Exhibit 10.2
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REVOLVING CREDIT AND GUARANTY AGREEMENT
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Among
BRADLEES STORES, INC.,
AS BORROWER,
BRADLEES, INC.,
and
EACH OF THE SUBSIDIARIES OF
THE BORROWER OR BRADLEES, INC., NAMED HEREIN,
EACH AS A GUARANTOR,
THE LENDERS PARTY HERETO,
BANKBOSTON, N.A.,
AS ADMINISTRATIVE AGENT, AS ISSUING BANK AND AS TRANCHE B AGENT,
BACK BAY CAPITAL FUNDING, LLC,
AS TRANCHE C AGENT,
BANKBOSTON RETAIL FINANCE, INC.,
AS COLLATERAL AGENT,
THE CIT GROUP/BUSINESS CREDIT INC.
and
CONGRESS FINANCIAL CORPORATION (NEW ENGLAND),
EACH AS CO-AGENT
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Dated as of February 2, 1999
(Conformed through Fourth Amendment and Waiver)
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TABLE OF CONTENTS
PAGE
INTRODUCTORY STATEMENT..............................................................................43
I. DEFINITIONS......................................................................................44
Section 1.01 Defined Terms................................................................44
Section 1.02 Terms Generally..............................................................68
II. AMOUNT AND TERMS OF CREDIT......................................................................68
Section 2.01 Commitment of the Lenders....................................................68
Section 2.02 Letters of Credit............................................................70
Section 2.03 Making of Loans..............................................................73
Section 2.04 Notes; Repayment of Loans....................................................76
Section 2.05 Interest on Loans............................................................76
Section 2.06 Default Interest.............................................................77
Section 2.07 Optional Termination or Reduction of Commitments.............................78
Section 2.08 Alternate Rate of Interest...................................................79
Section 2.09 Refinancing of Loans.........................................................79
Section 2.10 Mandatory Prepayment; Commitment Termination; Cash Collateral................80
Section 2.11 Optional Prepayment of Loans; Reimbursement of Lenders.......................82
Section 2.12 Maintenance of Loan Account; Statements of Account...........................84
Section 2.13 Cash Receipts................................................................84
Section 2.14 Application of Payments......................................................86
Section 2.15 Increased Costs..............................................................88
Section 2.16 Change in Legality...........................................................89
Section 2.17 Payments; No Setoff..........................................................90
Section 2.18 Taxes........................................................................91
Section 2.19 Certain Fees.................................................................94
Section 2.20 Unused Commitment Fee........................................................94
Section 2.21 Letter of Credit Fees........................................................94
Section 2.22 Nature of Fees...............................................................94
Section 2.23 Security Interest in Collateral..............................................95
Section 2.24 Right of Set-Off.............................................................95
Section 2.25 Security Interest in Bank Accounts...........................................95
Section 2.26 Payment of Obligations.......................................................95
III. REPRESENTATIONS AND WARRANTIES.................................................................96
Section 3.01 Organization and Authority...................................................96
Section 3.02 Due Execution................................................................96
Section 3.03 Statements Made..............................................................96
Section 3.04 Ownership....................................................................97
Section 3.05 Financial Statements and Bankruptcy Court Filings............................97
Section 3.06 Liens........................................................................97
Section 3.07 Compliance with Law..........................................................98
Section 3.08 Insurance....................................................................99
Section 3.09 The Confirmation Order.......................................................99
Section 3.10 Use of Proceeds.............................................................100
Section 3.11 Store Locations; Bank Accounts; Inventory...................................100
Section 3.12 Litigation and Claims.......................................................100
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Section 3.13 Material Adverse Change.....................................................101
Section 3.14 Payment of Obligations......................................................101
Section 3.15 Taxes and Tax Returns.......................................................101
Section 3.16 Franchises, Licenses, Permits, Leases, Patents, Copyrights, Trademarks
and Trade Names.............................................................101
Section 3.17 Labor Matters...............................................................102
Section 3.18 ERISA.......................................................................102
Section 3.19 Accounts Receivable Financing...............................................103
Section 3.20 Investment Company: Holding Company.........................................103
Section 3.21 Year 2000...................................................................104
IV. CONDITIONS OF LENDING..........................................................................104
Section 4.01 Conditions Precedent to Initial Loans and Initial Letters of Credit.........104
Section 4.02 Conditions Precedent to Each Tranche A Loan and Each Letter of Credit.......111
Section 4.03 Conditions Precedent to Each Tranche B Loan.................................112
Section 4.04 Conditions Precedent to the Tranche C Loan..................................112
V. AFFIRMATIVE COVENANTS...........................................................................113
Section 5.01 Financial Statements, Reports, etc..........................................113
Section 5.02 Corporate Existence.........................................................115
Section 5.03 Insurance...................................................................116
Section 5.04 Obligations and Taxes.......................................................117
Section 5.05 Notice of Event of Default, etc.............................................117
Section 5.06 Borrowing Base Certificate..................................................117
Section 5.07 Access to Books and Records; Inspections....................................117
Section 5.08 Fees........................................................................118
Section 5.09 Projections; Business Plan..................................................118
Section 5.10 ERISA.......................................................................118
Section 5.11 Environmental and Other Matters.............................................118
Section 5.12 Maintain Cash Concentration System..........................................119
Section 5.13 Maintain Security Interest..................................................119
Section 5.14 Collateral Access Agreements................................................119
Section 5.15 Inventory...................................................................120
Section 5.16 Further Assurances..........................................................120
Section 5.17 Use of Proceeds.............................................................120
Section 5.18 Permitted Note Debt and Trade Lien Debt.....................................120
Section 5.19 Yonkers.....................................................................120
Section 5.20 Mortgagee Waivers...........................................................120
VI. NEGATIVE COVENANTS.............................................................................121
Section 6.01 Liens.......................................................................121
Section 6.02 Merger, etc.................................................................121
Section 6.03 Indebtedness................................................................121
Section 6.04 Capital Expenditures........................................................122
Section 6.05 EBITDA......................................................................122
Section 6.06 Accounts Payable to Inventory Ratio.........................................123
Section 6.07 Debt Coverage Ratio.........................................................123
Section 6.08 Guarantees and Other Liabilities............................................123
Section 6.09 Dividends; Capital Stock....................................................123
Section 6.10 Transactions with Affiliates................................................124
Section 6.11 Investments, Loans and Advances.............................................124
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Section 6.12 Disposition of Assets.......................................................124
Section 6.13 Nature of Business..........................................................124
Section 6.14 Conflicting Agreements or Actions...........................................125
Section 6.15 Prepayments and Amendment of Debt Documents.................................125
Section 6.16 Amendments to Credit Plan Agreement.........................................126
Section 6.17 Eligible Inventory..........................................................126
Section 6.18 Minimum Excess Availability.................................................126
Section 6.19 Loan to Value...............................................................126
VII. EVENTS of Default.............................................................................126
Section 7.01 Events of Default...........................................................126
Section 7.02 Events of Super-Default.....................................................130
Section 7.03 When Continuing.............................................................132
VIII. THE AGENTS...................................................................................132
Section 8.01 Administration by Administrative Agent......................................132
Section 8.02 The Collateral Agent........................................................132
Section 8.03 Advances and Payments.......................................................132
Section 8.04 Sharing of Excess Payments..................................................133
Section 8.05 Agreement of Required Lenders...............................................134
Section 8.06 Liability of Agents.........................................................134
Section 8.07 Reimbursement and Indemnification...........................................135
Section 8.08 Rights of Agents............................................................135
Section 8.09 Independent Lenders and Issuing Bank........................................136
Section 8.10 Notice of Transfer..........................................................136
Section 8.11 Successor Administrative Agent, Tranche B Agent and Tranche C Agent.........136
Section 8.12 Reports and Financial Statements............................................137
IX. GUARANTY.......................................................................................137
Section 9.01 Guaranty....................................................................137
Section 9.02 No Impairment of Guaranty...................................................138
Section 9.03 Subrogation.................................................................138
Section 9.04 Credit Agreement............................................................139
Section 9.05 Maximum Guaranteed Amount...................................................139
Section 9.06 Release of Yonkers Guarantee and Liens......................................139
X. MISCELLANEOUS....................................................................................139
Section 10.01 Notices.....................................................................139
Section 10.02 Survival of Agreement, Representations and Warranties, etc..................140
Section 10.03 Successors and Assigns......................................................140
Section 10.04 Confidentiality.............................................................144
Section 10.05 Expenses; Documentary Taxes.................................................144
Section 10.06 Indemnity...................................................................145
Section 10.07 CHOICE OF LAW...............................................................145
Section 10.08 No Waiver...................................................................145
Section 10.09 Extension of Maturity.......................................................146
Section 10.10 Amendments, etc.............................................................146
Section 10.11 SUBMISSION TO JURISDICTION; WAIVER..........................................148
Section 10.12 Severability................................................................149
Section 10.13 Headings....................................................................149
Section 10.14 Execution in Counterparts...................................................149
Section 10.15 Prior Agreements............................................................149
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Section 10.16 Further Assurances..........................................................149
Section 10.17 Master Lease Agreement......................................................149
Section 10.18 WAIVER OF JURY TRIAL........................................................149
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ANNEXES
Annex A Commitment Amounts
EXHIBITS
Exhibit A-1 Form of Borrowing Base Certificate (Weekly)
Exhibit A-2 Form of Borrowing Base Certificate (Monthly)
Exhibit B-1 Form of Tranche A Note
Exhibit B-2 Form of Agent Advance Note
Exhibit B-3 Form of Tranche B Note
Exhibit B-4 Form of Tranche C Note
Exhibit C-1 Form of Confirmation Order
Exhibit C-2 Form of Yonkers Confirmation Order
Exhibit D-1 Form of Opinion of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP
Exhibit D-2 Form of Opinion of Borrower's Massachusetts Counsel
Exhibit D-3 Form of Opinion of Borrower's Connecticut Counsel
Exhibit D-4 Form of Opinion of Borrower's New Jersey Counsel
Exhibit E Form of Security Agreement
Exhibit F Form of Trademark Security Agreement
Exhibit G BTM Stipulation
Exhibit H Form of Compliance Certificate
SCHEDULES
Schedule 1.01(a) Additional Collateral
Schedule 1.01(b) Actuarial Methods and Assumptions
Schedule 1.01(c) Leasehold Reserves
Schedule 2.02(i) Existing Letters of Credit
Schedule 2.13(a) Cash Deposit Procedures (Depository Accounts)
Schedule 2.13(e) Coin Orders Accounts Procedures
Schedule 3.01 Jurisdictions of Qualification
Schedule 3.04 Subsidiaries
Schedule 3.10 Sources and Uses of Funds
Schedule 3.11(a) Location of Stores, Warehouses and Distribution Centers (Inventory
Locations)
Schedule 3.11(b) Bank Accounts and Cash Baskets
Schedule 3.11(c) Assets of Guarantors
Schedule 3.12 Claims and Pending Litigation
Schedule 3.16 Violation Exceptions
Schedule 3.18 ERISA Plans
Schedule 4.01(bb) Closing Documents List
Schedule 6.01 Tranche C Mortgaged Properties
ATTACHMENTS
Attachment I Terms of CAP Notes
Attachment II Terms of Cure Notes
Attachment III Terms of New Notes
Attachment IV Terms of Trade Lien
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REVOLVING CREDIT AND GUARANTY AGREEMENT (as amended,
supplemented or otherwise modified from time to time, this "AGREEMENT"), dated
as of February 2, 1999, among reorganized BRADLEES STORES, INC., a Massachusetts
corporation (the "BORROWER"), reorganized BRADLEES, INC., a Massachusetts
corporation ("BI"), and each of the other guarantors listed in Schedule 3.04
(together with BI, each a "GUARANTOR" and collectively, the "GUARANTORS"), the
Lenders named on Annex A hereto and each other Person from time to time party
hereto as a Lender, BANKBOSTON, N.A., a national banking association ("BBNA"),
as the issuer of Letters of Credit (in such capacity, together with any
successor issuer of Letters of Credit hereunder, the "ISSUING BANK"), as
administrative agent for the Issuing Bank, the Collateral Agent, the Tranche B
Agent and the Lenders (in such capacity, the "ADMINISTRATIVE AGENT"), and as
agent for the Tranche B Lenders (in such capacity, the "TRANCHE B AGENT"), BACK
BAY CAPITAL FUNDING, LLC, as the Tranche C Agent (the "TRANCHE C AGENT"),
BANKBOSTON RETAIL FINANCE, INC., a subsidiary of BBNA ("BBRF"), as collateral
agent (in such capacity, the "COLLATERAL AGENT"), and THE CIT GROUP/BUSINESS
CREDIT, INC. and CONGRESS FINANCIAL CORPORATION (NEW ENGLAND), each as co-agents
(collectively, the "CO-AGENTS").
INTRODUCTORY STATEMENT
On June 23, 1995, Bradlees Stores, Inc., Bradlees, Inc., and
certain affiliated entities (collectively, the "DEBTORS") filed voluntary
petitions with the Bankruptcy Court, each initiating a case under Chapter 11 of
the Bankruptcy Code (the cases of the Debtors, each a "CASE" and collectively,
the "CASES"), and have continued in the possession of their assets and in the
management of their businesses pursuant to Sections 1107 and 1108 of the
Bankruptcy Code. The Debtors currently are parties to a $250,000,000
debtor-in-possession Revolving Credit and Guaranty Agreement (as amended, the
"EXISTING CREDIT FACILITY"), dated as of December 23, 1997, with certain of the
Lenders, the Issuing Bank, the Administrative Agent, the Co-Agents and the
Collateral Agent.
On January 27, 1999 (the "CONFIRMATION DATE"), the Bankruptcy
Court confirmed the Debtors' Second Amended Joint Plan of Reorganization of
Bradlees Stores, Inc. and Affiliates Under Chapter 11 of the Bankruptcy Code (as
amended with the written consent of the Administrative Agent, the "CONFIRMED
PLAN"). As part of the implementation of the Confirmed Plan, the Debtors on
behalf of the Borrower have applied to the Lenders and the Issuing Bank for a
revolving credit and letter of credit facility in an aggregate principal amount
not to exceed $270,000,000, all of the Borrower's obligations under which are to
be guaranteed by the Guarantors and secured by substantially all assets (other
than Real Property (as defined below)) of the Borrower and the Guarantors (other
than the Yonkers Common Stock Collateral).
The extensions of credit hereunder will be used, first, to
repay in full all amounts outstanding under the Existing Credit Facility and
thereafter to provide working capital for and to finance Inventory purchases by
the Borrower and otherwise for general corporate purposes.
Accordingly, the parties hereto hereby agree as follows:
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DEFINITIONS
(a) DEFINED TERMS. As used in this Agreement, the
following terms shall have the meanings specified below:
"2000 MEETING DATE" shall mean the date of BI's regular
shareholders meeting in calendar year 2000.
"ABR LOAN" shall mean any Tranche A Loan bearing interest at
a rate determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"ACCOUNTS PAYABLE" shall mean amounts owing by the Borrower on
open account to creditors for purchases of goods and services, determined on a
consolidated basis pursuant to GAAP.
"ADDITIONAL COLLATERAL" shall mean the Borrower's leasehold
interest in those of its leases listed on Schedule 1.01(a) and any replacements
of such leases as provided in the New Notes Indenture (provided that any such
replacements shall not cause the aggregate appraised value of the Additional
Collateral to exceed $10,500,000, subject to adjustments deemed appropriate by
the Administrative Agent).
"ADJUSTED LIBOR RATE" shall mean, with respect to any
Eurodollar Borrowing for any Interest Period, an interest rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the quotient of
(a) the LIBOR Rate in effect for such Interest Period divided by (b) a
percentage (expressed as a decimal) equal to 100% minus Statutory Reserves.
"ADMINISTRATIVE AGENT" shall have the meaning set forth in the
first paragraph of this Agreement.
"AFFILIATE" shall mean, as to any Person, any other Person
which, directly or indirectly, is in control of, is controlled by, or is under
common control with such Person. For purposes of this definition, a Person (a
"CONTROLLED PERSON") shall be deemed to be "controlled by" another Person (a
"CONTROLLING PERSON") if the Controlling Person possesses, directly or
indirectly, power to direct or cause the direction of the management and
policies of the Controlled Person whether by contract or otherwise.
"AGENT ADVANCE" shall mean a Tranche A Loan or a Tranche B
Loan made by the Administrative Agent to the Borrower pursuant to Section
2.03(c) hereof.
"AGENTS" shall mean, collectively, the Administrative Agent,
the Collateral Agent, the Tranche B Agent and the Tranche C Agent.
"AGREEMENT" shall mean this Revolving Credit and Guaranty
Agreement, as the same may from time to time be amended, modified or
supplemented.
"ALTERNATE BASE RATE" shall mean, for any day, the higher of
(a) the annual rate of interest then most recently announced by BBNA at its head
office in Boston, Massachusetts as its "Base Rate" and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1% (0.50%) per annum. If for
any reason the Administrative Agent shall have determined (which
44
determination shall be conclusive absent manifest error) that it is unable to
ascertain the Federal Funds Effective Rate for any reason, including the
inability or failure of the Administrative Agent to obtain sufficient quotations
thereof in accordance with the terms hereof, the Alternate Base Rate shall be
determined without regard to clause (b) of the first sentence of this
definition, until the circumstances giving rise to such inability no longer
exist. Any change in the Alternate Base Rate due to a change in BBNA's Base Rate
or the Federal Funds Effective Rate shall be effective on the effective date of
such change in BBNA's Base Rate or the Federal Funds Effective Rate,
respectively.
"AMENDMENT EFFECTIVE DATE" shall mean the date on which the
Fourth Amendment becomes effective in accordance with its terms.
"AMOUNTS" shall have the meaning set forth in Section 2.18(a).
"APPRAISED VALUE" shall have the meaning set forth in the
definition of "Loan to Value Ratio."
"ASSIGNMENT AND ACCEPTANCE" shall mean an assignment and
acceptance entered into by a Lender and an Eligible Assignee, and accepted by
the Administrative Agent, in a form supplied by the Administrative Agent.
"BANKRUPTCY CODE" shall mean The Bankruptcy Reform Act of
1978, codified as 11 U.S.C. Section 101 et seq., as heretofore and hereafter
amended from time to time, and any successor act or statute.
"BANKRUPTCY COURT" shall mean the United States Bankruptcy
Court for the Southern District of New York, or any other court having
jurisdiction over the Cases.
"BASE ADVANCE RATE" shall have the meaning set forth in the
definition of "Borrowing Base."
"BBNA" shall have the meaning set forth in the first
paragraph of this Agreement.
"BBNA CONCENTRATION ACCOUNT" shall have the meaning set forth
in Section 2.13(a).
"BBNA DISBURSEMENT ACCOUNTS" shall have the meaning set forth
in Section 2.13(d).
"BBRF" shall have the meaning set forth in the first
paragraph of this Agreement.
"BI" shall have the meaning set forth in the first paragraph
of this Agreement.
"BLOCKED ACCOUNT AGREEMENTS" has the meaning set forth in
Section 2.13(a).
"BLOCKED ACCOUNT BANKS" shall mean the banks with whom the
Borrower has entered into Blocked Account Agreements.
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"BLOCKED ACCOUNTS" shall have the meaning set forth in
Section 2.13(a).
"BOARD" shall mean the Board of Governors of the Federal
Reserve System of the United States.
"BORROWING" shall mean the incurrence of Loans of a single
Type made from all the Tranche A Lenders, Tranche B Lenders or Tranche C
Lenders, as the case may be, on a single date and having, in the case of
Eurodollar Loans, a single Interest Period (with any ABR Loan made pursuant to
Section 2.16 being considered a part of the related Borrowing of Eurodollar
Loans).
"BORROWING BASE" shall mean, on any day, an amount equal to
(a) 80% of the then Loan Value of the then Eligible Receivables, PLUS (b) 72%
(the "BASE ADVANCE RATE") of the then Loan Value of Eligible Inventory plus
(without duplication) 72% of the lesser of (i) the then Loan Value of Eligible
LC Inventory and (ii) the then applicable Eligible LC Inventory Sublimit
(PROVIDED that, in no event shall the calculation under this clause (b) result
in a Loan to Value Ratio in excess of 80%), PLUS (c) the Overadvance Amount, if
any, MINUS (d) the then amount of all Borrowing Base Reserves.
"BORROWING BASE CERTIFICATE" shall mean a certificate
substantially in the form of Exhibit A-1 or, in the case of the first Borrowing
Base Certificate that is delivered after the close of each of the Borrower's
fiscal months, Exhibit A-2 (in each case with such changes therein as may be
required by the Administrative Agent to reflect the components of, and reserves
against, the Borrowing Base, the Tranche B Borrowing Base and the Tranche C
Borrowing Base, as provided for hereunder from time to time), executed and
certified by a Financial Officer of the Borrower, which shall include
appropriate exhibits and schedules as referred to therein.
"BORROWING BASE RESERVES" shall mean (i) such reserves against
the Borrowing Base, the Tranche B Borrowing Base and the Tranche C Borrowing
Base as the Administrative Agent from time to time may elect (with the consent
of the Tranche B Agent and the Tranche C Agent), in its reasonable discretion
and on seven (7) days' notice to the Borrower, to apply for purposes of
determining the Borrowing Base, the Tranche B Borrowing Base and the Tranche C
Borrowing Base on account of any matter, contingency or risk which the
Administrative Agent may in good ▇▇▇▇▇ ▇▇▇▇ potentially material to the prospect
of payment of the Credit Extensions, including (by way solely of illustration
and without in any manner limiting the Administrative Agent's right to apply a
reserve on account of any other matter, contingency or risk, whether similar or
not) such items as the Customer Credits Reserve and (ii) such reserves, up to
such amounts as set forth in Schedule 1.01(c) for the affected retail store,
against the Tranche C Borrowing Base as the Administrative Agent shall at the
request of the Tranche C Agent (based on the reasonable good faith determination
of the Tranche C Agent) and on seven (7) days' notice to the Borrower apply for
purposes of determining the Tranche C Borrowing Base on account of the closing
of any retail store or a default under any lease related to a retail store
which, in either case, is included in the Leasehold Collateral.
"BREAKAGE COSTS" shall have the meaning set forth in Section
2.11(b).
46
"BRS" shall mean BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (f/k/a
BancBoston Securities Inc.).
"BUSINESS DAY" shall mean any day other than a Saturday,
Sunday or other day on which banks in the State of New York or the Commonwealth
of Massachusetts are required or permitted to close (and, for a Letter of
Credit, other than a day on which the bank issuing such Letter of Credit is
closed); PROVIDED, HOWEVER, that when used in connection with a Eurodollar Loan,
the term "Business Day" shall also exclude any day on which banks are not open
for dealings in dollar deposits on the London interbank market.
"BUSINESS PLAN" shall mean a three year business plan prepared
by the Borrower on or about September 1998 setting forth the business objectives
for the Credit Parties for the 1998, 1999 and 2000 fiscal years, which plan
includes, among other things: for the first fiscal year, a monthly, and for the
following two fiscal years, a yearly (i) balance sheet, (ii) income statement,
and (iii) statement of cash flows.
"CAP NOTES" shall mean the Borrower's notes (i) in an
aggregate principal amount not to exceed $628,000 in favor of the holder of the
Class BSI-CAP Claim and (ii) with terms as set forth on ATTACHMENT I hereto and
incorporated herein and otherwise in form and substance reasonably satisfactory
to the Administrative Agent.
"CAPITAL EXPENDITURES" shall mean, for any period, the
aggregate of all expenditures (whether paid in cash or accrued as liabilities
during such period and excluding that portion of Capitalized Leases which is
capitalized on the consolidated balance sheet of the Credit Parties by the
Credit Parties during such period) that, in conformity with GAAP, are required
to be included in or reflected by the property, plant, equipment or intangibles
or similar fixed asset accounts reflected in the consolidated balance sheet of
the Credit Parties net of cash amounts received during such period in
reimbursement of Capital Expenditures made by the Credit Parties, excluding
interest capitalized during construction, by the Credit Parties during such
period that, in conformity with GAAP, are required to be included in or
reflected by the property, plant, equipment or intangibles or similar fixed
asset accounts reflected in the consolidated balance sheet of the Credit Parties
(including equipment which is purchased simultaneously with the trade-in of
existing equipment owned by the Borrower or any of the other Credit Parties to
the extent of the gross amount of such purchase price less the book value of the
equipment being traded in at such time), but excluding expenditures made in
connection with the replacement or restoration of assets to the extent
reimbursed or financed from insurance proceeds paid on account of the loss of or
the damage to the assets being replaced or restored, or from awards of
compensation arising from the taking by condemnation or eminent domain of such
assets being replaced.
"CAPITALIZED LEASE" shall mean, as applied to any Person, any
lease of property by such Person as lessee which would be capitalized on a
balance sheet of such Person prepared in accordance with GAAP.
"CASES" shall have the meaning set forth in the introductory
statement of this Agreement.
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"CASH COLLATERAL ACCOUNT" shall mean an interest-bearing
account established by the Borrower with the Administrative Agent at BBNA under
the sole and exclusive dominion and control of the Administrative Agent at the
office of BBNA at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ designated as
the "Bradlees Stores, Inc., Cash Collateral Account" that shall be used solely
for the purposes set forth in Sections 2.02, 2.10(a) and 2.14.
"CASH RECEIPTS" shall have the meaning set forth in Section
2.13(a).
"CHANGE OF CONTROL" shall mean one or more of the following
events: (a) a Person or group of Persons (within the meaning of Rule 13d-S under
the Securities Exchange Act of 1934, as amended) shall, as a result of a tender
or exchange offer, open market purchases, privately negotiated purchases or
otherwise, have become the direct or indirect beneficial owner (within the
meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of
securities of BI representing more than 30% of the combined voting power of the
outstanding voting securities for the election of the directors or shall have
the right to elect a majority of the Board of Directors of BI; or (b) less than
a majority of the members of BI's Board of Directors then in office shall be
persons who either (i) were serving as directors on the 2000 Meeting Date or
(ii) were nominated as directors and approved by the vote of the majority of the
directors who are directors referred to in clause (i) above or this clause (ii).
"CLASS BSI-CAP CLAIM" shall have the meaning set forth in the
Confirmed Plan.
"CLOSING DATE" shall mean the date on which this Agreement has
been executed and the conditions precedent to the making of the initial Loans
set forth in Sections 4.01 and 4.02 have been satisfied or waived in writing by
the Administrative Agent, the Issuing Bank, the Collateral Agent, the Tranche B
Agent, the Required Lenders and the Required Tranche B Lenders, which date shall
occur on or within one (1) Business Day after the Plan Effective Date (provided
that all conditions precedent set forth in Sections 4.01 and 4.02 have been
satisfied or waived as provided above).
"CLOSING DOCUMENTS LIST" shall mean the list of required
closing documents attached hereto as Schedule 4.01(bb).
"CO-AGENTS" shall have the meaning set forth in the first
paragraph of this Agreement.
"CODE" shall mean the Internal Revenue Code of 1986, as
amended, and any regulation promulgated thereunder.
"COIN ORDERS ACCOUNTS" shall have the meaning set forth in
Section 2.13(e).
"COLLATERAL" shall mean any and all assets, properties, and
rights of the Credit Parties pledged from time to time pursuant hereto or to the
Security Documents as security for the Obligations, which shall include, without
limitation, substantially all existing and after-acquired assets, properties and
rights of the Credit Parties (other than Real Property and the Yonkers Common
Stock Collateral), the Leasehold Collateral and all proceeds thereof.
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"COLLATERAL ACCESS AGREEMENTS" shall mean any landlord
waivers, mortgagee waivers, bailee letters or any similar acknowledgment
agreements of any warehouseman or processor in possession of Inventory of the
Borrower or any other Credit Party, in form and substance reasonably
satisfactory to the Collateral Agent.
"COLLATERAL AGENT" shall have the meaning set forth in the
first paragraph of this Agreement.
"COMMITMENT" shall mean, with respect to each Lender, the
aggregate commitment of such Lender hereunder (for Tranche A Loans, Tranche B
Loans and Tranche C Loans) in the amount set forth opposite its name on Annex A
hereto or as may subsequently be set forth in the Register from time to time, as
the same may be reduced from time to time pursuant to Section 2.07.
"COMMITMENT FEE" shall have the meaning set forth in Section
2.20.
"COMMITMENT PERCENTAGE" shall mean at any time, with respect
to each Lender, the percentage obtained by dividing the aggregate of its Tranche
A Commitment, its Tranche B Commitment and its Tranche C Commitment at such time
by the Total Commitment at such time.
"CONFIRMATION DATE" shall have the meaning set forth in the
introductory statement of this Agreement.
"CONFIRMATION ORDER" shall mean an order of the Bankruptcy
Court confirming the Confirmed Plan (other than with respect to Yonkers)
pursuant to sections 1128 and 1129 of the Bankruptcy Code.
"CONFIRMED PLAN" shall have the meaning set forth in the
introductory statement of this Agreement.
"CONSENT FEE" shall have the meaning set forth in subsection
4.01(k).
"CREDIT CARD OBLIGOR" shall mean any of Chase Merchant
Services, L.L.C., Novus Services, Inc., American Express Travel Related Services
Company, Inc., Citibank (South Dakota), N.A. and Citicorp Retail Services, Inc.,
and any other Person acceptable to the Administrative Agent in its sole
discretion, provided that each of the above entities and each such other Person
has executed and delivered to the Administrative Agent a Payment Direction
Agreement with respect to the Receivables due to the Borrower from such Obligor.
"CREDIT EXTENSIONS" shall be equal, as of any day, to the sum
of (a) the principal balance of all Loans then outstanding, and (b) the then
amount of the Letter of Credit Outstandings.
"CREDIT PARTIES" shall mean the Borrower, the Guarantors and
any other Subsidiary of BI or the Borrower that becomes a party to any Loan
Document.
49
"CREDIT PLAN AGREEMENT" shall mean that certain Credit Plan
Agreement dated as of July 31, 1998, among Bradlees Stores, Inc., Bradlees,
Inc., and Citibank (South Dakota), N.A.
"CURE NOTES" shall mean the Borrower's notes (i) in an
aggregate principal amount not to exceed $3,500,000 in favor of non-Debtor
parties to executory contracts that are to be assumed pursuant to the Confirmed
Plan for the purpose of paying "cure amounts" as required by Section 365 of the
Bankruptcy Code and (ii) with terms as set forth on ATTACHMENT II hereto and
incorporated herein and otherwise in form and substance reasonably satisfactory
to the Administrative Agent.
"CUSTOMER CREDITS RESERVE" shall mean a reserve established by
the Administrative Agent from time to time in an amount equal to the sum of (i)
fifty percent (50%) of the dollar value of gift certificates outstanding and
(ii) fifty percent (50%) of the dollar value of customer merchandise credits.
"DEBTORS" shall have the meaning set forth in the
introductory statement of this Agreement.
"DEFAULT" shall mean any event which, upon the giving of any
notice and/or the lapse of any period of time expressly set forth in Section
7.01, 7.02 or 7.03, would constitute an Event of Default or Event of
Super-Default, as applicable.
"DOLLARS" and "$" shall mean lawful money of the United
States of America.
"DOSTRA" shall mean reorganized Dostra Realty Co., Inc., a
Massachusetts corporation.
"EBITDA" shall mean, for any period, all as determined in
accordance with GAAP, the net income (or net loss) of the Borrower for such
period, PLUS (to the extent taken into account in determining such net income or
net loss) (a) the sum of (i) depreciation expense, (ii) amortization expense,
(iii) provision for LIFO adjustment for Inventory valuation, (iv) net total
Federal, state and local income tax expense, (v) gross interest expense for such
period less gross interest income for such period, (vi) any non-recurring charge
or restructuring charge which in accordance with GAAP is excluded from operating
income, (vii) the cumulative effect of any change in accounting principles,
(viii) extraordinary losses and (ix) "Chapter 11 expenses" (or "administrative
costs reflecting Chapter 11 expenses") as shown on the Borrower's statement of
income for such period, MINUS (b) extraordinary gains, and PLUS (c) the amount
of cash received (and minus the amount of cash expended) in such period in
respect of any amount which, under clause (vi) above, was taken into account in
determining EBITDA for such or any prior period.
"ELIGIBLE ASSIGNEE" shall mean (a) a commercial bank having
total assets in excess of $500,000,000, (b) a finance company, insurance company
or other financial institution (in each case with total assets in excess of
$200,000,000) or fund (with total assets in excess of $50,000,000) reasonably
acceptable to the Administrative Agent which in the ordinary course of business
extends credit or purchases debt of the type evidenced by the Notes and whose
becoming an assignee would not constitute a prohibited transaction under Section
4975 of ERISA, and (c) any other financial institution, fund or other Person
reasonably satisfactory to the Administrative Agent and approved by the
Borrower, which approval shall not be unreasonably
50
withheld or delayed, and which approval shall not be required upon the
occurrence and during the continuance of an Event of Default or an Event of
Super-Default.
"ELIGIBLE INVENTORY" shall mean, as of the date of
determination thereof, items of Inventory of the Borrower that are finished
goods, merchantable and readily saleable to the public in the ordinary course
and goods ("L/C GOODS") as to which a documentary Letter of Credit has been
issued and which, if in the possession of the Borrower, would be treated as the
Borrower's Inventory hereunder, but only if such goods have been consigned to
the Issuing Bank or the Borrower (along with delivery to the Issuing Bank or the
Borrower, as applicable, of the documents of title with respect thereto), in
each case deemed by the Administrative Agent in its reasonable discretion to be
eligible for inclusion in the calculation of the Borrowing Base, the Tranche B
Borrowing Base and the Tranche C Borrowing Base. Without limiting the foregoing,
unless otherwise approved in writing by the Administrative Agent, none of the
following shall be deemed to be Eligible Inventory, and Eligible Inventory shall
be reduced by the following:
(a) Inventory (other than L/C Goods) that is not owned solely
by the Borrower or with respect to which the Borrower does not have good, valid
and marketable title, free and clear of any Lien (other than (i) Liens granted
to the Collateral Agent, for its benefit and the ratable benefit of the other
Secured Parties, pursuant to the Loan Documents, (ii) Permitted Liens and (iii)
the Trade Lien (it being understood that only the Collateral Agent, for its
benefit and the ratable benefit of the other Secured Parties, shall have a
first-priority Lien on such Inventory));
(b) Inventory that is not located on, or in transit directly
to, property leased by the Borrower or in a contract warehouse or other third
party location, in each case, located in the United States and segregated or
otherwise separately identifiable from goods of others, if any, stored on the
premises;
(c) Inventory that is not reflected in the Borrower's stock
ledger report, warehouse status report or the "in-transit" account in the
general ledger;
(d) Inventory that has been returned or rejected by any of
the Borrower's customers and which is damaged or defective or to be returned to
vendor;
(e) Inventory not held for resale in the ordinary course,
including samples, publicity, display or demonstration Inventory, packaway
Inventory, and piece goods;
(f) consigned and leased Inventory;
(g) special order Inventory;
(h) supplies and packing or shipping materials;
(i) Inventory in which the Collateral Agent does not have a
first-priority perfected security interest pursuant to the Security Agreement or
which is not in transit to a location where the Collateral Agent will
immediately have such a first-priority perfected security interest therein; and
51
(j) Inventory reserves that may be required by the
Administrative Agent (with the consent of the Tranche B Agent) in the exercise
of its reasonable discretion and on 7 days' notice to the Borrower based on a
change in the value of the Inventory as determined by the Administrative Agent
in its reasonable discretion (including, by way of example, a Shrink Reserve,
inventory obsolescence, seasonality, imbalance, change in Inventory character,
composition or mix, change in ▇▇▇▇-down practices both permanent and point of
sale and change in retail ▇▇▇▇-on or ▇▇▇▇-up practices).
"ELIGIBLE LC INVENTORY" shall mean, as of the date of
determination thereof, documentary Letters of Credit (i) that have been issued
with an expiry date within 75 days of such date of determination, (ii) that have
been issued for the acquisition by the Borrower of Inventory which would
otherwise be Eligible Inventory if owned by the Borrower, and (iii) that may
include Letters of Credit issued as described in the third paragraph of the
Introductory Statement above, so long as such Letter of Credit would otherwise
satisfy the requirements hereof.
"ELIGIBLE LC INVENTORY SUBLIMIT" shall mean, for any fiscal
month of the Borrower, the dollar amount set forth opposite such fiscal month
below:
MONTH ELIGIBLE LC INVENTORY SUBLIMIT
January $20,000,000
February $20,000,000
March $20,000,000
April $24,000,000
May $33,000,000
June $34,000,000
July $35,000,000
August $38,000,000
September $30,000,000
October $20,000,000
November $20,000,000
December $20,000,000
"ELIGIBLE RECEIVABLES" shall mean, as of the date of
determination thereof, Receivables of the Borrower payable in Dollars and deemed
by the Administrative Agent in its reasonable discretion (with the consent of
the Tranche B Agent and the Tranche C Agent, which consent shall not be
unreasonably withheld) to be eligible for inclusion in the calculation of the
Borrowing Base. Without limiting the foregoing, unless otherwise approved in
writing by the Administrative Agent, none of the following shall be deemed to be
Eligible Receivables:
(a) Receivables that have been outstanding for more than 5
Business Days from the due date;
(b) Receivables not owned solely by the Borrower or with
respect to which the Borrower does not have good, valid and marketable title
thereto, free and clear of any Lien (other than (i) Liens granted to the
Collateral Agent, for its benefit and the ratable benefit of the other Secured
Parties, pursuant to the Loan Documents and (ii) Permitted Liens (it being
understood that only the Collateral Agent, for its benefit and the ratable
benefit of the other Secured Parties, shall have a first-priority Lien on such
Receivables));
52
(c) Receivables which the Administrative Agent determines in
its reasonable discretion (with the consent of the Tranche B Agent and the
Tranche C Agent) to be uncertain of collection; and
(d) with respect to Receivables created under the Credit Plan
Agreement, a notice of termination has been delivered thereunder.
"▇▇▇▇▇▇▇" shall mean, collectively, ▇▇▇▇▇▇▇ Associates, L.P.
and Westgate International, L.P.
"ENVIRONMENTAL LIEN" shall mean a Lien in favor of any
Governmental Authority for (i) any liability under federal or state
environmental laws or regulations, or (ii) damages arising from or costs
incurred by such Governmental Authority in response to a release or threatened
release of a hazardous or toxic waste, substance or constituent, or other
substance into the environment.
"EQUITY INTERESTS" shall mean any and all shares, interests,
participations or other equivalents (however designated) of capital stock in a
corporation and all warrants or options to purchase any of the foregoing.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"ERISA AFFILIATE" shall mean any trade or business (whether or
not incorporated) which is a member of a group of which the Borrower is a member
and which is under common control within the meaning of Section 414(b) or (c) of
the Code and the regulations promulgated and rulings issued thereunder.
"ESCROW PROCEEDS" shall have the meaning set forth in Section
2.13(c).
"EUROCURRENCY LIABILITIES" shall have the meaning assigned
thereto in Regulation D issued by the Board, as in effect from time to time.
"EURODOLLAR APPLICABLE MARGIN" shall mean 2.25% per annum.
"EURODOLLAR BORROWING" shall mean a Borrowing comprised of
Eurodollar Loans.
"EURODOLLAR INTEREST RATE" shall have the meaning set forth
in Section 2.05(b).
"EURODOLLAR LOAN" shall mean any Tranche A Loan bearing
interest at a rate determined by reference to the Adjusted LIBOR Rate in
accordance with the provisions of Article II.
"EVENT OF DEFAULT" shall have the meaning set forth in
Section 7.01.
"EVENT OF SUPER-DEFAULT" shall have the meaning set forth in
Section 7.02.
53
"EXISTING CREDIT FACILITY" shall have the meaning set forth in
the introductory statement of this Agreement.
"EXISTING EURODOLLAR LOANS" shall have the meaning set forth
in subsection 2.03(e).
"FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any day, the
rate per annum equal to the weighted average of the rates on overnight federal
funds transactions with members of the Federal Reserve System arranged by
federal funds brokers, 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 published for any day that is a Business
Day, the average of the quotations for such day on such transactions received by
the Administrative Agent from three funds brokers of recognized standing
selected by the Administrative Agent.
"FEE LETTERS" shall mean the Tranche A Fee Letter, the Tranche
B Fee Letter and the Tranche C Fee Letter.
"FEES" shall collectively mean the Commitment Fees, the
Letter of Credit Fees, the Consent Fee, the fees and charges described in
Section 2.02(c) and the fees referred to in Section 2.19.
"FILING DATE" shall mean June 23, 1995.
"FINANCIAL OFFICER" shall mean the Chief Executive Officer,
the Chief Financial Officer, the Vice President -- Controller or the Treasurer
of the Borrower.
"FOURTH AMENDMENT" shall mean the Fourth Amendment and Waiver,
dated as of June 29, 2000, among the Borrower, the Guarantors, the Lenders, the
Agents and the Co-Agents.
"GAAP" shall mean generally accepted accounting principles
applied on a basis consistent with those used in preparing the financial
statements referred to in Section 3.05.
"▇▇▇▇▇▇▇" shall mean ▇▇▇▇▇▇▇ Capital L.P.
"GOVERNMENTAL AUTHORITY" shall mean any Federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality or any court, in each case whether of the United States or any
foreign jurisdiction.
"GUARANTORS" shall have the meaning set forth in the first
paragraph of this Agreement.
"INDEBTEDNESS" shall mean, at any time and with respect to any
Person, (i) all indebtedness of such Person for borrowed money, (ii) all
indebtedness of such Person for the deferred purchase price of property or
services (other than property, including inventory, and services purchased, and
expense accruals and deferred compensation items arising, in the ordinary course
of business), (iii) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments (other than performance, surety and
appeal bonds arising in the ordinary course of business), (iv) all indebtedness
of such Person created or arising under
54
any conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (v) all obligations of such Person under leases which
have been or should be, in accordance with GAAP, recorded as capital leases, to
the extent required to be so recorded, (vi) all reimbursement, payment or
similar obligations of such Person, contingent or otherwise, under acceptance,
letter of credit or similar facilities, (vii) all Indebtedness referred to in
clauses (i) through (vi) above guaranteed directly or indirectly by such Person,
or in effect guaranteed directly or indirectly by such Person through an
agreement (A) to pay or purchase such Indebtedness or to advance or supply funds
for the payment or purchase of such Indebtedness, (B) to purchase, sell or lease
(as lessee or lessor) property, or to purchase or sell services, primarily for
the purpose of enabling the debtor to make payment of such Indebtedness or to
assure the holder of such Indebtedness against loss in respect of such
Indebtedness, (C) to supply funds to or in any other manner invest in the debtor
(including any agreement to pay for property or services irrespective of whether
such property is received or such services are rendered) or (D) otherwise to
assure a creditor against loss in respect of such Indebtedness, and (viii) all
Indebtedness referred to in clauses (i) through (vii) above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in any property owned by such
Person, even though such Person has not assumed or become liable for the payment
of such Indebtedness.
"INDENTURE SECURITY AGREEMENT" shall mean the "Security
Agreement" as defined in the New Notes Indenture.
"INSUFFICIENCY" shall mean, with respect to any Plan, the
amount, if any, of its unfunded benefit liabilities within the meaning of
Section 4001(a)(18) of ERISA.
"INTEREST COVERAGE RATIO" shall mean, for each fiscal quarter
of the Borrower, the ratio of the Borrower's (a) EBITDA LESS Capital
Expenditures to (b) cash Interest Expense, for the 12-month period ending on the
last day of such fiscal quarter.
"INTEREST EXPENSE" shall mean interest expense as determined
in accordance with GAAP.
"INTEREST PAYMENT DATE" shall mean (i) as to any Eurodollar
Loan having an Interest Period of 1, 2 or 3 months, the last day of such
Interest Period and (ii) as to all ABR Loans, Prime Plus Loans and, except with
respect to interest on the Tranche C Loans added to the principal amount of the
Tranche C Notes in accordance with Section 2.05(d), Tranche C Loans outstanding
at any time during any month, the first Business Day of the next succeeding
month.
"INTEREST PERIOD" shall mean, as to any Borrowing of
Eurodollar Loans, the period commencing on and including the date of such
Borrowing (including as a result of a refinancing of ABR Loans) or on the last
day of the preceding Interest Period applicable to such Borrowing and ending on
and excluding the numerically corresponding day (or if there is no corresponding
day, the last day) in the calendar month that is 1, 2 or 3 months thereafter, as
the Borrower may elect in the related notice delivered pursuant to Sections
2.03(b) or 2.09; PROVIDED, HOWEVER, that (i) if any Interest Period would end on
a day which shall not be a Business Day, such Interest
55
Period shall be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day, and (ii) no
Interest Period shall end later than the Termination Date.
"INTEREST RATE AGREEMENT" shall mean any interest rate
protection agreement, interest rate swap agreement, interest rate cap agreement,
interest rate collar agreement or other similar agreement or arrangement between
BBNA or any of its Affiliates, on the one hand, and the Borrower or any other
Credit Party, on the other hand.
"INVENTORY" shall mean all goods, wares and merchandise owned
and held for sale by the Borrower.
"INVESTMENTS" shall have the meaning set forth in Section
6.11.
"ISSUING BANK" shall have the meaning set forth in the first
paragraph of this Agreement.
"LEASEHOLD COLLATERAL" shall mean the interests and rights of
the Borrower and the Credit Parties in and to those certain leased store
locations as listed on Schedule 6.01 hereto (as such Schedule 6.01 may from time
to time be modified with the consent of the Tranche C Agent to reflect additions
and substitutions of leased store locations), each Leasehold Estate and all
proceeds thereof.
"LEASEHOLD ESTATE" shall have the meaning assigned to such
term in each Leasehold Mortgage, as applicable.
"LEASEHOLD MORTGAGE" shall mean each Leasehold Mortgage and
Security Agreement, dated as of June 29, 2000, by the Borrower, as grantor or
mortgagor, in favor of the Collateral Agent or the Special Collateral Agent with
respect to the Leasehold Collateral.
"LENDERS" shall mean the Persons identified on Annex A hereto
and each assignee that becomes a party to this Agreement as set forth in Section
10.03(b) or (c).
"LETTER OF CREDIT" shall mean a letter of credit that is (i)
issued for account of the Borrower, (ii) a standby or documentary letter of
credit, (iii) issued in connection with the purchase of Inventory by the
Borrower and for other purposes for which the Borrower has historically obtained
letters of credit, or for any other purpose that is reasonably acceptable to the
Administrative Agent (including, without limitation, the Letters of Credit
issued as described in the third paragraph of the Introductory Statement above),
and (iv) in form and substance reasonably satisfactory to the Issuing Bank.
"LETTER OF CREDIT FEES" shall mean the fees payable in respect
of Letters of Credit pursuant to Section 2.21.
"LETTER OF CREDIT OUTSTANDINGS" shall mean, at any time, the
sum of (a) with respect to Letters of Credit outstanding at such time, the
aggregate maximum amount that then is or at any time thereafter may become
available for drawing or payment thereunder PLUS (b) all
56
amounts theretofore drawn or paid under Letters of Credit for which the Issuing
Bank has not then been reimbursed.
"LIBOR RATE" shall mean, for any Interest Period for any
Eurodollar Borrowing, the rate (rounded upwards, if necessary, to the next 1/16
of 1%) at which dollar deposits approximately equal in principal amount to such
Eurodollar Borrowing and for a maturity comparable to such Interest Period are
offered to the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
"LIEN" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind whatsoever (including any conditional
sale or other title retention agreement or any lease in the nature thereof).
"LOAN ACCOUNT" shall have the meaning set forth in Section
2.12(a).
"LOAN DOCUMENTS" shall mean this Agreement, the Notes, the
Letters of Credit, the Fee Letters, all Borrowing Base Certificates, the Blocked
Account Agreements, the Collateral Access Agreements, the Payment Direction
Agreements, the Subsidiary Guaranty, the Security Documents, and any other
instrument or agreement executed and delivered in connection herewith or
therewith.
"LOAN TO VALUE RATIO" shall mean (i) when used in connection
with the definition of "Borrowing Base," the ratio expressed as a percentage of
(A) the Base Advance Rate to (B) the net appraised liquidation value at cost of
the Borrower's Inventory (expressed as a percentage of the cost value of such
Inventory), as determined from time to time by the Administrative Agent in
accordance with its standard procedures and with the assistance of an
independent appraiser (the "APPRAISED VALUE"), (ii) when used in connection with
the definition of "Overadvance Amount," the ratio expressed as a percentage of
(A) the sum of the Base Advance Rate and the Overadvance Rate to (B) the
Appraised Value and (iii) when used in connection with the definition of
"Tranche B Inventory Advance Rate," the ratio expressed as a percentage of (A)
the sum of the Base Advance Rate, the Overadvance Rate and the Tranche B
Inventory Advance Rate to (B) the Appraised Value.
"LOAN VALUE" shall mean the amount determined by the
Administrative Agent from time to time, in its reasonable discretion and
consistent with the Administrative Agent's usual business practices and policies
for similar borrowers similarly situated, as an appropriate estimate of the
value of Eligible Receivables, Eligible LC Inventory (which shall not exceed the
amount that may be drawn under such Letters of Credit), and Eligible Inventory
(which determination shall take into account the following factors, among
others: (i) the cost thereof, (a) as determined under the retail method of
accounting as reflected in the Borrower's stock ledger (the cost value of the
Inventory in the stock ledger will be adjusted based upon the lowest ticketed
retail price at which such Inventory is offered to the public, after all
permanent ▇▇▇▇-▇▇▇▇▇ (whether or not such price is then reflected on the
Borrower's accounting system)) or, (b) with respect to warehouse and in-transit
inventory, determined under the cost method of accounting, (ii) the first-in,
first-out accounting valuation method, (iii) the Borrower's
57
accounting practices, known to the Administrative Agent and in effect on the
date hereof, and (iv) excluding any capitalization costs or other non-purchase
price charges (other than "freight-in"), such as intracompany freight, used in
the Borrower's calculation of cost of goods sold.
"LOANS" shall mean all loans (including, without limitation,
Agent Advances) at any time made to the Borrower or for account of the Borrower
pursuant to this Agreement, whether constituting Tranche A Loans, Tranche B
Loans or Tranche C Loans.
"MASTER LEASE AGREEMENT" shall mean that certain Master Lease
Agreement, dated as of December 8, 1998, as amended, between BankBoston Leasing,
Inc., as lessor, and Bradlees Stores, Inc., as lessee.
"MATURITY DATE" shall mean the earlier to occur of (a) three
years from the Closing Date or (b) December 23, 2001.
"MORTGAGE DOCUMENTS" shall mean the Leasehold Mortgages and
each other document executed or delivered in connection with the grant by the
Borrower and each other Credit Party of a security interest in the Leasehold
Collateral to the Collateral Agent or the Special Collateral Agent, for its
benefit and the ratable benefit of the other Secured Parties.
"MORTGAGEE" has the meaning set forth in Section 4.01(ee).
"MORTGAGEE WAIVERS" has the meaning set forth in Section
4.01(ee).
"MULTIEMPLOYER PLAN" shall mean a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA
Affiliate is making or accruing an obligation to make contributions, or has
within any of the preceding five plan years made or accrued an obligation to
make contributions.
"MULTIPLE EMPLOYER PLAN" shall mean a Single Employer Plan,
which (i) is maintained for employees of the Borrower or an ERISA Affiliate and
at least one Person other than the Borrower and its ERISA Affiliates or (ii) was
so maintained and in respect of which the Borrower or an ERISA Affiliate could
have liability under Section 4064 or 4069 of ERISA in the event such Plan has
been or were to be terminated.
"NEW NOTES" shall mean the Borrower's notes (i) in an
aggregate principal amount not to exceed $40,000,000 in favor of (A) the banks
and other financial institutions (the "PRE-PETITION REVOLVER BANK GROUP")
holding pre-petition claims under that certain Credit Agreement, dated as of
March 3, 1993, as amended, among Bradlees, Inc., the Pre-Petition Revolver Bank
Group and Bankers Trust Company, as agent, (B) the banks and other financial
institutions holding pre-petition claims under the SPE Documents (as defined in
the Confirmed Plan) and (C) the holders of YON-GEN Claims, BRU-GEN Claims and
▇▇▇-GEN Claims (each as defined in the Confirmed Plan) and (ii) with terms as
set forth on ATTACHMENT III hereto and incorporated herein and otherwise in form
and substance reasonably satisfactory to the Administrative Agent.
58
"NEW NOTES INDENTURE" shall mean that certain Indenture,
dated as of February 2, 1999, between Bradlees Stores, Inc. as Issuer, Bradlees,
Inc. as Guarantor, New Horizons of Yonkers, Inc., as Guarantor and IBJ Whitehall
Bank & Trust Company, as Trustee.
"NONCOMPLIANCE NOTICE" shall have the meaning set forth in
Section 2.03(c).
"NON-U.S. LENDER" shall have the meaning set forth in Section
2.18(f).
"NOTES" shall mean the Tranche A Notes, the Tranche B Notes
and the Tranche C Notes.
"OBLIGATIONS" shall mean (a) the due and punctual payment of
principal of and interest on the Loans and the Notes and the reimbursement of
all amounts drawn under Letters of Credit, (b) the due and punctual payment of
the Fees and all other present and future, fixed or contingent, monetary
obligations of the Borrower and the other Credit Parties to the Lenders, the
Issuing Bank, the Collateral Agent, the Tranche B Agent, the Tranche C Agent,
the Co-Agents and the Administrative Agent under the Loan Documents, (c) the due
and punctual payment of any obligations of the Borrower or the other Credit
Parties to the Other Transactions Counterparties in accordance with, and in
connection with, the Master Lease Agreement and any Interest Rate Agreements,
and (d) any other obligations of the Borrower or any other Credit Party to any
Other Transactions Counterparty.
"OTHER TAXES" shall have the meaning set forth in Section
2.18(b).
"OTHER TRANSACTIONS COUNTERPARTIES" shall mean BBNA and its
Affiliates.
"OVERADVANCE AMOUNT" shall mean on any day from and including
March 1 through and including December 15 of any year, up to 5% (the
"OVERADVANCE RATE") of the then Loan Value of the then Eligible Inventory PLUS
(without duplication) 5% of the then Loan Value of the then Eligible LC
Inventory; PROVIDED, that (i) in connection with determining the Borrowing Base,
the Overadvance Rate and the Base Advance Rate, when combined, shall not result
in Tranche A Loans being made against greater than 77% of the Loan Value of
Eligible Inventory and Eligible LC Inventory, taken as a whole (but without
duplication) and (ii) in no event shall the application of the Overadvance
Amount to the Borrowing Base result in a Loan to Value Ratio in excess of 85%.
"OVERADVANCE MARGIN" shall mean (i) .50% per annum for any
month in which the Borrower has any Loans outstanding by utilizing the
Overadvance Amount under the Borrowing Base or (ii) at all other times, zero.
"OVERADVANCE RATE" shall have the meaning set forth in the
definition of "Overadvance Amount."
"PAYMENT DIRECTION AGREEMENT" shall mean an agreement among
the Borrower, the Administrative Agent and each Credit Card Obligor, in form and
substance satisfactory to the Administrative Agent, providing for the direct
payment to the BBNA Concentration Account of all amounts due to the Borrower
from such Credit Card Obligor
59
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or
any successor agency or entity performing substantially the same functions.
"PENSION PLAN" shall mean a defined benefit pension or
retirement plan which meets and is subject to the requirements of Section 401(a)
of the Code.
"PERMISSIBLE COLLATERAL" shall mean Yonkers' interests in the
real property and improvements (but not including any Inventory or other
personal property) located at the site of the Bradlees store located in Yonkers,
New York (the "YONKERS LEASED PROPERTY"), and the proceeds of any disposition of
the foregoing.
"PERMITTED INVESTMENTS" shall mean:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are backed by
the full faith and credit of the United States of America), in each case payable
in Dollars and maturing within twelve months from the date of acquisition
thereof;
(b) investments in certificates of deposit, banker's
acceptances and time deposits (including Eurodollar time deposits) payable in
Dollars and maturing within six months from the date of acquisition thereof
issued or guaranteed by or placed with (i) any domestic office of the
Administrative Agent or (ii) any domestic office of any other commercial bank of
recognized standing organized under the laws of the United States of America or
any State thereof that has a combined capital and surplus and undivided profits
of not less than $250,000,000 and is the principal banking Subsidiary of a bank
holding company having a long-term unsecured debt rating of at least "A" or the
equivalent thereof from Standard & Poor's Corporation or at least "P-2" or the
equivalent thereof from ▇▇▇▇▇'▇ Investors Service, Inc.;
(c) investments in commercial paper payable in Dollars and
maturing within six months from the date of acquisition thereof and issued by
(i) the holding company of the Administrative Agent or (ii) the holding company
of any other commercial bank of recognized standing organized under the laws of
the United States of America or any State thereof that has (A) a combined
capital and surplus in excess of $250,000,000 and (B) commercial paper rated at
least "A" or the equivalent thereof from Standard & Poor's Corporation or of at
least "P-2" or the equivalent thereof from ▇▇▇▇▇'▇ Investors Service, Inc.;
(d) investments in repurchase obligations payable in Dollars
with a term of not more than seven days for underlying securities of the types
described in clause (a) above entered into with any office of a bank or trust
company meeting the qualifications specified in clause (b) above;
(e) investments in money market funds substantially all the
assets of which are comprised of securities of the types described in clauses
(a) through (d) above; and
(f) to the extent owned on the Closing Date, investments in
the capital stock or partnership interests of any direct or indirect subsidiary
of the Borrower.
"PERMITTED LIENS" shall mean (i) Liens imposed by law (other
than Environmental Liens and any Lien imposed under ERISA) for taxes,
assessments or charges of any Governmental Authority for claims not yet due or
which are being contested in good faith by appropriate proceedings and with
respect to which adequate reserves or other appropriate provisions are being
maintained in accordance with GAAP; (ii) statutory Liens of landlords and Liens
of carriers, warehousemen, mechanics, materialmen and other Liens (other than
Environmental Liens and any Lien imposed under ERISA) imposed by law created in
the ordinary course of business for amounts not yet due or which are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves or other appropriate provisions are being maintained in
accordance with GAAP; (iii) Liens (other than any Lien imposed under ERISA)
incurred or deposits made in the ordinary course of business (including, without
limitation, surety bonds and appeal bonds) in connection with workers'
compensation, unemployment insurance and other types of social security benefits
or to secure the performance of tenders, bids, leases, contracts (other than for
the repayment of Indebtedness), statutory obligations and other similar
obligations or arising as a result of progress payments under government
contracts; (iv) easements (including, without limitation, reciprocal easement
agreements and utility agreements), rights-of-way, covenants, consents,
reservations, encroachments, variations and zoning and other restrictions,
charges or encumbrances (whether or not recorded) which do not interfere
materially with the ordinary conduct of the business of the Borrower or any
Guarantor, as the case may be, and which do not materially detract from the
value of the property to which they attach or materially impair the use thereof
to the Borrower or any Guarantor, as the case may be; (v) purchase money Liens
(a) existing on the Closing Date upon or in any property (other than Inventory)
acquired or held in the ordinary course of business to secure the purchase price
of such property and (b) to secure Indebtedness permitted by Section 6.03(ii)
and solely for the purpose of financing the acquisition of such property, (vi)
with respect to Leasehold Collateral only, Permitted Encumbrances (as defined in
the Leasehold Mortgages) and (vii) extensions, renewals or replacements of any
Lien referred to in paragraphs (i) through (vi) above; PROVIDED that the
principal amount of the obligation secured thereby is not increased and that any
such extension, renewal or replacement is limited to the property originally
encumbered thereby.
"PERMITTED NOTE DEBT" shall mean indebtedness outstanding
under the New Notes, the Cure Notes and the CAP Notes.
"PERSON" shall mean any natural person, corporation,
partnership, limited liability company, trust, joint venture, association,
company, estate, unincorporated organization or government or any agency or
political subdivision thereof.
"PLAN" shall mean any Single Employer Plan or Multiemployer
Plan.
"PLAN EFFECTIVE DATE" shall have the meaning set forth in
Section 4.01(e).
"PRIME PLUS LOAN" shall mean any Tranche B Loan bearing
interest at the rate set forth in Sections 2.05(c) or 2.06, as applicable.
"QUALIFIED PLAN" shall mean a pension plan (as defined in
Section 3(2) of ERISA) intended to be tax-qualified under Section 401(a) of the
Code and which the Borrower or any
61
ERISA Affiliate sponsors, maintains, or to which it makes or is obligated to
make contributions, or in the case of a multiple employer plan (as described in
Section 4064(a) of ERISA) has made contributions at any time during the
immediately preceding period covering at least five (5) plan years, but
excluding any Multiemployer Plan."
"REAL PROPERTY" shall mean all interests of the Borrower and
the other Credit Parties, as applicable, in their respective owned or leased
real property, other than the Leasehold Collateral.
"RECEIVABLES" shall mean, with respect to any Credit Card
Obligor, the indebtedness of such Credit Card Obligor to the Borrower under a
charge account agreement arising from a sale of merchandise or services by the
Borrower.
"REGISTER" shall have the meaning set forth in Section
10.03(e).
"REQUIRED LENDERS" shall mean, at any time, Lenders having
Loans outstanding representing at least 51% of the total Loans outstanding;
PROVIDED, HOWEVER, that if no Loans are outstanding, Required Lenders shall be
those Lenders having Commitments representing at least 51% of the Total
Commitment (without giving effect to any termination of all of the Commitments
pursuant to Article VII).
"REQUIRED SUPERMAJORITY LENDERS" shall mean, at any time,
Lenders having Loans outstanding representing at least 66 2/3% of the total
Loans outstanding; PROVIDED, HOWEVER, that if no Loans are outstanding,
Required Supermajority Lenders shall be those Lenders having Commitments
representing at least 66 2/3% of the Total Commitment (without giving effect
to any termination of all of the Commitments pursuant to Article VII).
"REQUIRED TRANCHE A LENDERS" shall mean, at any time, Tranche
A Lenders having Tranche A Loans outstanding representing at least 51% of the
total Tranche A Loans outstanding; PROVIDED, HOWEVER, that if no Tranche A Loans
are outstanding, Required Tranche A Lenders shall be those Tranche A Lenders
having Tranche A Commitments representing at least 51% of the aggregate Tranche
A Commitments (without giving effect to any termination of all of the Tranche A
Commitments pursuant to Article VII).
"REQUIRED TRANCHE B LENDERS" shall mean, at any time, Tranche
B Lenders having Tranche B Loans outstanding representing at least 51% of the
total Tranche B Loans outstanding; PROVIDED, HOWEVER, that if no Tranche B Loans
are outstanding, Required Tranche B Lenders shall be those Tranche B Lenders
having Tranche B Commitments representing at least 51% of the aggregate Tranche
B Commitments (without giving effect to any termination of all of the Tranche B
Commitments pursuant to Article VII).
"REQUIRED TRANCHE C LENDERS" shall mean, at any time, Tranche
C Lenders having Tranche C Loans outstanding representing at least 51% of the
total Tranche C Loans outstanding PROVIDED, HOWEVER, that if no Tranche C Loans
are outstanding, Required Tranche C Lenders shall be those Tranche C Lenders
having Tranche C Commitments representing at least 51% of the aggregate Tranche
C Commitments (without giving effect to any termination of all of the Tranche C
Commitments pursuant to Article VII).
62
"SECURED PARTIES" shall mean, collectively, the Lenders, the
Issuing Bank, the Agents, the Co-Agents and the Other Transactions
Counterparties and a "SECURED PARTY" shall mean any of the foregoing.
"SECURITY AGREEMENT" shall have the meaning set forth in
Section 4.01(f).
"SECURITY DOCUMENTS" shall mean the Security Agreement, the
Trademark Security Agreement, the Mortgage Documents and each other document
executed in connection with the grant by the Borrower and each other Credit
Party of a security interest in the Collateral to the Collateral Agent, for its
benefit and the ratable benefit of the other Secured Parties.
"SETTLEMENT DATE" shall have the meaning set forth in Section
2.03(d).
"SG&A EXPENSES" shall mean selling, general and administrative
expenses, as determined in accordance with GAAP.
"SHRINK RESERVE" shall mean, as of the date of any
determination thereof, (A) the positive result, if any, of subtracting (i) the
shrinkage percentage reserve then maintained by the Borrower in its stock ledger
from (ii) shrinkage (book to physical differences), calculated as a percentage
of cumulative net sales since the last physical inventory, for the Borrower's
most recent physical inventory with respect to Inventory located at stores and
distribution centers, MULTIPLIED BY (B) cumulative sales since the last physical
adjustment by the Borrower.
"SINGLE EMPLOYER PLAN" shall mean a single employer plan, as
defined in Section 4001(a)(15) of ERISA, (A) which the Borrower or any ERISA
Affiliate maintains, administers, contributes to or is required to contribute
to, or, within the five years prior to the Closing Date, maintained,
administered, contributed to or was required to contribute to, or under which
the Borrower or any ERISA Affiliate may incur any liability and (B) which covers
any employee or former employee of the Borrower or any ERISA Affiliate (with
respect to their relationship with such entities).
"SPECIAL COLLATERAL AGENT" shall mean, with respect to any
Leasehold Collateral located in the state of Maine, Fleet National Bank or any
of its affiliates qualified to do business in the state of Maine, as the
Collateral Agent shall appoint from time to time.
"SPECIFIED LOCATION SALES" shall have the meaning set forth
in Section 2.13(c).
"STATUTORY RESERVES" shall mean, on any date, the percentage
(expressed as a decimal) established by the Board and any other banking
authority which is the then stated maximum rate for all reserves (including but
not limited to any emergency, supplemental or other marginal reserve
requirements) applicable to any member bank of the Federal Reserve System in
respect of Eurocurrency Liabilities (or any successor category of liabilities
under Regulation D issued by the Board, as in effect from time to time). Such
reserve percentages shall include, without limitation, those imposed pursuant to
said Regulation. The Statutory Reserves shall be adjusted automatically on and
as of the effective date of any change in such percentage.
63
"SUBSIDIARY" shall mean, with respect to any Person (herein
referred to as the "parent"), any corporation, association or other business
entity (whether now existing or hereafter organized) of which at least a
majority of the securities or other ownership interests having ordinary voting
power for the election of directors is, at the time as of which any
determination is being made, owned or controlled by the parent or one or more
subsidiaries of the parent or by the parent and one or more subsidiaries of the
parent.
"TAX PAYMENT PLAN" shall have the meaning set forth in
Section 4.01(c).
"TAX REFUND ACCOUNT" shall have the meaning set forth in
Section 2.13(c).
"TAXES" shall have the meaning set forth in Section 2.18(a).
"TERMINATION DATE" shall mean the earliest to occur of (i) the
Maturity Date and (ii) the date on which the maturity of the Tranche A Loans,
the Tranche B Loans or the Tranche C Loans is accelerated and the commitments of
the Tranche A Lenders, the Tranche B Lenders, or the Tranche C Lenders, as
applicable, are terminated in accordance with Section 7.01 or Section 7.02, as
applicable.
"TERMINATION EVENT" shall mean (i) with respect to a Single
Employer Plan or a Multiple Employer Plan, a "reportable event", as such term is
described in Section 4043 of ERISA and the regulations issued thereunder (other
than a "reportable event" not subject to the provision for 30-day notice to the
PBGC under Section 4043 of ERISA or such regulations) or an event described in
Section 4068 of ERISA excluding events described in Section 4043(c)(9) of ERISA
or 29 CFR 4043.29 or 4043.35, (ii) the withdrawal of the Borrower or any ERISA
Affiliate from a Multiple Employer Plan during a plan year in which it was a
"substantial employer", as such term is defined in Section 4001(c) of ERISA, or
the incurrence of liability by the Borrower or any ERISA Affiliate under Section
4064 of ERISA upon the termination of a Multiple Employer Plan, or (iii)
providing notice of intent to terminate a Plan pursuant to Section 4041(c) of
ERISA or the treatment of a Plan amendment as a termination under Section 4041
of ERISA, or (iv) the institution of proceedings to terminate a Plan by the PBGC
under Section 4042 of ERISA, or (v) a complete or partial withdrawal by the
Borrower or any ERISA Affiliate from a Multiemployer Plan, or (vi) a failure by
the Borrower or any ERISA Affiliate to make required contributions to a Plan, or
(vii) the imposition of any liability under Title IV of ERISA, other than PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower
or any ERISA Affiliate, or (viii) an application for a funding waiver or an
extension of any amortization period pursuant to Section 412 of the Code with
respect to any Single Employer Plan, or (ix) the Borrower or any ERISA Affiliate
engages in a nonexempt prohibited transaction or otherwise becomes liable with
respect to a nonexempt prohibited transaction, the consequences of which, in the
aggregate, could reasonably have a material adverse effect on the financial
condition, operations, business, properties or assets of the Borrower and the
Guarantors, taken as a whole, or (x) a violation of the applicable requirements
of Section 404 or 405 of ERISA or the exclusive benefit rule under Section
401(a) of the Code by the Borrower or any ERISA Affiliate with respect to any
Single Employer Plan for which the Borrower or any of its Subsidiaries may be
liable, the consequences of which, in the aggregate, could reasonably have a
material adverse effect on the financial condition, operations, business,
properties or assets of the Borrower and the Guarantors, taken as a whole, or
(xi) any other event or condition which would
64
reasonably be expected to constitute grounds under Section 4042 of ERISA for the
termination of or the appointment of a trustee to administer, any Plan, or the
imposition of any liability under Title IV of ERISA (other than for the payment
of premiums to the PBGC).
"TOTAL COMMITMENT" shall mean, at any time, the sum of the
Commitments at such time.
"TRADEMARK SECURITY AGREEMENT" shall have the meaning set
forth in Section 4.01(h).
"TRADE DEBT" shall mean amounts owed by the Borrower to trade
vendors in connection with the purchase by the Borrower of Inventory in the
ordinary course of business.
"TRADE LIEN" shall mean a second-priority Lien on the
Borrower's Inventory to secure certain Trade Debt incurred subsequent to the
Plan Effective Date, such Lien to (i) be expressly subordinated to the Liens
granted in favor of the Collateral Agent, for its benefit and the ratable
benefit of the other Secured Parties, pursuant to the Loan Documents, (ii) have
terms as set forth on ATTACHMENT IV hereto and incorporated herein and (iii)
otherwise be in form and substance reasonably satisfactory to the Administrative
Agent.
"TRANCHE A COMMITMENT" shall mean, with respect to each
Lender, the commitment of such Lender hereunder set forth as its Tranche A
Commitment opposite its name on Annex A hereto or as may subsequently be set
forth in the Register from time to time, as the same may be reduced from time to
time pursuant to Section 2.07.
"TRANCHE A COMMITMENT PERCENTAGE" shall mean at any time, with
respect to each Lender, the percentage obtained by dividing its Tranche A
Commitment at such time by all Tranche A Commitments at such time.
"TRANCHE A CREDIT EXTENSIONS" shall be equal, as of any day,
to the sum of (a) the principal balance of all Tranche A Loans then outstanding
and (b) the then amount of the Letter of Credit Outstandings.
"TRANCHE A FEE LETTER" shall mean that certain agent's fee
letter, dated December 23, 1997, between the Borrower, as debtor and
debtor-in-possession, and the Administrative Agent.
"TRANCHE A LENDER" shall mean each Lender having a Tranche A
Commitment as set forth on Annex A hereto or in the Assignment and Acceptance by
which it becomes a Lender.
"TRANCHE A LOANS" shall mean all loans at any time made by
any Tranche A Lenders pursuant to Section 2.01(a), Section 2.02(d) or Section
2.03(c).
"TRANCHE A NOTES" shall mean the promissory notes of the
Borrower (i) substantially in the form of Exhibit B- 1, each payable to the
order of a Tranche A Lender, evidencing the Tranche A Loans and (ii)
substantially in the form of Exhibit B-2, payable to the Administrative Agent,
evidencing the Agent Advances.
65
"TRANCHE B AVAILABILITY AMOUNT" shall have the meaning set
forth in Section 2.01(b)(1).
"TRANCHE B BORROWING BASE" shall mean, on any day, an amount
equal to the Tranche B Inventory Advance Rate multiplied by the then Loan Value
of Eligible Inventory PLUS (without duplication) the Tranche B Inventory Advance
Rate multiplied by the lesser of (i) the then Loan Value of Eligible LC
Inventory and (ii) the then applicable Eligible LC Inventory Sublimit.
"TRANCHE B CANCELLATION DATE" shall have the meaning set forth
in Section 2.07(b).
"TRANCHE B COMMITMENT" shall mean, with respect to each
Lender, the commitment of such Lender hereunder set forth as its Tranche B
Commitment opposite its name on Annex A hereto or as may subsequently be set
forth in the Register from time to time, as the same may be reduced from time to
time pursuant to Section 2.07.
"TRANCHE B COMMITMENT PERCENTAGE" shall mean at any time, with
respect to each Lender, the percentage obtained by dividing its Tranche B
Commitment at such time by all Tranche B Commitments at such time.
"TRANCHE B DEFAULT NOTICE" shall have the meaning set forth in
Section 7.02.
"TRANCHE B FEE LETTER" shall mean that certain agent's fee
letter, dated December 16, 1998 between the Borrower, as debtor and
debtor-in-possession, and the Tranche B Agent.
"TRANCHE B INVENTORY ADVANCE RATE" shall mean, on any day, (a)
between July 1 and September 30 of each year, 7% and (b) at all other times, 8%;
PROVIDED that, the Tranche B Inventory Advance Rate shall be subject to periodic
adjustment by the Administrative Agent (based on periodic appraisals or
otherwise) in order to ensure that the aggregate of all Credit Extensions
(Tranche A and Tranche B) outstanding on any date will not exceed 93% of the
Loan to Value Ratio on such date.
"TRANCHE B LENDER" shall mean each Lender having a Tranche B
Commitment as set forth on Annex A hereto or in the Assignment and Acceptance by
which it becomes a Lender.
"TRANCHE B LOANS" shall mean all loans at any time made by any
Tranche B Lender pursuant to Section 2.01(b).
"TRANCHE B NOTES" shall mean the promissory notes of the
Borrower, substantially in the form of Exhibit B-3, each payable to the order of
a Tranche B Lender, evidencing the Tranche B Loans.
"TRANCHE B TERMINATION DATE" shall mean the earlier date to
occur of (i) the Termination Date, (ii) the Tranche B Cancellation Date and
(iii) the date on which the maturity of the Tranche B Loans is accelerated and
the commitments of the Tranche B Lenders are terminated in accordance with
Section 7.02.
66
"TRANCHE C BORROWING BASE" shall mean, on any day, an amount
equal to the result of (a) the lesser of (i) (x) from and including January 1
through and including April 30 of any calendar year, 90.0% of the Loan Value of
Eligible Inventory on such day, (y) from and including May 1 through and
including September 30 of any calendar year, 91.5% of the Loan Value of Eligible
Inventory on such day or (z) from and including October 1 through and including
December 31 of any calendar year, 93.0% of the Loan Value of Eligible Inventory
on such day, and (ii) 100.0% of the current Appraised Value, as determined by
the Tranche C Agent, of Eligible Inventory on such day, PLUS (b) 80.0% of
Eligible Receivables on such day, MINUS (c) the then amount of all Borrowing
Base Reserves.
"TRANCHE C COMMITMENT" shall mean, with respect to each
Lender, the commitment of such Lender hereunder set forth as its Tranche C
Commitment opposite its name on Annex A hereto or as may subsequently be set
forth in the Register from time to time.
"TRANCHE C COMMITMENT PERCENTAGE" shall mean at any time, with
respect to each Lender, the percentage obtained by dividing its Tranche C
Commitment at such time by all Tranche C Commitments at such time.
"TRANCHE C DEFAULT NOTICE" shall have the meaning set forth in
Section 7.02.
"TRANCHE C FEE LETTER" shall mean that certain agent's fee
letter, dated June 29, 2000, between the Borrower and the Tranche C Agent.
"TRANCHE C INTEREST RATE" shall mean an interest rate equal to
16.5% per annum.
"TRANCHE C LENDER" shall mean each Lender having a Tranche C
Commitment as set forth on Annex A hereto or in the Assignment and Acceptance by
which it becomes a Lender.
"TRANCHE C LOANS" shall mean the loans made by the Tranche C
Lenders pursuant to Section 2.01(c) in an amount not to exceed $20,000,000.
"TRANCHE C NOTES" shall mean the promissory notes of the
Borrower, substantially in the form of Exhibit B-4, each payable to the order of
a Tranche C Lender, evidencing the Tranche C Loans.
"TRANCHE C TERMINATION DATE" shall mean the earlier date to
occur of (i) the Termination Date and (ii) the date on which the maturity of the
Tranche C Loans is accelerated.
"TRANSFEREE" shall have the meaning set forth in Section
2.18(a).
"TYPE" when used in respect of any Loan or Borrowing shall
refer to the rate of interest by reference to which interest on such Loan or on
the Loans comprising such Borrowing is determined.
"UNFUNDED PENSION LIABILITIES" shall mean the "amount of
unfunded benefit liabilities" of a Single Employer Plan, as defined in Section
4001(a)(18) of ERISA but, utilizing, for purposes of calculating the value of
such liabilities, the actuarial methods and assumptions set forth on Schedule
1.1(b) hereto used in Table 4 to the actuarial report for The Bradlees
67
Stores, Inc. Retirement Plan for the Plan year ending January 31, 1998, or such
other assumptions as to which the Administrative Agent agrees in writing, such
agreement not to be unreasonably withheld.
"UNUSED TRANCHE A COMMITMENT" shall mean, on any day, (a) the
then aggregate amount of the Tranche A Commitments MINUS (b) the sum of (i) the
principal amount of Tranche A Loans then outstanding and (ii) the then Letter of
Credit Outstandings.
"WITHDRAWAL LIABILITY" shall have the meaning set forth under
Part I of Subtitle E of Title IV of ERISA.
"YONKERS" shall mean New Horizons of Yonkers, Inc., a Delaware
corporation, as debtor-and debtor-in-possession.
"YONKERS LEASED PROPERTY" shall have the meaning set forth in
the definition of Permissible Collateral.
"YONKERS LOCATION SALE" shall have the meaning set forth in
Section 2.13(c).
"YONKERS COMMON STOCK COLLATERAL" shall mean the Borrower's
interest in all of the issued and outstanding common stock of New Horizons of
Yonkers, Inc.
"YONKERS CONFIRMATION ORDER" shall mean an order of the
Bankruptcy Court confirming the Confirmed Plan with respect to Yonkers pursuant
to Sections 1128 and 1129 of the Bankruptcy Code.
(b) TERMS GENERALLY. The definitions in Section 1.01 shall
apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. All references herein to Articles,
Sections, Exhibits and Schedules shall be deemed references to Articles and
Sections of, and Exhibits and Schedules to, this Agreement unless the context
shall otherwise require. Except as otherwise expressly provided herein, all
terms of an accounting or financial nature shall be construed in accordance with
GAAP, as in effect from time to time; PROVIDED, HOWEVER, that for purposes of
determining compliance with any covenant set forth in Article VI, such terms
shall be construed in accordance with GAAP as in effect on the date of this
Agreement applied on a basis consistent with the application used in the
Borrower's audited financial statements for the fiscal year ended on February 1,
1997.
AMOUNT AND TERMS OF CREDIT
(c) COMMITMENT OF THE LENDERS.
(i) Each Tranche A Lender severally and not jointly
with any other Lender agrees, upon the terms and subject to the
conditions herein set forth, to extend credit to the Borrower on a
revolving basis, in the form of Tranche A Credit Extensions and in an
amount equal to such Tranche A Lender's Tranche A Commitment Percentage
thereof, subject to the following limitations:
68
(A) The aggregate outstanding amount of the Tranche A
Credit Extensions and Agent Advances shall not at any time exceed the lower of
(i) $250,000,000 or any lesser amount to which the Tranche A Commitments have
then been reduced by the Borrower pursuant to Section 2.07, and (ii) the then
amount of the Borrowing Base, plus the aggregate amount of cash then held in the
Cash Collateral Account pursuant to Sections 2.02, 2.10(a) and 2.14(a) (item
"fourth").
(B) No Tranche A Lender shall be obligated to issue
any Letter of Credit, and Letters of Credit shall be available from the Issuing
Bank, subject to the ratable participation of all Tranche A Lenders, as set
forth in Section 2.02. The Borrower will not at any time permit the aggregate
Letter of Credit Outstandings to exceed $90,000,000.
(C) Subject to all of the other provisions of this
Agreement, Tranche A Loans that are repaid may be reborrowed prior to the
Termination Date. No new Tranche A Credit Extension, however, shall be made to
the Borrower after the Termination Date.
(ii) Each Tranche B Lender severally and not jointly
with any other Lender agrees, upon the terms and subject to the
conditions herein set forth, to make loans to the Borrower on a
revolving basis (subject to clause (4) below), in the form of Tranche B
Loans and in an amount equal to such Tranche B Lender's Tranche B
Commitment Percentage thereof, subject to the following limitations:
(A) The aggregate outstanding amount of the Tranche B
Loans shall not at any time exceed the lower of (i) $20,000,000 or any lesser
amount to which the Tranche B Commitments have then been reduced by the Borrower
pursuant to Section 2.07 and (ii) the then amount of the Tranche B Borrowing
Base (such lower amount, the "TRANCHE B AVAILABILITY AMOUNT").
(B) The Tranche B Lenders shall not make Tranche B
Loans to the Borrower under Section 2.01(b) if, on the date the Borrower
requests such Tranche B Loan, amounts are available to be borrowed by the
Borrower under the Borrowing Base as calculated in accordance with Section
2.01(a)(1) unless the Borrower is not entitled to borrow such amounts because an
Event of Default which is not also an Event of Super-Default has occurred and is
continuing (subject, however, to clause (3) below).
(C) During the period beginning on the date of the
occurrence of an Event of Default and ending on the date that is ten (10)
Business Days thereafter, if during such period an Event of Super-Default has
not occurred, the aggregate amount of Tranche B Loans made during such period
shall not exceed the lower of (i) $5,000,000 and (ii) the Tranche B Availability
Amount. In the event such Event of Default is not waived within such ten
Business Day period, the Tranche B Lenders shall no longer be obligated to make
Tranche B Loans under this Agreement.
(D) Subject to Section 2.07(b), so long as any
Tranche A Loans remain outstanding, the principal amount of the Tranche B Loans
may not be repaid and any such repayments will be applied as provided in Section
2.11(a)(1).
69
(E) Subject to the other provisions of this
Agreement, Tranche B Loans that are repaid may be reborrowed prior to the
Tranche B Termination Date (subject to the other provisions of this Section
2.01(b)). No new Tranche B Loans, however, shall be made to the Borrower after
the Tranche B Termination Date.
(iii) Each Tranche C Lender severally and not jointly
with any other Lender agrees, upon the terms and subject to the conditions
herein set forth, to make loans to the Borrower, in the form of Tranche C Loans
and in an amount equal to such Tranche C Lender's Tranche C Commitment
Percentage thereof, subject to the following limitations:
(A) Except as provided in Section 2.10(e) and (f), so
long as any Tranche A Loans and Tranche B Loans remain outstanding, the
principal amount of the Tranche C Loans may not be repaid and any such
repayments will be applied as provided in Section 2.11(a)(1).
(1) Tranche C Loans that are repaid may not be
reborrowed.
(iv) Each Borrowing of Tranche A Loans (other than
Agent Advances) shall be made by the Tranche A Lenders PRO RATA in accordance
with their respective Tranche A Commitments, each Borrowing of Tranche B Loans
shall be made by the Tranche B Lenders PRO RATA in accordance with their
respective Tranche B Commitments, and each Borrowing of Tranche C Loans shall be
made by the Tranche C Lenders PRO RATA in accordance with their respective
Tranche C Commitments. The failure of any Lender to make any Loan shall neither
relieve any other Lender of its obligation to fund its Loan in accordance with
the provisions of this Agreement nor increase the obligation of any such other
Lender.
(d) LETTERS OF CREDIT.
(i) Upon the terms and subject to the conditions
herein set forth, the Borrower may request the Issuing Bank, at any
time and from time to time after the date hereof and prior to the
Termination Date, to issue, and subject to the terms and conditions
contained herein, the Issuing Bank shall issue, for the account of the
Borrower one or more Letters of Credit; PROVIDED that no Letter of
Credit shall be issued if after giving effect to such issuance (i) the
aggregate Letter of Credit Outstandings shall exceed $90,000,000, or
(ii) the aggregate Tranche A Credit Extensions would exceed the
limitation set forth in Section 2.01(a)(1); and PROVIDED, FURTHER, that
no Letter of Credit shall be issued if the Issuing Bank shall have
received notice from the Administrative Agent or the Required Tranche A
Lenders that the conditions to such issuance have not been met.
(ii) No Letter of Credit shall have an Expiry Date
later than the 90th day after the Maturity Date. In the case of each
Letter of Credit issued with an expiry date later than the Termination
Date, the Borrower shall, on or prior to the Termination Date, either
(i) cause such Letter of Credit to be returned to the Issuing Bank
undrawn and marked "canceled" and otherwise discharged in a manner
satisfactory to the
70
Issuing Bank or (ii) if the Borrower is unable to return and discharge such
Letter of Credit, either (x) provide a "back-to-back" letter of credit issued by
a bank and on terms in form and substance satisfactory to the Issuing Bank and
the Administrative Agent (in their sole and absolute discretion), in an amount
equal to 105% of the undrawn amount of such Letter of Credit or (y) deposit cash
in the Cash Collateral Account in an amount equal to 105% of the undrawn amount
under such Letter of Credit.
(iii) The Borrower shall pay to the Administrative
Agent, for the account of the Issuing Bank and in addition to all Letter of
Credit Fees provided for in Section 2.21, a fronting fee equal to 0.125% per
annum of the average daily balance of the maximum amount that at any time is
available for drawing or payment under each Letter of Credit, payable quarterly
in arrears, as well as such fees and charges in connection with the issuance,
negotiation, settlement, amendment and processing of each Letter of Credit
issued by the Issuing Bank as are customarily imposed by the Issuing Bank from
time to time in connection with letter of credit transactions.
(iv) Drafts drawn under each Letter of Credit
shall be reimbursed by the Borrower in Dollars not later than the first
Business Day following the date of draw and shall bear interest from the date
of draw until the first Business Day following the date of draw at a rate per
annum equal to the Alternate Base Rate and thereafter until reimbursed in
full at a rate per annum equal to the Alternate Base Rate PLUS 2.00% per
annum (computed on the basis of the actual number of days elapsed over any
year of 360 days). The Borrower shall effect such reimbursement (x) if such
draw occurs prior to the Termination Date (or the earlier date of termination
of the Tranche A Commitments), through a Borrowing of Tranche A Loans without
the satisfaction of the conditions precedent set forth in Section 4.02, or
(y) if such draw occurs on or after the Termination Date (or the earlier date
of termination of the Tranche A Commitments), in cash. Each Tranche A Lender
agrees to fund its Tranche A Commitment Percentage of the Tranche A Loans
described in clause (x) of the preceding sentence notwithstanding a failure
to satisfy the applicable lending conditions thereto or the provisions of
Sections 2.01 and 2.02 or the occurrence of the Termination Date.
(v) Immediately upon the issuance of any Letter of
Credit by the Issuing Bank, the Issuing Bank shall be deemed to have sold to
each Tranche A Lender and each such Tranche A Lender shall be deemed
unconditionally and irrevocably to have purchased from the Issuing Bank, without
recourse or warranty, an undivided interest and participation, to the extent of
such Tranche A Lender's Tranche A Commitment Percentage, in such Letter of
Credit, each drawing thereunder and the obligations of the Borrower and the
other Credit Parties under this Agreement and the other Loan Documents with
respect thereto. Upon any change in the Tranche A Commitments pursuant to
Section 10.03, it is hereby agreed that with respect to all Letter of Credit
Outstandings, there shall be an automatic adjustment to the participations
hereby created to reflect the new Tranche A Commitment Percentages of the
assigning and assignee Tranche A Lenders. Any action taken or omitted by the
Issuing Bank under or in connection with a Letter of Credit, if taken or omitted
in the absence of gross negligence or willful misconduct, shall not create for
the Issuing Bank any resulting liability to any Tranche A Lender.
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(vi) In the event that the Issuing Bank makes any
payment under any Letter of Credit and the Borrower shall not have reimbursed
such amount in full to the Issuing Bank pursuant to this Section 2.02, the
Issuing Bank shall promptly notify the Administrative Agent, which shall
promptly notify each Tranche A Lender of such failure, and each Tranche A Lender
shall promptly and unconditionally pay to the Administrative Agent for the
account of the Issuing Bank the amount of such Tranche A Lender's Tranche A
Commitment Percentage of such unreimbursed payment in Dollars and in same day
funds. If the Issuing Bank so notifies the Administrative Agent, and the
Administrative Agent so notifies the Tranche A Lenders prior to 11:00 a.m.,
Boston time, on any Business Day, each such Tranche A Lender shall make
available to the Issuing Bank such Tranche A Lender's Tranche A Commitment
Percentage of the amount of such payment on such Business Day in same day funds.
If and to the extent such Tranche A Lender shall not have so made its Tranche A
Commitment Percentage of the amount of such payment available to the Issuing
Bank, such Tranche A Lender agrees to pay to the Issuing Bank, forthwith on
demand such amount, together with interest thereon, for each day from such date
until the date such amount is paid to the Administrative Agent for the account
of the Issuing Bank at the Federal Funds Effective Rate. The failure of any
Tranche A Lender to make available to the Issuing Bank its Tranche A Commitment
Percentage of any payment under any Letter of Credit shall neither relieve any
Tranche A Lender of its obligation hereunder to make available to the Issuing
Bank its Tranche A Commitment Percentage of any payment under any Letter of
Credit on the date required, as specified above, nor increase the obligation of
such other Tranche A Lender. Whenever any Tranche A Lender has made payments to
the Issuing Bank in respect of any reimbursement obligation for any Letter of
Credit, such Tranche A Lender shall be entitled to share ratably, based on its
Tranche A Commitment Percentage, in all payments and collections thereafter
received on account of such reimbursement obligation.
(vii) Whenever the Borrower desires that the Issuing
Bank issue a Letter of Credit, it shall give to the Issuing Bank at least two
Business Days' prior written (including telegraphic, telex, facsimile or cable
communication) notice (or such shorter period as may be agreed upon in writing
by the Issuing Bank and the Borrower) specifying the date on which the proposed
Letter of Credit is to be issued (which shall be a Business Day), the stated
amount of the Letter of Credit so requested, the expiration date of such Letter
of Credit, the name and address of the beneficiary thereof, and the provisions
thereof.
(viii) The obligations of the Borrower to reimburse
the Issuing Bank for drawings made under any Letter of Credit shall be
unconditional and irrevocable and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances, including, without limitation
(it being understood that any such payment by the Borrower shall be without
prejudice to, and shall not constitute a waiver of, any rights the Borrower
might have or might acquire as a result of the payment by the Issuing Bank of
any draft or the reimbursement by the Borrower thereof): (i) any lack of
validity or enforceability of any Letter of Credit; (ii) the existence of any
claim, setoff, defense or other right which the Borrower or any Guarantor may
have at any time against a beneficiary of any Letter of Credit or against any of
the Lenders, whether in connection with this Agreement, the transactions
contemplated herein or any unrelated transaction;
72
(iii) any draft, demand, certificate or other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect; (iv) payment by the Issuing Bank of any Letter of Credit against
presentation of a demand, draft or certificate or other document which does
not comply with the terms of such Letter of Credit; (v) any other
circumstance or happening whatsoever, whether or not similar to any of the
foregoing; or (vi) the fact that any Event of Default shall have occurred
and be continuing.
(b) The Borrower hereby assumes and ratifies the obligations of
Bradlees Stores, Inc., as debtor-in-possession under or in connection with all
letters of credit issued and outstanding under the Existing Credit Facility that
are not canceled in connection with the repayment and termination of the
Existing Credit Facility (the "Existing Letters of Credit"). Such Existing
Letters of Credit shall be deemed to be Letters of Credit issued under this
Agreement and the Borrower shall be liable with respect to such Existing Letters
of Credit under this Section 2.02 as if such Existing Letters of Credit were
issued hereunder. All Existing Letters of Credit are listed on Schedule 2.02(i)
hereto.
(e) MAKING OF LOANS.
(i) Except as set forth in Section 2.09, Tranche A
Loans by the Tranche A Lenders shall be either ABR Loans or (so long as no
Event of Default has occurred and is continuing and the making of
Eurodollar Loans by any Tranche A Lender is not illegal or impractical)
Eurodollar Loans as the Borrower may request subject to and in accordance
with this Section 2.03. All Tranche B Loans shall be Prime Plus Loans. All
Loans made pursuant to the same Borrowing shall, unless otherwise
specifically provided herein, be Loans of the same Type. Each Lender may
fulfill its Commitment with respect to any Loan by causing any lending
office of such Lender to make such Loan; but any such use of a lending
office shall not affect the obligation of the Borrower to repay such Loan
in accordance with the terms of the applicable Note. Each Lender shall,
subject to its overall policy considerations, use reasonable efforts (but
shall not be obligated) to select a lending office which will not result in
the payment of increased costs by the Borrower pursuant to Section 2.15.
Subject to the other provisions of this Section 2.03 and the provisions of
Section 2.16, Borrowings of Loans of more than one Type may be incurred at
the same time, but no more than five Borrowings of Eurodollar Loans may be
outstanding at any time.
(ii) The Borrower shall give the Administrative Agent
two business days' prior notice of each Borrowing of Eurodollar Loans and
same-day notice of each Borrowing of ABR Loans or Prime Plus Loans, so long
as notice is given prior to 12:00 Noon, Boston time. Such notice shall be
irrevocable and (i) shall specify the amount of the proposed Borrowing
(which shall not be less than $1,000,000 in the case of Eurodollar Loans)
and the date thereof (which shall be a Business Day) and shall contain
disbursement instructions and (ii) in connection with Borrowings of Tranche
B Loans, shall certify that there are no amounts available to be borrowed
by the Borrower under the Tranche A Commitment as calculated in accordance
with Section 2.01(a)(1). Any such notice, to be effective, must be received
by the Administrative Agent not later than 1:00 p.m., Boston time, on the
second Business Day in the case of Eurodollar Loans and
73
not later than 12:00 Noon, Boston time, on the same day in the case of ABR
Loans and Prime Plus Loans, on which such Borrowing is to be made. Such
notice shall specify whether the Borrowing then being requested is to be a
Borrowing of ABR Loans, Prime Plus Loans or Eurodollar Loans and, if
Eurodollar Loans, the Interest Period with respect thereto. If no election
of Interest Period is specified in any such notice for a Borrowing of
Eurodollar Loans, such notice shall be deemed a request for an Interest
Period of one month. If no election is made as to the Type of Loan, such
notice shall be deemed a request for Borrowing of ABR Loans in the case of
Tranche A Loans (subject to Section 2.03(a)) and Prime Plus Loans in the
case of Tranche B Loans. The Administrative Agent shall promptly notify
each Lender of its proportionate share of such Borrowing, the date of such
Borrowing, the Type of Borrowing being requested and the Interest Period or
Interest Periods applicable thereto, as appropriate. On the borrowing date
specified in such notice, each Lender shall make its share of the Borrowing
available at the office of the Administrative Agent at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, no later than 3:00 p.m., Boston time, in
immediately available funds. Upon receipt of the funds made available by
the Lenders to fund any borrowing hereunder, the Administrative Agent shall
disburse such funds in the manner specified in the notice of borrowing
delivered by the Borrower and shall use reasonable efforts to make the
funds so received from the Lenders available to the Borrower no later than
4:00 p.m., Boston time.
(i) The Administrative Agent is authorized by the
Lenders, but is not obligated, to make Agent Advances up to $15,000,000 in the
aggregate outstanding at any time, consisting only of Tranche A Loans
(consisting of ABR Loans) or, if otherwise permitted under Section 2.01(b),
Tranche B Loans, upon a notice of Borrowing received by the Administrative Agent
(which notice, at the Administrative Agent's discretion, may be submitted prior
to 12:00 Noon, Boston time, on the same day for which such Agent Advance is
requested). Agent Advances of Tranche A Loans (together with all other Tranche A
Credit Extensions) may not at any time cause the Borrower to be in violation of
the provisions of Section 2.10(a) hereof. Agent Advances of Tranche B Loans
(together with all other Tranche B Loans outstanding) may not at any time cause
the Borrower to be in violation of the provisions of Section 2.10(b) or 2.10(d)
hereof. Agent Advances shall be subject to periodic settlement with the Tranche
A Lenders under the subsection (d) below.
(ii) Agent Advances may be made only in the
following circumstances: (A) for administrative convenience, the Administrative
Agent may, but is not obligated to, make Agent Advances in reliance upon the
Borrower's actual or deemed representations under Section 4.02 or 4.03, as
applicable, that the applicable conditions for borrowing are satisfied or (B) if
the conditions for borrowing under Section 4.02 or Section 4.03 (other than
Section 4.03(d), with respect to Agent Advances of Tranche B Loans), as
applicable, cannot be fulfilled, the Borrower shall give immediate notice
thereof to the Administrative Agent (a "NONCOMPLIANCE NOTICE"), and the
Administrative Agent may, but is not obligated to, continue to make Agent
Advances for fifteen (15) Business Days from the date the Administrative Agent
first receives such notice, or until sooner instructed by the Required
Supermajority Lenders; provided that the Administrative Agent promptly provides
each Lender with a copy of the Borrower's Noncompliance Notice. Notwithstanding
the foregoing, no Agent Advances shall be made pursuant to this subsection (ii)
that would cause the Borrower to be in violation of Section 2.10(a), 2.10(b) or
2.10(d), as applicable.
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(1) The amount of each Lender's Commitment
Percentage of outstanding Loans (other than Tranche C Loans, but including Agent
Advances)shall be computed weekly (or more frequently in the Administrative
Agent's discretion) and shall be adjusted upward or downward based on all Loans
(other than Tranche C Loans, but including Agent Advances) and repayments of
Loans (other than Tranche C Loans, but including Agent Advances) received by the
Administrative Agent as of 3:00 p.m., Boston time, on the first Business Day
following the end of the period specified by the Administrative Agent (such
date, the "SETTLEMENT DATE").
(2) The Administrative Agent shall deliver to
each of the Lenders (other than the Tranche C Lenders) promptly after the
Settlement Date a summary statement of the amount of outstanding Loans (other
than Tranche C Loans, but including Agent Advances) for the period and the
amount of repayments received for the period. As reflected on the summary
statement: (x) the Administrative Agent shall transfer to each Lender (other
than the Tranche C Lender) its applicable Commitment Percentage of repayments
(after accounting for unreimbursed Agent Advances) and (y) each Lender (other
than a Tranche C Lender) shall transfer to the Administrative Agent (as provided
below), or the Agent shall transfer to each Lender (other than a Tranche C
Lender), such amounts as are necessary to insure that, after giving effect to
all such transfers, the amount of Loans (other than Tranche C Loans) made by
each Lender (other than a Tranche C Lender) with respect to Loans (other than
Tranche C Loans, but including Agent Advances) shall be equal to such Lender's
applicable Commitment Percentage of Loans (other than Tranche C Loans)
outstanding as of such Settlement Date. If the summary statement requires
transfers to be made to the Administrative Agent by the Lenders (other than the
Tranche C Lenders) and 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 received after 12:00 Noon,
Boston time, then no later than 3:00 p.m., Boston time, on the next Business
Day. The obligation of each Lender (other than a Tranche C Lender) to transfer
such funds is irrevocable, unconditional and without recourse to or warranty by
the Administrative Agent and, notwithstanding the foregoing, on the day that the
Administrative Agent makes an Agent Advance hereunder, each Tranche A Lender
shall be deemed to have made its Tranche A Commitment Percentage of such Agent
Advance on such day. If and to the extent any Lender (other than a Tranche C
Lender) shall not have so made its transfer to the Administrative Agent, such
Lender agrees to pay to the Administrative 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 Administrative Agent at the Federal Funds
Effective Rate.
(iv) As an accommodation to the Borrower, to
the extent any Eurodollar Loans (as defined in the Existing Credit Facility) are
outstanding under the Existing Credit Facility on the Closing Date (the
"EXISTING EURODOLLAR LOANS"), such Existing Eurodollar Loans may be repaid with
Eurodollar Loans under this Agreement (subject to all of the conditions
precedent thereto set forth herein), and such Eurodollar Loans will have the
identical Interest Periods (or remainder thereof) as the Interest Periods
applicable to the corresponding Existing Eurodollar Loans and shall bear
interest at per annum rates identical to the interest rates applicable to the
corresponding Existing Eurodollar Loans under the Existing Credit Facility
75
(f) NOTES; REPAYMENT OF LOANS.
(i) The Tranche A Loans outstanding to each
Tranche A Lender (and to the Administrative Agent, with respect to Agent
Advances) shall be evidenced by a Tranche A Note duly executed on behalf of the
Borrower, dated the Closing Date, in substantially the form attached hereto as
Exhibit B-1 or B-2, as applicable, payable to the order of such Tranche A Lender
(or the Administrative Agent, as applicable) in an aggregate principal amount
equal to such Tranche A Lender's Tranche A Commitment (or, in the case of the
Tranche A Note evidencing the Agent Advances, $15,000,000). The Tranche B Loans
outstanding to each Tranche B Lender shall be evidenced by a Tranche B Note duly
executed on behalf of the Borrower, dated the Closing Date, in substantially the
form attached hereto as Exhibit B-3, payable to the order of such Tranche B
Lender in an aggregate principal amount equal to such Tranche B Lender's Tranche
B Commitment. The Tranche C Loans outstanding to each Tranche C Lender shall be
evidenced by a Tranche C Note duly executed on behalf of the Borrower, dated the
Amendment Effective Date, in substantially the form attached hereto as Exhibit
B-4, payable to the order of such Tranche C Lender in an aggregate principal
amount initially equal to such Tranche C Lender's Tranche C Commitment, which
principal amount may increase in accordance with Section 2.05(d).
(ii) The outstanding principal balance of
all Tranche A Loans, as evidenced by such Tranche A Notes, shall be payable on
the Termination Date (subject to earlier repayment as provided below), the
outstanding principal balance of all Tranche B Loans, as evidenced by such
Tranche B Notes, shall be payable on the Tranche B Termination Date (subject to
earlier repayment as provided below) and the outstanding principal balance of
all Tranche C Loans, as evidenced by such Tranche C Notes, shall be payable on
the Tranche C Termination Date (subject to earlier repayment as provided below).
Each Note shall bear interest from the date thereof on the outstanding principal
balance thereof as set forth in this Article II. Each Lender is hereby
authorized by the Borrower to endorse on a schedule attached to each Note
delivered to such Lender (or on a continuation of such schedule attached to such
Note and made a part thereof), or otherwise to record in such Lender's internal
records, an appropriate notation evidencing the date and amount of each Loan
from such Lender, each payment and prepayment of principal of any such Loan,
each payment of interest on any such Loan and the other information provided for
on such schedule; PROVIDED, HOWEVER, that the failure of any Lender to make such
a notation or any error hterein shall not affect the obligation
of the Borrower to repay the Loans made by such Lender in accordance with the
terms of this Agreement and the applicable Notes.
(g) INTEREST ON LOANS.
(i) Subject to Section 2.06, each ABR Loan
shall bear interest (computed on the basis of the actual number of days elapsed
over a year of 360 days) at a rate per annum that shall be equal to the then
Alternate Base Rate, PLUS the Overadvance Margin.
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(ii) Subject to Section 2.06, each
Eurodollar Loan shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 360 days) at a rate per annum equal,
during each Interest Period applicable thereto, to the Adjusted LIBOR Rate
for such Interest Period, PLUS the Eurodollar Applicable Margin, PLUS the
Overadvance Margin (the "EURODOLLAR INTEREST RATE"); PROVIDED that, after
the first anniversary of the Closing Date, if the Borrower's Interest
Coverage Ratio as measured at the end of any fiscal quarter is greater than
or equal to 2.5:1, then each Eurodollar Loan outstanding during the
following fiscal quarter shall bear interest during such fiscal quarter at
a rate per annum equal to the applicable Eurodollar Interest Rate LESS
0.25%.
(iii) Subject to Section 2.06, each Prime
Plus Loan shall bear interest (computed on the basis of the actual number
of days elapsed over a year of 360 days) at a rate per annum equal to the
Alternate Base Rate PLUS 7.00%.
(d) Subject to Section 2.06, each Tranche C Loan
shall bear interest (computed on the basis of the actual number of days elapsed
over a year of 360 days) at a rate per annum equal to the Tranche C Interest
Rate. Subject to Section 2.06, the Borrower shall have the option to pay all or
a portion of the interest payable on the Tranche C Loans in excess of 13% per
annum by adding such excess amount to the principal amount outstanding under the
Tranche C Notes on the last Business Day of each calendar quarter. The Borrower
shall give the Tranche C Agent an irrevocable notice that it will exercise such
right at least three Business Days prior to any Interest Payment Date as to
which such right is to be exercised.
(e) Accrued interest on all Loans, other than that
portion of interest on Tranche C Loans which the Borrower elects to add to the
principal amount of the Tranche C Notes in accordance with Section 2.05(d),
shall be payable in arrears on each Interest Payment Date applicable thereto at
maturity (whether by acceleration or otherwise), after such maturity on demand
and (with respect to Eurodollar Loans) upon any repayment or prepayment thereof
(on the amount prepaid). Accrued interest on the Tranche C Loans which
theBorrower elects to add to the principal amount of the Tranche C Notes in
accordance with Section 2.05(d) shall be payable as provided in Section 2.05(d).
(iv) All outstanding Loans (other than Prime
Plus Loans and Tranche C Loans) that on any day are not, in accordance with
the provisions of this Agreement, Eurodollar Loans shall, for such day,
constitute ABR Loans and, subject to Section 2.06, shall bear interest with
reference to the Alternate Base Rate as set forth in Section 2.05(a).
(h) DEFAULT INTEREST. Effective upon the
occurrence of any Event of Default and at all times thereafter while such Event
of Default is continuing, interest shall accrue on all outstanding Tranche A
Loans (after as well as before judgment) at a rate per annum (computed on the
basis of the actual number of days elapsed over a year of 360 days) equal to the
Alternate Base Rate PLUS 2.00% per annum, and such interest shall be payable on
demand. Effective upon the occurrence of any Event of Default or Event of
Super-Default and at all times thereafter while such Event of Default or Event
of Super-Default is continuing, interest shall accrue on all outstanding Tranche
B Loans (after as well as before judgment) at a rate per annum
77
(computed on the basis of the actual number of days elapsed over a year of
360 days) equal to the Alternate Base Rate PLUS 9.00%, and such interest
shall be payable on demand. Effective upon the occurrence of any Event of
Default or Event of Super-Default and at all times thereafter while such
Event of Default or Event of Super-Default is continuing, interest shall
accrue on all outstanding Tranche C Loans (after as well as before judgment)
at a rate per annum (computed on the basis of the actual number of days
elapsed over a year of 360 days) equal to 18.50%, and such interest shall be
payable on demand.
(i) OPTIONAL TERMINATION OR REDUCTION OF
COMMITMENTS
(a) Upon at least two Business Days' prior written
notice to the Administrative Agent, the Borrower may at any time in whole
permanently terminate, or from time to time in part permanently reduce, the
Commitments (other than the Tranche C Commitments). Each such reduction shall be
in the principal amount of $5,000,000 or any integral multiple thereof. Except
as set forth in subsection (b) hereof, each such reduction or termination shall
(i) reduce the Tranche A Commitment and the Tranche B Commitment on a PRO RATA
basis (ii) in accordance with Section 2.10, be applied ratably to the Commitment
of each Tranche A Lender and Tranche B Lender and (iii) be irrevocable when
given. At the effective time of each such reduction or termination, the Borrower
shall pay to the Administrative Agent for application as provided herein (i) all
Commitment Fees accrued on the amount of the Commitments so terminated or
reduced through the date thereof, (ii) any amount by which the Credit Extensions
outstanding on such date exceed the amount to which the applicable Commitments,
as the case may be, are to be reduced effective on such date and (iii) all
earned and unpaid Fees with respect to such Credit Extensions, in each case PRO
RATA based on the amount prepaid.
(b) Notwithstanding subsection (a) above, the
Borrower may permanently and irrevocably cancel all (but not less than all) of
the Tranche B Commitments at any time if, immediately after giving effect to
such cancellation and the repayment of all outstanding Tranche B Loans and all
interest and Fees relating thereto, the Borrower establishes to the satisfaction
of the Administrative Agent (based on the results of recent field examinations
or otherwise) that the amount available to be borrowed under the Tranche A
Commitments (as determined pursuant to Section 2.01(a)(1)) is not less than the
amount set forth below opposite the Borrower's fiscal month in which such
cancellation takes place:
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FISCAL MONTH REQUIRED EXCESS AVAILABILITY
February $39,000,000
March $46,000,000
April $49,000,000
May $48,000,000
June $36,000,000
July $38,000,000
August $31,000,000
September $34,000,000
October $47,000,000
November $43,000,000
December $47,000,000
January $46,000,000
At the effective time of such cancellation (the "TRANCHE B CANCELLATION DATE"),
the Borrower shall pay to the Administrative Agent for the account of the
Tranche B Lenders (and notwithstanding the payment priority provisions of
Sections 2.10(e) or (f), 2.11(a)(1) or 2.14) the full amount of all outstanding
Tranche B Loans, all accrued and unpaid interest relating thereto and all
accrued and unpaid Fees relating to the Tranche B Loans.
(j) ALTERNATE RATE OF INTEREST. In the event, and on
each occasion, that on the day two Business Days prior to the commencement of
any Interest Period for a Eurodollar Loan the Administrative Agent shall have
determined (which determination shall be conclusive and binding upon the
Borrower absent manifest error) that reasonable means do not exist for
ascertaining the applicable Adjusted LIBOR Rate, the Administrative Agent shall,
as soon as practicable thereafter, give written or telegraphic notice of such
determination to the Borrower and the Lenders. After such notice shall have been
given and until the circumstances giving rise to such notice no longer exist,
any request by the Borrower for any funding as, continuation of or conversion
into a Eurodollar Borrowing shall be deemed a request for a Borrowing of ABR
Loans.
(k) REFINANCING OF LOANS. The Borrower shall have the
right at any time, on two Business Days' prior irrevocable notice to the
Administrative Agent (which notice, to be effective, must be received by the
Administrative Agent not later than 1:00 p.m., Boston time, on the second
Business Day preceding the date of any refinancing), (x) to refinance any
outstanding Borrowing or Borrowings of Tranche A Loans of one Type (or a portion
thereof) with a Borrowing of Tranche A Loans of the other Type or (y) to
continue an outstanding Borrowing of Eurodollar Loans for an additional Interest
Period, subject to the following:
(a) no Borrowing of Tranche A Loans may be
refinanced into, or continued as, Eurodollar Loans at any time when an Event of
Default has occurred and is continuing;
(b) if less than a full Borrowing of Tranche
A Loans is refinanced, such refinancing shall be made PRO RATA among the Tranche
A Lenders, as applicable, in accordance with the respective principal amounts of
the Tranche A Loans comprising such Borrowing held by such Tranche A Lenders
immediately prior to such refinancing;
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(c) the aggregate principal amount of Tranche
A Loans being refinanced into or continued as Eurodollar Loans shall be at least
$1,000,000;
(d) each Tranche A Lender shall effect each
refinancing by applying the proceeds of its new Eurodollar Loan or ABR Loan, as
the case may be, to its Tranche A Loan being refinanced;
(e) the Interest Period with respect to a
Borrowing of Eurodollar Loans effected by a refinancing or in respect to the
Borrowing of Eurodollar Loans being continued as Eurodollar Loans shall commence
on the date of refinancing or the expiration of the current Interest Period
applicable to such continuing Borrowing, as the case may be;
(f) a Borrowing of Eurodollar Loans may be
refinanced only on the last day of an Interest Period applicable thereto;
(g) each request for a refinancing with a
Borrowing of Eurodollar Loans which fails to state an applicable Interest Period
shall be deemed to be a request for an Interest Period of one month; and
(h) no more than five Borrowings of
Eurodollar Loans may be outstanding at any time.
If the Borrower does not give notice to refinance any Borrowing of Eurodollar
Loans, or does not give notice to continue, or does not have the right to
continue, any Borrowing as Eurodollar Loans, in each case as provided above,
such Borrowing shall automatically be refinanced with a Borrowing of ABR Loans
at the expiration of the then-current Interest Period. The Administrative Agent
shall, after it receives notice from the Borrower, promptly give each Tranche A
Lender notice of any refinancing, in whole or part, of any Tranche A Loan made
by such Tranche A Lender.
(l) MANDATORY PREPAYMENT; COMMITMENT TERMINATION;
CASH COLLATERAL. The outstanding Obligations shall be subject to mandatory
prepayment as follows:
(a) If at any time the amount of the Tranche
A Credit Extensions exceeds the lower of (i) the then amount of the Tranche A
Commitments and (ii) the then amount of the Borrowing Base, PLUS the cash held
in the Cash Collateral Account pursuant to Sections 2.02 and 2.14, the Borrower
will within one Business Day (A) prepay the Tranche A Loans in an amount
necessary to eliminate such excess and (B) if, after giving effect to the
prepayment in full of all outstanding Tranche A Loans such excess has not been
eliminated, deposit cash into the Cash Collateral Account in an amount equal to
105% of the remaining amount of such excess.
(a) If at any time the amount of the Tranche B Loans
outstanding exceeds the lower of (i) the then amount of the Tranche B
Commitments and (ii) the then amount of the Tranche B Borrowing Base, the
Borrower will within one Business Day (A) prepay the Tranche A Loans in an
amount necessary to eliminate such excess, (B) if, after giving effect to
the prepayment in full of all outstanding Tranche A Loans such excess has
not
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been eliminated, prepay the Tranche B Loans in an amount necessary to
eliminate such excess and (C) if, after giving effect to the prepayment in
full of all outstanding Tranche A Loans and Tranche B Loans such excess has
not been eliminated, deposit cash into the Cash Collateral Account in an
amount equal to 105% of the remaining amount of such excess.
(b) Upon the Termination Date, the credit
facility provided hereunder shall be terminated in full and the Borrower shall
pay, in full and in cash, all outstanding Loans and all other outstanding
Obligations, except that if any Letter of Credit then remains outstanding, the
Borrower shall with respect to outstanding Letters of Credit comply with the
provisions of Section 2.02(b) with respect thereto.
(b) If at any time the sum of the outstanding amount of (A)
Tranche A Credit Extensions, PLUS (B) Tranche B Loans, PLUS (C) Tranche C
Loans (excluding that portion of the principal amount of Tranche C Loans
attributable to the payment of interest thereon by adding such interest
thereto in accordance with Section 2.05(d)) exceeds the then amount of the
Tranche C Borrowing Base, the Borrower will within one Business Day (A)
prepay the Tranche A Loans in an amount necessary to eliminate such excess,
(B) if, after giving effect to the prepayment in full of all outstanding
Tranche A Loans such excess has not been eliminated, prepay the Tranche B
Loans in an amount necessary to eliminate such excess, (C) if, after giving
effect to the prepayment in full of all outstanding Tranche A Loans and
Tranche B Loans such excess has not been eliminated, prepay the Tranche C
Loans in an amount necessary to eliminate such excess and (D) if, after
giving effect to the prepayment in full of all outstanding Tranche A Loans,
Tranche B Loans and Tranche C Loans such excess has not been eliminated,
deposit cash into the Cash Collateral Account in an amount equal to 105% of
the remaining amount of such excess.
(c) If, prior to the acceleration of the Loans in accordance with
Section 7.01 or 7.02, the Borrower shall sell, lease, convey or otherwise
dispose of any Leasehold Collateral, or any rights of the Borrower with
respect thereto, or receive any proceeds thereof (including, without
limitation, by way of a sale and leaseback) (other than in connection with
sublease and license agreements permitted by Section 17 of the related
Leasehold Mortgage), whether in a single transaction or a series of related
transactions, in each such case, net of (i) all reasonable costs incurred
and paid by the Borrower in connection with such transaction and (ii)
provided that a Default, an Event of Default or an Event of Super-Default
has not occurred and is not continuing or will not occur as a result of
such sale, lease, conveyance or other disposition, any income, franchise,
transfer or other tax liability payable by the Borrower in connection with
or as a result of such transaction, the net proceeds of such transaction
shall be paid to the Administrative Agent for application, FIRST, to the
prepayment in full of outstanding Tranche C Loans ratably in accordance
with each Tranche C Lender's Tranche C Commitment Percentage, SECOND,
to the prepayment in full of outstanding Agent Advances, THIRD, to the
prepayment in full of outstanding Tranche A Loans ratably in accordance
with each Tranche A Lender's Tranche A Commitment Percentage, FOURTH, to
the funding of a cash collateral deposit in the Cash Collateral Account in
an amount equal to 105% of all Letter of Credit
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Outstandings, and FIFTH to the prepayment in full of outstanding Tranche B
Loans ratably in accordance with each Tranche B Lender's Tranche B
Commitment Percentage.
(c) If, on and after the acceleration of the
Loans in accordance with Section 7.01 or 7.02, the Borrower shall sell, lease,
convey or otherwise dispose of any Leasehold Collateral, or any rights of the
Borrower with respect thereto, or receive any proceeds thereof (including,
without limitation, by way of a sale and leaseback), whether in a single
transaction or a series of related transactions, in each such case, net of all
reasonable costs incurred and paid by the Borrower in connection with such
transaction, the net proceeds of such transaction shall be paid to the
Administrative Agent for application, FIRST, to pay expense reimbursements and
indemnification then due and payable to the Administrative Agent, BRS, the
Issuing Bank, the Collateral Agent, the Tranche B Agent, the Tranche C Agent,
the Co-Agents and the Lenders; SECOND, to the prepayment in full of outstanding
Tranche C Loans, together with interest due and payable thereon, ratably in
accordance with each Tranche C Lender's Tranche C Commitment Percentage, THIRD,
if all outstanding Tranche C Loans have been repaid, to repay in full all
outstanding Tranche A Loans and all outstanding reimbursement obligations for
Letters of Credit, together with interest due and payable thereon and all
Breakage Costs due in respect of such repayment pursuant to Section 2.11(b);
FOURTH, if all outstanding Tranche A Loans and all outstanding reimbursement
obligations for Letters of Credit have been repaid, to repay in full all
outstanding Tranche B Loans, together with interest due and payable thereon;
FIFTH, to pay Fees then due and payable to the Tranche C Lenders; SIXTH, to pay
Fees then due and payable to the Administrative Agent, BRS, the Issuing Bank,
the Collateral Agent, the Tranche B Agent and the Co-Agents; SEVENTH, to pay
Fees then due and payable to the Tranche A Lenders; eighth, to pay Fees then due
and payable to the Tranche B Lenders; and NINTH, to pay all other Obligations
that are then outstanding and payable.
(m) OPTIONAL PREPAYMENT OF LOANS; REIMBURSEMENT OF LENDERS.
(i) The Borrower shall have the right at any
time and from time to time to prepay outstanding Loans in whole or in part,
(x) with respect to Eurodollar Loans, upon at least two Business Days'
prior written, telex or facsimile notice to the Administrative Agent prior
to 1:00 p.m., Boston time, and (y) with respect to ABR Loans, Prime Plus
Loans and Tranche C Loans, on the same Business Day if written, telex or
facsimile notice is received by the Administrative Agent prior to 3:00
p.m., Boston time, subject to the following limitations:
(A) Subject to Section 2.07(b), all optional
prepayments of any Loans shall be paid to the Administrative Agent for
application, FIRST, to the prepayment of outstanding Agent Advances, SECOND, to
the prepayment of outstanding Tranche A Loans ratably in accordance with each
Tranche A Lender's Tranche A Commitment Percentage, THIRD, to the funding of a
cash collateral deposit in the Cash Collateral Account in an amount equal to
105% of all Letter of Credit Outstandings, FOURTH, to the prepayment of
outstanding Tranche B Loans ratably in accordance with each Tranche B Lender's
Tranche B Commitment Percentage and FIFTH to the extent the Tranche A
Commitments and the Tranche B Commitments are no longer outstanding, to the
prepayment of outstanding Tranche C Loans ratably in accordance with each
Tranche C Lender's Tranche C Commitment Percentage.
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(B) Subject to the foregoing, outstanding ABR
Loans shall be prepaid before outstanding Eurodollar Loans are prepaid. Each
partial prepayment of Eurodollar Loans shall be in an integral multiple of
$1,000,000. No prepayment of Eurodollar Loans shall be permitted pursuant to
this Section 2.11(a) other than on the last day of an Interest Period applicable
thereto, unless the Borrower simultaneously reimburses the Tranche A Lenders for
all "Breakage Costs" (as defined below) associated therewith. No partial
prepayment of a Borrowing of Eurodollar Loans shall result in the aggregate
principal amount of the Eurodollar Loans remaining outstanding pursuant to such
Borrowing being less than $1,000,000.
(C) Each notice of prepayment shall specify the
prepayment date, the principal amount and Type of the Loans to be prepaid and,
in the case of Eurodollar Loans, the Borrowing or Borrowings pursuant to which
such Loans were made. Each notice of prepayment shall be irrevocable and shall
commit the Borrower to prepay such Loan by the amount and on the date stated
therein. The Administrative Agent shall, promptly after receiving notice from
the Borrower hereunder, notify each Lender of the principal amount and Type of
the Loans held by such Lender which are to be prepaid, the prepayment date and
the manner of application of the prepayment.
(ii) The Borrower shall reimburse each Tranche
A Lender on demand for any loss incurred or to be incurred by it in the
reemployment of the funds released (i) resulting from any prepayment (for
any reason whatsoever, including, without limitation, refinancing with ABR
Loans) of any Eurodollar Loan required or permitted under this Agreement,
if such Tranche A Loan is prepaid other than on the last day of the
Interest Period for such Tranche A Loan or (ii) in the event that after the
Borrower delivers a notice of borrowing under Section 2.03 in respect of
Eurodollar Loans, such Tranche A Loans are not made on the first day of the
Interest Period specified in such notice of borrowing for any reason other
than a breach by such Tranche A Lender of its obligations hereunder. Such
loss shall be the amount as reasonably determined by such Tranche A Lender
as the excess, if any, of (A) the amount of interest which would have
accrued to such Tranche A Lender on the amount so paid or not borrowed at a
rate of interest equal to the Adjusted LIBOR Rate for such Tranche A Loan,
for the period from the date of such payment or failure to borrow to the
last day (x) in the case of a payment or refinancing with ABR Loans other
than on the last day of the Interest Period for such Tranche A Loan, of the
then current Interest Period for such Tranche A Loan or (y) in the case of
such failure to borrow, of the Interest Period for such Tranche A Loan
which would have commenced on the date of such failure to borrow, over (B)
the amount of interest which would have accrued to such Tranche A Lender on
such amount by placing such amount on deposit for a comparable period with
leading banks in the London interbank market (collectively, "BREAKAGE
COSTS"). Any Tranche A Lender demanding reimbursement for such loss shall
deliver to the Borrower from time to time one or more certificates setting
forth the amount of such loss as determined by such Tranche A Lender.
(iii) In the event the Borrower fails to prepay
any Loan on the date specified in any prepayment notice delivered pursuant
to Section 2.11(a), the Borrower on demand by any Lender shall pay to the
Administrative Agent for the account of such Lender any amounts required to
compensate such Lender for any loss
83
incurred by such Lender as a result of such failure to prepay, including,
without limitation, any loss, cost or expenses incurred by reason of the
acquisition of deposits or other funds by such Lender to fulfill deposit
obligations incurred in anticipation of such prepayment. Any Lender
demanding such payment shall deliver to the Borrower from time to time one
or more certificates setting forth the amount of such loss as determined by
such Lender.
(iv) Whenever any partial prepayment of Loans
are to be applied to Eurodollar Loans, such Eurodollar Loans shall be
prepaid in the chronological order of their Interest Payment Dates.
(n) MAINTENANCE OF LOAN ACCOUNT; STATEMENTS OF ACCOUNT.
(i) The Administrative Agent shall maintain an
account on its books in the name of the Borrower (the "LOAN ACCOUNT") in
which the Borrower will be charged with (i) all Agent Advances and all
loans and advances made by the Lenders to the Borrower or for the
Borrower's account, including the Loans, (ii) all Letter of Credit
reimbursement obligations, Fees and interest that have become payable as
herein set forth, and (iii) if an Event of Default or an Event of
Super-Default has occurred and is continuing, any and all other Obligations
that have become payable. The charging of any Obligations to the Loan
Account shall not excuse the Borrower from paying such Obligations in cash
when due and shall not cure or waive any Default, Event of Default or Event
of Super-Default that may have resulted from non-payment thereof or any
right or remedy consequent thereon.
(ii) The Loan Account will be credited with all
amounts received by the Administrative Agent from the Borrower or from
others for the Borrower's account, including all amounts received in the
BBNA Concentration Account from the Blocked Account Banks, and the amounts
so credited shall be applied as set forth in Sections 2.10(e) and (f),
2.14(a), 2.14(b) and 2.14(c), as applicable. In no event shall prior
recourse to any deposit or other accounts, or any other assets, be a
prerequisite to the Administrative Agent's right to demand payment of any
Obligation upon its maturity. Further, the Administrative Agent shall have
no obligation whatsoever to perform in any respect any of the Borrower's
contracts or obligations relating to any of such accounts. After the end of
each month, the Administrative Agent shall send to the Borrower a statement
accounting for the charges, loans, advances and other transactions
occurring among and between the Administrative Agent, the Lenders and the
Borrower during that month. The monthly statements shall, absent manifest
error, be an account stated, which is final, conclusive and binding on the
Borrower.
(o) CASH RECEIPTS.
(i) On or prior to the Closing Date, the
Borrower and the Administrative Agent shall have entered into agency
agreements with the banks maintaining the deposit accounts identified on
Schedule 3.11(b) (collectively, the "BLOCKED ACCOUNTS"), which agreements
(the "BLOCKED ACCOUNT AGREEMENTS") shall be
84
in form and substance satisfactory to the Administrative Agent and shall
require, with respect to the deposit accounts identified on Schedule
3.11(b) as "depository accounts", the sweep on each Business Day (in
accordance with the Borrower's customary cash deposit procedures outlined
in Schedule 2.13(a) (as such procedures may be amended from time to time
with the consent of the Administrative Agent)) of all available cash
receipts from the sale of Inventory and other assets, all collections of
Receivables and other accounts, and all other cash payments received by the
Borrower or any other Credit Party from any Person or from any source or on
account of any sale or other transaction or event, except only (x) amounts
received on account of the Leasehold Collateral and to be applied in
accordance with Section 2.10(e) or (f), as applicable, and (y) the proceeds
of the Loans (all such non-excluded cash receipts and collections, "CASH
RECEIPTS"), from Blocked Accounts to a concentration account maintained by
the Collateral Agent at BBNA (the "BBNA CONCENTRATION ACCOUNT"). All Cash
Receipts shall be deposited into a Blocked Account or the BBNA
Concentration Account in accordance with the Borrower's customary cash
deposit procedures outlined in Schedule 2.13(a). The Borrower shall
accurately report to the Administrative Agent all amounts deposited in the
Blocked Accounts to ensure the proper transfer of funds as set forth above.
If at any time other than the times set forth above any cash or cash
equivalents owned by the Borrower or any other Credit Party are deposited
to any account, or held or invested in any manner, otherwise than in a
Blocked Account that is subject to a Blocked Account Agreement, the
Administrative Agent may require the Borrower to close such Blocked Account
and have all funds therein transferred to an account maintained by the
Administrative Agent at BBNA and all future deposits made to a Blocked
Account which is subject to a Blocked Account Agreement.
(ii) The Borrower may request that the
Administrative Agent close Blocked Accounts and/or open new Blocked
Accounts (or, in either case, permit the Borrower to do so), subject to the
execution and delivery to the Administrative Agent of appropriate Blocked
Account Agreements (unless expressly waived by the Administrative Agent)
consistent with the provisions of this Section 2.13 and otherwise
satisfactory to the Administrative Agent. Unless consented to in writing by
the Administrative Agent, the Borrower and the other Credit Parties may not
maintain any bank accounts other than the ones expressly contemplated
herein.
(iii) Notwithstanding anything contained herein
to the contrary, so long as no default or event of default has occurred and
is continuing under the Existing Credit Facility on the Closing Date, and
all Obligations under the Existing Credit Facility have been paid in full,
the Borrower may utilize up to $25,000,000 in proceeds, if any, remaining
in the Tax Refund Account (as defined in the Existing Credit Facility) and
from the Specified Location Sales (as defined in the Existing Credit
Facility) (collectively, the "ESCROW PROCEEDS"), other than the Yonkers
Location Sale (as defined in the Existing Credit Facility) to pay on or
after the Closing Date any costs directly associated with or claims payable
under the Confirmed Plan; PROVIDED that such funds are held in a segregated
account at BBNA and subject to the Lien of the Collateral Agent until such
application.
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(iv) The Borrower may also maintain with the
Administrative Agent at BBNA one or more disbursement accounts with a
balance at any time not in excess of the amounts set forth on Schedule
2.13(a) (the "BBNA DISBURSEMENT ACCOUNTS") to be used by the Borrower for
disbursements and payments (including payroll) in the ordinary course of
business or as otherwise permitted hereunder; PROVIDED that, upon the
occurrence and during the continuance of an Event of Default or an Event of
Super-Default, all amounts in such accounts may be swept by the
Administrative Agent into the BBNA Cash Concentration Account for
application in accordance with Sections 2.14(a), (b) and (c).
(v) Notwithstanding the foregoing, the Borrower
may maintain the bank accounts identified on Schedule 3.11(b) as "coin
orders accounts" (the "Coin Orders Accounts") from which the Borrower shall
be permitted (so long as no Default, Event of Default or Event of
Super-Default has occurred and is continuing) to make cash withdrawals in
accordance with its customary procedures as set forth on Schedule 2.13(e)
in effect on the date hereof to fund the ordinary-course cash operating
needs of its stores (such as change for registers and funds to cash
employees' paychecks (otherwise commonly referred to as "coin orders")),
provided that all such withdrawals are replaced in accordance with the
Borrower's customary practices. Each Coin Orders Account (i) shall be
subject to a blocked account agreement in form and substance satisfactory
to the Administrative Agent which shall provide that any amounts in each
such account in excess of the amounts set forth on Schedule 3.11(b) shall
be transferred on each Business Day to the BBNA Concentration Account and
(ii) may be funded with proceeds of Loans otherwise permitted to be made
hereunder.
(vi) Notwithstanding anything in this Agreement
to the contrary, the Borrower's failure to comply with the cash deposit and
sweep requirements set forth in Section 2.13(a) due directly to earthquake,
landslide, hurricane, tornado, fire, flood, material disruption in armored
car service, blizzard, act of God or the public enemy, act of war, public
disorder, rebellion, sabotage, revolution, epidemic, riot or quarantine
shall not be an Event of Default or an Event of Super-Default hereunder
unless such failure continues for 3 days.
(p) APPLICATION OF PAYMENTS.
(i) Prior to the acceleration of the Loans in
accordance with Section 7.01 or 7.02, all amounts received in the BBNA
Concentration Account from any source (other than amounts received on
account of the Leasehold Collateral and to be applied in accordance with
Section 2.10(e) or (f)), including the Blocked Account Banks shall be
credited to the Loan Account (effective as of the Business Day as of which
the Administrative Agent determines in good faith that it has received,
prior to 2:00 p.m., Boston time, immediately available funds therefor) and
such credits shall be applied in the following order: FIRST, to pay
interest due and payable on Credit Extensions and to pay Fees and expense
reimbursements and indemnification then due and payable to the
Administrative Agent, BRS, the Issuing Bank, the Collateral Agent, the
Tranche B Agent, the Tranche C Agent, the Co-Agents and the Lenders;
SECOND, to repay outstanding Agent Advances; THIRD, to repay outstanding
Tranche A Loans that are ABR
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Loans and all outstanding reimbursement obligations for Letters of Credit;
FOURTH, to repay outstanding Tranche A Loans that are Eurodollar Loans and
all Breakage Costs due in respect of such repayment pursuant to Section
2.11(b) or, at the Borrower's option (if no Default or Event of Default has
occurred and is then continuing), to fund a cash collateral deposit to the
Cash Collateral Account sufficient to pay, and with direction to pay, all
such outstanding Eurodollar Loans on the last day of the then-pending
Interest Period therefor; FIFTH, if any Default or Event of Default has
occurred and is continuing, to fund a cash collateral deposit in the Cash
Collateral Account in an amount equal to 105% of the aggregate maximum
amount that then is or at any time may become available for drawing or
payment under all outstanding Letters of Credit; PROVIDED, HOWEVER, that if
such Default or Event of Default shall be waived pursuant to the terms
hereof, such cash collateral shall be released and applied pursuant to
clauses SIXTH, SEVENTH and EIGHTH below or pursuant to Section 2.14(c), as
the case may be; SIXTH, if all outstanding Tranche A Credit Extensions have
been repaid or secured by cash collateral deposits as set forth above, to
repay outstanding Tranche B Loans; SEVENTH, if all outstanding Tranche A
Credit Extensions have been repaid or secured by cash collateral deposits
as set forth above and all Tranche B Loans have been repaid, and all
Tranche A Commitments and Tranche B Commitments shall have been terminated
in accordance with this Agreement, to repay outstanding Tranche C Loans;
and EIGHTH, to pay all other Obligations that are then outstanding and
payable. Any other amounts (other than amounts received on account of
Leasehold Collateral and to be applied in accordance with Section 2.10(e)
or (f)) received by the Administrative Agent, the Issuing Bank, the
Collateral Agent, the Tranche B Agent, the Tranche C Agent, the Co-Agents
or any Lender prior to the acceleration of the Loans in accordance with
Section 7.01 or 7.02 as contemplated by Section 2.17 shall also be applied
in the order set forth above in this Section 2.14(a).
(ii) On and after the acceleration of the Loans
in accordance with Section 7.01 or 7.02, all amounts received in the BBNA
Concentration Account from any source (other than amounts received on
account of the Leasehold Collateral and to be applied in accordance with
Section 2.10(e) or (f)), including the Blocked Account Banks shall be
credited to the Loan Account (effective as of the Business Day as of which
the Administrative Agent determines in good faith that it has received,
prior to 2:00 p.m., Boston time, immediately available funds therefor) and
such credits shall be applied in the following order: FIRST, to pay expense
reimbursements and indemnification then due and payable to the
Administrative Agent, BRS, the Issuing Bank, the Collateral Agent, the
Tranche B Agent, the Tranche C Agent, the Co-Agents and the Lenders;
SECOND, to repay in full all outstanding Agent Advances; THIRD, to repay in
full all outstanding Tranche A Loans and all outstanding reimbursement
obligations for Letters of Credit, together with interest due and payable
thereon and all Breakage Costs due in respect of such repayment pursuant to
Section 2.11(b); FOURTH, if all outstanding Tranche A Credit Extensions
have been repaid, to repay in full all outstanding Tranche B Loans,
together with interest due and payable thereon; fifth, if all outstanding
Tranche A Credit Extensions and Tranche B Loans have been repaid, to repay
in full all outstanding Tranche C Loans, together with interest due and
payable thereon; SIXTH, to pay Fees then due and payable to the
Administrative Agent, BRS, the Issuing Bank, the Collateral Agent, the
Tranche B Agent, the Tranche C Agent and the Co-Agents; SEVENTH, to pay
87
Fees then due and payable to the Tranche A Lenders; EIGHTH, to pay Fees
then due and payable to the Tranche B Lenders; NINTH, to pay Fees then due
and payable to the Tranche C Lenders; and TENTH, to pay all other
Obligations that are then outstanding and payable. Any other amounts (other
than amounts received on account of Leasehold Collateral and to be applied
in accordance with Section 2.10(e) or (f)) received by the Administrative
Agent, the Issuing Bank, the Collateral Agent, the Tranche B Agent, the
Tranche C Agent, the Co-Agents or any Lender on and after the acceleration
of the Loans in accordance with Section 7.01 or 7.02, as contemplated by
Section 2.17 shall also be applied in the order set forth above in this
Section 2.14(b).
(iii) Any amounts received in the BBNA
Concentration Account at any time when all of the applications set forth in
Section 2.14(a) or (b), as the case may be, have been and remain fully
funded shall be remitted to the Borrower, if and as the Borrower may
request.
(iv) If any item deposited to the BBNA
Concentration Account and credited to the Loan Account is dishonored or
returned unpaid for any reason, whether or not such return is rightful or
timely, the Administrative Agent shall have the right to reverse such
credit and charge the amount of such item to the Loan Account and the
Borrower shall indemnify the Administrative Agent, the Collateral Agent,
the Issuing Bank, the Tranche B Agent, the Tranche C Agent, the Co-Agents
and the Lenders against all claims and losses resulting from such dishonor
or return.
(q) INCREASED COSTS.
(i) Notwithstanding any other provision herein,
if after the date of this Agreement any change in applicable law or
regulation or in the interpretation or administration thereof by any
governmental authority charged with the interpretation or administration
thereof (whether or not having the force of law) shall change the basis of
taxation of payments to any Lender of the principal of or interest on any
Loan made by such Lender or any fees or other amounts payable hereunder
(other than changes in respect of Taxes, Other Taxes and taxes imposed on,
or measured by, the net income or overall gross receipts (in lieu of net
income) or franchise taxes of such Lender by the jurisdiction in which such
Lender has its principal office or by any political subdivision or taxing
authority therein), or shall impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets of, deposits with or
for the account of or credit extended by such Lender (except any such
reserve requirement which is reflected in the Adjusted LIBOR Rate) or shall
impose on such Lender or the London interbank market any other condition
affecting this Agreement or the Eurodollar Loans made by such Lender, and
the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan or to reduce the amount
of any sum received or receivable by such Lender hereunder or under the
Notes (whether of principal, interest or otherwise) by an amount deemed by
such Lender to be material, then the Borrower will pay to such Lender in
accordance with paragraph (c) below such additional amount or amounts as
will compensate such Lender for such additional costs incurred or reduction
suffered.
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(ii) If any Lender shall have determined that
the applicability of any law, rule, regulation or guideline adopted
pursuant to or arising out of the July 1988 report of the Basle Committee
on Banking Regulations and Supervisory Practices entitled "International
Convergence of Capital Measurement and Capital Standards", or the adoption
or effectiveness after the date hereof of any law, rule, regulation or
guideline regarding capital adequacy, or any change in any of the foregoing
or in the interpretation or administration of any of the foregoing by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or
any Lending office of such Lender) or any Lender's holding company with any
request or directive regarding capital adequacy (whether or not having the
force of law) of any such authority, central bank or comparable agency, has
or would have the effect of reducing the rate of return on such Lender's
capital or on the capital of such Lender's holding company, if any, as a
consequence of this Agreement, the Loans made by such Lender pursuant
hereto, such Lender's Commitment hereunder or the issuance of, or
participation in, any Letter of Credit by such Lender to a level below that
which such Lender or such Lender's holding company could have achieved but
for such adoption, change or compliance (taking into account such Lender's
policies and the policies of such Lender's holding company with respect to
capital adequacy) by an amount deemed by such Lender to be material, then
from time to time the Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender or such Lender's holding
company of any such reduction suffered.
(iii) A certificate of each Lender setting
forth such amount or amounts as shall be necessary to compensate such
Lender or its holding company as specified in paragraph (a) or (b) above,
as the case may be, shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay each Lender the
amount shown as due on any such certificate delivered to it within 10 days
after its receipt of the same. Any Lender receiving any such payment shall
promptly make a refund thereof to the Borrower if the law, regulation,
guideline or change in circumstances giving rise to such payment is
subsequently deemed or held to be invalid or inapplicable.
(iv) Failure on the part of any Lender to
demand compensation for any increased costs or reduction in amounts
received or receivable or reduction in return on capital with respect to
any period shall not constitute a waiver of such Lender's right to demand
compensation with respect to such period or any other period. The
protection of this Section 2.15 shall be available to each Lender
regardless of any possible contention of the invalidity or inapplicability
of the law, rule, regulation, guideline or other change or condition which
shall have occurred or been imposed.
(r) CHANGE IN LEGALITY.
(i) Notwithstanding anything to the contrary
contained elsewhere in this Agreement, if (x) any change in any law or
regulation or in the interpretation thereof by any governmental authority
charged with the administration thereof shall make it unlawful for a Lender
to make or maintain a Eurodollar Loan or to
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give effect to its obligations as contemplated hereby with respect to a
Eurodollar Loan or (y) at any time any Lender determines that the making or
continuance of any of its Eurodollar Loans has become impracticable as a
result of a contingency occurring after the date hereof which adversely
affects the London interbank market or the position of such Lender in the
London interbank market, then, by written notice to the Borrower, such
Lender may (i) declare that Eurodollar Loans will not thereafter be made by
such Lender hereunder, whereupon any request by the Borrower for a
Eurodollar Borrowing shall, as to such Lender only, be deemed a request for
an ABR Loan unless such declaration shall be subsequently withdrawn; and
(ii) require that all outstanding Eurodollar Loans made by it be converted
to ABR Loans, in which event all such Eurodollar Loans shall be
automatically converted to ABR Loans as of the effective date of such
notice as provided in paragraph (b) below. In the event any Lender shall
exercise its rights under clause (i) or (ii) of this paragraph (a), all
payments and prepayments of principal which would otherwise have been
applied to repay the Eurodollar Loans that would have been made by such
Lender or the converted Eurodollar Loans of such Lender shall instead be
applied to repay the ABR Loans made by such Lender in lieu of, or resulting
from the conversion of, such Eurodollar Loans.
(ii) For purposes of this Section 2.16, a
notice to the Borrower by any Lender pursuant to paragraph (a) above shall
be effective, if lawful, and if any Eurodollar Loans shall then be
outstanding, on the last day of the then-current Interest Period; and
otherwise such notice shall be effective on the date of receipt by the
Borrower.
(s) PAYMENTS; NO SETOFF.
(i) Except for amounts received upon the sale,
lease, conveyance or other disposition of the Leasehold Collateral and
applied in accordance with Section 2.10(e) or (f), all payments received by
the Administrative Agent, the Issuing Bank, the Collateral Agent, the
Tranche B Agent, the Tranche C Agent, the Co-Agents or any Lender for
application to or on account of any of the Obligations, whether received as
a deposit to the BBNA Concentration Account or as a payment made by the
Borrower or any other Credit Party or from the enforcement of the Liens of
the Collateral Agent on any property of the Borrower or any other Credit
Party shall be applied in the order of priority set forth in Section
2.14(a) or (b), as the case may be, and shall be applied ratably to the
payment of all outstanding Obligations within each category (FIRST through
EIGHTH or TENTH, as the case may be) set forth therein. All payments by the
Borrower or any other Credit Party under this Agreement and under the Notes
shall be (i) net of any tax applicable to the Borrower or Guarantor and
(ii) made in Dollars in immediately available funds at the office of the
Administrative Agent by 2:00 p.m., Boston time, on the date on which such
payment shall be due. Interest in respect of any Loan hereunder shall
accrue from and including the date of such Loan to but excluding the date
on which such Loan is paid in full or converted to a Loan of a different
Type.
(ii) All payments by the Borrower hereunder to
or for the benefit of any Lender, the Issuing Bank, the Collateral Agent,
the Tranche B Agent, the
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Tranche C Agent or the Administrative Agent shall be made without setoff,
counterclaim or other defense.
(t) TAXES.
(i) Any and all payments by the Borrower or any
other Credit Party hereunder and under the Notes and the other Loan
Documents shall be made free and clear of and without deduction or
withholding for any and all current or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect
thereto, EXCLUDING (i) taxes imposed on or measured by the net income or
overall gross receipts (if the overall gross receipts are used in
lieu of net income of the Administrative Agent, the Collateral Agent, the
Tranche B Agent, the Tranche C Agent or any Lender (or any transferee or
assignee thereof, including a participation holder (any such entity being
called a "TRANSFEREE")) and franchise taxes imposed on the
Administrative Agent, the Collateral Agent, the Tranche B Agent, the
Tranche C Agent or any Lender (or Transferee), in each instance if and to
the extent imposed by the jurisdiction under the laws of which the
Administrative Agent, the Collateral Agent, the Tranche B Agent, the
Tranche C Agent or any such Lender (or Transferee) is organized or any
political subdivision thereof or, in the case of each Lender (or a
Transferee), by the jurisdiction in which its leading office with respect
to the Loans is located or by any political subdivision or taxing authority
therein and (ii) taxes, levies, imposts, deductions, charges or
withholdings ("Amounts") that apply to payments hereunder or under the
Notes to a Lender (or Transferee) in accordance with laws in effect on the
later of the date of this Agreement and the date such Lender (or
Transferee) becomes a Lender (or Transferee, as the case may be), but not
excluding, with respect to such Lender (or Transferee), any increase in
such Amounts solely as a result of any change in such laws occurring after
such later date or any Amounts that would not have been imposed but for
actions (other than actions contemplated by this Agreement or the Notes)
taken by the Borrower after such later date (all such nonexcluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Borrower or any other Credit
Party shall be required by law to deduct or withhold any Taxes from or in
respect of any sum payable hereunder to the Lenders (or any Transferee),
the Collateral Agent, the Tranche B Agent, the Tranche C Agent or the
Administrative Agent, (i) the sum payable shall be increased by the amount
necessary so that after making all required deductions or withholding
(including deductions or withholding applicable to additional sums payable
under this Section 2.18) such Lender (or Transferee), the Collateral Agent,
the Tranche B Agent, the Tranche C Agent or the Administrative Agent (as
the case may be) shall receive an amount equal to the sum it would have
received had no such deductions or withholding been made, (ii) the Borrower
shall make such deductions or withholding and (iii) the Borrower shall pay
the full amount deducted or withheld to the relevant taxing authority or
other Governmental Authority in accordance with applicable law.
(ii) In addition, the Borrower agrees to pay to
the relevant Governmental Authority in accordance with applicable laws any
current or future stamp or documentary taxes or any other excise or
property taxes, charges, assessments or similar levies that arise from any
payment made hereunder or from the execution,
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delivery or registration of, or otherwise with respect to, this Agreement
or any other Loan Document (hereinafter referred to as "OTHER TAXES").
(iii) The Borrower will indemnify each Lender
(or Transferee), the Collateral Agent, the Tranche B Agent, the Tranche C
Agent and the Administrative Agent for the full amount of Taxes and Other
Taxes paid by such Lender (or Transferee), the Collateral Agent, the
Tranche B Agent, the Tranche C Agent or the Administrative Agent, as the
case may be, and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto, whether or not such Taxes or
Other Taxes were correctly or legally asserted by the relevant taxing
authority or other Governmental Authority. A certificate as to the amount
of such payment or liability prepared by a Lender (or Transferee), the
Collateral Agent, the Tranche B Agent, the Tranche C Agent or the
Administrative Agent, as applicable, absent manifest error, shall be final,
conclusive and binding for all purposes. Such indemnification shall be made
within 30 days after the date any Lender (or Transferee), the Collateral
Agent, the Tranche B Agent, the Tranche C Agent or the Administrative
Agent, as the case may be, makes written demand therefor. If any Lender (or
Transferee), the Collateral Agent, the Tranche B Agent, the Tranche C Agent
or the Administrative Agent receives a refund in respect of any Taxes or
Other Taxes as to which it has been indemnified by the Borrower pursuant to
this Section 2.18, it shall within 30 days after receipt of such refund,
repay such refund to the Borrower to the extent such refund is, in the
Borrower's sole judgment, attributable to amounts that have been paid by
the Borrower under this Section 2.18 with respect to the Taxes or Other
Taxes that give rise to such refund, net of all out-of-pocket expenses of
such Lender (or Transferee), Collateral Agent, Tranche B Agent, the Tranche
C Agent or Administrative Agent and with any interest thereon that is
received by the Lender (or Transferee), the Collateral Agent, the Tranche B
Agent, the Tranche C Agent or the Administrative Agent as part of the
refund; PROVIDED that the Borrower, upon the request of such
Lender (or Transferee), the Collateral Agent, the Tranche B Agent, the
Tranche C Agent or the Administrative Agent agrees to return such refund
(plus penalties, interest or other charges) to such Lender (or Transferee),
the Collateral Agent, the Tranche B Agent, the Tranche C Agent or the
Administrative Agent in the event such Lender (or Transferee), the
Collateral Agent, the Tranche B Agent, the Tranche C Agent or the
Administrative Agent is required to repay such refund and such additions
thereto to the relevant Governmental Authority. Nothing contained in this
Section 2.18 shall require any Lender (or Transferee), the Collateral
Agent, the Tranche B Agent, the Tranche C Agent or the Administrative Agent
to make available to the Borrower any of its tax returns (or any other
information relating to its taxes that it deems to be confidential).
(iv) Within 30 days after the date of any
payment of Taxes or Other Taxes by the Borrower to the relevant
Governmental Authority, the Borrower will furnish to the Administrative
Agent, at its address referred to on the signature pages hereof, the
original or a certified copy of a receipt issued by the Governmental
Authority evidencing payment thereof.
(v) Without prejudice to the survival of any
other agreement contained herein, the agreements and obligations contained
in this Section 2.18 shall survive the payment in full of the principal of
and interest on all Loans made hereunder.
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(vi) Each Lender (or Transferee) that is
organized under the laws of a jurisdiction other than the United States,
any State thereof or the District of Columbia (a "NON-U.S. LENDER") shall,
if legally able to do so, deliver to the Borrower such certificates,
documents or other evidence, as required by the Code or Treasury
Regulations issued pursuant thereto in order to be entitled to an exemption
from or a reduction in United States withholding taxes, including without
limitation (A) in the case of a Non-U.S. Lender claiming exemption from
United States Federal withholding tax under Code Section 871(h) or 881(c)
with respect to payments of "portfolio interest", a Form W-8, or any
subsequent versions thereof or successors thereto, together with a
certificate representing that such Non-U.S. Lender is not a bank for
purposes of Section 881(c) of the Code, is not a 10-percent shareholder
(within the meaning of Section 871(h)(3)(B) of the Code) of the Borrower
and is not a controlled foreign corporation related to the Borrower (within
the meaning of Section 864(d)(4) of the Code) or (B) Internal Revenue
Service Form 4224 or any subsequent version thereof or successor thereto,
establishing that such payment is not subject to United States Federal
withholding tax under the Code because such payment is effectively
connected with the conduct by such Lender (or Transferee) of a trade or
business in the United States or (C) Internal Revenue Service Form 1001 or
any subsequent version thereof or successor thereto, establishing that such
payment is totally exempt from United States Federal withholding tax or
subject to a reduced rate of such tax under a provision of an applicable
tax treaty. Unless the Borrower and the Administrative Agent have received
forms or other documents satisfactory to them indicating that such payments
hereunder or under the Notes are not subject to United States Federal
withholding tax or are subject to such tax at a rate reduced by an
applicable tax treaty, the Borrower or the Administrative Agent shall
withhold taxes from such payments at the applicable statutory rate. Such
forms and certifications shall be delivered by each Non-U.S. Lender
claiming an exemption from or reduction in applicable United States Federal
withholding tax (i) on or before the date it becomes a party to this
Agreement or, in the case of a Transferee, on or before the date it becomes
a Transferee, and (ii) promptly upon the obsolescence or invalidity of any
form so delivered by such Non-U.S. Lender.
(vii) The Borrower shall not be required to pay
any additional amounts to any Lender (or Transferee) in respect of United
States Federal withholding tax pursuant to Section 2.18(a) if the
obligation to pay such additional amounts would not have arisen but for a
failure by such Lender (or Transferee) to comply with the provisions of
Section 2.18(f).
(viii) Any Lender (or Transferee) claiming any
additional amounts payable pursuant to this Section 2.18 shall use
reasonable efforts (consistent with legal and regulatory restrictions) to
file any certificate or document requested by the Borrower or to change the
jurisdiction of its applicable lending office if the making of such a
filing or change would avoid the need for or reduce the amount of any such
additional amounts that may thereafter accrue and would not, in the sole
reasonable determination of such Lender or Transferee, be otherwise onerous
to such Lender (or Transferee).
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(u) CERTAIN FEES. The Borrower shall pay to the
Administrative Agent for the account of the Administrative Agent or BBNA,
as applicable, the fees set forth in the Tranche A Fee Letter as and when
payment of such fees is due as therein set forth. The Borrower shall pay to
the Tranche B Agent, for the account of the Tranche B Agent, or BBNA, as
applicable, the fees set forth in the Tranche B Fee Letter, as and when
payment of such fees is due as therein set forth. The Borrower shall pay to
the Tranche C Agent, for the account of the Tranche C Agent, the fees set
forth in the Tranche C Fee Letter, as and when payment of such fees is due
as therein set forth. The Borrower hereby ratifies and affirms, and agrees
that it is legally obligated to perform, all of the obligations of Bradlees
Stores, Inc., as debtor and debtor-in-possession, under the Fee Letters.
(v) UNUSED COMMITMENT FEE. The Borrower shall
pay to the Administrative Agent for the account of the Tranche A Lenders,
based upon their PRO RATA share of the Tranche A Credit Extensions, a
commitment fee (the "COMMITMENT FEE") computed by applying 0.30% per annum
(on the basis of actual days elapsed in a year of 360 days) to the average
daily balance of the Unused Tranche A Commitment for each day commencing on
and including the Closing Date and ending on but excluding the Termination
Date; PROVIDED that, after the first anniversary of the Closing Date, if
the Borrower's Interest Coverage Ratio as measured at the end of any fiscal
quarter is greater than or equal to 2.5:1, then the Commitment Fee during
the following fiscal quarter shall be computed by applying 0.25% per annum
(on the basis of actual days elapsed in a year of 360 days) to the average
daily balance of the Unused Tranche A Commitment for each day during such
fiscal quarter. Except as otherwise provided herein, the Commitment Fee so
accrued in any calendar month shall be payable on the first Business Day of
the immediately succeeding calendar month, except that all Commitment Fees
so accrued as of the Termination Date shall be payable on the Termination
Date.
(w) LETTER OF CREDIT FEES. The Borrower shall
pay to the Administrative Agent for the account of the Tranche A Lenders a
letter of credit fee (the "LETTER OF CREDIT FEE") computed by applying
1.50% per annum (on the basis of actual days elapsed in a year of 360 days)
to the average daily balance of the maximum amount that at any time is
available for drawing or payment under any and all outstanding Letters of
Credit; PROVIDED that, after the first anniversary of the Closing Date, if
the Borrower's Interest Coverage Ratio as measured at the end of a fiscal
quarter is greater than or equal to 2.5:1, then the Letter of Credit Fee
for each Letter of Credit outstanding during the following fiscal quarter
shall be computed by applying 1.25% per annum (on the basis of actual days
elapsed in a year of 360 days) to the average daily balance of the maximum
amount that at any time is available for drawing or payment under any and
all such Outstanding Letters of Credit. The Letter of Credit Fee so accrued
in any calendar month shall be payable on the first Business Day of the
immediately succeeding calendar month, except that all Letter of Credit
Fees so accrued as of the Termination Date shall be payable on the
Termination Date.
(x) NATURE OF FEES. All Fees shall be paid on
the dates due, in immediately available funds, to the Administrative Agent
for the respective accounts of the Administrative Agent, the Issuing Bank,
the Collateral Agent, the Tranche B Agent, the Tranche C Agent and the
Lenders, as provided herein and in the Fee Letters. Once paid, all fees
shall be fully-earned and shall not be refundable under any circumstances.
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(y) SECURITY INTEREST IN COLLATERAL. To secure
their Obligations under this Agreement and the other Loan Documents, the
Borrower and each Guarantor shall grant to the Collateral Agent, for its
benefit and the ratable benefit of the other Secured Parties, a
first-priority security interest in all of the Collateral pursuant hereto
and to the Security Documents.
(z) RIGHT OF SET-OFF.
(i) Subject to the provisions of Article
VII, upon the occurrence and during the continuance of any Event of
Default, the Administrative Agent, the Issuing Bank, the Collateral
Agent, the Tranche B Agent, the Tranche C Agent, each Co-Agent and
each Lender is hereby authorized at any time and from time to time, to
the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by the
Administrative Agent, the Issuing Bank, the Collateral Agent, the
Tranche B Agent, the Tranche C Agent, the Co-Agents and each such
Lender to or for the credit or the account of the Borrower or any
Guarantor against any and all of the obligations of such Borrower or
Guarantor now or hereafter existing under the Loan Documents,
irrespective of whether or not such Lender shall have made any demand
under any Loan Document and although such obligations may be
unmatured. The rights of each Lender, the Issuing Bank, the Collateral
Agent, the Tranche B Agent, the Tranche C Agent, each Co-Agent and the
Administrative Agent under this Section are in addition to other
rights and remedies which such Lender, the Issuing Bank, the
Collateral Agent, the Tranche B Agent, the Tranche C Agent, such
Co-Agent and the Administrative Agent may have upon the occurrence and
during the continuance of any Event of Default.
(ii) The provisions of Section 2.24(a)
shall not qualify or limit the provisions of Sections 2.10(e) and (f),
2.13 and 2.14.
(aa) SECURITY INTEREST IN BANK ACCOUNTS. The
Borrower and the Guarantors hereby assign and pledge to the Administrative
Agent, for its benefit and for the ratable benefit of the other Secured
Parties, and hereby grant to the Administrative Agent, for its benefit and
for the ratable benefit of the other Secured Parties, a first priority
security interest, senior to all other Liens, if any, in all of the
Borrower's and the Guarantors' right, title and interest in and to the Cash
Collateral Account, the Loan Account, the BBNA Disbursement Accounts, the
BBNA Concentration Account, any and all Blocked Accounts and all other
deposit accounts, and all cash, checks, money orders, Permitted Investments
and other cash equivalents of every type and description and all other
items of value now or hereafter contained therein or in transit thereto,
and any direct investment of the funds contained therein. The
Administrative Agent shall have sole dominion and control over all such
accounts.
(bb) PAYMENT OF OBLIGATIONS. Upon the maturity
(whether by acceleration or otherwise) of any Loans, Letter of Credit
reimbursement obligations or any other Obligations, the Lenders shall be
entitled to immediate payment of such Loans, reimbursement obligations,
liabilities and other Obligations.
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REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to make Loans and participate
in Letters of Credit and the Issuing Bank to issue Letters of Credit, the
Borrower and each of the other Credit Parties jointly and severally
represent and warrant as follows:
(cc) ORGANIZATION AND AUTHORITY. Each of the
Borrower and the other Credit Parties (i) is a corporation duly organized
and validly existing under the laws of the State of its incorporation and
is duly qualified as a foreign corporation and is in good standing in each
jurisdiction in which the failure to so qualify would have a material
adverse effect on the financial condition, operations, business, properties
or assets of the Borrower and the other Credit Parties taken as a whole;
(ii) has the requisite corporate power and authority to effect the
transactions contemplated hereby, and by the other Loan Documents, and
(iii) has all requisite corporate power and authority and the legal right
to own, pledge, mortgage and operate its properties, and to conduct its
business as now or currently proposed to be conducted. Schedule 3.01 lists
all jurisdictions in which the Borrower and the other Credit Parties are
qualified to do business as of the Closing Date.
(dd) DUE EXECUTION. The execution, delivery and
performance by each of the Borrower and the other Credit Parties of each of
the Loan Documents to which it is a party (including, without limitation,
the borrowing of Loans under this Agreement and the use of the proceeds
thereof) (i) are within the respective corporate powers of each of the
Borrower and the Guarantors, have been duly authorized by all necessary
corporate action, including the consent of shareholders where required, and
do not (and will not) (A) contravene the charter or by-laws of any of the
Borrower or the other Credit Parties, (B) violate any law (including,
without limitation, the Securities Exchange Act of 1934, as amended) or
regulation (including, without limitation, Regulations T, U or X of the
Board), or any order or decree of any court or governmental
instrumentality, (C) conflict with or result in a breach of, or constitute
a default under, any material indenture, mortgage or deed of trust or any
material lease, agreement or other instrument binding on the Borrower or
the other Credit Parties or any of their properties, or (D) result in or
require the creation or imposition of any Lien upon any of the property of
any of the Borrower or the other Credit Parties, other than the Liens
granted pursuant to this Agreement; and do not require the consent,
authorization by or approval of or notice to or filing or registration with
any Governmental Authority or any other Person. This Agreement has been
duly executed and delivered by each of the Borrower and the Guarantors.
This Agreement is, and each of the other Loan Documents to which the
Borrower and each of the other Credit Parties is or will be a party, when
delivered hereunder or thereunder, will be, a legal, valid and binding
obligation of the Borrower and each other Credit Party, as the case may be,
enforceable against the Borrower and the other Credit Parties, as the case
may be, in accordance with its terms.
(ee) STATEMENTS MADE. The statements, written
or oral, which have been made by the Borrower or any of the other Credit
Parties to the Administrative Agent or to the Bankruptcy Court in
connection with any Loan Document, and any financial statement delivered
pursuant hereto or thereto (other than to the extent that any such
statements constitute projections), taken as a whole and in light of the
circumstances in which made, contain no untrue statement of a material fact
and do not omit to state a material fact necessary to make such statements
not misleading; and, to the extent that any such written statements
constitute
96
projections, such projections were prepared in good faith on the basis of
assumptions, methods, data, tests and information believed by the Borrower
or such other Credit Party to be valid and accurate at the time such
projections were furnished to the Lenders.
(ff) OWNERSHIP. The Borrower is a wholly-owned
Subsidiary of BI and Yonkers is a wholly-owned subsidiary of the Borrower.
The Borrower has no direct or indirect Subsidiaries other than Yonkers and
BI has no direct or indirect Subsidiaries other than the Borrower and
Yonkers.
(gg) FINANCIAL STATEMENTS AND BANKRUPTCY COURT
FILINGS.
(i) The Borrower has furnished the
Administrative Agent, the Issuing Bank, the Collateral Agent, the
Tranche B Agent, the Tranche C Agent and the Lenders with copies of
(i) the audited consolidated financial statement and schedules of BI
for the most recently completed fiscal year for which such statements
are available and (ii) the unaudited consolidated financial statement
and schedules of BI for the most recently completed fiscal quarter for
which such statements are available. Such financial statements present
fairly the financial condition and results of operations of BI, the
Borrower and the other Credit Parties on a consolidated basis as of
such dates and for such periods; such balance sheets and the notes
thereto disclose all liabilities, direct or contingent, of BI, the
Borrower and the other Credit Parties as of the dates thereof required
to be disclosed by GAAP and such financial statements were prepared in
a manner consistent with GAAP, subject (in the case of such fiscal
quarter statement) to normal year end adjustments. No material adverse
change in the financial condition, operations, business, properties or
assets of the Borrower and the other Credit Parties, taken as a whole,
has occurred from that set forth in BI's consolidated financial
statements referenced in this Section 3.05. All other financial
information required to be delivered by the Borrower under this
Agreement (including, without limitation, all information delivered to
the Administrative Agent to determine the Borrower's compliance with
Sections 4.01(t) and (u)) are accurate in all respects.
(ii) The Borrower has furnished to the
Administrative Agent and its counsel copies of all pleadings, motions,
applications, judicial information, financial information and other
documents filed by or on behalf of the Borrower or any of the other
Credit Parties with the Bankruptcy Court in the Cases or distributed
by or on behalf of the Borrower or any of the Guarantors to any
official committee appointed in the Cases or served upon the Borrower
or any Guarantor in any of the Cases.
(hh) LIENS. There are no Liens of any nature
whatsoever on any property of the Borrower or any other Credit Party
(including, without limitation, the Collateral) except, (i) Permitted
Liens, (ii) Liens granted in favor of the Collateral Agent, for its benefit
and the ratable benefit of the other Secured Parties, pursuant to the Loan
Documents, (iii) Liens granted in favor of the Other Transactions
Counterparties in connection with Interest Rate Agreements, the Master
Lease Agreement and any other obligations owed by the Borrower or the other
Credit Parties to the Other Transactions Counterparties, (iv) the Trade
Lien, (v) Liens securing outstanding obligations of the Borrower under the
New Notes and the CAP Notes;
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PROVIDED that, the Liens securing obligations under the New Notes are
secured only by the Permissible Collateral, the Additional Collateral and
the Yonkers Common Stock Collateral (in each case, to the extent permitted
by the terms of Attachment III hereto) and the Liens securing the
obligations under the CAP Notes are secured only by a Lien on the CAP
Collateral (as defined in Attachment I hereto) and (vi) Liens on any
interests in Real Property securing Indebtedness permitted under Section
6.03(iii). Neither the Borrower nor any other Credit Party are parties to
any contract, agreement, lease or instrument the performance of which,
either unconditionally or upon the happening of an event, will result in or
require the creation of a Lien on any property of the Borrower or any other
Credit Party (other than as permitted by Section 6.01) or otherwise result
in a violation of this Agreement. The Liens granted by the Borrower and the
other Credit Parties in the Collateral pursuant to the Loan Documents are
fully-perfected first-priority security interests, subject only to
Permitted Liens. Notwithstanding the foregoing, on the Closing Date, and
after giving effect to the Confirmed Plan, there are no Liens on any of the
Collateral other than as set forth in clauses (ii), (iii), (iv) and (v)
above.
(ii) COMPLIANCE WITH LAW.
(i) The operations of the Borrower and
each of the other Credit Parties are not in violation of any
applicable federal, state or local environmental, health or safety
statutes (including, without limitation, the Occupational Health and
Safety Act), regulations, directions, ordinances, criteria or
guidelines.
(ii) Neither the Borrower nor any of the
other Credit Parties has received notice that any of the operations of
the Borrower or any of the other Credit Parties is the subject of any
judicial or administrative proceeding alleging the violation of any
federal, state or local environmental, health or safety statute,
regulation, direction, ordinance, criteria or guideline.
(iii) None of the operations of the
Borrower or any of the other Credit Parties is the subject of any
federal, state or local investigation involving allegations or
potential allegations that the Borrower or any of the other Credit
Parties disposed of any hazardous or toxic waste, substance or
constituent or other pollutant, contaminant or substance (including,
without limitation, petroleum) at any site that may require remedial
action, or any federal, state or local investigation evaluating
whether any remedial action is needed to respond to a release or
threatened release of any hazardous or toxic waste, substance or
constituent, or other pollutant, contaminant or substance (including,
without limitation, petroleum) into the environment.
(iv) Neither the Borrower nor any of the
other Credit Parties has filed any notice under any federal, state or
local law indicating past or present treatment, storage or disposal of
a hazardous waste or reporting a spill or release or threatened
release of a hazardous or toxic waste, substance or constituent, or
other pollutant, contaminant or substance (including, without
limitation, petroleum) into the environment.
(v) Neither the Borrower nor any of the
other Credit Parties has any contingent liability of which any of them
has knowledge or reasonably should have knowledge in connection with
any release or threatened release of any hazardous or toxic
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waste, substance or constituent, or other pollutant, contaminant or
substance (including, without limitation, petroleum) into the
environment, nor has the Borrower or any of the other Credit Parties
received any notice, letter or other indication of potential liability
arising from the disposal of any hazardous or toxic waste, substance
or constituent or other pollutant, contaminant or substance
(including, without limitation, petroleum) into the environment which,
in any such case referred to in this Section or in the aggregate,
could have a material adverse effect on the financial condition,
operations, business, properties or assets of the Borrower and the
other Credit Parties taken as a whole.
(jj) INSURANCE. All policies of insurance
of any kind or nature owned by or issued to the Borrower and the other
Credit Parties, including, without limitation, policies of life, fire,
theft, product liability, public liability, property damage, other
casualty, employee fidelity, workers' compensation, employee health and
welfare, title, property and liability insurance, are in full force and
effect and are of a nature and provide such coverage as is sufficient and
as is customarily carried by companies of the size and character of the
Borrower and the other Credit Parties. All liability policies of the
Borrower name the Administrative Agent, the Issuing Bank, the Collateral
Agent, the Tranche B Agent, the Tranche C Agent, the Co-Agents and the
Lenders as additional insureds and all casualty (property) policies name
the Collateral Agent as loss payee.
(kk) THE CONFIRMATION ORDER. On the date
of the making of the initial Loans or the issuance of the initial Letters
of Credit hereunder, whichever first occurs, the Confirmed Plan shall be
effective, all conditions to effectiveness of the Confirmed Plan have been
satisfied (other than those conditions which have been expressly waived in
accordance with Sections 10.02 and 10.03 of the Confirmed Plan by the
parties named therein and which waiver or waivers have been consented to in
writing by the Administrative Agent) and the Confirmation Order and the
Yonkers Confirmation Order each will have been entered and will not have
been stayed, amended (other than amendments deemed immaterial by the
Administrative Agent), vacated, reversed or rescinded and the Bankruptcy
Court's retention of jurisdiction, if any, under the Confirmation Order and
the Yonkers Confirmation Order shall not govern the enforcement of this
Agreement and the other Loan Documents or any rights or remedies relating
thereto after the Plan Effective Date. On the date of the making of any
Loan or the issuance of any Letter of Credit, (i) the Confirmed Plan will
be effective and the Confirmation Order will have been entered and will not
have been amended (other than amendments deemed immaterial by the
Administrative Agent), stayed, vacated, reversed or rescinded and (ii) the
Yonkers Confirmation Order will have been entered and will not have been
amended, stayed, vacated, reversed or rescinded in any manner which, in the
Administrative Agent's sole discretion, could have a material adverse
effect on (a) the assets, liabilities, business, operations, condition
(financial or otherwise) or prospects of the Borrower or any other Credit
Party or (b) the enforceability of the rights and remedies of the
Administrative Agent, the Issuing Bank, the Collateral Agent, the Tranche B
Agent, the Tranche C Agent, the Co-Agents and the Lenders under the Loan
Documents (including, without limitation, the Liens granted to the
Collateral Agent, for its benefit and the benefit of the other Secured
Parties, under the Loan Documents), or (c) the ability of the Borrower or
the other Credit Parties to pay the Obligations when due and to perform
their covenants and agreements under the Loan Documents. Upon the maturity
(whether by the acceleration or otherwise) of any of the Obligations of the
Borrower and the other Credit Parties hereunder and under the other Loan
Documents, the Lenders shall, subject to the provisions of
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Article VII, be entitled to immediate payment of such obligations, and to
enforce the remedies provided for hereunder and under the other Loan
Documents.
(ll) USE OF PROCEEDS. The proceeds of the
Loans will be used, first, to repay in full all loans, letter of credit
liabilities and other obligations outstanding under or in respect of the
Existing Credit Facility and, second, to make certain payments required
under the Confirmed Plan not in excess of $8,000,000 in the aggregate as
provided in the summary of sources and uses of funds set forth on Schedule
3.10 and to prepay up to the aggregate amount of $6,000 to the holders of
the New Notes, and thereafter will be used only to provide (i) working
capital for and to finance Inventory purchases by the Borrower and
otherwise for general corporate purposes of the Borrower and (ii) to prepay
the Permitted Note Debt in accordance with Section 6.15. The Borrower will
not use the proceeds of any Loans or any other property of the Borrower to
make any intercompany or Affiliate advances (it being understood that
proceeds of the Loans used for ordinary-course operating expenses of the
Bradlees store located in Yonkers, New York (so long as such store remains
open) will be deemed to be a permitted use of proceeds hereunder).
(mm) STORE LOCATIONS; BANK ACCOUNTS;
INVENTORY.
(i) Set forth on Schedule 3.11(a)
hereto is a complete and accurate list of the names and addresses of
all the retail stores, warehouses and distribution centers operated by
the Borrower on the Closing Date, which are all locations where any
Inventory of the Borrower is maintained.
(ii) Set forth on Schedule 3.11(b)
hereto is a complete and accurate list of all bank accounts, money
market accounts and other deposit or investment accounts for cash,
cash equivalents or investments maintained by the Borrower or any
other Credit Party or in which the Borrower or any Credit Party has
any interest.
(iii) No Credit Party other than the
Borrower owns any Inventory or operates any retail stores, warehouses
or distribution centers. No Credit Party other than the Borrower owns
any other material assets other than as set forth on Schedule 3.11(c)
(which schedule also sets forth the Borrower's good faith estimate of
the book value of such assets).
(iv) The assets of the Borrower
(including, without limitation, the Inventory and the Receivables) are
substantially in the amounts and of the quality previously represented
to the Administrative Agent in the most recent Borrowing Base
Certificate delivered to the Administrative Agent.
(nn) LITIGATION AND CLAIMS.
(i) Except as set forth on Schedule
3.12, there are no actions, suits or proceedings pending or, to the
knowledge of the Borrower or the other Credit Parties, threatened
against or affecting the Borrower or the other Credit Parties or any
of its properties, including (without limitation) the Inventory,
before any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, that is (i)
not fully reserved for under the Confirmed Plan and (ii)
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reasonably likely to be determined adversely to the Borrower or the
other Credit Parties and, if so determined adversely to the Borrower
or the other Credit Parties would have a material adverse effect on
the financial condition, business, properties, operations or assets of
the Borrower and the other Credit Parties, taken as a whole or the
prospects for repayment in full of the Obligations.
(ii) There are no pre-petition or
administrative claims or Liens other than those contemplated by the
Confirmed Plan to survive the Plan Effective Date and consented to by
the Administrative Agent.
(oo) MATERIAL ADVERSE CHANGE. No event or
series of events have occurred since the date of the Borrower's financial
statements reflecting the Confirmed Plan that has or have materially and
adversely affected (i) the assets, liabilities, business, operations,
condition (financial or otherwise) or prospects of the Borrower or any
other Credit Party or (ii) the enforceability of the rights and remedies of
the Administrative Agent, the Issuing Bank, the Collateral Agent, the
Tranche B Agent, the Tranche C Agent, the Co-Agents and the Lenders under
the Loan Documents (including, without limitation, the Liens granted to the
Collateral Agent, for its benefit and the benefit of the other Secured
Parties, under the Loan Documents), or (iii) the ability of the Borrower or
the Guarantors to pay the Obligations when due and to perform their
covenants and agreements under the Loan Documents.
(pp) PAYMENT OF OBLIGATIONS. The Borrower
and each other Credit Party have paid when due all rents under any
unexpired leases to which the Borrower or any other Credit Party is party
as lessee and all other material liabilities incurred by the Borrower or
any other Credit Party (other than any such rents or liabilities the amount
or validity of which are currently being contested in good faith by
appropriate proceedings and with respect to which reserves in conformity
with GAAP have been provided on the books of the Borrower or such other
Credit Party, as the case may be).
(qq) TAXES AND TAX RETURNS. Except for
those taxes agreed to be paid or otherwise settled pursuant to the Tax
Payment Plan, the Borrower and each other Credit Party has filed or caused
to be filed all material tax returns which are required to be filed and has
paid all taxes shown to be due and payable on said returns or on any
assessments made against it or any of its property and all other material
taxes, fees or other charges imposed on it or any of its property by any
Governmental Authority (other than any such taxes, assessments, fees or
other charges the amount or validity of which are currently being contested
in good faith by appropriate proceedings and with respect to which reserves
in conformity with GAAP have been provided on the books of the Borrower or
the other Credit Party, as the case may be).
(rr) FRANCHISES, LICENSES, PERMITS,
LEASES, PATENTS, COPYRIGHTS, TRADEMARKS AND TRADE NAMES. The Borrower and
each of the other Credit Parties have obtained and hold in full force and
effect, all franchises, licenses, leases, permits, certificates,
authorizations, qualifications, easements, rights of way and other rights
and approvals which are necessary or advisable for the operation of its
businesses as presently conducted and as proposed to be conducted. Except
as set forth on Schedule 3.16, neither the Borrower nor any of the other
Credit Parties is in violation of the terms of any such franchise, license,
lease, permit, certificate, authorization, qualification, easement, right
of way,
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right or approval. If any of the matters are resolved adversely to the
Borrower or the other Credit Parties there would not be a material adverse
effect on the financial condition, business, properties, operations or
assets of the Borrower and the other Credit Parties, taken as a whole or
the prospects for repayment in full of the Obligations. The Borrower
possesses or has the legal right to use such assets, licenses, patents,
patent applications, copyrights, service marks, trademarks and trade names
as are necessary or advisable to continue to conduct its present and
proposed business activities and such assets, licenses, patents, patent
applications, copyrights, service marks, trademarks and trade names are
valid and in full force and effect.
(ss) LABOR MATTERS.
(i) There are no controversies
pending or, to the best of the Borrower's knowledge after diligent
inquiry, threatened between the Borrower or any of the other Credit
Parties , on the one hand, and any of their respective employees, on
the other hand, which could have a material adverse effect on the
financial condition, operations, business, properties or assets of the
Borrower and the other Credit Parties taken as a whole.
(ii) Neither the Borrower nor any of
the other Credit Parties is engaged in any unfair labor practice.
There is (i) no unfair labor practice complaint pending against the
Borrower or any of the other Credit Parties or, to the best knowledge
of the Borrower, threatened against any of them, before the National
Labor Relations Board, and no grievance or significant arbitration
proceeding arising out of or under collective bargaining agreements is
so pending against the Borrower or any of the other Credit Parties or,
to the best knowledge of the Borrower, threatened against any of them,
(ii) no strike, labor dispute, slowdown or stoppage pending against
either of the Borrower or any of the other Credit Parties or, to the
best knowledge of the Borrower, threatened against any of them and
(iii) no union representation question with respect to the employees
of the Borrower or any other Credit Parties and no union organizing
activities.
(tt) ERISA. None of the Borrower, any
other Credit Party or any ERISA Affiliate maintains or contributes to any
Plan other than those listed on Schedule 3.18. Each Plan has been and is
being maintained and funded in accordance with its terms and in compliance
with all provisions of ERISA and the Code applicable thereto. The Borrower,
each of the other Credit Parties and each ERISA Affiliate have fulfilled
all obligations related to the minimum funding standards of ERISA and the
Code for each Plan, are in compliance with the currently applicable
provisions of ERISA and of the Code and have not incurred any liability
(other than routine liability for premiums) under Title IV of ERISA. No
Termination Event has occurred nor has any other event occurred that may
result in a Termination Event. No event or events have occurred in
connection with which the Borrower, any of its Subsidiaries, any ERISA
Affiliate, any fiduciary of a Plan or any Plan, directly or indirectly,
could be subject to any liability, individually or in the aggregate, under
ERISA, the Code or any other requirement of law or under any agreement,
instrument, statute, rule of law or regulation pursuant to or under which
any such entity has agreed to indemnify or is required to indemnify any
person against liability incurred under, or for a violation or failure to
satisfy the requirements of, any such statute, regulation or order. The
Borrower has delivered or caused to be delivered to the Administrative
Agent: (i) a copy of each Plan (or, where any such plan is not in writing,
a
102
complete description thereof) (and, if applicable, related trust agreements
or other funding instruments) and all amendments thereto, all written
interpretations thereof and written descriptions thereof that have been
distributed to employees or former employees of the Borrower or the other
Credit Parties; (ii) the most recent determination letter issued by the
Internal Revenue Service with respect to each Plan; (iii) for the three
most recent plan years, Annual Reports on Form 5500 Series required to be
filed with any governmental agency for each Plan; (iv) all actuarial
reports prepared for the last three plan years for each Plan; (v) a listing
of all Multiemployer Plans, with the aggregate amount of the most recent
annual contributions required to be made by the Borrower or any ERISA
Affiliate to each such plan and copies of the collective bargaining
agreements requiring such contributions; (vi) any information that has been
provided to the Borrower or any ERISA Affiliate regarding withdrawal
liability under any Multiemployer Plan; (vii) the aggregate amount of the
most recent annual payments made to former employees of the Borrower or any
ERISA Affiliate under any retiree health Plan; (viii) each Single Employer
Plan has been determined by the IRS to qualify under Section 401 of the
Code, and the trusts created thereunder have been determined to be exempt
from tax under the provisions of Section 501 of the Code, and to the best
knowledge of the Borrower nothing has occurred which would cause the loss
of such qualification or tax-exempt status; (ix) except as set forth on
SCHEDULE 3.18, no Single Employer Plan has any material Unfunded Pension
Liability as to which the Borrower is or may be liable; (x) the Borrower
and each ERISA Affiliate have complied in all material respects with the
notice and continuation coverage requirements of Section 4980B of the Code;
and (xi) there are no pending or, to the best knowledge of the Borrower,
threatened claims, actions or lawsuits, other than routine claims for
benefits in the usual and ordinary course, asserted or instituted against
(1) any Single Employer Plan maintained or sponsored by the Borrower, (2)
the Borrower or any ERISA Affiliate with respect to any Single Employer
Plan, or (3) any other fiduciary with respect to any Single Employer Plan
for which the Borrower may be directly or indirectly liable, through
indemnification obligations or otherwise.
(uu) ACCOUNTS RECEIVABLE FINANCING.
Neither the Borrower nor any of the other Credit Parties is party to any
accounts receivable financing arrangements whereby sales of Inventory are
conducted through the use of an in-store credit card or through the use of
a credit card offered by a third party lender (it being understood that the
acceptance by the Borrower of credit cards issued by Visa, Mastercard or
similar processors that does not entail an extension of credit by the
Borrower to its own customers (and is non-recourse to the Borrower other
than, with respect to accounts financed under the Credit Plan Agreement, to
the limited extent set forth therein) shall not be deemed to constitute
such an accounts receivable financing arrangement, even if the Borrower's
name or imprint appears on such Visa, Mastercard or similar credit cards).
(vv) INVESTMENT COMPANY: HOLDING COMPANY.
Neither the Borrower nor any of the other Credit Parties is (i) an
investment company or a company controlled by an investment company within
the meaning of the Investment Company Act of 1940, as amended, (ii) a
holding company or a Subsidiary company of a holding company, or an
Affiliate of a holding company or of a Subsidiary company of a holding
company, within the meaning of the Public Utility Holding Company Act of
1935, as amended, or (iii) subject to any other law which purports to
regulate or restrict its ability to borrow money or to consummate the
103
transactions contemplated by this Agreement or the other Loan Documents or
to perform its obligations hereunder or thereunder.
(ww) YEAR 2000. Any reprogramming required
to permit the proper functioning, in and following the year 2000, of (a)
BI's and its Subsidiaries' computer systems and (b) equipment containing
embedded microchips and testing of all such systems and equipment, as so
reprogrammed, will be completed by November 1, 1999. Except for such of the
reprogramming referred to in the preceding sentence as may be necessary,
the computer and management information systems of BI and its Subsidiaries
in effect as of the date hereof are, and with ordinary course upgrading and
maintenance will continue to be for the term of this Agreement, sufficient
to permit BI and its Subsidiaries to reasonably conduct their business and
to continue to render reports to the Agents and the Lenders as required
hereunder without resulting in a material adverse effect on the financial
condition, business, properties, operations or assets of BI and its
Subsidiaries, taken as a whole, or the prospects for repayment in full of
the Obligations. BI and its Subsidiaries have and will use reasonable
efforts to obtain assurances from their material vendors and entities whose
systems interface with those of BI and its Subsidiaries that such vendors
and entities are taking all necessary steps to insure that their respective
systems will be properly functioning in and following the year 2000.
CONDITIONS OF LENDING
(xx) CONDITIONS PRECEDENT TO INITIAL LOANS
AND INITIAL LETTERS OF CREDIT. The obligation of the Lenders to make
the initial Loans or the Issuing Bank to issue the initial Letters of
Credit, whichever may occur first, is subject to the following conditions
precedent:
(i) SUPPORTING DOCUMENTS. The
Administrative Agent shall have received for the Borrower and each of the
other Credit Parties:
(i) a copy of such entity's certificate of
incorporation, as amended, certified as of the Closing Date by the
Secretary of State of the state of its incorporation or a senior
officer of such entity;
(ii) a certificate of such Secretary of
State, dated as of the Closing Date, as to the good standing of that
entity and as to the charter documents on file in the office of such
Secretary of State;
(iii) a certificate of the Secretary or an
Assistant Secretary of that entity dated the date of the initial Loans
or the initial Letter of Credit hereunder, whichever first occurs, and
certifying (A) that attached thereto is a true and complete copy of
the by-laws of that entity as in effect on the date of such
certification, (B) that attached thereto is a true and complete copy
of resolutions adopted by the Board of Directors of that entity
authorizing the Borrowings and Letter of Credit extensions hereunder,
the execution, delivery and performance in accordance with their
respective terms of this Agreement, the Notes to be executed by it,
the Loan Documents and any other documents required or contemplated
hereunder or thereunder and the granting of the security interest in
the Cash Collateral Account contemplated hereby, (C) that the
certificate of
104
incorporation of that entity has not been amended since the date of
the last amendment thereto indicated on the certificate of the
Secretary of State furnished pursuant to clause (i) above, and (D) as
to the incumbency and specimen signature of each officer of that
entity executing this Agreement, the Notes to be executed by it and
the Loan Documents or any other document delivered by it in connection
herewith or therewith (such certificate to contain a certification by
another officer of that entity as to the incumbency and signature of
the officer signing the certificate referred to in this clause (iii));
(iv) a certificate of the Secretary of
State of each state where each such entity is qualified to do
business, dated as of a recent date as to the good standing of that
entity in such state;
(v) a duly-executed compliance certificate
in the form attached as Exhibit H; and
(vi) all certificates and filings
evidencing and effectuating that portion of the Combination
Transaction to occur on or about the Plan Effective Date, including,
without limitation, file-stamped copies of certificates of merger for
all Subsidiaries of BI or the Borrower (including, without limitation,
Dostra) contemplated by the Confirmed Plan to be merged with BI or the
Borrower on or about the Plan Effective Date.
(ii) NOTES. On or before the date of
the initial Loans or the issuance of the initial Letter of Credit
hereunder, whichever first occurs, the Administrative Agent shall have
received Notes executed on behalf of the Borrower, dated the Closing Date,
payable to the order of (i) each of the Tranche A Lenders, in the form of
Exhibit B-1, in an amount equal to such Tranche A Lender's Tranche A
Commitment, and in the form of Exhibit B-2, in an amount equal to
$15,000,000 to be delivered to the Administrative Agent for the Agent
Advances, and (ii) each of the Tranche B Lenders, in the form of Exhibit
B-3, in an amount equal to such Tranche B Lender's Tranche B Commitment.
(iii) THE CONFIRMED PLAN. Any
immaterial amendments (in the opinion of the Administrative Agent) to the
Confirmed Plan shall be satisfactory to the Administrative Agent and any
material amendments (in the opinion of the Administrative Agent) to the
Confirmed Plan shall be satisfactory to the Required Lenders. The Confirmed
Plan shall provide, among other things, that all claims of the creditors
(including trade creditors) of the Borrower and the other Credit Parties
which arose, or are deemed to have arisen, prior to the Filing Date shall
be either (i) Indebtedness governed by the Tax Payment Plan described
below, (ii) converted into Equity Interests of BI (including without
limitation, stock options and warrants convertible into capital stock of
BI), (iii) exchanged for the CAP Notes, the Cure Notes or the New Notes or
(iv) repaid in cash as set forth in the Confirmed Plan. The terms of all
Equity Interests (including, without limitation, all preferred stock issued
or to be issued (if any) by the Borrower related to the Confirmed Plan) and
indebtedness of the Borrower and the other Credit Parties to be outstanding
after giving effect to the Confirmed Plan shall be
105
reasonably satisfactory in all respects to the Administrative Agent,
PROVIDED, that any pre-petition tax claims (up to $3,400,000 in the
aggregate) may be paid subsequent to the Plan Effective Date pursuant to a
payment plan (the "TAX PAYMENT PLAN") on the terms set forth in the
Confirmed Plan (except as provided in Section 6.15 hereof) and as is
otherwise reasonably satisfactory to the Administrative Agent.
(iv) THE CONFIRMATION ORDERS. At the
time of the making of the initial Loans or at the time of the issuance of
the initial Letter of Credit, whichever first occurs, the Administrative
Agent, the Issuing Bank, the Collateral Agent, the Tranche B Agent and the
Lenders shall have received a certified copy of (i) the Confirmation Order
in the form attached hereto as Exhibit C-1 and (ii) the Yonkers
Confirmation Order in the form attached hereto as Exhibit C-2 and the
Confirmation Order and the Yonkers Confirmation Order shall each be
reasonably satisfactory to the Required Lenders. The Confirmation Order
shall not have been reversed, modified, vacated, rescinded or amended
(other than amendments deemed immaterial by the Administrative Agent) and
shall not be stayed or subject to a motion to stay and, unless otherwise
agreed by the Administrative Agent, all appeal periods relating to the
Confirmation Order shall have expired, and no appeals from the Confirmation
Order shall be outstanding. The Yonkers Confirmation Order (i) shall not
have been reversed, modified, vacated, rescinded or amended in any manner
which, in the Administrative Agent's sole discretion, could have a material
adverse effect on (a) the assets, liabilities, business, operations,
condition (financial or otherwise) or prospects of the Borrower or any
other Credit Party or (b) the enforceability of the rights and remedies of
the Administrative Agent, the Issuing Bank, the Collateral Agent, the
Tranche B Agent, the Co-Agents and the Lenders under the Loan Documents
(including, without limitation, the Liens granted to the Collateral Agent,
for its benefit and the benefit of the other Secured Parties, under the
Loan Documents), or (c) the ability of the Borrower or the other Credit
Parties to pay the Obligations when due and to perform their covenants and
agreements under the Loan Documents and (ii) shall not be stayed or subject
to a motion to stay and, unless otherwise agreed by the Administrative
Agent, all appeal periods relating to the Yonkers Confirmation Order shall
have expired, and no appeals from the Yonkers Confirmation Order shall be
outstanding. Except as consented to by the Administrative Agent, the
Bankruptcy Court's retention of jurisdiction under the Confirmation Order
and the Yonkers Confirmation Order shall not govern the enforcement of this
Agreement and the other Loan Documents or any rights or remedies relating
thereto after the Plan Effective Date. The Administrative Agent shall be
satisfied that the Bankruptcy Court has adequately addressed Yonkers'
status as a debtor-in-possession after the Closing Date and Yonkers'
execution, delivery and performance, as a debtor-in-possession, of the Loan
Documents to which it is a party.
(v) PLAN EFFECTIVE DATE. All
conditions precedent to the confirmation of the Confirmed Plan and to the
Effective Date (as defined in the Confirmed Plan) (the "PLAN EFFECTIVE
DATE") shall have been met (or the waiver thereof in accordance with
Sections 10.02 and 10.03 of the Confirmed Plan by the parties named therein
shall have been consented to in writing by the Administrative Agent) and
the Plan Effective Date and substantial consummation of the Confirmed
Reorganization shall have occurred (including, without limitation, the
Combination Transaction (as defined in the
106
Confirmed Plan), other than with respect to Yonkers) or shall be scheduled
to occur but for the making of the initial Loan hereunder.
(vi) SECURITY AGREEMENT. The Borrower
and each Guarantor shall have duly executed and delivered to the Collateral
Agent a Security Agreement in substantially the form of Exhibit E (the
"SECURITY AGREEMENT").
(vii) [Reserved].
(viii) TRADEMARK SECURITY AGREEMENT.
The Borrower and each applicable Guarantor shall have duly executed and
delivered to the Collateral Agent a Trademark Security Agreement in
substantially the form of Exhibit E (the "TRADEMARK SECURITY AGREEMENT").
(ix) BUSINESS PLAN. The Borrower
shall have delivered to the Administrative Agent at least sixty (60) days
prior to the Plan Effective Date the Business Plan in form and substance
satisfactory to the Administrative Agent.
(x) OPINIONS OF COUNSEL. The
Administrative Agent, the Issuing Bank, the Collateral Agent, the Tranche B
Agent, the Co-Agents and the Lenders shall have received the favorable
written opinion of (i) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, counsel to the Credit Parties,
substantially in the form attached as Exhibit D-1, (ii) counsel to the
Credit Parties reasonably satisfactory to the Administrative Agent in the
states of Massachusetts, Connecticut and New Jersey, substantially in the
forms attached as Exhibits ▇-▇, ▇-▇ and D-4, respectively and (iii) such
other counsel as may be requested by the Administrative Agent, in each case
dated the date of the initial Loans or the issuance of the initial Letter
of Credit, whichever first occurs.
(xi) PAYMENT OF FEES. Concurrent with
the initial Borrowing, the Borrower shall have paid (i) to the
Administrative Agent, the Issuing Bank, the Collateral Agent, the Tranche B
Agent and the Lenders, as applicable, the then unpaid balance of all
accrued and unpaid Fees owed under and pursuant to this Agreement and the
Fee Letters referred to in Section 2.19 and (ii) to the Administrative
Agent, for the pro rata benefit of the Tranche A Lenders, the "Second
Consent Fee" referred to and as defined in the Second Consent to
Modification of Commitment Letter between the Lenders and the Borrower
dated December 16, 1998 (the "CONSENT FEE").
(xii) CORPORATE AND JUDICIAL
PROCEEDINGS. All corporate and judicial proceedings and all instruments and
agreements in connection with the transactions among the Credit Parties,
the Administrative Agent, the Issuing Bank, the Collateral Agent, the
Tranche B Agent, the Co-Agents and the Lenders contemplated by this
Agreement shall be reasonably satisfactory in form and substance to the
Administrative Agent, and the Administrative Agent shall have received all
information and copies of all documents and papers, including records of
corporate and judicial proceedings, which the Administrative Agent may have
reasonably requested in connection therewith, such documents and papers
where appropriate to be certified by proper corporate, governmental or
judicial authorities.
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(xiii) LIEN SEARCHES. On or before
the Closing Date, the Administrative Agent shall have received the results
of UCC-1 and other Lien searches conducted in State and county levels in
jurisdictions in which the Credit Parties conduct business and in the
United States Patent and Trademark Office, which searches shall reflect the
absence of Liens on the assets (including Inventory and Receivables) of the
Credit Parties, other than (i) Permitted Liens, Liens permitted under
Section 6.01 or Liens for which duly-completed and executed termination
statements and releases reasonably satisfactory to the Administrative Agent
have been tendered prior to or concurrently with the initial Credit
Extension and (ii) Liens which have been duly terminated no later than the
Closing Date by an order of the Bankruptcy Court in form and substance
reasonably satisfactory to the Administrative Agent.
(xiv) FILINGS. All filings and other
actions required to create and perfect a first priority security interest
in favor of the Collateral Agent, for its benefit and the ratable benefit
of the other Secured Parties, on all Collateral owned or to be owned by the
Credit Parties shall have been duly made or taken.
(xv) ENVIRONMENTAL COMPLIANCE. The
Credit Parties shall have granted the Administrative Agent access to and
the right to inspect all reports, audits and other internal information of
the Credit Parties relating to environmental matters, and any third party
verification of certain matters relating to compliance with environmental
laws and regulations requested by the Administrative Agent, and the
Administrative Agent shall be satisfied that the Credit Parties are in
compliance in all material respects with all applicable environmental laws
and regulations and be satisfied with the costs of maintaining such
compliance.
(xvi) ACCOUNTS RECEIVABLE FINANCING.
Neither the Borrower nor any of the Credit Parties shall be party to any
accounts receivable financing arrangements whereby sales of Inventory are
conducted through the use of an in-store credit card or through the use of
a credit card offered by a third party lender (it being understood that the
acceptance by the Borrower of credit cards issued by Visa, Mastercard or
similar processors that does not entail an extension of credit by the
Borrower to its own customers (and is non-recourse to the Borrower (other
than, with respect to accounts financed under the Credit Plan Agreement, to
the limited extent set forth therein)) shall not be deemed to constitute
such an accounts receivable financing arrangement, even if the Borrower's
name or imprint appears on such Visa, Mastercard or similar credit cards).
(xvii) CASH MANAGEMENT SYSTEM. The
cash management system required to be maintained as of the date hereof
pursuant to Sections 2.13 and 2.14 shall be in place in all material
respects, as determined by the Administrative Agent in its sole and
absolute discretion.
(xviii) EXISTING CREDIT FACILITY.
There shall exist no defaults, events of defaults or prospective defaults
(based on projections provided by the Borrower) under the Existing Credit
Facility and all principal, interest, fees, and any
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other obligations under the Existing Facility shall have been, or on the
Closing Date will be, paid in full.
(xix) ACCOUNTS PAYABLE. All
undisputed Accounts Payable outstanding at the time of the Closing Date
shall be reasonably paid to date within the terms of the applicable
Accounts Payable, as agreed to by the Borrower.
(xx) EBITDA. The Borrower's EBITDA
(after cash restructuring costs (but excluding up to $3,500,000 of cash
restructuring costs incurred in the twelve month period ending on the
Closing Date and excluding that portion of EBITDA attributable to the
Bradlees stores located in Yonkers, New York and at Union Square in New
York, New York) for the 12-month period ending on the last day of the month
immediately preceding the month in which the Closing Date occurs shall not
be less than $30,000,000 (after adding back to EBITDA (to the extent not
already done so) up to $4,400,000 of SG&A Expenses relating to emergence
and other bonuses actually incurred by the Borrower in connection with the
Confirmed Plan).
(f) EXCESS AVAILABILITY. As measured on the
Closing Date, the aggregate amount of Tranche A Loans available to be borrowed
by the Borrower under Section 2.01(a)(1) plus the amount of Tranche B Loans
available to be borrowed by the Borrower under Section 2.01(b)(1) (after giving
effect to the repayment of all amounts outstanding under the Existing Credit
Facility and all cash payments required under the Confirmed Plan, whether made
(or required to be made) prior to, on or after the Closing Date (other than
payments to be made pursuant to the Tax Payment Plan)) shall not be less than
the amount specified opposite the Borrower's fiscal month in which the Closing
Date is to take place.
FISCAL MONTH REQUIRED EXCESS AVAILABILITY
February $35,000,000
March $40,000,000
April $39,000,000
May $40,000,000
June $25,000,000
July $25,000,000
August $36,000,000
September $37,000,000
October $35,000,000
November $35,000,000
December $38,000,000
January $37,000,000
(xxi) CONSENTS AND APPROVALS. The
Administrative Agent shall be satisfied in its sole discretion that all
insurance, Blocked Account Agreements, Payment Direction Agreements and
other consents and approvals required or necessary hereunder have been
received and are in full force and effect.
(xxii) OTHER INFORMATION. On or before the
Closing Date, the Administrative Agent shall have received an inventory
analysis conducted by an inventory liquidation analysis firm retained by
the Collateral Agent and a follow up review of the Borrower's books and
records conducted by a commercial financial audit
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firm retained by the Collateral Agent and such other information (financial
or otherwise) as it may have reasonably requested.
(xxiii) NO MATERIAL ADVERSE CHANGE. No
event or series of events shall have occurred at any time after November 2,
1997, which the Required Lenders in good faith determine to constitute a
material adverse change in (i) the assets, liabilities, business,
operations, condition (financial or otherwise) or prospects of the Borrower
or any other Credit Party, or (ii) the enforceability of the Liens, rights
and remedies of the Administrative Agent, the Issuing Bank, the Collateral
Agent, the Tranche B Agent, the Co-Agents and the Lenders under the Loan
Documents, (iii) the ability of the Borrower or the other Credit Parties to
pay the Obligations when due and to perform their covenants and agreements
under the Loan Documents, or (iv) the value of the assets of the Borrower
and the other Credit Parties.
(xxiv) INSURANCE. The Collateral Agent
shall be reasonably satisfied with the public liability insurance, third
party property damage insurance and casualty insurance required to be
maintained by the Borrower pursuant to Section 5.03 of this Agreement and
the Borrower shall have delivered to the Collateral Agent all documentation
required in connection with such insurance.
(xxv) COLLATERAL ACCESS AGREEMENTS. (i)
The Borrower shall have delivered to the Collateral Agent Collateral Access
Agreements duly-executed by the Borrower and/or the applicable Credit Party
or Credit Parties and each of the landlords and mortgagees of the
Borrower's warehouses located in Braintree, Massachusetts and Edison, New
Jersey; (ii) the Administrative Agent shall be satisfied in its sole
discretion that the Borrower shall have used its best efforts to obtain and
deliver to the Collateral Agent Collateral Access Agreements duly-executed
by the Borrower and/or the applicable Credit Party or Credit Parties and
each of the landlords and mortgagees of the Borrower's retail locations in
the Commonwealth of Pennsylvania; and (iii) the Administrative Agent shall
be satisfied in its sole discretion that the Borrower shall have used all
reasonable efforts to obtain and deliver to the Collateral Agent Collateral
Access Agreements duly-executed by the Borrower and/or the applicable
Credit Party or Credit Parties and each of the landlords and mortgagees of
each of its retail locations in the State of New Jersey.
(xxvi) LITIGATION. As of the Plan
Effective Date, the Administrative Agent shall be reasonably satisfied that
no litigation commenced or threatened against the Borrower and its
Affiliates could have a material adverse effect on the Borrower's or any
other Credit Party's financial condition, operations, assets or ability to
repay the Loans and other Obligations under this Agreement and the other
Loan Documents.
(xxvii) OTHER CLOSING DOCUMENTS. The
Administrative Agent shall have received all other documents, certificates
and instruments required to be delivered to it pursuant to this Agreement
and on the Closing Documents List (including, without limitation, executed
copies of this Agreement, all other Loan Documents, a Borrowing Base
Certificate and certified copies of all documents evidencing or relating to
the New
110
Notes, the CAP Notes, the Cure Notes, the Tax Payment Plan, the New
Warrants (as defined in the Confirmed Plan) and the Combination Transaction
(as defined in the Confirmed Plan)) and all such documents shall be
satisfactory in form and substance to the Administrative Agent.
(xxviii) OTHER FINANCIAL REQUIREMENTS. The financial condition,
capital structure, liabilities and financial projections, including,
without limitation, cash flow, of the Borrower shall be reasonably
satisfactory to the Administrative Agent in all respects.
(xxix) CLOSING DATE. The initial Credit Extension hereunder
shall occur no later than one (1) Business Day after the Plan Effective
Date.
(xxx) ADDITIONAL COLLATERAL AND PERMISSIBLE COLLATERAL. The
Administrative Agent shall be satisfied in its sole discretion with the
identity of each lease included in the Additional Collateral on the
Effective Date. The Administrative Agent shall have received and approved
an appraisal of the Additional Collateral conducted by ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇,
Inc., which appraisal shall determine the aggregate value of the Additional
Collateral to be not in excess of $10,500,000, subject to adjustments
deemed appropriate by the Administrative Agent. The Administrative Agent
shall have received, with respect to each lease included in the Additional
Collateral and the Permissible Collateral, a mortgagee's waiver and consent
in form and substance satisfactory to the Collateral Agent, duly-executed
by the Borrower, the Collateral Agent and the entity acting as mortgagee
(the "MORTGAGEE") on behalf of the holders of the New Notes (collectively,
the "MORTGAGEE WAIVERS").
(yy) CONDITIONS PRECEDENT TO EACH TRANCHE A LOAN AND EACH LETTER OF
CREDIT. The obligation of the Tranche A Lenders to make each Tranche A Loan
and of the Issuing Bank to issue each Letter of Credit, including the initial
Loan and the initial Letter of Credit, is subject to the following conditions
precedent:
(i) NOTICE. The Administrative Agent shall have received a notice
with respect to such borrowing or issuance, as the case may be, as required
by Article II.
(ii) REPRESENTATIONS AND WARRANTIES. All representations and
warranties contained in this Agreement and the other Loan Documents or
otherwise made in writing in connection herewith or therewith shall be true
and correct in all material respects on and as of the date of each
Borrowing or the issuance of each Letter of Credit hereunder with the same
effect as if made on and as of such date, other than representations and
warranties that relate solely to an earlier date.
(iii) NO DEFAULT. On the date of each Borrowing hereunder and the
issuance of each Letter of Credit, the Borrower and the other Credit
Parties shall be in compliance with all of the terms and provisions set
forth herein and in the other Loan Documents to be observed or performed
and no Default or Event of Default shall have occurred and be continuing.
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(iv) BORROWING BASE CERTIFICATE. The Administrative Agent shall
have received the timely delivery of the most recently required Borrowing
Base Certificate within three (3) Business Days following the end of each
business week (ending on the Saturday of such week), with each such
Borrowing Base Certificate including schedules as required by the
Collateral Agent.
(v) PAYMENT OF FEES. The Borrower shall have paid to the
Administrative Agent the then unpaid balance of all accrued and unpaid Fees
then payable under and pursuant to this Agreement and the Fee Letters.
The request by the Borrower for, and the acceptance by the Borrower of, each
extension of credit hereunder shall be deemed to be a representation and
warranty by the Borrower that the conditions specified in this Section 4.02 have
been satisfied at that time and that after giving effect to such extension of
credit the Borrower shall continue to be in compliance with the Borrowing Base
and the Tranche B Borrowing Base.
(zz) CONDITIONS PRECEDENT TO EACH TRANCHE B LOAN. The obligation
of the Tranche B Lenders to make each Tranche B Loan is subject to the
following conditions precedent:
(i) NOTICE. The Administrative Agent shall have received a notice
with respect to such borrowing or issuance, as the case may be, as required
by Article II.
(ii) NO SUPER-DEFAULT. On the date of each Borrowing hereunder,
no Event of Super-Default shall have occurred and be continuing.
(iii) BORROWING BASE CERTIFICATE. The Administrative Agent shall
have received the timely delivery of the most recently required Borrowing
Base Certificate within three (3) Business Days following the end of each
business week (ending on the Saturday of such week), with each such
Borrowing Base Certificate including schedules as required by the
Collateral Agent.
(iv) TRANCHE A AVAILABILITY. At the time of the requested
Borrowing, no amounts shall be available for borrowing under the Tranche A
Commitments as calculated in accordance with Section 2.01(a)(1).
(v) PAYMENT OF FEES. The Borrower shall have paid to the
Administrative Agent the then unpaid balance of all accrued and unpaid Fees
then payable under and pursuant to this Agreement and the Fee Letters.
The request by the Borrower for, and the acceptance by the Borrower of, each
extension of credit hereunder shall be deemed to be a representation and
warranty by the Borrower that (a) at the time of the requested Borrowing, no
amounts are available for borrowing under the Tranche A Commitments as
calculated in accordance with Section 2.01(a)(1) and (b) after giving effect to
such extension of credit the Borrower shall continue to be in compliance with
the Borrowing Base and the Tranche B Borrowing Base.
(aaa) CONDITIONS PRECEDENT TO THE TRANCHE C LOAN. The obligation
of the Tranche C Lenders to make the Tranche C Loan is subject to the
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satisfaction of the conditions precedent set forth in Section 4 and Section 12
of the Fourth Amendment.
AFFIRMATIVE COVENANTS
From the date hereof and for so long as any Commitment shall
be in effect or any Loan, Letter of Credit or other Obligation shall remain
outstanding (unless such Letter of Credit is fully collateralized to the
satisfaction of the Administrative Agent), the Borrower and each of the other
Credit Parties agree that the Borrower and each other Credit Party will:
(bbb) FINANCIAL STATEMENTS, REPORTS, ETC. In the case of the Borrower
and the other Credit Parties, (i) deliver to the Administrative Agent, the
Issuing Bank, the Collateral Agent, the Tranche B Agent, the Tranche C Agent
and each of the Lenders:
(i) Within 90 days after the end of each fiscal year of BI,
BI's consolidated and the Borrower's consolidated balance sheet and related
statement of income and cash flows, showing the financial condition of BI,
the Borrower and the other Credit Parties on a consolidated basis and the
Borrower on a consolidated basis as of the close of such fiscal year and
the results of their respective operations during such year, to be audited
by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or other independent public accountants of recognized
national standing acceptable to the Required Lenders and accompanied by an
opinion of such accountants (which shall not be qualified in any material
respect) and to be certified by a Financial Officer of the Borrower to the
effect that such consolidated financial statements fairly present the
financial condition and results of operations of BI, the Borrower and the
other Credit Parties on a consolidated basis and the Borrower on a
consolidated in accordance with GAAP consistently applied;
(ii) Within 45 days after the end of the first three fiscal
quarters of BI (commencing with the fiscal quarter ending on or about
January 30, 1999) and within 60 days after the end of the fourth fiscal
quarter of each fiscal year of BI, BI's consolidated and the Borrower's
consolidated balance sheets and related statements of income and cash
flows, showing the financial condition of BI, the Borrower, and the other
Credit Parties on a consolidated basis and the Borrower on a consolidated
basis as of the close of such fiscal quarter and the results of their
respective operations during such fiscal quarter and the then elapsed
portion of the fiscal year, each certified by a Financial Officer as fairly
presenting the financial condition and results of operations of BI, the
Borrower and the other Credit Parties on a consolidated basis and the
Borrower on a consolidated basis in accordance with GAAP consistently
applied, subject to normal year-end audit adjustments;
(iii) Concurrently with any delivery of financial statements
under (a) or (b) above, a certificate of the accounting firm or a Financial
Officer, as the case may be, opining on or certifying such statements (i)
certifying that no Default or Event of Default has occurred, or, if such a
Default or Event of Default has occurred, specifying the nature and extent
thereof and any corrective action taken or proposed to be taken with
respect thereto and (ii) setting forth computations in reasonable detail
satisfactory to the Administrative Agent demonstrating compliance with the
provisions of Sections 6.04, 6.05, 6.06 and 6.07 hereof;
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(iv) Within 30 days of the end of each fiscal month of BI
(commencing with the fiscal month ending on or about January 30, 1999) (or
45 days with respect to the fiscal month ending at the end of each fiscal
quarter of BI), the unaudited monthly income statement, balance sheet and
cash flow report of BI, the Borrower and the other Credit Parties on a
consolidated basis and the Borrower on a consolidated basis as of the close
of such fiscal month and the results of their respective operations during
such fiscal period and the then elapsed portion of the fiscal year (and
such other cash flow reports and operating statements as the Administrative
Agent, the Issuing Bank, the Collateral Agent, the Tranche B Agent or any
Lender may reasonably request), all certified by a Financial Officer as
fairly presenting the results of operations of BI, the Borrower and the
other Credit Parties on a consolidated basis and the Borrower on a
consolidated basis, subject to normal year-end audit adjustments;
(v) To the extent not otherwise required under this Section
5.01, those additional reports listed on Schedule 5.01(e) hereto;
(vi) Promptly after the same become publicly available,
copies of all periodic and other reports, proxy statements and other
materials filed by it with the Securities and Exchange Commission, or any
governmental authority succeeding to any of or all the functions of said
commission, or with any national securities exchange, as the case may be;
(vii) As soon as available and in any event (A) within 30
days after the Borrower or any of its ERISA Affiliates knows or has reason
to know that any Termination Event described in clause (i) of the
definition of Termination Event with respect to any Single Employer Plan of
the Borrower or such ERISA Affiliate has occurred and (B) within 10 days
after the Borrower or any of its ERISA Affiliates knows or has reason to
know that any other Termination Event with respect to any such Plan has
occurred, a statement of a Financial Officer describing such Termination
Event and the action, if any, which the Borrower or such ERISA Affiliate
proposes to take with respect thereto;
(viii) Promptly and in any event within 10 days after
receipt thereof by the Borrower or any of its ERISA Affiliates from the
PBGC copies of each notice received by the Borrower or any such ERISA
Affiliate of the PBGC's intention to terminate any Single Employer Plan of
the Borrower or such ERISA Affiliate or to have a trustee appointed to
administer any such Plan;
(ix) Promptly and in any event within 30 days after the
filing thereof with the Internal Revenue Service, copies of each Schedule B
(Actuarial Information) to the annual report (Form 5500 Series) with
respect to each Single Employer Plan of the Borrower or any of its ERISA
Affiliates;
(x) Within 10 days after notice is given or required to be
given to the PBGC under Section 302(f)(4)(A) of ERISA of the failure of the
Borrower or any of its ERISA Affiliates to make timely payments to a Plan,
a copy of any such notice filed and a statement of a Financial Officer of
the Borrower setting forth (A) sufficient
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information necessary to determine the amount of the lien under Section
302(f)(3), (B) the reason for the failure to make the required payments and
(C) the action, if any, which the Borrower or any of its ERISA Affiliates
proposed to take with respect thereto;
(xi) Promptly and in any event within 10 days after receipt
thereof by the Borrower or any ERISA Affiliate from a Multiemployer Plan
sponsor, a copy of each notice received by the Borrower or any ERISA
Affiliate concerning (A) the imposition of Withdrawal Liability by a
Multiemployer Plan, (B) the determination that a Multiemployer Plan is, or
is expected to be, in reorganization within the meaning of Title IV of
ERISA, (C) the termination of a Multiemployer Plan within the meaning of
Title IV of ERISA, or (D) the amount of liability incurred, or which may be
incurred, by the Borrower or any ERISA Affiliate in connection with any
event described in clause (A), (B) or (C) above; and
(xii) Promptly, from time to time, such other information
regarding the operations, business affairs and financial condition of the
Borrower or any other Credit Party, or compliance with the terms of any
material loan or financing agreements as the Administrative Agent, the
Issuing Bank, the Collateral Agent, the Tranche B Agent, the Tranche C
Agent or any Lender may reasonably request.
(xiii) Furnish to the Administrative Agent and its counsel
promptly after the same is available, copies of all pleadings, motions,
applications, judicial information, financial information and other
documents filed by or on behalf of the Borrower or any of the other Credit
Parties with the Bankruptcy Court or any other court of competent
jurisdiction.
(xiv) At least 15 days prior thereto, provide the
Administrative Agent with written notice of the closing of any store (it
being understood that the Borrower may only close stores as permitted by
Section 6.13(c)).
(xv) At least 5 days prior thereto, provide the
Administrative Agent with the identity of any lease (which shall not then
be included in the Leasehold Collateral) to be included in the Additional
Collateral after the Closing Date, as well as a certification of the
appraised value thereof.
(xvi) Promptly and in any event within 30 days after the end
of each fiscal month of the Borrower (commencing with the fiscal month
ending on or about July 31, 2000), a detailed statement of all amounts paid
and required to be paid in the previous calendar month with respect to each
leased store then included in the Leasehold Collateral on account of base
rent and required escrow of common area maintenance charges, together with
such supporting documentation as the Administrative Agent, the Issuing
Bank, the Collateral Agent, the Tranche B Agent, the Tranche C Agent or any
Lender may request.
(ccc) CORPORATE EXISTENCE. Do or cause to be done and cause each
of the other Credit Parties to do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its corporate existence,
material rights, licenses, permits and
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franchises and comply in all material respects with all laws and regulations
applicable to it; PROVIDED that nothing in this Section 5.02 shall prohibit any
Credit Party from being merged into the Borrower in accordance with Section 6.02
of this Agreement.
(ddd) INSURANCE.
(i) Keep its insurable properties (including, without
limitation, the Collateral) insured at all times, against such casualty
risks, including fire and other risks insured against by extended coverage,
as is customary with companies of the same or similar size in the same or
similar businesses in amounts and coverages reasonably satisfactory to the
Collateral Agent in its sole discretion. Such casualty insurance policies
shall name the Collateral Agent as loss payee and shall contain such other
provisions as the Collateral Agent may reasonably require to fully protect
the Collateral Agent's interest in the Collateral and to any payments to be
made under such policies in excess of $25,000 per occurrence. The Borrower
shall diligently file and prosecute its claim or claims for any award or
payment in connection with any casualty loss and the Borrower shall deposit
in the BBNA Concentration Account, promptly upon receipt thereof, any and
all insurance proceeds and payments by the Borrower on account of any such
casualty loss. After the occurrence and during the continuance of an Event
of Default, (i) no settlement on account of any such casualty loss shall be
made without the consent of the Lenders and (ii) the Collateral Agent may
participate in any such proceedings and the Borrower shall deliver to the
Collateral Agent such documents as may be requested by the Collateral Agent
to permit such participation and shall consult with the Collateral Agent,
its attorneys and agents in the making and prosecution of such claim or
claims. The Borrower hereby irrevocably authorizes and appoints the
Collateral Agent its attorney-in-fact, after the occurrence and during the
continuance of an Event of Default, to collect and receive any such award
or payment and to file and prosecute such claim or claims, which power of
attorney shall be irrevocable and shall be deemed to be coupled with an
interest, and the Borrower shall, upon demand of the Collateral Agent,
make, execute and deliver any and all assignments and other instruments
sufficient for the purpose of assigning any such award or payment to the
Collateral Agent for the benefit of the Lenders, free and clear of any
encumbrances of any kind or nature whatsoever.
(ii) Maintain in full force and effect public liability
insurance against claims for personal injury or death or property damage
occurring upon, in, about or in connection with the use of any properties
owned, occupied or controlled by the Borrower or any Subsidiary, as the
case may be, in such amounts and with such deductibles as are customary
with companies of the same or similar size in the same or similar
businesses and in the same geographic area in amounts and coverages
reasonably satisfactory to the Collateral Agent in its sole discretion.
(iii) Maintain such other insurance as may be required by
law.
(iv) Maintain the Administrative Agent, the Issuing Bank,
the Collateral Agent, the Co-Agents, the Tranche B Agent, the Tranche C
Agent, BRS and the Lenders as additional insureds on all liability policies
of the Borrower and the other Credit Parties.
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(eee) OBLIGATIONS AND TAXES. With respect to the Borrower
and each other Credit Party, pay all its material obligations in accordance with
their terms and pay and discharge promptly all material taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits or
in respect of its property before the same shall become in default, as well as
all material lawful claims for labor, materials and supplies or otherwise which,
if unpaid, might become a Lien or charge upon such properties or any part
thereof; PROVIDED, HOWEVER, that the Borrower and each other Credit Party shall
not be required to pay and discharge or to cause to be paid and discharged any
such tax, assessment, charge, levy or claim so long as the validity or amount
thereof shall be contested in good faith by appropriate proceedings (if the
Borrower and the other Credit Parties shall have set aside on their books
adequate reserves therefor).
(fff) NOTICE OF EVENT OF DEFAULT, ETC. Promptly give to the
Administrative Agent, the Issuing Bank, the Collateral Agent, the Tranche B
Agent, the Tranche C Agent and each Lender notice in writing of (i) any Default,
Event of Default, Event of Super-Default, (ii) any threatened or pending
litigation that could reasonably be expected to have a material adverse effect
on the Borrower if adversely determined or (iii) any termination or likely
termination (in the Borrower's reasonable judgment) of any lease with respect to
any location listed on Schedule 3.11(a).
(ggg) BORROWING BASE CERTIFICATE. Furnish to the Administrative
Agent as soon as available and in any event on or before Thursday of each week a
Borrowing Base Certificate for the week ending on the immediately preceding
Saturday, substantially in the form of Exhibit A-1 or A-2, as the case may be.
(hhh) ACCESS TO BOOKS AND RECORDS; INSPECTIONS.
(i) Maintain or cause to be maintained at all times true and
complete books and records of the financial operations of the Borrower and
the other Credit Parties.
(ii) Provide the Administrative Agent, the Issuing Bank, the
Collateral Agent, the Tranche B Agent, the Tranche C Agent, the Lenders and
their representatives access to all such books and records (to the extent
not covered by a legal privilege and if any such materials are so
privileged, subject to the Administrative Agent's ability to discuss with
the Borrower, the other Credit Parties and their professional advisors the
matters contained in such privileged materials and otherwise be satisfied
with respect thereto, as determined by the Administrative Agent) during
regular business hours, in order that they may examine and make abstracts
or copies from such books, accounts, records and other papers (including,
but not limited to, pertaining to Inventory included in the Borrowing Base,
the Tranche B Borrowing Base, the Tranche C Borrowing Base and Receivables
included in the Borrowing Base) for the purpose of verifying the accuracy
of any information delivered by the Borrower or any other Credit Party to
the Administrative Agent, the Issuing Bank, the Collateral Agent, the
Tranche B Agent, the Tranche C Agent or the Lenders pursuant to this
Agreement or for any other purpose reasonably related to this Agreement.
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(iii) At any reasonable time and from time to time during
regular business hours, permit the Administrative Agent, the Issuing Bank,
the Collateral Agent, the Tranche B Agent, the Tranche C Agent, either
Co-Agent, any Lender or any representatives of the Administrative Agent,
the Issuing Bank, the Collateral Agent, the Tranche B Agent, the Tranche C
Agent, either Co-Agent or any such Lender (including, without limitation,
examiners, appraisers and consultants) thereof to visit and/or inspect the
properties and assets (whether owned, leased or rented), systems and
procedures (including those relating to cash management) of the Borrower
and the other Credit Parties, to conduct Collateral examinations and verify
the components of the Borrowing Base, the Tranche B Borrowing Base and the
Tranche C Borrowing Base and to discuss the assets, liabilities, business,
operations, systems, procedures, conditions or prospects of the Borrower or
any other Credit Party with its directors, officers, employees, advisors
and consultants.
(iv) Permit the Administrative Agent, the Issuing Bank, the
Collateral Agent, the Tranche B Agent, the Tranche C Agent, any Lender or
any representatives thereof to discuss directly with the Borrower's
independent certified public accountants the business, financial condition
and other affairs of the Borrower.
(iii) FEES. In addition to the other Fees and expenses due
hereunder, pay on demand all reasonable fees and expenses of any consultants,
appraisers and advisors retained by any of the Agents in connection herewith or
any other Loan Document.
(jjj) PROJECTIONS; BUSINESS PLAN. As soon as practicable, but in
no event later than 60 days prior to each fiscal year end, furnish to the
Administrative Agent the Borrower's preliminary business plan and financial
projections for the 12-month fiscal period ending on or about January 31 in the
next succeeding year (with the corresponding final business plan to follow
within 30 days after the end of such fiscal year), in each case in form and
substance satisfactory to the Administrative Agent, and make a Financial Officer
available to meet and discuss the same with the Administrative Agent, the
Issuing Bank, the Collateral Agent, the Tranche B Agent, the Tranche C Agent,
the Co-Agents and the Lenders. At any time that the Borrower believes the
assumptions, assertions or other information set forth in the Business Plan are
no longer accurate or are outdated, as soon as practicable thereafter, the
Borrower shall deliver a revised business plan for the remainder of such
12-month fiscal period.
(kkk) ERISA. The Borrower shall establish, maintain and operate
all Plans to comply in all material respects with the provisions of ERISA, the
Code, and all other requirements of Law, other than to the extent that the
Borrower is in good faith contesting by appropriate proceedings and with
adequate reserves the validity or application of any such provision, law, rule,
regulation or interpretation.
(lll) ENVIRONMENTAL AND OTHER MATTERS. The Borrower and the other
Credit Parties will conduct their businesses so as to comply in all material
respects with all applicable federal, state and local laws, regulations,
directions, ordinances, criteria and guidelines, including, without limitation,
environmental, land use, occupational safety and health laws, regulations,
directions, ordinances, criteria, guidelines, requirements and permits in all
jurisdictions in which any of them is or may at any time be doing business,
except to the extent
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that the Borrower or any of the other Credit Parties are
contesting, in good faith by appropriate legal proceedings, any such law,
regulation, direction, ordinance, criteria, guideline or interpretation thereof
or application thereof; PROVIDED, FURTHER, that the Borrower and each of the
other Credit Parties shall comply with the order of any court or other
Governmental Authority relating to such laws unless the Borrower or such other
Credit Party shall currently be prosecuting an appeal or proceedings for review
and shall have secured a stay of enforcement or execution postponing enforcement
or execution pending such appeal or proceedings for review. The Borrower shall
promptly take all actions necessary to prevent the imposition of any Liens on
any of its properties arising out of or related to any environmental matters or
otherwise. At the request of the Administrative Agent, and at the sole cost and
expense of the Borrower, the Borrower shall provide the Administrative Agent
with any additional information or reports relating to environmental matters and
any potential related liability resulting therefrom as the Administrative Agent
may reasonably request. In addition, the Borrower shall provide the
Administrative Agent, at the Borrower's sole cost and expense, with copies of
any environmental audits, surveys or reports conducted in connection with the
purchase or sale by the Borrower of any real property.
(mmm) MAINTAIN CASH CONCENTRATION SYSTEM. Maintain the BBNA
Concentration Account and otherwise comply with the provisions of Section 2.13
of this Agreement.
(nnn) MAINTAIN SECURITY INTEREST. Execute, acknowledge and
deliver, or cause the execution, acknowledgment and delivery of, and thereafter
register, file or record, or cause to be registered, filed or recorded, in an
appropriate governmental office, any document or instrument supplemental to or
confirmatory of the Security Documents or otherwise reasonably deemed by the
Collateral Agent necessary or desirable for the continued validity, perfection
and first-priority status of the Liens on the Collateral covered thereby. If at
any time following the Closing Date the Borrower or any other Credit Party shall
acquire property of any nature whatsoever (other than Real Property) which is
intended to be by the terms of the applicable Security Documents and is not
otherwise subject to the Lien created by such Security Documents, as soon as
possible and in no event later than ten (10) days after the relevant acquisition
date, the Borrower or such other Credit Party shall grant to the Collateral
Agent, for its benefit and the ratable benefit of the other Secured Parties, a
first priority Lien on such property as collateral security for the Obligations
pursuant to documentation reasonably satisfactory in form and substance to the
Collateral Agent.
(ooo) COLLATERAL ACCESS AGREEMENTS. Until such time as the
Administrative Agent otherwise notifies the Borrower in writing, obtain and
deliver as soon as practicable to the Collateral Agent Collateral Access
Agreements duly-executed by the Borrower and/or the applicable Credit Party or
Credit Parties and each of the landlords and mortgagees of each location where
the Borrower maintains any Inventory. In furtherance of the foregoing, the
Borrower and/or the applicable Credit Party or Credit Parties shall, to the
satisfaction of the Administrative Agent in its sole discretion, (a) continue to
use (i) their best efforts to obtain Collateral Access Agreements with respect
to the Borrower's retail locations in the Commonwealth of Pennsylvania, and (ii)
their reasonable efforts to obtain Collateral Access Agreements with respect to
the Borrower's retail locations in the State of New Jersey and (b)
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use their best efforts to obtain Collateral Access Agreements from the landlords
of each leased property included in the Additional Collateral and the
Permissible Collateral.
(ppp) INVENTORY. Cause all Inventory to be (i) located at such
places, (ii) in such amounts and (iii) of the quality and value represented to
the Collateral Agent by the Borrower on or about the Closing Date.
(qqq) FURTHER ASSURANCES. Take all such further actions and
execute all such further documents and instruments as the Administrative Agent,
the Collateral Agent, the Tranche B Agent or the Tranche C Agent may at any time
reasonably determine in its sole discretion to be necessary or desirable to
further carry out and consummate the transactions contemplated by this Agreement
and the other Loan Documents, to cause the execution, delivery and performance
of this Agreement and the other Loan Documents to be duly authorized and to
perfect or protect the Liens (and the priority status thereof) of the Collateral
Agent in the Collateral.
(rrr) USE OF PROCEEDS. Use the proceeds of the Loans only to,
first, repay in full all loans, letter of credit liabilities and other
obligations outstanding under or in respect of the Existing Credit Facility and,
second, make certain payments required under the Confirmed Plan not in excess of
$8,000,000 in the aggregate as provided in the summary of sources and uses of
funds set forth on Schedule 3.10 and to prepay up to the aggregate amount of
$9,000 to the holders of the New Notes, and, thereafter, (i) provide working
capital for and finance Inventory purchases by the Borrower and otherwise for
general corporate purposes of the Borrower and (ii) prepay the Permitted Note
Debt in accordance with Section 6.15. The Borrower will not use the proceeds of
any Loans or any other property of the Borrower to make any intercompany or
Affiliate advances (it being understood that proceeds of the Loans used for
ordinary-course operating expenses of the Bradlees store located in Yonkers, New
York (so long as such store remains open) will be deemed to be a permitted use
of proceeds hereunder).
(sss) PERMITTED NOTE DEBT AND TRADE LIEN DEBT. (a) Ensure that at
all times the terms of the Permitted Note Debt and the Trade Lien Debt comply
with the respective provisions of this Agreement (including any Attachments
hereto) and (b) upon receipt of notice of a default or event of default, or an
event which is reasonably likely to result in a default or an event of default,
under the documents governing any Permitted Note Debt or the Trade Lien,
immediately deliver to the Administrative Agent notice thereof.
(ttt) YONKERS. On the Yonkers Effective Date (as defined in the
Confirmed Plan), cause Yonkers to consummate a Combination Transaction (as
defined in the Confirmed Plan) in a manner acceptable to the Administrative
Agent. If at any time the provisions of the Yonkers Confirmation Order
authorizing Yonkers to enter into the Loan Documents to which it is a party is
reversed or vacated, or modified or amended in a manner deemed unacceptable by
the Administrative Agent, use its best efforts to obtain promptly from the
Bankruptcy Court an order authorizing Yonkers to enter into the Loan Documents
to which it is a party NUNC PRO TUNC to the Closing Date.
(uuu) MORTGAGEE WAIVERS.(a) Within 10 Business Days of such
delivery (unless extended by the Collateral Agent) cause each Mortgagee Waiver
delivered to the
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Collateral Agent hereunder to be properly recorded in the real
estate records of the appropriate jurisdiction.
(b) If so instructed by the Collateral Agent following a default
by the Borrower under the New Notes Indenture, within 90 days of such
instruction, either (at the option of the Collateral Agent) (i) transfer all
Inventory, equipment and other Collateral from one or more of the Bradlees store
locations included in the Permissible Collateral or the Additional Collateral to
another existing warehouse or store location at which the Collateral Agent has a
first-priority perfected security interest with respect to Collateral located at
such warehouse or store or (ii) conduct a going-out-of-business or other sale or
disposition of such Collateral at any or all such Permissible Collateral or
Additional Collateral locations (with respect to any transferred Collateral, to
the extent local law permits such sale), all in compliance with the relevant
lease and Mortgagee Waiver and as instructed by the Collateral Agent.
NEGATIVE COVENANTS
From the date hereof and for so long as any Commitment shall be in
effect or any Loan, Letter of Credit, or other Obligation shall remain
outstanding (unless such Letter of Credit is fully collateralized to the
satisfaction of the Administrative Agent) the Borrower and each of the other
Credit Parties agree that the Borrower and each of the other Credit Parties will
not:
(vvv) LIENS. Incur, create, assume or suffer to exist any Lien on
any property of the Borrower or the other Credit Parties whether now owned or
hereafter acquired by the Borrower, other than (i) Permitted Liens; (ii) Liens
in favor of the Collateral Agent, for its benefit and the ratable benefit of the
other Secured Parties pursuant to the Loan Documents; (iii) Liens granted in
favor of the Other Transactions Counterparties in connection with Interest Rate
Agreements, the Master Lease Agreement and any other obligations owed by the
Borrower or the other Credit Parties to the Other Transactions Counterparties;
(iv) Liens on any interests in Real Property securing Indebtedness permitted
under Section 6.03(iii); (v) the Trade Lien; or (vi) Liens securing outstanding
obligations of the Borrower under the New Notes and the CAP Notes; PROVIDED,
that the Liens securing obligations under the New Notes shall be secured only by
the Permissible Collateral, the Additional Collateral and the Yonkers Common
Stock Collateral (in each case, to the extent permitted by the terms of
Attachment III hereto) and the Liens securing the obligations under the CAP
Notes shall be secured only by a Lien on the CAP Collateral (as defined in
Attachment I hereto).
(www) MERGER, ETC. Consolidate or merge with or into another
Person (other than with Subsidiaries or BI so long as the Borrower is the
surviving entity) or enter into any stock or asset acquisitions.
(xxx) INDEBTEDNESS. Contract, create, incur, assume or suffer to
exist any Indebtedness, except for (i) Indebtedness arising under this Agreement
or any other Loan Document; (ii) Indebtedness secured by purchase money Liens
and Capitalized Leases in an aggregate amount not to exceed $10,000,000 incurred
after the Closing Date; (iii) Indebtedness secured by any interests in Real
Property (other than the Leasehold Collateral) owned or leased by the Borrower
or any other Credit Party that is non-recourse to the Borrower and the other
Credit Parties and is otherwise on terms and conditions reasonably satisfactory
to the Administrative Agent and the proceeds of which are deposited in the BBNA
Concentration
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Account for application to the Obligations in accordance with
Section 2.14; (iv) Permitted Note Debt; (vi) Indebtedness arising under Interest
Rate Agreements; and (v) any pre-petition tax claims (up to $3,400,000 in the
aggregate) to be paid subsequent to the Plan Effective Date pursuant to the Tax
Payment Plan.
(yyy) CAPITAL EXPENDITURES. Make Capital Expenditures in any
fiscal year in excess of $30,000,000; PROVIDED, that, (i) up to $5,000,000 of
such $30,000,000 amount not expended in any fiscal year may be carried over for
expenditure in the immediately following fiscal year and (ii) so long as no
Default or Event of Default is then continuing, if, as of the end of the
Borrower's fiscal year, the Borrower's EBITDA for the previous 12-month period
exceeds $40,000,000, the Borrower may increase its Capital Expenditures above
$30,000,000 for the next fiscal year by the lesser of (x) 50% of the EBITDA in
excess of $40,000,000, and (y) $10,000,000. Notwithstanding the foregoing, to
the extent BI receives any cash proceeds (the "EQUITY PROCEEDS") from the
issuance (the "EQUITY ISSUANCE") by BI of any of its equity securities in a
transaction not otherwise prohibited under this Credit Agreement, the Equity
Proceeds may be used by the Credit Parties for Capital Expenditures without
counting such Capital Expenditures against the dollar limits set forth in the
immediately preceding sentence; PROVIDED that, (i) the Administrative Agent
shall have received fully executed copies of all instruments, agreements and
other documents which relate to such Equity Issuance (excluding copies of the
certificates representing the securities so issued, other than a specimen
thereof), (ii) as required by the Loan Documents, pending any expenditure of
such Equity Proceeds permitted under this Credit Agreement, all Equity Proceeds
are held by the Collateral Agent as Collateral for the Obligations pursuant to
documentation reasonably satisfactory to the Collateral Agent, (iii) at the end
of each month in which any Capital Expenditures are made from such Equity
Proceeds, the Administrative Agent receives from the Borrower a written
statement of the amount of such Capital Expenditures made during such month and
a certification from an officer of the Borrower that such expenditures were for
Capital Expenditures, and (iv) during the period that any Equity Proceeds are
being held by the Collateral Agent as provided above, to the extent that the
Borrower or any other Credit Party makes any expenditure that, historically, is
outside of the Borrower's or such Credit Party's ordinary course of business (as
reasonably determined by the Administrative Agent) that is not a Capital
Expenditure, the full amount of such expenditure shall be deducted from the
amount of such Equity Proceeds that may be utilized for Capital Expenditures in
excess of the amounts set forth in the immediately preceding sentence.
SECTION 1.02 EBITDA. Permit EBITDA (after cash restructuring costs and
after adding back to EBITDA (to the extent not already done so) (i) up to
$4,400,000 of SG&A Expenses relating to emergence and other bonuses actually
incurred by the Borrower in connection with the Confirmed Plan and (ii) up to
$2,600,000 of non-recurring costs associated with running "going out of business
sales" at the Bradlees stores located in Danvers, Massachusetts, Yonkers, New
York and at Union Square in New York, New York, in connection with the permanent
closure of such stores) for the 12-month period ending on or about the date set
forth below to be less than the amount specified opposite such date:
FISCAL QUARTER OF THE BORROWER ENDING ROLLING EBITDA
on or about January 31, 1999 $17,500,000
on or about April 30, 1999 $20,000,000
on or about July 31, 1999 $22,500,000
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on or about October 31, 1999 $27,500,000
on or about January 31, 2000 $30,000,000
and each fiscal quarter thereafter
(zzz) ACCOUNTS PAYABLE TO INVENTORY RATIO. Permit the ratio of
the amount of Accounts Payable to the value of Inventory of the Borrower (valued
on a first in - first out basis at the lower of cost or market calculated on the
retail method in accordance with GAAP and shown on the Borrower's financial
statements), expressed as a percentage, at the end of each month in any year set
forth below to be less than the percentage specified opposite such month:
MONTH MINIMUM PERCENTAGE
January 37.0%
February 40.0%
March 40.0%
April 40.0%
May 40.0%
June 40.0%
July 40.0%
August 42.5%
September 42.5%
October 42.5%
November 42.5%
December 40.0%
SECTION 1.03 DEBT COVERAGE RATIO. For the fiscal quarter of the
Borrower ending on or about January 31, 2001 and each fiscal quarter thereafter,
permit the Borrower's ratio of (a) EBITDA LESS Capital Expenditures and cash
payments for taxes to (b) cash Interest Expense PLUS principal payments on any
Indebtedness, for the 12-month period ending on the last day of such fiscal
quarter to be less than 1.00:1.
SECTION 1.04 GUARANTEES AND OTHER LIABILITIES. Purchase or repurchase
(or agree, contingently or otherwise, so to do) the Indebtedness of, or assume,
guarantee (directly or indirectly or by an instrument having the effect of
assuring another's payment or performance of any obligation or capability of so
doing, or otherwise), endorse or otherwise become liable, directly or
indirectly, in connection with the obligations, stock or dividends of any
Person, or permit any Subsidiary or Guarantor to do so, except for (i) the
Guaranty of the Guarantors hereunder, (ii) the unsecured subordinated guaranty
by BI of the Borrower's obligations under the New Notes, as set forth on
Attachment III hereto and (iii) the subordinated guaranty by Yonkers of the
Borrower's obligations under the New Notes, as set forth on Attachment III
hereto.
SECTION 1.05 DIVIDENDS; CAPITAL STOCK. Declare or pay, directly or
indirectly, any dividends or make any other distribution or payment (by way of
repurchase or otherwise), whether in cash, property, securities or a combination
thereof, with respect to (whether by reduction of capital or otherwise) any
shares of capital stock (or any options, warrants, rights or other equity
securities or agreements relating to any capital stock), or set apart
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any sum for the aforesaid purposes; PROVIDED that any Subsidiary of the Borrower
may pay dividends to the Borrower.
(aaaa) TRANSACTIONS WITH AFFILIATES. Sell or transfer any
property or assets to, or otherwise engage in any other transactions with, any
of its shareholders or Affiliates, except that the Borrower or any other Credit
Party may engage in any of the foregoing transactions in the ordinary course of
business at prices and on terms and conditions not less favorable to the
Borrower or such other Credit Party than could be obtained on an arm's-length
basis from unrelated third parties and which are consistent with past practices.
Notwithstanding the foregoing, the Borrower may not transfer any assets to any
other Credit Party except for proceeds of the loans to the extent provided in
Section 3.10.
(bbbb) INVESTMENTS, LOANS AND ADVANCES. Purchase, hold or acquire
any capital stock, evidences of indebtedness or other securities of, make or
permit to exist any loans or advances to, or make or permit to exist any
investment or any other interest in, any other Person (all of the foregoing,
"INVESTMENTS"), except for (i) ownership of the capital stock of the Borrower by
BI and each of the Guarantors listed on Schedule 3.04 (other than BI) and
Yonkers by the Borrower, (ii) relocation or similar type loans or advances to
new employees not in excess of $750,000 in the aggregate during the term of this
Agreement and (iii) Permitted Investments (provided the Collateral Agent has a
perfected first-priority security interest therein for its benefit and the
ratable benefit of the other Secured Parties).
(cccc) DISPOSITION OF ASSETS. Sell or otherwise dispose of any
assets (including, without limitation, the capital stock of any Subsidiary),
except for (a) sales of Inventory in arm's-length transactions in the ordinary
course of business and (b) so long as no Default or Event of Default has
occurred or is continuing or would occur after giving effect to such sale or
disposition, (i) sales of Inventory, furniture, fixtures and equipment located
in the retail stores permitted to be closed under Section 6.13(c) that are
closed or otherwise disposed of, (ii) the sale of obsolete or worn out equipment
disposed of in the ordinary course of business, and (iii) the sale or other
transfer of Real Property (other than the Leasehold Collateral), the proceeds of
which are deposited in the BBNA Concentration Account for application to the
Obligations in accordance with Section 2.14; PROVIDED that the following shall
not be deemed prohibited by this Agreement: (i) the return to vendors of
out-of-season, defective, damaged or nonconforming Inventory or negotiated
returns for credit and (ii) the sale of Permissible Collateral, provided that
the proceeds from such sale are promptly either (A) used to repay the amounts
outstanding under the New Notes or (B) deposited in a Blocked Account or the
BBNA Concentration Account for application to the Obligations in accordance with
Section 2.14.
(dddd) NATURE OF BUSINESS.
(i) Modify or alter in any material manner the nature and
type of its business as conducted at the Closing Date or the manner in
which such business is conducted.
(ii) Change, in any material respect, any of its inventory
or sales accounting, invoicing or billing practices or management
information or reporting systems except for the change of the Borrower's
Inventory tracking and accounting
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system reasonably satisfactory to the Administrative Agent (PROVIDED that, after
such change, the Borrower continues to use accounting and tracking methodologies
consistent with those currently used by the Borrower).
(iii) Close more than 15 retail stores, except as set forth
in subsection 7.01(k).
(iv) Move Inventory from other than the locations listed on
Schedule 3.11(a).
(eeee) CONFLICTING AGREEMENTS OR ACTIONS. Enter into any
stipulation or agreement, take any action, or request or permit any other Person
to take any action which does or could conflict or materially interfere with any
of the rights, privileges, benefits or remedies of the Administrative Agent, the
Co-Agents, the Tranche B Agent, the Tranche C Agent, the Issuing Bank, the
Collateral Agent, or any of the Lenders under any of the Loan Documents, or
materially diminish or impair the practical realization of any such right,
privilege, benefit or remedy.
(ffff) PREPAYMENTS AND AMENDMENT OF DEBT DOCUMENTS.
(a) Make any optional payment or prepayment on or redemption or
purchase of, or deliver any funds to any trustee for the prepayment, redemption
or defeasance of, any Permitted Note Debt or any Indebtedness governed by the
Tax Payment Plan (other than as expressly permitted under Sections 3.10 and 5.17
hereof) or (b) amend, modify or change, or consent or agree to any amendment,
modification or change to any of the material terms of any documents governing
the Permitted Note Debt, the Trade Lien or the Tax Payment Plan (other than any
such amendment, modification or change which would extend the maturity or reduce
the amount of any payment of principal thereof or which would reduce the rate or
extend the date for payment of interest thereon). Notwithstanding anything to
the contrary in clause (a) of this Section 6.15 and provided that no Default or
Event of Default has then occurred and is continuing, the Borrower may prepay
any amounts outstanding (i) under the CAP Notes and Cure Notes with the prior
written consent of the Administrative Agent, such consent not to be unreasonably
withheld and (ii) under the New Notes in accordance with the terms of such New
Notes and the documents governing such New Notes, each as in effect on the
Closing Date, (1) with the proceeds from the sale of the Permissible Collateral
or the sale of the Additional Collateral (if such sale is consented to in
writing by the Administrative Agent), (2) with the proceeds of any equity
offering by BI consummated after the Plan Effective Date, or (3) with other
funds if, with respect to this clause (3), immediately after giving effect to
such prepayment, the amount available to be borrowed by the Borrower under
Section 2.0l(a)(1) (after accounting for the payment by the Borrower of all of
its other due and payable payment obligations whether or not actually paid) is
not less than the amount set forth below opposite the Borrower's fiscal month in
which such prepayment takes place:
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FISCAL MONTH REQUIRED EXCESS AVAILABILITY
February $39,000,000
March $46,000,000
April $49,000,000
May $48,000,000
June $36,000,000
July $38,000,000
August $31,000,000
September $34,000,000
October $47,000,000
November $43,000,000
December $47,000,000
January $46,000,000
The Borrower shall provide the Administrative Agent with written notice at least
twenty and not more than forty-five days in advance of its intention to prepay
any of the CAP Notes, the Cure Notes and the New Notes and, with respect to any
prepayment of the New Notes pursuant to clause (ii)(3) above, written
calculations demonstrating the Borrower's compliance with the provisions
thereof.
(b) Notwithstanding the foregoing, indebtedness of the Borrower under
the New Notes may be converted into common stock of BI as provided in the
Indenture.
(gggg) AMENDMENTS TO CREDIT PLAN AGREEMENT. Enter into or agree
to any amendment to or other modification of the Credit Plan Agreement or any
other documents or instruments (including, without limitation, UCC-1 financing
statements) executed in connection therewith without the prior written consent
of the Administrative Agent, such consent not to be unreasonably withheld.
SECTION 1.06 ELIGIBLE INVENTORY. Permit the Loan Value of Eligible
Inventory, at any time prior to the closing by the Borrower of its retail store
in Manhattan, New York, to be less than $220,000,000, or, at any time on and
after the closing of such retail store, $210,000,000.
(hhhh) MINIMUM EXCESS AVAILABILITY. Permit the amount available
to be borrowed by the Borrower under Section 2.0l(a)(1) and Section 2.01(b)(1)
(without duplication) (after accounting for the payment by the Borrower of all
of its other due and payable payment obligations whether or not actually paid)
to be less than $50,000,000 at any time during the month of December in any
calendar year.
(iiii) LOAN TO VALUE. Permit at any time the sum of the
outstanding amount of (A) Tranche A Credit Extensions, PLUS (B) Tranche B Loans,
PLUS (C) Tranche C Loans (excluding that portion of the principal amount of
Tranche C Loans attributable to the payment of interest thereon by adding such
interest thereto in accordance with Section 2.06(d)) to exceed the then amount
of the Tranche C Borrowing Base.
EVENTS OF DEFAULT
(jjjj) EVENTS OF DEFAULT. If any of the following events (each,
an "EVENT OF DEFAULT") occurs:
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(i) any material representation or warranty made by the
Borrower or any other Credit Party in this Agreement or in any other Loan
Document or in connection with this Agreement or with the execution and
delivery of the Notes or the credit extensions hereunder or any material
statement or representation made in any report, financial statement,
certificate or other document furnished by the Borrower or any other Credit
Party to the Administrative Agent, the Issuing Bank, the Collateral Agent,
the Tranche B Agent, the Tranche C Agent, or any of the Lenders under or in
connection with this Agreement or any other Loan Document, shall prove to
have been false or misleading in any material respect when made or
delivered; or
(ii) default shall be made in the payment of any (i) Fees or
interest on the Loans when due, and such default shall continue unremedied
for more than three (3) Business Days or (ii) principal of the Loans or
other amounts payable by the Borrower hereunder (including, without
limitation, reimbursement obligations or cash collateralization in respect
of Letters of Credit), when and as the same shall become due and payable,
whether at the due date thereof or at a date fixed for prepayment thereof
or by acceleration thereof or otherwise; or
(iii) default shall be made by the Borrower or any other
Credit Party in the due observance or performance of any covenant,
condition or agreement contained in Article VI hereof; or
(iv) default shall be made by the Borrower or any other
Credit Party in the due observance or performance of any other covenant,
condition or agreement to be observed or performed pursuant to the terms of
this Agreement or any of the other Loan Documents and, with respect to
Sections 5.01, 5.02 or 5.10, such default shall continue unremedied for
more than five (5) Business Days; or
(v) dissolution, liquidation, winding up or cessation of the
Borrower's or any other Credit Party's businesses, or the failure of the
Borrower or any other Credit Party to meet its debts as they mature, or the
calling of one or more meetings of the Borrower's or any other Credit
Party's major creditors for purposes of obtaining a moratorium on payment
or a compromise of the Borrower's or any other Credit Party's debts; or
(vi) the insolvency of the Borrower or any other Credit
Party or the commencement on or after the Closing Date by or against the
Borrower or any other Credit Party of any bankruptcy, insolvency,
arrangement, reorganization, receivership or similar proceedings under any
federal or state law and, in the event any such proceeding is commenced
against the Borrower or any other Credit Party, such proceeding is not
dismissed within thirty (30) days; or
(vii) the loss by the Borrower or any other Credit Party of
any lease, permit, franchise or agreement, the loss of which could
reasonably be expected to have a material adverse effect on the financial
condition, operations or assets of the Borrower or the other Credit
Parties, or their ability to repay the Obligations or of the Collateral
Agent to realize on the Collateral; or
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(viii) failure of ▇▇▇▇▇ ▇▇▇▇▇▇▇ or some other person
reasonably acceptable to the Administrative Agent, to participate in the
affairs of the Borrower and the other Credit Parties as Chairman of the
Board of Directors and Chief Executive Officer with no diminution in the
present responsibilities and authority related to this executive management
position; or
(ix) (A) the occurrence of a default or event of default (in
each case without regard to any applicable grace periods) which permits, or
could permit, the acceleration of the maturity of, or the exercise of any
other remedies under (a) the Master Lease Agreement or any Interest Rate
Agreement or (b) any note, agreement or instrument evidencing (1) the New
Notes or the Tax Payment Plan or (2) any other Indebtedness of the Borrower
or any of the other Credit Parties, and the aggregate principal amount of
all such Indebtedness included in this clause (3) with respect to which
such a default or an event of default has occurred, or the maturity of
which is permitted to be accelerated, exceeds $10,000,000 or (B) at any
time more than 10 leases of the Borrower's retail locations or warehouses
have been declared to be terminated by the landlords thereunder and such
terminations have not been withdrawn, settled or otherwise adjudicated in
favor of the Borrower, PROVIDED THAT for purposes of this clause (B) only,
all leases with Vornado Realty Trust or its Affiliates will be deemed to be
one lease ; or
(x) (A) any material provision of any Loan Document shall,
for any reason, cease to be valid and binding on the Borrower or any of the
other Credit Parties; PROVIDED, that, with respect to Yonkers only, such
occurrence that is caused by any of the circumstances set forth in the
second sentence of Section 5.19 shall not be an Event of Default hereunder
so long as the Credit Parties comply with the provisions of such sentence
or (B) any Lien granted to the Collateral Agent under any Loan Document
shall cease to be a first-priority perfected Lien (subject only to
Permitted Liens), or, in the case of (A) or (B) the Borrower or any of the
other Credit Parties shall so assert in any pleading filed in any court; or
(xi) greater than fifty percent (50%) of the Borrower's
stores close (temporarily or otherwise) for more than seven (7) consecutive
days, unless such closures are covered by business interruption insurance;
or
(xii) any one or more judgments or orders as to a liability
or debt for the payment of money (not covered by insurance and workers'
compensation payments) in excess of $5,000,000 in the aggregate shall be
rendered against the Borrower or any of the other Credit Parties and either
(i) enforcement proceedings shall have been commenced and shall be
continuing by any creditor upon such judgment or order or (ii) there shall
be any period of 30 consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal, payment or
otherwise, shall not be in effect; or
(xiii) any non-monetary judgment or order shall be rendered
against the Borrower or any of the other Credit Parties which does or would
reasonably be expected to (i) cause a material adverse change in the
financial condition, business,
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operations or assets of the Borrower and the other Credit Parties taken as
a whole on a consolidated basis, (ii) have a material adverse effect on the
ability of the Borrower or any of the other Credit Parties to perform their
respective obligations under any Loan Document, or (iii) have a material
adverse effect on the Collateral or on the rights and remedies of the
Administrative Agent, the Issuing Bank, the Collateral Agent, the Tranche B
Agent, the Tranche C Agent, the Co-Agents or any Lender under any Loan
Document, and there shall be any period of 10 consecutive days during which
a stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; or
(xiv) (i) The Borrower or any ERISA Affiliate shall fail to
pay when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under a
Multiemployer Plan; (ii) the Borrower or any ERISA Affiliate shall fail to
satisfy, after application of any applicable grace periods, its
contribution requirements under Section 412(c)(11) of the Code, whether or
not it has sought a waiver under Section 412(d) of the Code; (iii) in the
case of a Termination Event involving the withdrawal from a Single Employer
Plan of a "substantial employer" (as defined in Section 4001(a)(2) or
Section 4062(e) of ERISA), the withdrawing employer's proportionate share
of that Plan's Unfunded Pension Liabilities is more than $5,000,000; (iv)
in the case of a Termination Event involving the complete or partial
withdrawal from a Multiemployer Plan, the withdrawing employer has incurred
a withdrawal liability in an aggregate amount exceeding $5,000,000; (v)
there occurs a Termination Event described in clauses (ix) or (x) of the
definition of Termination Event; (vi) in the case of a Termination Event
not described in clause (iii), (iv) or (v), the Unfunded Pension
Liabilities of the relevant Plan or Plans exceed $5,000,000; or (vii) a
Qualified Plan shall lose its qualification, and with respect to such loss
of qualification, the Borrower or any ERISA Affiliate can reasonably be
expected to be required to pay (for additional taxes, payments to or on
behalf of Plan participants, or otherwise) an aggregate amount exceeding
$5,000,000; or
(xv) it shall be determined (whether by the Bankruptcy Court
or by any other judicial or administrative forum) that the Borrower is
liable for the payment of claims arising out of any failure to comply (or
to have complied) with applicable environmental laws or regulations the
payment of which will have a material adverse effect on the financial
condition, business, properties, operations or assets of the Borrower or
the Borrower and/or the Guarantors, taken as a whole; or
(xvi) the occurrence of a Change of Control; or
(xvii) the Confirmation Order or the Yonkers Confirmation
Order is reversed, vacated, rescinded, modified or amended (except as
expressly provided in Section 3.09 and subsection 4.01(d) or, with respect
to the Yonkers Confirmation Order, if the Borrower complies with the
provisions of the second sentence of Section 5.19),
then, and in every such event and at any time thereafter during the continuance
of such event, the Administrative Agent may, and at the request of the Required
Tranche A Lenders shall, by notice (a "DEFAULT NOTICE") to the Borrower take one
or more of the following actions, at the same or different times: (i) terminate
forthwith all obligations of the Tranche A Lenders and the Issuing Bank to
extend credit under this Agreement, including any and
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all obligations to make Tranche A Loans or to issue Letters of Credit; (ii)
declare the Loans then outstanding to be forthwith due and payable (such
declaration to be consented to in advance by the Required Supermajority Lenders
if at such time any Tranche B Loans or Tranche C Loans are outstanding and the
Tranche B Lenders and the Tranche C Lenders have not at such time exercised
their remedies under clauses (ii) or (iv) of the last paragraph of Section 7.02
hereof), whereupon the principal of all outstanding Loans together with accrued
interest thereon and any unpaid accrued Fees and all other liabilities of the
Borrower accrued hereunder and under any other Loan Document shall become
forthwith due and payable, without presentment, demand, protest or any other
notice of any kind, all of which are hereby expressly waived by the Borrower and
the other Credit Parties, anything contained herein or in any other Loan
Document to the contrary notwithstanding; (iii) require the Borrower and the
other Credit Parties to deposit in the Cash Collateral Account, no later than
the first Business Day after such Default Notice is given, cash in an amount
equal to the sum of 105% of the aggregate amounts that then are or thereafter
may become available for drawing or payment under all outstanding Letters of
Credit and (without limiting or restricting any application permitted under
Sections 2.13 and 2.14) to the extent the Borrower and the other Credit Parties
shall fail to furnish such funds as demanded by the Administrative Agent, the
Administrative Agent shall be authorized to debit the accounts of the Borrower
and the other Credit Parties maintained with the Administrative Agent in such
amount; (iv) set-off amounts in the Cash Collateral Account or any other
accounts maintained by the Administrative Agent and apply such amounts to the
obligations of the Borrower and the other Credit Parties hereunder and in the
other Loan Documents in connection with the Loans as provided in Section 2.17(a)
(but this clause (iv) shall not limit or restrict any application permitted
under Sections 2.13 and 2.14); (v) instruct the Collateral Agent to exercise its
remedies under the Security Documents (including, without limitation,
foreclosure upon and taking possession of the Collateral), such instruction to
be consented to in advance by the Required Supermajority Lenders if at such time
any Tranche B Loans or Tranche C Loans are outstanding, and, to the extent the
exercise of such remedies shall be with respect to the Leasehold Collateral, by
the Required Tranche C Lenders if at such time any Tranche C Loans are
outstanding, and the Tranche B Lenders or the Tranche C Lenders have not at such
time exercised their remedies under clauses (ii) or (iv) of the last paragraph
of Section 7.02 hereof, and (vi) exercise any and all other remedies under the
Loan Documents and applicable law available to the Administrative Agent, the
Issuing Bank, the Collateral Agent, the Co-Agents and the Lenders.
(kkkk) EVENTS OF SUPER-DEFAULT. If any of the following
events (each, an "EVENT OF SUPER-DEFAULT") occurs:
(i) any of the representations and warranties set forth
in Sections 3.01, 3.03, 3.04, 3.09, 3.11(d) or 3.13 prove to have been
false or misleading in any material respect when made or delivered; or
(ii) default shall be made by the Borrower or any other
Credit Party in the due observance or performance of any covenant,
condition or agreement set forth in Sections 5.02, 5.06, 5.07, 5.12, 5.13,
5.15, 6.02, 6.09, 6.10, 6.12, 6.13(c) or (d), 6.17, 6.18 or 6.19 hereof
and, with respect to Section 5.02, such default shall continue unremedied
for more than five (5) Business Days and, with respect to Section 5.06,
such default shall continue unremedied for more than two (2) Business Days;
or
(iii) any Event of Default set forth in Sections 7.01
(b), (e), (f), (j), (p) or (q); or
(iv) (d) failure of the Borrower or the other Credit
Parties to comply with Sections 6 or 11 of the Security Agreement; or
(v) acceleration of the Tranche A Loans pursuant to
clause (ii) in the last paragraph of Section 7.01; or
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(vi) any other Event of Default that continues unwaived for
ten (10) Business Days;
then, and in every such event and at any time thereafter during the continuance
of any such event, (A) the Administrative Agent may, and at the request of the
Required Tranche B Lenders shall, by notice (a "TRANCHE B DEFAULT NOTICE") to
the Borrower take one or more of the following actions, at the same or different
times: (i) terminate forthwith all obligations of the Tranche B Lenders to
extend credit under this Agreement, including any and all obligations to make
Tranche B Loans; (ii) provided that either (a) the Tranche A Loans have been
declared due and payable pursuant to Section 7.01 or (b) 30 days have elapsed
since the occurrence of the Event of Super-Default, declare the Tranche B Loans
then outstanding to be forthwith due and payable, whereupon the principal of all
outstanding Tranche B Loans together with accrued interest thereon and any
unpaid accrued Fees and all other liabilities of the Borrower accrued hereunder
and under any other Loan Document shall become forthwith due and payable,
without presentment, demand, protest or any other notice of any kind, all of
which are hereby expressly waived by the Borrower and the other Credit Parties,
anything contained herein or in any other Loan Document to the contrary
notwithstanding; (iii) set-off amounts in the Cash Collateral Account or any
other accounts maintained by the Administrative Agent and apply such amounts to
the obligations of the Borrower and the other Credit Parties hereunder and in
the other Loan Documents in connection with the Tranche B Loans to the extent
provided in Section 2.17(a) (but this clause (iii) shall not limit or restrict
any application permitted under Sections 2.13 and 2.14); (iv) provided that
either (A) the Tranche A Loans have been declared due and payable pursuant to
Section 7.01 or (B) 30 days have elapsed since the occurrence of the Event of
Super-Default, instruct the Collateral Agent to exercise its remedies under the
Security Documents (including, without limitation, foreclosure upon and taking
possession of the Collateral) and (v) exercise any and all other remedies under
the Loan Documents and applicable law available to the Administrative Agent, the
Issuing Bank, the Collateral Agent, the Tranche B Agent, the Tranche C Agent,
the Co-Agents and the Lenders; and
(B) the Administrative Agent may, and at the request of the Required Tranche C
Lenders shall, by notice (a "TRANCHE C DEFAULT NOTICE") to the Borrower take one
or more of the following actions, at the same or different times: (i) provided
that either (a) the Tranche A Loans have been declared due and payable pursuant
to Section 7.01, (b) the Tranche B Loans have been declared due and payable
pursuant to Section 7.02, (c) 40 days have elapsed since the occurrence of the
Event of Super-Default (other than a default by the Borrower or any other Credit
Party in the due observance or performance of Section 6.19), or (d) 15 days have
elapsed since the occurrence of the default by the Borrower or any other Credit
Party in the due observance or performance of Section 6.19, declare the Tranche
C Loans then outstanding to be forthwith due and payable, whereupon the
principal of all outstanding Tranche C Loans together with accrued interest
thereon and any unpaid accrued Fees and all other liabilities of the Borrower
accrued hereunder and under any other Loan Document shall become forthwith due
and payable, without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived by the Borrower and the other
Credit Parties, anything contained herein or in any other Loan Document to the
contrary notwithstanding; (ii) set-off amounts in the Cash Collateral Account
funded in accordance with Section 2.10 or any other accounts maintained by the
Administrative Agent and apply such amounts to the obligations of the Borrower
and the other Credit Parties hereunder and in the other Loan Documents in
connection with the Tranche C Loans to the extent provided in Section 2.17(a)
(but this clause (ii) shall not limit or restrict any application permitted
under Sections 2.13 and 2.14); (iii) provided that either (a) the Tranche A
Loans have been declared due and payable pursuant to Section 7.01, (b) the
Tranche B Loans have been declared due and payable pursuant to Section 7.02, (c)
40 days have elapsed since the occurrence of the Event of Super-Default (other
than a default by the Borrower or any other Credit Party in the due observance
or performance of Section 6.19), or (d) 15 days have elapsed since the
occurrence of the default by the Borrower or any other Credit Party in the due
observance or performance of Section 6.19, instruct the Collateral Agent to
exercise its remedies under the Security Documents (including, without
limitation, foreclosure upon and taking possession of the Collateral), (iv) take
such action as the Required Tranche C Lenders deem necessary to protect or
realize upon the Collateral Agent's or the Special Collateral Agent's interest
in the Leasehold Collateral as permitted under the Leasehold Mortgages in such a
manner that does not adversely affect Collateral Agent's interest in or access
to the other Collateral, and (v) exercise any and all other remedies under the
Loan Documents and applicable law available to the Administrative Agent, the
Issuing Bank, the Collateral Agent, the Tranche B Agent, the Tranche C Agent,
the Co-Agents and the Lenders.
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(llll) WHEN CONTINUING. For all purposes under this Agreement, each
Default and Event of Default that has occurred shall be deemed to be continuing
at all times thereafter unless it either (a) is cured or corrected to the
reasonable written satisfaction of the Required Tranche A Lenders or (b) is
waived in writing by the Required Tranche A Lenders. For all purposes under this
Agreement, each Event of Super-Default that has occurred shall be deemed to be
continuing at all times thereafter unless it either (a) is cured or corrected to
the reasonable written satisfaction of the Required Tranche B Lenders and the
Required Tranche C Lenders or (b) is waived in writing by the Required Tranche B
Lenders and the Required Tranche C Lenders.
THE AGENTS
(mmmm) ADMINISTRATION BY ADMINISTRATIVE AGENT. The general administration
of the Loan Documents shall be by the Administrative Agent. The Lenders, the
Collateral Agent, the Tranche B Agent, the Tranche C Agent and the Issuing Bank
each hereby irrevocably authorizes the Administrative Agent (i) to enter into
the Loan Documents to which it is a party and (ii) at its discretion, to take or
refrain from taking such actions as agent on its behalf and to exercise or
refrain from exercising such powers under the Loan Documents and the Notes as
are delegated by the terms hereof or thereof, as appropriate, together with all
powers reasonably incidental thereto. The Administrative Agent shall have no
duties or responsibilities except as set forth in this Agreement and the
remaining Loan Documents.
(nnnn) THE COLLATERAL AGENT. Each Lender, the Administrative Agent, the
Tranche B Agent, the Co-Agents and the Issuing Bank hereby irrevocably (i)
designate BBRF as Collateral Agent under this Agreement and the other Loan
Documents, (ii) authorize the Collateral Agent to enter into the Collateral
Documents and the other Loan Documents to which it is a party and to perform its
duties and obligations thereunder and (iii) agree and consent to all of the
provisions of the Security Documents. All Collateral shall be held or
administered by the Collateral Agent (or its duly-appointed agent) for its
benefit and for the ratable benefit of the other Secured Parties. Any proceeds
received by the Collateral Agent from the foreclosure, sale, lease or other
disposition of any of the Collateral and any other proceeds received pursuant to
the terms of the Security Documents or the other Loan Documents shall be paid
over to the Administrative Agent for application as provided in Sections 2.10(e)
or (f), 2.14(a), (b) or (c), as applicable.
(oooo) ADVANCES AND PAYMENTS.
(i) On the date of each Loan, the Administrative Agent shall
be authorized (but not obligated) to advance, for the account of each of
the Lenders, the amount of the Loan to be made by it in accordance with
its Commitment hereunder. Should the Administrative Agent do so, each of
the Lenders agrees forthwith to reimburse the Administrative Agent in
immediately available funds for the amount so advanced on its behalf by
the Administrative Agent, together with interest at the Federal Funds
Effective Rate if not so reimbursed on the date due from and including
such date but not including the date of reimbursement.
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(ii) Any amounts received by the Administrative Agent in
connection with this Agreement or the other Loan Documents (other than
amounts to which the Administrative Agent is entitled pursuant to
Sections 2.19, 5.08, 8.07, 10.05 and 10.06), the application of which is
not otherwise provided for in this Agreement shall be applied in the
order of priority set forth in Sections 2.10(e) or (f), 2.14(a), (b) or
(c), as applicable. All amounts to be paid to a Lender, the Collateral
Agent, the Tranche B Agent, the Tranche C Agent, either Co-Agent or the
Issuing Bank by the Administrative Agent shall be credited to that
Lender, the Collateral Agent, the Tranche B Agent, the Tranche C Agent,
such Co-Agent or the Issuing Bank, as applicable, after collection by the
Administrative Agent, in immediately available funds either by wire
transfer or deposit in the correspondent account of that Lender, the
Collateral Agent, the Tranche B Agent, the Tranche C Agent, such Co-Agent
or the Issuing Bank with the Administrative Agent, as such Lender, the
Collateral Agent, the Tranche B Agent, the Tranche C Agent, such Co-Agent
or the Issuing Bank and the Administrative Agent shall from time to time
agree.
(pppp) SHARING OF EXCESS PAYMENTS. Each of the Lenders, the Collateral
Agent, the Tranche B Agent, the Tranche C Agent, each Co-Agent and the Issuing
Bank agrees that if it shall, through the exercise of a right of banker's lien,
setoff or counterclaim against the Borrower or any other Credit Party,
including, but not limited to, a secured claim under Section 506 of the
Bankruptcy Code or other security or interest arising from, or in lieu of, such
secured claim and received by such Lender, the Collateral Agent, the Tranche B
Agent, the Tranche C Agent, such Co-Agent or the Issuing Bank under any
applicable bankruptcy, insolvency or other similar law, or otherwise, obtain
payment in respect of its Obligations owed it (an "EXCESS PAYMENT") as a result
of which such Lender, the Collateral Agent, the Tranche B Agent, the Tranche C
Agent, such Co-Agent or the Issuing Bank has received payment of any Loans or
other Obligations outstanding to it in excess of the amount that it would have
received if all payments at any time applied to the Loans and other Obligations
had been applied in the order of priority set forth in Section 2.14, then such
Lender, the Collateral Agent, the Tranche B Agent, the Tranche C Agent, such
Co-Agent or the Issuing Bank shall promptly purchase at par (and shall be deemed
to have thereupon purchased) from the other Lenders, the Collateral Agent, the
Tranche B Agent, the Tranche C Agent, each Co-Agent and the Issuing Bank, as
applicable, a participation in the Loans and Obligations outstanding to such
other Persons, in an amount determined by the Administrative Agent in good faith
as the amount necessary to ensure that the economic benefit of such excess
payment is reallocated in such manner as to cause such excess payment and all
other payments at any time applied to the Loans and other Obligations to be
effectively applied in the order of priority set forth in Section 2.14 and,
within Tranche A, Tranche B and Tranche C, to each lender PRO RATA in proportion
to its Tranche A Commitment, Tranche B Commitment and Tranche C Commitment,
respectively; PROVIDED, that if any such excess payment is thereafter recovered
or otherwise set aside such purchase of participations shall be correspondingly
rescinded (without interest). The Borrower and each other Credit Party expressly
consents to the foregoing arrangements and agrees that any Lender, the
Collateral Agent, the Tranche B Agent, the Tranche C Agent, any Co-Agent or the
Issuing Bank holding (or deemed to be holding) a participation in any Loan or
other Obligation may exercise any and all rights of banker's lien, setoff or
counterclaim with respect to any and all moneys owing by the Borrower or such
other Credit Party to such Lender, the Collateral Agent, the Tranche B Agent,
the Tranche C Agent, such Co-Agent or the Issuing Bank as fully as if such
Lender, the
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Collateral Agent, the Tranche B Agent, the Tranche C Agent, such Co-Agent or the
Issuing Bank held a Note and was the original obligee thereon, in the amount of
such participation.
(qqqq) AGREEMENT OF REQUIRED LENDERS. (i) Upon any occasion requiring or
permitting an approval, consent, waiver, election or other action on the part of
only the Required Tranche A Lenders, action shall be taken by the Agents for and
on behalf or for the benefit of all Lenders upon the direction of the Required
Tranche A Lenders, and any such action shall be binding on all Lenders, (ii)
upon any occasion requiring or permitting an approval, consent, waiver, election
or other action on the part of only the Required Tranche B Lenders, action shall
be taken by the Agents for and on behalf or for the benefit of all Lenders upon
the direction of the Required Tranche B Lenders, and any such action shall be
binding on all Lenders, (iii) upon any occasion requiring or permitting an
approval, consent, waiver, election or other action on the part of only the
Required Tranche C Lenders, action shall be taken by the Agents for and on
behalf or for the benefit of all Lenders upon the direction of the Required
Tranche C Lenders, and any such action shall be binding on all Lenders, (iv)
upon any occasion requiring or permitting an approval, consent, waiver, election
or other action on the part of only the Required Lenders, action shall be taken
by the Agents for and on behalf or for the benefit of all Lenders upon the
direction of the Required Lenders, and any such action shall be binding on all
Lenders, and (v) upon any occasion requiring or permitting an approval, consent,
waiver, election or other action on the part of the Required Supermajority
Lenders, action shall be taken by the Agents for and on behalf or for the
benefit of all Lenders upon the direction of the Required Supermajority Lenders,
and any such action shall be binding on all Lenders. No amendment, modification,
consent, or waiver shall be effective except in accordance with the provisions
of Section 10.10.
(rrrr) LIABILITY OF AGENTS.
(i) Each of the Agents, when acting on behalf of the Lenders
and the Issuing Bank, may execute any of its respective duties under this
Agreement by or through any of its respective officers, agents and
employees, and none of the Agents nor their respective directors,
officers, agents or employees shall be liable to the Lenders, the
Co-Agents or the Issuing Bank or any of them for any action taken or
omitted to be taken in good faith, or be responsible to the Lenders, the
Co-Agents or the Issuing Bank or to any of them for the consequences of
any oversight or error of judgment, or for any loss, except to the extent
of any liability imposed by law by reason of such Agent's own gross
negligence or willful misconduct. The Agents and their respective
directors, officers, agents and employees shall in no event be liable to
the Lenders, the Co-Agents or the Issuing Bank or to any of them for any
action taken or omitted to be taken by them pursuant to instructions
received by them from the Required Lenders, Required Tranche A Lenders,
Required Tranche B Lenders, Required Tranche C Lenders or Required
Supermajority Lenders, as applicable, or in reliance upon the advice of
counsel selected by it. Without limiting the foregoing, none of the
Agents, nor any of their respective directors, officers, employees, or
agents shall be responsible to any Lender, the Co-Agents or the Issuing
Bank for the due execution, validity, genuineness, effectiveness,
sufficiency, or enforceability of, or for any statement, warranty or
representation in, this Agreement, any Loan Document or any related
agreement, document or order, or shall be required to ascertain or to
make any inquiry concerning the performance or observance
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by the Borrower or any other Credit Party of any of the terms,
conditions, covenants, or agreements of this Agreement or any of the Loan
Documents.
(ii) None of the Agents nor any of their respective
directors, officers, employees, or agents shall have any responsibility
to the Borrower or the other Credit Parties on account of the failure or
delay in performance or breach by any Lender, either Co-Agent or the
Issuing Bank or by the Borrower or the other Credit Parties of any of
their respective obligations under this Agreement or the Notes or any of
the Loan Documents or in connection herewith or therewith.
(iii) The Administrative Agent, the Tranche B Agent, the
Tranche C Agent and the Collateral Agent, in such capacities hereunder,
shall be entitled to rely on any communication, instrument, or document
reasonably believed by such person to be genuine or correct and to have
been signed or sent by a person or persons believed by such person to be
the proper person or persons, and, such person shall be entitled to rely
on advice of legal counsel, independent public accountants, and other
professional advisers and experts selected by such person.
(ssss) REIMBURSEMENT AND INDEMNIFICATION. Each Lender agrees (i) to
reimburse (x) each Agent for such Lender's Commitment Percentage of any expenses
and fees incurred by such Agent for the benefit of the Lenders, the Co-Agents or
the Issuing Bank under this Agreement, the Notes and any of the Loan Documents,
including, without limitation, counsel fees and compensation of agents and
employees paid for services rendered on behalf of the Lenders, the Co-Agents or
the Issuing Bank, and any other expense incurred in connection with the
operations or enforcement thereof not reimbursed by the Borrower or the other
Credit Parties and (y) each Agent for such Lender's Commitment Percentage of any
expenses of such Agent incurred for the benefit of the Lenders, the Co-Agents or
the Issuing Bank that the Borrower has agreed to reimburse pursuant to Section
10.05 and has failed to so reimburse and (ii) to indemnify and hold harmless the
Agents and any of their directors, officers, employees, or agents, on demand, in
the amount of such Lender's Commitment Percentage, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses, or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by, or asserted against it or any of them in any way
relating to or arising out of this Agreement, the Notes or any of the Loan
Documents or any action taken or omitted by it or any of them under this
Agreement, the Notes or any of the Loan Documents to the extent not reimbursed
by the Borrower or the other Credit Parties (except such as shall result from
their respective gross negligence or willful misconduct).
(tttt) RIGHTS OF AGENTS. It is understood and agreed that each of BBNA
and BBRF shall have the same rights and powers hereunder (including the right to
give such instructions) as the other Lenders and may exercise such rights and
powers, as well as its rights and powers under other agreements and instruments
to which it is or may be party, and engage in other transactions with the
Borrower or any other Credit Party, as though it were not the Administrative
Agent, the Tranche B Agent, the Tranche C Agent, or the Collateral Agent,
respectively, of the Lenders under this Agreement.
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(uuuu) INDEPENDENT LENDERS AND ISSUING BANK. The Lenders and the Issuing
Bank each acknowledges that it has decided to enter into this Agreement and to
make the Loans or issue the Letters of Credit hereunder based on its own
analysis of the transactions contemplated hereby and of the creditworthiness of
the Borrower and the other Credit Parties and agrees that the Agents shall bear
no responsibility therefor.
(vvvv) NOTICE OF TRANSFER. The Agents may deem and treat a Lender party
to this Agreement as the owner of such Lender's portion of the Loans for all
purposes, unless and until, and except to the extent, an Assignment and
Acceptance shall have become effective as set forth in Section 10.03(b) or (c).
(wwww) SUCCESSOR ADMINISTRATIVE AGENT, TRANCHE B AGENT AND TRANCHE C
AGENT. The Administrative Agent, the Tranche B Agent and the Tranche C Agent may
resign at any time by giving five (5) Business Days' written notice thereof to
the Lenders, the Issuing Bank, the other Agents and the Borrower. Upon any such
resignation of the Administrative Agent, the Required Lenders shall have the
right to appoint a successor Administrative Agent, which shall be reasonably
satisfactory to the Borrower, and, upon any such resignation of the Tranche B
Agent, the Required Tranche B Lenders shall have the right to appoint a
successor Tranche B Agent, which shall be reasonably satisfactory to the
Borrower and, upon any such resignation of the Tranche C Agent, the Required
Tranche C Lenders shall have the right to appoint a successor Tranche C Agent,
which shall be reasonably satisfactory to the Borrower. If no successor
Administrative Agent, Tranche B Agent or Tranche C Agent, as the case may be,
shall have been so appointed by the Required Lenders, the Required Tranche B
Lenders or the Required Tranche C Lenders, as applicable, and shall have
accepted such appointment, within 30 days after the retiring Agent's giving of
notice of resignation, the retiring Agent may, on behalf of the Lenders, the
other Agents and the Issuing Bank, appoint a successor Administrative Agent,
Tranche B Agent or Tranche C Agent, as the case may be, which shall be (i) a
commercial bank (or affiliate thereof) organized under the laws of the United
States of America or of any State thereof and having a combined capital and
surplus of a least $100,000,000, (ii) or a Lender capable of complying with all
of the duties of the Administrative Agent (and the Issuing Bank), the Tranche B
Agent or the Tranche C Agent, as the case may be, hereunder (in the opinion of
the retiring Agent and as certified to the Lenders in writing by such successor
Agent) which, in the case of (i) and (ii) above, so long as there is no Default,
Event of Default or Event of Super-Default, shall be reasonably satisfactory to
the Borrower. Upon the acceptance of any appointment as Administrative Agent,
Tranche B Agent or Tranche C Agent hereunder by a successor Administrative
Agent, Tranche B Agent or Tranche C Agent, as the case may be, such successor
Administrative Agent, Tranche B Agent or Tranche C 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 under this Agreement. After any retiring Agent's resignation
hereunder as such Agent, the provisions of this Article VIII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was such
Agent under this Agreement. Upon the effectiveness of the Administrative Agent's
resignation hereunder, it shall be deemed to have resigned as Issuing Bank as
well, with the Required Tranche A Lenders to appoint a successor Issuing Bank
from among the successor Administrative Agent and the Lenders; PROVIDED that
arrangements satisfactory to the replaced
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Issuing Bank are made with respect to Letters of Credit issued by the Issuing
Bank and outstanding as of the date of its resignation hereunder.
(xxxx) REPORTS AND FINANCIAL STATEMENTS. Promptly after receipt thereof
from the Borrower, the Administrative Agent shall remit to each Lender, the
Collateral Agent, the Tranche B Agent, the Tranche C Agent and the Issuing Bank
copies of all financial statements and reports required to be delivered by the
Borrower hereunder.
GUARANTY
(yyyy) GUARANTY.
(i) Each of the Guarantors unconditionally and irrevocably
guarantees the due and punctual payment and performance by the Borrower
of the Obligations. Each of the Guarantors further agrees that the
Obligations may be extended or renewed, in whole or in part, without
notice to or further assent from it, and it will remain bound upon this
guaranty notwithstanding any extension or renewal of any of the
Obligations. The Obligations of the Guarantors shall be joint and
several.
(ii) Each of the Guarantors waives presentation to, demand
for payment from and protest to the Borrower or any other Guarantor, and
also waives notice of protest for nonpayment. The obligations of the
Guarantors hereunder shall not be affected by (i) the failure of the
Administrative Agent, the Collateral Agent, the Issuing Bank, the Tranche
B Agent, the Tranche C Agent, either Co-Agent or a Lender to assert any
claim or demand or to enforce any right or remedy against the Borrower or
any other Guarantor under the provisions of this Agreement or any other
Loan Document or otherwise; (ii) any extension or renewal of any
provision hereof or thereof; (iii) any rescission, waiver, compromise,
acceleration, amendment or modification of any of the terms or provisions
of any of the Loan Documents; (iv) the release, exchange, waiver or
foreclosure of any security held by the Administrative Agent or the
Collateral Agent for the Obligations or any of them; (v) the failure of
the Administrative Agent, the Issuing Bank, the Collateral Agent, the
Tranche B Agent, the Tranche C Agent, either Co-Agent or a Lender to
exercise any right or remedy against any other Guarantor; (vi) the
release or substitution of any Guarantor or any other guarantor or (vii)
any bankruptcy, insolvency, reorganization, arrangement, adjustment,
composition, liquidation or the like of the Borrower or any Guarantor
including, but not limited to, (x) any Guaranteed Party's election, in
any proceeding instituted under the Bankruptcy Code, of the application
of Section 1111(b)(2) of the Bankruptcy Code, (y) any borrowing or grant
of a Lien by the Borrower or any Guarantor as debtor-in-possession, under
Section 364 of the Bankruptcy Code, or (z) the disallowance of all or any
portion of any Guaranteed Party's claim(s) for repayment of the
Obligations under Section 502 of the Bankruptcy Code.
(iii) Each of the Guarantors further agrees that this
guaranty constitutes a guaranty of performance and of payment when due
and not just of collection, and waives any right to require that any
resort be had by the Administrative Agent, the Issuing Bank, the
Collateral Agent, the Tranche B Agent, the Tranche C Agent, either
Co-Agent or a Lender to any security held for payment of the Obligations
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or to any balance of any deposit, account or credit on the books of the
Administrative Agent, the Issuing Bank, the Collateral Agent, the Tranche
B Agent, the Tranche C Agent, either Co-Agent or a Lender in favor of the
Borrower or any other Guarantor, or to any other Person.
(iv) Each of the Guarantors hereby waives any defense that
it might have based on a failure to remain informed of the financial
condition of the Borrower and of any other Guarantor and any
circumstances affecting the ability of the Borrower to perform under this
Agreement.
(v) Each Guarantor's guaranty shall not be affected by the
genuineness, validity, regularity or enforceability of the obligations,
the Notes or any other instrument evidencing any Obligations, or by the
existence, validity, enforceability, perfection, or extent of any
collateral therefor or by any other circumstance relating to the
obligations which might otherwise constitute a defense to this Guaranty.
None of the Administrative Agent, the Issuing Bank, the Collateral Agent,
the Tranche B Agent, the Tranche C Agent, either Co-Agent or any of the
Lenders makes any representation or warranty in respect to any such
circumstances or shall have any duty or responsibility whatsoever to any
Guarantor in respect of the management and maintenance of the
obligations.
(vi) Subject to the provisions of Article VII, upon the
Obligations becoming due and payable (by acceleration or otherwise), the
Lenders, the Issuing Bank, the Collateral Agent, the Tranche B Agent, the
Tranche C Agent, the Co-Agents and the Administrative Agent shall be
entitled to immediate payment of such obligations by the Guarantors upon
written demand by the Administrative Agent.
(zzzz) NO IMPAIRMENT OF GUARANTY. The obligations of the Guarantors
hereunder shall not be subject to any reduction, limitation, impairment or
termination for any reason, including, without limitation, any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to any
defense or set-off, counterclaim, recoupment, or termination whatsoever by
reason of the invalidity, illegality or unenforceability of the obligations.
Without limiting the generality of the foregoing, the obligations of the
Guarantors hereunder shall not be discharged or impaired or otherwise affected
by the failure of the Administrative Agent, the Issuing Bank, the Collateral
Agent, the Tranche B Agent, the Tranche C Agent, either Co-Agent or a Lender to
assert any claim or demand or to enforce any remedy under this Agreement or any
other agreement, by any waiver or modification of any provision thereof, by any
default, failure or delay, willful or otherwise, in the performance of the
Obligations, or by any other act or thing or omission or delay to do any other
act or thing which may or might in any manner or to any extent vary the risk of
the Guarantors or would otherwise operate as a discharge of the Guarantors as a
matter of law, unless and until the obligations are paid in full.
(aaaaa) SUBROGATION. Upon payment by any Guarantor of any sums to the
Administrative Agent, the Issuing Bank, the Collateral Agent, the Tranche B
Agent, the Tranche C Agent, either Co-Agent or a Lender hereunder, all rights of
such Guarantor against the Borrower arising as a result thereof by way of right
of subrogation or otherwise, shall in all
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respects be subordinate and junior in right of payment to the prior final and
indefeasible payment in full of all the Obligations. If any amount shall be paid
to such Guarantor for the account of the Borrower, such amount shall be held in
trust for the benefit of the Administrative Agent, the Issuing Bank, the
Collateral Agent, the Tranche B Agent, the Tranche C Agent, he Co-Agents and the
Lenders and shall forthwith be paid to the Administrative Agent, the Issuing
Bank, the Collateral Agent, the Tranche B Agent, the Tranche C Agent, the
Co-Agents and the Lenders to be credited and applied to the Obligations, whether
matured or unmatured.
(bbbbb) CREDIT AGREEMENT. Each of the Guarantors acknowledges that it has
read the Loan Documents and agrees to perform and observe all of the terms and
provisions herein and therein applicable thereto.
(ccccc) MAXIMUM GUARANTEED AMOUNT. Notwithstanding any other provision of
this Guaranty to the contrary, if the obligations of any Guarantor hereunder
would otherwise be held or determined by a court of competent jurisdiction in
any action or proceeding involving any state corporate law or any state or
Federal bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other law affecting the rights of creditors generally, to be void,
invalid or unenforceable to any extent on account of the amount of such
Guarantor's liability under this Guaranty, then notwithstanding any other
provision of this Guaranty to the contrary, the amount of such liability shall,
without any further action by such Guarantor or any other Person, be
automatically limited and reduced to the highest amount which is valid and
enforceable as determined in such action or proceeding.
(ddddd) RELEASE OF YONKERS GUARANTEE AND LIENS. Upon the transfer of
ownership of the Yonkers Common Stock Collateral from the Borrower to any other
Person (other than another Credit Party) pursuant to, and in compliance with,
the Indenture or the Indenture Security Agreement, the guaranty of Yonkers
hereunder and the Liens granted by Yonkers under the Security Agreement each
shall be released and Yonkers shall have no further obligations hereunder or
under the other Loan Documents (other than indemnity and expense claims arising
prior to the date of such release).
MISCELLANEOUS
(eeeee) NOTICES. Notices and other communications provided for herein
shall be in writing (including telegraphic, telex, facsimile or cable
communication) and shall be mailed, telegraphed, telexed, telecopied,
transmitted, cabled or delivered to the Borrower or any other Credit Party at
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Chief
Financial Officer (telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇), to a Lender (other than the
Tranche C Lenders), the Issuing Bank, the Collateral Agent, the Tranche B Agent,
either Co-Agent or the Administrative Agent to it at its address set forth on
the signature pages of this Agreement, and to the Tranche C Agent or the Tranche
C Lenders, to their respective addresses set forth on the signature pages to the
Fourth Amendment, or such other address as such party may from time to time
designate by giving written notice to the other parties hereunder. All notices
and other communications given to any party hereto in accordance with the
provisions of this Agreement shall be deemed to have been given on the fifth
Business Day after the date when sent by registered or certified mail, postage
prepaid, return receipt requested, if by mail; or when delivered to the
telegraph company, charges prepaid, if by telegram; or when receipt is
acknowledged, if by any telegraphic communications or facsimile equipment of the
sender; in
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each case addressed to such party as provided in this Section 10.01 or in
accordance with the latest unrevoked written direction from such party;
PROVIDED, HOWEVER, that in the case of notices to the Administrative Agent
notices pursuant to the preceding sentence and pursuant to Article II shall be
effective only when received by the Administrative Agent. Copies of all notices
and other communications given to the Borrower shall go to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
Esq.
(fffff) SURVIVAL OF AGREEMENT, REPRESENTATIONS AND WARRANTIES, ETC. All
warranties, representations and covenants made by the Borrower or any other
Credit Party herein or in any certificate or other instrument delivered by it or
on its behalf in connection with this Agreement shall be considered to have been
relied upon by the Lenders, the Issuing Bank, the Collateral Agent, the Tranche
B Agent, the Tranche C Agent, the Co-Agents and the Administrative Agent and
shall survive the making of the Loans and the issuance of Letters of Credit
herein contemplated and the issuance and delivery of the Notes and the Letters
of Credit, regardless of any investigation made by any Lender, the Issuing Bank,
the Collateral Agent, the Tranche B Agent, the Tranche C Agent, either Co-Agent
and the Administrative Agent or on its behalf and shall continue in full force
and effect so long as any amount due or to become due hereunder is outstanding
and unpaid and so long as the Commitments have not been terminated. All
statements in any such certificate or other instrument shall constitute
representations and warranties by the Borrower and the other Credit Parties
hereunder with respect to the Borrower and the other Credit Parties.
(ggggg) SUCCESSORS AND ASSIGNS.
(i) This Agreement shall be binding upon and inure to the
benefit of the Borrower, the Guarantors, the Administrative Agent, the
Issuing Bank, the Collateral Agent, the Tranche B Agent, the Tranche C
Agent, the Co-Agents and the Lenders and their respective successors and
assigns. Neither the Borrower nor any of the other Credit Parties may
assign or transfer any of their rights or obligations hereunder without
the prior written consent of all of the Lenders, the Issuing Bank, the
Collateral Agent, the Tranche B Agent, the Tranche C Agent, the Co-Agents
and the Administrative Agent. Each Lender may sell participations to any
Person in all or part of any Loan, or all or part of its Note or
Commitment, in which event, without limiting the foregoing, the
provisions of Section 2.15 and 2.18 shall inure to the benefit of each
purchaser of a participation (PROVIDED that such participant shall look
solely to the seller of such participation for such benefits and the
Borrower's and the Guarantors' liability, if any, under Sections 2.15
and 2.18 shall not be increased as a result of the sale of any such
participation) and the treatment of payments pursuant to Section 2.17,
shall be determined as if such Lender had not sold such participation. In
the event any Lender shall sell any participation, such Lender shall
retain the sole right and responsibility to enforce the obligations of
the Borrower and each of the other Credit Parties relating to the Loans,
including, without limitation, the right to approve any amendment,
modification or waiver of any provision of this Agreement other than
amendments, modifications or waivers which (i) reduce any Fees payable
hereunder to the Lenders, (ii) reduce the amount of any scheduled
principal payment on any Loan or reduce the principal amount of any Loan
or the rate of interest payable hereunder, (iii) extend the maturity of
the
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Borrower's obligations hereunder or (iv) release a material portion of
the Collateral in a manner not expressly permitted under the Loan
Documents without the benefit of such amendment, modification or waiver.
The sale of any such participation, shall not alter the rights and
obligations of the Lender selling such participation hereunder with
respect to the Borrower.
(ii) Each Lender (other than a Tranche C Lender) may assign
to one or more Lenders or Eligible Assignees all or a portion of its
interests, rights and obligations under this Agreement (including,
without limitation, all or a portion of its Tranche A Commitment, all or
a portion of its Tranche B Commitment, or all of them, together with the
same portion of the related Loans at the time owing to it and the related
Notes held be it); PROVIDED, HOWEVER, that (i) other than in the case of
an assignment to an Affiliate of the assignor Lender, or to another
Lender, the Administrative Agent and the Issuing Bank must give their
prior written consent, which consent will not be unreasonably withheld,
(ii) the aggregate amount of the Commitment and/or Loans held by each of
the assigning and assignee Lenders subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to
such assignment is delivered to the Administrative Agent and after giving
effect to such assignment) shall, unless otherwise agreed to in writing
by the Borrower (so long as there is no Event of Default) and the
Administrative Agent, in no event be less than $7,500,000, in the case of
Tranche A Loans, or $5,000,000, in the case of Tranche B Loans (unless
the assigning Lender assigns its entire remaining Commitment, in which
case such assigning Lender's Commitment shall be $0), and (iii) the
parties to each such assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording in the Register
(as defined below), an Assignment and Acceptance with blanks
appropriately completed, together with any Note subject to such
assignment and a processing and recordation fee of $3,000. Upon such
execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which
effective date shall be within ten Business Days after the execution
thereof (unless otherwise agreed to in writing by the Administrative
Agent), (A) 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 (B) the Lender thereunder shall, to
the extent provided in such Assignment and Acceptance, be released from
its obligations under this Agreement (and, in the case of an Assignment
and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender shall
cease to be a party hereto). The Borrower shall have no liability for the
$3,000 processing and recordation fee, but shall be responsible for its
own expenses and the expenses of the Administrative Agent.
Notwithstanding the foregoing, unless and until an Event of Default has
occurred, BBNA and BBRF agree to hold, between them, Commitments totaling
at least $25,000,000 in the aggregate; PROVIDED that, if BBNA
and BBRF's combined Commitment or, if greater, the aggregate amount of
their Loans outstanding, is reduced below the lesser of (x) 2.5% of the
then Total Commitments or total Loans outstanding, as applicable or (y)
$5,000,000 after the occurrence of an Event of Default, BBNA will, upon
the request of the Required Lenders, resign as Administrative Agent
hereunder pursuant to Section 8.10.
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(iii) Each Tranche C Lender may assign to any Person all or
a portion of its interests, rights and obligations under this Agreement,
all or part of such Tranche C Lender's Tranche C Loan, or all or part of
its Tranche C Note; PROVIDED, HOWEVER, that (i) the aggregate amount of
the Loans held by each of the assigning and assignee Lenders subject to
each such assignment (determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the
Administrative Agent and after giving effect to such assignment) shall,
unless otherwise agreed to in writing by the Borrower (so long as there
is no Event of Default) and the Administrative Agent, in no event be less
than $[5,000,000], (ii) the parties to each such assignment shall execute
and deliver to the Administrative Agent, for its acceptance and recording
in the Register (as defined below), an Assignment and Acceptance with
blanks appropriately completed, together with any Tranche C Note subject
to such assignment and a processing and recordation fee of $3,000, (iii)
there shall be no more than five (5) Tranche C Lenders at any one time
and (iv) unless otherwise agreed to by the Borrower and the Tranche C
Agent, Back Bay Capital Funding, LLC shall hold 25% of the total
outstanding Tranche C Loans at all times, and no Tranche C Lender (other
than Back Bay Capital Funding, LLC or any Affiliate thereof) may hold
Tranche C Loans representing more than 50% of the total Tranche C Loans
outstanding. Upon such execution, delivery, acceptance and recording,
from and after the effective date specified in each Assignment and
Acceptance, which effective date shall be within ten Business Days after
the execution thereof (unless otherwise agreed to in writing by the
Administrative Agent), (A) 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 Tranche C Lender hereunder and (B)
the Tranche C Lender thereunder shall, to the extent provided in such
Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all
or the remaining portion of an assigning Tranche C Lender's rights and
obligations under this Agreement, such Tranche C Lender shall cease to be
a party hereto). The Borrower shall have no liability for the $3,000
processing and recordation fee, but shall be responsible for its own
expenses and the expenses of the Administrative Agent.
(iv) By executing and delivering an Assignment and
Acceptance, the Lender assignor thereunder and the assignee thereunder
confirm to and agree with each other and the other parties hereto as
follows: (i) 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, such Lender assignor makes no
representation or warranty and assumes no responsibility with respect to
any statements warranties or representations made in or in connection
with this Agreement or any of the other Loan Documents or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of
this Agreement or any of the other Loan Documents; (ii) such Lender
assignor makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or
any other Credit Party or the performance or observance by the Borrower
or any other Credit Party of any of its obligations under this Agreement
or any of the other Loan Documents or any other instrument or document
furnished pursuant hereto; (iii) such assignee confirms that it has
received a copy of this Agreement and the other Loan Documents, together
with copies of the financial statements referred to in Section 3.04 and
such other documents and
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information as it has deemed appropriate to make its own credit analysis
and decision to enter into such Assignment and Acceptance; (iv) such
assignee will, independently and without reliance upon the Administrative
Agent, such Lender assignor or any other Lender and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under this Agreement; (v) such assignee appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement as are delegated to the
Administrative Agent by the terms thereto, together with such powers as
are reasonably incidental thereto; and (vi) such assignee agrees that it
will perform in accordance with their terms all obligations that by the
terms of this Agreement are required to be performed by it as a Lender.
(v) The Administrative Agent shall maintain at its office a
copy of each Assignment and Acceptance delivered to it and a register for
the recordation of the names and addresses of the Lenders and the
Commitments of, and principal amount of the Loans owing to, each Lender
from time to time (the "Register"). The entries in the Register shall be
conclusive, in the absence of manifest error, and the Borrower, the other
Credit Parties, the Administrative Agent, the Issuing Bank, the
Collateral Agent, the Tranche B Agent, the Tranche C Agent, the Co-Agents
and the Lenders shall treat each Person the name of which is recorded in
the Register as a Lender hereunder for all purposes of this Agreement.
The Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
(vi) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and the assignee thereunder together with
any Note subject to such assignment and the fee payable in respect
thereto, the Administrative Agent shall, if such Assignment and
Acceptance has been completed with blanks appropriately filled, (i)
accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt written notice
thereof to the Borrower (together with a copy thereof). Within five
Business Days after receipt of notice, the Borrower, at its own expense,
shall execute and deliver to the Administrative Agent in exchange for the
surrendered Note a new Note to the order of such assignee in an amount
equal to the Commitment and/or Loans assumed by it pursuant to such
Assignment and Acceptance and, if the assigning Lender has retained
Commitments and/or Loans hereunder, a new Note to the order of the
assigning Lender in an amount equal to the Commitment and/or Loans
retained by it hereunder. Such new Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such
surrendered Note, shall be dated the effective date of such Assignment
and Acceptance and shall otherwise be in substantially the form of the
surrendered Note. Thereafter, such surrendered Note shall be marked
canceled and returned to the Borrower.
(vii) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section 10.03, disclose to the assignee or participant or proposed
assignee or participant, any information relating to the Borrower or any
of the other Credit Parties furnished to such
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Lender by or on behalf of the Borrower or any of the other Credit
Parties; PROVIDED that prior to any such disclosure, each such assignee
or participant or proposed assignee or participant shall agree in writing
to be bound by the provisions of Section 10.04.
(viii) The Borrower hereby agrees to actively assist and
cooperate with the Administrative Agent in the Administrative Agent's
efforts to sell participations herein (as set forth in Section 10.03(a))
and assign to one or more Lenders, Eligible Assignees or other Persons a
portion of its interests, rights and obligations as a Lender under this
Agreement (as set forth in Section 10.03(b) or (c)).
(ix) Notwithstanding the provisions of this Section 10.03,
each Lender may at any time pledge or assign its interest in any Loans or
other Obligations to any Reserve Bank in the Federal Reserve System.
(hhhhh) CONFIDENTIALITY. Each Lender agrees to keep, and to cause its
agents, attorneys and financial advisors to keep, any information delivered or
made available by the Borrower or any of the other Credit Parties to it
confidential from anyone other than persons employed or retained by such Lender
who are or are expected to become engaged in evaluating, approving, structuring
or administering the Loans; PROVIDED that nothing herein shall prevent any
Lender from disclosing such information (i) to any other Lender, (ii) to any
other person if reasonably incidental to the administration of the Loans, (iii)
upon the order of any court or administrative agency, (iv) upon the request or
demand of any regulatory agency or authority, (v) which has been publicly
disclosed other than as a result of a disclosure by the Administrative Agent or
any Lender which is not permitted by this Agreement, (vi) in connection with any
litigation to which the Administrative Agent, the Collateral Agent, the Tranche
B Agent, the Tranche C Agent, any Lender, the Issuing Bank, either Co-Agent or
their respective Affiliates may be a party, (vii) to the extent reasonably
required in connection with the exercise of any remedy hereunder, (viii) to such
Lender's legal counsel and independent auditors, (ix) to any actual or proposed
participant or assignee of all or part of its rights hereunder subject to the
proviso in Section 10.03(g) and (x) to the extent required by law.
(iiiii) EXPENSES; DOCUMENTARY TAXES. Whether or not the transactions
hereby contemplated shall be consummated, the Borrower and the other Credit
Parties jointly and severally agree to pay (A) all reasonable out-of-pocket
expenses incurred by the Administrative Agent, the Collateral Agent, the Tranche
B Agent and the Tranche C Agent (including but not limited to the reasonable
fees and disbursements of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, special counsel for the
Administrative Agent, the Collateral Agent and the Tranche B Agent, and any
other replacement counsel that the Administrative Agent, the Collateral Agent,
the Tranche B Agent and the Tranche C Agent shall retain) in connection with the
preparation, execution, delivery and administration of this Agreement, the Notes
and the other Loan Documents, the making of the Loans and the issuance of the
Letters of Credit, and the syndication of the transactions contemplated hereby,
(B) the reasonable costs, fees and expenses of the Administrative Agent, the
Collateral Agent, the Tranche B Agent and the Tranche C Agent (including but not
limited to the reasonable fees and disbursements of internal and third-party
consultants and auditors) in connection with their periodic field audits and
appraisals, and monitoring and valuation of Collateral (including, without
limitation, Inventory and Receivables), (C) reasonable syndication expenses of
the Administrative Agent, and (D) all
144
reasonable out-of-pocket expenses incurred by the Lenders, the Issuing Bank, the
Collateral Agent, the Tranche B Agent, the Tranche C Agent, the Co-Agents and
the Administrative Agent in the enforcement or protection of the rights of any
one or more of the Lenders, the Issuing Bank, the Collateral Agent, the Tranche
B Agent, the Tranche C Agent, the Co-Agents or the Administrative Agent in
connection with this Agreement, the Notes or the other Loan Documents, including
but not limited to the reasonable fees and disbursements of any one or more
counsel for the Lenders, the Issuing Bank, the Collateral Agent, the Tranche B
Agent, the Tranche C Agent, the Co-Agents or the Administrative Agent incurred
in the protection, enforcement and foreclosure of their Liens on the Collateral
and of the Collateral Agent in the creation and maintenance of the perfection of
such Liens. Such payments shall be made on the Closing Date and thereafter on
demand. Whether or not the transactions hereby contemplated shall be
consummated, the Borrower and the other Credit Parties agree to reimburse the
Administrative Agent, the Issuing Bank, the Collateral Agent, the Tranche B
Agent, the Tranche C Agent, the Co-Agents and the Lenders for the Fees and
expenses required by the Fee Letters and the reimbursement provisions thereof
are hereby incorporated herein by reference. The obligations of the Borrower and
the other Credit Parties under this Section 10.05 shall survive the termination
of this Agreement and/or the payment of the Loans and/or the reimbursement of
the Letters of Credit. The fees and expenses payable hereunder are in addition
to those payable by the Borrower or the other Credit Parties under any other
Loan Document.
(jjjjj) INDEMNITY. The Borrower and each of the other Credit Parties
jointly and severally agree to defend, indemnify and hold harmless the
Administrative Agent, the Issuing Bank, the Collateral Agent, the Tranche B
Agent, the ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇, ▇▇▇, ▇▇▇▇, ▇▇▇▇, the Co-Agents and each Lender and
their respective Affiliates and each of their respective directors, officers,
employees, attorneys, partners, beneficiaries, trustees and agents (each an
"INDEMNIFIED PARTY") from and against any and all losses, claims, damages,
liabilities, costs and expenses (whether or not suit is brought) incurred by
such Indemnified Party arising out of claims made by any Person in any way
relating to the transactions contemplated hereby or by the other Loan Documents
or any litigation, investigation or proceeding related hereto or thereto but
excluding therefrom, in the case of an Indemnified Party, all losses, claims,
damages, liabilities, costs and expenses arising out of or resulting from
conduct to the extent determined by final order of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
such Indemnified Party.
(kkkkk) CHOICE OF LAW. THIS AGREEMENT, THE NOTES AND THE OTHER LOAN
DOCUMENTS SHALL IN ALL RESPECTS BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED WHOLLY WITHIN SUCH STATE.
(lllll) NO WAIVER. No failure on the part of the Administrative Agent,
the Issuing Bank, the Collateral Agent, the Tranche B Agent, the Tranche C
Agent, either Co-Agent or any of the Lenders to exercise, and no delay in
exercising, any right, power or remedy hereunder or under the Notes or any of
the other Loan Documents shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
145
All remedies hereunder are cumulative and are not exclusive of any other
remedies provided by law.
(mmmmm) EXTENSION OF MATURITY. Except as otherwise set forth in the
definition of "Interest Period," if any payment of principal of or interest on
the Notes or any other amount due hereunder becomes due and payable on a day
other than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day and, in the case of principal, interest shall be payable
thereon at the rate herein specified during such extension.
(nnnnn) AMENDMENTS, ETC.
(i) No modification, amendment or waiver of any provision of
this Agreement, the Notes or any Security Document, and no consent to any
departure by the Borrower or any other Credit Party therefrom, shall in
any event be effective unless the same shall be in writing and signed by
the Required Lenders (or with respect to the Security Documents, by the
Collateral Agent with the consent of the Required Lenders), and then such
waiver or consent shall be effective only in the specific instance and
for the purpose for which given; PROVIDED, HOWEVER, that:
(A) No such modification, amendment or waiver shall without
the written consent of all of the Lenders (i) amend or modify any provision of
this Agreement which provides for the unanimous consent or approval of the
Lenders, (ii) amend this Section 10.10, the definition of Required Lenders,
Required Tranche A Lenders, Required Tranche B Lenders, Required Tranche C
Lenders or Required Supermajority Lenders, (iii) release any material portion of
the Collateral from the Lien of the Loan Documents (except in connection with
permitted asset dispositions under Section 6.12), (iv) amend Section 6.01 so as
to permit any Lien on any assets of the Borrower or the other Credit Parties not
otherwise permitted on the Closing Date, (v) increase the Commitment of a Lender
(it being understood that a waiver of an Event of Default shall not constitute
an increase in the Commitment of a Lender), (vi) reduce the principal amount of
any Loan or the rate of interest payable thereon, (vii) extend any date for the
payment of interest hereunder, (viii) reduce any Fees payable hereunder, (ix)
extend the Maturity Date, (x) increase advance rates above the level in effect
on the Closing Date or, with respect to the Tranche C Borrowing Base, on the
Amendment Effective Date, (xi) increase the Overadvance Amount, (xii) permit the
sale of a material portion of the assets of the Borrower and the other Credit
Parties (except as expressly permitted under Section 6.12) or (xiii) subordinate
the Indebtedness hereunder, or the Liens granted hereunder or under the other
Loan Documents, to any other Indebtedness or Lien, as the case may be.
(B) No such amendment, modification or waiver may adversely
affect the rights and obligations of the Administrative Agent, the Collateral
Agent, the Tranche B Agent, the Co-Agent or the Issuing Bank hereunder without
its prior written consent.
(C) No such modification, amendment or waiver shall without
the written consent of the Required Tranche B Lenders (i) increase the interest
rate on the Tranche A Loans by more than one percentage point above the rate of
interest applicable on the Closing Date (provided, however, that if the interest
rate on Tranche A Loans is increased by one percentage point or less the
interest rate on Tranche B Loans shall be increased by the same
146
amount), (ii) accelerate the principal or interest payment or maturity dates of
the Tranche A Loans (other than in connection with an acceleration of the Loans
in connection with an Event of Default), (iii) reduce the Tranche A Commitment,
reduce the advance rates applicable to the Tranche A Loans or otherwise adjust
the Borrowing Base in any manner that has the effect of reducing the amount
available to be borrowed under the Tranche A Commitment so long as any amounts
are available to be borrowed under the Tranche B Commitment, (iv) waive or amend
any of the conditions precedent set forth in Sections 4.01 or 4.03, (v) waive
any Event of Super-Default or amend any provision of Article VII or (vi) create
any additional Event of Default which is not also an Event of Super-Default.
(1) No such modification, amendment or waiver shall without
the written consent of the Required Tranche C Lenders (i) increase the
interest rate on the Tranche A Loans or the Tranche B Loans by more than
one percentage point above the rate of interest applicable on the Closing
Date (provided, however, that if the interest rate on Tranche A Loans or
Tranche B Loans is increased by one percentage point or less the interest
rate on Tranche C Loans shall be increased by the same amount), (ii)
accelerate the principal or interest payment or maturity dates of the
Tranche A Loans or Tranche B Loans (other than in connection with an
acceleration of the Loans in connection with an Event of Default), (iii)
waive any Event of Super-Default or amend any provision of Article VII,
(iv) create any additional Event of Default which is not also an Event of
Super-Default, (v) amend Section 2.10(d), (e) or (f), 2.14(a) or (b),
6.17, 6.18 or 6.19, (vii) amend clause (ii) of the definition of
Borrowing Base Reserve, (viii) amend Section 6.12 so as to permit the
sale or other disposition of or release any portion of any Leasehold
Collateral, (ix) amend the definition of Tranche C Borrowing Base, (x)
amend any Leasehold Mortgage or (xi) amend any definition that would have
the effect of amending any of the foregoing..
(D) No notice to or demand on the Borrower or any Credit
Party shall entitle the Borrower or any other Credit Party to any other or
further notice or demand in the same, similar or other circumstances. Each
holder of a Note shall be bound by any amendment, modification, waiver or
consent authorized as provided herein, whether or not a Note shall have been
marked to indicate such amendment, modification, waiver or consent and any
consent by a Lender, or any holder of a Note, shall bind any Person subsequently
acquiring a Note, whether or not a Note is so marked. No amendment to this
Agreement shall be effective against the Borrower or any other Credit Party
unless signed by the Borrower or such other Credit Party, as the case may be.
(ii) Notwithstanding anything to the contrary contained in
Section 10.10(a), in the event that the Borrower requests that this
Agreement be modified, amended or waived in a manner which would require
the unanimous consent of all of the Lenders and such amendment is
approved by the Required Tranche A Lenders, the Required Tranche B
Lenders and the Required Tranche C Lenders, but not unanimously by the
Lenders, the Borrower, the Required Tranche A Lenders, the Required
Tranche B Lenders and the Required Tranche C Lenders shall be permitted
to amend this Agreement without the consent of the Lender or Lenders
which did not agree to the modification or amendment requested by the
Borrower (such Lender or Lenders, collectively the "MINORITY LENDERS") to
provide for (w) the termination of the
147
Commitment of each of the Minority Lenders, (x) the addition to this
Agreement of one or more other financial institutions (each of which
shall be an Eligible Assignee), or an increase in the Commitment of one
or more of the Required Tranche A Lenders, Required Tranche B Lenders or
Required Tranche C Lenders, so that the aggregate Tranche A Commitments,
the aggregate Tranche B Commitments and the aggregate Tranche C
Commitments, after giving effect to such amendment shall be in the same
amount as the aggregate Tranche A Commitments, the aggregate Tranche B
Commitments and the aggregate Tranche C Commitments, respectively,
immediately before giving effect to such amendment, (y) if any Loans are
outstanding at the time of such amendment, the making of such additional
Loans by such new or increasing Lender or Lenders, as the case may be, as
may be necessary to repay in full the outstanding Loans of the Minority
Lenders immediately before giving effect to such amendment and (z) such
other modifications to this Agreement as may be appropriate.
(ooooo) SUBMISSION TO JURISDICTION; WAIVER. THE BORROWER AND EACH OF THE
OTHER CREDIT PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(i) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO
WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT
IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK AND APPELLATE COURTS FROM
ANY THEREOF;
(ii) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE
BROUGHT IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH
COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT
COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(iii) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR
CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE
PREPAID, TO THE BORROWER OR SUCH OTHER CREDIT PARTY AT ITS ADDRESS SET
FORTH IN SECTION 10.1 OR AT SUCH OTHER ADDRESS OF WHICH THE
ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO; AND
(iv) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO
EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL
LIMIT THE RIGHT TO ▇▇▇ IN ANY OTHER JURISDICTION.
148
(ppppp) SEVERABILITY. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. If this Agreement or any
other Loan Document is deemed invalid or unenforceable with respect to any
Credit Party which is a party hereto or thereto, such Loan Document and all
other Loan Documents shall remain valid and enforceable with respect to all
other Credit Parties hereto or thereto, as the case may be.
(qqqqq) HEADINGS. Section headings used herein are for convenience only
and are not to affect the construction of or be taken into consideration in
interpreting this Agreement.
(rrrrr) EXECUTION IN COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall constitute an original, but all of
which taken together shall constitute one and the same instrument.
(sssss) PRIOR AGREEMENTS. This Agreement and the other Loan Documents
represent the entire agreement of the parties with regard to the subject matter
hereof and thereof and the terms of any letters and other documentation entered
into between the Borrower or any other Credit Party and any Lender, the Issuing
Bank, the Collateral Agent, the Co-Agents or the Administrative Agent prior to
the execution of this Agreement which relate to Loans or Letters of Credit to be
made or issued hereunder shall be replaced by the terms of this Agreement.
(ttttt) FURTHER ASSURANCES. Whenever and so often as reasonably requested
by the Administrative Agent, the Collateral Agent, the Tranche B Agent, the
Tranche C Agent or the Borrower and the other Credit Parties will promptly
execute and deliver or cause to be executed and delivered all such other and
further instruments, documents or assurances, and promptly do or cause to be
done all such other and further things as may be necessary and reasonably
required in order to further and more fully vest in the Administrative Agent,
the Issuing Bank, the Collateral Agent, the Tranche B Agent, the Tranche C
Agent, the Co-Agents and the Lenders, as applicable, all rights, Liens,
interests, powers, benefits, privileges and advantages conferred or intended to
be conferred by this Agreement and the other Loan Documents.
(uuuuu) MASTER LEASE AGREEMENT. The Borrower hereby ratifies and affirms,
and agrees that it is legally obligated to perform, all of the obligations of
Bradlees Stores, Inc., as debtor and debtor-in-possession, under the Master
Lease Agreement.
(vvvvv) WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE OTHER CREDIT
PARTIES, THE ADMINISTRATIVE AGENT, THE ISSUING BANK, THE COLLATERAL AGENT, THE
TRANCHE B AGENT, THE TRANCHE C AGENT, THE CO-AGENTS AND EACH LENDER HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
149
COUNTERCLAIM ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED THEREBY.
[SIGNATURE PAGES FOLLOW]
150
IN WITNESS WHEREOF, the parties hereto have caused this Revolving
Credit and Guaranty Agreement to be duly executed as of the day and the year
first, written.
BRADLEES STORES, INC.,
as Borrower
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President - Treasurer
GUARANTORS:
BRADLEES, INC.,
as a Guarantor
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President - Treasurer
NEW HORIZONS OF YONKERS, INC.,
as a debtor and debtor-in-possession,
as a Guarantor
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice president - Treasurer
BANKBOSTON, N.A.,
as Administrative Agent,
as Tranche B Agent, as Issuing Bank
and as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Director
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
151
FLEET RETAIL FINANCE, INC.,
as Collateral Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Director
Address: ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
THE CIT GROUP/BUSINESS CREDIT, INC.,
as Co-Agent and as a Lender
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
CONGRESS FINANCIAL CORPORATION
(NEW ENGLAND),
as Co-Agent and as a Lender
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
NATIONAL CITY COMMERCIAL FINANCE, INC.,
as a Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
▇▇▇
▇▇▇▇▇ ▇▇▇▇ FINANCIAL SERVICING
CORPORATION,
as a Lender
By:
------------------------------------
Name:
Title:
FOOTHILL CAPITAL CORPORATION,
as a Lender
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇ FINANCIAL, INC.
as a Lender
By: /s/ ▇▇▇▇ Wydbel
------------------------------------
Name: ▇▇▇▇ Wydbel
Title: Vice President
FIRSTRUST BANK,
as a Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice Presidnet
▇▇▇▇▇▇▇ NATIONAL LIFE INSURANCE
COMPANY,
as a Lender
By:
------------------------------------
Name:
Title:
153
FREMONT FINANCIAL CORPORATION,
as a Lender
By:
------------------------------------
Name:
Title:
LASALLE BUSINESS CREDIT, INC.,
as a Lender
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
GENERAL ELECTRIC CAPITAL CORPORATION,
as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Signatory
FINOVA CAPITAL CORPORATION,
as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇
Title: AVP
154
ANNEX A TO
REVOLVING CREDIT AND
GUARANTY AGREEMENT
TRANCHE A TRANCHE A TRANCHE B TRANCHE B TRANCHE C
COMMITMENT COMMITMENT COMMITMENT COMMITMENT COMMITMENT
NAME OF LENDER AMOUNT PERCENTAGE AMOUNT PERCENTAGE AMOUNT
-------------- ---------- ---------- ---------- ---------- ----------
Fleet National Bank $ 28,000,000 11% $ 6,666,666.67 33.3334% --
The CIT Group/Business Credit, Inc. $ 25,000,000 10% -- -- --
Congress Financial Corporation (New England) $ 40,000,000 16% -- -- --
First Trust Bank $ 10,000,000 4% -- -- --
▇▇▇▇▇▇▇ National Life Insurance Company $ 15,000,000 6% $ 6,666,666.66 33.3333% --
Foothill Income Trust II, L.P. $ 5,000,000 2% -- -- --
▇▇▇▇▇▇ Financial, Inc. $ 20,000,000 8% -- -- --
Foothill Capital Corporation $ 30,000,000 12% -- -- --
National City Commercial Finance, Inc. $ 15,000,000 6% -- -- --
Finova Capital Corporation $ 22,000,000 9% $ 6,666,666.67 33.3334% --
LaSalle National Bank $ 20,000,000 8% -- -- --
General Electric Capital Corporation $ 20,000,000 8% -- -- --
Back Bay Capital Funding, LLC -- -- -- $ 20,000,000
Total $250,000,000 100% $ 20,000,000 100% $ 20,000,000
TRANCHE C AGGREGATE
COMMITMENT AGGREGATE COMMITMENT
NAME OF LENDER PERCENTAGE COMMITMENT PERCENTAGE
-------------- ---------- ---------- ----------
Fleet National Bank -- $ 34,666,666.67 11.95%
The CIT Group/Business Credit, Inc. -- $ 25,000,000 8.62%
Congress Financial Corporation (New England) -- $ 40,000,000 13.79%
First Trust Bank -- $ 10,000,000 3.45%
▇▇▇▇▇▇▇ National Life Insurance Company -- $ 21,666,666.66 7.47%
Foothill Income Trust II, L.P. -- $ 20,000,000 6.90%
▇▇▇▇▇▇ Financial, Inc. -- $ 20,000,000 6.90%
Foothill Capital Corporation -- $ 15,000,000 5.17%
National City Commercial Finance, Inc. -- $ 15,000,000 5.17%
Finova Capital Corporation -- $ 18,666,666.67 6.44%
LaSalle National Bank -- $ 20,000,000 6.90%
General Electric Capital Corporation -- $ 20,000,000 6.90%
Back Bay Capital Funding, LLC 100% $ 20,000,000 6.90%
Total 100% $290,000,000 100%
155
ATTACHMENT I TO
CREDIT AGREEMENT
TERMS OF CAP NOTES
CAPITALIZED TERMS USED HEREIN WITHOUT DEFINITION SHALL HAVE THE MEANINGS GIVEN
TO SUCH TERMS IN THE CREDIT AGREEMENT TO WHICH THIS ATTACHMENT I IS ATTACHED
(THE "AGREEMENT").
Issuer: The Borrower.
Holder: The Holder of the Class BSI-CAP Claim.
Maximum Aggregate
Principal Amount: $628,000.00.
Maximum Interest Rate: 9% PER ANNUM.
Minimum Term: Three years.
Principal Repayment: Principal to be repaid in 12 equal quarterly
installments commencing 3 months after the
Plan Effective Date.
Interest Payments: Accrued interest to be paid on each principal
payment date.
Collateral: The Borrower's obligations under the CAP Notes
may be secured by a first lien on the property
(the "CAP COLLATERAL") on which BTM Capital
Corporation held a valid first priority security
interest as of the Confirmation Date pursuant to
the BTM Stipulation (as defined in the Confirmed
Plan and attached to the Agreement as Exhibit G).
Default and
Acceleration: No cross-default or cross-acceleration rights to
the Agreement.
156
ATTACHMENT II TO
CREDIT AGREEMENT
TERMS OF CURE NOTES
CAPITALIZED TERMS USED HEREIN WITHOUT DEFINITION SHALL HAVE THE MEANINGS GIVEN
TO SUCH TERMS IN THE CREDIT AGREEMENT TO WHICH THIS ATTACHMENT II IS ATTACHED
(THE "AGREEMENT").
Issuer: The Borrower.
Holders: Non-Debtor parties to executory contracts that
are to be, or have been, assumed pursuant to the
Confirmed Plan for the purpose of paying "cure
amounts" as required by Section 365 of the
Bankruptcy Code.
Maximum Aggregate Principal
Amount: $3,500,000.00.
Maximum Interest Rate: 9% PER ANNUM.
Minimum Term: Three years.
Principal Repayment: Principal to be repaid in 12 equal quarterly
installments commencing 3 months after the Plan
Effective Date.
Interest Payments: Accrued interest to be paid on each principal
payment date.
Collateral: None.
Default and
Acceleration: No cross-default or cross-acceleration rights to
the Agreement.
157
ATTACHMENT III TO
CREDIT AGREEMENT
TERMS OF NEW NOTES
CAPITALIZED TERMS USED HEREIN WITHOUT DEFINITION SHALL HAVE THE MEANINGS GIVEN
TO SUCH TERMS IN THE CREDIT AGREEMENT TO WHICH THIS ATTACHMENT III IS ATTACHED
(THE "AGREEMENT").
Issuer: The Borrower.
Holders: (i) The Banks and other financial institutions
(the "PRE-PETITION REVOLVER BANK GROUP") holding
pre-petition claims against the Debtors under
that certain Credit Agreement among BI, the
Pre-Petition Revolver Bank Group and Bankers
Trust Company, as agent, dated as of March 3,
1993, as amended, (ii) the banks and other
financial institutions holding pre-petition
claims under the SPE Documents (as defined in the
Confirmed Plan) and (iii) the holders of YON-GEN
Claims, BRU-GEN Claims and ▇▇▇-GEN Claims (each
as defined in the Confirmed Plan).
Guarantors: (i) BI, on an unsecured basis and expressly
subordinate to the guaranty by BI of the
Obligations of the Borrower under the Agreement
and otherwise reasonably satisfactory in form and
substance to the Administrative Agent and (ii)
Yonkers, secured only by the Yonkers Leased
Property and expressly subordinate to the
guaranty by Yonkers of the Obligations of the
Borrower under the Agreement and otherwise
reasonably satisfactory in form and substance to
the Administrative Agent.
Maximum Aggregate
Principal Amount: $40,000,000.00.
Maximum Interest Rate: 9% PER ANNUM.
Minimum Term: Five years.
Principal Repayment: None prior to maturity, except as permitted
under Section 6.15 of the Agreement.
Interest Payments: Accrued interest to be paid semi-annually on
January 1 and July 1 of each year, and upon final
payment in full of principal.
Collateral: The Borrower's obligations under the New Notes
may be secured by a first lien on the Permissible
Collateral, the Additional Collateral and the
Yonkers Common Stock Collateral; PROVIDED,
HOWEVER, that the Trustee for the Holders has
executed and delivered to the Collateral Agent
Mortgagee Waivers with respect to each location
included in the Permissible Collateral and the
Additional Collateral in form and substance
satisfactory to the Collateral Agent. In the
event the Net Proceeds (as defined in the
Confirmed Plan) from the sale or assignment of
the Union Square Lease (as defined in the
Confirmed Plan) do not exceed $15,000,000, the
Additional Collateral shall secure Indebtedness
under the New Notes in an amount not to exceed
the sum of (A) the lesser of (i) the difference
between $17,500,000 and the amount of such Net
Proceeds or (ii) $10,500,000 (such lesser amount,
the "DIFFERENTIAL AMOUNT") plus (B) an amount of
interest
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that would accrue on a principal amount of the
New Notes then outstanding equal to the
Differential Amount from the date of such
disposition to the date of calculation of such
payment pursuant to the terms of the New Notes
Indenture (but excluding any period for which
interest has in fact been paid under the New
Notes). In addition, the lien on the Additional
Collateral shall not be permitted unless the
holder thereof has entered into with the Borrower
and the Collateral Agent a mortgagee's waiver and
consent with respect to each location comprising
the Additional Collateral in form and substance
satisfactory to the Collateral Agent.
Release of Collateral: In the event the Net Proceeds from the sale or
assignment of the Union Square Lease exceed
$15,000,000, the Additional Collateral shall no
longer secure the Borrower's obligations under
the New Notes and the lien thereon shall be
promptly released by the holder thereof .
Conversion: New Notes convertible into common stock of BI on
terms reasonably acceptable to the Administrative
Agent.
Registration Rights: As described in the Confirmed Plan.
Default and
Acceleration: No cross-default or cross-acceleration rights to
the Agreement.
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ATTACHMENT IV TO
CREDIT AGREEMENT
TERMS OF TRADE LIEN
CAPITALIZED TERMS USED HEREIN WITHOUT DEFINITION SHALL HAVE THE MEANINGS GIVEN
TO SUCH TERMS IN THE CREDIT AGREEMENT TO WHICH THIS ATTACHMENT IV IS ATTACHED
(THE "AGREEMENT").
Debtor: The Borrower.
Secured Party: A collateral agent for the benefit of
trade vendors who provide retail merchandise to
the Borrower after the Plan Effective Date or
trade vendors who have provided retail
merchandise to the Borrower before the Plan
Effective Date who were not paid therefor as of
the Plan Effective Date.
Collateral: Inventory of the Borrower (and no other assets).
Priority: The Trade Lien shall be expressly subordinate to
the Lien granted to the Collateral Agent under
the Security Agreement, for its benefit and the
ratable benefit of the other Secured Parties,
securing the Obligations and shall provide that
the holders of the Trade Lien shall have no right
to exercise or enforce any rights with respect to
the Trade Lien or the Inventory (or to consent to
or approve any such exercise or enforcement by
the Collateral Agent), or to receive any payment
from the proceeds of the Inventory, unless and
until the Obligations are finally and
indefeasibly paid in full. The other terms of
such subordination shall be satisfactory to the
Collateral Agent in all respects.
Term: The Trade Lien shall be automatically released
upon the earliest to occur of (i) two years after
the Plan Effective Date, (ii) the date on which
the ratio of the amount of Accounts Payable of
the Borrower to the amount of Inventory of the
Borrower, computed on a cost basis, for any
rolling three-month period is more than five
percentage points less than such ratio on a
comparable store basis for the same period in the
prior year, (iii) the consummation of a
transaction pursuant to which the Borrower or BI
merges or otherwise combines with another company
or companies, (iv) as to any individual trade
vendor that has provided retail merchandise
during the pendency of the Case, at such time as
such vendor fails to provide retail merchandise
to the Borrower on terms which are at least as
favorable to the Borrower as the credit terms
under which such vendor provided retail
merchandise to the Borrower in the year prior to
the Plan Effective Date and (v) as to any
individual trade vendor that initially provides
retail merchandise to the Borrower after the Plan
Effective Date, at such time as such vendor fails
to provide retail merchandise to the Borrower on
terms which are as least as favorable to the
Borrower as the initial credit terms under which
such vendor first provided retail merchandise to
the Borrower. The Administrative Agent shall have
access to all information necessary to determine
if the trade vendors are providing sufficient
credit support, as determined by the formulas set
forth in clauses (ii) and (iv) above, and shall
have the authority to execute and file all
documents necessary to effectuate any such
release.
Default and Acceleration: No cross-default or cross-acceleration rights to
the Agreement.
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Other Intercreditor
Provisions: The holders of the Trade Lien shall have no
right to consent to or approve any amendments,
modifications, refinancings or other changes to
this Agreement or any other Loan Document,
including, without limitation, increases in
advance rates, interest rates and principal
amount and the creation or elimination of any
reserves or categories of ineligible Inventory.
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