Exhibit 10.1
Execution Copy
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Published CUSIP Number: ________________
CREDIT AGREEMENT
Dated as of June 17, 2005
among
▇▇▇▇▇▇ & ▇▇▇▇▇, INC.,
as a Borrower,
CERTAIN SUBSIDIARIES OF ▇▇▇▇▇▇ & NOBLE, INC.,
as Designated Co-Borrowers,
BANK OF AMERICA, N.A.,
as Administrative Agent, Swing Line Lender
and
L/C Issuer,
JPMORGAN CHASE BANK, N.A.,
as Syndication Agent,
CITICORP USA, INC.,
ING CAPITAL LLC,
SUNTRUST BANK,
and
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Documentation Agents
and
The Other Lenders Party Hereto
BANC OF AMERICA SECURITIES LLC
and
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.,
as Joint Lead Arrangers and Co-Book Managers
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TABLE OF CONTENTS
Section Page
ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS
1.01 Defined Terms...........................................................1
1.02 Other Interpretive Provisions..........................................22
1.03 Accounting Terms.......................................................23
1.04 Rounding...............................................................23
1.05 Times of Day...........................................................23
1.06 Letter of Credit Amounts...............................................23
1.07 Covenant Adjustments...................................................24
1.08 Exclusion of Certain Subsidiaries......................................24
ARTICLE II.
THE COMMITMENTS AND CREDIT EXTENSIONS
2.01 Committed Loans........................................................24
2.02 Borrowings, Conversions and Continuations of Committed Loans...........25
2.03 Letters of Credit......................................................26
2.04 Swing Line Loans.......................................................35
2.05 Prepayments............................................................38
2.06 Termination or Reduction of Commitments................................38
2.07 Repayment of Loans.....................................................39
2.08 Interest...............................................................39
2.09 Fees...................................................................40
2.10 Computation of Interest and Fees.......................................40
2.11 Evidence of Debt.......................................................41
2.12 Payments Generally; Administrative Agent's Clawback....................41
2.13 Sharing of Payments by Lenders.........................................43
2.14 Increase in Commitments................................................44
2.15 Designated Co-Borrowers; Joint and Several Liability;
Borrowers' Waivers and Consents; Agency of B&N.......................45
ARTICLE III.
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 Taxes..................................................................49
3.02 Illegality.............................................................51
3.03 Inability to Determine Rates...........................................51
3.04 Increased Costs; Reserves on Eurodollar Rate Loans.....................52
3.05 Compensation for Losses................................................53
3.06 Mitigation Obligations; Replacement of Lenders.........................54
3.07 Survival...............................................................54
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ARTICLE IV.
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
4.01 Conditions of Initial Credit Extension.................................54
4.02 Conditions to all Credit Extensions....................................56
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
5.01 Existence, Qualification and Power; Compliance with Laws...............57
5.02 Authorization; No Contravention........................................57
5.03 Governmental Authorization; Other Consents.............................57
5.04 Binding Effect.........................................................58
5.05 Financial Statements; No Material Adverse Effect.......................58
5.06 Litigation.............................................................58
5.07 No Default.............................................................58
5.08 Ownership of Property; Liens...........................................59
5.09 Environmental Compliance...............................................59
5.10 Insurance..............................................................59
5.11 Taxes..................................................................59
5.12 ERISA Compliance.......................................................59
5.13 Subsidiaries; Equity Interests.........................................60
5.14 Margin Regulations; Investment Company Act; Public
Utility Holding Company Act..........................................60
5.15 Disclosure.............................................................60
5.16 Compliance with Laws...................................................61
5.17 Intellectual Property; Licenses, Etc...................................61
ARTICLE VI.
AFFIRMATIVE COVENANTS
6.01 Financial Statements...................................................61
6.02 Certificates; Other Information........................................62
6.03 Notices................................................................64
6.04 Payment of Obligations.................................................64
6.05 Preservation of Existence, Etc.........................................64
6.06 Maintenance of Properties..............................................65
6.07 Maintenance of Insurance...............................................65
6.08 Compliance with Laws and Agreements....................................65
6.09 Books and Records......................................................65
6.10 Inspection Rights......................................................65
6.11 Use of Proceeds........................................................66
6.12 Guarantors.............................................................66
6.13 Compliance with ERISA..................................................66
6.14 Fiscal Year............................................................66
6.15 Internal Control Events................................................66
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ARTICLE VII.
NEGATIVE COVENANTS
7.01 Liens..................................................................67
7.02 Investments............................................................68
7.03 Indebtedness...........................................................69
7.04 Fundamental Changes....................................................70
7.05 Dispositions...........................................................70
7.06 Restricted Payments....................................................71
7.07 Change in Nature of Business...........................................71
7.08 Transactions with Affiliates...........................................72
7.09 Burdensome Agreements..................................................72
7.10 Use of Proceeds........................................................72
7.11 Financial Covenants....................................................72
7.12 Acquisitions...........................................................72
7.13 Sale and Leaseback.....................................................73
7.14 No Amendments to Organization Documents................................73
ARTICLE VIII.
EVENTS OF DEFAULT AND REMEDIES
8.01 Events of Default......................................................73
8.02 Remedies Upon Event of Default.........................................75
8.03 Application of Funds...................................................76
ARTICLE IX.
ADMINISTRATIVE AGENT
9.01 Appointment and Authority..............................................77
9.02 Rights as a Lender.....................................................77
9.03 Exculpatory Provisions.................................................77
9.04 Reliance by Administrative Agent.......................................78
9.05 Delegation of Duties...................................................78
9.06 Resignation of Administrative Agent....................................79
9.07 Non-Reliance on Administrative Agent and Other Lenders.................80
9.08 No Other Duties, Etc...................................................80
9.09 Administrative Agent May File Proofs of Claim..........................80
9.10 Guaranty Matters.......................................................81
ARTICLE X.
MISCELLANEOUS
10.01 Amendments, Etc........................................................81
10.02 Notices; Effectiveness; Electronic Communication.......................82
10.03 No Waiver; Cumulative Remedies.........................................84
10.04 Expenses; Indemnity; Damage Waiver.....................................84
10.05 Payments Set Aside.....................................................86
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10.06 Successors and Assigns.................................................86
10.07 Treatment of Certain Information; Confidentiality......................90
10.08 Right of Setoff........................................................91
10.09 Interest Rate Limitation...............................................92
10.10 Counterparts; Integration; Effectiveness...............................92
10.11 Survival of Representations and Warranties.............................92
10.12 Severability...........................................................93
10.13 Replacement of Lenders.................................................93
10.14 Governing Law; Jurisdiction; Etc.......................................93
10.15 Waiver of Jury Trial...................................................94
10.16 USA PATRIOT Act Notice.................................................95
SIGNATURES...................................................................S-1
SCHEDULES
1.01 Designated Co-Borrowers
1.01(b) Existing Letters of Credit
2.01 Commitments and Applicable Percentages
5.05 Supplement to Interim Financial Statements
5.06 Litigation
5.13 Subsidiaries; Other Equity Investments
7.01 Existing Liens
7.03 Existing Indebtedness
10.02 Administrative Agent's Office; Certain Addresses for Notices
10.06 Processing and Recordation Fees
EXHIBITS
Form of
A Committed Loan Notice
B Swing Line Loan Notice
C Note
D Compliance Certificate
E Assignment and Assumption
F Subsidiary Guaranty Agreement
G Designated Co-Borrower Request and Assumption Agreement
H Designated Co-Borrower Notice
I Opinion Matters
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CREDIT AGREEMENT
This CREDIT AGREEMENT ("Agreement") is entered into as of June 17, 2005,
among ▇▇▇▇▇▇ & NOBLE, INC., a Delaware corporation ("B&N"), certain wholly-owned
Subsidiaries of B&N, each lender from time to time party hereto (collectively,
the "Lenders" and individually, a "Lender"), BANK OF AMERICA, N.A., as
Administrative Agent, Swing Line Lender and L/C Issuer, JPMORGAN CHASE BANK,
N.A. as Syndication Agent, and Citicorp USA, Inc., ING Capital LLC, SunTrust
Bank, and Wachovia Bank, National Association, as Documentation Agents.
The Borrowers have requested that the Lenders provide a revolving credit
facility, and the Lenders are willing to do so on the terms and conditions set
forth herein.
In consideration of the mutual covenants and agreements herein contained,
the parties hereto covenant and agree as follows:
ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS
1.01 Defined Terms. As used in this Agreement, the following terms shall
have the meanings set forth below:
"Acquisition" means the acquisition of (i) a controlling equity or other
ownership interest in another Person (including the purchase of an option,
warrant or convertible or similar type security to acquire such a controlling
interest at the time it becomes exercisable by the holder thereof), whether by
purchase of such equity or other ownership interest or upon the exercise of an
option or warrant for, or conversion of securities into, such equity or other
ownership interest, or (ii) assets of another Person which constitute all or
substantially all of the assets of such Person or of a line or lines of business
conducted by such Person.
"Administrative Agent" means Bank of America in its capacity as
administrative agent under any of the Loan Documents, or any successor
administrative agent.
"Administrative Agent's Office" means the Administrative Agent's address
and, as appropriate, account as set forth on Schedule 10.02, or such other
address or account as the Administrative Agent may from time to time notify B&N
and the Lenders.
"Administrative Questionnaire" means an Administrative Questionnaire in a
form supplied by the Administrative Agent.
"Affiliate" means, with respect to any Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Aggregate Commitments" means the Commitments of all the Lenders.
"Agreement" means this Credit Agreement.
"Applicable Percentage" means with respect to any Lender at any time, the
percentage (carried out to the ninth decimal place) of the Aggregate Commitments
represented by such Lender's Commitment at such time. If the commitment of each
Lender to make Loans and the obligation of the L/C Issuer to make L/C Credit
Extensions have been terminated pursuant to Section 8.02 or if the Aggregate
Commitments have expired, then the Applicable Percentage of each Lender shall be
determined based on the Applicable Percentage of such Lender most recently in
effect, giving effect to any subsequent assignments. The initial Applicable
Percentage of each Lender is set forth opposite the name of such Lender on
Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender
becomes a party hereto, as applicable.
"Applicable Rate" means the following percentages per annum, based upon the
Consolidated Fixed Charge Coverage Ratio as set forth in the most recent
Compliance Certificate received by the Administrative Agent pursuant to Section
6.02(b):
Applicable Rate
Eurodollar
Rate +
----------
Consolidated or
Pricing Fixed Charge Coverage Standby Letters of Commercial Base Rate
Level Ratio Commitment Fee Credit Letter of Credit +
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1 >3.00 0.150% 0.750% 0.3750% 0.000%
2 >2.60 but <3.00 0.175% 0.875% 0.4375% 0.000%
3 >2.20 but <2.60 0.200% 1.000% 0.5000% 0.000%
4 >1.80 but < 2.20 0.200% 1.125% 0.5625% 0.000%
5 < 1.80 0.300% 1.375% 0.6875% 0.000%
Any increase or decrease in the Applicable Rate resulting from a change in the
Consolidated Fixed Charge Coverage Ratio shall become effective as of the first
Business Day immediately following the date a Compliance Certificate is
delivered pursuant to Section 6.02(b); provided, however, that if a Compliance
Certificate is not delivered when due in accordance with such Section, then
Pricing Level 5 shall apply as of the first Business Day after the date on which
such Compliance Certificate was required to have been delivered until the first
Business Day after the date of delivery to the Administrative Agent of such
Compliance Certificate. The Applicable Rate in effect from the Closing Date
through July 31, 2005 shall be determined based upon Pricing Level 3.
"Applicant Borrower" has the meaning specified in Section 2.15.
"Approved Fund" means any Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
"Arrangers" means Banc of America Securities LLC and ▇.▇. ▇▇▇▇▇▇ Securities
Inc., in their capacities as joint lead arrangers and co-book managers.
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"Assignee Group" means two or more Eligible Assignees that are Affiliates
of one another or two or more Approved Funds managed by the same investment
advisor.
"Assignment and Assumption" means an assignment and assumption entered into
by a Lender and an Eligible Assignee (with the consent of any party whose
consent is required by Section 10.06(b), and accepted by the Administrative
Agent, in substantially the form of Exhibit E or any other form approved by the
Administrative Agent.
"Attributable Indebtedness" means, on any date, (a) in respect of any
Capitalized Lease of any Person, the capitalized amount thereof that would
appear on a balance sheet of such Person prepared as of such date in accordance
with GAAP, and (b) in respect of any Synthetic Lease Obligation, the capitalized
amount of the remaining lease payments under the relevant lease that would
appear on a balance sheet of such Person prepared as of such date in accordance
with GAAP if such lease were accounted for as a Capitalized Lease.
"Audited Financial Statements" means the audited consolidated balance sheet
of B&N and its Subsidiaries for the fiscal year ended January 29, 2005 and the
related consolidated statements of income or operations, shareholders' equity
and cash flows for such fiscal year of B&N and its Subsidiaries, including the
notes thereto.
"Availability Period" means the period from and including the Closing Date
to the earliest of (a) the Maturity Date, (b) the date of termination of the
Aggregate Commitments pursuant to Section 2.06, and (c) the date of termination
of the commitment of each Lender to make Loans and of the obligation of the L/C
Issuer to make L/C Credit Extensions pursuant to Section 8.02.
"B&N License" has the meaning specified in Section 5.17.
"Bank of America" means Bank of America, N.A. and its successors.
"Base Rate" means for any day a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest
in effect for such day as publicly announced from time to time by Bank of
America as its "prime rate." The "prime rate" is a rate set by Bank of America
based upon various factors including Bank of America'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. Any change in such rate announced by Bank of America shall take effect at
the opening of business on the day specified in the public announcement of such
change.
"Base Rate Committed Loan" means a Committed Loan that is a Base Rate Loan.
"Base Rate Loan" means a Loan that bears interest based on the Base Rate.
"Borrower Materials" has the meaning specified in Section 6.02.
"Borrowers" mean (i) B&N and (ii) each Designated Co-Borrower, and each
individually, a "Borrower."
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"Borrowers' Liabilities" has the meaning specified in Section 2.15.
"Borrowing" means a Committed Borrowing or a Swing Line Borrowing, as the
context may require.
"Business Day" means any day other than a Saturday, Sunday or other day on
which commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Administrative Agent's Office is located or in
New York,
New York and, if such day relates to any Eurodollar Rate Loan, means
any such day on which dealings in Dollar deposits are conducted by and between
banks in the London interbank eurodollar market.
"Capitalized Lease" means a lease under which B&N or any of its
Subsidiaries is the lessee or obligor, the discounted future rental payment
obligations under which are required to be capitalized on the balance sheet of
the lessee or obligor in accordance with GAAP.
"Cash Collateralize" has the meaning specified in Section 2.03(g).
"Change in Law" means the occurrence, after the date of this Agreement, of
any of the following: (a) the adoption or taking effect of any law, rule,
regulation or treaty, (b) any change in any law, rule, regulation or treaty or
in the administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental Authority.
"Change of Control" means 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, but excluding any
employee benefit plan of such person or its subsidiaries, and any person or
entity acting in its capacity as trustee, agent or other fiduciary or
administrator of any such plan), other than ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, his spouse,
lineal descendants and trusts for the exclusive benefit of any such
individuals or the executor or administrator of the estate or legal
representative of any such individuals or any entity controlled by any of
them, becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5
under the Securities Exchange Act of 1934), directly or indirectly, of 40%
or more of the equity securities of B&N entitled to vote for members of the
board of directors or equivalent governing body of B&N on a fully-diluted
basis; or
(b) during any period of 24 consecutive months, a majority of the
members of the board of directors or other equivalent governing body of B&N
cease to be composed of individuals (i) who were members of that board or
equivalent governing body on the first day of such period, (ii) whose
election or nomination to that 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 that board or
equivalent governing body or (iii) whose election or nomination to that
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 that board or equivalent
governing body (excluding, in the case of both clause (ii) and clause
(iii), any individual whose initial nomination for, or assumption of office
as, a member of that board or equivalent governing body occurs as a result
of an actual or threatened
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solicitation of proxies or consents for the election or removal of one or
more directors by any person or group other than a solicitation for the
election of one or more directors by or on behalf of the board of
directors).
"Closing Date" means the first date all the conditions precedent in Section
4.01 are satisfied or waived in accordance with Section 10.01.
"Code" means the Internal Revenue Code of 1986.
"Commitment" means, as to each Lender, its obligation to (a) make Committed
Loans to the Borrowers pursuant to Section 2.01, (b) purchase participations in
L/C Obligations, and (c) purchase participations in Swing Line Loans, in an
aggregate principal amount at any one time outstanding not to exceed the amount
set forth opposite such Lender's name on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable,
as such amount may be adjusted from time to time in accordance with this
Agreement.
"Committed Borrowing" means a borrowing consisting of simultaneous
Committed Loans of the same Type and, in the case of Eurodollar Rate Loans,
having the same Interest Period made by each of the Lenders pursuant to Section
2.01.
"Committed Loan" has the meaning specified in Section 2.01.
"Committed Loan Notice" means a notice of (a) a Committed Borrowing, (b) a
conversion of Committed Loans from one Type to the other, or (c) a continuation
of Eurodollar Rate Loans, pursuant to Section 2.02(a), which, if in writing,
shall be substantially in the form of Exhibit A.
"Compliance Certificate" means a certificate substantially in the form of
Exhibit D.
"Consolidated EBITDA" means, for any period, for B&N and its Subsidiaries
on a consolidated basis, an amount equal to Consolidated Net Income for such
period plus (a) the Net Proceeds to B&N and its Subsidiaries during such period
upon exercise of any rights in respect of Equity Interests issued to directors,
officers and employees of B&N or any of its Subsidiaries, plus (b) the following
to the extent deducted in calculating such Consolidated Net Income: (i)
Consolidated Total Interest Expense for such period, (ii) the provision for
Federal, state, local and foreign income taxes payable by B&N and its
Subsidiaries for such period, (iii) depreciation and amortization expense of B&N
and its Subsidiaries for such period, (iv) extraordinary non-cash losses and,
without duplication, nonrecurring non-cash losses, in each case to the extent
such losses have not been and will not become cash losses in a later fiscal
period, and (v) expenses deducted in such period resulting from the issuance of
Equity Interests permitted hereunder, provided that such expenses are and will
be non-cash items in the period when taken and in all later fiscal periods.
"Consolidated EBITDAR" means, for any period for B&N and its Subsidiaries
on a consolidated basis, an amount equal to Consolidated EBITDA for such period,
plus Consolidated Rent Expense for such period.
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"Consolidated Fixed Charge Coverage Ratio" means, as of the last day of any
fiscal quarter of B&N, the ratio of (a) Consolidated EBITDAR for the four fiscal
quarters ending on such date to (b) Consolidated Fixed Charges for such four
fiscal quarters.
"Consolidated Fixed Charges" means, for any period, for B&N and its
Subsidiaries on a consolidated basis, the sum of (a) Consolidated Total Interest
Expense and (b) Consolidated Rent Expense.
"Consolidated Funded Indebtedness" means, as of any date of determination,
for B&N and its Subsidiaries on a consolidated basis, the sum of (a) the
outstanding principal amount of all obligations, whether current or long-term,
for borrowed money (including Obligations hereunder) and all obligations
evidenced by bonds, debentures, notes, loan agreements or other similar
instruments, (b) all purchase money Indebtedness, (c) all direct or contingent
obligations arising under letters of credit (including standby and commercial),
bankers' acceptances, bank guaranties, surety bonds and similar instruments, (d)
all obligations in respect of the deferred purchase price of property or
services (other than trade accounts payable in the ordinary course of business),
(e) Attributable Indebtedness in respect of Capitalized Leases and Synthetic
Lease Obligations, (f) without duplication, all Guarantees with respect to
outstanding Indebtedness of the types specified in clauses (a) through (e) above
of Persons other than B&N or any Subsidiary, and (g) all Indebtedness of the
types referred to in clauses (a) through (f) above of any partnership or joint
venture (other than a joint venture that is itself a corporation or limited
liability company) in which B&N or a Subsidiary is a general partner or joint
venturer, unless such Indebtedness is expressly made non-recourse to B&N or such
Subsidiary.
"Consolidated Leverage Ratio" means, as of the last day of any fiscal
quarter of B&N, the ratio of (a) Consolidated Funded Indebtedness as of such
date to (b) Consolidated EBITDA for the four fiscal quarters ending on such
date.
"Consolidated Net Income" means, for any period, for B&N and its
Subsidiaries on a consolidated basis, the net income of B&N and its Subsidiaries
(excluding extraordinary gains but including extraordinary losses) for that
period.
"Consolidated Rent Expense" means, for any period, the aggregate rental
expenses payable by B&N and the Subsidiaries on a consolidated basis for such
period (including percentage rent) under any operating lease classified as such
under GAAP, but not including any amount included in the definition of
"Consolidated Total Interest Expense."
"Consolidated Tangible Net Worth" means, as of any date of determination,
for B&N and its Subsidiaries on a consolidated basis, Shareholders' Equity of
B&N and its Subsidiaries on that date minus the Intangible Assets of B&N and its
Subsidiaries on that date.
"Consolidated Total Assets" means, as of any date on which the amount
thereof is to be determined, the net book value of all assets of B&N and its
Subsidiaries as determined on a consolidated basis.
"Consolidated Total Interest Expense" means, for any period, for B&N and
its Subsidiaries on a consolidated basis, all interest and all amortization of
debt discount and expense (including commitment fees, letter of credit fees,
balance deficiency fees and similar
6
expense) on all Indebtedness of B&N and the Subsidiaries on a consolidated basis
(including outstanding letters of credit), paid or required to be paid during
such period, all as determined in accordance with GAAP, together with the
portion of rent expense of B&N and its Subsidiaries with respect to such period
(x) under Capitalized Leases that would be treated as interest under GAAP and
(y) under Synthetic Leases that would be treated as interest under GAAP were
such leases treated as Capitalized Leases.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Control" means 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 ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Cost of Acquisition" means, with respect to any Acquisition, as at the
date of entering into any agreement therefor, the sum of the following (without
duplication): (i) the value of the Equity Interests of B&N or any Subsidiary to
be transferred in connection therewith, (ii) the amount of any cash and fair
market value of other property (excluding property described in clause (i) and
the unpaid principal amount of any debt instrument) given as consideration,
(iii) the amount (determined by using the face amount or the amount payable at
maturity, whichever is greater) of any Indebtedness incurred, assumed or
acquired by B&N or any Subsidiary in connection with such Acquisition, (iv) all
additional purchase price amounts in the form of earnouts and other contingent
obligations that should be recorded on the financial statements of B&N and its
Subsidiaries in accordance with GAAP, (v) all amounts paid in respect of
covenants not to compete, consulting agreements that should be recorded on
financial statements of B&N and its Subsidiaries in accordance with GAAP, and
other similar affiliated contracts in connection with such Acquisition, (vi) the
aggregate fair market value of all other consideration given by B&N or any
Subsidiary in connection with such Acquisition, and (vii) out of pocket
transaction costs for the services and expenses of attorneys, accountants and
other consultants incurred in effecting such transaction, and other similar
transaction costs so incurred. For purposes of determining the Cost of
Acquisition for any transaction, (A) the Equity Interests of B&N shall be valued
(I) in the case of any Equity Interests then designated as a national market
system security by the National Association of Securities Dealers, Inc.
("NASDAQ") or is listed on a national securities exchange, the average of the
last reported bid and ask quotations or the last prices reported thereon, and
(II) with respect to any other Equity Interests, as determined by the Board of
Directors of B&N, (B) the Equity Interests of any Subsidiary shall be valued as
determined by the Board of Directors of such Subsidiary, and (C) with respect to
any Acquisition accomplished pursuant to the exercise of options or warrants or
the conversion of securities, the Cost of Acquisition shall include both the
cost of acquiring such option, warrant or convertible security as well as the
cost of exercise or conversion.
"Credit Extension" means each of the following: (a) a Borrowing and (b) an
L/C Credit Extension.
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"Debtor Relief Laws" means the Bankruptcy Code of the United States, and
all other liquidation, conservatorship, bankruptcy, assignment for the benefit
of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.
"Default" means any event or condition that constitutes an Event of Default
or that, with the giving of any notice, the passage of time, or both, would be
an Event of Default.
"Default Rate" means (a) when used with respect to Obligations other than
Letter of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) the
Applicable Rate, if any, applicable to Base Rate Loans plus (iii) 2% per annum;
provided, however, that with respect to a Eurodollar Rate Loan, the Default Rate
shall be an interest rate equal to the interest rate (including any Applicable
Rate) otherwise applicable to such Loan plus 2% per annum, and (b) when used
with respect to Letter of Credit Fees, a rate equal to the Applicable Rate plus
2% per annum.
"Defaulting Lender" means any Lender that (a) has failed to fund any
portion of the Committed Loans, participations in L/C Obligations or
participations in Swing Line Loans 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 the 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.
"Designated Co-Borrower" means each of (i) ▇▇▇▇▇▇ & ▇▇▇▇▇ Booksellers,
Inc., (ii) ▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ llc, (iii) ▇. ▇▇▇▇▇▇ Bookseller, LLC, (iv) each
other direct or indirect Material Subsidiary of B&N listed on Schedule 1.01 and
(v) each other direct or indirect Material Subsidiary of B&N which B&N
designates as a Designated Co-Borrower from time to time in accordance with
Section 2.15, but excluding any Designated Co-Borrower released in accordance
with Section 10.01.
"Designated Borrower Notice" has the meaning specified in Section 2.15.
"Designated Borrower Request and Assumption Agreement" has the meaning
specified in Section 2.15.
"Disposition" or "Dispose" means the sale, transfer, license, lease or
other disposition (including any sale and leaseback transaction) of any property
by any Person, including any sale, assignment, transfer or other disposal, with
or without recourse, of any notes or accounts receivable or any rights and
claims associated therewith.
"Dollar" and "$" mean lawful money of the United States.
"Domestic Subsidiary" means any Subsidiary that is organized under the laws
of any political subdivision of the United States.
8
"Eligible Assignee" means (a) a Lender; (b) an Affiliate of a Lender; (c)
an Approved Fund; and (d) any other Person (other than a natural person)
approved by (i) the Administrative Agent, the L/C Issuer and the Swing Line
Lender, and (ii) unless an Event of Default has occurred and is continuing, B&N
(each such approval not to be unreasonably withheld or delayed); provided that
notwithstanding the foregoing, "Eligible Assignee" shall not include B&N or any
of B&N's Affiliates or Subsidiaries. Notwithstanding the foregoing, so long as
no Event of Default has occurred and is continuing, unless B&N otherwise
consents, an Eligible Assignee must be:
(a) a commercial bank or other financial institution organized under
the laws of the United States, or any state thereof or the District of
Columbia, and having total assets in excess of $5,000,000,000; or
(b) a commercial bank organized under the laws of any other country
which is a member of the Organization for Economic Cooperation and
Development (the "OECD"), or a political subdivision of any such country,
or the central bank of any country which is a member of the OECD, and
having total assets in excess of $5,000,000,000 and a combined capital and
surplus of at least $1,000,000,000.
"Environmental Laws" means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of B&N, any other Loan Party or any of their
respective Subsidiaries directly or indirectly resulting from or based upon (a)
violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of
any Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.
"Equity Interests" means, with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests in)
such Person, all of the securities convertible into or exchangeable for shares
of capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are outstanding on any date of determination.
"ERISA" means the Employee Retirement Income Security Act of 1974.
9
"ERISA Affiliate" means any trade or business (whether or not incorporated)
under common control with B&N within the meaning of Section 414(b) or (c) of the
Code (and Sections 414(m) and (o) of the Code for purposes of provisions
relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension Plan;
(b) a withdrawal by B&N or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer
(as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is
treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by B&N or any ERISA Affiliate from a Multiemployer Plan or
notification that a Multiemployer Plan is in reorganization; (d) the filing of a
notice of intent to terminate, the treatment of a Plan amendment as a
termination under Sections 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e)
an event or condition which constitutes grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any Pension
Plan or Multiemployer Plan; or (f) the imposition of any liability under Title
IV of ERISA, other than for PBGC premiums due but not delinquent under Section
4007 of ERISA, upon B&N or any ERISA Affiliate.
"Eurodollar Rate" means, for any Interest Period with respect to a
Eurodollar Rate Loan, the rate per annum equal to the British Bankers
Association LIBOR Rate ("BBA LIBOR"), as published by Reuters (or other
commercially available source providing quotations of BBA LIBOR as designated by
the Administrative Agent from time to time) at approximately 11:00 a.m., London
time, two Business Days prior to the commencement of such Interest Period, for
Dollar deposits (for delivery on the first day of such Interest Period) with a
term equivalent to such Interest Period. If such rate is not available at such
time for any reason, then the "Eurodollar Rate" for such Interest Period shall
be the rate per annum determined by the Administrative Agent to be the rate 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 Loan being
made, continued or converted by Bank of America and with a term equivalent to
such Interest Period would be offered by Bank of America's London Branch to
major banks in the London interbank eurodollar market at their request at
approximately 11:00 a.m. (London time) two Business Days prior to the
commencement of such Interest Period.
"Eurodollar Rate Loan" means a Committed Loan that bears interest at a rate
based on the Eurodollar Rate.
"Event of Default" has the meaning specified in Section 8.01.
"Excluded Taxes" means, with respect to the Administrative Agent, any
Lender, the L/C Issuer or any other recipient of any payment to be made by or on
account of any obligation of any Borrower hereunder, (a) taxes imposed on or
measured by its overall net income (however denominated), and franchise taxes
imposed on it (in lieu of net income taxes), by the jurisdiction (or any
political subdivision thereof) under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable Lending Office is located, (b) any branch
profits taxes imposed by the United States or any similar tax imposed by any
other jurisdiction in which such Borrower is located and (c) in the case of a
Foreign Lender (other than an assignee pursuant to a request by B&N under
Section 10.13), any
10
withholding tax that is imposed on amounts payable to such Foreign Lender at the
time such Foreign Lender becomes a party hereto (or designates a new Lending
Office) or is attributable to such Foreign Lender's failure or inability (other
than as a result of a Change in Law) to comply with Section 3.01(e), except to
the extent that such Foreign Lender (or its assignor, if any) was entitled, at
the time of designation of a new Lending Office (or assignment), to receive
additional amounts from the applicable Borrower with respect to such withholding
tax pursuant to Section 3.01(a).
"Existing
Credit Agreement" means that certain Amended and Restated
Revolving Credit and Term Loan Agreement dated as of August 10, 2004 among B&N,
certain Subsidiaries of B&N, Bank of America, as administrative agent, ING
Capital LLC, Wachovia Bank, National Association, SunTrust Bank and CitiCorp
USA, Inc., as co-documentation agents, and a syndicate of lenders, as amended
through the date hereof.
"Existing Letters of Credit" means those Letters of Credit set forth on
Schedule 1.01(b).
"Federal Funds Rate" means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members 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 (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of
America on such day on such transactions as determined by the Administrative
Agent.
"Fee Letter" means collectively, or individually as the context may
require, the letter agreement, dated May 4, 2005, among B&N, the Administrative
Agent, JPMorgan Chase Bank, N.A., as syndication agent and the Arrangers, and
the letter agreement, dated May 4, 2005, among B&N and the Administrative Agent.
"Foreign Lender" means, with respect to any Borrower, any Lender that is
organized under the laws of a jurisdiction other than that in which such
Borrower is resident for tax purposes. For purposes of this definition, the
United States, each State thereof and the District of Columbia shall be deemed
to constitute a single jurisdiction.
"Foreign Subsidiary" means any Subsidiary organized under the laws of a
political subdivision outside of the United States.
"FRB" means the Board of Governors of the Federal Reserve System of the
United States.
"Fund" means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
11
"GAAP" means generally accepted accounting principles in the United States
set forth in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.
"Governmental Authority" means the government of the United States or any
other nation, or of any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government (including
any supra-national bodies such as the European Union or the European Central
Bank).
"Granting Lender" has the meaning specified in Section 10.06(h).
"Guarantee" means, as to any Person, (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect, (i)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien), but excluding in all
cases endorsements for collection or deposit in the ordinary course of business.
The amount of any Guarantee shall be deemed to be an amount equal to the stated
or determinable amount of the related primary obligation, or portion thereof, in
respect of which such Guarantee is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith. The term "Guarantee" as a verb has a
corresponding meaning.
"Guarantors" means collectively, all Material Subsidiaries of B&N executing
a Subsidiary Guaranty Agreement on the Closing Date and all other Subsidiaries
that enter into a Guaranty Joinder Agreement pursuant to Section 6.12.
"Guaranty Joinder Agreement" means each Guaranty Joinder Agreement,
substantially in the form thereof attached to the Subsidiary Guaranty Agreement,
executed and delivered by a Guarantor to the Administrative Agent pursuant to
Section 6.12, as amended, modified, supplemented or amended and restated.
12
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Indebtedness" means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes, loan
agreements or other similar instruments;
(b) all direct or contingent obligations of such Person arising under
letters of credit (including standby and commercial), bankers' acceptances,
bank guaranties, surety bonds and similar instruments;
(c) net obligations of such Person under any Swap Contract;
(d) all obligations of such Person to pay the deferred purchase price
of property or services (other than trade accounts payable in the ordinary
course of business);
(e) indebtedness (excluding prepaid interest thereon) secured by a
Lien on property owned or being purchased by such Person (including
indebtedness arising under conditional sales or other title retention
agreements), whether or not such indebtedness shall have been assumed by
such Person or is limited in recourse;
(f) Capitalized Leases and Synthetic Lease Obligations;
(g) all obligations of such Person to purchase, redeem, retire,
defease or otherwise make any payment in respect of any Equity Interest in
such Person or any other Person, valued, in the case of a redeemable
preferred interest, at the greater of its voluntary or involuntary
liquidation preference plus accrued and unpaid dividends; and
(h) all Guarantees of such Person in respect of any of the foregoing.
For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness 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 Indebtedness is expressly
made non-recourse to such Person. The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date. The amount of any Capitalized Lease or Synthetic Lease
Obligation as of any date shall be deemed to be the amount of Attributable
Indebtedness in respect thereof as of such date.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
13
"Indemnitees" has the meaning specified in Section 10.04(b).
"Information" has the meaning specified in Section 10.07.
"Intangible Assets" means assets that are considered to be intangible
assets under GAAP, including customer lists, goodwill, computer software,
copyrights, trade names, trademarks, patents, franchises, licenses, unamortized
deferred charges, unamortized debt discount and capitalized research and
development costs.
"Interest Payment Date" means, (a) as to any Loan other than a Base Rate
Loan, the last day of each Interest Period applicable to such Loan and the
Maturity Date; provided, however, that if any Interest Period for a Eurodollar
Rate Loan exceeds three months, the respective dates that fall every three
months after the beginning of such Interest Period shall also be Interest
Payment Dates; and (b) as to any Base Rate Loan (including a Swing Line Loan),
the last Business Day of each March, June, September and December and the
Maturity Date.
"Interest Period" means, as to each Eurodollar Rate Loan, the period
commencing on the date such Eurodollar Rate Loan is disbursed or converted to or
continued as a Eurodollar Rate Loan and ending on the date one, two, three or
six months thereafter, as selected by B&N in its Committed Loan Notice or such
other period that is twelve months or less requested by B&N and consented to by
all the Lenders; provided that:
(i) any Interest Period that would otherwise end on a day that is not
a Business Day shall be extended to the next succeeding Business Day unless
such Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Business Day;
(ii) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall end on
the last Business Day of the calendar month at the end of such Interest
Period; and
(iii) no Interest Period shall extend beyond the Maturity Date.
"Internal Control Event" means, with respect to B&N or any Subsidiary, a
determination by management or the Audit Committee of the Board of Directors of
B&N or by B&N's Public Accountants that (i) a material weakness in internal
controls over financial reporting, as described in PCAOB Auditing Standard No.
2, exists in B&N's or any Subsidiary's internal control over financial
reporting, or (ii) a member of the senior management of B&N or any Subsidiary
has committed an act of fraud of any magnitude.
"Investment" means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of capital stock or other securities of another Person, (b) a loan,
advance or capital contribution to, Guarantee or assumption of debt of, or
purchase or other acquisition of any other debt or equity participation or
interest in, another Person (excluding any such loan, advance or contribution
having a term not exceeding 150 days representing the purchase price of
inventory or supplies sold by such Person in the ordinary course of business),
including any partnership or joint venture interest in
14
such other Person and any arrangement pursuant to which the investor Guarantees
Indebtedness of such other Person, (c) the purchase or other acquisition (in one
transaction or a series of transactions) of assets of another Person that
constitute a business unit or (d) the purchase or acquisition of real estate
held for sale or investment. For purposes of covenant compliance, the amount of
any Investment shall be the amount actually invested, without adjustment for
subsequent increases or decreases in the value of such Investment.
"IP Rights" has the meaning specified in Section 5.17.
"IRS" means the United States Internal Revenue Service.
"ISP" means, with respect to any Letter of Credit, the "International
Standby Practices 1998" published by the Institute of International Banking Law
& Practice (or such later version thereof as may be in effect at the time of
issuance).
"Issuer Documents" means with respect to any Letter of Credit, the Letter
of Credit Application, and any other document, agreement and instrument entered
into by the L/C Issuer and B&N (or any Subsidiary) or in favor the L/C Issuer
and relating to any such Letter of Credit.
"Laws" means, collectively, all applicable international, foreign, Federal,
state and local statutes, treaties, rules, guidelines, regulations, ordinances,
codes and administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.
"L/C Advance" means, with respect to each Lender, such Lender's funding of
its participation in any L/C Borrowing in accordance with its Applicable
Percentage.
"L/C Borrowing" means an extension of credit resulting from a drawing under
any Letter of Credit which has not been reimbursed on the date when made or
refinanced as a Committed Borrowing.
"L/C Credit Extension" means, with respect to any Letter of Credit, the
issuance thereof or extension of the expiry date thereof, or the increase of the
amount thereof.
"L/C Issuer" means Bank of America in its capacity as issuer of Letters of
Credit hereunder, or any successor issuer of Letters of Credit hereunder.
"L/C Obligations" means, as at any date of determination, the aggregate
amount available to be drawn under all outstanding Letters of Credit plus the
aggregate of all Unreimbursed Amounts, including all L/C Borrowings. For
purposes of computing the amount available to be drawn under any Letter of
Credit, the amount of such Letter of Credit shall be determined in accordance
with Section 1.06. For all purposes of this Agreement, if on any date of
determination a Letter of Credit has expired by its terms but any amount may
still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP,
such Letter of Credit shall be deemed to be "outstanding" in the amount so
remaining available to be drawn.
15
"Lender" has the meaning specified in the introductory paragraph hereto
and, as the context requires, includes the Swing Line Lender.
"Lending Office" means, as to any Lender, the office or offices of such
Lender described as such in such Lender's Administrative Questionnaire, or such
other office or offices as a Lender may from time to time notify B&N and the
Administrative Agent.
"Letter of Credit" means any letter of credit issued hereunder and shall
include the Existing Letter[s] of Credit. A Letter of Credit may be a commercial
letter of credit or a standby letter of credit.
"Letter of Credit Application" means an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in use
by the L/C Issuer.
"Letter of Credit Expiration Date" means the day that is five days prior to
the Maturity Date then in effect (or, if such day is not a Business Day, the
next preceding Business Day).
"Letter of Credit Fee" has the meaning specified in Section 2.03(i).
"Letter of Credit Sublimit" means an amount equal to $100,000,000. The
Letter of Credit Sublimit is part of, and not in addition to, the Aggregate
Commitments.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement in the nature of
a security interest of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).
"Loan" means an extension of credit by a Lender to any Borrower under
Article II in the form of a Committed Loan or a Swing Line Loan.
"Loan Documents" means this Agreement, each Designated Co-Borrower Request
and Assumption Agreement, each Note, each Issuer Document, the Fee Letter and
the Subsidiary Guaranty Agreement.
"Loan Parties" means, collectively, each Borrower and each Guarantor.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, liabilities
(actual or contingent), condition (financial or otherwise) of B&N and its
Subsidiaries taken as a whole; (b) a material impairment of the ability of the
Loan Parties, taken as a whole, to perform their obligations under any Loan
Document; or (c) a material adverse effect upon the enforceability against any
Loan Party of any Loan Document to which it is a party.
"Material Subsidiary" means, each direct or indirect Subsidiary of B&N that
(i) has total assets (including equity interests in other Subsidiaries) of equal
to or greater than 10% of Consolidated Total Assets (calculated as of the most
recent fiscal period with respect to which
16
the Administrative Agent shall have received financial statements required to be
delivered pursuant to Sections 6.01(a) or (b) (or if prior to delivery of any
financial statements pursuant to such Sections, then calculated based on the
Audited Financial Statements) (the "Required Financial Information")), or (ii)
has revenues (on a consolidated basis with its Subsidiaries) equal to or greater
than 10% of the total revenues (on a consolidated basis) of B&N and its
Subsidiaries (calculated for the most recent period for which the Administrative
Agent has received the Required Financial Information); provided, however, that
notwithstanding the foregoing, the term "Material Subsidiaries" shall mean
Subsidiaries of B&N that together have assets equal to not less than 90% of
Consolidated Total Assets (calculated as described above) and revenues of not
less than 90% of the total revenues of B&N and its Subsidiaries (calculated as
described above); provided further that if more than one combination of
Subsidiaries satisfies such threshold, then those Subsidiaries so determined to
be "Material Subsidiaries" shall be specified by B&N in writing to the
Administrative Agent.
"Maturity Date" means June 16, 2010.
"Multiemployer Plan" means any employee benefit plan of the type described
in Section 4001(a)(3) of ERISA, to which B&N or any ERISA Affiliate makes or is
obligated to make contributions, or during the preceding three plan years, has
made or been obligated to make contributions.
"Net Proceeds" means, with respect to the sale, transfer or other
disposition by any Loan Party of any Equity Interests to any Person other than
any Loan Party, the amount of cash (freely convertible into Dollars) received by
such Loan Party, from such sale or other disposition (including, without
limitation, any tax refund or tax benefit resulting from a loss on such sale or
other disposition as and when such tax benefit is realized), after (i) provision
for all income or other taxes of B&N and its Subsidiaries measured by or
resulting from such sale or other disposition, (ii) payment of all reasonable
third-party brokerage commissions and other reasonable out-of-pocket fees and
expenses to third parties related to such sale or other disposition, and (iii)
deduction of appropriate amounts to be provided by such Loan Party as a reserve,
in accordance with GAAP, against any liabilities associated with such sale,
transfer or other disposition and retained by such Loan Party after such sale or
other disposition.
"Note" means a promissory note made by the Borrowers in favor of a Lender
evidencing Loans made by such Lender, substantially in the form of Exhibit C.
"Obligations" means all advances to, and debts, liabilities, obligations,
covenants and duties of, any Loan Party arising under any Loan Document or
otherwise with respect to any Loan or Letter of Credit, or arising under any
Related Credit Arrangement, whether direct or indirect (including those acquired
by assumption), absolute or contingent, due or to become due, now existing or
hereafter arising and including interest and fees that accrue after the
commencement by or against any Loan Party or any Affiliate thereof of any
proceeding under any Debtor Relief Laws naming such Person as the debtor in such
proceeding, regardless of whether such interest and fees are allowed claims in
such proceeding.
"Organization Documents" means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents
17
with respect to any non-U.S. jurisdiction); (b) with respect to any limited
liability company, the certificate or articles of formation or organization and
operating agreement; and (c) with respect to any partnership, joint venture,
trust or other form of business entity, the partnership, joint venture or other
applicable agreement of formation or organization and any agreement, instrument,
filing or notice with respect thereto filed in connection with its formation or
organization with the applicable Governmental Authority in the jurisdiction of
its formation or organization and, if applicable, any certificate or articles of
formation or organization of such entity.
"Other Taxes" means all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any
payment made hereunder or under any other Loan Document or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement or any
other Loan Document.
"Outstanding Amount" means (i) with respect to Committed Loans and Swing
Line Loans on any date, the aggregate outstanding principal amount thereof after
giving effect to any borrowings and prepayments or repayments of Committed Loans
and Swing Line Loans, as the case may be, occurring on such date; and (ii) with
respect to any L/C Obligations on any date, the amount of such L/C Obligations
on such date after giving effect to any L/C Credit Extension occurring on such
date and any other changes in the aggregate amount of the L/C Obligations as of
such date, including as a result of any reimbursements by any Borrower of
Unreimbursed Amounts.
"Participant" has the meaning specified in Section 10.06(d).
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means any "employee pension benefit plan" (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by B&N or any ERISA
Affiliate or to which B&N or any ERISA Affiliate contributes or has an
obligation to contribute, or in the case of a multiple employer or other plan
described in Section 4064(a) of ERISA, has made contributions at any time during
the immediately preceding three plan years.
"Permitted Acquisition" means any Acquisition that is permitted by the
terms of Section 7.12.
"Person" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
"Plan" means any "employee benefit plan" (as such term is defined in
Section 3(3) of ERISA) established by B&N or, with respect to any such plan that
is subject to Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate.
"Platform" has the meaning specified in Section 6.02.
"Public Accountant" has the meaning specified in Section 6.01(a).
18
"Register" has the meaning specified in Section 10.06(c).
"Registered Public Accounting Firm" has the meaning specified in the
Securities Laws and shall be independent of the Borrowers as prescribed in the
Securities Laws.
"Related Parties" means, with respect to any Person, such Person's
Affiliates and the partners, directors, officers, employees, agents and advisors
of such Person and of such Person's Affiliates.
"Related Credit Arrangement" means, collectively, any Related Swap
Contracts and any Related Treasury Management Arrangements.
"Related Swap Contract" means one or more Swap Contracts between any
Borrower and a Lender or any Affiliate of a Lender and not prohibited by the
terms of the Loan Documents.
"Related Treasury Management Arrangement" means all arrangements for the
delivery of treasury management services to or for the benefit of any Loan Party
which are entered into or maintained with the Lender or an Affiliate of the
Lender.
"Relevant Date" means (i) in the case of each Lender signatory hereto on
the Closing Date, the Closing Date, and (ii) in the case of each other Lender,
the effective date of the Assignment and Acceptance or other document pursuant
to which it becomes a Lender.
"Reportable Event" means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.
"Request for Credit Extension" means (a) with respect to a Borrowing,
conversion or continuation of Committed Loans, a Committed Loan Notice, (b) with
respect to an L/C Credit Extension, a Letter of Credit Application, and (c) with
respect to a Swing Line Loan, a Swing Line Loan Notice.
"Required Lenders" means, as of any date of determination, Lenders having
more than 50% of the Aggregate Commitments or, if the commitment of each Lender
to make Loans and the obligation of the L/C Issuer to make L/C Credit Extensions
have been terminated pursuant to Section 8.02, Lenders holding in the aggregate
more than 50% of the Total Outstandings (with the aggregate amount of each
Lender's risk participation and funded participation in L/C Obligations and
Swing Line Loans being deemed "held" by such Lender for purposes of this
definition); provided that the Commitment of, and the portion of the Total
Outstandings held or deemed held by, any Defaulting Lender shall be excluded for
purposes of making a determination of Required Lenders.
"Responsible Officer" means the chief executive officer, president, chief
financial officer, vice president-finance, vice president-corporate finance,
treasurer, assistant treasurer or controller of the applicable Loan Party. Any
document delivered hereunder that is signed by a Responsible Officer of a Loan
Party shall be conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action on the part of such Loan Party
subject of such document and such Responsible Officer shall be conclusively
presumed to have acted on behalf of such Loan Party.
19
"Restricted Payment" means any dividend or other distribution (whether in
cash, securities or other property) with respect to any capital stock or other
Equity Interest of B&N or any Subsidiary, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any such capital stock or other Equity Interest, or on account of
any return of capital to B&N's stockholders, partners or members (or the
equivalent Person thereof).
"Sale Leaseback Amount" means, with respect to any fiscal year, an amount
equal to (i) $50,000,000 plus, beginning with fiscal year 2006, (ii) the excess
of (x) $50,000,000 over (y) the value of the arrangements described in Section
7.13 actually entered into by B&N and its Subsidiaries for the immediately prior
fiscal year.
"▇▇▇▇▇▇▇▇-▇▇▇▇▇" means the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002.
"SEC" means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
"Securities Laws" means the Securities Act of 1933, the Securities Exchange
Act of 1934, ▇▇▇▇▇▇▇▇-▇▇▇▇▇ and the applicable accounting and auditing
principles, rules, standards and practices promulgated, approved or incorporated
by the SEC or the Public Company Accounting Oversight Board, as each of the
foregoing may be amended and in effect on any applicable date hereunder.
"Shareholders' Equity" means, as of any date of determination, consolidated
shareholders' equity of B&N and its Subsidiaries as of that date determined in
accordance with GAAP.
"SPC" has the meaning specified in Section 10.06(h).
"Subsidiary" of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
"Subsidiary" or to "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of
B&N.
"Subsidiary Guaranty Agreement" means that certain Subsidiary Guaranty
Agreement dated as of the date hereof among the Guarantors and the
Administrative Agent (on behalf of the Lenders and others as therein provided)
substantially in the form of Exhibit F, as supplemented from time to time by the
execution and delivery of Guaranty Joinder Agreements pursuant to Section 6.12,
as from time to time the same may be otherwise supplemented or amended,
modified, amended and restated or replaced.
"Swap Contract" means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options,
20
forward commodity contracts, equity or equity index swaps or options, bond or
bond price or bond index swaps or options or forward bond or forward bond price
or forward bond index transactions, interest rate options, forward foreign
exchange transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap transactions,
currency options, spot contracts, or any other similar transactions or any
combination of any of the foregoing (including any options to enter into any of
the foregoing), whether or not any such transaction is governed by or subject to
any master agreement, and (b) any and all transactions of any kind, and the
related confirmations, which are subject to the terms and conditions of, or
governed by, any form of master agreement published by the International Swaps
and Derivatives Association, Inc., any International Foreign Exchange Master
Agreement, or any other similar master agreement (any such master agreement,
together with any related schedules, a "Master Agreement"), including any such
obligations or liabilities under any Master Agreement.
"Swap Termination Value" means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts 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 Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).
"Swing Line" means the revolving credit facility made available by the
Swing Line Lender pursuant to Section 2.04.
"Swing Line Borrowing" means a borrowing of a Swing Line Loan pursuant to
Section 2.04.
"Swing Line Lender" means Bank of America in its capacity as provider of
Swing Line Loans, or any successor swing line lender hereunder.
"Swing Line Loan" has the meaning specified in Section 2.04(a).
"Swing Line Loan Notice" means a notice of a Swing Line Borrowing pursuant
to Section 2.04(b), which, if in writing, shall be substantially in the form of
Exhibit B.
"Swing Line Sublimit" means an amount equal to the lesser of (a)
$75,000,000 and (b) the Aggregate Commitments. The Swing Line Sublimit is part
of, and not in addition to, the Aggregate Commitments.
"Synthetic Lease Obligation" means the monetary obligation of a Person
under (a) a so-called synthetic, off-balance sheet or tax retention lease, or
(b) an agreement for the use or possession of property creating obligations that
do not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).
21
"Taxes" means all present or future taxes, levies, imposts, duties,
deductions, withholdings, assessments, fees or other charges imposed by any
Governmental Authority, including any interest, additions to tax or penalties
applicable thereto.
"Threshold Amount" means $35,000,000.
"Total Outstandings" means the aggregate Outstanding Amount of all Loans
and all L/C Obligations.
"Type" means, with respect to a Committed Loan, its character as a Base
Rate Loan or a Eurodollar Rate Loan.
"Unfunded Pension Liability" means the excess of a Pension Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Pension Plan's assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.
"United States" and "U.S." mean the United States of America.
"Unreimbursed Amount" has the meaning specified in Section 2.03(c)(i).
1.02 Other Interpretive Provisions. With reference to this Agreement and
each other Loan Document, unless otherwise specified herein or in such other
Loan Document:
(a) The definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words
"include," "includes" and "including" shall be deemed to be followed by the
phrase "without limitation." The word "will" shall be construed to have the same
meaning and effect as the word "shall." Unless the context requires otherwise,
(i) any definition of or reference to any agreement, instrument or other
document (including any Organization Document) shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein or in any other Loan
Document), (ii) any reference herein to any Person shall be construed to include
such Person's successors and assigns, (iii) the words "herein," "hereof" and
"hereunder," and words of similar import when used in any Loan Document, shall
be construed to refer to such Loan Document in its entirety and not to any
particular provision thereof, (iv) all references in a Loan Document to
Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, the Loan Document in
which such references appear unless otherwise specified, (v) any reference to
any law shall include all statutory and regulatory provisions consolidating,
amending, replacing or interpreting such law and any reference to any law or
regulation shall, unless otherwise specified, refer to such law or regulation as
amended, modified or supplemented from time to time, and (vi) the words "asset"
and "property" shall be construed to have the same meaning and effect and to
refer to any and all tangible and intangible assets and properties, including
cash, securities, accounts and contract rights.
22
(b) In the computation of periods of time from a specified date to a later
specified date, the word "from" means "from and including;" the words "to" and
"until" each mean "to but excluding;" and the word "through" means "to and
including."
(c) Section headings herein and in the other Loan Documents are included
for convenience of reference only and shall not affect the interpretation of
this Agreement or any other Loan Document.
1.03 Accounting Terms. (a) Generally. All accounting terms not specifically
or completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations)
required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP applied on a consistent basis, as in effect from time to
time, applied in a manner consistent with that used in preparing the Audited
Financial Statements, except as otherwise specifically prescribed herein.
(b) Changes in GAAP. If at any time any change in GAAP would affect the
computation of any financial ratio or requirement set forth in any Loan
Document, and either B&N or the Required Lenders shall so request, the
Administrative Agent, the Lenders and B&N shall negotiate in good faith to amend
such ratio or requirement to preserve the original intent thereof in light of
such change in GAAP (subject to the approval of the Required Lenders); provided
that, until so amended, (i) such ratio or requirement shall continue to be
computed in accordance with GAAP prior to such change therein and (ii) B&N shall
provide to the Administrative Agent and the Lenders financial statements and
other documents required under this Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.
(c) Consolidation of Variable Interest Entities. All references herein to
consolidated financial statements of B&N and its Subsidiaries or to the
determination of any amount for B&N and its Subsidiaries on a consolidated basis
or any similar reference shall, in each case, be deemed to include each variable
interest entity that B&N is required to consolidate pursuant to FASB
Interpretation No. 46 - Consolidation of Variable Interest Entities: an
interpretation of ARB No. 51 (January 2003), or otherwise as required by GAAP,
as if such variable interest entity were a Subsidiary as defined herein.
1.04 Rounding. Any financial ratios required to be maintained by the
Borrowers pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).
1.05 Times of Day. Unless otherwise specified, all references herein to
times of day shall be references to Eastern time (daylight or standard, as
applicable).
1.06 Letter of Credit Amounts. Unless otherwise specified herein, the
amount of a Letter of Credit at any time shall be deemed to be the stated amount
of such Letter of Credit in effect at such time; provided, however, that with
respect to any Letter of Credit that, by its terms
23
or the terms of any Issuer Document related thereto, provides for one or more
automatic increases in the stated amount thereof, the amount of such Letter of
Credit shall be deemed to be the maximum stated amount of such Letter of Credit
after giving effect to all such increases, whether or not such maximum stated
amount is in effect at such time.
1.07 Covenant Adjustments.
(a) Covenant Acquisition Adjustments. Except as otherwise expressly
provided herein, for purposes of calculating the financial covenant in Section
7.11(b) for any period (or a portion of a period) that includes the date of the
consummation of any Permitted Acquisition, references to "B&N and its
Subsidiaries" shall include each acquired Person, or lines of business, as
applicable, and the EBITDA of such acquired Person or line of business (such
EBITDA to be formulated on the basis of the definition of Consolidated EBITDA
set forth herein), as if the Acquisition had been consummated on the first day
of any such period of measurement.
(b) Covenant Disposition Adjustments. Except as otherwise expressly
provided herein, for purposes of calculating the financial covenant in Section
7.11(b) for any period (or a portion of a period) that includes the date of any
Disposition of a Subsidiary or line of business, as applicable, Consolidated
EBITDA shall be determined on a historical pro forma basis to exclude the
results of operations of such Subsidiary or line of business, as applicable so
disposed.
1.08 Exclusion of Certain Subsidiaries. For purposes of Articles V, VI, VII
and VIII, in no event shall Calendar Club L.L.C. or BNW Canada Company or any of
their respective Subsidiaries be considered a Subsidiary (including without
limitation, for purposes of calculating the financial covenants in Section 7.11
and calculating Consolidated Total Assets and total revenues of B&N and its
Subsidiaries in the definition of "Material Subsidiary") or a Guarantor. In no
event shall Chelsea Insurance Company Ltd. be required to be a Guarantor.
ARTICLE II.
THE COMMITMENTS AND CREDIT EXTENSIONS
2.01 Committed Loans. Subject to the terms and conditions set forth herein,
each Lender severally agrees to make loans (each such loan, a "Committed Loan")
to the Borrowers from time to time, on any Business Day during the Availability
Period, in an aggregate amount not to exceed at any time outstanding the amount
of such Lender's Commitment; provided, however, that after giving effect to any
Committed Borrowing, (i) the Total Outstandings shall not exceed the Aggregate
Commitments, and (ii) the aggregate Outstanding Amount of the Committed Loans of
any Lender, plus such Lender's Applicable Percentage of the Outstanding Amount
of all L/C Obligations, plus such Lender's Applicable Percentage of the
Outstanding Amount of all Swing Line Loans shall not exceed such Lender's
Commitment. Within the limits of each Lender's Commitment, and subject to the
other terms and conditions hereof, the Borrowers may borrow under this Section
2.01, prepay under Section 2.05, and reborrow under this Section 2.01. Committed
Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided
herein.
24
2.02 Borrowings, Conversions and Continuations of Committed Loans.
(a) Each Committed Borrowing, each conversion of Committed Loans from one
Type to the other, and each continuation of Eurodollar Rate Loans shall be made
upon B&N's irrevocable notice to the Administrative Agent, which may be given by
telephone. Each such notice must be received by the Administrative Agent not
later than 1:00 p.m. (i) three Business Days prior to the requested date of any
Borrowing of, conversion to or continuation of Eurodollar Rate Loans or of any
conversion of Eurodollar Rate Loans to Base Rate Committed Loans, and (ii) on
the requested date of any Borrowing of Base Rate Committed Loans; provided,
however, that if B&N wishes to request Eurodollar Rate Loans having an Interest
Period other than one, two, three or six months in duration as provided in the
definition of "Interest Period", the applicable notice must be received by the
Administrative Agent not later than 1:00 p.m. four Business Days prior to the
requested date of such Borrowing, conversion or continuation, whereupon the
Administrative Agent shall give prompt notice to the Lenders of such request and
determine whether the requested Interest Period is acceptable to all of them.
Not later than 1:00 p.m., three Business Days before the requested date of such
Borrowing, conversion or continuation, the Administrative Agent shall notify B&N
(which notice may be by telephone) whether or not the requested Interest Period
has been consented to by all the Lenders. Each telephonic notice by B&N pursuant
to this Section 2.02(a) must be confirmed promptly by delivery to the
Administrative Agent of a written Committed Loan Notice, appropriately completed
and signed by a Responsible Officer of B&N (or a person designated by a
Responsible Officer in writing to the Administrative Agent from time to time as
having authority to execute such Committed Loan Notice, which writing shall
include the specimen signature of such designated person). Each Borrowing of,
conversion to or continuation of Eurodollar Rate Loans shall be in a principal
amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof. Except
as provided in Sections 2.03(c) and 2.04(c), each Borrowing of or conversion to
Base Rate Committed Loans shall be in a principal amount of $500,000 or a whole
multiple of $100,000 in excess thereof. Each Committed Loan Notice (whether
telephonic or written) shall specify (i) whether B&N is requesting a Committed
Borrowing, a conversion of Committed Loans from one Type to the other, or a
continuation of Eurodollar Rate Loans, (ii) the requested date of the Borrowing,
conversion or continuation, as the case may be (which shall be a Business Day),
(iii) the principal amount of Committed Loans to be borrowed, converted or
continued, (iv) the Type of Committed Loans to be borrowed or to which existing
Committed Loans are to be converted, and (v) if applicable, the duration of the
Interest Period with respect thereto. If B&N fails to specify a Type of
Committed Loan in a Committed Loan Notice or if B&N fails to give a timely
notice requesting a conversion or continuation, then the applicable Committed
Loans shall be made as, or converted to, Base Rate Loans. Any such automatic
conversion to Base Rate Loans shall be effective as of the last day of the
Interest Period then in effect with respect to the applicable Eurodollar Rate
Loans. If B&N requests a Borrowing of, conversion to, or continuation of
Eurodollar Rate Loans in any such Committed Loan Notice, but fails to specify an
Interest Period, it will be deemed to have specified an Interest Period of one
month.
(b) Following receipt of a Committed Loan Notice, the Administrative Agent
shall promptly notify each Lender of the amount of its Applicable Percentage of
the applicable Committed Loans, and if no timely notice of a conversion or
continuation is provided by B&N, the Administrative Agent shall notify each
Lender of the details of any automatic conversion to Base Rate Loans described
in the preceding subsection. In the case of a Committed Borrowing,
25
each Lender shall make the amount of its Committed Loan available to the
Administrative Agent in immediately available funds at the Administrative
Agent's Office not later than 2:00 p.m. on the Business Day specified in the
applicable Committed Loan Notice. Upon satisfaction of the applicable conditions
set forth in Section 4.02 (and, if such Borrowing is the initial Credit
Extension, Section 4.01), the Administrative Agent shall make all funds so
received available to B&N in like funds as received by the Administrative Agent
either by (i) crediting the account of B&N on the books of Bank of America with
the amount of such funds or (ii) wire transfer of such funds, in each case in
accordance with instructions provided to (and reasonably acceptable to) the
Administrative Agent by B & N; provided, however, that if, on the date the
Committed Loan Notice with respect to such Borrowing is given by B&N, there are
L/C Borrowings outstanding, then the proceeds of such Borrowing, first, shall be
applied to the payment in full of any such L/C Borrowings, and second, shall be
made available to the Borrowers as provided above.
(c) Except as otherwise provided herein, a Eurodollar Rate Loan may be
continued or converted only on the last day of an Interest Period for such
Eurodollar Rate Loan. During the existence of a Default, no Loans may be
requested as, converted to or continued as Eurodollar Rate Loans without the
consent of the Required Lenders.
(d) The Administrative Agent shall promptly notify B&N and the Lenders of
the interest rate applicable to any Interest Period for Eurodollar Rate Loans
upon determination of such interest rate. At any time that Base Rate Loans are
outstanding, the Administrative Agent shall notify B&N and the Lenders of any
change in Bank of America's prime rate used in determining the Base Rate
promptly following the public announcement of such change.
(e) After giving effect to all Committed Borrowings, all conversions of
Committed Loans from one Type to the other, and all continuations of Committed
Loans as the same Type, there shall not be more than ten Interest Periods in
effect with respect to Committed Loans.
2.03 Letters of Credit.
(a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C
Issuer agrees, in reliance upon the agreements of the Lenders set forth in
this Section 2.03, (1) from time to time on any Business Day during the
period from the Closing Date until the Letter of Credit Expiration Date, to
issue Letters of Credit for the account of the applicable Borrower or its
Subsidiaries, and to amend or extend Letters of Credit previously issued by
it, in accordance with subsection (b) below, and (2) to honor drawings
under the Letters of Credit; and (B) the Lenders severally agree to
participate in Letters of Credit issued for the account of the applicable
Borrower or its Subsidiaries and any drawings thereunder; provided that
after giving effect to any L/C Credit Extension with respect to any Letter
of Credit, (x) the Total Outstandings shall not exceed the Aggregate
Commitments, (y) the aggregate Outstanding Amount of the Committed Loans of
any Lender, plus such Lender's Applicable Percentage of the Outstanding
Amount of all L/C Obligations, plus such Lender's Applicable Percentage of
the Outstanding Amount of all Swing Line Loans shall not exceed such
Lender's
26
Commitment, and (z) the Outstanding Amount of the L/C Obligations shall not
exceed the Letter of Credit Sublimit. Each request by B&N for the issuance
or amendment of a Letter of Credit shall be deemed to be a representation
by the Borrowers that the L/C Credit Extension so requested complies with
the conditions set forth in the proviso to the preceding sentence. Within
the foregoing limits, and subject to the terms and conditions hereof, the
Borrowers' ability to obtain Letters of Credit shall be fully revolving,
and accordingly the Borrowers may, during the foregoing period, obtain
Letters of Credit to replace Letters of Credit that have expired or that
have been drawn upon and reimbursed. All Existing Letters of Credit shall
be deemed to have been issued pursuant hereto, and from and after the
Closing Date shall be subject to and governed by the terms and conditions
hereof.
(ii) The L/C Issuer shall not issue any Letter of Credit, if:
(A) subject to Section 2.03(b)(iii), the expiry date of such
requested Letter of Credit would occur more than twelve months after
the date of issuance or last extension, unless the Required Lenders
have approved such expiry date; or
(B) the expiry date of such requested Letter of Credit would
occur after the Letter of Credit Expiration Date, unless all the
Lenders have approved such expiry date.
(iii) The L/C Issuer shall not be under any obligation to issue any
Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority
or arbitrator shall by its terms purport to enjoin or restrain the L/C
Issuer from issuing such Letter of Credit, or any Law applicable to
the L/C Issuer or any request or directive (whether or not having the
force of law) from any Governmental Authority with jurisdiction over
the L/C Issuer shall prohibit, or request that the L/C Issuer refrain
from, the issuance of letters of credit generally or such Letter of
Credit in particular or shall impose upon the L/C Issuer with respect
to such Letter of Credit any restriction, reserve or capital
requirement (for which the L/C Issuer is not otherwise compensated
hereunder) not in effect on the Closing Date, or shall impose upon the
L/C Issuer any unreimbursed loss, cost or expense which was not
applicable on the Closing Date and which the L/C Issuer in good ▇▇▇▇▇
▇▇▇▇▇ material to it;
(B) the issuance of such Letter of Credit would violate one or
more policies of general applicability of the L/C Issuer;
(C) such Letter of Credit is to be denominated in a currency
other than Dollars;
(E) such Letter of Credit contains any provisions for automatic
reinstatement of the stated amount after any drawing thereunder; or
27
(F) a default of any Lender's obligations to fund under Section
2.03(c) exists or any Lender is at such time a Defaulting Lender
hereunder, unless the L/C Issuer has entered into satisfactory
arrangements with the Borrowers or such Lender to eliminate the L/C
Issuer's risk with respect to such Lender.
(iv) The L/C Issuer shall not amend any Letter of Credit if the L/C
Issuer would not be permitted at such time to issue such Letter of Credit
in its amended form under the terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of
Credit if (A) the L/C Issuer would have no obligation at such time to issue
such Letter of Credit in its amended form under the terms hereof, or (B)
the beneficiary of such Letter of Credit does not accept the proposed
amendment to such Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the Lenders with respect to
any Letters of Credit issued by it and the documents associated therewith,
and the L/C Issuer shall have all of the benefits and immunities (A)
provided to the Administrative Agent in Article IX with respect to any acts
taken or omissions suffered by the L/C Issuer in connection with Letters of
Credit issued by it or proposed to be issued by it and Issuer Documents
pertaining to such Letters of Credit as fully as if the term
"Administrative Agent" as used in Article IX included the L/C Issuer with
respect to such acts or omissions, and (B) as additionally provided herein
with respect to the L/C Issuer.
(b) Procedures for Issuance and Amendment of Letters of Credit;
Auto-Extension Letters of Credit.
(i) Each Letter of Credit shall be issued or amended, as the case may
be, upon the request of B&N delivered to the L/C Issuer (with a copy to the
Administrative Agent) in the form of a Letter of Credit Application,
appropriately completed and signed by a Responsible Officer of B&N (or a
person designated by a Responsible Officer in writing to the Administrative
Agent from time to time as having authority to execute such Letter of
Credit Application, which writing shall include the specimen signature of
such designated person) and, if applicable, of the applicable Subsidiary.
Such Letter of Credit Application must be received by the L/C Issuer and
the Administrative Agent not later than 11:00 a.m. at least two Business
Days (or such later date and time as the Administrative Agent and the L/C
Issuer may agree in a particular instance in their sole discretion) prior
to the proposed issuance date or date of amendment, as the case may be. In
the case of a request for an initial issuance of a Letter of Credit, such
Letter of Credit Application shall specify in form and detail satisfactory
to the L/C Issuer: (A) the proposed issuance date of the requested Letter
of Credit (which shall be a Business Day); (B) the amount thereof; (C) the
expiry date thereof; (D) the name and address of the beneficiary thereof;
(E) the documents to be presented by such beneficiary in case of any
drawing thereunder; (F) the full text of any certificate to be presented by
such beneficiary in case of any drawing thereunder; and (G) such other
matters as the L/C Issuer may require. In the case of a request for an
amendment of any outstanding Letter of Credit, such Letter of Credit
Application shall specify in form and detail satisfactory to the L/C Issuer
(A) the Letter of Credit to be amended; (B) the proposed date of amendment
28
thereof (which shall be a Business Day); (C) the nature of the proposed
amendment; and (D) such other matters as the L/C Issuer may require.
Additionally, the Borrowers shall furnish to the L/C Issuer and the
Administrative Agent such other documents and information pertaining to
such requested Letter of Credit issuance or amendment, including any Issuer
Documents, as the L/C Issuer or the Administrative Agent may require.
(ii) Promptly after receipt of any Letter of Credit Application, the
L/C Issuer will confirm with the Administrative Agent (by telephone or in
writing) that the Administrative Agent has received a copy of such Letter
of Credit Application from B&N and, if not, the L/C Issuer will provide the
Administrative Agent with a copy thereof. Unless the L/C Issuer has
received written notice from any Lender, the Administrative Agent or any
Loan Party, at least one Business Day prior to the requested date of
issuance or amendment of the applicable Letter of Credit, that one or more
applicable conditions contained in Article IV shall not then be satisfied,
then, subject to the terms and conditions hereof, the L/C Issuer shall, on
the requested date, issue a Letter of Credit for the account of the
applicable Borrower (or the applicable Subsidiary) or enter into the
applicable amendment, as the case may be, in each case in accordance with
the L/C Issuer's usual and customary business practices. Immediately upon
the issuance of each Letter of Credit, each Lender shall be deemed to, and
hereby irrevocably and unconditionally agrees to, purchase from the L/C
Issuer a risk participation in such Letter of Credit in an amount equal to
the product of such Lender's Applicable Percentage times the amount of such
Letter of Credit.
(iii) If B&N so requests in any applicable Letter of Credit
Application, the L/C Issuer may, in its sole and absolute discretion, agree
to issue a Letter of Credit that has automatic extension provisions (each,
an "Auto-Extension Letter of Credit"); provided that any such
Auto-Extension Letter of Credit must permit the L/C Issuer to prevent any
such extension at least once in each twelve-month period (commencing with
the date of issuance of such Letter of Credit) by giving prior notice to
the beneficiary thereof not later than a day (the "Non-Extension Notice
Date") in each such twelve-month period to be agreed upon at the time such
Letter of Credit is issued. Unless otherwise directed by the L/C Issuer,
B&N shall not be required to make a specific request to the L/C Issuer for
any such extension. Once an Auto-Extension Letter of Credit has been
issued, the Lenders shall be deemed to have authorized (but may not
require) the L/C Issuer to permit the extension of such Letter of Credit at
any time to an expiry date not later than the Letter of Credit Expiration
Date; provided, however, that the L/C Issuer shall not permit any such
extension if (A) the L/C Issuer has determined that it would not be
permitted, or would have no obligation, at such time to issue such Letter
of Credit in its revised form (as extended) under the terms hereof (by
reason of the provisions of clause (ii) or (iii) of Section 2.03(a) or
otherwise), or (B) it has received notice (which may be by telephone or in
writing) on or before the day that is five Business Days before the
Non-Extension Notice Date (1) from the Administrative Agent that the
Required Lenders have elected not to permit such extension or (2) from the
Administrative Agent, any Lender or B&N that one or more of the applicable
conditions specified in Section 4.02 is not then satisfied, and in each
such case directing the L/C Issuer not to permit such extension.
29
(iv) Promptly after its delivery of any Letter of Credit or any
amendment to a Letter of Credit to an advising bank with respect thereto or
to the beneficiary thereof, the L/C Issuer will also deliver to the
applicable Borrower and the Administrative Agent a true and complete copy
of such Letter of Credit or amendment.
(c) Drawings and Reimbursements; Funding of Participations.
(i) Upon receipt from the beneficiary of any Letter of Credit of any
notice of a drawing under such Letter of Credit, the L/C Issuer shall
notify B&N and the Administrative Agent thereof. Not later than 11:00 a.m.
on the date of any payment by the L/C Issuer under a Letter of Credit (each
such date, an "Honor Date"), the Borrowers shall reimburse the L/C Issuer
through the Administrative Agent in an amount equal to the amount of such
drawing. If the Borrowers fail to so reimburse the L/C Issuer by such time,
the Administrative Agent shall promptly notify each Lender of the Honor
Date, the amount of the unreimbursed drawing (the "Unreimbursed Amount"),
and the amount of such Lender's Applicable Percentage thereof. In such
event, the Borrowers shall be deemed to have requested a Committed
Borrowing of Base Rate Loans to be disbursed on the Honor Date in an amount
equal to the Unreimbursed Amount, without regard to the minimum and
multiples specified in Section 2.02 for the principal amount of Base Rate
Loans, but subject to the amount of the unutilized portion of the Aggregate
Commitments and the conditions set forth in Section 4.02 (other than the
delivery of a Committed Loan Notice). Any notice given by the L/C Issuer or
the Administrative Agent pursuant to this Section 2.03(c)(i) may be given
by telephone if immediately confirmed in writing; provided that the lack of
such an immediate confirmation shall not affect the conclusiveness or
binding effect of such notice.
(ii) Each Lender shall upon any notice pursuant to Section 2.03(c)(i)
make funds available to the Administrative Agent for the account of the L/C
Issuer at the Administrative Agent's Office in an amount equal to its
Applicable Percentage of the Unreimbursed Amount not later than 1:00 p.m.
on the Business Day specified in such notice by the Administrative Agent,
whereupon, subject to the provisions of Section 2.03(c)(iii), each Lender
that so makes funds available shall be deemed to have made a Base Rate
Committed Loan to the Borrowers in such amount. The Administrative Agent
shall remit the funds so received to the L/C Issuer.
(iii) With respect to any Unreimbursed Amount that is not fully
refinanced by a Committed Borrowing of Base Rate Loans because the
conditions set forth in Section 4.02 cannot be satisfied or for any other
reason, the Borrowers shall be deemed to have incurred from the L/C Issuer
an L/C Borrowing in the amount of the Unreimbursed Amount that is not so
refinanced, which L/C Borrowing shall be due and payable on demand
(together with interest) and shall bear interest at the Default Rate. In
such event, each Lender's payment to the Administrative Agent for the
account of the L/C Issuer pursuant to Section 2.03(c)(ii) shall be deemed
payment in respect of its participation in such L/C Borrowing and shall
constitute an L/C Advance from such Lender in satisfaction of its
participation obligation under this Section 2.03.
30
(iv) Until each Lender funds its Committed Loan or L/C Advance
pursuant to this Section 2.03(c) to reimburse the L/C Issuer for any amount
drawn under any Letter of Credit, interest in respect of such Lender's
Applicable Percentage of such amount shall be solely for the account of the
L/C Issuer.
(v) Each Lender's obligation to make Committed Loans or L/C Advances
to reimburse the L/C Issuer for amounts drawn under Letters of Credit, as
contemplated by this Section 2.03(c), shall be absolute and unconditional
and shall not be affected by any circumstance, including (A) any setoff,
counterclaim, recoupment, defense or other right which such Lender may have
against the L/C Issuer, the Borrowers or any other Person for any reason
whatsoever; (B) the occurrence or continuance of a Default, or (C) any
other occurrence, event or condition, whether or not similar to any of the
foregoing; provided, however, that each Lender's obligation to make
Committed Loans pursuant to this Section 2.03(c) is subject to the
conditions set forth in Section 4.02 (other than delivery by B&N of a
Committed Loan Notice). No such making of an L/C Advance shall relieve or
otherwise impair the obligation of the Borrowers to reimburse the L/C
Issuer for the amount of any payment made by the L/C Issuer under any
Letter of Credit, together with interest as provided herein.
(vi) If any Lender fails to make available to the Administrative Agent
for the account of the L/C Issuer any amount required to be paid by such
Lender pursuant to the foregoing provisions of this Section 2.03(c) by the
time specified in Section 2.03(c)(ii), the L/C Issuer shall be entitled to
recover from such Lender (acting through the Administrative Agent), on
demand, such amount with interest thereon for the period from the date such
payment is required to the date on which such payment is immediately
available to the L/C Issuer at a rate per annum equal to the greater of the
Federal Funds Rate and a rate determined by the L/C Issuer in accordance
with banking industry rules on interbank compensation. A certificate of the
L/C Issuer submitted to any Lender (through the Administrative Agent) with
respect to any amounts owing under this clause (vi) shall be conclusive
absent manifest error.
(d) Repayment of Participations.
(i) At any time after the L/C Issuer has made a payment under any
Letter of Credit and has received from any Lender such Lender's L/C Advance
in respect of such payment in accordance with Section 2.03(c), if the
Administrative Agent receives for the account of the L/C Issuer any payment
in respect of the related Unreimbursed Amount or interest thereon (whether
directly from a Borrower or otherwise, including proceeds of Cash
Collateral applied thereto by the Administrative Agent), the Administrative
Agent will distribute to such Lender its Applicable Percentage thereof
(appropriately adjusted, in the case of interest payments, to reflect the
period of time during which such Lender's L/C Advance was outstanding) in
the same funds as those received by the Administrative Agent.
(ii) If any payment received by the Administrative Agent for the
account of the L/C Issuer pursuant to Section 2.03(c)(i) is required to be
returned under any of the circumstances described in Section 10.05
(including pursuant to any settlement entered
31
into by the L/C Issuer in its discretion), each Lender shall pay to the
Administrative Agent for the account of the L/C Issuer its Applicable
Percentage thereof on demand of the Administrative Agent, plus interest
thereon from the date of such demand to the date such amount is returned by
such Lender, at a rate per annum equal to the Federal Funds Rate from time
to time in effect. The obligations of the Lenders under this clause shall
survive the payment in full of the Obligations and the termination of this
Agreement.
(e) Obligations Absolute. The obligation of each Borrower to reimburse the
L/C Issuer for each drawing under each Letter of Credit and to repay each L/C
Borrowing shall be absolute, unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances,
including the following:
(i) any lack of validity or enforceability of such Letter of Credit,
this Agreement, or any other Loan Document;
(ii) the existence of any claim, counterclaim, setoff, defense or
other right that B&N or any Subsidiary may have at any time against any
beneficiary or any transferee of such Letter of Credit (or any Person for
whom any such beneficiary or any such transferee may be acting), the L/C
Issuer or any other Person, whether in connection with this Agreement, the
transactions contemplated hereby or by such Letter of Credit or any
agreement or instrument relating thereto, or any unrelated transaction;
(iii) any draft, demand, certificate or other document presented under
such Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; or any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under such
Letter of Credit;
(iv) any payment by the L/C Issuer under such Letter of Credit against
presentation of a draft or certificate that does not strictly comply with
the terms of such Letter of Credit; or any payment made by the L/C Issuer
under such Letter of Credit to any Person purporting to be a trustee in
bankruptcy, debtor-in-possession, assignee for the benefit of creditors,
liquidator, receiver or other representative of or successor to any
beneficiary or any transferee of such Letter of Credit, including any
arising in connection with any proceeding under any Debtor Relief Law; or
(v) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including any other circumstance that
might otherwise constitute a defense available to, or a discharge of, B&N
or any Subsidiary.
The applicable Borrower shall promptly examine a copy of each Letter of
Credit and each amendment thereto that is delivered to it and, in the event of
any claim of noncompliance with such Borrower's instructions or other
irregularity, such Borrower will immediately notify the L/C Issuer. A Borrower
shall be conclusively deemed to have waived any such claim against the L/C
Issuer and its correspondents unless such notice is given as aforesaid.
(f) Role of L/C Issuer. Each Lender and each Borrower agree that, in paying
any drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any
32
document (other than any sight draft, certificates and documents expressly
required by the Letter of Credit) or to ascertain or inquire as to the validity
or accuracy of any such document or the authority of the Person executing or
delivering any such document. None of the L/C Issuer, the Administrative Agent,
any of their respective Related Parties nor any correspondent, participant or
assignee of the L/C Issuer shall be liable to any Lender for (i) any action
taken or omitted in connection herewith at the request or with the approval of
the Lenders or the Required Lenders, as applicable; (ii) any action taken or
omitted in the absence of gross negligence, willful misconduct or bad faith; or
(iii) the due execution, effectiveness, validity or enforceability of any
document or instrument related to any Letter of Credit or Issuer Document. The
Borrowers hereby assume all risks of the acts or omissions of any beneficiary or
transferee with respect to its use of any Letter of Credit; provided, however,
that this assumption is not intended to, and shall not, preclude the Borrowers'
pursuing such rights and remedies as it may have against the beneficiary or
transferee at law or under any other agreement. None of the L/C Issuer, the
Administrative Agent, any of their respective Related Parties nor any
correspondent, participant or assignee of the L/C Issuer shall be liable or
responsible for any of the matters described in clauses (i) through (v) of
Section 2.03(e); provided, however, that anything in such clauses to the
contrary notwithstanding, the Borrowers may have a claim against the L/C Issuer,
and the L/C Issuer may be liable to the Borrowers, to the extent, but only to
the extent, of any direct, as opposed to consequential or exemplary, damages
suffered by the Borrowers which the Borrowers prove were caused by the L/C
Issuer's willful misconduct, gross negligence or bad faith or the L/C Issuer's
willful failure to pay under any Letter of Credit after the presentation to it
by the beneficiary of a sight draft and certificate(s) strictly complying with
the terms and conditions of a Letter of Credit. In furtherance and not in
limitation of the foregoing, the L/C Issuer may accept documents that appear on
their face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary. The L/C Issuer shall
not be responsible for the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign a Letter of Credit
or the rights or benefits thereunder or proceeds thereof, in whole or in part,
which may prove to be invalid or ineffective for any reason, except to the
extent of the L/C Issuer's gross negligence, willful misconduct or bad faith.
(g) Cash Collateral. Upon the request of the Administrative Agent, (i) if
the L/C Issuer has honored any full or partial drawing request under any Letter
of Credit and such drawing has resulted in an L/C Borrowing, or (ii) if, as of
the Letter of Credit Expiration Date, any L/C Obligation for any reason remains
outstanding, the Borrowers shall, in each case, immediately Cash Collateralize
the then Outstanding Amount of all L/C Obligations. Sections 2.05 and 8.02(c)
set forth certain additional requirements to deliver Cash Collateral hereunder.
For purposes of this Section 2.03, Section 2.05 and Section 8.02(c), "Cash
Collateralize" means to pledge and deposit with or deliver to the Administrative
Agent, for the benefit of the L/C Issuer and the Lenders, as collateral for the
L/C Obligations, cash or deposit account balances pursuant to documentation in
form and substance satisfactory to the Administrative Agent and the L/C Issuer
(which documents are hereby consented to by the Lenders). Derivatives of such
term have corresponding meanings. Each Borrower hereby grants to the
Administrative Agent, for the benefit of the L/C Issuer and the Lenders, a
security interest in all such cash, deposit accounts and all balances therein
and all proceeds of the foregoing. Cash Collateral shall be maintained in
blocked, interest bearing deposit accounts at Bank of America.
33
(h) Applicability of ISP and UCP. Unless otherwise expressly agreed by the
L/C Issuer and the applicable Borrower when a Letter of Credit is issued
(including any such agreement applicable to an Existing Letter of Credit), (i)
the rules of the ISP shall apply to each standby Letter of Credit, and (ii) the
rules of the Uniform Customs and Practice for Documentary Credits, as most
recently published by the International Chamber of Commerce at the time of
issuance shall apply to each commercial Letter of Credit.
(i) Letter of Credit Fees. The Borrowers shall pay to the Administrative
Agent for the account of each Lender in accordance with its Applicable
Percentage a Letter of Credit fee (the "Letter of Credit Fee") for each Letter
of Credit equal to the Applicable Rate times the daily amount available to be
drawn under such Letter of Credit. For purposes of computing the daily amount
available to be drawn under any Letter of Credit, the amount of such Letter of
Credit shall be determined in accordance with Section 1.06. Letter of Credit
Fees shall be (i) computed on a quarterly basis in arrears and (ii) due and
payable on the first Business Day after the end of each March, June, September
and December, commencing with the first such date to occur after the issuance of
such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on
demand. If there is any change in the Applicable Rate during any quarter, the
daily amount available to be drawn under each Letter of Credit shall be computed
and multiplied by the Applicable Rate separately for each period during such
quarter that such Applicable Rate was in effect. Notwithstanding anything to the
contrary contained herein, upon the request of the Required Lenders, while any
Event of Default exists, all Letter of Credit Fees shall accrue at the Default
Rate.
(j) Fronting Fee and Documentary and Processing Charges Payable to L/C
Issuer. The Borrowers shall pay directly to the L/C Issuer for its own account a
fronting fee (i) with respect to each commercial Letter of Credit, at the rate
specified in the Fee Letter, computed on the amount of such Letter of Credit,
and payable upon the issuance thereof, (ii) with respect to any amendment of a
commercial Letter of Credit increasing the amount of such Letter of Credit, at a
rate separately agreed between B&N and the L/C Issuer, computed on the amount of
such increase, and payable upon the effectiveness of such amendment, and (iii)
with respect to each standby Letter of Credit, at the rate per annum specified
in the Fee Letter, computed on the daily amount available to be drawn under such
Letter of Credit and on a quarterly basis in arrears. Such fronting fee shall be
due and payable on the tenth Business Day after the end of each March, June,
September and December in respect of the most recently-ended quarterly period
(or portion thereof, in the case of the first payment), commencing with the
first such date to occur after the issuance of such Letter of Credit, on the
Letter of Credit Expiration Date and thereafter on demand. For purposes of
computing the daily amount available to be drawn under any Letter of Credit, the
amount of such Letter of Credit shall be determined in accordance with Section
1.06. In addition, the Borrowers shall pay directly to the L/C Issuer for its
own account the customary issuance, presentation, amendment and other processing
fees, and other standard costs and charges, of the L/C Issuer relating to
letters of credit as from time to time in effect. Such customary fees and
standard costs and charges are due and payable on demand and are nonrefundable.
(k) Conflict with Issuer Documents. In the event of any conflict between
the terms hereof and the terms of any Issuer Document, the terms hereof shall
control.
34
(l) Letters of Credit Issued for Subsidiaries. Notwithstanding that a
Letter of Credit issued or outstanding hereunder is in support of any
obligations of, or is for the account of, a Subsidiary, the Borrowers shall be
obligated to reimburse the L/C Issuer hereunder for any and all drawings under
such Letter of Credit. The Borrowers hereby acknowledge that the issuance of
Letters of Credit for the account of Subsidiaries inures to the benefit of the
Borrowers, and that the Borrowers' business derives substantial benefits from
the businesses of such Subsidiaries.
2.04 Swing Line Loans.
(a) The Swing Line. Subject to the terms and conditions set forth herein,
the Swing Line Lender agrees, in reliance upon the agreements of the other
Lenders set forth in this Section 2.04, to make loans (each such loan, a "Swing
Line Loan") to the Borrowers from time to time on any Business Day during the
Availability Period in an aggregate amount not to exceed at any time outstanding
the amount of the Swing Line Sublimit, notwithstanding the fact that such Swing
Line Loans, when aggregated with the Applicable Percentage of the Outstanding
Amount of Committed Loans and L/C Obligations of the Lender acting as Swing Line
Lender, may exceed the amount of such Lender's Commitment; provided, however,
that after giving effect to any Swing Line Loan, (i) the Total Outstandings
shall not exceed the Aggregate Commitments, and (ii) the aggregate Outstanding
Amount of the Committed Loans of any Lender, plus such Lender's Applicable
Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender's
Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall
not exceed such Lender's Commitment, and provided, further, that the Borrowers
shall not use the proceeds of any Swing Line Loan to refinance any outstanding
Swing Line Loan. Within the foregoing limits, and subject to the other terms and
conditions hereof, the Borrowers may borrow under this Section 2.04, prepay
under Section 2.05, and reborrow under this Section 2.04. Each Swing Line Loan
shall be a Base Rate Loan. Immediately upon the making of a Swing Line Loan,
each Lender shall be deemed to, and hereby irrevocably and unconditionally
agrees to, purchase from the Swing Line Lender a risk participation in such
Swing Line Loan in an amount equal to the product of such Lender's Applicable
Percentage times the amount of such Swing Line Loan.
(b) Borrowing Procedures. Each Swing Line Borrowing shall be made upon
B&N's irrevocable notice to the Swing Line Lender and the Administrative Agent,
which may be given by telephone. Each such notice must be received by the Swing
Line Lender and the Administrative Agent not later than 3:00 p.m. on the
requested borrowing date, and shall specify (i) the amount to be borrowed, which
shall be a minimum of $250,000, and (ii) the requested borrowing date, which
shall be a Business Day. Each such telephonic notice must be confirmed promptly
by delivery to the Swing Line Lender and the Administrative Agent of a written
Swing Line Loan Notice, appropriately completed and signed by a Responsible
Officer of B&N (or a person designated by a Responsible Officer in writing to
the Administrative Agent from time to time as having authority to execute such
Swing Line Loan Notice, which writing shall include the specimen signature of
such designated person). Promptly after receipt by the Swing Line Lender of any
telephonic Swing Line Loan Notice, the Swing Line Lender will confirm with the
Administrative Agent (by telephone or in writing) that the Administrative Agent
has also received such Swing Line Loan Notice and, if not, the Swing Line Lender
will notify the Administrative Agent (by telephone or in writing) of the
contents thereof. Unless the Swing
35
Line Lender has received notice (by telephone or in writing) from the
Administrative Agent (including at the request of any Lender) prior to 4:00 p.m.
on the date of the proposed Swing Line Borrowing (A) directing the Swing Line
Lender not to make such Swing Line Loan as a result of the limitations set forth
in the proviso to the first sentence of Section 2.04(a), or (B) that one or more
of the applicable conditions specified in Article IV is not then satisfied,
then, subject to the terms and conditions hereof, the Swing Line Lender will,
not later than 5:00 p.m. on the borrowing date specified in such Swing Line Loan
Notice, make the amount of its Swing Line Loan available to the applicable
Borrower at its office by crediting the account of the applicable Borrower on
the books of the Swing Line Lender in immediately available funds.
(c) Refinancing of Swing Line Loans.
(i) The Swing Line Lender at any time in its sole and absolute
discretion may request, on behalf of the Borrowers (which hereby
irrevocably authorizes the Swing Line Lender to so request on its behalf),
that each Lender make a Base Rate Committed Loan in an amount equal to such
Lender's Applicable Percentage of the amount of Swing Line Loans then
outstanding. Such request shall be made in writing (which written request
shall be deemed to be a Committed Loan Notice for purposes hereof) and in
accordance with the requirements of Section 2.02, without regard to the
minimum and multiples specified therein for the principal amount of Base
Rate Loans, but subject to the unutilized portion of the Aggregate
Commitments and the conditions set forth in Section 4.02. The Swing Line
Lender shall furnish B&N with a copy of the applicable Committed Loan
Notice promptly after delivering such notice to the Administrative Agent.
Each Lender shall make an amount equal to its Applicable Percentage of the
amount specified in such Committed Loan Notice available to the
Administrative Agent in immediately available funds for the account of the
Swing Line Lender at the Administrative Agent's Office not later than 2:00
p.m. on the day specified in such Committed Loan Notice, whereupon, subject
to Section 2.04(c)(ii), each Lender that so makes funds available shall be
deemed to have made a Base Rate Committed Loan to the applicable Borrower
in such amount. The Administrative Agent shall remit the funds so received
to the Swing Line Lender.
(ii) If for any reason any Swing Line Loan cannot be refinanced by
such a Committed Borrowing in accordance with Section 2.04(c)(i), the
request for Base Rate Committed Loans submitted by the Swing Line Lender as
set forth herein shall be deemed to be a request by the Swing Line Lender
that each of the Lenders fund its risk participation in the relevant Swing
Line Loan and each Lender's payment to the Administrative Agent for the
account of the Swing Line Lender pursuant to Section 2.04(c)(i) shall be
deemed payment in respect of such participation.
(iii) If any Lender fails to make available to the Administrative
Agent for the account of the Swing Line Lender any amount required to be
paid by such Lender pursuant to the foregoing provisions of this Section
2.04(c) by the time specified in Section 2.04(c)(i), the Swing Line Lender
shall be entitled to recover from such Lender (acting through the
Administrative Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such
payment is immediately available to the Swing Line Lender at a rate per
annum equal to the
36
greater of the Federal Funds Rate and a rate determined by the Swing Line
Lender in accordance with banking industry rules on interbank compensation.
A certificate of the Swing Line Lender submitted to any Lender (through the
Administrative Agent) with respect to any amounts owing under this clause
(iii) shall be conclusive absent manifest error.
(iv) Each Lender's obligation to make Committed Loans or to purchase
and fund risk participations in Swing Line Loans pursuant to this Section
2.04(c) shall be absolute and unconditional and shall not be affected by
any circumstance, including (A) any setoff, counterclaim, recoupment,
defense or other right which such Lender may have against the Swing Line
Lender, the Borrowers or any other Person for any reason whatsoever, (B)
the occurrence or continuance of a Default, or (C) any other occurrence,
event or condition, whether or not similar to any of the foregoing;
provided, however, that each Lender's obligation to make Committed Loans
pursuant to this Section 2.04(c) is subject to the conditions set forth in
Section 4.02. No such funding of risk participations shall relieve or
otherwise impair the obligation of the Borrowers to repay Swing Line Loans,
together with interest as provided herein.
(d) Repayment of Participations.
(i) At any time after any Lender has purchased and funded a risk
participation in a Swing Line Loan, if the Swing Line Lender receives any
payment on account of such Swing Line Loan, the Swing Line Lender will
distribute to such Lender its Applicable Percentage of such payment
(appropriately adjusted, in the case of interest payments, to reflect the
period of time during which such Lender's risk participation was funded) in
the same funds as those received by the Swing Line Lender.
(ii) If any payment received by the Swing Line Lender in respect of
principal or interest on any Swing Line Loan is required to be returned by
the Swing Line Lender under any of the circumstances described in Section
10.05 (including pursuant to any settlement entered into by the Swing Line
Lender in its discretion), each Lender shall pay to the Swing Line Lender
its Applicable Percentage thereof on demand of the Administrative Agent,
plus interest thereon from the date of such demand to the date such amount
is returned, at a rate per annum equal to the Federal Funds Rate. The
Administrative Agent will make such demand upon the request of the Swing
Line Lender. The obligations of the Lenders under this clause shall survive
the payment in full of the Obligations and the termination of this
Agreement.
(e) Interest for Account of Swing Line Lender. The Swing Line Lender shall
be responsible for invoicing B&N for interest on the Swing Line Loans. Until
each Lender funds its Base Rate Committed Loan or risk participation pursuant to
this Section 2.04 to refinance such Lender's Applicable Percentage of any Swing
Line Loan, interest in respect of such Applicable Percentage shall be solely for
the account of the Swing Line Lender.
(f) Payments Directly to Swing Line Lender. The Borrowers shall make all
payments of principal and interest in respect of the Swing Line Loans directly
to the Swing Line Lender.
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2.05 Prepayments.
(a) The Borrowers may, upon notice from B&N to the Administrative Agent, at
any time or from time to time voluntarily prepay Committed Loans in whole or in
part without premium or penalty; provided that (i) such notice must be received
by the Administrative Agent not later than 11:00 a.m. (A) three Business Days
prior to any date of prepayment of Eurodollar Rate Loans and (B) on the date of
prepayment of Base Rate Committed Loans; (ii) any prepayment of Eurodollar Rate
Loans shall be in a principal amount of $2,500,000 or a whole multiple of
$1,000,000 in excess thereof; and (iii) any prepayment of Base Rate Committed
Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000
in excess thereof or, in each case, if less, the entire principal amount thereof
then outstanding. Each such notice shall specify the date and amount of such
prepayment and the Type(s) of Committed Loans to be prepaid. The Administrative
Agent will promptly notify each Lender of its receipt of each such notice, and
of the amount of such Lender's Applicable Percentage of such prepayment. If such
notice is given by B&N, the Borrowers shall make such prepayment and the payment
amount specified in such notice shall be due and payable on the date specified
therein. Any prepayment of a Eurodollar Rate Loan shall be accompanied by all
accrued interest on the amount prepaid, together with any additional amounts
required pursuant to Section 3.05. Each such prepayment shall be applied to the
Committed Loans of the Lenders in accordance with their respective Applicable
Percentages.
(b) B&N may, upon notice to the Swing Line Lender (with a copy to the
Administrative Agent), at any time or from time to time, voluntarily prepay
Swing Line Loans in whole or in part without premium or penalty; provided that
(i) such notice must be received by the Swing Line Lender and the Administrative
Agent not later than 3:00 p.m. on the date of the prepayment, and (ii) any such
prepayment shall be in a minimum principal amount of $100,000. Each such notice
shall specify the date and amount of such prepayment. If such notice is given by
B&N, the Borrowers shall make such prepayment and the payment amount specified
in such notice shall be due and payable on the date specified therein.
(c) If for any reason the Total Outstandings at any time exceed the
Aggregate Commitments then in effect, the Borrowers shall immediately prepay
Loans and/or Cash Collateralize the L/C Obligations in an aggregate amount equal
to such excess; provided, however, that the Borrowers shall not be required to
Cash Collateralize the L/C Obligations pursuant to this Section 2.05(c) unless
after the prepayment in full of the Loans the Total Outstandings exceed the
Aggregate Commitments then in effect.
2.06 Termination or Reduction of Commitments. B&N may, upon notice to the
Administrative Agent, terminate the Aggregate Commitments, or from time to time
permanently reduce the Aggregate Commitments; provided that (i) any such notice
shall be received by the Administrative Agent not later than 1:00 p.m. three
Business Days prior to the date of termination or reduction, (ii) any such
partial reduction shall be in an aggregate amount of $5,000,000 or any whole
multiple of $1,000,000 in excess thereof, (iii) B&N shall not terminate or
reduce the Aggregate Commitments if, after giving effect thereto and to any
concurrent prepayments hereunder, the Total Outstandings would exceed the
Aggregate Commitments, and (iv) if, after giving effect to any reduction of the
Aggregate Commitments, the Letter of Credit Sublimit or the Swing Line Sublimit
exceeds the amount of the Aggregate Commitments, such
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Sublimit shall be automatically reduced by the amount of such excess. The
Administrative Agent will promptly notify the Lenders of any such notice of
termination or reduction of the Aggregate Commitments. Any reduction of the
Aggregate Commitments shall be applied to the Commitment of each Lender
according to its Applicable Percentage. All fees accrued until the effective
date of any termination of the Aggregate Commitments shall be paid on the
effective date of such termination. Notwithstanding the foregoing, a notice of
termination of the Aggregate Commitments delivered by B&N may state that such
notice is conditional upon the effectiveness of other credit facilities, in
which case such notice may be revoked by B&N (by notice of the Administrative
Agent on or prior to the specified effective date) if such condition is not
satisfied; provided, however, that the Borrowers will be responsible for any
amounts due under Section 3.05 notwithstanding any notice of revocation by B&N.
2.07 Repayment of Loans.
(a) The Borrowers shall repay to the Lenders on the Maturity Date the
aggregate principal amount of Committed Loans outstanding on such date.
(b) The Borrowers shall repay each Swing Line Loan on the earlier to occur
of (i) the date ten Business Days after such Loan is made and (ii) the Maturity
Date.
2.08 Interest.
(a) Subject to the provisions of subsection (b) below, (i) each Eurodollar
Rate Loan shall bear interest on the outstanding principal amount thereof for
each Interest Period at a rate per annum equal to the Eurodollar Rate for such
Interest Period plus the Applicable Rate; (ii) each Base Rate Committed Loan
shall bear interest on the outstanding principal amount thereof from the
applicable borrowing date at a rate per annum equal to the Base Rate plus the
Applicable Rate; and (iii) each Swing Line Loan shall bear interest on the
outstanding principal amount thereof from the applicable borrowing date at a
rate per annum equal to the Base Rate plus the Applicable Rate.
(b) (i) If any amount of principal of any Loan is not paid when due,
whether at stated maturity, by acceleration or otherwise, such amount shall
thereafter bear interest at a fluctuating interest rate per annum at all times
equal to the Default Rate to the fullest extent permitted by applicable Laws.
(ii) If any amount (other than principal of any Loan) payable by the
Borrowers under any Loan Document is not paid when due, whether at stated
maturity, by acceleration or otherwise, then upon the request of the
Required Lenders, such amount shall thereafter bear interest at a
fluctuating interest rate per annum at all times equal to the Default Rate
to the fullest extent permitted by applicable Laws.
(iii) Upon the request of the Required Lenders, while any Event of
Default exists, the Borrowers shall pay interest on the principal amount of
all outstanding Obligations hereunder at a fluctuating interest rate per
annum at all times equal to the Default Rate to the fullest extent
permitted by applicable Laws.
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(iv) Accrued and unpaid interest on past due amounts (including
interest on past due interest) shall be due and payable upon demand.
(c) Interest on each Loan shall be due and payable in arrears on each
Interest Payment Date applicable thereto and at such other times as may be
specified herein. Interest hereunder shall be due and payable in accordance with
the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.
2.09 Fees. In addition to certain fees described in subsections (i) and (j)
of Section 2.03: (a) Commitment Fee. The Borrowers shall pay to the
Administrative Agent for the account of each Lender in accordance with its
Applicable Percentage, a commitment fee equal to the Applicable Rate times the
actual daily amount by which the Aggregate Commitments exceed the sum of (i) the
Outstanding Amount of Committed Loans and (ii) the Outstanding Amount of L/C
Obligations. The commitment fee shall accrue at all times during the
Availability Period, including at any time during which one or more of the
conditions in Article IV is not met, and 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 on the
Maturity Date. The commitment fee shall be calculated quarterly in arrears, and
if there is any change in the Applicable Rate during any quarter, the actual
daily amount shall be computed and multiplied by the Applicable Rate separately
for each period during such quarter that such Applicable Rate was in effect.
(b) Other Fees. (i) The Borrowers shall pay to the Arrangers and the
Administrative Agent for their own respective accounts fees in the amounts and
at the times specified in the Fee Letter. Such fees shall be fully earned when
paid and shall not be refundable for any reason whatsoever.
(ii) The Borrowers shall pay to the Lenders such fees as shall have
been separately agreed upon in writing in the amounts and at the times so
specified. Such fees shall be fully earned when paid and shall not be
refundable for any reason whatsoever.
2.10 Computation of Interest and Fees. All computations of interest for
Base Rate Loans when the Base Rate is determined by Bank of America's "prime
rate" shall be made on the basis of a year of 365 or 366 days, as the case may
be, and actual days elapsed. All other computations of fees and interest shall
be made on the basis of a 360-day year and actual days elapsed (which results in
more fees or interest, as applicable, being paid than if computed on the basis
of a 365-day year). Interest shall accrue on each Loan for the day on which the
Loan is made, and shall not accrue on a Loan, or any portion thereof, for the
day on which the Loan or such portion is paid, provided that any Loan that is
repaid on the same day on which it is made shall, subject to Section 2.12(a),
bear interest for one day. Each determination by the Administrative Agent of an
interest rate or fee hereunder shall be conclusive and binding for all purposes,
absent manifest error.
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2.11 Evidence of Debt.
(a) The Credit Extensions made by each Lender shall be evidenced by one or
more accounts or records maintained by such Lender and by the Administrative
Agent in the ordinary course of business. The accounts or records maintained by
the Administrative Agent and each Lender shall be presumptively correct absent
manifest error of the amount of the Credit Extensions made by the Lenders to the
Borrowers and the interest and payments thereon. Any failure to so record or any
error in doing so shall not, however, limit or otherwise affect the obligation
of the Borrowers hereunder to pay any amount owing with respect to the
Obligations. In the event of any conflict between the accounts and records
maintained by any Lender and the accounts and records of the Administrative
Agent in respect of such matters, the accounts and records of the Administrative
Agent shall control in the absence of manifest error. Upon the request of any
Lender to a Borrower made through the Administrative Agent, such Borrower shall
execute and deliver to such Lender (through the Administrative Agent) a Note,
which shall evidence such Lender's Loans in addition to such accounts or
records. Each Lender may attach schedules to its Note and endorse thereon the
date, Type (if applicable), amount and maturity of its Loans and payments with
respect thereto.
(b) In addition to the accounts and records referred to in subsection (a),
each Lender and the Administrative Agent shall maintain in accordance with its
usual practice accounts or records evidencing the purchases and sales by such
Lender of participations in Letters of Credit and Swing Line Loans. In the event
of any conflict between the accounts and records maintained by the
Administrative Agent and the accounts and records of any Lender in respect of
such matters, the accounts and records of the Administrative Agent shall control
in the absence of manifest error.
2.12 Payments Generally; Administrative Agent's Clawback.
(a) General. All payments to be made by the Borrowers shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff.
Except as otherwise expressly provided herein, all payments by the Borrowers
hereunder shall be made to the Administrative Agent, for the account of the
respective Lenders to which such payment is owed, at the Administrative Agent's
Office in Dollars and in immediately available funds not later than 2:00 p.m. on
the date specified herein. The Administrative Agent will promptly distribute to
each Lender its Applicable Percentage (or other applicable share as provided
herein) of such payment in like funds as received by wire transfer to such
Lender's Lending Office. All payments received by the Administrative Agent after
2:00 p.m. shall be deemed received on the next succeeding Business Day and any
applicable interest or fee shall continue to accrue. If any payment to be made
by any Borrower shall come due on a day other than a Business Day, payment shall
be made on the next following Business Day, and such extension of time shall be
reflected in computing interest or fees, as the case may be.
(b) (i) Funding by Lenders; Presumption by Administrative Agent. Unless the
Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Committed Borrowing of Eurodollar Rate Loans (or, in the
case of any Committed Borrowing of Base Rate Loans, prior to 12:00 noon on the
date of such Committed Borrowing) that such Lender will not make available to
the Administrative Agent such Lender's share of such
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Committed Borrowing, the Administrative Agent may assume that such Lender has
made such share available on such date in accordance with Section 2.02 (or, in
the case of a Committed Borrowing of Base Rate Loans, that such Lender has made
such share available in accordance with and at the time required by Section
2.02) and may, in reliance upon such assumption, make available to the
applicable Borrower a corresponding amount. In such event, if a Lender has not
in fact made its share of the applicable Committed Borrowing available to the
Administrative Agent, then the applicable Lender and the applicable Borrower
severally agree to pay to the Administrative Agent forthwith on demand such
corresponding amount in immediately available funds with interest thereon, for
each day from and including the date such amount is made available to such
Borrower to but excluding the date of payment to the Administrative Agent, at
(A) in the case of a payment to be made by such Lender, the greater of the
Federal Funds Rate and a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation and (B) in the
case of a payment to be made by such Borrower, the interest rate applicable to
Base Rate Loans. If such Borrower and such Lender shall pay such interest to the
Administrative Agent for the same or an overlapping period, the Administrative
Agent shall promptly remit to such Borrower the amount of such interest paid by
such Borrower for such period. If such Lender pays its share of the applicable
Committed Borrowing to the Administrative Agent, then the amount so paid shall
constitute such Lender's Committed Loan included in such Committed Borrowing.
Any payment by such Borrower shall be without prejudice to any claim such
Borrower may have against a Lender that shall have failed to make such payment
to the Administrative Agent.
(ii) Payments by Borrowers; Presumptions by Administrative Agent.
Unless the Administrative Agent shall have received notice from B&N prior
to the date on which any payment is due to the Administrative Agent for the
account of the Lenders or the L/C Issuer hereunder that a Borrower will not
make such payment, the Administrative Agent may assume that such Borrower
has made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to the Lenders or the L/C Issuer,
as the case may be, the amount due. In such event, if such Borrower has not
in fact made such payment, then each of the Lenders or the L/C Issuer, as
the case may be, severally agrees to repay to the Administrative Agent
forthwith on demand the amount so distributed to such Lender or the L/C
Issuer, in immediately available funds with interest thereon, for each day
from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the greater
of the Federal Funds Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation.
A notice of the Administrative Agent to any Lender or Borrower with respect
to any amount owing under this subsection (b) shall be presumptively correct,
absent manifest error.
(c) Failure to Satisfy Conditions Precedent. If any Lender makes available
to the Administrative Agent funds for any Loan to be made by such Lender as
provided in the foregoing provisions of this Article II, and such funds are not
made available to the Borrowers by the Administrative Agent because the
conditions to the applicable Credit Extension set forth in Article IV are not
satisfied or waived in accordance with the terms hereof, the Administrative
Agent shall return such funds (in like funds as received from such Lender) to
such Lender, without interest.
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(d) Obligations of Lenders Several. The obligations of the Lenders
hereunder to make Committed Loans, to fund participations in Letters of Credit
and Swing Line Loans and to make payments pursuant to Section 10.04(c) are
several and not joint. The failure of any Lender to make any Committed Loan, to
fund any such participation or to make any payment under Section 10.04(c) on any
date required hereunder shall not relieve any other Lender of its corresponding
obligation to do so on such date, and no Lender shall be responsible for the
failure of any other Lender to so make its Committed Loan, to purchase its
participation or to make its payment under Section 10.04(c).
(e) Funding Source. Nothing herein shall be deemed to obligate any Lender
to obtain the funds for any Loan in any particular place or manner or to
constitute a representation by any Lender that it has obtained or will obtain
the funds for any Loan in any particular place or manner.
2.13 Sharing of Payments by Lenders. If any Lender shall, by exercising any
right of setoff or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of the Committed Loans made by it, or the
participations in L/C Obligations or in Swing Line Loans held by it resulting in
such Lender's receiving payment of a proportion of the aggregate amount of such
Committed Loans or participations and accrued interest thereon greater than its
pro rata share thereof as provided herein, then the Lender receiving such
greater proportion shall (a) notify the Administrative Agent of such fact, and
(b) purchase (for cash at face value) participations in the Committed Loans and
subparticipations in L/C Obligations and Swing Line Loans of the other Lenders,
or make such other adjustments as shall be equitable, so that the benefit of all
such payments shall be shared by the Lenders ratably in accordance with the
aggregate amount of principal of and accrued interest on their respective
Committed Loans and other amounts owing them, provided that:
(i) if any such participations or subparticipations are purchased and
all or any portion of the payment giving rise thereto is recovered, such
participations or subparticipations shall be rescinded and the purchase
price restored to the extent of such recovery, without interest; and
(ii) the provisions of this Section shall not be construed to apply to
(x) any payment made by the Borrowers pursuant to and in accordance with
the express terms of this Agreement or (y) any payment obtained by a Lender
as consideration for the assignment of or sale of a participation in any of
its Committed Loans or subparticipations in L/C Obligations or Swing Line
Loans to any assignee or participant, other than to B&N or any Subsidiary
thereof (as to which the provisions of this Section shall apply).
Each Loan Party consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against such
Loan Party rights of setoff and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of such Loan Party in the
amount of such participation.
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2.14 Increase in Commitments.
(a) Request for Increase. Provided there exists no Default, upon notice to
the Administrative Agent (which shall promptly notify the Lenders), B&N may from
time to time, request an increase in the Aggregate Commitments by an amount (for
all such requests) not exceeding $150,000,000; provided that (i) any such
request for an increase shall be in a minimum amount of $50,000,000, and (ii)
B&N may make a maximum of two such requests per calendar year. At the time of
sending such notice, B&N (in consultation with the Administrative Agent) shall
specify the time period within which each Lender is requested to respond (which
shall in no event be less than ten Business Days from the date of delivery of
such notice to the Lenders).
(b) Lender Elections to Increase. Each Lender shall notify the
Administrative Agent within such time period whether or not it agrees to
increase its Commitment and, if so, whether by an amount equal to, greater than,
or less than its Applicable Percentage of such requested increase. Any Lender
not responding within such time period shall be deemed to have declined to
increase its Commitment.
(c) Notification by Administrative Agent; Additional Lenders. The
Administrative Agent shall notify B&N and each Lender of the Lenders' responses
to each request made hereunder. To achieve the full amount of a requested
increase and subject to the approval of the Administrative Agent and the L/C
Issuer (which approvals shall not be unreasonably withheld or delayed) after B&N
offers to the then existing Lenders the right to commit to any such increase,
B&N may also invite additional Eligible Assignees to become Lenders pursuant to
a joinder agreement in form and substance satisfactory to the Administrative
Agent and its counsel.
(d) Effective Date and Allocations. If the Aggregate Commitments are
increased in accordance with this Section, the Administrative Agent and B&N
shall determine the effective date (the "Increase Effective Date") and the final
allocation of such increase. The Administrative Agent shall promptly notify B&N
and the Lenders of the final allocation of such increase and the Increase
Effective Date.
(e) Conditions to Effectiveness of Increase. As a condition precedent to
such increase, B&N shall deliver to the Administrative Agent a certificate of
each Loan Party dated as of the Increase Effective Date (in sufficient copies
for each Lender) signed by a Responsible Officer of such Loan Party (i)
certifying and attaching the resolutions adopted by such Loan Party approving or
consenting to such increase, and (ii) in the case of B&N, certifying that,
before and after giving effect to such increase, (A) the representations and
warranties contained in Article V and the other Loan Documents are true and
correct on and as of the Increase Effective Date, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they are true and correct as of such earlier date, and except that for
purposes of this Section 2.14, the representations and warranties contained in
subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most
recent statements furnished pursuant to clauses (a) and (b), respectively, of
Section 6.01, and (B) no Default exists. If Committed Loans would be outstanding
immediately after giving effect to any such increase, then simultaneously with
such increase (1) each Lender (including each new Lender assuming a portion of
the increase shall be deemed to have entered into a master assignment and
acceptance agreement, in
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substance substantially similar to Exhibit A, pursuant to which each such other
Lender shall have assigned to each such increasing Lender and new Lender a
portion of its Committed Loans necessary to reflect proportionately the
Aggregate Commitments as adjusted in accordance with this subsection (e), and
(2) in connection with such assignment, each such increasing Lender and each new
Lender shall pay to the Administrative Agent, for the account of each such other
Lender, such amount as shall be necessary to reflect the assignment to it of
Committed Loans, and in connection with such master assignment each such other
Lender may treat the assignment of Eurodollar Rate Loans as a prepayment of such
Eurodollar Borrowings for purposes of Section 3.05.
(f) Conflicting Provisions. This Section shall supersede any provisions in
Sections 2.13 or 10.01 to the contrary.
2.15 Designated Co-Borrowers; Joint and Several Liability; Borrowers'
Waivers and Consents; Agency of B&N. (a) Effective as of the date hereof ▇▇▇▇▇▇
& ▇▇▇▇▇ Booksellers, Inc., ▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ llc, ▇. ▇▇▇▇▇▇ Bookseller, LLC and
each Material Subsidiary of B&N listed on Schedule 1.01 shall each be a
"Designated Co-Borrower" hereunder and may receive Loans for its account on the
terms and conditions set forth in this Agreement.
(b) B&N may at any time, upon not less than 10 Business Days' notice from
B&N to the Administrative Agent (or such shorter period as may be agreed by the
Administrative Agent in its sole discretion), designate any Material Subsidiary
of B&N (an "Applicant Borrower") as a Designated Co-Borrower to receive Loans
hereunder by delivering to the Administrative Agent (which shall promptly
deliver counterparts thereof to each Lender) a duly executed notice and
agreement in substantially the form of Exhibit G (a "Designated Co-Borrower
Request and Assumption Agreement"). The parties hereto acknowledge and agree
that prior to any Applicant Borrower becoming entitled to utilize the credit
facilities provided for herein the Administrative Agent and the Lenders shall
have received such supporting resolutions, incumbency certificates, opinions of
counsel and other documents or information, in form, content and scope
reasonably satisfactory to the Administrative Agent, as may be reasonably
required by the Administrative Agent or the Required Lenders, and Notes signed
by such new Co-Borrowers to the extent any Lenders so require. An Applicant
Borrower shall be entitled to receive Loans hereunder, promptly upon receipt by
the Administrative Agent or the Required Lenders, as the case may be, of all
such requested resolutions, incumbency certificates, opinions of counsel and
other documents or information, and the Administrative Agent shall send a notice
in substantially the form of Exhibit H (a "Designated Borrower Notice") to B&N
and the Lenders specifying the effective date upon which the Applicant Borrower
shall constitute a Designated Co-Borrower for purposes hereof, which effective
date shall be no later than the fifth Business Day after the Applicant Borrower
has provided all the documents required by this Section 2.15(b), whereupon each
of the Lenders agrees to permit such Designated Co-Borrower to receive Loans
hereunder, on the terms and conditions set forth herein, and each of the parties
agrees that such Designated Co-Borrower otherwise shall be a Borrower for all
purposes of this Agreement; provided that no Committed Loan Notice or Letter of
Credit Application may be submitted by or on behalf of such Designated
Co-Borrower until the date five Business Days after such effective date.
(c) Notwithstanding any other provision of this Agreement, each Borrower
shall be jointly and severally liable as a primary obligor, and not merely as
surety, for any and all
45
Obligations now or hereafter owed to the Administrative Agent, the L/C Issuer
and the Lenders, whether voluntary or involuntary and however arising, whether
direct or acquired by any Lender by assignment or succession, whether due or not
due, absolute or contingent, liquidated or unliquidated, determined or
undetermined, and whether any Borrower or Borrowers may be liable individually
or jointly with others, or whether recovery upon such Obligations may be or
hereafter become barred by any statute of limitations, or whether such
Obligations may be or hereafter become otherwise unenforceable (such
Obligations, the "Borrowers' Liabilities"). For valuable consideration, each
Borrower unconditionally guarantees and promises to pay to Administrative Agent,
on behalf of itself and the Lenders, on demand, in lawful money of the United
States, any and all of the Borrowers' Liabilities. Notwithstanding the
foregoing, the liability of each Borrower individually with respect to its
Borrowers' Liabilities shall be limited to an aggregate amount equal to the
largest amount that would not render its obligations hereunder subject to
avoidance under Section 548 of the United States Bankruptcy Code or any
comparable provisions of any applicable state law. This is a guaranty of payment
and not of collection.
(d) The guaranty of each Borrower hereunder shall be a continuing guaranty
relating to any Borrowers' Liabilities, including those arising under successive
transactions which shall either continue Obligations or from time to time renew
any Obligations after such Obligations shall have been satisfied. Any payment by
any of the Borrowers shall not reduce the Borrowers' maximum obligation
hereunder.
(e) The Obligations of each Borrower are independent, and a separate action
or actions may be brought and prosecuted against a Borrower whether action is
brought against any other Borrower or whether any other Borrower is joined in
any such action or actions; and each Borrower waives the benefit of any statute
of limitations affecting its liability hereunder.
(f) Each Borrower agrees that neither the Administrative Agent nor any
Lender shall have any responsibility to inquire into the apportionment,
allocation or disposition of the proceeds of any Credit Extension as among the
Borrowers, and acknowledges that its liability hereunder shall not be reduced or
diminished by the identity of such Borrower giving or receiving of notices and
other communications, making requests for, or effecting conversions or
continuations of, Loans or Letters of Credit, executing and delivering
certificates, or receiving or allocating disbursements from the Lenders. Each
Borrower acknowledges that the handling of this credit facility on a joint
borrowing basis as set forth in this Agreement is solely an accommodation to
Borrowers and is done at their request. Each Borrower agrees that no Lender
shall incur any liability to such Borrower as a result of such accommodation.
(g) Each Borrower represents and warrants to the Administrative Agent and
the Lenders that the request for joint handling of the Loans, L/C Obligations
and other Obligations made hereunder was made because the Borrowers are engaged
in related operations and are interdependent. Each Borrower expects to derive
benefit, directly or indirectly, from such availability because the successful
operation of Borrowers is dependent on the continued successful performance of
the functions of the Borrowers as a group.
(h) Each Borrower represents and warrants to the Administrative Agent and
the Lenders that (i) it has established adequate means of obtaining from each
other Borrower on a
46
continuing basis financial and other information pertaining to the business,
operations and condition (financial and otherwise) of each other Borrower and
its respective property, and (ii) it now is and hereafter will be completely
familiar with the business, operations and condition (financial and otherwise)
of each other Borrower, and its property. Each Borrower hereby waives and
relinquishes any duty on the part of the Administrative Agent to disclose to
such Borrower any matter, fact or thing relating to the business, operations or
condition (financial or otherwise) of any other Borrower, or the property of any
other Borrower, whether now or hereafter known by the Administrative Agent or
any Lender during the life of this Agreement.
(i) Each Borrower expressly waives any right to require the Administrative
Agent and the Lenders to marshal assets in favor of any Borrower or any other
Person or to proceed against any other Borrower or any other Person or any
collateral provided by any other Borrower or any other Person, and agrees that
the Administrative Agent and the Lenders may proceed against any Borrower and/or
collateral in such order as they shall determine in their sole and absolute
discretion. The Administrative Agent and the Lenders may file a separate action
or actions against any Borrower, whether action is brought or prosecuted with
respect to any other security or against any other Person, or whether any other
Person is joined in any such action or actions. Each Borrower agrees that the
Administrative Agent and the Lenders and any other Borrower may deal with each
other in connection with the Obligations, the Borrowers' Liabilities or
otherwise, or alter any contracts or agreements now or hereafter existing
between any of them, in any manner whatsoever, all without in any way altering
or affecting the obligations of such Borrower under the Loan Documents.
(j) Each Borrower expressly waives any and all defenses now or hereafter
arising or asserted by reason of (i) any disability or other defense of any
other Borrower, any Guarantor or any other Person with respect to any
Obligations, (ii) the unenforceability or invalidity as to any other Borrower,
any Guarantor or any other Person of the Obligations, (iii) the unenforceability
or invalidity of any security or guaranty for the Obligations or the lack of
perfection or continuing perfection or failure of priority of any security for
the Obligations, (iv) the cessation for any cause whatsoever of the liability of
any Borrower, any Guarantor or any other Person (other than by reason of the
full payment and performance of all Obligations), (v) to the extent permitted by
law, any failure of the Administrative Agent and the Lenders to give notice of
sale or other disposition to any Borrower, any Guarantor or any other Person or
any defect in any notice that may be given in connection with any sale or
disposition, (vi) to the extent permitted by law, any failure of the
Administrative Agent and the Lenders to comply with applicable laws in
connection with the sale or other disposition of any collateral or other
security for any Obligation, including without limitation any failure of the
Administrative Agent and the Lenders to conduct a commercially reasonable sale
or other disposition of any collateral or other security for any obligation,
(vii) any act or omission of the Administrative Agent and the Lenders, that
directly or indirectly results in or aids the discharge or release of any
Borrower or any Guarantor or the Obligations or any other security or guaranty
therefor by operation of law or otherwise, (viii) any Law which provides that
the obligation of a surety or guarantor must neither be larger in amount nor in
other respects more burdensome than that of the principal or which reduces a
surety's or guarantor's obligation in proportion to the principal obligation,
(ix) any failure of the Administrative Agent and the Lenders to file or enforce
a claim in any bankruptcy or other proceeding with respect to any other
Borrower, any Guarantor or any other Person, (x) the election by the
Administrative Agent and the Lenders, in any bankruptcy proceeding of any other
47
Borrower or any Guarantor, of the application or non-application of Section
1111(b)(2) of the United States Bankruptcy Code, (xi) any extension of credit or
the grant of any Lien under ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Bankruptcy Code in
connection with the bankruptcy of any other Borrower or any Guarantor, (xii) any
use of cash collateral under Section 363 of the United States Bankruptcy Code,
or (xiii) any agreement or stipulation with any other Borrower or any Guarantor
with respect to the provision of adequate protection in any bankruptcy
proceeding of any Person.
(k) Notwithstanding anything to the contrary elsewhere contained herein or
in any other Loan Document to which any Borrower is a party, each Borrower
hereby waives, so long as any Lender shall have any Commitment hereunder, any
Loan or other Obligation hereunder shall remain unpaid or unsatisfied or any
Letter of Credit shall remain outstanding, with respect to each other Borrower
and its successors and assigns (including any surety) and any other party any
and all rights at law or in equity, to subrogation, to reimbursement, to
exoneration, to contribution, to setoff or to any other rights that could accrue
to a surety against a principal, to a guarantor against a maker, to an
accommodation party against the party accommodated, or to a holder or transferee
against a maker and which any Borrower may have or hereafter acquire against any
other Borrower or any other Person in connection with or as a result of the
execution, delivery and/or performance of this Agreement or any other Loan
Document. Each Borrower agrees that, so long as any Lender shall have any
Commitment hereunder, any Loan or other Obligation hereunder shall remain unpaid
or unsatisfied or any Letter of Credit shall remain outstanding, it shall not
have or assert any such rights against any other Borrower or its successors and
assigns or any other party (including any surety), either directly or as an
attempted setoff to any action commenced against any Borrower by another
Borrower (as borrower or in any other capacity) or any other party. Each
Borrower hereby acknowledges and agrees that this waiver is intended to benefit
the Administrative Agent and the Lenders and shall not limit or otherwise affect
Borrowers' liability hereunder, under any other Loan Document to which any
Borrower is a party, or the enforceability hereof or thereof.
(l) Any obligations of any Borrower or any Guarantor to any other Borrower,
now or hereafter existing, including but not limited to any obligations to a
Borrower or a Guarantor as subrogee of the Administrative Agent and the Lenders
or resulting from a Borrower's performance under this guaranty, are hereby
subordinated to the Borrowers' Liabilities. Such obligations of a Borrower or a
Guarantor to another Borrower, if the Administrative Agent so requests, shall be
enforced, and performance received by such Borrower or such Guarantor as trustee
for the Administrative Agent and the Lenders, and the proceeds thereof shall be
paid over to the Administrative Agent for the benefit of the Administrative
Agent and the Lenders on account of the Obligations of Borrowers to the
Administrative Agent and the Lenders, but without reducing or affecting in any
manner the liability of any Borrower under the other provisions of the guaranty
contained herein.
(m) Each Borrower irrevocably appoints B&N as its agent for all purposes
relevant to this Agreement and each of the other Loan Documents, including (i)
the giving and receipt of notices, (ii) the execution and delivery of all
documents, instruments and certificates contemplated herein and all
modifications hereto, and (iii) the receipt of the proceeds of any Loans made by
the Lenders, to Borrowers hereunder. Any acknowledgment, consent, direction,
certification or other action which might otherwise be valid or effective only
if given or taken by
48
all Borrowers, or by each Borrower acting singly, shall be valid and effective
if given or taken only by B&N, whether or not any such other Borrower joins
therein. Any notice, demand, consent, acknowledgement, direction, certification
or other communication delivered to B&N in accordance with the terms of this
Agreement or any other Loan Document shall be deemed to have been delivered to
each Borrower.
(n) In the event that any Borrower ceases to be a Domestic Subsidiary as a
result of any Disposition permitted hereunder and such Borrower has satisfied in
full such Borrower's Obligations (including L/C Obligations, but excluding
Obligations arising from Related Swap Contracts) under this Agreement and the
other Loan Documents, such Borrower (and all direct and indirect wholly-owned
Subsidiaries of such Borrower) shall be released from its obligations under this
Agreement and the other Loan Documents.
(o) Notwithstanding anything to the contrary contained herein, to the
extent this Agreement requires payment of an amount by "each Borrower", "the
Borrowers" or "a Borrower", such payment shall be made by the Borrowers without
duplication.
ARTICLE III.
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 Taxes.
(a) Payments Free of Taxes. Any and all payments by or on account of any
obligation of the respective Borrowers hereunder or under any other Loan
Document shall be made free and clear of and without reduction or withholding
for any Indemnified Taxes or Other Taxes, provided that if the applicable
Borrower shall be required by applicable law to deduct any Indemnified Taxes
(including any Other Taxes) from such payments, then (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)
the Administrative Agent, Lender or L/C Issuer, as the case may be, receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) such Borrower shall make such deductions and (iii) such Borrower shall
timely pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law; provided further, that the Borrowers shall not
be required to pay any additional amounts with respect to income or tax or
amounts owing to a Lender that (x) is a Foreign Lender and (y) has not delivered
the forms required by Section 3.01(e).
(b) Payment of Other Taxes by the Borrowers. Without limiting the
provisions of subsection (a) above, the Borrowers shall timely pay any Other
Taxes to the relevant Governmental Authority in accordance with applicable law.
(c) Indemnification by the Borrowers. The Borrowers shall jointly and
severally, indemnify the Administrative Agent, each Lender and the L/C Issuer,
within 10 days after demand therefor, for the full amount of any Indemnified
Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section) paid by the
Administrative Agent, such Lender or the L/C Issuer, as the case may be, and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed
49
or asserted by the relevant Governmental Authority. A certificate as to the
amount of such payment or liability delivered to a Borrower by a Lender or the
L/C Issuer (with a copy to the Administrative Agent), or by the Administrative
Agent on its own behalf or on behalf of a Lender or the L/C Issuer, shall be
presumptively correct absent manifest error.
(d) Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by a Borrower to a Governmental Authority, such
Borrower shall deliver to the Administrative Agent the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such payment,
a copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.
(e) Status of Lenders. Any Foreign Lender that is entitled to an exemption
from or reduction of withholding tax under the law of the jurisdiction in which
a Borrower is resident for tax purposes, or any treaty to which such
jurisdiction is a party, with respect to payments hereunder or under any other
Loan Document shall deliver to B&N (with a copy to the Administrative Agent), at
the time or times prescribed by applicable law or reasonably requested by B&N or
the Administrative Agent, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made without
withholding or at a reduced rate of withholding. In addition, any Lender, if
requested by B&N or the Administrative Agent, shall deliver such other
documentation prescribed by applicable law or reasonably requested by B&N or the
Administrative Agent as will enable B&N or the Administrative Agent to determine
whether or not such Lender is subject to backup withholding or information
reporting requirements.
Without limiting the generality of the foregoing, in the event that a
Borrower is resident for tax purposes in the United States, any Foreign Lender
shall deliver to B&N and the Administrative Agent (in such number of copies as
shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the request of B&N or the Administrative Agent, but only if such
Foreign Lender is legally entitled to do so), whichever of the following is
applicable:
(i) duly completed copies of Internal Revenue Service Form W-8BEN
claiming eligibility for benefits of an income tax treaty to which the
United States is a party,
(ii) duly completed copies of Internal Revenue Service Form W-8ECI,
(iii) in the case of a Foreign Lender claiming the benefits of the
exemption for portfolio interest under section 881(c) of the Code, (x) a
certificate to the effect that such Foreign Lender is not (A) a "bank"
within the meaning of section 881(c)(3)(A) of the Code, (B) a "10 percent
shareholder" of a Borrower within the meaning of section 881(c)(3)(B) of
the Code, or (C) a "controlled foreign corporation" described in section
881(c)(3)(C) of the Code and (y) duly completed copies of Internal Revenue
Service Form W-8BEN, or
(iv) any other form prescribed by applicable law as a basis for
claiming exemption from or a reduction in United States Federal withholding
tax duly completed
50
together with such supplementary documentation as may be prescribed by
applicable law to permit B&N to determine the withholding or deduction
required to be made.
(f) Treatment of Certain Refunds. If the Administrative Agent, any Lender
or the L/C Issuer determines that it has received a refund of any Taxes or Other
Taxes as to which it has been indemnified by any Borrower or with respect to
which such Borrower has paid additional amounts pursuant to this Section, it
shall pay to such Borrower an amount equal to such refund (but only to the
extent of indemnity payments made, or additional amounts paid, by such Borrower
under this Section with respect to the Taxes or Other Taxes giving rise to such
refund), net of all out-of-pocket expenses of the Administrative Agent, such
Lender or the L/C Issuer, as the case may be, and without interest (other than
any interest paid by the relevant Governmental Authority with respect to such
refund), provided that each Borrower, upon the request of the Administrative
Agent, such Lender or the L/C Issuer, agrees to repay the amount paid over to
such Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent, such Lender or the
L/C Issuer in the event the Administrative Agent, such Lender or the L/C Issuer
is required to repay such refund to such Governmental Authority. This subsection
shall not be construed to require the Administrative Agent, any Lender or the
L/C Issuer to make available its tax returns (or any other information relating
to its taxes that it deems confidential) to B&N or any other Person.
3.02 Illegality. If any Lender determines that as a result of a Change in
Law, any Law has made it unlawful, or that any Governmental Authority has
asserted that it is unlawful, for any Lender or its applicable Lending Office to
make, maintain or fund Eurodollar Rate Loans, or to determine or charge interest
rates based upon the Eurodollar Rate, or any Governmental Authority has imposed
material restrictions on the authority of such Lender to purchase or sell, or to
take deposits of, Dollars in the London interbank market, then, on written
notice thereof by such Lender to B&N through the Administrative Agent, any
obligation of such Lender to make or continue Eurodollar Rate Loans or to
convert Base Rate Committed Loans to Eurodollar Rate Loans shall be suspended
until such Lender notifies the Administrative Agent and B&N that the
circumstances giving rise to such determination no longer exist. Upon receipt of
such notice, the Borrowers shall, upon demand from such Lender (with a copy to
the Administrative Agent), prepay or, if applicable, convert all Eurodollar Rate
Loans of such Lender to Base Rate Loans, either on the last day of the Interest
Period therefor, if such Lender may lawfully continue to maintain such
Eurodollar Rate Loans to such day, or immediately, if such Lender may not
lawfully continue to maintain such Eurodollar Rate Loans. Upon any such
prepayment or conversion, the Borrowers shall also pay accrued interest on the
amount so prepaid or converted.
3.03 Inability to Determine Rates. If the Required Lenders determine that
for any reason in connection with any request for a Eurodollar Rate Loan or a
conversion to or continuation thereof that (a) Dollar deposits are not being
offered to banks in the London interbank eurodollar market for the applicable
amount and Interest Period of such Eurodollar Rate Loan, (b) adequate and
reasonable means do not exist for determining the Eurodollar Rate for any
requested Interest Period with respect to a proposed Eurodollar Rate Loan , or
(c) the Eurodollar Rate for any requested Interest Period with respect to a
proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to
such Lenders of funding such Loan, the Administrative Agent will promptly so
notify B&N and each Lender. Thereafter, the obligation of the Lenders to make or
maintain Eurodollar Rate Loans shall be suspended until the
51
Administrative Agent (upon the instruction of the Required Lenders) revokes such
notice. Upon receipt of such notice, B&N may revoke any pending request for a
Borrowing of, conversion to or continuation of Eurodollar Rate Loans or, failing
that, will be deemed to have converted such request into a request for a
Committed Borrowing of Base Rate Loans in the amount specified therein.
3.04 Increased Costs; Reserves on Eurodollar Rate Loans.
(a) Increased Costs Generally. If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit,
compulsory loan, insurance charge or similar requirement against assets of,
deposits with or for the account of, or credit extended or participated in
by, any Lender (except any reserve requirement contemplated by Section
3.04(e)) or the L/C Issuer;
(ii) subject any Lender or the L/C Issuer to any tax of any kind
whatsoever with respect to this Agreement, any Letter of Credit, any
participation in a Letter of Credit or any Eurodollar Rate Loan made by it,
or change the basis of taxation of payments to such Lender or the L/C
Issuer in respect thereof (except for Indemnified Taxes or Other Taxes
covered by Section 3.01 and the imposition of, or any change in the rate
of, any Excluded Tax payable by such Lender or the L/C Issuer); or
(iii) impose on any Lender or the L/C Issuer or the London interbank
market any other condition, cost or expense affecting this Agreement or
Eurodollar Rate Loans made by such Lender or any Letter of Credit or
participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Rate Loan (or of maintaining its
obligation to make any such Loan), or to increase the cost to such Lender or the
L/C Issuer of participating in, issuing or maintaining any Letter of Credit (or
of maintaining its obligation to participate in or to issue any Letter of
Credit), or to reduce the amount of any sum received or receivable by such
Lender or the L/C Issuer hereunder (whether of principal, interest or any other
amount) then, upon request of such Lender or the L/C Issuer, B&N will pay (or
cause the applicable Designated Co-Borrower to pay) to such Lender or the L/C
Issuer, as the case may be, such additional amount or amounts as will compensate
such Lender or the L/C Issuer, as the case may be, for such additional costs
incurred or reduction suffered.
(b) Capital Requirements. If any Lender or the L/C Issuer determines that
any Change in Law affecting such Lender or the L/C Issuer or any Lending Office
of such Lender or such Lender's or the L/C Issuer's holding company, if any,
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender's or the L/C Issuer's capital or on the capital of such
Lender's or the L/C Issuer's holding company, if any, as a consequence of this
Agreement, the Commitments of such Lender or the Loans made by, or
participations in Letters of Credit held by, such Lender, or the Letters of
Credit issued by the L/C Issuer, to a level below that which such Lender or the
L/C Issuer or such Lender's or the L/C Issuer's holding company could have
achieved but for such Change in Law (taking into consideration such Lender's or
the L/C Issuer's policies and the policies of such Lender's or the L/C Issuer's
52
holding company with respect to capital adequacy), then from time to time B&N
will pay (or cause the applicable Designated Co-Borrower to pay) to such Lender
or the L/C Issuer, as the case may be, such additional amount or amounts as will
compensate such Lender or the L/C Issuer or such Lender's or the L/C Issuer's
holding company for any such reduction suffered.
(c) Certificates for Reimbursement. A certificate of a Lender or the L/C
Issuer setting forth the amount or amounts necessary to compensate such Lender
or the L/C Issuer or its holding company, as the case may be, as specified in
subsection (a) or (b) of this Section and delivered to B&N shall be
presumptively correct absent manifest error. B&N shall pay (or cause the
applicable Designated Co-Borrower to pay) such Lender or the L/C Issuer, as the
case may be, the amount shown as due on any such certificate within 10 days
after receipt thereof.
(d) Delay in Requests. Failure or delay on the part of any Lender or the
L/C Issuer to demand compensation pursuant to the foregoing provisions of this
Section shall not constitute a waiver of such Lender's or the L/C Issuer's right
to demand such compensation, provided that the Borrowers shall not be required
to compensate a Lender or the L/C Issuer pursuant to the foregoing provisions of
this Section for any increased costs incurred or reductions suffered more than
90 days prior to the date that such Lender or the L/C Issuer, as the case may
be, notifies B&N of the Change in Law giving rise to such increased costs or
reductions and of such Lender's or the L/C Issuer's intention to claim
compensation therefor (except that, if the Change in Law giving rise to such
increased costs or reductions is retroactive, then the 90-day period referred to
above shall be extended to include the period of retroactive effect thereof).
(e) Reserves on Eurodollar Rate Loans. The Borrowers 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 Loan equal to the actual
costs of such reserves allocated to such Loan 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 Loan,
provided B&N shall have received at least 10 days' prior notice (with a copy to
the Administrative Agent) of such additional interest from such Lender. If a
Lender fails to give notice 10 days prior to the relevant Interest Payment Date,
such additional interest shall be due and payable 10 days from receipt of such
notice.
3.05 Compensation for Losses. Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, B&N shall promptly compensate (or cause
the applicable Designated Co-Borrower to compensate) such Lender for and hold
such Lender harmless from any loss, cost or expense incurred by it as a result
of:
(a) any continuation, conversion, payment or prepayment of any Loan other
than a Base Rate Loan on a day other than the last day of the Interest Period
for such Loan (whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise);
(b) any failure by the Borrowers (for a reason other than the failure of
such Lender to make a Loan) to prepay, borrow, continue or convert any Loan
other than a Base Rate Loan on the date or in the amount notified by B&N or the
applicable Designated Co-Borrower; or
53
(c) any assignment of a Eurodollar Rate Loan on a day other than the last
day of the Interest Period therefor as a result of a request by B&N pursuant to
Section 10.13;
including any loss or expense arising from the liquidation or reemployment of
funds obtained by it to maintain such Loan or from fees payable to terminate the
deposits from which such funds were obtained. B&N shall also pay (or cause the
applicable Designated Co-Borrower to pay) any customary administrative fees
charged by such Lender in connection with the foregoing.
For purposes of calculating amounts payable by B&N (or the applicable Designated
Borrower) to the Lenders under this Section 3.05, each Lender shall be deemed to
have funded each Eurodollar Rate Loan made by it at the Eurodollar Rate for such
Loan by a matching deposit or other borrowing in the London interbank eurodollar
market for a comparable amount and for a comparable period, whether or not such
Eurodollar Rate Loan was in fact so funded.
3.06 Mitigation Obligations; Replacement of Lenders.
(a) Designation of a Different Lending Office. If any Lender requests
compensation under Section 3.04, or a Borrower is required to pay any additional
amount to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 3.01, or if any Lender gives a notice pursuant to Section
3.02, then such Lender shall use reasonable efforts to designate a different
Lending Office for funding or booking its Loans hereunder or to assign its
rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04,
as the case may be, in the future, or eliminate the need for the notice pursuant
to Section 3.02, as applicable, and (ii) in each case, would not subject such
Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. The Borrowers hereby agree, jointly and
severally, to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
(b) Replacement of Lenders. If any Lender requests compensation under
Section 3.04, or if a Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 3.01, B&N may replace such Lender in accordance with Section 10.13.
3.07 Survival. All of the Borrowers' obligations under this Article III
shall survive termination of the Aggregate Commitments and repayment of all
other Obligations hereunder.
ARTICLE IV.
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
4.01 Conditions of Initial Credit Extension. The obligation of the L/C
Issuer and each Lender to make its initial Credit Extension hereunder is subject
to satisfaction of the following conditions precedent:
(a) The Administrative Agent's receipt of the following, each of which
shall be originals or telecopies (followed promptly by originals) unless
otherwise specified, each properly executed by a Responsible Officer of the
signing Loan Party, each dated the Closing Date (or, in
54
the case of certificates of governmental officials, a recent date before the
Closing Date) and each in form and substance satisfactory to the Administrative
Agent and each of the Lenders:
(i) executed counterparts of this Agreement, the Subsidiary Guaranty
Agreement, each sufficient in number for distribution to the Administrative
Agent, each Lender and B & N;
(ii) a Note executed by the Borrowers in favor of each Lender
requesting a Note;
(iii) such certificates of resolutions or other action, incumbency
certificates and/or other certificates of Responsible Officers of each Loan
Party as the Administrative Agent may require evidencing the identity,
authority and capacity of each Responsible Officer thereof authorized to
act as a Responsible Officer in connection with this Agreement and the
other Loan Documents to which such Loan Party is a party;
(iv) such documents and certifications as the Administrative Agent may
reasonably require to evidence that each Loan Party is duly organized or
formed, and that each Loan Party is validly existing, in good standing and
qualified to engage in business in each jurisdiction where its ownership,
lease or operation of properties or the conduct of its business requires
such qualification, except to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect;
(v) a favorable opinion of ▇▇▇▇▇ ▇▇▇▇ LLP, counsel to the Loan
Parties, addressed to the Administrative Agent and each Lender, as to the
matters set forth in Exhibit I;
(vi) a certificate of a Responsible Officer of each Loan Party either
(A) attaching copies of all consents, licenses and approvals required in
connection with the execution, delivery and performance by such Loan Party
and the validity against such Loan Party of the Loan Documents to which it
is a party, and such consents, licenses and approvals shall be in full
force and effect, or (B) stating that no such consents, licenses or
approvals are so required;
(vii) a certificate signed by a Responsible Officer of B&N certifying
(A) that the conditions specified in Sections 4.02(a) and (b) have been
satisfied, (B) that there has been no event or circumstance since the date
of the Audited Financial Statements that has had or could be reasonably
expected to have, either individually or in the aggregate, a Material
Adverse Effect; (C) a calculation of the Consolidated Fixed Charge Coverage
Ratio as of the last day of the fiscal quarter of B&N most recently ended
prior to the Closing Date; and (D) as to the absence of any action, suit,
investigation or proceeding pending, or, to the knowledge of B&N,
threatened in any court or before any arbitrator or governmental authority
that either individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect;
(viii) a duly completed Compliance Certificate as of the last day of
the fiscal quarter of B&N ended on April 30, 2005, signed by the chief
financial officer, vice-president-finance or vice president-corporate
finance of B & N;
55
(ix) evidence that all insurance required to be maintained pursuant to
the Loan Documents has been obtained and is in effect;
(x) evidence that the Existing
Credit Agreement has been or
concurrently with the Closing Date is being terminated and all Liens
securing obligations under the Existing
Credit Agreement have been or
concurrently with the Closing Date are being released; and
(xi) such other assurances, certificates, documents, consents or
opinions as the Administrative Agent, the L/C Issuer, the Swing Line Lender
or the Required Lenders reasonably may require.
(b) Any fees required to be paid on or before the Closing Date shall have
been paid.
(c) Unless waived by the Administrative Agent, the Borrowers shall have
paid all fees, charges and disbursements of counsel to the Administrative Agent
to the extent invoiced prior to or on the Closing Date, plus such additional
amounts of such fees, charges and disbursements as shall constitute its
reasonable estimate of such fees, charges and disbursements incurred or to be
incurred by it through the closing proceedings (provided that such estimate
shall not thereafter preclude a final settling of accounts between the Borrowers
and the Administrative Agent).
Without limiting the generality of the provisions of Section 9.04, for
purposes of determining compliance with the conditions specified in this Section
4.01, each Lender that has signed this Agreement shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter required thereunder to be consented to or approved by or acceptable
or satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.
4.02 Conditions to all Credit Extensions. The obligation of each Lender to
honor any Request for Credit Extension (other than a Committed Loan Notice
requesting only a conversion of Committed Loans to the other Type, or a
continuation of Eurodollar Rate Loans) is subject to the following conditions
precedent:
(a) The representations and warranties of B&N and each other Loan Party
contained in Article V or any other Loan Document, or which are contained in any
document furnished at any time under or in connection herewith or therewith, (i)
which are qualified by materiality shall be true and correct, and (ii) which are
not qualified by materiality shall be true and correct in all material respects,
in each case, on and as of the date of such Credit Extension, except to the
extent that such representations and warranties specifically refer to an earlier
date, in which case they shall be true and correct, or true and correct in all
material respects, as the case may be, as of such earlier date, and except that
for purposes of this Section 4.02, the representations and warranties contained
in subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most
recent consolidated statements furnished pursuant to clauses (a) and (b),
respectively, of Section 6.01.
(b) No Default shall exist, or would result from such proposed Credit
Extension or from the application of the proceeds thereof.
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(c) The Administrative Agent and, if applicable, the L/C Issuer or the
Swing Line Lender shall have received a Request for Credit Extension in
accordance with the requirements hereof.
(d) If the applicable Borrower is a Designated Co-Borrower, then the
conditions of Section 2.15 to the designation of such Borrower as a Designated
Co-Borrower shall have been met to the reasonable satisfaction of the
Administrative Agent.
Each Request for Credit Extension (other than a Committed Loan Notice
requesting only a conversion of Committed Loans to the other Type or a
continuation of Eurodollar Rate Loans) submitted by B&N shall be deemed to be a
representation and warranty that the conditions specified in Sections 4.02(a)
and (b) have been satisfied on and as of the date of the applicable Credit
Extension.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
Each Borrower represents and warrants to the Administrative Agent and the
Lenders that:
5.01 Existence, Qualification and Power; Compliance with Laws. Each Loan
Party (a) is duly organized or formed, validly existing and in good standing
under the Laws of the jurisdiction of its incorporation or organization, (b) has
all requisite power and authority and all requisite governmental licenses,
authorizations, consents and approvals to (i) own or lease its assets and carry
on its business and (ii) execute, deliver and perform its obligations under the
Loan Documents to which it is a party, (c) is duly qualified and is licensed and
in good standing under the Laws of each jurisdiction where its ownership, lease
or operation of properties or the conduct of its business requires such
qualification or license; except in each case referred to in clause (b)(i) or
(c), to the extent that failure to do so could not reasonably be expected to
have a Material Adverse Effect.
5.02 Authorization; No Contravention. The execution, delivery and
performance by each Loan Party of each Loan Document to which such Person is
party, have been duly authorized by all necessary corporate or other
organizational action, and do not and will not (a) contravene the terms of any
of such Person's Organization Documents; (b) conflict with or result in any
breach or contravention of, or the creation of any Lien under, or require any
payment to be made under (i) any Contractual Obligation to which such Person is
a party or affecting such Person or the properties of such Person or any of its
Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental
Authority or any arbitral award to which such Person or its property is subject,
in each case except to the extent such conflict or breach could not reasonably
be expected to have a Material Adverse Effect; or (c) violate any Law.
5.03 Governmental Authorization; Other Consents. No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document.
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5.04 Binding Effect. This Agreement has been, and each other Loan Document,
when delivered hereunder, will have been, duly executed and delivered by each
Loan Party that is party thereto. This Agreement constitutes, and each other
Loan Document when so delivered will constitute, a legal, valid and binding
obligation of such Loan Party, enforceable against each Loan Party that is party
thereto in accordance with its terms, except as the enforceability thereof may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally and by
the application of general equitable principles.
5.05 Financial Statements; No Material Adverse Effect.
(a) The Audited Financial Statements (i) were prepared in accordance with
GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; (ii) fairly present the financial condition
of B&N and its Subsidiaries as of the date thereof and their results of
operations for the period covered thereby in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein; and (iii) show all material indebtedness and other liabilities,
direct or contingent, of B&N and its Subsidiaries as of the date thereof,
including liabilities for taxes, material commitments and Indebtedness.
(b) The unaudited consolidated balance sheets of B&N and its Subsidiaries
dated April 30, 2005 (the "Interim Statements"), and the related consolidated
statements of income or operations, shareholders' equity and cash flows for the
fiscal quarter ended on that date (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein, and (ii) fairly present the financial condition of B&N
and its Subsidiaries as of the date thereof and their results of operations for
the period covered thereby, subject, in the case of clauses (i) and (ii), to the
absence of footnotes and to normal year-end audit adjustments. Schedule 5.05
sets forth all material indebtedness and other liabilities, direct or
contingent, of B&N and its consolidated Subsidiaries as of the date of such
financial statements, including liabilities for taxes, material commitments and
Indebtedness, that is not shown on the Interim Statements.
(c) Since the date of the Audited Financial Statements, there has been no
event or circumstance, either individually or in the aggregate, that has had or
could reasonably be expected to have a Material Adverse Effect.
5.06 Litigation. There are no actions, suits, proceedings, claims or
disputes pending or, to the knowledge of B&N, threatened or contemplated, at
law, in equity, in arbitration or before any Governmental Authority, by or
against B&N or any of its Subsidiaries or against any of their properties or
revenues that (a) purport to affect or pertain to this Agreement or any other
Loan Document, or any of the transactions contemplated hereby, or (b) except as
specifically disclosed in Schedule 5.06, either individually or in the aggregate
could reasonably be expected to have a Material Adverse Effect, and there has
been no material adverse change in the status, or financial effect on any Loan
Party or any Subsidiary thereof, of the matters described on Schedule 5.06.
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5.07 No Default. No Default has occurred and is continuing or would result
from the consummation of the transactions contemplated by this Agreement or any
other Loan Document.
5.08 Ownership of Property; Liens. Each of B&N and each Subsidiary has good
record and marketable title in fee simple to, or valid leasehold interests in,
all real property material to its business, except for such defects in title as
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. The property of B&N and its Subsidiaries is subject to
no Liens, other than Liens permitted by Section 7.01.
5.09 Environmental Compliance. B&N and its Subsidiaries conduct in the
ordinary course of business a review of the effect of existing Environmental
Laws and claims alleging potential liability or responsibility for violation of
any Environmental Law on their respective businesses, operations and properties,
and as a result thereof B&N has reasonably concluded that such Environmental
Laws and claims could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
5.10 Insurance. The properties of B&N and its Subsidiaries are insured with
financially sound and reputable insurance companies not Affiliates of B&N (with
the exception of Chelsea Insurance Company Ltd. so long as it is duly licensed
by the appropriate Government Authority in its state of incorporation to conduct
business as an insurer in such state and meets and maintains the appropriate
capital requirements to maintain such licensure), in such amounts, with such
deductibles and covering such risks as are customarily carried by companies
engaged in similar businesses and owning similar properties in localities where
B&N or the applicable Subsidiary operates.
5.11 Taxes. B&N and its Subsidiaries have filed all Federal, state and
other material tax returns and reports required to be filed, and have paid all
Federal, state and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those which are being contested in good
faith by appropriate proceedings diligently conducted and for which adequate
reserves have been provided in accordance with GAAP. There is no proposed tax
assessment against B&N or any Subsidiary that would, if made, be reasonably
expected to have a Material Adverse Effect. Neither any Loan Party nor any
Subsidiary thereof is party to any tax sharing agreement other than the tax
sharing agreement between B&N and Game Stop Corp.
5.12 ERISA Compliance.
(a) Each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code and other Federal or state Laws. Each Plan that is
intended to qualify under Section 401(a) of the Code has received a favorable
determination letter from the IRS or an application for such a letter is
currently being processed by the IRS with respect thereto and, to the best
knowledge of B&N, nothing has occurred which would prevent, or cause the loss
of, such qualification. B&N and each ERISA Affiliate have made all required
contributions to each Plan subject to Section 412 of the Code, and no
application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made with respect to any Plan,
except to the extent any failure to make such contribution would reasonably be
expected to have a Material Adverse Effect.
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(b) There are no pending or, to the best knowledge of B&N, threatened
claims, actions or lawsuits, or action by any Governmental Authority, with
respect to any Plan that could reasonably be expected to have a Material Adverse
Effect. There has been no prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan that has resulted or could
reasonably be expected to result in a Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to occur;
(ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither B&N nor
any ERISA Affiliate has incurred, or reasonably expects to incur, any liability
under Title IV of ERISA with respect to any Pension Plan (other than premiums
due and not delinquent under Section 4007 of ERISA); (iv) neither B&N nor any
ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and
no event has occurred which, with the giving of notice under Section 4219 of
ERISA, would result in such liability) under Sections 4201 or 4243 of ERISA with
respect to a Multiemployer Plan; and (v) neither B&N nor any ERISA Affiliate has
engaged in a transaction that could be subject to Sections 4069 or 4212(c) of
ERISA, in each case to the extent that any failure to comply with clauses (i)
through (iv) of this Section 5.12(c) could not reasonably be expected to have a
Material Adverse Effect.
5.13 Subsidiaries; Equity Interests. As of the Closing Date, B&N has no
Subsidiaries other than those specifically disclosed in Part (a) of Schedule
5.13, and all of the outstanding Equity Interests in such Subsidiaries have been
validly issued, are fully paid and nonassessable and are owned by a Loan Party
in the amounts specified on Part (a) of Schedule 5.13 free and clear of all
Liens. The Borrowers have no equity investments in any other corporation or
entity other than those specifically disclosed in Part(b) of Schedule 5.13.
5.14 Margin Regulations; Investment Company Act; Public Utility Holding
Company Act.
(a) No Borrower is engaged or will engage, principally or as one of its
important activities, in the business of purchasing or carrying margin stock
(within the meaning of Regulation U issued by the FRB), or extending credit for
the purpose of purchasing or carrying margin stock. Following the application of
the proceeds of each Borrowing or drawing under each Letter of Credit, not more
than 25% of the value of the assets (either of B&N only or of B&N and its
Subsidiaries on a consolidated basis) subject to the provisions of Section 7.01
or Section 7.05 or subject to any restriction contained in any agreement or
instrument between any Borrower and any Lender or any Affiliate of any Lender
relating to Indebtedness and within the scope of Section 8.01(e) will be margin
stock.
(b) None of B&N, any Person Controlling B&N, or any Subsidiary (i) is a
"holding company," or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company," within the meaning of the Public Utility Holding Company Act of 1935,
or (ii) is or is required to be registered as an "investment company" under the
Investment Company Act of 1940.
5.15 Disclosure. B&N has disclosed to the Administrative Agent and the
Lenders all agreements, instruments and corporate or other restrictions to which
it or any of its Subsidiaries is subject, and all other matters known to it,
that, individually or in the aggregate, could
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reasonably be expected to result in a Material Adverse Effect. No report,
financial statement, certificate or other information furnished (whether in
writing or orally) by or on behalf of any Loan Party to the Administrative Agent
or any Lender in connection with the transactions contemplated hereby and the
negotiation of this Agreement or delivered hereunder or under any other Loan
Document (in each case, as modified or supplemented by other information so
furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not materially misleading; provided
that, with respect to projected financial information, B&N represents only that
such information was prepared in good faith based upon assumptions believed to
be reasonable at the time.
5.16 Compliance with Laws. Each of B&N and each Subsidiary is in compliance
with the requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its properties, except in such instances in which (a)
such requirement of Law or order, writ, injunction or decree is being contested
in good faith by appropriate proceedings diligently conducted or (b) the failure
to comply therewith, either individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
5.17 Intellectual Property; Licenses, Etc. B&N and its Subsidiaries own, or
possess the right to use, all of the trademarks, service marks, trade names,
copyrights, patents, patent rights, franchises, licenses and other intellectual
property rights (collectively, "IP Rights") that are reasonably necessary for
the operation of their respective businesses, without conflict with the rights
of any other Person. To the best knowledge of B&N, no slogan or other
advertising device, product, process, method, substance, part or other material
now employed, or now contemplated to be employed, by B&N or any Subsidiary
infringes upon any rights held by any other Person. Without limitation of the
foregoing, B&N has the perpetual license to use the name "▇▇▇▇▇▇ & Noble, Inc."
(the "B&N License") in the operation of its business as currently conducted
without any conflict with any rights of others.
ARTICLE VI.
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or any
fees or other amounts payable under the Loan Documents shall remain unpaid or
unsatisfied, or any Letter of Credit shall remain outstanding, B&N shall, and
shall (except in the case of the covenants set forth in Sections 6.01, 6.02, and
6.03) cause each Subsidiary to:
6.01 Financial Statements. Deliver to the Administrative Agent and each
Lender, in form and detail satisfactory to the Administrative Agent and the
Required Lenders:
(a) as soon as available, but in any event within 90 days after the end of
each fiscal year of B&N (or if earlier, 15 days after the date required to be
filed with the SEC (without giving effect to any extension permitted by the
SEC)) (commencing with the fiscal year ended January 28, 2006), a consolidated
balance sheet of B&N and its Subsidiaries as at the end of such fiscal year, and
the related consolidated statements of income or operations, shareholders'
equity and cash flows for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, all in reasonable
detail and prepared in accordance with GAAP, audited
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and accompanied by (i) a report and opinion of BDO ▇▇▇▇▇▇▇ LLP or another
Registered Public Accounting Firm of nationally recognized standing reasonably
acceptable to the Required Lenders (the "Public Accountants") as to whether such
financial statements are free of material misstatement, which report and opinion
shall be prepared in accordance with audit standards of the Public Company
Accounting Oversight Board and applicable Securities Laws and shall not be
subject to any "going concern" or like qualification or exception or any
qualification or exception as to the scope of such audit or with respect to the
absence of material misstatement and (ii) an attestation report of such
Registered Public Accounting Firm as to B&N's internal controls pursuant to
Section 404 of ▇▇▇▇▇▇▇▇-▇▇▇▇▇; and
(b) as soon as available, but in any event within 45 days after the end of
each of the first three fiscal quarters of each fiscal year of B&N (or if
earlier, five Business Days after the date required to be filed with the SEC
(without giving effect to any extension permitted by the SEC)) (commencing with
the fiscal quarter ended April 30, 2005), a consolidated balance sheet of B&N
and its Subsidiaries as at the end of such fiscal quarter, and the related
consolidated statements of income or operations, shareholders' equity and cash
flows for such fiscal quarter and for the portion of B&N's fiscal year then
ended, setting forth in each case in comparative form the figures for the
corresponding fiscal quarter of the previous fiscal year and the corresponding
portion of the previous fiscal year, all in reasonable detail, certified by a
Responsible Officer of B&N as fairly presenting the financial condition, results
of operations, shareholders' equity and cash flows of B&N and its Subsidiaries
in accordance with GAAP, subject only to normal year-end audit adjustments and
the absence of footnotes.
As to any information contained in materials furnished pursuant to Section
6.02(d), the Borrowers shall not be separately required to furnish such
information under clause (a) or (b) above, but the foregoing shall not be in
derogation of the obligation of the Borrowers to furnish the information and
materials described in clauses (a) and (b) above at the times specified therein.
6.02 Certificates; Other Information. Deliver to the Administrative Agent
and each Lender, in form and detail satisfactory to the Administrative Agent and
the Required Lenders:
(a) concurrently with the delivery of the financial statements referred to
in Section 6.01(a), a certificate of the chief financial officer,
vice-president-finance or vice president-corporate finance of B&N stating that
in making the examination necessary therefor no knowledge was obtained of any
Default or, if any such Default shall exist, stating the nature and status of
such event;
(b) concurrently with the delivery of the financial statements referred to
in Sections 6.01(a) and (b) (commencing with the delivery of the financial
statements for the fiscal quarter ended July 30, 2005), a duly completed
Compliance Certificate signed by a Responsible Officer of B&N, together with a
reconciliation of such financial statements to the covenant calculations set
forth in Section 7.11, which reconciliation shall exclude the results of
operations of Calendar Club L.L.C. and BNW Canada Company.
(c) promptly after any request by the Administrative Agent or any Lender,
copies of any detailed audit reports, management letters or recommendations
submitted to the board of directors (or the audit committee of the board of
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directors) of B&N by independent accountants in connection with the accounts or
books of B&N or any Subsidiary, or any audit of any of them;
(d) promptly upon the filing thereof, copies of all registration
statements, proxy statements and annual, quarterly, monthly or other reports
which B&N or any Loan Party files with the SEC (including without limitation,
copies of all reports on Form 8-K that B&N files with the SEC);
(e) promptly, and in any event within five Business Days after receipt
thereof by any Loan Party or any Subsidiary thereof, copies of each notice or
other correspondence received from the SEC (or comparable agency in any
applicable non-U.S. jurisdiction) concerning any investigation or possible
investigation or other inquiry by such agency regarding financial or other
operational results of any Loan Party or any Subsidiary thereof; and
(f) promptly, such additional information regarding the business, financial
or corporate affairs of B&N or any Subsidiary, or compliance with the terms of
the Loan Documents, as the Administrative Agent or any Lender may from time to
time reasonably request.
Documents required to be delivered pursuant to Section 6.01(a) or (b) or
Section 6.02(d) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which the
Borrowers post such documents, or provides a link thereto on B&N's website on
the Internet at the website address listed on Schedule 10.02; or (ii) on which
such documents are posted on the Borrowers' behalf on an Internet or intranet
website, if any, to which each Lender and the Administrative Agent have access
(whether a commercial, third-party website or whether sponsored by the
Administrative Agent); provided that: (i) the Borrowers shall deliver paper
copies of such documents to the Administrative Agent or any Lender that requests
the Borrowers to deliver such paper copies until a written request to cease
delivering paper copies is given by the Administrative Agent or such Lender and
(ii) the Borrowers shall notify the Administrative Agent and each Lender (by
telecopier or electronic mail) of the posting of any such documents and provide
to the Administrative Agent by electronic mail electronic versions (i.e., soft
copies) of such documents. Notwithstanding anything contained herein, in every
instance B&N shall be required to provide paper copies of the Compliance
Certificates required by Section 6.02(b) to the Administrative Agent. Except for
such Compliance Certificates, the Administrative Agent shall have no obligation
to request the delivery or to maintain copies of the documents referred to
above, and in any event shall have no responsibility to monitor compliance by
the Borrowers with any such request for delivery, and each Lender shall be
solely responsible for requesting delivery to it or maintaining its copies of
such documents.
Each Borrower hereby acknowledges that (a) the Administrative Agent and/or
the Arrangers will make available to the Lenders and the L/C Issuer materials
and/or information provided by or on behalf of such Borrower hereunder
(collectively, "Borrower Materials") by posting the Borrower Materials on
IntraLinks or another similar electronic system (the "Platform") and (b) none of
the Lenders may be "public-side" Lenders (i.e., Lenders that do not wish to
receive material non-public information with respect to such Borrower or its
securities)
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(each, a "Public Lender"). Each Borrower hereby agrees that (w) no Borrower
Materials are to be made available to Public Lenders; (x) all Borrower Materials
shall be treated as private and may contain material non-public information with
respect to such Borrower or its securities for purposes of United States Federal
and state securities laws; and (y) the Administrative Agent and the Arrangers
shall treat all Borrower Materials that are not marked "PUBLIC" as being
suitable only for posting on a portion of the Platform not designated "Public
Investor".
6.03 Notices. Promptly, or in any event within five Business Days, notify
the Administrative Agent and each Lender:
(a) of the occurrence of any Default of which a Responsible Officer has
obtained knowledge;
(b) of any matter that has resulted or could reasonably be expected to
result in a Material Adverse Effect, including (i) breach or non-performance of,
or any default under, a Contractual Obligation of B&N or any Subsidiary; (ii)
any dispute, litigation, investigation, proceeding or suspension between B&N or
any Subsidiary and any Governmental Authority; or (iii) the commencement of, or
any material development in, any litigation or proceeding affecting B&N or any
Subsidiary, including pursuant to any applicable Environmental Laws;
(c) of the occurrence of any ERISA Event;
(d) of any material change in accounting policies or financial reporting
practices by B&N or any Subsidiary;
(e) of the Public Accountants' determination (in connection with its
preparation of its report under Section 6.01(a)) or B&N's determination of the
occurrence or existence of any Internal Control Event ; and
(f) of any change in the name, corporate form or state of organization of
B&N or any Loan Party or any change in the name or names under which B&N's or
any Loan Party's business is transacted.
Each notice pursuant to this Section shall be accompanied by a statement of
a Responsible Officer of B&N setting forth details of the occurrence referred to
therein and stating what action the Borrowers have taken and proposes to take
with respect thereto. Each notice pursuant to Section 6.03(a) shall describe
with particularity any and all provisions of this Agreement and any other Loan
Document that have been breached.
6.04 Payment of Obligations. Pay and discharge as the same shall become due
and payable, all its obligations and liabilities, including all tax liabilities,
assessments and governmental charges or levies upon it or its properties or
assets, unless the same are being contested in good faith by appropriate
proceedings diligently conducted and adequate reserves in accordance with GAAP
are being maintained by B&N or such Subsidiary.
6.05 Preservation of Existence, Etc. (a) Preserve, renew and maintain in
full force and effect its legal existence and good standing under the Laws of
the jurisdiction of its organization except in a transaction permitted by
Section 7.04 or 7.05; (b) take all reasonable
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action to maintain all rights, privileges, permits, licenses and franchises
necessary or desirable in any material respect in the normal conduct of its
business, except to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect; and (c) preserve or renew all of its
registered patents, trademarks, trade names and service marks, including the B&N
License, the non-preservation of which could reasonably be expected to have a
Material Adverse Effect.
6.06 Maintenance of Properties. (a) Maintain, preserve and protect all of
its material properties and equipment necessary in the operation of its business
in good working order and condition, ordinary wear and tear excepted; (b) make
all necessary repairs thereto and renewals and replacements thereof except where
the failure to do so could not reasonably be expected to have a Material Adverse
Effect; and (c) maintain or cause to be maintained all material real property
leases, occupancy agreements, assignments, subleases or other similar agreements
as may be required for the conduct of any Loan Party's business.
6.07 Maintenance of Insurance. Maintain with financially sound and
reputable insurance companies not Affiliates of B&N, insurance with respect to
its properties and business against loss or damage of the kinds customarily
insured against by Persons engaged in the same or similar business, of such
types and in such amounts (after giving effect to any self-insurance compatible
with the following standards) as are customarily carried under similar
circumstances by such other Persons and providing for not less than 30 days'
prior notice to the Administrative Agent of termination, lapse or cancellation
of such insurance.
6.08 Compliance with Laws and Agreements. (a) Comply in all material
respects with the requirements of all Laws and all orders, writs, injunctions
and decrees applicable to it or to its business or property, except in such
instances in which (i) such requirement of Law or order, writ, injunction or
decree is being contested in good faith by appropriate proceedings diligently
conducted; or (ii) the failure to comply therewith could not reasonably be
expected to have a Material Adverse Effect; and
(b) promptly and fully comply with all Contractual Obligations to which any
one or more of them is a party, except for any such Contractual Obligations
(other than the Loan Documents) (i) the performance of which would cause a
Default, (ii) then being contested by any of them in good faith by appropriate
proceedings, or (iii) if the failure to comply therewith does not have a
Material Adverse Effect.
6.09 Books and Records. Maintain proper books of record and account, in
which full, true and correct entries in conformity with GAAP consistently
applied shall be made of all financial transactions and matters involving the
assets and business of B&N or such Subsidiary, as the case may be.
6.10 Inspection Rights. Permit representatives and independent contractors
of the Administrative Agent and each Lender to visit and inspect (once in any
12-month period) any of its properties, to examine its corporate, financial and
operating records, and make copies thereof or abstracts therefrom, and to
discuss its affairs, finances and accounts with its directors, officers, and
independent public accountants, all at the expense of the Administrative Agent
or such Lender, as applicable, and at such reasonable times during normal
business hours and as often as
65
may be reasonably desired, upon reasonable advance notice to B & N; provided,
however, that when an Event of Default exists the Administrative Agent or any
Lender (or any of their respective representatives or independent contractors)
may do any of the foregoing at the expense of the Borrowers at any time during
normal business hours and without advance notice.
6.11 Use of Proceeds. Use the proceeds of the Credit Extensions for (i)
general corporate purposes, including but not limited to share repurchases,
dividends and acquisitions, not in contravention of any Law or of any Loan
Document and (ii) repayment of outstanding amounts under the Existing
Credit
Agreement.
6.12 Guarantors. Notify the Administrative Agent at the time that any
Person becomes a Material Subsidiary or the time any existing Subsidiary becomes
a Material Subsidiary, and promptly thereafter (and in any event within 30
days), cause such Person to (a) if such Subsidiary is a Domestic Subsidiary,
deliver to the Administrative Agent either a Designated Co-Borrower Request and
Assumption Agreement or a Guaranty Joinder Agreement, in either case, duly
executed by such Material Subsidiary; (b) if such Subsidiary is a Foreign
Subsidiary, and to the extent lawful, no onerous governmental approval
requirements would result or be necessary and no adverse tax consequences would
result therefrom, deliver to the Administrative Agent a Guaranty Joinder
Agreement duly executed by such Material Subsidiary, and (c) deliver to the
Administrative Agent documents of the types referred to in clauses (iii) and
(iv) of Section 4.01(a) and favorable opinions of counsel to such Person (which
shall cover, among other things, the legality, validity, binding effect and
enforceability of the documentation referred to in clause (a)), all in form,
content and scope reasonably satisfactory to the Administrative Agent.
Notwithstanding anything to the contrary herein, B&N shall at all times cause
such of its Subsidiaries that together have assets equal to or not less than 90%
of Consolidated Total Assets and revenues of not less than 90% of the total
revenues of B&N and its Subsidiaries (each calculated as described in the
definition of Material Subsidiary) to be either Designated Co-Borrowers under
this Agreement or to be bound by the terms of the Subsidiary Guaranty Agreement.
6.13 Compliance with ERISA. Cause, and cause each of its ERISA Affiliates
to: (a) maintain each Pension Plan in compliance in all material respects with
the applicable provisions of ERISA, the Code and other federal or state law; (b)
cause each Pension Plan which is qualified under Section 401(a) of the Code to
maintain such qualification; and (c) make all required contributions to any
Pension Plan subject to Section 412 of the Code.
6.14 Fiscal Year. Notify the Administrative Agent of any change in B&N's
fiscal year (whereupon, notwithstanding the provisions of Section 10.01, the
Administrative Agent and the Lenders shall have the right to modify the timing
of the financial covenants hereunder accordingly in order to correspond to any
such change in fiscal year).
6.15 Internal Control Events. Upon notification from the Administrative
Agent to B&N that the Required Lenders require remediation of any Internal
Control Event of which they have received notice pursuant to Section 6.03(e) or
as reported in any report delivered pursuant to Section 6.01(a), remediate or
cause to be remediated such Internal Control Event, and to test and confirm such
remediation, not later than the end of the time period reasonably agreed by the
Required Lenders with B&N as necessary for such remediation (the "Remediation
Period"). It is
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understood that the Remediation Period will require a sufficient period of time
to permit testing required by the relevant Securities Laws.
ARTICLE VII.
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or any
fees or other amounts payable under the Loan Documents shall remain unpaid or
unsatisfied, or any Letter of Credit shall remain outstanding, B&N shall not,
nor shall it permit any Subsidiary to, directly or indirectly:
7.01 Liens. Create, incur, assume or suffer to exist any Lien upon any of
its property, assets or revenues, whether now owned or hereafter acquired, other
than the following:
(a) Liens pursuant to any Loan Document;
(b) Liens existing on the date hereof and listed on Schedule 7.01 and any
renewals or extensions thereof, provided that (i) the property covered thereby
is not changed, (ii) the amount secured or benefited thereby is not increased,
(iii) the direct or any contingent obligor with respect thereto is not changed,
and (iv) any renewal or extension of the obligations secured or benefited
thereby is permitted by Section 7.03(b);
(c) Liens for taxes not yet due or which are being contested in good faith
and by appropriate proceedings diligently conducted, if adequate reserves with
respect thereto are maintained on the books of the applicable Person in
accordance with GAAP;
(d) carriers', warehousemen's, mechanics', materialmen's, repairmen's or
other like Liens arising in the ordinary course of business which are not
overdue for a period of more than 30 days or which are being contested in good
faith and by appropriate proceedings diligently conducted, if adequate reserves
with respect thereto are maintained on the books of the applicable Person;
(e) pledges or deposits in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other social security
legislation, other than any Lien imposed by ERISA;
(f) landlords' and lessors' statutory Liens in respect of rent not in
default;
(g) deposits to secure the performance of bids, trade contracts and leases
(other than Indebtedness), statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
(h) Liens relating to real estate consisting of easements, rights-of-way,
restrictions and other similar encumbrances affecting real property which, in
the aggregate, do not materially interfere with the ordinary conduct of the
business of the applicable Person;
(i) Liens securing judgments for the payment of money not constituting an
Event of Default under Section 8.01(h);
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(j) Liens securing Indebtedness permitted under Section 7.03(e); provided
that (i) such Liens do not at any time encumber any property other than the
property financed by such Indebtedness and (ii) the Indebtedness secured thereby
does not exceed the cost or fair market value, whichever is lower, of the
property being acquired on the date of acquisition; and
(k) possessory Liens in favor of brokers and dealers arising in connection
with the acquisition or disposition of Investments owned as of the date hereof
and Permitted Investments, provided that such liens (a) attach only to such
Investments and (b) secure only obligations incurred in the ordinary course and
arising in connection with the acquisition or disposition of such Investments
and not any obligation in connection with margin financing;
(l) security interests in favor of the issuer of any documentary letters of
credit for the account of the Borrowers covering only the following: (i) any
documentation presented in connection with a drawing under such letter of
credit, (ii) all goods which are described in such documents or any such letter
of credit, and (iii) the proceeds thereof;
(m) Liens in connection with any sale-leasebacks permitted by Section 7.13;
provided that no such Lien shall extend to cover any property or asset of such
Loan Party other than the lease entered into in connection with any such
sale-leaseback;
(n) Liens in favor of a financial institution encumbering deposits
(including the right of set-off) held by such financial institution in the
ordinary course of its business and which are within the general parameters
customary in the banking industry;
(o) Liens on the assets of any Guarantor in favor of B&N or any other
Guarantor and Liens on assets of B&N in favor of any Guarantor; and
(p) Liens securing other permitted Indebtedness that does not exceed
$25,000,000 in the aggregate in addition to those Liens permitted by Section
7.01(a) through (o).
7.02 Investments. Make any Investments, except:
(a) Investments as of the date hereof and set forth on Schedule 7.02(a);
(b) Investments held by B&N or such Subsidiary in the form of (i) notes,
bonds or other obligations of the United States of America or any agency
thereof, (ii) notes, bonds or other obligations of states, counties, and
municipalities of the United States that are rated not less than MIG1 or VMIG1;
(iii) certificates of deposit or other deposit instruments or accounts of banks
or trust companies organized under the laws of the United States or any state
thereof that have total assets of at least $40,000,000,000, (iv) certificates of
deposit or other deposit instruments or accounts of Foreign Banks that have an
agency, branch or representative bank with a domestic U.S. license and have
total assets of at least $50,000,000,000, (v) commercial paper that is rated not
less than prime-one or A-1 or their equivalents by ▇▇▇▇▇'▇ Investors Service,
Inc. ("Moody's") or Standard & Poor's Corporation ("S&P"), respectively, or
their successors, (vi) corporate notes or bonds that are rated not less than A
or their equivalents by Moody's or S&P or their successors, (vii) any repurchase
agreement secured by any one or more of the foregoing, or (viii) any mutual fund
that invests exclusively in securities of any one or more of the foregoing;
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(c) advances to officers, directors and employees of B&N and the other Loan
Parties in an aggregate amount not to exceed $5,000,000 at any time outstanding,
for travel, entertainment, relocation and analogous ordinary business purposes;
(d) Investments of B&N in any Guarantor and Investments of any Guarantor in
B&N or in another Guarantor;
(e) Investments consisting of extensions of credit in the nature of
accounts receivable or notes receivable arising from the grant of trade credit
in the ordinary course of business, and Investments received in satisfaction or
partial satisfaction thereof from financially troubled account debtors to the
extent reasonably necessary in order to prevent or limit loss;
(f) Guarantees permitted by Section 7.03;
(g) Investments consisting of Permitted Acquisitions;
(h) Investment in Chelsea Insurance Company Ltd. not to exceed $25,000,000;
and
(i) other Investments in an aggregate amount at any one time outstanding
not in excess of $50,000,000, provided that at the time of such Investment and
immediately after giving effect thereto no Default shall have occurred and be
continuing,
provided that in no event shall Investments in Foreign Subsidiaries exceed 10%
of B&N's Consolidated Tangible Net Worth as of the most recently completed
fiscal quarter.
7.03 Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness under the Loan Documents;
(b) Indebtedness outstanding on the date hereof and listed on Schedule 7.03
and any refinancings, refundings, renewals or extensions thereof; provided that
the amount of such Indebtedness is not increased at the time of such
refinancing, refunding, renewal or extension except by an amount equal to a
reasonable premium or other reasonable amount paid, and fees and expenses
reasonably incurred, in connection with such refinancing and by an amount equal
to any existing commitments unutilized thereunder;
(c) Guarantees of B&N or any Guarantor in respect of Indebtedness otherwise
permitted hereunder of B&N or any other Guarantor;
(d) obligations (contingent or otherwise) of B&N or any Subsidiary existing
or arising under any Swap Contract, provided that (i) such obligations are (or
were) entered into by such Person in the ordinary course of business for the
purpose of directly mitigating risks associated with liabilities, commitments,
investments, assets, or property held or reasonably anticipated by such Person,
or changes in the value of securities issued by such Person, and not for
purposes of speculation or taking a "market view;" and (ii) such Swap Contract
does not contain any provision exonerating the non-defaulting party from its
obligation to make payments on outstanding transactions to the defaulting party;
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(e) Indebtedness in respect of Capitalized Leases, Synthetic Lease
Obligations and purchase money obligations for fixed or capital assets within
the limitations set forth in Section 7.01(j); provided, however, that the
aggregate amount of all such Indebtedness at any one time outstanding shall not
exceed $100,000,000;
(f) Indebtedness (including renewals, extensions and refinancings thereof
so long as the principal amount thereof is not increased) not otherwise
permitted under this Section 7.03; provided, that the aggregate outstanding
amount of Indebtedness permitted by this clause (f) shall not at any time exceed
$25,000,000; and
(g) unsecured Indebtedness so long as no Default has occurred and is
continuing at the time of, or would result from, the issuance thereof and so
long as no agreement pursuant to which any such Indebtedness is issued contains
terms or provisions in conflict with or more restrictive than the terms or
provisions contained in this Agreement.
7.04 Fundamental Changes. Merge, dissolve, liquidate, consolidate with or
into another Person, or Dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to or in favor of any Person, except that, so long as no
Default exists or would result therefrom:
(a) any Subsidiary may merge with (i) B&N, provided that B&N shall be the
continuing or surviving Person, or (ii) any one or more other Subsidiaries,
provided that when any Guarantor is merging with another Subsidiary, the
Guarantor shall be the continuing or surviving Person or the surviving Person
shall become a Guarantor substantially simultaneously;
(b) any Subsidiary may Dispose of all or substantially all of its assets
(upon voluntary liquidation or otherwise) (i) to B&N or to another Subsidiary;
provided that if the transferor in such a transaction is a Guarantor, then the
transferee must either be B&N or a Guarantor or (ii) in connection with any
Disposition permitted under Section 7.05(g); and
(c) any Subsidiary (other than a Guarantor) may liquidate or dissolve if
B&N determines in good faith that such liquidation or dissolution is in the best
interests of B&N and is not materially disadvantageous to the Lenders.
7.05 Dispositions. Make any Disposition or enter into any agreement to make
any Disposition, except:
(a) Dispositions of obsolete or worn out property, whether now owned or
hereafter acquired, in the ordinary course of business;
(b) Dispositions of inventory in the ordinary course of business;
(c) Dispositions of equipment or real property to the extent that (i) such
property is exchanged for credit against the purchase price of similar
replacement property or (ii) the proceeds of such Disposition are reasonably
promptly applied to the purchase price of such replacement property;
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(d) Dispositions of property by any Subsidiary to B&N or to a wholly-owned
Subsidiary; provided that if the transferor of such property is a Guarantor, the
transferee thereof must either be a Borrower or a Guarantor;
(e) Dispositions permitted by Section 7.04;
(f) non-exclusive licenses of IP Rights in the ordinary course of business
and substantially consistent with past practice for terms not exceeding five
years;
(g) Dispositions of Investments described in Section 7.02(b); and
(h) Dispositions by B&N and its Subsidiaries not otherwise permitted under
this Section 7.05; provided that (i) at the time of such Disposition, no Default
shall exist or would result from such Disposition and (ii) the aggregate book
value of all property Disposed of in reliance on this clause (h) in any fiscal
year shall not exceed 10% of Consolidated Total Assets as of the Closing Date;
provided, however, that any Disposition pursuant to clauses (a) through (h)
shall be for fair market value.
7.06 Restricted Payments. Declare or make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do so,
except that, so long as no Default shall have occurred and be continuing at the
time of any action described below or would result therefrom:
(a) each Subsidiary may make Restricted Payments to B&N, the Guarantors and
any other Person that owns an Equity Interest in such Subsidiary, ratably
according to their respective holdings of the type of Equity Interest in respect
of which such Restricted Payment is being made;
(b) B&N and each Subsidiary may declare and make dividend payments or other
distributions payable solely in the common stock or other common Equity
Interests of such Person;
(c) B&N and each Subsidiary may purchase, redeem or otherwise acquire
Equity Interests issued by it with the proceeds received from the substantially
concurrent issue of new shares of its common stock or other common Equity
Interests;
(d) B&N may declare or pay cash dividends to its stockholders and purchase,
redeem or otherwise acquire for cash Equity Interests issued by it; and
(e) B&N and each Subsidiary may make Restricted Payments as regular
compensation or bonuses to its employees in the ordinary course of business and
consistent with past practices.
7.07 Change in Nature of Business. Engage in any material line of business
substantially different from those lines of business conducted by B&N and its
Subsidiaries on the date hereof or any business substantially related,
incidental or complementary thereto.
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7.08 Transactions with Affiliates. Enter into any transaction of any kind
with any Affiliate of B&N, whether or not in the ordinary course of business,
other than on fair and reasonable terms substantially as favorable to B&N or
such Subsidiary as would be obtainable by B&N or such Subsidiary at the time in
a comparable arm's length transaction with a Person other than an Affiliate;
provided that the foregoing restriction shall not apply to transactions between
or among B&N and any Guarantor or between and among any Guarantors.
7.09 Burdensome Agreements. Enter into any Contractual Obligation (other
than this Agreement or any other Loan Document) that (a) limits the ability (i)
of any Subsidiary to make Restricted Payments to any Borrower or any Guarantor
or to otherwise transfer property to any Borrower or any Guarantor, (ii) of any
Subsidiary to Guarantee the Indebtedness of any Borrower or (iii) of any
Borrower or any Subsidiary to create, incur, assume or suffer to exist Liens on
property of such Person; provided, however, that this clause (iii) shall not
prohibit any negative pledge incurred or provided in favor of any holder of
Indebtedness permitted under Section 7.03(e) solely to the extent any such
negative pledge relates to the property financed by or the subject of such
Indebtedness; or (b) requires the grant of a Lien to secure an obligation of
such Person if a Lien is granted to secure another obligation of such Person;
provided that the foregoing shall not apply to (x) restrictions and conditions
imposed by applicable Law, (y) customary restrictions and conditions contained
in agreements relating to the sale of a Subsidiary pending such sale, provided
that such restrictions and conditions apply only to the Subsidiary that is to be
sold and such sale is permitted hereunder and (z) clause (a)(iii) of this
Section shall not apply to customary provisions in leases restricting the
assignment thereof.
7.10 Use of Proceeds. Use the proceeds of any Credit Extension, whether
directly or indirectly, and whether immediately, incidentally or ultimately, to
purchase or carry margin stock (within the meaning of Regulation U of the FRB)
or to extend credit to others for the purpose of purchasing or carrying margin
stock or to refund indebtedness originally incurred for such purpose.
7.11 Financial Covenants.
(a) Consolidated Fixed Charge Coverage Ratio. Permit the Consolidated Fixed
Charge Coverage Ratio as of the end of any four fiscal quarters of B&N to be
less than 1.75 to 1.00.
(b) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio as
of the end of any four fiscal quarters of B&N to be greater than 2.00 to 1.00.
7.12 Acquisitions. Enter into any agreement, contract, binding commitment
or other arrangement providing for any Acquisition, or take any action to
solicit the tender of securities or proxies in respect thereof in order to
effect any Acquisition, unless (i) the Person to be (or whose assets are to be)
acquired does not oppose such Acquisition and the line or lines of business of
the Person to be acquired are substantially the same as one or more line or
lines of business conducted by the Borrowers and its Subsidiaries, or
substantially related, incidental or complementary thereto, (ii) no Default or
Event of Default shall have occurred and be continuing either immediately prior
to or immediately after giving effect to such Acquisition and, if the Cost of
Acquisition is in excess of $100,000,000, B&N shall have furnished to the
Administrative
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Agent (A) pro forma historical financial statements as of the end of the most
recently completed fiscal year of B&N and most recent interim fiscal quarter, if
applicable, giving effect to such Acquisition and (B) a Compliance Certificate
prepared on a historical pro forma basis as of the most recent date for which
financial statements have been furnished pursuant to Section 4.01(a) or Section
6.01(a) or (b) giving effect to such Acquisition, which certificate shall
demonstrate that no Default or Event of Default would exist immediately after
giving effect thereto, (iii) the Person acquired shall be a majority-owned
Subsidiary, or be merged into B&N or a majority-owned Subsidiary, immediately
upon consummation of the Acquisition (or if assets are being acquired, the
acquiror shall be B&N or a majority-owned Subsidiary), and (iv) after the
consummation of the Acquisition each Subsidiary that is a Domestic Subsidiary or
Foreign Subsidiary (to the extent applicable) shall have complied with the
provisions of Section 6.12.
7.13 Sale and Leaseback. Enter into any arrangement, directly or
indirectly, whereby it shall sell or transfer any property owned by it in order
to lease such property or lease other property that B&N or such other Loan Party
intends to use for substantially the same purpose as the property being sold or
transferred, in excess of the Sale Leaseback Amount.
7.14 No Amendments to Organization Documents. At any time cause or permit
any of the Organization Documents of such Person to be modified, amended or
supplemented in any material respect whatever adverse to the Lenders or the
Administrative Agent, without (in each case) the express prior written
agreement, consent or approval of the Administrative Agent.
ARTICLE VIII.
EVENTS OF DEFAULT AND REMEDIES
8.01 Events of Default. Any of the following shall constitute an Event of
Default:
(a) Non-Payment. Any Borrower or any other Loan Party fails to pay (i) when
and as required to be paid herein, any amount of principal of any Loan or any
L/C Obligation, or (ii) within three Business Days after the same becomes due,
any interest on any Loan or on any L/C Obligation, or any fee due hereunder, or
(iii) within five days after the same becomes due, any other amount payable
hereunder or under any other Loan Document; or
(b) Specific Covenants. Any Borrower fails to perform or observe any term,
covenant or agreement contained in any of Section 6.01, 6.02, 6.03, 6.05, 6.10,
6.11 or 6.12 or Article VII; or
(c) Other Defaults. Any Loan Party fails to perform or observe any other
covenant or agreement (not specified in subsection (a) or (b) above) contained
in any Loan Document on its part to be performed or observed and such failure
continues for 30 days; or
(d) Representations and Warranties. Any representation, warranty,
certification or statement of fact made or deemed made by or on behalf of B&N or
any other Loan Party herein, in any other Loan Document, or in any document
delivered in connection herewith or therewith shall be incorrect or misleading
when made or deemed made; or
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(e) Cross-Default. (i) B&N 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 Indebtedness or Guarantee (other than
Indebtedness hereunder and Indebtedness under Swap Contracts) 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 the Threshold Amount, or (B) fails to observe or
perform any other agreement or condition relating to any such Indebtedness or
Guarantee 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 Indebtedness
or the beneficiary or beneficiaries of such Guarantee (or a trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries) to cause, with
the giving of notice if required, such Indebtedness to 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
Indebtedness to be made, prior to its stated maturity, or such Guarantee to
become payable or cash collateral in respect thereof to be demanded; or (ii)
there occurs under any Swap Contract an Early Termination Date (as defined in
such Swap Contract) resulting from (A) any event of default under such Swap
Contract as to which B&N or any Subsidiary is the Defaulting Party (as defined
in such Swap Contract) or (B) any Termination Event (as so defined) under such
Swap Contract as to which B&N or any Subsidiary is an Affected Party (as so
defined) and, in either event, the Swap Termination Value owed by B&N or such
Subsidiary as a result thereof is greater than the Threshold Amount; or
(f) Insolvency Proceedings, Etc. Any Loan Party or any of its Subsidiaries
institutes or consents to the institution of any proceeding under any Debtor
Relief Law, or makes an assignment for the benefit of creditors; or applies for
or consents to the appointment of any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer for it or for all or any material
part of its property; or any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer is appointed without the
application or consent of such Person and the appointment continues undischarged
or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law
relating to any such Person or to all or any material part of its property is
instituted without the consent of such Person and continues undismissed or
unstayed for 60 calendar days, or an order for relief is entered in any such
proceeding or the Borrower or any Subsidiary shall take any action to institute
or effect any of the foregoing; or
(g) Inability to Pay Debts; Attachment. (i) B&N or any Subsidiary becomes
unable or admits in writing its inability or fails generally to pay its debts as
they become due, or (ii) any writ or warrant of attachment or execution or
similar process is issued or levied against all or any material part of the
property of any such Person and is not released, vacated or fully bonded within
30 days after its issue or levy; or
(h) Judgments. There is entered against B&N or any Subsidiary (i) a final
judgment or order for the payment of money in an aggregate amount exceeding the
Threshold Amount (to the extent not covered by independent third-party insurance
as to which the insurer does not dispute coverage), or (ii) any one or more
non-monetary final judgments that have, or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect and, in either case,
(A) enforcement proceedings are commenced by any creditor upon such judgment
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or order, or (B) there is a period of 20 consecutive days during which a stay of
enforcement of such judgment, by reason of a pending appeal or otherwise, is not
in effect; or
(i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of the Borrowers under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of the Threshold
Amount, or (ii) any Borrower or any ERISA Affiliate fails to pay when due, after
the expiration of any applicable grace period, any installment payment with
respect to its withdrawal liability under Section 4201 of ERISA under a
Multiemployer Plan in an aggregate amount in excess of the Threshold Amount; or
(j) Invalidity of Loan Documents. Any material provision of any Loan
Document, at any time after its execution and delivery and for any reason other
than as expressly permitted hereunder or thereunder or satisfaction in full of
all the Obligations, ceases to be in full force and effect; or any Loan Party or
any other Person contests in any manner the validity or enforceability of any
material provision of any Loan Document; or any Loan Party denies that it has
any or further liability or obligation under any Loan Document, or purports to
revoke, terminate or rescind any provision of any Loan Document; or
(k) Change of Control. There occurs any Change of Control; or
(l) Licenses. There shall occur the loss, suspension or revocation of, or
failure to renew (a) any license or permit now held or hereafter acquired if
such loss, suspension, revocation or failure to renew could reasonably be
expected to have a Material Adverse Effect or (b) the B&N License.
8.02 Remedies Upon Event of Default. If any Event of Default occurs and is
continuing, the Administrative Agent shall, at the request of, or may, with the
consent of, the Required Lenders, take any or all of the following actions:
(a) declare the commitment of each Lender to make Loans and any obligation
of the L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such
commitments and obligation shall be terminated;
(b) declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrowers;
(c) require that the Borrowers Cash Collateralize the L/C Obligations (in
an amount equal to the then Outstanding Amount thereof); and
(d) exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Lenders under the Loan Documents;
provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to any Borrower under the Bankruptcy Code of the
United States, the obligation of each Lender to make Loans and any obligation of
the L/C Issuer to make L/C Credit Extensions
75
shall automatically terminate, the unpaid principal amount of all outstanding
Loans and all interest and other amounts as aforesaid shall automatically become
due and payable, and the obligation of the Borrowers to Cash Collateralize the
L/C Obligations as aforesaid shall automatically become effective, in each case
without further act of the Administrative Agent or any Lender.
8.03 Application of Funds. After the exercise of remedies provided for in
Section 8.02 (or after the Loans have automatically become immediately due and
payable and the L/C Obligations have automatically been required to be Cash
Collateralized as set forth in the proviso to Section 8.02), any amounts
received on account of the Obligations shall be applied by the Administrative
Agent in the following order:
First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including fees, charges and
disbursements of counsel to the Administrative Agent and amounts payable under
Article III) payable to the Administrative Agent in its capacity as such;
Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal, interest, Letter of Credit
Fees, Swap Termination Values and other amounts owing under any Related Credit
Arrangement) payable to the Lenders and the L/C Issuer (including fees, charges
and disbursements of counsel to the respective Lenders and the L/C Issuer and
amounts payable under Article III), ratably among them in proportion to the
respective amounts described in this clause Second payable to them;
Third, to payment of that portion of the Obligations constituting accrued
and unpaid Letter of Credit Fees and interest on the Loans, L/C Borrowings and
other Obligations (other than Swap Termination Values and other amounts owing
under any Related Credit Arrangement), ratably among the Lenders and the L/C
Issuer in proportion to the respective amounts described in this clause Third
payable to them;
Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans and L/C Borrowings, ratably among the Lenders and the L/C
Issuer in proportion to the respective amounts described in this clause Fourth
held by them;
Fifth, to the Administrative Agent for the account of the L/C Issuer, to
Cash Collateralize that portion of L/C Obligations comprised of the aggregate
undrawn amount of Letters of Credit;
Sixth, to payment of Swap Termination Values owing to any Lender or any
Affiliate of any Lender arising under Related Swap Contracts that shall have
been terminated and as to which the Administrative Agent shall have received
notice of such termination and the Swap Termination Value thereof from the
applicable Lender or Affiliate of a Lender and payment of amounts owing to any
Lender or any Affiliate of any Lender under any other Related Credit Arrangement
and as to which the Administrative Agent shall have received notice of such
amount from the applicable Lender or Affiliate of a Lender;
Seventh, to the payment of all other Obligations of the Loan Parties owing
under or in respect of the Loan Documents that are due and payable to the
Administrative Agent and the
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Lenders, or any of them, on such date, ratably based on the respective aggregate
amounts of all such Obligations owing to the Administrative Agent and the
Lenders on such date; and
Last, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to B&N or as otherwise required by Law.
Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Fifth above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.
ARTICLE IX.
ADMINISTRATIVE AGENT
9.01 Appointment and Authority. Each of the Lenders and the L/C Issuer
hereby irrevocably appoints Bank of America to act on its behalf as the
Administrative Agent hereunder and under the other Loan Documents and authorizes
the Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms hereof or
thereof, together with such actions and powers as are reasonably incidental
thereto. The provisions of this Article are solely for the benefit of the
Administrative Agent, the Lenders and the L/C Issuer, and neither any Borrower
nor any other Loan Party shall have rights as a third party beneficiary of any
of such provisions.
9.02 Rights as a Lender. The Person serving as the Administrative Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not the
Administrative Agent and the term "Lender" or "Lenders" shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the Person
serving as the Administrative Agent hereunder in its individual capacity. Such
Person and its Affiliates may accept deposits from, lend money to, act as the
financial advisor or in any other advisory capacity for and generally engage in
any kind of business with B&N or any Subsidiary or other Affiliate thereof as if
such Person were not the Administrative Agent hereunder and without any duty to
account therefor to the Lenders.
9.03 Exculpatory Provisions. The Administrative Agent shall not have any
duties or obligations except those expressly set forth herein and in the other
Loan Documents. Without limiting the generality of the foregoing, the
Administrative Agent:
(a) shall not be subject to any fiduciary or other implied duties,
regardless of whether a Default has occurred and is continuing;
(b) shall not have any duty to take any discretionary action or exercise
any discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that the Administrative Agent
is required to exercise as directed in writing by the Required Lenders (or such
other number or percentage of the Lenders as shall be expressly provided for
herein or in the other Loan Documents), provided that the Administrative Agent
shall not be required to take any
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action that, in its opinion or the opinion of its counsel, may expose the
Administrative Agent to liability or that is contrary to any Loan Document or
applicable law; and
(c) shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to any of the Borrowers or any of their
respective Affiliates that is communicated to or obtained by the Person serving
as the Administrative Agent or any of its Affiliates in any capacity.
The Administrative Agent shall not be liable for any action taken or not
taken by it (i) with the consent or at the request of the Required Lenders (or
such other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 10.01 and 8.02) or (ii) in the absence of
its own gross negligence or willful misconduct. The Administrative Agent shall
be deemed not to have knowledge of any Default unless and until notice
describing such Default is given to the Administrative Agent by B&N, a Lender or
the L/C Issuer.
The Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or (v) the satisfaction
of any condition set forth in Article IV or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to the
Administrative Agent.
9.04 Reliance by Administrative Agent. The Administrative Agent shall be
entitled to rely upon, and shall not incur any liability for relying upon, any
notice, request, certificate, consent, statement, instrument, document or other
writing (including any electronic message, Internet or intranet website posting
or other distribution) believed by it to be genuine and to have been signed,
sent or otherwise authenticated by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to have been made by the proper Person, and shall not incur any liability
for relying thereon. In determining compliance with any condition hereunder to
the making of a Loan, or the issuance of a Letter of Credit, that by its terms
must be fulfilled to the satisfaction of a Lender or the L/C Issuer, the
Administrative Agent may presume that such condition is satisfactory to such
Lender or the L/C Issuer unless the Administrative Agent shall have received
notice to the contrary from such Lender or the L/C Issuer prior to the making of
such Loan or the issuance of such Letter of Credit. The Administrative Agent may
consult with legal counsel (who may be counsel for any Borrower), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.
9.05 Delegation of Duties. The Administrative Agent may perform any and all
of its duties and exercise its rights and powers hereunder or under any other
Loan Document by or
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through any one or more sub-agents appointed by the Administrative Agent. The
Administrative Agent and any such sub-agent may perform any and all of its
duties and exercise its rights and powers by or through their respective Related
Parties. The exculpatory provisions of this Article shall apply to any such
sub-agent and to the Related Parties of the Administrative Agent and any such
sub-agent, and shall apply to their respective activities in connection with the
syndication of the credit facilities provided for herein as well as activities
as Administrative Agent.
9.06 Resignation of Administrative Agent. The Administrative Agent may at
any time give notice of its resignation to the Lenders, the L/C Issuer and B&N.
Upon receipt of any such notice of resignation, the Required Lenders shall have
the right, in consultation with B&N, to appoint a successor, which shall be a
bank with an office in the United States, or an Affiliate of any such bank with
an office in the United States. If no such successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Administrative Agent gives notice of its
resignation, then the retiring Administrative Agent may on behalf of the Lenders
and the L/C Issuer, appoint a successor Administrative Agent meeting the
qualifications set forth above; provided that if the Administrative Agent shall
notify B&N and the Lenders that no qualifying Person has accepted such
appointment, then such resignation shall nonetheless become effective in
accordance with such notice and (1) the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents and (2) all payments, communications and determinations provided to be
made by, to or through the Administrative Agent shall instead be made by or to
each Lender and the L/C Issuer directly, until such time as the Required Lenders
appoint a successor Administrative Agent as provided for above in this Section.
Upon the acceptance of a successor's appointment as Administrative Agent
hereunder, such successor shall succeed to and become vested with all of the
rights, powers, privileges and duties of the retiring (or retired)
Administrative Agent, and the retiring Administrative Agent shall be discharged
from all of its duties and obligations hereunder or under the other Loan
Documents (if not already discharged therefrom as provided above in this
Section). The fees payable by the Borrowers to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrowers and such successor. After the retiring Administrative
Agent's resignation hereunder and under the other Loan Documents, the provisions
of this Article and Section 10.04 shall continue in effect for the benefit of
such retiring Administrative Agent, its sub-agents and their respective Related
Parties in respect of any actions taken or omitted to be taken by any of them
while the retiring Administrative Agent was acting as Administrative Agent.
Any resignation by Bank of America as Administrative Agent pursuant to this
Section shall also constitute its resignation as L/C Issuer and Swing Line
Lender. Upon the acceptance of a successor's appointment as Administrative Agent
hereunder, (a) such successor shall succeed to and become vested with all of the
rights, powers, privileges and duties of the retiring L/C Issuer and Swing Line
Lender, (b) the retiring L/C Issuer and Swing Line Lender shall be discharged
from all of their respective duties and obligations hereunder or under the other
Loan Documents, and (c) the successor L/C Issuer shall issue letters of credit
in substitution for the Letters of Credit, if any, outstanding at the time of
such succession or make other arrangements satisfactory to the retiring L/C
Issuer to effectively assume the obligations of the retiring L/C Issuer with
respect to such Letters of Credit.
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9.07 Non-Reliance on Administrative Agent and Other Lenders. Each Lender
and the L/C Issuer acknowledges that it has, independently and without reliance
upon the Administrative Agent or any other Lender or any of their Related
Parties and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender and the L/C Issuer also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other
Lender or any of their Related Parties and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or any related agreement or any document furnished
hereunder or thereunder.
9.08 No Other Duties, Etc. Anything herein to the contrary notwithstanding,
none of the Bookrunners, Arrangers, Documentation Agents or Syndication Agent
listed on the cover page hereof shall have any powers, duties or
responsibilities under this Agreement or any of the other Loan Documents, except
in its capacity, as applicable, as the Administrative Agent, a Lender or the L/C
Issuer hereunder.
9.09 Administrative Agent May File Proofs of Claim. In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
any Loan Party, the Administrative Agent (irrespective of whether the principal
of any Loan or L/C Obligation 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 any Borrower) shall be entitled and
empowered, by intervention in such proceeding or otherwise
(a) to file and prove a claim for the whole amount of the principal and
interest owing and unpaid in respect of the Loans, L/C Obligations and all other
Obligations that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of the Lenders, the L/C
Issuer and the Administrative Agent (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Lenders, the L/C
Issuer and the Administrative Agent and their respective agents and counsel and
all other amounts due the Lenders, the L/C Issuer and the Administrative Agent
under Sections 2.03(i) and (j), 2.09 and 10.04) allowed in such judicial
proceeding; and
(b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender and the L/C Issuer to make such payments to the Administrative Agent
and, in the event that the Administrative Agent shall consent to the making of
such payments directly to the Lenders and the L/C Issuer, to pay to the
Administrative Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of the Administrative Agent and its agents and
counsel, and any other amounts due the Administrative Agent under Sections 2.09
and 10.04.
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Nothing contained herein shall be deemed to authorize the Administrative
Agent to authorize or consent to or accept or adopt on behalf of any Lender or
the L/C Issuer any plan of reorganization, arrangement, adjustment or
composition affecting the Obligations or the rights of any Lender or to
authorize the Administrative Agent to vote in respect of the claim of any Lender
in any such proceeding.
9.10 Guaranty Matters. The Lenders and the L/C Issuer irrevocably authorize
the Administrative Agent, at its option and in its discretion, to release any
Guarantor from its obligations under the Subsidiary Guaranty if such Person
ceases to be a Subsidiary as a result of a transaction permitted hereunder. So
long as no Default or Event of Default has occurred and is continuing, upon the
Administrative Agent's determination, it shall release such Guarantor from its
obligations under the Subsidiary Guaranty.
Upon request by the Administrative Agent at any time, the Required Lenders
will confirm in writing the Administrative Agent's authority to release any
Guarantor from its obligations under the Subsidiary Guaranty pursuant to this
Section 9.10.
ARTICLE X.
MISCELLANEOUS
10.01 Amendments, Etc. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent to any departure by any
Borrower or any other Loan Party therefrom, shall be effective unless in writing
signed by the Required Lenders and the Borrowers or the applicable Loan Party,
as the case may be, and acknowledged by the Administrative Agent, and each such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no such amendment,
waiver or consent shall:
(a) waive any condition set forth in Section 4.01(a) without the written
consent of each Lender;
(b) extend or increase the Commitment of any Lender (or reinstate any
Commitment terminated pursuant to Section 8.02) without the written consent of
such Lender;
(c) postpone any date fixed by this Agreement or any other Loan Document
for any payment or mandatory prepayment of principal, interest, fees or other
amounts due to the Lenders (or any of them) hereunder or under any other Loan
Document without the written consent of each Lender directly affected thereby;
(d) reduce the principal of, or the rate of interest specified herein on,
any Loan or L/C Borrowing, or (subject to clause (v) of the second proviso to
this Section 10.01) any fees or other amounts payable hereunder or under any
other Loan Document, or change the manner of computation of any financial ratio
(including any change in any applicable defined term) used in determining the
Applicable Rate that would result in a reduction of any interest rate on any
Loan or any fee payable hereunder without the written consent of each Lender
directly affected thereby; provided, however, that only the consent of the
Required Lenders shall be necessary to amend the definition of "Default Rate"
(but only to the extent that such amendment would not
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result in the Default Rate being less than the interest rate that would be
applicable in the absence of a default) or to waive any obligation of any
Borrower to pay interest or Letter of Credit Fees at the Default Rate;
(e) change Section 2.13 or Section 8.03 in a manner that would alter the
pro rata sharing of payments required thereby without the written consent of
each Lender;
(f) change any provision of this Section or the definition of "Required
Lenders" or any other provision hereof specifying the number or percentage of
Lenders required to amend, waive or otherwise modify any rights hereunder or
make any determination or grant any consent hereunder, without the written
consent of each Lender; or
(g) release all or substantially all of the value of the Subsidiary
Guaranty without the written consent of each Lender;
and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders required above,
affect the rights or duties of the L/C Issuer under this Agreement or any Issuer
Document relating to any Letter of Credit issued or to be issued by it; (ii) no
amendment, waiver or consent shall, unless in writing and signed by the Swing
Line Lender in addition to the Lenders required above, affect the rights or
duties of the Swing Line Lender under this Agreement; (iii) no amendment, waiver
or consent shall, unless in writing and signed by the Administrative Agent in
addition to the Lenders required above, affect the rights or duties of the
Administrative Agent under this Agreement or any other Loan Document; (iv)
Section 10.06(h) may not be amended, waived or otherwise modified without the
consent of each Granting Lender all or any part of whose Loans are being funded
by an SPC at the time of such amendment, waiver or other modification; and (v)
the Fee Letter may be amended, or rights or privileges thereunder waived, in a
writing executed only by the parties thereto. 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
Commitment of such Lender may not be increased or extended without the consent
of such Lender.
10.02 Notices; Effectiveness; Electronic Communication.
(a) Notices Generally. Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in subsection (b) below), all notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopier as
follows, 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 the Borrowers, the Administrative Agent, the L/C Issuer or
the Swing Line Lender, to the address, telecopier number, electronic mail
address or telephone number specified for such Person on Schedule 10.02;
and
(ii) if to any other Lender, to the address, telecopier number,
electronic mail address or telephone number specified in its Administrative
Questionnaire.
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Notices sent by hand or overnight courier service, or mailed by certified
or registered mail, shall be deemed to have been given when received; notices
sent by telecopier shall be deemed to have been given when sent (except that, if
not given during normal business hours for the recipient, shall be deemed to
have been given at the opening of business on the next business day for the
recipient). Notices delivered through electronic communications to the extent
provided in subsection (b) below, shall be effective as provided in such
subsection (b).
(b) Electronic Communications. Notices and other communications to the
Lenders and the L/C Issuer hereunder may be delivered or furnished by electronic
communication (including e mail and Internet or intranet websites) pursuant to
procedures approved by the Administrative Agent, provided that the foregoing
shall not apply to notices to any Lender or the L/C Issuer pursuant to Article
II if such Lender or the L/C Issuer, as applicable, has notified the
Administrative Agent that it is incapable of receiving notices under such
Article by electronic communication. The Administrative Agent or the Borrowers
may, in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it,
provided that approval of such procedures may be limited to particular notices
or communications.
Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender's receipt of an acknowledgement from the intended recipient (such as by
the "return receipt requested" function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.
(c) The Platform. THE PLATFORM IS PROVIDED "AS IS" AND "AS AVAILABLE." THE
AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF
THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM
LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF
ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT
PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event
shall the Administrative Agent or any of its Related Parties (collectively, the
"Agent Parties") have any liability to any Borrower, any Lender, the L/C Issuer
or any other Person for losses, claims, damages, liabilities or expenses of any
kind (whether in tort, contract or otherwise) arising out of any Borrower's or
the Administrative Agent's transmission of Borrower Materials through the
Internet, except to the extent that such losses, claims, damages, liabilities or
expenses are determined by a court of competent jurisdiction by a final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Agent Party; provided, however, that in no event shall any
Agent Party have any liability to any Borrower, any Lender, the L/C Issuer or
any other
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Person for indirect, special, incidental, consequential or punitive damages (as
opposed to direct or actual damages).
(d) Change of Address, Etc. Each of the Borrowers, the Administrative
Agent, the L/C Issuer and the Swing Line Lender may change its address,
telecopier or telephone number for notices and other communications hereunder by
notice to the other parties hereto. Each other Lender may change its address,
telecopier or telephone number for notices and other communications hereunder by
notice to a Borrower, the Administrative Agent, the L/C Issuer and the Swing
Line Lender. In addition, each Lender agrees to notify the Administrative Agent
from time to time to ensure that the Administrative Agent has on record (i) an
effective address, contact name, telephone number, telecopier number and
electronic mail address to which notices and other communications may be sent
and (ii) accurate wire instructions for such Lender.
(e) Reliance by Administrative Agent, L/C Issuer and Lenders. The
Administrative Agent, the L/C Issuer and the Lenders shall be entitled to rely
and act upon any notices (including telephonic Committed Loan Notices and Swing
Line Loan Notices) purportedly given by or on behalf of a Borrower even if (i)
such notices were not made in a manner specified herein, were incomplete or were
not preceded or followed by any other form of notice specified herein, or (ii)
the terms thereof, as understood by the recipient, varied from any confirmation
thereof. B&N shall indemnify the Administrative Agent, the L/C Issuer, each
Lender and the Related Parties of each of them from all losses, costs, expenses
and liabilities resulting from the reliance by such Person on each notice
purportedly given by or on behalf of a Borrower. All telephonic notices to and
other telephonic communications with the Administrative Agent may be recorded by
the Administrative Agent, and each of the parties hereto hereby consents to such
recording.
10.03 No Waiver; Cumulative Remedies. No failure by any Lender, the L/C
Issuer or the Administrative Agent to exercise, and no delay by any such Person
in exercising, any right, remedy, power or privilege hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
10.04 Expenses; Indemnity; Damage Waiver.
(a) Costs and Expenses. The Borrowers shall pay (i) all reasonable
out-of-pocket expenses incurred by the Administrative Agent and its Affiliates
(including the reasonable fees, charges and disbursements of counsel for the
Administrative Agent), in connection with the syndication of the credit
facilities provided for herein, the preparation, negotiation, execution,
delivery and administration of this Agreement and the other Loan Documents or
any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out-of-pocket expenses incurred by the L/C
Issuer in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder and (iii) all
out-of-pocket expenses incurred by the Administrative Agent, any Lender or the
L/C Issuer (including the fees, charges and disbursements of any counsel for the
Administrative Agent, any Lender or
84
the L/C Issuer), in connection with the enforcement or protection of its rights
(A) in connection with this Agreement and the other Loan Documents, including
its rights under this Section, or (B) in connection with the Loans made or
Letters of Credit issued hereunder, including all such out-of-pocket expenses
incurred during any workout, restructuring or negotiations in respect of such
Loans or Letters of Credit.
(b) Indemnification by the Borrowers. The Borrowers shall, jointly and
severally, indemnify the Administrative Agent (and any sub-agent thereof), each
Arranger, each Lender and the L/C Issuer, and each Related Party of any of the
foregoing Persons (each such Person being called an "Indemnitee") against, and
hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses (including the reasonable fees, charges and
disbursements of any counsel for any Indemnitee), incurred by any Indemnitee or
asserted against any Indemnitee by any third party or by any Borrower or any
other Loan Party arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement, any other Loan Document or any
agreement or instrument contemplated hereby or thereby, the performance by the
parties hereto of their respective obligations hereunder or thereunder, the
consummation of the transactions contemplated hereby or thereby or, in the case
of the Administrative Agent (and any sub-agent thereof) and its Related Parties
only, the administration of this Agreement and the other Loan Documents, (ii)
any Loan or Letter of Credit or the use or proposed use of the proceeds
therefrom (including any refusal by the L/C Issuer to honor a demand for payment
under a Letter of Credit if the documents presented in connection with such
demand do not strictly comply with the terms of such Letter of Credit), (iii)
any actual or alleged presence or release of Hazardous Materials on or from any
property owned or operated by B&N or any of its Subsidiaries, or any
Environmental Liability related in any way to B&N or any of its Subsidiaries, or
(iv) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory, whether brought by a third party or by B&N or any other Loan Party, and
regardless of whether any Indemnitee is a party thereto, in all cases, whether
or not caused by or arising, in whole or in part, out of the comparative,
contributory or sole negligence of the Indemnitee; provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses (x) are determined by a court
of competent jurisdiction by final and nonappealable judgment to have resulted
from the gross negligence or willful misconduct of such Indemnitee or (y) result
from a claim brought by B&N or any other Loan Party against an Indemnitee for
breach in bad faith of such Indemnitee's obligations hereunder or under any
other Loan Document, if B&N or such Loan Party has obtained a final and
nonappealable judgment in its favor on such claim as determined by a court of
competent jurisdiction.
(c) Reimbursement by Lenders. To the extent that any Borrower for any
reason fails to indefeasibly pay any amount required under subsection (a) or (b)
of this Section to be paid by it to the Administrative Agent (or any sub-agent
thereof), the L/C Issuer or any Related Party of any of the foregoing, each
Lender severally agrees to pay to the Administrative Agent (or any such
sub-agent), the L/C Issuer or such Related Party, as the case may be, such
Lender's Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount,
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent (or any such sub-agent) or the L/C Issuer in
its
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capacity as such, or against any Related Party of any of the foregoing acting
for the Administrative Agent (or any such sub-agent) or L/C Issuer in connection
with such capacity. The obligations of the Lenders under this subsection (c) are
subject to the provisions of Section 2.12(d).
(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted
by applicable law, no Borrower shall assert, and each Borrower hereby waives,
any claim against any Indemnitee, on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct or actual
damages) arising out of, in connection with, or as a result of, this Agreement,
any other Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or Letter of Credit or the
use of the proceeds thereof. No Indemnitee referred to in subsection (b) above
shall be liable for any damages arising from the use by unintended recipients of
any information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with this
Agreement or the other Loan Documents or the transactions contemplated hereby or
thereby.
(e) Payments. All amounts due under this Section shall be payable not later
than ten Business Days after demand therefor.
(f) Survival. The agreements in this Section shall survive the resignation
of the Administrative Agent and the L/C Issuer, the replacement of any Lender,
the termination of the Aggregate Commitments and the repayment, satisfaction or
discharge of all the other Obligations.
10.05 Payments Set Aside. To the extent that any payment by or on behalf of
any Borrower is made to the Administrative Agent, the L/C Issuer or any Lender,
or the Administrative Agent, the L/C Issuer or any Lender exercises its right of
setoff, and such payment or the proceeds of such setoff or any part thereof is
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required (including pursuant to any settlement entered into by the
Administrative Agent, the L/C Issuer or such Lender in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of
such recovery, the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such setoff had not occurred, and (b) each Lender
and the L/C Issuer severally agrees to pay to the Administrative Agent upon
demand its applicable share (without duplication) of any amount so recovered
from or repaid by the Administrative Agent, plus interest thereon from the date
of such demand to the date such payment is made at a rate per annum equal to the
Federal Funds Rate from time to time in effect. The obligations of the Lenders
and the L/C Issuer under clause (b) of the preceding sentence shall survive the
payment in full of the Obligations and the termination of this Agreement.
10.06 Successors and Assigns.
(a) Successors and Assigns Generally. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that no Borrower nor
any other Loan Party may assign or
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otherwise transfer any of its rights or obligations hereunder without the prior
written consent of the Administrative Agent and each Lender and no Lender may
assign or otherwise transfer any of its rights or obligations hereunder except
(i) to an Eligible Assignee in accordance with the provisions of subsection (b)
of this Section, (ii) by way of participation in accordance with the provisions
of subsection (d) of this Section, (iii) by way of pledge or assignment of a
security interest subject to the restrictions of subsection (f) of this Section,
or (iv) to an SPC in accordance with the provisions of subsection (h) of this
Section (and any other attempted assignment or transfer by any party hereto
shall be null and void). Nothing in this Agreement, expressed or implied, shall
be construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby, Participants to the extent
provided in subsection (d) of this Section and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent,
the L/C Issuer and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.
(b) Assignments by Lenders. Any Lender may at any time assign to one or
more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans
(including for purposes of this subsection (b), participations in L/C
Obligations and in Swing Line Loans) at the time owing to it); provided that
(i) except in the case of an assignment of the entire remaining amount
of the assigning Lender's Commitment and the Loans at the time owing to it
or in the case of an assignment to a Lender or an Affiliate of a Lender or
an Approved Fund with respect to a Lender, the aggregate amount of the
Commitment (which for this purpose includes Loans outstanding thereunder)
or, if the Commitment is not then in effect, the principal outstanding
balance of the Loans of the assigning Lender subject to each such
assignment, determined as of the date the Assignment and Assumption with
respect to such assignment is delivered to the Administrative Agent or, if
"Trade Date" is specified in the Assignment and Assumption, as of the Trade
Date, shall not be less than $5,000,000 unless each of the Administrative
Agent and, so long as no Event of Default has occurred and is continuing,
B&N otherwise consents (each such consent not to be unreasonably withheld
or delayed); provided, however, that concurrent assignments to members of
an Assignee Group and concurrent assignments from members of an Assignee
Group to a single Eligible Assignee (or to an Eligible Assignee and members
of its Assignee Group) will be treated as a single assignment for purposes
of determining whether such minimum amount has been met;
(ii) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations
under this Agreement with respect to the Loans or the Commitment assigned,
except that this clause (ii) shall not apply to rights in respect of Swing
Line Loans;
(iii) any assignment of a Commitment must be approved by the
Administrative Agent, the L/C Issuer and the Swing Line Lender unless the
Person that is the proposed assignee is itself a Lender (whether or not the
proposed assignee would otherwise qualify as an Eligible Assignee); and
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(iv) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a
processing and recordation fee in the amount, if any, required as set forth
in Schedule 10.06, and the Eligible Assignee, if it shall not be a Lender,
shall deliver to the Administrative Agent an Administrative Questionnaire.
Subject to acceptance and recording thereof by the Administrative Agent
pursuant to subsection (c) of this Section, from and after the effective date
specified in each Assignment and Assumption, the Eligible Assignee thereunder
shall be a party to this Agreement and, to the extent of the interest assigned
by such Assignment and Assumption, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Sections 3.01, 3.04, 3.05, and 10.04 with
respect to facts and circumstances occurring prior to the effective date of such
assignment. Upon request, each Borrower (at its expense) shall execute and
deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
subsection shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
subsection (d) of this Section.
(c) Register. The Administrative Agent, acting solely for this purpose as
an agent of the Borrowers, shall maintain at the Administrative Agent's Office a
copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts of the Loans and L/C Obligations owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be presumptively correct absent manifest error, and the
Borrowers, the Administrative Agent and the Lenders may treat each Person whose
name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by each of the
Borrowers and the L/C Issuer at any reasonable time and from time to time upon
reasonable prior notice. In addition, at any time that a request for a consent
for a material or substantive change to the Loan Documents is pending, any
Lender may request and receive from the Administrative Agent a copy of the
Register.
(d) Participations. Any Lender may at any time, without the consent of, or
notice to, any Borrower or the Administrative Agent, sell participations to any
Person (other than a natural person or B&N or any of B&N's Affiliates or
Subsidiaries) (each, a "Participant") in all or a portion of such Lender's
rights and/or obligations under this Agreement (including all or a portion of
its Commitment and/or the Loans (including such Lender's participations in L/C
Obligations and/or Swing Line Loans) owing to it); provided that (i) such
Lender's obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrowers, the Administrative
Agent, the Lenders and the L/C Issuer shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations under
this Agreement.
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Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso to
Section 10.01 that affects such Participant. Subject to subsection (e) of this
Section, each Borrower agrees that each Participant shall be entitled to the
benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to subsection (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 10.08 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.13 as though it were a
Lender.
(e) Limitations upon Participant Rights. A Participant shall not be
entitled to receive any greater payment under Section 3.01 or 3.04 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with B&N's prior written consent. A Participant that
would be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 3.01 unless B&N is notified of the participation sold to
such Participant and such Participant agrees, for the benefit of the Borrowers,
to comply with Section 3.01(e) as though it were a Lender.
(f) Certain Pledges. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement (including
under its Note, if any) to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank; provided
that no such pledge or assignment shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
(g) Electronic Execution of Assignments. The words "execution," "signed,"
"signature," and words of like import in any Assignment and Assumption shall be
deemed to include electronic signatures or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, the
New York State Electronic Signatures and Records Act,
or any other similar state laws based on the Uniform Electronic Transactions
Act.
(h) Special Purpose Funding Vehicles. Notwithstanding anything to the
contrary contained herein, any Lender (a "Granting Lender") may grant to a
special purpose funding vehicle identified as such in writing from time to time
by the Granting Lender to the Administrative Agent and B&N (an "SPC") the option
to provide all or any part of any Committed Loan that such Granting Lender would
otherwise be obligated to make pursuant to this Agreement; provided that (i)
nothing herein shall constitute a commitment by any SPC to fund any Committed
Loan, and (ii) if an SPC elects not to exercise such option or otherwise fails
to make all or any part of such Committed Loan, the Granting Lender shall be
obligated to make such Committed Loan pursuant to the terms hereof or, if it
fails to do so, to make such payment to the Administrative Agent as is required
under Section 2.12(b)(ii). Each party hereto hereby agrees that (i) neither the
grant to any SPC nor the exercise by any SPC of such option shall
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increase the costs or expenses or otherwise increase or change the obligations
of the Borrowers under this Agreement (including its obligations under Section
3.04), (ii) no SPC shall be liable for any indemnity or similar payment
obligation under this Agreement for which a Lender would be liable, and (iii)
the Granting Lender shall for all purposes, including the approval of any
amendment, waiver or other modification of any provision of any Loan Document,
remain the lender of record hereunder. The making of a Committed Loan by an SPC
hereunder shall utilize the Commitment of the Granting Lender to the same
extent, and as if, such Committed Loan were made by such Granting Lender. In
furtherance of the foregoing, each party hereto hereby agrees (which agreement
shall survive the termination of this Agreement) that, prior to the date that is
one year and one day after the payment in full of all outstanding commercial
paper or other senior debt of any SPC, it will not institute against, or join
any other Person in instituting against, such SPC any bankruptcy,
reorganization, arrangement, insolvency, or liquidation proceeding under the
laws of the United States or any State thereof. Notwithstanding anything to the
contrary contained herein, any SPC may (i) with notice to, but without prior
consent of B&N and the Administrative Agent and with the payment of a processing
fee in the amount of $2,500, assign all or any portion of its right to receive
payment with respect to any Committed Loan to the Granting Lender and (ii)
disclose on a confidential basis any non-public information relating to its
funding of Committed Loans to any rating agency, commercial paper dealer or
provider of any surety or Guarantee or credit or liquidity enhancement to such
SPC.
(i) Resignation as L/C Issuer or Swing Line Lender after Assignment.
Notwithstanding anything to the contrary contained herein, if at any time Bank
of America assigns all of its Commitment and Loans pursuant to subsection (b)
above, Bank of America may, (i) upon 30 days' notice to B&N and the Lenders,
resign as L/C Issuer and/or (ii) upon 30 days' notice to B&N, resign as Swing
Line Lender. In the event of any such resignation as L/C Issuer or Swing Line
Lender, B&N shall be entitled to appoint from among the Lenders a successor L/C
Issuer or Swing Line Lender hereunder; provided, however, that no failure by B&N
to appoint any such successor shall affect the resignation of Bank of America as
L/C Issuer or Swing Line Lender, as the case may be. If Bank of America resigns
as L/C Issuer, it shall retain all the rights, powers, privileges and duties of
the L/C Issuer hereunder with respect to all Letters of Credit outstanding as of
the effective date of its resignation as L/C Issuer and all L/C Obligations with
respect thereto (including the right to require the Lenders to make Base Rate
Committed Loans or fund risk participations in Unreimbursed Amounts pursuant to
Section 2.03(c)). If Bank of America resigns as Swing Line Lender, it shall
retain all the rights of the Swing Line Lender provided for hereunder with
respect to Swing Line Loans made by it and outstanding as of the effective date
of such resignation, including the right to require the Lenders to make Base
Rate Committed Loans or fund risk participations in outstanding Swing Line Loans
pursuant to Section 2.04(c). Upon the appointment of a successor L/C Issuer
and/or Swing Line Lender, (a) such successor shall succeed to and become vested
with all of the rights, powers, privileges and duties of the retiring L/C Issuer
or Swing Line Lender, as the case may be, and (b) the successor L/C Issuer shall
issue letters of credit in substitution for the Letters of Credit, if any,
outstanding at the time of such successor or make other arrangements
satisfactory to Bank of America to effectively assume the obligations of Bank of
America with respect to such Letters of Credit.
10.07 Treatment of Certain Information; Confidentiality. Each of the
Administrative Agent, the Lenders and the L/C Issuer agrees to maintain the
confidentiality of
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the Information (as defined below), except that Information may be disclosed (a)
to its Affiliates and to its and its Affiliates' respective partners, directors,
officers, employees, agents, advisors and representatives (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
purporting to have jurisdiction over it (including any self-regulatory
authority, such as the National Association of Insurance Commissioners), (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, provided that, if lawful and practicable to do so under
the circumstances, B&N is given with reasonable promptness prior written notice
of the request for production of such Information, except for Information
provided to regulators in the ordinary course of bank regulatory oversight, (d)
to any other party hereto, (e) in connection with the exercise of any remedies
hereunder or under any other Loan Document or any action or proceeding relating
to this Agreement or any other Loan Document or the enforcement of rights
hereunder or thereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to (i) any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
a Borrower and its obligations, (g) with the consent of B&N or (h) to the extent
such Information (x) becomes publicly available other than as a result of a
breach of this Section or (y) becomes available to the Administrative Agent, any
Lender, the L/C Issuer or any of their respective Affiliates on a
nonconfidential basis from a source other than the Borrowers.
For purposes of this Section, "Information" means all information received
from B&N or any Subsidiary relating to B&N or any Subsidiary or any of their
respective businesses, other than any such information that is available to the
Administrative Agent, any Lender or the L/C Issuer on a nonconfidential basis
prior to disclosure by B&N or any Subsidiary, provided that, in the case of
information received from B&N or any Subsidiary after the date hereof, such
information is clearly identified 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.
Each of the Administrative Agent, the Lenders and the L/C Issuer
acknowledges that (a) the Information may include material non-public
information concerning B&N or a Subsidiary, as the case may be, (b) it has
developed compliance procedures regarding the use of material non-public
information and (c) it will handle such material non-public information in
accordance with applicable Law, including Federal and state securities Laws.
10.08 Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender, the L/C Issuer and each of their respective Affiliates
is hereby authorized at any time and from time to time, to the fullest extent
permitted by applicable law, to set off and apply any and all deposits (general
or special, time or demand, provisional or final, in whatever currency) at any
time held and other obligations (in whatever currency) at any time owing by such
Lender, the L/C Issuer or any such Affiliate to or for the credit or the account
of B&N or any other Loan Party against any and all of the obligations of B&N or
such Loan Party now or hereafter existing under this Agreement or any other Loan
Document to such Lender or the L/C
91
Issuer, irrespective of whether or not such Lender or the L/C Issuer shall have
made any demand under this Agreement or any other Loan Document and although
such obligations of B&N or such Loan Party may be contingent or unmatured or are
owed to a branch or office of such Lender or the L/C Issuer different from the
branch or office holding such deposit or obligated on such indebtedness. The
rights of each Lender, the L/C Issuer and their respective Affiliates under this
Section are in addition to other rights and remedies (including other rights of
setoff) that such Lender, the L/C Issuer or their respective Affiliates may
have. Each Lender and the L/C Issuer agrees to notify B&N and the Administrative
Agent promptly after any such setoff and application, provided that the failure
to give such notice shall not affect the validity of such setoff and
application.
10.09 Interest Rate Limitation. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the "Maximum Rate"). If the Administrative Agent or
any Lender shall receive interest in an amount that exceeds the Maximum Rate,
the excess interest shall be applied to the principal of the Loans or, if it
exceeds such unpaid principal, refunded to the Borrowers. In determining whether
the interest contracted for, charged, or received by the Administrative Agent or
a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by
applicable Law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude voluntary prepayments
and the effects thereof, and (c) amortize, prorate, allocate, and spread in
equal or unequal parts the total amount of interest throughout the contemplated
term of the Obligations hereunder.
10.10 Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and the other
Loan Documents constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 4.01, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent
shall have received counterparts hereof that, when taken together, bear the
signatures of each of the other parties hereto. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy shall be effective
as delivery of a manually executed counterpart of this Agreement.
10.11 Survival of Representations and Warranties. All representations and
warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Credit Extension, and shall continue in full
force and effect as long as any Loan or any other Obligation hereunder shall
remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.
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10.12 Severability. If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
10.13 Replacement of Lenders. If (i) any Lender requests compensation under
Section 3.04, (ii) if a Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 3.01, (iii) or if any Lender is a Defaulting Lender, or (iv) so long as
no Default or Event of Default has occurred and is continuing, any Lender fails
to approve any amendment, waiver or consent that has received the written
approval of the Required Lenders and which also requires the approval of such
Lender, then, in each case above, B&N may, at its sole expense and effort, upon
notice to such Lender and the Administrative Agent, require such Lender to
assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in, and consents required by, Section 10.06), all of its
interests, rights and obligations under this Agreement and the related Loan
Documents to an assignee that shall assume such obligations (which assignee may
be another Lender, if a Lender accepts such assignment), provided that:
(a) B&N shall have paid (or caused to be paid) to the Administrative Agent
the assignment fee specified in Section 10.06(b);
(b) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and L/C Advances, accrued interest thereon,
accrued fees and all other amounts payable to it hereunder and under the other
Loan Documents (including any amounts under Section 3.05) from the assignee (to
the extent of such outstanding principal and accrued interest and fees) or B&N
or applicable Designated Co-Borrower (in the case of all other amounts);
(c) in the case of any such assignment resulting from a claim for
compensation under Section 3.04 or payments required to be made pursuant to
Section 3.01, such assignment will result in a reduction in such compensation or
payments thereafter; and
(d) such assignment does not conflict with applicable Laws.
A Lender shall not be required to make any such assignment or delegation
if, prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling B&N to require such assignment and delegation cease to
apply.
10.14 Governing Law; Jurisdiction; Etc.
(a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK.
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(b) SUBMISSION TO JURISDICTION. EACH PARTY HERETO IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF
NEW YORK SITTING IN
NEW YORK COUNTY
AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF SUCH STATE,
AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH
NEW YORK STATE COURT
OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.
EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS
AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE
ADMINISTRATIVE AGENT, ANY LENDER OR THE L/C ISSUER MAY OTHERWISE HAVE TO BRING
ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
AGAINST ANY BORROWER OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF
ANY JURISDICTION.
(c) WAIVER OF VENUE. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY
COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT.
(d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE
OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS
AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY APPLICABLE LAW.
10.15 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PERSON WOULD NOT, IN THE EVENT OF
94
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
10.16 USA PATRIOT Act Notice. Each Lender that is subject to the Act (as
hereinafter defined) and the Administrative Agent (for itself and not on behalf
of any Lender) hereby notifies the Borrowers that pursuant to the requirements
of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the "Act"), it is required to obtain, verify and record information that
identifies the Borrowers, which information includes the name and address of
each Borrower and other information that will allow such Lender or the
Administrative Agent, as applicable, to identify such Borrower in accordance
with the Act.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President and Treasurer
▇▇▇▇▇▇ & NOBLE BOOKSELLERS, INC.
▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ LLC
▇. ▇▇▇▇▇▇ BOOKSELLER, LLC
▇▇▇▇▇▇ & NOBLE PUBLISHING, INC.
STERLING PUBLISHING CO., INC.
▇▇▇▇▇▇ & ▇▇▇▇▇ BOOKSELLERS (MN),
INC.
▇▇▇▇▇▇ & NOBLE BOOKSELLERS
(TEXAS), L.P.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President and Treasurer
S-1
BANK OF AMERICA, N.A., as
Administrative Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Title: Vice President
--------------------------------
S-2
BANK OF AMERICA, N.A., as a Lender, L/C
Issuer and Swing Line Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
--------------------------------
Title: Vice President
--------------------------------
S-3
JPMORGAN CHASE BANK, N.A., as a Lender and
as Syndication Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------
Title: Vice President
--------------------------------
S-4
CITICORP USA, INC., as a Documentation
Agent and as a Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Title: Vice President
--------------------------------
S-5
ING CAPITAL LLC, as a Documentation Agent
and as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Title: Managing Director
--------------------------------
S-6
SUNTRUST BANK, as a Documentation Agent and
as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Title: Managing Director
--------------------------------
S-7
WACHOVIA BANK, NATIONAL ASSOCIATION, as a
Documentation Agent and as a Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------
Title: Associate
--------------------------------
S-8
SOVEREIGN BANK, as a Lender
By: /s/ ▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇
--------------------------------
Title: Senior Vice President
--------------------------------
S-9
UNION BANK OF CALIFORNIA, N.A., as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Title: Vice President & Manager
--------------------------------
S-10
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION, as
a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Title: Vice President
--------------------------------
▇-▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Title: Vice President
--------------------------------
S-12
FIFTH THIRD BANK, as a Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
Title: Vice President
--------------------------------
S-13
MANUFACTURERS AND TRADERS TRUST COMPANY, as
a Lender
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Title: Vice President
--------------------------------
▇-▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------
Title: Senior Vice President
--------------------------------
▇-▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ PLC, as a Lender
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Title: Vice President
--------------------------------
S-16
U.S. BANK NATIONAL ASSOCIATION, as a Lender
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Title: AVP
--------------------------------
S-17
COMERICA BANK, as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------
Title: Account Officer
--------------------------------
S-18
FIRST HAWAIIAN BANK, as a Lender
By: /s/ ▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇
--------------------------------
Title: Vice President
--------------------------------
S-19
HIBERNIA NATIONAL BANK, as a Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------
Title: Sr. Vice President
--------------------------------
S-20