EXHIBIT 10.11
REVOLVING CREDIT
AGREEMENT
SUNGLASS HUT TRADING CORPORATION
WATCH STATION, INC.
As Borrowers
SUNGLASS HUT INTERNATIONAL, INC.
As Guarantor
THE LENDERS
FLEET NATIONAL BANK
As Agent
LASALLE BANK NATIONAL ASSOCIATION
As
Syndication Agent
UNION BANK OF CALIFORNIA, N.A.
As Documentation Agent
and
FLEETBOSTON ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INC.
As Arranger
Dated as of May 18, 2000
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TABLE OF CONTENTS
Title
Section Page
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ss.1. DEFINITIONS.........................................................8
ss.1.1. Definitions..............................................8
ss.1.2. Rules of Interpretation.................................20
ss.2. THE REVOLVING CREDIT LOANS.........................................20
ss.2.1. Commitment to Make Revolving Credit Loans...............20
ss.2.2. Revolving Credit Commitment Fee.........................20
ss.2.3. Reduction and Increases of Commitments..................21
ss.2.4. The Revolving Credit Notes..............................22
ss.2.5. Interest on Loans.......................................22
ss.2.6. Requests for Revolving Credit Loans.....................22
ss.2.7. Swingline Loans.........................................23
ss.2.8. Maturity................................................24
ss.2.9. Mandatory Repayments of Revolving Credit Loans..........24
ss.2.10. Optional Prepayments of Loans...........................25
ss.2.11. Conversion Options......................................25
ss.2.12. Funds for Loans.........................................26
ss.3. LETTERS OF CREDIT..................................................26
ss.3.1. Establishment of Letter of Credit Sublimits.............26
ss.3.2. Letter of Credit Fees...................................27
ss.3.3. Effect of Drawing Under Letter of Credit................27
ss.3.4. Requests for Issuance of Letters of Credit..............27
ss.3.5. Additional Provisions Relating to Letters of Credit.....28
ss.3.6. L/C Participations......................................29
ss.4. CERTAIN GENERAL PROVISIONS.........................................29
ss.4.1. Closing Fee.............................................29
ss.4.2. Agent's Fees............................................29
ss.4.3. Funds for Payments......................................30
ss.4.4. Computations............................................30
ss.4.5. Inability to Determine Eurodollar Rate..................30
ss.4.6. Illegality..............................................30
ss.4.7. Additional Costs, Etc...................................31
ss.4.8. Capital Adequacy........................................32
ss.4.9. Certificate.............................................32
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ss.4.10. Indemnity...............................................32
ss.4.11. Interest After Default..................................32
ss.4.12 Maximum Rate of Interest................................32
ss.5. COLLATERAL SECURITY................................................33
ss.6. REPRESENTATIONS AND WARRANTIES.....................................33
ss.6.1. Corporate Authority; Etc................................33
ss.6.2. Governmental Approvals..................................33
ss.6.3. Title to Properties; Leases.............................33
ss.6.4. Financial Statements....................................34
ss.6.5. No Material Changes, Etc................................34
ss.6.6. Franchises, Patents, Copyrights, Etc....................34
ss.6.7. Litigation..............................................34
ss.6.8. No Materially Adverse Contracts, Etc....................34
ss.6.9. Compliance With Other Instruments, Laws, Etc............35
ss.6.10. Tax Status..............................................35
ss.6.11. No Event of Default.....................................35
ss.6.12. Holding Company and Investment Company Acts.............35
ss.6.13. Absence of UCC Financing Statements, Etc................35
ss.6.14. Certain Transactions....................................35
ss.6.15. Employee Benefit Plans; Multiemployer Plans; Guaranteed
Pension Plans........................................35
ss.6.16. Regulations U and X.....................................35
ss.6.17. Environmental Compliance................................36
ss.6.18. Subsidiaries............................................36
ss.6.19. Loan Documents..........................................36
ss.7. AFFIRMATIVE COVENANTS..............................................36
ss.7.1. Punctual Payment........................................36
ss.7.2. Records and Accounts....................................36
ss.7.3. Financial Statements, Certificates and Information......37
ss.7.4. Notices.................................................38
ss.7.5. Existence; Maintenance of Properties....................38
ss.7.6. Insurance...............................................39
ss.7.7. Taxes...................................................39
ss.7.8. Inspection of Properties and Books......................39
ss.7.9. Compliance with Laws, Contracts, Licenses, and Permits..40
ss.7.10. Use of Proceeds.........................................40
ss.7.11. Pledge of Stock of Material Foreign Subsidiaries........40
ss.7.12. Further Assurances......................................40
ss.8. CERTAIN NEGATIVE COVENANTS.........................................40
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ss.8.1. Restrictions on Indebtedness............................40
ss.8.2. Restrictions on Liens, Etc..............................41
ss.8.3. Restrictions on Investments.............................42
ss.8.4. Merger, Consolidation...................................43
ss.8.5. Sale and Leaseback......................................43
ss.8.6. Compliance with Environmental Laws......................43
ss.8.7. Distributions...........................................43
ss.8.8. Subsidiaries............................................43
ss.8.9. Fiscal Year.............................................43
ss.8.10. Loans and Advances......................................43
ss.8.11 Transactions with Affiliates............................44
ss.8.12. Subordinated Debt.......................................44
ss.8.13. No Restrictions on Obligations..........................45
ss.9. FINANCIAL COVENANTS OF THE BORROWER................................45
ss.9.1. Minimum Consolidated Net Worth..........................45
ss.9.2. Senior Funded Debt to Consolidated EBITDA Ratio.........45
ss.9.3. Consolidated Operating Cash Flow to Debt Service Ratio..45
ss.9.4. Maximum Total Funded Debt to Consolidated EBITDA Ratio..46
ss.10. CLOSING CONDITIONS.................................................46
ss.10.1. Loan Documents..........................................46
ss.10.2. Certified Copies of Organization Documents..............46
ss.10.3. By-laws; Resolutions....................................46
ss.10.4. Incumbency Certificate; Authorized Signers..............47
ss.10.5. Validity of Liens.......................................47
ss.10.6. Financial Performance Covenant Compliance...............47
ss.10.7. Consents and Approvals..................................47
ss.10.8. Opinions of Counsel.....................................47
ss.10.9. Payoff Letter...........................................47
ss.10.10. Payment of Fees.........................................47
ss.10.11. Financial Statements....................................47
ss.10.12. Governmental Regulations................................47
ss.10.13. Due Diligence...........................................47
ss.10.14. No Litigation...........................................48
ss.10.15. Additional Documents....................................48
ss.11. CONDITIONS TO ALL BORROWINGS AND ISSUANCE OF LETTERS
OF CREDIT..........................................................48
ss.11.1. Representations True; No Event of Default...............48
ss.11.2. No Legal Impediment.....................................48
ss.11.3. Governmental Regulation.................................48
ss.11.4. Proceedings and Documents...............................48
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ss.12. EVENTS OF DEFAULT; ACCELERATION; ETC...............................49
ss.12.1 Events of Default and Acceleration......................49
ss.12.2 Termination of Commitments..............................51
ss.12.3 Remedies................................................51
ss.12.4 Distribution of Collateral Proceeds.....................51
ss.13. SETOFF.............................................................52
ss.14. THE AGENT..........................................................53
ss.14.1. Authorization...........................................53
ss.14.2. Employees and Agents....................................53
ss.14.3. No Liability............................................53
ss.14.4. No Representations......................................53
ss.14.5. Payments................................................54
ss.14.6. Holders of Notes........................................54
ss.14.7. Indemnity...............................................54
ss.14.8. Agent as Lender.........................................55
ss.14.9. Resignation.............................................55
ss.14.10. Notification of Defaults and Events of Default..........55
ss.14.11. Duties in the Case of Enforcement.......................55
ss.14.12. Syndication Agent and Documentation Agent...............55
ss.15. EXPENSES...........................................................55
ss.16. INDEMNIFICATION....................................................56
ss.17. SURVIVAL OF COVENANTS, ETC.........................................56
ss.18. ASSIGNMENT AND PARTICIPATION.......................................57
ss.18.1. Conditions to Assignment by Lenders.....................57
ss.18.2. Certain Representations and Warranties;
Limitations; Covenants..................................57
ss.18.3. Register................................................58
ss.18.4. New Notes...............................................58
ss.18.5. Participations..........................................58
ss.18.6. Pledge by Lender........................................58
ss.18.7. No Assignment by Borrowers..............................58
ss.18.8. Disclosure..............................................59
ss.19. NOTICES, ETC.......................................................59
ss.20. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE.................59
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ss.21. HEADINGS...........................................................59
ss.22. COUNTERPARTS.......................................................60
ss.23. ENTIRE AGREEMENT, ETC..............................................60
ss.24. WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS.....................60
ss.25. CONSENTS, AMENDMENTS, WAIVERS, ETC.................................60
ss.26. SEVERABILITY.......................................................61
ss.27. DESIGNATION OF LEAD BORROWER AS BORROWERS' AGENT...................61
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EXHIBITS
EXHIBIT A - Form of Revolving Credit Note
EXHIBIT B - Form of Notice of Borrowing
EXHIBIT C - Form of Swingline Note
EXHIBIT D - Form of Notice of Conversion
EXHIBIT E - Form of Compliance Certificate
EXHIBIT F - Form of Assignment and Acceptance
SCHEDULES
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Schedule 1 Commitments
Schedule 1.2 Existing L/Cs
Schedule 6.3 Title to Property
Schedule 6.7 Litigation
Schedule 6.10 Tax Status
Schedule 6.14 Certain Transactions
Schedule 6.15 Employee Benefit Plans
Schedule 6.17 Environmental Compliance
Schedule 6.18(a) Subsidiaries
Schedule 6.18(b) Inactive Subsidiaries
Schedule 7.6 Insurance
Schedule 8.1 Indebtedness
Schedule 8.2 Liens
Schedule 8.3 Investments
Schedule 8.10 Loans and Advances
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REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT is made as of May18, 2000, by and between
Sunglass Hut Trading Corporation ("Trading"), a Florida corporation having its
chief executive office at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
Watch Station, Inc. ("Watch") a Florida corporation having its chief executive
office at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Sunglass Hut
International, Inc. (the "Parent"), a Florida corporation having its chief
executive office at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, the
financial institutions from time to time party hereto (the "Lenders"), and Fleet
National Bank (in such capacity, the "Agent") as agent for the Lenders, a
national banking association organized and existing under the laws of the United
States of America having an office at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, and LaSalle Bank National Association (in such capacity, the "Syndication
Agent"), a national banking association organized and existing under the laws of
the United States of America having an office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇, ▇▇▇▇▇▇▇; and Union Bank of California, N.A. (in such capacity, the
"Documentation Agent") , a national banking association having an office at ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; and FleetBoston ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, Inc. (in such capacity, the "Arranger"), a corporation organized and
existing under the laws of the Commonwealth of Massachusetts having an office at
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
ss.1. DEFINITIONS
ss.1.1. Definitions.
All capitalized terms used in this Agreement, in any other Loan Document or in
any certificate, report or other document made or delivered pursuant to this
Agreement (unless otherwise defined therein) shall have the meanings assigned to
them below:
Affiliate: With respect to any two Persons, a relationship in which (a) one
holds, directly or indirectly, not less than twenty-five Percent (25%) of the
capital stock, beneficial interests, partnership interests, or other equity
interests of the other; or (b) one has, directly or indirectly, the right, under
ordinary circumstances, to vote for the election of a majority of the directors
(or other body or Person who has those powers customarily vested in a board of
directors of a corporation); or (c) not less than twenty-five Percent (25%) of
their respective ownership is directly or indirectly held by the same third
Person.
Agent. See Preamble hereto.
Agent's Fee. Has the meaning set forth in the Fee Letter.
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Agreement. This Agreement, as the same may be supplemented or amended from time
to time.
Applicable Margin. From the Closing Date until adjusted as provided herein, the
following rates:
Applicable Eurodollar Margin: 2.25%
Applicable Base Rate Margin: 0.25%
Thereafter, the Applicable Margin shall be adjusted based upon the following
performance criteria:
--------------------------------------------------------------------------------
Level
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I
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II
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III
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IV
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V
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The Applicable Margin shall be adjusted quarterly as follows: (x) commencing
with the fiscal quarter ending April 29, 2000, the Applicable Margin shall be
adjusted only if the ratio of Total Funded Debt to Consolidated EBITDA results
in the Borrowers achieving Levels I, II or III, and (y) thereafter, commencing
with the fiscal quarter ending October 29, 2000, the Applicable Margin shall be
adjusted to any of Levels I, II, III, IV, or V based upon the ratio of Total
Funded Debt to Consolidated EBITDA. Each adjustment in the Applicable Margin, if
any, shall be effective, as of each date that the Borrowers deliver to the
Agent, and based upon, the financial statements required to be delivered
pursuant to ss.ss.7.3(a) and (b) hereof and the statement delivered pursuant to
ss.7.3(d) hereof. Upon the occurrence of an Event of Default, interest shall
accrue at the rate set forth in ss.4.11.
Arranger. See Preamble hereto.
Asset Sale. Any sale, lease, conveyance, transfer or other disposition
by the Parent or any of its Subsidiaries (including by way of merger,
consolidation or a sale-leaseback transaction) in any transaction of any asset
(other than sales, leases, and other dispositions of inventory in the ordinary
course of business).
Base Margin Rate. The aggregate of the Base Rate plus the Applicable
Margin for Base Rate Loans.
Base Rate. The greater of (i) the variable rate of interest announced
from time to time by the Agent at its head office as its Prime Rate, and (ii)
the Federal Funds Effective Rate plus 1/2 of 1% per annum (rounded upwards, if
necessary, to the next 1/8 of 1%). The "Prime Rate" is a reference rate and does
not necessarily represent the lowest or best rate being charged to any customer.
9
Base Rate Loan. Each Revolving Credit Loan which bears interest at the
Base Margin Rate.
Borrower or Borrowers. Collectively and individually, Trading and
Watch.
Business Day. Any day other than a Saturday, Sunday, legal holiday or
other day on which banks in Boston, Massachusetts are required or permitted by
law to close, and in the case of Eurodollar Rate Loans, also a day which is a
Eurodollar Business Day.
Capital Event. (a) The issuance by the Parent or any of its
Subsidiaries on or after the Closing Date (i) of Indebtedness or (ii) of any
equity interest (excluding any equity interest issued by a Subsidiary to a
Borrower or to the Parent), or (b) the receipt by the Parent or any of its
Subsidiaries of insurance or other proceeds arising from, or on account of, any
casualty or condemnation to any of their assets, or (c) the receipt by the
Parent or any of its Subsidiaries of any federal, state, or local tax refund in
excess of $500,000.00 in the aggregate.
Capital Expenditures. All Capitalized Leases and all expenditures made
by the Parent or any of its Subsidiaries which are capitalized or are required
to be capitalized on the consolidated balance sheet of the Parent and its
Subsidiaries in accordance with Generally Accepted Accounting Principles.
Capitalized Leases. Leases under which the Parent or any of its
Subsidiaries is the lessee or the obligor, the discounted future rental payment
obligations under which are capitalized or are required to be capitalized on the
balance sheet of the lessee or obligor in accordance with Generally Accepted
Accounting Principles.
Change in Control: The occurrence of any of the following:
(a) The acquisition, by any group of persons (within the
meaning of the Securities Exchange Act of 1934, as amended) or by any Person, of
beneficial ownership (within the meaning of Rule 13d-3 of the Securities and
Exchange Commission) of 20% or more of the issued and outstanding capital stock
of the Parent having the right, under ordinary circumstances, to vote for the
election of directors of the Parent.
(b) More than half of the Persons who were directors of the
Parent on the first day of any period consisting of twelve (12) consecutive
calendar months (the first of which twelve (12) month periods commencing with
the first day of the month during which this Agreement was executed), cease, for
any reason other than death or disability, to be directors of the Parent, unless
each such Person who ceases to be a director is replaced by a Person appointed
by the remaining directors.
Closing Date. The first date on which the conditions set forth
inss.ss.10 and 11 have been satisfied and any Revolving Credit Loans are to be
made.
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Closing Fee. Has the meaning set forth in the Fee Letter.
Code. The Internal Revenue Code of 1986 and the rules and regulations
thereunder, collectively, as the same may from time to time be supplemented or
amended and remain in effect.
Collateral. All property in which the Agent is granted an Encumbrance
from time to time by the Borrower or any Guarantor hereunder or under any
Security Document.
Commitment. With respect to each Lender, the amount set forth on
Schedule 1 hereto as the amount of such Lender's commitment to make Revolving
Credit Loans to the Borrowers and to participate in Swingline Loans and Letters
of Credit, or any lesser amount, including zero, resulting from a termination or
reduction of such amount in accordance with ss.2.3 or ss.12.2.
Commitment Expansion Fees. Has the meaning set forth in the Fee Letter.
Commitment Percentage. With respect to each Lender, the percentage set
forth on Schedule 1 hereto as such Lender's percentage of the aggregate
Commitments of all of the Lenders.
Consolidated EBITDA. At any date as of which the amount thereof shall
be determined, the result (determined with respect to the same period and
without duplication) of (a) Consolidated Net Income of the Parent and its
Subsidiaries, plus (b) the sum of (i) interest included as an expense in the
calculation of Consolidated Net Income of the Parent and its Subsidiaries during
such period, (ii) depreciation, amortization and other non-cash deductions
included as an expense in the calculation of Consolidated Net Income of the
Parent and its Subsidiaries during such period, and (iii) income taxes included
as an expense in the calculation of Consolidated Net Income of the Parent and
its Subsidiaries during such period, minus (c) (i) extraordinary gains included
as revenues in the calculation of Consolidated Net Income of the Parent and its
Subsidiaries during such period, and minus (ii) any interest income earned
during such period, all as determined in accordance with Generally Accepted
Accounting Principles.
Consolidated Net Income. At any time as of which the amount thereof
shall be determined, the consolidated net income of the Parent and its
Subsidiaries, after deduction of all expenses, taxes and other proper charges,
determined in accordance with Generally Accepted Accounting Principles.
Consolidated Net Worth. At any date as of which the amount thereof
shall be determined, Consolidated Total Assets minus Consolidated Total
Liabilities, plus any Subordinated Indebtedness.
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Consolidated Operating Cash Flow. With respect to any fiscal period,
the result (determined with respect to the same period and without duplication)
of (a) Consolidated EBITDA, minus (b) Capital Expenditures made by the Borrowers
during such period, minus (c) all income taxes paid in cash during such period.
Consolidated Total Assets. At any date as of which the amount thereof
shall be determined, all assets that should, in accordance with Generally
Accepted Accounting Principles, be classified as assets on the consolidated
balance sheet of the Parent and its Subsidiaries.
Consolidated Total Liabilities. At any date as of which the amount
thereof shall be determined, all obligations that should, in accordance with
Generally Accepted Accounting Principles, be classified as liabilities on the
consolidated balance sheet of the Parent and its Subsidiaries, including in any
event all Indebtedness.
Controlled Group. All trades or businesses (whether or not
incorporated) under common control that, together with the Borrowers, are
treated as a single employer under ss. 414(b) or 414(c) of the Code or ss. 4001
of ERISA.
Conversion Request. A notice given by the Lead Borrower to the Agent of
its election to convert or continue a Revolving Credit Loan in accordance
withss.2.11.
Convertible Notes. The Parent's 5 1/4% Convertible Subordinated Notes
due 2003 issued under the Indenture dated as of June 26, 1996 between the Parent
and the Bank of New York, as Trustee.
Debt Service Charges. For any fiscal period of the Parent and its
Subsidiaries, the sum of (i) interest and fees paid or required to be paid in
cash by the Parent and its Subsidiaries during such period on account of or with
respect to Indebtedness, and (ii) regularly scheduled principal payments made or
required to be made by the Parent and its Subsidiaries on account of
Indebtedness during such period, each as determined in accordance with Generally
Accepted Accounting Principles.
Default. An Event of Default or event or condition that, but for the
requirement that time elapse or notice be given or both, would constitute an
Event of Default.
Distribution. The declaration or payment of any dividend on or in
respect of any shares of any class of capital stock of the Parent or its
Subsidiaries, other than dividends payable solely in shares of common stock; the
purchase, redemption or other retirement of any shares of any class of capital
stock of the Parent or any of its Subsidiaries, directly or indirectly; the
return of capital by the Parent or any of its Subsidiaries to its shareholders;
or any other distribution on or in respect of any shares of any class of capital
stock of the Parent or any of its Subsidiaries.
Documentation Agent. See Preamble hereto.
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Documentary Letters of Credit. Letters of Credit issued by an Issuing
Bank pursuant to this Agreement, the drawing under which requires the delivery
of bills of lading, airway bills, or similar types of documents of title.
Domestic Lending Office. Initially, the office of each Lender
designated as such in Schedule 1 hereto; thereafter, such other office of such
Lender, if any, located within the United States that will be making or
maintaining Base Rate Loans.
Domestic Subsidiaries. Any Subsidiary organized under the laws of, or
having a place of business in, the United States of America or any state or
political subdivision thereof.
Drawdown Date. The date on which any Revolving Credit Loan is made or
is to be made, and the date on which any Revolving Credit Loan is converted or
continued in accordance with ss.2.11.
Eligible Assignee. Any commercial bank or non-bank financial
institution, including, without limitation, any insurance company, savings bank,
or savings and loan association, having total assets in excess of
$1,000,000,000.00.
Encumbrance. Any security interest, mortgage, pledge, hypothecation,
lien, attachment, or charge of any kind (including any agreement to give any of
the foregoing); the interest of a lessor under any Capitalized Leases;
conditional sale or other title retention agreement; sale of accounts receivable
or chattel paper; or other arrangement pursuant to which any Person is entitled
to any preference or priority with respect to the property or assets of another
Person or the income or profits of such other Person or which constitutes an
interest in property to secure an obligation; each of the foregoing whether
consensual or non-consensual and whether arising by way of agreement, operation
of law, legal process or otherwise.
ERISA. The Employee Retirement Income Security Act of 1974 and the
rules and regulations thereunder, collectively, as the same may from time to
time be supplemented or amended and remain in effect.
ERISA Affiliate: Any Person which is under common control with the
Borrowers within the meaning of ss. 4001 of ERISA or is part of a group which
includes the Borrowers and which would be treated as a single employer under ss.
414 of the Internal Revenue Code of 1986, as amended.
Environmental Laws. Any and all applicable foreign, federal, state and
local environmental, health or safety statutes, laws, regulations, rules,
ordinances, policies and rules or common law (whether now existing or hereafter
enacted or promulgated), of all governmental agencies, bureaus or departments
which may now or hereafter have jurisdiction over the Parent or any of its
Subsidiaries and all applicable judicial and administrative and regulatory
decrees, judgments and orders, including common law rulings and determinations,
relating to injury to, or the protection of, real or personal
13
property or human health or the environment, including, without limitation, all
requirements pertaining to reporting, licensing, permitting, investigation,
remediation and removal of emissions, discharges, releases or threatened
releases of Hazardous Materials, chemical substances, pollutants or contaminants
whether solid, liquid or gaseous in nature, into the environment or relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of such Hazardous Materials, chemical substances,
pollutants or contaminants.
Eurocurrency Reserve Rate. For any day with respect to a Eurodollar
Rate Loan, the maximum rate (expressed as a decimal) at which any lender subject
thereto would be required to maintain reserves under Regulation D of the Board
of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such liabilities were
outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in the Eurocurrency Reserve Rate.
Eurodollar Business Day. Any day on which commercial banks are open for
international business (including dealings in dollar deposits) in London or such
other eurodollar interbank market as may be selected by the Agent in its sole
discretion acting in good faith.
Eurodollar Lending Office. Initially, the office of each Lender
designated as such in Schedule 1 hereto; thereafter, such other office of such
Lender, if any, that shall be making or maintaining Eurodollar Rate Loans.
Eurodollar Rate. For any Interest Period with respect to a Eurodollar
Rate Loan, the quotient (rounded to the fourth decimal place) of (a) the rate at
which the Agent's Eurodollar Lending Office is offered dollar deposits two
Eurodollar Business Days prior to the beginning of such Interest Period in an
interbank eurodollar market where the eurodollar and foreign currency and
exchange operations of such Eurodollar Lending Office are customarily conducted
for delivery on the first day of such Interest Period for the number of days
comprised therein and in an amount comparable to the amount of the Eurodollar
Rate Loan to which such Interest Period applies, divided by (b) a number equal
to 1.00 minus the Eurocurrency Reserve Rate.
Eurodollar Rate Loans. Those Loans bearing interest calculated by
reference to the Eurodollar Rate.
Event of Default. Any event described inss.12.1.
Existing L/Cs. Those letters of credit previously issued by Fleet
National Bank for the account of the Borrowers as more particularly described on
Schedule 1.2 hereto.
Federal Funds Effective Rate. For any day, a fluctuating interest rate
per annum equal to the weighted average of the rates on overnight Federal funds
transactions with
14
members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for such day on such transactions received by the Agent from three
Federal funds brokers of recognized standing selected by the Agent.
Fee Letter. That certain letter agreement between the Agent and the
Borrowers as of even date herewith, as amended and in effect from time to time.
Generally Accepted Accounting Principles. Principles that are (i)
consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its predecessors, as in effect from time to time
and (ii) consistently applied with past financial statements of the Parent and
its Domestic Subsidiaries adopting the same principles; provided that a
certified public accountant would, insofar as the use of such accounting
principles is pertinent, be in a position to deliver an unqualified opinion
(other than a qualification regarding changes in Generally Accepted Accounting
Principles) as to financial statements in which such principles have been
properly applied.
Guarantees. As applied to the Parent and its Subsidiaries (excepting
and excluding the Joint Ventures) all guarantees, endorsements or other
contingent or surety obligations with respect to obligations of others whether
or not reflected on the consolidated balance sheet of the Parent and its
Subsidiaries, including any obligation to furnish funds, directly or indirectly
(whether by virtue of partnership arrangements, by agreement to keep-well or
otherwise), through the purchase of goods, supplies or services, or by way of
stock purchase, capital contribution, advance or loan, or to enter into a
contract for any of the foregoing, for the purpose of payment of obligations of
any other Person.
Guarantors. Each of the Parent and its direct and indirect Domestic
Subsidiaries (excepting and excluding the Joint Ventures) and Sunglass Hut of
Canada, Ltd..
Hazardous Material. Any substance (i) the presence of which requires or
may hereafter require notification, investigation or remediation under any
Environmental Law; (ii) which is or becomes defined as a "hazardous waste",
"hazardous material" or "hazardous substance" or "controlled industrial waste"
or "pollutant" or "contaminant" under any present or future Environmental Law or
amendments thereto including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. ss. 9601 et
seq.) and any, applicable local statutes and the regulations promulgated
thereunder; (iii) which is toxic, explosive, corrosive, flammable, infectious,
radioactive, carcinogenic, mutagenic or otherwise hazardous and is or becomes
regulated by any governmental authority, agency, department, commission, board,
agency or instrumentality of any foreign country, the United States, any state
of the United States, or any political subdivision thereof to the extent any of
the foregoing has or had jurisdiction over the Parent or any of its
Subsidiaries; or (iv) without
15
limitation, which contains gasoline, diesel fuel or other petroleum products,
asbestos or polychlorinated biphenyl's ("PCB's").
Hedge Agreements. All interest rate swaps, caps or collar agreements or
similar arrangements dealing with interest rates or currency exchange rates or
the exchange of nominal interest obligations, either generally or under specific
contingencies.
Hypothec. Has the meaning set forth inss.14.1 hereof.
Indebtedness. As applied to the Parent and its Subsidiaries, (i) all
obligations for borrowed money or other extensions of credit, including all
obligations representing the deferred purchase price of property, other than
accounts payable arising in the ordinary course of business, (ii) all
obligations evidenced by bonds, notes, debentures or other similar instruments,
(iii) all obligations secured by any mortgage, pledge, security interest or
other lien on property owned or acquired by the Parent or any of its
Subsidiaries whether or not the obligations secured thereby shall have been
assumed, (iv) that portion of all obligations arising under Capitalized Leases
that is required to be capitalized on the consolidated balance sheet of the
Parent and its Subsidiaries, (v) all Guarantees, (vi) all obligations that are
immediately due and payable out of the proceeds of or production from property
now or hereafter owned or acquired by the Parent or any of its Subsidiaries,
(vii) all reimbursement obligations with respect to letters of credit and
acceptances issued for the account of such Person, and (viii) the Indebtedness
of a partnership or joint venture in which such Person is a general partner or
joint venturer.
Inactive Subsidiaries. Those Subsidiaries which are inactive,
hold no assets, engage in no business activity, and which are identified on
Schedule 6.18(b) and which the Parent intends to dissolve or deregister, as the
case may be, in accordance with the provisions of ss.7.5 hereof.
Interest Payment Date. (a) As to any Base Rate Loan, the
Business Day immediately following the last day of the Interest Period relating
thereto; and (b) as to any Eurodollar Rate Loan, the last day of any Interest
Period, provided that with respect to Eurodollar Rate Loans having an Interest
Period in excess of three months, the Interest Payment Date for such Loans shall
be the last day of the third month thereof and the last day of the Interest
Period.
Interest Period. With respect to each Loan, (a) initially, the period
commencing on the Drawdown Date of such Loan and ending (i) for any Base Rate
Loan, on the last day of the calendar month; and (ii) for any Eurodollar Rate
Loan, 1, 2, 3, or 6 months as the Lead Borrower may elect in the request for
such Loan; and (b) thereafter, each period commencing on the last day of the
preceding Interest Period applicable to such Loan and ending on the last day of
one of the periods set forth above, as selected by the Lead Borrower in a
Conversion Request (except that in the event the Borrowers have not provided the
Agent with a Conversion Request, then the Interest Period shall end on the last
day of the calendar month, as provided for in ss.2.11(c)), or with respect
16
to any Base Rate Loan which is continued in accordance with the provisions of
ss.2.11(b), then the Interest Period shall end on the last day of the calendar
month; provided that all of the foregoing provisions relating to Interest
Periods are subject to the following:
(A) if any Interest Period with respect to a Eurodollar Rate
Loan would otherwise end on a day that is not a Eurodollar Business Day, that
Interest Period shall be extended to the next succeeding Eurodollar Business Day
unless the result of such extension would be to carry such Interest Period into
another calendar month, in which event such Interest Period shall end on the
immediately preceding Eurodollar Business Day;
(B) if any Interest Period with respect to a Base Rate Loan
would end on a day that is not a Business Day, that Interest Period shall end on
the next succeeding Business Day;
(C) if the Borrower shall fail to give notice as provided in
ss.2.11(c), the Lead Borrower shall be deemed to have requested a conversion of
the affected Eurodollar Rate Loan to a Base Rate Loan on the last day of the
then current Interest Period with respect thereto;
(D) any Interest Period relating to any Eurodollar Rate Loan
that begins on the last Eurodollar Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar month at the
end of such Interest Period) shall end on the last Eurodollar Business Day of a
calendar month; and
(E) any Interest Period relating to any Eurodollar Rate Loan
that would otherwise extend beyond the Revolving Credit Termination Date shall
end, instead, on the Revolving Credit Termination Date.
Investment. As applied to the Parent and its Subsidiaries, the purchase
or acquisition of any share of capital stock, partnership interest, evidence of
indebtedness or other equity security of any other person or entity, any loan,
advance or extension of credit to, or contribution to the capital of, any other
person or entity, any real estate held for sale or investment, any commodities
futures contracts held other than in connection with bona fide hedging
transactions, any other investment in any other person or entity, and the making
of any commitment or acquisition of any option to make an Investment.
Issuing Bank. Fleet National Bank or such other Lender as the Agent and
the Lead Borrower may agree.
Joint Ventures. Collectively, (i) Vash, LLC, organized under the laws
of the state of Delaware, (ii) Rays Airport I, organized under the laws of the
state of Florida, and (iii) Rays II, organized under the laws of the state of
Florida.
Lead Borrower. Trading.
17
Lenders. See Preamble hereto.
Letters of Credit. Documentary Letters of Credit and Standby Letters of
Credit.
Loan Documents. This Agreement, the Revolving Credit Notes, the
Swingline Note, the Security Documents, all Letters of Credit, the Fee Letter,
and all other instruments, documents and agreements executed by the Borrowers
and each Guarantor in connection therewith, as each may be modified, amended,
supplemented or restated.
Loan. A loan made to the Borrowers by the Swingline Lender or the
Lenders pursuant to Section 2 and Section 3 of this Agreement, and "Loans" means
all of such loans, collectively.
Majority Lenders. Prior to termination of the Commitments, Lenders
whose Commitment Percentages aggregate not less than 51% of all Commitment
Percentages. After termination of the Commitments, Lenders whose percentage of
the outstanding Obligations aggregate not less than 51% of all outstanding
Obligations.
Material Foreign Subsidiary. Any Subsidiary which is not a Domestic
Subsidiary, and which Subsidiary (A) accounts for either (i) 2.5% of the sales
of the Parent and its Subsidiaries on a consolidated basis, or (ii) 4.0% of the
Consolidated EBITDA, or (B) is obligated to any other Subsidiary for
intercompany loans or other intercompany Indebtedness in an aggregate amount of
at least $3,000,000.00. As of the date hereof, the Agent and the Lenders
acknowledge and agree that Sunglass Hut Canada, Ltd. Sunglass Hut Australia Pty,
Sunglass World Holdings Pty Limited, and Sunglass Hut (UK) Limited constitute
Material Foreign Subsidiaries.
Maximum Drawing Amount. With respect to all outstanding Letters of
Credit, the sum of $10,000,000.
Net Proceeds. The aggregate amount of cash proceeds from any Asset Sale
or Capital Event (after payment of associated fees and expenses (including,
without limitation, reasonable fees and expenses of counsel, brokers, investment
advisors, accountants, appraisers, and underwriter's discounts) and after the
deduction of any reserve, the amount of which reserve shall have been determined
in good faith by the chief financial officer of the Parent, for any tax
liability on account of such Asset Sale or Capital Event after giving effect to
the overall tax position of the Parent and its Subsidiaries, taken as a whole)
received by the Parent or its Subsidiaries and cash proceeds paid from time to
time with respect to any promissory note or other instrument or security
delivered to the Parent or its Subsidiaries in connection with said transaction.
Notwithstanding the foregoing, any excess portion of any reserve for tax
liability after payment of the actual tax liability shall constitute Net
Proceeds.
18
Non-Material Foreign Subsidiary. Any Subsidiary which is not a Domestic
Subsidiary and is not a Material Foreign Subsidiary.
Obligations. Any and all obligations of the Parent and its Subsidiaries
to the Agent, the Swingline Lender and the Lenders arising out of or on account
of this Agreement and any other Loan Document of every kind and description,
direct or indirect, absolute or contingent, primary or secondary, due or to
become due, now existing or hereafter arising, regardless of how they arise or
by what agreement or instrument, if any, and including obligations to perform
acts and refrain from taking action as well as obligations to pay money.
Obligors. Collectively, the Borrowers and the Guarantors.
PBGC. The Pension Benefit Guaranty Corporation or any entity succeeding
to any or all of its functions under ERISA.
Parent. See Preamble hereto.
Permitted Liens. Has the meaning set forth inss.8.2 hereof.
Permitted Stock Repurchases. The purchase by the Parent of the Parent's
capital stock (or options to purchase such stock) in accordance with the
provisions of ss.8.7 hereof.
Permitted Watch World Acquisition. The acquisition by the Parent of
Watch World International, Inc. (a) for a purchase price (including cash,
assumed indebtedness and capital stock of the Parent) not to exceed
$32,500,000.00, (b) which acquisition shall be consummated within 60 days after
the Closing Date and shall be on terms and conditions consistent with the
purchase and sale agreement dated as of May 4, 2000 by and between the Parent
and Watch World International, Inc., the terms and conditions of which have been
approved by the Agent, and (c) immediately subsequent to which Watch World
International, Inc. shall become an Obligor hereunder and shall ▇▇▇▇▇ ▇ ▇▇▇▇ on
all of its assets to the Agent for the ratable benefit of the Lenders to secure
the Obligations.
Person. Any individual, corporation, partnership, trust, unincorporated
association, limited liability company, business, or other legal entity, and any
government or any governmental agency or political subdivision thereof.
Plan. At any time, an employee pension or other benefit plan that is
subject to Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code and is either (i) maintained by the Parent or any member
of the Controlled Group for employees of the Parent and its Subsidiaries or any
member of the Controlled Group or (ii) if such Plan is established, maintained
pursuant to a collective bargaining agreement or any other arrangement under
which more than one employer makes contributions and to which the Parent or any
member of the Controlled Group is then
19
making or accruing an obligation to make contributions or has within the
preceding five Plan years made contributions.
Repurchase Conditions. The satisfaction of each of the following
conditions:
(a) Total Leverage does not exceed 3.00:1.00 after giving
effect to any purchase of the Parent's common stock by the Parent or any of its
Subsidiaries; and
(b) Senior Leverage does not exceed 1.75:1.00 after giving
effect to any purchase of the Parent's common stock by the Parent or any of its
Subsidiaries.
Revolving Credit Period. The period beginning on the date of this
Agreement and extending through and including the Revolving Credit Termination
Date or such earlier date on which the commitment to make Revolving Loans is
terminated or the Commitment Amount is reduced to zero in accordance with the
terms hereof.
Revolving Credit Loans. The Loans made to the Borrowers pursuant
toss.2.1 of this Agreement.
Revolving Credit Notes. Has the meaning set forth inss.2.4 hereof.
Revolving Credit Termination Date. March 31, 2003.
Security Documents. All security agreements, non-encumbrance agreements
and other instruments, documents, and agreements from the Borrowers and/or any
Guarantor, granting a lien, security interest or other right in favor of the
Agent and the Lenders in any asset of the Borrowers or any Guarantor to secure
the Obligations, whether such agreements now exist or hereafter arise.
Senior Funded Debt. At any date as of which the amount thereof shall be
determined, an amount equal to all Indebtedness of the Parent and of its
Subsidiaries (including, without limitation, the Obligations) other than
Indebtedness on account of Documentary Letters of Credit against which a drawing
has not been made, under the Convertible Notes, under any other Subordinated
Indebtedness, and permitted Indebtedness under ss.8.1(i).
Senior Leverage. At any date as of which the amount thereof shall be
determined, the ratio of Senior Funded Debt to Consolidated EBITDA, calculated
on a trailing four quarters basis.
Standby Letters of Credit. Letters of Credit issued by the Issuing Bank
pursuant to this Agreement, the drawing under which does not require the
delivery of bills of lading, airway bills or other similar types of documents of
title, or which are customarily referred to as Standby Letters of Credit.
20
Stated Amount. The maximum amount for which a Letter of Credit may be
honored.
Subordinated Indebtedness. Indebtedness the payment of principal of and
interest on which is expressly subordinated in right of payment, in form and on
terms approved by the Agent in writing, to the prior payment in full of the
Obligations. Subordinated Indebtedness, includes, without limitation, the
Convertible Notes, and other obligations due or to become due, under the
Indenture dated as of June 26, 1996 between the Parent and The Bank of New York,
as Trustee relating to the Convertible Notes.
Subsidiary. Any corporation, association, joint stock company, business
trust or other similar organization of which 50% or more of the ordinary voting
power for the election of a majority of the members of the board of directors or
other governing body of such entity is held or controlled by the Parent or a
Subsidiary of the Parent; or any other such organization the management of which
is directly or indirectly controlled by the Parent or a Subsidiary of the Parent
through the exercise of voting power or otherwise; or any joint venture, whether
incorporated or not, in which the Parent or any of its Subsidiaries has a 50%
ownership interest.
Swingline Commitment. The lesser of (a) $10,000,000, and (b) the unused
portion of the Revolving Credit Commitments then in effect.
Swingline Lender. Fleet National Bank.
Swingline Loan. Has the meaning set forth inss.2.7(a) hereof.
Swingline Note. Has the meaning set forth inss.2.7(c) hereof.
Syndication Agent. See Preamble hereto.
Trading. See Preamble hereto.
Total Funded Debt. At any date as of which the amount thereof shall be
determined, an amount equal to all Indebtedness of the Parent and of its
Subsidiaries (including, without limitation, the Obligations and Indebtedness
under the Convertible Notes) except and excluding (i) Indebtedness under
ss.8.1(i) and (ii) Indebtedness on account of Documentary Letters of Credit
against which a drawing has not been made.
Total Leverage. At any date as of which the amount thereof shall be
determined, the ratio of Total Funded Debt to Consolidated EBITDA, calculated on
a trailing four quarters basis.
Type. As to any Loan, its nature as a Base Margin Loan or a Eurodollar
Rate Loan.
21
UCC: The Uniform Commercial Code as in effect in Massachusetts (Mass.
Gen. Laws., Ch. 106).
Unused Fee. (a) Unless the Unused Fee Reduction Conditions are, and
continue to be satisfied, a fee equal to 0.50% per annum on the average daily
amount by which the Revolving Credit Commitments exceeds the sum of the
outstanding amount of Revolving Credit Loans and the Stated Amount of all
Letters of Credit during each calendar quarter or portion thereof from the date
hereof to the Revolving Credit Termination Date. (b) During the period during
which the Unused Fee Reduction Conditions are, and continue to be satisfied, the
Unused Fee shall be reduced to 0.375% per annum.
Unused Fee Reduction Conditions. The occurrence of both of the
following: (a) the average daily amount by which the Revolving Credit
Commitments exceed the outstanding amount of Revolving Credit Loans and the
Stated Amount of all Letters of Credit during a calendar quarter is less than an
amount equal to fifty percent (50%) of the Revolving Credit Commitments, and (b)
the ratio of Total Funded Debt to Consolidated EBITDA is at or above the ratio
set forth in Levels III, IV or V of the definition of Applicable Margin.
Voting Interests. Stock or similar ownership interests, of any class or
classes (however designated), the holders of which are at the time entitled, as
such holders, (a) to vote for the election of a majority of the directors (or
persons performing similar functions) of the corporation, association,
partnership, trust or other business entity involved, or (b) to control, manage,
or conduct the business of the corporation, partnership, association, trust or
other business entity involved.
Watch. See Preamble hereto.
ss.1.2. Rules of Interpretation.
(a) A reference to any document or agreement shall include
such document or agreement as amended, modified or supplemented from time to
time in accordance with its terms and the terms of this Agreement.
(b) The singular includes the plural and the plural includes
the singular.
(c) A reference to any law includes any amendment or
modification to such law.
(d) A reference to any Person includes its permitted
successors and permitted assigns.
(e) Accounting terms not otherwise defined herein have the
meanings assigned to them by Generally Accepted Accounting Principles.
22
(f) The words "include", "includes" and "including" are not
limiting.
(g) All terms not specifically defined herein or by Generally
Accepted Accounting Principles, which terms are defined in the UCC, have the
meanings assigned to them therein.
(h) Reference to a particular "ss." refers to that section of
this Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of
like import shall refer to this Agreement as a whole and not to any particular
section or subdivision of this Agreement.
ss.2. THE REVOLVING CREDIT LOANS.
ss.2.1. Commitment to Make Revolving Credit Loans. Subject to the terms
and conditions set forth in this Agreement, each of the Lenders severally (and
not jointly) agrees to lend to the Borrowers and the Borrowers may borrow,
repay, and reborrow from time to time between the Closing Date and the Revolving
Credit Termination Date upon notice by the Lead Borrower to the Agent given in
accordance with ss.2.6, such sums as are requested by the Lead Borrower, (each a
"Revolving Credit Loan"), provided, that the sum of the outstanding amount of
the Revolving Credit Loans (after giving effect to all amounts requested), the
outstanding amount of Swingline Loans, and the Stated Amount of all outstanding
Letters of Credit shall not at any time exceed the Commitments. The Revolving
Credit Loans shall be made pro rata in accordance with each Lender's Commitment
Percentage. Each request for a Revolving Credit Loan hereunder shall constitute
a representation and warranty by the Borrowers that the conditions set forth in
ss.10 and ss.11, in the case of the initial Revolving Credit Loan, and ss.11, in
the case of all other Revolving Credit Loans, have been satisfied on the date of
such request.
ss.2.2. Revolving Credit Commitment Fee. The Borrower agrees to pay to
the Agent, for the account of the Lenders, in accordance with their respective
Commitment Percentages, the Unused Fee from the date hereof to the Revolving
Credit Termination Date. The Unused Fee shall be payable quarterly in arrears on
the first Business Day of each calendar quarter for the immediately preceding
calendar quarter commencing on the first such date following the date hereof,
with a final payment on the Revolving Credit Termination Date or any earlier
date on which the Commitments shall terminate.
ss.2.3. Reduction and Increases of Commitments. (a) The Borrowers shall
have the right at any time and from time to time after August 18, 2000, upon
five (5) Business Days' prior written notice from the Lead Borrower to the Agent
to reduce by an integral multiple of $1,000,000.00 or, subject to the provisions
of ss.4.10 hereof, terminate entirely the unborrowed portion of the Commitments,
whereupon the Commitments of the Lenders shall be reduced pro rata in accordance
with their respective Commitment Percentages of the amount specified in such
notice or, as the case may be, terminated.
23
Upon the effective date of any such reduction or termination, the Borrowers
shall pay to the Agent for the respective accounts of the Lenders the full
amount of any Unused Fee then accrued on the amount of the reduction. No
reduction or termination of the Commitments may be reinstated.
(b) The Commitments of the Lenders shall be reduced pro rata in
accordance with their respective Commitment Percentages by an amount equal to
(i) the payments required to be made pursuant to ss.2.9 hereof (other than
pursuant to ss.2.9(a)) and (ii) the payments made pursuant to ss.2.10 hereof.
(c) Subject to the provisions of ss.2.3(d) hereof, the Commitments of
the Lenders shall be reduced pro rata in accordance with their respective
Commitment Percentages on each of the following dates in the following amounts:
--------------------------------------------------------------------------------
Date
--------------------------------------------------------------------------------
July 31, 2001
--------------------------------------------------------------------------------
October 31, 2001
--------------------------------------------------------------------------------
January 31, 2002
--------------------------------------------------------------------------------
April 30, 2002
--------------------------------------------------------------------------------
July 31, 2002
--------------------------------------------------------------------------------
October 31, 2002
--------------------------------------------------------------------------------
January 31, 2003
--------------------------------------------------------------------------------
(d) Unless a Default or Event of Default has occurred and is
continuing, the Lead Borrower may request that the Commitments be increased by
an aggregate amount of up to $55,000,000, provided that the Commitments shall
not in any event exceed $180,000,000 hereunder, provided, however, that (i) any
Lender which is party to this Agreement prior to such increase shall have the
first option, and may elect, to fund its pro rata share of the increase, thereby
increasing its Commitment hereunder, but no Lender shall have the obligation to
do so, (ii) in the event that it becomes necessary to include a new lender to
provide additional funding as a result of any increase under this ss.2.3(d),
such new Lender must be reasonably acceptable to the Agent and the Borrowers,
(iii) the Lenders' Commitments and Commitment Percentages shall be
correspondingly adjusted, as necessary, to reflect any increase in the
Commitments and Schedule 1 shall be amended to reflect such adjustments, and
(iv) to the extent necessary, the Lenders shall make assignments amongst each
other of the outstanding Loans and Letters of Credit to reflect any such
adjusted Commitments and Commitment Percentages. In the event that the
Commitments are so increased, (A) the amount of Commitment reductions required
pursuant to ss.2.3(c) hereof shall be increased (x) on each date set forth in
that section through October 31, 2002 by an amount equal to one-seventh of the
difference between the outstanding Commitments as of July 31, 2001 and
$125,000,000, and (y) on January 31, 2003 by such amount as may be necessary to
reduce the outstanding Commitments to $120,000,000; and (B) the Borrowers shall
pay the Agent the Commitment Expansion Fees for the account of the Lenders, at
the times and in the amounts set forth in the Fee Letter.
24
ss.2.4. The Revolving Credit Notes. The Revolving Credit Loans shall be
evidenced by separate promissory notes of the Borrowers in substantially the
form of Exhibit A hereto (the "Revolving Credit Notes"), dated as of the Closing
Date and completed with appropriate insertions. One Revolving Credit Note shall
be payable to the order of each Lender in a principal amount equal to such
Lender's Commitment with respect to the Revolving Credit Loans. The Borrowers
irrevocably authorize each Lender to make or cause to be made, at or about the
time of the Drawdown Date of any Revolving Credit Loan or at the time of receipt
of any payment of principal on such Lender's Revolving Credit Note, an
appropriate notation on such Lender's records reflecting the making of such
Revolving Credit Loan or (as the case may be) the receipt of such payment. The
outstanding amount of the Revolving Credit Loans set forth on such Lender's
records shall be prima facie evidence of the principal amount thereof owing and
unpaid to such Lender, but the failure to record, or any error in so recording,
any such amount on such Lender's records shall not limit or otherwise affect the
obligations of the Borrowers hereunder or under any Revolving Credit Note to
make payments of principal of or interest on any Revolving Credit Note when due.
Upon receipt of an affidavit of an officer of any Lender as to the loss, theft,
destruction or mutilation of its Revolving Credit Note, the Borrowers will issue
a replacement Revolving Credit Note in the same principal amount thereof and
otherwise of like tenor. Such affidavit shall provide for an indemnity by such
Lender in favor of the Borrowers for any actual monetary loss, reasonably
incurred by the Borrowers, in connection with any individual or entity in
possession of, and claiming to be a holder of, the original Revolving Credit
Note or from any attempt to collect upon the original Revolving Credit Note.
ss.2.5. Interest on Loans.
(a) Each Revolving Credit Loan which is a Base Rate Loan and each
Swingline Loan shall bear interest for the period commencing with the Drawdown
Date thereof and ending on the last day of the Interest Period with respect
thereto at a per annum rate equal to the aggregate of the Base Rate plus the
Applicable Margin for Base Rate Loans.
(b) Each Revolving Credit Loan which is a Eurodollar Rate Loan shall
bear interest for the period commencing with the Drawdown Date thereof and
ending on the last day of the Interest Period with respect thereto at a rate
equal to the aggregate of the Eurodollar Rate determined for such Interest
Period, plus the Applicable Margin for Eurodollar Rate Loans.
(c) The Borrower shall pay interest on each Revolving Credit Loan and
Swingline Loan in arrears on each Interest Payment Date with respect thereto.
ss.2.6. Requests for Revolving Credit Loans. (a) The Lead Borrower
shall give to the Agent telephonic notice (confirmed in writing in the form of
Exhibit B hereto) of each Revolving Credit Loan requested hereunder. Each such
notice shall be
25
irrevocable and binding on the Borrowers and shall obligate the Borrowers to
accept the Revolving Credit Loan requested from the Lenders on the proposed
Drawdown Date.
(b) Notices for any Revolving Credit Loans which are Base Rate Loans
shall be furnished to the Agent no later than 1:30 p.m. (Boston time) on the
same Business Day of the proposed Drawdown Date. Each such notice shall specify
(i) the principal amount of the Revolving Credit Loan requested (each such
notice shall be in a minimum amount of $1,000,000 or an integral multiple of
$100,000 in excess thereof) and (ii) the proposed Drawdown Date of such
Revolving Credit Loan.
(c) Notices for any Revolving Credit Loans which are Eurodollar Rate
Loans shall be furnished to the Agent by 1:00 p.m. (Boston time) three (3)
Eurodollar Business Days prior to the proposed Drawdown Date. Each such notice
shall specify (i) the principal amount of the Revolving Credit Loan requested,
(ii) the proposed Drawdown Date of such Revolving Credit Loan and (iii) the
Interest Period for such Revolving Credit Loan. Each such notice shall be in a
minimum amount of $1,000,000 or an integral multiple of $100,000 in excess
thereof. Promptly upon the receipt of any notice of a Eurodollar Rate Loan, the
Agent shall notify each of the Lenders thereof.
ss.2.7. Swingline Loans
(a) The Swingline Lender is authorized by the Lenders, but is
not obligated, to make Loans up to $10,000,000 in the aggregate outstanding at
any time (each, a "Swingline Loan"), consisting only of Base Rate Loans upon a
notice of borrowing received by the Agent and the Swingline Lender (which notice
shall be submitted prior to 1:30 p.m., Boston time, on the same Business Day as
the proposed Drawdown Date). Swingline Loans shall be subject to periodic
settlement with the Lenders under ss.2.7(b) below. No Swingline Loans shall be
made pursuant to this ss.2.7(a) if after giving effect thereto, the aggregate
outstanding amount of the Revolving Credit Loans, the outstanding Stated Amount
of Letters of Credit and the outstanding Swingline Loans would exceed the
Commitments.
(b) The Swingline Lender (i) shall on Wednesday of each week,
and (ii) may (but shall not be obligated to), at any time, on behalf of the
Borrowers (which hereby authorize the Swingline Lender to act in its behalf in
that regard), request the Agent to cause the Lenders to make a Revolving Credit
Loan (which shall be a Base Rate Loan) in an amount equal to such Lender's
Commitment Percentage of the outstanding amount of Swingline Loans made in
accordance with ss.2.7(a) hereof, which request may be made regardless of
whether the conditions set forth in ss.ss.10 and 11 have been satisfied. Upon
such request, each Lender shall make available to the Agent the proceeds of such
Revolving Credit Loan for the account of the Swingline Lender. If the Swingline
Lender requires a Revolving Credit Loan to be made by the Lenders and the
request therefor is received prior to 12:00 Noon, Boston time, on a Business
Day, such transfers shall be made in immediately available funds no later than
3:00 p.m., Boston time, that day; and, if the request therefor is received after
12:00 Noon, Boston
26
time, then no later than 3:00 p.m., Boston time, on the next Business Day. The
obligation of each Lender to transfer such funds is irrevocable, unconditional
and without recourse to or warranty by the Agent or the Swingline Lender. If and
to the extent any Lender shall not have so made its transfer to the Agent, such
Lender agrees to pay to the Agent, forthwith on demand such amount, together
with interest thereon, for each day from such date until the date such amount is
paid to the Agent at the Federal Funds Effective Rate. If prior to the making of
a Revolving Credit Loan one of the events described in ss.12.1(h) or (i) shall
have occurred and be continuing with respect to a Borrower, each Lender will, on
the date such Revolving Credit Loan was to or would have been made, purchase an
undivided participating interest in the outstanding Swingline Loans in an amount
equal to (i) its Commitment Percentage times (ii) the aggregate principal amount
of Swingline Loans then outstanding. Each Lender will immediately transfer to
the Swingline Lender, in immediately available funds, the amount of its
participation.
(c) The Borrowers will execute and deliver to the Swingline
Lender a promissory note of the Borrowers evidencing the Swingline Loans,
substantially in the form of Exhibit C (a "Swing Line Note"), payable to the
order of the Swingline Lender and in a principal amount equal to the Swingline
Commitment. The Borrowers irrevocably authorize the Swingline Lender to make or
cause to be made, at or about the time of the Drawdown Date of any Swingline
Loan or at the time of receipt of any payment of principal on the Swingline
Note, an appropriate notation on the Swingline Lender's records reflecting the
making of such Swingline Loan or (as the case may be) the receipt of such
payment. The outstanding amount of the Swingline Loans set forth on the
Swingline Lender's records shall be prima facie evidence of the principal amount
thereof owing and unpaid to the Swingline Lender, but the failure to record, or
any error in so recording, any such amount on the Swingline Lender's records
shall not limit or otherwise affect the obligations of the Borrowers hereunder
to make payments of principal of or interest on the Swingline Note when due.
Upon receipt of an affidavit of an officer of the Swingline Lender as to the
loss, theft, destruction or mutilation of the Swingline Note, the Borrowers will
issue a replacement Swingline Note in the same principal amount thereof and
otherwise of like tenor. Such affidavit shall provide for an indemnity by the
Swingline Lender in favor of the Borrowers for any actual monetary loss,
reasonably incurred by the Borrowers, in connection with any individual or
entity in possession of, and claiming to be a holder of, the original Swingline
Note or from any attempt to collect upon the original Swingline Note.
ss.2.8. Maturity. The Borrower promises to pay on the Revolving Credit
Termination Date, and there shall become absolutely due and payable on the
Revolving Credit Termination Date, all of the Revolving Credit Loans outstanding
on such date, together with any and all accrued and unpaid interest thereon.
ss.2.9. Mandatory Repayments of Revolving Credit Loans. The Borrower
shall pay, and there shall become due and payable, as a prepayment in respect of
the Obligations the following:
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(a) If at any time the sum of the aggregate outstanding
principal balance of the Revolving Credit Loans and the Swingline Loans and the
Stated Amount of Letters of Credit outstanding exceeds the then Commitments, the
amount of such excess.
(b) One hundred percent (100%) of the Net Proceeds of any
Capital Event, provided that no such prepayment shall be required on account of
the Net Proceeds received from or on account of a casualty or condemnation
unless such Net Proceeds are not reinvested in replacement assets within 365
days after receipt thereof. Such prepayment shall be made within three (3)
Business Days upon receipt by the Parent or any of its Subsidiaries of the Net
Proceeds therefrom (or with respect to the Net Proceeds received from or on
account of a casualty or condemnation, 365 days after receipt).
(c) One hundred percent (100%) of the Net Proceeds of any
Asset Sale in excess of $1,000,000.00 in any fiscal year of the Parent and its
Subsidiaries. Such prepayment shall be made within three (3) Business Days upon
receipt by the Borrower or its Subsidiaries of the Net Proceeds therefrom.
(d) In the event that Total Leverage is greater than 1.25:1.00
as of January 31, 2003, a payment in such amount as may be necessary in order to
reduce and maintain the aggregate outstanding principal balance of the Revolving
Credit Loans and the Swingline Loans and the Stated Amount of Letters of Credit
outstanding to an amount not greater than the sum of (i) $10,000,000, plus (ii)
seventy-five percent (75%) of the book value of the Borrowers' inventory as
shown on the Borrowers' books and records as of January 31, 2003.
The amounts so prepaid pursuant to this ss.2.9 shall be applied FIRST, to the
principal balance of the Revolving Credit Loans until the Revolving Credit Loans
have been paid in full; SECOND, to cash collateralize all outstanding Letters of
Credit, and THIRD, to all other Obligations in such order and manner as the
Agent shall determine in its discretion. Each such prepayment shall be applied,
in the absence of instruction by the Borrower, first to the principal of Base
Rate Loans and then to the principal of Eurodollar Rate Loans (together with any
amounts due under ss.4.10 hereof). As long as no Event of Default has occurred
and is continuing, at the request of the Lead Borrower, the Agent shall hold all
amounts required to be applied to Eurodollar Rate Loans in an interest bearing
cash collateral account and will apply such funds to the applicable Eurodollar
Rate Loans at the end of the then pending Interest Period therefor (provided
that the foregoing shall in no way limit or restrict the Agent's and the
Lenders' rights upon the subsequent occurrence of an Event of Default, and
provided further that interest shall continue to accrue on the Eurodollar Rate
Loans until application of the proceeds in the cash collateral account). Any
portion of Obligations which is prepaid may not be reborrowed. The acceptance by
the Lenders of any prepayments required hereunder shall not be deemed to
constitute a waiver of any Default or Event of Default arising from the
consummation of any transaction which is otherwise prohibited hereunder.
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ss.2.10. Optional Prepayments of Loans. (a) Subject to the provisions
of ss.4.10 the Borrowers shall have the right, at their election, at any time
after August 18, 2000 to repay the outstanding amount of the Loans, as a whole
or in part without premium or penalty; provided that the full or partial
prepayment of the outstanding amount of any Eurodollar Rate Loans pursuant to
this Section may be made only on the last day of the Interest Period relating
thereto. The Borrower shall give the Agent, no later than 10:00 a.m., Boston
time, at least three (3) Business Days' prior written notice of any proposed
repayment pursuant to this ss.2.10 of any Loans, specifying the proposed date of
payment of the Loans and the principal amount to be paid. Each such partial
prepayment of the Loans shall be in an integral multiple of $10,000,000, shall
be accompanied by the payment of accrued interest on the principal repaid to the
date of payment and shall be applied, in the absence of instruction by the
Borrowers, first to the principal of Base Rate Loans and then to the principal
of Eurodollar Rate Loans in inverse order of maturity. No prepayment hereunder
shall postpone the date for, or reduce the amount of, any subsequent payment
under the Loans.
ss.2.11. Conversion Options.
(a) The Borrowers may elect from time to time to convert any
Loan to a Loan of another Type, provided that (i) with respect to any such
conversion of a Eurodollar Rate Loan into a Loan of another Type, such
conversion shall only be made on the last day of the Interest Period with
respect thereto; (ii) with respect to any such conversion of a Loan to a Loan of
another Type, the Lead Borrower shall give the Agent notice of such election no
later than 12:00 noon (Boston time) three (3) Eurodollar Business Days prior to
the proposed date of conversion; and (iii) no Loan may be converted into a
Eurodollar Rate Loan when any Default or Event of Default has occurred and is
continuing. Any notice of conversion shall be in the form of Exhibit D, annexed
hereto. All or any part of outstanding Loans of any Type may be converted as
provided herein, provided that (x) partial conversions shall be in an aggregate
principal amount of $1,000,000 or an integral multiple of $500,000.00 in excess
thereof and (y) no more than five (5) Interest Periods for Loans which are
Eurodollar Rate Loans may be outstanding at any one time. Each Conversion
Request shall be irrevocable by the Borrowers.
(b) Any Loan of any Type may be continued as such upon the
expiration of an Interest Period with respect thereto by compliance by the
Borrowers with the notice provisions contained in ss.2.11(a); provided that no
Eurodollar Rate Loan may be continued as such when any Default or Event of
Default has occurred and is continuing, but shall be automatically converted to
a Base Rate Loan on the last day of the first Interest Period relating thereto
ending during the continuance of any Default or Event of Default of which the
officers of the Agent active upon the Borrowers' account have actual knowledge.
The Agent shall notify the Lenders promptly when any such automatic conversion
contemplated by this ss.2.11(b) is scheduled to occur.
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(c) In the event that the Borrowers do not notify the Agent of
the Borrowers' election hereunder with respect to any Loan, such Loan shall be
automatically converted to a Base Rate Loan at the end of the applicable
Interest Period.
ss.2.12. Funds for Loans.
(a) Each Lender does hereby authorize the Agent to make all
Loans, subject to the terms and conditions of this Agreement, which are
requested by the Borrowers during any Business Day. Each Lender does hereby
further irrevocably agree, whether or not this Agreement has been terminated, an
Event of Default has occurred, or the Obligations have been accelerated, not
later than 11:00 a.m. (Boston time) on each Business Day to make available to
the Agent, at its office, in immediately available funds, the amount of such
Lender's Commitment Percentage of each Revolving Credit Loan made by the Agent
on the immediately preceding Business Day after taking into account payments
received by the Agent and applied to the Revolving Credit Loans on such Business
Day. The failure or refusal of any Lender to make available to the Agent at the
aforesaid time and place the amount of its Commitment Percentage of the
Revolving Credit Loans shall not relieve any other Lender from its several
obligation hereunder to make available to the Agent the amount of such other
Lender's Commitment Percentage of any Loan, nor shall such failure or refusal
obligate any other Lender to fund such failing or refusing Lender's Commitment
Percentage of any Loan.
(b) The Agent may, unless notified to the contrary by any
Lender prior to the Business Day immediately following a Drawdown Date, assume
that such Lender has made available to the Agent the amount of such Lender's
Commitment Percentage of the Loan made on such Drawdown Date. If any Lender
makes available to the Agent such amount on a date after the Business Day
immediately following such Drawdown Date, such Lender shall pay to the Agent on
demand an amount equal to the product of (i) the weighted average, computed for
the period referred to in clause (iii) below, of the interest rate paid by the
Agent for federal funds acquired by the Agent during each day included in such
period, times (ii) the amount of such Lenders' Commitment Percentage of such
Loans, times (iii) a fraction, the numerator of which is the number of days that
elapse from and including such Business Day immediately following the Drawdown
Date to the date on which the amount of such Lenders' Commitment Percentage of
such Loans shall become immediately available to the Agent, and the denominator
of which is 365. A statement of the Agent submitted to such Lender with respect
to any amounts owing under this paragraph shall be prima facie evidence of the
amount due and owing to the Agent by such Lender. If the amount of such Lender's
Commitment Percentage of such Loans is not made available to the Agent by such
Lender within three (3) Business Days following such Drawdown Date, the Agent
shall be entitled to recover such amount from the Borrowers on demand, with
interest thereon at the rate per annum applicable to the subject Loans made on
such Drawdown Date.
ss.3. LETTERS OF CREDIT.
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ss.3.1. Establishment of Letter of Credit Sublimits.
(a) Subject to the terms and conditions of this Agreement, the Agent,
upon written request of the Lead Borrower, agrees to cause the Issuing Bank to
issue Letters of Credit on behalf of the Lenders for the account of the
Borrowers during the Revolving Credit Period until the occurrence of any
Default, each such Letter of Credit to be in such form as the Lead Borrower and
the Issuing Bank may agree from time to time. As of the date that the initial
Revolving Credit Loan is made, all Existing L/Cs shall be deemed to have been
issued under this Agreement and shall constitute Letters of Credit for all
purposes hereunder.
(b) The amount which the beneficiaries under all Letters of Credit then
outstanding may draw thereunder shall not at any time exceed the Maximum Drawing
Amount.
(c) The aggregate of (i) the Stated Amount of all Letters of Credit at
any time outstanding, plus (ii) the amount of all outstanding Swingline Loans,
plus (iii) the amount of all outstanding all Revolving Credit Loans shall not
exceed the Commitments.
(d) No Documentary Letter of Credit shall have an expiry date later
than the earlier of (i) ninety (90) days after the issuance of such Documentary
Letter of Credit; or (ii) ninety (90) days prior to the Revolving Credit
Termination Date.
(e) No Standby Letter of Credit shall have an expiry date later than
the earlier of (i) 365 days after the issuance of such Standby Letter of Credit;
or (ii) thirty (30) days prior to the Revolving Credit Termination Date.
ss.3.2. Letter of Credit Fees.
(a) The Borrowers will pay to the Agent, for the ratable benefit of the
Lenders, a fee for each Documentary Letter of Credit equal to the greater of (i)
the Applicable Margin for Eurodollar Rate Loans per annum as in effect from time
to time of the Stated Amount of each such Documentary Letter of Credit, or (ii)
$500 for each such Documentary Letter of Credit. Such fees shall be payable by
the Borrowers monthly in arrears on the first Business Day of each month
(b) The Borrowers will pay to the Agent, for the ratable benefit of the
Lenders, a fee for each Standby Letter of Credit equal to the Applicable Margin
for Eurodollar Rate Loans per annum as in effect from time to time of the Stated
Amount of each Standby Letter of Credit. Such fees shall be payable by the
Borrowers monthly in arrears on the first Business Day of each month.
(c) In addition to the fees payable pursuant to Subsections (a) and
(b), above, the Borrowers shall pay to the Issuing Bank (i) a fronting fee equal
to 0.125% of the Stated Amount of each Letter of Credit, which shall be due and
payable on each
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issuance thereof, and (ii) customary issuance, processing, amendment, and
administrative fees on account of each Documentary Letter of Credit.
(d) All fees provided for in this ss. 3.2 shall be calculated in
accordance with the provisions of ss.4.4 hereof and shall be non-refundable
under any circumstances.
ss.3.3. Effect of Drawing Under Letter of Credit.
The Borrowers shall reimburse the Agent and the Issuing Bank for the
amount of any honoring of a Letter of Credit issued for the account of the
Borrowers. Any drawing or presentation which is not so reimbursed by the
Borrowers on the Business Day when so honored, shall constitute, a Revolving
Credit Loan (or if the Commitments have been terminated shall constitute a loan
by each of the Lenders pro rata in accordance with each Lender's Commitment
Percentage).
ss.3.4. Requests for Issuance of Letters of Credit.
(a) Each request for the issuance of a Letter of Credit hereunder shall
constitute a representation by the Borrowers that the applicable conditions set
forth in ss.ss.10 and 11, below, have been satisfied on the date of such
request.
(b) The Lead Borrower shall execute and deliver to the Issuing Bank
such further documents and instruments in connection with any Letter of Credit
as the Issuing Bank, in accordance with its then customary practices with
respect to similar facilities, reasonably may request.
ss.3.5. Additional Provisions Relating to Letters of Credit.
(a) The obligations of the Borrowers with respect to Letters of Credit
shall be absolute and unconditional and shall rank pari pasu with the
obligations of the Borrowers to repay all other Obligations. The Lenders'
rights, powers, privileges and immunities specified in or arising under this
Agreement and the other Loan Documents are in addition to any heretofore or at
any time hereafter otherwise created or arising, whether by statute or rules of
law or contract.
(b) None of the Issuing Bank, the Issuing Bank's correspondents, any
advising, negotiating, or paying bank with respect to any Letter of Credit, the
Agent, or the Lenders shall be responsible in any way for:
(i) performance by any beneficiary under any Letter of Credit
of that beneficiary's obligations to any Borrower; or
(ii) except as a result of their respective gross negligence
or wilful misconduct, the form, sufficiency, correctness, genuineness, authority
of any person signing; falsification; or the legal effect of; any documents
called for under any Letter of
32
Credit if (with respect to the foregoing) such documents on their face appear to
be in order.
(c) The Issuing Bank may honor, as complying with the terms of any
Letter of Credit and of any drawing thereunder, any drafts or other documents
otherwise in order, but signed or issued by an administrator, executor,
conservator, trustee in bankruptcy, debtor in possession, assignee for the
benefit of the creditors, liquidator, receiver, or other legal representative of
the party authorized under such Letter of Credit to draw or issue such drafts or
other documents.
(d) Unless otherwise agreed to, in the particular instance, the
Borrowers hereby authorize the Issuing Bank to (i) select an advising bank, if
any; (ii) select a paying bank, if any; and (iii) select a negotiating bank.
(e) All directions, correspondence, and funds transfers relating to any
Letter of Credit are at the risk of the Borrowers. The Issuing Bank, the Agent,
and the Lenders shall have discharged their respective obligations under any
Letter of Credit which, or the drawing under which, includes payment
instructions, by the initiation of the method of payment called for in, and in
accordance with, such instruments (or by any other commercially reasonable and
comparable method). The Issuing Bank, the Agent, and the Lenders do not assume
any responsibility for any inaccuracy, interruption, error, or delay in
transmission or delivery by post, telegraph or cable, or for any inaccuracy of
translation.
(f) The Issuing Bank's, the Agent's and the Lenders' rights, powers,
privileges and immunities specified in or arising under this Agreement are in
addition to any heretofore or at any time hereafter otherwise created or
arising, whether by statute or rule of law or contract.
(g) The Letters of Credit, except to the extent otherwise expressly
provided hereunder or agreed to in writing by the Issuing Bank and the Lead
Borrower, will be governed by the Uniform Customs and Practice for Documentary
Credits, International Chamber of Commerce, Publication No. 500, and any
subsequent revisions thereof.
(h) The obligations of the Borrowers under this Agreement with respect
to the Letters of Credit are absolute, unconditional, and irrevocable and shall
be performed strictly in accordance with the terms hereof under all
circumstances, whatsoever including, without limitation, the following:
(i) Any lack of validity or enforceability or restriction,
restraint or stay in the enforcement of this Agreement,
any Letter of Credit, or any other agreement or
instrument relating thereto.
(ii) Any amendment or waiver of any Letter of Credit.
33
(iii) The existence of any claim, set-off, defense, or other
right which any Borrower may have at any time against
the beneficiary of any Letter of Credit.
(iv) Any good faith honoring of a drawing under a Letter of
Credit, which drawing could possibly have been
dishonored based upon a strict construction of the
terms of the Letter of Credit.
ss.3.6. L/C Participations
(a) The Issuing Bank irrevocably agrees to grant and hereby grants to
each Lender (other than such Issuing Bank), and, to induce such Issuing Bank to
issue Letters of Credit hereunder, each such Lender irrevocably agrees to accept
and purchase and hereby accepts and purchases from such Issuing Bank, on the
terms and conditions hereinafter stated, for such Lender's own account and risk
an undivided interest equal to such Lender's Commitment Percentage in such
Issuing Bank's obligations and rights under each Letter of Credit issued by such
Issuing Bank hereunder and the amount of each draft paid by such Issuing Bank
thereunder. Each such Lender unconditionally and irrevocably agrees with the
Issuing Bank that, if a draft is paid under any Letter of Credit issued by the
Issuing Bank for which the Issuing Bank is not reimbursed in full by the
Borrowers in accordance with the terms of this Agreement, such Lender shall pay
to the Agent for the account of the Issuing Bank upon demand an amount equal to
such Lender's Commitment Percentage of the amount of such draft, or any part
thereof, which is not so reimbursed.
(b) If any amount required to be paid by any Lender to any Issuing Bank
pursuant to subsection 3.6(a) in respect of any unreimbursed portion of any
payment made by the Issuing Bank under any Letter of Credit issued by the
Issuing Bank is not paid to the Issuing Bank within three Business Days after
the date such payment is due, such Lender shall pay to the Issuing Bank on
demand interest at the rate set forth in ss.2.12(b) hereof.
ss.4. CERTAIN GENERAL PROVISIONS.
ss.4.1. Closing Fee. The Borrowers, jointly and severally, agree to pay
to the Agent for the pro rata accounts of the Lenders the Closing Fee, which
shall be paid to the Agent on the Closing Date.
ss.4.2. Agent's Fees. The Borrower shall pay to the Agent for the
Agent's own account, the Agent's Fee in such amounts and at such times agreed
upon by the Agent and the Borrower in the Fee Letter.
ss.4.3. Funds for Payments.
34
(a) All payments of principal, interest, commitment fees, closing fees
and any other amounts due hereunder or under any of the other Loan Documents
shall be made to the Agent, for the respective accounts of the Lenders and the
Agent, at its office at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at
such other location that the Agent may from time to time designate, in each case
in immediately available funds.
(b) All payments by the Borrower hereunder and under any of the other
Loan Documents shall be made without setoff or counterclaim and free and clear
of and without deduction for any taxes, levies, imposts, duties, charges, fees,
deductions, withholdings, compulsory loans, restrictions or conditions of any
nature now or hereafter imposed or levied by any jurisdiction or any political
subdivision thereof or taxing or other authority therein unless the Borrower is
compelled by law to make such deduction or withholding. If any such obligation
is imposed upon the Borrower with respect to any amount payable by it hereunder
or under any of the other Loan Documents, the Borrower will pay to the Agent,
for the account of the Lenders or (as the case may be) the Agent, on the date on
which such amount is due and payable hereunder or under such other Loan
Document, such additional amount in Dollars as shall be necessary to enable the
Lenders or the Agent to receive the same net amount which the Lenders or the
Agent would have received on such due date had no such obligation been imposed
upon the Borrower. The Borrower will deliver promptly to the Agent certificates
or other valid vouchers for all taxes or other charges deducted from or paid
with respect to payments made by the Borrower hereunder or under such other Loan
Document.
ss.4.4. Computations. All computations of interest on the Base Rate
Loans and of other fees payable by the Borrowers to the extent applicable shall
be based on a 365-day year and paid for the actual number of days elapsed. All
computations of interest on Eurodollar Rate Loans shall be based on a 360-day
year and paid for the actual number of days elapsed. Each change in the Base
Rate shall be effective, for purposes of the determination of interest
hereunder, contemporaneously with the effectiveness of such change in the Base
Rate. Except as otherwise provided in the definition of the term "Interest
Period" with respect to Eurodollar Rate Loans, whenever a payment hereunder or
under any of the other Loan Documents becomes due on a day that is not a
Business Day, the due date for such payment shall be extended to the next
succeeding Business Day, and interest shall accrue during such extension. The
outstanding amount of the Loans from time to time shall be considered correct
and binding on the Borrowers, absent fraud or manifest error, unless within one
hundred eighty (180) days after mailing by the Agent to the Lead Borrower of any
notice of such outstanding amount, the Lead Borrower shall notify the Agent in
writing of any objection thereto.
ss.4.5. Inability to Determine Eurodollar Rate. In the event, prior to
the commencement of any Interest Period relating to any Eurodollar Rate Loan,
the Agent shall determine that adequate and reasonable methods do not exist for
ascertaining the Eurodollar Rate that would otherwise determine the rate of
interest to be applicable to any Eurodollar Rate Loan during any Interest
Period, the Agent shall forthwith give notice of such determination (which shall
be conclusive and binding on the Borrower
35
and the Lenders) to the Borrower and the Lenders. In such event (a) any request
for a Loan with respect to Eurodollar Rate Loans shall be automatically
withdrawn and shall be deemed a request for Base Rate Loans, (b) each Eurodollar
Rate Loan on the last day of the then current Interest Period thereof will
automatically become a Base Rate Loan, and (c) the obligations of the Lenders to
make Eurodollar Rate Loans shall be suspended until the Agent determines that
the circumstances giving rise to such suspension no longer exist, whereupon the
Agent shall so notify the Borrower and the Lenders.
ss.4.6. Illegality. Notwithstanding any other provisions herein, if any
present or future law, regulation, treaty or directive or in the interpretation
or application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Rate Loans, such Lender shall forthwith give notice of such
circumstances to the Borrower and thereupon (a) the Commitment of such Lender to
make Eurodollar Rate Loans or convert Loans of another type to Eurodollar Rate
Loans shall forthwith be suspended and (b) the Eurodollar Rate Loans then
Outstanding shall be converted automatically to Base Rate Loans on the last day
of each Interest Period applicable to such Eurodollar Rate Loans or within such
earlier period as may be required by law. The Borrower hereby agrees promptly to
pay the Agent for the account of such Lender, upon demand by such Lender, any
additional amounts necessary to compensate such Lender for any costs incurred by
such Lender in making any conversion in accordance with this ss.4.6, including
any interest or fees payable by such Lender to lenders of funds obtained by it
in order to make or maintain its Eurodollar Loans hereunder and any amounts
payable under ss.4.10 hereof.
ss.4.7. Additional Costs, Etc. If any present or future applicable law,
which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to any Lender or the Agent by any central bank or other fiscal,
monetary or other authority (whether or not having the force of law), shall:
(a) subject any Lender or the Agent to any tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature with respect to this
Agreement, the other Loan Documents, such Lender's Commitment or the Loans
(other than taxes based upon or measured by the income or profits of such Lender
or the Agent); or
(b) materially change the basis of taxation (except for
changes in taxes on income or profits) of payments to any Lender of the
principal of or the interest on any Loans or any other amounts payable to any
Lender under this Agreement or the other Loan Documents; or
(c) impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Agreement) any special
deposit, reserve,
36
assessment, liquidity, capital adequacy or other similar requirements (whether
or not having the force of law) against assets held by, or deposits in or for
the account of, or loans by, or commitments of an office of any Lender; or
(d) impose on any Lender or the Agent any other conditions or
requirements with respect to this Agreement, the other Loan Documents, the
Loans, such Lender's Commitment, or any class of loans or commitments of which
any of the Loans or such Lenders' Commitment forms a part;
(e) impose on any Lender any other conditions or requirements
relating to any Letters of Credit, and the result of any of the foregoing is
(i) to increase the cost to any Lender of making, funding,
issuing, renewing, extending or maintaining any of the Loans or such Lender's
Commitment or Letters of Credit; or
(ii) to reduce the amount of principal, interest or other
amount payable to such Lender or the Agent hereunder on account of such Lender's
Commitment or any of the Loans or Letters of Credit; or
(iii) to require such Lender or the Agent to make any
payment or to forego any interest or other sum payable hereunder, the amount of
which payment or foregone interest or other sum is calculated by reference to
the gross amount of any sum receivable or deemed received by such Lender or the
Agent from the Borrower hereunder,
then, and in each such case, the Borrower will, upon demand made by the Agent or
any such Lender at any time and from time to time and as often as the occasion
therefor may arise, pay to such Lender or the Agent such additional amounts as
will be sufficient to compensate such Lender or the Agent for such additional
cost, reduction, payment or foregone interest or other sum. The payment
obligations under this ss.4.7 shall terminate one month after the Revolving
Credit Termination Date unless prior written notice of any claim hereunder has
been provided to the Parent.
ss.4.8. Capital Adequacy. If any present or future law, governmental
rule, regulation, policy, guideline or directive (whether or not having the
force of law) or the interpretation thereof by a court or governmental authority
with appropriate jurisdiction affects the amount of capital required or expected
to be maintained by any Lender or the Agent or any corporation controlling such
Lender or the Agent and such Lender or the Agent determines that the amount of
capital required to be maintained by it is increased by or based upon the
existence of the Loans or the Commitments made or deemed to be made pursuant
hereto, then the Agent or any such Lender may notify the Borrower of such fact,
and the Borrower shall pay to such Lender or the Agent from time to time on
demand, as an additional fee payable hereunder, such amount as such Lender or
the Agent shall determine in good faith and certify in a notice to the Borrower
37
to be an amount that will adequately compensate such Lender in light of these
circumstances for its increased costs of maintaining such capital. The payment
obligations under this ss.4.8 shall terminate one month after the Revolving
Credit Termination Date unless prior written notice of any claim hereunder has
been provided to the Parent.
ss.4.9. Certificate. A certificate setting forth any additional amounts
payable pursuant to ss.ss.4.7 or 4.8 and a brief explanation of such amounts
which are due, submitted by any Lender or the Agent to the Borrower, shall be
prima facie evidence that such amounts are due and owing.
ss.4.10. Indemnity. The Borrower agrees to indemnify each Lender and to
hold each Lender harmless from and against any loss, cost or expense (including
loss of anticipated profits) that such Lender may sustain or incur (including,
without limitation, by virtue of acceleration after the occurrence of any Event
of Default) as a consequence of (a) default by the Borrower in payment of the
principal amount of or any interest on any Eurodollar Rate Loans as and when due
and payable, including any such loss or expense arising from interest or fees
payable by such Lender to lenders of funds obtained by it in order to maintain
its Eurodollar Rate Loans, (b) default by the Borrower in making a borrowing or
conversion after the Borrower has given (or is deemed to have given) a request
for a Loan or a Conversion Request (c) the making of any payment of a Eurodollar
Rate Loan or the making of any conversion of any such Loan to a Base Rate Loan
on a day that is not the last day of the applicable Interest Period with respect
thereto, including interest or fees payable by such Lender to lenders of funds
obtained by it in order to maintain any such Loans.
ss.4.11. Interest After Default. Following the occurrence and during
the continuance of an Event of Default, principal and all other amounts payable
hereunder or under any of the other Loan Documents, at the option of the
Majority Lenders, shall bear interest payable on demand at a rate per annum
equal to the aggregate of the respective interest rates for Base Rate Loans plus
two percent (2%) per annum.
ss.4.12 Maximum Rate of Interest. All Loan Documents are hereby
expressly limited so that in no contingency or event whatsoever, whether by
reason or acceleration or otherwise, shall the amount paid, or agreed to be paid
to the Lenders for the Indebtedness to the Lenders hereunder exceed the maximum
permissible under applicable law. As used herein, "applicable law" shall mean
the law in effect as of the Closing Date, provided, however, that in the event
there is a change in the law which results in a higher permissible rate of
interest, then the Indebtedness hereunder shall be governed by such new law as
of its effective date. If, under or from any circumstances whatsoever,
fulfillment of any provisions of any Loan Document at the time performance of
such provision shall be due, shall involve transcending the limit of such
validity prescribed by applicable law, then the obligation to be fulfilled shall
automatically be reduced to the limits of such validity, and if under or from
circumstances whatsoever the Lenders should receive as interest an amount which
would exceed the highest lawful
38
rate, such amount which would be excessive interest shall be applied to the
reduction of the principal balance of the Obligations and not to the payment of
interest.
ss.5. COLLATERAL SECURITY. The Obligations shall be secured by a
perfected first priority security interest to be held by the Agent (subject only
to Permitted Liens) in the Collateral.
ss.6. REPRESENTATIONS AND WARRANTIES. The Obligors represent and
warrant to the Agent and the Lenders as follows.
ss.6.1. Corporate Authority; Etc.
(a) Incorporation; Good Standing. The Obligors (i) are
corporations, validly existing and in good standing under the laws of the
jurisdiction of their incorporation (ii) have all requisite power to own their
properties and conduct their businesses as now conducted and as presently
contemplated, and (iii) are in good standing as a foreign corporation and are
duly authorized to do business in each jurisdiction where by reason of the
nature or location of that Obligor's assets such qualification may be necessary.
(b) Authorization. The execution, delivery and performance of
this Agreement and the other Loan Documents to which the Obligors are to become
a party and the transactions contemplated hereby and thereby (i) are within the
authority of the Obligors, (ii) have been duly authorized by all necessary
proceedings, (iii) do not and will not conflict with or result in any breach or
contravention of any provision of law, statute, rule, regulation or agreement to
which any Obligor is subject or any judgment, order, writ, injunction, license
or permit applicable to any Obligor, and (iv) do not and will not conflict with
any provision of any Obligor's organization documents or other charter documents
or bylaws of, or any agreement or other instrument binding upon, any Obligor.
(c) Enforceability. The execution and delivery of this
Agreement and the other Loan Documents to which the Obligors are or are to
become a party will result in valid and legally binding obligations of the
Obligors enforceable against each of them in accordance with the respective
terms and provisions hereof and thereof, except as enforceability is limited by
bankruptcy, insolvency, reorganization, moratorium or other laws relating to or
affecting generally the enforcement of creditors' rights and except to the
extent that availability of the remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding
therefor may be brought.
ss.6.2. Governmental Approvals. The execution, delivery and performance
by the Obligors of this Agreement and the other Loan Documents to which the
Obligors are or are to become a party and the transactions contemplated hereby
and thereby do not require the approval or consent of, or filing with, any
governmental agency or authority
39
other than those already obtained and the filing of related financing statements
in the appropriate records office with respect thereto.
ss.6.3. Title to Properties; Leases. Except as indicated on Schedule
6.3 hereto, the Parent and its Subsidiaries own all of the assets reflected in
the consolidated balance sheet of the Parent as of January 29, 2000 or acquired
since that date (except property and assets sold or otherwise disposed of in the
ordinary course of business since that date), and such assets are not subject to
any mortgages, leases, conditional sales agreements, title retention agreements,
liens or other encumbrances except Permitted Liens.
ss.6.4. Financial Statements. The following financial statements have
been furnished to each of the Lenders:
A consolidated balance sheet of the Borrower and its
Subsidiaries as of January 29, 2000, and a consolidated statement of income for
the fiscal year then ended, accompanied by an auditor's report prepared without
qualification by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP or another independent certified public
accountant selected by the Parent and satisfactory to the Agent. Such balance
sheet and statement of income have been prepared in accordance with Generally
Accepted Accounting Principles and fairly present the financial condition of the
Parent and its Subsidiaries as at the close of business on the date thereof and
the results of operations for the fiscal year then ended. There are no
contingent liabilities of the Parent or any of its Subsidiaries as of such date
involving material amounts, not disclosed in said balance sheet and the related
notes thereto.
ss.6.5. No Material Changes, Etc. Since January 29, 2000, there has
occurred no materially adverse change in the financial condition or business of
the Parent or its Subsidiaries as shown on or reflected in the consolidated
balance sheet of the Parent and its Subsidiaries as of such date, or the
consolidated statement of income for the fiscal year then ended, other than
changes in the ordinary course of business that have not had any materially
adverse effect on the business or financial condition of the Parent and its
Subsidiaries, taken as a whole.
ss.6.6. Franchises, Patents, Copyrights, Etc. The Parent and its
Subsidiaries possess all franchises, patents, copyrights, trademarks, trade
names, licenses and permits, and rights in respect of the foregoing, adequate
for the conduct of its business substantially as now conducted without known
conflict with any rights of others, except where a failure to possess such
rights would not have a materially adverse effect on the business, assets or
financial condition of the Parent and its Subsidiaries.
ss.6.7. Litigation. Except as stated on Schedule 6.7, there are no
actions, suits, proceedings or investigations of any kind pending or, to the
knowledge of the Obligors, threatened against the Parent or any of its
Subsidiaries before any court, tribunal or administrative agency or board that,
if adversely determined, would likely, either in any case or in the aggregate,
materially adversely affect the properties, assets, financial
40
condition or business of the Obligors or materially impair the right of the
Parent and its Subsidiaries, taken as a whole, to carry on business
substantially as now conducted by them, or result in any substantial liability
not adequately covered by insurance, or for which adequate reserves are not
maintained on the balance sheet of the Parent and its Subsidiaries, or which
challenge the validity of this Agreement or any of the other Loan Documents
taken as a whole, or any action taken or to be taken pursuant hereto or thereto.
ss.6.8. No Materially Adverse Contracts, Etc. Neither the Parent nor
any of its Subsidiaries is subject to any charter, corporate or other legal
restriction, or any judgment, decree, order, rule or regulation that has or is
expected in the future to have a materially adverse effect on the business,
assets or financial condition of the Parent and its Subsidiaries taken as a
whole. Neither the Parent nor any of its Subsidiaries is a party to any contract
or agreement that has or is expected to have any materially adverse effect on
the business of the Parent or its Subsidiaries taken as a whole.
ss.6.9. Compliance With Other Instruments, Laws, Etc. Neither the
Parent nor any of its Subsidiaries is in violation of any provision of its
charter or other organization documents, by-laws, or any agreement or instrument
to which it may be subject or by which it or any of its properties may be bound
or any decree, order, judgment, statute, license, rule or regulation, in any of
the foregoing cases in a manner that could result in the imposition of
substantial penalties or materially and adversely affect the financial
condition, properties or business of the Parent and its Subsidiaries taken as a
whole.
ss.6.10. Tax Status. Except as stated on Schedule 6.10, the Parent and
its Subsidiaries (a) have made or filed all federal and state income and all
other tax returns, reports and declarations required by any jurisdiction to
which it is subject, (b) have paid all taxes and other governmental assessments
and charges shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith and by appropriate
proceedings and (c) have set aside on its books provisions reasonably adequate
for the payment of all taxes for periods subsequent to the periods to which such
returns, reports or declarations apply. There are no unpaid taxes in any
material amount claimed to be due by the taxing authority of any jurisdiction,
and the Obligors know of no basis for any such claim.
ss.6.11. No Event of Default. No Default or Event of Default has
occurred and is continuing.
ss.6.12. Holding Company and Investment Company Acts. Neither the
Parent nor any of its Subsidiaries is a "holding company", or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding company", as
such terms are defined in the Public Utility Holding Company Act of 1935; nor
are any of them an "investment company", or an "affiliated company" or a
"principal underwriter" of an "investment company", as such terms are defined in
the Investment Company Act of 1940.
41
ss.6.13. Absence of UCC Financing Statements, Etc. Except with respect
to Permitted Liens, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or recorded with any
filing records, registry, or other public office, that purports to cover, affect
or give notice of any present or possible future lien on, or security interest
in, any material Collateral or rights thereunder.
ss.6.14. Certain Transactions. Except as set forth on Schedule 6.14,
none of the officers, trustees, directors, or employees of the Parent or any of
its Subsidiaries is presently a party to any transaction with the Borrower or
any of its Subsidiaries (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
trustee, director or such employee or, to the knowledge of the Obligors, any
corporation, partnership, trust or other entity in which any officer, trustee,
director, or any such employee has a substantial interest or is an officer,
director, trustee or partner.
ss.6.15. Employee Benefit Plans; Multiemployer Plans; Guaranteed
Pension Plans. Neither any Obligor nor any ERISA Affiliate maintains or
contributes to any Employee Benefit Plan, Multiemployer Plan or Guaranteed
Pension Plan other than as set forth in Schedule 6.15 hereof.
ss.6.16. Regulations U and X. No portion of any Loan is to be used for
the purpose of purchasing or carrying any "margin security" or "margin stock" as
such terms are used in Regulations U and X of the Board of Governors of the
Federal Reserve System, 12 C.F.R. Parts 221 and 224.
ss.6.17. Environmental Compliance. Except as disclosed on Schedule
6.17,
(a) the operations of the Parent and each of its Subsidiaries
comply with all applicable Environmental Laws;
(b) none of the operations of the Parent or any of the
Subsidiaries is the subject of any judicial or administrative proceeding
alleging the violation of any Environmental Laws;
(c) none of the operations of the Parent or any of its
Subsidiaries is the subject of any federal or state investigation evaluating
whether the Parent or any of its Subsidiaries disposed of any hazardous or toxic
waste, substance or constituent at any site that may require remedial action, or
any federal or state investigation evaluating whether any remedial action is
needed to respond to a release of any hazardous or toxic waste, substance or
constituent into the environment;
(d) neither the Parent nor any of its Subsidiaries has filed
any notice under any federal or state law indicating past or present treatment,
storage or disposal
42
of a hazardous waste or reporting a spill or release of a hazardous or toxic
waste, substance or constituent into the environment;
(e) neither the Parent nor any of the Subsidiaries has any
contingent liability in connection with any release of any hazardous or toxic
waste, substance or constituent into the environment, nor has the Parent or any
of the Subsidiaries received any notice, letter or other indication of potential
liability arising from the disposal of any hazardous or toxic waste, substance
or constituent into the environment.
ss.6.18. Subsidiaries. Schedule 6.18(a) sets forth all of the direct
and indirect Subsidiaries of the Parent. Schedule 6.18(b) sets forth all of the
Inactive Subsidiaries. The Parent or a Subsidiary is the owner, free and clear
of all liens and encumbrances, of all of the issued and outstanding capital
stock of each Subsidiary. All shares of such stock have been validly issued and
are fully paid and nonassessable and no rights to subscribe to any additional
shares have been granted, and no options, warrants, or similar rights are
outstanding other than the Convertible Notes.
ss.6.19. Loan Documents. All of the representations and warranties of
the Obligors made in the other Loan Documents or any document or instrument
delivered to the Agent or the Lenders pursuant to or in connection with any of
such Loan Documents are true and correct in all material respects.
ss.7. AFFIRMATIVE COVENANTS. The Obligors covenant and agree that, so
long as any Obligation is outstanding or any Lender has any obligation to make
any Loan:
ss.7.1. Punctual Payment. The Obligors will duly and punctually pay or
cause to be paid the principal and interest on the Loans and all interest, fees
and other Obligations provided for in this Agreement, all in accordance with the
terms of this Agreement and the Notes, as well as all other sums owing pursuant
to the Loan Documents.
ss.7.2. Records and Accounts. The Obligors will (a) keep, and cause
each of their Subsidiaries to keep, true and accurate records and books of
account in which full, true and correct entries will be made in accordance with
Generally Accepted Accounting Principles and (b) maintain adequate accounts and
reserves for all taxes (including income taxes), depreciation and amortization
of their properties and the properties of their Subsidiaries, contingencies, and
other reserves.
ss.7.3. Financial Statements, Certificates and Information. The Lead
Borrower will deliver to each of the Lenders:
(a) As soon as practicable, but in any event not later than
ninety (90) days after the end of each fiscal year of the Parent, the audited
consolidated balance sheet of the Parent and its Subsidiaries at the end of such
year, and the related audited consolidated statements of earnings and cash flows
for such year, each setting forth in
43
comparative form the figures for the previous fiscal year and all such
statements to be in reasonable detail, prepared in accordance with Generally
Accepted Accounting Principles, and accompanied by an auditor's report prepared
without qualification by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP (or by another independent
certified public accountant acceptable to the Agent), together with the notes
accompanying the financial statements and a written statement from such
accountants to the effect that they have read a copy of this Agreement, and
that, in making the examination necessary to said certification, they have
obtained no knowledge of any Default or Event of Default, or, if such
accountants shall have obtained knowledge of any then existing Default or Event
of Default they shall disclose in such statement any such Default or Event of
Default.
(b) As soon as practicable, but in any event not later than
forty-five(45) days after the end of each quarter, commencing with fiscal
quarter ending April 29, 2000, copies of the unaudited consolidated balance
sheet of the Parent and its Subsidiaries as of the end of such quarter, and the
related unaudited consolidated statements of income and cash flow for such
quarter and that portion of the Parent's and its Subsidiaries' fiscal year then
elapsed (including a breakdown of such financial results by division and a
comparison of such financial results to the prior year's results and to the
projections furnished the Agent and the Lenders from time to time in accordance
with the provisions of this Agreement), all in reasonable detail and prepared in
accordance with Generally Accepted Accounting Principles, together with a
certification by the principal financial or accounting officer of the Parent
that the information contained in such financial statements fairly presents the
financial position of the Parent and its Subsidiaries on the date thereof
(subject to year-end adjustments).
(c) As soon as practicable, but in any event not later than
thirty (30) days after the end of each month, copies of the unaudited
consolidated balance sheet of the Parent and its Subsidiaries as of the end of
such month, and the related unaudited consolidated statements of income and cash
flow for such month and that portion of the Parent's and its Subsidiaries'
fiscal year then elapsed, and projections for such future period as the Agent
may require, all in reasonable detail and in form satisfactory to the Agent and
prepared in accordance with Generally Accepted Accounting Principles, together
with a certification by the principal financial or accounting officer of the
Parent that the information contained in such financial statements fairly
presents the financial position of the Parent and its Subsidiaries on the date
thereof (subject to year-end adjustments).
(d) Simultaneously with the delivery of the financial
statements referred to in subsections (a) and (b), above, a statement in the
form of Exhibit E hereto signed by the principal financial or accounting officer
of the Parent and setting forth in reasonable detail computations (A) to
determine the Applicable Margin and (B) evidencing compliance with the covenants
contained in ss.9, and (if applicable) reconciliations to reflect changes in
Generally Accepted Accounting Principles.
(e) Contemporaneously with the filing or mailing thereof,
copies of all material of a financial nature filed with the Securities and
Exchange Commission
44
(including, without limitation, SEC Forms 10K and 10Q) or sent to the
stockholders of the Parent.
(f) Contemporaneously with the Borrower's receipt thereof,
copies of all accountants' management letters.
(g) As soon as practicable, but in any event not later than
thirty (30) days after the end of each fiscal year, monthly projections of the
financial condition and operations of the Parent and its Subsidiaries for the
following fiscal year, including, but not limited to, a projected consolidating
balance sheet, statement of operations, statement of cash flows and statement of
changes in stockholders' equity and projected calculations of the financial
performance covenants set forth in ss.9 hereof, for such fiscal year.
(h) After January 31, 2003 but on or before February 15, 2003,
a certification from the Parent's principal financial or accounting officer, as
to the Total Leverage as of January 31, 2003; and
(i) From time to time such other financial data and
information as the Agent or any Lender may reasonably request.
ss.7.4. Notices.
(a) Defaults. The Lead Borrower will promptly notify the Agent
and each of the Lenders in writing of the occurrence of any Default or Event of
Default. If any Person shall give any notice or take any other action in respect
of a claimed default (whether or not constituting an Event of Default) under
this Agreement or under any note, evidence of indebtedness, indenture or other
obligation to which or with respect to which the Parent or any of its
Subsidiaries is a party or obligor, whether as principal or surety, and such
default would permit the holder of such note or obligation or other evidence of
indebtedness to accelerate the maturity thereof, the Lead Borrower shall
forthwith give written notice thereof to the Agent and each of the Lenders,
describing the notice or action and the nature of the claimed default.
(b) Environmental Events. The Lead Borrower will promptly give
notice to the Agent (i) of any violation of any Environmental Law that the
Parent or any of its Subsidiaries reports in writing or is reportable by such
Person in writing to any federal, state or local environmental agency and (ii)
upon becoming aware thereof, of any inquiry, proceeding, investigation, or other
action, including a notice from any agency of potential environmental liability,
or any federal, state or local environmental agency or board, that in either
case involves any assets of the Parent or any of its Subsidiaries or has the
potential to materially affect the assets, liabilities, financial condition or
operations of the Parent and its Subsidiaries or the Agent's security interests
pursuant to the Security Documents.
45
(c) Notice of Litigation and Judgments. The Lead Borrower will
give notice to the Agent and each of the Lenders in writing, simultaneous with
the delivery of the financial information required to be delivered pursuant to
ss.7.3(b) above, of any litigation or proceedings threatened in writing or any
pending litigation and proceedings affecting the Parent or any of its
Subsidiaries or to which the Parent or any of its Subsidiaries is or is to
become a party, and which litigation or proceedings involves a claim in excess
of $100,000.00, stating the nature and status of such litigation or proceedings.
The Lead Borrower will give notice to the Agent and each of the Lenders, in
writing, in form and detail satisfactory to the Agent and each of the Lenders,
within ten (10) days of any judgment, final or otherwise, against the Parent or
any of its Subsidiaries.
ss.7.5. Existence; Maintenance of Properties. The Obligors will do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence as corporations under the jurisdiction of their
incorporation. The Obligors will do or cause to be done all things necessary to
preserve and keep in full force all of its rights and franchises and those of
their Subsidiaries, except for the Inactive Subsidiaries. The Obligors, except
with respect to the Inactive Subsidiaries (i) will cause all of its properties
and those of their Subsidiaries used or useful in the conduct of its business or
the business of their Subsidiaries to be maintained and kept in good condition,
repair and working order and supplied with all necessary equipment, (ii) will
cause to be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Obligors may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times, and (iii) except as provided below, will,
and will cause each of its Subsidiaries to, continue to engage primarily in the
businesses now conducted by them and in related businesses. The Obligors (i)
shall not make any loans or advances to, or transfer any assets to, any Inactive
Subsidiary, nor allow any Inactive Subsidiary to engage in any business
activity, other than such activity which may be required in connection with the
dissolution and/or deregistration of such Inactive Subsidiary, and (ii) shall
dissolve all Inactive Subsidiaries, which are Domestic Subsidiaries, on or
before ninety (90) days from the date hereof, and shall endeavor in good faith
and use its reasonable efforts to dissolve or deregister all Inactive
Subsidiaries, which are not Domestic Subsidiaries as soon as possible, but in no
event, not later than one (1) year from the date hereof. In the event that any
Inactive Subsidiary has not been dissolved or deregistered in accordance with
the provisions of the preceding sentence, the parent of such Inactive Subsidiary
shall execute and deliver to the Agent, within thirty (30) days of the Agent's
request, a stock pledge, in form and substance reasonably satisfactory to the
Agent, to pledge the stock of such Inactive Subsidiary to the Agent for the
ratable benefit of the Lenders and such other documents, instruments and
agreements which the Agent may reasonably require in connection therewith.
ss.7.6. Insurance. Schedule 7.6 sets forth all presently existing
insurance maintained by the Obligors. The Obligors will maintain insurance on
all Collateral as required by the Loan Documents and will maintain with respect
to their other properties, and will cause each of their Subsidiaries to maintain
with financially sound and
46
reputable insurers, insurance with respect to such properties and its business
against such casualties and contingencies as shall be in accordance with the
general practices of businesses engaged in similar activities in similar
geographic areas and in amounts, containing such terms, in such forms and for
such periods as may be reasonable and prudent.
ss.7.7. Taxes. The Obligors will duly pay and discharge, or cause to be
paid and discharged, before the same shall become overdue, all taxes,
assessments and other governmental charges imposed upon them and their
properties, sales and activities, or any part thereof, or upon the income or
profits therefrom, as well as all claims for labor, materials, or supplies;
provided, that any such tax, assessment, charge or other governmental charge
need not be paid if the validity of the amount thereof shall currently be
contested in good faith by appropriate proceedings and if the Obligors have set
aside on their books, adequate reserves with respect thereto; and provided
further that the Obligors will pay all such taxes, assessments, charges or other
governmental charges forthwith upon the commencement of proceedings to foreclose
any lien that may have attached as security therefor.
ss.7.8. Inspection of Properties and Books. (a) The Obligors shall
permit the Lenders, through the Agent or any of the Lenders' other designated
representatives (at the Obligors' expense) to visit and inspect any of the
properties of the Obligors or any of their Subsidiaries to examine the books of
account of the Obligors and their Subsidiaries (and to make copies thereof and
extracts therefrom) and to discuss the affairs, finances and accounts of the
Obligors and their Subsidiaries with, and to be advised as to the same by, its
officers, all at such reasonable times and intervals as the Agent or any Lender
may reasonably request.
(b) Without limiting the rights of the Agent and the Lenders
under ss.7.8(a), above, the Obligors shall permit the Agent, at the Obligors'
expense, (i) to undertake commercial finance examinations; and (ii) to obtain
appraisals of any of the Obligors' assets in form and substance and by
appraisers satisfactory to the Agent; all of the foregoing at such times and
intervals as the Agent may request, provided, however, unless an Event of
Default has occurred and is continuing, the Agent agrees that the Agent shall
only obtain one (1) appraisal and one (1) commercial finance examination during
any one (1) consecutive twelve (12) month period.
ss.7.9. Compliance with Laws, Contracts, Licenses, and Permits. Except
where the failure to do so would not have a material adverse effect on the
business, operations conditions (financial or otherwise), performance or
properties of the Obligors and their Subsidiaries taken as a whole, the Obligors
will comply with, and will cause each of their Subsidiaries to comply with (a)
all applicable laws and regulations now or hereafter in effect wherever its
business is conducted, including all Environmental Laws, (b) the provisions of
their corporate charter and other charter documents and by-laws, (c) all
agreements and instruments to which they are a party or by which they or any of
their properties may be bound and (d) all applicable decrees, orders, and
judgments. If at any time while any Obligation is outstanding or the Lenders
have any obligation to make
47
Loans hereunder, any authorization, consent, approval, permit or license from
any officer, agency or instrumentality of any government shall become necessary
or required in order that the Obligors may fulfill any of their obligations
hereunder, the Obligors will promptly take or cause to be taken all reasonable
steps to obtain such authorization, consent, approval, permit or license and
furnish the Agent and the Lenders with evidence thereof.
ss.7.10. Use of Proceeds. The Borrowers will use the proceeds of the
Revolving Credit Loans solely to refinance existing Indebtedness to Fleet Retail
Finance Inc., as Agent, for working capital, for loans to the Parent to fund
Permitted Stock Repurchases, for Capital Expenditures permitted herein, for the
funding of the Permitted Watch World Acquisition, and for general corporate
purposes.
ss.7.11. Pledge of Stock of Material Foreign Subsidiaries. In the event
after the date hereof, any Subsidiary shall become a Material Foreign
Subsidiary, the parent of such Material Foreign Subsidiary shall execute and
deliver to the Agent, within thirty (30) days of the Agent's request, a stock
pledge, in form and substance satisfactory to the Agent, to pledge the stock of
such Material Foreign Subsidiary to the Agent for the ratable benefit of the
Lenders, and such other documents, instruments and agreements which the Agent
may reasonably require in connection therewith.
ss.7.12. Further Assurances. The Obligors will cooperate with, and will
cause each of their Subsidiaries to cooperate with the Agent and the Lenders and
execute such further instruments and documents as any Lender or the Agent shall
reasonably request to carry out to their satisfaction the transactions
contemplated by this Agreement and the other Loan Documents.
ss.8. CERTAIN NEGATIVE COVENANTS. The Obligors covenant and agree that,
so long as any Obligation is outstanding or any of the Lenders has any
obligation to make any Loans:
ss.8.1. Restrictions on Indebtedness. The Obligors will not, and will
not permit any of their Subsidiaries to, create, incur, assume, guarantee or be
or remain liable, contingently or otherwise, with respect to any Indebtedness
other than:
(a) Indebtedness to the Lenders arising under any of the Loan
Documents;
(b) current liabilities of the Obligors or their Subsidiaries
incurred in the ordinary course of business but not incurred through (i) the
borrowing of money, or (ii) the obtaining of credit except for credit on an open
account basis customarily extended and in fact extended in connection with
normal purchases of goods and services;
(c) Indebtedness in respect of taxes, assessments,
governmental charges or levies and claims for labor, materials and supplies to
the extent that payment
48
therefor shall not at the time be required to be made in accordance with the
provisions of ss.7.7;
(d) Indebtedness in respect of judgments or awards that have
been in force for less than the applicable period for taking an appeal so long
as execution is not levied thereunder or in respect of which an Obligor shall at
the time in good faith be prosecuting an appeal or proceedings for review and in
respect of which a stay of execution shall have been obtained pending such
appeal or review;
(e) endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the ordinary course
of business;
(f) Indebtedness existing on the date of this Agreement and
listed and described on Schedule 8.1 hereto;
(g) Indebtedness on account of Capital Leases in an amount not
to exceed $500,000.00 in the aggregate outstanding at any time;
(h) Other Indebtedness, which together with the Indebtedness
described in ss.8.1(g) hereof does not exceed $2,000,000.00 in the aggregate
outstanding at any time;
(i) Indebtedness incurred by the Parent pursuant to (i) the
guaranty by the Parent, in the ordinary conduct of the business of the Parent
and its Subsidiaries, consistent with past business practices, of any
Subsidiary's Indebtedness, and/or (ii) any indemnity obligation incurred by the
Parent in the ordinary conduct of the business of the Parent and its
Subsidiaries, consistent with past business practices, with respect to any
obligations of a Subsidiary;
(j) Hedge Agreements in respect of Indebtedness otherwise
permitted hereby that bears interest at a floating rate, so long as such
agreements are not entered into for speculative purposes.
ss.8.2. Restrictions on Liens, Etc. The Obligors will not, and will not
permit any of their Subsidiaries to, (a) create or incur or suffer to be created
or incurred or to exist any lien, encumbrance, mortgage, pledge, charge,
restriction or other security interest of any kind upon any of their property or
assets of any character whether now owned or hereafter acquired, or upon the
income or profits therefrom; (b) transfer any of their property or assets or the
income or profits therefrom for the purpose of subjecting the same to the
payment of Indebtedness or performance of any other obligation in priority to
payment of its general creditors; (c) acquire, or agree or have an option to
acquire, any property or assets upon conditional sale or other title retention
or purchase money security agreement, device or arrangement; (d) suffer to exist
for a period of more than sixty (60) days after the same shall have been
incurred any Indebtedness or claim or demand against them that if unpaid might
by law or upon bankruptcy or insolvency, or otherwise, be given any priority
whatsoever over its general creditors; or (e) sell, assign,
49
pledge or otherwise transfer any accounts, contract rights, general intangibles,
chattel paper or instruments, with or without recourse; provided that the
Obligors and any Subsidiary of the Obligors may create or incur or suffer to be
created or incurred or to exist the following (collectively, the "Permitted
Liens"):
(i) liens in favor of any Obligor on all or part of the assets
of Subsidiaries of such Obligor securing Indebtedness owing by Subsidiaries of
such Obligor to such Obligor;
(ii) liens on properties to secure taxes, assessments and
other government charges or claims for labor, material or supplies in respect of
obligations not overdue;
(iii) deposits or pledges made in connection with, or to
secure payment of, workmen's compensation, unemployment insurance, old age
pensions or other social security obligations;
(iv) liens on properties in respect of judgments or awards,
the Indebtedness with respect to which is permitted byss.8.1(d);
(v) liens of carriers, warehousemen, mechanics and
materialmen, and other like liens on properties in existence less than 40 days
from the date of creation thereof in respect of obligations not overdue;
(vi) encumbrances on properties consisting of easements,
rights of way, zoning restrictions, restrictions on the use of real property and
defects and irregularities in the title thereto, landlord's or lessor's liens
under leases to which an Obligor or a Subsidiary of an Obligor is a party, and
other minor liens or encumbrances none of which interferes materially with the
use of the property affected in the ordinary conduct of the business of the
Obligors and its Subsidiaries, which defects do not individually or in the
aggregate have a materially adverse effect on the business of any Obligor
individually or of the Parent and its Subsidiaries on a consolidated basis.
(vii) presently outstanding liens listed on Schedule 8.2
hereto;
(viii) liens in favor of the Agent and the Lenders under the
Loan Documents; and
(ix) purchase money liens in equipment to secure Indebtedness
otherwise permitted hereby.
ss.8.3. Restrictions on Investments. The Obligors will not, and will
not permit any of their Subsidiaries to, make or permit to exist or to remain
outstanding any Investment except Investments which constitute:
50
(a) (i) marketable direct or guaranteed obligations of the
United States of America that mature within one (1) year from the date of
purchase by the Obligors;
(ii) demand deposits, certificates of deposit, bankers
acceptances and time deposits of United States banks having total assets in
excess of $1,000,000,000.00;
(iii) securities commonly known as "commercial paper"
issued by a corporation organized and existing under the laws of the United
States of America or any state thereof that at the time of purchase have been
rated and the ratings for which are not less than "P 1" if rated by ▇▇▇▇▇'▇
Investors Services, Inc., and not less than "A 1" if rated by Standard and
Poor's;
(b) Permitted Stock Repurchases;
(c) Investments existing on the date hereof and listed on
Schedule 8.3 hereto; and
(d) As long as no Event of Default then exists or would arise
therefrom, Investments in the ordinary course of business consistent with past
and existing practices in an amount not to exceed $7,500,000.00 during any
fiscal year in the aggregate.
ss.8.4. Merger, Consolidation. The Obligors will not, and will not
permit any of their Subsidiaries (except the Inactive Subsidiaries) to, become a
party to any merger or consolidation, or agree to or effect any asset
acquisition or disposition or stock acquisition or disposition (other than the
acquisition or disposition of assets in the ordinary course of business
consistent with past practices) except (i) the merger or consolidation of one or
more of the Subsidiaries (including any Inactive Subsidiary) of an Obligor with
and into an Obligor, or (ii) the merger or consolidation of two or more
Subsidiaries (including any Inactive Subsidiaries) of any Obligor, or (iii) as
long as no default or Event of Default then exists or would arise therefrom, the
Permitted Watch World Acquisition.
ss.8.5. Sale and Leaseback. Except for sales and leasebacks of
equipment in the aggregate amount of $1,000,000.00 during any fiscal year of the
Obligors, the Obligors will not, and will not permit any of their Subsidiaries
to, enter into any arrangement, directly or indirectly, whereby the Obligor or
any Subsidiary of the Obligors shall sell or transfer any property owned by it
in order then or thereafter to lease such property or lease other property that
the Obligor or any Subsidiary of an Obligor intends to use for substantially the
same purpose as the property being sold or transferred.
ss.8.6. Compliance with Environmental Laws. The Obligors will not, and
will not permit any of their Subsidiaries to, do any of the following: (a) use
any property as a facility for the handling, processing, storage or disposal of
Hazardous Material, except in
51
full compliance with Environmental Laws, (b) cause or permit to be located on
any of their properties any underground tank or other underground storage
receptacle for Hazardous Material except in full compliance with Environmental
Laws, or (c) generate or dispose of any Hazardous Material on any of its
properties except in full compliance with Environmental Laws.
ss.8.7. Distributions. The Parent and its Subsidiaries will not make
any Distributions, provided that as long as no Default exists or arises as a
result of such payment, and the Repurchase Conditions are satisfied, the
Borrowers may make loans to the Parent to enable the Parent to repurchase the
Parent's capital stock or to acquire options for the purchase or sale of such
stock, provided further that the aggregate amount so loaned to the Parent from
and after t he Closing Date shall not exceed $100,000,000.
ss.8.8. Subsidiaries. Without limiting the provisions of ss.8.3, the
Obligors shall not acquire, form, or otherwise invest in any Subsidiary other
than in the ordinary course of business consistent with past and existing
practices and only (i) if a Domestic Subsidiary, the Subsidiary executes a
guaranty of the Obligations and grants the Agent first perfected liens on its
assets, and (ii) all of the stock of such Subsidiary (or with respect to a
Material Foreign Subsidiary, 65% of its stock) is pledged to the Agent as
security for the Obligations and (iii) no Event of Default exists or would arise
therefrom.
ss.8.9. Fiscal Year. The fiscal year of the Parent and its Subsidiaries
presently ends on the Saturday closest to January 31 of each year. The Parent
and its Subsidiaries shall not change their fiscal year end without furnishing
prior written notice thereof to, and first obtaining the consent of, the
Majority Lenders, which consent shall not be unreasonably withheld or delayed.
ss.8.10. Loans and Advances. The Obligors will not and will not permit
any of their Subsidiaries to, make any loans or advances to any Person other
than:
(a) Loans to the Parent in accordance with the provisions
ofss.8.7 hereof;
(b) Loans and advances existing on the date hereof and listed
on Schedule 8.10 hereof;
(c) Advance payments made to an Obligor's suppliers in the
ordinary course;
(d) Advances to any Obligor's officers, employees, and
salespersons with respect to reasonable expenses to be incurred by such
officers, employees, and salespersons for the benefit of such Obligor, which
expenses are properly substantiated by the person seeking such advance and
properly reimbursable by such Obligor;
52
(e) Loans to the Joint Ventures in an amount not to exceed
$500,000.00 in the aggregate outstanding at any one time provided that no Event
of Default then exists or would arise therefrom;
(f) Loans and advances to both Material Foreign Subsidiaries
and Non-Material Foreign Subsidiaries (exclusive of those set forth on Schedule
8.10 hereof), in an amount not to exceed the aggregate outstanding at any one
time of (i) $5,000,000.00, plus (ii) that amount which is equal to seventy-five
percent (75%) of that portion of the Consolidated EBITDA which is attributable
to both Material Foreign Subsidiaries and Non-Material Foreign Subsidiaries, on
a rolling four (4) quarter basis (after giving effect to any previous loans made
pursuant to this subclause (ii)), provided that no Event of Default then exists
or would arise therefrom;
(g) Provided that no Event of Default then exists or would
arise therefrom, bridge loans to any employees of the Parent or its Subsidiaries
which bridge loans are made in the ordinary conduct of the business of the
Parent and its Subsidiaries, consistent with past business practices, and the
proceeds of which bridge loans shall be used by such employees for relocation
expenses or as otherwise permitted under the Parent's employee assistance plan,
and which bridge loans shall not exceed $1,000,000.00 in the aggregate
outstanding at any one time; and
(h) Loans to any Subsidiary not expressly prohibited under
this Agreement; provided that no Event of Default then exists or would arise
therefrom.
ss.8.11 Transactions with Affiliates. The Obligors shall not make any
payment, make any Investment, nor give any value to any Subsidiary or Affiliate
except in the ordinary course of business, consistent with past and existing
practices of the Obligors, or not otherwise prohibited hereunder, provided that
no Event of Default then exists or would arise therefrom.
ss.8.12. Subordinated Debt.
(a) The Obligors shall not
(i) effect or permit any material change or amendment to the
terms of the instruments, documents, or agreements evidencing the Subordinated
Debt;
(ii) grant any collateral security for the Subordinated Debt;
or
(iii) directly or indirectly, make any payment of any
principal of, or in redemption, retirement or repurchase of, any Subordinated
Debt (other than payments of interest at the times and rates set forth in the
instruments, documents, and agreements evidencing the Subordinated Debt).
(b) The Obligors acknowledge that the Obligations (and the Parent's
Guaranty thereof) constitute "Designated Senior Indebtedness" for purposes of,
and as defined in,
53
the Indenture dated as of June 26, 1996 between the Parent and The Bank of New
York, as Trustee relating to the Convertible Notes, as amended and in effect.
ss.8.13. No Restrictions on Obligations. None of the Obligors shall
enter into or become subject to, directly or indirectly, any agreement
prohibiting or restricting in any manner (including, without limitation, by way
of covenant, representation or event of default) (i) the incurrence, creation or
assumption of the Obligations or any encumbrances on any property of any
Obligor, except in the case of customary transfer restrictions in Affiliates
owned 50% or less by any Obligor, or (ii) the granting of a security interest,
pledge or encumbrance in favor of the Agent and the Lenders on any asset of any
Obligor.
ss.9. FINANCIAL COVENANTS OF THE BORROWER. The Borrowers covenant and
agree that, so long as any Obligation is outstanding or any Lender has any
obligation to make any Loans:
ss.9.1. Minimum Consolidated Net Worth. The Borrowers shall not permit
Consolidated Net Worth at any time to be less than the result of (a)
$40,000,000, plus (b) one hundred percent (100%) of the proceeds of any stock
issuance by the Parent and/or any of its Subsidiaries on a cumulative basis,
plus (c) fifty percent (50%) of Consolidated Net Income (but not less than zero)
in each fiscal quarter of the Parent and its Subsidiaries, commencing with
fiscal quarter ended April 29, 2000, on a cumulative basis, minus (d) the amount
of any Permitted Stock Repurchases.
ss.9.2. Senior Funded Debt to Consolidated EBITDA Ratio. The Borrowers
shall not permit the ratio of Senior Funded Debt to Consolidated EBITDA, tested
as of the end of each of the following quarters, calculated on a rolling four
(4) quarters basis to exceed the following:
--------------------------------------------------------------------------------
Fiscal Quarter Ending
--------------------------------------------------------------------------------
April 29, 2000
--------------------------------------------------------------------------------
July 29, 2000
--------------------------------------------------------------------------------
October 28, 2000
--------------------------------------------------------------------------------
February 3, 2001
--------------------------------------------------------------------------------
May 5, 2001
--------------------------------------------------------------------------------
August 4, 2001
--------------------------------------------------------------------------------
November 3, 2001
--------------------------------------------------------------------------------
February 2, 2002
--------------------------------------------------------------------------------
May 4, 2002
--------------------------------------------------------------------------------
August 3, 2002 and each
fiscal quarter end
thereafter
--------------------------------------------------------------------------------
ss.9.3. Consolidated Operating Cash Flow to Debt Service Ratio. The
Borrowers shall not permit the ratio of Consolidated Operating Cash Flow to Debt
Service
54
Charges, tested as of the end of each of the following quarters, calculated on a
rolling four (4) quarter basis to be less than the following:
--------------------------------------------------------------------------------
Fiscal Quarters Ending
In
--------------------------------------------------------------------------------
Fiscal Year 2000
--------------------------------------------------------------------------------
Fiscal Year 2001
--------------------------------------------------------------------------------
Fiscal Year 2002 and
thereafter
--------------------------------------------------------------------------------
ss.9.4. Maximum Total Funded Debt to Consolidated EBITDA Ratio. The
Borrowers shall not permit the ratio of Total Funded Debt to Consolidated
EBITDA, tested as of the end of each of the following quarters, calculated on a
rolling four quarter basis, to exceed the following:
--------------------------------------------------------------------------------
Fiscal Quarter Ending
--------------------------------------------------------------------------------
April 29, 2000
--------------------------------------------------------------------------------
July 29, 2000
--------------------------------------------------------------------------------
October 28, 2000
--------------------------------------------------------------------------------
February 3, 2001
--------------------------------------------------------------------------------
May 5, 2001
--------------------------------------------------------------------------------
August 4, 2001
--------------------------------------------------------------------------------
November 3, 2001
--------------------------------------------------------------------------------
February 2, 2002
--------------------------------------------------------------------------------
May 4, 2002
--------------------------------------------------------------------------------
August 3, 2002 and each fiscal
quarter thereafter
--------------------------------------------------------------------------------
ss.10. CLOSING CONDITIONS. The obligations of the Agent and the Lenders
to make the Revolving Credit Loans and of the Issuing Bank on behalf of the
Lenders to issue Letters of Credit shall be subject to satisfaction of the
following conditions precedent:
ss.10.1. Loan Documents. Each of the Loan Documents shall have been
duly executed and delivered by the respective parties thereto and, shall be in
full force and effect and shall be in form and substance satisfactory to each of
the Lenders.
ss.10.2. Certified Copies of Organization Documents. Each of the
Lenders shall have received from the Obligors a copy, certified as of a recent
date by the appropriate officer of the State in which Obligors are organized to
be true and complete, of the corporate charter and any other organization
documents of Obligors as in effect on such date of certification.
ss.10.3. By-laws; Resolutions. All action on the part of the Obligors
necessary for the valid execution, delivery and performance by the Obligors of
this Agreement and the other Loan Documents to which they are or are to become a
party shall have been duly
55
and effectively taken, and evidence thereof satisfactory to the Lenders shall
have been provided to each of the Lenders. Each of the Lenders shall have
received from the Obligors true copies of the Obligors' by-laws and the
resolutions adopted by the Obligors' board of directors authorizing the
transactions described herein, each certified by each Obligor's secretary as of
a recent date to be true and complete.
ss.10.4. Incumbency Certificate; Authorized Signers. Each of the
Lenders shall have received from the Obligors an incumbency certificate, dated
as of the Closing Date, signed by a duly authorized officer of each Obligor and
giving the name and bearing a specimen signature of each individual who shall be
authorized: (a) to sign, in the name and on behalf of the Obligors, each of the
Loan Documents to which the Obligors are or are to become a party; (b) to make
requests for Loans and Conversion Requests; and (c) to give notices and to take
other action under the Loan Documents.
ss.10.5. Validity of Liens. The Security Documents shall be effective
to create in favor of the Agent for the benefit of the Lenders a legal, valid
and enforceable first (except for Permitted Liens entitled to priority under
applicable law) security interest in the Collateral. All filings, recordings,
deliveries of instruments and other actions necessary or desirable in the
opinion of the Lenders to protect and preserve such security interests shall
have been duly effected. The Agent shall have received evidence thereof in form
and substance satisfactory to the Agent and the Lenders.
ss.10.6. Financial Performance Covenant Compliance. The Obligors shall
have furnished the Agent with a certificate demonstrating compliance with all
financial covenants set forth inss.9 hereof on a pro forma basis.
ss.10.7. Consents and Approvals. All governmental and third party
consents and approvals, if any, necessary in connection with this Agreement and
the other Loan Documents, shall have been obtained (without the imposition of
any conditions that are not acceptable to the Agent) and shall remain in effect;
all applicable waiting periods with respect to such consents and approvals shall
have expired without any action being taken by any competent authority; and, in
the judgement of the Agent; no law or regulation shall be applicable which
restrains, prevents, or imposes materially adverse conditions upon this
Agreement or the other Loan Documents.
ss.10.8. Opinions of Counsel. The Agent shall have received an opinion
of counsel to the Obligors in form and substance reasonably satisfactory to the
Agent.
ss.10.9. Payoff Letter. The Agent shall have received a payoff letter
from the Borrowers' existing lenders satisfactory in form and substance to the
Agent.
ss.10.10. Payment of Fees. The Obligors shall have paid to the Agent
(a) for the pro rata accounts of the Lenders the Closing Fee pursuant toss.4.1,
and (b) the Agent's Fee.
ss.10.11. Financial Statements. The Agent shall be satisfied that the
financial information delivered to it prior to the Closing Date fairly presents
the business
56
and financial condition of the Parent and its Subsidiaries as at the close of
business on the respective dates thereof, and that no material adverse change
shall have occurred in the business, condition (financial or otherwise),
operations, performance, properties or prospects of the Parent, the Borrowers or
any of their respective Subsidiaries, taken as a whole, from the Parent's and
the Borrowers' financial statements at, and for the period closing at January
29, 2000.
ss.10.12. Governmental Regulations. No material changes in governmental
regulation or policy affecting the Agent or Lenders involved in this transaction
or the Obligors shall have occurred prior to the Closing Date.
ss.10.13. Due Diligence. The Agent, in connection with its conduct of
due diligence, shall have been given such access to the management, records,
books of account, contracts and properties of the Parent, the Borrowers and
their respective Subsidiaries and shall have received such financial, business,
and other information regarding the Parent, the Borrowers and their respective
Subsidiaries as it shall have requested, including, without limitation,
information as to possible contingent liabilities, transactions with affiliates,
tax matters, environmental matters, and obligations under ERISA and welfare
plans, collective bargaining agreements and other arrangements with employees.
The Agent and Agent's counsel shall have completed their due diligence
investigation of the Borrower and its subsidiaries in scope with the results of
such due diligence being satisfactory to the Agent and its counsel.
ss.10.14. No Litigation. No action, suit, investigation, litigation or
proceeding shall be pending or threatened in any court or before any arbitrator
or governmental instrumentality that (i) reasonably could be expected to have a
material adverse effect on the business, condition (financial or otherwise),
operations, performance, properties or prospects of the Parent or any of its
Subsidiaries, taken as a whole or (ii) would materially adversely affect this
Agreement and the other Loan Documents, taken as a whole. The current status of
all pending litigation shall be reasonably satisfactory to Agent.
ss.10.15. Additional Documents. The Borrower shall have provided such
additional instruments and documents to the Agent and the Lenders as the Agent
and the Agent's counsel may have reasonably requested.
ss.11. CONDITIONS TO ALL BORROWINGS AND ISSUANCE OF LETTERS OF CREDIT.
The obligations of the Lenders to make any Loan or for the Issuing Bank to issue
any Letter of Credit, whether on or after the Closing Date, shall also be
subject to the satisfaction of the following conditions precedent:
ss.11.1. Representations True; No Event of Default. Each of the
representations and warranties of the Parent and its Subsidiaries contained in
this Agreement, the other Loan Documents or in any document or instrument
delivered pursuant to or in connection with this Agreement shall be true as of
the date as of which they were made and shall also be true at and as of the time
of the making of such Loan, with the same
57
effect as if made at and as of that time (except to the extent of changes
resulting from transactions contemplated and permitted by this Agreement and the
other Loan Documents and changes occurring in the ordinary course of business
that singly or in the aggregate are not materially adverse, and except to the
extent that such representations and warranties relate expressly to an earlier
date) and no Default or Event of Default shall have occurred and be continuing.
Each of the Lenders shall have received a certificate of the Borrower signed by
an authorized officer of the Borrower to such effect.
ss.11.2. No Legal Impediment. No change shall have occurred in any law
or regulations thereunder or interpretations thereof that in the reasonable
opinion of any Lender would make it illegal for such Lender to make such Loan.
ss.11.3. Governmental Regulation. Each Lender shall have received such
statements in substance and form reasonably satisfactory to such Lender as such
Lender shall require for the purpose of compliance with any applicable
regulations of the Comptroller of the Currency or the Board of Governors of the
Federal Reserve System.
ss.11.4. Proceedings and Documents. All proceedings in connection with
the transactions contemplated by this Agreement, the other Loan Documents and
all other documents incident thereto shall be reasonably satisfactory in
substance and in form to the Lenders and to the Agent's counsel, and the Lenders
and such counsel shall have received all information and such counterpart
originals or certified or other copies of such documents as the Agent may
reasonably request.
ss.12. EVENTS OF DEFAULT; ACCELERATION; ETC.
ss.12.1 Events of Default and Acceleration. If any of the following
events ("Events of Default") shall occur:
(a) The failure of any Borrower to pay any principal of the
Loans at the stated date of maturity or any accelerated date of maturity, or the
failure of any Borrower to pay any principal of the Loans at any other date
fixed for payment within two (2) Business Days of such date;
(b) The failure of any Borrower to pay any interest on the
Loans or any other sums due hereunder or under any of the other Loan Documents
at the stated date of maturity or any accelerated date of maturity, or the
failure of any Borrower to pay any interest on the Loans or any other sums due
hereunder or under any of the other Loan Documents at any other date fixed for
payment within two (2) Business Days of such date;
(c) Any Borrower shall fail to comply with any of its
covenants contained in ss.ss.7.3, 7.5 and 7.9 hereof within five (5) Business
Days after written notice of such failure has been given to the Borrowers by the
Agent;
58
(d) Any Borrower shall fail to comply with any of its
covenants contained in any other provision of ss.7, ss.8 or ss.9 hereof;
(e) Any Borrower or any Subsidiary shall fail to perform any
other term, covenant or agreement contained herein (other than those specified
elsewhere in this ss.12) or any of the covenants contained in any other Loan
Documents for thirty (30) days after written notice of such failure has been
given to the Borrowers by the Agent; provided, however, such cure period shall
be extended for an additional thirty (30) days if the Borrower or such
Subsidiary has diligently commenced such cure but is unable to complete same
within the initial thirty (30) day period and such cure can be completed within
such additional thirty (30) day period;
(f) any representation or warranty of the Borrowers, the
Parent or any Subsidiary in this Agreement or any of the other Loan Documents or
in any other document or instrument delivered pursuant to or in connection with
this Agreement is determined by the Agent to have been false in any material
respect upon the date when made or deemed to have been made or repeated;
(g) Any Borrower, the Parent or any Subsidiary shall fail to
pay at maturity, or within any applicable period of grace, any obligation for
borrowed money or credit received or in respect of any Capitalized Leases, in
excess of $1,000,000.00, or fail to observe or perform any term, covenant or
agreement contained in any agreement by which it is bound, evidencing or
securing borrowed money or credit received or in respect of any Capitalized
Leases, in excess of $1,000,000.00, for such period of time as would permit
(assuming the giving of appropriate notice if required) the holder or holders
thereof or of any obligations issued thereunder to accelerate the maturity
thereof;
(h) Any Borrower, the Parent or any Subsidiary shall make an
assignment for the benefit of creditors, or admit in writing its inability to
pay or generally fail to pay its debts as they mature or become due, or shall
petition or apply for the appointment of a trustee or other custodian,
liquidator or receiver of any Borrower, the Parent or any Subsidiary or of any
substantial part of the assets of any Borrower, the Parent or any of the
Subsidiary or shall commence any case or other proceeding relating to any
Borrower, the Parent or any Subsidiary under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or liquidation or
similar law of any jurisdiction, now or hereafter in effect, or shall take any
action to authorize or in furtherance of any of the foregoing, or if any such
petition or application shall be filed or any such case or other proceeding
shall be commenced against any Borrower, the Parent or any Subsidiary and any
Borrower, the Parent or any Subsidiary shall indicate its approval thereof,
consent thereto or acquiescence therein;
(i) The filing of any case or other proceeding against any of
the Borrowers, the Parent or any Subsidiary under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution or
liquidation or similar law of any jurisdiction, now or hereafter in effect and
such case or proceeding is not
59
discharged or dismissed within thirty (30) days of its commencement; a decree or
order is entered appointing any such trustee, custodian, liquidator or receiver
or adjudicating any Borrower, the Parent or any Subsidiary bankrupt or
insolvent, or approving a petition in any such case or other proceeding, or a
decree or order for relief is entered in respect of any Borrower, the Parent or
any Subsidiary, in an involuntary case under federal bankruptcy laws as now or
hereafter constituted;
(j) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty days, whether or not consecutive, any final
judgment against any Borrower, the Parent or any Subsidiary that, with other
outstanding final judgments, undischarged, against any Borrower, the Parent or
any Subsidiary exceeds in the aggregate $2,500,000.00;
(k) if any of the Loan Documents shall be canceled,
terminated, revoked or rescinded or any action at law, suit or in equity or
other legal proceeding to cancel, revoke or rescind any of the Loan Documents
shall be commenced by or on behalf of any Borrower, the Parent or any
Subsidiary, or any court or any other governmental or regulatory authority or
agency of competent jurisdiction shall make a determination that, or issue a
judgment, order, decree or ruling to the effect that, any one or more of the
Loan Documents is illegal, invalid or unenforceable in accordance with the terms
thereof;
(l) with respect to any Guaranteed Pension Plan, an ERISA
Reportable Event shall have occurred and the Majority Lenders shall have
determined in their reasonable discretion that such event reasonably could be
expected to result in liability of any Borrower, the Parent or any Subsidiary to
the PBGC on such Guaranteed Pension Plan in an aggregate amount exceeding
$1,000,000.00 and (i) such event in the circumstances occurring reasonably could
constitute grounds for the termination of such Guaranteed Pension Plan by the
PBGC or for the appointment by the appropriate United States District Court of a
trustee to administer such Guaranteed Pension Plan; or (ii) a trustee shall have
been appointed by the United States District Court to administer such Plan; or
(iii) the PBGC shall have instituted proceedings to terminate such Guaranteed
Pension Plan;
(m) Any Borrower, the Parent or any Subsidiary shall be
indicted for a United States federal crime, a punishment for which could
reasonably include the forfeiture of any assets of any Borrower, the Parent or
such Subsidiary, the effect of which could reasonably be expected to affect in
any material way (i) the conduct by the Parent and its Subsidiaries, taken as a
whole, of its business in the ordinary course, (ii) the Collateral, or (iii) the
financial condition of the Parent and its Subsidiaries, taken as a whole;
(n) the termination or attempted termination of any guaranty
executed by a Guarantor; or
(o) any Change in Control shall occur.
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then, and in any such event, so long as the same may be continuing, the Agent
may, and, upon the request of the Majority Lenders shall, by notice in writing
to the Lead Borrower declare all amounts owing with respect to this Agreement,
the Notes and the other Loan Documents to be, and they shall thereupon forthwith
become, immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby expressly waived by the
Borrower; provided that in the event of any Event of Default specified in
ss.12.1(h) or 12.1(i), all such amounts shall become immediately due and payable
automatically and without any requirement of notice from any of the Lenders or
the Agent.
ss.12.2 Termination of Commitments. If any one or more Events of
Default specified in ss.12.1(h) or ss.12.1(i) shall occur, the Commitments shall
forthwith terminate and the Lenders shall be relieved of all obligations to make
Loans to the Borrowers and of all obligations to cause Letters of Credit to be
issued. If any other Event of Default shall have occurred and be continuing, or
if on any Drawdown Date the conditions precedent to the making of the Loans to
be made on such Drawdown Date are not satisfied, the Agent may, and upon the
request of the Majority Lenders shall by notice to the Borrower, terminate the
Commitments, and upon such notice being given such Commitments shall terminate
immediately and the Lenders shall be relieved of all further obligations to make
Loans and of all obligations to cause Letters of Credit to be issued. No
termination of the credit hereunder shall relieve the Borrowers of any of the
Obligations or any of its existing obligations to the Agent and the Lenders
arising under other agreements or instruments. Furthermore, in the event of
termination of the Commitments hereunder, the Borrower shall furnish the Agent
with cash collateral for all outstanding Letters of Credit in an amount equal to
one hundred five percent of the Stated Amount of all outstanding Letters of
Credit. Such cash collateral may be immediately applied against any drawing
under any such Letter of Credit without further notice to or consent from the
Borrowers and, to the extent not utilized for such purpose, shall secure and may
be applied against any and all Obligations hereunder.
ss.12.3 Remedies. In case any one or more of the Events of Default
shall have occurred and be continuing, and whether or not the Lenders shall have
accelerated the maturity of the Loans pursuant to ss.12.1, the Agent may
proceed, with the consent of the Majority Lenders but not otherwise, to protect
and enforce its rights and remedies under this Agreement, the Notes or any of
the other Loan Documents by suit in equity, action at law or other appropriate
proceeding, whether for the specific performance of any covenant or agreement
contained in this Agreement and the other Loan Documents or any instrument
pursuant to which the Obligations to such Lender or the Agent are evidenced,
and, if such amount shall have become due, by declaration or otherwise, proceed
to enforce the payment thereof or any other legal or equitable right of such
Lender or the Agent. No remedy herein conferred upon any Lender or the Agent or
the holder of any Note is intended to be exclusive of any other remedy and each
and every remedy shall be cumulative and shall be in addition to every other
remedy given hereunder or now or hereafter existing at law or in equity or by
statute or any other provision of law.
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ss.12.4 Distribution of Collateral Proceeds. In the event that,
following the occurrence and during the continuance of any Default or Event of
Default, the Agent or any Lender, as the case may be, receives any monies in
connection with the enforcement of any of the Security Documents, or otherwise
with respect to the realization upon any of the Collateral, such monies shall be
turned over to the Agent and distributed by the Agent for application as
follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of, the Agent and each Lender for or in respect of all reasonable
costs, expenses, disbursements and losses which shall have been incurred or
sustained by the Agent or any such Lender in connection with the collection of
such monies by the Agent or such Lenders (exclusive of the Agent's fee payable
pursuant to ss.4.2), for the exercise, protection or enforcement by the Agent or
any such Lenders of all or any of the rights, remedies, powers and privileges of
the Agent or such Lenders under this Agreement or any of the other Loan
Documents or in respect of the Collateral or in support of any provision of
adequate indemnity to the Agent or such Lenders against any taxes or liens which
by law shall have, or may have, priority over the rights of the Agent or the
Lenders to such monies;
(b) Second, to all other Obligations (other than those
described in subparagraphs (c) and (d), below) in such order or preference as
the Majority Lenders may determine; provided, however, that distributions in
respect of such Obligations shall be made (i) pari passu among Obligations with
respect to the Agent's fee payable pursuant to ss.4.2 and all other such
Obligations and (ii) such Obligations owing to the Lenders with respect to each
type of Obligation (other than those described in subparagraphs (c) and (d),
below) such as interest, principal, fees and expenses, shall be made among the
Lenders pro rata; and provided, further that the Agent may in its discretion
make proper allowance to take into account any Obligations not then due and
payable;
(c) Third, to all other Obligations not described in
subparagraphs First and Second, above;
(d) Fourth, upon payment and satisfaction in full or other
provisions for payment in full satisfactory to the Lenders and the Agent of all
of the Obligations, to the payment of any obligations required to be paid
pursuant to ss.9-504(1)(c) of the Uniform Commercial Code of the Commonwealth of
Massachusetts; and
(f) Fifth, the excess, if any, shall be returned to the
Borrowers or to such other Persons as are entitled thereto.
ss.13. SETOFF. Regardless of the adequacy of any collateral, during the
continuance of any Event of Default, any deposits (general or specific, time or
demand, provisional or final, regardless of currency, maturity, or the branch of
where such deposits are held) or other sums credited by or due from any of the
Lenders to any
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Borrower and any securities or other property of any Borrower in the possession
of any Lender may be applied to or set off against the payment of Obligations of
the Borrowers to such Lender. Any and all rights to require the Agent and the
Lenders to exercise their rights and remedies with respect to any other
Collateral which secures the Obligations prior to exercising their right of
setoff against such deposits, credits, securities and other property are hereby
knowingly, voluntarily and irrevocably waived. Each of the Lenders agrees with
each other Lender that (a) if an amount to be set off is to be applied to
Indebtedness of the Borrowers to such Lender, other than Indebtedness evidenced
by the Notes held by such Lender, such amount shall be applied ratably to such
other Indebtedness and to the Indebtedness evidenced by all such Notes held by
such Lender, and (b) if such Lender shall receive from the Borrowers, whether by
voluntary payment, exercise of the right of setoff, counterclaim, cross action,
enforcement of the claim evidenced by the Notes held by such Lender by
proceedings against the Borrowers at law or in equity or by proof thereof in
bankruptcy, reorganization, liquidation, receivership or similar proceedings, or
otherwise, and shall retain and apply to the payment of the Note or Notes held
by such Lender any amount in excess of its ratable portion of the payments
received by all of the Lenders with respect to the Notes held by all of the
Lenders, such Lender will make such disposition and arrangements with the other
Lenders with respect to such excess, either by way of distribution, pro tanto
assignment of claims, subrogation or otherwise as shall result in each Lender
receiving in respect of the Notes held by it its proportionate payment as
contemplated by this Agreement; provided that if all or any part of such excess
payment is thereafter recovered from such Lender, such disposition and
arrangements shall be rescinded and the amount restored to the extent of such
recovery, but without interest.
ss.14. THE AGENT.
ss.14.1. Authorization. The Agent is authorized to take such action on
behalf of each of the Lenders and to exercise all such powers as are hereunder
and under any of the other Loan Documents and any related documents delegated to
the Agent, together with such powers as are reasonably incident thereto,
provided that no duties or responsibilities not expressly assumed herein or
therein shall be implied to have been assumed by the Agent. The relationship
between the Agent and the Lenders is and shall be that of agent and principal
only, and nothing contained in this Agreement or any of the other Loan Documents
shall be construed to constitute the Agent as a trustee for any Lender. Without
limiting the foregoing, the Agent is hereby appointed and hereby accepts its
appointment as fonde de pouvior of the Lenders as contemplated by Article 2692
of the Civil Code of Quebec to enter into, to take and to hold, on behalf of,
and for the benefit of the Lenders, the Hypothec to be executed and delivered by
Sunglass Hut of Canada. Ltd. in favor of the Agent for the ratable benefit of
the Lenders (as amended from time to time, the "Hypothec"), and to exercise such
powers and duties which are conferred upon the Agent under the Hypothec or any
other deed of hypothec or herein or under any other Loan Document. Any Person
who becomes a Lender shall be deemed to have consented to and confirmed the
Agent as fonde de pouvior and to have ratified as of the date such Person
becomes a Lender, all actions taken by the fonde de pouvior.
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ss.14.2. Employees and Agents. The Agent may exercise its powers and
execute its duties by or through employees or agents and shall be entitled to
take, and to rely on, advice of counsel concerning all matters pertaining to its
rights and duties under this Agreement and the other Loan Documents. The Agent
may utilize the services of such Persons as the Agent in its sole discretion may
reasonably determine, and all reasonable fees and expenses of any such Persons
shall be paid by the Borrowers and if not paid by the Borrowers shall be paid by
the Lenders based upon their respective Commitment Percentages.
ss.14.3. No Liability. Neither the Agent nor any of its shareholders,
directors, officers or employees nor any other Person assisting them in their
duties nor any agent or employee thereof, shall be liable for any waiver,
consent or approval given or any action taken, or omitted to be taken, in good
faith by it or them hereunder or under any of the other Loan Documents, or in
connection herewith or therewith, or be responsible for the consequences of any
oversight or error of judgment whatsoever, except that the Agent or such other
Person, as the case may be, may be liable for losses due to its willful
misconduct or gross negligence.
ss.14.4. No Representations. The Agent shall not be responsible for the
execution or validity or enforceability of this Agreement, the Notes, any of the
other Loan Documents or any instrument at any time constituting, or intended to
constitute, collateral security for the Notes, or for the value of any such
collateral security or for the validity, enforceability or collectibility of any
such amounts owing with respect to the Notes, or for any recitals or statements,
warranties or representations made herein or in any of the other Loan Documents
or in any certificate or instrument hereafter furnished to it by or on behalf of
the Parent or any of its Subsidiaries, or be bound to ascertain or inquire as to
the performance or observance of any of the terms, conditions, covenants or
agreements herein or in any instrument at any time constituting, or intended to
constitute, collateral security for the Notes. The Agent shall not be bound to
ascertain whether any notice, consent, waiver or request delivered to it by the
Borrowers or any holder of any of the Notes shall have been duly authorized or
is true, accurate and complete. The Agent has not made nor does it now make any
representations or warranties, express or implied, nor does it assume any
liability to the Lenders, with respect to the credit worthiness or financial
condition of the Parent or any of its Subsidiaries. Each Lender acknowledges
that it has, independently and without reliance upon the Agent or any other
Lender, and based upon such information and documents as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement.
ss.14.5. Payments.
(a) As between the Agent and the Borrowers, a payment by the
Borrowers to the Agent hereunder or any of the other Loan Documents for the
account of any Lender shall constitute a payment to such Lender. The Agent
agrees promptly to distribute to each Lender such Lenders' pro rata share of
payments received by the
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Agent for the account of the Lenders except as otherwise expressly provided
herein or in any of the other Loan Documents.
(b) If in the opinion of the Agent the distribution of any
amount received by it in such capacity hereunder, under the Notes or under any
of the other Loan Documents could reasonably be expected to involve it in
liability, it may refrain from making distribution until its right to make
distribution shall have been adjudicated by a court of competent jurisdiction.
If a court of competent jurisdiction shall adjudge that any amount received and
distributed by the Agent is to be repaid, each Person to whom any such
distribution shall have been made shall either repay to the Agent its
proportionate share of the amount so adjudged to be repaid or shall pay over the
same in such manner and to such Persons as shall be determined by such court.
(c) Notwithstanding anything to the contrary contained in this
Agreement or any of the other Loan Documents, any Lender that fails (i) to make
available to the Agent its pro rata share of any Loan that the Agent made on its
behalf or (ii) to comply with the provisions of ss.14 with respect to making
dispositions and arrangements with the other Lenders, where such Lenders' share
of any payment received, whether by setoff or otherwise, is in excess of its pro
rata share of such payments due and payable to all of the Lenders, in each case
as, when and to the full extent required by the provisions of this Agreement,
shall be deemed delinquent (a "Delinquent Lender") and shall be deemed a
Delinquent Lender until such time as such delinquency is cured. A Delinquent
Lender shall be deemed to have assigned any and all payments due to it from the
Borrower, whether on account of outstanding Loans, interest, fees or otherwise,
to the remaining nondelinquent Lenders for application to, and reduction of,
their respective pro rata shares of all outstanding Loans. The Delinquent Lender
hereby authorizes the Agent to distribute such payments to the nondelinquent
Lenders in proportion to their respective pro rata shares of all outstanding
Loans. A Delinquent Lender shall be deemed to have satisfied in full a
delinquency when and if the Lenders' respective pro rata shares of all
outstanding Loans have returned to those in effect immediately prior to such
delinquency and without giving effect to the nonpayment causing such
delinquency.
(d) In addition to any other remedies provided for herein, a
Delinquent Lender shall not be entitled to vote on any matters (except a
Delinquent Lender may vote on those matters requiring a unanimous vote pursuant
to ss.25 hereof) until the delinquency is cured.
ss.14.6. Holders of Notes. The Agent may deem and treat the payee of
any Note as the absolute owner or purchaser thereof for all purposes hereof
until it shall have been furnished in writing with a different name by such
payee or by a subsequent holder, assignee or transferee.
ss.14.7. Indemnity. The Lenders ratably agree hereby to indemnify and
hold harmless the Agent from and against any and all claims, actions and suits
(whether groundless or otherwise), losses, damages, costs, expenses (including
any expenses
65
for which the Agent has not been reimbursed by the Borrower as required by
ss.15), and liabilities of every nature and character arising out of or related
to this Agreement, the Notes, or any of the other Loan Documents or the
transactions contemplated or evidenced hereby or thereby, or the Agent's actions
taken hereunder or thereunder, except to the extent that any of the same shall
be directly caused by the Agent's willful misconduct or gross negligence.
ss.14.8. Agent as Lender. In its individual capacity, the Agent shall
have the same obligations and the same rights, powers and privileges in respect
to its Commitment and the Loans made by it, and as the holder of any of the
Notes as it would have were it not also the Agent.
ss.14.9. Resignation. The Agent may resign at any time by giving sixty
(60) days' prior written notice thereof to the Lenders and the Lead Borrower.
Upon any such resignation, the Majority Lenders shall have the right to appoint
a successor Agent. Unless an Event of Default shall have occurred and be
continuing, such successor Agent shall be reasonably acceptable to the Lead
Borrower. If no successor Agent shall have been so appointed by the Majority
Lenders and shall have accepted such appointment within sixty (60) days after
the retiring Agent's giving of notice of resignation, then the retiring Agent
may, on behalf of the Lenders, appoint a successor Agent. Upon the acceptance of
any appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder. After any retiring Agent's
resignation, the provisions of this Agreement and the other Loan Documents shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as Agent.
ss.14.10. Notification of Defaults and Events of Default. Each Lender
hereby agrees that, upon learning of the existence of a Default or an Event of
Default, it shall promptly notify the Agent thereof. The Agent hereby agrees
that upon receipt of any notice under this ss.14.10 it shall promptly notify the
other Lenders of the existence of such Default or Event of Default.
ss.14.11. Duties in the Case of Enforcement. In case one of more Events
of Default have occurred and shall be continuing, and whether or not
acceleration of the Obligations shall have occurred, the Agent shall, if (a) so
requested by the Majority Lenders and (b) the Lenders have provided to the Agent
such additional indemnities and assurances against expenses and liabilities as
the Agent may reasonably request, proceed to enforce the provisions of the
Security Documents authorizing the sale or other disposition of all or any part
of the Collateral and exercise all or any such other legal and equitable and
other rights or remedies as it may have in respect of such Collateral. The
Majority Lenders may direct the Agent in writing as to the method and the extent
of any such sale or other disposition, the Lenders hereby agreeing to indemnify
and hold the Agent harmless from all liabilities incurred in respect of all
actions taken or omitted in accordance with such directions, provided that the
Agent
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need not comply with any such direction to the extent that the Agent reasonably
believes the Agent's compliance with such direction to be unlawful or
commercially unreasonable in any applicable jurisdiction.
ss.14.12. Syndication Agent and Documentation Agent. Notwithstanding
any provision of this Agreement or any of the other Loan Documents, the
Syndication Agent and the Documentation Agent shall have no powers, rights,
duties, responsibilities or liabilities with respect to this Agreement and the
other Loan Documents.
ss.15. EXPENSES. The Borrowers, jointly and severally, agree to pay (a)
the reasonable costs of producing and reproducing this Agreement, the other Loan
Documents and the other agreements and instruments mentioned herein, (b) any
taxes (including any interest and penalties in respect thereto) payable by the
Agent or any of the Lenders (other than taxes based upon the Agent's or any
Lenders' net income), including any recording, mortgage, documentary or
intangibles taxes in connection with the Loan Documents, or other taxes payable
on or with respect to the transactions contemplated by this Agreement, including
any taxes payable by the Agent or any of the Lenders after the Closing Date (the
Borrowers hereby jointly and severally agreeing to indemnify the Agent and each
Lender with respect thereto), (c) all appraisal fees, engineer's fees, and the
reasonable fees, expenses and disbursements of the Agent's counsel or any local
counsel to the Agent incurred in connection with the preparation, administration
or interpretation of the Loan Documents and other instruments mentioned herein,
each closing hereunder, and amendments, modifications, approvals, consents or
waivers hereto or hereunder, (d) the fees, expenses and disbursements of the
Agent incurred by the Agent in connection with the preparation, administration
or interpretation of the Loan Documents and other instruments mentioned herein,
(e) all reasonable out-of-pocket expenses (including reasonable attorneys' fees
and costs and the fees and costs of appraisers, engineers, investment bankers or
other experts retained by any Lender or the Agent in connection with any such
enforcement proceedings) incurred by any Lender or the Agent in connection with
(i) the enforcement of or preservation of rights under any of the Loan Documents
against the Parent or any of its Subsidiaries or the administration thereof and
(ii) any litigation, proceeding or dispute whether arising hereunder or
otherwise, in any way related to any Lenders' or the Agent's relationship with
the Parent or any of its Subsidiaries and (f) all reasonable fees, expenses and
disbursements of any Lender or the Agent incurred in connection with UCC (and
other jurisdiction) searches, UCC (and other jurisdiction) filings or mortgage
recordings. The covenants of this ss.15 shall survive payment or satisfaction of
payment of the Obligations.
ss.16. INDEMNIFICATION. The Borrowers, jointly and severally, agree to
indemnify and hold harmless the Agent and the Lenders from and against any and
all claims, actions and suits whether groundless or otherwise, and from and
against any and all liabilities, losses, damages and expenses of every nature
and character arising out of this Agreement or any of the other Loan Documents
or the transactions contemplated hereby including, without limitation, (a) any
actual or proposed use by the Borrowers of the proceeds of any of the Loans, (b)
any actual or alleged infringement of
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any patent, copyright, trademark, service ▇▇▇▇ or similar right of the Borrowers
or any of its Subsidiaries comprised in the Collateral, (c) the Parent or any of
its Subsidiaries entering into or performing this Agreement or any of the other
Loan Documents or (d) with respect to the Parent and its Subsidiaries and their
respective properties and assets, the violation of any Environmental Law, the
release or threatened release of any Hazardous Material or any action, suit,
proceeding or investigation brought or threatened with respect to any Hazardous
Material (including, but not limited to claims with respect to wrongful death,
personal injury or damage to property), in each case including, without
limitation, the reasonable fees and disbursements of counsel and allocated costs
of internal counsel incurred in connection with any such investigation,
litigation or other proceeding; provided however that neither a Lender nor the
Agent shall be entitled to indemnification if a court of competent jurisdiction
finally determines (all appeals having been exhausted or waived) that such
Lender or the Agent acted with gross negligence or willful misconduct. In
litigation, or the preparation therefor, the Agent shall be entitled to select
its counsel and, in addition to the foregoing indemnity, the Borrowers, jointly
and severally, agree to pay promptly the reasonable fees and expenses of such
counsel. If, and to the extent that the obligations of the Borrowers under this
ss.16 are unenforceable for any reason, the Borrowers hereby agree to make the
maximum contribution to the payment in satisfaction of such obligations which is
permissible under applicable law. The provisions of this ss.16 shall survive the
repayment of the Obligations and the termination of the obligations of the
Lenders hereunder.
ss.17. SURVIVAL OF COVENANTS, ETC. All covenants, agreements,
representations and warranties made herein, in the Notes, in any of the other
Loan Documents or in any documents or other papers delivered by or on behalf of
the Parent or any of its Subsidiaries pursuant hereto shall be deemed to have
been relied upon by the Lenders and the Agent, notwithstanding any investigation
heretofore or hereafter made by any of them, and shall survive the making by the
Lenders of any of the Loans and issuance of Letters of Credit, as herein
contemplated, and shall continue in full force and effect so long as any amount
due under this Agreement or the Notes or any of the other Loan Documents remains
outstanding or any Lender has any obligation to make any Loans or issue Letters
of Credit. The indemnification obligations of the Borrowers provided herein and
the other Loan Documents shall survive the full repayment of amounts due and the
termination of the obligations of the Lenders hereunder and thereunder to the
extent provided herein and therein. All statements contained in any certificate
or other paper delivered to any Lender or the Agent at any time by or on behalf
of the Parent or any of its Subsidiaries pursuant hereto or in connection with
the transactions contemplated hereby shall constitute representations and
warranties by the Parent or such Subsidiary hereunder.
ss.18. ASSIGNMENT AND PARTICIPATION.
ss.18.1. Conditions to Assignment by Lenders. Except as provided
herein, each Lender may assign to one or more Eligible Assignees all or a
portion of its interests, rights and obligations under this Agreement (including
all or a portion of its Commitment
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Percentage and Commitment and the same portion of the Loans at the time owing to
it, and the Notes held by it); provided that (a) the Agent (and if no Event of
Default then exists, the Lead Borrower) shall have given its prior written
consent to such assignment, which consent shall not be unreasonably withheld or
delayed. (In that regard, the consent of the Lead Borrower will be deemed given
unless the Lead Borrower provides the Agent with written objection not more than
five (5) Business Days after the Agent shall have given the Lead Borrower
written notice of such proposed assignment); (b) each such assignment shall be
of a constant, and not a varying, percentage of all the assigning Lenders'
rights and obligations under this Agreement, (c) each assignment shall be in an
amount that is a whole multiple of $5,000,000.00, (d) each Lender which is a
Lender on the date hereof shall retain, free of any such assignment, an amount
of its Commitment of not less than $5,000,000.00; and (e) the parties to such
assignment shall execute and deliver to the Agent, for recording in the Register
(as hereinafter defined), an Assignment and Acceptance, substantially in the
form of Exhibit F hereto (an "Assignment and Acceptance"), together with any
Notes subject to such assignment. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each Assignment and
Acceptance, which effective date shall be at least five (5) Business Days after
the execution thereof, (i) the assignee thereunder shall be a party hereto and,
to the extent provided in such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder, and (ii) the assigning Lender shall, to the
extent provided in such assignment and upon payment to the Agent of the
registration fee referred to in ss.18.3, be released from its obligations under
this Agreement.
ss.18.2. Certain Representations and Warranties; Limitations;
Covenants. By executing and delivering an Assignment and Acceptance, the parties
to the assignment thereunder confirm to and agree with each other and the other
parties hereto as follows: (a) other than the representation and warranty that
it is the legal and beneficial owner of the interest being assigned thereby free
and clear of any adverse claim, the 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, the other Loan Documents or any other instrument or
document furnished pursuant hereto; (b) the assigning Lender makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Parent and its Subsidiaries or any other Person
primarily or secondarily liable in respect of any of the Obligations, or the
performance or observance by the Borrower and its Subsidiaries or any other
Person primarily or secondarily liable in respect of any of the Obligations of
any of their obligations under this Agreement or any of the other Loan Documents
or any other instrument or document furnished pursuant hereto or thereto; (c)
such assignee confirms that it has received a copy of this Agreement, together
with copies of the most recent financial statements referred to in ss.6.4 and
ss.7.3 and 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; (d) such assignee will, independently and without reliance upon the
assigning Lender, the Agent or any other Lender and based on such documents and
information as it shall deem
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appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (e) such assignee represents and
warrants that it is an Eligible Assignee; (f) such assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement and the other Loan Documents as are delegated
to the Agent by the terms hereof or thereof, together with such powers as are
reasonably incidental thereto; (g) such assignee agrees that it will perform in
accordance with their terms all of the obligations that by the terms of this
Agreement are required to be performed by it as a Lender; and (h) such assignee
represents and warrants that it is legally authorized to enter into such
Assignment and Acceptance.
ss.18.3. Register. The Agent shall maintain a copy of each Assignment
and Acceptance delivered to it and a register or similar list (the "Register")
for the recordation of the names and addresses of the Lenders and the Commitment
Percentages of, and principal amount of the Loans owing to the Lenders from time
to time. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrowers, the Agent and the Lenders may treat each
Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrowers and the Lenders at any reasonable time and from time to time upon
reasonable prior notice. Upon each such recordation, the assigning Lender agrees
to pay to the Agent a registration fee in the sum of $3,500.00.
ss.18.4. New Notes. Upon its receipt of an Assignment and Acceptance
executed by the parties to such assignment, together with each Note subject to
such assignment, the Agent shall (a) record the information contained therein in
the Register, and (b) give prompt notice thereof to the Borrowers and the
Lenders (other than the assigning Lender). Within five (5) Business Days after
receipt of such notice, the Borrowers, at their own expense, shall execute and
deliver to the Agent, in exchange for each surrendered Note, a new Note to the
order of such Eligible Assignee in an amount equal to the amount assumed by such
Eligible Assignee pursuant to such Assignment and Acceptance and, if the
assigning Lender has retained some portion of its obligations hereunder, a new
Note to the order of the assigning Lender in an amount equal to the amount
retained by it hereunder. Such new Notes shall provide that they are
replacements for the surrendered Notes, shall be in an aggregate principal
amount equal to the aggregate principal amount of the surrendered Notes, shall
be dated the effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of the assigned Notes. The surrendered
Notes shall be canceled and returned to the Lead Borrower.
ss.18.5. Participations. Each Lender may sell participations to one or
more banks or other entities in all or a portion of such Lenders' rights and
obligations under this Agreement and the other Loan Documents; provided that (a)
the Agent shall have given its prior written consent to such participation, (b)
each such participation shall be in an amount of not less than $5,000,000.00,
(c) any such sale or participation shall not affect the rights and duties of the
selling Lender hereunder to the Borrowers, (d) the only
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rights granted to the participant pursuant to such participation arrangements
with respect to waivers, amendments or modifications of the Loan Documents shall
be the rights to approve waivers, amendments or modifications that would reduce
the principal of or the interest rate on any Loans, extend the term or increase
the amount of the Commitment of such Lender as it relates to such participant,
reduce the amount of any fees to which such participant is entitled or extend
any regularly scheduled payment date for principal or interest, and (e) no
participant shall have the right to grant further participations or assign its
rights, obligations or interests under such participation to other Persons
without the prior written consent of the Agent.
ss.18.6. Pledge by Lender. Notwithstanding the provisions of ss.18.1,
any Lender may at any time pledge all or any portion of its interest and rights
under this Agreement (including all or any portion of its Note) to any of the
twelve Federal Reserve Lenders organized under ss.4 of the Federal Reserve Act,
12 U.S.C. ss.341. No such pledge or the enforcement thereof shall release the
pledgor Lender from its obligations hereunder or under any of the other Loan
Documents.
ss.18.7. No Assignment by Borrowers. The Borrowers shall not assign or
transfer any of its rights or obligations under any of the Loan Documents
without the prior written consent of each of the Lenders.
ss.18.8. Disclosure. The Borrowers agree that in addition to
disclosures made in accordance with standard banking practices any Lender may
disclose information obtained by such Lender pursuant to this Agreement to
assignees or participants and potential assignees or participants hereunder.
ss.19. NOTICES, ETC. Except as othe wise expressly provided in this
Agreement, all notices and other communications made or required to be given
pursuant to this Agreement or the Note shall be in writing and shall be
delivered in hand, mailed by United States registered or certified first class
mail, postage prepaid, sent by overnight courier, or sent by telegraph,
telecopy, telefax or telex and confirmed by delivery via courier or postal
service, addressed as follows:
(a) if to the Borrowers, at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Chief Financial Officer together with a copy to ▇▇▇▇
▇▇▇▇▇▇, Esquire, General Counsel, or at such other address for notice as the
Borrowers shall last have furnished in writing to the Person giving the notice,
together with a copy to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP, ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ; and
(b) if to the Agent, at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Director, or such other
address for notice as the Agent shall last have furnished in writing to the Lead
Borrower, together with a copy to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇
LLP, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; and.
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(c) if to any Lender, at such Lenders' address set forth on
Schedule 1 hereto, or such other address for notice as such Lender shall have
last furnished in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or
made and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile and
(ii) if sent by registered or certified first-class mail, postage prepaid, on
the third Business Day following the mailing thereof.
ss.20. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE. THIS
AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF
THE COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SUCH COMMONWEALTH (EXCLUDING THE
LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE BORROWERS AGREE THAT ANY
SUIT FOR THE ENFORCEMENT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS
MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL
COURT SITTING THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH
COURT AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWER
BY MAIL AT THE ADDRESS SPECIFIED IN ss.19. THE BORROWERS HEREBY WAIVE ANY
OBJECTION THAT THEY MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR
ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.
ss.21. HEADINGS. The captions in this Agreement are for convenience of
reference only and shall not define or limit the provisions hereof.
ss.22. COUNTERPARTS. This Agreement and any amendment hereof may be
executed in several counterparts and by each party on a separate counterpart,
each of which when so executed and delivered shall be an original, and all of
which together shall constitute one instrument. In proving this Agreement it
shall not be necessary to produce or account for more than one such counterpart
signed by the party against whom enforcement is sought.
ss.23. ENTIRE AGREEMENT, ETC. The Loan Documents and any other
documents executed in connection herewith or therewith express the entire
understanding of the parties with respect to the transactions contemplated
hereby. Neither this Agreement nor any term hereof may be changed, waived,
discharged or terminated, except as provided inss.25.
ss.24. WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS. THE PARTIES
HERETO HEREBY WAIVE THEIR RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR
CLAIM ARISING OUT OF ANY DISPUTE IN
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CONNECTION WITH THIS AGREEMENT, THE NOTES OR ANY OF THE OTHER LOAN DOCUMENTS,
ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH
RIGHTS AND OBLIGATIONS. THE BORROWERS HEREBY WAIVES ANY RIGHT THEY MAY HAVE TO
CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO IN THE PRECEDING SENTENCE ANY
SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN,
OR IN ADDITION TO, ACTUAL DAMAGES. THE BORROWERS (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY LENDER OR THE AGENT HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH LENDER OR THE AGENT WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (B) ACKNOWLEDGES THAT THE
AGENT AND THE LENDERS HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS TO WHICH THEY ARE PARTIES BY, AMONG OTHER THINGS, THE
WAIVERS AND CERTIFICATIONS CONTAINED HEREIN.
ss.25. CONSENTS, AMENDMENTS, WAIVERS, ETC. Except as otherwise
expressly provided in this Agreement, any consent or approval required or
permitted by this Agreement may be given, and any term of this Agreement or of
any other instrument related hereto or mentioned herein may be amended, and the
performance or observance by the Borrower of any terms of this Agreement or such
other instrument or the continuance of any Default or Event of Default may be
waived (either generally or in a particular instance and either retroactively or
prospectively) with, but only with, the written consent of the Majority Lenders.
Notwithstanding the foregoing,
(a) without the written consent of each Lender affected
thereby, (i) the rate of interest on the Obligations and fees payable to the
Lenders may not be decreased, and (ii) the dates for payment of, or amounts
payable on any such date on account of, principal or interest under the
Obligations, and (iii) the amount of the Commitments of the Lenders may not be
changed;
(b) none of the following: the definition of Majority Lenders;
the forgiveness of any of the Obligations; the release of a material portion of
the Collateral (as determined by the Agent) not expressly contemplated herein or
in the other Loan Documents; the release of any Borrower or Guarantor; or the
provisions of thisss.25;
may not be amended without the written consent of all of the Lenders;
(c) and the amount of the Agent's fee payable for the Agent's
account and the provisions ofss.14 may not be amended without the written
consent of the Agent.
No waiver shall extend to or affect any obligation not expressly waived
or impair any right consequent thereon. No course of dealing or delay or
omission on the part of the Agent or any Lender in exercising any right shall
operate as a waiver thereof or otherwise be prejudicial thereto. No notice to or
demand upon the Borrower shall entitle the Borrower to other or further notice
or demand in similar or other circumstances.
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ss.26. SEVERABILITY. The provisions of this Agreement are severable,
and if any one clause or provision hereof shall be held invalid or unenforceable
in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof, in
such jurisdiction, and shall not in any manner affect such clause or provision
in any other jurisdiction, or any other clause or provision of this Agreement in
any jurisdiction.
ss.27. DESIGNATION OF LEAD BORROWER AS BORROWERS' AGENT. (a) Each
Borrower hereby designates the Lead Borrower as that Borrower's agent to request
the issuance of Letters of Credit and Loans, the proceeds of which shall be
available to each Borrower for the same uses as those set forth in ss.7.10,
above. As the disclosed principal for its agent, each Borrower shall be
obligated to the Agent and the Lenders on account of Loans so made and Letters
of Credit so issued as if made directly by the Lenders to that Borrower,
notwithstanding the manner by which such Loans and Letters of Credit are
recorded on the books and records of the Lead Borrower and of any Borrower.
(b) The proceeds of each of such Loans shall be deposited into
such account as may be indicated by the Lead Borrower. Neither the Agent, nor
any Lender shall have any obligation to see the application of such proceeds.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
SUNGLASS HUT TRADING CORPORATION
By____________________________
Title:
WATCH STATION, INC.
By____________________________
Title:
SUNGLASS HUT INTERNATIONAL, INC.
By____________________________
Title:
FLEET NATIONAL BANK,
as Agent and Lender
By____________________________
Title:
LASALLE BANK NATIONAL ASSOCIATION,
as Syndication Agent and Lender
By____________________________
Title:
UNION BANK OF CALIFORNIA, N.A.,
as Documentation Agent and Lender
By____________________________
Title:
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FLEETBOSTON ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, INC.,
as Arranger
By____________________________
Title:
FIRSTAR BANK, N.A., as Lender
By____________________________
Title:
UNION PLANTERS BANK, as Lender
By____________________________
Title:
SECTION I561976.9
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