Exhibit 10.1
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of September 7, 2004
among
▇▇▇▇▇▇▇▇'▇ INC.,
and
CERTAIN OF ITS SUBSIDIARIES PARTY HERETO,
as the Credit Parties,
THE LENDING INSTITUTIONS NAMED HEREIN,
as the Lenders,
BANK OF AMERICA, N.A.,
as the Collateral Agent and the Revolving Agent,
and
JEWELRY INVESTORS II, L.L.C.,
as the Term Agent
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS............................................................................................2
Section 1.1 Definitions................................................................................2
Section 1.2 Accounting Terms..........................................................................42
Section 1.3 Interpretive Provisions...................................................................42
ARTICLE 2 REVOLVING CREDIT FACILITIES...........................................................................43
Section 2.1 Revolving Facility........................................................................43
Section 2.2 Method of Borrowing; Notice of Request for Extensions of Credit...........................44
Section 2.3 Additional Provisions Relating to Letters of Credit.......................................45
Section 2.4 Additional Provisions Relating to Revolving Loans.........................................50
Section 2.5 Revolving Notes...........................................................................51
ARTICLE 3 TERM LOAN FACILITY....................................................................................52
Section 3.1 Term Loans................................................................................52
Section 3.2 Making of Term Loans......................................................................52
Section 3.3 Term Loan Notes...........................................................................52
ARTICLE 4 OTHER PROVISIONS RELATING TO CREDIT FACILITIES........................................................52
Section 4.1 Interest..................................................................................52
Section 4.2 Default Rate..............................................................................53
Section 4.3 Additional Provisions With Respect to Term Loans..........................................53
Section 4.4 Maximum Interest Rate.....................................................................54
Section 4.5 [Reserved].................................................................................55
Section 4.6 Repayment.................................................................................55
Section 4.7 Prepayments...............................................................................55
Section 4.8 Termination of Revolving Credit Facility..................................................57
Section 4.9 Fees......................................................................................58
Section 4.10 Taxes, Yield Protection...................................................................59
Section 4.11 Pro Rata Treatment........................................................................61
Section 4.12 Sharing of Payments.......................................................................61
Section 4.13 Certain Limitations.......................................................................62
Section 4.14 Payments, Computations, Etc...............................................................63
Section 4.15 Evidence of Debt..........................................................................65
Section 4.16 Bank Products.............................................................................66
ARTICLE 5 CONDITIONS............................................................................................66
Section 5.1 Closing Conditions........................................................................66
Section 5.2 Conditions to all Extensions of Credit....................................................69
ARTICLE 6 REPRESENTATIONS AND WARRANTIES........................................................................70
Section 6.1 Financial Condition.......................................................................70
Section 6.2 No Changes or Restricted Payments.........................................................70
Section 6.3 Organization; Existence; Compliance with Law..............................................71
Section 6.4 Power; Authorization; Enforceable Obligations.............................................71
Section 6.5 No Legal Bar..............................................................................71
Section 6.6 No Material Litigation and Disputes.......................................................72
Section 6.7 No Defaults...............................................................................72
Section 6.8 Ownership and Operation of Property.......................................................72
Section 6.9 Intellectual Property.....................................................................72
Section 6.10 No Burdensome Restrictions................................................................73
Section 6.11 Taxes.....................................................................................73
Section 6.12 ERISA.....................................................................................73
Section 6.13 Governmental Regulations, Etc.............................................................74
Section 6.14 Subsidiaries..............................................................................75
Section 6.15 Purpose of Extensions of Credit...........................................................75
Section 6.16 Environmental Matters.....................................................................75
Section 6.17 No Material Misstatements.................................................................76
Section 6.18 Labor Matters.............................................................................76
Section 6.19 Security Documents........................................................................77
Section 6.20 Location of Real Property and Leased Premises.............................................78
Section 6.21 Solvency..................................................................................78
Section 6.22 Bank Accounts; Merchant Accounts..........................................................78
ARTICLE 7 AFFIRMATIVE COVENANTS.................................................................................78
Section 7.1 Information Covenants.....................................................................78
Section 7.2 Preservation of Existence and Franchises..................................................84
Section 7.3 Books and Records.........................................................................84
Section 7.4 Compliance with Law.......................................................................84
Section 7.5 Payment of Taxes and Other Indebtedness...................................................84
Section 7.6 Insurance.................................................................................85
Section 7.7 Maintenance of Property...................................................................85
Section 7.8 Performance of Obligations................................................................85
Section 7.9 Use of Proceeds...........................................................................85
Section 7.10 Audits/Inspections........................................................................86
Section 7.11 Financial Covenants.......................................................................86
Section 7.12 New Subsidiaries; Addition of Subsidiaries as Borrowers and Guarantors....................93
Section 7.13 Guaranties of the Obligations.............................................................93
Section 7.14 Additional Collateral; Further Assurances.................................................94
Section 7.15 Landlord and Mortgagee Agreements.........................................................95
Section 7.16 Bank as Depository........................................................................95
Section 7.17 Implementation of New Computer Systems....................................................95
Section 7.18 Term Lender Expert........................................................................95
Section 7.19 Distributions among Borrower and Guarantors...............................................96
Section 7.20 4-Wall Profitability Analysis.............................................................96
Section 7.21 Chief Restructuring Officer...............................................................96
ARTICLE 8 NEGATIVE COVENANTS....................................................................................97
Section 8.1 Indebtedness..............................................................................97
Section 8.2 Liens.....................................................................................98
Section 8.3 Nature of Business........................................................................98
Section 8.4 Merger and Consolidation, Dissolution, and Acquisitions...................................98
Section 8.5 Asset Dispositions........................................................................99
Section 8.6 Investments..............................................................................100
Section 8.7 Restricted Payments......................................................................100
Section 8.8 Modifications and Payments in Respect of Other Funded Debt...............................100
Section 8.9 Transactions with Affiliates.............................................................101
Section 8.10 Fiscal Year; Organizational Documents....................................................101
Section 8.11 Ownership of Subsidiaries................................................................101
Section 8.12 No Further Negative Pledges..............................................................101
Section 8.13 Limitation on Management Fees............................................................102
Section 8.14 Limitation on Foreign Subsidiaries.......................................................102
Section 8.15 Inventory Classification.................................................................102
Section 8.16 Cash Settlements.........................................................................102
Section 8.17 Conversion Ratio.........................................................................103
Section 8.18 New Stores...............................................................................103
Section 8.19 Vendor Financing Program.................................................................103
Section 8.20 Crescent.................................................................................103
ARTICLE 9 EVENTS OF DEFAULT....................................................................................105
Section 9.1 Events of Default........................................................................105
Section 9.2 Acceleration; Remedies...................................................................107
ARTICLE 10 AGENCY PROVISIONS...................................................................................108
Section 10.1 Appointment and Authorization...........................................................108
Section 10.2 Delegation of Duties....................................................................109
Section 10.3 Liability of the Agents.................................................................109
Section 10.4 Reliance by the Agents..................................................................110
Section 10.5 Notice of Default.......................................................................111
Section 10.6 Credit Decision.........................................................................111
Section 10.7 Indemnification.........................................................................112
Section 10.8 The Agents in Individual Capacity.......................................................113
Section 10.9 Successor Agents........................................................................114
Section 10.10 Withholding Tax.........................................................................116
Section 10.11 Collateral Matters......................................................................117
Section 10.12 Restrictions on Actions by the Lenders; Sharing of Payments.............................118
Section 10.13 Agency for Perfection...................................................................119
Section 10.14 Payments by the Collateral Agent to the Lenders.........................................119
Section 10.15 Field Audit and Examination Reports; Disclaimer by the Lenders..........................120
Section 10.16 Relation Among the Lenders..............................................................120
Section 10.17 Settlement Among Revolving Lenders......................................................120
Section 10.18 Consent of Revolving Agent Not Required.................................................124
ARTICLE 11 INTERCREDITOR PROVISIONS............................................................................124
Section 11.1 Ranking of Loans........................................................................124
Section 11.2 Exercise of Remedies....................................................................126
Section 11.3 Reserves................................................................................128
Section 11.4 Amendments and Waivers..................................................................128
Section 11.5 No Contest..............................................................................128
Section 11.6 Bankruptcy..............................................................................128
Section 11.7 Post-Petition Financing.................................................................129
Section 11.8 Legends.................................................................................129
Section 11.9 Management of Revolving Loans; Maintenance of Priorities................................129
Section 11.10 [Reserved.].............................................................................130
Section 11.11 Obligations of the Credit Parties Unconditional.........................................130
Section 11.12 Term Lenders Entitled to Assume Payments of Interest
and Fees Not Prohibited in Absence of Notice............................................130
Section 11.13 Term Lender's Purchase Right and Right of First Refusal.................................130
Section 11.14 Obligation of the Revolving Lenders to Make Revolving Loans;
Right to Terminate Commitments and Accelerate Obligations...............................131
Section 11.15 Reinstatement...........................................................................132
Section 11.16 No Implied Duties; No Partnership.......................................................132
Section 11.17 Benefits of this Article 11; Conflicts..................................................132
ARTICLE 12 AMENDMENT AND RESTATEMENT...........................................................................132
Section 12.1 Transactions on the Closing Date.........................................................132
Section 12.2 Amendment and Restatement; Waiver of Claims..............................................133
Section 12.3 Release and Waivers......................................................................133
ARTICLE 13 MISCELLANEOUS.......................................................................................134
Section 13.1 Notices.................................................................................134
Section 13.2 Right of Setoff.........................................................................135
Section 13.3 Benefit of Agreement; Assignments.......................................................136
Section 13.4 No Waiver; Remedies Cumulative..........................................................138
Section 13.5 Expenses; Indemnification...............................................................139
Section 13.6 Amendments, Waivers, and Consents.......................................................141
Section 13.7 Counterparts............................................................................143
Section 13.8 Headings................................................................................143
Section 13.9 Survival................................................................................143
Section 13.10 Governing Law; Choice of Forum; Service of Process......................................143
Section 13.11 Waiver of Jury Trial....................................................................145
Section 13.12 Severability............................................................................146
Section 13.13 Entirety................................................................................146
Section 13.14 Binding Effect; Termination.............................................................146
Section 13.15 Confidentiality.........................................................................146
Section 13.16 Other Security and Guaranties...........................................................147
Section 13.17 Agency of ▇▇▇▇▇▇▇▇'▇ for Each Other Credit Party........................................147
Section 13.18 Joint and Several Liability.............................................................147
Section 13.19 Contribution and Indemnification Among the Borrowers....................................149
Section 13.20 Additional Borrowers and Guarantors.....................................................149
Section 13.21 Express Waivers By the Credit Parties in Respect of Cross Guaranties and
Cross Collateralization.................................................................149
Section 13.22 Financial Condition, Etc................................................................150
Section 13.23 Conflict................................................................................151
Section 13.24 Bifurcation of Credit Facility..........................................................151
SCHEDULES
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Schedule 1.1A Existing Letters of Credit
Schedule 1.1B Investments
Schedule 1.1C Permitted Liens
Schedule 1.1D Lenders and Revolving Commitments
Schedule 1.1E Changes and Restricted Payments
Schedule 1.1F Litigation
Schedule 6.9 Intellectual Property
Schedule 6.14 Subsidiaries
Schedule 6.18 Labor Matters
Schedule 6.20 Real Properties; Locations of Collateral; Chief
Executive Offices/Principal Places of Business
Schedule 6.22 Bank Accounts; Merchant Accounts
Schedule 7.6 Insurance
Schedule 7.17 Computer System
Schedule 8.1 Indebtedness
Schedule 8.9 Transactions with Affiliates
Schedule 8.18 New Stores
Schedule 13.1 Lenders' Addresses
EXHIBITS
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Exhibit A-1 Form of Revolving Note
Exhibit A-2 Form of Term Note
Exhibit B Form of Notice of Borrowing
Exhibit C Form of Officer's Compliance Certificate
Exhibit D Form of Assignment and Acceptance
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
--------------------------------------------
THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of
September 7, 2004 (this "Agreement"), is by and among the lending institutions
from time to time parties hereto (such lending institutions, together with
their respective successors and assigns, are referred to hereinafter each
individually as a "Lender" and collectively as the "Lenders"), Bank of America,
N.A. as administrative agent for the Revolving Lenders (in such capacity and
including its successors, the "Revolving Agent"), Jewelry Investors II, L.L.C.
as administrative agent for the Term Lenders (in such capacity and including
its successors, the "Term Agent"), Bank of America, N.A., as collateral agent
for the Lenders, the Term Agent, and the Revolving Agent (in such capacity and
including its successors and assigns, the "Collateral Agent"), and ▇▇▇▇▇▇▇▇'▇
Inc., a Delaware corporation, and each of its Subsidiaries party hereto.
RECITALS:
---------
A. Capitalized terms used in this Agreement, and not otherwise defined
herein, shall have the meanings specified in Article 1.
▇. ▇▇▇▇▇▇▇▇'▇, certain of its Affiliates, Bank of America, N.A., and
certain other lending institutions are party to that certain Amended and
Restated Credit Agreement dated as of August 28, 2002 (as amended, the
"Original Credit Agreement"), whereby certain credit facilities were made
available to ▇▇▇▇▇▇▇▇'▇ and such Affiliates on the terms and conditions set
forth therein.
C. The parties to the Original Credit Agreement have entered into
certain agreements in connection with the Original Credit Agreement, including,
without limitation, a forbearance agreement and a fee letter in connection
therewith.
D. The Borrowers have requested that the Original Credit Agreement be
amended and restated to make available to the Borrowers credit facilities in
the aggregate principal amount of $135,000,000 consisting of (i) a revolving
credit facility for loans and letters of credit in the aggregate principal
amount not to exceed $67,500,000, and (ii) a term loan credit facility in the
aggregate principal amount of $67,500,000, which extensions of credit the
Borrowers will use for the purposes permitted pursuant to Section 6.15 and
Section 7.9, and to amend and restate certain other provisions of the Original
Credit Agreement as set forth herein.
E. The Lenders have agreed to amend and restate the Original Credit
Agreement and make available to the Borrowers a revolving credit facility and a
term loan facility upon the terms and conditions set forth in this Agreement.
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
-----------
Section 1.1 Definitions. As used in this Agreement, the following
terms have the meanings specified below:
"Accounts Payable" means all obligations owing to creditors for
inventory and includes, without limitation, open account arrangements with
suppliers of inventory to the Credit Parties, sums due and owing by the
Borrowers for deferred payables pursuant to the Vendor Documents, and amounts
owing to trade creditors for consigned goods sold by a Borrower.
"ACH Transactions" means any cash management or related services,
including, without limitation, the automated clearinghouse transfer of funds by
Bank of America for the account of any Borrower pursuant to agreement or
overdrafts.
"Acquisition" means the purchase or acquisition by any Person of any
Capital Stock of another Person or all or any substantial portion of the
Property (other than Capital Stock) of another Person, whether or not involving
a merger or consolidation with such other Person.
"Adjusted Base Rate" means the Base Rate plus the Applicable
Percentage.
"Adjusted Eurodollar Rate" means the Eurodollar Rate plus the
Applicable Percentage.
"Adjusted Net Earnings from Operations" means, for the Consolidated
Group for any period, the net income after provision for income taxes for such
period, as determined in accordance with GAAP and reported on the financial
statements of the Consolidated Group, excluding any and all of the following
included in such net income: (a) gain or loss arising from the sale of any
capital assets; (b) gain arising from any write-up, or loss arising from any
write-down, in the book value of any asset; (c) earnings of any Person,
substantially all the assets of which have been acquired by a member of
Consolidated Group in any manner, to the extent realized by such other Person
prior to the date of acquisition; (d) earnings of any Person (excluding a
member of the Consolidated Group) in which a member of the Consolidated Group
has an ownership interest unless (and only to the extent) such earnings shall
actually have been received by a member of the Consolidated Group in the form
of cash distributions; (e) earnings of Crescent in which ▇▇▇▇▇▇▇▇'▇ or any
other Credit Party has an ownership interest, including any dividends or other
payments received by ▇▇▇▇▇▇▇▇'▇ or such other Credit Party with respect to any
Capital Stock of Crescent; (f) interest earned by ▇▇▇▇▇▇▇▇'▇ pursuant to the
Note Purchase Agreement, dated as of August 28, 2002, between ▇▇▇▇▇▇▇▇'▇ and
Crescent and such other agreements, certificates, documents, and instruments
executed or delivered in connection therewith, as such agreements,
certificates, documents, and instruments may be amended, restated, or otherwise
modified from time to time; (g) earnings of any Person to which assets of a
member of the Consolidated Group shall have been sold, transferred, or disposed
of, or into which a member of the Consolidated Group shall have been merged, or
which has been a party with a member of the Consolidated Group to any
consolidation or other form of reorganization, prior to the date of such
transaction; (h) gain arising from the acquisition of debt or equity securities
of a member of the Consolidated Group or gain or loss from cancellation or
forgiveness of Indebtedness; (i) gain or loss arising from extraordinary items,
as determined in accordance with GAAP, or from any other non-recurring
transaction; (j) non-cash compensation expenses which shall not, after August
28, 2002, exceed $1,500,000 in the aggregate arising from the forgiveness of
principal and interest of loans made by ▇▇▇▇▇▇▇▇'▇ during the Fiscal Year ended
in 1995 to its chairman of the board of directors and its chief executive
officer, each in the original principal amount of $1,500,000; (k) charges
associated with closing of retail locations, to the extent determined in
accordance with GAAP, after the Closing Date in an aggregate amount not in
excess of $4,500,000 during the term of this Agreement; and (l) non-cash
charges incurred in connection with or as part of any Restatement.
"Affiliate" means, with respect to any Person (the "subject Person"),
any other Person (a) directly or indirectly controlling or controlled by or
under direct or indirect common control with the subject Person or (b) directly
or indirectly owning or holding ten percent (10.0%) or more of the Capital
Stock of the subject Person. For purposes of this definition, "control" when
used with respect to any Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agent-Related Persons" means the Agents, together with their
respective Affiliates, and the officers, directors, employees, counsel,
representatives, agents, and attorneys-in-fact of the Agents and their
respective Affiliates.
"Agents" means, collectively, the Collateral Agent, the Revolving
Agent, and the Term Agent, and "Agent" means any one of them.
"Aggregate Revolving Commitment Amount" means the aggregate amount of
Revolving Commitments in effect from time to time, such amount being
sixty-seven million five hundred thousand Dollars ($67,500,000) on the Closing
Date.
"Agreement" has the meaning specified in the introductory paragraph
and includes, without limitation, all amendments, restatements, or other
modifications hereto from time to time.
"Amended Administrative Agent's Fee Letter" means that certain letter
agreement, dated concurrently herewith, between the Revolving Agent and the
Borrowers, which amends and restates the "Administrative Agent's Fee Letter"
(as defined in the Original Credit Agreement).
"Anniversary Date" means an anniversary of the Closing Date.
"Applicable Percentage" means, as of the Closing Date,
(a) with respect to Revolving Loans and all other Total
Obligations other than the Term Loans, the Unused Line Fee, and the
Letter of Credit Fee, 0.00% (zero percent),
(b) with respect to the Term Loans, 11.00% or, in the event
of a failure to comply by December 31, 2005, with the terms of Section
7.1(a) with respect to delivery of ▇▇▇▇▇▇▇▇'▇ financial statements for
its Fiscal Year ending October 1, 2005, and for so long as such
failure to comply exists, 13.00%,
(c) with respect to the Unused Line Fee, 0.50%, and
(d) with respect to the Letter of Credit Fee, 2.25%.
"Appraisal Value" means, with respect to any inventory or Installment
Contracts, the net value thereof as provided in the definition of Net Orderly
Liquidation Value, but before application of any discount for liquidation.
"Asset Disposition" means (a) the sale, lease, or other disposition of
any Property by any member of the Consolidated Group (including the Capital
Stock of a Subsidiary but excluding Capital Stock of ▇▇▇▇▇▇▇▇'▇), and (b)
receipt by any member of the Consolidated Group of any cash insurance proceeds
or condemnation award payable by reason of theft, loss, physical destruction or
damage, taking, or similar event with respect to any of its Property. For
purposes hereof "Asset Disposition" shall not include, in any event, (v) the
sale of inventory in the ordinary course of business consistent with past
practice, (w) the sale, lease, or other disposition of machinery and equipment
which is obsolete or no longer used or useful in the conduct of the Borrowers'
business, (x) the sale or disposition of Investments included in clause (a) of
the definition of Permitted Investments, (y) the issuance of Capital Stock of a
Subsidiary to any member of the Consolidated Group or the issuance of Capital
Stock of a Subsidiary pro rata to all of its holders in a manner that does not
dilute the ownership interest of the members of the Consolidated Group therein;
and (z) the granting of any Permitted Liens or the making of Permitted
Investments.
"Assignment and Acceptance" has the meaning specified in Section
13.3(b).
"Bank of America" means Bank of America, N.A., and its successors.
"Bank Product Reserves" means all reserves which the Collateral Agent
from time to time establishes in its reasonable discretion in accordance with
the terms of this Agreement for the Bank Products then provided or outstanding.
"Bank Products" means any one or more of the following types of
services or facilities extended to any Credit Party by Bank of America or any
Affiliate of Bank of America in reliance on Bank of America's agreement to
indemnify such Affiliate: (a) credit cards; (b) ACH Transactions; (c) cash
management, including, without limitation, controlled disbursement services;
and (d) Hedging Agreements entered into with the consent of the Term Agent.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the United
States Code, as amended, modified, succeeded, or replaced from time to time.
"Bankruptcy Event" means, with respect to any Person, the occurrence
of any of the following with respect to such Person: (a) a court or
governmental agency having jurisdiction shall enter a decree or order for
relief in respect of such Person in an involuntary case under any applicable
bankruptcy, insolvency, or other similar law now or hereafter in effect, or
appoint a receiver, liquidator, assignee, custodian, trustee, or sequestrator
(or similar official) of such Person or for any substantial part of its
Property or order the winding up or liquidation of its affairs; (b) there shall
be commenced against such Person an involuntary case under any applicable
bankruptcy, insolvency, or other similar law now or hereafter in effect, or any
case, proceeding or other action for the appointment of a receiver, liquidator,
assignee, custodian, trustee, or sequestrator (or similar official) of such
Person or for any substantial part of such Person's Property or for the winding
up or liquidation of its affairs, and such involuntary case or other case,
proceeding or other action shall remain undismissed, undischarged, or unbonded
for a period of sixty (60) consecutive days; (c) such Person shall commence a
voluntary case under any applicable bankruptcy, insolvency, or other similar
law now or hereafter in effect, or consent to the entry of an order for relief
in an involuntary case under any such law, or consent to the appointment or
taking possession by a receiver, liquidator, assignee, custodian, trustee, or
sequestrator (or similar official) of such Person or for any substantial part
of its Property or make any general assignment for the benefit of creditors; or
(d) such Person shall be unable to, or shall admit in writing its inability to,
pay its debts generally as they become due.
"Base Rate" means, for any day, the rate of interest in effect for
such day as publicly announced from time to time by Bank of America in
Charlotte, North Carolina as its "prime rate" (the "prime rate" being a rate
set by the 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 the prime 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. Each interest rate
based upon the Base Rate shall be adjusted simultaneously with any change in
the Base Rate.
"Borrower" means, separately and individually, any of ▇▇▇▇▇▇▇▇'▇, FFP,
Stores, and any other Person who becomes a party to this Agreement as a
"Borrower" pursuant to the terms hereof, jointly, severally, and collectively,
and "Borrowers" means more than one or all of the foregoing Persons, jointly,
severally, and collectively, as the context requires.
"Borrowing Base Certificate" has the meaning specified in Section
7.1(e).
"Business Day" means a day other than a Saturday, Sunday, or other day
on which commercial banks in Pasadena, California or Charlotte, North Carolina
are authorized or required by law to close, except that, when used in
connection with a Term Loan, such day shall also be a day on which dealings
between banks are carried on in Dollar deposits in London, England.
"Businesses" has the meaning specified in Section 6.16(a).
"Capital Adequacy Regulation" means any guideline, request, or
directive of any central bank or other Governmental Authority, or any other
law, rule, or regulation, whether or not having the force of law, in each case,
regarding capital adequacy of any bank or of any corporation controlling a
bank.
"Capital Expenditures" means all payments due (whether or not paid
during any period) in respect of the cost of the purchase, acquisition, or
construction of any fixed asset, plant, equipment, or intangible subject to
amortization, or any renewal, improvement, replacement, substitution, or
addition thereto, which has a useful life of more than one year, including,
without limitation, those costs arising in connection with the direct or
indirect acquisition of such asset by way of increased product or service
charges or in connection with a Capital Lease or Synthetic Lease.
"Capital Lease" means, as applied to any Person, any lease of any
Property by that Person as lessee which, in accordance with GAAP, is or should
be accounted for as a capital lease on the balance sheet of that Person.
"Capital Stock" means (a) in the case of a corporation, capital stock,
(b) in the case of an association or business entity, any and all shares,
interests, participations, rights, or other equivalents (however designated) of
capital stock, (c) in the case of a partnership, partnership interests (whether
general or limited), (d) in the case of a limited liability company, membership
interests, (e) any other units, rights, securities, equity interests,
participations, or equivalent evidences of ownership that confer on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person, and (f) warrants, options, or other similar
rights to acquire any of the foregoing.
"Cash Equivalents" means (a) securities issued or directly and fully
guaranteed or insured by the United States or any agency or instrumentality
thereof (provided that the full faith and credit of the United States is
pledged in support thereof) having maturities of not more than twelve (12)
months from the date of acquisition, (b) Dollar denominated time deposits and
certificates of deposit of (i) any Lender, (ii) any domestic commercial bank of
recognized standing having capital and surplus in excess of $500,000,000, or
(iii) any bank whose short-term commercial paper rating from Standard & Poor's
Corporation ("S&P") is at least A-1 or the equivalent thereof or from ▇▇▇▇▇'▇
Investor Service, Inc. ("▇▇▇▇▇'▇") is at least P-1 or the equivalent thereof
(any such bank being an "Approved Bank"), in each case with maturities of not
more than 270 days from the date of acquisition, (c) commercial paper and
variable or fixed rate notes issued by a Lender or any Approved Bank (or by the
parent company thereof) or any variable rate notes issued by, or guaranteed by,
any domestic corporation rated A-1 (or the equivalent thereof) or better by S&P
or P-1 (or the equivalent thereof) or better by Moody's and maturing within six
(6) months of the date of acquisition, (d) repurchase agreements entered into
by any Person with a bank or trust company (including any of the Lenders) or
recognized securities dealer having capital and surplus in excess of
$500,000,000 for direct obligations issued by or fully guaranteed by the United
States in which such Person shall have a perfected first priority security
interest (subject to no other Liens) and having, on the date of purchase
thereof, a fair market value of at least 100% of the amount of the repurchase
obligations, and (e) Investments, classified in accordance with GAAP as current
assets, in money market investment programs registered under the Investment
Company Act of 1940, as amended, which are administered by reputable financial
institutions having capital of at least $500,000,000 and the portfolios of
which are limited to Investments of the character described in the preceding
clauses (a) through (d).
"Change of Control" means the occurrence of any of the following
events (a) any Person other than ▇▇▇▇▇▇ Ean ▇▇▇▇▇, the Initial Term Lender or
any of their respective affiliates owns and controls, directly or indirectly,
Voting Stock of ▇▇▇▇▇▇▇▇'▇ in an amount sufficient to elect a majority of
▇▇▇▇▇▇▇▇'▇ board of directors, (b) ▇▇▇ ▇▇▇▇▇▇ (i) is terminated as chief
executive officer of ▇▇▇▇▇▇▇▇'▇ and is not immediately succeeded by a chief
executive officer reasonably acceptable to the Required Lenders, or (ii)
resigns or is incapacitated and is not succeeded by a chief executive officer
reasonably acceptable to the Required Lenders within 30 days of his resignation
or incapacity, (c) either (i) four or more Persons who are members of
▇▇▇▇▇▇▇▇'▇ board of directors as of the Closing Date resign, are removed, or
are not reelected (in each case for reasons other than legal cause) during the
eighteen-month period following the Closing Date, or (ii) three or more Persons
who are independent directors of ▇▇▇▇▇▇▇▇'▇ as of the Closing Date resign, are
removed, or are not reelected (in each case for reasons other than legal cause)
during the eighteen-month period following the Closing Date, in either case in
clause (c)(i) and clause (c)(ii) preceding, without being replaced with
directors (independent directors in the case of clause (c)(ii)) reasonably
satisfactory to the Term Lenders, or (d) any Credit Party (other than
▇▇▇▇▇▇▇▇'▇), or any of its Subsidiaries (other than FCJVLP), ceases to be a
wholly-owned Subsidiary of ▇▇▇▇▇▇▇▇'▇, excluding any such Subsidiary of
▇▇▇▇▇▇▇▇'▇ which is the subject of a transaction permitted by Section 8.4 or
Section 8.5.
"CIT" means The CIT Group/Business Credit, Inc., and its successors.
"Closing Date" means the date of this Agreement.
"Collateral" means a collective reference to the collateral which is
identified in, and at any time will be covered by, the Collateral Documents.
"Collateral Agent" has the meaning specified in the introductory
paragraph of this Agreement and includes any successor "Collateral Agent"
appointed in accordance with this Agreement.
"Collateral Documents" means a collective reference to the Security
Agreements, the Mortgages (if any), and such other documents executed and
delivered in connection with the attachment and perfection of the Liens arising
thereunder in favor of the Collateral Agent, any other Agent, or any Lender,
including, without limitation, UCC financing statements and patent and
trademark filings.
"Commitment Period" means the period from and including the Closing
Date to but not including the earlier of (a) the Termination Date, (b) the
Revolving Facility Termination Date, or (c) the date on which the Commitments
terminate in accordance with the provisions of this Agreement.
"Commitments" means any of the Revolving Commitments and/or the LOC
Commitments.
"Consolidated" means, with respect to any Person, the consolidation of
accounts or financial reports of such Person and its Subsidiaries in accordance
with GAAP; provided that the Crescent Parties shall not be considered
Subsidiaries of ▇▇▇▇▇▇▇▇'▇ for purposes of this definition whether or not GAAP
would require otherwise.
"Consolidated Group" means ▇▇▇▇▇▇▇▇'▇ and its Subsidiaries.
"Consumer Protection Laws" means the Truth in Lending Act (and
Regulation Z promulgated thereunder), Equal Credit Opportunity Act, Fair Credit
Reporting Act, Fair Debt Collection Practices Act, ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Financial
Privacy Act, anti-discrimination and fair lending laws, and all other federal
and state laws, regulations, orders, directives, or similar requirements of any
Governmental Authority intended for the protection of consumers in connection
with the extension of consumer credit.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any material agreement, instrument, or
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Cougar" means Cougar Reinsurance Company, Ltd., a Turks and Caicos
Islands company, and its successors and assigns.
"Credit Documents" means two or more of this Agreement, the Notes, the
LOC Documents (excluding any Letter of Credit), the Guaranty Agreements, the
Amended Administrative Agent's Fee Letter, the Collateral Documents, any
agreement entered into in connection with any Bank Products, and all other
related agreements and documents issued or delivered hereunder or thereunder or
pursuant hereto or thereto (in each case as the same may be amended, restated,
or otherwise modified from time to time), and "Credit Document" means any one
of them.
"Credit Parties" means, collectively, the Borrowers and the
Guarantors, and "Credit Party" means any one of such Persons.
"Crescent" means Crescent Jewelers, a California corporation, and its
successors and assigns.
"Crescent Investment Restructuring Transaction" means (a) a
restructuring of the Crescent Capital Stock owned by any Credit Party or any
other Investment in any Crescent Party owned by any Credit Party or (b) the
taking of any other action with respect to the existing Investments of any
Credit Party in any Crescent Party and or any claims that any Credit Party has
or may hereafter have against any Crescent Party, including conversion of any
such Investment or claim into a different type of Investment or settlement of
amounts owing under such existing Investments and claims and transfers of such
Investments and claims among the Credit Parties, but excluding specifically any
transfer or exchange of cash or any Property (excluding Capital Stock of
▇▇▇▇▇▇▇▇'▇) to any Crescent Party in connection with any such transaction.
"Crescent Parties" means, collectively, Crescent Jewelers Inc., a
Delaware corporation, and each of its Subsidiaries.
"Default" means any event, act, or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Default Relating Solely to the Term Loans" means either (a) an Event
of Default consisting solely of the failure to pay any portion of the Term
Obligations when due, (b) a Default consisting solely of the breach by the
Borrowers of a Tier I Financial Covenant, (c) an Event of Default consisting
solely of the breach by the Borrowers of the requirements of Section 7.18; and
(d) an Event of Default under Section 9.1(j) to the extent arising under clause
(c) of the definition of "Change of Control".
"Defaulting Revolving Lender" means, at any time, any Revolving Lender
(the "subject Revolving Lender") that (a) has failed to make a Revolving Loan
or purchase a Participation Interest required pursuant to the terms of this
Agreement within one Business Day of when due, (b) other than as set forth in
clause (a) preceding, has failed to pay to the Revolving Agent or any other
Revolving Lender an amount owed by the subject Revolving Lender pursuant to the
terms of this Agreement within one Business Day of when due, unless such amount
is subject to a good faith dispute or discount, or (c) has been deemed
insolvent or has become subject to a bankruptcy or insolvency proceeding or
with respect to which (or with respect to any of the assets of which) a
receiver, trustee, or similar official has been appointed.
"Designated Account" has the meaning specified in Section 2.4(a).
"Designated Event of Default" means an Event of Default pursuant to:
(a) Section 6.17, but only if such Event of Default results
from an intentional or willful misstatement of a Credit Party
following the Closing Date or if such Event of Default would
reasonably be expected to have a Material Adverse Effect;
(b) Section 7.1(a) but only after the passage of sixty (60)
calendar days from the date that such Event of Default first becomes
such;
(c) Sections 7.1(b) and (d) but only after the passage of
thirty (30) calendar days from the date that such Event of Default
first becomes such;
(d) Sections 7.1(e), (g) and (h);
(e) Section 7.1(r), but only if such Event of Default arises
by reason of a failure to certify the amount of sales during December
of the relevant year and not by reason of the failure to certify
compliance with any financial covenant;
(f) Section 7.10, but only after the passage of two (2)
Business Days after written notice of the Event of Default is first
given to the Collateral Agent and the Term Agent;
(g) Section 7.11, but only in respect of Tier II Financial
Covenants;
(h) Section 7.21;
(j) Section 8.2, but only if the Liens relate to inventory or
Installment Contracts and secure Indebtedness in excess of $10,000,000
in the aggregate;
(j) Sections 8.4(a) and (b);
(k) Section 8.4(c), but only if the cost of all such
Acquisitions prohibited thereby is in excess of $10,000,000 in the
aggregate;
(l) Section 8.5, but only if the Asset Disposition involves
inventory or Installment Contracts with a book value in excess of
$10,000,000 in the aggregate;
(m) Section 8.18;
(n) Sections 9.1(a)(i), (ii), (iii) or (iv), in each case in
respect of amounts owning to the Revolving Lenders, or any of them;
(o) Section 9.1(a)(v), provided that such Event of Default
arises from the failure of the Borrowers to pay such other amounts
that exceed, in the aggregate, with all other amounts owing pursuant
to Section 9.1(a), $2,000,000 owing to the Revolving Lenders, or any
of them;
(p) Section 9.1(f); and
(q) Section 9.1(j) to the extent such Event of Default arises
out of a Change of Control under clause (b) of the definition of
Change of Control.
"Discharge of the Revolving Obligations" means the satisfaction of
each of the following requirements (a) payment in full in cash of all Revolving
Obligations owing to the Collateral Agent, the Revolving Agent, and the
Revolving Lenders, (b) with respect to all Letters of Credit outstanding,
termination of such letters of credit or delivery to the Revolving Agent of a
Supporting Letter of Credit or cash collateral in accordance with Section
2.3(i), (c) termination of the Revolving Commitments, and (d) adequate
provision is made for the satisfaction of any indemnification right of the
Collateral Agent, the Revolving Agent, or any Revolving Lender in respect of an
asserted claim (whether or not such claim has been filed or registered with any
court, Governmental Authority, or any other governing body, as applicable) that
is required to be treated as a material loss contingency under GAAP.
"Disclosed Matters" means (a) any default, violation, breach, failure
to comply with any statute, rule, regulation or agreement, failure to comply
with GAAP, litigation (excluding legal proceedings not set forth on Schedule
1.1F arising in the ordinary course of business), investigation, or any claim
that any of the foregoing has or may occur described in any annual, quarterly,
or current reports filed by ▇▇▇▇▇▇▇▇'▇ with the SEC prior to the Closing Date
(beginning with ▇▇▇▇▇▇▇▇'▇ 2002 Annual Report on Form 10-K filed December 20,
2002) or as set forth on Schedule 1.1E or Schedule 1.1F or as otherwise
disclosed in writing to the Lenders on or prior to the Closing Date, and any
now or hereafter actual or threatened claims, litigation, investigation, or
other disputes arising from such matters, including any shareholder litigation
(derivative or otherwise) in respect of such matters and (b) breaches or
claims, previously or hereafter alleged by any of the Crescent Parties, by
▇▇▇▇▇▇▇▇'▇ or any of its Subsidiaries of their respective covenants and other
obligations pursuant to any services (or other) agreement between ▇▇▇▇▇▇▇▇'▇ or
any of its Subsidiaries, on the one hand, and any of the Crescent Parties, on
the other hand, or any of their respective Affiliates, any other claims from
time to time asserted by any of the Crescent Parties, or any Person claiming
through or on behalf of the Crescent Parties or any claims by any Person that
the Credit Parties are responsible for the obligations of the Crescent Parties
and any now or hereafter actual or threatened litigation in respect of such
breaches or claims, but only to the extent such breaches or claims are alleged
to have occurred prior to the Closing Date.
"Discretionary Over-Advance" has the meaning specified in Section
2.1(b).
"Dollars" and "$" means dollars in lawful currency of the United
States. Unless otherwise specified, all payments under this Agreement shall be
made in Dollars.
"Domestic Credit Party" means any Credit Party which is incorporated
or organized under the laws of any state of the United States or the District
of Columbia.
"Domestic Subsidiary" means any Subsidiary which is incorporated or
organized under the laws of any state of the United States or the District of
Columbia.
"EBITDA" means, for any period, the sum of (a) Adjusted Net Earnings
from Operations, plus (b) to the extent deducted in determining Adjusted Net
Earnings from Operations, (i) Interest Expense, plus (ii) income and franchise
taxes, plus (iii) depreciation and amortization, in each case on a Consolidated
basis determined in accordance with GAAP, plus (iv) charges, professional fees,
and expenses incurred during the period from the Closing Date through
▇▇▇▇▇▇▇▇'▇ Fiscal Year ending October 1, 2005 (the "EBITDAIR Period"), in
connection with Disclosed Matters (including charges, professional fees, and
expenses associated with investigations of and litigation against the Credit
Parties included in the Disclosed Matters) and fees and expenses payable to any
chief restructuring officer, to the extent that such charges have not been
previously reported by the Credit Parties on financial statements prepared in
accordance with GAAP, plus (v) charges consisting of restructuring charges
under GAAP and incurred during the EBITDAIR Period, plus (vi) charges incurred
during the EBITDAIR Period in respect of any restructuring of the credit
department of the Credit Parties, plus (vii) sign-on bonuses incurred during
the EBITDAIR Period and payable to a chief financial officer or a chief
merchandising officer, but only, in the case of clauses (iv) through (viii),
for the purposes of calculating EBITDA for any period that includes all or any
portion of the EBITDAIR Period.
"Eligible Assignee" means (a) a Lender, (b) an Affiliate of a Lender,
(c) a commercial bank, commercial finance company, or other asset based lender
having total assets in excess of $1,000,000,000, and (d) any other Person
reasonably acceptable to (i) with respect to any assignment of the Revolving
Loans, the Revolving Agent, and (ii) with respect to any assignment of the Term
Loans, the Term Agent, provided, however, that no Borrower nor an Affiliate of
any Borrower shall qualify as an Eligible Assignee.
"Eligible Installment Contracts" means, for each Borrower as of any
date of determination and without duplication, those Installment Contracts
which the Collateral Agent, in its reasonable discretion, determines are
eligible, but excluding, without limiting the Collateral Agent's discretionary
rights:
(a) any Installment Contract which is (i) not subject to a
perfected, first priority (subject to inchoate Liens for government
charges or assessments not yet due) Lien in favor of the Collateral
Agent to secure the Total Obligations, (ii) subject to any other Lien
that is not a Permitted Lien, or (iii) evidences a transaction not in
compliance with any Requirement of Law;
(b) any Installment Contract for which payment thereunder is
doubtful or is determined to be uncollectible (including, without
limitation, any Installment Contract under which any payment is more
than sixty (60) days past due on a "contractual" basis);
(c) any Installment Contract which is modified or rewritten;
(d) any Installment Contract with a term of more than
twenty-four (24) months;
(e) any Installment Contract for which the obligations of the
debtor thereunder are evidenced by a note, chattel paper, or other
instrument, unless the covenants set forth in the Security Agreement
applicable to such note, chattel paper, or instrument have been
complied with;
(f) any Installment Contract for which the debtor thereunder
is not solvent or is subject to any bankruptcy or insolvency
proceeding of any kind or which has died or been declared judicially
incompetent;
(g) any Installment Contract for which the debtor thereunder
is located outside of the United States (unless payment for the goods
shipped is secured by an irrevocable letter of credit in form and
substance and from an institution acceptable to the Collateral Agent
and with respect to which the letter-of-credit rights (as defined in
the UCC) have been assigned to the Collateral Agent pursuant to
documents in form and substance acceptable to the Collateral Agent;
(h) any Installment Contract which is contingent or which is
subject to offset, discount, or deduction (in each case to the extent
of such offset, discount, or deduction) or which is subject to any
counterclaim, dispute, or other defense to payment;
(i) any Installment Contract under which any Subsidiary,
employee, or Affiliate of a Borrower is the debtor;
(j) any Installment Contract representing a sale to the
government of the United States or any subdivision thereof unless the
Federal Assignment of Claims Act (or other similar Requirement of Law)
has been complied with to the satisfaction of the Collateral Agent
with respect to such Installment Contract;
(k) any Installment Contract with respect to which any of the
representations, warranties, covenants, and agreements contained in
the Credit Documents are not or have ceased to be complete and correct
or have been breached;
(l) any Installment Contract which represents a sale on a
▇▇▇▇-and-hold, guaranteed sale, sale and return, sale on approval,
consignment, or other repurchase or return basis;
(m) any Installment Contract arising from a transaction which
does not conform to the credit criteria of a Borrower in effect at the
time such Installment Contract is entered into;
(n) any Installment Contract owing from a debtor the
Collateral Agent reasonably determines is not creditworthy;
(o) any Installment Contract under which the initial payment
is more than forty-five (45) days from the original date of sale;
(p) any Installment Contract under which the merchandise
purchased by the debtor has been repossessed or a Borrower has
demanded return of such merchandise;
(q) any Installment Contract arising in a transaction in
which the goods covered thereby have not been delivered;
(r) the portion of any sales tax included in any Installment
Contract;
(s) any Installment Contract which has payment terms which
are not fully amortizing within twenty-four (24) months after the date
of sale with respect thereto; and
(t) any Installment Contract which fails to meet such other
specifications and requirements as may from time to time be
established by the Collateral Agent in its reasonable discretion.
"Eligible Inventory" means, for each Borrower as of any date of
determination and without duplication, the lower of the aggregate book value
(based on a FIFO or a moving average cost valuation, consistently applied) or
fair market value of finished goods inventory owned by such Borrower, less
reserves against inventory shrinkage as are reasonably satisfactory to the
Collateral Agent and other appropriate reserves determined in accordance with
GAAP. Without limiting the foregoing, Eligible Inventory excludes in any event:
(a) inventory which is (i) not subject to a perfected, first
priority (subject to inchoate Liens for government charges or
assessments not yet due) Lien in favor of the Collateral Agent to
secure the Total Obligations or (ii) subject to any other Lien that is
not a Permitted Lien;
(b) inventory which is defective, obsolete, or not in good or
merchantable condition or fails to meet standards for sale or use
imposed by governmental agencies, departments, or divisions having
regulatory authority over such goods;
(c) inventory which is not useable or salable at prices
approximating its cost in the ordinary course of the business
(including, without duplication, the amount of any reserves for
obsolescence, unsalability, or decline in value);
(d) inventory located outside of the United States or in
transit (other than between locations operated by the Borrowers);
(e) inventory which is leased or held on sale and return,
sale on approval, consignment, or other repurchase or return basis;
(f) inventory that has been returned to a Borrower unless
such inventory meets all of the other requirements of eligibility
contained herein or repossessed by a Borrower;
(g) inventory that is located in a public warehouse or in
possession of a bailee or in a facility (other than a retail store
operated by a Borrower) leased by a Borrower if the applicable
warehouseman, bailee, or lessor has not delivered to the Collateral
Agent a subordination or waiver agreement, in form and substance
satisfactory to the Collateral Agent;
(h) inventory that is not finished goods or is raw materials,
work-in-process, chemicals, samples, prototypes, supplies, or packing
and shipping materials;
(i) inventory that is subject to a third party's trademark or
other proprietary right, unless the Collateral Agent is satisfied that
it could sell such inventory on satisfactory terms during the
existence of an Event of Default;
(j) inventory which is to be returned to any vendor;
(k) any capitalized costs included in inventory; and
(l) inventory which fails to meet such other specifications
and requirements as may from time to time be established by the
Collateral Agent in its reasonable discretion.
"Environmental Laws" means any and all lawful and applicable federal,
state, local, and foreign, statutes, laws, regulations, ordinances, rules,
judgments, orders, decrees, permits, concessions, grants, franchises, licenses,
agreements, and other governmental restrictions relating to the environment or
to emissions, discharges, releases, or threatened releases of Materials of
Environmental Concern into the environment, including, without limitation,
ambient air, surface water, ground water, or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of Materials of Environmental Concern.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto, as interpreted by the rules and
regulations thereunder, all as the same may be in effect from time to time.
References to sections of ERISA shall be construed also to refer to any
successor sections.
"ERISA Affiliate" means an entity which is under common control with
any member of the Consolidated Group within the meaning of Section 4001(a)(14)
of ERISA, or is a member of a group which includes any member of the
Consolidated Group and which is treated as a single employer under Sections
414(b) or (c) of the Internal Revenue Code.
"ERISA Affiliate Plan" means any employee benefit plan (as defined in
Section 3(3) of ERISA) which is covered by ERISA and with respect to which any
ERISA Affiliate that is not a member of the Consolidated Group is (or, if such
plan were terminated at such time, would under Section 4069 of ERISA be deemed
to be) an "employer" within the meaning of Section 3(5) of ERISA.
"ERISA Event" means (a) with respect to any Plan, the occurrence of a
Reportable Event or the substantial cessation of operations (within the meaning
of Section 4062(e) of ERISA), (b) the withdrawal by any member of the
Consolidated Group from a Multiple Employer Plan during a plan year in which it
was a substantial employer (as such term is defined in Section 4001(a)(2) of
ERISA), or the termination of a Multiple Employer Plan, (c) the distribution of
a notice of intent to terminate or the actual termination of a Plan pursuant to
Section 4041(a)(2) or 4041A of ERISA, (d) the institution of proceedings to
terminate or the actual termination of a Plan by the PBGC under Section 4042 of
ERISA, (e) any event or condition which might constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan, (f) the complete or partial withdrawal of any member of
the Consolidated Group from a Multiemployer Plan, (g) the conditions for
imposition of a lien under Section 302(f) of ERISA exist with respect to any
Plan, or (h) the adoption of an amendment to any Plan requiring the provision
of security to such Plan pursuant to Section 307 of ERISA.
"Eurodollar Rate" means, for any Interest Period, with respect to Term
Loans, the rate of interest per annum determined pursuant to the following
formula:
Eurodollar Rate = Offshore Base Rate
------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Reserve Percentage" means, as of the first day of
any Interest Period, the reserve percentage (expressed as a
decimal, rounded upward to the next 1/100th of 1.00%) in
effect on such day applicable to member banks under
regulations issued from time to time by the Federal Reserve
Board for determining the maximum reserve requirement
(including any emergency, supplemental, or other marginal
reserve requirement) with respect to Eurocurrency funding
(currently referred to as "Eurocurrency liabilities"). The
Eurodollar Rate for each outstanding Term Loan shall be
adjusted automatically as of the first day of each Interest
Period.
"Offshore Base Rate" means the rate per annum appearing on
Telerate Page 3750 (or any successor page) as the London
interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period for a term
comparable to such Interest Period. If for any reason such
rate is not available, the Offshore Base Rate shall be, for
any Interest Period, the rate per annum appearing on Reuters
Screen LIBO Page as the London interbank offered rate for
deposits in Dollars at approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period;
provided, however, if more than one rate is specified on
Reuters Screen LIBO Page, the applicable rate shall be the
arithmetic mean of all such rates. If for any reason none of
the foregoing rates is available, the Offshore Base Rate
shall be, for any Interest Period, the rate per annum
determined by Bank of America as the rate of interest at
which Dollar deposits in the approximate amount of the Term
Loan comprising part of such borrowing would be offered by
Bank of America's London Branch to major banks in the
offshore Dollar market at their request at or about 11:00
a.m. (London time) two Business Days prior to the first day
of such Interest Period for a term comparable to such
Interest Period.
"Event of Default" has the meaning specified in Section 9.1.
"Excess Availability" means, at any time, an amount determined as the
result of (a) the Total Borrowing Base, minus (b) the Total Obligations, minus
(c) all accounts payable of the Borrowers which are past due for payment.
"Excluded Property" means, with respect to any member of the
Consolidated Group, including any Person that becomes a member of the
Consolidated Group after the Closing Date, any Property of such member of the
Consolidated Group which, subject to the terms of Section 8.12, is subject to a
Lien of the type described in clause (h) of the definition of "Permitted Liens"
pursuant to documents which prohibit such member of the Consolidated Group from
granting any other Liens in such Property.
"Executive Officer" of any Person means any of the chief executive
officer, chief operating officer, president, chief accounting officer, and
chief financial officer of such Person.
"Existing Letters of Credit" means the letters of credit identified on
Schedule 1.1A.
"Extension of Credit" means, as to any Lender, the making of, or
participation in, a Loan by such Lender or the issuance or extension of, or
participation in, a Letter of Credit by such Lender.
"FBI" means ▇▇▇▇▇▇▇▇'▇ Beneficiary Inc., a Delaware corporation, and
its successors and assigns.
"FCJVH" means FCJV Holding Corp., a Delaware corporation, and its
successors and assigns.
"FCJVLP" means FCJV, L.P., a Delaware limited partnership, and its
successors and assigns.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100th of 1.00%) 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 charged to Bank
of America on such day on such transactions as determined by the Revolving
Agent.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System or any successor thereto.
"Fees" means all fees payable by the Borrowers pursuant to Section
4.9.
"FFP" means ▇▇▇▇▇▇▇▇'▇ Florida Partnership, a Florida general
partnership, and its successors and assigns.
"FHC" means ▇▇▇▇▇▇▇▇'▇ Holding Corp., a Delaware corporation, and its
successors and assigns.
"FILLC" means ▇▇▇▇▇▇▇▇'▇ Investments LLC, a Georgia limited liability
company, and its successors and assigns.
"Fiscal Period" means one of the three fiscal periods in a Fiscal
Quarter, each of which is approximately one calendar month in duration. There
are twelve (12) Fiscal Periods in each Fiscal Year.
"Fiscal Quarter" means one of the four thirteen week, or if applicable
fourteen week, quarters in a Fiscal Year, with the first of such quarters
beginning on the first day of a Fiscal Year and ending on Saturday of the
thirteenth (or fourteenth, if applicable) week in such quarter.
"Fiscal Year" means, with respect to each member of the Consolidated
Group, the Fiscal Year for financial accounting purposes consisting of 52 or 53
weeks ending on the Saturday closest to September 30 of each year.
"Fixed Charge Coverage Ratio" means, for any period, the ratio of
EBITDA divided by Fixed Charges.
"Fixed Charges" means, for any period, the sum of (a) the cash portion
of Interest Expense for such period, plus (b) payments of Funded Debt
(including mandatory commitment reductions, sinking fund payments, payments in
respect of the principal component of Capital Leases, Synthetic Leases, and the
like relating thereto) for such period other than payments of (i) principal of
the Loans, (ii) reimbursement obligations in respect of Letters of Credit, and
(iii) principal of Funded Debt (if any) under the Vendor Financing Program,
plus (c) Capital Expenditures, minus any cash received (including the proceeds
of any insurance or condemnation award to the extent such proceeds are used to
purchase or acquire any fixed asset or improvement) upon the disposal of any
capital asset which is not applied to (i) the repayment of any Indebtedness
other than the Loans or reimbursement obligations in respect of Letters of
Credit or (ii) or payment of any fees, costs, and expenses of such disposal,
plus (d) Restricted Payments (if any), plus (e) federal, state, local, and
foreign income taxes paid in cash, in each case determined in accordance with
GAAP.
"FMC" means ▇▇▇▇▇▇▇▇'▇ Management Corp., a Delaware corporation, and
its successors and assigns.
"Foreign Subsidiary" means a Subsidiary which is not a Domestic
Subsidiary.
"▇▇▇▇▇▇▇▇'▇" means ▇▇▇▇▇▇▇▇'▇ Inc., a Delaware corporation, and its
successors and assigns.
"Funded Debt" means, with respect to any Person (the "subject
Person"), without duplication (a) all obligations of the subject Person for
borrowed money (other than, to the extent it may be included herein, trade debt
incurred in the ordinary course of business), (b) all obligations of the
subject Person evidenced by bonds, debentures, notes, or similar instruments,
or upon which interest payments are customarily made (other than, to the extent
it may be included herein, trade debt incurred in the ordinary course of
business), (c) all purchase money Indebtedness (including for purposes hereof,
indebtedness and obligations in respect of conditional sale or title retention
arrangements relating to Property purchased (other than customary reservations
of title under agreements with suppliers entered into in the ordinary course of
business, including, without limitation, the consignment of inventory and all
obligations issued or assumed as the deferred purchase price of Property or
services purchased), excluding trade debt incurred in the ordinary course of
business, which would appear as liabilities on a balance sheet) of the subject
Person, including, without limitation, the principal portion of all obligations
of the subject Person outstanding under Capital Leases, (d) all Support
Obligations of the subject Person with respect to Funded Debt of another
Person, (e) the maximum available amount of all standby letters of credit
issued or bankers' acceptances facilities for the account of the subject Person
and, without duplication, all drafts drawn thereunder (to the extent
unreimbursed), (f) all Funded Debt of another Person secured by a Lien on any
Property of the subject Person, whether or not such Funded Debt has been
assumed by the subject Person, provided that for purposes hereof the amount of
such Funded Debt shall be limited to the amount of such Funded Debt as to which
there is recourse to the subject Person or the fair market value of the
property which is subject to the Lien, if less, (g) the outstanding attributed
principal amount under any Securitization Transaction to which the subject
Person is a party, (h) the principal portion of obligations outstanding under
Synthetic Leases under which the subject Person is the lessee, and (i) the
maximum amount of all contingent obligations (including earn-out payments)
incurred in connection with Permitted Acquisitions and Acquisitions consummated
prior to the Closing Date. The "Funded Debt" of the subject Person shall
include the "Funded Debt" of any partnership or joint venture in which the
subject Person is a general partner or joint venturer, but only to the extent
to which there is recourse to the subject Person for the payment of such Funded
Debt.
"Funding Date" means any date on which any of the following occur: (a)
a borrowing hereunder consisting of Revolving Loans made to the Borrowers, or
any of them, on the same day by the Revolving Lenders, by Bank of America in
the case of a borrowing funded by Non-Ratable Loans, or by the Collateral Agent
in case of a borrowing consisting of a Discretionary Over-Advance; or (b) the
issuance of a Letter of Credit.
"GAAP" means generally accepted accounting principles in the United
States applied on a consistent basis and subject to the terms of Section 1.2.
"Governmental Authority" means any nation or government, any state,
province, municipality, or other political subdivision thereof, any central
bank (or similar monetary or regulatory authority) thereof, any entity
exercising executive, legislative, judicial, regulatory, or administrative
functions of or pertaining to the government, and any corporation or other
entity owned or controlled, through stock or capital ownership or otherwise, by
and of the foregoing, and any department, agency, board, commission tribunal,
committee, or instrumentality of any of the foregoing.
"Gross Installment Contract Amount" means, for any period of
determination, the average daily outstanding balance during such period of all
Installment Contracts, including all unearned interest, premiums for insurance
and product warranties, and other fees and charges, whether earned or unearned,
owing by the debtor thereunder.
"Gross Installment Contract Payments" means, as of any date of
determination with respect to each Installment Contract, the outstanding
balance thereof including all unearned interest, premiums for insurance and
product warranties, and other fees and charges, whether earned or unearned,
owing by the debtor thereunder.
"Guarantors" means ▇▇▇▇▇▇▇▇'▇, FMC, FFP, FHC, Stores, FCJVH, FCJVLP,
FBI, FILLC, and each other Person (including its successors and assigns) which
may hereafter become a Guarantor by execution of a guaranty agreement in form
and substance reasonably acceptable to the Collateral Agent, and "Guarantor"
means any one of the foregoing.
"Guaranty Agreement" means any agreement executed and delivered by a
Credit Party which guarantees the payment or performance of the Total
Obligations, and "Guaranty Agreements" means two or more of such agreements,
collectively, as any such agreement may be amended, restated, or otherwise
modified from time to time.
"Hedging Agreement" means an interest rate protection agreement or
foreign currency exchange agreement, as such agreement may be amended,
restated, or otherwise modified from time to time.
"Indebtedness" means, with respect to any Person (the "subject
Person"), without duplication (a) all Funded Debt of the subject Person, (b)
all obligations of the subject Person under take-or-pay or similar arrangements
or under commodities agreements, (c) all Indebtedness of others secured by (or
for which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on, or payable out of the proceeds of
production from, Property owned or acquired, whether or not the obligations
secured thereby have been assumed, (d) all Support Obligations with respect to
Indebtedness of another Person, (e) all obligations under Hedging Agreements,
(f) all preferred Capital Stock which by the terms thereof could be (at the
request of the holders thereof or otherwise) subject to mandatory cash sinking
fund payments, redemption, or other acceleration (other than as a result of a
Change of Control or an Asset Disposition that does not in fact result in a
redemption of such preferred Capital Stock) at any time during the term of this
Agreement, and (g) the Indebtedness of any partnership or unincorporated joint
venture in which such Person is a general partner or a joint venturer.
"Indemnified Liabilities" has the meaning specified in Section 13.5.
"Initial Term Lender" means Jewelry Investors II, L.L.C.
"Installment Contract" means any loan agreement, installment sale
contract, or other form of instrument or document evidencing obligations owing
by a retail purchaser to a Borrower with respect to financial accommodations
provided by such Borrower to such purchaser in connection with a sale of
merchandise to such purchaser.
"Intellectual Property" has the meaning specified in Section 6.9.
"Interest Expense" means, for any period, interest expense determined
in accordance with GAAP on a Consolidated basis and including the amortization
of debt discount and premium, the interest component of Capital Leases and
Synthetic Leases and the implied interest component under Securitization
Transactions.
"Interest Payment Date" means (a) with respect to the Revolving Loans,
the first day of each calendar month and the Revolving Facility Termination
Date, and (b) with respect to the Term Loans (i) the first day of each calendar
month for all Term Loans accruing interest at a rate not based on the
Eurodollar Rate (if any), (ii) with respect to all Term Loans accruing interest
at a rate based on the Eurodollar Rate, the first day of each calendar month of
each Interest Period, (iii) the date of repayment of principal of the Term
Loans, and (iv) the Termination Date. If an Interest Payment Date falls on a
date other than a Business Day, such Interest Payment Date shall be deemed to
be the next Business Day.
"Interest Period" means, with respect to any Term Loan, each period of
three months duration commencing with the three month period beginning on the
Closing Date, provided, however, that (a) if any Interest Period would end on a
day which is not a Business Day, such Interest Period shall be extended to the
next succeeding Business Day (except that if the next succeeding Business Day
falls in the next succeeding calendar month, then on the next preceding
Business Day), (b) no Interest Period shall extend beyond the Termination Date,
and (c) if an Interest Period begins on a day for which there is no numerically
corresponding day in the calendar month in which the Interest Period is to end,
such Interest Period shall end on the last day of such calendar month.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and any successor statute thereto, as interpreted by
the rules and regulations issued thereunder, in each case as in effect from
time to time. References to sections of the Internal Revenue Code shall be
construed also to refer to any successor sections thereto.
"Investment" in any Person means (a) the acquisition (whether for
cash, property, services, assumption of Indebtedness, securities, or otherwise)
of Capital Stock, bonds, notes, debentures, partnership, joint ventures, or
other ownership interests or other securities of such Person, (b) any deposit
with, or advance, loan, or other extension of credit to, such Person (other
than deposits made in connection with the purchase of equipment or other assets
in the ordinary course of business and Permitted Liens under clause (e) of the
definition of Permitted Liens), or (c) any other capital contribution to or
investment in such Person, including without limitation, any Support
Obligations (including any support for a letter of credit issued on behalf of
such Person) incurred for the benefit of such Person, but excluding any
Restricted Payment to such Person.
"Investor Documents" means the Warrant, the Participation Agreement,
and the Investor Rights Agreement, dated concurrently herewith, executed and
delivered by ▇▇▇▇▇▇▇▇'▇ in favor of the Term Lenders.
"Investor Rights Agreement" means the investor rights agreement, dated
concurrently herewith, by and between ▇▇▇▇▇▇▇▇'▇ and the Initial Term Lender.
"Issuing Lender" means Bank of America.
"Lender" and "Lenders" have the meanings specified in the introductory
paragraph of this Agreement.
"Letter of Credit" means any Existing Letter of Credit and any letter
of credit issued by the Issuing Lender for the account of a Borrower in
accordance with the terms of Section 2.1(d).
"Letter of Credit Fee" has the meaning specified in Section 4.9(b).
"Licenses" means all licenses, permits, and other grants of authority
obtained or required to be obtained from any Governmental Authority in
connection with the management or operation of the business of the members of
the Consolidated Group or the ownership, lease, license, or use of any Property
of the members of the Consolidated Group.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, security interest, encumbrance, lien (statutory or otherwise),
preference, priority, or charge of any kind (including any agreement to give
any of the foregoing, any conditional sale or other title retention agreement,
any financing or similar statement or notice filed by a Person authorized to do
so under the UCC as adopted and in effect in the relevant jurisdiction or other
similar recording or notice statute, and any lease in the nature thereof).
"Loan" or "Loans" means the Revolving Loans (including the Non-Ratable
Loans, the Discretionary Over-Advances, and any Permitted Overadvances) and the
Term Loans.
"LOC Commitment" means the commitment of the Issuing Lender to issue,
and of the Lenders to participate in, Letters of Credit and LOC Obligations
hereunder.
"LOC Committed Amount" means the maximum amount of LOC Obligations
hereunder as specified in Section 2.1(d).
"LOC Documents" means, with respect to any Letter of Credit, such
Letter of Credit, any amendments thereto, any documents delivered in connection
therewith, any application therefor, and any agreements, instruments,
guarantees, or other documents (whether general in application or applicable
only to such Letter of Credit) governing or providing for (a) the rights and
obligations of the parties concerned or at risk or (b) any collateral security
for such obligations.
"LOC Obligations" means, at any time, the sum of (a) the maximum
amount which is, or at any time thereafter may become, available to be drawn
under Letters of Credit then outstanding, assuming compliance with all
requirements for drawings referred to in such Letters of Credit, plus (b) the
aggregate amount of all drawings under Letters of Credit honored by the Issuing
Lender but not reimbursed by the Borrowers; provided that such sum shall
exclude, at all times, Letters of Credit that have been cash collateralized or
are supported by a stand-by letter of credit by a third-party in form and
substance acceptable to the Revolving Agent.
"Margin Stock" means "margin stock" or any "margin security" as
defined in Regulation T, Regulation U, and Regulation X.
"Material Adverse Effect" means a material adverse effect on (a) the
condition (financial or otherwise), operations, business, assets, or
liabilities of the Consolidated Group taken as a whole, (b) the ability of any
Credit Party or other party thereto to perform any material obligation under
the Credit Documents to which it is a party, or (c) the material rights and
remedies of the Agents and the Lenders under the Credit Documents; provided
that (i) any change to the extent attributable to any Disclosed Matter, (ii)
the occurrence of any Restatement Event, or (iii) the existence or occurrence
of any Disclosed Matter, in each case, shall not constitute a Material Adverse
Effect.
"Materials of Environmental Concern" means any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Laws, including, without limitation,
asbestos, polychlorinated biphenyls, and urea-formaldehyde insulation.
"Maximum Rate" means, at any time, the maximum rate of interest the
Lenders may lawfully contract for, charge, or receive in respect of the Total
Obligations as allowed by any Requirement of Law.
"Merchant Account" means, in respect of a Credit Party, any account,
agreement or arrangement between such Credit Party and another Person pursuant
to which such other Person gives or makes available credit to such Credit Party
in respect of credit card transactions generated by such Person.
"Merchant Account Agreement" means an agreement evidencing a Merchant
Account, and any renewal, extension, modification, amendment, or restatement
thereof.
"Mortgaged Property" means Property which is the subject of a
Mortgage.
"Mortgages" means those mortgages, deeds of trust, security deeds, or
like instruments given to the Collateral Agent, for the benefit of the Agents
and the Lenders, to secure the Total Obligations, as such agreements may be
amended, restated, or otherwise and modified from time to time.
"Multiemployer Plan" means a Plan which is a "multiemployer plan" as
defined in Sections 3(37) or 4001(a)(3) of ERISA.
"Multiple Employer Plan" means a Plan (other than a Multiemployer
Plan) which any member of the Consolidated Group or any ERISA Affiliate and at
least one employer other than the members of the Consolidated Group or any
ERISA Affiliate are contributing sponsors.
"Net Balance" means, as of any date of determination, the Gross
Installment Contract Payments of an Installment Contract, less all unearned
interest, fees, and charges (including premiums for insurance and product
warranties) owing by the debtor thereunder.
"Net Orderly Liquidation Value" means, with respect to any inventory
or Installment Contracts, the recovery value thereof in an orderly liquidation
net of all costs of liquidation, as reasonably determined by the Collateral
Agent based upon methodology utilized in the most recent quarterly written
appraisal of the Borrowers' inventory and Installment Contracts, prepared by an
experienced and reputable independent appraiser acceptable to the Collateral
Agent.
"Non-Ratable Loan" and "Non-Ratable Loans" have the meanings specified
in Section 2.4(e).
"Note" or "Notes" means any of the Revolving Notes or the Term Notes.
"Notice of Borrowing" means a written notice of borrowing, in
substantially the form of Exhibit B, as required by Section 2.2(a).
"Operating Lease" means, as applied to any Person, any lease by such
Person as lessee (including, without limitation, leases which may be terminated
by the lessee at any time) of any Property which is not a Capital Lease.
"Original Credit Agreement" has the meaning specified in Recital B.
"Other Taxes" means any present or future stamp or documentary taxes
or any other excise or property taxes, charges, or similar levies (excluding,
in the case of each Lender and each Agent, such taxes (including income taxes
or franchise taxes) as are imposed on or measured by each Lender's or each
Agent's net income) which arise from any payment made hereunder or from the
execution, delivery, or registration of, or otherwise with respect to, this
Agreement or any other Credit Documents.
"Participant" means any commercial bank, financial institution, or
other Person not an Affiliate of the Credit Parties who shall have been granted
the right by any Lender to participate in the financing provided by such Lender
under this Agreement, and who shall have entered into a participation agreement
in form and substance satisfactory to such Lender.
"Participation Agreement" means the participation agreement, dated
concurrently herewith, by and between ▇▇▇▇▇▇▇▇'▇ and the Initial Term Lender.
"Participation Interest" means the purchase by a Lender of a
participation in LOC Obligations as provided in Section 2.3(f), and in Loans as
provided in Section 4.12.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA and any successor thereto.
"Permitted Acquisition" means any Acquisition that satisfies each of
the following requirements:
(a) such Acquisition is not a hostile or contested
Acquisition;
(b) the business acquired in connection with such Acquisition
is (i) located in the United States, (ii) organized under Requirements
of Law of the United States, and (iii) not engaged, directly or
indirectly, in any line of business other than the businesses in which
the Borrowers are engaged on the Closing Date and any business
activities that are substantially similar, related, or incidental
thereto;
(c) both immediately before and immediately after giving
effect to such Acquisition and the Extensions of Credit (if any)
requested to be made in connection therewith, each of the
representations and warranties in the Credit Documents is true and
correct (except (i) any such representation or warranty which relates
to a specified prior date and (ii) to the extent the Collateral Agent
and the Lenders have been notified in writing by the Credit Parties
that any representation or warranty is not correct and the Required
Lenders have explicitly waived in writing compliance with such
representation or warranty) and no Default or Event of Default exists
or will exist or would result therefrom;
(d) (i) as soon as available, but not less than thirty (30)
days prior to such Acquisition, the Borrowers have given the
Collateral Agent and the Lenders (A) notice of such Acquisition, (B) a
copy of all business and financial information reasonably requested by
the Collateral Agent or any Lender including financial statements,
statements of cash flow, and projections of availability (i.e.
Borrowing Base minus the Obligations) prepared on a Pro Forma Basis
for the twelve (12) Fiscal Periods ended as of the most recent Fiscal
Period end and for each of the subsequent twelve (12) Fiscal Periods,
such financial information to be reasonably satisfactory to the
Collateral Agent and the Required Lenders, (C) if the Installment
Contracts and inventory acquired in connection with such Acquisition
are proposed to be included in the determination of the Borrowing
Base, the Collateral Agent shall have conducted a field audit and
appraisal of the business and property of the acquired entity,
including its Installment Contracts and inventory, and (D) a
certificate of an Executive Officer of ▇▇▇▇▇▇▇▇'▇ certifying (and
showing the calculations therefor in reasonable detail) that the
Credit Parties will be in compliance with each of the covenants set
forth in Section 7.11 on a Pro Forma Basis for the twelve (12) Fiscal
Periods ended as of the most recent Fiscal Period end before and after
giving effect to such Acquisition and (ii) as soon as available, the
information provided to the board of directors of ▇▇▇▇▇▇▇▇'▇ with
respect to such Acquisition;
(e) the aggregate consideration paid in connection with all
such Acquisitions (whether paid in cash, constituting assumed or
acquired Indebtedness, or otherwise, but excluding any Capital Stock
of ▇▇▇▇▇▇▇▇'▇) does not exceed $1,000,000 during the term of this
Agreement;
(f) if such Acquisition is an Acquisition of the Capital
Stock of a Person, the Acquisition is structured so that the acquired
Person shall become a wholly-owned Subsidiary of a Borrower and (if
applicable), subject to Section 13.20, a Credit Party pursuant to the
terms of this Agreement;
(g) no Credit Party shall, as a result of or in connection
with any such Acquisition, assume or incur any direct or contingent
liabilities (whether relating to environmental, tax, litigation, or
other matters) that could reasonably be expected, as of the date of
such Acquisition, to result in the existence or occurrence of a
Material Adverse Effect;
(h) in connection with an Acquisition of the Capital Stock of
any Person, all Liens, other than any Liens which constitute Permitted
Liens, on Property of such Person shall be terminated, and in
connection with an Acquisition of the assets of any Person, all Liens
on such assets, other than Liens which constitute Permitted Liens
hereunder, shall be terminated; and
(i) ▇▇▇▇▇▇▇▇'▇ shall certify (and provide the Collateral
Agent and the Lenders with a calculation prepared on a Pro Forma Basis
in form and substance reasonably satisfactory to the Collateral Agent
and the Lenders) to the Collateral Agent and the Lenders that,
immediately after giving effect to completion of such Acquisition,
Excess Availability is not less than $5,000,000.
"Permitted Distributions" means (a) any Restricted Payment by a Credit
Party to a Borrower or by a Credit Party that is not a Borrower to another
Credit Party that is not a Borrower; (b) partnership distributions of not more
than 99% of Stores' taxable income from Stores to FILLC, provided that the
proceeds thereof are immediately distributed by FILLC to FBI, immediately
distributed by FBI to FHC, immediately distributed by FHC to FMC, and
immediately distributed by FMC to ▇▇▇▇▇▇▇▇'▇, and (c) partnership distributions
of not more than 99% of FFP's taxable income from FFP to FMC provided that the
proceeds thereof are immediately distributed by FMC to ▇▇▇▇▇▇▇▇'▇; provided,
further, that with respect to clauses (b) and (c) preceding, no distribution of
taxable income may be made more than three years after such taxable income was
earned by Stores or FFP, respectively.
"Permitted Investments" means Investments consisting of:
(a) cash and Cash Equivalents;
(b) accounts receivable created, acquired, or made in the
ordinary course of business and payable or dischargeable in accordance
with customary trade terms;
(c) Investments consisting of Capital Stock, obligations,
securities, or other Property received in settlement of accounts
receivable (created in the ordinary course of business) from bankrupt
obligors;
(d) Investments existing as of the Closing Date and set forth
in Schedule 1.1B;
(e) advances or loans to directors, officers, and employees
in the ordinary course of business for reasonable business expenses
that do not exceed $1,000,000 in the aggregate at any one time
outstanding;
(f) Investments by members of the Consolidated Group in other
members of the Consolidated Group existing on the Closing Date;
(g) Investments by members of the Consolidated Group in and
to Domestic Credit Parties;
(h) Investments which constitute Permitted Acquisitions; and
(i) other Investments of a nature not contemplated in clauses
(a) through (h) preceding (but specifically excluding any Investment
in any of the Crescent Parties) in an amount not to exceed $1,000,000
in the aggregate at any time outstanding.
"Permitted Liens" means:
(a) Liens in favor of the Collateral Agent to secure the
Total Obligations;
(b) [Reserved];
(c) Liens (other than Liens created or imposed under ERISA)
for taxes, assessments, or governmental charges or levies not yet due
or Liens for taxes being contested in good faith by appropriate
proceedings for which adequate reserves determined in accordance with
GAAP have been established (and as to which the Property subject to
any such Lien is not yet subject to foreclosure, sale, or loss on
account thereof);
(d) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, and materialmen and other Liens imposed by
law or pursuant to customary reservations or retentions of title
arising in the ordinary course of business, provided that such Liens
secure (i) only amounts not yet due and payable, (ii) which, if due
and payable, are unfiled and no other action has been taken to enforce
the same or are being contested in good faith by appropriate
proceedings for which adequate reserves determined in accordance with
GAAP have been established (and as to which the Property subject to
any such Lien is not yet subject to foreclosure, sale, or loss on
account thereof), or (iii) secure amounts due and payable in respect
of leased locations for retail stores to be opened or closed where no
inventory or proceeds of inventory is located and such Lien does not
attach to any of the tenant's Property not located on the premises
that are the subject of such lease;
(e) Liens (other than Liens created or imposed under ERISA)
incurred or deposits made by any member of the Consolidated Group in
the ordinary course of business in connection with workers'
compensation, unemployment insurance, and other types of social
security, or to secure the performance of tenders, statutory
obligations, bids, leases, government contracts, performance and
return-of-money bonds, and other similar obligations (exclusive of
obligations for the payment of borrowed money);
(f) Liens in connection with attachments or judgments
(including judgment or appeal bonds), provided that the attachments or
the judgments secured shall, within thirty (30) days after the entry
thereof, have been discharged or execution thereof stayed pending
appeal, or shall have been discharged within thirty (30) days after
the expiration of any such stay;
(g) easements, rights-of-way, restrictions (including zoning
restrictions), minor defects or irregularities in title, and other
similar charges or encumbrances not, in any material respect,
impairing the use of the encumbered Property for its intended
purposes;
(h) Liens on Property of any Person securing purchase money
Indebtedness (including Capital Leases and Synthetic Leases) of such
Person to the extent permitted under Section 8.1(c), provided that any
such Lien attaches only to the Property financed or leased and such
Lien attaches concurrently with or within ninety (90) days after the
acquisition thereof;
(i) leases or subleases, and licenses or sublicenses, granted
to others not interfering in any material respect with the business of
any member of the Consolidated Group;
(j) any interest or title of a lessor under, and Liens
arising from UCC financing statements (or equivalent filings,
registrations, or agreements in foreign jurisdictions) relating to,
leases not prohibited by this Agreement;
(k) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection
with the importation of goods;
(l) Liens deemed to exist in connection with Investments in
repurchase agreements which constitute Permitted Investments;
(m) normal and customary rights of setoff upon deposits of
cash in favor of banks or other depository institutions;
(n) Liens of a collection bank arising under Section 4-210 of
the UCC on items in the course of collection;
(o) Liens existing as of the Closing Date and set forth in
Schedule 1.1C; provided that no such Lien shall at any time be
extended to or cover any Property other than the Property subject
thereto on the Closing Date, and provided, further, that
notwithstanding the foregoing, any such Lien which purports to cover
Collateral, including without limitation, proceeds of consigned goods
described in clause (p) following shall not be a Permitted Lien after
the expiration of one hundred twenty (120) days after the Closing
Date;
(p) Liens on goods consigned to a Borrower in connection with
consignment arrangements, provided that (i) such consignment
arrangement is evidenced by a written agreement in form and substance
satisfactory to the Collateral Agent, (ii) such Lien does not attach
to proceeds of such goods, and (iii) such Lien is limited to such
goods only during any such consignment;
(q) extension, renewal, or replacement (or successive
extensions, renewals, or replacements), in whole or in part, of Liens
referred to in the foregoing clauses; provided that the Liens given in
connection any such extension, renewal, or replacement shall be
limited to the property securing the Lien prior to extension, renewal,
or replacement and where such Lien secures Funded Debt, the Lien given
in connection with such extension, renewal, or replacement shall not
secure indebtedness in an amount exceeding the principal amount
secured immediately prior to the extension, renewal, or replacement;
(r) [Reserved];
(s) Liens comprised of any exclusion or exception under any
title insurance policy provided to the Collateral Agent in accordance
with the Credit Documents (which policy shall be in form and content
reasonably satisfactory to the Collateral Agent);
(t) Liens existing at the time of a Permitted Acquisition
(provided that such Lien is not created in anticipation of such
Permitted Acquisition) on equipment, Real Estate, and fixtures
acquired in connection with a Permitted Acquisition; and
(u) Liens in favor of the Borrowers' trade vendors, or any of
them, or their respective agents, trustees, or other representatives
securing credit support or trade terms, provided that such Liens are
subordinated pursuant to the Vendor Documents or by one or more other
subordination agreements (in form and substance satisfactory to the
Collateral Agent and the Lenders) to the Liens granted to the
Collateral Agent in the Credit Documents.
"Permitted Overadvances" means advances of Revolving Loans in excess
of the Total Borrowing Base of up to $6,000,000 in the aggregate outstanding at
any time, provided that, after giving effect to such advances, the total
principal amount of the Revolving Loans and the Term Loans then outstanding,
would not exceed the lesser of (a) $135,000,000 or (b) 96.0% of the sum of (i)
the Net Orderly Liquidation Value of the Borrowers' Installment Contracts,
provided that, for purposes of this definition, in no event will the Net
Orderly Liquidation Value of the Borrowers' Installment Contracts be deemed to
be greater than 40.0% of the Appraisal Value of such Installment Contracts,
plus (ii) the Net Orderly Liquidation Value of Borrowers' inventory, provided
that, for purposes of this definition, in no event will the Net Orderly
Liquidation Value of the inventory be deemed to be greater than 65.0% of the
Appraisal Value of such inventory.
"Person" means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust, or other enterprise
(whether or not incorporated) or any Governmental Authority.
"Plan" means any employee benefit plan (as defined in Section 3(3) of
ERISA) which is covered by ERISA and with respect to which any member of the
Consolidated Group or any ERISA Affiliate is (or, if such plan were terminated
at such time, would under Section 4069 of ERISA be deemed to be) an "employer"
within the meaning of Section 3(5) of ERISA.
"Pro Forma Basis" means that, for purposes of determining compliance
with any provision of this Agreement, including the financial covenants set
forth in Section 7.11, on a "Pro Forma Basis", that any transaction occurring
on or after the Closing Date shall be deemed to have occurred as of the first
day of the applicable measurement period ending as of the most recent Fiscal
Period end immediately preceding the date of such transaction with respect to
which the Collateral Agent and the Lenders have received the Required Financial
Information. As used herein, "transaction" means (a) any Acquisition as
referred to in the definition of Permitted Acquisition, and (b) any Asset
Disposition allowed by Section 8.5. In connection with any calculation of the
financial covenants set forth in Section 7.11, upon giving effect to a
transaction on a Pro Forma Basis:
(w) any Indebtedness assumed or acquired in connection with a
Permitted Acquisition (A) shall be deemed to have been incurred as of
the first day of the applicable period and (B) if such Indebtedness
has a floating or formula rate, shall have an implied rate of interest
for the applicable period (for purposes of this definition) determined
by utilizing the rate which is or would be in effect with respect to
such Indebtedness as at the relevant date of determination;
(x) income statement items (whether positive or negative)
attributable to the Property acquired in connection with a Permitted
Acquisition shall be included beginning as of the first day of the
applicable period;
(y) income statement items (whether positive or negative)
attributable to the Property disposed of in any such Asset Disposition
shall be excluded; and
(z) any Indebtedness which is retired in connection with any
such Asset Disposition shall be excluded and deemed to have been
retired as of the first day of the applicable period.
"Pro Forma Compliance Certificate" means a certificate of an Executive
Officer of ▇▇▇▇▇▇▇▇'▇ delivered to the Collateral Agent and the Lenders in
connection with (a) any merger or consolidation allowed by Section 8.4, (b) any
Asset Disposition allowed by Section 8.5, or (c) any Permitted Acquisition, as
applicable, and containing reasonably detailed calculations, upon giving effect
to the applicable transaction on a Pro Forma Basis, of the EBITDA as of the
most recent Fiscal Period end preceding the date of the applicable transaction
with respect to which the Collateral Agent and the Lenders have received the
Required Financial Information.
"Property" means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Real Property" means, with respect to any member of the Consolidated
Group, any real property (wherever located) which (a) is owned or leased by
such member of the Consolidated Group and (b) is not Excluded Property.
"Register" has the meaning specified in Section 13.3(g).
"Regulation T" means Regulation T of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Regulation X" means Regulation X of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Regulation Z" means Regulation Z of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Reorganization" means the following transactions, which occurred
prior to the Closing Date:
(a) ▇▇▇▇▇▇▇▇'▇ contributed Crescent preferred stock ($50
million book value) and Crescent note ($35 million book value) to the
capital of FMC;
(b) FMC contributed Crescent preferred stock ($50 million book
value) and Crescent note ($35 million book value) to the capital of
FHC;
(c) ▇▇▇▇▇▇▇▇'▇ and FHC created FILLC;
(d) FHC contributed its 99% LP interest in Stores (estimated
book value $80,139,276), Crescent preferred stock ($50 million book
value), Crescent note ($35 million book value) (total of $165,139,276
book value) to FILLC in exchange for a 99% interest in FILLC;
(e) ▇▇▇▇▇▇▇▇'▇ contributed a note payable of $1,651,393
(interest only at prime) to FILLC in exchange for a 1% interest in
FILLC;
(f) FHC created FBI;
(g) FHC contributed its 99% interest in FILLC to FBI.; and
(h) FBI transferred to FHC 100% of FBI's common stock.
"Reportable Event" means any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the advance or thirty
(30) day notice requirement has been waived by regulation.
"Required Financial Information" means the annual and periodic
compliance certificates and related financial statements and information
required by the provisions of Section 7.1(a), Section 7.1(b), and Section
7.1(d).
"Required Lenders" means, as of any date of determination, each of (a)
the Required Revolving Lenders and (b) the Required Term Lenders.
"Required Revolving Lenders" means (a) at any time prior to the
termination of the Revolving Loan Commitments, the Revolving Lenders having
more than fifty-five percent (55.0%) of the Revolving Loan Commitments and (b)
at any time after termination of the Revolving Loan Commitments, the Revolving
Lenders holding more than fifty-five percent (55.0%) of the outstanding
principal of the Revolving Loans; provided that, notwithstanding the foregoing
limitations, to the extent any Revolving Lender party to this Agreement on the
Closing Date is a Revolving Lender on any date of determination, the
affirmative vote or consent of such Revolving Lender shall be required in any
determination of "Required Revolving Lenders"; provided, further, that in any
case, the Revolving Commitments of, and outstanding principal amount of
Revolving Obligations (taking into account Participation Interests therein)
owing to, a Defaulting Revolving Lender shall be excluded for purposes hereof
in making a determination of "Required Revolving Lenders". To the extent that
any Term Lender or the Term Agent acquires any of the Revolving Loans, whether
by purchase, assignment, or otherwise, such Term Lenders shall be treated for
all purposes of this definition as a Revolving Lender which is a Revolving
Lender on the Closing Date. In addition, at any time while there are only two
Revolving Lenders (i) when a Designated Event of Default has occurred and the
Revolving Lenders are authorized to establish Reserves and/or reduce advance
rates, either Revolving Lender may direct the Collateral Agent to establish
such Reserves or to reduce advance rates; and (ii) either Revolving Lender
shall have the right to revoke, by written notice to the Revolving Agent, the
right and ability of the Revolving Agent to make Discretionary Over-Advances.
"Required Term Lenders" means, at any time, the Term Lenders holding
more than fifty percent (50.0%) of the outstanding principal of the Term Loans;
provided that, notwithstanding the foregoing limitation, to the extent the
Initial Term Lender is a Term Lender on any date of determination, the
affirmative vote or consent of the Initial Term Lender shall be required in any
determination of "Required Term Lenders".
"Requirement of Law" means, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of
such Person, and any law, treaty, rule, regulation, or ordinance (including,
without limitation, Consumer Protection Laws and Environmental Laws) or
determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or to which any of its
material Property is subject.
"Reserves" means reserves that limit the availability of credit
hereunder, consisting of reserves against borrowing availability established
(subject to Section 11.3) by the Collateral Agent from time to time as follows:
(a) those established in the Collateral Agent's reasonable
discretion as a result of negative forecasts and/or trends in the
Borrowers' business, industry, prospects, profits, operations, or
financial condition or other issues, circumstances, or facts (in each
of the foregoing cases either arising on or after the Closing Date or,
with respect to those in existence prior to the Closing Date, a
continued decline therein) that could reasonably be expected to
negatively and materially impact the Collateral or the Borrowers'
business, prospects, profits, operations, industry, financial
condition, or assets, including, without limitation, (i) Bank Product
Reserves and (ii) reserves for accrued, unpaid interest on the Loans
and fees and expenses payable by the Borrowers pursuant to the terms
of the Credit Documents; and
(b) the following reserves established from time to time in
the Collateral Agent's reasonable discretion (subject to Section
11.3): (i) a reserve of $9,500,000 until August 31, 2005, for so long
as the Borrowers have not obtained financing pursuant to the Vendor
Financing Program in an amount of at least $15,000,000 on terms
reasonably acceptable to the Term Lenders, such reserve to be reduced
by $0.63333 for each $1.00, without duplication, of financing pursuant
to the Vendor Financing Program made available to the Borrowers on
terms reasonably satisfactory to the Term Lenders; (ii) reserves for
consignment goods purchased but not paid for unless the consignor of
such goods has agreed in writing in form and substance satisfactory to
the Collateral Agent that such goods will be treated as owned by any
Borrower and such goods and the proceeds thereof are not subject to
any Lien in favor of such consignor or claim of ownership by such
consignor; (iii) reserves for the Borrowers' gift certificate and
layaway programs; (iv) commencing on April 1, 2005, reserves in
respect of clauses (a)(iii) or (b)(iii) of the Revolving Borrowing
Base only for rent for leased locations, provided that no such rent
reserves will be taken for stores to be opened or closed where no
inventory or proceeds of inventory are located, and provided further
that no such rent reserves will be in effect while any Permitted
Overadvance is outstanding if the Borrowers are in compliance with the
Tier I Financial Covenants; and (v) reserves during any period while
the Borrowers have failed to deliver any weekly cash forecasts,
Borrowing Base Certificate, collateral report, or financial statements
required to be delivered pursuant to Section 7.1.
"Restatement" means any restatement of any financial statements for
any member of the Consolidated Group for any Fiscal Year ending prior to the
Fiscal Year of ▇▇▇▇▇▇▇▇'▇ ending on October 1, 2005 (or any Fiscal Period or
Fiscal Quarter of any such Fiscal Year or of the Fiscal Year of ▇▇▇▇▇▇▇▇'▇
ending on October 1, 2005) but only to the extent attributable to a Disclosed
Matter, and other adjustments any such Fiscal Year, Fiscal Period or Fiscal
Quarter required by ▇▇▇▇▇▇▇▇'▇ independent certified public accountants that in
and of themselves, individually or collectively, would not require restatement
of ▇▇▇▇▇▇▇▇'▇ financial statements.
"Restatement Date" means the earlier of (a) the date that is 18 months
from the Closing Date or (b) the date on which the Borrowers deliver audited
annual financial statements for the Fiscal Year ending October 1, 2005 that
satisfy the requirements set forth in Section 7.1(a).
"Restatement Event" means (a) any Restatement, (b) any lawsuit or
other action previously or hereafter brought against any of the Borrowers, any
Subsidiary of a Borrower, any of their Affiliates, or any present or former
officer or director of any Borrower, any Subsidiary of a Borrower or any of
their Affiliates involving or arising out of any Restatement or the need
therefor, and any settlement thereof or other development with respect thereto,
(c) the failure to (i) timely satisfy any requirement for the delivery or
filing of financial statements, Form 10-K or Form 10-Q of the Borrowers and the
Guarantors for any Fiscal Year, Fiscal Period, or Fiscal Quarter ending prior
to October 1, 2005, (ii) timely satisfy any requirement for the delivery or
filing of financial statements or the Form 10-K of the Borrowers for the
Borrowers' Fiscal Year ending October 1, 2005 on or prior to the Restatement
Date or in the case of Form 10-K or audited financial statements, thereafter,
but only if the reason for any such failure after the Restatement Date is the
inability to comply with FIN 46, or (iii) timely file Form 10-Q for any Fiscal
Quarter ending prior to the Restatement Date, or (d) the occurrence of any
default or event of default under any indenture, instrument or other agreement
or contract, or the exercise of any remedy in respect thereof, that arises
directly or indirectly as a result of any of the matters described in clause
(a) through clause (c) preceding or this clause (d).
"Restricted Payment" means (a) any dividend or other payment or
distribution, direct or indirect, on account of any shares of any class of
Capital Stock of any member of the Consolidated Group, now or hereafter
outstanding (including without limitation, any payment in connection with any
dissolution, merger, consolidation, or disposition involving any member of the
Consolidated Group), or to the holders, in their capacity as such, of any
shares of any class of Capital Stock of any member of the Consolidated Group,
now or hereafter outstanding (other than dividends or distributions payable in
the same class of Capital Stock of the applicable Person or dividends or
distributions payable to any Borrower (directly or indirectly through
Subsidiaries) or any such dividends or distributions payable to a Borrower),
(b) any redemption, retirement, sinking fund or similar payment, purchase, or
other acquisition for value, direct or indirect, of any shares of any class of
Capital Stock of any member of the Consolidated Group, now or hereafter
outstanding, and (c) any payment made to retire, or to obtain the surrender of,
any outstanding warrants, options, or other rights to acquire shares of any
class of Capital Stock of any member of the Consolidated Group, now or
hereafter outstanding.
"Revolving Agent" has the meaning specified in the introductory
paragraph of this Agreement.
"Revolving Borrowing Base" means:
(a) as of any day from the Closing Date through and including
March 31, 2005, an amount equal to the lesser of:
(i) $67,500,000;
(ii) the Total Borrowing Base, minus the principal
amount of the Term Loan outstanding; or
(iii) the lesser of (y) 52.5% of Eligible Inventory,
or (z) 80.0% of the Net Orderly Liquidation Value of
the Borrowers' inventory, provided that, for
purposes of calculation of the "Revolving Borrowing
Base", in no event will the Net Orderly Liquidation
Value of the Borrowers' inventory be deemed to be
greater than 65.0% of the Appraisal Value of such
inventory; minus Reserves,
(b) as of any day on or after April 1, 2005, an amount equal
to the lesser of:
(i) $67,500,000;
(ii) the Total Borrowing Base, minus the principal
amount of the Term Loan outstanding; or
(iii) the lesser of (y) 55.0% of Eligible Inventory,
or (z) 85.0% of the Net Orderly Liquidation Value of
the Borrowers' inventory, provided that for purposes
of calculation of the "Revolving Borrowing Base", in
no event will the Net Orderly Liquidation Value of
the Borrowers' inventory be deemed to be greater
than 65.0% of the Appraisal Value of such inventory;
minus Reserves.
"Revolving Commitment" means the commitment of each Revolving Lender
to make its ratable share of Revolving Loans hereunder.
"Revolving Commitment Percentage" means, for each Revolving Lender, a
fraction (expressed as a percentage), the numerator of which is the Revolving
Committed Amount of such Revolving Lender at such time and the denominator of
which is the Aggregate Revolving Commitment Amount at such time. The Revolving
Commitment Percentages are specified in Schedule 1.1D, which may be amended by
the Revolving Agent from time to time to reflect assignments by one Revolving
Lender to another Revolving Lender.
"Revolving Committed Amount" means, individually, the maximum
Revolving Commitment of each Lender, and collectively, the aggregate maximum
amount of all the Revolving Commitments of the Lenders hereunder. The Revolving
Committed Amounts are specified in Schedule 1.1D, which may be amended by the
Revolving Agent from time to time to reflect assignments by one Revolving
Lender to another Revolving Lender.
"Revolving Creditor" means any one of the Revolving Agent or any
Revolving Lender and "Revolving Creditors" means the Revolving Agent and the
Revolving Lenders, collectively.
"Revolving Facility Termination Date" means December 15, 2006.
"Revolving Lender" means each lending institution from time to time
party hereto which is designated as a "Revolving Lender" on the signature pages
of this Agreement or the signature pages of an Assignment and Acceptance
pursuant to which such lending institution becomes a party to this Agreement,
and "Revolving Lenders" means two or more of such Persons, as the context
requires.
"Revolving Loans" has the meaning specified in Section 2.1(a).
"Revolving Note" or "Revolving Notes" means the promissory notes of
the Borrowers, in substantially the form attached as Exhibit A-1, in favor of
each of the Revolving Lenders evidencing the Revolving Loans, individually or
collectively, as appropriate, as each such promissory note may be amended,
restated, or otherwise modified from time to time.
"Revolving Obligations" means that portion of the Total Obligations
owing to any of the Revolving Agent or the Revolving Lenders.
"Sale and Leaseback Transaction" means any arrangement pursuant to
which any member of the Consolidated Group, directly or indirectly, becomes
liable as lessee, guarantor, or other surety with respect to any lease, whether
an Operating Lease or a Capital Lease, of any Property (a) which such member of
the Consolidated Group has sold or transferred (or is to sell or transfer) to a
Person which is not a member of the Consolidated Group or (b) which such member
of the Consolidated Group intends to use for substantially the same purpose as
any other Property which has been sold or transferred (or is to be sold or
transferred) by such member of the Consolidated Group to another Person which
is not a member of the Consolidated Group in connection with such lease.
"Securities Exchange Act" means the Securities Exchange Act of 1934
and the regulations promulgated thereunder.
"SEC" means the Securities and Exchange Commission.
"Securitization Transaction" means, with respect to any Person (the
"subject Person"), any financing transaction or series of financing
transactions that have been or may be entered into by the subject Person
pursuant to which the subject Person may sell, convey, or otherwise transfer to
a Subsidiary, Affiliate, or any other Person, any accounts receivable, notes
receivable, rights to future lease payments or residuals, or other similar
rights to payment (the "Securitization Receivables") (whether such
Securitization Receivables are then existing or arising in the future) of the
subject Person, and any assets related thereto, including, without limitation,
all security interests in merchandise or services financed thereby, the
proceeds of such Securitization Receivables, and other assets which are
customarily sold or in respect of which security interests are customarily
granted in connection with securitization transactions involving such assets.
"Security Agreement" means each Security Agreement, executed and
delivered by any Credit Party to secure the Total Obligations, as such
agreement may be amended, restated, or otherwise modified from time to time,
and "Security Agreements" means two or more of such agreements, collectively.
"Single Employer Plan" means any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan or a Multiple Employer Plan.
"Solvent" means, when used with respect to any Person, that at the
time of determination:
(a) the assets of such Person, at a fair valuation, are in
excess of the total amount of its debts (including contingent
liabilities);
(b) the present fair saleable value of its assets is greater
than its probable liability on its existing debts as such debts become
absolute and matured;
(c) it is then able and expects to be able to pay its debts
(including contingent debts and other commitments) as they mature; and
(d) it has capital sufficient to carry on its business as
conducted and as proposed to be conducted.
For purposes of determining whether a Person is "Solvent", the amount of any
contingent liability shall be computed as the amount that, in light of all the
facts and circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
"Stores" means FI Stores Limited Partnership, a Georgia limited
partnership, and its successors and assigns.
"Subject Properties" has the meaning specified in Section 6.16.
"Subordinated Debt" means any Indebtedness of a member of the
Consolidated Group which, by its terms, is expressly subordinated in right of
payment to the prior payment of the Total Obligations on the terms and
conditions and evidenced by documentation satisfactory to the Required Lenders.
"Subordination Agreement" means that certain Subordination Agreement
dated as of August 28, 2002, among ▇▇▇▇▇▇▇▇'▇, Bank of America (in its capacity
as administrative agent under the Original Credit Agreement), Crescent, and
Crescent Jewelers, Inc., a Delaware corporation, as the same may be amended,
restated, or otherwise modified from time to time.
"Subsidiary" means, with respect to any Person (the "subject Person"),
any corporation, partnership, association, limited liability company, joint
venture, trust or other business entity of which more than fifty percent
(50.0%) of the voting Capital Stock or other Capital Stock, is owned or
controlled directly or indirectly by the subject Person, or one or more of the
Subsidiaries of the subject person, or a combination thereof; provided that
Crescent shall not be a Subsidiary of any Credit Party unless such Credit Party
(or the Credit Parties collectively) beneficially owns or controls a majority
of the Capital Stock of Crescent having ordinary voting power (other than by
reason of the happening of a contingency) for the election of the members of
the board of directors of Crescent. Unless the context otherwise clearly
requires, "Subsidiary" or "Subsidiaries" refer to a Subsidiary or Subsidiaries
of ▇▇▇▇▇▇▇▇'▇.
"Support Obligations" means, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or
collection) guaranteeing or intended to guarantee any Indebtedness of any other
Person in any manner, whether direct or indirect, and including, without
limitation, any obligation, whether or not contingent (a) to purchase any such
Indebtedness or any Property constituting security therefor, (b) to advance or
provide funds or other support for the payment or purchase of any such
Indebtedness or to maintain working capital, solvency, or other balance sheet
condition of such other Person (including without limitation, keep well
agreements, maintenance agreements, comfort letters, or similar agreements or
arrangements) for the benefit of any holder of Indebtedness of such other
Person, (c) to lease or purchase Property, securities, or services primarily
for the purpose of assuring the holder of such Indebtedness, or (d) to
otherwise assure or hold harmless the holder of such Indebtedness against loss
in respect thereof. The amount of any "Support Obligation" hereunder shall be
deemed to be an amount equal to the outstanding principal amount (or maximum
principal amount, if larger) of the Indebtedness in respect of which such
Support Obligation is made.
"Supporting Letter of Credit" has the meaning specified in Section
2.3(i).
"Synthetic Lease" means any synthetic lease, tax retention operating
lease, off-balance sheet loan, or similar off-balance sheet financing product
where such transaction is considered borrowed money indebtedness for tax
purposes but is classified as an Operating Lease under GAAP.
"Taxes" means any and all present or future taxes, levies, imposts,
deductions, charges, or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Agent and each Lender, such taxes (including
income taxes or franchise taxes) as are imposed on or measured by such Agent's
or such Lender's income in the jurisdiction (whether federal, state, or local
and including any political subdivision thereof) under the laws of which such
Agent or such Lender, as the case may be, is organized or maintains a lending
office.
"Term Agent" has the meaning specified in the introductory paragraph
of this Agreement.
"Term Creditor" means any one of the Term Agent or any Term Lender and
"Term Creditors" means the Term Agent and the Term Lenders, collectively.
"Term Lender" means each lending institution from time to time party
hereto which is designated as a "Term Lender" on the signature pages of this
Agreement or the signature pages of an Assignment and Acceptance pursuant to
which such lending institution becomes a party to this Agreement, and "Term
Lenders" means two or more of such Persons, as the context requires.
"Term Loan" has the meaning provided in Section 3.1.
"Term Note" or "Term Notes" means the promissory notes of the
Borrowers, in substantially the form attached as Exhibit A-2, in favor of each
of the Term Lenders evidencing the Term Loans, individually or collectively, as
appropriate, as each such promissory note may be amended, restated or otherwise
modified from time to time.
"Term Obligations" means that portion of the Total Obligations owing
to any of the Term Agent or the Term Lenders.
"Termination Date" means August 31, 2007, or such later date as to
which the Term Agents, the Term Lenders, and the Borrowers may in their sole
discretion by written consent agree.
"Tier I Financial Covenants" means the financial covenants of the
Borrowers set forth in Sections 7.11(b)(i), 7.11(c)(i), 7.11(d)(i), 7.11(e)(i),
and 7.11(f)(i).
"Tier II Financial Covenants" means the financial covenants of the
Borrowers set forth in Sections 7.11(a), 7.11(b)(ii), 7.11(c)(ii), 7.1(d)(ii),
7.11(e)(ii), and 7.11(f)(ii).
"Total Borrowing Base" means:
(a) as of any day from the Closing Date through and including
March 31, 2005, an amount equal to
(i) the lesser of:
(A) $125,000,000; or
(B) the sum of
(1) the lesser of (y) 42.5% of the Net Balance of
the Borrowers' Eligible Installment Contracts, or (z)
85.0% of the Net Orderly Liquidation Value of the
Borrowers' Installment Contracts, provided that, for
the purposes of calculation of the "Total Borrowing
Base", in no event will the Net Orderly Liquidation
Value of the Borrowers' Installment Contracts be
deemed to be greater than 40.0% of the Appraisal Value
of such Installment Contracts; and
(2) the lesser of (y) 52.5% of Eligible
Inventory, or (z) 85.0% of the Net Orderly Liquidation
Value of the Borrowers' inventory, provided that, for
the purposes of calculation of the "Total Borrowing
Base", in no event will the Net Orderly Liquidation
Value of the Borrowers' inventory be deemed to be
greater than 65.0% of the Appraisal Value of such
inventory; minus
(3) Reserves; and
(b) as of any day on or after April 1, 2005, an amount equal to
(i) the lesser of:
(A) $135,000,000; or
(B) the sum of
(1) the lesser of (y) 45.0% of the Net Balance of
the Borrowers' Eligible Installment Contracts, or (z)
90.0% of the Net Orderly Liquidation Value of the
Borrowers' Installment Contracts, provided that, for
the purposes of calculation of the "Total Borrowing
Base", in no event will the Net Orderly Liquidation
Value of the Borrowers' Installment Contracts be
deemed to be greater than 40.0% of the Appraisal Value
of such Installment Contracts; and
(2) the lesser of (y) 55.0% of Eligible
Inventory, or (z) 90.0% of the Net Orderly Liquidation
Value of the Borrowers' inventory, provided that, for
the purposes of calculation of the "Total Borrowing
Base", in no event will the Net Orderly Liquidation
Value of the Borrowers' inventory be deemed to be
greater than 65.0% of the Appraisal Value of such
inventory; minus
(3) Reserves.
"Total Obligations" means all present and future loans, advances,
liabilities, obligations, covenants, duties, and debts owing by the Borrowers
and the other Credit Parties, to the Agents and/or any Lender, arising under or
pursuant to the Original Agreement (and continued pursuant hereto), this
Agreement, or any of the other Credit Documents, whether or not evidenced by
any note, or other instrument or document, whether arising from an extension of
credit, opening of a letter of credit, acceptance, loan, guaranty,
indemnification, or otherwise, whether direct or indirect, absolute or
contingent, due or to become due, primary or secondary, as principal or
guarantor, and including all principal, interest, charges, expenses, fees,
attorneys' fees, filing fees, and any other sums chargeable to any Credit Party
hereunder or under any of the other Credit Documents, including, without
limitation, all debts, liabilities, and obligations now or hereafter arising
from or in connection with Bank Products.
"UCC" means the Uniform Commercial Code (or any successor statute), as
in effect from time to time, of the State of New York or of any other state,
the laws of which are required as a result thereof to be applied in connection
with the issue of perfection of security interests; provided that to the extent
that the UCC is used to define any term herein or in any other Credit Document
and such term is defined differently in different Articles or Divisions of the
UCC, the definition of such term contained in Article or Division 9 shall
govern.
"United States" means the United States of America.
"Unused Line Fee" has the meaning specified in Section 4.9(a).
"Vendor Documents" means the letter agreements, security agreement,
collateral trust agreement, guaranty agreement, and intercreditor agreement
executed by the collateral agent for certain of the Credit Parties' trade
vendors and each other agreement or document executed or delivered in
connection with the Vendor Financing Program.
"Vendor Financing Program" means a program pursuant to which one or
more vendors of the Borrowers agree to defer payment of trade accounts payable
owing by the Borrowers for merchandise purchased or memo goods sold prior to
July 31, 2004 and past due as of such date.
"Voting Stock" means, with respect to any Person, Capital Stock issued
by such Person, the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to vote
has been suspended by the happening of such a contingency.
"Warrant" means the warrant, dated concurrently herewith, issued by
▇▇▇▇▇▇▇▇'▇ to the Initial Term Lender to acquire 3.0 million shares of Class A
common stock, par value $0.01 per share, of ▇▇▇▇▇▇▇▇'▇.
"Wholly Owned Subsidiary" of any Person means any Subsidiary 100% of
whose Voting Stock is at the time owned by such Person directly or indirectly
through other Wholly Owned Subsidiaries.
Section 1.2 Accounting Terms. Except as otherwise expressly provided
herein, all accounting terms used herein shall be interpreted, and all
financial statements and certificates and reports as to financial matters
required to be delivered to the Lenders hereunder shall be prepared, in
accordance with GAAP applied on a consistent basis. All calculations made for
the purposes of determining compliance with this Agreement shall (except as
otherwise expressly provided herein) be made by application of GAAP applied on
a basis consistent with the most recent annual or periodic financial
statements of the Consolidated Group delivered pursuant to Section 7.1 (or,
prior to the delivery of the first financial statements of the Consolidated
Group pursuant to Section 7.1, consistent with the financial statements
referenced in Section 6.1(b) (subject to changes resulting from audit and
normal year-end audit adjustments)); provided, however, that if (a) the
Borrowers shall object to determining such compliance on such basis at the
time of delivery of such financial statements due to any change in GAAP or the
rules promulgated with respect thereto or any requirements of the Borrowers'
independent certified public accountants or (b) any of the Agents or the
Required Lenders shall object in writing within sixty (60) days after delivery
of such financial statements, then such calculations shall be made on a basis
consistent with the most recent financial statements delivered by the
Borrowers to the Lenders as to which no such objection have been made.
Section 1.3 Interpretive Provisions. Wherever used in this Agreement:
(a) The meanings of defined terms are equally applicable to
the singular and plural forms of the defined terms. Terms used herein
that are defined in the UCC and are not otherwise defined herein shall
have the meanings specified therefor in the UCC.
(b) The words "hereof", "herein", "hereunder", and similar
words refer to this Agreement as a whole and not to any particular
provision of this Agreement. Section, Subsection, Schedule, and
Exhibit references are to this Agreement unless otherwise specified.
The term "documents" includes any and all instruments, documents,
agreements, certificates, indentures, notices, and other writings,
however evidenced. The term "including" is not limiting and means
"including, without limitation". 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". The word
"or" is not exclusive.
(c) Unless otherwise expressly provided herein (i) references
to agreements (including this Agreement) and other contractual
instruments shall be deemed to include all subsequent amendments,
restatements, and other modifications thereto, but only to the extent
such amendments, restatements, and other modifications are not
prohibited by the terms of any Credit Document and (ii) references to
any statute or regulation are to be construed as including all
statutory and regulatory provisions consolidating, amending,
replacing, supplementing, or interpreting the statute or regulation.
(d) This Agreement and the other Credit Documents may use
several different limitations, tests, or measurements to regulate the
same or similar matters. All such limitations, tests, and measurements
are cumulative and shall each be performed in accordance with their
terms.
(e) For purposes of Section 9.1, a breach of a financial
covenant contained in Section 7.11 shall be deemed to have occurred as
of any date of determination thereof by the Collateral Agent or as of
the last day of any specified measuring period, regardless of when the
financial statements reflecting such breach are delivered to the
Collateral Agent and the Lenders.
(f) This Agreement and the other Credit Documents are the
result of negotiations among, and have been reviewed by counsel to,
each Agent, each Lender, and the Credit Parties and are the products
of all parties. Accordingly, this Agreement and the other Credit
Documents shall not be construed against the Agents, the Lenders, or
the Credit Parties merely because of their respective involvement in
the preparation thereof.
ARTICLE 2
REVOLVING CREDIT FACILITIES
---------------------------
Section 2.1 Revolving Facility.
(a) Revolving Commitment. During the Commitment Period,
subject to the terms and conditions hereof, each Revolving Lender
severally agrees to make revolving loans (the "Revolving Loans"; such
Revolving Loans to include Non-Ratable Loans made by Bank of America
pursuant to Section 2.4(e) and Permitted Overadvances) to the
Borrowers in the amount of such Lender's Revolving Commitment
Percentage of such Revolving Loans for the purposes hereinafter set
forth; provided that (i) with regard to the Revolving Lenders
collectively, the aggregate principal amount of Revolving Loans and
LOC Obligations at any time shall not exceed the Revolving Borrowing
Base and (ii) with regard to each Revolving Lender individually, such
Revolving Lender's Revolving Commitment Percentage of the Revolving
Loans and LOC Obligations at any time shall not exceed such Lender's
Revolving Committed Amount. The Revolving Loans may be repaid and
re-borrowed in accordance with the provisions of this Agreement.
(b) Discretionary Overadvances. Notwithstanding the provisions
of Section 2.1(a), the Revolving Agent may, upon request of the
Collateral Agent, make Revolving Loans in its discretion
("Discretionary Over-Advances") for and on behalf of the Revolving
Lenders in an aggregate principal amount outstanding at any time not
to exceed $5,000,000, even though (i) a Default or Event of Default
then exists and has not been waived or cured, (ii) the other
conditions to Extensions of Credit under Section 5.2 have not or
cannot be satisfied, or (iii) after giving effect thereto, the
Revolving Loans and LOC Obligations then outstanding will be in excess
of the Revolving Borrowing Base (but not in excess of the Aggregate
Revolving Commitment Amount), if in the reasonable business judgment
of the Collateral Agent, such advances are necessary or advisable for
the protection or preservation of the Collateral or in order to
improve the likelihood of repayment of the Revolving Obligations
(including financing working capital needs). The Collateral Agent will
give prompt notice to the Lenders of any Discretionary Over-Advances
and the circumstances giving rise thereto, and each Revolving Lender
will promptly reimburse the Collateral Agent for its ratable share of
such advance. The right and ability of the Revolving Agent to make
Discretionary Over-Advances hereunder are subject to revocation by
written notice to the Revolving Agent from the Required Revolving
Lenders.
(c) Permitted Overadvances. Notwithstanding the provisions of
Section 2.1(a), so long as no Event of Default exists and is
continuing, excluding any Default or Event of Default arising as a
result of the Revolving Loans and LOC Obligations being in excess of
the Revolving Borrowing Base or the principal amount of the Loans and
LOC Obligations being in excess of the Total Borrowing Base, during
the period between August 1, 2005 and September 30, 2005, subject to
the terms and conditions of this Agreement, each Revolving Lender
severally agrees to make Permitted Overadvances to the Borrowers for
the purposes set forth in Section 6.15.
(d) Letter of Credit Commitment. During the Commitment Period,
subject to the terms and conditions hereof and of the LOC Documents,
if any, and such other terms and conditions which the Issuing Lender
may reasonably require, the Revolving Agent shall cause the Issuing
Lender to issue, and the Revolving Lenders shall participate severally
in (to the extent of their respective Revolving Commitment
Percentages), such standby and documentary Letters of Credit as any of
the Borrowers may request, in form acceptable to the Issuing Lender,
for the purposes hereinafter set forth; provided that the aggregate
amount of LOC Obligations shall not exceed $10,000,000 at any time
(the "LOC Committed Amount").
Section 2.2 Method of Borrowing; Notice of Request for Extensions of
Credit. Any Borrower may request an Extension of Credit hereunder by written
notice (or telephonic notice promptly confirmed in writing) as follows:
(a) Revolving Loans. In the case of Revolving Loans, to the
Revolving Agent not later than 10:00 a.m. (Pasadena, California time)
on the Business Day of the requested borrowing. Each such request for
borrowing shall be irrevocable and shall specify (A) that a Revolving
Loan is requested, (B) the date of the requested borrowing (which
shall be a Business Day), and (C) the aggregate principal amount to be
borrowed.
(b) Letters of Credit. The Borrowers must notify the Revolving
Agent of any request for issuance of a Letter of Credit by 10:00 a.m.
(Pasadena, California time) at least three (3) Business Days prior to
the proposed issuance date. Such notice shall be irrevocable and must
specify the original face amount of the Letter of Credit requested,
the Business Day of issuance of such requested Letter of Credit,
whether such Letter of Credit may be drawn in a single or in partial
draws, the Business Day on which the requested Letter of Credit is to
expire, the purpose for which such Letter of Credit is to be issued,
and the beneficiary of the requested Letter of Credit. The Borrowers
shall attach to such notice the proposed form of the Letter of Credit.
Section 2.3 Additional Provisions Relating to Letters of Credit.
(a) Amounts Outside Expiration Date. The Revolving Agent shall
not have any obligation to cause the Issuing Lender to issue any
Letter of Credit at any time if: (i) the maximum face amount of the
requested Letter of Credit is greater than the unused portion of the
aggregate LOC Committed Amount at such time; (ii) the maximum undrawn
amount of the requested Letter of Credit and all commissions, fees,
and charges due from the Borrowers in connection with the opening
thereof exceeds (A) the lesser of the Revolving Borrowing Base or the
Aggregate Revolving Commitment Amount, minus (B) the Revolving
Obligations at such time; or (iii) such Letter of Credit has an
expiration date later than (A) the Revolving Facility Termination Date
or (B) more than twelve (12) calendar months from the date of issuance
(except as any Letter of Credit may be extended pursuant to an
"evergreen" or automatic renewal provision, provided that any such
extension shall not be for an expiration date beyond the Revolving
Facility Termination Date).
(b) Other Conditions. In addition to being subject to the
satisfaction of the applicable conditions precedent contained in
Article 5, the obligation of the Revolving Agent to cause the Issuing
Lender to issue any Letter of Credit is subject to the following
conditions precedent having been satisfied in a manner reasonably
satisfactory to the Revolving Agent:
(i) the Borrowers shall have delivered to the Issuing
Lender, at such times and in such manner as the Issuing Lender
may prescribe, an application in form and substance
satisfactory to the Issuing Lender and reasonably satisfactory
to the Revolving Agent for the issuance of the Letter of
Credit and such other documents as may be required pursuant to
the terms thereof, and the form, terms, and purpose of the
proposed Letter of Credit shall be satisfactory to the
Revolving Agent and the Issuing Lender (provided that in the
event any term of such application or any other document is
inconsistent with the terms of this Agreement the terms of
this Agreement shall be controlling); and
(ii) as of the date of issuance, no order of any court,
arbitrator, or Governmental Authority shall purport by its
terms to enjoin or restrain money center banks generally from
issuing letters of credit of the type and in the amount of the
proposed Letter of Credit, and no law, rule, or regulation
applicable to money center banks generally and no request or
directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over money center
banks generally shall prohibit, or request that the Issuing
Lender refrain from, the issuance of letters of credit
generally or the issuance of such proposed Letters of Credit.
(c) Issuance of Letters of Credit.
(i) Responsibilities of the Revolving Agent; Issuance.
The Revolving Agent shall determine, as of the Business Day
immediately preceding the requested issuance date of the
Letter of Credit set forth in the notice from the Borrower
pursuant to Section 2.2(b), whether the conditions set forth
in Section 2.3(a) have been met as of such date. If the
Revolving Agent determines that such conditions are met, the
Revolving Agent shall cause the Issuing Lender to issue the
requested Letter of Credit on the requested issuance date so
long as the other conditions hereof are met.
(ii) Extensions and Amendments. The Revolving Agent
shall not be obligated to cause the Issuing Lender to extend
or amend any Letter of Credit issued pursuant hereto unless
the requirements of this Section 2.3 are met as though a new
Letter of Credit were being requested and issued. With respect
to any Letter of Credit which contains any "evergreen" or
automatic renewal provision, each Lender shall be deemed to
have consented to any such extension or renewal unless such
Lender shall have provided to the Revolving Agent written
notice that it declines to consent to any such extension or
renewal at least thirty (30) days prior to the date on which
the Issuing Lender is entitled to decline to extend or renew
the Letter of Credit; provided that, notwithstanding the
foregoing, if all of the requirements of this Section 2.3 are
met and no Default or Event of Default has occurred and is
continuing, no Revolving Lender may decline to consent to any
such extension or renewal.
(d) Payments Pursuant to Letters of Credit. The Borrowers
agree to reimburse the Issuing Lender promptly upon demand for any
draw under any Letter of Credit and to pay the Issuing Lender promptly
upon demand the amount of all other charges and fees payable to the
Issuing Lender under or in connection with any Letter of Credit when
due, irrespective of any claim, setoff, defense, or other right which
the Borrowers may have at any time against the Issuing Lender or any
other Person. Each drawing under any Letter of Credit shall constitute
a request by the Borrower for a borrowing of a Revolving Loan in the
amount of such drawing. The Funding Date with respect to such
borrowing shall be the date of such drawing.
(e) Indemnification; Exoneration; Power of Attorney.
(i) Indemnification. The Borrowers agree to protect,
indemnify, pay, and save the Revolving Lenders, the Revolving
Agent, and the Issuing Lender harmless from and against any
and all claims, demands, liabilities, damages, losses, costs,
charges, and expenses (including attorneys' fees and expenses)
which any Revolving Lender, the Revolving Agent, or the
Issuing Lender may incur or be subject to as a consequence,
direct or indirect, of the issuance of any Letter of Credit
except to the extent that it shall be determined in a final,
nonappealable judgment by a court of competent jurisdiction
that any such claims, demands, liabilities, damages, losses,
costs, charges, and expenses resulted from the gross
negligence or willful misconduct of the Revolving Lenders, the
Revolving Agent, or the Issuing Lender, respectively. The
Borrowers' obligations under this Section 2.3(e) will survive
payment of all of the other Revolving Obligations.
(ii) Assumption of Risk by the Borrowers. As among the
Borrowers, the Revolving Lenders, the Revolving Agent, and the
Issuing Lender, the Borrowers assume all risks of the acts and
omissions of, or misuse of any of the Letters of Credit by,
the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, the
Revolving Lenders, the Revolving Agent, and the Issuing Lender
shall not be responsible for: (A) the form, validity,
sufficiency, accuracy, genuineness, or legal effect of any
document submitted by any Person in connection with the
application for and issuance of and presentation of drafts
with respect to any of the Letters of Credit, even if it
should prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent, or forged; (B) the
validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any 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; (C) the failure of the beneficiary
of any Letter of Credit to comply duly with conditions
required in order to draw upon such Letter of Credit; (D)
errors, omissions, interruptions, or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex, or
otherwise, whether or not they be in cipher unless such
errors, omissions, interruptions, or delays are the result of
the gross negligence or willful misconduct of the Issuing
Lender; (E) errors in interpretation of technical terms; (F)
any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any Letter
of Credit or of the proceeds thereof unless such loss or delay
is the result of the gross negligence or willful misconduct of
such Person; (G) the misapplication by the beneficiary of any
Letter of Credit of the proceeds of any drawing under such
Letter of Credit; (H) any consequences arising from causes
beyond the control of the Revolving Lenders, the Revolving
Agent, or the Issuing Lender, including any act or omission,
whether rightful or wrongful, of any present or future de jure
or de facto Governmental Authority; or (I) the Issuing
Lender's honor of a draw for which the draw or any certificate
fails to comply with the terms of the Letter of Credit unless
such failure to comply is the result of the gross negligence
or willful misconduct of the Issuing Lender. None of the
foregoing affects, impairs, or prevents the vesting of any
rights or powers of the Revolving Agent, any Revolving Lender,
or the Issuing Lender under this Section 2.3(e).
(iii) Exoneration. Without limiting the foregoing, no
action or omission whatsoever by the Revolving Agent or any
Revolving Lender (excluding the Issuing Lender acting in such
capacity) under or in connection with any of the Letters of
Credit or any related matters shall result in any liability of
the Revolving Agent or any Revolving Lender to the Borrowers,
or relieve the Borrowers of any of their obligations under
this Agreement to any such Person.
(iv) Rights Against Issuing Lender. Nothing contained
in this Agreement is intended to limit the Borrowers' rights,
if any, with respect to the Issuing Lender which arise as a
result of the letter of credit application and related
documents executed by and between the Borrowers and the
Issuing Lender.
(v) Account Party. The Borrowers hereby authorize and
direct the Issuing Lender to name any Borrower as the "Account
Party" in any Letter of Credit and to deliver to the Revolving
Agent all instruments, documents, and other writings and
property received by the Issuing Lender pursuant to each such
Letter of Credit, and to accept and rely upon the Revolving
Agent's instructions and agreements with respect to all
matters arising in connection with each such Letter of Credit
or the application therefor.
(vi) Power of Attorney. In connection with all
inventory financed by any Letter of Credit, the Borrowers
hereby appoint the Collateral Agent, or the Collateral Agent's
designee, as its attorney, with full power and authority: (A)
to sign and/or endorse any Borrower's name upon any warehouse
or other receipts; (B) to sign any Borrower's name on bills of
lading and other negotiable and non-negotiable documents; (C)
to clear inventory through customs in the Collateral Agent's
or any Borrower's name, and to sign and deliver to customs
officials powers of attorney in any Borrower's name for such
purpose; (D) to complete in any Borrower's or the Collateral
Agent's name, any order, sale, or transaction, obtain the
necessary documents in connection therewith, and collect the
proceeds thereof; and (E) to do such other acts and things as
are necessary in order to enable the Collateral Agent to
obtain possession or control of such inventory and to obtain
payment of the Total Obligations. Neither the Collateral Agent
nor its designee, as any Borrower's attorney, will be liable
for any acts or omissions, nor for any error of judgment or
mistakes of fact or law other than for gross negligence or
willful misconduct. This power, being coupled with an
interest, is irrevocable until all Total Obligations have been
paid and satisfied.
(vii) Control of Inventory. In connection with all
inventory financed by Letters of Credit, the Borrowers will,
at the Collateral Agent's request, instruct all suppliers,
carriers, forwarders, customs brokers, warehouses, or others
receiving or holding cash, checks, inventory, documents, or
instruments in which the Collateral Agent holds a security
interest to deliver them to the Collateral Agent and/or
subject to the Collateral Agent's order, and if they shall
come into any Borrower's possession, to deliver them, upon
request, to the Collateral Agent in their original form. The
Borrowers shall also, at the Collateral Agent's written
request, designate the Collateral Agent as the consignee on
all bills of lading and other negotiable and non-negotiable
documents.
(f) Participation in Letters of Credit. Each Revolving Lender,
with respect to the Existing Letters of Credit, hereby purchases a
participation interest in such Existing Letters of Credit, and with
respect to Letters of Credit issued on or after the Closing Date, upon
issuance of a Letter of Credit, shall be deemed to have purchased
without recourse a risk participation from the Issuing Lender in such
Letter of Credit and the obligations arising thereunder, in each case
in an amount equal to such Lender's pro rata share of the obligations
under such Letter of Credit (based on the Revolving Commitment
Percentages of such Lender) and absolutely, unconditionally, and
irrevocably assumes, as primary obligor and not as surety, and becomes
obligated to pay to the Issuing Lender therefor and discharge when
due, such Lender's pro rata share of the obligations arising under
such Letter of Credit. Without limiting the scope and nature of each
Revolving Lender's participation in any Letter of Credit, to the
extent that the Issuing Lender has not been reimbursed as required
hereunder or under any such Letter of Credit, each Revolving Lender
shall pay to the Issuing Lender its pro rata share of such
unreimbursed drawing in same day funds upon demand therefor. The
obligation of each Revolving Lender to reimburse the Issuing Lender
shall be absolute and unconditional and shall not be affected by the
occurrence of a Default, an Event of Default, or any other occurrence
or event. Any such reimbursement shall not relieve or otherwise impair
the obligation of the Borrowers to reimburse the Issuing Lender under
any Letter of Credit, together with interest as provided in this
Agreement.
(g) Uniform Customs and Practices. The Issuing Lender may have
the Letters of Credit be subject to The Uniform Customs and Practice
for Documentary Credits (the "UCP") or the International Standby
Practices 1998 (the "ISP98"), in either case as published as of the
date of issue by the International Chamber of Commerce, in which case
the UCP or the ISP98, as applicable, may be incorporated therein and
deemed in all respects to be a part thereof.
(h) Responsibility of Issuing Lender. It is expressly
understood and agreed that the obligations of the Issuing Lender
hereunder to the Revolving Lenders are only those expressly set forth
in this Agreement and that the Issuing Lender shall be entitled to
assume that the conditions precedent set forth in Section 5.2 have
been satisfied unless it shall have been notified by the Borrowers or
a Revolving Lender (other than the Issuing Lender in its capacity as
the Revolving Agent or a Revolving Lender) that any such condition
precedent has not been satisfied; provided, however, that nothing set
forth in this Section 2.3 shall be deemed to prejudice the right of
any Revolving Lender to recover from the Issuing Lender any amounts
made available by such Revolving Lender to the Issuing Lender pursuant
to this Section 2.3 in the event that it is determined by a court of
competent jurisdiction that the payment with respect to a Letter of
Credit constituted gross negligence or willful misconduct on the part
of the Issuing Lender.
(i) Supporting Letter of Credit; Cash Collateral. If,
notwithstanding the provisions of Section 2.3(a), any Letter of Credit
is outstanding upon the termination of this Agreement, then upon such
termination the Borrowers shall deposit with the Collateral Agent with
respect to each such Letter of Credit then outstanding, as the
Revolving Agent in its discretion shall specify, either (i) a standby
letter of credit (a "Supporting Letter of Credit") in form and
substance satisfactory to the Revolving Agent, issued by an issuer
satisfactory to the Revolving Agent in an amount equal to the greatest
amount for which such Letter of Credit may be drawn, plus any fees and
expenses associated with such Letter of Credit, under which Supporting
Letter of Credit the Collateral Agent is entitled to draw amounts
necessary to reimburse the Issuing Lender, the Revolving Agent, and
the Revolving Lenders for payments to be made by the Issuing Lender,
the Revolving Agent, and the Revolving Lenders under such Letter of
Credit and any fees and expenses associated with such Letter of Credit
or (ii) cash in an amount necessary to reimburse the Issuing Lender,
the Revolving Agent, and the Revolving Lenders for payments to be made
by the Issuing Lender, the Revolving Agent, and the Revolving Lenders
under such Letter of Credit and any fees and expenses associated with
such Letter of Credit. Such Supporting Letter of Credit or deposit of
cash shall be held by the Collateral Agent, for the benefit of the
Issuing Lender, the Revolving Agent, and the Revolving Lenders, as
security for, and to provide for the payment of, the aggregate undrawn
amount of such Letters of Credit remaining outstanding.
Section 2.4 Additional Provisions Relating to Revolving Loans.
(a) Disbursement. The Revolving Agent is authorized and
directed by the Borrowers to transfer the proceeds of the Revolving
Loans to an account maintained with Bank of America as specified by
the Borrowers (the "Designated Account"). The Borrowers may designate
a replacement Designated Account from time to time by written notice
to the Revolving Agent. Any designation by the Borrowers of the
Designated Account must be reasonably acceptable to the Revolving
Agent.
(b) Reliance Upon Authority; No Liability. The Revolving Agent
is entitled to rely conclusively on any individual's request for
Extensions of Credit on behalf of any Borrower, so long as the
proceeds thereof are to be transferred to the Designated Account. The
Revolving Agent shall have no duty to verify the identity of any
individual representing himself or herself as a person authorized by
the Borrowers to make such requests on their behalf. The Revolving
Agent shall not incur any liability to the Borrowers as a result of
acting upon any notice referred to in Section 2.2 which the Revolving
Agent reasonably believes to have been given by an officer or other
person duly authorized by the Borrowers to request Extensions of
Credit on behalf of the Borrowers or for otherwise acting under this
Section 2.4. The crediting of Revolving Loans to the Designated
Account shall conclusively establish the obligation of the Borrowers
to repay such Revolving Loans as provided herein.
(c) The Revolving Agent's Election. Subject to the
requirements of Section 2.4(e), promptly after receipt of a request
for an Extension of Credit in compliance with Section 2.2(a), the
Revolving Agent shall elect in its discretion to have the terms of
Section 2.4(d) or Section 2.4(e) apply to such requested borrowing. If
Bank of America declines in its sole discretion to make a Non-Ratable
Loan pursuant to Section 2.4(e), the terms of Section 2.4(d) shall
apply to the requested borrowing.
(d) Making of Revolving Loans. If the Revolving Agent elects
to have the terms of this Section 2.4(d) apply to a requested
borrowing, then promptly after receipt of a Notice of Borrowing or
telephonic notice in lieu thereof, the Revolving Agent shall notify
the Revolving Lenders by telecopy, telephone, or e-mail of the
requested borrowing. Subject to satisfaction of the applicable
conditions precedent set forth in Article 5, each Revolving Lender
shall transfer its Revolving Commitment Percentage of the requested
borrowing to the Revolving Agent in immediately available funds, to
the account from time to time designated by the Revolving Agent, not
later than 12:00 noon (Pasadena, California time) on the applicable
Funding Date. After the Revolving Agent's receipt of the proceeds of
such requested borrowing, the Revolving Agent shall make the proceeds
of such requested borrowing available to the applicable Borrower on
the applicable Funding Date by transferring same day funds to the
Designated Account.
(e) Making of Non-Ratable Loans. Subject to Section 2.4(c), if
the Revolving Agent elects, with the consent of Bank of America, to
have the terms of this Section 2.4(e) apply to a requested borrowing,
Bank of America shall make a Revolving Loan in the amount of such
requested borrowing available to the applicable Borrower on the
applicable Funding Date by transferring same day funds to the
Designated Account. Each Revolving Loan made solely by Bank of America
pursuant to this Section 2.4(e) is referred to hereinafter as a
"Non-Ratable Loan", and such Loans are collectively referred to as the
"Non-Ratable Loans". Each Non-Ratable Loan shall be subject to all the
terms and conditions applicable to other Loans, except that all
payments thereon shall be payable to Bank of America solely for its
own account. The aggregate amount of Non-Ratable Loans outstanding at
any time shall not exceed $5,000,000. The Revolving Agent shall not
request Bank of America to make any Non-Ratable Loan if the Revolving
Agent has received written notice from any Lender that one or more of
the applicable conditions precedent set forth in Article 5 will not be
satisfied on the requested Funding Date for the applicable borrowing.
The Non-Ratable Loans shall be secured by the Liens granted to the
Collateral Agent in and to the Collateral and shall constitute
Revolving Loans and Revolving Obligations.
Section 2.5 Revolving Notes. The Borrowers shall execute and deliver
to each Revolving Lender a Revolving Note. Each Revolving Note shall be in the
principal amount of the applicable Revolving Lender's Revolving Committed
Amount and dated as of the Closing Date or the date of any assignment of a
portion of any Lender's Revolving Commitment. Each Revolving Note shall
represent the obligation of the Borrowers to pay the amount of the applicable
Revolving Lender's Revolving Committed Amount, or, if less, such Lender's
Revolving Commitment Percentage of the aggregate unpaid principal amount of all
Revolving Loans made to the Borrowers together with interest thereon as
prescribed in this Agreement.
ARTICLE 3
TERM CREDIT FACILITY
Section 3.1 Term Loans. Subject to the terms and conditions of this
Agreement, the Initial Term Lender agrees to make term loans (collectively, the
"Term Loans") to the Borrowers on the Closing Date, for the purposes
hereinafter set forth, in a total principal amount equal to sixty-seven million
five hundred thousand Dollars ($67,500,000), consisting of (a) outstanding
amounts owing to the Initial Term Lender (excluding participation in any
Existing Letters of Credit) under the Original Credit Agreement as of the
Closing Date, which shall be converted to Term Loans as specified in Section
12.1, and (b) cash in the amount of the difference between the total principal
amount of the Term Loans and the amount specified in clause (a).
Section 3.2 Making of Term Loans. The Initial Term Lender shall
transfer the Term Loans in the amount referred to in clause (b) of Section 3.1
to the Term Agent in immediately available funds not later than 2:30 p.m.
(Pasadena, California time) on the Closing Date. After the Term Agent's receipt
of all proceeds of the Term Loans, the Term Agent shall make the proceeds of
the Term Loans available to the Borrowers by transferring same day funds equal
to the proceeds of the Term Loans received by the Term Agent to the Revolving
Agent for distribution to the "Lenders" (as defined in the Original Credit
Agreement), other than the Initial Term Lender, in accordance with the
provisions of Section 12.1.
Section 3.3 Term Loan Notes. The Borrowers shall execute and deliver
to each Term Lender a Term Note. Each Term Note shall be in the principal
amount of the applicable Term Lender's pro rata share of sixty-seven million
five hundred thousand Dollars ($67,500,000) and dated as of the Closing Date or
the date of any assignment of a portion of any Lender's Term Loan. Each Term
Note shall represent the obligation of the Borrowers to pay the amount of the
applicable Term Lender's Term Loan, together with interest thereon as
prescribed in this Agreement.
ARTICLE 4
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
Section 4.1 Interest. Subject to Section 4.2 and Section 4.4, the
Loans and other Total Obligations shall bear interest at a per annum rate,
payable in arrears on each applicable Interest Payment Date (or at such other
times as may be specified herein), as follows:
(a) with respect to the Revolving Loans, the Adjusted Base
Rate;
(b) with respect to the Term Loans, the Adjusted Eurodollar
Rate, except as otherwise provided by Section 4.3(b);
(c) at all times for any other Revolving Obligations which
remain unpaid, the Adjusted Base Rate; and
(d) at all times for any other Term Obligations which remain
unpaid, the Adjusted Eurodollar Rate; and
Section 4.2 Default Rate. Subject to Section 4.4, during the existence
of an Event of Default, upon the election of the Revolving Agent or the
Required Revolving Lenders, with respect to the Revolving Loans and the Letter
of Credit Fee, and upon the election of the Term Agent or the Required Term
Lenders, with respect to the Term Loans (a) the principal of and, to the extent
permitted by law, interest on the Revolving Loans and the Term Loans, as
applicable, and any other amounts owing hereunder or under the other Credit
Documents shall bear interest, payable on demand, at a per annum rate two
percent (2.00%) greater than the rate that would otherwise be applicable and
(b) the Letter of Credit Fee will accrue at a per annum rate two percent
(2.00%) greater than the rate that would otherwise be applicable.
Section 4.3 Additional Provisions With Respect to Term Loans.
(a) Funding Losses. The Borrowers shall reimburse each Term
Lender and hold each Term Lender harmless from any loss or expense
which such Term Lender may sustain or incur as a consequence of:
(i) the failure of the Borrowers to make on a timely basis
any payment of principal of any Term Loan; or
(ii) the prepayment or other payment (including after
acceleration thereof) of any Term Loans on a day that is not
the last day of the relevant Interest Period;
excluding any such loss of anticipated profit but including any loss
or expense arising from the liquidation or reemployment of funds
obtained by such Term Lender to maintain its Term Loans or from fees
payable to terminate the deposits from which such funds were obtained.
(b) Inability to Determine Rates. If the Term Agent determines
that for any reason adequate and reasonable means do not exist for
determining the Eurodollar Rate for any requested Interest Period with
respect to the Term Loans, or that the Eurodollar Rate for any
requested Interest Period with respect to the Term Loans does not
adequately and fairly reflect the cost to the Term Lenders of funding
such Loans, the Term Agent will promptly so notify the Borrowers and
each Term Lender. Thereafter, the obligation of the Lenders to
maintain Term Loans hereunder at a rate determined by the Eurodollar
Rate shall be suspended until the Term Agent revokes such notice in
writing. Upon giving of a notice pursuant to the first sentence of
this clause(b), the Term Loans shall bear interest at the Base Rate,
plus 8.45% until such time as adequate and reasonable means exist for
determining the Eurodollar Rate.
(c) Certificates of the Term Agent. If any Term Lender claims
reimbursement or compensation under this Section 4.3, the Term Agent
shall determine the amount thereof and shall deliver to the Borrowers
(with a copy to the affected Term Lender) a certificate setting forth
in reasonable detail the amount payable to the affected Term Lender,
and such certificate shall be conclusive and binding on the Borrowers
in the absence of manifest error.
(d) Survival. The agreements and obligations of the Borrowers
in this Section 4.3 shall survive the payment of the Total
Obligations.
Section 4.4 Maximum Interest Rate. If any of the interest rates set
forth in Section 4.1, Section 4.2, and Section 4.3(b) (collectively herein, the
"Interest Rate"), absent the limitation set forth in this Section 4.4, would
have exceeded the Maximum Rate, then the Interest Rate shall be the Maximum
Rate, and, if in the future, the Interest Rate would otherwise be less than the
Maximum Rate, then the Interest Rate shall remain at the Maximum Rate until
such time as the amount of interest paid hereunder equals the amount of
interest which would have been paid if the same had not been limited by the
Maximum Rate. In the event that, upon payment in full of the Total Obligations,
the total amount of interest paid or accrued under the terms of this Agreement
and the other Credit Documents is less than the total amount of interest which
would, but for this Section 4.4, have been paid or accrued if the Interest Rate
otherwise set forth in this Agreement had at all times been in effect, then the
Borrowers shall, to the extent permitted by Requirements of Law, pay to the
Collateral Agent, for the account of the Lenders, as applicable, an amount
equal to the excess of (a) the lesser of (i) the amount of interest which would
have been paid or accrued if the Maximum Rate had, at all times, been in effect
or (ii) the amount of interest which would have been paid or accrued had the
interest rate otherwise set forth in this Agreement, at all times, been in
effect over (b) the amount of interest actually paid or accrued under this
Agreement. Each of the Agents, each Lender, the Issuing Lender, and each of the
Borrowers acknowledges, agrees, and declares that it is its intention to
expressly comply with all Requirements of Law in respect of limitations on the
amount or rate of interest that can legally be contracted for, charged, or
received under or in connection with the Credit Documents. Notwithstanding
anything to the contrary contained in any Credit Document (even if any such
provision expressly declares that it controls all other provisions of the
Credit Documents), in no contingency or event whatsoever shall the amount of
interest (including the aggregate of all charges, fees, benefits, or other
compensation which constitutes interest under any applicable law) under the
Credit Documents paid by the Borrowers, received by any Agent, any Lender, or
the Issuing Lender or agreed to be paid by the Borrowers, or requested or
demanded to be paid by any Agent, any Lender, or the Issuing Lender exceed the
Maximum Rate, and all provisions of the Credit Documents in respect of the
contracting for, charging, or receiving compensation for the use, forbearance,
or detention of money shall be limited as provided by this Section 4.4. In the
event any such interest is paid to any Agent, any Lender, or the Issuing Lender
by the Borrowers in an amount or at a rate which would exceed the Maximum Rate,
such Agent, such Lender, or the Issuing Lender, as the case may be, shall
automatically apply such excess to any unpaid amount of the Total Obligations
other than interest, in the inverse order of maturity (provided that, to the
extent permitted by this Agreement and applicable law, the Revolving
Obligations shall be paid prior to any payment of the Term Obligations), or if
the amount of such excess exceeds said unpaid amount, such excess shall be paid
to the Borrowers, as applicable. All interest paid, or agreed to be paid, by
the Borrowers, or taken, reserved, or received by any Agent, any Lender, or the
Issuing Lender, shall be amortized, prorated, spread, and allocated in respect
of the Total Obligations throughout the full term of this Agreement.
Notwithstanding any provision contained in any of the Credit Documents, or in
any other related documents executed pursuant hereto, neither any Agent, any
Lender, or the Issuing Lender shall ever be entitled to charge, receive, take,
reserve, collect, or apply as interest any amount which, together with all
other interest under the Credit Documents would result in a rate of interest
under the Credit Documents in excess of the Maximum Rate and, in the event any
Agent, any Lender, or the Issuing Lender ever charges, receives, takes,
reserves, collects, or applies any amount in respect of the Borrowers that
otherwise would, together with all other interest under the Credit Documents,
be in excess of the Maximum Rate, such amount shall automatically be deemed to
be applied in reduction of the unpaid principal balance of the Total
Obligations (other than interest and provided that, to the extent permitted by
this Agreement and applicable law, the Revolving Obligations shall be paid
prior to any payment of the Term Obligations), if such principal balance is
paid in full, any remaining excess shall forthwith be paid to the Borrowers, as
applicable. The Borrowers, the Agents, the Lenders, and the Issuing Lender
shall, to the maximum extent permitted under any Requirement of Law (A)
characterize any non-principal payment as a standby fee, commitment fee,
prepayment charge, delinquency charge, expense, or reimbursement for a
third-party expense rather than as interest and (B) exclude prepayments,
acceleration, and the effects thereof. Nothing in any Credit Document shall be
construed or so operate as to require or obligate the Borrowers to pay any
interest, fees, costs, or charges greater than is permitted by any Requirement
of Law. Subject to the foregoing, the Borrowers hereby agree that the actual
effective rate of interest from time to time existing under the Credit
Documents, including all amounts agreed to by the Borrowers or charged or
received by the Agents, the Lenders, or the Issuing Lender pursuant to and in
accordance with the Credit Documents, which may be deemed to be interest under
any Requirement of Law, shall be deemed to be a rate which is agreed to and
stipulated by the Borrowers and the Lenders in accordance with Requirements of
Law.
Section 4.5 [Reserved].
Section 4.6 Repayment. The Borrowers shall repay the outstanding
principal balance of the Revolving Loans, together with all other Revolving
Obligations, including all accrued and unpaid interest thereon, on the
Revolving Facility Termination Date. The Borrowers shall repay the outstanding
principal balance of the Term Loans, together with all other Total Obligations,
including all accrued and unpaid interest thereon, on the Termination Date. In
addition, and without limiting the generality of the foregoing, upon demand the
Borrowers shall make the prepayments required pursuant to Section 4.7(b).
Section 4.7 Prepayments.
(a) Voluntary Prepayments.
(i) The Revolving Loans may be repaid in whole or in
part without premium or penalty.
(ii) Until the Discharge of the Revolving Obligations,
the principal of the Term Loans may not be prepaid in whole or
in part. After the Discharge of the Revolving Obligations, the
Borrowers may prepay the Term Loans as follows:
(A) after the first Anniversary Date, the Term
Loans may be prepaid in whole (but not in part) at a
price of 102% of the outstanding principal amount of
the Term Loans, together with any interest accrued
thereon, any fees payable to the Term Agent or the Term
Lenders, and all other Term Obligations; and
(B) after the second Anniversary Date, the Term
Loans may be prepaid in whole or in part (in increments
of $1,000,000 or integral multiples thereof) at a price
of 100% of the outstanding principal amount of the Term
Loans being prepaid, together with any interest accrued
thereon, any fees payable to the Term Agent or the Term
Lenders, and, in the event of payment of all of the
Term Loans, all other Term Obligations.
(b) Mandatory Prepayments.
(i) Revolving Commitments. If at any time the Loans,
excluding any principal of the Permitted Overadvances or of
the Discretionary Over-Advances if demand therefor has not
been made, and LOC Obligations shall exceed the Total
Borrowing Base, the Borrowers shall promptly prepay, upon
demand from any Agent, the Revolving Loans in the amount of
such excess to the extent Revolving Obligations are
outstanding. If at any time (A) the aggregate principal amount
of the Revolving Loans and LOC Obligations shall exceed the
lesser of (1) the Aggregate Revolving Commitment Amount or (2)
the Revolving Borrowing Base, plus any principal of the
Permitted Overadvances or of the Discretionary Over-Advances
if demand therefor has not been made, or (B) the aggregate
amount of LOC Obligations shall exceed the LOC Committed
Amount, the Borrowers, upon demand from the Revolving Agent,
shall promptly prepay the Revolving Loans and/or pay to a cash
collateral account in respect of the LOC Obligations an amount
equal to such excess.
(ii) Term Commitments. After the Discharge of the
Revolving Obligations, if at any time the Term Loans exceed
the Total Borrowing Base, the Borrowers shall make payment
promptly on demand from the Term Agent on the Term Loans in an
amount sufficient to eliminate the difference between the
Total Borrowing Base and the Term Loans outstanding.
(iii) Asset Dispositions. The Borrowers shall prepay
the Total Obligations in an amount equal to the net proceeds
of any Asset Disposition upon receipt thereof. Prepayments
under this clause (iii), (A) until the Discharge of the
Revolving Obligations, shall be applied to the Revolving
Obligations and (B) shall not result in a reduction of the
Revolving Commitments and amounts paid on account thereof may
be reborrowed subject to the availability and the other
conditions to Extensions of Credit hereunder. After the
Discharge of the Revolving Obligations, the Borrowers shall
prepay the Term Obligations in an amount equal to the net
proceeds of any Asset Disposition upon receipt thereof.
Section 4.8 Termination of Revolving Credit Facility.
(a) The Borrowers may terminate the Revolving Commitments upon
at least twenty (20) days prior written notice thereof to the Agents
and the Lenders, upon (i) the payment in full of all outstanding
Revolving Loans, together with accrued and unpaid interest thereon,
and the cancellation and return of all outstanding Letters of Credit
(or alternatively, with respect to each such Letter of Credit, the
furnishing to the Collateral Agent in the Revolving Agent's
discretion, of a Supporting Letter of Credit or cash deposit, in each
case in amounts and in the manner required by Section 2.3(i)), (ii)
the payment in full of all reimbursable expenses and other Revolving
Obligations together with accrued and unpaid interest thereon, and
(iii) the payment in full of any amount due under Section 4.10. The
aggregate amount of the Revolving Commitment Amount shall not be
reduced except in connection with termination of the Revolving
Commitments.
(b) The Revolving Commitments will terminate on the Revolving
Facility Termination Date unless sooner terminated in accordance with
the terms hereof. The term of this Agreement will end on the
Termination Date unless sooner terminated in accordance with the terms
hereof. The Collateral Agent, without notice to the Credit Parties may
terminate this Agreement (i) with respect to the Revolving
Obligations, upon direction from the Revolving Agent (acting upon the
instruction of the Required Revolving Lenders) during the existence of
a Designated Event of Default or (ii) with respect to the Total
Obligations, upon direction from the Term Agent (acting upon the
instruction of the Required Term Lenders) during the existence of an
Event of Default. Upon the effective date of termination of this
Agreement for any reason whatsoever, the Total Obligations (including
all unpaid principal, accrued and unpaid interest, and any early
termination or prepayment fees, but excluding indemnification
obligations to the extent no claim with respect thereto has been
asserted and remains unsatisfied) shall become immediately due and
payable and the Borrowers shall immediately arrange for the
cancellation and return of all Letters of Credit then outstanding or,
if permitted by the Revolving Agent in its discretion, presentation to
the Collateral Agent of a Supporting Letter of Credit or cash
collateral as specified in Section 2.3(i). Notwithstanding the
termination of this Agreement, until the Total Obligations are
indefeasibly paid and performed in full in cash and all outstanding
Letters of Credit have been delivered to the Collateral Agent or a
Supporting Letter of Credit or cash collateral delivered to the
Collateral Agent as provided by Section 2.3(i), the Credit Parties
shall remain bound by the terms of this Agreement and the other Credit
Documents, as applicable, and shall not be relieved of any of their
obligations hereunder or under any other Credit Document, and the
Agents and the Lenders shall retain all of their rights and remedies
hereunder and under the other Credit Documents (including, without
limitation, the Liens granted to the Collateral Agent under the Credit
Documents in, and all rights and remedies with respect to, all then
existing and after-arising Collateral); provided that after Discharge
of the Revolving Obligations, the Revolving Lenders and the Revolving
Agent shall cease to have any rights or Liens hereunder or under any
other Credit Documents other than such rights which by their terms
survive Discharge of the Revolving Obligations; provided, further,
that on the date of Discharge of the Revolving Obligations all rights,
duties, and obligations of the Revolving Agent shall vest in the Term
Agent on such date and shall continue for the benefit of the Term
Agent thereafter.
Section 4.9 Fees.
(a) Unused Line Fee. Subject to Section 4.4, until the
Revolving Loans have been paid in full and the Revolving Commitments
have been terminated, the Borrowers agree to pay to the Collateral
Agent, for the ratable benefit of the Revolving Lenders in accordance
with their respective Revolving Commitment Percentages, on the first
day of each calendar month and on the Revolving Facility Termination
Date, a fee (the "Unused Line Fee") at a per annum rate equal to the
Applicable Percentage for the Unused Line Fee multiplied by the amount
by which the Revolving Committed Amount exceeded the sum of the
average daily amount of the Revolving Loans and the average daily
amount of all LOC Obligations outstanding during the immediately
preceding month or shorter period if calculated for the first month
after the Closing Date or on the Revolving Facility Termination Date.
For purposes of computing the Unused Line Fee (i) any payment received
by the Collateral Agent (if received prior to 11:00 a.m. (Pasadena,
California time)) shall be deemed to be credited to the Borrowers'
loan account on the Business Day following the date such payment is
received by the Revolving Agent and (ii) Non-Ratable Loans shall not
be counted toward or considered usage under the Revolving Committed
Amount.
(b) Letter of Credit Fees. Subject to Section 4.2 and Section
4.4, the Borrowers agree to pay to the Collateral Agent, for the
account of the Revolving Lenders, in accordance with their respective
Revolving Commitment Percentages, on the first day of each calendar
month and on the Termination Date, a fee (the "Letter of Credit Fee")
at a per annum rate equal to the Applicable Percentage for Letters of
Credit, multiplied by the average daily undrawn face amount of all
Letters of Credit outstanding during the immediately preceding month
or shorter period if calculated for the first month after the Closing
Date or on the Revolving Facility Termination Date. The Borrowers also
agree to pay all reasonable out-of-pocket costs, fees, and expenses
incurred by the Issuing Lender in connection with the application for,
processing of, issuance of, or amendment to any Letter of Credit,
which costs, fees, and expenses shall include a "fronting fee" in an
amount equal to one-quarter percent (0.25%) of the face amount of such
Letter of Credit, payable to the Issuing Lender on the date of
issuance of each Letter of Credit.
(c) Administrative Fees. The Borrowers shall pay to the
Collateral Agent, for the account of the Revolving Agent, the fees set
forth in the Amended Administrative Agent's Fee Letter.
(d) Term Loan Continuation Fee. If any principal amount of the
Term Loan remains outstanding on the first Business Day after the
second Anniversary Date, the Borrowers shall pay to the Collateral
Agent, for the benefit of the Term Lenders, a fee equal to 1.00% of
such outstanding principal amount. The fee set forth in this Section
4.9(d) will be fully earned and payable on the second Anniversary
Date.
(e) Permitted Overadvance Fee. If any Permitted Overadvance is
made, the Borrowers shall pay to the Collateral Agent, for the benefit
of the Revolving Lenders, in each calendar month in which any
Permitted Overadvance is outstanding, a fee equal to $100,000 and
shall pay to the Collateral Agent, for the benefit of the Term
Lenders, an overadvance fee equal to $250,000. The fees set forth in
this Section 4.9(e) will be fully earned and payable upon the making
of any Permitted Overadvance.
Section 4.10 Taxes, Yield Protection.
(a) Taxes.
(i) Any and all payments by the Borrowers, or any of
them, to any Agent or any Lender under this Agreement and any
other Credit Document shall be made free and clear of, and
without deduction or withholding for, any Taxes. In addition,
subject to Section 10.10(e), the Borrowers shall pay all Other
Taxes.
(ii) The Borrowers agree to indemnify and hold harmless
each Agent and each Lender for the full amount of Taxes or
Other Taxes (including any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section 4.10(a))
paid by any Agent or any Lender and any liability (including
penalties, interest, additions to tax, and expenses) arising
therefrom or with respect thereto, whether or not such Taxes
or Other Taxes were correctly or legally asserted. Payment
under this indemnification shall be made within thirty (30)
days after the date any Agent or any Lender makes written
demand therefor.
(iii) If the Borrowers shall be required by law to
deduct or withhold any Taxes or Other Taxes from or in respect
of any sum payable hereunder to any Agent or any Lender, then:
(A) the sum payable shall be increased as
necessary so that after making all required deductions
and withholdings (including without limitation,
deductions and withholdings applicable to additional
sums payable under this Section 4.10(a)) such Agent or
such Lender, as the case may be, receives an amount
equal to the sum it would have received had no such
deductions or withholdings been made;
(B) the Borrowers shall make such deductions and
withholdings;
(C) the Borrowers shall pay the full amount
deducted or withheld to the relevant taxing authority
or other authority in accordance with any applicable
law; and
(D) the Borrowers shall also pay to the
Collateral Agent, for the account of each Revolving
Lender and Term Lender at the time interest is paid, as
applicable, all additional amounts which the respective
Lender specifies as necessary to preserve the after-tax
yield such Lender would have received if such Taxes or
Other Taxes had not been imposed.
(iv) Within thirty (30) days after the date of any
payment by the Borrowers of Taxes or Other Taxes, the
Borrowers shall furnish the Collateral Agent the original or a
certified copy of a receipt evidencing payment thereof, or
other evidence of payment satisfactory to the Collateral
Agent.
(v) If the Borrowers are required to pay additional
amounts to any Agent or any Lender pursuant to Section
4.10(a)(iii), then such Agent or such Lender shall use
reasonable efforts (consistent with legal and regulatory
restrictions) to change the jurisdiction of its lending office
so as to eliminate any such additional payment by the
Borrowers which may thereafter accrue, if such change in the
judgment of such Agent or such Lender is not otherwise
disadvantageous to such Agent or such Lender.
(vi) For any period with respect to which a Lender has
failed to provide the Borrowers and the Collateral Agent with
the appropriate forms pursuant to Section 10.10(a) (unless
such failure is due to a change in treaty, law, or regulation
occurring subsequent to the date on which a form originally
was required to be provided), such Lender shall not be
entitled to indemnification under this Section 4.10 with
respect to Taxes imposed by the United States.
(b) Increased Costs and Reduction of Return. If any Lender
determines that (i) the introduction of any Capital Adequacy
Regulation, (ii) any change in any Capital Adequacy Regulation, (iii)
any change in the interpretation or administration of any Capital
Adequacy Regulation by any central bank or other Governmental
Authority charged with the interpretation or administration thereof,
or (iv) compliance by such Lender or any corporation or other entity
controlling such Lender with any Capital Adequacy Regulation, affects
or would affect the amount of capital required or expected to be
maintained by such Lender or any corporation or other entity
controlling such Lender and (taking into consideration such Lender's
or such corporation's or other entity's policies with respect to
capital adequacy and such Lender's desired return on capital)
determines that the amount of such capital is increased as a
consequence of its Revolving Commitment, Loans, credits, or
obligations under this Agreement, then, upon demand of such Lender to
the Borrowers through the Collateral Agent, the Borrowers shall pay to
the Collateral Agent, for the account of such Lender and from time to
time as specified by such Lender, additional amounts sufficient to
compensate such Lender for such increase.
(c) Certificates of the Agents. If any Lender claims
reimbursement or compensation under this Section 4.10, the Collateral
Agent shall determine the amount thereof and shall deliver to the
Borrowers (with a copy to the affected Lender) a certificate setting
forth in reasonable detail the amount payable to the affected Lender,
and such certificate shall be conclusive and binding on the Borrowers
in the absence of manifest error.
(d) Survival. The agreements and obligations of the Borrowers
in this Section 4.10 shall survive the payment of the Total
Obligations.
Section 4.11 Pro Rata Treatment. Except to the extent otherwise
provided herein:
(a) Revolving Loans. Each Revolving Loan advance, each payment
or prepayment of principal of any Revolving Loan (other than
Non-Ratable Loans and Discretionary Over-Advances) or reimbursement
obligations arising from drawings under Letters of Credit, each
payment of interest on the Revolving Loans or reimbursement
obligations arising from drawings under Letters of Credit, each
payment of Unused Line Fees, each payment of the Letter of Credit Fee,
and each reduction of the Revolving Committed Amount (if any) shall be
allocated pro rata among the Revolving Lenders in accordance with
their respective Revolving Commitment Percentages.
(b) Term Loans. Each payment or prepayment of principal of any
Term Loan, each payment of interest on the Term Loans, each payment of
any fees owing to the Term Lenders, shall be allocated pro rata among
the Term Lenders in accordance with their respective pro rata shares
of the outstanding Term Loans.
(c) Advances. No Revolving Lender shall be responsible for the
failure or delay by any other Revolving Lender in its obligation to
make its ratable share of a borrowing hereunder; provided, however,
that the failure of any Revolving Lender to fulfill its obligations
hereunder shall not relieve any other Revolving Lender of its
obligations hereunder.
Section 4.12 Sharing of Payments. The Lenders agree among themselves
that, in the event that any Lender obtains payment in respect of any Loan, LOC
Obligations, or any other obligation owing to such Lender under this Agreement
through the exercise of a right of setoff, banker's lien, or counterclaim, or
pursuant to a secured claim under Section 506 of Title 11 of the United States
Code or other security or interest arising from, or in lieu of, such secured
claim, received by such Lender under any applicable bankruptcy, insolvency, or
other similar law or otherwise, or by any other means, in excess of its pro
rata share of such payment as provided for in this Agreement, such Lender shall
promptly purchase from the other Lenders a Participation Interest in such
Loans, LOC Obligations, and other obligations in such amounts, and make such
other adjustments from time to time, as shall be equitable to the end that all
Lenders share such payment in accordance with their respective ratable shares
as provided for in this Agreement. The Lenders further agree among themselves
that if payment to a Lender obtained by such Lender through the exercise of a
right of setoff, banker's lien, counterclaim, or other event as aforesaid shall
be rescinded or must otherwise be restored, each Lender which shall have shared
the benefit of such payment shall, by repurchase of a Participation Interest
theretofore sold, return its share of that benefit (together with its share of
any accrued interest payable with respect thereto) to each Lender whose payment
shall have been rescinded or otherwise restored. The Borrowers agree that any
Lender so purchasing such a Participation Interest may, to the fullest extent
permitted by law, exercise all rights of payment, including setoff, banker's
lien, or counterclaim, with respect to such Participation Interest as fully as
if such Lender were a holder of such Loan, LOC Obligations, or other obligation
in the amount of such Participation Interest. Except as otherwise expressly
provided in this Agreement, if any Lender or any Agent shall fail to remit to
the applicable Agent or any other Lender an amount payable by such Lender or
such Agent to such other Agent or such other Lender pursuant to this Agreement
on the date when such amount is due, such payments shall be made together with
interest thereon for each date from the date such amount is due until the date
such amount is paid to the applicable Agent or such other Lender at a rate per
annum equal to the Federal Funds Rate. If under any applicable bankruptcy,
insolvency, or other similar law, any Lender receives a secured claim in lieu
of a setoff to which this Section 4.12 applies, such Lender shall, to the
extent practicable, exercise its rights in respect of such secured claim in a
manner consistent with the rights of the Lenders under this Section 4.12 to
share in the benefits of any recovery on such secured claim.
Section 4.13 Certain Limitations. The provisions of Section 4.10 shall
be subject to the following:
(a) Each Lender that desires compensation or indemnification
under Section 4.10 shall notify the Borrowers through the Collateral
Agent of any event occurring after the Closing Date entitling such
Lender to compensation or indemnification under any of such Sections
as promptly as practicable, but in any event within ninety (90) days
after the occurrence of the event giving rise thereto; provided that
(i) if any such Lender fails to give such notice within ninety (90)
days after the occurrence of such an event, such Lender shall only be
entitled to compensation or indemnification in respect of such event
accruing under Section 4.10 with respect to the period from and after
the date ninety (90) days prior to the date that such Lender does give
notice.
(b) Any notice given by a Lender pursuant to clause (a)
preceding shall certify (i) that one of the events described in
Section 4.10 has occurred, describing in reasonable detail the nature
of such event, (ii) as to the increased cost, reduced amount
receivable, or loss or expense resulting from such event, and (iii) as
to the additional amount demanded by such Lender, attaching a
reasonably detailed explanation of the calculation thereof. Such a
certificate as to any compensation or indemnification payable pursuant
to Section 4.10, submitted by such Lender through the Collateral Agent
to the Borrowers, shall be conclusive and binding on the parties
hereto in the absence of manifest error.
(c) If any Lender requests compensation or indemnification
from the Borrowers under Section 4.10, the Borrowers may, at their
option, within fifteen (15) days after receipt by the Borrowers of
written demand from the affected Lender for payment of such
compensation or indemnification, notify the Collateral Agent and such
affected Lender of the Borrowers' intention to replace the affected
Lender. So long as no Event of Default shall have occurred and be
continuing, the Borrowers may obtain, at the Borrowers' expense, a
replacement Lender (which must be an Eligible Assignee) for the
affected Lender. If the Borrowers obtain a replacement Lender within
ninety (90) days following notice of their intention to do so, the
affected Lender must sell and assign its loans and obligations and any
Commitments to such replacement Lender pursuant to Section 13.3, for
an amount equal to the principal balance of all Loans held by the
affected Lender and all accrued interest and Fees with respect thereto
through the date of such sale, provided that the Borrowers shall have
paid to such affected Lender the compensation or indemnification that
it is entitled to receive under Section 4.10, through the date of such
sale and assignment. Notwithstanding the foregoing, the Borrowers
shall not have the right to obtain a replacement Lender if the
affected Lender rescinds its demand for such compensation or
indemnification within fifteen (15) days following its receipt of the
Borrowers' notice of intention to replace such affected Lender.
Additionally, if the Borrowers give a notice to the Collateral Agent
and the affected Lender of the Borrowers' intention to replace such
affected Lender and the Borrowers do not so replace such affected
Lender within ninety (90) days thereafter, the Borrowers' rights under
this Section 4.13(c) shall terminate and the Borrowers shall promptly
pay all compensation or indemnification demanded by such affected
Lender pursuant to Section 4.10.
Section 4.14 Payments, Computations, Etc.
(a) Generally. Except as otherwise specifically provided
herein, all payments hereunder shall be made to the Collateral Agent
in Dollars in immediately available funds, without setoff, deduction,
counterclaim, or withholding of any kind, at the Collateral Agent's
office specified in Section 13.1 not later than 10:00 a.m. (Pasadena,
California time) on the date when due; provided that no Default or
Event of Default shall be deemed to have occurred in connection with
payments made on the due date but received after such cut-off time,
even though credited for receipt on the following Business Day.
Payments received after such time shall be deemed to have been
received on the next succeeding Business Day. The Collateral Agent may
(but shall not be obligated to) debit the amount of any such payment
which is not made by such time to any ordinary deposit account of the
Borrowers or any Guarantor maintained with the Collateral Agent (with
notice to the Borrowers or such Guarantor). Each Borrower shall, at
the time it makes any payment under this Agreement, specify to the
Collateral Agent the Loans, LOC Obligations, Fees, interest, or other
amounts payable by such Borrower hereunder to which such payment is to
be applied (and in the event that such Borrower fails so to specify,
or if such application would be inconsistent with the terms hereof,
the Collateral Agent shall distribute such payment to the Lenders,
through their respective Agents, in such manner as the Collateral
Agent, in accordance with Article 11, may determine to be appropriate
in respect of obligations owing by the Borrowers hereunder, subject to
the terms of Section 4.11). The Collateral Agent will distribute such
payments to such Lenders, through their respective Agents if any such
payment is received prior to 10:00 a.m. (Pasadena, California time) on
a Business Day in like funds as received prior to the end of such
Business Day and otherwise the Collateral Agent will distribute any
such payment to such Lenders on the next succeeding Business Day.
Whenever any payment hereunder shall be stated to be due on a day
which is not a Business Day, the due date thereof shall be extended to
the next succeeding Business Day (subject to accrual of interest and
Fees for the period of such extension), except that in the case of
Term Loans, if the extension would cause the payment to be made in the
next following calendar month, then such payment shall instead be made
on the next preceding Business Day. Subject to Section 4.4, unless
expressly provided otherwise herein, all computations of interest and
fees shall be made on the basis of actual number of days elapsed over
a year of 360 days. Interest shall accrue from and include the date of
borrowing, but exclude the date of payment.
(b) Allocation of Payments After Event of Default.
Notwithstanding any other provisions of this Agreement to the
contrary, during the existence of an Event of Default, all amounts
collected or received on or in respect of the Total Obligations
(including proceeds of the Collateral) shall be paid over or delivered
as follows, but in no event in a manner inconsistent with the
provisions of Section 11.1;
FIRST, to the payment of all reasonable
out-of-pocket costs and expenses (including without
limitation, reasonable attorneys' fees) of the Collateral
Agent actually incurred in connection with enforcing the
rights and remedies of the Agents and the Lenders under the
Credit Documents (including without limitation, exercising
rights and remedies in respect of the Collateral) and any
protective advances (including any Discretionary
Over-Advances) made with respect thereto, excluding any of
the foregoing solely relating to Bank Products;
SECOND, to payment of any fees and expenses
(including without limitation, fees and expenses owing
pursuant to Section 13.5(a)) owed to the Collateral Agent,
the Revolving Agent, the Term Agent, and the Lenders (in such
order) under the Credit Documents and not paid pursuant to
clause "FIRST" preceding, excluding any of the foregoing
solely relating to Bank Products;
THIRD, to the payment of all accrued interest and
fees on or in respect of the Revolving Obligations;
FOURTH, to the payment of all accrued interest and
fees on or in respect of the Term Obligations;
FIFTH, to the payment of the outstanding principal
amount of the Revolving Obligations (including the payment or
cash collateralization of the outstanding LOC Obligations);
SIXTH, to the payment of all amounts due with respect
to Bank Products;
SEVENTH, to the payment of all other Revolving
Obligations hereunder and other obligations which shall have
become due and payable under the Credit Documents otherwise
and not repaid pursuant to clauses "FIRST" through "THIRD",
"FIFTH", and "SIXTH" preceding;
EIGHTH, to the payment of all accrued interest and
fees in respect of the Term Obligations that have not been
paid pursuant to clause "FOURTH" preceding by reason of the
provisions of Article 11;
NINTH, to the payment of the outstanding principal
amount of the Term Obligations;
TENTH, to the payment of all other Term Obligations
hereunder and other obligations which shall have become due
and payable under the Credit Documents otherwise and not
repaid pursuant to clauses "FIRST", "SECOND", "FOURTH",
"EIGHTH" and "NINTH" preceding; and
ELEVENTH, to the payment of the surplus, if any, to
whoever may be lawfully entitled to receive such surplus.
In carrying out the foregoing (i) amounts received shall be applied in
the numerical order provided until exhausted prior to application to
the next succeeding category, (ii) except as otherwise provided in
this Agreement, the Lenders shall receive amounts ratably in
accordance with their respective pro rata share (based on the
proportion that the then outstanding Obligations held by such Lenders
bears to the aggregate amount of Obligations then outstanding) of
amounts available to be applied pursuant to clauses "THIRD", "FIFTH",
and "SEVENTH" preceding, with respect to the Revolving Obligations,
and clauses "FOURTH", "EIGHTH", "NINTH", and "TENTH" with respect to
the Term Obligations, and (iii) to the extent that any amounts
available for distribution pursuant to clause "FIFTH" preceding are
attributable to the issued but undrawn amount of outstanding Letters
of Credit, such amounts shall be held by the Collateral Agent in a
cash collateral account and applied (A) first, to reimburse the
Issuing Lender for any drawings under such Letters of Credit and (B)
then, following the expiration of all Letters of Credit, to all other
obligations in the manner specified above.
Section 4.15 Evidence of Debt.
(a) Each Lender shall maintain an account or accounts
evidencing each Loan made by such Lender to the Borrowers from time to
time, including the amounts of principal and interest payable and paid
to such Lender from time to time under this Agreement. Each Lender
will make reasonable efforts to maintain the accuracy of its account
or accounts and to promptly update its account or accounts from time
to time, as necessary.
(b) The Collateral Agent shall maintain the Register pursuant
to Section 13.3(g), and a subaccount for each Lender, in which
Register and subaccounts (taken together) shall be recorded (i) the
amount, type, and (if applicable) Interest Period of each such Loan,
(ii) the amount of any principal or interest due and payable or to
become due and payable to each Lender hereunder, and (iii) the amount
of any sum received by the Collateral Agent hereunder from or for the
account of the Borrowers or any Guarantor and each Lender's share
thereof. The Collateral Agent will make reasonable efforts to maintain
the accuracy of the subaccounts referred to in the preceding sentence
and to promptly update such subaccounts from time to time, as
necessary.
(c) The entries made in the accounts, Register, and
subaccounts maintained pursuant to clause (b) preceding (and, if
consistent with the entries of the Collateral Agent, clause (a)) shall
be prima facie evidence of the existence and amounts of the
obligations of the Borrowers and the Guarantors therein recorded
absent manifest error; provided, however, that the failure of any
Lender or the Collateral Agent to maintain any such account, such
Register, or such subaccount, as applicable, or any error therein,
shall not in any manner affect the obligation of the Borrowers or the
Guarantors to repay the Loans and obligations owing hereunder and
under the other Credit Documents to such Lender.
Section 4.16 Bank Products. The Borrowers may request and the
Revolving Agent may, in its sole and absolute discretion, arrange for the
Credit Parties to obtain Bank Products from Bank of America or any Affiliate of
Bank of America although no Credit Party is required to do so. To the extent
Bank Products are provided by an Affiliate of Bank of America, the Borrowers
agree to indemnify and hold the Agents, Bank of America, and the Lenders
harmless from any and all costs and obligations now or hereafter incurred by
any Agent, Bank of America, or any of the Lenders which arise from any
indemnity given by the Revolving Agent to its Affiliates related to such Bank
Products; provided, however, nothing contained in this Section 4.16 is intended
to limit any Credit Party's rights with respect to Bank of America or its
Affiliates, if any, which arise as a result of the execution of documents by
and between such Credit Party and Bank of America or its Affiliates which
relate to Bank Products. The agreement contained in this Section 4.16 shall
survive termination of this Agreement. The Borrowers acknowledge and agree that
the obtaining of Bank Products by the Credit Parties from Bank of America or
Bank of America's Affiliates (a) is in the sole and absolute discretion of Bank
of America or Bank of America's Affiliates and (b) is subject to all rules and
regulations of Bank of America or Bank of America's Affiliates.
ARTICLE 5
CONDITIONS
Section 5.1 Closing Conditions. The obligations of the Lenders to
enter into this Agreement and to make the initial Extensions of Credit shall be
subject to satisfaction of the following conditions (in form and substance
acceptable to the Agents and the Lenders).
(a) Executed Credit Documents. The Collateral Agent shall have
received: (i) multiple counterparts of this Agreement; (ii) a
Revolving Note for each Revolving Lender, (iii) a Term Note for each
Term Lender, and (iv) multiple counterparts of the other Credit
Documents, in each case executed by a duly authorized officer of each
party thereto and in each case conforming to the requirements of this
Agreement.
(b) Legal Opinions. The Collateral Agent shall have received
multiple counterparts of opinions of counsel for the Credit Parties
relating to the Credit Documents and the transactions contemplated
therein, in form and substance satisfactory to the Agents and the
Lenders, and including, among other things, opinions regarding
enforceability of the Credit Documents and the perfection of the
security interests created thereby.
(c) [Reserved]
(d) Personal Property Collateral. The Collateral Agent shall
have received each of the following:
(i) UCC financing statements for each jurisdiction as
is necessary or appropriate, in the Collateral Agent's
discretion, to perfect the Liens in the Collateral granted to
the Collateral Agent pursuant to the Credit Documents;
(ii) original certificates evidencing the Capital Stock
which is pledged as Collateral pursuant to any Credit
Document, together with undated stock transfer powers executed
in blank;
(iii) such patent, trademark, and copyright notices and
filings as necessary or appropriate, in the Collateral Agent's
discretion, to perfect the security interests of the
Collateral Agent in the Credit Parties' Intellectual Property.
(e) Evidence of Insurance. The Collateral Agent shall have
received evidence, in form, scope, and substance, reasonably
satisfactory to the Agents, of all insurance coverage as required by
this Agreement together with loss payable endorsements in form
acceptable to the Collateral Agent.
(f) Absence of Legal Proceedings. Except as set forth on
Schedule 1.1E or Schedule 1.1F, there shall not exist any action,
suit, investigation, or proceeding pending in any court or before any
arbitrator or Governmental Authority which could reasonably be
expected to have a Material Adverse Effect.
(g) Corporate Documents. The Collateral Agent shall have
received the following (or their equivalent) for each of the Credit
Parties:
(i) copies of the organization documents of such Credit
Party certified to be true and complete as of a recent date by
the appropriate Governmental Authority of the state or other
jurisdiction of its organization and certified by a secretary,
assistant secretary, general partner, or similar Person of
such Credit Party to be true and correct as of the Closing
Date;
(ii) a copy of the bylaws, partnership agreement,
operating agreement, or other equivalent agreement or document
of such Credit Party certified by a secretary, assistant
secretary, general partner, or similar Person of such Credit
Party to be true and correct and in force and effect as of the
Closing Date;
(iii) copies of resolutions of the board of directors
of such Credit Party or of the general partner, members, or
similar Persons approving and adopting the Credit Documents to
which such Credit Party is a party and the transactions
contemplated therein and authorizing execution and delivery
thereof, certified by a secretary, assistant secretary,
general partner, or such Person of such Credit Party to be
true and correct and in force and effect as of the Closing
Date;
(iv) certificates of good standing and existence (or
its equivalent) with respect to each Credit Party certified as
of a recent date by the appropriate Governmental Authorities
of the state of organization and each other state in which the
failure to so qualify and be in good standing would be
reasonably likely to have a Material Adverse Effect on the
business or operations of such Credit Party in such state; and
(v) an officer's certificate of the Credit Parties,
dated as of the Closing Date, certifying to such factual
matters as may be reasonably requested by the Agents.
(h) Priority of Liens. The Collateral Agent shall have
received satisfactory evidence that (i) the Collateral Agent holds a
perfected, first priority Lien on all Collateral and (ii) none of the
Collateral is subject to any Liens other than Permitted Liens.
(i) Officer's Certificates. The Collateral Agent shall have
received a certificate executed by an Executive Officer of ▇▇▇▇▇▇▇▇'▇
as of the Closing Date, in form and substance satisfactory to the
Collateral Agent, stating that (i) except for any Restatement Event or
for the Disclosed Matters, each Borrower and each Guarantor is in
compliance with all existing financial obligations, (ii) all
governmental, shareholder, and third party consents and approvals, if
any, necessary with respect to the Credit Documents and the
transactions contemplated thereby have been obtained, (iii) there is
no pending, or to such Executive Officer's knowledge, threatened
action, suit, investigation, or proceeding in any court or before any
arbitrator or governmental instrumentality that purports to affect any
Credit Party or any transaction contemplated by the Credit Documents,
which could reasonably be expected to have a Material Adverse Effect,
(iv) immediately after giving effect to the initial Extensions of
Credit on the Closing Date (A) no Default or Event of Default exists
and (B) all representations and warranties contained herein and in the
other Credit Documents are true and correct in all material respects,
and (v) since August 20, 2004, no Material Adverse Effect has
occurred.
(j) Merchant Account Agreements. The Collateral Agent shall
have received true, correct, and complete copies of all Merchant
Account Agreements which any Credit Party is party to.
(k) Borrowing Base Certificate. The Collateral Agent shall
have received a Borrowing Base Certificate dated as of the most recent
week-end preceding the Closing Date, in form and substance
satisfactory to the Collateral Agent and certified by an Executive
Officer, the director of finance, treasurer, or corporate controller
of ▇▇▇▇▇▇▇▇'▇, or another officer of ▇▇▇▇▇▇▇▇'▇ acceptable to the
Collateral Agent, to be true and correct as of the date thereof.
(l) Forecasts. The Credit Parties shall have delivered to the
Agents and the Lenders a forecast, prepared on a Consolidated basis in
form acceptable to the Collateral Agent, covering the period from the
Closing Date through and including the first Anniversary Date,
including balance sheets, income statements, cash flow projections,
and availability calculations based on the Revolving Borrowing Base
and the Total Borrowing Base.
(m) Fees and Expenses. The Credit Parties shall have paid to
the Lenders and the Agents all fees and expenses owed by the Credit
Parties in connection with this Agreement and the other Credit
Documents.
(n) Investor Documents. ▇▇▇▇▇▇▇▇'▇ shall have executed and
delivered to the Term Agent the Investor Documents in form and
substance satisfactory to the Term Lenders and reasonably satisfactory
to the Revolving Agent and the Collateral Agent.
(o) Physical Inventory Count. The Borrowers shall have
conducted a physical count of their inventory observed by Regis
Inventory Specialists.
(p) Slow Moving Inventory Analysis. The Borrowers shall have
completed a detailed slow-moving inventory analysis including, but not
limited to, amount, type, location, and estimated years supply on-hand
(based on prior 12-month historical sales).
Section 5.2 Conditions to all Extensions of Credit. The obligation of
each Lender to make any Loan or of the Issuing Lender to issue any Letter of
Credit (including the ini\tial Extensions of Credit) is subject to the
satisfaction of the following conditions precedent on the date of making such
Extension of Credit:
(a) Representations and Warranties. The representations and
warranties made by the Borrowers and the Guarantors herein and in the
other Credit Documents or which are contained in any certificate
furnished at any time under or in connection herewith or therewith
shall be true and correct in all material respects on and as of the
date of such Extension of Credit as if made on and as of such date
(except for those which expressly relate to an earlier date and except
for changes expressly permitted therein or as expressly contemplated
herein).
(b) No Default or Event of Default. No Default or Event of
Default shall have occurred and be continuing on such date or after
giving effect to the Extension of Credit to be made on such date
unless, for these purposes and for purposes of Section 6.7, (i) such
Default or Event of Default shall have been waived in accordance with
this Agreement or, (ii) with respect to the obligations of the
Revolving Lenders such Default or Event of Default is a Default
Relating Solely to the Term Loans or such Default or Event of Default
arises from a breach of the Tier I Financial Covenants.
(c) Material Adverse Effect. No event has occurred and is
continuing, or would result from such Extension of Credit, which has
had or would have a Material Adverse Effect.
(d) Additional Conditions to Revolving Loans and Letters of
Credit. If the making of a Revolving Loan, or issuance of a Letter of
Credit, is requested pursuant to Section 2.1 and Section 2.2, all
conditions set forth in Article 2 shall have been satisfied.
Each request for an Extension of Credit and each acceptance by any Borrower of
an Extension of Credit shall be deemed to constitute a representation and
warranty by the Borrowers as of the date of such Extension of Credit that the
applicable conditions in clauses (a), (b), and (c) preceding (as applicable)
have been satisfied.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
------------------------------
To induce the Lenders to enter into this Agreement and to make the
Extensions of Credit hereunder, each of the Borrowers and the Guarantors hereby
represents and warrants to each Agent and to each Lender that:
Section 6.1 Financial Condition. Except for changes resulting from any
Restatement Event, each of the financial statements described below (copies of
which have heretofore been provided to the Lenders) (x) have been prepared in
accordance with GAAP consistently applied throughout the periods covered
thereby, (y) except as disclosed in writing to the Lenders, are complete and
correct in all material respects, and (z) present fairly in all material
respects the financial condition (including disclosure of all material
liabilities, contingent or otherwise) and results from operations of the
entities and for the periods specified, subject in the case of interim
company-prepared statements to normal year-end adjustments and the absence of
footnotes:
(a) [Reserved]
(b) company-prepared Consolidated balance sheets for
▇▇▇▇▇▇▇▇'▇ and its Subsidiaries as of July 24, 2004, together with
related Consolidated statements of income and cash flows for the
Fiscal Period then ending; and
(c) after the Closing Date, the annual and periodic financial
statements provided in accordance with Section 7.1(a) and Section
7.1(b).
Section 6.2 No Changes or Restricted Payments. Since the date of the
financial statements referenced in Section 6.1 and the most recent financial
statements referenced in Section 7.1:
(a) for the period from the date of such financial statements
to the Closing Date, except as previously disclosed in writing to the
Lenders (i) there have been no material sales, transfers, or other
dispositions of any material part of the business or property of the
members of the Consolidated Group, nor have there been any material
purchases or other acquisitions of any business or property (including
the Capital Stock of any other Person) by the members of the
Consolidated Group, which are not reflected in the financial
statements referenced in Section 6.1, Section 7.1(a), and Section
7.1(b) and (ii) no Restricted Payments have been declared or paid by
members of the Consolidated Group, except for Permitted Distributions;
and
(b) there has been no circumstance, development, or event
relating to or affecting the members of the Consolidated Group which
has had or could reasonably be expected to have a Material Adverse
Effect.
Section 6.3 Organization; Existence; Compliance with Law. Each of the
members of the Consolidated Group (a) is duly incorporated, organized or
formed, and validly existing in good standing under the laws of the
jurisdiction of its incorporation, organization, or formation, (b) has the
corporate or other necessary power and authority, and the legal right to own
and operate its Property, to lease the Property it operates as lessee, and to
conduct the business in which it is currently engaged, (c) is duly qualified as
a foreign entity and in good standing under the laws of each jurisdiction where
its ownership, lease, or operation of Property or the conduct of its business
requires such qualification, other than in such jurisdictions where the failure
to be so qualified and in good standing would not, in the aggregate, have a
Material Adverse Effect, and (d) is in compliance with all Requirements of Law
(including, without limitation, Consumer Protection Laws), except to the extent
that the failure to comply therewith would not, in the aggregate, be reasonably
expected to have a Material Adverse Effect.
Section 6.4 Power; Authorization; Enforceable Obligations. Each of the
Credit Parties has the corporate or other necessary power and authority, and
the legal right, to make, deliver, and perform the Credit Documents to which it
is a party and has taken all necessary corporate or other action to authorize
the execution, delivery, and performance by it of the Credit Documents to which
it is a party. No consent or authorization of, filing with, notice to, or other
act by or in respect of, any Governmental Authority or any other Person is
required in connection with acceptance of Extensions of Credit or the making of
the guaranties hereunder or with the execution, delivery, or performance of any
Credit Documents by the Credit Parties (other than those which have been
obtained, such filings as are required by the Securities and Exchange
Commission and to fulfill other reporting requirements with Governmental
Authorities) or with the validity or enforceability of any Credit Document
against the Credit Parties (except such filings as are necessary in connection
with the perfection of the Liens created by such Credit Documents). Each Credit
Document to which any Credit Party is a party constitutes a legal, valid, and
binding obligation of such Credit Party enforceable against such Credit Party
in accordance with its respective terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium, or
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law).
Section 6.5 No Legal Bar. The execution, delivery, and performance of
the Credit Documents, the borrowings hereunder, and the use of the Extensions
of Credit will not violate any Requirement of Law or any Contractual Obligation
of any member of the Consolidated Group (except those as to which waivers or
consents have been obtained), and will not result in, or require, the creation
or imposition of any Lien on any Property or revenue of any member of the
Consolidated Group pursuant to any Requirement of Law or Contractual Obligation
other than the Liens arising under or contemplated in connection with the
Credit Documents. No member of the Consolidated Group is in default under or
with respect to any of its Contractual Obligations in any respect which would
reasonably be expected to have a Material Adverse Effect. The Credit Parties'
entering into the Credit Documents and incurrence of the Total Obligations is
not prohibited under the terms of any Subordinated Debt.
Section 6.6 No Material Litigation and Disputes.
(a) No claim, litigation, investigation, or proceeding of or
before any arbitrator or Governmental Authority is pending or, to the
best knowledge of the Borrowers and the Guarantors, threatened by or
against, any members of the Consolidated Group or against any of their
respective Properties or revenues which (i) relate to the Credit
Documents or any of the transactions contemplated hereby or thereby or
(ii) would reasonably be expected to have a Material Adverse Effect.
(b) No default exists and, to the best knowledge of the
Borrowers and the Guarantors, no default has been asserted, under any
Contractual Obligations to which any members of the Consolidated Group
are party which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
Section 6.7 No Defaults. No Default or Event of Default has occurred
and is continuing.
Section 6.8 Ownership and Operation of Property. Each of the members
of the Consolidated Group (a) has good record and marketable title to, or a
valid leasehold interest in, all its material Real Property, and good title to,
or a valid leasehold interest in, all its other material Property, and none of
such Property is subject to any Lien, except for Permitted Liens and (b) holds
all licenses, permits, franchises, or other certifications, consents,
approvals, and authorizations, governmental or private, necessary to the
ownership of its Property and to the conduct of its business, except for any
such licenses, permits, franchises, or other certifications, consents,
approvals, and authorizations which the failure to hold could not reasonably be
expected to have a Material Adverse Effect.
Section 6.9 Intellectual Property. Each of the members of the
Consolidated Group owns, or has the legal right to use, all United States
trademarks, tradenames, copyrights, patents, technology, know-how, and
processes, if any, necessary for each of them to conduct its business as
currently conducted (the "Intellectual Property") except for those the failure
to own or have such legal right to use would not be reasonably expected to have
a Material Adverse Effect. Schedule 6.9 sets forth a list of the Intellectual
Property owned and used by members of the Consolidated Group as of the Closing
Date. No claim has been asserted in writing to any Borrower or any Guarantor
and is pending by any Person challenging or questioning the use of any such
Intellectual Property or the validity or effectiveness of any such Intellectual
Property, and the use of such Intellectual Property by the members of the
Consolidated Group does not infringe on the rights of any Person, except for
such claims and infringements that, in the aggregate, could not be reasonably
expected to have a Material Adverse Effect.
Section 6.10 No Burdensome Restrictions. No Requirement of Law or
Contractual Obligation of the members of the Consolidated Group would be
reasonably expected to have a Material Adverse Effect.
Section 6.11 Taxes. Each member of the Consolidated Group has filed or
caused to be filed all income tax returns (federal, state, local, and foreign)
and all other tax returns which are required to be filed and has paid, except
where any failure to file or pay could not reasonably be expected to have a
Material Adverse Effect, (a) all amounts shown therein to be due (including
interest and penalties) and (b) all other taxes, fees, assessments, and other
governmental charges (including mortgage recording taxes, documentary stamp
taxes, and intangibles taxes) owing, except for such amounts or taxes which are
not yet delinquent or are being contested in good faith by appropriate
proceedings for which adequate reserves determined in accordance with GAAP have
been established unless the failure to make any such payment could give rise to
an immediate right to foreclose on a Lien securing such amounts. No tax claim
or assessment has been asserted against any member of the Consolidated Group
which if adversely determined could reasonably be expected to have a Material
Adverse Effect.
Section 6.12 ERISA. Except as would not reasonably be expected to have
a Material Adverse Effect:
(a) During the five (5) year period prior to the date on which
this representation is made or deemed made: (i) no ERISA Event has
occurred, and, to the best knowledge of the Borrowers and the
Guarantors, no event or condition has occurred or exists as a result
of which any ERISA Event could reasonably be expected to occur with
respect to any Plan; (ii) no "accumulated funding deficiency", as such
term is defined in Section 302 of ERISA and Section 412 of the
Internal Revenue Code, whether or not waived, has occurred with
respect to any Plan; (iii) each Plan has been maintained, operated,
and funded in compliance with its own terms and in material compliance
with the provisions of ERISA, the Internal Revenue Code, and any other
applicable federal or state laws; and (iv) no lien in favor of the
PBGC or a Plan has arisen or is reasonably likely to arise on account
of any Plan.
(b) The actuarial present value of all "benefit liabilities"
(as defined in Section 4001(a)(16) of ERISA), whether or not vested,
under each Single Employer Plan, as of the last annual valuation date
prior to the date on which this representation is made or deemed made
(determined, in each case, in accordance with Financial Accounting
Standards Board Statement 87, utilizing the actuarial assumptions used
in such Plan's most recent actuarial valuation report), did not exceed
as of such valuation date the fair market value of the assets of such
Plan.
(c) No member of the Consolidated Group has incurred, or, to
the best knowledge of the Borrowers and the Guarantors, could be
reasonably expected to incur, any withdrawal liability under ERISA to
any Multiemployer Plan or Multiple Employer Plan. No member of the
Consolidated Group would become subject to withdrawal liability under
ERISA if any member of the Consolidated Group were to withdraw
completely from all Multiemployer Plans and Multiple Employer Plans as
of the valuation date most closely preceding the date on which this
representation is made or deemed made. No member of the Consolidated
Group has received any notification that any Multiemployer Plan is in
reorganization (within the meaning of Section 4241 of ERISA), is
insolvent (within the meaning of Section 4245 of ERISA), or has been
terminated (within the meaning of Title IV of ERISA), and no
Multiemployer Plan is, to the best knowledge of the Borrowers and the
Guarantors, reasonably expected to be in reorganization, insolvent, or
terminated.
(d) No prohibited transaction (within the meaning of Section
406 of ERISA or Section 4975 of the Internal Revenue Code) or breach
of fiduciary responsibility has occurred with respect to a Plan which
has subjected or may subject any member of the Consolidated Group to
liability under Sections 406, 409, 502(i), or 502(l) of ERISA or
Section 4975 of the Internal Revenue Code, or under any agreement or
other instrument pursuant to which any member of the Consolidated
Group has agreed or is required to indemnify any Person against any
such liability.
(e) No member of the Consolidated Group has liability with
respect to "expected post-retirement benefit obligations" within the
meaning of the Financial Accounting Standards Board Statement 106.
Each Plan which is a welfare plan (as defined in Section 3(1) of
ERISA) to which Sections 601-609 of ERISA and Section 4980B of the
Internal Revenue Code apply has been administered in compliance in all
material respects of such sections.
(f) Neither the execution and delivery of this Credit
Agreement nor the consummation of the financing transactions
contemplated thereunder will involve any transaction which is subject
to the prohibitions of Sections 404, 406, or 407 of ERISA by reason of
the identity of any member of the Consolidated Group or in connection
with which a tax could be imposed on any member of the Consolidated
Group pursuant to Section 4975 of the Internal Revenue Code.
(g) No ERISA Affiliate that is not a member of the
Consolidated Group has incurred, or to the best knowledge of the
Borrowers and the Guarantors, could reasonably be expected to incur,
any liability under ERISA, the Internal Revenue Code or otherwise in
relation to any ERISA Affiliate Plan that would have a Material
Adverse Effect.
Section 6.13 Governmental Regulations, Etc. None of the members of the
Consolidated Group is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, or the Investment Company Act of
1940, each as amended. In addition, none of the members of the Consolidated
Group is (i) an "investment company" registered or required to be registered
under the Investment Company Act of 1940, as amended, and is not controlled by
such a company or (ii) a "holding company", or a "subsidiary company" of a
"holding company", or an "affiliate" of a "holding company" or of a
"subsidiary" of a "holding company", within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
Section 6.14 Subsidiaries. Schedule 6.14 sets forth all of the
Subsidiaries of ▇▇▇▇▇▇▇▇'▇ as of the Closing Date, including the jurisdiction
of organization, classes of Capital Stock (including options, warrants, rights
of subscription, conversion, and exchangeability, and other similar rights),
ownership, and ownership percentages thereof. The outstanding shares of Capital
Stock shown have been duly authorized and validly issued and, in the case of
any corporation, are fully paid and non-assessable and are owned free of Liens
other than Liens of the type described in clauses (a), (b), (c), (f), (q), and
(u) of the definition of Permitted Liens. Except as identified on Schedule
6.14, the outstanding shares of Capital Stock shown are not the subject of any
buy-sell, voting trust, or other shareholder agreement and are not subject to
the preemptive rights of any Person.
Section 6.15 Purpose of Extensions of Credit. The Loans will be used
by the Borrowers solely to (a) refinance the indebtedness, liabilities, and
obligations of ▇▇▇▇▇▇▇▇'▇ under the Original Credit Agreement as set forth in
Section 12.1 and (b) provide working capital and for other general corporate
purposes of the Credit Parties, including Permitted Acquisitions. No portion of
the Loan proceeds will be used directly or indirectly (w) to buy or carry any
Margin Stock, (x) to repay or otherwise refinance indebtedness of any Person
incurred to buy or carry any Margin Stock, (y) to extend credit for the purpose
of buying or carrying any Margin Stock, or (z) to acquire any security in any
transaction that is subject to Section 13 or 14 of the Securities Exchange Act
of 1934 and the regulations promulgated thereunder, and notwithstanding any
other provision to the contrary, no portion of the Loans will be used for any
purpose which violates any provision of Regulation T, Regulation U, or
Regulation X.
Section 6.16 Environmental Matters. Except as would not reasonably be
expected to have a Material Adverse Effect:
(a) Each of the facilities and properties owned, leased, or
operated by the members of the Consolidated Group (the "Subject
Properties") and all operations at the Subject Properties are in
compliance with all applicable Environmental Laws, and there is no
violation of any Environmental Law with respect to the Subject
Properties or the businesses operated by the members of the
Consolidated Group (the "Businesses"), and there are no conditions
relating to the Businesses or Subject Properties that could give rise
to liability under any applicable Environmental Laws.
(b) None of the Subject Properties contains, or to the
knowledge of the Borrowers or the Guarantors has previously contained,
any Materials of Environmental Concern at, on or under the Subject
Properties in amounts or concentrations that constitute or constituted
a violation of, or could give rise to liability under, Environmental
Laws.
(c) None of the members of the Consolidated Group has received
any written notice of, or written inquiry from any Governmental
Authority regarding, any violation, alleged violation, non-compliance,
liability, or potential liability regarding environmental matters or
compliance with Environmental Laws with regard to any of the Subject
Properties or the Businesses, nor does any member of the Consolidated
Group have knowledge or reason to believe that any such notice will be
received or is being threatened.
(d) Materials of Environmental Concern have not been
transported or disposed of from the Subject Properties, or generated,
treated, stored, or disposed of at, on, or under any of the Subject
Properties or any other location, in each case by or on behalf of any
members of the Consolidated Group in violation of, or in a manner that
would be reasonably likely to give rise to liability under, any
applicable Environmental Law.
(e) No judicial proceeding or governmental or administrative
action is pending or, to the best knowledge of the Borrowers or the
Guarantors, threatened, under any Environmental Law to which any
member of the Consolidated Group is or will be named as a party, nor
are there any consent decrees or other decrees, consent orders,
administrative orders, or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with
respect to any member of the Consolidated Group, the Subject
Properties, or the Businesses.
(f) There has been no release or, threat of release of
Materials of Environmental Concern at or from the Subject Properties,
or arising from or related to the operations (including, without
limitation, disposal) of any member of the Consolidated Group in
connection with the Subject Properties or otherwise in connection with
the Businesses, in violation of or in amounts or in a manner that
could give rise to liability under Environmental Laws.
Section 6.17 No Material Misstatements. Except as a result of any
Restatement Event, none of the information, reports, financial statements,
exhibits, or schedules, taken as a whole, furnished by or on behalf of any
member of the Consolidated Group to any Agent or any Lender in connection with
the negotiation of the Credit Documents or included therein or delivered
pursuant thereto contained, contains, or will contain any misstatement of a
material fact or omitted, omits, or will omit to state any material fact
necessary to make the statements therein not materially misleading, provided
that to the extent any such information, report, financial statement, exhibit,
or schedule was based upon or constitutes a forecast or projection, each of the
Borrowers and the Guarantors represents only that it acted in good faith and
utilized reasonable assumptions and due care in the preparation of such
information, report, financial statement, exhibit, or schedule.
Section 6.18 Labor Matters. Except as set forth in Schedule 6.18, as
of the Closing Date:
(a) there are no strikes or lockouts against any members of
the Consolidated Group pending or, to the best knowledge of the
Borrowers and the Guarantors, threatened;
(b) the hours worked by and payments made to employees of the
Consolidated Group have not been in violation of the Fair Labor
Standards Act or any other applicable federal, state, local, or
foreign law dealing with such matters in any case where a Material
Adverse Effect would reasonably be expected to occur as a result of
the violation thereof;
(c) all payments due from members of the Consolidated Group,
or for which any claim may be made against a member of the
Consolidated Group, on account of wages and employee health and
welfare insurance and other benefits, have been paid or accrued as a
liability on the books of the respective members of the Consolidated
Group; and
(d) none of the members of the Consolidated Group is party to
a collective bargaining agreement.
Section 6.19 Security Documents.
(a) Security Agreements. Each Security Agreement is effective
to create in favor of the Collateral Agent, for the benefit of the
Agents and the Lenders, a legal valid and enforceable security
interest in the "Collateral" identified therein and, when financing
statements in appropriate form are filed in the appropriate offices
for the locations specified as the jurisdiction of incorporation or
organization (as applicable) of each Credit Party in Schedule 2.4(d)
to each such Security Agreement, such Security Agreement shall create
a fully perfected Lien on, pledge of, and security interest in, all
right, title, and interest of the grantors thereunder in such
"Collateral" that may be perfected by filing, recording, or
registering a financing statement under the UCC, in each case prior
and superior in right to any other Lien on any Collateral other than
Permitted Liens which are specifically permitted to have priority over
the Liens of the Collateral Agent.
(b) Intellectual Property. Each Security Agreement, together
with the applicable Notice of Grant of Security Interest in Trademarks
and the applicable Notice of Grant of Security Interest in Patents
filed with the United States Patent and Trademark Office and the
applicable Notice of Grant of Security Interest in Copyrights filed
with the United States Copyright Office, is effective to create in
favor of the Collateral Agent, for the benefit of the Agents and the
Lenders, a legal, valid, enforceable, and perfected Lien on, security
interest in, and pledge of, all right, title, and interest of the
grantors in all Patents and Patent Licenses, Trademarks and Trademark
Licenses, and Copyrights and Copyright Licenses (each as defined in
such Security Agreement) and in which a Lien may be perfected by
filing, recording, or registration of a Notice in the United States
Parent and Trademark Office and the United States Copyright Office, in
each case prior and superior in right to any other Lien other than
Permitted Liens which are specifically permitted hereunder to have
priority over the Liens of the Collateral Agent.
(c) Mortgages. The Mortgages (if any) are effective to create
in favor of the Collateral Agent, for the benefit of the Agents and
the Lenders, a legal, valid, and enforceable Lien on all of the
respective grantors' right, title, and interest in and to the
Mortgaged Property thereunder and the proceeds thereof, and constitute
fully perfected Liens on, and security interests in, all right, title,
and interest of the grantors in such Mortgaged Property and the
proceeds thereof, in each case prior and superior in right to any
other Lien other than Permitted Liens which are specifically permitted
hereunder to have priority over the Liens of the Collateral Agent.
Section 6.20 Location of Real Property and Leased Premises. As
of the Closing Date, Schedule 6.20 sets forth:
(a) a complete and correct list of all Real Property owned or
leased by any member of the Consolidated Group, with the street
address and state where located and a designation of whether such Real
Property is owned or leased;
(b) a list of all locations where any tangible personal
property (including, without limitation, chattel paper) of any member
of the Consolidated Group is located, including the street address and
state where located; and
(c) the chief executive office and principal place of business
of each member of the Consolidated Group.
Section 6.21 Solvency. Each of the Credit Parties is Solvent after
giving effect to entering into this Agreement and the other Credit Documents
and each Extension of Credit to be made on the Closing Date (including each
Existing Letter of Credit).
Section 6.22 Bank Accounts; Merchant Accounts. As of the Closing Date,
Schedule 6.22 contains a complete and accurate list of all bank accounts
maintained by each Credit Party with any bank or other financial institution
and each Merchant Account.
ARTICLE 7
AFFIRMATIVE COVENANTS
---------------------
The Borrowers and the Guarantors hereby covenant and agree that so
long as this Agreement is in effect or any amounts payable hereunder or under
any other Credit Document shall remain outstanding or any Letter of Credit is
outstanding, and until all of the Commitments hereunder shall have terminated:
Section 7.1 Information Covenants.
(a) Annual Financial Statements. The Borrowers and the
Guarantors will furnish, or cause to be furnished, to each of the
Agents and the Lenders, as soon as available, and in any event within
ninety (90) days after the close of each Fiscal Year of ▇▇▇▇▇▇▇▇'▇,
beginning with the Fiscal Year ending October 1, 2005, a Consolidated
balance sheet and income statement of the members of the Consolidated
Group as of the end of such Fiscal Year, together with related
Consolidated statements of operations and retained earnings and of
cash flows for such Fiscal Year, in each case setting forth in
comparative form Consolidated figures for the preceding Fiscal Year,
all such financial information described above to be in reasonable
form and detail and audited by independent certified public
accountants of recognized national standing reasonably acceptable to
the Agents and whose opinion shall be to the effect that such
financial statements have been prepared in accordance with GAAP
(except for changes with which such accountants concur) and shall not
be limited as to the scope of the audit or qualified as to the status
of the members of the Consolidated Group as a going concern or any
other material qualifications or exceptions; provided that,
notwithstanding the foregoing, such financial statements for
▇▇▇▇▇▇▇▇'▇ Fiscal Year ending October 1, 2005, need not be completed,
delivered to the Agents or any Lender, or filed with the SEC until 18
months after the Closing Date; provided, further, that if any Borrower
or Guarantor is unable to complete and file such financial statements
by such date solely by reason of the application of FIN 46 to
Crescent, such Borrower or Guarantor may satisfy the requirement of
this covenant by filing unaudited Consolidated GAAP financial
statements for the Fiscal Year ending October 1, 2005 (excluding the
application of FIN 46 to Crescent) on Form 8-K with the SEC, certified
by an Executive Officer or the treasurer or corporate controller of
▇▇▇▇▇▇▇▇'▇.
(b) Periodic Financial Statements. The Borrowers and the
Guarantors will furnish, or cause to be furnished, to each of the
Agents and Lenders, as soon as available, and in any event within
thirty (30) days after the end of each Fiscal Period, beginning with
the Fiscal Period ending August 21, 2004, or forty-five (45) days for
any Fiscal Period which ends on the last day of a Fiscal Year, a
Consolidated balance sheet, income statement, and statements of cash
flows of the members of the Consolidated Group for such Fiscal Period,
in each case setting forth in comparative form Consolidated figures
for the corresponding Fiscal Period of the preceding Fiscal Year, all
such financial information described above to be in reasonable form
and detail and reasonably acceptable to the Agents, and accompanied by
a certificate of an Executive Officer of ▇▇▇▇▇▇▇▇'▇ to the effect that
such monthly financial statements fairly present in all material
respects the financial condition of the members of the Consolidated
Group and have been prepared in accordance with GAAP, subject to
changes resulting from audit and normal year-end audit adjustments and
the absence of footnotes; provided, that prior to the Restatement
Date, the Consolidated financial statements for any Fiscal Period
pursuant to this Section 7.1(b) may be prepared on a basis consistent
with the Consolidated financial statements referred to in Section
6.1(b), without giving effect to the Restatement, the effect of the
Restatement on Fiscal Years prior to the Restatement Date, and the
effect of any new method of accounting of the character described in
the definition of "Restatement", and the Executive Officer's
certification need not state that such Consolidated financial
statements have been prepared in accordance with GAAP, but must
certify that such Consolidated financial statements have been prepared
on a basis consistent with the Consolidated financial statements
referred to in Section 6.1(b) and may otherwise be qualified to
reflect this proviso.
(c) Periodic Forecasts. The Borrowers shall deliver to each of
the Agents and Lenders, prepared for the members of the Consolidated
Group on a Consolidated basis in form previously provided or otherwise
reasonably acceptable to the Agents:
(i) no later than the first Business Day of each
calendar week (A) until the Borrowers have obtained financing
under the Vendor Financing Program in an amount of at least
$15,000,000 on terms reasonably acceptable to the Collateral
Agent, a cash forecast covering each day beginning on the date
of such forecast for the following 30 day period, and (B)
thereafter until January 31, 2005, a cash forecast covering
each calendar week beginning on the date of such forecast for
the following thirteen calendar week period;
(ii) no later than the first Business Day of each
Fiscal Period, a cash forecast covering each calendar week
beginning closest to the beginning date of such Fiscal Period,
forecast for the following thirteen calendar week period; and
(iii) within 30 days prior to the beginning of each
Fiscal Year of ▇▇▇▇▇▇▇▇'▇ through the Termination Date,
beginning with the Fiscal Year beginning on October 2, 2005,
an annual business plan and forecast including pro forma
balance sheets, income statements, cash flow projections of
the Consolidated Group, and availability calculations based on
the Revolving Borrowing Base and the Total Borrowing Base.
(d) Officer's Certificate. The Borrowers and the Guarantors
will furnish, or cause to be furnished, to each of the Agents and
Lenders, at the time of delivery of the financial statements provided
for in Section 7.1(a) and Section 7.1(b) preceding, a certificate of
an Executive Officer of ▇▇▇▇▇▇▇▇'▇, substantially in the form of
Exhibit C (i) demonstrating compliance with the financial covenants
contained in Section 7.11 by calculation thereof as of the end of each
such Fiscal Period (as applicable) and (ii) stating that no Default or
Event of Default exists, or if any Default or Event of Default does
exist, specifying the nature and extent thereof and what action the
Credit Parties propose to take with respect thereto.
(e) Borrowing Base Certificate. The Borrowers and the
Guarantors will furnish, or cause to be furnished, to each of the
Agents and Lenders, no later than the first Business Day following the
end of the preceding calendar week, or on a more frequent basis as
requested by the Collateral Agent, a statement of the Total Borrowing
Base and the Revolving Borrowing Base and their respective components
as of the end of the immediately preceding week (or such other more
frequent period), in form and content satisfactory to the Collateral
Agent and certified by an Executive Officer, the treasurer, director
of finance, or corporate controller of ▇▇▇▇▇▇▇▇'▇, or other officer of
▇▇▇▇▇▇▇▇'▇ acceptable to the Collateral Agent, to be true and correct
as of the date thereof (a "Borrowing Base Certificate") together with
a schedule of the Borrowers' receivables created since the immediately
preceding such schedule and Borrowing Base Certificate.
(f) [Reserved]
(g) Collateral Reports. The Borrowers and the Guarantors will
furnish, or cause to be furnished, to each of the Agents and Lenders,
within fifteen (15) days after the end of each Fiscal Period, in form
and detail reasonably satisfactory to the Collateral Agent, (i) an
aging of the accounts receivable of the Borrowers, together with a
computation of Eligible Installment Contracts in detail satisfactory
to the Collateral Agent and a reconciliation to the previous Fiscal
Period's aging of the accounts receivable of the Borrowers and to
their respective general ledgers and financial statements, (ii) an
aging of the accounts payable of the Borrowers, (iii) reports by
category of inventory of the Borrowers, with additional detail showing
additions to and deletions from the Borrowers' inventory, together
with a computation of Eligible Inventory in detail satisfactory to the
Collateral Agent and a reconciliation to the general ledger and
financial statements, (iv) a list of all new locations where the
Credit Parties have any Collateral and any other locations where
Collateral is no longer kept by the Credit Parties (including a
listing of retail store locations opened or closed during such Fiscal
Period), including the address and, if requested by the Collateral
Agent, contact information for any landlord, and (v) with the delivery
of each of the foregoing, a certificate executed by the chief
financial officer or treasurer of ▇▇▇▇▇▇▇▇'▇ certifying as to the
accuracy and completeness of the foregoing. If any of the records of
the Borrowers or reports of the Collateral are prepared by an
accounting service or other agent, each of the Borrowers hereby
authorizes such service or agent to deliver such records, reports, and
related documents to the Collateral Agent, for distribution to the
Lenders.
(h) Physical Count of Inventory. On or before September 30,
2004, or such other date as the Collateral Agent may agree, the
Borrowers shall deliver to each of the Agents and the Lenders the
report prepared by the third party observing the physical count of the
Borrowers' inventory conducted by the Borrowers as required by Section
5.1(o).
(i) [Reserved].
(j) Consumer Credit Policies. The Borrowers and the Guarantors
will furnish, or cause to be furnished, to each of the Agents and the
Lenders, concurrently with delivery of the financial statements for
the last day of each Fiscal Quarter delivered pursuant to clause (a)
or clause (b) preceding, written notice to each of the Agents and the
Lenders of material changes or modifications in any Borrowers'
consumer credit policies and practices, together with a written
explanation, in detail reasonably satisfactory to each of the Agents
and the Lenders, of such changes or modifications to such consumer
credit policies or practices.
(k) Investment Banking Agreements. The Borrowers and the
Guarantors will promptly furnish, or cause to be furnished, to each of
the Agents and the Lenders, copies of any investment banking
engagement agreement entered into by any Credit Party after the
Closing Date.
(l) Auditor's Reports. The Borrowers and the Guarantors will
furnish, or cause to be furnished, to each of the Agents and the
Lenders, promptly upon receipt thereof, a copy of any other report or
"management letter" submitted by independent accountants to any member
of the Consolidated Group in connection with any annual, interim, or
special audit of the books of such Person.
(m) Reports. The Borrowers and the Guarantors will furnish, or
cause to be furnished, to each of the Agents and the Lenders, promptly
upon transmission or receipt thereof (i) copies of any filings and
registrations with, and reports to or from, the Securities and
Exchange Commission, or any successor agency (excluding any exhibits
thereto and any registration statements filed on Form S-8), and copies
of all financial statements, proxy statements, notices, and reports as
any member of the Consolidated Group shall send to its stockholders or
to a holder of any Indebtedness owed by any member of the Consolidated
Group in its capacity as such a holder and (ii) upon the request of
any Agent or Lender, all reports and written information to and from
the United States Environmental Protection Agency, or any state or
local agency responsible for environmental matters, the United States
Occupational Health and Safety Administration, or any state or local
agency responsible for health and safety matters, or any successor
agencies or authorities concerning environmental, health, or safety
matters.
(n) Notices. Upon any Executive Officer of the Borrower or any
Guarantor obtaining actual knowledge thereof, the Borrowers and the
Guarantors will immediately furnish, or cause to be furnished, to each
of the Agents and the Lenders, written notice of (i) the occurrence of
an event or condition consisting of a Default or Event of Default,
specifying the nature and existence thereof and what action the Credit
Parties propose to take with respect thereto, (ii) the occurrence of
any of the following with respect to any member of the Consolidated
Group (A) the pendency or commencement of any litigation, arbitration,
or governmental proceeding against such Person which could reasonably
be expected to have a Material Adverse Effect or (B) the institution
of any proceedings against such Person with respect to, or the receipt
of notice by such Person of potential liability or responsibility for
violation, or alleged violation of any federal, state, or local law,
rule, or regulation, including but not limited to, Environmental Laws,
the violation of which could reasonably be expected to have a Material
Adverse Effect, and (iii) the occurrence of any default or other
breach or failure to perform under any agreement with respect to any
Subordinated Debt.
(o) ERISA. Upon any Executive Officer of the Borrower or any
Guarantor obtaining knowledge thereof, the Borrowers and the
Guarantors will give written notice to each of the Agents and the
Lenders promptly (and in any event within five (5) Business Days) of:
(i) any event or condition, including, but not limited to, any
Reportable Event, that constitutes, or might reasonably lead to, an
ERISA Event; (ii) with respect to any Multiemployer Plan, the receipt
of notice as prescribed in ERISA or otherwise of any withdrawal
liability assessed against the Credit Parties or any ERISA Affiliates,
or of a determination that any Multiemployer Plan is in reorganization
or insolvent (both within the meaning of Title IV of ERISA); (iii) the
failure to make full payment on or before the due date (including
extensions) thereof of all amounts which any member of the
Consolidated Group or any ERISA Affiliate is required to contribute to
each Plan pursuant to its terms and as required to meet the minimum
funding standard set forth in ERISA and the Internal Revenue Code with
respect thereto; or (iv) any change in the funding status of any Plan
that could have a Material Adverse Effect, together with a description
of any such event or condition or a copy of any such notice and a
statement by an Executive Officer of ▇▇▇▇▇▇▇▇'▇ briefly setting forth
the details regarding such event, condition, or notice, and the
action, if any, which has been or is being taken or is proposed to be
taken by the Credit Parties with respect thereto. Promptly upon
request, the Borrowers and the Guarantors shall furnish to each of the
Agents and the Lenders such additional information concerning any Plan
as may be reasonably requested, including, but not limited to, copies
of each annual report/return (Form 5500 series), as well as all
schedules and attachments thereto required to be filed with the
Department of Labor and/or the Internal Revenue Service pursuant to
ERISA and the Internal Revenue Code, respectively, for each "plan
year" (within the meaning of Section 3(39) of ERISA).
(p) Additional Patents and Trademarks. At the time of delivery
of the financial statements and reports pursuant to Section 7.1(a),
the Borrowers and the Guarantors will furnish, or cause to be
furnished, to each of the Agents and the Lenders, a report signed by
an Executive Officer of ▇▇▇▇▇▇▇▇'▇ setting forth (i) a list of
registration numbers for all patents, trademarks, service marks,
tradenames, and copyrights awarded to any member of the Consolidated
Group since the last day of the immediately preceding Fiscal Year and
(ii) a list of all patent applications, trademark applications,
service ▇▇▇▇ applications, trade name applications, and copyright
applications submitted by any member of the Consolidated Group since
the last day of the immediately preceding Fiscal Year and the status
of each such application, all in such form as shall be reasonably
satisfactory to the Collateral Agent.
(q) Notices to Subordinated Creditors. The Borrowers and the
Guarantors will furnish, or cause to be furnished to each of the
Agents and the Lenders copies of (i) all statements, reports, notices,
documents, and certificates, furnished to the holders of any
Subordinated Debt, and (ii) all material notices required to be
delivered pursuant to any of the Vendor Documents and not otherwise
furnished to each of the Agents and the Lenders pursuant to this
Agreement.
(r) Certificate of December Sales. The Borrowers and the
Guarantors will furnish, or cause to be furnished, to each of the
Agents and the Lenders, as soon as available, and in any event within
five (5) Business Days after the end of each Fiscal Period ending
closest to December 31 of each year, a certificate of an Executive
Officer of ▇▇▇▇▇▇▇▇'▇ stating the actual retail sales of the Credit
Parties in the Fiscal Period ending closest to December 31 of such
year and demonstrating compliance with the financial covenant
contained in Section 7.11(d) by calculation thereof as of the end of
each such Fiscal Period.
(s) Bank Accounts. With each of the certificates delivered
pursuant to clause (d) preceding, the Borrowers and the Guarantors
will furnish, or cause to be furnished, to the Collateral Agent a
listing of each bank account opened or closed by any Credit Party
during the preceding Fiscal Period, and any Merchant Account Agreement
entered into by any Credit Party during the preceding Fiscal Period.
(t) Other Information. With reasonable promptness upon any
such request, the Borrowers and the Guarantors will furnish, or cause
to be furnished, to each of the Agents and the Lenders, such other
information regarding the business, properties, or financial condition
of any member of the Consolidated Group as any Agent or Lender,
through the Collateral Agent, may reasonably request.
(u) Notice to Collateral Agent. The Credit Parties shall,
subject to preservation of any otherwise available attorney-client
privilege or any other applicable Requirement of Law that prohibits
such disclosure (provided that the same was not implemented on the
application or required approval of the Credit Parties), give the
Collateral Agent prompt notice of all on-going, material developments
in the discussions and negotiations regarding the settlement of the
litigation and disputes listed in Part A of Schedule 1.1F, or any
other litigation or dispute not listed on Part A of Schedule 1.1F
arising out of the same or similar facts and circumstances, it being
understood that the foregoing includes, but shall in no way be limited
to, the entry into definitive settlement arrangements.
Section 7.2 Preservation of Existence and Franchises. Except as a
result of or in connection with a dissolution, merger, or disposition of a
Subsidiary permitted under Section 8.4 or Section 8.5, the Borrowers and the
Guarantors will, and will cause each of their respective Subsidiaries to, do
all things necessary to preserve and keep in full force and effect its
existence and all material rights, franchises, and authority.
Section 7.3 Books and Records. The Borrowers and the Guarantors will,
and will cause each of their respective Subsidiaries to, keep complete and
accurate books and records of its transactions in accordance with good
accounting practices on the basis of GAAP (including the establishment and
maintenance of appropriate reserves) and keep such books and records in a
location with fire, casualty, and theft protection satisfactory to the
Collateral Agent.
Section 7.4 Compliance with Law. The Borrowers and the Guarantors
will, and will cause each of their respective Subsidiaries to, comply with all
laws, rules, regulations, and orders, and all applicable restrictions imposed
by all Governmental Authorities, applicable to it and its Property if
noncompliance with any such law, rule, regulation, order, or restriction could
reasonably be expected to have a Material Adverse Effect.
Section 7.5 Payment of Taxes and Other Indebtedness. The Borrowers and
the Guarantors will, and will cause each of their respective Subsidiaries to,
pay and discharge (a) all taxes, assessments, and governmental charges or
levies imposed upon it, or upon its income or profits, or upon any of its
Properties, before they shall become delinquent and (b) all lawful claims
(including claims for labor, materials, and supplies) which, if unpaid, might
give rise to a Lien upon any of its Properties; provided, however, that no
member of the Consolidated Group shall be required to pay (y) any such tax,
assessment, charge, levy, claim, or Indebtedness which is being contested in
good faith by appropriate proceedings for which adequate reserves determined in
accordance with GAAP have been established, unless the failure to make any such
payment (i) could give rise to an immediate right to foreclose on a Lien
securing such amounts or (ii) could have a Material Adverse Effect or (z) rent
for any unopened or closed retail stores where no inventory or proceeds of
inventory is located so long as any Lien arising as a result of such
non-payment does not attach to any Property of the Consolidated Group that is
not on such leased premises.
Section 7.6 Insurance.
(a) The Borrowers and the Guarantors will, and will cause each
of their respective Subsidiaries to, at all times maintain in full
force and effect insurance (including worker's compensation insurance,
liability insurance, casualty insurance, flood insurance, and business
interruption insurance) in such amounts, covering such risks and
liabilities, and with such deductibles or self-insurance retentions as
are in accordance with normal industry practice (or as otherwise
required by the Collateral Documents). The Collateral Agent shall be
named as loss payee or mortgagee, as its interest may appear, and/or
additional insured with respect to any such insurance providing
coverage in respect of any Collateral, and each provider of any such
insurance shall agree, by endorsement upon the policy or policies
issued by it or by independent instruments furnished to the Collateral
Agent, that it will give the Collateral Agent thirty (30) days prior
written notice before any such policy or policies shall be altered or
canceled, and that no act or default of any member of the Consolidated
Group or any other Person shall affect the rights of the Collateral
Agent or the Lenders under such policy or policies. The present
insurance coverage of the members of the Consolidated Group is
outlined as to carrier, policy number, expiration date, type, and
amount on Schedule 7.6.
(b) The proceeds from insurance received from the theft, loss,
physical destruction or damage, taking, or similar event shall be used
either to repair, replace, or reinvest in the same or similar assets,
or, if not so applied, to prepay the Total Obligations as if such
theft, loss, physical destruction or damage, taking, or similar event
were an Asset Disposition.
Section 7.7 Maintenance of Property. The Borrowers and the Guarantors
will, and will cause each of their respective Subsidiaries to, maintain and
preserve its properties and equipment material to the conduct of its business
in good repair, working order, and condition, normal wear and tear and casualty
and condemnation excepted, and will make, or cause to be made, in such
properties and equipment from time to time all repairs, renewals, replacements,
extensions, additions, betterments, and improvements thereto as may be needed
or proper, to the extent and in the manner customary for companies in similar
businesses, except, as to any of the foregoing activities, where the activities
are not otherwise prohibited by hereunder.
Section 7.8 Performance of Obligations. Each of the Borrowers and each
of the Guarantors will, and will cause each of their respective Subsidiaries
to, perform in all material respects all of its obligations under the terms of
all material agreements, indentures, mortgages, security agreements, and other
debt instruments to which it is a party or by which it is bound except to the
extent that the failure to do so will not result in a Material Adverse Effect.
Section 7.9 Use of Proceeds. The Borrowers will use the proceeds of
Extensions of Credit solely for the purposes set forth in Section 6.15 and not
for prepayment of interest or payment or prepayment of principal of any
Subordinated Debt or for any other payments of Subordinated Debt which would
violate the terms of any subordination agreement applicable thereto.
Section 7.10 Audits/Inspections. Upon reasonable notice and during
normal business hours, the Borrowers and the Guarantors will, and will cause
each of their respective Subsidiaries to, permit representatives appointed by
any Agent, including, without limitation, independent accountants, agents,
attorneys, and appraisers (but not more frequently than is required by the
Security Agreements), to visit and inspect its property, including its books
and records, its accounts receivable and inventory, its facilities and its
other business assets, and to make photocopies or photographs thereof and to
write down and record any information such representative obtains and shall
permit such Agent or its representatives to investigate and verify the accuracy
of information provided to the Agents and the Lenders and to discuss all such
matters with the officers, employees, and representatives of such Person and
will cooperate fully with any such representatives or agents and provide
reasonable assistance in connection with preparation of any appraisal or report
to be prepared or delivered in connection therewith. The cost of such
inspections, audits, appraisals, and reports shall be at the expense of the
Borrowers as provided in this Agreement. The Lenders, and their representatives
may accompany any Agent and its representatives on any such inspection or audit
at their own expense. All information and reports prepared as a result of any
such audit or inspection by any Agent shall be provided to the other Agents and
the Lenders.
Section 7.11 Financial Covenants.
(a) Tier II Fixed Charge Coverage Ratio. The Fixed Charge
Coverage Ratio, determined for the Consolidated Group on a
Consolidated basis as of the last day of each Fiscal Quarter set forth
below for the preceding four (4) Fiscal Quarters ending as of such
date (provided that (a) for the Fiscal Quarters ending after the
Closing Date and before the first Anniversary Date, such calculation
shall be cumulative for the complete Fiscal Quarters elapsed since the
Closing Date) shall not be less than:
Fiscal Quarter Ending Ratio
--------------------- -----
---------------------------------------------------------
| January 1, 2005 | 2.1:1.0 |
|-----------------------------|---------------------------|
| April 2, 2005 | 1.2:1.0 |
|-----------------------------|---------------------------|
| July 2, 2005 | 0.8:1.0 |
|-----------------------------|---------------------------|
| October 1, 2005 | 0.8:1.0 |
|-----------------------------|---------------------------|
| December 31, 2005 | 0.9:1.0 |
|-----------------------------|---------------------------|
| April 1, 2006 | 1.1:1.0 |
|-----------------------------|---------------------------|
| July 1, 2006 | 1.2:1.0 |
|-----------------------------|---------------------------|
| September 30, 2006 | 1.2:1.0 |
----------------------------------------------------------
(b) Minimum December Sales.
(i) Tier I Minimum December Sales. The Borrowers and
the Guarantors shall cause the actual retail sales of the
Credit Parties in the Fiscal Period ending closest to December
31 of each year to be not less than (A) $118,700,000 for such
Fiscal Period in 2004, with the cash portion of such retail
sales to be not less than $66,900,000, (B) $125,900,000 for
such Fiscal Period in 2005, and (C) $127,200,000 for such
Fiscal Period in 2006.
(ii) Tier II Minimum December Sales. The Borrowers and
the Guarantors shall cause the actual retail sales of the
Credit Parties in the Fiscal Period ending closest to December
31 of each year to be not less than (A) $112,100,000 for such
Fiscal Period in 2004, with the cash portion of such retail
sales to be not less than $63,400,000, and (B) $119,300,000
for such Fiscal Period in 2005.
(c) Minimum Adjusted EBITDA.
(i) Tier I Minimum EBITDA. Consolidated EBITDA, as of
the last day of each Fiscal Period set forth below, beginning
with the Fiscal Period ending on October 30, 2004, for the
preceding twelve (12) Fiscal Periods ending as of such date
(provided that (a) for the Fiscal Period ending on October 30,
2004, and the following eleven Fiscal Periods, such
calculation shall be cumulative for the Fiscal Periods elapsed
since October 2, 2004) shall not be less than:
Fiscal Period Ending Consolidated EBITDA
-------------------- -------------------
-----------------------------------------------------------
| October 30, 2004 | ($4,600,000) |
| -----------------------------|--------------------------- |
| November 27, 2004 | ($6,500,000) |
| -----------------------------|--------------------------- |
| January 1, 2005 | $18,900,000 |
| -----------------------------|--------------------------- |
| January 29, 2005 | $15,700,000 |
| -----------------------------|--------------------------- |
| February 26, 2005 | $22,000,000 |
| -----------------------------|--------------------------- |
| April 2, 2005 | $20,400,000 |
| -----------------------------|--------------------------- |
| April 30, 2005 | $18,800,000 |
| -----------------------------|--------------------------- |
| May 28, 2005 | $20,200,000 |
| -----------------------------|--------------------------- |
| July 2, 2005 | $20,900,000 |
| -----------------------------|--------------------------- |
| July 30, 2005 | $19,500,000 |
| -----------------------------|--------------------------- |
| August 27, 2005 | $18,800,000 |
| -----------------------------|--------------------------- |
| October 1, 2005 | $18,800,000 |
| -----------------------------|----------------------------|
| October 29, 2005 | $17,700,000 |
| -----------------------------|----------------------------|
| November 26, 2005 | $19,500,000 |
| -----------------------------|----------------------------|
| December 31, 2005 | $22,800,000 |
| -----------------------------|----------------------------|
| January 28, 2006 | $23,100,000 |
| -----------------------------|----------------------------|
| February 25, 2006 | $24,200,000 |
| -----------------------------|----------------------------|
| April 1, 2006 | $24,800,000 |
| -----------------------------|----------------------------|
| April 29, 2006 | $25,000,000 |
| -----------------------------|----------------------------|
| May 27, 2006 | $25,300,000 |
| -----------------------------|----------------------------|
| July 1, 2006 | $25,500,000 |
| -----------------------------|----------------------------|
| July 29, 2006 | $25,600,000 |
| -----------------------------|----------------------------|
| August 26, 2006 | $25,700,000 |
| -----------------------------|----------------------------|
| September 30, 2006 | $26,300,000 |
| -----------------------------|----------------------------|
| October 28, 2006 | $26,300,000 |
| -----------------------------|----------------------------|
| November 25, 2006 | $26,300,000 |
| -----------------------------|----------------------------|
| December 30, 2006 | $26,800,000 |
| -----------------------------|----------------------------|
| January 27, 2007 | $26,700,000 |
| -----------------------------|----------------------------|
| February 24, 2007 | $26,900,000 |
| -----------------------------|----------------------------|
| March 31, 2007 | $26,900,000 |
| -----------------------------|----------------------------|
| April 28, 2007 | $27,000,000 |
| -----------------------------|----------------------------|
| May 26, 2007 | $27,000,000 |
| -----------------------------|----------------------------|
| June 30, 2007 | $27,100,000 |
| -----------------------------|----------------------------|
| July 28, 2007 | $27,200,000 |
| -----------------------------|----------------------------|
| August 25, 2007 | $26,900,000 |
-----------------------------------------------------------
(ii) Tier II Minimum EBITDA. Consolidated EBITDA, as of
the last day of each Fiscal Period, beginning with the Fiscal
Period ending on October 30, 2004, for the preceding twelve
(12) Fiscal Periods ending as of such date (provided that (a)
for the Fiscal Period ending on October 30, 2004, and the
following eleven Fiscal Periods, such calculation shall be
cumulative for the Fiscal Periods elapsed since October 2,
2004) shall not be less than:
Fiscal Period Ending Consolidated EBITDA
-------------------- -------------------
-------------------------------------------------------------
| October 30, 2004 | ($6,900,000) |
|-----------------------------|-----------------------------|
| November 27, 2004 | ($10,400,000) |
|-----------------------------|-----------------------------|
| January 1, 2005 | $15,400,000 |
|-----------------------------|-----------------------------|
| January 29, 2005 | $12,800,000 |
|-----------------------------|-----------------------------|
| February 26, 2005 | $17,900,000 |
|-----------------------------|-----------------------------|
| April 2, 2005 | $16,600,000 |
|-----------------------------|-----------------------------|
| April 30, 2005 | $15,300,000 |
|------------------------------|-----------------------------|
| May 28, 2005 | $16,400,000 |
|------------------------------|-----------------------------|
| July 2, 2005 | $17,000,000 |
|------------------------------|-----------------------------|
| July 30, 2005 | $15,900,000 |
|------------------------------|-----------------------------|
| August 27, 2005 | $15,300,000 |
|------------------------------|-----------------------------|
| October 1, 2005 | $15,300,000 |
|------------------------------|-----------------------------|
| October 29, 2005 | $13,000,000 |
|------------------------------|-----------------------------|
| November 26, 2005 | $14,000,000 |
|------------------------------|-----------------------------|
| December 31, 2005 | $18,700,000 |
|------------------------------|-----------------------------|
| January 28, 2006 | $19,000,000 |
|------------------------------|-----------------------------|
| February 25, 2006 | $20,000,000 |
|------------------------------|-----------------------------|
| April 1, 2006 | $21,900,000 |
|------------------------------|-----------------------------|
| April 29, 2006 | $22,000,000 |
|------------------------------|-----------------------------|
| May 27, 2006 | $22,300,000 |
|------------------------------|-----------------------------|
| July 1, 2006 | $22,500,000 |
| -----------------------------|------------------------------
| July 29, 2006 | $22,600,000 |
| -----------------------------|-----------------------------|
| August 26, 2006 | $22,700,000 |
| -----------------------------|-----------------------------|
| September 30, 2006 | $23,200,000 |
| -----------------------------|-----------------------------|
| October 28, 2006 | $23,200,000 |
| -----------------------------|-----------------------------|
| November 25, 2006 | $23,200,000 |
-----------------------------------------------------------
(d) Minimum Ratio of Accounts Payable to Inventory.
(i) Tier I Minimum Ratio of Accounts Payable to
Inventory. As of the end of each Fiscal Period set forth
below, the Credit Parties shall maintain a ratio, expressed as
a percentage, of Accounts Payable to inventory of at least the
ratio set forth opposite such Fiscal Period below:
Fiscal Period Ending Amount
-------------------- ------
-------------------------------------------------------------
| October 30, 2004 | 52.6% |
| -----------------------------|-----------------------------|
| November 27, 2004 | 47.9% |
| -----------------------------|-----------------------------|
| January 1, 2005 | 46.0% |
| -----------------------------|-----------------------------|
| January 29, 2005 | 43.5% |
| -----------------------------|-----------------------------|
| February 26, 2005 | 36.3% |
| -----------------------------|-----------------------------|
| April 2, 2005 | 36.8% |
| -----------------------------|-----------------------------|
| April 30, 2005 | 34.8% |
| -----------------------------|-----------------------------|
| May 28, 2005 | 33.1% |
| -----------------------------|-----------------------------|
| July 2, 2005 | 31.5% |
| -----------------------------|-----------------------------|
| July 30, 2005 | 31.6% |
| -----------------------------|-----------------------------|
| August 27, 2005 | 30.2% |
| -----------------------------|-----------------------------|
| October 1, 2005 | 30.4% |
| -----------------------------|-----------------------------|
| October 29, 2005 | 44.9% |
| -----------------------------|-----------------------------|
| November 26, 2005 | 48.3% |
| -----------------------------|-----------------------------|
| December 31, 2005 | 36.4% |
| -----------------------------|-----------------------------|
| January 28, 2006 | 34.4% |
| -----------------------------|-----------------------------|
| February 25, 2006 | 26.7% |
| -----------------------------|-----------------------------|
| April 1, 2006 | 27.2% |
| -----------------------------|-----------------------------|
| April 29, 2006 | 25.3% |
| -----------------------------|-----------------------------|
| May 27, 2006 | 23.2% |
| -----------------------------|-----------------------------|
| July 1, 2006 | 21.6% |
| -----------------------------|-----------------------------|
| July 29, 2006 | 21.9% |
| -----------------------------|-----------------------------|
| August 26, 2006 | 20.4% |
| -----------------------------|-----------------------------|
| September 30, 2006 | 20.5% |
| -----------------------------|-----------------------------|
| October 28, 2006 | 37.0% |
| -----------------------------|-----------------------------|
| November 25, 2006 | 40.5% |
| -----------------------------|-----------------------------|
| December 30, 2006 | 37.1% |
| -----------------------------|-----------------------------|
| January 27, 2007 | 35.1% |
| -----------------------------|-----------------------------|
| February 24, 2007 | 27.5% |
| -----------------------------|-----------------------------|
| March 31, 2007 | 27.9% |
| -----------------------------|-----------------------------|
| April 28, 2007 | 25.9% |
| -----------------------------|-----------------------------|
| May 26, 2007 | 23.8% |
| -----------------------------|-----------------------------|
| June 30, 2007 | 22.3% |
| -----------------------------|-----------------------------|
| July 28, 2007 | 22.6% |
| -----------------------------|-----------------------------|
| August 25, 2007 | 21.0% |
------------------------------------------------------------
(ii) Tier II Minimum Ratio of Accounts Payable to
Inventory. As of the end of each Fiscal Period set forth
below, the Credit Parties shall maintain a ratio, expressed as
a percentage, of Accounts Payable to inventory of at least the
ratio set forth opposite such Fiscal Period below:
Fiscal Period Ending Amount
-------------------- ------
-------------------------------------------------------------
| October 30, 2004 | 49.1% |
| -----------------------------|-----------------------------|
| November 27, 2004 | 44.4% |
| -----------------------------|-----------------------------|
| January 1, 2005 | 42.0% |
| -----------------------------|-----------------------------|
| January 29, 2005 | 40.2% |
| -----------------------------|-----------------------------|
| February 26, 2005 | 33.0% |
| -----------------------------|-----------------------------|
| April 2, 1005 | 33.5% |
| -----------------------------|-----------------------------|
| April 30, 2005 | 31.5% |
| -----------------------------|-----------------------------|
| May 28, 2005 | 29.8% |
| -----------------------------|-----------------------------|
| July 2, 2005 | 28.2% |
| -----------------------------|-----------------------------|
| July 30, 2005 | 28.3% |
| -----------------------------|-----------------------------|
| August 27, 2005 | 26.9% |
| -----------------------------|-----------------------------|
| October 1, 2005 | 27.1% |
| -----------------------------|-----------------------------|
| October 29, 2005 | 41.4% |
| -----------------------------|-----------------------------|
| November 26, 2005 | 44.8% |
| -----------------------------|-----------------------------|
| December 31, 2005 | 32.4% |
| -----------------------------|-----------------------------|
| January 28, 2006 | 31.1% |
| -----------------------------|-----------------------------|
| February 25, 2006 | 23.4% |
| -----------------------------|-----------------------------|
| April 1, 2006 | 23.9% |
| -----------------------------|-----------------------------|
| April 29, 2006 | 22.0% |
| -----------------------------|-----------------------------|
| May 27, 2006 | 19.9% |
| -----------------------------|-----------------------------|
| July 1, 2006 | 18.3% |
| -----------------------------|-----------------------------|
| July 29, 2006 | 18.6% |
| -----------------------------|-----------------------------|
| August 26, 2006 | 17.1% |
| -----------------------------|-----------------------------|
| September 30, 2006 | 17.2% |
| -----------------------------|-----------------------------|
| October 28, 2006 | 33.5% |
| -----------------------------|-----------------------------|
| November 25, 2006 | 37.0% |
-------------------------------------------------------------
(e) Minimum Ratio of Installment Contract Collections to
Installment Contracts.
(i) Tier I Minimum Ratio of Installment Contract
Collections to Installment Contracts. The Credit Parties shall
maintain, at the end of each Fiscal Period set forth below, a
ratio, expressed as a percentage, of aggregate payments
received on account of Installment Contract collections during
such Fiscal Period and the immediately preceding Fiscal Period
to the Gross Installment Contract Amount for the same two
Fiscal Periods of not less than the ratio set forth below:
Fiscal Period Ending Amount
-------------------- ------
------------------------------------------------------------
| October 1, 2004 | 19.7% |
| -----------------------------|-----------------------------|
| October 30, 2004 | 22.3% |
| -----------------------------|-----------------------------|
| November 27, 2004 | 19.0% |
| -----------------------------|-----------------------------|
| January 1, 2005 | 18.1% |
| -----------------------------|-----------------------------|
| January 29, 2005 | 19.3% |
| -----------------------------|-----------------------------|
| February 26, 2005 | 23.3% |
| -----------------------------|-----------------------------|
| April 2, 1005 | 27.4% |
| -----------------------------|-----------------------------|
| April 30, 2005 | 25.2% |
| -----------------------------|-----------------------------|
| May 28, 2005 | 20.3% |
| -----------------------------|-----------------------------|
| July 2, 2005 | 20.6% |
| -----------------------------|-----------------------------|
| July 30, 2005 | 20.6% |
| -----------------------------|-----------------------------|
| August 27, 2005 | 20.1% |
| -----------------------------|-----------------------------|
| October 1, 2005 | 21.6% |
| -----------------------------|-----------------------------|
| October 29, 2005 | 21.1% |
| -----------------------------|-----------------------------|
| November 26, 2005 | 18.9% |
| -----------------------------|-----------------------------|
| December 31, 2005 | 18.1% |
| -----------------------------|-----------------------------|
| January 28, 2006 | 19.6% |
| -----------------------------|-----------------------------|
| February 25, 2006 | 23.8% |
| -----------------------------|-----------------------------|
| April 1, 2006 | 27.8% |
| -----------------------------|-----------------------------|
| April 29, 2006 | 25.3% |
| -----------------------------|-----------------------------|
| May 27, 2006 | 20.3% |
| -----------------------------|-----------------------------|
| July 1, 2006 | 20.6% |
| -----------------------------|-----------------------------|
| July 29, 2006 | 20.6% |
| -----------------------------|-----------------------------|
| August 26, 2006 | 20.1% |
| -----------------------------|-----------------------------|
| September 30, 2006 | 21.6% |
| -----------------------------|-----------------------------|
| October 28, 2006 | 21.1% |
| -----------------------------|-----------------------------|
| November 25, 2006 | 18.9% |
| -----------------------------|-----------------------------|
| December 30, 2006 | 18.1% |
| -----------------------------|-----------------------------|
| January 27, 2007 | 19.6% |
| -----------------------------|-----------------------------|
| February 24, 2007 | 23.8% |
| -----------------------------|-----------------------------|
| March 31, 2007 | 27.8% |
| -----------------------------|-----------------------------|
| April 28, 2007 | 25.3% |
| -----------------------------|-----------------------------|
| May 26, 2007 | 20.3% |
| -----------------------------|-----------------------------|
| June 30, 2007 | 20.6% |
| -----------------------------|-----------------------------|
| July 28, 2007 | 20.6% |
| -----------------------------|-----------------------------|
| August 25, 2007 | 20.1% |
------------------------------------------------------------
(ii) Tier II Minimum Ratio of Installment Contract
Collections to Installment Contracts. The Credit Parties shall
maintain, at the end of each Fiscal Period set forth below, a
ratio, expressed as a percentage, of aggregate payments
received on account of Installment Contract collections during
such Fiscal Period and the immediately preceding Fiscal Period
to the Gross Installment Contract Amount for the same two
Fiscal Periods of not less than the ratio set forth below:
Fiscal Period Ending Amount
-------------------- ------
-----------------------------------------------------------
| October 1, 2004 | 17.9% |
| -----------------------------| ----------------------------|
| October 30, 2004 | 20.5% |
| -----------------------------| ----------------------------|
| November 27, 2004 | 17.2% |
| -----------------------------| ----------------------------|
| January 1, 2005 | 16.3% |
| -----------------------------| ----------------------------|
| January 29, 2005 | 17.5% |
| -----------------------------| ----------------------------|
| February 26, 2005 | 21.5% |
| -----------------------------| ----------------------------|
| April 2, 1005 | 25.6% |
| -----------------------------| ----------------------------|
| April 30, 2005 | 23.4% |
| -----------------------------| ----------------------------|
| May 28, 2005 | 18.5% |
| -----------------------------| ----------------------------|
| July 2, 2005 | 18.8% |
| -----------------------------| ----------------------------|
| July 30, 2005 | 18.8% |
| -----------------------------| ----------------------------|
| August 27, 2005 | 18.3% |
| -----------------------------| ----------------------------|
| October 1, 2005 | 19.8% |
| -----------------------------| ----------------------------|
| October 29, 2005 | 19.3% |
| -----------------------------| ----------------------------|
| November 26, 2005 | 17.1% |
| -----------------------------| ----------------------------|
| December 31, 2005 | 16.3% |
| -----------------------------| ----------------------------|
| January 28, 2006 | 17.8% |
| -----------------------------| ----------------------------|
| February 25, 2006 | 22.0% |
| -----------------------------| ----------------------------|
| April 1, 2006 | 26.0% |
| -----------------------------| ----------------------------|
| April 29, 2006 | 23.5% |
| -----------------------------| ----------------------------|
| May 27, 2006 | 18.5% |
| -----------------------------| ----------------------------|
| July 1, 2006 | 18.8% |
| ----------------------------| ----------------------------|
| July 29, 2006 | 18.8% |
| -----------------------------| ----------------------------|
| August 26, 2006 | 18.3% |
| -----------------------------| ----------------------------|
| September 30, 2006 | 19.8% |
| -----------------------------| ----------------------------|
| October 28, 2006 | 19.3% |
| -----------------------------|-----------------------------|
| November 25, 2006 | 17.1% |
-----------------------------------------------------------
(f) Capital Expenditures.
(i) Tier I Capital Expenditures. As of the end of each
Fiscal Period, the Credit Parties shall not have made, or have
permitted any of their Subsidiaries to have made, any Capital
Expenditures that would cause the aggregate of all such
Capital Expenditures made by the Credit Parties and their
Subsidiaries to exceed the amount set forth below for the
applicable period below:
-----------------------------------------------------------
| Period | Amount |
|---------------------------------------|-------------------|
| From the Closing Date through | |
| October 1, 2005 | $6,000,000 |
|---------------------------------------|-------------------|
| From the Closing Date | |
| through October 1, 2006 | $12,000,000 |
|---------------------------------------|-------------------|
| From the Closing Date through | |
| October 1, 2007 | $18,000,000 |
-----------------------------------------------------------
(ii) Tier II Capital Expenditures. As of the end of each Fiscal
Period, the Credit Parties shall not have made, or have
permitted any of their Subsidiaries to have made, any Capital
Expenditures that would cause the aggregate of all such
Capital Expenditures made by the Credit Parties and their
Subsidiaries to exceed the amount set forth below for the
applicable period below:
-----------------------------------------------------------
| Period | Amount |
|---------------------------------------|-------------------|
| From the Closing Date through | |
| October 1, 2005 | $7,500,000 |
|---------------------------------------|-------------------|
| From the Closing Date | |
| through October 1, 2006 | $15,000,000 |
|---------------------------------------|-------------------|
| From the Closing Date through | |
| October 1, 2007 | $22,500,000 |
-----------------------------------------------------------
Section 7.12 New Subsidiaries; Addition of Subsidiaries as Borrowers
and Guarantors. Promptly upon creation or acquisition of any Subsidiary by a
Credit Party, other than any Subsidiary which is organized under Requirements
of Law of a jurisdiction other than the United States or a state of the United
States, the Credit Parties shall propose to the Agents that such new Subsidiary
become, and with the Required Lenders' consent pursuant to Section 13.20, cause
such Subsidiary to become either a Borrower and a Guarantor or a Guarantor (but
not a Borrower) under the Credit Documents. Any Subsidiary which must be added
as either a Borrower or a Guarantor (but not a Borrower) as provided in this
Section 7.12, shall promptly execute and deliver a joinder agreement, all items
of the type required by Section 5.1 (as applicable) as if such Subsidiary was a
Credit Party on the Closing Date, and such other Credit Documents as the
Collateral Agent may reasonably require.
Section 7.13 Guaranties of the Obligations. Each Credit Party,
including any Person which becomes a Borrower or a Guarantor after the Closing
Date pursuant to the terms of this Agreement, shall guarantee payment and
performance of the Total Obligations (other than such Total Obligations owing
by itself) pursuant to a Guaranty Agreement in form and substance satisfactory
to the Collateral Agent, duly executed or joined in (as applicable) by each
such Credit Party. Each Borrower acknowledges and expressly agrees with each
Agent and each Lender that the guaranty by such Borrower is required solely as
a condition to, and is given solely as inducement for and in consideration of,
credit or accommodations extended or to be extended under the Credit Documents
to any or all of the other Borrowers and is not required or given as a
condition of extensions of credit to such Borrower.
Section 7.14 Additional Collateral; Further Assurances.
(a) Subject to Requirements of Law, each Credit Party shall
cause any Subsidiary of ▇▇▇▇▇▇▇▇'▇ which is required to become a
Credit Party pursuant to the terms of this Agreement to, upon the
request of any Agent (i) grant Liens to the Collateral Agent, for the
benefit of the Agents and the Lenders, pursuant to such documents as
the Collateral Agent may reasonably deem necessary and deliver such
property, documents, and instruments as the Collateral Agent may
request to perfect the Liens of the Collateral Agent in the Collateral
of such Subsidiary, (ii) execute a Guaranty Agreement with respect to
the Total Obligations (excluding the Total Obligations of such Credit
Party) pursuant to Section 7.13, in form and substance satisfactory to
the Collateral Agent, and (iii) in connection with the foregoing
requirements, or either of them, deliver to the Collateral Agent all
items of the type required by Section 5.1(a) (as applicable). Upon
execution and delivery of such Credit Documents and other instruments,
certificates, and agreements, such Subsidiary shall automatically
become a Borrower and a Guarantor, or a Guarantor (but not a
Borrower), as applicable, hereunder and thereupon shall have all of
the rights, benefits, duties, and obligations in such capacity under
the Credit Documents.
(b) Without limiting the foregoing, each Credit Party shall,
and shall cause each of ▇▇▇▇▇▇▇▇'▇ Subsidiaries which is required to
become a Credit Party pursuant to the terms of this Agreement to,
execute and deliver, or cause to be executed and delivered, to the
Collateral Agent such documents and agreements, and shall take or
cause to be taken such actions as the Collateral Agent may, from time
to time, reasonably request to carry out the terms and conditions of
this Agreement and the other Credit Documents.
(c) Upon any Agent's request, each Credit Party will deliver
to the Collateral Agent the following with respect to each parcel of
Real Property owned by any Credit Party:
(i) a Mortgage in proper form for recording in the
jurisdiction in which such Real Property covered thereby is
located;
(ii) ALTA or other mortgagee's policies, in form and
substance satisfactory to the Collateral Agent, with respect
to the Real Property subject to the Mortgages;
(iii) an environmental site assessment, in compliance
with applicable Requirements of Law prepared by a credentialed
environmental consultant acceptable to the Collateral Agent;
(iv) a boundary survey prepared and certified to the
Collateral Agent by a credentialed surveyor acceptable to the
Collateral Agent; and
(v) such other information, documentation, and
certifications, in form and substance satisfactory to the
Collateral Agent, as may be reasonably requested by the
Collateral Agent;
provided that with respect to any parcel of Real Property owned by a
Credit Party which is subject to a Lien on the Closing Date, delivery
of the items required by clause (i) through clause (v) preceding may
be deferred until such Credit Party, using commercially reasonable
efforts, has obtained consent of the holders of such Liens and any
other consent required by any agreement in effect on the Closing Date
with respect to such Real Property.
Section 7.15 Landlord and Mortgagee Agreements. The Credit Parties
will provide to the Collateral Agent upon the request of any Agent, a
landlord's or mortgagee's waiver and consent agreement or subordination and
consent agreement, in form and substance reasonably acceptable to the
Collateral Agent, duly executed on behalf of each landlord or mortgagee, as the
case may be, of Real Property on which any Eligible Inventory or Eligible
Installment Contracts is located, with respect to any location which is not a
retail location; provided that the Collateral Agent may, in its discretion,
defer or waive delivery of any such waiver and consent agreement or
subordination and consent agreement and establish a Reserve with respect to any
Collateral located on any such Real Property for which the Collateral Agent has
not received such acceptable waiver and consent agreement or subordination and
consent agreement; provided, further, that in the event the Credit Parties,
after use of commercially reasonable efforts, are unable to obtain any such
waiver and consent agreement or subordination and consent agreement, the
Agents' and the Lenders' sole remedy in connection therewith shall be to
establish a Reserve with respect to such location. With respect to all retail
locations, the Credit Parties may provide a landlord's or mortgagee's waiver
and consent agreement or subordination and consent agreement, in form and
substance reasonably acceptable to the Collateral Agent, duly executed on
behalf of each landlord or mortgagee, as the case may be, and that in the event
the Credit Parties provide any such landlord's or mortgagee's waiver and
consent agreement or subordination and consent agreement, the Collateral Agents
will not establish a rent Reserve with respect to such location.
Section 7.16 Bank as Depository. Each of the Credit Parties shall
maintain Bank of America as its principal depository bank, including for the
maintenance of operating, administrative, cash management, collection activity,
and other deposit accounts for the conduct of its business.
Section 7.17 Implementation of New Computer Systems. The Credit
Parties will implement a new point-of-sale computer-based management
information and accounting systems substantially conforming to the systems
described by the Borrowers in writing to the Agents and the Lenders in
accordance with Schedule 7.17.
Section 7.18 Term Lender Expert. The Borrowers agree that, at the
expense of the Credit Parties (all such costs and expenses to be reasonable and
documented), the Term Agent may in its sole discretion select and retain an
expert satisfactory to the Term Agent to evaluate the credit extension and
collection functions and policies of the Borrowers, the Guarantors, and their
Subsidiaries. The Credit Parties shall provide such expert full access to such
premises, records, information and personnel of the Credit Parties (during
normal business hours and on reasonable notice, but not more frequently than
quarterly unless a Default or an Event of Default exists) as such expert may
reasonably request to enable it to properly evaluate the Credit Parties' credit
extension and collection functions. The Term Agent shall promptly provide a
copy of each report prepared by such expert to ▇▇▇▇▇▇▇▇'▇, the Collateral
Agent, and the Revolving Agent.
Section 7.19 Distributions among Borrower and Guarantors. The Credit
Parties and FILLC will cause any cash proceeds of dividends, redemptions,
collections, interest payments or cash proceeds of the sale or other
disposition of the Series A Preferred Stock referred to in the Subordination
Agreement, the Junior Notes referred to in the Subordination Agreement and the
$1,651,393 Note delivered to FILLC as part of the Reorganization and all
partnership distributions from Stores to FILLC to be distributed or otherwise
contributed by FILLC immediately to FBI, by FBI immediately to FHC, by FHC
immediately to FMC and by FMC immediately to ▇▇▇▇▇▇▇▇'▇; provided, however,
that this requirement shall not permit any payment or other action prohibited
by the Subordination Agreement, Section 8.7, or otherwise. The Credit Parties
and FMC will cause all partnership distributions from FFP to FMC to be
distributed or otherwise contributed by FMC immediately to ▇▇▇▇▇▇▇▇'▇;
provided, however, that this requirement shall not permit any payment or other
action prohibited by Section 8.7 or otherwise.
Section 7.20 4-Wall Profitability Analysis. The Borrowers shall
conduct a store rationalization 4-wall profitability analysis once during each
Fiscal Quarter and deliver the results of such analysis to the Agents and the
Lenders on or before September 30, 2004, and on or before the end of each
Fiscal Quarter thereafter and provide a report of the results of such analysis,
in form reasonably acceptable to the to the Agents on or before September 30 of
each calendar year. The analysis conducted pursuant to this Section shall
include, but not be limited to, a year-over-year store contribution plan by
month and by year-to-date, by store and by region.
Section 7.21 Chief Restructuring Officer.
(a) ▇▇▇▇▇▇▇▇'▇ shall retain the services of a "chief
restructuring officer" or other similar personnel, such officer's or
personnel's engagement to be in form and scope and on terms and
conditions satisfactory to the Required Lenders, until the first such
date, which shall be no earlier than January 31, 2005, unless the
Collateral Agent shall otherwise agree, as of which each of the
following conditions is satisfied: (i) ▇▇▇▇▇▇▇▇'▇ has had a chief
financial officer and controller for at least 45 consecutive days
prior to such date, (ii) the Term Agent and the Revolving Agent are
satisfied in their reasonable discretion that the Credit Parties are
reliably providing financial and collateral reports as contemplated by
this Agreement, and (iii) no Default or Event of Default exists and is
continuing as of such date.
(b) For purposes of this Section 7.21 only, the engagement of
KZC Services, LLC as of the Closing Date is in form and scope and on
terms and conditions satisfactory to the Lenders.
ARTICLE 8
NEGATIVE COVENANTS
------------------
The Borrowers and the Guarantors hereby covenant and agree that so
long as this Agreement is in effect or any amounts payable hereunder or under
any other Credit Document shall remain outstanding or any Letter of Credit is
outstanding, and until all of the Commitments hereunder shall have terminated:
Section 8.1 Indebtedness. The Borrowers and the Guarantors will not
permit any member of the Consolidated Group to contract, create, incur, assume,
or permit to exist any Indebtedness, except:
(a) Indebtedness existing or arising under this Agreement or
the other Credit Documents;
(b) Indebtedness of the Borrowers and their Subsidiaries set
forth on Schedule 8.1, and renewals, refinancings, and extensions
thereof on terms and conditions which, taken as a whole, are no less
favorable to such Person than such existing Indebtedness;
(c) purchase money Indebtedness (including for purposes hereof
obligations in respect of Capital Leases or Synthetic Leases)
hereafter incurred by the Borrowers or any of their Subsidiaries to
finance the purchase of fixed assets and any refinancing thereof;
provided that (i) the total of all such Indebtedness for the Borrowers
and their Subsidiaries taken together shall not exceed an aggregate
principal amount of $5,000,000 at any one time outstanding, (ii) such
Indebtedness when incurred shall not exceed the purchase price of the
asset(s) financed, and (iii) no such Indebtedness shall be refinanced
for a principal amount in excess of the principal balance outstanding
thereon at the time of such refinancing;
(d) obligations of the Borrowers or their Subsidiaries owing
under interest rate, commodities, and foreign currency exchange
protection agreements entered into in the ordinary course of business
to manage existing or anticipated risks and not for speculative
purposes;
(e) unsecured intercompany Indebtedness owing by a member of
the Consolidated Group to another member of the Consolidated Group
(subject, however, to the limitations of Section 8.6 in the case of
the member of the Consolidated Group extending the loan, advance, or
credit);
(f) Support Obligations given by members of the Consolidated
Group with respect to any Indebtedness permitted under this Section
8.1;
(g) Indebtedness (if any) under the Vendor Documents;
(h) Indebtedness acquired or assumed in connection with a
Permitted Acquisition (including any holdback note or deferral of a
portion of the purchase price (including earn-out payments)); and
(i) other unsecured Indebtedness of the Borrowers and their
Subsidiaries in an aggregate outstanding principal amount of up to
$2,500,000 at any time.
Section 8.2 Liens. The Borrowers and the Guarantors will not permit
any member of the Consolidated Group to contract, create, incur, assume, or
permit to exist any Lien with respect to any of its Property, whether now owned
or hereafter acquired, except for Permitted Liens.
Section 8.3 Nature of Business. The Borrowers and the Guarantors will
not permit any member of the Consolidated Group to substantively alter the
character or conduct of the business conducted by such Person as of the Closing
Date and any business ancillary or complimentary thereto.
Section 8.4 Merger and Consolidation, Dissolution, and Acquisitions.
(a) No member of the Consolidated Group will enter into any
transaction of merger or consolidation, except that:
(i) any member of the Consolidated Group may be a party
to a transaction of merger or consolidation with another
member of the Consolidated Group; provided that (A) if
▇▇▇▇▇▇▇▇'▇ is a party to such transaction, it shall be the
surviving entity and (B) in any event, and without limiting
clause (A) preceding, the surviving entity (if not ▇▇▇▇▇▇▇▇'▇)
shall be a Domestic Subsidiary of ▇▇▇▇▇▇▇▇'▇ and, if the
survivor is not already a Credit Party, it shall execute and
deliver such Credit Documents as may be necessary for
compliance with the provisions of Section 7.12 and Section
7.13;
(ii) any member of the Consolidated Group which is not
Borrower may enter into a transaction of merger or
consolidation in connection with an Asset Disposition
permitted under Section 8.5; and
(iii) Cougar and any Domestic Subsidiary of a Borrower
may be a party to a transaction of merger or consolidation
with a Person other than a member of the Consolidated Group,
provided that (A) the surviving Person shall be Cougar or a
wholly-owned Domestic Subsidiary of a Borrower, as applicable,
and the provisions of Section 7.12, Section 7.13, and Section
7.14 shall have been complied with and (B) such transaction
shall otherwise constitute a Permitted Acquisition.
(b) No member of the Consolidated Group may dissolve,
liquidate, or wind up its affairs, other than any such member that is
not a Borrower and whose assets are transferred to a Credit Party in
an Asset Disposition allowed by Section 8.5.
(c) No member of the Consolidated Group shall make any
Acquisition (except for Permitted Investments, Permitted Acquisitions,
or as otherwise expressly permitted by the provisions of clause (a)
preceding), without the prior written consent of the Required Lenders.
Section 8.5 Asset Dispositions. The Borrowers and the Guarantors will
not permit any member of the Consolidated Group to make any Asset Disposition
(including, without limitation, any Sale and Leaseback Transaction), unless:
(a) the sale, lease, or other disposition is to a Borrower;
(b) the sale, lease, or other disposition is by a Credit Party
other than a Borrower, to another Credit Party;
(c) such Asset Disposition is in connection with the closing
of retail store locations of a Borrower in the ordinary course of
business; provided that the Borrowers will not close more than
seventy-five (75) retail store locations in any twelve (12)
consecutive Fiscal Periods occurring after the Closing Date; and
provided, further that the Borrowers shall not undertake to close ten
(10) or more retail store locations concurrently unless it shall
either (i) deliver to the Collateral Agent a plan for such closures in
form and substance reasonably satisfactory to the Collateral Agent no
less than fifteen (15) days prior to beginning such undertaking, or
(ii) engage a nationally recognized liquidator;
(d) such Asset Disposition is the result of theft, loss,
physical destruction, or damage, taking or similar event with respect
to the assets subject to such Asset Disposition and the proceeds from
insurance resulting from such Asset Disposition are used to repair,
replace, or reinvest in the same or similar assets;
(e) in all other cases, (i) no accounts or Installment
Contracts will be the subject of any such sale, except in compliance
with clause (f) following, (ii) any Eligible Inventory sold in
connection with any such sale shall be sold for cash at least equal to
an amount equal to such Eligible Inventory multiplied by 0.55, (iii)
at least ninety-five percent (95.0%) of the consideration paid
therefor shall consist of cash, Cash Equivalents, and Eligible
Inventory, (iv) if the subject transaction involves Capital Stock of a
Subsidiary of a Borrower, the subject transaction is of a controlling
interest in such Subsidiary, (v) the aggregate net book value of all
assets sold, leased, or otherwise disposed of shall not exceed
$5,000,000 in any Fiscal Year of ▇▇▇▇▇▇▇▇'▇, (vi) no Default or Event
of Default shall exist immediately after giving effect thereto, and
(vii) the Borrowers shall have demonstrated compliance with the
financial covenants in Section 7.11 on a Pro Forma Basis after giving
effect to the disposition and shall have delivered to the Agents and
the Lenders a Pro Forma Compliance Certificate (including
reaffirmation of the representations and warranties hereunder as of
such date before and after giving effect to such transaction) in
connection therewith;
(f) the assets sold consist of Installment Contracts which
have been written-off in accordance with the applicable Borrower's
credit policies and which are sold in a transaction consistent with
such Borrower's customary business practices after (i) if no Default
or Event of Default exists at the time of such sale, prior written
notice of such sale to the Collateral Agent and (ii) if any Default or
Event of Default exists at the time of such sale, prior written
approval of the Collateral Agent. All proceeds of any sale pursuant to
this Section shall be delivered to the Collateral Agent in accordance
with the applicable Security Agreement and applied to the outstanding
Total Obligations; or
(g) such Asset Disposition involves (i) disposition of any
Investment in, or other claims against, Crescent (including, without
limitation, Capital Stock of Crescent), or (ii) disposition of leases
for unopened or closed stores.
With respect to any assets subject to a disposition permitted by this Section
8.5, at the Borrowers' expense, the Collateral Agent will promptly deliver to
the Borrowers upon request such release documentation (including delivery of
applicable stock certificates) as may be reasonably requested to give effect to
the release of such assets from the security interests securing the Borrowers'
obligations hereunder.
Section 8.6 Investments. The Borrowers and the Guarantors will not
permit any member of the Consolidated Group to make or permit to exist any
Investment in or to any Person, except for Permitted Investments; provided that
no member of the Consolidated Group may make any Investment (including any
Investment which is of a type included in the definition of Permitted
Investments) in any Person which owns or controls ▇▇▇▇▇▇▇▇'▇.
Section 8.7 Restricted Payments. Neither any Borrower, nor any
Guarantor, will make any Restricted Payment except for Permitted Distributions.
Section 8.8 Modifications and Payments in Respect of Other Funded
Debt. None of the members of the Consolidated Group will:
(a) after the issuance thereof, amend or modify (or permit the
amendment or modification of) the terms of any Subordinated Debt or
modify the terms of the standstill provisions under the Vendor
Documents in a manner adverse to the interests of the Lenders
(including specifically any amendment of the terms of subordination,
shortening any maturity or average life to maturity or requiring any
payment sooner than previously scheduled or increasing the interest
rate or fees applicable thereto) or in a manner prohibited by the
subordination provisions thereof; or
(b) make any prepayment, redemption, defeasance, or
acquisition for value of (including, without limitation, by way of
depositing money or securities with the trustee with respect thereto
before due for the purpose of paying when due), or refund, refinance,
or exchange of any Funded Debt (other than the Indebtedness under this
Agreement and the other Credit Documents, intercompany Indebtedness
permitted hereunder, and any Indebtedness under the Vendor Financing
Program permitted by Section 8.19) other than regularly scheduled
payments of principal and interest on such Funded Debt or payment made
with equity securities of ▇▇▇▇▇▇▇▇'▇, except in connection with a
refinancing or refunding permitted hereunder.
Section 8.9 Transactions with Affiliates. The Borrowers and the
Guarantors will not permit any member of the Consolidated Group to enter into
or permit to exist any transaction or series of transactions with any officer,
director, shareholder, Subsidiary, or Affiliate of such Person other than (a)
advances of working capital to any Borrower, (b) transfers of other assets to
any Borrower or from any Credit Party which is not a Borrower to any other
Credit Party, (c) transactions permitted by Section 8.1, Section 8.4, Section
8.5, Section 8.6, or Section 8.7, (d) normal compensation and reimbursement of
expenses of current and former officers and directors; (e) the transactions
entered into prior to the Closing Date and set forth on Schedule 8.9 (provided
▇▇▇▇▇▇▇▇'▇ shall undertake no further activities in respect of the joint
venture with Crescent referred to in such Schedule, other than activities
relating to the winding down of such joint venture), (f) compensation and
reimbursement of expenses of any restructuring officer, and (g) except as
otherwise specifically limited in this Agreement, other transactions which are
entered into on terms and conditions substantially as favorable to such Person
as would be obtainable by it in a comparable arms-length transaction with a
Person other than an officer, director, shareholder, Subsidiary, or Affiliate.
Notwithstanding the foregoing, but without otherwise limiting the foregoing,
except for a Crescent Investment Restructuring Transaction and transactions
otherwise permitted by this Agreement between any Credit Party and any Crescent
Party, no Credit Party may enter into any transaction with the holders of the
▇▇▇▇▇▇▇▇'▇ Class B shares of Capital Stock or any other Person outside of the
Consolidated Group that is controlled by the holders of such Class B shares
(excluding any transaction not involving a transfer of cash or other Property
(other than Capital Stock of ▇▇▇▇▇▇▇▇'▇) to such owner).
Section 8.10 Fiscal Year; Organizational Documents. Without the prior
written consent of the Required Lenders (which consent shall not be
unreasonably withheld), the Credit Parties will not permit any member of the
Consolidated Group to amend, modify, or change (a) the last day of its Fiscal
Year or (b) its articles of incorporation (or corporate charter, trust
agreement, or other similar organizational document) or bylaws (or other
similar document) other than in a manner which does not adversely affect the
rights of the Agents or the Lenders.
Section 8.11 Ownership of Subsidiaries. Notwithstanding any other
provision of this Agreement to the contrary, the Borrowers and the Guarantors
will not permit any member of the Consolidated Group to (a) permit any Person
other than a Borrower or any Wholly Owned Subsidiary of a Borrower to own any
Capital Stock of any Subsidiary of a Borrower, except (i) as in existence on
the Closing Date, (ii) to qualify directors where required by applicable law or
to satisfy other requirements of applicable law with respect to the ownership
of Capital Stock of Foreign Subsidiaries, or (iii) as a result of or in
connection with a dissolution, merger, consolidation, or disposition of a
Subsidiary permitted under Section 8.4 or Section 8.5, (b) permit any
Subsidiary of a Borrower to issue any shares of preferred Capital Stock, or (c)
permit, create, incur, assume, or suffer to exist any Lien on any Capital Stock
of any Subsidiary of a Borrower, except for Permitted Liens.
Section 8.12 No Further Negative Pledges. The Borrowers and the
Guarantors will not permit any member of the Consolidated Group to enter into,
assume, or become subject to any agreement prohibiting or otherwise restricting
the creation or assumption of any Lien upon its properties or assets, whether
now owned or hereafter acquired, or requiring the grant of any security for any
obligation if security is given for any other obligation, except (a) pursuant
to or as otherwise expressly permitted by this Agreement and the other Credit
Documents and (b) pursuant to the terms of (i) any purchase money Indebtedness
permitted by Section 8.1(c) and (ii) any purchase money Indebtedness for
equipment, improvements, or Real Estate existing on the Closing Date.
Section 8.13 Limitation on Management Fees. The Borrowers and the
Guarantors will not permit members of the Consolidated Group to pay management
or consulting fees to any Affiliates (including without limitation, ▇▇▇▇▇▇
▇▇▇▇▇▇ and its Affiliates).
Section 8.14 Limitation on Foreign Subsidiaries. After the Closing
Date, the Borrowers and the Guarantors will not permit any member of the
Consolidated Group to create, acquire, or permit to exist any Subsidiary which
is not a Domestic Subsidiary (other than Cougar Reinsurance Company, Ltd., a
Turks and Caicos company) without the prior written consent of the Required
Lenders.
Section 8.15 Inventory Classification. During any calendar month, the
Credit Parties shall not transfer, convert, or otherwise reclassify (a)
Eligible Inventory into consigned goods unless (i) no Default or Event of
Default exists, (ii) the aggregate fair market value thereof does not exceed
$2,000,000, and (iii) the Credit Parties provide at least ten (10) Business
Days prior written notice thereof to the Collateral Agent, which notification
contains satisfactory calculations that, after giving effect to such
transaction, the aggregate principal amount of the Loans and LOC Obligations
will not exceed the Total Borrowing Base and the aggregate principal amount of
the Revolving Loans and LOC Obligations will not exceed the Revolving Borrowing
Base or (b) consigned goods into inventory owned by a Credit Party, unless (i)
no Default or Event of Default exists and (ii) the Credit Parties deliver to
the Collateral Agent, on or before the first date following such
reclassification that a Borrowing Base Certificate is required to be delivered
by Section 7.1(e), a listing of such newly-classified inventory by type,
amount, and consignment vendor in form satisfactory to the Collateral Agent. In
the event that any Credit Party transfers, converts, or otherwise reclassifies
any consigned goods into inventory owned by a Credit Party, such inventory
otherwise consisting of "Eligible Inventory" will not be included as such until
the Borrowers have delivered the listing required by Section 8.15(b)(ii) and
the Collateral Agent has had a reasonable amount of time to confirm from such
listing that such inventory should qualify as "Eligible Inventory".
Section 8.16 Cash Settlements. No Credit Party may enter into any cash
settlement in any of the litigation set forth in Part A of Schedule 1.1F, or
any other litigation or dispute not listed on Schedule 1.1F arising out of the
same or similar facts and circumstances, if the aggregate amount of all such
cash settlements would exceed $5,000,000 during any Fiscal Year or $10,000,000
during the period from the Closing Date through and including the Termination
Date; provided that no cash settlement payments may be made unless ▇▇▇▇▇▇▇▇'▇
notifies the Collateral Agent that ▇▇▇▇▇▇▇▇'▇ has satisfied the covenants set
forth in Section 7.11 that are to be tested as of January 1, 2005, or any
Default or Event of Default arising from any failure to satisfy such covenant
is waived in writing.
Section 8.17 Conversion Ratio. ▇▇▇▇▇▇▇▇'▇ shall not increase, or enter
into any transaction or agreement which has the effect of increasing, the
conversion ratio of its Class B shares into Class A shares.
Section 8.18 New Stores. The Borrowers shall not acquire, including as
part of any Permitted Acquisition, or open more than twenty (20) new retail
stores during the period from the Closing Date through and including December
31, 2005, other than (a) pursuant to commitments to open new retail stores
existing as of the Closing Date and set forth on Schedule 8.18, (b) to relocate
(based on the Borrowers' reporting requirements and otherwise consistent with
past practices) an existing store, (c) after giving effect to such acquisition
or opening no Default or Event of Default exists, and (d) with the consent of
the Collateral Agent, in its sole discretion. In no event shall FFP acquire or
open any stores, or otherwise maintain or hold any Collateral or maintain a
place of business other than in the States of Florida and Georgia.
Section 8.19 Vendor Financing Program.
(a) Prior to September 1, 2005, the Borrowers shall not pay or
prepay any principal amount of trade accounts payable deferred under
the Vendor Financing Program, whether by reason of any scheduled
amortization or otherwise, unless after giving effect to such payment
or prepayment the total amount deferred under the Vendor Financing
Program will not be less than $15,000,000.
(b) The Borrowers shall provide the Collateral Agent with not
less than seven (7) days advance notice of any payment made in respect
of amounts deferred under the Vendor Financing Program, other than
mandatory payments scheduled or provided for under the Vendor
Documents, together with a statement demonstrating compliance with
Section 8.19(a) after giving effect to such payment.
Section 8.20 Crescent.
(a) Notwithstanding anything to the contrary in this Agreement
(including, without limitation, Sections 8.4, 8.6, 8.9 and 8.11), (i)
a Credit Party may enter into a Crescent Investment Restructuring
Transaction; provided, however, that (A) no Credit Party may transfer
any cash or other Property (other than Capital Stock of ▇▇▇▇▇▇▇▇'▇) to
any Crescent Party or any of their respective Affiliates that is not
part of the Consolidated Group in connection with any such
transaction; and (B) following consummation of such Crescent
Investment Restructuring Transaction, no Default or Event of Default
shall exist arising out of the breach of any covenant contained in
Article 7 or Article 8 after giving effect to the provisions of
Section 8.20(b); and (ii) each Credit Party may continue providing all
or any services and licenses to Crescent to the same as extent
provided on the Closing Date.
(b) If, as a result of any Crescent Investment Restructuring
Transaction, any Crescent Party would be deemed to be a Subsidiary of
any of the Borrowers, the Borrowers may at any time elect, by written
notice to the Agents and the Lenders, to provide that all of Sections
7.1, 7.10, 7.11, and 7.12, Article 8 (other than Sections 8.7, 8.9,
and 8.13) shall be applied as if such Crescent Party were not a
Subsidiary of such Borrower and the Crescent Parties shall not be
considered part of the Consolidated Group, subject to the following:
(i) the financial statements (other than the annual
audited financial statements but including annual unaudited
financial statements) required to be furnished by the
Borrowers pursuant to Sections 7.1(a) and 7.1(b) shall be
prepared without the Consolidation of the Crescent Parties;
(ii) the annual audited financial statements of
▇▇▇▇▇▇▇▇'▇ and its Subsidiaries (including any applicable
Crescent Party for such purpose) required to be delivered
pursuant to Section 7.1(a) shall be accompanied by a
consolidating schedule showing the financial condition and
results of the Credit Parties excluding the Crescent Parties
(such schedule to be audited to the extent permitted by
Generally Accepted Auditing Standards);
(iii) each Crescent Party that becomes a Subsidiary of
any Credit Party shall provide a full and unconditional
release to the Credit Parties, on terms reasonably
satisfactory to the Collateral Agent, of all claims and causes
of action that such Crescent Party has or may have against the
Credit Parties through and including the date of the Crescent
Investment Restructuring Transaction; and
(iv) the stock of any Crescent Party held directly or
indirectly by any Credit Party, shall be pledged as Collateral
to secure the Total Obligations under one or more of the
Security Agreements.
(c) Each Crescent Party that becomes a Subsidiary (but not a
Credit Party) shall (i) do all things necessary to observe
organizational formalities and, to the extent required pursuant to the
terms of this Agreement, preserve its existence, (ii) not conduct
business in the same name of ▇▇▇▇▇▇▇▇'▇ or any Credit Party (it being
understood that any Crescent Party may continue to use any tradename
or trademark of any Credit Party licensed to it as otherwise permitted
by this Agreement), (iii) maintain, or cause to be maintained, books,
records, financial statements, and bank accounts separate from those
of the Credit Parties, (iv) maintain its assets in such a manner that
it will not be costly or difficult to segregate, ascertain, or
identify its individual assets from those of any Credit Party and
otherwise not commingle any of its funds and other assets with those
of any Credit Party, (v) at all times hold itself out to the public as
an entity separate and distinct from any Credit Party, correct any
known misunderstanding regarding its status as an entity separate from
any Credit Party and not identify itself or any other Crescent Party
as a division or part of any Credit Party, (vi) utilize a separate
telephone number and separate stationary, invoices, and checks from
those of any Credit Party, (vii) at all times, to the extent that it
shares office space with any Credit Party, do so pursuant to a written
agreement with such Credit Party allocating rent and other tenant
charges under an applicable arm's-length lease, and (viii) not hold
itself out to be responsible for the debts or obligations of any
Credit Party or state or imply that any Credit Party is responsible
for its debts or obligations.
ARTICLE 9
EVENTS OF DEFAULT
-----------------
Section 9.1 Events of Default. An event of default shall exist upon the
occurrence of any of the following specified events (each an "Event of
Default"):
(a) the Borrowers or any Guarantor shall default in the
payment when due of (i) any principal of any of the Loans, (ii) any
reimbursement obligations arising from drawings under Letters of
Credit, (iii) any interest on the Loans or on any reimbursement
obligations arising from drawings under Letters of Credit, (iv) any
Fees owing hereunder, or (v) any other amount owing under any of the
other Credit Documents or in connection herewith or therewith;
(b) any representation, warranty, or statement made or deemed
to be made by any Borrower or any Guarantor herein, in any of the
other Credit Documents, or in any statement or certificate delivered
or required to be delivered pursuant hereto or thereto shall prove
untrue in any material respect on the date as of which it was deemed
to have been made;
(c) any Borrower or any Guarantor shall
(i) default in the due performance or observance of any
term, covenant, or agreement contained in Sections 7.2, 7.9,
7.10, 7.11, or 7.14 or in Article 8,
(ii) default in the due performance of the requirements
of Section 7.1(e) in the Collateral Agent's discretion and
such default shall continue unremedied for more than two
Business Days,
(iii) default in the due performance or observance of
any term, covenant, or agreement contained in Sections 7.1
(other than Section 7.1(e)) or Section 7.16 and such default
shall continue unremedied for a period of at least five (5)
Business Days after the earlier of an Executive Officer of a
Credit Party becoming aware of such default or notice thereof
by any Agent,
(iv) default in the due performance or observance by it
of any term, covenant, or agreement (other than those referred
to in clauses (a), (b), (c)(i), (c)(ii), (c)(iii), and (d)
through (k) of this Section 9.1) contained in this Credit
Agreement or in any other Credit Document and such default
shall continue unremedied for a period of at least thirty (30)
days after the earlier of an Executive Officer of a Credit
Party becoming aware of such default or notice thereof by any
Agent; or
(d) except as otherwise expressly permitted herein, any Credit
Document shall fail to be in full force and effect in all material
respects or to give the Agents and/or the Lenders the Liens, rights,
powers, and privileges purported to be created thereby in all material
respects, or any Credit Party shall so state in writing;
(e) except as the result of or in connection with a
dissolution, merger, or disposition of a Subsidiary permitted under
Section 8.4 or Section 8.5, the guaranty given by any Guarantor
(including any Person which becomes a Guarantor after the Closing Date
in accordance with Section 7.12) or any provision thereof shall cease
to be in full force and effect in all material respects, or any
Guarantor (including any Person which becomes a Guarantor after the
Closing Date in accordance with Section 7.12) or any Person acting by
or on behalf of such Guarantor shall deny or disaffirm such
Guarantor's obligations under such guaranty;
(f) any Bankruptcy Event shall occur with respect to any
Credit Party, or pursuant to article "SIXTH" of its Certificate of
Incorporation, ▇▇▇▇▇▇▇▇'▇ shall propose or enter into any negotiations
with its creditors or stockholders (or any class of its creditors or
stockholders) concerning a compromise or arrangement of its
Indebtedness;
(g) with respect to any Indebtedness (other than Indebtedness
outstanding under this Agreement, but including any Subordinated Debt)
in excess of $2,000,000 in the aggregate for the members of the
Consolidated Group taken as a whole (i) any member of the Consolidated
Group shall default in any payment (beyond the applicable grace period
with respect thereto, if any) with respect to any such Indebtedness,
(ii) the occurrence and continuance of a default in the observance or
performance of any covenant or requirement relating to such
Indebtedness or contained in any instrument or agreement evidencing,
securing, or relating thereto, or any other event or condition shall
occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit, the holder or holders of such
Indebtedness (or trustee or agent on behalf of such holders) to cause
(determined without regard to whether any notice or lapse of time is
required), any such Indebtedness to become due prior to its stated
maturity, or (iii) any such Indebtedness shall be declared due and
payable, or be required to be prepaid other than by a regularly
scheduled required prepayment, prior to the stated maturity thereof;
provided that any default under clause (ii) or clause (iii) preceding
with respect to Indebtedness owing by ▇▇▇▇▇▇▇▇'▇ for acquisition of
its headquarters in Savannah, Georgia to the extent arising from any
failure to deliver financial statements prior to the Restatement Date
shall not constitute an Event of Default under this Agreement;
(h) one or more judgments or decrees shall be entered against
one or more of the members of the Consolidated Group involving a
liability of $3,000,000 or more in the aggregate (to the extent not
paid or fully covered by insurance provided by a carrier who has
acknowledged coverage and has the ability to perform) or otherwise
having a Material Adverse Effect and any such judgments or decrees
shall not have been vacated, discharged, or stayed or bonded pending
appeal within thirty (30) days from the entry thereof;
(i) any of the following events or conditions, if such event
or condition is reasonably likely to involve the imposition of taxes,
penalties, and other liabilities against members of the Consolidated
Group in an aggregate amount in excess of $1,000,000: (i) any
"accumulated funding deficiency", as such term is defined in Section
302 of ERISA and Section 412 of the Internal Revenue Code, whether or
not waived, shall exist with respect to any Plan, or any Lien shall
arise on the assets of any member of the Consolidated Group in favor
of the PBGC or a Plan; (ii) an ERISA Event shall occur with respect to
a Single Employer Plan which is, in the reasonable opinion of the
Collateral Agent, likely to result in the termination of such Plan for
purposes of Title IV of ERISA; (iii) an ERISA Event shall occur with
respect to a Multiemployer Plan or Multiple Employer Plan which is, in
the reasonable opinion of the Collateral Agent, likely to result in
(A) the termination of such Plan for purposes of Title IV of ERISA or
(B) any member of the Consolidated Group incurring any liability in
connection with a withdrawal from, reorganization of (within the
meaning of Section 4241 of ERISA), or insolvency (within the meaning
of Section 4245 of ERISA) of such Plan; (iv) any prohibited
transaction (within the meaning of Section 406 of ERISA or Section
4975 of the Internal Revenue Code) or breach of fiduciary
responsibility shall occur which may subject any member of the
Consolidated Group or any ERISA Affiliate to any liability under
Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of the
Internal Revenue Code, or under any agreement or other instrument
pursuant to which any member of the Consolidated Group or any ERISA
Affiliate has agreed or is required to indemnify any Person against
any such liability; or (v) the occurrence of any event described in
clause (i) through clause (iv) preceding in relation to an ERISA
Affiliate Plan, if such event actually results in any member of the
Consolidated Group incurring liability for taxes, penalties, or other
liabilities in an aggregate amount in excess of $1,000,000;
(j) there shall occur a Change of Control; or
(k) ▇▇▇▇▇▇▇▇'▇ shall not comply with any of the terms and
conditions applicable to it in the Subordination Agreement.
Section 9.2 Acceleration; Remedies. Upon the occurrence of an Event of
Default, and at any time thereafter unless and until such Event of Default has
been waived by the requisite Lenders (pursuant to the voting requirements
specified in Section 13.6) or cured to the satisfaction of the requisite
Lenders (pursuant to the voting procedures specified in Section 13.6), the
Collateral Agent shall, upon the request and direction of the Revolving Agent
and/or the Term Agent, as the case may be pursuant to Article 11, by written
notice to the Borrowers take any of the following actions:
(a) declare the Revolving Commitments terminated, whereupon
the Revolving Commitments shall be immediately terminated;
(b) declare the unpaid principal of, and any accrued interest
in respect of, all Loans, any reimbursement obligations arising from
drawings under Letters of Credit, and any and all other indebtedness
or obligations of any and every kind owing by the Credit Parties to
the Collateral Agent and/or any of the Lenders hereunder to be due,
whereupon the same shall be immediately due and payable without
presentment, demand, protest, or other notice of any kind, all of
which are hereby waived by the Credit Parties;
(c) direct the Borrowers and the Guarantors to pay (and the
Borrowers and the Guarantors agree that upon receipt of such notice,
or upon the occurrence of an Event of Default under Section 9.1(f),
they will immediately pay) to the Collateral Agent additional cash, to
be held by the Collateral Agent, for the benefit of the Revolving
Agent and the Revolving Lenders, in a cash collateral account as
additional security for the LOC Obligations in respect of subsequent
drawings under all then outstanding Letters of Credit in an amount
equal to the maximum aggregate amount which may be drawn under all
Letters of Credits then outstanding; and
(d) enforce any and all rights and interests created and
existing under the Credit Documents, including, without limitation,
all rights and remedies existing under the Collateral Documents, all
rights and remedies against a Guarantor, and all rights of set-off.
Notwithstanding the foregoing, if an Event of Default specified in Section
9.1(f) shall occur with respect to any Borrower, then the Revolving Commitments
shall automatically terminate and all Loans, all reimbursement obligations
arising from drawings under Letters of Credit, all accrued interest in respect
thereof, all accrued and unpaid Fees, and all other indebtedness or obligations
owing to the Agents and/or any of the Lenders hereunder automatically shall
immediately become due and payable without the giving of any notice or other
action by the Collateral Agent or the Lenders.
ARTICLE 10
AGENCY PROVISIONS
-----------------
Section 10.1 Appointment and Authorization.
(a) Each Revolving Lender and the Issuing Lender hereby
designates and appoints Bank of America (acting in its capacity as the
Revolving Agent) to act as such Revolving Lender's agent under this
Agreement and the other Credit Documents, and each Revolving Lender
and the Issuing Lender hereby irrevocably authorizes the Revolving
Agent to take such action on such Revolving Lender's behalf under the
provisions of this Agreement and each other Credit Document and to
exercise such powers and perform such duties as are expressly
delegated to the Revolving Agent by the terms of this Agreement or any
other Credit Document, together with such powers as are reasonably
incidental thereto.
(b) Each Term Lender hereby designates and appoints Jewelry
Investors II, L.L.C. (acting in its capacity as the Term Agent) to act
as such Term Lender's agent under this Agreement and the other Credit
Documents, and each Term Lender hereby irrevocably authorizes the Term
Agent to take such action on such Term Lender's behalf under the
provisions of this Agreement and each other Credit Document and to
exercise such powers and perform such duties as are expressly
delegated to the Term Agent by the terms of this Agreement or any
other Credit Document, together with such powers as are reasonably
incidental thereto.
(c) Each of the Revolving Agent, the Term Agent, and each of
the Lenders hereby designates and appoints Bank of America (acting in
its capacity as the Collateral Agent) as such Person's agent under
this Agreement and the other Credit Documents, and each such Person
hereby irrevocably authorizes the Collateral Agent to take such action
on such Person's behalf under the provisions of this Agreement and
each other Credit Document and to exercise such powers and perform
such duties as are expressly delegated to the Collateral Agent by the
terms of this Agreement or any other Credit Document, together with
such powers as are reasonably incidental thereto.
(d) Each Agent agrees to act as such on the express conditions
contained in this Article 10. The provisions of this Article 10 are
solely for the benefit of the Agents and the Lenders, and the Credit
Parties shall have no rights as third party beneficiaries of any of
the provisions contained in this Article 10 other than as expressly
provided in Section 10.10 and Section 10.11. Notwithstanding any
provision to the contrary contained elsewhere in this Agreement or in
any other Credit Document, no Agent shall have any duties or
responsibilities, except those expressly set forth herein, nor shall
any Agent have or be deemed to have any fiduciary relationship with
any Lender, and no implied covenants, functions, responsibilities,
duties, obligations, or liabilities shall be read into this Agreement
or any other Credit Document or otherwise exist against any Agent.
Without limiting the generality of the foregoing sentence, the use of
the term agent in this Agreement with reference to any Agent is not
intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any Requirement of Law.
Instead, such term is used merely as a matter of market custom, and is
intended to create or reflect only an administrative relationship
between independent contracting parties. Except as expressly otherwise
provided in this Agreement, each Agent shall have and may use its sole
discretion with respect to exercising or refraining from exercising
any discretionary rights or taking or refraining from taking any
actions which such Agent is expressly entitled to take or assert under
this Agreement and the other Credit Documents, including with respect
to the Collateral Agent (i) the determination of the applicability of
ineligibility criteria with respect to the calculation of the
Borrowing Base, (ii) the making of Discretionary Over-Advances, and
(iii) to the extent (if any) permitted, the exercise of remedies
pursuant to Section 9.2, and any action so taken or not taken shall be
deemed consented to by the Lenders.
Section 10.2 Delegation of Duties. Each Agent may execute any of its
duties under this Agreement or any other Credit Document by or through agents,
employees, or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. No Agent shall be responsible
for the negligence or misconduct of any agent or attorney-in-fact that it
selects as long as such selection was made without gross negligence or willful
misconduct.
Section 10.3 Liability of the Agents. None of the Agent-Related
Persons shall (a) be liable for any action taken or omitted to be taken by any
of them under or in connection with this Agreement or any other Credit Document
or the transactions contemplated hereby (except for its own gross negligence or
willful misconduct) or (b) responsible in any manner to any of the Lenders for
any recital, statement, representation, or warranty made by any Credit Party or
any Affiliate of any Credit Party, or any officer thereof, contained in this
Agreement or in any other Credit Document, or in any certificate, report,
statement, or other document referred to or provided for in, or received by any
Agent under or in connection with, this Agreement or any other Credit Document,
or the validity, effectiveness, genuineness, enforceability, or sufficiency of
this Agreement or any other Credit Document, or for any failure of any Credit
Party or any other party to any Credit Document to perform its obligations
hereunder or thereunder. None of the Agent-Related Persons are under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Credit Document, or to inspect the properties, books or
records of any Credit Party or any Credit Party's Affiliates.
Section 10.4 Reliance by the Agents. Each Agent shall be entitled to
rely, and will be fully protected in relying, upon any writing, resolution,
notice, consent, certificate, affidavit, letter, telegram, facsimile, telex, or
telephone message, statement, or other document or conversation believed by it
to be genuine and correct and to have been signed, sent, or made by the proper
Person or Persons, and upon advice and statements of legal counsel (including,
without limitation, counsel to any Credit Party), independent accountants and
other experts selected by such Agent.
(a) Each Agent shall be fully justified in failing or refusing
to take any action under this Agreement or any other Credit Document
unless it shall first receive such advice or concurrence of the
Required Lenders, the Required Revolving Lenders, or the Required Term
Lenders, as the case may be, as such Agent deems appropriate and, if
it so requests, it shall first be indemnified to its satisfaction
against any and all liability and expense which may be incurred by it
by reason of taking or continuing to take any such action by:
(i) the Lenders, as to the Collateral Agent;
(ii) the Revolving Lenders, as to the Revolving Agent; and
(iii) the Term Lenders, as to the Term Agent.
(b) The Collateral Agent shall act or refrain from acting and
shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Credit Document in
accordance with a request or consent of the Revolving Agent (acting at
the written direction of the Required Revolving Lenders) and the Term
Agent (acting at the written direction of the Required Term Lenders)
or, as the case may be, by the Required Lenders, and such request and
any action taken or failure to act pursuant thereto shall be binding
upon all of the Lenders, except as otherwise provided in Article 11.
(c) The Revolving Agent shall in all cases be fully protected
in acting, or in refraining from acting, under this Agreement or any
other Credit Document in accordance with a request or consent of the
Required Revolving Lenders (or such other percentage of Lenders if so
required by Section 13.6), and such request and any action taken or
failure to act pursuant thereto shall be binding upon all of the
Revolving Lenders.
(d) The Term Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement or any
other Credit Document in accordance with a request or consent of the
Required Term Lenders (or such other percentage of Lenders if so
required by Section 13.6), and such request and any action taken or
failure to act pursuant thereto shall be binding upon all of the Term
Lenders.
Section 10.5 Notice of Default. No Agent shall be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default unless
such Agent shall have received written notice from a Credit Party or a Lender
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". Each Agent will notify the
other Agents and the Lenders of its receipt of any such notice. The Collateral
Agent shall take such action with respect to such Default or Event of Default
as may be requested by the Revolving Agent and the Term Agent, as each of such
Agents may be instructed by the Revolving Lenders and the Term Lenders,
respectively, in accordance with Article 9 and Section 11.2; provided, however,
that unless and until the Collateral Agent has received any such request, the
Collateral Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable.
Section 10.6 Credit Decision. Each Lender acknowledges that none of
the Agent-Related Persons has made any representation or warranty to it, and
that no act by any Agent hereinafter taken, including any review of the affairs
of the Credit Parties and their Affiliates, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lender. Each
Lender represents to each Agent that it has, independently and without reliance
upon any Agent-Related Person and based on such documents and information as it
has deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition, and
creditworthiness of the Credit Parties and their Affiliates, and all applicable
bank regulatory laws relating to the transactions contemplated hereby, and made
its own decision to enter into this Agreement and to extend credit to the
Borrowers. Each Lender also represents that it will, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals, and decisions in taking or not taking action under
this Agreement and the other Credit Documents, and to make such investigations
as it deems necessary to inform itself as to the business, prospects,
operations, property, financial and other condition, and creditworthiness of
the Credit Parties and their Affiliates. Except for notices, reports, and other
documents expressly herein required to be furnished to the Lenders by an Agent,
no Agent shall have any duty or responsibility to provide any Lender or any
other Agent with any credit or other information concerning the business,
prospects, operations, property, financial and other condition, or
creditworthiness of the Credit Parties and their Affiliates which may come into
the possession of any of the Agent-Related Persons.
Section 10.7 Indemnification.
(a) WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED HEREBY ARE
CONSUMMATED, THE LENDERS SHALL, UPON DEMAND, INDEMNIFY THE COLLATERAL
AGENT AND ITS RESPECTIVE AGENT-RELATED PERSONS (TO THE EXTENT NOT
REIMBURSED BY OR ON BEHALF OF THE CREDIT PARTIES AND WITHOUT LIMITING
THE OBLIGATION OF THE CREDIT PARTIES TO DO SO), IN ACCORDANCE WITH
THEIR PRO RATA SHARES OF THE LOANS, FROM AND AGAINST ANY AND ALL
INDEMNIFIED LIABILITIES OTHER THAN LIABILITIES RELATING TO BANK
PRODUCTS; PROVIDED, HOWEVER, THAT NO LENDER SHALL BE LIABLE FOR THE
PAYMENT TO THE COLLATERAL AGENT AND ITS RESPECTIVE AGENT-RELATED
PERSONS OF ANY PORTION OF SUCH INDEMNIFIED LIABILITIES RESULTING
SOLELY FROM SUCH PERSON'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
Without limitation of the foregoing, each Lender shall reimburse the
Collateral Agent, upon demand, for its pro rata share of any costs or
out-of-pocket expenses (including fees and expenses for legal counsel)
incurred by the Collateral Agent in connection with the preparation,
execution, delivery, administration, modification, amendment, or
enforcement (whether through negotiations, legal proceedings, or
otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Credit Document, or
any document contemplated by or referred to herein, to the extent that
the Collateral Agent is not reimbursed for such expenses by or on
behalf of the Credit Parties. The undertaking in this Section 10.7
shall survive the payment of the Total Obligations and the resignation
or replacement of the Collateral Agent.
(b) WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED HEREBY ARE
CONSUMMATED, THE REVOLVING LENDERS SHALL, UPON DEMAND, INDEMNIFY THE
REVOLVING AGENT AND ITS RESPECTIVE AGENT-RELATED PERSONS (TO THE
EXTENT NOT REIMBURSED BY OR ON BEHALF OF THE CREDIT PARTIES AND
WITHOUT LIMITING THE OBLIGATION OF THE CREDIT PARTIES TO DO SO), IN
ACCORDANCE WITH THEIR PRO RATA SHARES OF THE REVOLVING LOANS, FROM AND
AGAINST ANY AND ALL INDEMNIFIED LIABILITIES OTHER THAN LIABILITIES
RELATING TO BANK PRODUCTS; PROVIDED, HOWEVER, THAT NO REVOLVING LENDER
SHALL BE LIABLE FOR THE PAYMENT TO THE REVOLVING AGENT AND ITS
RESPECTIVE AGENT-RELATED PERSONS OF ANY PORTION OF SUCH INDEMNIFIED
LIABILITIES RESULTING SOLELY FROM SUCH PERSON'S GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT. Without limitation of the foregoing, each
Revolving Lender shall reimburse the Revolving Agent, upon demand, for
its pro rata share of any costs or out-of-pocket expenses (including
fees and expenses for legal counsel) incurred by the Revolving Agent
in connection with the preparation, execution, delivery,
administration, modification, amendment, or enforcement (whether
through negotiations, legal proceedings, or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement,
any other Credit Document, or any document contemplated by or referred
to herein, to the extent that the Revolving Agent is not reimbursed
for such expenses by or on behalf of the Credit Parties. The
undertaking in this Section 10.7(b) shall survive the payment of the
Revolving Obligations and the resignation or replacement of the
Revolving Agent.
(c) WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED HEREBY ARE
CONSUMMATED, THE TERM LENDERS SHALL, UPON DEMAND, INDEMNIFY THE TERM
AGENT AND ITS RESPECTIVE AGENT-RELATED PERSONS (TO THE EXTENT NOT
REIMBURSED BY OR ON BEHALF OF THE CREDIT PARTIES AND WITHOUT LIMITING
THE OBLIGATION OF THE CREDIT PARTIES TO DO SO), IN ACCORDANCE WITH
THEIR PRO RATA SHARES OF THE TERM LOANS, FROM AND AGAINST ANY AND ALL
INDEMNIFIED LIABILITIES; PROVIDED, HOWEVER, THAT NO TERM LENDER SHALL
BE LIABLE FOR THE PAYMENT TO THE TERM AGENT AND ITS RESPECTIVE
AGENT-RELATED PERSONS OF ANY PORTION OF SUCH INDEMNIFIED LIABILITIES
RESULTING SOLELY FROM SUCH PERSON'S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT. Without limitation of the foregoing, each Term Lender
shall reimburse the Term Agent, upon demand, for its pro rata share of
any costs or out-of-pocket expenses (including fees and expenses for
legal counsel) incurred by the Term Agent in connection with the
preparation, execution, delivery, administration, modification,
amendment, or enforcement (whether through negotiations, legal
proceedings, or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Credit Document, or
any document contemplated by or referred to herein, to the extent that
the Term Agent is not reimbursed for such expenses by or on behalf of
the Credit Parties. The undertaking in this Section 10.7(c) shall
survive the payment of the Term Obligations and the resignation or
replacement of the Term Agent.
Section 10.8 The Agents in Individual Capacity. Each of Bank of
America, Jewelry Investors II, L.L.C., and their respective Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in, and generally engage in any kind of banking,
trust, financial advisory, underwriting, or other business with any Credit
Party and its Affiliates as though such Person were not an Agent under this
Agreement and without notice to or consent of the Lenders. Bank of America,
Jewelry Investors II, L.L.C., and their respective Affiliates may receive
information regarding any Credit Party or its Affiliates and account debtors
(including information that may be subject to confidentiality obligations in
favor of any such Credit Party or Affiliate), and the Lenders acknowledge that
no Agent and neither Bank of America nor Jewelry Investors II, L.L.C. shall be
under any obligation to provide such information to the Lenders. With respect
to its Revolving Loans, Bank of America as a Revolving Lender shall have the
same rights, powers, and obligations under this Agreement as any other
Revolving Lender and may exercise the same as though it were not an Agent, and
the terms "Revolving Lender," "Revolving Lenders," "Lender", and "Lenders"
include Bank of America in its individual capacity. With respect to its Term
Loans, Jewelry Investors II, L.L.C. as a Term Lender shall have the same
rights, powers, and obligations under this Agreement as any other Term Lender
and may exercise the same as though it were not an Agent, and the terms "Term
Lender," "Term Lenders," "Lender", and "Lenders" include Jewelry Investors II,
L.L.C. in its individual capacity.
Section 10.9 Successor Agents.
(a) The Collateral Agent may resign as Collateral Agent (the
"resigning Collateral Agent") upon at least thirty (30) days prior
notice to the Revolving Agent, the Term Agent, the Lenders, and the
Credit Parties. Such resignation will be effective upon approval of a
successor Collateral Agent (the "successor Collateral Agent") by the
Revolving Agent, the Term Agent, and Bank of America if it is a
Revolving Lender. Upon the acceptance of its appointment as the
successor Collateral Agent, the successor Collateral Agent shall
succeed to all rights, powers, and duties of the resigning Agent and
the resigning Collateral Agent and the term "Collateral Agent" shall
mean the successor Collateral Agent and the resigning Collateral
Agent's appointment, powers, and duties as the Collateral Agent shall
be terminated. Notwithstanding the foregoing, in the event that Bank
of America ceases to be a Revolving Lender hereunder and the Term
Agent does not approve of a successor Collateral Agent designated by
Bank of America and reasonably satisfactory to the remaining Revolving
Lenders party to this Agreement on the Closing Date or Bank of America
does not designate a successor Collateral Agent, then the following
provisions shall apply:
(i) the Term Agent shall use its commercially
reasonable efforts to retain a successor Collateral Agent
reasonably satisfactory to the remaining Revolving Lenders
party to this Agreement on the Closing Date as soon as
reasonably practicable;
(ii) if the successor Collateral Agent designated by
Term Agent is not a Revolving Lender, the Borrowers shall pay
any such successor Collateral Agent a market rate collateral
servicing fee; and
(iii) Bank of America shall continue to serve as the
Collateral Agent until such time as the successor Collateral
Agent designated by the Term Agent accepts its appointment as
such; provided that for so long as Bank of America shall
continue to serve as Collateral Agent it shall be paid a
market rate collateral servicing fee and gross negligence
shall not be excluded from the indemnification provisions of
Section 10.7; and provided further that Bank of America shall
not be required to serve in such capacity for a period
exceeding 60 days from the date that is ceases to be a
Revolving Lender;
During any period that Bank of America continues to serve as
Collateral Agent as aforesaid, (x) all rights of the Collateral Agent,
including pursuant to Articles 10 and 11, shall continue to apply to
Bank of America and (y) all rights of the Revolving Agent, including
pursuant to Articles 10 and 11, shall apply to such Revolving Agent as
the Revolving Lenders shall designate in accordance with this
Agreement.
(b) The Revolving Agent may resign as Revolving Agent upon at
least thirty (30) days prior written notice to the Lenders and the
Credit Parties, such resignation to be effective upon the acceptance
by a successor agent to its appointment as the Revolving Agent. In the
event Bank of America sells all of its Commitments and Loans as part
of a sale, transfer, or other disposition by Bank of America of
substantially all of its loan portfolio, Bank of America shall resign
as the Revolving Agent and such purchaser or transferee shall become
the successor Revolving Agent hereunder. Subject to the foregoing, if
the Revolving Agent resigns under this Agreement, the Required
Revolving Lenders shall appoint from among the Revolving Lenders a
successor agent for the Revolving Lenders (the "successor Revolving
Agent"). If no successor Revolving Agent is appointed prior to the
effective date of the resignation of the resigning Revolving Agent,
the resigning Revolving Agent may appoint, after consulting with the
Revolving Lenders and the Borrowers, a successor Revolving Agent from
among the Revolving Lenders. Upon the acceptance of its appointment as
the successor Revolving Agent, the successor Revolving Agent shall
succeed to all the rights, powers, and duties of the resigning
Revolving Agent and the term "Revolving Agent" shall mean the
successor Revolving Agent and the resigning Revolving Agent's
appointment, powers, and duties as the Revolving Agent shall be
terminated. The appointment of any successor Revolving Agent shall, so
long as no Default or Event of Default shall exist, be subject to the
prior consent of the Borrowers (such consent not to be unreasonably
withheld). Notwithstanding anything to the contrary contained herein,
if Bank of America shall resign as Revolving Agent, the appointment of
a successor Revolving Agent shall be subject to the prior consent of
the remaining Revolving Lenders party to this Agreement on the Closing
Date and the Term Agent (such consent not to be unreasonably
withheld).
(c) The Term Agent may resign as Term Agent upon at least
thirty (30) days prior notice to the Lenders and the Credit Parties,
such resignation to be effective upon the acceptance of a successor
agent to its appointment as the Term Agent. In the event Jewelry
Investors II, L.L.C. sells all of its Term Loans as part of a sale,
transfer, or other disposition by Jewelry Investors II, L.L.C. of
substantially all of its loan portfolio, Jewelry Investors II, L.L.C.
shall resign as the Term Agent and such purchaser or transferee shall
become the successor Term Agent hereunder. Subject to the foregoing,
if the Term Agent resigns (the "resigning Term Agent") under this
Agreement, the Required Term Lenders shall appoint from among the Term
Lenders a successor agent for the Term Lenders (the "successor Term
Agent"). If no successor Term Agent is appointed prior to the
effective date of the resignation of the resigning Term Agent, the
resigning Term Agent may appoint, after consulting with the Term
Lenders and, so long as no Event of Default exists, the Borrowers, a
successor Term Agent from among the Term Lenders. Upon the acceptance
of its appointment as the successor Term Agent, the successor Term
Agent shall succeed to all the rights, powers, and duties of the
resigning Term Agent and the term "Term Agent" shall mean the
successor Term Agent and the resigning Term Agent's appointment,
powers, and duties as the Term Agent shall be terminated. The
appointment of any successor Term Agent shall, so long as no Default
or Event of Default shall exist, be subject to the prior consent of
the Borrowers (such consent not to be unreasonably withheld).
(d) After any resigning Agent's resignation hereunder as an
Agent, the provisions of this Article 10 shall continue to inure to
its benefit as to any actions taken or omitted to be taken by it while
it was an Agent under this Agreement.
Section 10.10 Withholding Tax.
(a) If any Lender is a "foreign corporation, partnership, or
trust" within the meaning of the Internal Revenue Code and such Lender
claims exemption from, or a reduction of, United States withholding
tax under Sections 1441 or 1442 of the Internal Revenue Code, such
Lender agrees with and in favor of the Collateral Agent, to deliver to
the Collateral Agent and the Borrowers:
(i) if such Lender claims an exemption from, or a
reduction of, withholding tax under a United States tax
treaty, two (2) properly completed and executed IRS Forms
W-8BEN and W-8ECI before the payment of any interest in the
first calendar year and before the payment of any interest in
each third succeeding calendar year during which interest may
be paid under this Agreement;
(ii) if such Lender claims that interest paid under
this Agreement is exempt from United States withholding tax
because it is effectively connected with a United States trade
or business of such Lender, two (2) properly completed and
executed copies of IRS Form W-8ECI before the payment of any
interest is due in the first taxable year of such Lender and
in each succeeding taxable year of such Lender during which
interest may be paid under this Agreement, and IRS Form W-9;
and
(iii) such other form or forms as may be required under
the Internal Revenue Code or other laws of the United States
as a condition to exemption from, or reduction of, United
States withholding tax.
Such Lender agrees to promptly notify the Collateral Agent and the
Borrowers of any change in circumstances which would modify or render
invalid any claimed exemption or reduction.
(b) If any Lender claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form
W-8BEN and such Lender sells, assigns, grants a participation in, or
otherwise transfers all or part of the Total Obligations owing to such
Lender under this Agreement, such Lender agrees to notify the
Collateral Agent and the Borrowers of the percentage amount in which
it is no longer the beneficial owner of such Total Obligations owing
to such Lender. To the extent of such percentage amount, the
Collateral Agent and the Borrowers will treat such Lender's IRS Form
W-8BEN as no longer valid.
(c) If any Lender is entitled to a reduction in the applicable
withholding tax, the Collateral Agent or the Borrowers may withhold
from any interest payment to such Lender an amount equivalent to the
applicable withholding tax after taking into account such reduction.
If the forms or other documentation required by clause (a) preceding
are not delivered to the Collateral Agent and the Borrowers, then the
Collateral Agent or the Borrowers may withhold from any interest
payment to such Lender not providing such forms or other documentation
an amount equivalent to the applicable withholding tax.
(d) If the IRS or any other Governmental Authority of the
United States or other jurisdiction asserts a claim that the
Collateral Agent or the Borrowers did not properly withhold tax from
amounts paid to or for the account of any Lender (because the
appropriate form was not delivered, was not properly executed, or
because such Lender failed to notify the Collateral Agent or the
Borrowers of a change in circumstances relating to such Lender but not
including a change in law, which rendered the exemption from, or
reduction of, withholding tax ineffective) such Lender shall indemnify
the Collateral Agent and the Borrowers fully for all amounts paid,
directly or indirectly, by the Collateral Agent or the Borrowers as
tax or otherwise, including penalties and interest, and including any
taxes imposed by any jurisdiction on the amounts payable to the
Collateral Agent under this Section 10.10, together with all costs and
expenses (including fees and expenses for legal counsel). The
obligation of the Lenders under this clause (d) shall survive the
payment of the Total Obligations and the resignation or replacement of
the Collateral Agent.
Section 10.11 Collateral Matters.
(a) The Lenders hereby irrevocably authorize the Collateral
Agent, at its option and in its sole discretion, to release any Liens
upon any Collateral: (i) upon the termination of the Commitments and
payment and satisfaction in full of all Loans and reimbursement
obligations in respect of Letters of Credit, and the termination of
all outstanding Letters of Credit (whether or not any of such
obligations are due) and all other Total Obligations; (ii)
constituting property being sold or disposed of if the Credit Party
disposing of such property certifies to the Collateral Agent that the
sale or disposition is made in compliance with the terms of this
Agreement (and the Collateral Agent may rely conclusively on any such
certificate, without further inquiry); (iii) constituting property in
which no Credit Party owned any interest at the time the Lien was
granted or at any time thereafter; or (iv) constituting property
leased to a Credit Party under a lease which has expired or been
terminated in a transaction permitted under this Agreement. Except as
provided above, the Collateral Agent will not release any of the
Collateral Agent's Liens without the prior written authorization of
the Revolving Agent (acting at the written direction of the Required
Revolving Lenders) and the Term Agent (acting at the written direction
of the Required Term Lenders); provided that the Collateral Agent may,
in its discretion, release (but only if at the time of such release no
Event of Default exists) its Liens on Collateral valued in the
aggregate not in excess of $2,000,000 during each calendar year
without the prior written authorization of the Revolving Agent and the
Term Agent. Upon request by the Collateral Agent or the Credit Parties
at any time, the Revolving Agent (acting at the written direction of
the Required Revolving Lenders) and the Term Agent (acting at the
written direction of the Required Term Lenders) will confirm in
writing the Collateral Agent's authority to release any Liens granted
to the Collateral Agent in the Credit Documents upon particular types
or items of Collateral pursuant to this Section 10.11.
(b) Upon receipt by the Collateral Agent of any authorization
required pursuant to Section 10.11(a) from the Revolving Agent and the
Term Agent of the Collateral Agent's authority to release any Liens
upon particular types or items of Collateral, and upon at least five
(5) Business Days prior written request by the Credit Parties, the
Collateral Agent shall (and is hereby irrevocably authorized by the
Lenders to) execute such documents as may be necessary to evidence the
release of the Liens granted to the Collateral Agent in the Credit
Documents upon such Collateral; provided, however, that (i) the
Collateral Agent shall not be required to execute any such document on
terms which, in the Collateral Agent's opinion, would expose the
Collateral Agent to liability or create any obligation or entail any
consequence other than the release of such Liens without recourse or
warranty and (ii) such release shall not in any manner discharge,
affect, or impair the Total Obligations or any Liens (other than those
expressly being released) upon (or obligations of the Credit Parties
in respect of) all interests retained by the Credit Parties, including
the proceeds of any sale, all of which shall continue to constitute
part of the Collateral.
(c) The Collateral Agent shall have no obligation whatsoever
to any of the Lenders to assure that the Collateral exists or is owned
by the Credit Parties or is cared for, protected, or insured or has
been encumbered, or that the Liens granted to the Collateral Agent in
the Credit Documents have been properly or sufficiently or lawfully
created, perfected, protected, or enforced or are entitled to any
particular priority, or to exercise at all or in any particular manner
or under any duty of care, disclosure, or fidelity, or to continue
exercising, any of the rights, authorities, and powers granted or
available to the Collateral Agent pursuant to any of the Credit
Documents, it being understood and agreed that in respect of the
Collateral, or any act, omission, or event related thereto, the
Collateral Agent may act in any manner it may deem appropriate
consistent and in accordance with the terms of this Agreement and the
other Credit Documents, given the Collateral Agent's own interest in
the Collateral in its capacity as one of the Lenders and that the
Collateral Agent shall have no other duty or liability whatsoever to
any Lender as to any of the foregoing.
Section 10.12 Restrictions on Actions by the Lenders; Sharing
of Payments.
(a) Each of the Lenders agrees that it shall not, without the
express written consent of the Revolving Agent (acting at the written
direction of the Required Revolving Lenders) and the Term Agent
(acting at the written direction of the Required Term Lenders), and
that such Lender shall, upon the request of the Revolving Agent
(acting at the written direction of the Required Revolving Lenders)
and the Term Agent (acting at the written direction of the Required
Term Lenders) and to the extent such Lender is lawfully entitled to do
so, setoff against the Total Obligations any amounts owing by such
Lender to any Credit Party or any accounts of any Credit Party now or
hereafter maintained with such Lender. Each of the Lenders further
agrees that it shall not, unless specifically requested to do so by
the Revolving Agent (acting at the written direction of the Required
Revolving Lenders) and the Term Agent (acting at the written direction
of the Required Term Lenders), take or cause to be taken any action to
enforce such Lender's rights under this Agreement or any other Credit
Document or against any Credit Party, including the commencement of
any legal or equitable proceedings to foreclose any Lien on or
otherwise enforce any security interest in any of the Collateral.
(b) If at any time or times any Lender shall receive (i) by
payment, foreclosure, setoff, or otherwise, any proceeds of Collateral
or any payments with respect to the Total Obligations owing to such
Lender arising under, or relating to, this Agreement or the other
Credit Documents, except for any such proceeds or payments received by
such Lender from the Collateral Agent pursuant to the terms of this
Agreement, or (ii) payments from the Collateral Agent in excess of the
portion of all such distributions to which such Lender is entitled
under this Agreement, such Lender shall promptly turn the same over to
the Collateral Agent, in kind, and with such endorsements as may be
required to negotiate the same to the Collateral Agent, or in same day
funds, as applicable, for the account of all of the Lenders and for
application to the Total Obligations in accordance with the applicable
provisions of this Agreement.
Section 10.13 Agency for Perfection. Each Lender hereby appoints each
other Lender as agent for the purpose of perfecting Liens, for the benefit of
the Agents and the Lenders, in assets that, in accordance with Articles 8 or 9
of the UCC or any other Requirements of Law can be perfected only by
possession. Should any Lender (other than the Collateral Agent) obtain
possession of any such Collateral, such Lender shall notify the Collateral
Agent thereof, and, promptly upon the Collateral Agent's request therefor,
shall deliver such Collateral to the Collateral Agent or otherwise deal with
such Collateral in accordance with the Collateral Agent's instructions.
Section 10.14 Payments by the Collateral Agent to the Lenders. All
payments to be made by the Collateral Agent to the Agents or Lenders shall be
made by bank wire transfer or internal transfer of immediately available funds
to each Agent or Lender pursuant to wire transfer instructions delivered in
writing to the Collateral Agent on or prior to the Closing Date (or if such
Lender is an assignee, delivered with or in the applicable Assignment and
Acceptance), or pursuant to such other wire transfer instructions as each party
may designate for itself by written notice to the Collateral Agent.
Concurrently with each such payment, the Collateral Agent shall identify
whether such payment (or any portion thereof) represents principal, premium, or
interest on the Loans or otherwise. Unless the Collateral Agent receives notice
from the Borrowers prior to the date on which any payment is due to the Lenders
that the Borrowers will not make such payment in full as and when required, the
Collateral Agent may assume that the Borrowers have made such payment in full
to the Collateral Agent on such date in immediately available funds and the
Collateral Agent may (but shall not be so required), in reliance upon such
assumption, distribute to each Lender on such due date an amount equal to the
amount then due such Lender. If and to the extent the Borrowers have not made
such payment in full to the Collateral Agent, each Lender shall repay to the
Collateral Agent, on demand, such amount distributed to such Lender, together
with interest thereon at the Federal Funds Rate for each day from the date such
amount is distributed to such Lender until the date repaid.
Section 10.15 Field Audit and Examination Reports; Disclaimer by the
Lenders. By signing this Agreement, each Lender:
(a) is deemed to have requested that the Collateral Agent
furnish such Lender, promptly after it becomes available, a copy of
each field audit or examination report (each a "Report" and
collectively, the "Reports") prepared by or on behalf of the
Collateral Agent;
(b) expressly agrees and acknowledges that neither Bank of
America nor the Collateral Agent (i) makes any representation or
warranty as to the accuracy of any Report; or (ii) shall be liable for
any information contained in any Report;
(c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that the Collateral Agent, Bank
of America, or any other party performing any audit or examination
will inspect only specific information regarding the Credit Parties
and will rely significantly upon the Credit Parties' books and
records, as well as on representations of the Credit Parties'
personnel;
(d) except as otherwise permitted pursuant to Section 13.15,
agrees to keep all Reports confidential and strictly for its internal
use, and not to distribute except to its Participants, or use any
Report in any other manner; and
(e) without limiting the generality of any other
indemnification provision contained in this Agreement, agrees: (i) to
hold the Collateral Agent and any such other Lender preparing a Report
harmless from any action the indemnifying Lender may take or
conclusion the indemnifying Lender may reach or draw from any Report
in connection with any loans or other credit accommodations that the
indemnifying Lender has made or may make to the Credit Parties, or the
indemnifying Lender's participation in, or the indemnifying Lender's
purchase of, a loan or loans of the Credit Parties; and (ii) to pay
and protect, and indemnify, defend, and hold the Agent and any such
other Lender preparing a Report harmless from and against, the claims,
actions, proceedings, damages, costs, expenses, and other amounts
(including fees and expenses of legal counsel) incurred by the
Collateral Agent and any such other Lender preparing a Report as the
direct or indirect result of any third parties who might obtain all or
part of any Report through the indemnifying Lender.
Section 10.16 Relation Among the Lenders. The Lenders are not partners
or co-venturers, and no Lender shall be liable for the acts or omissions of, or
(except as otherwise set forth herein in case of the Collateral Agent)
authorized to act for, any other Lender.
Section 10.17 Settlement Among Revolving Lenders.
(a) Each Revolving Lender's funded portion of the Revolving
Loans is intended by the Revolving Lenders to be equal at all times to
such Revolving Lender's Revolving Commitment Percentage of the
outstanding Revolving Loans. Notwithstanding such agreement, the
Collateral Agent, the Revolving Agent, Bank of America, and the
Revolving Lenders agree (which agreement shall not be for the benefit
of, or enforceable by, the Credit Parties) that in order to facilitate
the administration of this Agreement and the other Credit Documents,
settlement among them as to the Revolving Loans, including the
Non-Ratable Loans, and the Discretionary Over-Advances shall take
place on a periodic basis in accordance with the following provisions:
(i) The Revolving Agent shall request settlement (a
"Settlement") among the Collateral Agent, the Revolving Agent,
and the Revolving Lenders on at least a weekly basis, or on a
more frequent basis at the Revolving Agent's election (A) on
behalf of Bank of America, with respect to each outstanding
Non-Ratable Loan, (B) on behalf of the Revolving Agent, with
respect to each Discretionary Over-Advance, and (C) with
respect to collections received, in each case, by notifying
the Collateral Agent and the Revolving Lenders of such
requested Settlement by telecopy, telephone, e-mail, or other
similar form of transmission, of such requested Settlement, no
later than 12:00 noon (Pasadena, California time) on the date
of such requested Settlement (the "Settlement Date"). Each
Revolving Lender (other than Bank of America, in the case of
Non-Ratable Loans, and the Collateral Agent in the case of
Discretionary Over-Advances) shall transfer the amount of such
Revolving Lender's Revolving Commitment Percentage of the
outstanding principal amount of the Non-Ratable Loans and
Discretionary Over-Advances with respect to which Settlement
is requested to the Revolving Agent, to such account of the
Revolving Agent as the Revolving Agent may designate, not
later than 2:00 p.m. (Pasadena, California time), on the
Settlement Date applicable thereto. Settlements may occur
during the continuation of a Default or an Event of Default
and whether or not the applicable conditions precedent set
forth in Article 5 have then been satisfied. Such amounts
transferred to the Revolving Agent shall be applied against
the amounts of the applicable Non-Ratable Loan or
Discretionary Over-Advance and, together with the portion of
such Non-Ratable Loan or Discretionary Over-Advance
representing Bank of America's Revolving Commitment Percentage
thereof, shall constitute Revolving Loans of such Revolving
Lenders, respectively. If any such amount is not transferred
to the Revolving Agent by any Revolving Lender on the
Settlement Date applicable thereto, the Revolving Agent shall
be entitled to recover such amount on demand from such
Revolving Lender together with interest thereon at the Federal
Funds Rate for the first three (3) days from and after the
Settlement Date and thereafter at the Adjusted Base Rate (Y)
on behalf of Bank of America, with respect to each outstanding
Non-Ratable Loan and (Z) for the Revolving Agent, with respect
to each Discretionary Over-Advance.
(ii) Notwithstanding the foregoing, not more than one
(1) Business Day after demand is made by the Revolving Agent
(whether before or after the occurrence of a Default or an
Event of Default and regardless of whether the Revolving Agent
has requested a Settlement with respect to a Non-Ratable Loan
or Discretionary Over-Advance), each other Revolving Lender
(A) shall irrevocably and unconditionally purchase and receive
from Bank of America or the Revolving Agent, as applicable,
without recourse or warranty, an undivided interest and
participation in such Non-Ratable Loan or Discretionary
Over-Advance equal to such Revolving Lender's Revolving
Commitment Percentage of such Non-Ratable Loan or
Discretionary Over-Advance and (B) if Settlement has not
previously occurred with respect to such Non-Ratable Loans or
Discretionary Over-Advance, upon demand by Bank of America or
the Revolving Agent, as applicable, shall pay to Bank of
America or the Revolving Agent, as applicable, as the purchase
price of such participation an amount equal to one-hundred
percent (100%) of such Revolving Lender's Revolving Commitment
Percentage of such Non-Ratable Loans or Discretionary
Over-Advance. If such amount is not in fact transferred to the
Revolving Agent by any Revolving Lender, the Revolving Agent
shall be entitled to recover such amount on demand from such
Revolving Lender together with interest thereon at the Federal
Funds Rate for the first three (3) days from and after such
demand and thereafter at the Adjusted Base Rate.
(iii) From and after the date, if any, on which any
Revolving Lender purchases an undivided interest and
participation in any Non-Ratable Loan or Discretionary
Over-Advance pursuant to clause (ii) preceding, the Revolving
Agent shall promptly distribute to such Revolving Lender, such
Revolving Lender's Revolving Commitment Percentage of all
payments of principal and interest and all proceeds of
Collateral received by the Revolving Agent in respect of such
Non-Ratable Loan or Discretionary Over-Advance.
(iv) Between Settlement Dates, to the extent no
Discretionary Over-Advances are outstanding, the Revolving
Agent may pay over to Bank of America any payments received by
the Revolving Agent, which in accordance with the terms of
this Agreement would be applied to the reduction of the
Revolving Loans, for application to the Non-Ratable Loans. If,
as of any Settlement Date, collections received since the then
immediately preceding Settlement Date have been applied to
Bank of America's Revolving Loans (other than to Non-Ratable
Loans or Discretionary Over-Advances in which a Revolving
Lender has not yet funded its purchase of a participation
pursuant to clause (ii) preceding), as provided for in the
previous sentence, Bank of America shall pay to the Revolving
Agent for the accounts of the Revolving Lenders, to be applied
to the outstanding Revolving Loans of such Revolving Lenders,
an amount such that each Revolving Lender shall, upon receipt
of such amount, have, as of such Settlement Date, its
Revolving Commitment Percentage of the Revolving Loans. During
the period between Settlement Dates, Bank of America (with
respect to Non-Ratable Loans), the Revolving Agent (with
respect to Discretionary Over-Advances), and each Revolving
Lender (with respect to the Revolving Loans other than
Non-Ratable Loans and Discretionary Over-Advances), shall be
entitled to interest at the applicable rate or rates payable
under this Agreement on the actual average daily amount of
funds employed by Bank of America, the Revolving Agent, and
the other Revolving Lenders.
(b) The Revolving Lenders' Failure to Perform. All Revolving
Loans (other than Non-Ratable Loans and Discretionary Over-Advances)
shall be made by the Revolving Lenders simultaneously and in
accordance with their Revolving Commitment Percentages. It is
understood that (i) no Revolving Lender shall be responsible for any
failure by any other Revolving Lender to perform its obligation to
make any Revolving Loans hereunder, nor shall the Revolving Committed
Amount of any Revolving Lender be increased or decreased as a result
of any failure by any other Revolving Lender to perform its obligation
to make any Revolving Loans, (ii) no failure by any Revolving Lender
to perform its obligation to make any Revolving Loans hereunder shall
excuse any other Revolving Lender from its obligation to make any
Revolving Loans hereunder, and (iii) the obligations of each Revolving
Lender hereunder shall be several, not joint and several.
(c) Defaulting Revolving Lenders. Unless the Revolving Agent
receives notice from a Revolving Lender on or prior to the Closing
Date or, with respect to any borrowing after the Closing Date, at
least one (1) Business Day prior to the date of such borrowing, that
such Revolving Lender will not make available as and when required
hereunder to the Revolving Agent such Revolving Lender's Revolving
Commitment Percentage of such borrowing, the Revolving Agent may
assume that each Revolving Lender has made such amount available to
the Revolving Agent in immediately available funds on the Funding
Date. Furthermore, the Revolving Agent may, in reliance upon such
assumption, make available to the Borrowers on such date a
corresponding amount. If any Revolving Lender has not transferred its
full Revolving Commitment Percentage of any borrowing to the Revolving
Agent in immediately available funds and if the Revolving Agent has
transferred a corresponding amount to the Borrowers on the Business
Day following such Funding Date the applicable Revolving Lender shall
make such amount available to the Revolving Agent, together with
interest at the Federal Funds Rate for that day. A notice by the
Revolving Agent submitted to any Revolving Lender with respect to
amounts owing shall be conclusive, absent manifest error. If each
Revolving Lender's full Revolving Commitment Percentage of any
requested borrowing is transferred to the Revolving Agent as required,
the amount transferred to the Revolving Agent shall constitute such
Revolving Lender's Revolving Loan for all purposes of this Agreement.
If any such amount is not transferred to the Revolving Agent on the
Business Day following the Funding Date, the Revolving Agent will
notify the Borrowers of such failure to fund and, upon demand by the
Revolving Agent, the Borrowers shall pay such amount to the Revolving
Agent for the Revolving Agent's account, together with interest
thereon for each day elapsed since the date of such borrowing, at a
rate per annum equal to the Adjusted Base Rate. The failure of any
Revolving Lender to make any Revolving Loan on any Funding Date (any
such Revolving Lender, prior to the cure of such failure, being
referred to herein as a "Defaulting Revolving Lender") shall not
relieve any other Revolving Lender of its obligation hereunder to make
a Revolving Loan on such Funding Date. No Revolving Lender shall be
responsible for any other Revolving Lender's failure to advance such
other Revolving Lenders' Revolving Commitment Percentage of any
borrowing.
(d) Retention of Defaulting Revolving Lender's Payments. The
Collateral Agent shall not be obligated to transfer to a Defaulting
Revolving Lender any payments made by the Borrowers to the Collateral
Agent for the Defaulting Revolving Lender's benefit, nor shall a
Defaulting Revolving Lender be entitled to the sharing of any payments
hereunder. Amounts payable to a Defaulting Revolving Lender shall
instead be paid to or retained by the Revolving Agent. In its
discretion, the Revolving Agent may loan the Borrowers the amount of
all such payments received or retained by it for the account of such
Defaulting Revolving Lender. Any amounts so loaned to the Borrowers
shall bear interest at the Adjusted Base Rate and for all other
purposes of this Agreement shall be treated as if they were Revolving
Loans, provided, however, that for purposes of voting or consenting to
matters with respect to the Credit Documents and determining the
Revolving Commitment Percentages, such Defaulting Revolving Lender
shall be deemed not to be a "Revolving Lender." Until a Defaulting
Revolving Lender cures its failure to fund its Revolving Commitment
Percentage of any borrowing (i) such Defaulting Revolving Lender shall
not be entitled to any portion of the Unused Line Fee and (ii) the
Unused Line Fee shall accrue in favor of the Revolving Lenders which
have funded their respective Revolving Commitment Percentage of such
requested borrowing and shall be allocated among such performing
Revolving Lenders ratably based upon their relative Revolving
Committed Amount. This Section 10.17(d) shall remain effective with
respect to such Revolving Lender until such time as the Defaulting
Revolving Lender shall no longer be in default of any of its
obligations under this Agreement. The terms of this Section shall not
be construed to increase or otherwise affect the Revolving Commitment
of any Revolving Lender, or relieve or excuse the performance by the
Borrowers of their duties and obligations hereunder.
Section 10.18 Consent of Revolving Agent Not Required. Notwithstanding
anything to the contrary contained in this Agreement, upon and after the
Discharge of the Revolving Obligations, the Collateral Agent shall not require
the Revolving Agent's or any Revolving Lender's consent to any proposed action
by the Collateral Agent which would otherwise require such consent.
ARTICLE 11
INTERCREDITOR PROVISIONS
------------------------
Section 11.1 Ranking of Loans.
(a) Except as otherwise provided in this Article 11, (i) the
Revolving Obligations shall be senior in right of payment to the Term
Obligations and (ii) until Discharge of the Revolving Obligations, no
principal of the Term Obligations will be prepaid or repaid to any
Term Creditor; it being expressly understood that until Discharge of
the Revolving Obligations, no Collateral or proceeds thereof shall be
applied to the Term Obligations, except as otherwise provided in
Section 11.1(b) and Section 11.6. The Revolving Creditors' priority
under this Section 11.1(a) includes, without limitation, priority to
the Term Creditors' post-petition interest, fees, and reasonable
expenses after the occurrence of a Bankruptcy Event, whether or not
allowable under the Bankruptcy Code or other applicable law.
(i) Subject to Section 11.1(b), until Discharge of the
Revolving Obligations, no Term Creditor shall accept or
receive, by setoff or in any other manner, from any Credit
Party the whole or any part of any sums which may now or
hereafter be owing to the Term Creditors by the Credit
Parties, or any of their respective predecessors, successors
or assigns, including, without limitation, a receiver, trustee
or debtor in possession, under or in connection with the Term
Obligations.
(ii) If any payment, distribution or any Collateral
proceeds is received by any Term Creditor from any Credit
Party with respect to the Term Obligations prior to Discharge
of the Revolving Obligations, such Term Creditor shall receive
and hold the same for the benefit of the Revolving Creditors
and, subject to applicable law, rule, or order of any
Governmental Authority, shall forthwith deliver such assets to
the Revolving Agent in precisely the form received (except for
the endorsement or assignment by such Term Creditor where
necessary), for application on any of the Revolving
Obligations, due or not due. If the Term Creditors
unreasonably fail to make any such endorsement or assignment
to the Revolving Creditors, the Revolving Agent and any of its
officers or agents are hereby irrevocably authorized to make
such endorsement or assignment.
(iii) In the event of any bankruptcy, assignment for
the benefit of creditors or similar proceedings against any
Credit Party, the Term Creditors shall file all claims they
may have against such Credit Party, and shall request the
debtor in possession, trustee in bankruptcy, or like Person,
as appropriate, to pay over to the Revolving Agent all amounts
due to the Term Creditors on account of the Term Obligations
until Discharge of the Revolving Obligations. Each Term
Creditor agrees to receive any such sums or distributions that
come into its possession on behalf of the Revolving Lenders
and to deliver the same promptly to the Revolving Agent for
the benefit of the Revolving Creditors. All monies so received
by any Revolving Creditor (including, without limitation,
adequate protection payments) shall be applied to the
Revolving Obligations (including attorneys' fees and expenses
of collection owed to the Revolving Creditors by such Credit
Party), whether then due or not, and the Revolving Creditors
shall account to the Term Creditor(s) only for any balance
remaining.
(b) Notwithstanding anything to the contrary in Section
11.1(a), before Discharge of the Revolving Obligations, the Term
Creditors shall be entitled to receive payments of (i) interest on the
Term Loan unless the Revolving Obligations that have accrued or are
due as of the date of such interest payment on the Term Loan is to be
paid have not been paid to the Collateral Agent; provided, however,
that at such time as such accrued and due Revolving Obligations have
been paid, payment of interest to the Term Lenders (including any
arrearages) shall resume; and provided, further, that in the event a
payment of principal is required to be made pursuant to Section 4.7(b)
because the Loans and LOC Obligations exceed the Total Borrowing Base,
whether or not such payment of principal has been made, the Term
Lenders shall remain entitled to receive interest payments so long as
interest is being paid on the Revolving Loans; (ii) unless a
Bankruptcy Event shall have occurred and be continuing, fees and
expenses under this Agreement and the other Credit Documents, provided
that all Revolving Obligations accrued to or due as of the date of
payment of such fees and expenses have been paid; and (iii) if a
Bankruptcy Event exists and an order of the bankruptcy court provides
for adequate protection of the Revolving Obligations (including,
without limitation, the timely payment of post-petition interest,
fees, and reasonable expenses, whether or not allowable under the
Bankruptcy Code or other applicable law), then the Term Creditors
shall be entitled to receive and retain the following payments from or
on behalf of the Credit Parties or any of them: (A) post-petition fees
and expenses, including professional fees and expenses, accrued on the
Term Loans (which post-petition fees and expenses shall be paid before
any other obligations of any of the Credit Parties under this
Agreement of the other Credit Documents), but only if the
post-petition fees and expenses, including professional fees and
expenses, accrued on the Revolving Loans are paid first in full (even
if any other amounts owed in respect of the Revolving Obligations
remain unpaid), and (B) post-petition interest accrued on the Term
Loans, but only if post-petition interest accrued on the Revolving
Loans is paid first in full (even if any pre-petition amounts owed in
respect of the Revolving Obligations remain unpaid), and (C)
pre-petition interest, fees and expenses, including professional fees
and expenses, accrued on the Term Loans, but only if pre-petition
interest, fees and expenses, including professional fees and expenses,
accrued on the Revolving Loans is paid first in full; provided,
however, that, notwithstanding anything to the contrary in this
Agreement, in connection with any reorganization, restructuring or
readjustment, the Term Lenders may receive, accept and retain
securities provided thereby that are equity securities or are junior
in right of payment to all indebtedness issued to the Revolving
Lenders in such plan of reorganization, restructuring or readjustment
to substantially the same extent as, or to a greater extent than, the
Term Obligations are junior in right of payment to the Revolving
Obligations as provided in this Agreement.
Section 11.2 Exercise of Remedies.
(a) Notwithstanding anything in this Agreement or in any other
Credit Document to the contrary, but subject to the Revolving Lenders
right to cease funding in accordance with Section 11.14, if an Event
of Default that is not a Designated Event of Default exists, the
Collateral Agent shall exercise remedies, whether pursuant to Section
9.2, Section 4.8 or any other provision of the Credit Documents, only
at the direction of the Term Agent; provided, however, that if an
Event of Default occurs as a result of a breach of a Tier II Financial
Covenant, the Collateral Agent may only exercise remedies at the joint
direction of the Revolving Agent (acting at the direction of the
Revolving Lenders) and the Term Agent (acting at the direction of the
Term Lenders). If a Designated Event of Default exists, either or both
of the Term Agent and the Revolving Agent may direct the Collateral
Agent to exercise remedies and in such event, if the Term Agent and
the Revolving Agent provide different instructions to the Collateral
Agent, the Collateral Agent shall, to the extent practicable, follow
each such instruction; provided that if the Term Agent and Revolving
Agent provide conflicting instructions the Collateral Agent shall
follow the more "Aggressive" of the remedies directed to be taken. For
the purposes of this Agreement, more "Aggressive" remedy shall mean
the remedy designed to liquidate the Collateral in the most expedited
manner. If the Collateral Agent cannot reasonably determine one remedy
to be more "Aggressive" than another, the Collateral Agent shall
notify each such Agent and the Collateral Agent shall exercise
remedies only upon the receipt of non-conflicting joint instructions
of both Agents; provided, further that, for the avoidance of doubt, if
one Agent instructs the Collateral Agent not to exercise a remedy or
otherwise to refrain from taking an action and the other Agent
instructs to the Collateral Agent to exercise a remedy or otherwise
take an action, such instructions shall not be deemed to be in
conflict for these purposes and the Collateral Agent shall be bound by
the instruction to exercise such remedy or take such action, as the
case may be; and provided, further that in connection with the sale of
Collateral pursuant to an exercise of remedies that results in the
sale of Inventory and/or Accounts in bulk, the purchase price to be
accepted by the Collateral Agent and the terms, conditions, costs and
expenses of any liquidator or similar professional engaged to sell the
Collateral shall be acceptable to the Revolving Agent and the Term
Agent.
(b) Upon the exercise of remedies against the Collateral, no
payment will be made out of the proceeds of the Collateral except in
accordance with the priority of payment set forth in Section 11.1(a).
For purposes of this Section 11.2 only, "exercise remedies" or
"exercise of remedies" shall mean any of the following: (i) the taking
of actions to collect or enforce all or any part of any of the Total
Obligations or any claims in respect thereof against any Credit Party
or any Credit Party's property or assets or any property or assets of
any direct or indirect subsidiary of any Credit Party; (ii) the
application of any property or assets of any Credit Party or any
affiliated or unaffiliated third party to any of the Total Obligations
with respect to any Credit Party or any affiliated or unaffiliated
third party or any of its property or assets; (iii) the taking of
control or possession of, or the exercise of any right of setoff with
respect to any, property or assets of any Credit Party or the sale or
other disposition of any interest in such property or assets; (iv) the
taking of any action to interfere with any rights in respect of such
property or assets of, or held by, any Lender or its ability to
realize upon or otherwise deal with such property or assets; or (v)
the commencement or maintenance of any action, suit or other
proceeding at law, in equity or otherwise in furtherance of any of the
foregoing or to otherwise enforce rights against any Credit Party or
any Credit Party's property or assets or to direct the owner of such
property or assets to sell or otherwise dispose of any interest
therein. To "exercise remedies" shall mean to take or institute the
taking of any exercise of remedies. For purposes of clarification, the
terms "exercise of remedies" and "exercise remedies" exclude any
reduction in the advance rates under the Revolving Borrowing Base, and
the Revolving Lenders may, upon the occurrence and during the
continuation of a Designated Event of Default, reduce the advance
rates under the Revolving Borrowing Base without the necessity or
consent of the Term Agent or any Term Lender. All references herein to
"property" or "assets" include, without limitation, the Collateral.
Section 11.3 Reserves. The Collateral Agent shall not set Reserves
without the prior approval of the Term Agent (which approval shall not be
unreasonably withheld or delayed), except that the Collateral Agent may set the
following Reserves in its reasonable discretion: (i) Reserves enumerated in
clauses (a)(i), (a)(ii), (b)(ii), and (b)(iii) of the definition of "Reserves";
(ii) Reserves for not more than one month's rent at leased locations, provided
that such reserves are applied only to clause (a)(iii) or clause (b)(iii) of
the definition of "Revolving Borrowing Base"; (iii) Reserves in an amount not
to exceed $2,500,000 in the aggregate under clause (b)(v) of the definition of
Reserves; except that in the event the Borrowers fail to timely deliver any
Borrowing Base Certificates and other collateral reports such Reserves shall be
subject to no limitation other than the reasonable discretion of the Collateral
Agent; (iv) additional Reserves established by the Required Revolving Lenders
upon the occurrence and during the continuation of a Designated Event of
Default; and (v) other Reserves in an amount not to exceed $2,500,000 in the
aggregate.
Section 11.4 Amendments and Waivers. Notwithstanding anything to the
contrary provided in Section 13.6, before Discharge of the Revolving
Obligations, this Agreement and the other Credit Documents may only be amended
and waivers and consents may only be granted with the written approval of each
of the Term Agent, acting at the direction of the Term Lenders or Required
Term Lenders, as the case may be, and the Revolving Agent, acting at the
direction of the Revolving Lenders or the Required Revolving Lenders, as the
case may be; provided, however, that Revolving Agent or Revolving Lender
approval is not required (a) for any amendment or other modification of the
Credit Documents that would: (i) extend the maturity date or reduce the amount
of any Term Loan; (ii) reduce the interest rate applicable to the Term Loans
or extend the date of payment for any Term Loan or ; (iii) make any of the
Tier I Financial Covenants easier to satisfy; (iv) lower the threshold
necessary for Required Term Lender approval in the definition of "Required
Term Lenders"; (v) substitute a requirement for unanimous Term Lender approval
with a requirement for Required Term Lender approval; or (vi) amend the
definition of Total Borrowing Base such that availability under the Total
Borrowing Base increases by no more than $7,500,000, or (b) for any waiver of
the Defaults Relating Solely to the Term Loans.
Section 11.5 No Contest. Each Lender agrees that it will not contest
or challenge the validity or enforceability of any portion of the Total
Obligations.
Section 11.6 Bankruptcy. The provisions of this Article 11 shall
continue in full force and effect notwithstanding the occurrence and
continuance of any Bankruptcy Event. Each Agent and each Lender acknowledges
and agrees for the benefit of the others that without the prior written consent
of each of the Revolving Agent and the Term Agent, no Agent or Lender will
participate in any involuntary bankruptcy filing against any of the Credit
Parties, or, in the event of a bankruptcy filing by or against any of the
Credit Parties, for a period from the petition date to (a) 180 days following
the petition date (if a Credit Party files a plan of reorganization during the
first 120 days following the petition date) or (b) 120 days following the
petition date, if no plan or reorganization is filed during such period, will
exercise any remedies, including seeking to lift the automatic stay, appoint
any trustee or receiver or pursue any sale of the Collateral; provided,
however, that if the Revolving Lenders reasonably believe that the value of the
Collateral is such that the Revolving Obligations are not adequately protected,
or if the Term Lenders reasonably believe that the value of the Collateral is
such that the Term Obligations are not adequately protected, the Revolving
Lenders or the Term Lenders, as the case may be, shall be permitted to move the
bankruptcy court for a determination to that effect, and, if the bankruptcy
court so finds, the Revolving Lenders or the Term Lenders, as the case may be,
shall be permitted to pursue their remedies (subject in all cases to the
provisions as to the priority of recovery of the Revolving Obligations as
provided in Section 11.1). Each Lender agrees to support a motion for payment
of pre-petition interest, fees and expenses on the Revolving Loans and the Term
Loans during the pendency of any Bankruptcy Event. Notwithstanding anything to
the contrary herein, in connection with any Bankruptcy Event concerning any
Credit Party, (y) any Lender may file a proof of claim, and may amend such
proof of claim, in respect of any indebtedness or other obligations owing by
such Credit Party to such Lender and (z) any Lender may on its own object to
the motion of any other party in such bankruptcy case (provided that no Lender
shall object to, or seek to challenge the validity or priority of, the claims
or liens of any other Lender against such Credit Party arising under or in
connection with this Agreement). The Term Lenders may not approve of any plan
of reorganization proposed in any Bankruptcy Event concerning any Credit Party
unless the plan provides for the Discharge of the Revolving Obligations.
Section 11.7 Post-Petition Financing. In the event of a Bankruptcy
Event, neither the Term Lenders nor the Revolving Lenders (or any of them)
shall seek to obtain senior Liens and priorities in connection with any
post-petition financing of the Credit Parties without the consent of the
Required Revolving Lenders or the Required Term Lenders, respectively;
provided, however, that the Revolving Lenders may, without the consent of the
Term Lenders, provide emergency interim debtor-in-possession financing to the
extent necessary to pay payroll and similar expenses necessary to maintain
operations during the initial weeks of any bankruptcy filing; provided that the
amount of such financing shall be no greater than the lesser of (a) the amount
which would otherwise be available under the Revolving Borrowing Base or by a
Discretionary Overadvance had the Borrower not filed for bankruptcy protection,
and (b) $4,000,000.
Section 11.8 Legends. The faces of any instrument evidencing the Term
Obligations or any portion thereof will be forthwith inscribed with a legend
conspicuously indicating that payment thereon is subject to the payment
priorities in favor of the Revolving Lenders as set forth in this Agreement,
and copies thereof will forthwith be delivered to the Revolving Agent. Any
instrument evidencing any of the Term Obligations or any portion thereof which
is hereafter executed will, on the date thereof, be inscribed with the
aforesaid legend, and copies thereof will be delivered to the Revolving Agent
on the date of its execution or within five (5) Business Days thereafter.
Section 11.9 Management of Revolving Loans; Maintenance of Priorities.
(a) The Lien and other priorities provided in Section 11.1
shall not be altered or otherwise affected by any amendment,
modification, supplement, extension, renewal, or restatement of any
Revolving Obligations (or the documents evidencing or securing the
same in accordance with this Agreement), nor by any action or inaction
that any Revolving Creditor or the Collateral Agent may take or fail
to take in respect of any Collateral in accordance with this Agreement
in each case except to the extent that an action or inaction results
from such Party's willful misconduct or gross negligence and that
negatively impacts the Term Lenders.
(b) The Revolving Creditors shall be entitled to manage and
supervise the Revolving Loans in accordance with this Agreement and
their usual practices (to the extent not inconsistent with the terms
of this Agreement), modified from time to time as they deem
appropriate under the circumstances.
Section 11.10 [Reserved.]
Section 11.11 Obligations of the Credit Parties Unconditional. Nothing
contained in this Article 11 or elsewhere in this Agreement or in the other
Credit Documents is intended to or shall impair, as between the Credit Parties
and their creditors other than the holders of the Revolving Loans, the
Obligations of the Credit Parties, which are absolute and unconditional, to pay
the Term Obligations to the Term Lenders as and when they shall become due and
payable in accordance with their terms, or is intended to or shall affect the
relative rights of the Term Lenders and creditors of the Credit Parties other
than the holders of Revolving Loans, from exercising all remedies otherwise
permitted by applicable law upon the happening of an Event of Default, subject
to the rights, under this Article 11, of the Revolving Lenders with respect to
assets of the Credit Parties received upon the exercise of any such remedy. The
failure of the Credit Parties to make payment on account of the Term
Obligations by reason of any provision of this Article 11 shall not be
construed as preventing the occurrence or continuance of an Event of Default.
Section 11.12 Term Lenders Entitled to Assume Payments of Interest and
Fees Not Prohibited in Absence of Notice. Neither the Term Agent nor any Term
Lender shall be charged at any time with knowledge of the existence of any
facts which would prohibit the making of any payment to it, unless and until
the Term Agent shall have received written notice thereof from the Collateral
Agent or the Revolving Agent and prior to the receipt of any such written
notice, the Term Agent and each Term Lender shall be entitled to assume
conclusively that no such facts exist. But the foregoing does not impair the
obligation of any Term Creditor that receives any payment prohibited by Section
11.1 to immediately return such payment to the Revolving Agent upon notice from
the Collateral Agent or the Revolving Agent that such payment was made in
violation of Section 11.1.
Section 11.13 Term Lender's Purchase Right and Right of First Refusal.
The Term Agent shall have the right at any time to purchase the Revolving Loan
of any Revolving Lender that opposes a course of action or inaction advocated
by the Term Agent or the Required Term Lenders or votes in favor of or consents
to any course of action opposed by the Term Agent or the Required Term Lenders
and whose vote is a blocking vote, such that a change in the vote will lead to
the approval of the course of action advocated by the Term Lenders, at a
purchase price equal to 100% of the principal amount of such Revolving Loan
outstanding, plus accrued and unpaid interest due and owing thereunder
(including, without limitation, default interest), plus all fees and reasonable
out-of-pocket expenses actually incurred for which such Revolving Lender is
entitled to be reimbursed pursuant to the Credit Documents (the "Purchase
Price") by giving written notice to such Revolving Lender (a "Purchase
Notice"). In the event that any Revolving Lender seeks to sell, transfer, or
otherwise dispose of all or any portion of its Revolving Loans to any Person
(other than an Affiliate), such Revolving Lender shall provide to the Term
Agent timely advance written notice of such proposed sale, transfer or
disposition, including the terms thereof, and shall provide to the Term Agent
the right to acquire such Revolving Loans on the same terms (such price, the
"Right of First Refusal Price"). Such Revolving Lender shall not effect such a
sale, transfer or disposition of such Revolving Loans to any person other than
the Term Agent, unless the Term Agent has failed to notify such Revolving
Lender of the Term Agent's intent to exercise its right of acquisition (such
notice, a Purchase Notice) within 2 business days after delivery of the
aforesaid notification. In the event that the Term Agent does not exercise such
right, such Revolving Lender shall have a period of 45 business days thereafter
to close a sale, transfer or other disposition on terms no less favorable to
such Revolving Lender than those communicated to the Term Agent, provided that
if such a closing does not occur within such period, the Term Agent shall be
entitled to a new notice and right of first refusal opportunity for any
subsequent sale.
(a) The Term Agent and the applicable Revolving Lender shall
close the purchase of the Revolving Loan of such Revolving Lender
within 5 Business Days after the date of delivery of the Purchase
Notice (the "Closing Date"). At such closing, the selling Revolving
Lender and the Term Lender shall execute and deliver an Assignment and
Acceptance and any other appropriate documents, and the selling
Revolving Lender shall deliver to the Term Lender its Revolving Note
evidencing such Revolving Lender's Revolving Loan and such instruments
of transfer, duly executed and acknowledged by the selling Revolving
Lender, as in the reasonable judgment of the Term Lender shall be
sufficient to transfer to the Term Lender the entire interest of the
selling Revolving Lender in and to its Revolving Loan, against payment
by the Term Lender in full of the Purchase Price of such Loan by
federal wire transfer or other immediately available funds to such
account or accounts as the selling Revolving Lender shall have
specified in writing to the Term Lender.
(b) By entering into this Agreement, each Revolving Lender
agrees to sell its Revolving Loan to the Term Lenders in accordance
with the terms of this Section 11.13. The Term Lender is hereby
authorized to demand specific performance of this Section 11.13 at any
time when any Revolving Lender shall have failed to comply with the
provisions hereof and each Revolving Lender irrevocably waives any
defense based on the adequacy of a remedy at law which might be
asserted as a bar to such remedy of specific performance.
(c) The Term Agent may assign all or any portion of its rights
under this Section 11.13 to any Term Lender or any Affiliate of any
Term Lender.
Section 11.14 Obligation of the Revolving Lenders to Make Revolving
Loans;. Notwithstanding anything to the contrary set forth herein or in any
other Credit Document, if an Event of Default has occurred and is continuing
(other than a Default Relating Solely to the Term Loans), the Revolving Lenders
shall not be required to make Revolving Loans to the Borrowers; it being
understood that the occurrence of a Default Relating Solely to the Term Loans
shall not, by itself, relieve the Revolving Lenders of the obligation to make
Revolving Loans, whether pursuant to Section 5.2(b) or otherwise.
Section 11.15 Reinstatement. If a court order or other legal process
compels a Revolving Creditor to disgorge or return any payment or Collateral
proceeds, or any portion thereof, applied to the Revolving Obligations, this
Agreement will be reinstated to the extent of the amount returned or disgorged.
Section 11.16 No Implied Duties; No Partnership. Notwithstanding any
provision to the contrary contained elsewhere in this Agreement or in any other
Credit Document, no Lender shall have any duties or responsibilities, except
those expressly set forth herein, nor shall any Lender have or be deemed to
have any fiduciary relationship with any other Lender, and no implied
covenants, functions, responsibilities, duties, obligations, or liabilities
shall be read into this Agreement or any other Credit Document or otherwise
exist against any Lender. Neither the execution of this Agreement, nor any
action or transaction contemplated hereby, shall be construed to be, or deemed
to constitute, the formation or creation of a partnership or joint venture
between or among the Lenders.
Section 11.17 Benefits of this Article 11; Conflicts. Nothing in this
Article 11, express or implied, shall give to any person, other than the Agents
and the Lenders, any benefit or any legal or equitable right, remedy or claim
under this Article 11. The provisions of this Article 11 are solely for the
benefit of the Agents and the Lenders and not for the benefit of any other
creditor of the Credit Parties, the Credit Parties, or any other Person. As
between the Lenders and the Agents, the terms and conditions of this Agreement
and the other Credit Documents are subject in all respects to this Article 11.
ARTICLE 12
AMENDMENT AND RESTATEMENT
-------------------------
Section 12.1 Transactions on the Closing Date. Upon the satisfaction
of each of the conditions set forth in Article 5 and the making of the Term
Loans, the following will automatically occur:
(a) first, the outstanding amounts owing to Jewelry Investors
II, L.L.C. under the Original Credit Agreement (other than any
participation in any Existing Letters of Credit) will be converted to
Term Loans;
(b) second, the participations of Jewelry Investors II, L.L.C.
in any Existing Letters of Credit will be reassigned to the Revolving
Lenders in accordance with their Revolving Commitment Percentages;
(c) third, the remaining proceeds of the Term Loans will be
applied to reduce the "Revolving Loans" of the Revolving Lenders
outstanding under the Original Credit Agreement on a pro rata basis
and the remaining "Revolving Loans" and "Letters of Credit"
outstanding under (and as defined in) the Original Credit Agreement
shall be Revolving Loans and Letters of Credit outstanding under this
Agreement; and
(d) fourth, Jewelry Investors II, L.L.C.'s respective duties,
obligations, and commitments as a party to the Original Credit
Agreement, but not its rights thereunder, shall terminate.
Section 12.2 Amendment and Restatement; Waiver of Claims.
(a) This Agreement and the other Credit Documents amends and
restates in its entirety the Original Credit Agreement and the "Credit
Documents" (as defined in the Original Credit Agreement). All rights,
benefits, indebtedness, interests, liabilities, and obligations of the
parties to the agreements, documents, and instruments executed and
delivered in connection with the Original Credit Agreement (the
"Original Credit Documents") are hereby renewed (or converted as the
case may be), amended, restated, and superseded in their entirety
according to the terms and provisions set forth herein and in the
other Credit Documents. This Agreement does not constitute, nor may it
result in, a waiver of or a release, discharge, or forgiveness of any
amount payable pursuant to the Original Credit Documents or any
indebtedness, liabilities, or obligations of the Credit Parties
thereunder, all of which are renewed and continued and are hereafter
payable and to be performed in accordance with this Agreement. Neither
this Agreement nor the other Credit Documents extinguish the
indebtedness outstanding in connection with the Original Credit
Documents, nor do they constitute a novation with respect thereto.
(b) All obligations of any Credit Party under any guaranty
agreement executed pursuant to the Original Credit Documents are
renewed and continued and are hereafter payable in accordance with the
Guaranty Agreements executed by such Credit Parties, and each such
Credit Party acknowledges and agrees that the "Guaranteed Obligations"
as defined by the Guaranty Agreements include, without limitation, the
"Obligations" under the Original Credit Agreement existing on the
Closing Date as renewed by this Agreement and the Total Obligations.
(c) All security interests, liens, and assignments previously
granted by any Credit Party pursuant to the Original Credit Documents
are hereby renewed and continued, and all such security interests,
liens, and assignments shall remain in full force and effect as
security for the Total Obligations.
Section 12.3 Release and Waivers.
(a) EACH CREDIT PARTY REPRESENTS AND WARRANTS THAT AS OF THE
CLOSING DATE THERE ARE NO CLAIMS OR OFFSETS AGAINST, OR DEFENSES OR
COUNTERCLAIMS TO, ITS OBLIGATIONS UNDER THIS AGREEMENT OR ANY OF THE
"CREDIT DOCUMENTS" (AS DEFINED IN THE ORIGINAL CREDIT AGREEMENT;
HEREIN THE "ORIGINAL CREDIT DOCUMENTS"), NOR ANY CAUSES OF ACTION
ARISING THEREFROM. TO INDUCE THE AGENTS AND THE LENDERS TO ENTER INTO
THIS AGREEMENT EACH CREDIT PARTY WAIVES ANY AND ALL SUCH CLAIMS,
OFFSETS, DEFENSES, COUNTERCLAIMS, OR CAUSES OF ACTION WHETHER KNOWN OR
UNKNOWN, ARISING PRIOR TO THE DATE HEREOF AND RELATING TO THE ORIGINAL
CREDIT DOCUMENTS OR THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS.
EACH CREDIT PARTY ACKNOWLEDGES THAT IT MAY HEREAFTER DISCOVER FACTS
DIFFERENT FROM OR IN ADDITION TO THOSE NOW KNOWN OR BELIEVED TO BE
TRUE WITH RESPECT TO SUCH CLAIMS, OFFSETS, DEFENSES, COUNTERCLAIMS, OR
CAUSES OF ACTION, AND AGREES THAT THIS AGREEMENT AND THE PRECEDING
RELEASE ARE AND WILL REMAIN EFFECTIVE IN ALL RESPECTS NOTWITHSTANDING
ANY SUCH DIFFERENCES OR ADDITIONAL FACTS.
(b) As of the effectiveness of this Agreement and the making
of the Term Loans, the Agents and the Lenders waive any existing
"Defaults" or "Events of Default" under (and as defined in) the
Original Credit Agreement or the Original Credit Documents.
ARTICLE 13
MISCELLANEOUS
-------------
Section 13.1 Notices. Except as otherwise expressly provided herein,
all notices and other communications shall have been duly given and shall be
effective (a) when delivered, (b) when transmitted via telecopy (or other
facsimile device) to the number specified below, (c) only with respect to any
financial information required to be delivered pursuant to Section 7.1, when
transmitted to and received at an e-mail address acceptable to each of the
Agents and the Lenders and provided to the Borrowers in writing at any time,
(d) the Business Day following the day on which the same has been delivered
prepaid to a reputable national overnight air courier service, or (e) the third
Business Day following the day on which the same is sent by certified or
registered mail, postage prepaid, in each case to the respective parties at the
address, in the case of the Borrowers, the Guarantors, and the Agents, set
forth below, and, in the case of the Lenders, set forth on Schedule 13.1, or at
such other address as such party may specify by written notice to the other
parties hereto:
if to the Borrowers or the Guarantors:
▇▇▇▇▇▇▇▇'▇ Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Executive Officer
and General Counsel
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Revolving Agent:
Bank of America, N.A.
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ , ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Account Executive
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Term Agent:
Jewelry Investors II, L.L.C.
c/o Farallon Capital Partners
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇'▇ Portfolio Manager
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Collateral Agent:
Bank of America, N.A.
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ , ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Account Executive
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Section 13.2 Right of Setoff. In addition to any rights and remedies
of the Agents or the Lenders provided by law, if an Event of Default exists or
the Loans have been accelerated, each Agent and each Lender is authorized at
any time and from time to time, without prior notice to the Credit Parties, any
such notice being waived by the Credit Parties to the fullest extent permitted
by law, to setoff and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held by, and other indebtedness at
any time owing by, such Agent or Lender or any Affiliate of such Agent or
Lender to or for the credit or the account of the Credit Parties against the
Total Obligations to such Agent or Lender, now or hereafter existing,
irrespective of whether or not such Agent or Lender shall have made demand
under this Agreement or any other Credit Document and although such Total
Obligations owing by the Credit Parties may be contingent or unmatured. Each
Agent and each Lender agrees promptly to notify the Credit Parties and the
Agents after any such setoff and application made by such Lender; provided,
however, the failure to give such notice shall not affect the validity of such
setoff and application. NOTWITHSTANDING THE FOREGOING, NO AGENT OR LENDER SHALL
EXERCISE ANY RIGHT OF SETOFF, BANKER'S LIEN, OR THE LIKE AGAINST ANY DEPOSIT
ACCOUNT OR PROPERTY OF ANY CREDIT PARTY HELD OR MAINTAINED BY SUCH AGENT OR
LENDER WITHOUT THE PRIOR WRITTEN UNANIMOUS CONSENT OF THE LENDERS.
Section 13.3 Benefit of Agreement; Assignments.
(a) This Agreement shall be binding upon and inure, except as
expressly provided in this Agreement, to the benefit of and be
enforceable by the respective successors and assigns of the parties
hereto; provided that neither any Borrower nor any Guarantor may
assign or transfer any of its interests and obligations without prior
written consent of each of the Lenders; provided further that the
rights of each Lender to transfer, assign, or grant participations in
its rights and/or obligations hereunder shall be limited as provided
by this Section 13.3.
(b) Any Lender may, with the written consent (which consent
shall not be unreasonably withheld) of the Revolving Agent, with
respect to the Revolving Lenders, and the Term Agent, with respect to
the Term Lenders, assign and delegate to one or more Eligible
Assignees (provided that no consent of any Agent shall be required in
connection with any assignment and delegation by a Lender to an
Affiliate of such Lender or to another Lender) (each an "Assignee")
all, or any ratable part of all, of the Loans, the Commitments, and
the other rights and obligations of such Lender hereunder, in a
minimum amount of $10,000,000 and integral amounts of $1,000,000 in
excess thereof or all of such assigning Lender's Loans and Commitments
(provided that, unless an assignor Lender has assigned and delegated
all of its Loans and Commitments, no such assignment and/or delegation
shall be permitted unless, after giving effect thereto, such assignor
Lender retains Loans and/or a Commitment in a minimum amount of
$10,000,000); provided, however, that the Credit Parties and the
Agents may continue to deal solely and directly with such Lender in
connection with the interest so assigned to an Assignee until (i)
written notice of such assignment, together with payment instructions,
addresses, and related information with respect to the Assignee, shall
have been given to the Borrowers and the Agents by such Lender and the
Assignee, (ii) such Lender and its Assignee shall have delivered to
the Borrowers and the Collateral Agent an Assignment and Acceptance in
the form of Exhibit D (an "Assignment and Acceptance") together with
any Notes subject to such assignment, and (iii) the assignor Lender or
Assignee has paid to the Collateral Agent a processing fee in the
amount of $5,000. The Borrowers agree to promptly execute and deliver
new or replacement Notes as reasonably requested by the Collateral
Agent to evidence assignments of the Loans and Commitments in
accordance herewith.
(c) From and after the date that the Collateral Agent notifies
the assignor Lender that it has received an executed Assignment and
Acceptance and payment of the above-referenced processing fee (i) the
Assignee thereunder shall be a party hereto and, to the extent that
rights and obligations, including, but not limited to, the obligation
to participate in Letters of Credit have been assigned to it pursuant
to such Assignment and Acceptance, shall have the rights and
obligations of a Lender under the Credit Documents and (ii) the
assignor Lender shall, to the extent that rights and obligations
hereunder and under the other Credit Documents have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights
and be released from its obligations under this Agreement (and in the
case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this
Agreement, such Lender shall cease to be a party hereto).
(d) By executing and delivering an Assignment and Acceptance,
the assigning Lender thereunder and the Assignee thereunder confirm to
and agree with each other and the other parties hereto as follows: (i)
other than as provided in such Assignment and Acceptance, such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties, or
representations made in or in connection with this Agreement or the
execution, legality, validity, enforceability, genuineness,
sufficiency, or value of this Agreement or any other Credit Document
furnished pursuant hereto or the attachment, perfection, or priority
of any Lien granted by the Credit Parties to the Collateral Agent or
any Lender in the Collateral; (ii) such assigning Lender makes no
representation or warranty and assumes no responsibility with respect
to the financial condition of the Credit Parties or the performance or
observance by the Credit Parties of any of their respective
obligations under this Agreement or any other Credit Document
furnished pursuant hereto; (iii) such Assignee confirms that it has
received a copy of this Agreement, together with such other documents
and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance;
(iv) such Assignee will, independently and without reliance upon any
Agent, such assigning Lender, or any other Lender, and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking
action under this Agreement; (v) such Assignee appoints and authorizes
the Collateral Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement and the other Credit
Documents as are delegated to the Collateral Agent by the terms
hereof, together with such powers, including the discretionary rights
and incidental power, as are reasonably incidental thereto; and (vi)
such Assignee agrees that it will perform in accordance with their
terms all of the obligations which by the terms of this Agreement are
required to be performed by it as a Lender.
(e) Immediately upon satisfaction of the requirements of
Section 13.3(b), this Agreement shall be deemed to be amended to the
extent, but only to the extent, necessary to reflect the addition of
the Assignee and the resulting adjustment of the Commitments arising
therefrom. The Commitment allocated to each Assignee shall reduce such
Commitments of the assigning Lender pro tanto.
(f) Any Lender may at any time sell to one or more
participants participating interests in any Loans, the Commitments of
that Lender, and the other interests of that Lender (the "originating
Lender") hereunder and under the other Credit Documents; provided,
however, that (i) the originating Lender's obligations under this
Agreement shall remain unchanged, (ii) the originating Lender shall
remain solely responsible for the performance of such obligations,
(iii) the Credit Parties and the Agents shall continue to deal solely
and directly with the originating Lender in connection with the
originating Lender's rights and obligations under this Agreement and
the other Credit Documents, and (iv) no Lender shall transfer or grant
any participating interest under which the participant has rights to
approve any amendment to, or any consent or waiver with respect to,
this Agreement or any other Credit Document except the matters set
forth in Section 13.6(a)(i), Section 13.6(a)(ii), and Section
13.6(a)(iii), and (v) all amounts payable by the Borrowers hereunder
shall be determined as if such Lender had not sold such participation,
except that, if amounts outstanding under this Agreement are due and
unpaid, or shall have been declared or shall have become due and
payable upon the occurrence of an Event of Default, each participant
shall be deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement to the
same extent and subject to the same limitation as if the amount of its
participating interest were owing directly to it as a Lender under
this Agreement.
(g) The Collateral Agent shall maintain at its address
referred to in Section 13.1 a copy of each Assignment and Acceptance
delivered to and accepted by it and a register for the recordation of
the names and addresses of the Lenders and the Commitment of, and
principal amount of the Loans owing to, each Lender from time to time
(the "Register"). The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and the Credit
Parties, the Agents, and the Lenders may treat each Person whose name
is recorded in the Register as a Lender hereunder for all purposes of
this Agreement. The Register shall be available for inspection by the
Credit Parties or any Lender at any reasonable time and from time to
time upon reasonable prior notice. Any assignment of any loan,
commitment, interest, or obligation hereunder or under the other
Credit Documents shall be effective only upon an entry with respect
thereto being made in the Register.
(h) Upon its receipt of an Assignment and Acceptance executed
by the parties thereto, together with any Note subject to such
assignment and payment of the processing fee, the Collateral Agent
shall (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register, and (iii) give prompt
notice thereof to the parties thereto.
(i) Any Lender may furnish any information concerning the
members of the Consolidated Group in the possession of such Lender
from time to time to assignees and participants (including prospective
assignees and participants), subject, however, to the provisions of
Section 13.15.
(j) Notwithstanding any other provision in this Agreement, any
Lender may at any time create a security interest in, or pledge of,
all or any portion of its rights under and interest in this Agreement
in favor of any Federal Reserve Bank in accordance with Regulation A
of the Federal Reserve Board or United States Treasury Regulation 31
CFR ss.203.14, and such Federal Reserve Bank may enforce such pledge
or security interest in any manner permitted under Requirements of
Law.
Section 13.4 No Waiver; Remedies Cumulative. No failure or delay on
the part of any Agent or any Lender in exercising any right, power, or
privilege hereunder or under any other Credit Document and no course of dealing
between any Agent or any Lender and any of the Credit Parties shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, power,
or privilege hereunder or under any other Credit Document preclude any other or
further exercise thereof or the exercise of any other right, power, or
privilege hereunder or thereunder. The rights and remedies provided herein are
cumulative and not exclusive of any rights or remedies which any Agent or any
Lender would otherwise have. No notice to or demand on any Credit Party in any
case shall entitle the Credit Parties to any other or further notice or demand
in similar or other circumstances or constitute a waiver of the rights of the
Agents or the Lenders to any other or further action in any circumstances
without notice or demand.
Section 13.5 Expenses; Indemnification.
(a) The Borrowers agree to pay to each Agent, for its benefit,
on demand, all reasonable costs and expenses that such Agent pays or
incurs in connection with the negotiation, preparation, syndication,
consummation, administration (including reasonable costs of travel,
lodging, and meals incurred in connection with administration of this
Agreement), enforcement, and termination of this Agreement or any of
the other Credit Documents, including: (i) all reasonable fees,
expenses, and disbursements of any law firm, counsel, or other
professional advisors engaged by such Agent; (ii) reasonable costs and
expenses (including all fees, expenses, and disbursements of any law
firm or counsel engaged by such Agent) in connection with
administration of this Agreement and for any amendment, supplement,
waiver, consent, or subsequent closing in connection with the Credit
Documents and the transactions contemplated thereby; (iii) reasonable
costs and expenses of lien and title searches, title insurance, and
environmental audits; (iv) taxes, fees, and other charges for
recording the Mortgages, filing financing statements and
continuations, and other actions to perfect, protect, and continue the
Liens granted to the Collateral Agent in the Credit Documents
(including reasonable costs and expenses paid or incurred by the
Collateral Agent in connection with the consummation of this
Agreement); (v) sums paid or incurred to pay any amount or take any
action required of any Credit Party under the Credit Documents that
such Credit Party fails to pay or take; (vi) costs of inspections and
verifications of the Collateral, including travel, lodging, and meals
for field examinations and inspections of the Collateral and the
Credit Parties' operations by the Collateral Agent, plus the
Collateral Agent's then customary charge for field examinations and
audits and the preparation of reports thereof (such charge is
currently $850 per day (or portion thereof) for each Person retained
or employed by the Collateral Agent with respect to each field
examination or audit); (vii) costs and expenses of forwarding loan
proceeds, collecting checks and other items of payment, and
establishing and maintaining payment accounts and lockboxes, and costs
and expenses of preserving and protecting the Collateral; (viii)
reasonable out-of-pocket costs and expenses incurred by the Term Agent
under Section 7.18, and (ix) costs incurred by the Collateral Agent in
connection with obtaining appraisals of the Borrowers' inventory and
Installment Contracts to determine the Net Orderly Liquidation Value
and Appraisal Value thereof up to one time in each Fiscal Quarter of
▇▇▇▇▇▇▇▇'▇. In addition, upon demand, the Borrowers agree to pay to
each Agent and each Lender (as applicable) all costs and expenses
incurred by such Agent or such Lender (including all reasonable fees,
expenses, and disbursements of any law firm or other counsel engaged
by any Agent and all reasonable fees, expenses, and disbursements
incurred by the Lenders (as a group) for one law firm retained by the
Lenders), in each case, paid or incurred to obtain payment of the
Total Obligations, enforce the Liens granted to the Collateral Agent
in any Credit Document, sell or otherwise realize upon the Collateral,
and otherwise enforce the provisions of the Credit Documents, or to
defend any claims made or threatened against any Agent or any Lender
arising out of the transactions contemplated hereby (including
preparations for and consultations concerning any such matters).
Additionally, the Borrowers agree to reimburse Bank of America for all
costs, fees, and expenses for which any Credit Party is obligated
under the Original Credit Agreement, and Bank of America is authorized
to charge such amounts to the loan account of the Borrowers. The
foregoing may not be construed to limit any other provisions of the
Credit Documents regarding costs and expenses to be paid by the
Borrowers. All of the foregoing costs and expenses will be charged to
the loan account of the Borrowers as Revolving Loans.
(b) EACH CREDIT PARTY AGREES TO DEFEND, INDEMNIFY, AND HOLD
THE AGENT-RELATED PERSONS, AND EACH LENDER AND EACH OF THEIR
RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, COUNSEL, REPRESENTATIVES,
AGENTS, AND ATTORNEYS-IN-FACT (EACH, AN "INDEMNIFIED PERSON") HARMLESS
FROM AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES,
DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, CHARGES,
EXPENSES, AND DISBURSEMENTS (INCLUDING ATTORNEY FEES AND EXPENSES) OF
ANY KIND OR NATURE WHATSOEVER WHICH MAY AT ANY TIME (INCLUDING AT ANY
TIME FOLLOWING REPAYMENT OF THE LOANS AND THE TERMINATION,
RESIGNATION, OR REPLACEMENT OF ANY AGENT OR REPLACEMENT OF ANY LENDER)
BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST ANY SUCH PERSON IN ANY
WAY RELATING TO OR ARISING OUT OF THIS AGREEMENT, ANY OTHER CREDIT
DOCUMENT, OR ANY OTHER AGREEMENT, DOCUMENT, OR INSTRUMENT CONTEMPLATED
BY OR REFERRED TO HEREIN OR THEREIN, OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY, OR ANY ACTION TAKEN OR OMITTED BY ANY SUCH PERSON
UNDER OR IN CONNECTION WITH ANY OF THE FOREGOING, INCLUDING WITH
RESPECT TO ANY INVESTIGATION, LITIGATION, OR PROCEEDING (INCLUDING ANY
INSOLVENCY PROCEEDING OR APPELLATE PROCEEDING) RELATED TO OR ARISING
OUT OF THIS AGREEMENT, ANY OTHER CREDIT DOCUMENT, OR THE LOANS OR THE
USE OF THE PROCEEDS THEREOF, WHETHER OR NOT ANY INDEMNIFIED PERSON IS
A PARTY THERETO (ALL THE FOREGOING, COLLECTIVELY, THE "INDEMNIFIED
LIABILITIES"); PROVIDED THAT THE CREDIT PARTIES SHALL HAVE NO
OBLIGATION HEREUNDER TO ANY INDEMNIFIED PERSON WITH RESPECT TO
INDEMNIFIED LIABILITIES TO THE EXTENT DETERMINED IN A FINAL,
NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE
RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH
INDEMNIFIED PERSON. THE AGREEMENTS IN THIS SECTION 13.5(b) SHALL
SURVIVE PAYMENT OF ALL OTHER TOTAL OBLIGATIONS.
(c) EACH CREDIT PARTY AGREES TO INDEMNIFY, DEFEND, AND HOLD
HARMLESS THE AGENTS AND THE LENDERS FROM ANY LOSS OR LIABILITY
DIRECTLY OR INDIRECTLY ARISING OUT OF THE USE, GENERATION,
MANUFACTURE, PRODUCTION, STORAGE, RELEASE, THREATENED RELEASE,
DISCHARGE, DISPOSAL, OR PRESENCE OF A HAZARDOUS SUBSTANCE RELATING TO
ANY CREDIT PARTY'S OPERATIONS, BUSINESS, OR PROPERTY. THIS INDEMNITY
WILL APPLY WHETHER THE HAZARDOUS SUBSTANCE IS ON, UNDER, OR ABOUT ANY
CREDIT PARTY'S PROPERTY OR OPERATIONS OR PROPERTY LEASED TO ANY CREDIT
PARTY. THIS INDEMNITY INCLUDES, BUT IS NOT LIMITED TO, REASONABLE
ATTORNEY FEES AND EXPENSES. THIS INDEMNITY EXTENDS TO THE AGENTS AND
THE LENDERS, THEIR AFFILIATES, SUBSIDIARIES, AND ALL OF THEIR
DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, SUCCESSORS, ATTORNEYS, AND
ASSIGNS. AS USED IN THIS CLAUSE (c), "HAZARDOUS SUBSTANCES" MEANS ANY
SUBSTANCE, MATERIAL, OR WASTE THAT IS OR BECOMES DESIGNATED OR
REGULATED AS "TOXIC", "HAZARDOUS", "POLLUTANT", OR "CONTAMINANT" OR A
SIMILAR DESIGNATION OR REGULATION UNDER ANY FEDERAL, STATE, OR LOCAL
LAW (WHETHER UNDER COMMON LAW, STATUTE, REGULATION, OR OTHERWISE) OR
JUDICIAL OR ADMINISTRATIVE INTERPRETATION OF SUCH, INCLUDING PETROLEUM
OR NATURAL GAS. THIS INDEMNITY WILL SURVIVE REPAYMENT OF ALL OTHER
TOTAL OBLIGATIONS.
Section 13.6 Amendments, Waivers, and Consents. Subject to Section
11.4, neither this Agreement nor any other Credit Document nor any of the terms
hereof or thereof may be amended, changed, waived, discharged, or terminated
unless such amendment, change, waiver, discharge, or termination is in writing
entered into by, or approved in writing by, the Required Lenders and the
Borrowers, provided, however, that:
(a) except as specifically provided in clause (iv) following,
without the consent of each Lender, neither this Agreement nor any
other Credit Document may be amended to
(i) increase the aggregate amount of the Commitments
(including the Revolving Loan Commitments and the LOC
Committed Amount) or, with the consent of only the Lender
affected thereby, increase the Commitment of a Lender over the
amount thereof in effect (it being understood and agreed that
a waiver of any Default or Event of Default or mandatory
reduction in the Commitments shall not constitute a change in
the terms of any Commitment of any Lender),
(ii) except as the result of or in connection with an
Asset Disposition permitted by Section 8.5 or a sale or other
disposition of the type that is expressly excluded from the
definition of "Asset Disposition" as otherwise expressly
permitted under Section 10.11 or the Collateral Documents,
release or subordinate any Collateral,
(iii) except as the result of or in connection with a
dissolution, merger, or disposition of a member of the
Consolidated Group permitted under Section 8.4, release any
Credit Party from its obligations under the Credit Documents,
(iv) amend, modify, or waive any provision of this
Section 13.6 or Section 4.10 through Section 4.13, Section
4.14(b), Section 9.1(a), Section 13.2, Section 13.3, Section
13.5, or Section 13.9,
(v) reduce any percentage specified in or otherwise
change any percentage of the Commitments which is required for
the Lenders to take any action under this Agreement, or
otherwise modify, the definition of Required Lenders,
(vi) amend the definition of "Eligible Installment
Contracts", "Eligible Inventory", "Reserves", "Revolving
Borrowing Base", or "Total Borrowing Base", or
(vii) consent to the assignment or transfer by any
Borrower or any other Credit Party of any of its rights and
obligations under (or in respect of) the Credit Documents
except as permitted thereby;
(b) (i) without the consent of the Agents, no provision of
Article 10 or Article 11 may be amended, and (ii) any of the
provisions contained in Article 10 or Article 11 may be amended
without the consent of any of the Credit Parties;
(c) without the consent of the Issuing Lender, no provision of
Section 2.2(b) or Section 2.3 may be amended;
(d) without the consent of the Agents and the Required Lenders
no provision in Article 2 may be amended, changed, waived or
terminated;
(e) the extension of the final maturity of any Revolving Loan
or the extension of the date of any reimbursement obligation, or any
portion thereof, arising from drawings under Letters of Credit, in
each case to a date that is no later than the final maturity of any
Term Loan, does not require the consent of any Term Creditor;
(f) any Lender may reduce the rate or extend the time of
payment of interest (other than as a result of waiving the
applicability of any post-default increase in interest rates) thereon
or Fees hereunder with respect to any of the Total Obligations owing
to such Lender without the consent of any Agent or any other Lender;
and
(g) any Lender may reduce or waive the principal amount of any
Loan or of any reimbursement obligation, or any portion thereof,
arising from drawings under Letters of Credit owing to such Lender
without the consent of any Agent or any other Lender.
Notwithstanding the fact that the consent of all the Lenders is required in
certain circumstances as provided in clause (a) preceding (y) each Lender is
entitled to vote as such Lender sees fit on any bankruptcy reorganization plan
that affects the Loans, and each Lender acknowledges that the provisions of
Section 1126(c) of the Bankruptcy Code supersede the unanimous consent
provisions set forth herein and (z) the Required Lenders may consent to allow a
Credit Party to use cash collateral in the context of a bankruptcy or
insolvency proceeding.
Section 13.7 Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall be
an original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Agreement to produce or account
for more than one such counterpart for each of the parties hereto. Delivery by
facsimile by any of the parties hereto of an executed counterpart of this
Agreement shall be as effective as an original executed counterpart hereof and
shall be deemed a representation that an original executed counterpart hereof
will be delivered.
Section 13.8 Headings. The headings of the sections and subsections
hereof are provided for convenience only and shall not in any way affect the
meaning or construction of any provision of this Agreement.
Section 13.9 Survival. All indemnities set forth herein, including,
without limitation, in Section 2.3(e), Section 4.10, Section 10.7, and Section
13.5, shall survive the execution and delivery of this Agreement, the making of
the Loans, the issuance of the Letters of Credit, the repayment of the Loans,
LOC Obligations, and other obligations under the Credit Documents, and the
termination of the Commitments hereunder, and all representations and
warranties made by the Borrowers and the Guarantors herein shall survive
delivery of the Notes and the making of the Loans hereunder.
Section 13.10 Governing Law; Choice of Forum; Service of Process.
(a) THIS AGREEMENT IS GOVERNED BY THE APPLICABLE LAW
PERTAINING IN THE STATE OF NEW YORK, OTHER THAN THOSE CONFLICT OF LAW
PROVISIONS THAT WOULD DEFER TO THE SUBSTANTIVE LAWS OF ANOTHER
JURISDICTION; PROVIDED THAT PERFECTION ISSUES WITH RESPECT TO ARTICLE
9 OF THE UCC MAY GIVE EFFECT TO APPLICABLE CHOICE OR CONFLICT OF LAW
RULES SET FORTH IN ARTICLE 9 OF THE UCC) AND PROVIDED, FURTHER THAT
THE AGENTS AND THE LENDERS RETAIN ALL RIGHTS ARISING UNDER FEDERAL
LAW. THIS GOVERNING LAW ELECTION HAS BEEN MADE BY THE PARTIES IN
RELIANCE ON, AMONG OTHER THINGS, SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK, AS AMENDED (AS AND TO THE
EXTENT APPLICABLE), AND OTHER APPLICABLE LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF
THE STATES OF CALIFORNIA OR NEW YORK OR OF THE UNITED STATES LOCATED
IN LOS ANGELES COUNTY, CALIFORNIA, OR NEW YORK COUNTY, NEW YORK, AND
BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE CREDIT
PARTIES, THE AGENTS, AND THE LENDERS CONSENTS, FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE
COURTS. EACH OF THE CREDIT PARTIES, THE AGENTS, AND THE LENDERS
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT, ANY
OTHER CREDIT DOCUMENT, OR ANY OTHER AGREEMENT, DOCUMENT, OR INSTRUMENT
RELATED HERETO OR THERETO. NOTWITHSTANDING THE FOREGOING (i) THE
AGENTS AND THE LENDERS HAVE THE RIGHT TO BRING ANY ACTION OR
PROCEEDING AGAINST ANY CREDIT PARTY OR ITS PROPERTY IN THE COURTS OF
ANY OTHER JURISDICTION THE AGENTS OR THE LENDERS DEEM NECESSARY OR
APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR OTHER SECURITY
FOR THE TOTAL OBLIGATIONS AND (ii) EACH OF THE PARTIES HERETO
ACKNOWLEDGES THAT ANY APPEALS FROM THE COURTS DESCRIBED IN THE
IMMEDIATELY PRECEDING SENTENCE MAY HAVE TO BE HEARD BY A COURT LOCATED
OUTSIDE THOSE JURISDICTIONS.
(c) EACH CREDIT PARTY HEREBY WAIVES PERSONAL SERVICE OF ANY
AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS
MAY BE MADE BY REGISTERED MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO
SUCH CREDIT PARTY AT ITS ADDRESS SET FORTH IN SECTION 13.1 AND SERVICE
SO MADE WILL BE DEEMED TO BE COMPLETED FIVE (5) DAYS AFTER THE SAME
SHALL HAVE BEEN SO DEPOSITED IN THE UNITED STATES MAILS POSTAGE
PREPAID. NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF THE AGENTS
OR THE LENDERS TO SERVE LEGAL PROCESS BY ANY OTHER MANNER PERMITTED BY
LAW.
(d) NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT TO
THE CONTRARY, ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES,
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT
DOCUMENT, INCLUDING ANY CLAIM BASED ON OR ARISING FROM AN ALLEGED
TORT, SHALL AT THE REQUEST OF ANY PARTY HERETO BE DETERMINED BY
BINDING ARBITRATION. The arbitration must be conducted in accordance
with the United States Arbitration Act (Title 9, U.S. Code),
notwithstanding any choice of law provision in this Agreement, and
under the Commercial Rules of the American Arbitration Association
("AAA"). The arbitrator(s) shall give effect to statutes of limitation
in determining any claim. Any controversy concerning whether an issue
is arbitrable shall be determined by the arbitrator(s). Judgment upon
the arbitration award may be entered in any court having jurisdiction.
The institution and maintenance of an action for judicial relief or
pursuant to a provisional or ancillary remedy shall not constitute a
waiver of the right of either party, including the plaintiff, to
submit the controversy or claim to arbitration if any other party
contests such action for judicial relief.
(e) Notwithstanding the provisions of clause (d) preceding, no
controversy or claim shall be submitted to arbitration without the
consent of all parties if, at the time of the proposed submission,
such controversy or claim arises from or related to an obligation to
the Lenders which is secured by real estate property collateral
(exclusive of real estate space lease assignments). If all the parties
do not consent to submission of such a controversy or claim to
arbitration, the controversy or claim shall be determined as provided
in Section 13.10(f).
(f) At the request of any party, a controversy or claim which
is not submitted to arbitration as provided and limited in Section
13.10(d) and Section 13.10(e) shall be determined by judicial
reference. If such an election is made, the parties shall designate to
the court a referee or referees selected under the auspices of the AAA
in the same manner as arbitrators are selected in AAA sponsored
proceedings. The presiding referee of the panel, or the referee if
there is a single referee, shall be an active attorney or retired
judge. Judgment upon the award rendered by such referee or referees
shall be entered in the court in which such proceeding was commenced.
(g) No provision of clause (d) through clause (f) preceding
shall limit the right of the Agents or the Lenders to exercise
self-help remedies such as setoff, foreclosure against, or sale of,
any real or personal property collateral or security, or obtaining
provisional or ancillary remedies from a court of competent
jurisdiction before, after, or during the pendency of any arbitration
or other proceeding. The exercise of a remedy does not waive the right
of either party to resort to arbitration or reference. At the
Collateral Agent's option, foreclosure under a deed of trust or
mortgage may be accomplished either by exercise of power of sale under
the deed of trust or mortgage or by judicial foreclosure.
Section 13.11 Waiver of Jury Trial. EACH OF THE CREDIT PARTIES, THE
LENDERS, AND THE AGENTS IRREVOCABLY WAIVES ITS RESPECTIVE RIGHTS TO A TRIAL BY
JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO
THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING, OR OTHER LITIGATION OF ANY TYPE
BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED
PERSON, PARTICIPANT, OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT
CLAIMS, OR OTHERWISE. EACH OF THE CREDIT PARTIES, THE LENDERS, AND THE AGENTS
AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL
WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, EACH OF THE PARTIES FURTHER
AGREES THAT ITS RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF
THIS SECTION 13.11 AS TO ANY ACTION, COUNTERCLAIM, OR OTHER PROCEEDING WHICH
SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS
AGREEMENT, THE OTHER CREDIT DOCUMENTS, OR ANY PROVISION HEREOF OR THEREOF. THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS, OR
MODIFICATIONS TO THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS.
Section 13.12 Severability. If any provision of any of the Credit
Documents is determined to be illegal, invalid, or unenforceable, such
provision shall be fully severable and the remaining provisions shall remain in
full force and effect and shall be construed without giving effect to the
illegal, invalid, or unenforceable provisions.
Section 13.13 Entirety. This Agreement, together with the other Credit
Documents, represents the entire agreement of the parties hereto and thereto
and supersedes all prior agreements and understandings, oral or written, if
any, including any commitment letters or correspondence relating to the Credit
Documents or the transactions contemplated herein and therein.
Section 13.14 Binding Effect; Termination.
(a) This Agreement shall become effective at such time on or
after the Closing Date when it shall have been executed by the
Borrowers, the Guarantors, the Agents, and the Lenders, and the
Collateral Agent shall have received copies hereof which, when taken
together, bear the signatures of each such Person and thereafter this
Agreement shall be binding upon and inure to the benefit of the
Borrowers, the Guarantors, the Agents, each Lender, and their
respective successors and assigns.
(b) The term of this Agreement shall be until no Loans, LOC
Obligations, or any other amounts payable hereunder or under any of
the other Credit Documents shall remain outstanding, no Letters of
Credit shall be outstanding (other than those supported by cash
collateral or a Supporting Letter of Credit), all of the Loans and
obligations owing hereunder and under the other Credit Documents have
been irrevocably satisfied in full and all of the Commitments
hereunder shall have expired or been terminated.
Section 13.15 Confidentiality. The Agents and each Lender (each, a
"Lending Party") agrees to keep confidential any information furnished or made
available to it by the Credit Parties pursuant to this Agreement that is marked
confidential; provided that nothing herein shall prevent any Agent or any
Lender from disclosing such information (a) to any other Agent or any other
Lender or any Affiliate of any Agent or any Lender, or any officer, director,
employee, agent, or advisor of any Agent or any Lender or Affiliate of any
Agent or any Lender, (b) to any other Person if reasonably incidental to the
administration of the credit facility provided herein, (c) as required by any
law, rule, or regulation, (d) upon the order of any court or administrative
agency, (e) upon the request or demand of any regulatory agency or authority,
(f) that is or becomes available to the public or that is or becomes available
to any Agent or any Lender other than as a result of a disclosure by any Agent
or any Lender prohibited by this Agreement, (g) in connection with any
litigation to which such Agent or such Lender or any of their respective
Affiliates may be a party, (h) to the extent necessary in connection with the
exercise of any remedy under this Agreement or any other Credit Document, (i)
to the National Association of Insurance Commissioners or any similar
organization or any nationally recognized rating agency that requires access to
information about a Lender's investment portfolio in connection with ratings
issued with respect to such Lender, (j) to any direct or indirect contractual
counterparty in swap agreements or such contractual counterparty's professional
advisor (so long as such contractual counterparty or professional advisor to
such contractual counterparty (i) has been approved in writing by the Borrowers
and (ii) agrees in a writing enforceable by the Borrowers to be bound by the
provisions of this Section 13.15), and (k) subject to provisions substantially
similar to those contained in this Section 13.15, to any actual or proposed
participant or assignee.
Section 13.16 Other Security and Guaranties. The Collateral Agent may,
without notice or demand and without affecting the Credit Parties' obligations
hereunder, from time to time: (a) take from any Person and hold collateral
(other than the Collateral) for the payment of all or any part of the Total
Obligations and exchange, enforce, or release such collateral or any part
thereof; and (b) accept and hold any endorsement or guaranty of payment of all
or any part of the Total Obligations and release or substitute any such
endorser or guarantor, or any Person who has given any Lien in any other
collateral as security for the payment of all or any part of the Total
Obligations, or any other Person in any way obligated to pay all or any part of
the Total Obligations.
Section 13.17 Agency of ▇▇▇▇▇▇▇▇'▇ for Each Other Credit Party. Each
of the other Credit Parties irrevocably appoints ▇▇▇▇▇▇▇▇'▇ as its agent for
all purposes relevant to this Agreement, including the giving and receipt of
notices and execution and delivery of all documents, instruments, and
certificates contemplated herein and all modifications hereto. Any
acknowledgment, consent, direction, certification, or other action which might
otherwise be valid or effective only if given or taken by all or any of the
Credit Parties or acting singly, shall be valid and effective if given or taken
only by ▇▇▇▇▇▇▇▇'▇, whether or not any of the other Credit Parties joins
therein, and the Agents and the Lenders shall have no duty or obligation to
make further inquiry with respect to the authority of ▇▇▇▇▇▇▇▇'▇ under this
Section 13.17, provided that nothing in this Section 13.17 shall limit the
effectiveness of, or the right of the Agents and the Lenders to rely upon, any
notice (including, without limitation, a Notice of Borrowing), document,
instrument, certificate, acknowledgment, consent, direction, certification, or
other action delivered by any Credit Party pursuant to this Agreement.
Section 13.18 Joint and Several Liability. All Loans, upon funding,
shall be deemed to be jointly funded to and received by the Borrowers. Each
Borrower jointly and severally agrees to pay, and shall be jointly and
severally liable under this Agreement for, all of the Total Obligations,
regardless of the manner or amount in which proceeds of Loans are used,
allocated, shared, or disbursed by or among the Borrowers themselves, or the
manner in which the Agents and/or any Lender accounts for such Loans or other
extensions of credit on its books and records. Each Borrower shall be liable
for all amounts due to the Agents and/or any Lender under this Agreement,
regardless of which Borrower actually receives Loans or other extensions of
credit hereunder or the amount of such Loans and extensions of credit received
or the manner in which the Agents and/or such Lender accounts for such Loans or
other extensions of credit on its books and records. Each Borrower's
indebtedness, liabilities, and obligations with respect to Loans and other
extensions of credit made to it, and such Borrower's indebtedness, liabilities,
and obligations arising as a result of the joint and several liability of such
Borrower hereunder, with respect to Loans made to the other Borrowers
hereunder, shall be separate and distinct obligations, but all such
indebtedness, liabilities, and obligations shall be primary obligations of such
Borrower. The Borrowers acknowledge and expressly agree with the Agents and
each Lender that the joint and several liability of each Borrower is required
solely as a condition to, and is given solely as inducement for and in
consideration of, credit or accommodations extended or to be extended under the
Credit Documents to any or all of the other Borrowers and is not required or
given as a condition of extensions of credit to such Borrower. Each Borrower's
indebtedness, liabilities, and obligations under this Agreement and as an
obligor under a Guaranty Agreement shall be separate and distinct obligations.
Each Borrower's indebtedness, liabilities, and obligations under this Agreement
shall, to the fullest extent permitted by law, be unconditional irrespective of
(i) the validity or enforceability, avoidance, or subordination of the
indebtedness, liabilities, and obligations of any other Borrower or of any
promissory note or other document evidencing all or any part of the
indebtedness, liabilities, and obligations of any other Borrower, (ii) the
absence of any attempt to collect the indebtedness, liabilities, and
obligations from any other Borrower, any Guarantor, or any other security
therefor, or the absence of any other action to enforce the same, (iii) the
waiver, consent, extension, forbearance, or granting of any indulgence by the
Agents and/or any Lender with respect to any provision of any instrument
evidencing the indebtedness, liabilities, and obligations of any other Borrower
or Guarantor, or any part thereof, or any other agreement now or hereafter
executed by any other Borrower or Guarantor and delivered to any Agent and/or
any Lender, (iv) the failure by any Agent and/or any Lender to take any steps
to perfect and maintain its security interest in, or to preserve its rights to,
any security or collateral for the indebtedness, liabilities, and obligations
of any other Borrower or Guarantor, (v) any Agent's and/or any Lender's
election, in any proceeding instituted under the Bankruptcy Code, of the
application of Section 1111(b)(2) of the Bankruptcy Code, (vi) any borrowing or
grant of a security interest by any other Borrower, as debtor-in-possession
under Section 364 of the Bankruptcy Code; (vii) the disallowance of all or any
portion of any Agent's and/or any Lender's claim(s) for the repayment of the
indebtedness, liabilities, and obligations of any other Borrower under Section
502 of the Bankruptcy Code, or (viii) any other circumstances which might
constitute a legal or equitable discharge or defense of a guarantor or of any
other Borrower. With respect to any Borrower's indebtedness, liabilities, and
obligations arising as a result of the joint and several liability of the
Borrowers hereunder with respect to Loans or other extensions of credit made to
any of the other Borrowers hereunder, such Borrower waives, until the Total
Obligations shall have been paid in full and this Agreement shall have been
terminated, any right to enforce any right of subrogation or any remedy which
any Agent and/or any Lender now has or may hereafter have against any other
Borrower, any endorser or any Guarantor of all or any part of the Total
Obligations, and any benefit of, and any right to participate in, any security
or collateral given to any Agent and/or any Lender to secure payment of the
Total Obligations or any other liability of any Borrower to any Agent and/or
any Lender. Upon any Event of Default, the Collateral Agent may proceed
directly and at once, without notice, against any Borrower to collect and
recover the full amount, or any portion of the Total Obligations, without first
proceeding against any other Borrower or any other Person, or against any
security or collateral for the Total Obligations. Each Borrower consents and
agrees that the none of the Agents or the Lenders shall be under any obligation
to marshal any assets in favor of any Borrower or against or in payment of any
or all of the Total Obligations.
Section 13.19 Contribution and Indemnification Among the Borrowers.
Each Borrower is obligated to repay the Total Obligations as joint and several
obligors under this Agreement. To the extent that any Borrower shall, under
this Agreement as a joint and several obligor, repay any of the Total
Obligations constituting Loans made to another Borrower hereunder or other
Total Obligations incurred directly and primarily by any other Borrower (an
"Accommodation Payment"), then the Borrower making such Accommodation Payment
shall be entitled to contribution and indemnification from, and be reimbursed
by, each of the other Borrowers in an amount, for each of such other Borrowers,
equal to a fraction of such Accommodation Payment, the numerator of which
fraction is such other Borrower's Allocable Amount and the denominator of which
is the sum of the Allocable Amounts of all of the Borrowers. As of any date of
determination, the "Allocable Amount" of each Borrower shall be equal to the
maximum amount of liability for Accommodation Payments which could be asserted
against such Borrower hereunder without (a) rendering such Borrower "insolvent"
within the meaning of Section 101(31) of the Bankruptcy Code, Section 2 of the
Uniform Fraudulent Transfer Act ("UFTA"), or Section 2 of the Uniform
Fraudulent Conveyance Act ("UFCA"), (b) leaving such Borrower with unreasonably
small capital or assets, within the meaning of Section 548 of the Bankruptcy
Code, Section 4 of the UFTA, or Section 5 of the UFCA, or (c) leaving such
Borrower unable to pay its debts as they become due within the meaning of
Section 548 of the Bankruptcy Code or Section 4 of the UFTA, or Section 5 of
the UFCA. All rights and claims of contribution, indemnification, and
reimbursement under this Section shall be subordinate in right of payment to
the prior payment in full of the Total Obligations. The provisions of this
Section 13.19 shall, to the extent expressly inconsistent with any provision in
any Credit Document, supersede such inconsistent provision.
Section 13.20 Additional Borrowers and Guarantors. Addition of any
Person as a Borrower or a Guarantor is subject to approval of the Agents and
the Required Lenders, and may be conditioned upon such requirements as they may
reasonably determine in their discretion, including, without limitation: (a)
the furnishing of such financial and other information as the Agents or any
such Lender may request; (b) approval by all appropriate approval authorities
of the Agents and each such Lender; (c) execution and delivery by the Credit
Parties, such Person, the Agents, and the Required Lenders of such agreements
and other documentation (including without limitation, an amendment to this
Agreement or any other Credit Document), and the furnishing by such Person or
any of the Credit Parties of such certificates, opinions, and other
documentation, as the Agents and any such Lender may reasonably request.
Neither the Agents nor any Lender shall have any obligation to approve any such
Person for addition as a party to this Agreement.
Section 13.21 Express Waivers By the Credit Parties in Respect of
Cross Guaranties and Cross Collateralization. Each Credit Party agrees as
follows:
(a) Each Credit Party hereby waives: (i) notice of acceptance
of this Agreement; (ii) notice of the making of any Loans, the
issuance of any Letter of Credit, or any other financial
accommodations made or extended under the Credit Documents or the
creation or existence of any indebtedness, liabilities, or obligations
under the Credit Documents; (iii) notice of the amount of the
indebtedness, liabilities, and obligations under the Credit Documents,
subject, however, to such Credit Party's right to make inquiry of the
Agents to ascertain the amount of the indebtedness, liabilities, and
obligations under the Credit Documents at any reasonable time; (iv)
notice of any adverse change in the financial condition of any other
Credit Party or of any other fact that might increase such Credit
Party's risk with respect to such other Credit Party under the Credit
Documents; (v) notice of presentment for payment, demand, protest, and
notice thereof as to any promissory notes or other instruments among
the Credit Documents; and (vii) all other notices (except if such
notice is specifically required to be given to such Credit Party
hereunder or under any of the other Credit Documents to which such
Credit Party is a party) and demands to which such Credit Party might
otherwise be entitled.
(b) Each Credit Party hereby waives the right by statute or
otherwise to require any Agent or any Lender to institute suit against
any other Credit Party or to exhaust any rights and remedies which any
Agent or any Lender has or may have against any other Credit Party.
Each Credit Party further waives any defense arising by reason of any
disability or other defense of any other Credit Party (other than the
defense that the Total Obligations shall have been fully and finally
performed and indefeasibly paid) or by reason of the cessation from
any cause whatsoever of the liability of any such Credit Party in
respect thereof.
(c) Each Credit Party hereby waives and agrees not to assert
against any Agent, any Lender, or the Issuing Lender: (i) any defense
(legal or equitable), setoff, counterclaim, or claim which such Credit
Party may now or at any time hereafter have against any other Credit
Party or any other party liable under the Credit Documents; (ii) any
defense, setoff, counterclaim, or claim of any kind or nature
available to any other Credit Party against any Agent, any Lender, or
the Issuing Lender, arising directly or indirectly from the present or
future lack of perfection, sufficiency, validity, or enforceability of
the Total Obligations or any security therefor; (iii) any right or
defense arising by reason of any claim or defense based upon an
election of remedies by any Agent, any Lender, or the Issuing Lender
under any applicable law; (iv) the benefit of any statute of
limitations affecting any other Credit Party's liability hereunder or
under any other Credit Document;
(d) Each Credit Party consents and agrees that, without notice
to or by such Credit Party and without affecting or impairing the
obligations of such Credit Party hereunder, any Agent may (subject to
any requirement for consent of any of the Lenders to the extent
required by this Agreement), by action or inaction: (i) compromise,
settle, extend the duration or the time for the payment of, or
discharge the performance of, or may refuse to or otherwise not
enforce the Credit Documents; (ii) release all or any one or more
parties to any one or more of the Credit Documents or grant other
indulgences to any other Credit Party in respect thereof; (iii) amend
or modify in any manner and at any time (or from time to time) any of
the Credit Documents; or (iv) release or substitute any Person liable
for payment of the Total Obligations, or enforce, exchange, release,
or waive any security for the Total Obligations or any guaranty
therefor;
Section 13.22 Financial Condition, Etc. Each Credit Party represents
and warrants to the Agents and the Lenders that such Credit Party is currently
informed of the financial condition of all other Credit Parties and all other
circumstances which a diligent inquiry would reveal and which bear upon the
risk of nonpayment of the Total Obligations. Each Credit Party further
represents and warrants that such Credit Party has read and understands the
terms and conditions of the Credit Documents. Each Credit Party agrees that
neither any Agent, any Lender, nor the Issuing Lender has any responsibility to
inform any Credit Party of the financial condition of any other Credit Party or
of any other circumstances which bear upon the risk of nonpayment or
nonperformance of the Total Obligations.
Section 13.23 Conflict. To the extent that there is a conflict or
inconsistency between any provision hereof, on the one hand, and any provision
of any Credit Document, on the other hand, this Agreement shall control.
Section 13.24 Bifurcation of Credit Facility. In the event that funds
managed by, or other Persons controlled by, Farallon Capital Management, LLC
own and control, directly or through any controlled Person, Voting Stock of
▇▇▇▇▇▇▇▇'▇ having more than 37.5% of the total voting power of all such
outstanding Voting Stock, the Credit Parties and the Lenders agree that, upon
the request of the Required Revolving Lenders, they shall promptly bifurcate
the Revolving Loan and Term Loan components of this credit facility, pursuant
to documentation reasonably satisfactory to the Required Revolving Lenders, the
Required Term Lenders and the Credit Parties, into two separate credit
facilities with all intercreditor provisions to be in form and substance
identical to the existing agreement.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Agreement to be duly executed and delivered as of the date
first written above.
CREDIT PARTIES:
---------------
▇▇▇▇▇▇▇▇'▇ INC.
By: /s/ ▇▇▇ ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
Title: Chief Executive Officer
▇▇▇▇▇▇▇▇'▇ FLORIDA PARTNERSHIP
By: ▇▇▇▇▇▇▇▇'▇ Management Corp., its
Managing Partner
By: /s/ ▇▇▇ ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
Title: President
FI STORES LIMITED PARTNERSHIP
By: ▇▇▇▇▇▇▇▇'▇ Inc., its general partner
By: /s/ ▇▇▇ ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
Title: Chief Executive Officer
▇▇▇▇▇▇▇▇'▇ HOLDING CORP.
By: /s/ ▇▇▇ ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
Title: President
▇▇▇▇▇▇▇▇'▇ MANAGEMENT CORP.
By: /s/ ▇▇▇ ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
Title: President
FCJV HOLDING CORP.
By: /s/ ▇▇▇ ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
Title: President
SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Signature Page
FCJV, L.P.
By: FCJV Holding Corp.,
its general partner
By: /s/ ▇▇▇ ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
Title: President
▇▇▇▇▇▇▇▇'▇ INVESTMENTS LLC
By: ▇▇▇▇▇▇▇▇'▇ Inc.,
its Managing Member
By: /s/ ▇▇▇ ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
Title: Chief Executive Officer
▇▇▇▇▇▇▇▇'▇ BENEFICIARY INC.
By: /s/ ▇▇▇ ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
Title: President
SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Signature Page
COLLATERAL AGENT
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BANK OF AMERICA, N.A.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
REVOLVING AGENT:
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BANK OF AMERICA, N.A.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
TERM AGENT:
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JEWELRY INVESTORS II, L.L.C.
By: FARALLON CAPITAL MANAGEMENT, L.L.C.,
its manager
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Managing Member
SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Signature Page
REVOLVING LENDERS:
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BANK OF AMERICA, N.A.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
THE CIT GROUP/BUSINESS CREDIT, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
TERM LENDER:
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JEWELRY INVESTORS II, L.L.C.
By: FARALLON CAPITAL MANAGEMENT, L.L.C.,
its manager
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Managing Member
SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Signature Page