, Borrower and all
Guarantors.
MAINTENANCE CAPITAL EXPENDITURES means, for any Fiscal Quarter, an
amount equal to the actual Capital Expenditures incurred by the Companies during
that Fiscal Quarter for the maintenance and
10
improvement of the Company-operated retail stores, other than Capital
Expenditures incurred in connection with new store openings.
MATERIAL ADVERSE EVENT means any set of one or more circumstances or
events which, individually or collectively, could reasonably be expected to
result in or cause any (a) material and adverse effect on the financial
condition, business, or results of operations of the Companies, taken as a
whole, or (b) Default or Potential Default.
MATERIAL AGREEMENT means any written or oral agreement, contract,
commitment, or understanding under which any Company is obligated to make
payments or is entitled to receive revenues in excess of $10,000,000 in any
fiscal year.
MATERIAL SUBSIDIARY means, at any time, either:
(a) Any Subsidiary of Borrower (other than a Subsidiary
created for the purpose of securitizing accounts receivable of Borrower
and its other Subsidiaries) that has (or, in respect of a newly formed
or acquired Subsidiary, would have on a pro forma basis) contributed at
least 5% of any of (i) the gross revenues of the Companies for the
immediately preceding fiscal year of the Companies, or (ii) the Net
Income of the Companies for the immediately preceding fiscal year of
the Companies, or (iii) the Tangible Net Worth of the Companies as of
the last day of the immediately preceding fiscal year of the Companies;
or
(b) All Subsidiaries of Borrower at any time when all
Companies that would not otherwise be Material Subsidiaries according
to CLAUSE (a) above shall have (or, in respect of newly formed or
acquired Subsidiaries, would have on a pro forma basis) collectively
contributed more than 25% of any of (i) the gross revenues of the
Companies for the immediately preceding fiscal year of the Companies,
or (ii) the Net Income of the Companies for the immediately preceding
fiscal year of the Companies, or (iii) the Tangible Net Worth of the
Companies as of the last day of the immediately preceding fiscal year
of the Companies.
MATERIAL DOMESTIC SUBSIDIARY means a Domestic Subsidiary that is also a
Material Subsidiary.
MAXIMUM AMOUNT and MAXIMUM RATE respectively mean, for each Lender, the
maximum non-usurious amount and the maximum non-usurious rate of interest which,
under applicable Law, such Lender is permitted to contract for, charge, take,
reserve, or receive on the Obligation.
MAXIMUM REVOLVER AMOUNT means an amount equal to $150,000,000, which
amount shall not be increased without the approval of all Lenders.
▇▇▇▇▇'▇ means ▇▇▇▇▇'▇ Investors Services, Inc., or, if ▇▇▇▇▇'▇ no
longer publishes ratings, another nationally recognized rating agency acceptable
to Administrative Agent.
MULTIEMPLOYER PLAN means a multiemployer plan as defined in Sections
3(37) or 4001(a)(3) of ERISA or Section 414(f) of the Code to which any Company
or any ERISA Affiliate is making, has made, is accruing, or has accrued, an
obligation to make contributions or has, within any of the preceding five plan
years, made or accrued an obligation to make contributions.
NET INCOME means, for any period and any Person, net income determined
on a consolidated basis in accordance with GAAP applied on a consistent basis,
but excluding as income (a) net gains on the sale, conversion, or other
disposition of capital assets and net gains on the acquisition, retirement,
sale, or other disposition of capital stock and other securities of such Person,
(b) any write-up of any assets, and (c) any other net gain or credit of an
extraordinary nature.
11
NOTES means, at the time of any determination thereof, all outstanding
and unpaid Revolver Notes and the Swing Line Note.
OBLIGATION means all present and future indebtedness, liabilities, and
obligations, and all renewals, modifications, and extensions thereof, or any
part thereof, now or hereafter owed to Administrative Agent, any other Agent,
any Lender, or any Affiliate of any Lender by any Company arising from, by
virtue of, or pursuant to any Loan Document, together with all interest accruing
thereon, fees, costs, and expenses (including, without limitation, all
reasonable attorneys' fees and expenses incurred in the enforcement or
collection thereof) payable under the Loan Documents.
OSHA means the Occupational Safety and Health Act of 1970, 29
U.S.C. Section 671 et seq.
PARTICIPANT is defined in SECTION 13.13(e).
PBGC means the Pension Benefit Guaranty Corporation, or any successor
thereof, established pursuant to ERISA.
PERMITTED INVESTMENT means the following:
(a) Government Securities;
(b) Collective investment funds created pursuant to
Regulation 9 of the Office of the Comptroller of the Currency of the
United States, rated AAA by S&P or Aaa by ▇▇▇▇▇'▇ and in compliance
with Securities and Exchange Commission Rule 2(a)7, that are invested
solely in one or more securities of the United States government,
securities issued by one or more agencies of the United States
government, repurchase agreements, reverse repurchase agreements, and
individual corporate securities rated AAA by S&P or Aaa by ▇▇▇▇▇'▇;
(c) Certificates of deposit, eurodollar certificates of
deposit, demand and time deposits, and prime bankers acceptances issued
by any financial institution organized and existing under the laws of
the United States of America or any of its states and having on the
date of the investment an S&P rating of at least A- or A-1 or a ▇▇▇▇▇'▇
rating of at least A-3 or P-1, in each case due within one year after
the date of the making of the investment;
(d) Fully collateralized repurchase agreements, with a
financial institution described in CLAUSE (C) above, having a defined
termination date, fully secured by obligations of the United States
government, or its agencies, and due within one year after the date of
the making of the investment;
(e) Tax-exempt mutual funds that invest in municipal
securities rated A1 or higher or AA or higher by S&P or P1 or higher or
Aa or higher by ▇▇▇▇▇'▇ and in compliance with Securities and Exchange
Commission Rule 2(a)7;
(f) Variable-rate tax-exempt demand notes issued by
municipalities and rated AA or higher by S&P or Aa or higher by ▇▇▇▇▇'▇
and due within one year after the date of the making of the investment;
(g) Commercial paper issued by corporations and rated A2
or higher by S&P or P2 or higher by ▇▇▇▇▇'▇ and corporate debt
obligations rated BBB or higher by S&P or Baa2 or higher by ▇▇▇▇▇'▇. So
long as the instrument is rated A1 or higher or A- or higher by S&P or
P1 or higher or A3 or higher by ▇▇▇▇▇'▇ it must be due within one year
after the date of the making
12
of the investment, otherwise it shall be due within 90 days after the
date of the making of the investment;
(h) Loan participations through a financial institution
described in CLAUSE (c) above provided the underlying corporate credit
is rated A2 or higher by S&P and P2 or higher by ▇▇▇▇▇'▇ and provided
such loan participations are limited in duration to overnight
investments;
(i) Purchases of a majority of the outstanding Stock of
any Person;
(j) Investments by any one or more Loan Parties in other
Loan Parties so long as no Default or Potential Default exists or
arises as a result thereof;
(k) Working-capital advances from Borrower to The Pier
Retail Group Limited that are not outstanding more than 90 days and
that never exceed a total of $5,000,000 principal amount outstanding at
any time;
(l) Borrower's ownership of beneficial interests in
securitized receivables or in any master trust established in
connection with the sale of accounts receivable for an accounts
receivable financing or securitization facility;
(m) Loans or advances to directors, officers, and
employees of the Loan Parties that never exceed a total of $10,000,000
outstanding for all of the Loan Parties and to the extent not
prohibited by the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002;
(n) Indebtedness of customers created in any Loan Party's
ordinary course of business in a manner consistent with its present
practices; and
(o) Financial ▇▇▇▇▇▇ not for speculative purposes.
PERMITTED LIENS means, with respect to the Companies, Liens permitted
under SECTION 9.13 as described in such Section.
PERSON means any individual, entity, or Governmental Authority.
POTENTIAL DEFAULT means the occurrence of any event or existence of any
circumstance which, with the giving of notice or lapse of time or both, would
become a Default.
PRIME RATE means the per annum rate of interest established and
announced from time to time by ▇▇▇▇▇ Fargo as its "prime rate" based upon
various factors including ▇▇▇▇▇ Fargo's costs and desired return, general
economic conditions, and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such announced rate.
PRINCIPAL DEBT means, on any date of determination, the aggregate
unpaid principal balance of all Borrowings under the Revolver Facility
(including, without limitation, Borrowings under the Swing Line Subfacility),
together with (but without duplication) the aggregate unpaid reimbursement
obligations of Borrower in respect of drawings under any LC.
PRO RATA or PRO RATA PART, for each Lender, means on any date of
determination (a) the proportion which the Principal Debt owed to such Lender
(whether held directly or through a participation and determined after giving
effect thereto) bears to the Principal Debt owed to all Lenders at the time in
question, and (b) if no Principal Debt is outstanding, then the proportion that
the aggregate of such Lender's Committed Sums then in effect bears to the
Revolver Commitment then in effect.
13
RECEIVABLES FINANCING AMOUNT means, as of any date of determination,
the amount of the liability that would be included on a consolidated balance
sheet of the Companies, if the sale of accounts receivable under a
Securitization Facility were re-characterized as a financing transaction.
REGISTER is defined in SECTION 13.13(c).
REGULATION D means Regulation D of the Board of Governors of the
Federal Reserve System, as amended.
REGULATION U means Regulation U of the Board of Governors of the
Federal Reserve System, as amended.
RELEASE means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposal,
deposit, dispersal, migrating, or other movement into the air, ground, or
surface water, or soil.
REPORTABLE EVENT shall have the meaning specified in Section 4043 of
ERISA or the regulations issued thereunder in connection with an Employee Plan,
excluding events for which the notice requirement is waived under applicable
PBGC regulations other than those events described in sections 4043.21, 4043.24,
and 4043.28 of such regulations, including each such provision as it may
subsequently be renumbered.
REPRESENTATIVES means representatives, officers, directors, employees,
attorneys, and agents.
REQUIRED LENDERS means, subject to the proviso set forth below, (a) if
there is only one Lender hereunder, such Lender, (b) if there is more than one
Lender, but only one non-Defaulting Lender, hereunder, such non-Defaulting
Lender, and (c) if there is more than one non-Defaulting Lender hereunder, (i)
on any date of determination on and after the date of the Closing Date and prior
to the Termination Date, two or more Lenders holding more than 50% of the
Revolver Commitment; and (ii) on any date of determination on or after the
Termination Date, two or more Lenders holding more than 50% of the sum of
(without duplication) (A) Principal Debt plus (B) the aggregate Rights of
Lenders with respect to LCs, whether such Rights result from Lenders' issuance
of LCs or participations in LCs under SECTION 2.2(b); provided that the Revolver
Commitment of, and the portion of Principal Debt and Rights with respect to LCs
held or deemed held by any Defaulting Lender shall be excluded for purposes of
making a determination of Required Lenders.
RESPONSIBLE OFFICER means the chairman, president, chief executive
officer, chief financial officer, executive vice president, senior vice
president, or treasurer of Borrower, or, for all purposes under the Loan
Documents, any other officer designated from time to time by the Board of
Directors of Borrower, which designated officer is acceptable to Administrative
Agent.
RESTRICTED INVESTMENT means Investments that are not Permitted
Investments.
REVOLVER COMMITMENT means an amount (subject to reduction,
cancellation, or increase as herein provided) equal to $125,000,000.
REVOLVER COMMITMENT USAGE means, at the time of any determination
thereof, the sum of (a) the aggregate Principal Debt (including the Swing Line
Principal Debt) plus, without duplication, (b) the LC Exposure.
14
REVOLVER FACILITY means the credit facility as described in and subject
to the limitations set forth in SECTION 2.1 hereof, including the LC Subfacility
and the Swing Line Subfacility.
REVOLVER NOTE means any promissory note executed pursuant to SECTION
3.1(b) in substantially the form of EXHIBIT A-1, and all renewals and extensions
of all or any part thereof.
RIGHTS means rights, remedies, powers, privileges, and benefits.
ROLLING PERIOD means, on any date of determination, the most recent
12-month period ended on the last day of the most recently ended Fiscal Quarter.
SCHEDULE means, unless specified otherwise, a schedule attached to this
Agreement, as the same may be supplemented and modified from time to time in
accordance with the terms of the Loan Documents.
SECURITIZATION FACILITY means any facility established for the purchase
or financing of accounts receivable of the Companies, which receivables are
created through the use of Pier 1 National Bank's proprietary credit card.
SOLVENT means, as to a Person, that (a) the aggregate fair market value
of such Person's assets exceeds its liabilities (whether contingent,
subordinated, unmatured, unliquidated, or otherwise), (b) such Person has
sufficient cash flow to enable it to pay its Debts as they mature, and (c) such
Person does not have unreasonably small capital to conduct such Person's
businesses.
S&P means Standard & Poor's Rating Group (a division of ▇▇▇▇▇▇-▇▇▇▇,
Inc.), or if S&P no longer publishes ratings, another nationally recognized
ratings agency acceptable to Administrative Agent.
STOCK means all shares, options, warrants, general or limited
partnership interests, membership interests, or other ownership interests
(regardless of how designated) of or in a corporation, partnership, limited
liability company, trust, or other entity, whether voting or nonvoting,
including common stock, preferred stock, or any other similar "equity security"
(as such term is defined in Rule 3a11-1 of the General Rules and Regulations
promulgated by the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended).
SUBFACILITIES means, collectively, the LC Subfacility and the Swing
Line Subfacility; SUBFACILITY means, either of the LC Subfacility or the Swing
Line Subfacility.
SUBSIDIARY means, in respect of any Person (herein referred to as the
"PARENT"), any corporation, partnership, limited liability company, association,
or other business entity (a) of which Stock representing more than fifty percent
(50%) of the equity or more than fifty percent (50%) of the ordinary voting
power or more than fifty percent (50%) of the general partnership interests are,
at the time any determination is being made, owned, Controlled, or held, or (b)
which is, at the time any determination is made, otherwise Controlled, by the
Parent or one or more Subsidiaries of the Parent or by the Parent and one or
more Subsidiaries of the Parent. "CONTROL" shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
or policies of a Person, whether through the ownership of Stock, by contract, or
otherwise, and "CONTROLLING" and "CONTROLLED" shall have meanings correlative
thereto.
SWING LINE BORROWING means any Borrowing under the Swing Line
Subfacility.
15
SWING LINE COMMITMENT means an amount (subject to availability,
reduction, or cancellation as herein provided) equal to $15,000,000.
SWING LINE LENDER means ▇▇▇▇▇ Fargo Bank, National Association, and its
successors and assigns.
SWING LINE NOTE means any promissory note executed pursuant to SECTION
3.1(b) in substantially the form of EXHIBIT A-2, and all renewals and extensions
of all or any part thereof.
SWING LINE PRINCIPAL DEBT means, on any date of determination, that
portion of the Principal Debt outstanding under the Swing Line Subfacility.
SWING LINE SUBFACILITY means the subfacility under the Revolver
Facility described in, and subject to the limitations of, SECTION 2.3.
SYNDICATION AGENT means Bank of America, N.A., and its permitted
successors or assigns as "Syndication Agent" under the Loan Documents.
SYNTHETIC LEASE means a lease that is accounted for as an operating
lease for accounting purposes, but as a Capital Lease for tax purposes.
TANGIBLE ASSETS means, at any time and for any Person, the sum of (a)
the book value of all assets, minus (b) all assets treated as intangible assets
under GAAP (including goodwill, trademarks, trade names, copyrights, patents,
and unamortized debt discount and expense).
TANGIBLE NET WORTH means, at any time and for any Person, the sum of
(i) its stockholders' equity, minus (ii) the total (without duplication of
deductions already made in arriving at stockholders' equity) of the book value
of all assets treated as intangible assets under GAAP, including, but not
limited to, goodwill, trademarks, trade names, copyrights, patents, and
unamortized debt discount and expense.
TAXES means, for any Person, taxes, assessments, or other governmental
charges or levies imposed upon such Person, its income, or any of its
properties, franchises, or assets.
TERMINATION DATE means the earlier of (a) August 22, 2006, and (b) the
effective date of any other termination, cancellation, or acceleration of all
commitments to lend under the Revolver Facility.
TYPE means any type of Borrowing determined with respect to the
interest option applicable thereto.
UTILIZATION FEE is defined in SECTION 5.4.
VOTING STOCK means securities (as such term is defined in Section 2(1)
of the Securities Act of 1933, as amended) of any class or classes, the holders
of which are ordinarily, in the absence of contingencies, entitled to elect a
majority of the corporate directors (or Persons performing similar functions).
▇▇▇▇▇ FARGO means ▇▇▇▇▇ Fargo Bank, National Association, in its
individual capacity as a Lender, and its successors and assigns.
1.2 NUMBER AND GENDER OF WORDS; OTHER REFERENCES. Unless otherwise
specified in the Loan Documents, (a) where appropriate, the singular includes
the plural and vice versa, and words of any gender include each other gender,
(b) heading and caption references may not be construed in interpreting
16
provisions, (c) section, paragraph, annex, schedule, exhibit, and similar
references are to the particular Loan Document in which they are used, (d)
references to "telecopy," "facsimile," "fax," or similar terms are to facsimile
or telecopy transmissions, (e) references to "including" mean including without
limiting the generality of any description preceding that word, (f) the rule of
construction that references to general items that follow references to specific
items are limited to the same type or character of those specific items is not
applicable in the Loan Documents, (g) references to any Person include that
Person's heirs, personal representatives, successors, trustees, receivers, and
permitted assigns, (h) references to any Law include every amendment or
supplement to it, rule and regulation adopted under it, and successor or
replacement for it, and (i) references to any Loan Document or other document
include every renewal and extension of it, amendment and supplement to it, and
replacement or substitution for it.
1.3 ACCOUNTING PRINCIPLES. All accounting and financial terms used
in the Loan Documents and the compliance with each financial covenant therein
shall be determined in accordance with GAAP, and, all accounting principles
shall be applied on a consistent basis so that the accounting principles in a
current period are comparable in all material respects to those applied during
the preceding comparable period. If Borrower or any Lender determines that a
change in GAAP from that in effect on the date hereof has altered the treatment
of certain financial data to its detriment under this Agreement, such party may,
by written notice to the others and Administrative Agent not later than ten (10)
days after the effective date of such change in GAAP, request renegotiation of
the financial covenants affected by such change. If Borrower and Required
Lenders have not agreed on revised covenants within thirty (30) days after
delivery of such notice, then, for purposes of this Agreement, GAAP will mean
generally accepted accounting principles on the date just prior to the date on
which the change that gave rise to the renegotiation occurred.
1.4 CURRENCY REFERENCES. Unless otherwise specified herein, all
dollar amounts expressed herein shall refer to Dollars.
SECTION 2 BORROWING PROVISIONS.
2.1 REVOLVER FACILITY. Each Lender severally, but not jointly,
agrees to lend to Borrower such Lender's Commitment Percentage of one or more
Borrowings under the Revolver Facility not to exceed such Lender's Committed
Sum, which Borrowings may be repaid and reborrowed from time to time in
accordance with the terms and provisions of the Loan Documents; provided that,
(a) each such Borrowing must occur on a Business Day and no later than the
Business Day immediately preceding the Termination Date; (b) each such Borrowing
shall be in an amount not less than $1,000,000 or a greater integral multiple of
$500,000 if a Eurodollar Rate Borrowing, $500,000 or a greater integral multiple
of $100,000 if a Base Rate Borrowing or $250,000 or a greater integral multiple
of $50,000 if a Swing Line Borrowing; and (c) on any date of determination, the
Revolver Commitment Usage shall never exceed the Revolver Commitment.
2.2 LC SUBFACILITY.
(a) Conditions. Subject to the terms and conditions of
this Agreement and applicable Law, the applicable LC Issuer agrees to
issue LCs upon Borrower's application therefor (denominated in Dollars)
by delivering to Administrative Agent and the applicable LC Issuer a
properly completed LC Request and an LC Agreement with respect thereto
no later than 10:00 a.m. Dallas, Texas time three Business Days before
such LC is to be issued; provided that, (i) on any date of
determination and after giving effect to any LC to be issued on such
date, the Commitment Usage shall never exceed the Revolver Commitment
then in effect, (ii) on any date of determination and after giving
effect to any LC to be issued on such date, the LC Exposure shall never
exceed $50,000,000 (as such commitment under the LC Subfacility may be
reduced or canceled as herein provided), (iii) at the time of issuance
of such LC, no Default or Potential
17
Default shall have occurred and be continuing, and (iv) each LC must
expire no later than the earlier of the Termination Date or one year
from its issuance; provided that, any LC may provide for automatic
renewal for successive twelve month periods (but no renewal period may
extend beyond the Termination Date) unless the applicable LC Issuer has
given prior notice to the applicable beneficiary of its election not to
extend such LC. Prior to issuing any LC, the applicable LC Issuer shall
confirm with Administrative Agent that the condition in CLAUSE (i)
above is satisfied.
(b) Participations. Immediately upon the issuance by any
LC Issuer of any LC, the applicable LC Issuer shall be deemed to have
sold and transferred to each other Lender, and each other such Lender
shall be deemed irrevocably and unconditionally to have purchased and
received from the applicable LC Issuer, without recourse or warranty,
an undivided interest and participation, to the extent of such Lender's
Commitment Percentage in such LC, the LC Agreement related thereto, and
all Rights of the applicable LC Issuer in respect thereof (other than
Rights to receive certain fees provided for in SECTION 5.5(b)).
(c) Reimbursement Obligation. To induce LC Issuers to
issue and maintain LCs and to induce Lenders to participate in issued
LCs, Borrower agrees to pay or reimburse the applicable LC Issuer (i)
on the date on which any draft is presented under any LC, the amount of
any draft paid or to be paid by such LC Issuer and (ii) promptly, upon
demand, the amount of any fees (in addition to the fees described in
SECTION 5) which such LC Issuer customarily charges to a Person
similarly situated in the ordinary course of its business for amending
LC Agreements, for honoring drafts under letters of credit, and taking
similar action in connection with letters of credit. If Borrower has
not reimbursed the applicable LC Issuer for any drafts paid or to be
paid within 24 hours of demand therefor by such LC Issuer, Borrower
shall be deemed to have requested and Administrative Agent is hereby
irrevocably authorized to fund such reimbursement obligations as a Base
Rate Borrowing to the extent of availability under the Revolver
Facility. The proceeds of such Borrowing shall be advanced directly to
the relevant LC Issuer in payment of Borrower's unpaid reimbursement
obligation. If for any reason, funds cannot be advanced under the
Revolver Facility, then Borrower's reimbursement obligation shall
continue to be due and payable. Borrower's obligations under this
SECTION 2.2(c) shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim, or defense
to payment which Borrower may have at any time against any LC Issuer,
Administrative Agent, or any other Person. From the date that the
applicable LC Issuer pays a draft under a LC until the related
reimbursement obligation of Borrower is paid or funded by proceeds of a
Borrowing, the unpaid reimbursement obligations shall accrue interest
at the Default Rate, which accrued interest shall be payable on demand.
(d) General. Each LC Issuer shall promptly notify
Borrower and Administrative Agent of the date and the amount of any
draft presented for honor under any LC issued by such LC Issuer (but
failure to give any such notice shall not affect Borrower's obligations
under this Agreement). The applicable LC Issuer shall pay the requested
amount upon presentment of a draft for honor unless such presentment on
its face does not comply with the terms of the applicable LC. When
making payment, the applicable LC Issuer may disregard (i) any default
or potential default that exists under any other agreement and (ii) the
obligations under any other agreement that have or have not been
performed by the beneficiary or any other Person (and the applicable LC
Issuer shall not be liable for any obligation of any Person
thereunder). Borrower's reimbursement obligations to the LC Issuers,
Administrative Agent, and Lenders, and each Lender's obligations to the
LC Issuers and Administrative Agent, under this SECTION 2.2 are
absolute and unconditional irrespective of, and the LC Issuers and
Administrative Agent are not responsible for, (i) the validity,
enforceability, sufficiency, accuracy, or genuineness of documents or
endorsements which appear appropriate on their face (even if they are
in any
18
respect invalid, unenforceable, insufficient, inaccurate, fraudulent,
or forged), (ii) any dispute by any Company with or any Company's
claims, setoffs, defenses, counterclaims, or other Rights against any
LC Issuer, Administrative Agent, any Lender, or any other Person, or
(iii) the occurrence of any Potential Default or Default. However,
nothing in this SECTION 2.2 constitutes a waiver of the Rights of
Borrower or any Lender to assert any claim or defense based upon the
gross negligence or willful misconduct of any LC Issuer. To the extent
any Lender has funded its ratable share of any draft under an LC, then
Administrative Agent shall promptly distribute reimbursement payments
received from Borrower to such Lender according to its ratable share.
In the event any payment by Borrower received by Administrative Agent
with respect to any LC and distributed to Lenders on account of their
participations therein is thereafter set aside, avoided, or recovered
from Administrative Agent in connection with any receivership,
liquidation, or bankruptcy proceeding, each Lender which received such
distribution shall, upon demand by Administrative Agent, contribute
such Lender's ratable portion of the amount set aside, avoided, or
recovered, together with interest at the rate required to be paid by
Administrative Agent upon the amount required to be repaid by it.
(e) Obligation of Lenders. If Borrower fails to reimburse
any LC Issuer as provided in SECTION 2.2(c) within 24 hours of the
demand therefor by such LC Issuer and funds cannot be advanced under
the Revolver Facility to satisfy the reimbursement obligations, then
such LC Issuer shall promptly notify Administrative Agent of such fact
and Administrative Agent shall promptly notify each Lender of
Borrower's failure, of the date and the amount of the draft paid, and
of such Lender's Commitment Percentage thereof. Each Lender shall
promptly and unconditionally fund its participation interest in such
unreimbursed draft by making available to Administrative Agent (for the
benefit of the relevant LC Issuer) in Dollars in immediately available
funds such Lender's Commitment Percentage of the unreimbursed draft.
Funds are due and payable to Administrative Agent on or before 1:00
p.m., Dallas, Texas time on the Business Day when Administrative Agent
gives notice to each Lender of Borrower's reimbursement failure (if
given prior to 10:00 a.m., Dallas, Texas time) or on the next
succeeding Business Day (if notice was given after 10:00 a.m., Dallas,
Texas time). All amounts payable by any Lender shall accrue interest at
the Federal Funds Rate from the day the applicable draft is paid by the
relevant LC Issuer to (but not including) the date the amount is paid
by the Lender to Administrative Agent.
(f) Duties of LC Issuers. Each LC Issuer agrees with each
Lender that it will exercise and give the same care and attention to
each LC that it issues as it gives to its other letters of credit. No
LC Issuer shall have any liability to any Lender with respect to such
LCs (other than liability arising from the gross negligence or willful
misconduct of such LC Issuer). Each Lender and Borrower agree that, in
paying any draw under any LC, no LC Issuer shall have any
responsibility to obtain any document (other than any documents
required by the respective LC) or to ascertain or inquire as to any
document's validity, enforceability, sufficiency, accuracy, or
genuineness or the authority of any Person delivering any such
document. LC Issuers, Administrative Agent, Lenders, and their
respective Representatives shall not be liable to any other Lender or
any Company for any LCs use or for any beneficiary's acts or omissions.
Any action, inaction, error, delay, or omission taken or suffered by
any LC Issuer, Administrative Agent, or any of their Representatives
under or in connection with any LC, applicable drafts or documents, or
the transmission, dispatch, or delivery of any related message or
advice, if in good faith and in conformity with such Laws as any LC
Issuer, Administrative Agent, or any of their Representatives may deem
applicable and in accordance with the standards of care specified in
the Uniform Customs and Practice for Documentary Credits, as
supplemented by the Supplement for Electronic Presentation, each issued
by the International Chamber of Commerce, as in effect on the date of
issue of such LC, shall be binding upon the Companies and Lenders and
shall not place any LC Issuer, Administrative Agent, or any of their
Representatives under any resulting
19
liability to any Company or any Lender. No less than once each month,
each LC Issuer shall give a summary report of the issued and
outstanding LCs of such LC Issuer to Administrative Agent, in form and
substance satisfactory to Administrative Agent, and Administrative
Agent shall distribute such summary reports to Lenders promptly upon
receipt thereof.
(g) Cash Collateral. On the Termination Date, or on any
date that the LC Exposure exceeds the then-effective commitment under
the LC Subfacility, or upon any demand by any LC Issuer upon the
occurrence and during the continuance of a Default, Borrower shall
provide to Administrative Agent, for the benefit of LC Issuers and
Lenders, (i) cash collateral in Dollars in an amount equal to 110% of
the LC Exposure existing on such date, such cash and all interest
thereon shall constitute cash collateral for all LCs, and (ii) such
additional cash collateral as any LC Issuer or Administrative Agent may
from time to time require, so that the cash collateral amount shall at
all times equal 110% of the LC Exposure. Any cash collateral deposited
under this CLAUSE (G), and all interest earned thereon, shall be held
by Administrative Agent and invested and reinvested at the expense and
the written direction of Borrower, in U.S. Treasury Bills with
maturities of no more than ninety (90) days from the date of
investment.
(h) INDEMNIFICATION. BORROWER SHALL PROTECT, INDEMNIFY,
PAY, AND SAVE EACH LC ISSUER, ADMINISTRATIVE AGENT, AND EACH LENDER
HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, LIABILITIES,
DAMAGES, OR LOSSES OF, OR OWED TO THIRD PARTIES (INCLUDING ANY OF THE
FOREGOING ARISING FROM THE NEGLIGENCE OF ANY LC ISSUER, ADMINISTRATIVE
AGENT, LENDERS, OR THEIR RESPECTIVE REPRESENTATIVES), AND ANY AND ALL
RELATED COSTS, CHARGES, AND EXPENSES (INCLUDING REASONABLE ATTORNEYS'
FEES), WHICH ANY LC ISSUER, ADMINISTRATIVE AGENT, OR ANY LENDER MAY
INCUR OR BE SUBJECT TO AS A CONSEQUENCE, DIRECT OR INDIRECT, OF (I) THE
ISSUANCE OF ANY LC, (II) ANY DISPUTE ABOUT A LC, OR (III) THE FAILURE
OF ANY LC ISSUER TO HONOR A DRAFT UNDER SUCH LC AS A RESULT OF ANY ACT
OR OMISSION (WHETHER RIGHT OR WRONG) OF ANY PRESENT OR FUTURE
GOVERNMENTAL AUTHORITY. HOWEVER, NO PERSON IS ENTITLED TO INDEMNITY
HEREUNDER FOR ITS OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. THE
FOREGOING INDEMNITY PROVISIONS SHALL SURVIVE THE SATISFACTION AND
PAYMENT OF THE OBLIGATION AND TERMINATION OF THIS AGREEMENT.
(i) LC Agreements. Although referenced in any LC, terms
of any particular agreement or other obligation to the beneficiary are
not incorporated into this Agreement in any manner. The fees and other
amounts payable with respect to each LC are as provided in this
Agreement, drafts under any LC shall be deemed part of the Obligation,
and in the event of any conflict between the terms of this Agreement
and any LC Agreement, the terms of this Agreement shall be controlling.
2.3 SWING LINE SUBFACILITY.
(a) For the convenience of the parties and as an integral
part of the transactions contemplated by the Loan Documents, Swing Line
Lender, solely for its own account, agrees to make any requested
Borrowing of $250,000 or a greater integral multiple of $50,000,
subject to those terms and conditions applicable to Borrowings set
forth in SECTIONS 7.2(c) through (g), directly to Borrower as a Swing
Line Borrowing without requiring any other Lender to fund its Pro Rata
Part thereof unless and until SECTION 2.3(b) is applicable; provided
that: (i) each Swing Line Borrowing must occur on a Business Day and no
later than the Business Day immediately preceding the Termination Date;
(ii) the aggregate Swing Line Principal Debt outstanding on any date of
determination shall not exceed the Swing Line Commitment; (iii) on any
date of determination, the Revolver Commitment Usage shall never exceed
the Revolver Commitment;
20
(iv) the Principal Debt outstanding on any date of determination shall
not exceed the Revolver Commitment then in effect; (v) at the time of
such Swing Line Borrowing, no Default or Potential Default shall have
occurred and be continuing; (vi) each Swing Line Borrowing shall bear
interest at a rate per annum equal to the Base Rate; provided that at
any time after Lenders are deemed to have purchased, pursuant to
SECTION 2.3(b), a participation in any Swing Line Borrowing, such
Borrowing shall bear interest at the Default Rate; and (vii) no
additional Swing Line Borrowing shall be made at any time after any
Lender has refused, notwithstanding the requirements of SECTION 2.3(b),
to purchase a participation in any Swing Line Borrowing as provided in
such Section, and until such purchase shall occur or until the Swing
Line Borrowing has been repaid. Each Swing Line Borrowing shall be
available and may be prepaid on same day telephonic notice from
Borrower to Swing Line Lender, so long as such notice is received by
Swing Line Lender prior to 2:00 p.m., Dallas, Texas time. Accrued
interest on Swing Line Borrowings shall be due and payable on each
March 31, June 30, September 30, and December 31, and on the
Termination Date.
(b) Swing Line Borrowings shall be due no later than ten
(10) Business Days after such Swing Line Borrowing is made. If Borrower
fails to repay any Swing Line Borrowing as provided herein, then
Borrowers shall be deemed to have requested and Administrative Agent is
hereby irrevocably authorized to fund such amount as a Base Rate
Borrowing to the extent of availability under the Revolver Facility. If
funds cannot be or are not advanced under the Revolver Facility to
satisfy the obligations under the Swing Line Subfacility,
Administrative Agent shall timely notify each Lender of such failure
and of the date and amount not paid. No later than the close of
business on the date such notice is given (if such notice was given
prior to 12:00 noon, Dallas, Texas time on any Business Day, or, if
made at any other time, on the next Business Day following the date of
such notice), each Lender shall be deemed to have irrevocably and
unconditionally purchased and received from Swing Line Lender an
undivided interest and participation in such Swing Line Borrowing to
the extent of such Lender's Pro Rata Part thereof, and each Lender
shall make available to Swing Line Lender in immediately available
funds such Lender's Pro Rata Part of the unpaid amount of such Swing
Line Borrowing. All such amounts payable by any Lender shall include
interest thereon from the date on which such payment is payable by such
Lender to, but not including, the date such amount is paid by such
Lender to Administrative Agent, at the Federal Funds Rate. If such
Lender does not promptly pay such amount upon Administrative Agent's
demand therefor, and until such time as such Lender makes the required
payment, Swing Line Lender shall be deemed to continue to have
outstanding a Swing Line Borrowing in the amount of such unpaid
obligation. Each payment by Borrower of all or any part of any Swing
Line Borrowing shall be paid to Administrative Agent for the ratable
benefit of Swing Line Lender and those Lenders who have funded their
participations in such Swing Line Principal Debt under this SECTION
2.3(b); provided that, with respect to any such participation, all
interest accruing on the Swing Line Principal Debt to which such
participation relates prior to the date of funding such participation
shall be payable solely to Swing Line Lender for its own account. In
the event that any payment received by the Swing Line Lender is
required to be returned, each Lender will return to the Swing Line
Lender any portion thereof previously distributed by the Swing Line
Lender to it.
(c) Notwithstanding anything to the contrary in this
Agreement, each Lender's obligation to fund the Borrowings and to
purchase and fund participating interests pursuant to SECTION 2.3(b)
shall be absolute and unconditional and shall not be affected by any
circumstance, including, without limitation, (i) any setoff,
counterclaim, recoupment, defense, or other Right which such Lender or
Borrower may have against the Swing Line Lender, Borrower, or any other
Person for any reason whatsoever; (ii) the occurrence or continuance of
a Potential Default or a Default or the failure to satisfy any of the
conditions specified in SECTION 7; (iii) any adverse change in the
condition (financial or otherwise) of any Company; (iv) any breach of
this
21
Agreement by Borrower, any Guarantor, or any Lender; or (v) any other
circumstance, happening, or event whatsoever, whether or not similar to
any of the foregoing.
2.4 INCREASE IN REVOLVER COMMITMENT. So long as no Default or
Potential Default exists or arises as a result therefrom, Borrower may on a
one-time basis request any one or more Lenders to increase their respective
Committed Sums or request other financial institutions first approved by
Administrative Agent (which approval shall not be unreasonably withheld or
delayed by Administrative Agent and shall be deemed given by Administrative
Agent if no objection is received by Borrower from Administrative Agent within
five Business Days after notice of such other financial institution has been
provided to Administrative Agent) to agree to a Committed Sum, so that the
Revolver Commitment may be increased to no more than the Maximum Revolver
Amount. Any such increase of the Revolver Commitment must be effected by an
amendment that is executed in accordance with SECTION 13.11 by Borrower,
Administrative Agent, and the one or more Lenders who have agreed to increase
their Committed Sums or by new Lenders who have agreed to new Committed Sums. No
Lender is obligated to increase its Committed Sum under any circumstances, and
no Lender's Committed Sum may be increased except by its execution of an
amendment to this Agreement in accordance with SECTION 13.11. Each new Lender
providing such additional Committed Sum shall be a "Lender" hereunder, entitled
to the rights and benefits, and subject to the duties, of a Lender under the
Loan Documents. No such increase may be requested if an Event of Default shall
have occurred and be continuing at the time of such request or at the time such
increase is requested to be made. In such case, each Lender's Commitment
Percentage shall be recalculated to reflect the new proportionate share of the
revised Revolver Commitment and the Lender responsible for the additional
Committed Sum (the "PURCHASING LENDER") shall, immediately upon receiving notice
from Administrative Agent, pay to each Lender an amount equal to its Pro Rata
Part of the Principal Debt outstanding as of such date. All such payments with
respect to the Principal Debt shall reduce the outstanding Principal Debt owed
to each Lender receiving such payments and shall represent advances under the
Revolver Facility to Borrower by the purchasing Lender; all such payments with
respect to funded participations under the Swing Line Subfacility or LC
Subfacility (as the case may be) shall reduce the applicable participation of
each Lender receiving such payment and shall represent the purchase by the
purchasing Lender of a participation under the Swing Line Subfacility or the LC
Subfacility (as the case may be). The purchasing Lender shall be entitled to
share ratably in interest accruing on the balances purchased, at the rates
provided herein for such balances, from and after the date of purchase. All new
Borrowings under the Revolver Facility occurring after an increase of the
Revolver Commitment shall be funded in accordance with the Lender's revised
Commitment Percentages.
2.5 TERMINATIONS OR REDUCTIONS OF COMMITMENTS.
(a) Voluntary Commitment Reduction. Without premium or penalty,
and upon giving not less than five Business Days prior written and irrevocable
notice to Administrative Agent, Borrower may terminate in whole or in part the
unused portion of the Revolver Commitment, the Swing Line Commitment, or the
commitment under the LC Subfacility; provided that: (i) each partial termination
of the Revolver Commitment shall be in an amount of not less than $10,000,000 or
a greater integral multiple of $1,000,000; each partial termination of the Swing
Line Commitment or the commitment under the LC Subfacility shall be in an amount
of not less than $2,500,000 or a greater integral multiple of $500,000; and (ii)
on any date of determination, the amount of the Revolver Commitment may not be
reduced below the Revolver Commitment Usage, the Swing Line Commitment may not
be reduced below the Swing Line Principal Debt, and the commitment under the LC
Subfacility shall not be reduced below the LC Exposure. At the time of any
commitment termination under this SECTION 2.5, Borrower shall pay to
Administrative Agent, for the account of each Lender, any amounts that may then
be due under SECTION 3.3(b), all accrued and unpaid fees then due and payable
under this Agreement, the interest attributable to the amount of that reduction,
and any related Consequential Loss. Any part of the Revolver
22
Commitment, the Swing Line Commitment, or the commitment under the LC
Subfacility that is terminated may not be reinstated.
(b) Additional Reductions. The Swing Line Commitment and
the commitment under the LC Subfacility shall each be reduced from time
to time on the date of any voluntary reduction of the Revolver
Commitment by the amount, if any, by which each such Subfacility
exceeds the Revolver Commitment after giving effect to such reduction
of the Revolver Commitment.
(c) Ratable Allocation of Revolver Commitment Reductions.
Each reduction of the Revolver Commitment under this SECTION 2.5 shall
be allocated among the Lenders in accordance with their respective
Commitment Percentages.
2.6 BORROWING PROCEDURE. The following procedures apply to all
Borrowings (other than Swing Line Borrowings and Borrowings pursuant to SECTION
2.2(c)):
(a) Borrowing Request. Borrower may request a Borrowing
by making or delivering a Borrowing Notice to Administrative Agent
requesting that Lenders fund a Borrowing on a certain date (the
"BORROWING DATE"), which Borrowing Notice (i) shall be irrevocable and
binding on Borrower, (ii) shall specify the Borrowing Date, amount,
Type, and (for a Borrowing comprised of Eurodollar Rate Borrowings)
Interest Period, and (iii) must be received by Administrative Agent no
later than 12:00 noon Dallas, Texas time on the third Business Day
preceding the Borrowing Date for any Eurodollar Rate Borrowing or 12:00
noon, Dallas, Texas time on the Business Day preceding the Borrowing
Date for any Base Rate Borrowing. Administrative Agent shall timely
notify each Lender with respect to each Borrowing Notice.
(b) Funding. Each Lender shall remit its Commitment
Percentage of each requested Borrowing to Administrative Agent's
principal office in Dallas, Texas, in funds which are or will be
available for immediate use by Administrative Agent by 1:00 p.m.
Dallas, Texas time on the applicable Borrowing Date. Subject to receipt
of such funds, Administrative Agent shall (unless to its actual
knowledge any of the conditions precedent therefor have not been
satisfied by Borrower or waived by the requisite Lenders under SECTION
13.11) make such funds available to Borrower by causing such funds to
be deposited to the account designated to Administrative Agent by
Borrower.
(c) Funding Assumed. Absent contrary written notice from
a Lender by 1:00 p.m. Dallas, Texas time on the applicable Borrowing
Date, Administrative Agent may assume that each Lender has made its
Commitment Percentage of the requested Borrowing available to
Administrative Agent on the applicable Borrowing Date, and
Administrative Agent may, in reliance upon such assumption (but shall
not be required to), make available to Borrower a corresponding amount.
If a Lender fails to make its Commitment Percentage of any requested
Borrowing available to Administrative Agent on the applicable Borrowing
Date, Administrative Agent may recover the applicable amount on demand,
(i) from that Lender together with interest, commencing on the
Borrowing Date and ending on (but excluding) the date Administrative
Agent recovers the amount from that Lender, at an annual interest rate
equal to the Federal Funds Rate, or (ii) if that Lender fails to pay
its amount upon demand, then from Borrower. No Lender is responsible
for the failure of any other Lender to make its Commitment Percentage
of any Borrowing available as required by SECTION 2.6(b); however,
failure of any Lender to make its Commitment Percentage of any
Borrowing so available does not excuse any other Lender from making its
Commitment Percentage of any Borrowing so available.
SECTION 3 TERMS OF PAYMENT.
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3.1 LOAN ACCOUNTS, NOTES, AND PAYMENTS.
(a) Loan Accounts; Noteless Transaction. The Principal
Debt owed to each Lender shall be evidenced by one or more Loan
Accounts or records maintained by such Lender in the ordinary course of
business. The Loan Accounts or records maintained by Administrative
Agent (including, without limitation, the Register) and each Lender
shall be prima facie evidence absent manifest error of the amount of
the Borrowings made by Borrower from each Lender under this Agreement
and the interest and principal payments thereon. Any failure to so
record or any error in doing so shall not, however, limit or otherwise
affect the obligation of Borrower under the Loan Documents to pay any
amount owing with respect to the Obligation.
(b) Notes. Upon the request of any Lender, made through
Administrative Agent, the Principal Debt owed to such Lender may be
evidenced by one or more of the following Notes (as the case may be):
(i) a Revolver Note and (ii) a Swing Line Note (with respect to the
Swing Line Principal Debt). In the event Notes are requested by any
Lender, Borrower shall promptly prepare, execute, and deliver to each
requesting Lender Notes payable to the order of such Lender.
(c) Payment. Other than the LC fees payable directly to
LC Issuers pursuant to SECTION 5.5(b), all payments of principal,
interest, and other amounts to be made by Borrower under this Agreement
and the other Loan Documents shall be made to Administrative Agent at
its principal office in Dallas, Texas in Dollars and in funds which are
or will be available for immediate use by Administrative Agent by 1:00
p.m. Dallas, Texas time on the day due, without setoff, deduction, or
counterclaim. Payments made after 1:00 p.m. Dallas, Texas, time shall
be deemed made on the Business Day next following. Administrative Agent
shall pay to each Lender, in accordance with its Pro Rata Part, any
payment of principal, interest, fees, or other amount to which such
Lender is entitled hereunder on the same day Administrative Agent shall
have received the same from Borrower; provided such payment is received
by Administrative Agent prior to 1:00 p.m. Dallas, Texas time, and
otherwise before 1:00 p.m. Dallas, Texas time on the Business Day next
following.
(d) Payment Assumed. Unless Administrative Agent has
received notice from Borrower prior to the date on which any payment is
due under this Agreement that Borrower will not make that payment in
full, Administrative Agent may assume that Borrower has made the full
payment due and Administrative Agent may, in reliance upon that
assumption, cause to be distributed to the appropriate Lender on that
date the amount then due to such Lenders. If and to the extent Borrower
does not make the full payment due to Administrative Agent, each Lender
shall repay to Administrative Agent on demand the amount distributed to
that Lender by Administrative Agent together with interest for each day
from the date that Lender received payment from Administrative Agent
until the date that Lender repays Administrative Agent (unless such
repayment is made on the same day as such distribution), at an annual
interest rate equal to the Federal Funds Rate.
3.2 INTEREST AND PRINCIPAL PAYMENTS.
(a) Interest. Accrued interest on each Eurodollar Rate
Borrowing is due and payable on the last day of its respective Interest
Period, on the date of any prepayment set forth in SECTION 3.3, and on
the Termination Date; provided that, if any Interest Period is greater
than three months, then accrued interest is also due and payable on the
three month anniversary of the date on which such Interest Period
commences and on each three month anniversary thereafter, as well as on
the last day of such Interest Period. Accrued interest on each Base
Rate Borrowing
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shall be due and payable on each March 31, June 30, September 30, and
December 31, and on the Termination Date.
(b) Principal Debt. The Principal Debt is due and payable
on the Termination Date.
3.3 PREPAYMENTS.
(a) Optional Prepayments. Except as set forth herein,
after giving Administrative Agent advance written notice of the intent
to prepay, Borrower may voluntarily prepay all or any part of the
Principal Debt or the Swing Line Principal Debt, from time to time and
at any time, in whole or in part, without premium or penalty; provided
that: (i) such notice must be received by Administrative Agent by 1:00
p.m., Dallas, Texas time, (x) one Business Day preceding the date of
prepayment of any Base Rate Borrowing and (y) two Business Days
preceding the date of prepayment of any Eurodollar Rate Borrowing; (ii)
each such partial prepayment must be in a minimum amount of at least
$1,000,000 or a greater integral multiple of $100,000 thereof or such
lesser amount as may be outstanding under the Revolver Facility (or
with respect to prepayments of the Swing Line Principal Debt,
$1,000,000 or a greater integral multiple of $100,000 thereof or such
lesser amount as may be outstanding under the Swing Line Subfacility);
(iii) any Eurodollar Rate Borrowing may only be prepaid at the end of
an applicable Interest Period (unless Borrower pays the amount of any
Consequential Loss); and (iv) Borrower shall pay any related
Consequential Loss within ten (10) days after demand therefor.
Conversions under SECTION 3.11 are not prepayments. Each notice of
prepayment shall specify the prepayment date, the applicable loan
hereunder of Principal Debt being prepaid, and the Type of Borrowing(s)
and amount(s) of such Borrowing(s) to be prepaid and shall constitute a
binding obligation of Borrower to make a prepayment on the date stated
therein, together with (unless such prepayment is made with respect to
a Base Rate Borrowing or Swing Line Borrowing) accrued and unpaid
interest to the date of such payment on the aggregate principal amount
prepaid. Unless a Default or Potential Default has occurred and is
continuing (or would arise as a result thereof), any payment or
prepayment of the Principal Debt may be reborrowed by Borrower, subject
to the terms and conditions of the Loan Documents.
(b) Revolver Facility Mandatory Payments/Reductions. On
any date of determination (i) if the Revolver Commitment Usage exceeds
the Revolver Commitment then in effect, or the Swing Line Principal
Debt exceeds the Swing Line Commitment then in effect, then Borrower
shall make a mandatory prepayment of the Principal Debt or the Swing
Line Principal Debt, as the case may be, in at least the amount of such
excess, together with (x) all accrued and unpaid interest on the
principal amount so prepaid and (y) any Consequential Loss arising as a
result thereof; provided that, on any such reduction date, if no Swing
Line Principal Debt or Principal Debt is then outstanding, but the LC
Exposure exceeds the Revolver Commitment, then Borrower shall provide
to Administrative Agent, for the benefit of Lenders, cash collateral in
Dollars in an amount at least equal to 110% of such excess.
3.4 INTEREST OPTIONS. Except that the Eurodollar Rate may not be
selected when a Default or Potential Default exists and except as otherwise
provided in this Agreement, Borrowings bear interest at a rate per annum equal
to the lesser of (a) as to the respective Type of Borrowing (as designated by
Borrower in accordance with this Agreement), the Base Rate, or the Eurodollar
Rate plus the Applicable Margin for Eurodollar Rate Borrowings, and (b) the
Maximum Rate. Each change in the Base Rate or the Maximum Rate, subject to the
terms of this Agreement, will become effective, without notice to Borrower or
any other Person, upon the effective date of such change.
3.5 QUOTATION OF RATES. It is hereby acknowledged that a
Responsible Officer or other appropriately designated officer of Borrower may
call Administrative Agent on or before the date on
25
which a Borrowing Notice is to be delivered by Borrower in order to receive an
indication of the rates then in effect, but such indicated rates shall neither
be binding upon Administrative Agent or Lenders nor affect the rate of interest
which thereafter is actually in effect when the Borrowing Notice is given or on
the Borrowing Date.
3.6 DEFAULT RATE. At the option of Required Lenders and to the
extent permitted by Law after the occurrence and during the continuation of a
Default, all of the Obligation shall bear interest from such date of Default at
the Default Rate until paid, regardless whether such payment is made before or
after entry of a judgment; provided that, the Default Rate shall automatically
apply in the case of SECTIONS 2.2(c), 2.3(a), and 11.3 where the Default Rate is
specified.
3.7 INTEREST RECAPTURE. If the designated rate applicable to any
Borrowing exceeds the Maximum Rate, the rate of interest on such Borrowing shall
be limited to the Maximum Rate, but any subsequent reductions in such designated
rate shall not reduce the rate of interest thereon below the Maximum Rate until
the total amount of interest accrued thereon equals the amount of interest which
would have accrued thereon if such designated rate had at all times been in
effect. In the event that at maturity (stated or by acceleration), or at final
payment of the Principal Debt, the total amount of interest paid or accrued is
less than the amount of interest which would have accrued if such designated
rates had at all times been in effect, then, at such time and to the extent
permitted by Law, Borrower shall pay an amount equal to the difference between
(a) the lesser of the amount of interest which would have accrued if such
designated rates had at all times been in effect and the amount of interest
which would have accrued if the Maximum Rate had at all times been in effect,
and (b) the amount of interest actually paid or accrued on the Principal Debt.
3.8 INTEREST CALCULATIONS. Interest will be calculated on the
basis of actual number of days (including the first day but excluding the last
day) elapsed but computed as if each calendar year consisted of 360 days in the
case of an Eurodollar Rate Borrowing (unless the calculation would result in an
interest rate greater than the Maximum Rate, in which event interest will be
calculated on the basis of a year of 365 or 366 days, as the case may be) and
365 or 366 days, as the case may be, in the case of a Base Rate Borrowing. All
interest rate determinations and calculations by Administrative Agent are
conclusive and binding absent manifest error.
3.9 MAXIMUM RATE. Regardless of any provision contained in any
Loan Document, neither Administrative Agent nor any Lender shall ever be
entitled to contract for, charge, take, reserve, receive, or apply, as interest
on all or any part of the Obligation, any amount in excess of the Maximum Rate,
and, if Lenders ever do so, then such excess shall be deemed a partial
prepayment of principal and treated hereunder as such and any remaining excess
shall be refunded to Borrower. In determining if the interest paid or payable
exceeds the Maximum Rate, Borrower and Lenders shall, to the maximum extent
permitted under applicable Law, (a) treat all Borrowings as but a single
extension of credit (and Lenders and Borrower agree that such is the case and
that provision herein for multiple Borrowings is for convenience only), (b)
characterize any nonprincipal payment as an expense, fee, or premium rather than
as interest, (c) exclude voluntary prepayments and the effects thereof, and (d)
amortize, prorate, allocate, and spread the total amount of interest throughout
the entire contemplated term of the Obligation. However, if the Obligation is
paid and performed in full prior to the end of the full contemplated term
thereof, and if the interest received for the actual period of existence thereof
exceeds the Maximum Amount, Lenders shall refund such excess, and, in such
event, Lenders shall not, to the extent permitted by Law, be subject to any
penalties provided by any Laws for contracting for, charging, taking, reserving,
or receiving interest in excess of the Maximum Amount. For purposes of
determining the "Maximum Rate" or the "Maximum Amount," then those terms mean
the "weekly ceiling" from time to time in effect under Texas Finance Code
Section 303.303, as amended. Borrower agrees that Chapter 346 of the Texas
Finance Code, as amended (which regulates certain revolving credit loan accounts
and revolving tri-party accounts), does not apply to the Obligation.
26
3.10 INTEREST PERIODS. When Borrower requests any Eurodollar Rate
Borrowing, Borrower may elect the interest period (each an "INTEREST PERIOD")
applicable thereto, which shall be, at Borrower's option and subject to
availability, one, two, three, or six months; provided, however, that: (a) the
initial Interest Period for a Eurodollar Rate Borrowing shall commence on the
date of such Borrowing (including the date of any conversion thereto), and each
Interest Period occurring thereafter in respect of such Borrowing shall commence
on the day on which the next preceding Interest Period applicable thereto
expires; (b) if any Interest Period for a Eurodollar Rate Borrowing begins on a
day for which there is no numerically corresponding Business Day in the calendar
month at the end of such Interest Period, such Interest Period shall end on the
next Business Day immediately following what otherwise would have been such
numerically corresponding day in the calendar month at the end of such Interest
Period (unless such date would be in a different calendar month from what would
have been the month at the end of such Interest Period, or unless there is no
numerically corresponding day in the calendar month at the end of the Interest
Period; whereupon, such Interest Period shall end on the last Business Day in
the calendar month at the end of such Interest Period); (c) no Interest Period
may be chosen with respect to any portion of the Principal Debt which would
extend beyond the scheduled repayment date (including any dates on which
mandatory prepayments are required to be made) for such portion of the Principal
Debt; and (d) no more than an aggregate of five (5) Interest Periods shall be in
effect at one time.
3.11 CONVERSIONS. Borrower may (a) convert a Eurodollar Rate
Borrowing on the last day of the applicable Interest Period to a Base Rate
Borrowing, (b) convert a Base Rate Borrowing at any time to a Eurodollar Rate
Borrowing, and (c) elect a new Interest Period (in the case of a Eurodollar Rate
Borrowing), by giving a Conversion Notice of such intent to Administrative Agent
no later than 10:00 a.m. Dallas, Texas time on the third Business Day prior to
the date of conversion or the last day of the Interest Period, as the case may
be (in the case of a conversion to a Eurodollar Rate Borrowing or an election of
a new Interest Period), and no later than 10:00 a.m. Dallas, Texas time one
Business Day prior to the last day of the Interest Period (in the case of a
conversion to a Base Rate Borrowing); provided that, the principal amount
converted to, or continued as, a Eurodollar Rate Borrowing shall be in an amount
not less than $1,000,000 or a greater integral multiple of $500,000 (or such
lesser amount as may be outstanding). Administrative Agent shall timely notify
each Lender with respect to each Conversion Notice. Absent Borrower's Conversion
Notice or election of a new Interest Period, a Eurodollar Rate Borrowing shall
be deemed converted to a Base Rate Borrowing effective as of the expiration of
the Interest Period applicable thereto. No Eurodollar Rate Borrowing may be
either made or continued as a Eurodollar Rate Borrowing, and no Base Rate
Borrowing may be converted to a Eurodollar Rate Borrowing, if the interest rate
for such Eurodollar Rate Borrowing would exceed the Maximum Rate. The right to
convert from a Base Rate Borrowing to a Eurodollar Rate Borrowing, or to
continue as a Eurodollar Rate Borrowing shall not be available during the
occurrence of a Default or Potential Default.
3.12 ORDER OF APPLICATION.
(a) No Default. If no Default or Potential Default exists
and if no order of application is otherwise specified in the Loan
Documents, payments and prepayments of the Obligation shall be applied
first to fees, second to accrued interest then due and payable on the
Principal Debt, and then to the remaining Obligation in the order and
manner as Borrower may direct.
(b) Default. If a Default or Potential Default exists (or
if Borrower fails to give directions as permitted under SECTION
3.12(a)), any payment or prepayment (including proceeds from the
exercise of any Rights) shall be applied to the Obligation in the
following order: (i) to the ratable payment of all fees, expenses, and
indemnities for which Agents or Lenders have not been paid or
reimbursed in accordance with the Loan Documents (as used in this
SECTION 3.12(b)(i), a "ratable payment" for any Lender or any Agent
shall be, on any date of determination, that proportion which the
portion of the total fees, expenses, and indemnities owed to such
Lender or such Agent bears to the total aggregate fees and indemnities
owed to all
27
Lenders and Agents on such date of determination); (ii) to the ratable
payment of accrued and unpaid interest on the Principal Debt (as used
in this SECTION 3.12(b)(ii), "ratable payment" means, for any Lender,
on any date of determination, that proportion which the accrued and
unpaid interest on the Principal Debt owed to such Lender bears to the
total accrued and unpaid interest on the Principal Debt owed to all
Lenders); (iii) to the ratable payment of the Swing Line Principal Debt
which is due and payable and which remains unfunded by any Borrowing;
provided that, such payments shall be allocated ratably among the Swing
Line Lender and the Lenders which have funded their participations in
the Swing Line Principal Debt (as used in this SECTION 3.12(b)(iii),
"ratable payment" and "ratably" means for Swing Line Lender and any
Lender, on any date of determination, that proportion which the Swing
Line Principal Debt owed (whether directly or by participations) to
Swing Line Lender or such Lender (as applicable) bears to the Swing
Line Principal Debt owed to the Swing Line Lender and all Lenders);
(iv) to the ratable payment of any reimbursement obligation with
respect to any LC issued pursuant to the Agreement which is due and
payable and which remains unfunded by any Borrowing; provided that,
such payments shall be allocated ratably among the applicable LC Issuer
and the Lenders which have funded their participations in such LC (as
used in this SECTION 3.12(b)(iv), "ratable payment" and "ratably" means
for any LC Issuer and any Lender, on any date of determination, that
proportion which the reimbursement obligation under such LC owed
(whether directly or by participations) to such LC Issuer or Lender (as
applicable) bears to the reimbursement obligation under such LC owed to
the applicable LC Issuer and all Lenders); (v) to the ratable payment
of the remaining Principal Debt (as used in this SECTION 3.12(b)(v),
"ratable payment" means for any Lender, on any date of determination,
that proportion which the Principal Debt owed to such Lender bears to
the Principal Debt owed to all Lenders); (vi) to provide cash
collateral in an amount equal to 110% of the LC Exposure then existing
in accordance with SECTION 2.2(g); and (vii) to the payment of the
remaining Obligation in the order and manner Required Lenders deem
appropriate.
Subject to the provisions of SECTION 12 and provided that Administrative Agent
shall not in any event be bound to inquire into or to determine the validity,
scope, or priority of any interest or entitlement of any Lender and may suspend
all payments or seek appropriate relief (including, without limitation,
instructions from Required Lenders or an action in the nature of interpleader)
in the event of any doubt or dispute as to any apportionment or distribution
contemplated hereby, Administrative Agent shall promptly distribute such amounts
to each Lender in accordance with the Agreement and the related Loan Documents.
3.13 SHARING OF PAYMENTS, ETC. If any Lender shall obtain any
payment or prepayment with respect to the Obligation (whether voluntary,
involuntary, or otherwise, including, without limitation, as a result of
exercising its Rights under SECTION 3.14) which is in excess of its share of any
such payment in accordance with the relevant Rights of the Lenders under the
Loan Documents, then such Lender shall purchase from the other Lenders such
participations as shall be necessary to cause such purchasing Lender to share
the excess payment with each other Lender in accordance with the relevant Rights
under the Loan Documents. If all or any portion of such excess payment is
subsequently recovered from such purchasing Lender, then the purchase shall be
rescinded and the purchase price restored to the extent of such recovery.
Borrower agrees that any Lender purchasing a participation from another Lender
pursuant to this SECTION 3.13 may, to the fullest extent permitted by Law,
exercise all of its Rights of payment (including the Right of offset) with
respect to such participation as fully as if such Lender were the direct
creditor of Borrower in the amount of such participation.
3.14 OFFSET. If a Default exists, each Lender shall be entitled to
exercise (for the benefit of all Lenders in accordance with SECTION 3.13) the
Right of offset (or any similar Right existing under applicable Law) against
each and every account and other property, or any interest therein, which any
28
Loan Party may now or hereafter have with, or which is now or hereafter in the
possession of, such Lender to the extent of the full amount of the Obligation.
3.15 BOOKING BORROWINGS. To the extent permitted by Law, any Lender
may make, carry, or transfer its Borrowings at, to, or for the account of any of
its branch offices or the office of any of its Affiliates; provided that, no
Affiliate shall be entitled to receive any greater payment under SECTION 4 than
the transferor Lender would have been entitled to receive with respect to such
Borrowings.
SECTION 4 CHANGE IN CIRCUMSTANCES.
4.1 INCREASED COST AND REDUCED RETURN.
(a) Changes in Law. If, after the date hereof, the
adoption of any applicable Law or any change in any applicable Law or
any change in the interpretation or administration thereof by any
Governmental Authority, or compliance by any Lender (or its Applicable
Lending Office) with any request or directive (whether or not having
the force of law) of any such Governmental Authority:
(i) shall subject such Lender (or its Applicable
Lending Office) to any Tax or other charge with respect to any
Eurodollar Rate Borrowing, its Notes, or its obligation to
loan Eurodollar Rate Borrowings, or change the basis of
taxation of any amounts payable to such Lender (or its
Applicable Lending Office) under the Loan Documents in respect
of any Eurodollar Rate Borrowings (other than Taxes imposed on
the overall net income of such Lender by the jurisdiction in
which such Lender has its principal office or such Applicable
Lending Office);
(ii) shall impose, modify, or deem applicable any
reserve, special deposit, assessment, or similar requirement
(other than the Reserve Requirement utilized in the
determination of the Adjusted Eurodollar Rate) relating to any
extensions of credit or other assets of, or any deposits with
or other liabilities or commitments of, such Lender (or its
Applicable Lending Office), including the commitment of such
Lender hereunder; or
(iii) shall impose on such Lender (or its
Applicable Lending Office) or the London interbank market any
other condition affecting the Loan Documents or any of such
extensions of credit or liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such
Lender (or its Applicable Lending Office) of making, converting into,
continuing, or maintaining any Eurodollar Rate Borrowings or to reduce
any sum received or receivable by such Lender (or its Applicable
Lending Office) under the Loan Documents with respect to any Eurodollar
Rate Borrowing, then Borrower shall pay to such Lender on demand such
amount or amounts as will compensate such Lender for such increased
cost or reduction. If any Lender requests compensation by Borrower
under this SECTION 4.1(a), Borrower may, by notice to such Lender (with
a copy to Administrative Agent), suspend the obligation of such Lender
to loan or continue Borrowings of the Type with respect to which such
compensation is requested, or to convert Borrowings of any other Type
into Borrowings of such Type, until the event or condition giving rise
to such request ceases to be in effect (in which case the provisions of
SECTION 4.4 shall be applicable); provided, that such suspension shall
not affect the Right of such Lender to receive the compensation so
requested.
(b) Capital Adequacy. If, after the date hereof, any
Lender shall have determined that the adoption of any applicable Law
regarding capital adequacy or any change therein or in
29
the interpretation or administration thereof by any Governmental
Authority charged with the interpretation or administration thereof, or
any request or directive regarding capital adequacy (whether or not
having the force of law) of any such Governmental Authority has or
would have the effect of reducing the rate of return on the capital of
such Lender or any corporation controlling such Lender as a consequence
of such Lender's obligations hereunder to a level below that which such
Lender or such corporation could have achieved but for such adoption,
change, request, or directive (taking into consideration its policies
with respect to capital adequacy), then from time to time upon demand
Borrower shall pay to such Lender such additional amount or amounts as
will compensate such Lender for such reduction.
(c) Reserve Requirement. Borrower shall pay to each
Lender, as long as such Lender shall be required to maintain reserves
with respect to liabilities or assets consisting of or including
Eurocurrency funds or deposits (currently known as "EUROCURRENCY
LIABILITIES"), additional interest on the unpaid principal amount of
each Eurodollar Rate Borrowing equal to the actual costs of such
reserves allocated to such Borrowing by such Lender (as determined by
such Lender in good faith, which determination shall be conclusive),
which shall be due and payable on each date on which interest is
payable on such Borrowing; provided however, that Borrower shall have
received at least 15 days' prior notice (with a copy to Administrative
Agent) of such additional interest from such Lender. If a Lender fails
to give notice 15 days prior to the relevant payment date set forth in
SECTION 3.2 herein, such additional interest shall be due and payable
15 days from receipt of such notice.
(d) Changes in Applicable Lending Office. Compensation
Statement. Each Lender shall promptly notify Borrower and
Administrative Agent of any event of which it has knowledge, occurring
after the date hereof, which will entitle such Lender to compensation
pursuant to this Section and will designate a different Applicable
Lending Office if such designation will avoid the need for, or reduce
the amount of, such compensation and will not, in the judgment of such
Lender, be otherwise disadvantageous to it. Any Lender claiming
compensation under this Section shall furnish to Borrower and
Administrative Agent a statement setting forth the additional amount or
amounts to be paid to it hereunder which shall be conclusive in the
absence of manifest error. In determining such amount, such Lender may
use any reasonable averaging and attribution methods.
4.2 LIMITATION ON TYPES OF LOANS. If on or prior to the first day
of any Interest Period for any Eurodollar Rate Borrowing:
(a) Inability to Determine Eurodollar Rate.
Administrative Agent determines (which determination shall be
conclusive) that by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period; or
(b) Cost of Funds. Required Lenders determine (which
determination shall be conclusive) and notify Administrative Agent that
the Eurodollar Rate will not adequately and fairly reflect the cost to
the Lenders of funding Eurodollar Rate Borrowings for such Interest
Period;
then Administrative Agent shall give Borrower prompt notice thereof specifying
the relevant amounts or periods, and so long as such condition remains in
effect, the Lenders shall be under no obligation to fund additional Eurodollar
Rate Borrowings, continue Eurodollar Rate Borrowings, or to convert Base Rate
Borrowings into Eurodollar Rate Borrowings, and Borrower shall, on the last
day(s) of the then current Interest Period(s) for the outstanding Eurodollar
Rate Borrowings, either prepay such Borrowings or convert such Borrowings into
Base Rate Borrowings in accordance with the terms of this Agreement.
30
4.3 ILLEGALITY. Notwithstanding any other provision of the Loan
Documents, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to make, maintain, or fund Eurodollar Rate Borrowings
hereunder, then such Lender shall promptly notify Borrower thereof and such
Lender's obligation to make or continue Eurodollar Rate Borrowings and to
convert other Base Rate Borrowings into Eurodollar Rate Borrowings shall be
suspended until such time as such Lender may again make, maintain, and fund
Eurodollar Rate Borrowings (in which case the provisions of SECTION 4.4 shall be
applicable).
4.4 TREATMENT OF AFFECTED LOANS. If the obligation of any Lender
to fund Eurodollar Rate Borrowings or to continue, or to convert Base Rate
Borrowings into Eurodollar Rate Borrowings, shall be suspended pursuant to
SECTIONS 4.1, 4.2, or 4.3 hereof, such Lender's Eurodollar Rate Borrowings shall
be automatically converted into Base Rate Borrowings on the last day(s) of the
then current Interest Period(s) for Eurodollar Rate Borrowings (or, in the case
of a conversion required by SECTION 4.3 hereof, on such earlier date as such
Lender may specify to Borrower with a copy to Administrative Agent) and, unless
and until such Lender gives notice as provided below that the circumstances
specified in SECTIONS 4.1, 4.2, or 4.3 hereof that gave rise to such conversion
no longer exist:
(a) to the extent that such Lender's Eurodollar Rate
Borrowings have been so converted, all payments and prepayments of
principal that would otherwise be applied to such Lender's Eurodollar
Rate Borrowings shall be applied instead to its Base Rate Borrowings;
and
(b) all Borrowings that would otherwise be made or
continued by such Lender as Eurodollar Rate Borrowings shall be made or
continued instead as Base Rate Borrowings, and all Borrowings of such
Lender that would otherwise be converted into Eurodollar Rate
Borrowings shall be converted instead into (or shall remain as) Base
Rate Borrowings.
If such Lender gives notice to Borrower (with a copy to Administrative Agent)
that the circumstances specified in SECTIONS 4.1, 4.2, or 4.3 hereof that gave
rise to the conversion of such Lender's Eurodollar Rate Borrowings pursuant to
this SECTION 4.4 no longer exist (which such Lender agrees to do promptly upon
such circumstances ceasing to exist) at a time when Eurodollar Rate Borrowings
made by other Lenders are outstanding, such Lender's Base Rate Borrowings shall
be automatically converted, on the first day(s) of the next succeeding Interest
Period(s) for such outstanding Eurodollar Rate Borrowings, to the extent
necessary so that, after giving effect thereto, all Eurodollar Rate Borrowings
held by the Lenders and by such Lender are held pro rata (as to principal
amounts, Types, and Interest Periods) in accordance with their respective
Committed Sums.
4.5 COMPENSATION. Upon the request of any Lender, Borrower shall
pay to such Lender such amount or amounts as shall be sufficient (in the
reasonable opinion of such Lender) to compensate it for any loss, cost, or
expense (including loss of anticipated profits) incurred by it as a result of:
(a) any payment, prepayment, or conversion of a
Eurodollar Rate Borrowing for any reason (including, without
limitation, the acceleration of the loan pursuant to SECTION 11.1, but
excluding any conversion under SECTION 4.4) on a date other than the
last day of the Interest Period for such Borrowing; or
(b) any failure by Borrower for any reason (including,
without limitation, the failure of any condition precedent specified in
SECTION 7.2 to be satisfied, but excluding any conversion under SECTION
4.4) to borrow, convert, continue, or prepay a Eurodollar Rate
Borrowing on the date for such borrowing, conversion, continuation, or
prepayment specified in the relevant Borrowing Notice, prepayment,
continuation, or conversion under this Agreement.
4.6 TAXES.
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(a) General. Any and all payments by Borrower to or for
the account of any LC Issuer, Lender, or Administrative Agent hereunder
or under any other Loan Document shall be made free and clear of and
without deduction for any and all present or future Taxes, excluding,
in the case of each LC Issuer, Lender, and Administrative Agent, Taxes
imposed on its income and franchise Taxes imposed on it by the
jurisdiction under the laws of which such LC Issuer, Lender (or its
Applicable Lending Office), or Administrative Agent (as the case may
be) is organized, or any political subdivision thereof (the "EXCLUDED
TAXES"). If Borrower shall be required by law to deduct any Taxes
(other than Excluded Taxes) from or in respect of any sum payable under
any Loan Document to any LC Issuer, Lender, or Administrative Agent,
(i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to
additional sums payable under this SECTION 4.6) such LC Issuer, Lender,
or Administrative Agent receives an amount equal to the sum it would
have received had no such deductions been made, (ii) Borrower shall
make such deductions, (iii) Borrower shall pay the full amount deducted
to the relevant taxation authority or other authority in accordance
with applicable law, and (iv) Borrower shall furnish to Administrative
Agent, at its address listed in SCHEDULE 2.1, the original or a
certified copy of a receipt evidencing payment thereof.
(b) Stamp and Documentary Taxes. In addition, Borrower
agrees to pay any and all present or future stamp or documentary taxes
and any other excise or property taxes or charges or similar levies
(other than Excluded Taxes) which arise from any payment made under any
Loan Document or from the execution or delivery of, or otherwise with
respect to, any Loan Document (hereinafter referred to as "OTHER
TAXES").
(c) Indemnification for Taxes. Borrower agrees to
indemnify each LC Issuer, Lender, and Administrative Agent for the full
amount of Taxes and Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts
payable under this SECTION 4.6, but excluding all Excluded Taxes) paid
by such LC Issuer, Lender, or Administrative Agent (as the case may be)
and any liability (including penalties, interest, and expenses) arising
therefrom or with respect thereto.
(d) Withholding Tax Forms. Each Lender organized under
the Laws of a jurisdiction outside the United States, on or prior to
the Closing Date in the case of each Lender listed on the signature
pages hereof and on or prior to the date on which it becomes a Lender
in the case of each other Lender, and from time to time thereafter if
requested in writing by Borrower or Administrative Agent (but only so
long as such Lender remains lawfully able to do so), shall provide
Borrower and Administrative Agent with (i) two duly completed copies of
Internal Revenue Service Form W-BEN, W-8ECI, W-8IMY, W-9, or other
applicable form, as the case may be, certifying in each case that such
Lender is entitled to benefits under an income tax treaty to which the
United States is a party which reduces the rate of withholding tax on
payments of interest or certifying that the income receivable pursuant
to this Agreement is effectively connected with the conduct of a trade
or business in the United States, or certifying that such Lender is
entitled to an exemption from or a reduced rate of tax on payment
pursuant to the "portfolio interest" exception under Section 871(h) or
881(c) of the Code, (ii) if applicable, a statement indicating that
such Holder is entitled to the "portfolio interest" exception under
Section 871(h) or 881(c)(3) of the Code, and (iii) any other
governmental forms or certificates which are necessary or required
under an applicable tax treaty or otherwise by Law to reduce or
eliminate withholding tax, which has been reasonably requested by
Borrower or Administrative Agent. If an event (including without
limitation any change in treaty, Law, or regulation) has occurred prior
to the date on which any delivery required by the preceding sentence
would otherwise be required which renders all such forms inapplicable
or which would prevent any Lender from duly completing and delivering
any such form with respect to it and such Lender
32
advises Borrower and Administrative Agent that it is not capable of
receiving payments without any deduction or withholding of United
States federal income tax, such Lender shall not be required to deliver
such forms.
(e) Failure to Provide Withholding Forms; Changes in Tax
Laws. For any period with respect to which a Lender has failed to
provide Borrower and Administrative Agent with the appropriate form
pursuant to SECTION 4.6(d) (unless such failure is due to a change in
Law occurring subsequent to the date on which a form originally was
required to be provided), such Lender shall not be entitled to
indemnification under SECTION 4.6(a) or 4.6(b) with respect to Taxes
imposed by the United States; provided, however, that should a Lender,
which is otherwise exempt from or subject to a reduced rate of
withholding tax, become subject to Taxes because of its failure to
deliver a form required hereunder, Borrower shall take such steps as
such Lender shall reasonably request to assist such Lender to recover
such Taxes.
(f) Change in Applicable Lending Office. If Borrower is
required to pay additional amounts to or for the account of any Lender
pursuant to this SECTION 4.6, then such Lender will agree to use
reasonable efforts to change the jurisdiction of its Applicable Lending
Office so as to eliminate or reduce any such additional payment which
may thereafter accrue if such change, in the judgment of such Lender,
is not otherwise disadvantageous to such Lender.
(g) Tax Payment Receipt. Within thirty (30) days after
the date of any payment of Taxes, Borrower shall furnish to
Administrative Agent the original or a certified copy of a receipt
evidencing such payment.
(h) Survival. Without prejudice to the survival of any
other agreement of Borrower hereunder, the agreements and obligations
of Borrower contained in this SECTION 4.6 shall survive the termination
of the Revolver Commitment and the payment in full of the Obligation
for two years.
SECTION 5 FEES.
5.1 TREATMENT OF FEES. Except as otherwise provided by Law, the
fees described in this SECTION 5: (a) do not constitute compensation for the
use, detention, or forbearance of money, (b) are in addition to, and not in lieu
of, interest and expenses otherwise described in the Loan Documents, (c) shall
be payable in accordance with SECTION 3.1(c), (d) shall be non-refundable, (e)
shall, to the fullest extent permitted by Law, bear interest, if not paid when
due, at the Default Rate, and (f) shall be calculated on the basis of actual
number of days (including the first day but excluding the last day) elapsed, but
computed as if each calendar year consisted of 360 days, unless such computation
would result in interest being computed in excess of the Maximum Rate in which
event such computation shall be made on the basis of a year of 365 or 366 days,
as the case may be.
5.2 FEES OF ADMINISTRATIVE AGENT AND ARRANGER. Borrower shall pay
to Administrative Agent and Arranger, as the case may be, solely for their
respective accounts, the fees described in that certain separate letter
agreement dated as of July 15, 2003, between Borrower, Administrative Agent, and
Arranger.
5.3 COMMITMENT FEE. Borrower shall pay to the Administrative Agent
for the account of each Lender, in accordance with its Commitment Percentage, a
commitment fee (the "COMMITMENT FEE") calculated daily from the Closing Date but
payable in installments in arrears on each March 31, June 30, September 30, and
December 31, and on the Termination Date commencing September 30, 2003. On any
day of determination, the Commitment Fee shall be an amount equal to the
Applicable Margin for Commitment Fees multiplied by the amount by which (a) the
Revolver Commitment then in effect on
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such day exceeds (b) the Revolver Commitment Usage on such day. Each such
installment shall be calculated in accordance with SECTION 5.1(f). Solely for
the purposes of this SECTION 5.3 (i) determinations of the average daily
Revolver Commitment Usage shall exclude Swing Line Principal Debt, and (ii)
"ratable" shall mean, for any period of determination, with respect to any
Lender, that proportion of which (x) the average daily unused Committed Sum of
such Lender during such period bears to (y) the amount of the average daily
unused Revolver Commitment during such period.
5.4 UTILIZATION FEE. Borrower shall pay to the Administrative
Agent for the account of each Lender, in accordance with its Commitment
Percentage, a utilization fee (the "UTILIZATION FEE") equal to the Applicable
Margin for Utilization Fee (applied on a per diem basis) times the actual daily
aggregate Revolver Commitment Usage; provided that (i) prior to the Termination
Date, the Utilization Fee shall be payable only in respect of each day that such
aggregate Revolver Commitment Usage exceeds 50% of the Revolver Commitment then
in effect, and (ii) on and after the Termination Date, the Utilization Fee shall
be payable only in respect of each day that such aggregate Revolver Commitment
Usage exceeds 50% of the Revolver Commitment that was in existence on the
Business Day immediately prior to the termination of the Revolver Commitment.
The Utilization Fee shall be due and payable quarterly in arrears on the last
Business Day of each March, June, September, and December, commencing with the
first such date to occur after the Closing Date, and ending on the date both the
Principal Debt has been paid in full and the Revolver Commitment has been
terminated. The Utilization Fee shall be calculated quarterly in arrears in
accordance with SECTION 5.1(f), and if there is any change in the Applicable
Margin during any quarter, the actual daily amount shall be computed and
multiplied by the Applicable Margin for Utilization Fee (on a per diem basis)
separately for each period during such quarter that such Applicable Margin was
in effect. The Utilization Fee shall accrue at all times, including at any time
during which one or more of the conditions in SECTION 7.2 is not met.
5.5 LC FEES. As an inducement for the issuance (including, without
limitation, any extension) of each LC, Borrower agrees to pay:
(a) To Administrative Agent, for the account of each
Lender, according to each Lender's Commitment Percentage on the day the
fee is payable, a LC fee payable quarterly in arrears for so long as
each such LC is outstanding, on the last Business Day of each March,
June, September, and December and on the expiry date of the LC. The fee
for each LC or any extension thereof shall be in an amount equal to the
product of (a) the Applicable Margin for Eurodollar Rate Borrowings in
effect on the date of payment of such fee (calculated on a per annum
basis) multiplied by (b) the stated amount of such LC.
(b) To the applicable LC Issuer, solely for its
individual account, and in addition to such LC Issuer's ratable portion
of the LC issuance fees payable pursuant to SECTION 5.5(a), a fronting
fee of 0.125% of the face amount of such LC (or extensions thereof)
payable on the date of issuance of any LC by such LC Issuer (or any
extension thereof). In addition, Borrower shall pay to the applicable
LC Issuer, solely for its individual account, standard administrative
charges for LC amendments.
SECTION 6. GUARANTIES.
6.1 GUARANTIES. As an inducement to Agents and Lenders to enter
into this Agreement, Borrower shall cause each Company that is, or hereafter
becomes, a Material Domestic Subsidiary of Borrower (other than Pier 1 National
Bank) to execute and deliver to Administrative Agent a Guaranty substantially in
the form and upon the terms of EXHIBIT C, providing for the guaranty of payment
and performance of the Obligation. In addition, promptly after the designation,
formation, or acquisition of any Company that is (or becomes) a Material
Domestic Subsidiary of Borrower, Borrower shall cause such Company to execute
and deliver to Administrative Agent a Guaranty substantially in the form and
34
upon the terms of EXHIBIT C, providing for the guaranty of payment and
performance of the Obligation, together with certified Constituent Document of
such Company, resolutions with respect to the approval of the Guaranty, and an
opinion of counsel to such Company in form and substance satisfactory to
Administrative Agent.
6.2 RELEASE OF GUARANTIES.
(a) Upon Sale or Disposition of any Guarantor. Upon any
sale, transfer, or disposition of any Guarantor which is expressly
permitted pursuant to the Loan Documents (or is otherwise authorized by
Required Lenders), and upon seven (7) Business Days' prior written
request by Borrower (which request must be accompanied by true and
correct copies of (i) all documents of transfer or disposition,
including any contract of sale (except to the extent disclosure of all
or any part of any such agreement is prohibited by a confidentiality
provision) and (ii) all requested release instruments), Administrative
Agent shall (and is hereby irrevocably authorized by the Lenders to)
execute such documents as may be necessary to evidence the release of
such Guarantor from the Guaranty.
(b) General Provisions. The actions of Administrative
Agent under this SECTION 6.2 are subject to the following: (i) no such
release of Guaranties shall be granted if any Default or Potential
Default has occurred and is continuing; (ii) Administrative Agent shall
not be required to execute any such document on terms which, in
Administrative Agent's opinion, would expose Administrative Agent to
liability or create any obligation or entail any consequence other than
the release of such Guaranties without recourse or warranty; (iii)
prior to any release of Guaranties, Borrower and each remaining
Guarantor shall confirm and ratify its liability with respect to the
Obligation; and (iv) such release shall not in any manner discharge,
affect, or impair the liability of Borrower or the remaining Guarantors
for the Obligation.
6.3 CONTROL; LIMITATION OF RIGHTS. Notwithstanding anything herein
or in any other Loan Document to the contrary, (a) the transactions contemplated
hereby (i) do not and will not constitute, create, or have the effect of
constituting or creating, directly or indirectly, actual or practical ownership
of any Loan Party by Agents or Lenders, or control, affirmative or negative,
direct or indirect, by Agents or Lenders over the management or any other aspect
of the operation of any Loan Party, which ownership or control remains
exclusively and at all times in the Loan Parties.
SECTION 7 CONDITIONS PRECEDENT.
7.1 CONDITIONS PRECEDENT TO CLOSING. This Agreement shall not
become effective, and Lenders shall not be obligated to advance any Borrowing
and LC Issuers shall not be obligated to issue any LC, as the case may be,
unless Administrative Agent has received all of the agreements, documents,
instruments, and other items described on SCHEDULE 7.1. Notwithstanding anything
to the contrary contained herein, the Agreement shall be deemed effective upon
the making of the initial extension of credit hereunder.
7.2 CONDITIONS PRECEDENT TO EACH BORROWING. In addition to the
conditions stated in SECTION 7.1, Lenders will not be obligated to fund (as
opposed to continue or convert) any Borrowing, and no LC Issuer will be
obligated to issue, extend the expiry date of, renew, or increase the amount of
any LC, as the case may be, unless on the date of such Borrowing or issuance,
extension, renewal, or increase (and after giving effect thereto), as the case
may be: (a) Administrative Agent (and LC Issuer, if applicable) shall have
timely received therefor a Borrowing Notice or a LC Request (together with the
applicable LC Agreement), as the case may be; (b) the applicable LC Issuer shall
have received the LC fees provided for in SECTION 5.5(b) hereof; (c) all of the
representations and warranties of any Company set forth in the Loan Documents
are true and correct in all material respects; (d) no Default or Potential
35
Default shall have occurred and be continuing or shall arise as a result of the
requested Borrowing or LC; and (e) the funding of such Borrowings and issuance,
extension, renewal, or increase of such LC, as the case may be, is permitted by
Law. Each Borrowing Notice and LC Request delivered to Administrative Agent (or
LC Issuers, as applicable) shall constitute the representation and warranty by
Borrower to Administrative Agent (or LC Issuers, as applicable) that, as of the
Borrowing Date or the date of issuance of, extension of the expiry date of, or
renewal or increase in the amount of the requested LC, as the case may be, the
statements above are true and correct in all respects. Each condition precedent
in this Agreement is material to the transactions contemplated in this
Agreement, and time is of the essence in respect of each thereof. Subject to the
prior written approval of Required Lenders (or as otherwise set forth in
SECTIONS 2.2(c) or 2.3(b)), Lenders may fund any Borrowing, and LC Issuers may
issue, extend the expiry date of, renew, or increase any LC, without all
conditions being satisfied, but, to the extent permitted by Law, the same shall
not be deemed to be a waiver of the requirement that each such condition
precedent be satisfied as a prerequisite for any subsequent funding or issuance,
unless Required Lenders specifically waive each such item in writing.
SECTION 8 REPRESENTATIONS AND WARRANTIES. Each Company represents and warrants
to Administrative Agent and Lenders as follows:
8.1 PURPOSE OF CREDIT FACILITY. Borrower will use (or will lend
such proceeds to its Subsidiaries to so use) all proceeds of Borrowings for one
or more of the following: (a) to repay the Debt existing under the Existing
Credit Agreement and pay the related costs and expenses; (b) for working capital
of the Companies; and (c) for general corporate purposes. No Company is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any "margin stock" within the
meaning of Regulation U. No part of the proceeds of any Borrowing will be used,
directly or indirectly, for a purpose which violates any Law, including, without
limitation, the provisions of Regulation T, U, or X (as enacted by the Board of
Governors of the Federal Reserve System, as amended).
8.2 EXISTENCE, GOOD STANDING, AUTHORITY, AND AUTHORIZATIONS. Each
Company is duly organized, validly existing, and in good standing under the Laws
of its jurisdiction of organization (such jurisdictions being identified on
SCHEDULE 8.3, as supplemented and modified in writing from time to time to
reflect any changes to such Schedule as a result of transactions permitted by
the Loan Documents). Except where not a Material Adverse Event, each Company is
duly qualified to transact business and is in good standing in each jurisdiction
where the nature and extent of its business and properties require the same.
Except where not a Material Adverse Event, each Company possesses all the
Authorizations, franchises, permits, licenses, certificates of compliance, and
approvals and grants of authority necessary or required in the conduct of its
respective business(es), and the same are valid, binding, enforceable, and
subsisting without any defaults thereunder or enforceable adverse limitations
thereon and are not subject to any proceedings or claims opposing the issuance,
development, or use thereof or contesting the validity thereof. No
authorization, consent, approval, waiver, license, or formal exemptions from,
nor any filing, declaration, or registration with, any Governmental Authority
(federal, state, or local), non-governmental entity, or Person under the terms
of contracts or otherwise, is required by reason of or in connection with the
execution and performance of the Loan Documents by the Loan Parties.
8.3 SUBSIDIARIES; CAPITAL STOCK. The Companies have no
Subsidiaries except as disclosed on SCHEDULE 8.3 (as supplemented and modified
in writing from time to time to reflect any changes to such Schedule as a result
of transactions permitted by the Loan Documents). All of the outstanding shares
of capital stock (or similar voting interests) of each Company and each
Subsidiary thereof are duly authorized, validly issued, fully paid, and
nonassessable and are owned of record and beneficially as set forth on SCHEDULE
8.3 (as supplemented and modified in writing from time to time to reflect any
changes to such Schedule as a result of transactions permitted by the Loan
Documents), free and clear of any Liens, restrictions, claims, or Rights of
another Person, other than Permitted Liens, and none of such
36
shares owned by any Company is subject to any restriction on transfer thereof
except for restrictions imposed by applicable securities Laws and general
corporate Laws.
8.4 AUTHORIZATION AND CONTRAVENTION. The execution and delivery by
each Loan Party of each Loan Document to which it is a party and the performance
by such Loan Party of its obligations thereunder (a) are within the
organizational power of such Loan Party; (b) will have been duly authorized by
all necessary organizational action on the part of such Loan Party when such
Loan Document is executed and delivered, (c) require no action by or in respect
of, or filing with, any Governmental Authority, which action or filing has not
been taken or made on or prior to the Closing Date (or if later, the date of
execution and delivery of such Loan Document), (d) will not violate any
provision of the Constituent Documents of such Loan Party, (e) will not violate
any provision of Law applicable to it, other than such violations which
individually or collectively could not be a Material Adverse Event, (f) will not
violate any Material Agreements to which it is a party, other than such
violations which could not be a Material Adverse Event, and (g) will not result
in the creation or imposition of any Lien on any asset of any Loan Party, other
than as contemplated by this Agreement. Each Loan Party has (or will have upon
consummation thereof) all necessary consents and approvals of any Person or
Governmental Authority required to be obtained in order to effect any asset
transfer, change of control, merger, or consolidations permitted by the Loan
Documents.
8.5 BINDING EFFECT. Upon execution and delivery by all parties
thereto, each Loan Document will constitute a legal, valid, and binding
obligation of each Loan Party party thereto, enforceable against each such Loan
Party in accordance with its terms, except as enforceability may be limited by
applicable Debtor Relief Laws and general principles of equity.
8.6 FINANCIAL STATEMENTS. The Current Financials were prepared in
accordance with GAAP and present fairly, in all material respects, the
consolidated financial condition, results of operations, and cash flows of the
Companies as of, and for the portion of the fiscal year ending on, the date or
dates thereof (subject only to normal year-end audit adjustments for interim
statements).
8.7 LITIGATION, CLAIMS, INVESTIGATIONS. No Company is subject to,
or aware of the threat of, any Litigation which is reasonably likely to be
determined adversely to any Company, and, if so adversely determined, could
(individually or collectively with other Litigation) be a Material Adverse
Event. There are no formal complaints, suits, claims, investigations, or
proceedings initiated at or by any Governmental Authority pending or threatened
by or against any Company which could be a Material Adverse Event, nor any
judgments, decrees, or orders of any Governmental Authority outstanding against
any Company that could be a Material Adverse Event.
8.8 TAXES. All Tax returns of each Company required to be filed
have been filed (or extensions have been granted) prior to delinquency, except
for any such returns for which the failure to so file could not be a Material
Adverse Event, and all Taxes imposed upon each Company which are due and payable
have been paid prior to delinquency, other than Taxes for which the criteria for
Permitted Liens (as specified in SECTION 9.13(b)(vi)) have been satisfied or for
which nonpayment thereof could not constitute a Material Adverse Event.
8.9 ENVIRONMENTAL MATTERS. No Company (a) knows of any
environmental condition or circumstance, such as the presence or Release of any
Hazardous Substance, on any property presently or previously owned by any
Company that could be a Material Adverse Event, (b) knows of any violation by
any Company of any Environmental Law, except for such violations that could not
be a Material Adverse Event, or (c) knows that any Company is under any
obligation to remedy any violation of any Environmental Law, except for such
obligations that could not be a Material Adverse Event; provided, however, that
each Company (x) to the best of its knowledge, has in full force and effect all
Environmental Permits, licenses, and approvals required to conduct its
operations and is operating in
37
substantial compliance thereunder, and (y) has taken prudent steps to determine
that its properties and operations are not in violation of any Environmental
Law.
8.10 EMPLOYEE BENEFIT PLANS. (a) No Employee Plan has incurred an
"accumulated funding deficiency" (as defined in Section 302 of ERISA and Section
412 of the Code) that could reasonably be expected to be a Material Adverse
Event, (b) no Company or ERISA Affiliate thereof has incurred liability to the
PBGC or with respect to an Employee Plan, which liability is currently due and
remains unpaid under Title IV of ERISA and could reasonably be expected to be a
Material Adverse Event, (c) each Employee Plan subject to ERISA and the Code
complies in all material respects, both in form and operation, with ERISA and
the Code, (d) no ERISA Event has occurred or is reasonably expected to occur
with respect to any Employee Plan or Multiemployer Plan which, individually or
collectively with all other ERISA Events then existing, could reasonably be
expected to be a Material Adverse Event, (e) the present value of all accrued
benefits under each Employee Plan (based on actuarial assumptions used for
funding purposes in the most recent actuarial valuation prepared by the Employee
Plan's actuary with respect to such Employee Plan) did not, as of the last
annual actuarial valuation date for such Employee Plan, exceed the then-current
value of the assets of such Employee Plan, and (f) the present value of accrued
benefits under each Employee Plan (based on PBGC actuarial assumptions used for
plan termination), does not exceed the value of the assets of such Employee Plan
by more than $35,000,000.
8.11 PROPERTIES; LIENS. Each Company has good and marketable title
to all its property reflected on the Current Financials, except (a) for (i)
property that is obsolete, (ii) property that has been disposed of in the
ordinary course of business, or (iii) property with title defects or failures in
title which would not be a Material Adverse Event, or (b) as otherwise permitted
by the Loan Documents. Except for Permitted Liens, there is no Lien on any
property of any Company, and the execution, delivery, performance, or observance
of the Loan Documents will not require or result in the creation of any Lien on
such property.
8.12 GOVERNMENT REGULATIONS. No Company is subject to regulation
under the Investment Company Act of 1940, as amended, the Public Utility Holding
Company Act of 1935, as amended, or any other Law (other than Regulations T, U,
and X of the Board of Governors of the Federal Reserve System) which regulates
the incurrence of Debt.
8.13 INTELLECTUAL PROPERTY. Each Company owns or has sufficient and
legally enforceable Rights to use all material licenses, patents, patent
applications, copyrights, service marks, trademarks, trademark applications, and
trade names necessary to continue to conduct its businesses as heretofore
conducted by it, now conducted by it, and now proposed to be conducted by it.
Each Company is conducting its business without infringement or claim of
infringement of any license, patent, copyright, service ▇▇▇▇, trademark, trade
name, trade secret, or other intellectual property right of others, other than
any such infringements or claims which, if successfully asserted against or
determined adversely to any Company, could not, individually or collectively,
constitute a Material Adverse Event. No infringement or claim of infringement by
others of any material license, patent, copyright, service ▇▇▇▇, trademark,
trade name, trade secret, or other intellectual property of any Company exists,
except where such Company is actively prosecuting to cease such infringement and
such infringement (if it continued unabated) could not reasonably be expected to
result in a Material Adverse Event. Borrower and each other Company, has an
active program to identify and protect against infringement and abandonment,
their respective licenses, patents, copyrights, service marks, trademarks, trade
names, trade secrets, and other intellectual property.
8.14 COMPLIANCE WITH LAWS. No Company is in violation of any Laws
(including, without limitation, Environmental Laws) other than such violations
which could not, individually or collectively, be a Material Adverse Event. No
Company has received notice alleging any noncompliance with any
38
Laws, except for such noncompliance which no longer exists, or which could not
constitute a Material Adverse Event.
8.15 REGULATION U. "Margin Stock" (as defined in Regulation U)
constitutes less than 25% of those assets of the Companies, which are subject to
any limitation on sale, pledge, or other restrictions hereunder.
8.16 FULL DISCLOSURE. There is no material fact or condition
relating to the Loan Documents or the financial condition, business, or property
of any Company which could be a Material Adverse Event and which has not been
related, in writing, to Administrative Agent. All information heretofore
furnished by any Company to any Lender or Administrative Agent in connection
with the Loan Documents was, and all such information hereafter furnished by any
Company to any Lender or Administrative Agent will be, true and accurate in all
material respects or based on reasonable estimates on the date as of which such
information is stated or certified.
8.17 NO DEFAULT. No Default or Potential Default exists or will
arise as a result of the execution of the Loan Documents or of any Borrowing
hereunder.
8.18 SOLVENT. At the time of each Borrowing hereunder and the
issuance of each LC hereunder, each Loan Party is (and after giving effect to
the transactions contemplated by the Loan Documents and any incurrence of
additional Debt, will be) Solvent.
8.19 TAX SHELTER REGULATIONS. Borrower does not intend to treat the
Borrowings and/or LCs and related transactions as being a "reportable
transaction" (within the meaning of Treasury Regulation Section 1.6011-4). In
the event Borrower determines to take any action inconsistent with such
intention, it will promptly notify Administrative Agent thereof. If the Borrower
so notifies Administrative Agent, Borrower acknowledges that one or more of the
Lenders may treat its Principal Debt and/or its interest in Swing Line
Borrowings and/or LCs as part of a transaction that is subject to Treasury
Regulation Section 301.6112-1, and such Lender or Lenders, as applicable, will
maintain the lists and other records required by such Treasury Regulation.
8.20 LABOR MATTERS. Except where not a Material Adverse Event (a)
no actual or threatened strikes, labor disputes, slow downs, walkouts, work
stoppages, or other concerted interruptions of operations that involve any
employees employed at any time in connection with any Company's business
activities or operations exist, (b) hours worked by and payment made to the
employees of any Company have not been in violation of the Fair Labor Standards
Act or any other applicable Law pertaining to labor matters, (c) all payments
due from any Company for employee health and welfare insurance, including,
without limitation, workers compensation insurance, have been paid or accrued as
a liability on its books, and (d) the business activities and operations of each
Company are in compliance with OSHA and other applicable health and safety Law.
SECTION 9 COVENANTS. Each Loan Party covenants and agrees (and agrees to cause
its Subsidiaries and, with respect to SECTION 9.10, its ERISA Affiliates) to
perform, observe, and comply with each of the following covenants applicable to
such Person, from the Closing Date and so long thereafter as Lenders are
committed to fund Borrowings and any LC Issuer is committed to issue LCs under
this Agreement and thereafter until the payment in full of the Principal Debt
(and termination of outstanding LCs, if any) and payment in full of all other
interest, fees, and other amounts of the Obligation then due and owing, unless
Borrower receives a prior written consent to the contrary by Administrative
Agent as authorized by Required Lenders:
9.1 USE OF PROCEEDS. Borrower shall use (and shall cause each
other Company to use) the proceeds of Borrowings only for the purposes
represented herein.
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9.2 BOOKS AND RECORDS. The Companies shall maintain books,
records, and accounts necessary to prepare financial statements in accordance
with GAAP.
9.3 ITEMS TO BE FURNISHED. Borrower shall cause the following to
be furnished to Administrative Agent for delivery to Lenders:
(a) Promptly after preparation, and no later than 90 days
after the last day of each fiscal year of Borrower, Financial
Statements showing the consolidated financial condition and results of
operations calculated for the Companies, as of, and for the year ended
on, such day, accompanied by:
(i) the opinion, without material qualification,
of a firm of nationally-recognized independent certified
public accountants, based on an audit using generally accepted
auditing standards, that such Financial Statements were
prepared in accordance with GAAP and present fairly the
consolidated financial condition and results of operations of
the Companies; and
(ii) a Compliance Certificate.
(b) Promptly after preparation, and no later than 45 days
after the last day of each of the first three Fiscal Quarters of each
year, Financial Statements showing the consolidated financial condition
and results of operations calculated for the Companies for such Fiscal
Quarter and for the period from the beginning of the then-current
fiscal year to, such last day, accompanied by a Compliance Certificate.
(c) Notice, promptly after any Company knows or has
reason to know of (i) the existence and status of any Litigation, any
order or judgment for the payment of money, or any warrant of
attachment, sequestration, or similar proceeding against the assets of
any Company which could (individually or collectively) be a Material
Adverse Event, (ii) any material change in any material fact or
circumstance represented or warranted in any Loan Document, (iii) a
Default or Potential Default specifying the nature thereof and what
action any Company has taken, is taking, or proposes to take with
respect thereto, (iv) any federal, state, or local Law limiting or
controlling the operations of any Company which has been issued or
adopted hereafter and which could be a Material Adverse Event, (v) the
receipt by any Company of notice of any violation or alleged violation
of any Environmental Law or Environmental Permit or any Environmental
Liability or potential Environmental Liability, which violation or
liability or alleged violation or liability could, individually or
collectively with other such violations or allegations, constitute a
Material Adverse Event, (vi) any announcement by ▇▇▇▇▇'▇ or S&P of any
change in a Debt Rating, or (vii) the occurrence of an ERISA Event or
the incurrence of any liability by any Company or ERISA Affiliate with
respect to any ERISA Event, which ERISA Event or liabilities
(individually or in the aggregate with all other then existing ERISA
Events and related liabilities of the Companies and ERISA Affiliates)
could reasonably be expected to be a Material Adverse Event, specifying
the nature thereof and what action such Company or ERISA Affiliate has
taken, is taking, or proposes to take with respect thereto.
(d) Promptly upon receipt thereof, copies of (i) all
notices from the PBGC terminating or appointing a trustee for any
Employee Plan, (ii) all notices of termination or reorganization from
any sponsor of a Multiemployer Plan, (iii) all notices from any sponsor
of a Multiemployer Plan imposing withdrawal liability on any Company or
ERISA Affiliate thereof, and (iv) all notices from the PBGC regarding a
potential Reportable Event or a request for information to assess the
impact of any proposed transaction of any Company or ERISA Affiliate
thereof.
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(e) Promptly after any of the information or disclosures
provided on any of the Schedules delivered pursuant to this Agreement
becomes outdated or incorrect in any material respect, such revised or
updated Schedule(s) as may be necessary or appropriate to update or
correct such information or disclosures.
(f) Promptly after preparation, true, correct, and
complete copies of all material reports or filings filed by or on
behalf of any Company with any Governmental Authority (including the
Securities and Exchange Commission).
(g) promptly after Borrower has notified Administrative
Agent of any intention by Borrower to treat the Borrowings and/or LCs
and related transactions as being a "reportable transaction" (within
the meaning of Treasury Regulation Section 1.6011-4), a duly completed
copy of IRS Form 8886 or any successor form.
(h) Promptly upon request therefor by Administrative
Agent or Lenders, such information (not otherwise required to be
furnished under the Loan Documents) respecting the business affairs,
assets, and liabilities of the Companies, and such opinions,
certifications, and documents, in addition to those mentioned in this
Agreement, as reasonably requested, which information shall be subject
to the confidentiality provisions set forth in SECTION 13.15 herein.
9.4 INSPECTIONS. Upon reasonable notice, the Loan Parties shall
allow Administrative Agent or any Lender (or their respective Representatives),
at the expense of Administrative Agent or such Lender if occurring prior to the
occurrence of a Default or Potential Default, and subject to the confidentiality
provisions set forth in SECTION 13.15 herein, to inspect any of their
properties, to review reports, files, and other records and to make and take
away copies thereof, to conduct tests or investigations, and to discuss any of
their respective affairs, conditions, and finances with directors, officers,
employees, and independent accountants of the Loan Parties, from time to time,
during reasonable business hours.
9.5 TAXES. Each Company (a) shall promptly pay when due any and
all Taxes other than Taxes the applicability, amount, or validity of which is
being contested in good faith by lawful proceedings diligently conducted, and
against which reserve or other provision required by GAAP has been made, and in
respect of which levy and execution of any lien securing same have been and
continue to be stayed, and (b) shall not, directly or indirectly, use any
portion of the proceeds of any Borrowing to pay the wages of employees unless a
timely payment to or deposit with the appropriate Governmental Authorities of
all amounts of Tax required to be deducted and withheld with respect to such
wages is also made.
9.6 PAYMENT OF OBLIGATIONS. Borrower shall pay the Obligation in
accordance with the terms and provisions of the Loan Documents. Each Company
shall promptly pay (or renew and extend) all of its material obligations as the
same become due (unless such obligations [other than the Obligation] are being
contested in good faith by appropriate proceedings and against which reserves or
other provision required by GAAP has been made).
9.7 MAINTENANCE OF EXISTENCE, ASSETS, AND BUSINESS. Except as
otherwise permitted by SECTIONS 9.20, each Company shall at all times: (a)
maintain its existence and good standing in the jurisdiction of its organization
and its authority to transact business in all other jurisdictions where the
failure to so maintain its existence, good standing, or authority to transact
business could be a Material Adverse Event; (b) maintain all licenses, permits,
and franchises necessary for its business where the failure to so maintain could
be a Material Adverse Event; and (c) keep all of its assets which are useful in
and necessary to its business in good working order and condition (ordinary wear
and tear excepted) and
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make all necessary repairs thereto and replacements thereof except where the
failure to so maintain could be a Material Adverse Event.
9.8 INSURANCE. Each Company shall (a) carry and maintain in full
force and effect at all times with financially sound and reputable insurers (or
in an insurance fund or by self-insurance authorized by the jurisdiction in
which its operations are carried on) insurance in such amounts (and with
co-insurance and deductibles) as such insurance is usually carried by
corporations of established reputation engaged in the same or similar businesses
and similarly situated, and (b) maintain self-insurance only to the extent that
a prudent corporation of established reputation engaged in the same or similar
businesses and similarly situated would rely upon self-insurance
9.9 PRESERVATION AND PROTECTION OF RIGHTS. Each Loan Party shall
perform such acts and duly authorize, execute, acknowledge, deliver, file, and
record any additional agreements, documents, instruments, and certificates as
Administrative Agent or Required Lenders may reasonably deem necessary or
appropriate in order to preserve and protect the Rights of Administrative Agent
and Lenders under any Loan Document.
9.10 EMPLOYEE BENEFIT PLANS. Except where not a Material Adverse
Event (individually or collectively), no Loan Party shall permit any of the
events or circumstances described in SECTION 8.10 to exist or occur.
9.11 ENVIRONMENTAL LAWS. Each Company shall (a) conduct its
business so as to comply with all applicable Environmental Laws except to the
extent noncompliance does not constitute a Material Adverse Event and shall
promptly take corrective action to remedy any non-compliance with any
Environmental Law, (b) promptly investigate and remediate any known Release or
threatened Release of any Hazardous Substance on any property owned by any
Company or at any facility operated by any Company to the extent and degree
necessary to comply with Law and to assure that any Release or threatened
Release does not result in a substantial endangerment to human health or the
environment, and (c) establish and maintain a management system designed to
ensure compliance with applicable Environmental Laws and minimize financial and
other risks to each Company arising under applicable Environmental Laws or as a
result of environmentally-related injuries to Persons or property.
9.12 DEBT AND GUARANTIES. (a) No Subsidiary of Borrower (other than
a Subsidiary created for the purpose of securitizing accounts receivable of
Borrower and its other Subsidiaries) may create, incur, assume, or suffer to
exist any Debt other than (i) industrial development revenue bonds existing on
the date of this agreement; (ii) Debt for the construction of Borrower's new
corporate headquarters building in Fort Worth, Texas, in an amount not to exceed
the lesser of Borrower's cost of construction or the fair market value of the
building; and (iii) other Debt so long as (x) no Default or Potential Default
exists or arises as a result thereof and (y) the total Debt under this CLAUSE
(ii) does not collectively exceed 10% of the Tangible Net Worth of the
Companies; and (b) no Company may have or commit to have any direct or indirect
guaranties, endorsements, and other contingent obligations for Debt of any other
Person except the following so long as the total principal amount guaranteed
(including any unfunded principal under committed lines of credit or similar
arrangements) in respect of all of the following never exceeds the Tangible Net
Worth of the Companies: (i) guaranties of the Obligation; (ii) the guaranties
that are existing on the Closing Date (other than in respect of the Debt under
the Existing Credit Agreement and other Debt that is being refinanced by
Borrowings) and all renewals, extensions, amendments, modifications, and
refinancings of (but not any principal increases after the date of this
agreement to) any of that Debt; (iii) guaranties of Debt of any Loan Party to
the extent that the creation of that Debt constitutes Debt permitted under
CLAUSE (a) of this SECTION 9.12; and (iv) guaranties of Debt that is secured by
assets of the primary obligor having a fair market value at least equal to the
amount of that Debt, as determined by an independent qualified appraiser
selected by Borrower (which appraisal, at the
42
reasonable request of Administrative Agent and at Borrower's expense, shall be
promptly updated no more than once during each 12-month period ending on or
after the Closing Date).
9.13 LIENS. No Company will, directly or indirectly, (a) enter into
or permit to exist any arrangement or agreement which directly or indirectly
prohibits any Company from creating or incurring any Lien on any of its assets,
other than (i) the Loan Documents, (ii) customary provisions in leases
(including Synthetic Leases) restricting the assignment thereof, and (iii) the
agreements evidencing Liens permitted by CLAUSES (b)(vi) through (ix) below, so
long as such prohibitions extend solely to the property or assets covered by
such Liens, or (b) create, incur, or suffer or permit to be created or incurred
or to exist any Lien upon any of its assets, except:
(i) Liens securing the Obligation;
(ii) Pledges or deposits made to secure payment
of worker's compensation, or to participate in any fund in
connection with worker's compensation, unemployment insurance,
pensions, or other social security programs, but expressly
excluding any Liens in favor of the PBGC or otherwise under
ERISA;
(iii) Other Liens arising in the ordinary course
of its business or the ownership of its property and assets
(including easements and similar encumbrances and Liens upon
shipped goods paid for by a documentary letter of credit) that
were not incurred in connection with the borrowing of money,
the obtaining of advances or credit, or the payment of the
deferred purchase price of property or assets, that do not in
the aggregate materially interfere with the operation of the
applicable Company's business, and that are not a
Material-Adverse Event;
(iv) Liens of landlords or of mortgagees of
landlords, arising solely by operation of law, on fixtures and
movable property located on premises leased in the ordinary
course of business;
(v) The following, so long as the validity or
amount thereof is being contested in good faith and by
appropriate and lawful proceedings diligently conducted,
reserve or other appropriate provisions (if any) required by
GAAP shall have been made, levy and execution thereon have
been stayed and continue to be stayed, and they do not in the
aggregate materially detract from the value of the property of
the Person in question, or materially impair the use thereof
in the operation of its business: (i) claims and Liens for
Taxes (other than Liens relating to Environmental Laws or
ERISA); (ii) claims and Liens upon, and defects of title to,
real or personal property, including any attachment of
personal or real property or other legal process prior to
adjudication of a dispute of the merits; and (iii) claims and
Liens of mechanics, materialmen, warehousemen, carriers,
landlords, or other like Liens;
(vi) financing statements filed as protective
filings on any securitized receivables;
(vii) Liens existing on any property of any Person
at the time it becomes a Company so long as (a) that Lien does
not encumber any other property of any Company and (b) the
aggregate amount of Debt secured by that Lien never exceeds
100% of the fair market value of that property;
(viii) Liens on any property acquired, constructed,
or improved by any Company after the date of this agreement
and created contemporaneously with or within
43
12 months after the date of that acquisition, completion of
construction, or improvement to secure Debt assumed or
incurred to finance up to 100% of the purchase price or cost
of construction or improvement of that property so long as
that Lien encumbers only the property so acquired or
constructed and any improvements to that property;
(ix) Liens existing on the date of this agreement
and disclosed on SCHEDULE 9.13;
(x) Any Lien described in CLAUSES (vi) through
(ix) above resulting from renewing, extending, or refunding
outstanding Debt so long as the principal amount of the Debt
so secured is not increased and that Lien is not extended to
any other property; and
(xi) Other Liens incurred in connection with the
borrowing of money or any other Liens so long as the total
Debt secured by Liens under this CLAUSE (xi) never exceeds 5%
of the Tangible Assets of the Companies.
9.14 TRANSACTIONS WITH AFFILIATES. No Company shall (a) enter into
any material transaction with any of its Affiliates (excluding transactions
among or between Loan Parties), other than transactions in the ordinary course
of business and upon fair and reasonable terms which have been approved by a
majority of the respective Company's Board of Directors that are disinterested
in such transaction, or (b) pay any salaries or other compensation, consulting
fees, or management fees or other like payments to any of its Affiliates, other
than in the ordinary course of business for services rendered.
9.15 COMPLIANCE WITH LAWS AND DOCUMENTS. No Company shall violate
the provisions of any Laws (including, without limitation, Environmental Laws,
Environmental Permits, ERISA, and OSHA) applicable to it, or any Material
Agreement to which it is a party, if such violation alone, or when aggregated
with all other such violations, could be a Material Adverse Event; no Company
shall violate the provisions of its Constituent Documents, or modify, repeal,
replace, or amend any provision of its Constituent Documents, if such action
could adversely affect the Rights of Lenders.
9.16 FISCAL YEAR AND ACCOUNTING METHODS. No Company will change its
fiscal year for book accounting purposes or its method of accounting, other than
(a) immaterial changes in methods or as required by GAAP, or (b) in connection
with an acquisition, such changes to the newly-acquired entity so as to conform
its fiscal year and its method of accounting to those of the Companies.
9.17 GOVERNMENT REGULATIONS. No Company will conduct its business
in such a way that it will become subject to regulation under the Investment
Company Act of 1940, as amended, the Public Utility Holding Company Act of 1935,
as amended, or any other Law (other than Regulations T, U, and X of the Board of
Governors of the Federal Reserve System, which regulates the incurrence of Debt.
9.18 RESTRICTIONS ON SUBSIDIARIES. No Loan Party shall enter into
or permit to exist any material arrangement or agreement which directly or
indirectly prohibits any such Person from (a) declaring, making, or paying,
directly or indirectly, any Distribution to any Loan Party, (b) paying any Debt
owed to any Loan Party, (c) making loans, advances, or investments to any Loan
Party, or (d) transferring any of its property or assets to any Loan Party;
provided that the foregoing shall not apply to restrictions or conditions (i)
imposed by Law, (ii) imposed by any Loan Document, and (iii) customarily
contained in agreements relating to the sale of any Company pending the sale of
such Company, so long as such restrictions and conditions apply only to the
Company that is to be sold and such sale is permitted by the Loan Documents.
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9.19 SALE OF ASSETS. No Loan Party may sell, transfer, or otherwise
dispose of (or commit to do so) any of its assets (including any equity
ownership of any other Company) other than (a) sales and dispositions in the
ordinary course of business for a fair and adequate consideration, (b) sales of
assets which are obsolete or are no longer in use and which are not significant
to the continuation of that Loan Party's business, (c) sales and dispositions
among Loan Parties in compliance with the terms of SECTION 9.14, (e) sales of
accounts receivable of any Loan Party pursuant to an accounts receivable
financing or securitization facility, and (f) dispositions of assets, the net
proceeds of which do not exceed 10% of Tangible Assets of the Companies in any
fiscal year.
9.20 PRIMARY BUSINESS. Each Loan Party shall continue to conduct
substantially all of its operations in the same primary businesses as those in
which the Loan Parties currently operate, which includes developing and
operating specialty retail stores either (a) through Company-owned stores or
through franchise arrangements in North America and Europe or (b) through
franchise arrangements in other countries.
9.21 MERGERS AND DISSOLUTIONS. No Loan Party may merge or
consolidate with any other Person other than:
(a) Borrower may merge or consolidate with or into any
other corporation so long as (i) Borrower is the continuing or
surviving entity and (ii) no Default or Potential Default exists or
arises as a result thereof;
(b) Any other Loan Party may merge or consolidate with or
into any other corporation so long as (i) the successor corporation
becomes a Subsidiary of Borrower and a Loan Party upon that merger or
consolidation and (ii) no Default or Potential Default exists or arises
as a result thereof; and
(c) Any Loan Party may merge or consolidate with or into
any other Loan Party so long as (i) Borrower is the surviving or
continuing corporation if involved, and (ii) no Default or Potential
Default exists or arises as a result thereof.
9.22 FINANCIAL COVENANTS. As calculated on a consolidated basis for
the Companies:
(a) Leverage Ratio. Borrower shall never permit the
Leverage Ratio to be greater than 2.75 to 1.00.
(b) Fixed Charge Coverage Ratio. Borrower shall never
permit the Fixed Charge Coverage Ratio to be less than 1.25 to 1.00.
(c) Tangible Net Worth. Borrower shall never permit the
Tangible Net Worth of the Companies (determined as of the last day of
each Fiscal Quarter) to be less than the sum of (a) $469,673,000, plus
(b) 50% of the Companies' cumulative Net Income (without deduction for
losses) commencing with the Fiscal Quarter ending August 30, 2003, plus
(c) 100% of the gross proceeds of any Equity Issuance (including
changes in Tangible Net Worth due to any conversions of Debt to Stock
of any Company).
9.23 ADDITIONAL GUARANTIES. Borrower shall cause each Company that
is a Material Domestic Subsidiary of Borrower formed or acquired after the date
of this Agreement, or on the date hereof is not a Material Domestic Subsidiary
but after the date hereof becomes a Material Domestic Subsidiary, to execute a
Guaranty within thirty days after the date of its formation or acquisition, or
becoming a Material Domestic Subsidiary, as the case may be.
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9.24 RESTRICTED INVESTMENTS . No Company may make, or pay any
Restricted Investment (a) if a Default or Potential Default exists or arises as
a result thereof or (b) that would cause the total Restricted Investments by all
Companies during any Fiscal Year to exceed $25,000,000 for all of the Companies.
9.25 STOCK REDEMPTIONS. Borrower shall not redeem, purchase, or
otherwise acquire any of its own Stock in excess of $12,500,000 in the aggregate
in any Fiscal Quarter; provided however, the limitations in this SECTION 9.25
shall not apply if (a) on any date of any such redemption, repurchase, or
acquisition, (i) the Debt Rating issued by ▇▇▇▇▇'▇ is Baa3 or better or (ii) the
Debt Rating issued by S&P is BBB- or better, or (b) the average aggregate
Revolver Commitment Usage over the immediately preceding Fiscal Quarter is less
than $50,000,000.
9.26 FURTHER ASSURANCES. Upon request of Administrative Agent or
any Lender, each Loan Party shall promptly and at its expense (a) cure any
defects in the creation, issuance, execution, and delivery of any Loan Document
to which it is intended to be party and (b) execute and deliver to
Administrative Agent or any Lender all such other and further documents,
agreements, and instruments in compliance with or accomplishment of the
covenants and agreements of that Loan Party under the applicable Loan Document,
to further evidence and more fully describe its obligations under that Loan
Document, to correct any omissions in that Loan Document, or to more fully state
the obligations set out in that Loan Document.
SECTION 10 DEFAULT. The term "DEFAULT" means the occurrence of any one or more
of the following events:
10.1 PAYMENT OF OBLIGATION. The failure or refusal of any Loan
Party to pay (a) any principal of the Obligation when the same becomes due
(whether by its terms, by acceleration, or as otherwise provided in the Loan
Documents); and (b) interest, fees, premium, or any other part of the Obligation
within three Business Days after the same becomes due and payable in accordance
with the Loan Documents; or
10.2 COVENANTS. The failure or refusal of Borrower (and, if
applicable, any other Loan Party) to punctually and properly perform, observe,
and comply with:
(a) Any covenant, agreement, or condition contained in
SECTIONS 9.1, 9.4, 9.7, 9.10, 9.12, 9.13, 9.14, 9.17 through 9.22,
9.24, and 9.25.
(b) Any covenant, agreement, or condition contained in
SECTIONS 9.3 AND 9.23, and such failure or refusal continues for 10
days; and
(c) Any other covenant, agreement, or condition contained
in any Loan Document (other than the covenants to pay the Obligation
set forth in SECTION 10.1 and the covenants in SECTIONS 10.2(a) and
10.2(b)), and such failure or refusal continues for 30 days.
10.3 DEBTOR RELIEF. Any Loan Party (a) shall not be Solvent, (b)
fails to pay its Debts generally as they become due, (c) voluntarily seeks,
consents to, or acquiesces in the benefit of any Debtor Relief Law, other than
as a creditor or claimant, or (d) becomes a party to or is made the subject of
any proceeding provided for by any Debtor Relief Law, other than as a creditor
or claimant, that could suspend or otherwise adversely affect the Rights of
Administrative Agent or any Lender granted in the Loan Documents (unless, in the
event such proceeding is involuntary, the petition instituting same is dismissed
within 30 days after its filing).
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10.4 JUDGMENTS AND ATTACHMENTS. Any Company fails, within 60 days
after entry, to pay, bond, or otherwise discharge any judgment or order for the
payment of money in excess of $10,000,000 (individually or collectively) or any
warrant of attachment, sequestration, or similar proceeding against any of their
respective assets having a value (individually or collectively) in excess of
$10,000,000 which is not stayed on appeal.
10.5 GOVERNMENT ACTION. Where either it is a Material Adverse Event
or the fair value of the assets involved exceed (from and after the Closing Date
and individually or collectively for all of the Loan Parties) (a) $10,000,000 in
respect of a final non-appealable order is issued by any Governmental Authority
(including the United States Justice Department) seeking to cause any Loan Party
to divest a significant portion of its assets under any antitrust, restraint of
trade, unfair competition, industry regulation, or similar Law, or (b)
$10,000,000 in respect of any Governmental Authority condemning, seizing, or
otherwise appropriating, or taking custody or control of all or any substantial
portion of any Loan Party's assets.
10.6 MISREPRESENTATION. Any representation or warranty made herein
or in any Loan Document shall at any time prove to have been incorrect in any
material respect when made.
10.7 CHANGE OF CONTROL. With respect to Borrower, an event or
series of events by which: (a) any "person" or "group" (as such terms are used
in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934) becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Securities
Exchange Act of 1934, except that a Person shall be deemed to have "beneficial
ownership" of all Stock that such Person has the right to acquire, whether such
right is exercisable immediately or only after the passage of time), directly or
indirectly, of twenty-five percent (25%) or more of the Stock of Borrower; or
(b) during any period of twelve (12) consecutive months, a majority of the
members of the board of directors or other equivalent governing body of Borrower
cease to be composed of individuals (i) who were members of such board or
equivalent governing body on the first (1st) day of such period, (ii) whose
election or nomination to such board or equivalent governing body was approved
by individuals referred to in CLAUSE (i) above constituting at the time of such
election or nomination at least a majority of such board or equivalent governing
body, or (iii) whose election or nomination to such board or other equivalent
governing body was approved by individuals referred to in CLAUSES (i) and (ii)
above constituting at the time of such election or nomination at least a
majority of such board or equivalent governing body.
10.8 DEFAULT UNDER OTHER DEBT AND AGREEMENTS. (i) Borrower or any
Subsidiary (A) fails to make any payment when due (whether by scheduled
maturity, required prepayment, acceleration, demand, or otherwise) in respect of
any Debt (other than the Obligation) having an aggregate principal amount
(including undrawn committed or available amounts and including amounts owing to
all creditors under any combined or syndicated credit arrangement) of more than
$15,000,000, or (B) fails to observe or perform any other agreement or condition
relating to any such Debt or contained in any instrument or agreement
evidencing, securing, or relating thereto, or any other event occurs, the effect
of which default or other event is to cause, or to permit the holder or holders
of such Debt (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the giving of notice if required,
such Debt to be demanded or to become due or to be repurchased, prepaid,
defeased, or redeemed (automatically or otherwise), or an offer to repurchase,
prepay, defease, or redeem such Debt to be made, prior to its stated maturity,
or cash collateral in respect thereof to be demanded; or (ii) there occurs under
any Financial Hedge an Early Termination Date (as defined in such Financial
Hedge) resulting from (A) any event of default under such Financial Hedge as to
which Borrower or any Subsidiary is the Defaulting Party (as defined in such
Swap Contract) or (B) any Termination Event (as so defined) under such Financial
Hedge as to which Borrower or any Subsidiary is an Affected Party (as so
defined) and, in either event, the Hedge Termination Value owed by Borrower or
such Subsidiary as a result thereof is greater than $15,000,000.
47
10.9 EMPLOYEE BENEFIT PLANS. (a) Any Company or ERISA Affiliate
shall fail to pay when due an amount or amounts for which it is liable under
Title IV of ERISA, which aggregate unpaid amounts for all such entities exceed
$10,000,000 in the aggregate; or (b) an ERISA Event shall occur or exist with
respect to any Employee Plan or Multiemployer Plan, and as a result of such
ERISA Event and all other ERISA Events then-existing, the aggregate liabilities
incurred (or in the reasonable judgment of Required Lenders, likely to be
incurred) of the Companies and the ERISA Affiliates to any Employee Plan,
Multiemployer Plan, or the PBGC (or any combination thereof) shall exceed
$10,000,000 (net of actual or, in the sole determination of Administrative
Agent, likely, recoveries, payments or insurance proceeds).
10.10 LCs. Administrative Agent or any LC Issuer shall have been
served with, or becomes otherwise subject to, a court order, injunction, or
other process or decree restraining or seeking to restrain it from paying any
amount under any LC and either (a) there has been a drawing under such LC which
any LC Issuer would otherwise be obligated to pay and Borrower has refused to
reimburse the applicable LC Issuer for such payment or (b) the expiration date
of such LC has occurred but the right of any beneficiary thereunder to draw
under such LC has been extended past the expiration date in connection with the
pendency of the related court action or proceeding and Borrower has failed to
deposit with Administrative Agent (for the benefit of the applicable LC Issuer)
cash collateral in an amount equal to the maximum drawing which could be made
under such LC.
10.11 VALIDITY AND ENFORCEABILITY OF LOAN DOCUMENTS. Any Loan
Document shall, at any time after its execution and delivery and for any reason,
cease to be in full force and effect in any material respect or be declared to
be null and void (other than in accordance with the terms hereof or thereof) or
the validity or enforceability thereof be contested by any Company party thereto
or any Company shall deny in writing that it has any or any further liability or
obligations under any Loan Document to which it is a party.
10.12 DISSOLUTION. Any Loan Party shall dissolve, liquidate, or
otherwise terminate its existence.
10.13 OWNERSHIP OF LOAN PARTIES. Except as a result of transactions
permitted by this Agreement, one or more Loan Parties fail to own, beneficially
and of record, with power to vote, a percentage of the issued and outstanding
shares of Stock of each Subsidiary of Borrower that is a Loan Party, which
percentage is (a) the percentage owned by the Loan Parties as reflected on
SCHEDULE 8.3 as of the Closing Date or (b) the percentage from time to time
acquired by the Loan Parties (which must be at least a majority).
10.14 SEC REPORTING REQUIREMENTS. Borrower fails to comply with any
applicable reporting requirements of the Securities Exchange Act of 1934 for
which the failure to report would constitute a Material Adverse Event.
SECTION 11 RIGHTS AND REMEDIES.
11.1 REMEDIES UPON DEFAULT.
(a) Debtor Relief. If a Default exists under SECTION
10.3(c) or 10.3(d), the commitment to extend credit hereunder shall
automatically terminate and the entire unpaid balance of the Obligation
shall automatically become due and payable without any action or notice
of any kind whatsoever, and Borrower shall be required to provide cash
collateral in an amount equal to 110% of the LC Exposure then existing
in accordance with SECTION 2.2(g).
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(b) Other Defaults. If any Default exists, Administrative
Agent may (and, subject to the terms of SECTION 12, shall upon the
request of Required Lenders) or Required Lenders may, do any one or
more of the following: (i) if the maturity of the Obligation has not
already been accelerated under SECTION 11.1(a), declare the entire
unpaid balance of the Obligation, or any part thereof, immediately due
and payable, whereupon it shall be due and payable; (ii) terminate the
commitments of Lenders to extend credit hereunder; (iii) reduce any
claim to judgment; (iv) to the extent permitted by Law, exercise (or
request each Lender to, and each Lender shall be entitled to, exercise)
the Rights of offset or banker's Lien against the interest of each Loan
Party in and to every account and other property of any Loan Party
which are in the possession of Administrative Agent or any Lender to
the extent of the full amount of the Obligation (to the extent
permitted by Law, each Loan Party being deemed directly obligated to
each Lender in the full amount of the Obligation for such purposes);
(v) if the maturity of the Obligation has not already been accelerated
under SECTION 11.1(a), demand Borrower to provide cash collateral in an
amount equal to 110% of the LC Exposure then existing in accordance
with SECTION 2.2(g); and (vi) exercise any and all other legal or
equitable Rights afforded by the Loan Documents, the Laws of the State
of Texas, or any other applicable jurisdiction as Administrative Agent
or Required Lenders (as the case may be) shall deem appropriate, or
otherwise, including, but not limited to, the Right to bring suit or
other proceedings before any Governmental Authority either for specific
performance of any covenant or condition contained in any of the Loan
Documents or in aid of the exercise of any Right granted to
Administrative Agent or any Lender in any of the Loan Documents.
11.2 LOAN PARTY WAIVERS; NO RELEASE. To the extent permitted by
Law, the Loan Parties hereby waive presentment and demand for payment, protest,
notice of intention to accelerate, notice of acceleration, and notice of protest
and nonpayment, and agree that their respective liability with respect to the
Obligation (or any part thereof) shall not be affected by any renewal or
extension in the time of payment of the Obligation (or any part thereof), by any
indulgence, or by any release or change in any security for the payment of the
Obligation (or any part thereof). No Borrower's obligations under the Loan
Documents may be released, diminished, or affected by the occurrence of any one
or more of the following events: (a) any full or partial release of the
liability of any other obligor on the Obligation, including, without limitation,
any release of any other Borrower as contemplated by SECTION 6.2, except for any
final release resulting from payment in full of such Obligation; (b) the
insolvency, bankruptcy, or lack of corporate or partnership power of any other
obligor at any time liable for any of the Obligation, whether now existing or
occurring in the future; (c) the unenforceability of any of the Obligation
against any other obligor or any security securing same because it exceeds the
amount permitted by Law, the act of creating it is ultra ▇▇▇▇▇, the officers
creating it exceeded their authority or violated their fiduciary duties in
connection with it, or otherwise; or (d) any payment of the Obligation to
Administrative Agent or any Lender is held to constitute a preference under any
Debtor Relief Law or for any other reason Administrative Agent or any Lender is
required (without any obligation of any Lender or Administrative Agent to
contest such requirement) to refund that payment or make payment to someone else
(and in each such instance, the Obligation will be reinstated in an amount equal
to that payment).
11.3 PERFORMANCE BY ADMINISTRATIVE AGENT. If any covenant, duty, or
agreement of any Company is not performed in accordance with the terms of the
Loan Documents, after the occurrence and during the continuance of a Default,
Administrative Agent may, at its option (but subject to the approval of Required
Lenders), perform or attempt to perform such covenant, duty, or agreement on
behalf of such Company. In such event, any amount expended by Administrative
Agent in such performance or attempted performance shall be payable by the Loan
Parties, jointly and severally, to Administrative Agent on demand, shall become
part of the Obligation, and shall bear interest at the Default Rate from the
date of such expenditure by Administrative Agent until paid. Notwithstanding the
foregoing, it is expressly understood that Administrative Agent does not assume,
and shall never have, except by its
49
express written consent, any liability or responsibility for the performance of
any covenant, duty, or agreement of any Company.
11.4 DELEGATION OF DUTIES AND RIGHTS. Lenders may perform any of
their duties or exercise any of their Rights under the Loan Documents by or
through their respective Representatives.
11.5 NOT IN CONTROL. Nothing in any Loan Document shall, or shall
be deemed to (a) give any Agent or any Lender the Right to exercise control over
the assets (including real property), affairs, or management of any Company, (b)
preclude or interfere with compliance by any Company with any Law, or (c)
require any act or omission by any Company that may be harmful to Persons or
property. Any "Material Adverse Event" or other materiality qualifier in any
representation, warranty, covenant, or other provision of any Loan Document is
included for credit documentation purposes only and shall not, be deemed to,
mean that any Agent or any Lender acquiesces in any non-compliance by any
Company with any Law or document, or that any Agent or any Lender does not
expect the Company to promptly, diligently, and continuously carry out all
appropriate removal, remediation, and termination activities required or
appropriate in accordance with all Environmental Laws. The Agents and the
Lenders have no fiduciary relationship with or fiduciary duty to any Company
arising out of or in connection with the Loan Documents, and the relationship
between the Agents and the Lenders, on the one hand, and Companies, on the other
hand, in connection with the Loan Documents is solely that of debtor and
creditor. The power of the Agents and Lenders under the Loan Documents is
limited to the Rights provided in the Loan Documents, which Rights exist solely
to assure payment and performance of the Obligation and may be exercised in a
manner calculated by the Agents and Lenders in their respective good faith
business judgment.
11.6 COURSE OF DEALING. The acceptance by Administrative Agent or
Lenders at any time and from time to time of partial payment on the Obligation
shall not be deemed to be a waiver of any Default then existing. No waiver by
Administrative Agent, Required Lenders, or Lenders of any Default shall be
deemed to be a waiver of any other then-existing or subsequent Default. No delay
or omission by Administrative Agent, Required Lenders, or Lenders in exercising
any Right under the Loan Documents shall impair such Right or be construed as a
waiver thereof or any acquiescence therein, nor shall any single or partial
exercise of any such Right preclude other or further exercise thereof, or the
exercise of any other Right under the Loan Documents or otherwise.
11.7 CUMULATIVE RIGHTS. All Rights available to Administrative
Agent and Lenders under the Loan Documents are cumulative of and in addition to
all other Rights granted to Administrative Agent and Lenders at Law or in
equity, whether or not the Obligation is due and payable and whether or not
Administrative Agent or Lenders have instituted any suit for collection,
foreclosure, or other action in connection with the Loan Documents.
11.8 APPLICATION OF PROCEEDS. Any and all proceeds ever received by
Administrative Agent or Lenders from the exercise of any Rights pertaining to
the Obligation shall be applied to the Obligation in the order and manner set
forth in SECTION 3.12.
11.9 CERTAIN PROCEEDINGS. Each Loan Party will promptly execute and
deliver, or cause the execution and delivery of, all applications, certificates,
instruments, registration statements, and all other documents and papers
Administrative Agent or Lenders may reasonably request in connection with the
obtaining of any consent, approval, registration (other than securities Law
registration), qualification, permit, license, or Authorization of any
Governmental Authority or other Person necessary or appropriate for the
effective exercise of any Rights under the Loan Documents. Because the Loan
Parties agree that Administrative Agent's and Lenders' remedies at Law for
failure of the Loan Parties to comply with the provisions of this Section would
be inadequate and that such failure would not be adequately
50
compensable in damages, the Loan Parties agree that the covenants of this
Section may be specifically enforced.
11.10 EXPENDITURES BY LENDERS. Borrower shall promptly pay within
fifteen (15) Business Days after request therefor (a) all reasonable costs,
fees, and expenses paid or incurred by Administrative Agent, incident to any
Loan Document (including, but not limited to, the reasonable fees and expenses
of counsel to Administrative Agent in connection with the syndication,
negotiation, preparation, delivery, execution, coordination and administration
of the Loan Documents and any related amendment, waiver, or consent) and (b) all
reasonable costs and expenses of Lenders and Administrative Agent incurred by
Administrative Agent or any Lender in connection with the enforcement of the
obligations of any Loan Party arising under the Loan Documents (including,
without limitation, costs and expenses incurred in connection with any workout
or bankruptcy) or the exercise of any Rights arising under the Loan Documents
(including, but not limited to, reasonable attorneys' fees, court costs and
other costs of collection), all of which shall be a part of the Obligation and
shall bear interest at the Default Rate from the date due until the date repaid.
11.11 INDEMNIFICATION. BORROWER AND EACH OTHER LOAN PARTY (BY
EXECUTION OF A GUARANTY) AGREES, JOINTLY AND SEVERALLY, TO INDEMNIFY AND HOLD
HARMLESS EACH AGENT, ARRANGER, LC ISSUER, AND EACH LENDER AND EACH OF THEIR
RESPECTIVE AFFILIATES AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES,
AGENTS, ATTORNEYS, AND ADVISORS (EACH, AN "INDEMNIFIED PARTY") FROM AND AGAINST
ANY AND ALL CLAIMS, DAMAGES, LOSSES, LIABILITIES (INCLUDING, WITHOUT LIMITATION,
ANY ENVIRONMENTAL LIABILITIES), COSTS, AND EXPENSES (INCLUDING, WITHOUT
LIMITATION, REASONABLE ATTORNEYS' FEES) THAT MAY BE INCURRED BY OR ASSERTED OR
AWARDED AGAINST ANY INDEMNIFIED PARTY, IN EACH CASE ARISING OUT OF OR IN
CONNECTION WITH OR BY REASON OF (INCLUDING, WITHOUT LIMITATION, IN CONNECTION
WITH ANY INVESTIGATION, LITIGATION, OR PROCEEDING OR PREPARATION OF DEFENSE IN
CONNECTION THEREWITH) THE LOAN DOCUMENTS, ANY OF THE TRANSACTIONS CONTEMPLATED
HEREIN OR THE ACTUAL OR PROPOSED USE OF THE PROCEEDS OF THE BORROWINGS
(INCLUDING ANY OF THE FOREGOING ARISING FROM THE NEGLIGENCE OF THE INDEMNIFIED
PARTY), EXCEPT TO THE EXTENT SUCH CLAIM, DAMAGE, LOSS, LIABILITY, COST, OR
EXPENSE IS FOUND IN A FINAL, NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT
JURISDICTION TO HAVE RESULTED FROM SUCH INDEMNIFIED PARTY'S GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT. IN THE CASE OF AN INVESTIGATION, LITIGATION OR OTHER
PROCEEDING TO WHICH THE INDEMNITY IN THIS SECTION 11.12 APPLIES, SUCH INDEMNITY
SHALL BE EFFECTIVE WHETHER OR NOT SUCH INVESTIGATION, LITIGATION OR PROCEEDING
IS BROUGHT BY BORROWER, THEIR DIRECTORS, SHAREHOLDERS, OR CREDITORS, OR AN
INDEMNIFIED PARTY OR ANY OTHER PERSON OR ANY INDEMNIFIED PARTY IS OTHERWISE A
PARTY THERETO AND WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED HEREBY ARE
CONSUMMATED. BORROWER AND EACH OTHER LOAN PARTY (BY EXECUTION OF A GUARANTY)
AGREE NOT TO ASSERT ANY CLAIM AGAINST ANY INDEMNIFIED PARTY ON ANY THEORY OF
LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL, OR PUNITIVE DAMAGES ARISING OUT
OF OR OTHERWISE RELATING TO THE LOAN DOCUMENTS, ANY OF THE TRANSACTIONS
CONTEMPLATED HEREIN OR THE ACTUAL OR PROPOSED USE OF THE PROCEEDS OF THE
BORROWINGS. WITHOUT PREJUDICE TO THE SURVIVAL OF ANY OTHER AGREEMENT OF THE
COMPANIES HEREUNDER, THE AGREEMENTS AND OBLIGATIONS OF THE LOAN PARTIES
CONTAINED IN THIS SECTION 11.12 SHALL SURVIVE THE PAYMENT IN FULL OF THE
BORROWINGS AND ALL OTHER AMOUNTS PAYABLE UNDER THE LOAN DOCUMENTS AND THE
TERMINATION OF THE REVOLVER COMMITMENT.
SECTION 12 AGREEMENT AMONG LENDERS.
12.1 ADMINISTRATIVE AGENT; LC ISSUERS.
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(a) Appointment of Administrative Agent. Each Lender
hereby appoints ▇▇▇▇▇ Fargo Bank, National Association (and ▇▇▇▇▇ Fargo
Bank, National Association hereby accepts such appointment) as its
nominee and agent, in its name and on its behalf: (i) to act as nominee
for and on behalf of such Lender in and under all Loan Documents; (ii)
to arrange the means whereby the funds of Lenders are to be made
available to Borrower under the Loan Documents; (iii) to take such
action as may be requested by any Lender under the Loan Documents (when
such Lender is entitled to make such request under the Loan Documents
and after such requesting Lender has obtained the concurrence of such
other Lenders as may be required under the Loan Documents); (iv) to
receive all documents and items to be furnished to Lenders under the
Loan Documents; (v) to timely distribute, and Administrative Agent
agrees to so distribute, to each Lender all material information,
requests, documents, and items received from Borrower under the Loan
Documents; (vi) to promptly distribute to each Lender its Pro Rata Part
of each payment or prepayment (whether voluntary, as proceeds of
collateral upon or after foreclosure, or otherwise) in accordance with
the terms of the Loan Documents; (vii) to deliver to the appropriate
Persons requests, demands, approvals, and consents received from
Lenders; and (viii) to execute, on behalf of Lenders, such releases or
other documents or instruments as are permitted by the Loan Documents
or as directed by Lenders from time to time; provided, however,
Administrative Agent shall not be required to take any action which
exposes Administrative Agent to personal liability or which is contrary
to the Loan Documents or applicable Law.
(b) Actions of LC Issuers. Each LC Issuer shall act on
behalf of the Lenders with respect to any LC issued by it and the
documents associated therewith, and the LC Issuer shall have all of the
benefits and immunities (i) provided to the Administrative Agent in
this SECTION 12 with respect to any acts taken or omissions suffered by
such LC Issuer in connection with LCs issued by it or proposed to be
issued by it and the LC Agreements pertaining to such LCs as fully as
if the term "Administrative Agent" as used in this SECTION 12 included
the LC Issuer with respect to such acts or omissions, and (ii) as
additionally provided herein with respect to the LC Issuer.
(c) Resignation of Administrative Agent. Successor
Administrative Agents. Administrative Agent may resign at any time as
Administrative Agent under the Loan Documents by giving written notice
thereof to Lenders and may be removed as Administrative Agent under the
Loan Documents at any time with cause by Required Lenders; provided
that any such resignation by ▇▇▇▇▇ Fargo shall also constitute its
resignation as the Swing Line Lender and a LC Issuer. Should the
initial or any successor Administrative Agent ever cease to be a party
hereto or should the initial or any successor Administrative Agent ever
resign or be removed as Administrative Agent, then Required Lenders
shall elect the successor Administrative Agent from among the Lenders
(other than the resigning Administrative Agent). If no successor
Administrative Agent shall have been so appointed by Required Lenders,
within 30 days after the retiring Administrative Agent's giving of
notice of resignation or Required Lenders' removal of the retiring
Administrative Agent, then the retiring Administrative Agent may, on
behalf of Lenders, appoint a successor Administrative Agent, which
shall be a commercial bank having a combined capital and surplus of at
least $1,000,000,000. Upon the acceptance of any appointment as
Administrative Agent under the Loan Documents by a successor
Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the Rights of the
retiring Administrative Agent and Swing Line Lender, and the respective
terms "Administrative Agent" and "Swing Line Lender" shall mean such
successor administrative agent and swing line lender, and the retiring
Administrative Agent and Swing Line Lender shall be discharged from its
duties and obligations of Administrative Agent under the Loan
Documents, and each Lender shall execute such documents as any Lender
may reasonably request to reflect such change in and under the Loan
Documents. After any retiring Administrative Agent's resignation or
removal as Administrative Agent under the Loan
52
Documents, the provisions of this SECTION 12 shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was
Administrative Agent under the Loan Documents.
(d) Administrative Agent as a Lender. Non-Fiduciary.
Administrative Agent, in its capacity as a Lender, shall have the same
Rights under the Loan Documents as any other Lender and may exercise
the same as though it were not acting as Administrative Agent; the term
"Lender" shall, unless the context otherwise indicates, include
Administrative Agent and any LC Issuer hereunder; and any resignation
by, or removal of Administrative Agent hereunder shall not impair or
otherwise affect any Rights which it has or may have in its capacity as
an individual Lender. Each Lender and each Loan Party agrees that
Administrative Agent is not a fiduciary for Lenders or for the
Companies but simply is acting in the capacity described herein to
alleviate administrative burdens for both the Companies and Lenders,
that Administrative Agent has no duties or responsibilities to Lenders
or the Companies except those expressly set forth herein, and that
Administrative Agent in its capacity as a Lender has all Rights of any
other Lender.
(e) Other Activities of Administrative Agent.
Administrative Agent and its Affiliates may now or hereafter be engaged
in one or more loan, letter of credit, leasing, or other financing
transactions with any Company, act as trustee or depositary for any
Company, or otherwise be engaged in other transactions with any Company
(collectively, the "OTHER ACTIVITIES") not the subject of the Loan
Documents. Without limiting the Rights of Lenders specifically set
forth in the Loan Documents, Administrative Agent and its Affiliates
shall not be responsible to account to Lenders for such other
activities, and no Lender shall have any interest in any other
activities, any present or future guaranties by or for the account of
any Company which are not contemplated or included in the Loan
Documents, any present or future offset exercised by Administrative
Agent and its Affiliates in respect of such other activities, any
present or future property taken as security for any such other
activities, or any property now or hereafter in the possession or
control of Administrative Agent or its Affiliates which may be or
become security for the obligations of Loan Parties arising under the
Loan Documents by reason of the general description of indebtedness
secured or of property contained in any other agreements, documents, or
instruments related to any such other activities; provided that, if any
payments in respect of such guaranties or such property or such offsets
referenced above, or the proceeds thereof, shall be applied to
reduction of the Obligation arising under the Loan Documents, then each
Lender shall be entitled to share in such application on a Pro Rata
basis.
12.2 EXPENSES. Upon demand by Administrative Agent, each Lender
shall pay its Pro Rata Part of any reasonable expenses (including, without
limitation, court costs, reasonable attorneys' fees, and other costs of
collection) incurred by Administrative Agent in connection with any of the Loan
Documents if and to the extent Administrative Agent does not receive
reimbursement therefor from other sources within 60 days after incurred;
provided that, each Lender shall be entitled to receive its Pro Rata Part of any
reimbursement for such expenses, or part thereof, which Administrative Agent
subsequently receives from such other sources.
12.3 PROPORTIONATE ABSORPTION OF LOSSES. Except as otherwise
provided in the Loan Documents, nothing in the Loan Documents shall be deemed to
give any Lender any advantage over any other Lender insofar as the Obligation
arising under the Loan Documents is concerned, or to relieve any Lender from
absorbing its ratable portion of any losses sustained with respect to the
Obligation (except to the extent such losses result from unilateral actions or
inactions of any Lender that are not made in accordance with the terms and
provisions of the Loan Documents).
12.4 DELEGATION OF DUTIES; RELIANCE. Administrative Agent may
perform any of its duties or exercise any of its Rights under the Loan Documents
by or through its Representatives. Administrative Agent and its Representatives
shall (a) be entitled to rely upon (and shall be protected in relying upon)
53
any writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telecopy, telegram, telex or teletype message, statement, order, or
other documents or conversation believed by it or them to be genuine and correct
and to have been signed or made by the proper Person and, with respect to legal
matters, upon opinions of counsel selected by Administrative Agent, (b) be
entitled to deem and treat each Lender as the owner and holder of the Obligation
owed to such Lender for all purposes until, subject to SECTION 13.13, written
notice of the assignment or transfer thereof shall have been given to and
received by Administrative Agent (and any request, authorization, consent, or
approval of any Lender shall be conclusive and binding on each subsequent
holder, assignee, or transferee of the Obligation owed to such Lender or portion
thereof until such notice is given and received), (c) not be deemed to have
notice of the occurrence of a Default or Potential Default unless a responsible
officer of Administrative Agent, who handles matters associated with the Loan
Documents and transactions thereunder, has received written notice from a Lender
or Borrower and stating that such notice is a "Notice of Default," and (d) be
entitled to consult with legal counsel (including counsel for any Company),
independent accountants, and other experts selected by Administrative Agent and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts.
12.5 LIMITATION OF LIABILITY.
(a) General. None of the Agents or any of their
respective Representatives shall be liable for any action taken or
omitted to be taken by it or them under the Loan Documents in good
faith and reasonably believed by it or them to be within the discretion
or power conferred upon it or them by the Loan Documents or be
responsible for the consequences of any error of judgment, except for
fraud, gross negligence, or willful misconduct; and none of the Agents
or any of their respective Representatives has a fiduciary relationship
with any Lender by virtue of the Loan Documents (provided that, nothing
herein shall negate the obligation of Administrative Agent to account
for funds received by it for the account of any Lender).
(b) Non-Discretionary Actions; Indemnification. Unless
indemnified to its satisfaction against loss, cost, liability, and
expense, neither Administrative Agent nor any other Agent shall be
compelled to do any act under the Loan Documents or to take any action
toward the execution or enforcement of the powers thereby created or to
prosecute or defend any suit in respect of the Loan Documents. If
Administrative Agent requests instructions from Lenders or Required
Lenders, as the case may be, with respect to any act or action
(including, but not limited to, any failure to act) in connection with
any Loan Document, Administrative Agent shall be entitled (but shall
not be required) to refrain (without incurring any liability to any
Person by so refraining) from such act or action unless and until it
has received such instructions. Except where action of Required Lenders
or all Lenders is required in the Loan Documents, Administrative Agent
may act hereunder in its own discretion without requesting
instructions. In no event, however, shall Administrative Agent or any
of its respective Representatives be required to take any action which
it or they determine could incur for it or them criminal or onerous
civil liability. Without limiting the generality of the foregoing, no
Lender shall have any right of action against Administrative Agent as a
result of Administrative Agent's acting or refraining from acting
hereunder in accordance with the instructions of Required Lenders (or
all Lenders if required in the Loan Documents).
(c) Independent Credit Decision. Neither Administrative
Agent nor any other Agent or LC Issuer shall be responsible in any
manner to any Lender or any Participant for, and each Lender represents
and warrants that it has not relied upon Administrative Agent, any
other Agent, or any LC Issuer in respect of, (i) the creditworthiness
of any Loan Party and the risks involved to such Lender, (ii) the
effectiveness, enforceability, genuineness, validity, or the due
execution of any Loan Document, (iii) any representation, warranty,
document, certificate, report, or statement made therein or furnished
thereunder or in connection therewith, (iv) the existence, priority, or
54
perfection of any Lien hereafter granted or purported to be granted
under any Loan Document, or (v) observation of or compliance with any
of the terms, covenants, or conditions of any Loan Document on the part
of any Loan Party. Each Lender agrees to indemnify Administrative Agent
and each LC Issuer and their respective Representatives and hold them
harmless from and against (but limited to such Lender's Pro Rata Part
of) any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, reasonable expenses, and reasonable
disbursements of any kind or nature whatsoever which may be imposed on,
asserted against, or incurred by them in any way relating to or arising
out of the Loan Documents or any action taken or omitted by them under
the Loan Documents (INCLUDING ANY OF THE FOREGOING ARISING FROM THE
NEGLIGENCE OF ADMINISTRATIVE AGENT, ANY LC ISSUER, OR THEIR
REPRESENTATIVES), to the extent Administrative Agent, LC Issuer, and
their respective Representatives are not reimbursed for such amounts by
any Loan Party (provided that, Administrative Agent, any LC Issuer, and
their respective Representatives shall not have the right to be
indemnified hereunder for its or their own fraud, gross negligence, or
willful misconduct).
12.6 DEFAULT.
(a) Upon the occurrence and continuance of a Default,
Lenders agree to promptly confer in order that Required Lenders or
Lenders, as the case may be, may agree upon a course of action for the
enforcement of the Rights of Lenders; and Administrative Agent shall be
entitled to refrain from taking any action (without incurring any
liability to any Person for so refraining) unless and until
Administrative Agent shall have received instructions from Required
Lenders. All Rights of action under the Loan Documents, if any,
hereunder may be enforced by Administrative Agent and any suit or
proceeding instituted by Administrative Agent in furtherance of such
enforcement shall be brought in its name as Administrative Agent
without the necessity of joining as plaintiffs or defendants any other
Lender, and the recovery of any judgment shall be for the benefit of
Lenders subject to the expenses of Administrative Agent. In actions
with respect to any property of the Loan Parties, Administrative Agent
is acting for the ratable benefit of each Lender. Any and all
agreements to subordinate (whether made heretofore or hereafter) other
indebtedness or obligations of the Loan Parties to the Obligation shall
be construed as being for the ratable benefit of each Lender.
(b) In case of the pendency of any receivership,
insolvency, liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition, or other judicial proceeding relative to any
Loan Party, Administrative Agent (irrespective of whether any Principal
Debt or LC Exposure shall then be due and payable as herein expressed
or by declaration or otherwise and irrespective of whether the
Administrative Agent shall have made any demand on Borrower) shall be
entitled and empowered, by intervention in such proceeding or otherwise
(i) to file and prove a claim for the whole
amount of the principal and interest owing and unpaid in
respect of the Principal Debt and interest due thereon, LC
Exposure, and all other Obligation that is owing and unpaid
and to file such other documents as may be necessary or
advisable in order to have the claims of the Lenders and
Administrative Agent (including any claim for the reasonable
compensation, expenses, disbursements, and advances of the
Lenders and Administrative Agent and their respective agents
and counsel and all other amounts due the Lenders and the
Administrative Agent under SECTIONS 5 and 11.10) allowed in
such judicial proceeding; and
(ii) to collect and receive any monies or other
property payable or deliverable on any such claims and to
distribute the same;
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and any custodian, receiver, assignee, trustee, liquidator,
sequestrator, or other similar official in any such judicial proceeding
is hereby authorized by each Lender to make such payments to
Administrative Agent and, in the event that Administrative Agent shall
consent to the making of such payments directly to the Lenders, to pay
to Administrative Agent any amount due for the reasonable compensation,
expenses, disbursements, and advances of Administrative Agent and its
agents and counsel, and any other amounts due the Administrative Agent
under SECTIONS 5 and 11.10.
Nothing contained herein shall be deemed to authorize Administrative
Agent to authorize or consent to or accept or adopt on behalf of any
Lender any plan of reorganization, arrangement, adjustment, or
composition affecting the Obligation or the Rights of any Lender or to
authorize Administrative Agent to vote in respect of the claim of any
Lender in any such proceeding.
(c) Lenders hereby irrevocably authorize Administrative
Agent, at its option and in its discretion, to release any Guaranty:
(i) upon termination of the Revolver Commitment and payment and
satisfaction of the Obligation; (ii) upon the sale, transfer, or
disposition of any Guarantor which is expressly permitted pursuant to
the Loan Documents, including, without limitation, under SECTION 9.19;
(iii) as contemplated in SECTION 6.2; or (iv) if approved, authorized,
or ratified in writing by all necessary Lenders. Upon request by
Administrative Agent at any time, Lenders will confirm in writing
Administrative Agent's authority to release particular Guaranties
pursuant to this SECTION 12.6.
(d) In furtherance of the authorizations set forth in
this SECTION 12.6, each Lender hereby irrevocably appoints
Administrative Agent its attorney-in-fact, with full power of
substitution, for and on behalf of and in the name of each such Lender,
to execute instruments of release or to take other action necessary to
release Guaranties to the extent authorized in PARAGRAPH (c) hereof.
This power of attorney shall be liberally, not restrictively, construed
so as to give the greatest latitude to Administrative Agent's power, as
attorney, relative to the matters described in this SECTION 12.6. The
powers and authorities herein conferred on Administrative Agent may be
exercised by Administrative Agent through any Person who, at the time
of the execution of a particular instrument, is an officer of
Administrative Agent. The power of attorney conferred by this SECTION
12.6(d) is granted for valuable consideration and is coupled with an
interest and is irrevocable so long as the Obligation, or any part
thereof, shall remain unpaid or Lenders are obligated to make any
Borrowings under the Loan Documents.
12.7 LIMITATION OF LIABILITY. To the extent permitted by Law, (a)
neither Administrative Agent nor any other Agent (acting in their respective
agent capacities) shall incur any liability to any other Lender, Agent, or
Participant except for acts or omissions resulting from its own fraud, gross
negligence or willful misconduct, and (b) neither Administrative Agent nor any
other Agent, Lender, or Participant shall incur any liability to any other
Person for any act or omission of any other Lender, Agent, or Participant.
12.8 RELATIONSHIP OF LENDERS. Nothing herein shall be construed as
creating a partnership or joint venture among Agents and Lenders.
12.9 BENEFITS OF AGREEMENT. None of the provisions of this SECTION 12
shall inure to the benefit of any Company or any other Person other than
Lenders; consequently, no Company or any other Person shall be entitled to rely
upon, or to raise as a defense, in any manner whatsoever, the failure of any
Agent or any Lender to comply with such provisions.
12.10 AGENTS. None of the Lenders identified in this Agreement as a
"Syndication Agent" or "Documentation Agent" shall have any Rights, powers,
obligations, liabilities, responsibilities, or duties
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under the Loan Documents other than those applicable to all Lenders as such.
Without limiting the foregoing, none of the Lenders so identified as a
"Syndication Agent" or "Documentation Agent" shall have or be deemed to have any
fiduciary relationship with any Lender. Any Lender that is a "Syndication Agent"
or "Documentation Agent," may voluntarily relinquish its title by giving written
notice thereof to Administrative Agent and Borrower. Upon such relinquishments,
a successor "Syndication Agent" or "Documentation Agent" may be appointed upon
the mutual agreement of Borrower and Administrative Agent.
12.11 OBLIGATIONS SEVERAL. The obligations of Lenders hereunder are
several, and each Lender hereunder shall not be responsible for the obligations
of the other Lenders hereunder, nor will the failure of one Lender to perform
any of its obligations hereunder relieve the other Lenders from the performance
of their respective obligations hereunder.
SECTION 13 MISCELLANEOUS.
13.1 HEADINGS. The headings, captions, and arrangements used in any of
the Loan Documents are, unless specified otherwise, for convenience only and
shall not be deemed to limit, amplify, or modify the terms of the Loan
Documents, nor affect the meaning thereof.
13.2 NONBUSINESS DAYS. In any case where any payment or action is due
under any Loan Document on a day which is not a Business Day, such payment or
action may be delayed until the next-succeeding Business Day, but interest and
fees shall continue to accrue in respect of any payment to which it is
applicable until such payment is in fact made; provided that, if, in the case of
any such payment in respect of a Eurodollar Rate Borrowing, the next-succeeding
Business Day is in the next calendar month, then such payment shall be made on
the next-preceding Business Day.
13.3 COMMUNICATIONS; FACSIMILE COPIES.
(a) General. Unless otherwise expressly provided herein,
all notices and other communications provided for hereunder shall be in
writing (including by facsimile transmission). All such written notices
shall be mailed, faxed or delivered to the applicable address,
facsimile number or (subject to CLAUSE (c) below) electronic mail
address, and all notices and other communications expressly permitted
hereunder to be given by telephone shall be made to the applicable
telephone number, as follows:
(i) if to Administrative Agent, to the address,
facsimile number, electronic mail address or telephone number
specified for Administrative Agent on SCHEDULE 2.1 or to such
other address, facsimile number, electronic mail address, or
telephone number as shall be designated by such party in a
notice to the other parties;
(ii) if to Borrower or any other Loan Party, the
address set forth by such Person's signature on the signature
page of this Agreement or the Guaranty (as applicable) or to
such other address, facsimile number, electronic mail address,
or telephone number as shall be designated by such party in a
notice to Administrative Agent; and
(iii) if to any other Lender, to the address,
facsimile number, electronic mail address, or telephone number
specified in its Administrative Questionnaire or to such other
address, facsimile number, electronic mail address or
telephone number as shall be designated by such party in a
notice to the other parties.
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All such notices and other communications shall be deemed to be given
or made upon the earlier to occur of (i) actual receipt by the relevant
party hereto and (ii) (A) if delivered by hand or by courier, when
signed for by or on behalf of the relevant party hereto; (B) if
delivered by mail, four Business Days after deposit in the mails,
postage prepaid; (C) if delivered by facsimile, when sent and receipt
has been confirmed by telephone; and (D) if delivered by electronic
mail (which form of delivery is subject to the provisions of CLAUSE (c)
below), when delivered; provided, however, that notices and other
communications to Administrative Agent, any LC Issuer, and the Swing
Line Lender pursuant to SECTION 2 shall not be effective until actually
received by such Person. In no event shall a voicemail message be
effective as a notice, communication or confirmation hereunder.
(b) Effectiveness of Facsimile Documents and Signatures.
Loan Documents may be transmitted and/or signed by facsimile. The
effectiveness of any such documents and signatures shall, subject to
applicable Law, have the same force and effect as manually-signed
originals and shall be binding on all Loan Parties, Administrative
Agent, and the Lenders. Administrative Agent may also require that any
such documents and signatures be confirmed by a manually-signed
original thereof; provided, however, that the failure to request or
deliver the same shall not limit the effectiveness of any facsimile
document or signature.
(c) Limited Use of Electronic Mail. Electronic mail and
Internet and intranet websites may be used only to distribute routine
communications, such as financial statements and other information as
provided in SECTION 9.3, and to distribute Loan Documents for execution
by the parties thereto, and may not be used for any other purpose.
13.4 FORM AND NUMBER OF DOCUMENTS. Each agreement, document,
instrument, or other writing to be furnished under any provision of the Loan
Documents must be in form and substance and in such number of counterparts as
may be reasonably satisfactory to Administrative Agent and its counsel.
13.5 EXCEPTIONS TO COVENANTS. No Loan Party shall take any action or
fail to take any action which is permitted as an exception to any of the
covenants contained in any Loan Document if such action or omission would result
in the breach of any other covenant contained in any of the Loan Documents.
13.6 SURVIVAL. All covenants, agreements, undertakings,
representations, and warranties made in any of the Loan Documents shall survive
all closings under the Loan Documents and, except as otherwise indicated, shall
not be affected by any investigation made by any party. All rights of, and
provisions relating to, reimbursement and indemnification of Administrative
Agent, any Agent, or any Lender (and any other provision of the Loan Documents
that expressly provides for such survival) shall survive termination of this
Agreement and payment in full of the Obligation.
13.7 GOVERNING LAW. (A) THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, the LAW OF THE STATE OF TEXAS applicable to
agreements made and to be performed entirely within such State; PROVIDED THAT
ADMINISTRATIVE Agent AND EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER
FEDERAL LAW.
(B) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF TEXAS
SITTING IN DALLAS COUNTY, TEXAS OR OF THE UNITED STATES FOR THE NORTHERN
DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS, BORROWER, EACH OTHER LOAN PARTY, ADMINISTRATIVE Agent, AND
EACH LENDER CONSENTS, FOR ITSELF AND IN
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RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.
BORROWER, EACH OTHER LOAN PARTY, ADMINISTRATIVE Agent, AND EACH LENDER
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT
OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO. BORROWER, EACH OTHER
LOAN PARTY, ADMINISTRATIVE Agent, AND EACH LENDER WAIVES PERSONAL SERVICE OF ANY
SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY THE LAW OF SUCH STATE.
13.8 INVALID PROVISIONS. If any provision in any Loan Document is held
to be illegal, invalid, or unenforceable, such provision shall be fully
severable; the appropriate Loan Document shall be construed and enforced as if
such provision had never comprised a part thereof; and the remaining provisions
thereof shall remain in full force and effect and shall not be affected by such
provision or by its severance therefrom. Administrative Agent, Lenders, and each
Loan Party party to such Loan Document agree to negotiate, in good faith, the
terms of a replacement provision as similar to the severed provision as may be
possible and be legal, valid, and enforceable.
13.9 ENTIRETY. THE RIGHTS AND OBLIGATIONS OF EACH LOAN PARTY, LENDERS,
AND AGENTS SHALL BE DETERMINED SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND
INSTRUMENTS, AND ANY PRIOR ORAL AGREEMENTS BETWEEN SUCH PARTIES ARE SUPERSEDED
BY AND MERGED INTO SUCH WRITINGS. THIS AGREEMENT (AS AMENDED IN WRITING FROM
TIME TO TIME) AND THE OTHER WRITTEN LOAN DOCUMENTS EXECUTED BY ANY LOAN PARTY,
ANY LENDER, AND/OR ANY AGENT, (TOGETHER WITH ALL COMMITMENT LETTERS AND FEE
LETTERS AS THEY RELATE TO THE PAYMENT OF FEES AFTER THE CLOSING DATE) REPRESENT
THE FINAL AGREEMENT BETWEEN THE LOAN PARTIES, LENDERS, AND AGENTS, AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS BY SUCH PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN SUCH
PARTIES.
13.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO (INCLUDING BORROWER AND
EACH OTHER LOAN PARTY BY EXECUTION OF A GUARANTY), IN EACH CASE FOR ITSELF, ITS
SUCCESSORS AND ASSIGNS, EACH HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY
OF ANY CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT
OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE
PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE
TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY
HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION, OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE
WAIVER OF THEIR RIGHT TO TRIAL BY JURY. THE WAIVERS IN THIS SECTION 13.10 ARE
IRREVOCABLE, MEANING THAT THEY MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THESE WAIVERS SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, SUPPLEMENTS, AND
REPLACEMENTS TO OR OF THIS OR ANY OTHER LOAN DOCUMENT.
13.11 AMENDMENTS, CONSENTS, CONFLICTS, AND WAIVERS.
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(a) Except as otherwise specifically provided, (i) this
Agreement may only be amended, modified, or waived by an instrument in
writing executed jointly by Borrower and Required Lenders, and, in the
case of any matter affecting Administrative Agent (except removal of
Administrative Agent as provided in SECTION 12) by Administrative
Agent, and, in the case of any matter affecting LC Issuers by LC
Issuers, and may only be supplemented by documents delivered or to be
delivered in accordance with the express terms hereof, and (ii) the
other Loan Documents may only be the subject of an amendment,
modification, or waiver if Borrower and Required Lenders, and, in the
case of any matter affecting Administrative Agent (except as set forth
above), Administrative Agent, have approved same.
(b) Any amendment to or consent or waiver under any Loan
Document which purports to accomplish any of the following must be by
an instrument in writing executed by Borrower and executed (or
approved, as the case may be) by each Lender affected thereby, and, in
the case of any matter affecting Administrative Agent, by
Administrative Agent: (i) postpones or delays any date fixed by the
Loan Documents for any payment or mandatory prepayment of all or any
part of the Obligation payable to such Lender or Administrative Agent;
(ii) reduces the interest rate or decreases the amount of any payment
of principal, interest, fees, or other sums payable to Administrative
Agent or any such Lender hereunder (except such reductions as are
contemplated by this Agreement); (iii) changes the definitions of
"REQUIRED LENDERS," "PRO RATA" or "PRO RATA PART"; (iv) changes the
order of application of any payment or prepayment set forth in SECTIONS
3.3 and 3.12 in any manner that materially affects such Lender or
Administrative Agent; (v) except as otherwise permitted by any Loan
Document, waives compliance with, amends, or releases all or
substantially all of the Guaranties; (vi) increases the Maximum
Revolver Amount; or (vii) changes this CLAUSE (b) or any other matter
specifically requiring the consent of all Lenders hereunder.
Notwithstanding anything to the contrary herein, no Defaulting Lender
shall have any right to approve or disapprove any amendment, waiver, or
consent hereunder, except that the Committed Sum of such Lender may not
be increased or extended without the consent of such Lender.
(c) Any amendment to increase any Lender's Committed Sum
pursuant to SECTION 2.4 or otherwise or to add any new Lender pursuant
to SECTION 2.4 shall be executed by Borrower and the particular
existing or new Lender.
(d) Any conflict or ambiguity between the terms and
provisions of this Agreement and terms and provisions in any other Loan
Document shall be controlled by the terms and provisions herein.
(e) No course of dealing nor any failure or delay by
Administrative Agent, any Lender, or any of their respective
Representatives with respect to exercising any Right of Administrative
Agent or any Lender hereunder shall operate as a waiver thereof. A
waiver must be in writing and signed by Administrative Agent and
Required Lenders (or by all Lenders, if required hereunder) to be
effective, and such waiver will be effective only in the specific
instance and for the specific purpose for which it is given.
13.12 MULTIPLE COUNTERPARTS. The Loan Documents may be executed in a
number of identical counterparts, each of which shall be deemed an original for
all purposes and all of which constitute, collectively, one agreement; but, in
making proof of any Loan Document, it shall not be necessary to produce or
account for more than one such counterpart. It is not necessary that each Lender
execute the same counterpart so long as identical counterparts are executed by
Borrower, each Lender, and Administrative Agent. This Agreement shall become
effective when counterparts hereof shall have been executed and delivered to
Administrative Agent by each Lender, Administrative Agent, and Borrower, or,
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when Administrative Agent shall have received telecopied, telexed, or other
evidence satisfactory to it that such party has executed and is delivering to
Administrative Agent a counterpart hereof.
13.13 SUCCESSORS AND ASSIGNS; ASSIGNMENTS AND PARTICIPATIONS.
(a) This Agreement shall be binding upon, and inure to
the benefit of the parties hereto and their respective successors and
assigns, except that (i) Borrower may not, directly or indirectly,
assign or transfer, or attempt to assign or transfer, any of its
Rights, duties, or obligations under any Loan Documents without the
express written consent of all Lenders, and (ii) except as permitted
under this Section, no Lender may transfer, pledge, assign, sell any
participation in, or otherwise encumber its portion of the Obligation.
(b) Each Lender may assign to one or more Eligible
Assignees all or a portion of its Rights and obligations under the Loan
Documents (including, without limitation, all or a portion of its
Borrowings and its Notes -- to the extent any Principal Debt owed to
such assigning Lender is evidenced by a Note or Notes); provided,
however, that:
(i) each such assignment shall be to an Eligible
Assignee;
(ii) except in the case of an assignment to
another Lender or an Affiliate of Lender, or in the case of an
assignment of all of a Lender's Rights and obligations under
the Loan Documents, any such partial assignment under the
Revolver Facility shall not be less than $5,000,000 (unless
Administrative Agent and, unless a Default or Potential
Default has occurred and is continuing, Borrower consents
thereto (in their sole discretion) in writing which may be
evidenced by their acceptance and execution of the related
Assignment and Acceptance Agreement), provided that, no
partial assignment (including any assignment among Lenders)
may result in any Lender holding less than $5,000,000.
(iii) each such assignment by a Lender shall be of
a proportionate part of all of the assigning Lender's Rights
and obligations under this Agreement and the Notes (to the
extent any Principal Debt owed to such assigning Lender is
evidenced by a Note or Notes);
(iv) the parties to such assignment shall execute
and deliver to Administrative Agent for its acceptance an
Assignment and Acceptance Agreement in the form of EXHIBIT E
hereto ("ASSIGNMENT AND ACCEPTANCE"), together with any Notes
(to the extent any Principal Debt owed to such assigning
Lender is evidenced by a Note or Notes) subject to such
assignment and a processing fee of $3,500, including, without
limitation, any assignment between Lenders; and
(v) so long as any Lender is an Agent under this
Agreement, such Lender (or an Affiliate of such Lender) shall
retain an economic interest in the Loan Documents, will not
assign all of its Rights, duties, or obligations under the
Loan Documents, except to an Affiliate of such Lender, and
will not enter into any Assignment and Acceptance that would
have the effect of such Lender assigning all of its Rights,
duties, or obligations under the Loan Documents to any Person
other than an Affiliate of such Lender unless such Agent has
relinquished such title in accordance with SECTION 12.1 (with
respect to Administrative Agent) or SECTION 12.10 (with
respect to the other Agents).
Upon execution, delivery, and acceptance of such Assignment and
Acceptance, the assignee thereunder shall be a party hereto and, to the
extent of such assignment, have the obligations,
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Rights, and benefits of a Lender under the Loan Documents and the
assigning Lender shall, to the extent of such assignment, relinquish
its Rights and be released from its obligations under the Loan
Documents. Upon the consummation of any assignment pursuant to this
Section, but only upon the request of the assignor or assignee made
through Administrative Agent, Borrower shall issue appropriate Notes to
the assignor and the assignee, reflecting such Assignment and
Acceptance. If the assignee is not incorporated under the laws of the
United States of America or a state thereof, it shall deliver to
Borrower and Administrative Agent certification as to exemption from
deduction or withholding of Taxes in accordance with SECTION 4.6.
(c) Administrative Agent shall maintain at its address
referred to in SECTION 13.3 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 Commitment Percentage
of, Committed Sum of, and Principal Debt 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
Borrower, Administrative Agent, and the Lenders may treat each Person
whose name is recorded in the Register as a Lender hereunder for all
purposes of the Loan Documents. The Register shall be available for
inspection by Borrower, or any Lender at any reasonable time and from
time to time upon reasonable prior notice. Upon the consummation of any
assignment in accordance with this SECTION 13.13, SCHEDULE 2.1 shall
automatically be deemed amended (to the extent required) by
Administrative Agent to reflect the name, address, and, where
appropriate, respective Committed Sum of the assignor and assignee.
(d) Upon its receipt of an Assignment and Acceptance
executed by the parties thereto, together with any Notes (to the extent
any Principal Debt owed to such assigning Lender is evidenced by a Note
or Notes) subject to such assignment and payment of the processing fee,
Administrative 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) record the information
contained therein in the Register, and (iii) give prompt notice thereof
to the parties thereto.
(e) Subject to the provisions of this Section and in
accordance with applicable Law, any Lender may, in the ordinary course
of its commercial banking business and in accordance with applicable
Law, at any time sell to one or more Persons (each a "PARTICIPANT")
participating interests in its portion of the Obligation. In the event
of any such sale to a Participant, (i) such Lender shall remain a
"Lender" under the Loan Documents and the Participant shall not
constitute a "Lender" hereunder, (ii) such Lender's obligations under
the Loan Documents shall remain unchanged, (iii) such Lender shall
remain solely responsible for the performance thereof, (iv) such Lender
shall remain the holder of its share of the Principal Debt for all
purposes under the Loan Documents, (v) Borrower and Administrative
Agent shall continue to deal solely and directly with such Lender in
connection with such Lender's Rights and obligations under the Loan
Documents, and (vi) such Lender shall be solely responsible for any
withholding taxes or any filing or reporting requirements relating to
such participation and shall hold Borrower and Administrative Agent and
their respective successors, permitted assigns, officers, directors,
employees, agents, and representatives harmless against the same.
Participants shall have no Rights under the Loan Documents, other than
certain voting Rights as provided below. Subject to the following, each
Lender shall be entitled to obtain (on behalf of its Participants) the
benefits of SECTION 4 with respect to all participations in its part of
the Obligation outstanding from time to time, so long as Borrower shall
not be obligated to pay any amount in excess of the amount that would
be due to such Lender under SECTION 4 calculated as though no
participations have been made. No Lender shall sell any participating
interest under which the Participant shall have any Rights to approve
any amendment, modification, or waiver of any Loan Document, except to
the extent such amendment, modification, or waiver extends the due date
for payment of any amount
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in respect of principal (other than mandatory prepayments, if any),
interest, or fees due under the Loan Documents, reduces the interest
rate or the amount of principal or fees applicable to the Obligation
(except such reductions as are contemplated by the Loan Documents), or
releases all or any substantial portion of the Guaranties (except such
releases of Guaranties as are contemplated in SECTION 6.2); provided
that, in those cases where a Participant is entitled to the benefits of
SECTION 4 or a Lender grants Rights to its Participants to approve
amendments to or waivers of the Loan Documents respecting the matters
previously described in this sentence, such Lender must include a
voting mechanism in the relevant participation agreement or agreements,
as the case may be, whereby a majority of such Lender's portion of the
Obligation (whether held by such Lender or Participant) shall control
the vote for all of such Lender's portion of the Obligation. Except in
the case of the sale of a participating interest to another Lender, the
relevant participation agreement shall not permit the Participant to
transfer, pledge, assign, sell participations in, or otherwise encumber
its portion of the Obligation, unless the consent of the transferring
Lender (which consent will not be unreasonably withheld) has been
obtained.
(f) Notwithstanding any other provision set forth in this
Agreement, any Lender may, without notice to, or the consent of
Borrower or Administrative Agent, at any time assign and pledge all or
any portion of its Borrowings and its Notes (to the extent any
Principal Debt owed to such assigning Lender is evidenced by a Note or
Notes) to any Federal Reserve Bank as collateral security pursuant to
Regulation A and any Operating Circular issued by such Federal Reserve
Bank or any Lender which is a fund may pledge all or any portion of its
Borrowings and its Notes (to the extent any Principal Debt owed to such
assigning Lender is evidenced by a Note or Notes) to its trustee in
support of its obligations to its trustee. No such assignment shall
release the assigning Lender from its obligations hereunder.
13.14 DISCHARGE ONLY UPON PAYMENT IN FULL; REINSTATEMENT IN CERTAIN
CIRCUMSTANCES. The obligations of each Loan Party under the Loan Documents shall
remain in full force and effect until termination of the Revolver Commitment,
payment in full of the Principal Debt and of all interest, fees, and other
amounts of the Obligation then due and owing, and expiration of all LCs, except
that SECTIONS 4, 11, and 13, and any other provisions under the Loan Documents
expressly intended to survive by the terms hereof or by the terms of the
applicable Loan Documents, shall survive such termination. If at any time any
payment of the principal of or interest on any Note or any other amount payable
by Borrower under any Loan Document is rescinded or must be otherwise restored
or returned upon the insolvency, bankruptcy, or reorganization of Borrower or
otherwise, the obligations of each Loan Party under the Loan Documents with
respect to such payment shall be reinstated as though such payment had been due
but not made at such time.
13.15 CONFIDENTIALITY. Each of Administrative Agent and Lenders agrees
to maintain the confidentiality of the Information (as defined below), except
that Information may be disclosed (a) to its and its Affiliates' directors,
officers, employees, and agents, including accountants, legal counsel, and other
advisors (it being understood that the Persons to whom such disclosure is made
will be informed of the confidential nature of such Information and instructed
to keep such Information confidential); (b) to the extent requested by any
regulatory authority; (c) to the extent required by applicable Laws or
regulations or by any subpoena or similar legal process; (d) to any other party
to this Agreement; (e) in connection with the exercise of any Rights hereunder
or any suit, action, or proceeding relating to this Agreement or the enforcement
of rights hereunder; (f) subject to an agreement containing provisions
substantially the same as those of this Section, to (i) any Eligible Assignee of
or Participant in, or any prospective Eligible Assignee of or Participant in,
any of its Rights or obligations under this Agreement or (ii) any direct or
indirect contractual counterparty or prospective counterparty (or such
contractual counterparty's or prospective counterparty's professional advisor)
to any credit derivative transaction relating to obligations of the Loan
Parties; (g) with the consent of Borrower; or (h) to the extent such Information
(i) becomes publicly available other than as a result of a breach of this
Section or
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(ii) becomes available to Administrative Agent or any Lender on a
nonconfidential basis from a source other than Loan Party. In addition,
Administrative Agent and the Lenders may disclose the existence of this
Agreement and information about this Agreement to market data collectors,
similar service providers to the lending industry, and service providers to
Administrative Agent and the Lenders in connection with the administration and
management of this Agreement, the other Loan Documents, the Commitment, and the
Borrowing. For the purposes of this Section, "INFORMATION" means all information
received from any Loan Party relating to any Loan Party or its business, other
than any such information that is available to Administrative Agent or any
Lender on a nonconfidential basis prior to disclosure by any Loan Party;
provided that, in the case of information received from a Loan Party after the
date hereof, such information is clearly identified in writing at the time of
delivery as confidential. Any Person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information. Notwithstanding anything herein to
the contrary, "INFORMATION" shall not include, and Administrative Agent and each
Lender may disclose without limitation of any kind, any information with respect
to the "tax treatment" and "tax structure" (in each case, within the meaning of
Treasury Regulation Section 1.6011-4) of the transactions contemplated hereby
and all materials of any kind (including opinions or other tax analyses) that
are provided to Administrative Agent or such Lender relating to such tax
treatment and tax structure; provided that with respect to any document or
similar item that in either case contains information concerning the tax
treatment or tax structure of the transaction as well as other information, this
sentence shall only apply to such portions of the document or similar item that
relate to the tax treatment or tax structure of the Borrowings, LCs, and
transactions contemplated hereby.
[REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGES FOLLOW.]
64
EXECUTED as of the date first written above.
PIER 1 IMPORTS, INC.,
as Borrower
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chairman of the Board, President and
Chief Executive Officer
Mailing Address:
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Signature Page to Revolving Credit Agreement
(Pier 1 Imports, Inc.)
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent, as Swing Line
Lender, and as a Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
Signature Page to Revolving Credit Agreement
(Pier 1 Imports, Inc.)
BANK OF AMERICA, N.A.,
as Syndication Agent and as a Lender
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
Signature Page to Revolving Credit Agreement
(Pier 1 Imports, Inc.)
JPMORGAN CHASE BANK,
as Documentation Agent and as a Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
Signature Page to Revolving Credit Agreement
(Pier 1 Imports, Inc.)
WACHOVIA BANK, NATIONAL ASSOCIATION,
as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Signature Page to Revolving Credit Agreement
(Pier 1 Imports, Inc.)
HSBC BANK U.S.A.,
as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: First Vice President
Signature Page to Revolving Credit Agreement
(Pier 1 Imports, Inc.)
SUNTRUST BANK,
as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director
Signature Page to Revolving Credit Agreement
(Pier 1 Imports, Inc.)
THE BANK OF TOKYO - MITSUBISHI, LTD.,
as a Lender
By: /s/ ▇▇▇▇▇▇ Trader
-------------------------------------
Name: ▇▇▇▇▇▇ Trader
Title: Banking Off.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: VP & Manager
Signature Page to Revolving Credit Agreement
(Pier 1 Imports, Inc.)
BANK ONE, N.A.,
as a Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
Signature Page to Revolving Credit Agreement
(Pier 1 Imports, Inc.)
EXHIBIT A-1
FORM OF REVOLVER NOTE
$____________ ____________ __, ____
FOR VALUE RECEIVED, PIER 1 IMPORTS, INC. ("BORROWER"), hereby promises
to pay to the order of ______________________ ("LENDER"), at the offices of
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent for Lender and
others as described below, on the Termination Date, the lesser of (a)
$_______________ and (b) the aggregate Principal Debt disbursed by Lender to
Borrower and outstanding and unpaid on the Termination Date (together with
accrued and unpaid interest thereon) at such interest rates as are specified in
the Credit Agreement (hereinafter defined).
This note has been executed and delivered under, and is subject to the
terms of, the Revolving Credit Agreement, dated as of August 22, 2003 (as
amended, modified, supplemented, or restated from time to time, the "CREDIT
AGREEMENT"), among Borrower, Administrative Agent, Lender, and other agents and
lenders party thereto, and is one of the "Revolver Notes" referred to therein.
Unless defined herein, capitalized terms used herein that are defined in the
Credit Agreement have the meaning given to such terms in the Credit Agreement.
Reference is made to the Credit Agreement for provisions affecting this note
regarding applicable interest rates, principal and interest payment dates, final
maturity, voluntary prepayments, acceleration of maturity, exercise of Rights,
payment of attorneys' fees, court costs, and other costs of collection, certain
waivers by Borrower and others now or hereafter obligated for payment of any
sums due hereunder and security for the payment hereof. Without limiting the
immediately preceding sentence, reference is made to SECTION 3.9 of the Credit
Agreement for usury savings provisions.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF TEXAS APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
ENTIRELY WITHIN SUCH STATE; PROVIDED THAT ADMINISTRATIVE AGENT AND EACH LENDER
SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
PIER 1 IMPORTS, INC.
By: ___________________________
Name:______________________
Title:_____________________
EXHIBIT ▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF SWING LINE NOTE
$15,000,000 ____________ __, ____
FOR VALUE RECEIVED, PIER 1 IMPORTS, INC. ("BORROWER"), hereby promises
to pay to the order of ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION ("SWING LINE
LENDER"), on the Termination Date, the lesser of (a) $15,000,000 and (b) the
Swing Line Principal Debt disbursed by Swing Line Lender to Borrower (together
with accrued and unpaid interest thereon) at such interest rates, on such dates,
and in such amounts as are specified in the Credit Agreement (hereinafter
defined).
This note has been executed and delivered under, and is subject to the
terms of, the Revolving Credit Agreement, dated as of August 22, 2003 (as
amended, modified, supplemented, or restated from time to time, the "CREDIT
AGREEMENT"), among Borrower, ▇▇▇▇▇ Fargo Bank, National Association, as
Administrative Agent, Swing Line Lender, and other agents and lenders party
thereto, and is the "Swing Line Note" referred to therein. Unless defined
herein, capitalized terms used herein that are defined in the Credit Agreement
have the meaning given to such terms in the Credit Agreement. Reference is made
to the Credit Agreement for provisions affecting this note regarding applicable
interest rates, principal and interest payment dates, final maturity, voluntary
prepayments, acceleration of maturity, exercise of Rights, payment of attorneys'
fees, court costs, and other costs of collection, certain waivers by Borrower
and others now or hereafter obligated for payment of any sums due hereunder and
security for the payment hereof. Without limiting the immediately preceding
sentence, reference is made to SECTION 3.9 of the Credit Agreement for usury
savings provisions.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF TEXAS APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
ENTIRELY WITHIN SUCH STATE; PROVIDED THAT ADMINISTRATIVE AGENT AND EACH LENDER
SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
PIER 1 IMPORTS, INC.
By: ___________________________
Name:______________________
Title:_____________________
EXHIBIT ▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF BORROWING NOTICE
(Pier 1 Imports, Inc.)
Dated ______________ __, ____
▇▇▇▇▇ Fargo Bank, National Association
as Administrative Agent for the
Lenders as defined in the Credit
Agreement referred to below
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
C7300-034
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Senior Loan Administrator - Closings
Agency Syndications
PHONE ▇▇▇-▇▇▇-▇▇▇▇
FAX ▇▇▇-▇▇▇-▇▇▇▇
Reference is made to the Revolving Credit Agreement, dated as of August
22, 2003 (as amended, modified, supplemented, or restated from time to time, the
"CREDIT AGREEMENT"), among Pier 1 Imports, Inc. ("BORROWER"), ▇▇▇▇▇ Fargo Bank,
National Association, as Administrative Agent, and other Agents and Lenders
party thereto. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Credit Agreement. The
undersigned Borrower hereby gives you notice pursuant to the Credit Agreement
that it requests a Borrowing under the Credit Agreement, and in that connection
set forth below the terms on which such Borrowing is requested to be made:
Borrowing Date:(1) ________________
Amount of Borrowing:(2) ____________________
Type of Borrowing:(3) ___________________
For a Eurodollar Rate Borrowing, the Interest Period and the last day
thereof:(4) __________________
The undersigned Borrower hereby certifies that the following statements
are true and correct on the date hereof, and will be true and correct on the
Borrowing Date specified herein after giving effect to such Borrowing:
(a) The requested Borrowing will not cause the Revolver
Commitment Usage to exceed the Revolver Commitment;
(b) All of the representations and warranties of any
Company set forth in the Loan Documents are true and correct in all
material respects;
(c) No Default or Potential Default has occurred and is
continuing or will arise after giving effect to the requested
Borrowing; and
(d) The requested Borrowing is permitted by Law.
EXHIBIT B-1
Very truly yours,
Pier 1 Imports, Inc.
By: ________________________________
Name:___________________________
Title:__________________________
Rate:_________________________
Confirmed by:_________________
(1) Must be a Business Day occurring prior to the Termination Date and be at
least (a) three Business Days following receipt by Administrative Agent of
this Borrowing Notice for any Eurodollar Rate Borrowing, and (b) One
Business Day following receipt by Administrative Agent of this Borrowing
Notice for any Base Rate Borrowing.
(2) Not less than $1,000,000 or greater integral multiple of $500,000 if a
Eurodollar Rate Borrowing, or $500,000 or greater integral multiple of
$100,000 if a Base Rate Borrowing.
(3) Eurodollar Rate Borrowing or Base Rate Borrowing.
(4) 1, 2, 3, or 6 months; in no event may the Interest Period end after the
Termination Date.
EXHIBIT B-1
2
EXHIBIT B-2
FORM OF CONVERSION NOTICE
(Pier 1 Imports, Inc.)
_______________ __, ____
▇▇▇▇▇ Fargo Bank, National Association
as Administrative Agent for the
Lenders as defined in the Credit
Agreement referred to below
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
C7300-034
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Senior Loan Administrator - Closings
Agency Syndications
PHONE ▇▇▇-▇▇▇-▇▇▇▇
FAX ▇▇▇-▇▇▇-▇▇▇▇
Reference is made to the Revolving Credit Agreement, dated as of August
22, 2003 (as amended, modified, supplemented, or restated from time to time, the
"CREDIT AGREEMENT"), among Pier 1 Imports, Inc., ("BORROWER"), ▇▇▇▇▇ Fargo Bank,
National Association, as Administrative Agent, and other Agents and Lenders
party thereto. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Credit Agreement. The
undersigned Borrower hereby gives you notice pursuant to SECTION 3.11 of the
Credit Agreement that it elects to convert a Borrowing under the Credit
Agreement from one Type to another Type or elects a new Interest Period for a
Eurodollar Rate Borrowing, and in that connection set forth below the terms on
which such election is requested to be made:
Date of conversion or last day of applicable Interest Period:(1)
_______________
Principal amount of existing Borrowing being converted or continued:(2)
_______________
New Type of Borrowing selected (or Type of Borrowing continued):(3)
_______________
For conversion to, or continuation of, a Eurodollar Rate Borrowing,
Interest Period and the last day thereof:(4) _______________
As of the date hereof and of the requested Conversion, no Default or
Potential Default has occurred and is continuing.
On the date the rate is set, please confirm the interest rate below and
return by facsimile transmission to _________________________.
EXHIBIT B-2
Very truly yours,
Pier 1 Imports, Inc.
By: ________________________________
Name:___________________________
Title:__________________________
Rate:_________________________
Confirmed by:_________________
(1) Must be a Business Day at least (a) three Business Days following
receipt by Administrative Agent of this Conversion Notice for any
conversion from a Base Rate Borrowing to a Eurodollar Rate Borrowing or
a continuation of a Eurodollar Rate Borrowing for an additional
Interest Period, and (b) one Business Day following receipt by
Administrative Agent of this Conversion Notice for a conversion from a
Eurodollar Rate Borrowing to a Base Rate Borrowing.
(2) Not less than $1,000,000 or greater integral multiple of $500,000 or
such lesser amount as may be outstanding (if a Eurodollar Rate
Borrowing).
(3) Eurodollar Rate Borrowing or Base Rate Borrowing.
(4) 1, 2, 3, or 6; in no event may the Interest Period after the
Termination Date.
EXHIBIT B-2
2
EXHIBIT B-3
FORM OF LC REQUEST
(Pier 1 Imports, Inc.)
______________ __, ____
_____________________________,
as LC Issuer as defined in the Credit
Agreement referred to below
___________________________
___________________________
Attn: ______________________
Fax: ______________________
▇▇▇▇▇ Fargo Bank, National Association
as Administrative Agent for the
Lenders as defined in the Credit
Agreement referred to below
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
C7300-034
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Senior Loan Administrator - Closings
Agency Syndications
PHONE ▇▇▇-▇▇▇-▇▇▇▇
FAX ▇▇▇-▇▇▇-▇▇▇▇
Reference is made to the Revolving Credit Agreement, dated as of August
22, 2003 (as amended, modified, supplemented, or restated from time to time, the
"CREDIT AGREEMENT"), among Pier 1 Imports, Inc. ("BORROWER"), ▇▇▇▇▇ Fargo Bank,
National Association, as Administrative Agent, and other Agents and Lenders
party thereto. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Credit Agreement. Borrower
hereby gives you notice pursuant to SECTION 2.2(a) of the Credit Agreement that
it requests the [issuance/extension/renewal/increase in the stated amount] of an
LC under the LC Subfacility, and in that connection sets forth below the terms
on which such LC is requested to be [issued/extended/renewed/increased]:
(A) Face amount of the LC(1) _____________________
(B) Date on which the LC is to be
[issued/extended/renewed/increased](2) _____________________
(C) Expiration date of the LC(3) _____________________
Accompanying this notice is a duly executed and properly completed LC
Agreement in the form satisfactory to LC Issuer, together with the payment of
any LC Fees due and payable pursuant to SECTION 5.5 of the Credit Agreement.
Borrower hereby certifies that the following statements are true and
correct on the date hereof, and will be true and correct on the date specified
herein for the [issuance/extension/renewal/increase] of the LC, after giving
effect to the [issuance/extension/renewal/increase] of such LC:
EXHIBIT B-3
(a) the [issuance/extension/renewal/increase] of the
requested LC will not cause the Revolver Commitment Usage to exceed the
Revolver Commitment;
(b) the [issuance/extension/renewal/increase] of the
requested LC will not cause the LC Exposure to exceed $50,000,000;
(c) all of the representations and warranties of any
Company set forth in the Loan Documents are true and correct in all
material respects;
(d) no Default or Potential Default has occurred and is
continuing or will arise after giving effect to the requested LC; and
(e) the issuance of the requested LC is permitted by Law.
Very truly yours,
Pier 1 Imports, Inc.
By: ________________________________
Name:___________________________
Title:__________________________
Rate:_________________________
Confirmed by:_________________
(1) The amount of requested LC, plus the LC Exposure shall not exceed
$50,000,000 (as the maximum amount of such LC Subfacility may be reduced or
canceled in accordance with the Loan Documents).
(2) Must be a Business Day at least three Business Days following receipt by LC
Issuer and Administrative Agent of this LC Request.
(3) Not later than the earlier of the Termination Date or one year from the date
of issuance.
EXHIBIT B-3
2
EXHIBIT C
FORM OF GUARANTY
THIS GUARANTY is executed as of __, 2003, [jointly and severally] by
the undersigned ([each a] "GUARANTOR," [and collectively, the "GUARANTORS"]),
for the benefit of ▇▇▇▇▇ Fargo Bank, National Association (in its capacity as
Administrative Agent for the benefit of Lenders).
RECITALS
A. Pier 1 Imports, Inc. ("BORROWER"), ▇▇▇▇▇ Fargo Bank, National
Association, as Administrative Agent (including its permitted successors and
assigns in such capacity, "ADMINISTRATIVE AGENT"), and certain other Agents and
Lenders (including their respective permitted successors and assigns, "LENDERS")
have entered into a Revolving Credit Agreement, dated as of August 22, 2003 (as
amended, modified, supplemented, or restated from time to time, the "CREDIT
AGREEMENT");
B. Provisions of the Credit Agreement permit each Guarantor to
directly or indirectly receive proceeds of Borrowings made pursuant thereto; and
C. This Guaranty is integral to the transactions contemplated by
the Loan Documents and the execution and delivery hereof is a condition
precedent to Lenders' obligations to extend credit under the Loan Documents.
ACCORDINGLY, for adequate and sufficient consideration, the receipt and
adequacy of which are hereby acknowledged, [each] Guarantor [, jointly and
severally,] guarantees to Administrative Agent and Lenders the prompt payment of
the Guaranteed Debt (defined below) as follows:
1. DEFINITIONS. Terms defined in the Credit Agreement have the
same meanings when used, unless otherwise defined, in this Guaranty. As used in
this Guaranty:
BORROWER means Borrower (as defined in the Credit Agreement), Borrower
as a debtor-in-possession, and any receiver, trustee, liquidator, conservator,
custodian, or similar party appointed for Borrower or for all or substantially
all of Borrower's assets under any Debtor Relief Law.
CREDIT AGREEMENT is defined in the recitals to this Guaranty.
GUARANTEED DEBT means, collectively, whether now existing or hereafter
arising, (a) the Obligation and (b) all present and future costs, attorneys'
fees, and expenses reasonably incurred by Administrative Agent or any Lender to
enforce Borrower's, [any] Guarantor's, or any other obligor's payment of any of
the Guaranteed Debt, including, without limitation (to the extent lawful), all
present and future amounts that would become due but for the operation of
Section 502 or 506 or any other provision of Title 11 of the United States Code
and all present and future accrued and unpaid interest (including, without
limitation, all post-maturity interest and any post-petition interest in any
proceeding under Debtor Relief Laws to which Borrower or [any] Guarantor becomes
subject).
GUARANTOR [and GUARANTORS] is defined in the preamble to this Guaranty.
LENDER means, individually, or LENDERS means, collectively, on any date
of determination, Administrative Agent and Lenders and their permitted
successors and assigns.
EXHIBIT C
SUBORDINATED DEBT means [, for each Guarantor,] all present and future
obligations (including, without limitation, Subrogation/Contribution Rights
(defined below)) of any Company to [such] Guarantor, whether those obligations
are (a) direct, indirect, fixed, contingent, liquidated, unliquidated, joint,
several, or joint and several, (b) due or to become due to [such] Guarantor, (c)
held by or are to be held by [such] Guarantor, (d) created directly or acquired
by assignment or otherwise, or (e) evidenced in writing.
2. GUARANTY. This is an absolute, irrevocable, and continuing
guaranty of payment, not collection, and the circumstance that at any time or
from time to time the Guaranteed Debt may be paid in full does not affect the
obligation of [any] Guarantor with respect to the Guaranteed Debt incurred after
that. This Guaranty remains in effect until the Guaranteed Debt is fully and
irrevocably paid and performed, and all commitments to extend any credit under
the Loan Documents have terminated, and all LCs have expired or been terminated.
[No] Guarantor may [not] rescind or revoke its obligations with respect to the
Guaranteed Debt.
3. CONSIDERATION. [Each] Guarantor represents and warrants that
the extension of credit and other transactions under the Credit Agreement may
reasonably be expected to directly or indirectly benefit it, that it is
benefiting from the financial strength and flexibility of Borrower and its
consolidated Subsidiaries and the advances made to Guarantor and the other
Companies, and that the value of the consideration received and to be received
by [such] Guarantor is reasonably worth at least as much as [such] Guarantor's
liability and obligation under this Guaranty.
4. CUMULATIVE RIGHTS. If [any] Guarantor becomes liable for any
indebtedness owing by Borrower to Administrative Agent or any Lender, other than
under this Guaranty, that liability may not be in any manner impaired or
affected by this Guaranty. The Rights of Administrative Agent or Lenders under
this Guaranty are cumulative of any and all other Rights that Administrative
Agent or Lenders may ever have against [any] Guarantor. The exercise by
Administrative Agent or Lenders of any Right under this Guaranty or otherwise
does not preclude the concurrent or subsequent exercise of any other Right.
5. PAYMENT UPON DEMAND. If a Default exists, [each] Guarantor
shall, on demand and without further notice of dishonor and without any notice
having been given to [any] Guarantor previous to that demand of either the
acceptance by Administrative Agent or Lenders of this Guaranty or the creation
or incurrence of any Guaranteed Debt, pay the amount of the Guaranteed Debt then
due and payable to Administrative Agent and Lenders. It is not necessary for
Administrative Agent or Lenders, in order to enforce that payment by [any]
Guarantor, first or contemporaneously to institute suit or exhaust remedies
against Borrower or others liable on any Guaranteed Debt or to enforce Rights
against any collateral securing any Guaranteed Debt.
6. SUBORDINATION. The Subordinated Debt is expressly subordinated
to the full and final payment of the Guaranteed Debt. Upon the occurrence and
during the continuation of a Default, [each] Guarantor agrees not to accept or
attempt to collect (whether through litigation or otherwise) any payment of any
Subordinated Debt from any Company. If [any] Guarantor receives any payment of
any Subordinated Debt in violation of the foregoing, [such] Guarantor shall hold
that payment in trust for Administrative Agent and Lenders and promptly turn it
over to Administrative Agent, in the form received (with any necessary
endorsements), to be applied to the Guaranteed Debt.
7. SUBROGATION AND CONTRIBUTION.
Guarantor shall have the benefit of, and does not waive, any Rights of
recourse, subrogation, reimbursement, contribution, indemnification, or similar
Rights (collectively, "SUBROGATION/CONTRIBUTION
EXHIBIT C
2
RIGHTS") which Guarantor may have under applicable Law against any Company as a
result of Guarantor's performance of its obligations hereunder. Without limiting
the effect of SECTION 6 immediately above, until irrevocable payment in full of
the Guaranteed Debt and the termination of the Obligation of Lenders to extend
credit under the Loan Documents, (a) [no] Guarantor may [not] assert, enforce,
or otherwise exercise, or seek to obtain or share in, any security for
Subrogation/Contribution Rights against Borrower or any other obligor on the
Guaranteed Debt or any security, (b) [each] Guarantor defers all of the
foregoing Rights (whether they arise in equity, under contract, by statute,
under common Law, or otherwise), and (c) [each] Guarantor defers the benefit of,
and subordinates any Right to participate in, any security given to
Administrative Agent or Lenders or any other beneficiary to secure payment of
any Guaranteed Debt.
8. NO RELEASE. Guarantor's[s'] obligations under this Guaranty
may not be released, diminished, or affected by the occurrence of any one or
more of the following events: (a) any taking or accepting of any other security
or assurance for any Guaranteed Debt; (b) any release, surrender, exchange,
subordination, impairment, or loss of any collateral securing any Guaranteed
Debt; (c) any full or partial release of the liability of any other obligor on
the Obligation (including, without limitation, any release effected pursuant to
SECTION 6 of the Credit Agreement), except for any final release resulting from
irrevocable payment in full of the entire Obligation; (d) the modification of,
or waiver of compliance with, any terms of any other Loan Document; (e) the
insolvency, bankruptcy, or lack of corporate or partnership power of any other
obligor at any time liable for any Guaranteed Debt, whether now existing or
occurring in the future; (f) any renewal, extension, or rearrangement of any
Guaranteed Debt or any adjustment, indulgence, forbearance, or compromise that
may be granted or given by Administrative Agent or any Lender to any other
obligor on the Obligation; (g) any neglect, delay, omission, failure, or refusal
of Administrative Agent or any Lender to take or prosecute any action in
connection with the Guaranteed Debt or to foreclose, take, or prosecute any
action in connection with any Loan Document; (h) any failure of Administrative
Agent or any Lender to notify [any] Guarantor of any renewal, extension, or
assignment of any Guaranteed Debt, or the release of any security or of any
other action taken or refrained from being taken by Administrative Agent or any
Lender against Borrower or any new agreement between Administrative Agent, any
Lender, and Borrower; it being understood that neither Administrative Agent nor
any Lender is required to give [any] Guarantor any notice of any kind under any
circumstances whatsoever with respect to or in connection with any Guaranteed
Debt, other than any notice required to be given to [any] Guarantor by Law or
elsewhere in this Guaranty; (i) the unenforceability of any Guaranteed Debt
against any other obligor or any security securing same because it exceeds the
amount permitted by Law, the act of creating it is ultra ▇▇▇▇▇, the officers
creating it exceeded their authority or violated their fiduciary duties in
connection with it, or otherwise; or (j) any payment of the Obligation to
Administrative Agent or any Lender is held to constitute a preference under any
Debtor Relief Law or for any other reason Administrative Agent or any Lender is
required to refund that payment or make payment to someone else (and in each
such instance this Guaranty will be reinstated in an amount equal to that
payment).
9. WAIVERS. By execution hereof, [each] Guarantor acknowledges
and agrees to the waivers set forth in SECTION 11.2 of the Credit Agreement. To
the maximum extent lawful, [each] Guarantor waives all Rights by which it might
be entitled to require suit on an accrued Right of action in respect of any
Guaranteed Debt or require suit against Borrower or others.
10. LOAN DOCUMENTS. By execution hereof, [each] Guarantor
covenants and agrees that certain representations, warranties, terms, covenants,
and conditions set forth in the Loan Documents are applicable to Guarantor[s] by
their terms and shall be imposed upon Guarantor[s], and [each] Guarantor
reaffirms that each such representation and warranty is true and correct to the
extent that it relates to such Guarantor and covenants and agrees to promptly
and properly perform, observe, and comply with each such term, covenant, or
condition. Moreover, [each] Guarantor acknowledges and
EXHIBIT C
3
agrees that this Guaranty is subject to the offset provisions of the Loan
Documents in favor of Administrative Agent and Lenders. In the event the Credit
Agreement or any other Loan Document shall cease to remain in effect for any
reason whatsoever during any period when any part of the Guaranteed Debt remains
unpaid, the terms, covenants, and agreements of the Credit Agreement or such
other Loan Document incorporated herein by reference shall nevertheless continue
in full force and effect as obligations of Guarantor[s] under this Guaranty.
11. RELIANCE AND DUTY TO REMAIN INFORMED. [Each] Guarantor
confirms that it has executed and delivered this Guaranty after reviewing the
terms and conditions of the Loan Documents and such other information as it has
deemed appropriate in order to make its own credit analysis and decision to
execute and deliver this Guaranty. [Each] Guarantor confirms that it has made
its own independent investigation with respect to Borrower's creditworthiness
and is not executing and delivering this Guaranty in reliance on any
representation or warranty by Administrative Agent or any Lender as to that
creditworthiness. [Each] Guarantor expressly assumes all responsibilities to
remain informed of the financial condition of Borrower and any circumstances
affecting Borrower's ability to perform under the Loan Documents to which it is
a party or any collateral securing any Guaranteed Debt.
12. NO REDUCTION. The Guaranteed Debt may not be reduced,
discharged, or released because or by reason of any existing or future offset,
claim, or defense (except for the defense of complete and final payment of the
Guaranteed Debt) of Borrower or any other obligor against Administrative Agent
or any Lender or against payment of the Guaranteed Debt, whether that offset,
claim, or defense arises in connection with the Guaranteed Debt or otherwise.
Those claims and defenses include, without limitation, failure of consideration,
breach of warranty, fraud, bankruptcy, incapacity/infancy, statute of
limitations, lender liability, accord and satisfaction, usury, forged
signatures, mistake, impossibility, frustration of purpose, and
unconscionability.
13. INSOLVENCY OF GUARANTOR[S]. Should [any] Guarantor (a) not be
Solvent, or (b) fail to pay its debts generally as they become due, or (c)
voluntarily seek, consent to, or acquiesce in, the benefit or benefits of any
Debtor Relief Law (other than as a creditor or claimant), or (d) become a party
to (or be made the subject of) any proceeding provided for by any Debtor Relief
Law (other than as a creditor or claimant) that could suspend or otherwise
adversely affect the Rights of Administrative Agent or any Lender granted
hereunder (unless, in the event such proceeding is involuntary, the petition
instituting same is dismissed within 60 days after its filing; provided,
however, that no order for relief shall have been entered in the interim), then,
in any such event, the Guaranteed Debt shall be, as among [such] Guarantor,
Administrative Agent, and Lenders, a fully matured, due, and payable obligation
of [such] Guarantor to Administrative Agent and Lenders, payable in full by
[such] Guarantor to Lenders upon demand, and the amount thereof so payable shall
be the estimated amount owing in respect of the contingent claim created
hereunder.
14. LOAN DOCUMENT. This Guaranty is a Loan Document and is subject
to the applicable provisions of SECTIONS 1 and 13 of the Credit Agreement,
including, without limitation, the provisions relating to GOVERNING LAW,
JURISDICTION, VENUE, AND WAIVER OF JURY TRIAL, all of which are incorporated
into this Guaranty by reference the same as if set forth in this Guaranty
verbatim.
EXHIBIT C
4
15. NOTICES. For purposes of SECTION 13.3 of the Credit Agreement,
[each] Guarantor's address and telecopy number are as set forth next to [such]
Guarantor's signature on the signature page hereof.
16. AMENDMENTS, ETC. No amendment, waiver, or discharge to or
under this Guaranty is valid unless it is in writing and is signed by the party
against whom it is sought to be enforced and is otherwise in conformity with the
requirements of SECTION 13.11 of the Credit Agreement or in conformity with
SECTION 6.2 of the Credit Agreement.
17. ADMINISTRATIVE AGENT AND LENDERS. Administrative Agent is
Administrative Agent for each Lender under the Credit Agreement. All Rights
granted to Administrative Agent under or in connection with this Guaranty are
for each Lender's ratable benefit. Administrative Agent may, without the joinder
of any Lender, exercise any Rights in Administrative Agent's or Lenders' favor
under or in connection with this Guaranty. Administrative Agent's and each
Lender's Rights and obligations vis-a-vis each other may be subject to one or
more separate agreements between those parties. However, [no] Guarantor is [not]
required to inquire about any such agreement or is subject to any of its terms
unless [such] Guarantor specifically joins such agreement; therefore, neither
Guarantor[s] nor [its] [their] respective successors or assigns is entitled to
any benefits or provisions of any such separate agreement or is entitled to rely
upon or raise as a defense any party's failure or refusal to comply with the
provisions of such agreement.
[18. JOINT AND SEVERAL OBLIGATIONS OF GUARANTORS.
(a) Subject to CLAUSE (c) of this SECTION 18, each Guarantor is
accepting joint and several liability hereunder in consideration of the
financial accommodation to be provided by the holders of the Guaranteed Debt,
for the mutual benefit, directly and indirectly, of each Guarantor and in
consideration of the undertakings of each Guarantor to accept joint and several
liability for the obligations of each of them.
(b) Subject to CLAUSE (c) of this SECTION 18, each Guarantor
jointly and severally hereby irrevocably and unconditionally accepts, not merely
as a surety but also as a co-debtor, joint and several liability with the other
Guarantors with respect to the payment and performance of all of the Guaranteed
Debt arising under this Guaranty, the other Loan Documents, and any other
documents relating to the Guaranteed Debt, it being the intention of the parties
hereto that all the Guaranteed Debt shall be the joint and several obligations
of each Guarantor without preferences or distinction among them.
(c) Notwithstanding any provision to the contrary contained
herein, in any other of the Loan Documents, or in any other documents relating
to the Guaranteed Debt, the obligations of each Guarantor under the Credit
Agreement and the other Loan Documents shall be limited to an aggregate amount
equal to the largest amount that would not render such obligations subject to
avoidance under Section 548 of the Bankruptcy Code or any comparable provisions
of any applicable state law.]
19. PARTIES. This Guaranty benefits Administrative Agent, Lenders,
and their respective successors and assigns and binds Guarantor[s] and [its]
[their respective] successors and assigns. Upon appointment of any successor
Administrative Agent under the Credit Agreement, all of the Rights of
Administrative Agent under this Guaranty automatically vest in that new
Administrative Agent as successor Administrative Agent on behalf of Lenders
without any further act, deed, conveyance, or other formality other than that
appointment. The Rights of Administrative Agent and Lenders under this Guaranty
may be transferred with any assignment of the Guaranteed Debt pursuant to and in
accordance with the terms of the Credit Agreement. The Credit Agreement contains
provisions governing assignments of the Guaranteed Debt and of Rights and
obligations under this Guaranty.
EXHIBIT C
5
REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGE(S) TO FOLLOW.
EXHIBIT C
6
EXECUTED as of the date first stated in this Guaranty.
GUARANTOR[S]:
Address: __________________________
By: ________________________________
Name: __________________________
Telephone: ________________________ Title: _________________________
Facsimile: ________________________
EXHIBIT C
7
EXHIBIT D
FORM OF COMPLIANCE CERTIFICATE
(Pier 1 Imports, Inc.)
DATE: ________________,
SUBJECT PERIOD: ___________ ended _________________,
ADMINISTRATIVE AGENT: ▇▇▇▇▇ Fargo Bank, National Association
BORROWER: Pier 1 Imports, Inc.
This certificate is delivered under the Revolving Credit Agreement,
dated as of August 22, 2003 (as amended, modified, supplemented, or restated
from time to time, the "CREDIT AGREEMENT"), among Borrower, Lenders, ▇▇▇▇▇ Fargo
Bank, National Association, as Administrative Agent for itself and other
Lenders, and other Agents party thereto. Capitalized terms used herein and not
otherwise defined herein shall have the meaning given to such terms in the
Credit Agreement.
The undersigned certifies to Lenders that:
(a) the undersigned is a Responsible Officer of Borrower in the
position set forth under the signature below;
(b) the Financial Statements attached to this certificate were
prepared in accordance with GAAP, and present fairly in all material respects
the consolidated financial condition and results of operations of the Companies
as of, and for the [three, six, or nine months, or fiscal year] ended
on, , ____ (the "SUBJECT PERIOD") [(subject only to normal year-end audit
adjustments)];
(c) the undersigned has reviewed the activities of the Companies
during the Subject Period, and during the Subject Period, (i) the Companies
kept, observed, performed, and fulfilled each and every covenant and condition
of the Loan Documents in all material respects, and (ii) no Default (nor any
Potential Default) has occurred which has not been cured or waived; and
(d) the status of compliance by the Companies with SECTION 9.22 of
the Credit Agreement at the end of the Subject Period is as set forth on ANNEX A
to this certificate;
[Signature of Responsible Officer of Borrower]
By: __________________________________________
Name: ____________________________________
Title: ___________________________________
EXHIBIT D
ANNEX A TO COMPLIANCE CERTIFICATE
(Pier 1 Imports, Inc.)
Status of Compliance with SECTION 9.22 of the Credit Agreement (1)
[(Unless otherwise indicated, all calculations are to be made on a
consolidated basis for the Companies at the date of determination with
respect to the most recently-ended Rolling Period in accordance
with SECTION 1.3 of the Credit Agreement)]
Borrower shall provide to Administrative Agent (for the benefit of
Lenders) detailed calculations, in form and substance reasonably acceptable to
Administrative Agent, demonstrating compliance with the following covenants:
SECTION 9.22(a) - LEVERAGE RATIO
SECTION 9.22(b) - FIXED CHARGE COVERAGE RATIO
SECTION 9.22(c) - TANGIBLE NET WORTH
(1) All as more particularly determined in accordance with the terms of the
Credit Agreement, which control in the event of conflicts with this form.
ANNEX A TO COMPLIANCE CERTIFICATE
EXHIBIT E
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
This Assignment and Acceptance (this "ASSIGNMENT AND ACCEPTANCE") is
dated as of the Effective Date set forth below and is entered into by and
between [Insert name of Assignor] (the "ASSIGNOR") and [Insert name of Assignee]
(the "ASSIGNEE"). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (the "CREDIT
AGREEMENT"), receipt of a copy of which is hereby acknowledged by the Assignee.
The Standard Terms and Conditions set forth in ANNEX 1 attached hereto are
hereby agreed to and incorporated herein by reference and made a part of this
Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Standard Terms
and Conditions and the Credit Agreement, as of the Effective Date inserted by
the Administrative Agent as contemplated below (i) all of the Assignor's rights
and obligations as a Lender under the Credit Agreement and any other documents
or instruments delivered pursuant thereto to the extent related to the amount
and percentage interest identified below of all of such outstanding rights and
obligations of the Assignor under the respective facilities identified below
(including, without limitation, LCs and Swing Line Borrowings included in such
facilities) and (ii) to the extent permitted to be assigned under applicable
law, all claims, suits, causes of action and any other right of the Assignor (in
its capacity as a Lender) against any Person, whether known or unknown, arising
under or in connection with the Credit Agreement, any other documents or
instruments delivered pursuant thereto or the loan transactions governed thereby
or in any way based on or related to any of the foregoing, including, but not
limited to, contract claims, tort claims, malpractice claims, statutory claims
and all other claims at law or in equity related to the rights and obligations
sold and assigned pursuant to CLAUSE (i) above (the rights and obligations sold
and assigned pursuant to CLAUSES (i) and (ii) above being referred to herein
collectively as, the "ASSIGNED INTEREST"). Such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Assignment
and Assumption, without representation or warranty by the Assignor.
1. Assignor: ______________________________
2. Assignee: ______________________________ [and is an Affiliate of
[identify Lender]]
3. Borrower: Pier 1 Imports, Inc.
4. Administrative Agent: ▇▇▇▇▇ Fargo Bank, National Association, as the
administrative agent under the Credit Agreement
5. Credit Agreement: The Revolving Credit Agreement, dated as of August
22, 2003, among Pier 1 Imports, Inc., ▇▇▇▇▇ Fargo Bank, National
Association, and the other Lenders and Agents parties thereto
6. Assigned Interest:
Aggregate Amount of Revolver Commitment for all Lenders: _____________________
Amount of Revolver Commitment Assigned: _______________________
Percentage Assigned: __________________________
EXHIBIT E
Effective Date: __________________, 20__ [TO BE INSERTED BY ADMINISTRATIVE AGENT
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]
The terms set forth in this Assignment and Assumption are hereby agreed to:
ASSIGNOR
--------
[NAME OF ASSIGNOR]
By: _____________________________
Title:
ASSIGNEE
--------
[NAME OF ASSIGNEE]
By: _____________________________
Title:
Consented to and Accepted:
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION, as
Administrative Agent
By: _________________________________
Title:
[Consented to](1):
Pier 1 Imports, Inc.
By: _________________________________
Title:
--------------------------
(1) To be added only if the consent of Borrower is required by the
terms of the Credit Agreement.
EXHIBIT E
2
ANNEX 1 TO ASSIGNMENT AND ASSUMPTION
CREDIT AGREEMENT WITH PIER 1 IMPORTS, INC.
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
1.1. Assignor. The Assignor (a) represents and warrants
that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the
Assigned Interest is free and clear of any lien, encumbrance or other adverse
claim, and (iii) it has full power and authority, and has taken all action
necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby; and (b) assumes no
responsibility with respect to (i) any statements, warranties or representations
made in or in connection with the Credit Agreement or any other Loan Document,
(ii) the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Loan Documents or any collateral thereunder, (iii) the financial
condition of the Borrower, any of its Subsidiaries or Affiliates or any other
Person obligated in respect of any Loan Document, or (iv) the performance or
observance by the Borrower, any of its Subsidiaries or Affiliates or any other
Person of any of their respective obligations under any Loan Document.
1.2. Assignee. The Assignee (a) represents and warrants
that (i) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby and to become a Lender under the Credit
Agreement, (ii) it meets all requirements of an Eligible Assignee under the
Credit Agreement (subject to receipt of such consents as may be required under
the Credit Agreement), (iii) from and after the Effective Date, it shall be
bound by the provisions of the Credit Agreement as a Lender thereunder and, to
the extent of the Assigned Interest, shall have the obligations of a Lender
thereunder, (iv) it has received a copy of the Credit Agreement, together with
copies of the most recent financial statements delivered pursuant to SECTION 9.3
thereof, as applicable, and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Assumption and to purchase the Assigned Interest on the
basis of which it has made such analysis and decision independently and without
reliance on the Administrative Agent or any other Lender, and (v) if it is a
Lender organized under the Laws of a jurisdiction outside the United States,
attached hereto is any documentation required to be delivered by it pursuant to
the terms of the Credit Agreement, duly completed and executed by the Assignee;
and (b) agrees that (i) it will, independently and without reliance on the
Administrative Agent, the Assignor or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Loan
Documents, and (ii) it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender.
2. Payments. From and after the Effective Date, the
Administrative Agent shall make all payments in respect of the Assigned interest
(including payments of principal, interest, fees and other amounts) to the
Assignee whether such amounts have accrued prior to or on or after the Effective
Date. The Assignor and the Assignee shall make all appropriate adjustments in
payments by the Administrative Agent for periods prior to the Effective Date or
with respect to the making of this assignment directly between themselves.
3. General Provisions. This Assignment and Assumption
shall be binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns. This Assignment and Assumption may be
executed in any number of counterparts, which together shall constitute one
instrument. Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by telecopy shall be effective as delivery of a
manually executed counterpart of this Assignment and Assumption. This Assignment
and Assumption shall be governed by, and construed in accordance with, the law
of the State of Texas.
4
SCHEDULE 1.1
FISCAL-MONTH ENDS
(Pier 1 Imports, Inc.)
Fiscal Year - 04 Fiscal Year - 05 Fiscal Year - 06 Fiscal Year - 07
---------------- ---------------- ---------------- ----------------
04/05/03 04/03/04 04/02/05 04/01/06
05/03/03 05/01/04 04/30/05 04/29/06
05/31/03* 05/29/04* 05/28/05* 05/27/06*
07/05/03 07/03/04 07/02/05 07/01/06
08/02/03 07/31/04 07/30/05 07/29/06
08/30/03* 08/28/04* 08/27/05* 08/26/06*
10/04/03 09/02/04 10/01/05 09/30/06
11/01/03 10/30/04 10/29/05 10/28/06
11/29/03* 11/27/04* 11/26/05* 11/25/06*
01/03/04 01/01/05 12/31/05 12/30/06
01/31/04 01/29/05 01/28/06 01/27/07
02/28/04* 02/26/05* 02/25/06* 03/03/07*
* Denotes Fiscal Quarter end
SCHEDULE 1.1
SCHEDULE 2.1
LENDERS AND COMMITMENTS
(Pier 1 Imports, Inc.)
LENDER
------
PERCENTAGE COMMITTED SUM COMMITMENT
---------- ------------- -------------
▇▇▇▇▇ Fargo Bank, National Association $ 27,500,000.00 22.000000000%
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
214.661-1225; ▇▇▇.▇▇▇.▇▇▇▇ (fax)
JPMorgan Chase Bank $ 17,500,000.00 14.000000000%
Bank of America, N.A. $ 17,500,000.00 14.000000000%
Wachovia Bank, National Association $ 15,000,000.00 12.000000000%
HSBC Bank U.S.A. $ 12,500,000.00 10.000000000%
SunTrust Bank $ 12,500,000.00 10.000000000%
The Bank of Tokyo-Mitsubishi, Ltd. $ 12,500,000.00 10.000000000%
Bank One, N.A. $ 10,000,000.00 8.000000000%
TOTAL: $125,000,000.00 100.000000000%
SCHEDULE 2.1
SCHEDULE 7.1
CONDITIONS PRECEDENT TO CLOSING
(Pier 1 Imports, Inc.)
The Agreement and related Loan Documents shall not become effective
unless Administrative Agent has received all of the following (unless otherwise
indicated, all documents shall be dated as of August 22, 2003, and all terms
used with their initial letters capitalized are used herein with their meanings
as defined in the Agreement) or the following conditions shall have otherwise
been satisfied or waived:
1. The Agreement. The Agreement (together with all Schedules and Exhibits
thereto) executed by Borrower, Administrative Agent, and each Lender.
2. Notes. With respect to any Lender requesting Notes pursuant to SECTION
3.1(b), each of the Notes, payable to the order of each applicable
Lender, as contemplated in SECTION 3.1(b).
3. Guaranty. A Guaranty, in the form of EXHIBIT C, executed by each
Guarantor.
4. Organizational Documents. Copies of the Articles of Incorporation,
Certificate of Incorporation, or Articles of Organization and all
amendments thereto of each Loan Party (other than any Loan Party that
is a partnership), each accompanied by two certificates that such copy
is correct and complete, (a) one certificate dated a Current Date (as
used herein, the term "CURRENT DATE" means any date not more than 30
days prior to the Closing Date), issued by the appropriate Governmental
Authority of the jurisdiction of organization of each such entity, and
(b) one certificate dated the Closing Date, executed by a Responsible
Officer, and the Secretary, Assistant Secretary, or other similar
officer of each such entity.
5. Bylaws/Operating Agreements. A copy of the Operating Agreement or
Bylaws, and all amendments thereto, of each Loan Party (other than any
Loan Party that is a partnership), accompanied by a certificate that
such copy is correct and complete, dated the Closing Date, and executed
by a Responsible Officer, and the Secretary, Assistant Secretary, or
other similar officer of each such entity.
6. Partnership Agreements. A copy of the currently-effective partnership
agreement for each Loan Party that is a partnership, and all amendments
thereto, accompanied by a certificate that such copy is correct and
complete, dated the Closing Date, executed by the general partner or
other appropriate managing partner of such partnership, together with a
certificate of limited partnership dated a Current Date, issued by the
appropriate Governmental Authority of the jurisdiction of organizations
of each such partnership that is a limited partnership.
7. Good Standing and Authority. Certificates of the appropriate
Governmental Authorities of each jurisdiction of organization of each
Loan Party, each dated a Current Date, to the effect that each such
Loan Party organized in such jurisdiction is in good standing with
respect to the payment of franchise and similar Taxes (to the extent
such information is available) and is duly qualified to transact
business in such jurisdiction.
8. Incumbency/Secretary's Certificate. Certificates of incumbency dated as
of the Closing Date with respect to all managers, officers, or partners
of each Loan Party that will be authorized to execute or attest to any
of the Loan Documents on behalf of such Loan Party, executed by a
Responsible Officer, and the Secretary, Assistant Secretary, or other
similar officer of each such
SCHEDULE 7.1
Loan Party (or general partner or other appropriate managing partner
for any Loan Party that is a partnership).
9. Resolutions. Copies of resolutions duly adopted by the Board of
Directors or other governing body of each Loan Party, approving this
Agreement and the other Loan Documents and authorizing the transactions
contemplated in such Loan Documents, accompanied by a certificate of
the Secretary or an Assistant Secretary of each such Loan Party, dated
as of the Closing Date, certifying that such copy is a true and correct
copy of resolutions duly adopted at a meeting of (which may be held by
conference telephone or similar communications equipment by means of
which all Persons participating in a meeting can hear each other if
permitted by applicable Law and, if required by such Law, by such
entity's Bylaws or Operating Agreement), or by the unanimous written
consent of (if permitted by applicable Law and, if required by such
Law, by such entity's Bylaws or Operating Agreement), the Board of
Directors or other governing body of each such Loan Party, and that
such resolutions constitute all the resolutions adopted with respect to
such transactions, have not been amended, modified, or revoked in any
respect, and are in full force and effect as of the Closing Date.
10. Partnership Authorization. For each Loan Party that is a partnership,
evidence of authorization by the applicable partners, in each case
authorizing the execution and full performance of the Loan Documents,
and all other documents and actions required pursuant thereto,
accompanied by a certificate from the general partner or other
appropriate managing partner, dated as of the Closing Date, certifying
that such copy is a true and correct copy of the authorizations adopted
by the partnership and that such authorizations constitute all
authorizations adopted with respect to such transactions, have not been
amended, modified, or revoked in any respect, and are in full force and
effect as of the Closing Date.
11. Opinion of Counsel to the Loan Parties. The opinion of outside counsel
to the Loan Parties, addressed to Administrative Agent and Lenders, on
terms acceptable to Administrative Agent.
12. Payoff Letters/Lien Releases. Payoff letters or other evidence of
payoff amounts in form and substance reasonably acceptable to
Administrative Agent relating to the payoff of the Existing Credit
Agreement and the release of any Liens other than Permitted Liens.
13. Consents, filings, etc. Evidence satisfactory to Administrative Agent
and its counsel that each of the Loan Parties has received all
approvals, authorizations, consents, and waivers of any Governmental
Authority or other Person necessary or appropriate for the execution,
delivery, and performance by each Loan Party of the Loan Documents to
which it is a party, including, without limitation, (a) all such
approvals, authorizations, consents, and waivers disclosed in the Loan
Documents, and (b) all filings, consents, or approvals with or of
Governmental Authorities necessary to enter into the Loan Documents or
consummate any other transactions contemplated by the Loan Documents.
14. Borrowing Notice. A duly completed Borrowing Notice for the initial
Borrowing, delivered to Administrative Agent.
15. Current Financials and Compliance Certificate. True and correct copies
of the Current Financials, together with a Compliance Certificate
prepared as of the Closing Date, on a pro forma basis after giving
effect to the closing of the Loan Documents.
16. Payment of Fees and Closing Fees. Evidence of payment of all fees
payable on or prior to the Closing Date to Administrative Agent, any
other Agent, Arranger, or any Lender as provided for
SCHEDULE 7.1
2
in SECTION 5 of the Agreement (including, without limitation, any
upfront fees payable to Lenders), together with reimbursements to
Administrative Agent and Arranger for all fees and expenses incurred in
connection with the negotiation, preparation, and closing of the
transactions evidenced by the Loan Documents (including, without
limitation, attorney's fees and expenses).
17. Debt Rating. Confirmation satisfactory to Administrative Agent that
Borrower's long-term unsecured debt is rated a minimum of BBB-/Baa3 by
both S&P and ▇▇▇▇▇'▇, respectively.
18. No Judgments. There shall not exist any decree, judgment, ruling,
injunction, or other Law which restrains the consummation of any
transaction contemplated by the Loan Documents in the manner
contemplated therein.
19. Other Documents. Such other agreements, documents, instruments,
opinions, certificates, and evidences as Administrative Agent may
reasonably request.
SCHEDULE 7.1
3
SCHEDULE 8.3
CAPITAL STOCK AND PARTNERSHIP INTERESTS
(Pier 1 Imports, Inc.)
(Attached)
SCHEDULE 8.3
[CORPORATE ORGANIZATIONAL CHART]
SCHEDULE 9.13
EXISTING LIENS
(Pier 1 Imports, Inc.)
Fixed and floating charges on all or substantially all of the present and future
assets of The Pier (Retail) Limited.