CONFORMED COPY
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AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of March 10, 1995
As Amended and Restated as of December 4, 1996
among
ETHAN ▇▇▇▇▇ INC.,
as Borrower,
ETHAN ▇▇▇▇▇ INTERIORS INC.,
THE LENDERS NAMED HEREIN,
and
THE CHASE MANHATTAN BANK,
as Administrative Agent, Collateral Agent, and
Swingline Lender.
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TABLE OF CONTENTS
Page
I. DEFINITIONS............................................................ 2
SECTION 1.01. Defined Terms................................................ 2
SECTION 1.02. Terms Generally..............................................18
II. THE CREDITS...........................................................18
SECTION 2.01. Commitments..................................................18
SECTION 2.02. Loans........................................................18
SECTION 2.03. Borrowing Procedure; Interest Rate Elections.................20
SECTION 2.04. Evidence of Debt; Repayment of Loans.........................21
SECTION 2.05. Fees.........................................................22
SECTION 2.06. Interest on Loans............................................23
SECTION 2.07. Default Interest.............................................23
SECTION 2.08. Alternate Rate of Interest...................................23
SECTION 2.09. Termination and Reduction of Commitments.....................24
SECTION 2.10. Prepayment...................................................24
SECTION 2.11. Reserve Requirements; Change in Circumstances................25
SECTION 2.12. Change in Legality...........................................26
SECTION 2.13. Indemnity....................................................27
SECTION 2.14. Pro Rata Treatment...........................................27
SECTION 2.15. Sharing of Set Offs..........................................27
SECTION 2.16. Payments.....................................................28
SECTION 2.17. Taxes........................................................28
SECTION 2.18. Assignment of Commitments Under Certain
Circumstances..............................................33
SECTION 2.19. Swingline Loans..............................................32
SECTION 2.20. Letters of Credit............................................33
III. REPRESENTATIONS AND WARRANTIES.......................................37
SECTION 3.01. Organization; Powers.........................................37
SECTION 3.02. Authorization................................................37
SECTION 3.03. Enforceability...............................................38
SECTION 3.04. Governmental Approvals.......................................38
SECTION 3.05. Financial Statements.........................................38
SECTION 3.06. No Material Adverse Change...................................38
SECTION 3.07. Title to Properties; Possession Under Leases.................38
SECTION 3.08. Subsidiaries.................................................38
SECTION 3.09. Litigation; Compliance with Laws.............................38
SECTION 3.10. Agreements...................................................39
SECTION 3.11. Federal Reserve Regulations..................................39
SECTION 3.12. Investment Company Act; Public Utility Holding
Company Act................................................39
SECTION 3.13. Use of Proceeds..............................................39
SECTION 3.14. Tax Returns..................................................39
SECTION 3.15. No Material Misstatements....................................40
SECTION 3.16. Employee Benefit Plans.......................................40
SECTION 3.17. Environmental Matters........................................40
SECTION 3.18. Insurance....................................................41
SECTION 3.19. Security Documents ..........................................41
SECTION 3.20. Location of Real Property....................................41
SECTION 3.21. Labor Matters................................................41
SECTION 3.22. Patents, Trademarks, etc.....................................42
IV. CONDITIONS............................................................42
SECTION 4.01. All Credit Events............................................43
SECTION 4.02. Effectiveness................................................43
V. AFFIRMATIVE COVENANTS..................................................43
SECTION 5.01. Existence; Businesses and Properties........................43
SECTION 5.02. Insurance....................................................44
SECTION 5.03. Obligations and Taxes........................................45
SECTION 5.04. Financial Statements, Reports, etc...........................45
SECTION 5.05. Litigation and Other Notices.................................47
SECTION 5.06. Employee Benefits............................................47
SECTION 5.07. Maintaining Records; Access to Properties and
Inspections................................................48
SECTION 5.08. Use of Proceeds..............................................48
SECTION 5.09. Further Assurances...........................................48
SECTION 5.10. Environmental Matters........................................49
VI. NEGATIVE COVENANTS....................................................49
SECTION 6.01. Indebtedness.................................................49
SECTION 6.02. Liens........................................................51
SECTION 6.03. Sale and Lease-Back Transactions.............................52
SECTION 6.04. Investments, Loans and Advances; Certain
Acquisitions...............................................53
SECTION 6.05. Mergers, Consolidations and Sales of Assets..................55
SECTION 6.06. Transactions with Stockholders and Affiliates................56
SECTION 6.07. Business of Holdings, Borrower and Subsidiaries..............56
SECTION 6.08. Restricted Payments..........................................56
SECTION 6.09. Limitations Regarding Senior Notes...........................57
SECTION 6.10. Amendment of Constituent Documents...........................58
SECTION 6.11. Subsidiaries.................................................58
SECTION 6.12. Consolidated Net Worth.......................................58
SECTION 6.13. Consolidated Fixed Charge Coverage Ratio.....................58
SECTION 6.14. Leverage Ratio...............................................58
SECTION 6.15. Fiscal Year..................................................58
SECTION 6.16. Limitations Regarding Capital Stock..........................58
VII. EVENTS OF DEFAULT....................................................59
VIII. THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT....................62
IX. MISCELLANEOUS........................................................64
SECTION 9.01. Notices......................................................64
SECTION 9.02. Survival of Agreement........................................65
SECTION 9.03. Binding Effect...............................................65
SECTION 9.04. Successors and Assigns.......................................65
SECTION 9.05. Expenses; Indemnity..........................................68
SECTION 9.06. Right of Setoff..............................................69
SECTION 9.07. Applicable Law...............................................69
SECTION 9.08. Waivers; Amendment...........................................69
SECTION 9.09. Interest Rate Limitation.....................................70
SECTION 9.10. Entire Agreement.............................................70
SECTION 9.11. Waiver of Jury Trial.........................................71
SECTION 9.12. Severability.................................................71
SECTION 9.13. Counterparts.................................................71
SECTION 9.14. Headings.....................................................71
SECTION 9.15. Jurisdiction; Consent to Service of Process..................71
SECTION 9.16. Confidentiality..............................................72
SECTION 9.17. Release of Collateral........................................72
SECTION 9.18. Defaulting Lender............................................73
SECTION 9.19. Release of Mortgages.........................................73
EXHIBITS
Exhibit A Administrative Questionnaire
Exhibit B Form of Assignment & Acceptance
Exhibit C Form of Borrowing Request
Exhibit D Form of Note
SCHEDULES
Schedule 1.01 Mortgaged Properties
Schedule 2.01 Commitments
Schedule 3.08 Subsidiaries and Excluded Subsidiaries
Schedule 3.09 Litigation
Schedule 3.17 Environmental Matters
Schedule 3.18 Insurance
Schedule 3.20 Real Property
Schedule 6.01 Existing Indebtedness
Schedule 6.02 Existing Liens
Schedule 6.04 Existing Investments
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AMENDED AND RESTATED CREDIT AGREEMENT dated as of March
10, 1995, as amended and restated as of December 4, 1996, among
ETHAN ▇▇▇▇▇ INC., a Delaware corporation (the "Borrower"), ETHAN
▇▇▇▇▇ INTERIORS INC., a Delaware corporation ("Holdings"), the
financial institutions from time to time parties hereto (together
with the Swingline Lender (as defined below), the "Lenders"), and
THE CHASE MANHATTAN BANK (as successor to Chemical Bank), a New
York banking corporation, as swingline lender (in such capacity,
the "Swingline Lender"), and as administrative agent (in such
capacity, the "Administrative Agent") and as collateral agent (in
such capacity, the "Collateral Agent") for the Lenders.
The Borrower, Holdings, the Original Lenders (such term and each
other capitalized term used herein having the meaning set forth in Article I
hereof), the Administrative Agent, the Collateral Agent and the Swingline Lender
are parties to a Credit Agreement dated as of March 10, 1995, and in effect
prior to the effectiveness of this Agreement (the "Original Credit Agreement").
The Borrower and Holdings have requested that the Lenders, the Administrative
Agent, the Collateral Agent and the Swingline Lender agree to amend and restate
the Original Credit Agreement in order to (i) amend certain provisions therein
and (ii) to release and discharge the Mortgaged Properties from the Liens
created under the Mortgages. The Lenders, the Administrative Agent, the
Collateral Agent and the Swingline Lender are willing to agree to such amendment
and restatement of the Original Credit Agreement, subject to the terms and
conditions hereinafter set forth.
The Borrower has requested that the Lenders extend credit in the
form of Revolving Loans at any time and from time to time prior to the Revolving
Credit Maturity Date, in an aggregate principal amount at any time outstanding
not in excess of $100,000,000. The Borrower has requested the Swingline Lender
to extend credit in the form of Swingline Loans at any time and from time to
time prior to the Revolving Credit Maturity Date, in an aggregate principal
amount at any time outstanding not in excess of $3,000,000. The Borrower has
requested the Issuing Bank to issue letters of credit to support payment
obligations incurred in the ordinary course of business by the Borrower and its
Subsidiaries in an aggregate face amount at any time outstanding not to exceed
$40,000,000. The proceeds of the Loans are to be used to pay all amounts owing,
if any, under the Original Credit Agreement on the Restatement Effective Date
and otherwise for working capital and other general corporate purposes
(including all proper and legitimate business purposes), and such Letters of
Credit are to be used for general corporate purposes.
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The Lenders are willing to extend such credit to the Borrower and
the Issuing Bank is willing to issue letters of credit for the account of the
Borrower on the terms and subject to the conditions set forth herein.
Accordingly, the parties hereto agree as follows:
ARTICLE I. DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms shall have the meanings specified below:
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
"ABR Loan" shall mean any Loan bearing interest at the Alternate
Base Rate in accordance with the provisions of Article II.
"Adjusted LIBO Rate" shall mean, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum (rounded, if
necessary, to the next 1/16 of 1%) equal to the product of (a) the LIBO Rate in
effect for such Interest Period and (b) Statutory Reserves.
"Administrative Agent Fees" shall have the meaning assigned to such
term in Section 2.05(b).
"Administrative Questionnaire" shall mean an Administrative
Questionnaire in the form of Exhibit A.
"Affiliate" shall mean, when used with respect to a specified
person, another person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by or is under common Control with the
person specified.
"Aggregate Revolving Credit Exposure" shall mean the aggregate
amount of the Lenders' Revolving Credit Exposures.
"Alternate Base Rate" shall mean, for any day, a rate per annum
(rounded, if necessary, to the next 1/16 of 1%) equal to the greatest of (a) the
Prime Rate in effect on such day, (b) the Base CD Rate in effect on such day
plus 1% and (c) the Federal Funds Effective Rate in effect on such day plus 1/2
of 1%. If for any reason the Administrative Agent shall have determined (which
determination shall be conclusive absent manifest error) that it is unable to
ascertain the Base CD Rate or the Federal Funds Effective Rate or both for any
reason, including the inability or failure of the Administrative Agent to obtain
sufficient quotations in accordance with the terms thereof, the Alternate Base
Rate shall be determined without regard to clause (b) or (c), or both, of the
preceding sentence, as appropriate, until the circumstances giving rise to such
inability no longer exist. Any change in the Alternate Base Rate due to a change
in the Prime Rate, the Three-Month Secondary CD Rate or the Federal Funds
Effective Rate shall be effective on the effective date of such change in the
Prime Rate, the Three-Month Secondary CD Rate or the Federal Funds Effective
Rate, respectively.
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"Applicable Fixed Charge Coverage Ratio" shall mean, at any time,
the Consolidated Fixed Charge Coverage Ratio for the most recent period of four
consecutive fiscal quarters of the Borrower for which financial statements have
been delivered to the Administrative Agent pursuant to Section 5.04.
"Applicable Percentage" shall mean, with respect to any Eurodollar
Loan, or with respect to the Commitment Fees or L/C Participation Fees, as the
case may be, the applicable percentage set forth below under the caption
"Eurodollar Spread" or "Commitment Fee Percentage" or "L/C Fee Percentage", as
the case may be, in each case determined as provided below:
Eurodollar Commitment Fee L/C Fee
Spread Percentage Percentage
------ ---------- ----------
Category 1 0.3500% 0.1250% 0.2250%
----------
Category 2 0.4000% 0.1500% 0.2750%
----------
Category 3 0.4500% 0.1875% 0.3250%
----------
Category 4 0.6250% 0.2250% 0.5000%
----------
Category 5 0.7500% 0.2500% 0.6250%
----------
During any period that either ▇▇▇▇▇'▇ or S&P is rating the Obligations, the
"Applicable Percentage" shall be determined by reference to the applicable
percentage set forth above on the line designated as (i) "Category 1", so long
as the Obligations are rated Baa1 or better by ▇▇▇▇▇'▇ or BBB+ or better by S&P,
(ii) "Category 2", so long as the conditions described in clause (i) above are
not satisfied but the Obligations are rated Baa2 or better by ▇▇▇▇▇'▇ or BBB or
better by S&P, (iii) "Category 3", so long as the conditions described in
clauses (i) and (ii) above are not satisfied but the Obligations are rated Baa3
or better by ▇▇▇▇▇'▇ or BBB- or better by S&P, (iv) "Category 4", so long as the
conditions described in clauses (i), (ii) and (iii) above are not satisfied but
the Obligations are rated Ba1 or better by ▇▇▇▇▇'▇ or BB+ or better by S&P or
(v) "Category 5", so long as the conditions described in clauses (i), (ii),
(iii) and (iv) above are not satisfied; provided that if and only if the ratings
established by ▇▇▇▇▇'▇ and S&P shall fall in the same category, then (a) if
based on such ratings at the time the "Applicable Percentage" would be
determined by reference to "Category 2" but the Applicable Fixed Charge Coverage
Ratio at the time is 4.0 to 1.0 or greater, then the "Applicable Percentage"
shall be determined by reference to the applicable percentage set forth above on
the line designated as "Category 1", (b) if based on such ratings at the time
the "Applicable Percentage" would be determined by reference to "Category 3" but
the Applicable Fixed Charge Coverage Ratio at the time is 3.5 to 1.0 or greater,
then the "Applicable Percentage" shall be determined by reference to the
applicable percentage set forth above on the line designated as "Category 2",
(c) if based on such ratings at the time the "Applicable Percentage" would be
determined by reference to "Category 4" but the Applicable Fixed Charge Coverage
Ratio at the time is 3.0 to 1.0 or greater, then the "Applicable Percentage"
shall be determined by reference to the applicable percentage set forth above on
the line designated as "Category 3" or (d) if based on such ratings at the time
the "Applicable Percentage" would be determined by reference to "Category 5" but
the Applicable Fixed Charge Coverage Ratio at the time is 2.75 to 1.0 or
greater, then the "Applicable Percentage" shall be determined by reference to
the applicable percentage set forth above on the line designated as "Category
4". The "Applicable Percentage" shall be determined by the Administrative Agent
and, for purposes of determinations pursuant to the preceding sentence, no
rating or change of a rating by ▇▇▇▇▇'▇ or S&P shall be effective until the
Administrative Agent receives notice thereof. The Applicable Fixed Charge
Coverage Ratio at any time shall be determined based upon the most recent
financial statements delivered to the Administrative Agent pursuant to
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Section 5.04 and each change in the "Applicable Percentage" based upon a change
in the Applicable Fixed Charge Coverage Ratio shall be effective upon receipt by
the Administrative Agent of (i) such financial statements indicating such change
and (ii) notice by the Borrower of such change in the "Applicable Percentage"
based upon the Applicable Fixed Charge Coverage Ratio; provided that if such
financial statements and notice are not delivered to the Administrative Agent by
the date that delivery thereof is required by Section 5.04, then the "Applicable
Percentage" shall be determined without regard to the Applicable Fixed Charge
Coverage Ratio unless and until such financial statements and notice are so
delivered. If neither ▇▇▇▇▇'▇ nor S&P is rating the Obligations, then (A) for a
period of 90 days commencing on the date that the Obligations ceased to be so
rated, the Borrower and the Lenders shall negotiate in good faith to amend this
definition in a manner that will substitute for such ratings financial tests
(which may include tests by reference solely to the Borrower's Applicable Fixed
Charge Coverage Ratio and Leverage Ratio) for determining the "Applicable
Percentage", (B) during such 90-day period, the "Applicable Percentage" shall be
the same as that in effect immediately prior to commencement of such period and
(C) if the Borrower and the Lenders fail to agree upon any such amendment within
such 90-day period, then upon and after expiration of such 90-day period the
"Applicable Percentage" shall be determined by reference to the applicable
percentage set forth on the line designated as "Category 5" until such agreement
is reached; provided that if at any time, whether during or after expiration of
any such 90-day period, the Borrower arranges for ▇▇▇▇▇'▇ or S&P to commence
rating the Obligations, then the "Applicable Percentage" shall be determined
based upon any such rating or ratings so obtained (and the Applicable Fixed
Charge Coverage Ratio) as provided above so long as a rating is available.
"Assessment Rate" shall mean for any date the annual rate (rounded,
if necessary, to the next 1/100 of 1%) most recently estimated by the
Administrative Agent as the then current net annual assessment rate that will be
employed in determining amounts payable by the Administrative Agent to the
Federal Deposit Insurance Corporation (or any successor) for insurance by such
Corporation (or such successor) of time deposits made in Dollars at the
Administrative Agent's domestic offices.
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Lender and an assignee, and accepted by the Administrative
Agent, substantially in the form of Exhibit B or such other form as shall be
approved by the Administrative Agent.
"Base CD Rate" shall mean the sum of (a) the product of (i) the
Three-Month Secondary CD Rate and (ii) Statutory Reserves and (b) the Assessment
Rate.
"Board" shall mean the Board of Governors of the Federal Reserve
System of the United States.
"Borrowing" shall mean a group of Loans of a single Type made by the
Lenders on a single date and as to which a single Interest Period is in effect.
"Borrowing Request" shall mean a request by the Borrower in
accordance with the terms of Section 2.03 and substantially in the form of
Exhibit C.
"Business Day" shall mean any day other than a Saturday, Sunday or
day on which banks in New York City are authorized or required by law to close;
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 in the London interbank market.
"Capital Lease Obligations" of any person shall mean the obligations
of such person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital
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leases on a balance sheet of such person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"Cash Equivalents" shall mean (a) securities with maturities of one
year or less from the date of acquisition issued or fully guaranteed by the
United States or any agency or instrumentality thereof, (b) certificates of
deposit, banker's acceptances and time deposits with maturities of one year or
less from the date of acquisition and overnight bank deposits, in each case of
any commercial bank having a long-term unsecured debt rating of at least "A" by
S&P or "A2" by ▇▇▇▇▇'▇, (c) repurchase obligations with a term of not more than
twelve days for underlying securities of the types described in clauses (a) and
(b) above entered into with any of the Lenders and (d) commercial paper of a
domestic issuer with maturities of one year or less rated at least A-1 by S&P or
P-1 by ▇▇▇▇▇'▇; (e) commercial paper of any bank or other financial institution
meeting the qualifications in clause (b) above; and (f) investments in money
market funds, substantially all assets of which comprise securities of the types
described in clauses (a) through (e) above.
A "Change in Control" shall be deemed to have occurred if (a)
Holdings shall cease to own 100% of the capital stock of the Borrower, (b) any
person or group (within the meaning of Rule 13d-5 of the Securities Exchange Act
of 1934 as in effect on the date hereof) shall own directly or indirectly,
beneficially or of record, shares representing 30% or more of the aggregate
ordinary voting power represented by the issued and outstanding capital stock of
Holdings; (c) a majority of the seats (other than vacant seats) on the board of
directors of Holdings shall at any time have been occupied by persons who were
neither (i) nominated by the board of directors of Holdings, nor (ii) appointed
by directors so nominated; (d) any person or group shall otherwise directly or
indirectly Control Holdings; or (e) any "change of control" or similar event
shall occur under the Senior Note Documents.
"Closing Date" shall mean the date on which the Original Credit
Agreement became effective in accordance with Section 4.02 thereof.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" shall mean all the "Collateral" as defined in any
Security Document.
"Commitment" shall mean, with respect to any Lender, such Lender's
Revolving Credit Commitment and Swingline Commitment and, with respect to the
Issuing Bank, its L/C Commitment.
"Commitment Fee" shall have the meaning assigned to such term in
Section 2.05(a).
"Consolidated Capital Expenditures" shall mean, for any period, the
sum of (a) the aggregate of all expenditures (whether paid in cash or other
consideration or accrued as a liability) by the Borrower and its consolidated
Subsidiaries during such period that, in conformity with GAAP, should be
included in "additions to property, plant or equipment" or comparable items
reflected in the consolidated statement of cash flows of the Borrower and its
consolidated Subsidiaries; provided that "Consolidated Capital Expenditures"
shall not include (i) any of the foregoing expenditures to the extent made with
the proceeds from property or casualty insurance or compensation with respect to
eminent domain or condemnation proceedings or (ii) any of the foregoing
expenditures to the extent constituting an acquisition made in reliance upon
clause (b) of Section 6.04; plus (b) the aggregate of all payments of Capital
Lease Obligations during such period (except to the extent allocable to
interest).
"Consolidated EBITDA" shall mean, for any period, Consolidated Net
Income for such period, before giving effect to any extraordinary gains or
losses or any gains or losses resulting from sales of assets (other than sales
of inventory in the ordinary course of business), plus, to the extent deducted
in computing such Consolidated Net Income, the sum of (a) income tax expense
(whether paid or deferred), (b) Consolidated
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Interest Expense, (c) depreciation and amortization and (d) any non-cash charges
resulting from any restructuring or consolidation of operations or any grant,
exercise or cancellation of stock options or warrants.
"Consolidated Fixed Charge Coverage Ratio" shall mean, for any
period, the ratio of (a) the sum of (i) Consolidated EBITDA plus (ii) Rental
Expense minus (iii) Consolidated Capital Expenditures to (b) the sum of (i)
Consolidated Interest Expense plus (ii) Rental Expense, in each case for such
period.
"Consolidated Interest Expense" shall mean, for any period, the
gross consolidated interest expense of the Borrower for such period determined
on a consolidated basis in accordance with GAAP, and including, to the extent
not otherwise included, Capital Lease Obligations (to the extent allocable to
interest) and all commissions, discounts and other fees and charges with respect
to letters of credit and bankers' acceptances and the net costs (i.e. costs
minus benefits) under interest rate protection agreements and other interest
hedging arrangements, but excluding amortization of deferred financing costs to
the extent otherwise included.
"Consolidated Net Income" shall mean, for any period, the
consolidated net income or loss of the Borrower for such period determined on a
consolidated basis in accordance with GAAP; provided, however, that (a) there
shall be deducted any dividends paid to Holdings pursuant to Section 6.08 (other
than dividends paid to repay loans made by the Borrower to Holdings as
contemplated thereby) and any loans made to Holdings for the purposes set forth
therein, to the extent that the proceeds thereof are used in a manner that would
result in (or has resulted in) a deduction in calculating the net income or loss
of Holdings and is not otherwise deducted in calculating the consolidated net
income or loss of the Borrower, and (b) there shall be excluded (i) the income
(or loss) of any Person in which any other Person (other than the Borrower or
any of its Subsidiaries) has a joint interest, except to the extent of the
amount of dividends or other distributions actually paid to the Borrower or any
of its Subsidiaries by such Person during such period and except that the
Borrower's interest in ▇▇-▇▇ Properties, Inc. may be recognized on an equity
basis, (ii) the income (or loss) of any Person accrued prior to the date it
becomes a Subsidiary of the Borrower or is merged into or consolidated with the
Borrower or any of its Subsidiaries or that Person's assets are acquired by the
Borrower or any of its Subsidiaries and (iii) the income of any Subsidiary of
the Borrower to the extent that the declaration or payment of dividends or
similar distributions by the Subsidiary of that income is not at the time
permitted by operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to
that Subsidiary.
"Consolidated Net Worth" shall mean, as of any date of
determination, the consolidated stockholders' equity of the Borrower determined
on a consolidated basis in accordance with GAAP, less treasury stock, if any,
and less the amount of any Indebtedness of Holdings to the Borrower included as
an asset of the Borrower in determining such consolidated stockholders' equity,
plus the aggregate amount of non-cash charges resulting from the grant, exercise
or cancellation of stock options or warrants, to the extent such non-cash
charges were deducted in calculating the consolidated net income of the Borrower
for any period subsequent to June 30, 1996, and prior to such date of
determination.
"Consolidated Total Assets" shall mean, as of any date of
determination, the total assets which would properly be classified as
consolidated assets of the Borrower and its Subsidiaries at such date in
accordance with GAAP.
"Consolidated Total Debt" shall mean, as of any date of
determination, all Indebtedness (excluding (a) Guarantees of Indebtedness, to
the extent the Guaranteed Indebtedness is already included, (b) Indebtedness of
the type described in clause (i) of the definition of the term Indebtedness and
(c) to the extent such Indebtedness is contingent in nature, Indebtedness of the
type described in clause (j) of the definition of the term Indebtedness) of the
Borrower and its consolidated Subsidiaries determined on a consolidated basis in
accordance with GAAP.
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"Control" shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
person, whether through the ownership of voting securities, by contract or
otherwise, and "Controlling" and "Controlled" shall have meanings correlative
thereto.
"Credit Event" shall have the meaning assigned to such term in
Section 4.01.
"Dealer Notes" shall mean all promissory notes held by the Borrower
representing loans or advances to its dealers which are made in accordance with
the past business practices of the Borrower, made in accordance with its
standard credit procedures and made for the purpose of financing (i) dealer
inventories in connection with the opening or expanding of a new Store, (ii) the
purchase by the dealer of a Store, (iii) dealer capital improvement and
leasehold improvements, or (iv) the conversion (on a secured basis) of accounts
receivable and services sold to dealers from open accounts receivable.
"Default" shall mean any event or condition which upon notice, lapse
of time or both would constitute an Event of Default.
"Designated Payment" shall mean any amount that is required to be
treated as a "Designated Payment" by any provision of this Agreement.
"Designated Payment Amount" shall mean, at any time, an amount equal
to the excess, if any, of (a) 50% of Consolidated Net Income (excluding
extraordinary gains and any gains or losses resulting from sales of assets,
other than sales of inventory in the ordinary course of business) for the period
of eight consecutive fiscal quarters (or shorter period commencing on January 1,
1994) most recently ended, treated as a single accounting period, minus (b) the
sum of all Designated Payments made during the period referred to in clause (a)
above (excluding any Designated Payments made in respect of Consolidated Net
Income for a previous period, it being understood that, for purposes of this
exclusion, each Designated Payment shall be considered made in reliance upon
Consolidated Net Income for the earliest quarterly period included pursuant to
clause (a) at the time such Designated Payment is made, to the extent not relied
upon for previous Designated Payments). For purposes of calculating the
Designated Payment Amount, Consolidated Net Income shall be adjusted to exclude
any gains or losses resulting from the payment of Designated Payments.
"Dollars" or "$" shall mean lawful money of the United States of
America.
"Environment" shall mean ambient air, surface water and groundwater
(including potable water, navigable water and wetlands), the land surface or
subsurface strata, the workplace or as otherwise defined in any Environmental
Law.
"Environmental Claim" means any written accusation, allegation,
notice of violation, claim, demand, order, directive, cost recovery action or
other cause of action by, or on behalf of, any Governmental Authority or any
person for damages, injunctive or equitable relief, personal injury (including
sickness, disease or death), Remedial Action costs, tangible or intangible
property damage, natural resource damages, nuisance, pollution, any adverse
effect on the environment caused by any Hazardous Material, or for fines,
penalties or restrictions, resulting from or based upon: (a) the existence, or
the continuation of the existence, of a Release (including sudden or non-sudden,
accidental or non-accidental Releases); (b) exposure to any Hazardous Material;
(c) the presence, use, handling, transportation, storage, treatment or disposal
of any Hazardous Material; or (d) the violation or alleged violation of any
Environmental Law or Environmental Permit.
"Environmental Law" means any and all applicable present and future
treaties, laws, rules, regulations, codes, ordinances, orders, decrees,
judgments, injunctions, notices or binding agreements issued, promulgated or
entered into by any Governmental Authority, relating in any way to the
environment, preservation or reclamation of natural resources, the management,
Release or threatened Release of any
- 7 -
Hazardous Material or to health and safety matters, including the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. ▇▇.▇▇. 9601
et seq. (collectively "CERCLA"), the Solid Waste Disposal Act, as amended by the
Resource Conservation and Recovery Act of 1976 and Hazardous and Solid
Amendments of 1984, 42 U.S.C. ▇▇.▇▇. 6901 et seq., the Federal Water Pollution
Control Act, as amended by the Clean Water Act of 1977, 33 U.S.C. ▇▇.▇▇. 1251 et
seq., the Clean Air Act of 1970, as amended 42 U.S.C. ▇▇.▇▇. 7401 et seq., the
Toxic Substances Control Act of 1976, 15 U.S.C. ▇▇.▇▇. 2601 et seq., the
Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. ▇▇.▇▇. 651 et
seq., the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C.
▇▇.▇▇. 11001 et seq., the Safe Drinking Water Act of 1974, as amended, 42 U.S.C.
▇▇.▇▇. 300(f) et seq., the Hazardous Materials Transportation Act, 49 U.S.C.
▇▇.▇▇. 1801 et seq., and any similar or implementing state or local law, and all
amendments or regulations promulgated thereunder.
"Environmental Permit" means any permit, approval, authorization,
certificate, license, variance, filing or permission required by or from any
Governmental Authority pursuant to any Environmental Law.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414 of the Code.
"Eurodollar Borrowing" shall mean a Borrowing comprised of
Eurodollar Loans.
"Eurodollar Loan" shall mean any Loan bearing interest at a rate
determined by reference to the Adjusted LIBO Rate in accordance with the
provisions of Article II.
"Event of Default" shall have the meaning assigned to such term in
Article VII.
"Excluded Subsidiary" shall mean, at any time, any Subsidiary of the
Borrower identified on Schedule 3.08 as an "Excluded Subsidiary" and that has
not ceased to be an "Excluded Subsidiary" as provided below; provided that such
Subsidiary (a) does not own, lease, license or hold any assets or properties,
(including patents, trademarks, trade names and other intellectual property)
other than such as are not used or useful in the businesses conducted by the
Borrower and its other Subsidiaries, and in any event such assets and properties
do not, in the aggregate (for all Subsidiaries that are treated as "Excluded
Subsidiaries"), have a fair market value in excess of $1,000,000, (b) did not,
during the period of four consecutive fiscal quarters of the Borrower ended on
the most recent date for which quarterly or annual financial statements of
Holdings are available, have revenues that, together with the revenues of all
other Subsidiaries that are treated as "Excluded Subsidiaries", accounted for
more than 3% of the consolidated revenues of the Borrower and its Subsidiaries
during such period, and (c) does not have any Indebtedness or any other material
liabilities. At any time the Borrower may, and shall if one or more Excluded
Subsidiaries fail to satisfy one or more of the conditions described in clauses
(a) through (d) above, notify the Administrative Agent that one or more Excluded
Subsidiaries shall cease to constitute an "Excluded Subsidiary", whereupon such
Subsidiary or Subsidiaries shall cease to constitute an "Excluded Subsidiary"
for all purposes hereof. The Borrower may not designate any Subsidiary that is
not an Excluded Subsidiary as an Excluded Subsidiary.
"Federal Funds Effective Rate" shall mean, for any day, 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 on the
next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a Business Day, the average
of the quotations for the day of
- 8 -
such transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Fees" shall mean the Commitment Fees, the Administrative Agent
Fees, the LC Participation Fees and the Issuing Bank Fees.
"Financial Officer" of any corporation shall mean the chief
financial officer, principal accounting officer, Treasurer or Controller of such
corporation, and the Assistant Treasurer and Assistant Controller for the
purpose of giving notice pursuant to Sections 2.03, 2.10, 2.19 and 2.20.
"Foreign Subsidiary" shall mean any Subsidiary organized outside of
the United States.
"GAAP" shall mean generally accepted accounting principles applied
on a consistent basis.
"Governmental Authority" shall mean any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or regulatory
body.
"Guarantee" of or by any person shall mean any obligation,
contingent or otherwise, of such person guaranteeing or having the economic
effect of guaranteeing any Indebtedness of any other person (the "primary
obligor") in any manner, whether directly or indirectly, and including any
obligation of such person, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or to
purchase (or to advance or supply funds for the purchase of) any security for
the payment of such Indebtedness, (b) to purchase or lease property, securities
or services for the purpose of assuring the owner of such Indebtedness of the
payment of such Indebtedness or (c) to maintain working capital, equity capital
or any other financial statement condition or liquidity of the primary obligor
so as to enable the primary obligor to pay such Indebtedness; provided, however,
that the term Guarantee shall not include endorsements for collection or deposit
in the ordinary course of business.
"Guarantee Agreement " shall mean the Guarantee Agreement dated as
of March 10, 1995, among the Guarantors and the Administrative Agent.
"Guarantors" shall mean Holdings and the Subsidiary Guarantors.
"Hazardous Materials" means all explosive or radioactive substances
or wastes, hazardous or toxic substances or wastes, pollutants, solid, liquid or
gaseous wastes, including petroleum or petroleum distillates, asbestos or
asbestos containing materials, polychlorinated biphenyls ("PCBs") or
PCB-containing materials or equipment, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Indebtedness" of any person shall mean, without duplication, (a)
all obligations of such person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such person
upon which interest charges are customarily paid, (d) all obligations of such
person under conditional sale or other title retention agreements relating to
property or assets purchased by such person, (e) all obligations of such person
issued or assumed as the deferred purchase price of property or services
(excluding trade accounts payable and accrued obligations incurred in the
ordinary or customary course of business), (f) all Indebtedness of others
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such person, whether or not the obligations secured thereby have
been assumed, (g) all Guarantees by such person of Indebtedness of others, (h)
all Capital Lease Obligations of such person, (i) all obligations of such person
in respect of Rate Protection Agreements and (j) all obligations of such person
as an account party in respect of letters of credit and bankers'
- 9 -
acceptances. The Indebtedness of any person shall include the Indebtedness of
any partnership in which such person is a general partner.
"Indemnity, Subrogation and Contribution Agreement" shall mean the
Indemnity, Subrogation and Contribution Agreement dated as of March 10, 1995,
among the Borrower, the Subsidiary Guarantors and the Administrative Agent.
"Information Memorandum" shall mean the confidential information
memorandum, dated as of November, 1996, prepared by the Borrower and distributed
by the Administrative Agent to the Lenders.
"Interest Payment Date" shall mean, with respect to any Loan, the
last day of the Interest Period applicable to the Borrowing of which such Loan
is a part and, in the case of a Eurodollar Borrowing with an Interest Period of
more than three months' duration, each day that would have been an Interest
Payment Date had successive Interest Periods of three months' duration been
applicable to such Borrowing, and, in addition, any date on which such Loan
shall be changed to a different Type.
"Interest Period" shall mean (a) as to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing or on the last day of the
immediately preceding Interest Period applicable to such Borrowing, as the case
may be, and ending on the numerically corresponding day (or, if there is no
numerically corresponding day, on the last day) in the calendar month that is 1,
2, 3, 6 or (if available, as determined by the Administrative Agent and the
Lenders) 9 or 12 months thereafter, as the Borrower may elect and (b) as to any
ABR Borrowing, the period commencing on the date of such Borrowing or on the
last day of the immediately preceding Interest Period applicable to such
Borrowing, as the case may be, and ending on the earliest of (i) the next
succeeding March 31, June 30, September 30 or December 31, (ii) the Revolving
Credit Maturity Date and (iii) the date such Borrowing is prepaid in accordance
with Section 2.10(b); provided, however, that if any Interest Period would end
on a day other than a Business Day, such Interest Period shall be extended to
the next succeeding Business Day unless, in the case of a Eurodollar Borrowing
only, 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.
Interest shall accrue from and including the first day of an Interest Period to
but excluding the last day of such Interest Period.
"Issuing Bank" shall mean, as the context may require, (a) The Chase
Manhattan Bank or (b) any other Lender that may become an Issuing Bank pursuant
to Section 2.20(i) or 2.20(k), with respect to Letters of Credit issued by such
Lender.
"Issuing Bank Fees" shall have the meaning assigned to such term in
Section 2.05(c).
"Kathwari Employment Agreement" shall mean the employment agreement
dated as of July 27, 1994, among Holdings, the Borrower and ▇▇. ▇▇▇▇▇▇▇▇.
"L/C Commitment" shall mean the commitment of the Issuing Bank to
issue Letters of Credit pursuant to Section 2.20.
"L/C Disbursement" shall mean a payment or disbursement made by the
Issuing Bank pursuant to a Letter of Credit.
"L/C Exposure" shall mean at any time the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate principal amount of all L/C Disbursements that have not yet been
reimbursed at such time. The L/C Exposure of any Revolving Credit Lender at any
time shall mean its Pro Rata Percentage of the aggregate L/C Exposure at such
time.
- 10 -
"L/C Participation Fee" shall have the meaning assigned to such term
in Section 2.05(c).
"Letter of Credit" shall mean any letter of credit issued pursuant
to Section 2.20.
"Leverage Ratio" shall mean, on any date, the ratio of (a)
Consolidated Total Debt to (b) the sum of (i) Consolidated Total Debt and (ii)
Consolidated Net Worth, in each case as of such date.
"LIBO Rate" shall mean, with respect to any Eurodollar Borrowing,
the rate (rounded, if necessary, to the next 1/16 of 1%) at which Dollar
deposits approximately equal in principal amount to the Administrative Agent's
portion of 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, with respect to any asset, (a) any mortgage, deed
of trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement relating to such asset and
(c) in the case of securities, any purchase option, call or similar right of a
third party with respect to such securities.
"Loan Documents" shall mean this Agreement, the Letters of Credit,
the Guarantee Agreement, the Security Documents, the Indemnity, Subrogation and
Contribution Agreement and the Notes, if any.
"Loan Parties" shall mean the Borrower and the Guarantors.
"Loans" shall mean the Revolving Loans and the Swingline Loans.
"Margin Stock" shall have the meaning assigned to such term in
Regulation U.
"Material Adverse Effect" shall mean (a) a materially adverse effect
on the business, assets, operations, prospects or condition, financial or
otherwise, of Holdings, or the Borrower, or the Borrower and the Subsidiaries
taken as a whole, (b) material impairment of the ability of any Loan Party to
perform any of its obligations under any Loan Document to which it is or will be
a party or (c) material impairment of the rights of or benefits available to the
Lenders under any Loan Document.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc., and its
successors.
"Mortgaged Properties" shall mean the real properties specified on
Schedule 1.01 and improvements thereto and equipment located at such properties.
"Mortgages" shall mean the mortgages, deeds of trust, assignments of
leases and rents, modifications and other security documents previously
delivered to the Collateral Agent creating a Lien on the Mortgaged Properties in
connection with the Original Credit Agreement.
"Multiemployer Plan" shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate (other
than one considered an ERISA Affiliate only pursuant to subsection (m) or (o) of
Code Section 414) 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.
- 11 -
"Non Wholly Owned Subsidiary" shall mean a Subsidiary that is not a
Wholly Owned Subsidiary.
"Note" shall mean a promissory note of the Borrower, substantially
in the form of Exhibit D.
"Obligations" shall mean all obligations defined as "Obligations" in
the Guarantee Agreement and the Security Documents.
"Original Credit Agreement" shall have the meaning ascribed thereto
in the preamble to this Agreement.
"Original Lenders" shall mean the "Lenders" under, and as defined
in, the Original Credit Agreement immediately prior to the effectiveness of this
Agreement.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred
to and defined in ERISA.
"Perfection Certificate" shall mean the Perfection Certificate
substantially in the form of Annex 2 to the Security Agreement.
"Permitted Receivables Facility" shall mean (a) the receivables
financing arrangement existing under the Monogram Credit Card Bank of Georgia
Program Agreement dated as of November 9, 1993, between Monogram Credit Card
Bank of Georgia and the Borrower, as in effect on the date hereof, and as
amended or modified after the date hereof with the prior written consent of the
Required Lenders; (b) any successor retail receivables financing arrangement
entered into by the Borrower pursuant to documentation reasonably satisfactory
to the Required Lenders and on terms and conditions that are either (i) no less
favorable to the Borrower than those of the predecessor arrangement that is
being replaced or (ii) satisfactory to the Required Lenders; provided, however,
that, if the Borrower delivers to the Lenders documentation with respect to any
amendment, modification or replacement of a Permitted Receivables Facility, any
Lender that fails to notify the Borrower in writing of any objection to such
amendment, modification or replacement within 10 Business Days after its receipt
thereof shall be deemed to have consented to and approved of such documentation
and the terms and conditions set forth therein; and (c) any other retail
receivables financing arrangement that (i) applies only to receivables from
retail customers, (ii) provides for a "true" sale of such receivables without
recourse to Holdings, the Borrower or any Subsidiary, except for obligations of
the Borrower to repurchase such receivables on terms and conditions (including
the circumstances in which such repurchases may be required) no less favorable
to the Borrower than those of the arrangement referred to in clause (a) above,
(iii) does not impose any financial covenants upon Holdings, the Borrower or any
Subsidiary, or any other covenants or obligations materially more burdensome
than those contained in the arrangement referred to in clause (a) above, and
(iv) is conducted pursuant to documentation delivered to the Lenders at least 10
Business Days before such arrangement is implemented. Any Permitted Receivables
Facility shall continue to be a Permitted Receivables Facility after any
amendment or modification thereto and without the consent of the Required
Lenders if after giving effect to such amendment or modification the arrangement
(i) is no less favorable to the Borrower than prior to giving effect to such
amendment or modification and (ii) does not adversely affect the rights or
interests of the Lenders.
"Permitted Sale-Leaseback Transaction" shall mean any sale by the
Borrower or any of its Subsidiaries of any property which property is then
leased back to the respective seller; provided that (a) such sale shall be made
for fair market value (as determined by the Borrower in good faith), (b) the
consideration for such sale shall consist entirely of cash consideration, (c) if
such transaction results in Indebtedness (including any Capital Lease
Obligation), such Indebtedness is permitted under Section 6.01, (d) no Default
or Event of Default has occurred and is continuing at the time of, or would
result from, such transaction and (e) the
- 12 -
resulting lease provides for substantially equal payments during each one-year
period during the term of such lease except that a balloon payment shall be
permitted at the end of the lease term) and (i) with a minimum term of at least
seven years, in the case of real property and improvements thereto, or (ii) with
a minimum term of at least three years, in the case of personal property.
"Person" or "person" shall mean any natural person, corporation,
business trust, joint venture, association, company, partnership or government,
or any agency or political subdivision thereof.
"Plan" shall mean any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code that is maintained for current or former employees, or any
beneficiary thereof, of the Borrower or any ERISA Affiliate.
"Pledge Agreement" shall mean the Pledge Agreement dated as of March
10, 1995, among Holdings, the Borrower, the Subsidiaries party thereto and the
Collateral Agent.
"Pro Rata Percentage" of any Revolving Credit Lender at any time
shall mean the percentage of the Total Revolving Credit Commitment represented
by such Lender's Revolving Credit Commitment.
"Prime Rate" shall mean the rate of interest per annum publicly
announced from time to time by the Administrative Agent as its prime rate in
effect at its principal office in New York City; each change in the Prime Rate
shall be effective on the date such change is publicly announced as being
effective.
"Rate Protection Agreements" shall mean interest rate protection
agreements, foreign currency exchange agreements, commodity price protection
agreements and other interest or currency exchange rate or commodity price
hedging arrangements.
"Register" shall have the meaning given such term in Section
9.04(d).
"Regulation G" shall mean Regulation G of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation U" shall mean Regulation U of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation X" shall mean Regulation X of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing,
depositing, dispersing, emanating or migrating of any Hazardous Material in,
into, onto or through the environment.
"Remedial Action" means (a) "remedial action" as such term is
defined in CERCLA, 42 U.S.C. Section 9601(24), and (b) all other actions
required by any Governmental Authority or voluntarily undertaken to: (i)
cleanup, remove, treat, ▇▇▇▇▇ or in any other way address any Hazardous Material
in the environment; (ii) prevent the Release or threat of Release, or minimize
the further Release of any Hazardous Material so it does not migrate or endanger
or threaten to endanger public health, welfare or the environment; or (iii)
perform studies and investigations in connection with, or as a precondition to,
(i) or (ii) above.
"Rental Expense" shall mean, for any period, all payment obligations
of Borrower and its consolidated Subsidiaries accrued during such period under
agreements for rent, lease, hire or use of any real or
- 13 -
personal property, including obligations in the nature of operating leases but
excluding Capital Lease Obligations.
"Reportable Event" shall mean any reportable event as defined in
Section 4043(b) of ERISA or the regulations issued thereunder with respect to a
Plan (other than a Plan maintained by an ERISA Affiliate that is considered an
ERISA Affiliate only pursuant to subsection (m) or (o) of Code Section 414).
"Required Lenders" shall mean, at any time, Lenders having Revolving
Credit Exposure and unused Revolving Credit Commitments representing in excess
of 50% of the sum of the Aggregate Revolving Credit Exposure and unused
Revolving Credit Commitments at such time.
"Responsible Officer" of any corporation shall mean any executive
officer or Financial Officer of such corporation and any other officer or
similar official thereof responsible for the administration of the obligations
of such corporation in respect of this Agreement.
"Restatement Effective Date" shall mean the date on which this
Agreement becomes effective in accordance with Section 4.02.
"Restricted Payment" shall have the meaning assigned to such term in
Section 6.08.
"Revolving Credit Borrowing" shall mean a Borrowing comprised of
Revolving Loans.
"Revolving Credit Commitment" shall mean, with respect to each
Lender, the commitment of such Lender to make Revolving Loans hereunder as set
forth in Schedule 2.01, or in the Assignment and Acceptance pursuant to which
such Lender assumed its Revolving Credit Commitment, as applicable, as the same
may be reduced from time to time pursuant to Section 2.09 and pursuant to
assignments by such Lender pursuant to Section 9.04. The parties hereto
acknowledge that the Revolving Credit Commitments set forth in Schedule 2.01
are, in some respects, different than those previously in effect under the
Original Credit Agreement and, as of the Restatement Effective Date, Schedule
2.01 shall apply and the Lenders shall be released from their Revolving Credit
Commitments under the Original Credit Agreement to the extent inconsistent with
Schedule 2.01. For purposes of determining each Lender's L/C Exposure, each
Letter of Credit, if any, outstanding as of the Restatement Effective Date shall
be deemed to have been issued on the Restatement Effective Date.
"Revolving Credit Exposure" shall mean, with respect to any Lender
at any time, the aggregate principal amount at such time of all outstanding
Revolving Credit Loans of such Lender, plus the aggregate amount at such time of
such Lender's L/C Exposure, plus the aggregate amount at such time of such
Lender's Swingline Exposure.
"Revolving Credit Lender" shall mean a Lender with a Revolving
Credit Commitment.
"Revolving Credit Maturity Date" shall mean March 10, 2000.
"Revolving Loans" shall mean the revolving loans made by the Lenders
to the Borrower pursuant to Section 2.01. Each Revolving Loan shall be a
Eurodollar Revolving Loan or an ABR Revolving Loan.
"S&P" shall mean Standard & Poor's Ratings Group and its successors.
"Secured Parties" shall have the meaning assigned to such term in
the Security Agreement.
- 14 -
"Security Agreement" shall mean the Security Agreement dated as of
March 10, 1995, among the Borrower, the Subsidiaries party thereto and the
Collateral Agent.
"Security Documents" shall mean the Security Agreement, the Pledge
Agreement and each of the security agreements and other instruments and
documents executed and delivered pursuant to any of the foregoing or pursuant to
Section 5.09.
"Senior Notes" shall mean the Borrower's $75,000,000 original
aggregate principal amount of 8-3/4% Senior Notes due 2001, as amended,
supplemented or otherwise modified.
"Senior Note Documents" shall mean the Senior Notes, the Senior Note
Indenture and all other documents and agreements entered into in connection
therewith, in each case as amended, supplemented or otherwise modified.
"Senior Note Indenture" shall mean the Indenture, dated as of March
11, 1993, between the Borrower and The First National Bank of Boston, as
Trustee, as amended, supplemented or otherwise modified.
"Statutory Reserves" shall mean a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board and any other banking authority, domestic or foreign,
to which the Administrative Agent or any Lender (including any branch,
Affiliate, or other Funding Office making or holding a Loan) is subject (a) with
respect to the Base CD Rate, for new negotiable nonpersonal time deposits in
Dollars of over $100,000 with maturities approximately equal to three months,
and (b) with respect to the Adjusted LIBO Rate, for Eurocurrency Liabilities (as
defined in Regulation D of the Board). Such reserve percentages shall include
those imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to
constitute Eurocurrency Liabilities and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets
which may be available from time to time to any Lender under such Regulation D.
Statutory Reserves shall be adjusted automatically on and as of the effective
date of any change in any reserve percentage.
"Store" shall mean any retail store used by the Borrower in its
furniture retail network.
"subsidiary" shall mean, with respect to any person (herein referred
to as the "parent"), any corporation, partnership, association or other business
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or more
than 50% of the general partnership interests are, at the time any determination
is being made, owned, controlled or held, or (b) which is, at the time any
determination is made, otherwise Controlled, by the parent or one or more
subsidiaries of the parent or by the parent and one or more subsidiaries of the
parent.
"Subsidiary" shall mean any subsidiary of the Borrower.
"Subsidiary Guarantor" shall mean each Subsidiary that is or becomes
a party to a Guarantee Agreement.
"Swingline Commitment" shall mean the commitment of the Swingline
Lender to make loans pursuant to Section 2.19, as the same may be reduced from
time to time pursuant to Section 2.09.
"Swingline Exposure" shall mean at any time the aggregate principal
amount at such time of all outstanding Swingline Loans. The Swingline Exposure
of any Revolving Credit Lender at any time shall equal its Pro Rata Percentage
of the aggregate Swingline Exposure at such time.
- 15 -
"Swingline Loan" shall mean any loan made by the Swingline Lender
pursuant to Section 2.19.
"Three-Month Secondary CD Rate" shall mean, for any day, the
secondary market rate for three-month certificates of deposit reported as being
in effect on such day (or, if such day shall not be a Business Day, the next
preceding Business Day) by the Board through the public information telephone
line of the Federal Reserve Bank of New York (which rate will, under the current
practices of the Board, be published in Federal Reserve Statistical Release
H.15(519) during the week following such day), or, if such rate shall not be so
reported on such day or such next preceding Business Day, the average of the
secondary market quotations for three-month certificates of deposit of major
money center banks in New York City received at approximately 10:00 a.m., New
York City time, on such day (or, if such day shall not be a Business Day, on the
next preceding Business Day) by the Administrative Agent from three New York
City negotiable certificate of deposit dealers of recognized standing selected
by it.
"Total Revolving Credit Commitment" shall mean, at any time, the
aggregate amount of the Revolving Credit Commitments, as in effect at such time.
"Transactions" shall have the meaning assigned to such term in
Section 3.02.
"Type", when used in respect of any Loan or Borrowing, shall refer
to the Rate by reference to which interest on such Loan or on the Loans
comprising such Borrowing is determined. For purposes hereof, "Rate" shall
include the Adjusted LIBO Rate and the Alternate Base Rate.
"Withdrawal Liability" shall mean liability to a Multiemployer Plan
as a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
"Wholly Owned Subsidiary" shall mean a Subsidiary of which
securities (except for directors' qualifying shares) or other ownership
interests representing 100% of the equity, including 100% of the ordinary voting
power, are, at the time any determination is being made, owned by the Borrower,
either directly or indirectly through other Subsidiaries that satisfy the
requirements of this definition.
SECTION 1.02. 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. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
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, (a) any reference in this Agreement to any Loan
Document shall mean such document as amended, restated, supplemented or
otherwise modified from time to time and (b) 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 the covenants contained in Article VI, all accounting terms herein shall be
interpreted and all accounting determinations hereunder shall be made in
accordance with GAAP as in effect on the date of this Agreement and applied on a
basis consistent with the application used in the financial statements referred
to in Section 3.05.
ARTICLE II. THE CREDITS
SECTION 2.01. Commitments. Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, each Lender
agrees, severally and not jointly, to make Revolving Loans to the Borrower, at
any time and from time to time on or after the date hereof, and until the
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earlier of the Revolving Credit Maturity Date and the termination of the
Revolving Credit Commitment of such Lender in accordance with the terms hereof,
in an aggregate principal amount at any time outstanding that will not result in
(i) such Lender's Revolving Credit Exposure exceeding (ii) such Lender's
Revolving Credit Commitment.
Within the limits set forth in the preceding sentence, the Borrower
may borrow, pay or prepay and reborrow Revolving Loans on or after the
Restatement Effective Date and prior to the Revolving Credit Maturity Date,
subject to the terms, conditions and limitations set forth herein.
SECTION 2.02. Loans. (a) Each Loan (other than a Swingline Loan, as
to which this Section 2.02 shall not apply) shall be made as part of a Borrowing
consisting of Loans made by the Lenders ratably in accordance with their
applicable Revolving Credit Commitments; provided, however, that the failure of
any Lender to make any Loan shall not in itself relieve any other Lender of its
obligation to lend hereunder (it being understood, however, that no Lender shall
be responsible for the failure of any other Lender to make any Loan required to
be made by such other Lender). The Loans comprising any Borrowing shall be in an
aggregate principal amount which is (i) not less than $500,000 and is an
integral multiple of $100,000, in the case of an ABR Borrowing, (ii) not less
than $500,000 and is an integral multiple of $500,000, in the case of a
Eurodollar Borrowing, or (iii) equal to the remaining available balance of the
Revolving Credit Commitments.
(b) Subject to Sections 2.08 and 2.12, each Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request
pursuant to Section 2.03. Each Lender may at its option make any Eurodollar Loan
by causing any domestic or foreign branch or Affiliate of such Lender to make
such Loan; provided that any exercise of such option shall not affect the
obligation of the Borrower to repay such Loan in accordance with the terms of
this Agreement. Borrowings of more than one Type may be outstanding at the same
time; provided, however, that the Borrower shall not be entitled to request any
Borrowing which, if made, would result in more than 20 Eurodollar Borrowings
outstanding hereunder at any time. For purposes of the foregoing, Borrowings
having different Interest Periods, regardless of whether they commence on the
same date, shall be considered separate Borrowings.
(c) Each Lender shall make each Loan to be made by it hereunder on
the proposed date thereof by wire transfer to such account as the Administrative
Agent may designate in federal funds not later than 11:00 a.m., New York City
time, and the Administrative Agent shall by 12:00 (noon), New York City time,
credit the amounts so received to an account with the Administrative Agent
designated by the Borrower in the applicable Borrowing Request, which account
must be in the name of the Borrower or, if a Borrowing shall not occur on such
date because any condition precedent herein specified shall not have been met,
return the amounts so received to the respective Lenders.
(d) Unless the Administrative Agent shall have received notice from
a Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's portion of such Borrowing,
the Administrative Agent may assume that such Lender has made such portion
available to the Administrative Agent on the date of such Borrowing in
accordance with paragraph (c) above and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If the Administrative Agent shall have so made funds
available then, to the extent that such Lender shall not have made such portion
available to the Administrative Agent, such Lender and the Borrower severally
agree to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Administrative Agent at (i) in the case of the Borrower, the
interest rate applicable at the time to the Loans comprising such Borrowing and
(ii) in the case of such Lender, a rate determined by the Administrative Agent
to represent its cost of overnight or short-term funds (which determination
shall be conclusive absent manifest error). If such Lender shall repay to the
Administrative Agent such corresponding amount, such amount shall constitute
such Lender's Loan as part of such Borrowing for
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purposes of this Agreement. Nothing in this paragraph shall be construed to
relieve any Lender of its obligation to make Loans hereunder or to prejudice any
rights that the Borrower may have against any Lender as a result of any failure
by such Lender to make Loans hereunder.
(e) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request any Borrowing if the Interest Period
requested with respect thereto would end after the Revolving Credit Maturity
Date.
(f) If the Issuing Bank shall not have received from the Borrower
any payment required to be made under Section 2.20(e) by the time such payment
is required to be made, then, the Issuing Bank will promptly notify the
Administrative Agent of the L/C Disbursement and the Administrative Agent will
promptly notify each Revolving Credit Lender of such L/C Disbursement and its
Pro Rata Percentage thereof. Each Revolving Credit Lender shall pay by wire
transfer of immediately available funds to the Administrative Agent not later
than 2:00 p.m., New York City time, on such date (or, if such Revolving Credit
Lender shall have received such notice later than 12:00 (noon), New York City
time, on any day, not later than 10:00 a.m., New York City time, on the
immediately following Business Day), an amount equal to such Lender's Pro Rata
Percentage of such L/C Disbursement and the Administrative Agent will promptly
pay to the Issuing Bank amounts so received by it from the Revolving Credit
Lenders. The Administrative Agent will promptly pay to the Issuing Bank any
amounts received by it from the Borrower pursuant to Section 2.20(e) prior to
the time that any Revolving Credit Lender makes any payment pursuant to this
paragraph (f); any such amounts received by the Administrative Agent thereafter
will be promptly remitted by the Administrative Agent to the Revolving Credit
Lenders that shall have made such payments and to the Issuing Bank, as their
interests may appear. If any Revolving Credit Lender shall not have made its Pro
Rata Percentage of such L/C Disbursement available to the Administrative Agent
as provided above, such Lender and the Borrower severally agree to pay interest
on such amount, for each day from and including the date such amount is required
to be paid in accordance with this paragraph to but excluding the date such
amount is paid, to the Administrative Agent for the account of the Issuing Bank
at (i) in the case of the Borrower, the applicable rate per annum under Section
2.20(h), without duplication and (ii) in the case of such Lender, for the first
such day, the Federal Funds Effective Rate, and for each day thereafter, the
Alternate Base Rate. If (i) the Revolving Credit Lenders make the payments
required pursuant to this paragraph (f) in respect of any L/C Disbursement, (ii)
the Borrower notifies the Administrative Agent in accordance with Section
2.20(e) that all or any portion of such payments should be financed with ABR
Loans, specifying the amount thereof to be so financed, (iii) the amount so
specified is not less than $500,000 and is an integral multiple of $100,000, and
(iv) the conditions to Borrowing set forth in Section 4.01 are satisfied at the
time, then the amount of such payments so specified shall constitute ABR Loans
made on the date such payments were made for all purposes hereof and the
Administrative Agent shall promptly advise the Lenders thereof.
(g) Any Borrowing made on the Restatement Effective Date shall be
made as an ABR Borrowing.
SECTION 2.03. Borrowing Procedure; Interest Rate Elections. (a) In
order to request a Borrowing (other than a Swingline Loan, as to which this
Section 2.03 shall not apply), the Borrower shall give to the Administrative
Agent telephonic notice of the contents of its Borrowing Request (promptly
confirmed by hand delivery or telecopy notice to the Administrative Agent of a
duly completed Borrowing Request substantially in the form of Exhibit C) (i) in
the case of a Eurodollar Borrowing, not later than 11:00 a.m., New York City
time, three Business Days before a proposed Borrowing, and (ii) in the case of
an ABR Borrowing, not later than 12:00 noon, New York City time, one Business
Day before a proposed Borrowing; provided, however, that Borrowing Requests with
respect to Borrowings to be made on the Restatement Effective Date may, at the
discretion of the Administrative Agent, be delivered later than the times
specified above. Each Borrowing Request shall be irrevocable, signed by or on
behalf of the Borrower and shall specify the following information: (i) whether
the Borrowing then being requested is to be a Eurodollar Borrowing or
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an ABR Borrowing; (ii) the date of such Borrowing (which shall be a Business
Day), (iii) the number and location of the account to which funds are to be
disbursed (which shall be an account that complies with the requirements of
Section 2.02(c)); (iv) the amount of such Borrowing; and (v) if such Borrowing
is to be a Eurodollar Borrowing, the Interest Period with respect thereto;
provided, however, that, notwithstanding any contrary specification in any
Borrowing Request, each requested Borrowing shall comply with the requirements
set forth in Section 2.02. If no election as to the Type of Borrowing is
specified in any such notice, then the requested Borrowing shall be an ABR
Borrowing. If no Interest Period with respect to any Eurodollar Borrowing is
specified in any such notice, then the Borrower shall be deemed to have selected
an Interest Period of one month's duration. The Administrative Agent shall
promptly (and in any event on the same day that the Administrative Agent
receives such notice, if received by 1:00 p.m., New York City time, on such day)
advise the Lenders of any notice given pursuant to this Section 2.03 (and the
contents thereof) and of each Lender's portion of the requested Borrowing.
(b) The Revolving Loans included in any Revolving Credit Borrowing
shall initially be of the Type and have the Interest Period determined as
provided in paragraph (a) above. Thereafter, the Borrower may from time to time
elect to change or continue the Type of all or a portion of the Loans included
in such Borrowing, as follows:
(i) if such Loans are ABR Loans, the Borrower may elect to change
such Loans to Eurodollar Loans; or
(ii) if such Loans are Eurodollar Loans, the Borrower may elect to
change such Loans to ABR Loans or to continue such Loans as Eurodollar Loans for
an additional Interest Period.
Each such election shall be made by delivering a notice to the Administrative
Agent at the time and in the manner applicable to a Borrowing Request under
paragraph (a) above, and specifying the information required to be specified in
such a Borrowing Request, and the contents thereof shall be communicated by the
Administrative Agent to the Lenders, in each case as though the Loans resulting
from such election were being advanced as a Borrowing on the date such election
is to become effective. In any event (i) the Borrower may not elect to change or
continue any Eurodollar Loans except pursuant to an election that is effective
on the last day of the Interest Period applicable thereto, (ii) each Borrowing
resulting from any such election (including each separate Borrowing resulting
from an election that applies to a portion of the Loans included in a Borrowing)
shall comply with the requirements set forth in Section 2.02, and (iii) if any
election applies to a portion of the Loans included in a Borrowing, such portion
shall be allocated ratably among the Loans included in such Borrowing. If the
Borrower shall not have delivered a notice in accordance with this paragraph
prior to 11:00 a.m., New York City time, three Business Days before the last day
of the Interest Period then in effect for any Borrowing, then, except to the
extent that the Borrower is required to repay or elects to prepay such Borrowing
in accordance with Section 2.04 or 2.10, the Loans included in such Borrowing
shall be converted into or continued as ABR Loans on the last day of such
Interest Period then if effect.
SECTION 2.04. Evidence of Debt; Repayment of Loans. (a) The
outstanding principal balance of each Revolving Loan and Swingline Loan shall be
payable on the Revolving Credit Maturity Date. Each Loan shall bear interest
from the date of the first Borrowing hereunder on the outstanding principal
balance thereof as set forth in Section 2.06.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness to such Lender resulting from
each Loan made by such Lender from time to time, including the amounts of
principal and interest payable and paid such Lender from time to time under this
Agreement.
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(c) The Administrative Agent shall maintain accounts in which it
will record (i) the amount of each Loan made hereunder, the Type of each Loan
made and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder from the Borrower and each Lender's share
thereof.
(d) The entries made in the accounts maintained pursuant to
paragraphs (b) and (c) of this Section 2.04 shall be prima facie evidence of the
existence and amounts of the obligations therein recorded, absent manifest
error; provided, however, that the failure of any Lender or the Administrative
Agent to maintain such accounts or any error therein shall not in any manner
affect the obligations of the Borrower to repay the Loans in accordance with
their terms.
(e) Notwithstanding any other provision of this Agreement, in the
event any Lender shall request and receive a Note payable to such Lender and its
registered assigns, the interests represented by that Note shall at all times
(including after any assignment of all or part of such interests pursuant to
Section 9.04) be represented by one or more Notes payable to the payee named
therein or its registered assigns.
SECTION 2.05. Fees. (a) The Borrower agrees to pay to each Lender,
through the Administrative Agent, on the last day of March, June, September and
December in each year, and on the date on which the Revolving Credit Commitment
of such Lender shall be terminated as provided herein, a commitment fee (a
"Commitment Fee") equal to the Applicable Percentage per annum on the average
daily unused amount of the Revolving Credit Commitment of such Lender during the
preceding quarter (or other period commencing with the Restatement Effective
Date or ending with the Revolving Credit Maturity Date or the date on which the
Revolving Credit Commitment of such Lender shall be terminated). All Commitment
Fees shall be computed on the basis of the actual number of days elapsed in a
year of 360 days. The Commitment Fee due to each Lender shall commence to accrue
on the Restatement Effective Date and shall cease to accrue on the date on which
the Revolving Credit Commitment of such Lender shall be terminated as provided
herein. For purposes of calculating Commitment Fees only, no portion of the
Revolving Credit Commitments shall be deemed utilized under Section 2.14 as a
result of outstanding Swingline Loans.
(b) The Borrower agrees to pay to the Administrative Agent, for its
own account, the administrative fees separately agreed to between the Borrower
and the Administrative Agent at the time so agreed to be payable (the
"Administrative Agent Fees").
(c) The Borrower agrees to pay (i) to each Revolving Credit Lender,
through the Administrative Agent, on the last day of March, June, September and
December of each year and on the date on which the Revolving Credit Commitment
of such Lender shall be terminated as provided herein, a fee (an "L/C
Participation Fee") equal to the Applicable Percentage per annum on such
Lender's Pro Rata Percentage of the average daily aggregate L/C Exposure
(excluding the portion thereof attributable to unreimbursed L/C Disbursements)
during the preceding quarter (or shorter period commencing with the Restatement
Effective Date or ending with the Revolving Credit Maturity Date or the date on
which the Revolving Credit Commitment of such Lender shall be terminated) and
(ii) to the Issuing Bank with respect to each Letter of Credit, on the last day
of March, June, September and December in each year and on the date on which the
L/C Commitment of such Issuing Bank shall be terminated as provided herein, a
fee equal to 0.125% per annum (or such other rate as the Borrower and such
Issuing Bank may agree) on the aggregate face amount of such Letter of Credit
during the preceding quarter (or shorter period commencing with the date of
issuance of such Letter of Credit or ending with the expiration or termination
such Letter of Credit) plus, in connection with the issuance, amendment,
extension, renewal or transfer of any Letter of Credit or any L/C Disbursement,
the Issuing Bank's customary documentary and processing charges (collectively,
the "Issuing Bank Fees"). All L/C Participation Fees and Issuing Bank Fees shall
be computed on the basis of the actual number of days elapsed in a year of 360
days.
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(d) All Fees shall be paid on the dates due, in immediately
available funds, to the Administrative Agent for distribution, if and as
appropriate, among the Lenders, except that the Issuing Bank Fees shall be paid
directly to the Issuing Bank. Once paid, none of the Fees shall be refundable
under any circumstances.
SECTION 2.06. Interest on Loans. (a) Subject to the provisions of
Section 2.07, the Loans comprising each ABR Borrowing shall bear interest
(computed on the basis of the actual number of days elapsed over a year of 365
or 366 days, as the case may be, when determined by reference to the Prime Rate
and over a year of 360 days at all other times) at a rate per annum equal to the
Alternate Base Rate.
(b) Subject to the provisions of Section 2.07, the Loans comprising
each Eurodollar Borrowing 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 Adjusted LIBO Rate for the Interest Period in effect for such Borrowing
plus the Applicable Percentage.
(c) Interest on each Loan shall be payable on the Interest Payment
Dates applicable to such Loan except as otherwise provided in this Agreement.
The applicable Alternate Base Rate or Adjusted LIBO Rate for each Interest
Period or day within an Interest Period, as the case may be, shall be determined
by the Administrative Agent, and such determination shall be conclusive absent
manifest error.
SECTION 2.07. Default Interest. If the Borrower shall default in the
payment of the principal of or interest on any Loan or any other amount becoming
due hereunder, by acceleration or otherwise, the Borrower shall on demand from
time to time pay interest, to the extent permitted by law, on such defaulted
amount up to (but not including) the date of actual payment (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 sum of the Alternate Base
Rate plus 2.00%.
SECTION 2.08. 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 Borrowing the Administrative Agent shall have
determined that Dollar deposits in the principal amount of the Loans comprising
such Borrowing are not generally available in the London interbank market, or
that the rates at which such Dollar deposits are being offered will not
adequately and fairly reflect the cost to any Lender of making or maintaining
its Eurodollar Loan during such Interest Period, or that reasonable means do not
exist for ascertaining the Adjusted LIBO Rate, the Administrative Agent shall,
as soon as practicable thereafter, give written or telecopy notice of such
determination to the Borrower and the Lenders. In the event of any such
determination, until the Administrative Agent shall have advised the Borrower
and the Lenders that the circumstances giving rise to such notice no longer
exist, any request by the Borrower for a Eurodollar Borrowing pursuant to
Section 2.03 shall be deemed to be a request for an ABR Borrowing. Each
determination by the Administrative Agent hereunder shall be conclusive absent
manifest error.
SECTION 2.09. Termination and Reduction of Commitments. (a) The
Revolving Credit Commitments and the Swingline Commitment shall be automatically
terminated on the Revolving Credit Maturity Date.
(b) Upon at least three Business Days' prior irrevocable telephonic
notice (promptly confirmed by hand delivery or telecopy 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 Revolving Credit
Commitments or the Swingline Commitment; provided, however, that (i) each
partial reduction of the Revolving Credit Commitments shall be in an integral
multiple of $1,000,000 and in a minimum principal amount of $1,000,000 and (ii)
the Total Revolving Credit Commitment shall not be terminated at any time that
there is any
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Revolving Credit Exposure, nor reduced to an amount that is less than the sum of
the Aggregate Revolving Credit Exposure at the time.
(c) Each reduction in the Revolving Credit Commitments hereunder
shall be made ratably among the Lenders in accordance with their respective
Commitments. The Borrower shall pay to the Administrative Agent for the account
of the Lenders, on the date of each termination or reduction, the Commitment
Fees on the amount of the Commitments so terminated or reduced accrued to the
date of such termination or reduction.
SECTION 2.10. Prepayment. (a) The Borrower shall have the right at
any time and from time to time to prepay any Borrowing, in whole or in part,
upon prior telephonic notice (promptly confirmed by hand delivery or telecopy
notice) to the Administrative Agent before 11:00 a.m., New York City time, on
the date three Business Days prior to the prepayment date, in the case of a
Eurodollar Borrowing, or one Business Day prior to the prepayment date, in the
case of an ABR Borrowing; provided, however, that each partial prepayment shall
be in an amount which is an integral multiple of $100,000 and not less than
$500,000.
(b) In the event of any termination of the Revolving Credit
Commitments, the Borrower shall repay or prepay all its outstanding Revolving
Credit Borrowings on the date of such termination. In the event of any partial
reduction of the Revolving Credit Commitments, then (i) at or prior to the
effective date of such reduction, the Administrative Agent shall notify the
Borrower and the Revolving Credit Lenders of the Aggregate Revolving Credit
Exposure and (ii) if the Aggregate Revolving Credit Exposure would exceed the
Total Revolving Credit Commitment after giving effect to such reduction, then
the Borrower shall, on the date of such reduction, repay or prepay Revolving
Credit Borrowings or Swingline Loans (or a combination thereof) in an amount
sufficient to eliminate such excess.
(c) Each notice of prepayment shall specify the prepayment date and
the principal amount of each Borrowing (or portion thereof) to be prepaid, shall
be irrevocable and shall commit the Borrower to prepay such Borrowing by the
amount stated therein on the date stated therein. All prepayments under this
Section 2.10 shall be subject to Section 2.13 but without premium or penalty.
All prepayments of Loans (other than ABR Loans prepaid pursuant to paragraph (a)
of this Section 2.10) under this Section 2.10 shall be accompanied by accrued
interest on the principal amount being prepaid to the date of payment.
SECTION 2.11. Reserve Requirements; Change in Circumstances. (a) 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
or the Issuing Bank of the principal of or interest on any Eurodollar Loan made
by such Lender or any Fees or other amounts payable hereunder (other than
changes in respect of taxes imposed on the overall net income of such Lender or
the Issuing Bank by the jurisdiction in which such Lender or the Issuing Bank
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 or the Issuing Bank (except any
such reserve requirement which is reflected in the Adjusted LIBO Rate) or shall
impose on such Lender or the Issuing Bank or the London interbank market any
other condition affecting this Agreement or Eurodollar Loans made by such Lender
or any Letter of Credit or participation therein, and the result of any of the
foregoing shall be to increase the cost to such Lender or the Issuing Bank of
making or maintaining any Eurodollar Loan or of issuing or maintaining any
Letter of Credit or purchasing or maintaining a participation therein, or to
reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise) by an
amount deemed by such Lender or the Issuing Bank to be material, then the
Borrower will pay to such Lender or the Issuing Bank, as the case may be, upon
demand such additional amount or amounts as will compensate such Lender or the
Issuing Bank, as the case may be, for such additional costs incurred or
reduction suffered.
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(b) If any Lender or the Issuing Bank shall have determined that the
adoption after the date hereof of any law, rule, regulation, agreement or
guideline regarding capital adequacy, or any change after the date hereof in any
such law, rule, regulation, agreement or guideline (whether such law, rule,
regulation, agreement or guideline has been adopted) or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof, or compliance by any Lender (or any
lending office of such Lender) or the Issuing Bank or any Lender's or the
Issuing Bank's holding company with any request or directive regarding capital
adequacy (whether or not having the force of law) of any Governmental Authority
has or would have the effect of reducing the rate of return on such Lender's or
the Issuing Bank's capital or on the capital of such Lender's or the Issuing
Bank's holding company, if any, as a consequence of this Agreement or the Loans
made or participation in Letters of Credit purchased by such Lender pursuant
hereto or the Letters of Credit issued by the Issuing Bank pursuant hereto to a
level below that which such Lender or the Issuing Bank or such Lender's or the
Issuing Bank's holding company could have achieved but for such applicability,
adoption, change or compliance by an amount deemed by such Lender or the Issuing
Bank to be material, then from time to time the Borrower shall pay to such
Lender or the Issuing Bank, as the case may be, such additional amount or
amounts as will compensate such Lender or the Issuing Bank or such Lender's or
the Issuing Bank's holding company for any such reduction suffered. Any Lender
or Issuing Bank may utilize reasonable averaging and attribution methods in
determining any amount or amounts under this paragraph.
(c) A certificate of a Lender or the Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or the Issuing Bank or its
holding company, as applicable, as specified in paragraph (a) or (b) above shall
be delivered to the Borrower, shall set forth in reasonable detail the
circumstances giving rise to such certificate and the basis for calculation of
the amount or amounts for which compensation is required, shall constitute
rebuttable presumptive evidence of such amount or amounts and, if not rebutted
within five Business Days, shall be conclusive and binding. The Borrower shall
pay each Lender or the Issuing Bank the amount shown as due on any such
certificate delivered by it within 10 days after its receipt of the same.
(d) The protection of this Section shall be available to each Lender
and the Issuing Bank regardless of any possible contention of the invalidity or
inapplicability of the law, rule, regulation, agreement, guideline or other
change or condition which shall have occurred or been imposed.
(e) Each Lender or Issuing Bank will promptly notify the Borrower
and the Administrative Agent of any event of which it has knowledge that will
entitle such Lender or Issuing Bank to compensation pursuant to this Section
(any such event, a "Compensation Event"). No Lender or Issuing Bank shall be
entitled to compensation pursuant to this Section in respect of any Compensation
Event for any period of time in excess of 365 days prior to such notice;
provided that, if a Compensation Event by its terms is retroactive, such 365-
day period shall be increased by the duration of the retroactive effect of such
Compensation Event.
SECTION 2.12. Change in Legality. (a) Notwithstanding any other
provision herein, if, after the date hereof, any change in any law or regulation
or in the interpretation thereof by any Governmental Authority charged with the
administration or interpretation thereof shall make it unlawful for any Lender
to make or maintain any Eurodollar Loan or to give effect to its obligations as
contemplated hereby with respect to any Eurodollar Loan, then, by written notice
to the Borrower and to the Administrative Agent:
(i) such Lender may declare that Eurodollar Loans will not
thereafter (for the duration of such unlawfulness or impracticability) be made
by such Lender hereunder, whereupon such Lender will not make any further
Eurodollar Loans and any request 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 (or, if a Loan to the Borrower cannot be made for
the reasons specified above, such request shall be deemed to have been
withdrawn); and
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(ii) such Lender may 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 (i) or (ii) above, 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.
(b) For purposes of this Section 2.12, a notice to the Borrower by
any Lender shall be effective as to each Eurodollar Loan, if lawful, on the last
day of the Interest Period currently applicable to such Eurodollar Loan; in all
other cases such notice shall be effective on the date of receipt by the
Borrower.
SECTION 2.13. Indemnity. The Borrower shall indemnify each Lender
against any loss or expense which such Lender may sustain or incur as a
consequence of (a) any event, other than a default by such Lender in the
performance of its obligations hereunder, which results in (i) such Lender
receiving or being deemed to receive any amount on account of the principal of
any Loan prior to the end of the Interest Period in effect therefor or (ii) any
Eurodollar Loan to be made, continued or converted by such Lender not being
made, continued or converted after notice thereof shall have been given by the
Borrower hereunder (any of the events referred to in this clause (a) being
called a "Breakage Event") or (b) any default in the making of any payment or
prepayment required to be made hereunder. In the case of any Breakage Event,
such loss shall include an amount equal to the excess, as reasonably determined
by such Lender, of (i) its cost of obtaining funds for the Loan which is the
subject of such Breakage Event for the period from the date of such Breakage
Event to the last day of the Interest Period in effect (or which would have been
in effect) for such Loan over (ii) the amount of interest likely to be realized
by such Lender in redeploying the funds released or not utilized by reason of
such Breakage Event for such period. A certificate of any Lender setting forth
any amount or amounts which such Lender is entitled to receive pursuant to this
Section shall be delivered to the Borrower, shall set forth in reasonable detail
the basis for such amount or amounts, shall constitute rebuttable presumptive
evidence of such amount or amounts and, if not rebutted within five Business
Days, shall be conclusive and binding.
SECTION 2.14. Pro Rata Treatment. Except as required under Section
2.12, each Borrowing, each payment or prepayment of principal of any Borrowing,
each payment of interest on the Loans, each payment of the Commitment Fees, each
reduction of the Revolving Credit Commitments and each change of any Borrowing
to a Borrowing of another Type shall be allocated pro rata among the Lenders in
accordance with their respective Revolving Credit Commitments (or, if such
Commitments shall have expired or been terminated, in accordance with the
respective principal amounts of their outstanding Revolving Loans). Each Lender
agrees that in computing such Lender's portion of any Borrowing to be made
hereunder, the Administrative Agent may, in its discretion, round each Lender's
percentage of such Borrowing, computed in accordance with Section 2.01, to the
next higher or lower whole Dollar amount.
SECTION 2.15. Sharing of Setoffs. Each Lender agrees that if it
shall, through the exercise of a right of banker's lien, setoff or counterclaim
against any Loan Party, or pursuant to a secured claim under Section 506 of
Title 11 of the United States Code or other security or interest arising from,
or in lieu of, such secured claim, received by such Lender under any applicable
bankruptcy, insolvency or other similar law or otherwise, or by any other means,
obtain payment (voluntary or involuntary) in respect of any Loan or Loans or L/C
Disbursement as a result of which the unpaid principal portion of its Loans and
participations in L/C Disbursements shall be proportionately less than the
unpaid principal portion of the Loans and participations in L/C Disbursements of
any other Lender, it shall be deemed simultaneously to have purchased from such
other Lender at face value, and shall promptly pay to such other Lender the
purchase price for, a participation in the Loans and L/C Exposure of such other
Lender, so that the aggregate unpaid principal amount of the Loans and L/C
Exposure and participations in Loans and L/C Exposure held by each Lender shall
be in the same
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proportion to the aggregate unpaid principal amount of all Loans and L/C
Exposure then outstanding as the principal amount of its Loans and L/C Exposure
prior to such exercise of banker's lien, setoff or counterclaim or other event
was to the principal amount of all Loans and L/C Exposure outstanding prior to
such exercise of banker's lien, setoff or counterclaim or other event; provided,
however, that, if any such purchase or purchases or adjustments shall be made
pursuant to this Section and the payment giving rise thereto shall thereafter be
recovered, such purchase or purchases or adjustments shall be rescinded to the
extent of such recovery and the purchase price or prices or adjustment restored
without interest. The Borrower expressly consents to the foregoing arrangements
and agrees that any Lender holding a participation in a Loan or L/C Disbursement
deemed to have been so purchased may exercise any and all rights of banker's
lien, setoff or counterclaim with respect to any and all moneys owing by the
Borrower to such Lender by reason thereof as fully as if such Lender had made a
Loan directly to the Borrower in the amount of such participation.
SECTION 2.16. Payments. (a) The Borrower shall make each payment
(including principal of or interest on any Borrowing or any L/C Disbursement or
any Fees or other amounts) hereunder and under any other Loan Document not later
than 12:00 (noon), New York City time, on the date when due in immediately
available funds. Each such payment (other than (i) Issuing Bank Fees, which
shall be paid directly to the Issuing Bank, and (ii) principal of and interest
on Swingline Loans, which shall be paid directly to the Swingline Lender except
as otherwise provided in Section 2.19(e)) shall be made to the Administrative
Agent at its offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇. Each such payment
shall be made in Dollars.
(b) Whenever any payment (including principal of or interest on any
Borrowing or any Fees or other amounts) hereunder or under any other Loan
Document shall become due, or otherwise would occur, on a day that is not a
Business Day, such payment may be made on the next succeeding Business Day, and
such extension of time shall in such case be included in the computation of
interest or Fees, if applicable.
SECTION 2.17. Taxes. (a) Any and all payments by the Borrower
hereunder and under any other Loan Document shall be made, in accordance with
Section 2.16, free and clear of and without deduction for any and all current or
future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding (i) income taxes and interest and
penalties thereon imposed on the net income of the Administrative Agent, any
Lender or the Issuing Bank (or any transferee or assignee thereof, including a
participation holder (any such entity a "Transferee")) and (ii) franchise taxes
imposed on the net income of the Administrative Agent, any Lender or the Issuing
Bank (or Transferee), in each case by the jurisdiction under the laws of which
the Administrative Agent, such Lender or the Issuing Bank (or Transferee) is
organized or any political subdivision thereof (all such nonexcluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities and interest
and penalties thereon, collectively or individually, being called "Taxes"). If
the Borrower shall be required to deduct any Taxes from or in respect of any sum
payable hereunder or under any other Loan Document to the Administrative Agent,
any Lender or the Issuing Bank (or any Transferee), (i) the sum payable shall be
increased by the amount (an "additional amount") necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section 2.17) the Administrative Agent, such Lender or the
Issuing Bank (or Transferee), as the case may be, shall receive an amount equal
to the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law.
(b) In addition, the Borrower agrees to pay to the relevant
Governmental Authority in accordance with applicable law any current or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies (including, mortgage recording taxes and similar fees) and
interest and penalties thereon that arise from any payment made hereunder or
under any other Loan Document or from the execution, delivery or registration
of, or otherwise with respect to, this Agreement or any other Loan Document
("Other Taxes").
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(c) The Borrower will indemnify the Administrative Agent, each
Lender and the Issuing Bank (or Transferee) for the full amount of Taxes and
Other Taxes paid by the Administrative Agent, such Lender or the Issuing Bank
(or Transferee), as the case may be, and any liability (including penalties,
interest and expenses (including reasonable attorney's fees and expenses)
arising therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability prepared by the
Administrative Agent, a Lender or the Issuing Bank (or Transferee), or the
Administrative Agent on its behalf, absent manifest error, shall be final,
conclusive and binding for all purposes. Such indemnification shall be made
within 30 days after the date the Administrative Agent, any Lender or the
Issuing Bank (or Transferee), as the case may be, makes written demand therefor.
(d) If the Administrative Agent, a Lender or the Issuing Bank (or
Transferee) shall become aware that it is entitled to claim a refund from a
Governmental Authority in respect of Taxes or Other Taxes as to which it has
been indemnified by the Borrower, or with respect to which the Borrower has paid
additional amounts, pursuant to this Section 2.17, it shall promptly notify the
Borrower of the availability of such refund claim and shall, within 30 days
after receipt of a request by the Borrower, make a claim to such Governmental
Authority for such refund at the Borrower's expense. If the Administrative
Agent, a Lender or the Issuing Bank (or Transferee) receives a refund (including
pursuant to a claim for refund made pursuant to the preceding sentence) in
respect of any Taxes or Other Taxes as to which it has been indemnified by the
Borrower or with respect to which the Borrower has paid additional amounts
pursuant to this Section 2.17, it shall within 30 days from the date of such
receipt pay over such refund to the Borrower (but only to the extent of
indemnity payments made, or additional amounts paid, by the Borrower under this
Section 2.17 with respect to the Taxes or Other Taxes giving rise to such
refund), net of all reasonable and necessary out-of-pocket expenses of the
Administrative Agent, such Lender or the Issuing Bank (or Transferee) and
without interest (other than interest paid by the relevant Governmental
Authority with respect to such refund); provided, however, that the Borrower,
upon the request of the Administrative Agent, such Lender or the Issuing Bank
(or Transferee), agrees to repay the amount paid over to the Borrower (plus
penalties, interest or other charges) to the Administrative Agent, such Lender
or the Issuing Bank (or Transferee) in the event the Administrative Agent, such
Lender or the Issuing Bank (or Transferee) is required to repay such refund to
such Governmental Authority.
(e) As soon as practicable after the date of any payment of Taxes or
Other Taxes by the Borrower to the relevant Governmental Authority, the Borrower
will deliver to the Administrative Agent, at its address referred to in Section
9.01, the original or a certified copy of a receipt issued by such Governmental
Authority evidencing payment thereof.
(f) Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this Section 2.17
shall survive the payment in full of the principal of and interest on all Loans
made hereunder, the expiration or cancellation of all Letters of Credit and the
reimbursement of all draws thereunder.
(g) 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 deliver to the Borrower and the
Administrative Agent two copies of either United States Internal Revenue Service
Form 1001 or Form 4224, or, in the case of a Non-U.S. Lender claiming exemption
from U.S. Federal withholding tax under Section 871(h) or 881(c) of the Code
with respect to payments of "portfolio interest", a Form W-8, or any subsequent
versions thereof or successors thereto (and, if such Non-U.S. Lender delivers a
Form W-8, 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)), properly completed and duly executed by such
Non-U.S. Lender claiming complete exemption from, or
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reduced rate of, U.S. Federal withholding tax on payments by the Borrower under
this Agreement and the other Loan Documents. Such forms shall be delivered by
each Non-U.S. Lender on or before the date it becomes a party to this Agreement
(or, in the case of a Transferee that is a participation holder, on or before
the date such participation holder becomes a Transferee hereunder) and on or
before the date, if any, such Non-U.S. Lender changes its applicable lending
office by designating a different lending office (a "New Lending Office"). In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Non-U.S.
Lender. Notwithstanding any other provision of this Section 2.17(g), a Non-U.S.
Lender shall not be required to deliver any form pursuant to this Section
2.17(g) that such Non-U.S. Lender is not legally able to deliver.
(h) The Borrower shall not be required to indemnify any Non-U.S.
Lender or to pay any additional amounts to any Non-U.S. Lender in respect of
United States Federal withholding tax pursuant to paragraph (a) or (c) above to
the extent that (i) the obligation to withhold amounts with respect to United
States Federal withholding tax existed on the date such Non U.S. Lender became a
party to this Agreement (or, in the case of a Transferee that is a participation
holder, on the date such participation holder became a Transferee hereunder) or,
with respect to payments to a New Lending Office, the date such Non-U.S. Lender
designated such New Lending Office with respect to a Loan ; provided, however,
that this paragraph (h) shall not apply (x) to any Transferee or New Lending
Office that becomes a Transferee or New Lending Office as a result of an
assignment, participation, transfer or designation made at the request of the
Borrower and (y) to the extent the indemnity payment or additional amounts any
Transferee, or any Lender (or Transferee), acting through a New Lending Office,
would be entitled to receive (without regard to this paragraph (h)) do not
exceed the indemnity payment or additional amounts that the person making the
assignment, participation or transfer to such Transferee, or Lender (or
Transferee) making the designation of such New Lending Office, would have been
entitled to receive in the absence of such assignment, participation, transfer
or designation or (ii) the obligation to pay such additional amounts would not
have arisen but for a failure by such Non-U.S. Lender to comply with the
provisions of paragraph (g) above.
(i) Any Lender or Issuing Bank (or Transferee) claiming any
indemnity payment or additional amounts payable pursuant to this Section 2.17
shall use reasonable efforts (consistent with legal and regulatory restrictions)
to file any certificate or document reasonably requested in writing 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 indemnity payment or additional amounts that may thereafter accrue
and would not, in the sole determination of such Lender or Issuing Bank (or
Transferee), be otherwise disadvantageous to such Lender or Issuing Bank (or
Transferee).
(j) Nothing contained in this Section 2.17 shall require any Lender
or the Issuing Bank (or any Transferee) or the Administrative Agent to make
available any of its tax returns (or any other information that it deems to be
confidential or proprietary).
SECTION 2.18. Assignment of Commitments Under Certain Circumstances.
(a) In the event (i) any Lender or the Issuing Bank delivers a certificate
requesting compensation pursuant to Section 2.11, (ii) any Lender or the Issuing
Bank delivers a notice described in Section 2.12 or (iii) the Borrower is
required to pay any additional amount to any Lender or the Issuing Bank or any
Governmental Authority on account of any Lender or the Issuing Bank pursuant to
Section 2.17, the Borrower may, at its sole expense and effort, upon notice to
such Lender or the Issuing Bank and the Administrative Agent, require such
Lender or the Issuing Bank to transfer and assign, without recourse (in
accordance with and subject to the restrictions contained in Section 9.04), all
of its interests, rights and obligations under this Agreement to an assignee
which shall assume such assigned obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (w) no Default or
Event of Default has occurred and is continuing, (x) such assignment shall not
conflict with any law, rule or regulation or order of any court or other
Governmental Authority having jurisdiction, (y) the Borrower shall have received
the prior written consent of the
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Administrative Agent (and, if a Revolving Credit Commitment is being assigned,
of the Issuing Bank and Swingline Lender), which consent shall not unreasonably
be withheld, and (z) the Borrower or such assignee shall have paid to the
affected Lender or the Issuing Bank in immediately available funds an amount
equal to the sum of the principal of and interest accrued to the date of such
payment on the outstanding Loans and participations in L/C Disbursements and
Swingline Loans of such Lender or the Issuing Bank plus all Fees and other
amounts accrued for the account of such Lender or the Issuing Bank hereunder
(including any amounts under Section 2.11 and Section 2.13); provided further
that if prior to any such transfer and assignment the circumstances or event
that resulted in such Lender's or the Issuing Bank's claim for compensation
under Section 2.11 or notice under Section 2.12 or the amounts paid pursuant to
Section 2.17, as the case may be, cease to cause such Lender or the Issuing Bank
to suffer increased costs or reductions in amounts received or receivable or
reduction in return on capital, or cease to have the consequences specified in
Section 2.12, or cease to result in amounts being payable under Section 2.17, as
the case may be (including as a result of any action taken by such Lender or the
Issuing Bank pursuant to paragraph (b) below), or if such Lender or the Issuing
Bank shall waive its right to claim further compensation under Section 2.11 in
respect of such circumstances or event or shall withdraw its notice under
Section 2.12 or shall waive its right to further payments under Section 2.17 in
respect of such circumstances or event, as the case may be, then such Lender or
the Issuing Bank shall not thereafter be required to make any such transfer and
assignment hereunder. In the case of any such assignment by an Issuing Bank,
such assignment shall not affect the Issuing Bank's rights under this Agreement
in respect of any Letters of Credit issued by it that remain outstanding.
(b) If (i) any Lender or the Issuing Bank shall request compensation
under Section 2.11, (ii) any Lender or the Issuing Bank delivers a notice
described in Section 2.12 or (iii) the Borrower is required to pay any
additional amount to any Lender or the Issuing Bank or any Governmental
Authority on account of any Lender or the Issuing Bank pursuant to Section 2.17,
then such Lender or the Issuing Bank shall exercise reasonable efforts (which
shall not require such Lender or the Issuing Bank to incur an unreimbursed loss
or unreimbursed cost or expense or otherwise take any action inconsistent with
its internal policies or suffer any disadvantage or burden deemed by it to be
significant) to assign its rights and delegate and transfer its obligations
hereunder to another of its offices, branches or affiliates, if such assignment
would reduce its claims for compensation under Section 2.11 or enable it to
withdraw its notice pursuant to Section 2.12 or would reduce amounts payable
pursuant to Section 2.17, as the case may be, in the future. The Borrower hereby
agrees to pay all reasonable costs and expenses incurred by any Lender or the
Issuing Bank in connection with any such assignment, delegation and transfer.
SECTION 2.19. Swingline Loans. (a) Swingline Commitment. Subject to
the terms and conditions and relying upon the representations and warranties
herein set forth, the Swingline Lender agrees to make loans to the Borrower at
any time and from time to time on and after the Restatement Effective Date and
until the earlier of the Revolving Credit Maturity Date and the termination of
the Revolving Credit Commitments in accordance with the terms hereof, in an
aggregate principal amount at any time outstanding that will not result in (i)
the aggregate principal amount of all Swingline Loans exceeding $3,000,000 in
the aggregate or (ii) the Aggregate Revolving Credit Exposure, after giving
effect to any Swingline Loan, exceeding the Total Revolving Credit Commitment.
Each Swingline Loan shall be in a principal amount that is not less than
$100,000 and is an integral multiple of $50,000. The Swingline Commitment may be
terminated or reduced from time to time as provided herein. Within the foregoing
limits, the Borrower may borrow, pay or prepay and reborrow Swingline Loans
hereunder on and after the Restatement Effective Date and prior to the Revolving
Credit Maturity Date, subject to the terms, conditions and limitations set forth
herein.
(b) Swingline Loans. The Borrower shall notify the Administrative
Agent by telephonic notice (promptly confirmed by hand delivery or telecopy
notice) not later than 12:00 noon, New York City time, on the day of a proposed
Swingline Loan. Such notice shall be delivered on a Business Day, shall be
irrevocable and shall refer to this Agreement and shall specify the requested
date (which shall be a Business Day) and amount of such Swingline Loan. The
Administrative Agent will promptly advise the Swingline
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Lender of any notice received from the Borrower pursuant to this paragraph (b).
The Swingline Lender shall make each Swingline Loan available to the Borrower by
means of a credit to the general deposit account of the Borrower with the
Swingline Lender by 3:00 p.m. on the date such Swingline Loan is so requested to
be made.
(c) Prepayment. The Borrower shall have the right at any time and
from time to time to prepay any Swingline Loan, in whole or in part, upon giving
telephonic notice (promptly confirmed by hand delivery or telecopy notice) to
the Swingline Lender and to the Administrative Agent before 12:00 (noon), New
York City time on the date of prepayment at the Swingline Lender's address for
notices specified on Schedule 2.01; provided, however, that partial prepayments
shall be in a principal amount that is an integral multiple of $50,000. All
principal payments of Swingline Loans pursuant to Section 2.10(b) shall be
accompanied by accrued interest on the principal amount being repaid to the date
of payment.
(d) Interest. Each Swingline Loan shall be an ABR Loan and, subject
to the provisions of Section 2.07, shall bear interest as provided in Section
2.06(a).
(e) Participations. The Swingline Lender may by written notice given
to the Administrative Agent not later than 10:00 a.m., New York City time, on
any Business Day require the Revolving Credit Lenders to acquire participations
in all or a portion of the Swingline Loans outstanding. Such notice shall
specify the aggregate amount of Swingline Loans and accrued interest thereon in
which Revolving Credit Lenders will participate. The Administrative Agent will,
promptly upon receipt of such notice, give notice to each Revolving Credit
Lender, specifying in such notice such Lender's Pro Rata Percentage of such
Swingline Loan or Loans and accrued interest thereon. In consideration and in
furtherance of the foregoing, each Revolving Credit Lender hereby absolutely and
unconditionally agrees, upon receipt of notice as provided above, to pay to the
Administrative Agent, for the account of the Swingline Lender, such Revolving
Credit Lender's Pro Rata Percentage of such Swingline Loan or Loans and accrued
interest thereon. Each Lender acknowledges and agrees that its obligation to
acquire participations in Swingline Loans pursuant to this paragraph is absolute
and unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or an Event of Default,
and that each such payment shall be made without any offset, abatement,
withholding or reduction whatsoever. Each Lender shall comply with its
obligation under this paragraph by wire transfer of immediately available funds,
in the same manner as provided in Section 2.02(c) with respect to Loans made by
such Lender (and Section 2.02(c) shall apply, mutatis mutandis, to the payment
obligations of the Lenders) and the Administrative Agent shall promptly pay to
the Swingline Lender amounts so received by it from the Lenders. The
Administrative Agent shall notify the Borrower of any participations in any
Swingline Loan acquired pursuant to this paragraph and thereafter payments in
respect of such Swingline Loan shall be made to the Administrative Agent and not
to the Swingline Lender. Any amounts received by the Swingline Lender from the
Borrower (or other party on behalf of the Borrower) in respect of a Swingline
Loan after receipt by the Swingline Lender of the proceeds of a sale of
participations therein shall be promptly remitted to the Administrative Agent;
any such amounts received by the Administrative Agent shall be promptly remitted
by the Administrative Agent to the Lenders that shall have made their payments
pursuant to this paragraph and to the Swingline Lender, as their interests may
appear. The purchase of participations in a Swingline Loan pursuant to this
paragraph shall not relieve the Borrower (or other party liable for obligations
of the Borrower) of its default in respect of the payment thereof.
SECTION 2.20. Letters of Credit. (a) General. The Borrower may
request the issuance of a Letter of Credit, in a form reasonably acceptable to
the Administrative Agent and the Issuing Bank, appropriately completed, for the
account of the Borrower, at any time and from time to time while the Revolving
Credit Commitments remain in effect. This Section shall not be construed to
impose an obligation upon the Issuing Bank to issue any Letter of Credit that is
inconsistent with the terms and conditions of this Agreement.
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(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. In order to request the issuance of a Letter of Credit (or to amend,
renew or extend an existing Letter of Credit), the Borrower shall hand deliver
or telecopy to the Issuing Bank and the Administrative Agent (reasonably in
advance of the requested date of issuance, amendment, renewal or extension) a
notice requesting the issuance of a Letter of Credit, or identifying the Letter
of Credit to be amended, renewed or extended, the date of issuance, amendment,
renewal or extension, the date on which such Letter of Credit is to expire
(which shall comply with paragraph (c) below), the amount of such Letter of
Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare such Letter of Credit. Following
receipt of such notice and prior to the issuance of the requested Letter of
Credit or the applicable amendment, renewal or extension, the Administrative
Agent shall notify the Borrower and the Issuing Bank of the amount of the
Aggregate Revolving Credit Exposure after giving effect to (i) the issuance,
amendment, renewal or extension of such Letter of Credit, (ii) the issuance or
expiration of any other Letter of Credit that is to be issued or will expire
prior to the requested date of issuance of such Letter of Credit and (iii) the
borrowing or repayment of any Revolving Credit Loans or Swingline Loans that
(based upon notices delivered to the Administrative Agent by the Borrower) are
to be borrowed or repaid prior to the requested date of issuance of such Letter
of Credit. A Letter of Credit shall be issued, amended, renewed or extended only
if, and upon issuance, amendment, renewal or extension of each Letter of Credit
the Borrower shall be deemed to represent and warrant that, after giving effect
to such issuance, amendment, renewal or extension (A) the L/C Exposure shall not
exceed $40,000,000, and (B) the Aggregate Revolving Credit Exposure shall not
exceed the Total Revolving Credit Commitment. Promptly following the end of each
month, the Administrative Agent shall notify the Lenders of the L/C Exposure as
of the end of such month.
(c) Expiration Date. Each Letter of Credit shall expire at or prior
to the close of business on the date that is five Business Days prior to the
Revolving Credit Maturity Date or, if such Letter of Credit is a commercial
letter of credit, the earlier of such date and date 180 days after the date of
issuance of such Letter of Credit.
(d) Participations. By the issuance of a Letter of Credit and
without any further action on the part of the Issuing Bank or the Lenders, the
Issuing Bank hereby grants to each Lender, and each such Lender hereby acquires
from the applicable Issuing Bank, a participation in such Letter of Credit equal
to such Lender's Pro Rata Percentage of the aggregate amount available to be
drawn under such Letter of Credit, effective upon the issuance of such Letter of
Credit. In consideration and in furtherance of the foregoing, each Lender hereby
absolutely and unconditionally agrees to pay to the Administrative Agent, for
the account of the Issuing Bank, such Lender's Pro Rata Percentage of each L/C
Disbursement made by the Issuing Bank and not reimbursed by the Borrower (or, if
applicable, another party pursuant to its obligations under any other Loan
Document) forthwith on the date due as provided in Section 2.02(f). Each Lender
acknowledges and agrees that its obligation to acquire participations pursuant
to this paragraph in respect of Letters of Credit is absolute and unconditional
and shall not be affected by any circumstance whatsoever, including the
occurrence and continuance of a Default or an Event of Default, and that each
such payment shall be made without any offset, abatement, withholding or
reduction whatsoever; provided, however, that the foregoing shall not be
construed to impose an obligation of the Lenders to reimburse an L/C
Disbursement that the Borrower is not required to reimburse due to the gross
negligence or wilful misconduct of the Issuing Bank (determined as provided in
Section 2.20(f)).
(e) Reimbursement. If the Issuing Bank shall make any L/C
Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such
L/C Disbursement by paying an amount equal to such L/C Disbursement to the
Administrative Agent not later than 12:00 (noon) on the date that such L/C
Disbursement is made or, if the Borrower shall have received notice of such L/C
Disbursement later than 10:00 a.m., New York City time, on the date that such
L/C Disbursement is made, not later than 12:00 (noon), New York City time, on
the immediately following Business Day; provided that the Borrower may, to the
extent that such L/C Disbursement is not less than $500,000 and is an integral
multiple of $100,000 and subject to the conditions to
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Borrowing set forth in Section 4.01, request by notice to the Administrative
Agent not later than the time that payment would be required as aforesaid that
such payment be financed with ABR Loans as contemplated by Section 2.02(f) and,
to the extent such payment is so financed with ABR Loans in accordance with
Section 2.02(f), such payment shall not be required to be made by the Borrower
under this Section 2.20(e).
(f) Obligations Absolute. The Borrower's obligations to reimburse
L/C Disbursements as provided in paragraph (e) above shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement, under any and all circumstances whatsoever,
and irrespective of:
(i) any lack of validity or enforceability of any Letter of Credit
or any Loan Document, or any term or provision therein;
(ii) any amendment or waiver of or any consent to departure from all
or any of the provisions of any Letter of Credit or any Loan Document;
(iii) the existence of any claim, setoff, defense or other right
that the Borrower, any other party guaranteeing, or otherwise obligated with,
the Borrower, any Subsidiary or other Affiliate thereof or any other person may
at any time have against the beneficiary under any Letter of Credit, the Issuing
Bank, the Administrative Agent or any Lender or any other person, whether in
connection with this Agreement, any other Loan Document or any other related or
unrelated agreement or transaction;
(iv) any draft or other document presented under a 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;
(v) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or other document that does not comply with the terms of
such Letter of Credit; and
(vi) any other act or omission to act or delay of any kind of the
Issuing Bank, the Lenders, the Administrative Agent or any other person or any
other event or circumstance whatsoever, whether or not similar to any of the
foregoing, that might, but for the provisions of this Section, constitute a
legal or equitable discharge of the Borrower's obligations hereunder;
provided that the foregoing shall not be construed to impose an obligation upon
the Borrower to reimburse the Issuing Bank to the extent that neither the
Borrower nor any Subsidiary received any benefit from such L/C Disbursement as a
direct result of the Issuing Bank's gross negligence or wilful misconduct in
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof; it is understood that the Issuing Bank may
accept documents that are on their face in order, without responsibility for
further investigation, regardless of any notice or information to the contrary
and, in making any payment under any Letter of Credit (A) the Issuing Bank's
exclusive reliance on the documents presented to it under such Letter of Credit
as to any and all matters set forth therein, including reliance on the amount of
any draft presented under such Letter of Credit, whether or not the amount due
to the beneficiary thereunder equals the amount of such draft and whether or not
any document presented pursuant to such Letter of Credit proves to be
insufficient in any respect, if such document on its face appears to be in
order, and whether or not any other statement or any other document presented
pursuant to such Letter of Credit proves to be forged or invalid or any
statement therein proves to be inaccurate or untrue in any respect whatsoever
and (B) any noncompliance in any immaterial respect of the documents presented
under such Letter of Credit with the terms thereof shall, in each case, be
deemed not to constitute wilful misconduct or gross negligence of the Issuing
Bank.
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(g) Disbursement Procedures. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall as promptly
as possible give telephonic notification, confirmed by telecopy, to the
Administrative Agent and the Borrower of such demand for payment and whether the
Issuing Bank has made or will make an L/C Disbursement thereunder; provided that
any failure to give or delay in giving such notice shall not relieve the
Borrower of its obligation to reimburse the Issuing Bank and the Lenders with
respect to any such L/C Disbursement. The Administrative Agent shall promptly
give each Lender notice thereof.
(h) Interim Interest. If the Issuing Bank shall make any L/C
Disbursement in respect of a Letter of Credit, then, unless the Borrower shall
reimburse such L/C Disbursement in full not later than 12:00 (noon), New York
City time, on the date that such L/C Disbursement is made, the unpaid amount
thereof shall bear interest, for each day from and including the date of such
L/C Disbursement to but excluding the date of payment at the Alternate Base
Rate; provided that to the extent that such L/C Disbursement is not reimbursed
by the Borrower prior to 12:00 (noon), New York City time on the third Business
Day after the date such L/C Disbursement is made and is not financed with ABR
Loans in accordance with Section 2.02(f), then such unpaid amount shall bear
interest from and including such third Business Day to but excluding the date of
payment as provided in Section 2.07.
(i) Resignation or Removal of the Issuing Bank. The Issuing Bank may
resign at any time by giving 180 days' prior written notice to the
Administrative Agent, the Lenders and the Borrower, and may be removed at any
time by the Borrower by notice to the Issuing Bank, the Administrative Agent and
the Lenders. Subject to the last sentence of this paragraph, upon the acceptance
of any appointment as the Issuing Bank hereunder by a successor Issuing Bank,
such successor shall succeed to and become vested with all the interests, rights
and obligations of the retiring Issuing Bank and the retiring Issuing Bank shall
be discharged from its obligations to issue additional Letters of Credit
hereunder. At the time such removal or resignation shall become effective, the
Borrower shall pay all accrued and unpaid Issuing Bank Fees. The acceptance of
any appointment as the Issuing Bank hereunder by a successor Lender shall be
evidenced by an agreement entered into by such successor, in a form satisfactory
to the Borrower and the Administrative Agent, and, from and after the effective
date of such agreement, (i) such successor Lender shall have all the rights and
obligations of the previous Issuing Bank under this Agreement and the other Loan
Documents and (ii) references herein and in the other Loan Documents to the term
"Issuing Bank" shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require. After the resignation or removal of the Issuing Bank
hereunder, the retiring Issuing Bank shall remain a party hereto and shall
continue to have all the rights and obligations of an Issuing Bank under this
Agreement and the other Loan Documents with respect to Letters of Credit issued
by it prior to such resignation or removal, but shall not be required to issue
additional Letters of Credit.
(j) Cash Collateralization. If any Event of Default shall occur and
be continuing, the Borrower shall, on the Business Day it receives notice from
the Administrative Agent or the Required Lenders thereof and the amount to be
deposited, deposit in an account with the Collateral Agent, for the benefit of
the Revolving Credit Lenders, an amount in cash equal to the L/C Exposure as of
such date. Such deposit shall be held by the Collateral Agent as collateral for
the payment and performance of the Obligations. The Collateral Agent shall have
exclusive dominion and control, including the exclusive right of withdrawal,
over such account. Other than any interest earned on the investment of such
deposits in Cash Equivalents, which investments shall be made at the option and
sole discretion of the Collateral Agent, such deposits shall not bear interest.
Interest or profits, if any, on such investments shall accumulate in such
account. Moneys in such account shall (i) automatically be applied by the
Administrative Agent to reimburse the Issuing Bank for L/C Disbursements for
which it has not been reimbursed, (ii) be held for the satisfaction of the
reimbursement obligations of the Borrower for the L/C Exposure at such time and
(iii) if the maturity of the Loans has been accelerated, be applied to satisfy
the Obligations. If the Borrower is required to provide an amount of cash
collateral hereunder as a result of the occurrence of an Event of Default, such
amount (to the extent not applied
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as aforesaid) shall be returned to the Borrower within three Business Days after
all Events of Default have been cured or waived.
(k) Additional Issuing Banks. The Borrower may, at any time and from
time to time with the consent of the Administrative Agent (which consent shall
not be unreasonably withheld) and such Lender, designate one or more additional
Lenders to act as an issuing bank under the terms of this Agreement. Any Lender
designated as an issuing bank pursuant to this paragraph (k) shall be deemed to
be an "Issuing Bank" (in addition to being a Lender) in respect of Letters of
Credit issued or to be issued by such Lender, and, with respect to any Letter of
Credit, such term shall thereafter apply to the Issuing Bank that shall have
issued such Letter of Credit.
ARTICLE III. REPRESENTATIONS AND WARRANTIES
Each of Holdings and the Borrower represents and warrants to each of
the Lenders that:
SECTION 3.01. Organization; Powers. Each of Holdings and the
Borrower and each of the Subsidiaries (other than the Excluded Subsidiaries) (a)
is a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, (b) has all requisite power and
authority to own its property and assets and to carry on its business as now
conducted and as proposed to be conducted, (c) is qualified to do business in
every jurisdiction where such qualification is required, except where the
failure so to qualify could not reasonably be expected to result in a Material
Adverse Effect, and (d) has the corporate power and authority to execute,
deliver and perform its obligations under each of the Loan Documents and each
other agreement or instrument contemplated thereby to which it is or will be a
party and, in the case of the Borrower, to borrow hereunder.
SECTION 3.02. Authorization. The execution, delivery and performance
by each Loan Party of each of the Loan Documents to which it is or will be a
party and, in the case of the Borrower, the borrowings hereunder (collectively,
the "Transactions") (a) have been duly authorized by all requisite corporate
and, if required, stockholder action and (b) will not (i) violate (A) any
provision of law, statute, rule or regulation, or of the certificate or articles
of incorporation or other constitutive documents or by-laws of Holdings, the
Borrower or any Subsidiary, (B) any order of any Governmental Authority or (C)
any provision of any indenture, agreement or other instrument to which Holdings,
the Borrower or any Subsidiary is a party or by which any of them or any of
their property is or may be bound, (ii) be in conflict with, result in a breach
of or constitute (alone or with notice or lapse of time or both) a default under
any such indenture, agreement or other instrument or (iii) result in the
creation or imposition of any Lien upon or with respect to any property or
assets now owned or hereafter acquired by Holdings, the Borrower or any
Subsidiary, other than Liens created pursuant to the Security Documents.
SECTION 3.03. Enforceability. This Agreement has been duly executed
and delivered by Holdings and the Borrower and constitutes, and each other Loan
Document when executed and delivered by each Loan Party party thereto will
constitute, a legal, valid and binding obligation of Holdings and the Borrower
and such Loan Party enforceable against Holdings and the Borrower and such Loan
Party in accordance with its terms.
SECTION 3.04. Governmental Approvals. No action, consent or approval
of, registration or filing with or any other action by any Governmental
Authority is or will be required in connection with the Transactions, except for
(a) filings and recordings in connection with the perfection of Liens granted
under the Security Documents and (b) such as have been made or obtained and are
in full force and effect.
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SECTION 3.05. Financial Statements. Holdings has heretofore
furnished to the Lenders its consolidated and consolidating balance sheet and
statement of operations and consolidated statement of cash flows as of and for
the fiscal year ended June 30, 1996, which consolidated statements were audited
by and accompanied by the opinion of KPMG Peat Marwick LLP, independent public
accountants, and its unaudited consolidated and consolidating balance sheet and
statement of operations and consolidated statement of cash flows as of and for
the three month period ended September 30, 1996. Such financial statements
present fairly the financial condition and results of operations and cash flows
of Holdings and its consolidated subsidiaries as of such dates and for such
periods. Each such balance sheet and the notes thereto disclose all material
liabilities, direct or contingent, of Holdings on a consolidated basis as of the
date thereof. Such financial statements were prepared in accordance with GAAP
applied on a consistent basis.
SECTION 3.06. No Material Adverse Change. There has been no material
adverse change in the business, assets, operations, prospects or condition,
financial or otherwise, of the Borrower and the Subsidiaries, taken as a whole,
since June 30, 1996.
SECTION 3.07. Title to Properties; Possession Under Leases. (a) Each
of Holdings, the Borrower and the Subsidiaries (other than the Excluded
Subsidiaries) has good and marketable title to, or valid leasehold interests in,
all its material properties and assets, except for minor defects in title that
do not interfere with its ability to conduct its business as currently conducted
or to utilize such properties and assets for their intended purposes. All such
material properties and assets are free and clear of Liens, other than Liens
expressly permitted by Section 6.02.
(b) Each of Holdings, the Borrower and the Subsidiaries (other than
the Excluded Subsidiaries) has complied with all obligations under all material
leases to which it is a party as a lessee and all such leases are in full force
and effect. Each of Holdings, the Borrower and the Subsidiaries (other than the
Excluded Subsidiaries) enjoys peaceful and undisturbed possession under all such
material leases.
SECTION 3.08. Subsidiaries. Schedule 3.08 sets forth as of the
Closing Date a list of all Subsidiaries of the Borrower and the percentage
ownership interest of the Borrower therein. Each Subsidiary that is an "Excluded
Subsidiary" satisfies the conditions set forth in the definition of the term
"Excluded Subsidiary".
SECTION 3.09. Litigation; Compliance with Laws. (a) Except as set
forth in Schedule 3.09, there are not any actions, suits or proceedings at law
or in equity or by or before any Governmental Authority now pending or, to the
knowledge of Holdings or the Borrower, threatened against or affecting Holdings
or the Borrower or any Subsidiary or any business, property or rights of any
such person (i) which involve any Loan Document or the Transactions or (ii) as
to which there is a reasonable possibility of an adverse determination and
which, if adversely determined, could, individually or in the aggregate, result
in a Material Adverse Effect.
(b) None of Holdings, the Borrower or any of the Subsidiaries or any
of their respective material properties or assets is in violation of, nor will
the continued operation of their material properties and assets as currently
conducted violate, any law, rule or regulation (including any zoning, building,
Environmental and Safety Law, ordinance, code or approval or any building
permits), or is in default with respect to any judgment, writ, injunction or
decree of any Governmental Authority, except any such violations or defaults
that, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect.
SECTION 3.10. Agreements. (a) None of Holdings, the Borrower or any
of the Subsidiaries is a party to any agreement or instrument or subject to any
corporate restriction that has resulted or could reasonably be anticipated to
result in a Material Adverse Effect.
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(b) None of Holdings, the Borrower or any of the Subsidiaries is in
default in any manner under any provision of any indenture or other agreement or
instrument evidencing Indebtedness, or any other material agreement or
instrument to which it is a party or by which it or any of its properties or
assets are or may be bound, where such default could reasonably be anticipated
to result in a Material Adverse Effect.
SECTION 3.11. Federal Reserve Regulations. (a) None of Holdings, the
Borrower or any of the Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
(b) No part of the proceeds of any Loan will be used, whether
directly or indirectly, and whether immediately, incidentally or ultimately, (i)
to purchase or carry Margin Stock or to extend credit to others for the purpose
of purchasing or carrying Margin Stock or to refund indebtedness originally
incurred for such purpose, or (ii) for any purpose which entails a violation of,
or which is inconsistent with, the provisions of the Regulations of the Board,
including Regulation G, U or X.
SECTION 3.12. Investment Company Act; Public Utility Holding Company
Act. None of Holdings, the Borrower or any Subsidiary is (a) an "investment
company" as defined in, or subject to regulation under, the Investment Company
Act of 1940 or (b) a "holding company" as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935.
SECTION 3.13. Use of Proceeds. The Borrower will use the proceeds of
the Loans and will request the issuance of Letters of Credit only for the
purposes specified in the preamble to this Agreement.
SECTION 3.14. Tax Returns. Each of Holdings, the Borrower and the
Subsidiaries has filed or caused to be filed all Federal, state and local tax
returns required to have been filed by it and has paid or caused to be paid all
taxes due and payable by it and all assessments received by it, except taxes
that are being contested in good faith by appropriate proceedings and for which
adequate reserves have been established in accordance with GAAP.
SECTION 3.15. No Material Misstatements. (a) No factual information,
including factual information contained in the Information Memorandum or in any
report, financial statement, exhibit or schedule, furnished by or on behalf of
Holdings or the Borrower to the Administrative Agent or any Lender in connection
with the negotiation of any Loan Document or included therein or delivered
pursuant thereto (when considered as a whole with all other factual information
so furnished) contained, contains or will contain, as of the date so furnished,
any material misstatement of fact or omitted, omits or will omit to state, as of
the date so furnished, any material fact necessary to make the statements
therein, in the light of the circumstances under which they were, are or will be
made, not misleading.
(b) All financial projections contained in the Information
Memorandum or otherwise furnished by or on behalf of Holdings or the Borrower to
the Administrative Agent or any Lender in connection with the negotiation of any
Loan Document or delivered pursuant thereto have been and will be prepared in
good faith based upon estimates and assumptions believed by management of the
Borrower to be reasonable at the time of preparation thereof (except as
otherwise disclosed in writing therein), it being understood that projections as
to future performance are not to be viewed as facts and that actual results may
differ from projected results and such differences may be material.
SECTION 3.16. Employee Benefit Plans. Each of the Borrower and its
ERISA Affiliates is in compliance in all material respects with the applicable
provisions of ERISA and the Code and the regulations and published
interpretations thereunder. No Reportable Event has occurred in respect of any
Plan of the Borrower or any ERISA Affiliate. The present value of all benefit
liabilities under each Plan (based on those assumptions used to fund such Plan)
did not, as of the last annual valuation date applicable thereto, exceed by
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more than $1,000,000 the value of the assets of such Plan, and the present value
of all benefit liabilities of all underfunded Plans (based on those assumptions
used to fund each such Plan) did not, as of the last annual valuation dates
applicable thereto, exceed by more than $5,000,000 the value of the assets of
all such underfunded Plans. Neither the Borrower nor any ERISA Affiliate has
incurred any Withdrawal Liability that materially adversely affects the
financial condition of the Borrower and its ERISA Affiliates taken as a whole.
Neither the Borrower nor any ERISA Affiliate has received any notification that
any Multiemployer Plan is in reorganization or has been terminated, within the
meaning of Title IV of ERISA, and no Multiemployer Plan is reasonably expected
to be in reorganization or to be terminated, where such reorganization or
termination has resulted or can reasonably be expected to result in an increase
in the contributions required to be made to such Plan that would materially and
adversely affect the financial condition of the Borrower and its ERISA
Affiliates taken as a whole.
SECTION 3.17. Environmental Matters. Except as set forth in Schedule
3.17:
(a) The soils and groundwater beneath the properties owned or
operated by Holdings, the Borrower and the Subsidiaries (the "Properties") do
not contain any Hazardous Materials in amounts or concentrations which (i)
constitute a violation of, or (ii) give rise to liability under, Environmental
Laws, which violations and liabilities, in the aggregate, could reasonably be
anticipated to result in a Material Adverse Effect.
(b) The Properties and all operations of the Borrower and the
Subsidiaries are in compliance, and in the last three years have been in
compliance, with all Environmental Laws and all necessary Environmental Permits
have been obtained and are in effect, except to the extent that such
non-compliance or failure to obtain any necessary permits, in the aggregate,
could not reasonably be anticipated to result in a Material Adverse Effect.
(c) There have been no Releases or threatened Releases at, from,
under or proximate to the Properties or otherwise in connection with the
operations of the Borrower or the Subsidiaries, which Releases or threatened
Releases, in the aggregate, could reasonably be anticipated to result in a
Material Adverse Effect.
(d) None of Holdings, the Borrower or any of the Subsidiaries has
received any notice of an Environmental Claim in connection with the Properties
or the operations of the Borrower or the Subsidiaries or with regard to any
person whose liabilities for environmental matters Holdings, the Borrower or the
Subsidiaries has retained or assumed, in whole or in part, contractually, by
operation of law or otherwise, which, in the aggregate, could reasonably be
anticipated to result in a Material Adverse Effect, nor do Holdings, the
Borrower or the Subsidiaries have reason to believe that any such notice will be
received or is being threatened.
SECTION 3.18. Insurance. Schedule 3.18 sets forth a true, complete
and correct description of all insurance maintained by the Borrower or by the
Borrower for its Subsidiaries as of the Closing Date. As of each such date, such
insurance is in full force and effect and all premiums have been duly paid. The
Borrower and its Subsidiaries have insurance in such amounts and covering such
risks and liabilities as are in accordance with normal industry practice.
SECTION 3.19. Security Documents. (a) The Pledge Agreement is
effective to create in favor of the Collateral Agent, for the ratable benefit of
the Secured Parties, a legal, valid and enforceable security interest in the
Collateral (as defined in the Pledge Agreement) and the Pledge Agreement shall
constitute a fully perfected first priority Lien on, and security interests in,
all right, title and interest of the pledgors thereunder in such Collateral and
the proceeds thereof, in each case prior and superior in right to any other
person.
(b) The Security Agreement is effective to create in favor of the
Collateral Agent, for the ratable benefit of the Secured Parties, a legal, valid
and enforceable security interest in the Collateral (as
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defined in the Security Agreement) and the Security Agreement shall constitute a
fully perfected Lien on, and security interest in, all right, title and interest
of the grantors thereunder in such Collateral and the proceeds thereof, in each
case prior and superior in right to any other person, other than with respect to
Liens expressly permitted by Section 6.02.
SECTION 3.20. Location of Real Property. Schedule 3.20 lists
completely and correctly as of the Closing Date all real property owned by the
Borrower and the Subsidiaries and the addresses thereof. The Borrower and the
Subsidiaries own in fee all the real property set forth on Schedule 3.20.
SECTION 3.21. Labor Matters. There are no significant strikes,
lockouts, slowdowns or other labor disputes against Holdings, the Borrower or
any of its Subsidiaries pending or, to the knowledge of Holdings or the
Borrower, threatened that could reasonably be expected to, individually or in
the aggregate, have a Material Adverse Effect. The hours worked by and payment
made to employees of Holdings, the Borrower or any of its Subsidiaries have not
been in violation of the Fair Labor Standards Act or any other applicable
Federal, state, local or foreign law dealing with such matters, where such
violations could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect. The consummation of the Transactions will
not give rise to a right of termination or right of renegotiation on the part of
any union under any collective bargaining agreement to which Holdings, the
Borrower or any of its Subsidiaries is a party or by which Holdings, the
Borrower or any of its Subsidiaries is bound.
SECTION 3.22. Patents, Trademarks, etc. Each of the Borrower and
each of its Subsidiaries owns, or is licensed to use, all patents, trademarks,
trade names, copyrights, technology, know-how and processes, service marks and
rights with respect to the foregoing that are (a) used in or necessary for the
conduct of their respective businesses as currently conducted and (b) material
to the business, assets, operations, properties, prospects or condition
(financial or otherwise) of the Borrower and its Subsidiaries taken as a whole.
The use of such patents, trademarks, trade names, copyrights, technology,
know-how, processes and rights with respect to the foregoing by the Borrower and
its Subsidiaries does not infringe on the rights of any Person. Holdings and the
Excluded Subsidiaries do not own or license any such patents, trademarks, trade
names, copyrights, technology, know-how or processes, service marks or rights.
ARTICLE IV. CONDITIONS
SECTION 4.01. All Credit Events. The obligations of the Lenders to
make Loans and of the Issuing Bank to issue Letters of Credit are subject to the
satisfaction, on the date of each Borrowing, including each Borrowing of a
Swingline Loan, and on the date of each issuance of a Letter of Credit (each
such event, a "Credit Event"), of each of the following conditions:
(a) The Administrative Agent shall have received a notice of such
Borrowing as required by Section 2.03 or, in the case of the issuance of a
Letter of Credit, the Issuing Bank and the Administrative Agent shall have
received a notice requesting the issuance of such Letter of Credit as required
by Section 2.20(b) or, in the case of the Borrowing of a Swingline Loan, the
Swingline Lender and the Administrative Agent shall have received a notice
requesting such Swingline Loan as required by Section 2.19(b).
(b) The representations and warranties set forth in Article III
hereof and in the other Loan Documents shall be true and correct in all
material respects on and as of the date of such Credit Event with the same
effect as though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date.
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(c) Each Loan Party shall be in compliance with all the terms and
provisions set forth herein and in each other Loan Document on its part to be
observed or performed, and at the time of and immediately after such Credit
Event, no Event of Default or Default shall have occurred and be continuing.
Each Credit Event shall be deemed to constitute a representation and warranty by
the Borrower on the date of such Credit Event as to the matters specified in
paragraphs (b) and (c) of this Section 4.01.
SECTION 4.02. Effectiveness. The effectiveness of this Agreement and
the obligations of the Lenders and the Issuing Bank hereunder are subject to the
satisfaction of the following conditions:
(a) The Administrative Agent shall have received counterparts of
this Agreement signed on behalf of Holdings, the Borrower, the Issuing Bank
and all the Lenders.
(b) All legal matters incident to this Agreement, the borrowings and
extensions of credit hereunder and the other Loan Documents shall be
reasonably satisfactory to the Lenders, to the Issuing Bank and to Cravath,
Swaine & ▇▇▇▇▇, counsel for the Administrative Agent.
(c) The Administrative Agent shall have received all Fees, together
with all other fees separately agreed to be payable to the Administrative
Agent and the Lenders in connection with the amendment and restatement of the
Original Credit Agreement pursuant hereto, and other amounts due and payable
on or prior to the Restatement Effective Date, including, to the extent
invoiced, reimbursement or payment of all out-of-pocket expenses required to
be reimbursed or paid by the Borrower hereunder or under any other Loan
Document.
(d) All outstanding Loans, accrued and unpaid interest thereon and
accrued and unpaid Fees (other than Administrative Agent Fees) under the
Original Credit Agreement shall be paid in full (without prejudice to the
Borrower's right to borrow hereunder in order to finance such payment).
The Administrative Agent shall notify the Borrower and the Lenders
when the Restatement Effective Date occurs, and such notice shall be conclusive
absent manifest error. Each party hereto hereby acknowledges and confirms that
the Guarantee Agreement, the Security Documents and the Indemnity, Subrogation
and Contribution Agreement shall remain in effect on and after the Restatement
Effective Date and shall continue to apply to the Obligations. Unless and until
the Restatement Effective Date occurs, the Original Credit Agreement shall
remain in effect in accordance with its terms and shall not be affected hereby.
ARTICLE V. AFFIRMATIVE COVENANTS
Each of Holdings and the Borrower covenants and agrees with each
Lender that so long as this Agreement shall remain in effect and until the
Commitments have been terminated and the principal of and interest on each Loan,
all Fees and all other expenses or amounts payable under any Loan Document shall
have been paid in full and all Letters of Credit have been canceled or have
expired and all amounts drawn thereunder have been reimbursed in full, unless
the Required Lenders shall otherwise consent in writing, each of Holdings and
the Borrower will, and will cause each of the Subsidiaries to:
SECTION 5.01. Existence; Businesses and Properties. (a) Do or cause
to be done all things necessary to preserve, renew and keep in full force and
effect its legal existence, except as otherwise expressly permitted under
Section 6.05 and except that the foregoing shall not apply to Excluded
Subsidiaries.
(b) Do or cause to be done all things necessary to (i) obtain,
preserve, renew, extend and keep in full force and effect the rights, licenses,
permits, franchises, authorizations, patents, copyrights,
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trademarks and trade names material to the conduct of its business; (ii)
maintain and operate such business in substantially the manner in which it is
presently conducted and operated; (iii) comply in all material respects with all
applicable laws, rules, regulations and orders of any Governmental Authority,
whether now in effect or hereafter enacted; and (iv) at all times maintain and
preserve all property material to the conduct of such business and keep such
property in good repair, working order and condition and from time to time make,
or cause to be made, all needful and proper repairs, renewals, additions,
improvements and replacements thereto necessary in order that the business
carried on in connection therewith may be properly conducted at all times;
provided that (A) clauses (i), (ii), and (iv) above shall not apply to Excluded
Subsidiaries, (B) the foregoing shall not prevent any transaction expressly
permitted under Section 6.05, (C) the foregoing shall not prevent Holdings, the
Borrower or any Subsidiary from withdrawing its qualification as a foreign
corporation in any jurisdiction and (D) the foregoing clause (i) shall not
prevent Holdings, the Borrower or any Subsidiary from taking or failing to take
any action respecting any right, license, permit, franchise, authorization,
patent, copyright, trademark or trade name determined by it to be in the best
interest of the Borrower and the Subsidiaries; provided further that the
foregoing clauses (C) and (D) shall not be construed to permit the taking of, or
failure to take, any action that could reasonably be expected to result in a
Material Adverse Effect.
SECTION 5.02. Insurance. (a) Keep its insurable properties
adequately insured at all times by financially sound and reputable insurers;
maintain such other insurance, to such extent and against such risks, including
fire and other risks insured against by extended coverage, as is customary with
companies in the same or similar businesses, including 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 it; and maintain such other insurance as may be
required by law.
(b) Cause all such policies relating to any Collateral to be
endorsed or otherwise amended to include a "standard" or "New York" lender's
loss payable endorsement, in form and substance satisfactory to the
Administrative Agent and the Collateral Agent, which endorsement shall provide
that, from and after the Closing Date, if the insurance carrier shall have
received written notice from the Administrative Agent or the Collateral Agent of
the occurrence of an Event of Default, the insurance carrier shall pay all
proceeds relating to any Collateral otherwise payable to the Borrower or the
Loan Parties under such policies directly to the Collateral Agent; cause all
such policies to provide that neither the Borrower, the Administrative Agent,
the Collateral Agent nor any other party shall be a coinsurer thereunder and to
contain a "Replacement Cost Endorsement", without any deduction for
depreciation, and such other provisions as the Administrative Agent or the
Collateral Agent may reasonably require from time to time to protect their
interests; deliver original or certified copies of all such policies to the
Collateral Agent; cause each such policy to provide that it shall not be
canceled, modified or not renewed (i) by reason of nonpayment of premium upon
not less than 10 days' prior written notice thereof by the insurer to the
Administrative Agent and the Collateral Agent or (ii) for any other reason upon
not less than 30 days' prior written notice thereof by the insurer to the
Administrative Agent and the Collateral Agent; deliver to the Administrative
Agent and the Collateral Agent, prior to the cancellation, modification or
nonrenewal of any such policy of insurance, a copy of a renewal or replacement
policy (or other evidence of renewal of a policy previously delivered to the
Administrative Agent and the Collateral Agent) together with evidence
satisfactory to the Administrative Agent and the Collateral Agent of payment of
the premium therefor. In addition, the policies of general liability insurance
shall name the Collateral Agent as an additional insured.
(c) Notify the Administrative Agent and the Collateral Agent
immediately whenever any separate insurance concurrent in form or contributing
in the event of loss with that required to be maintained under this Section 5.02
is taken out by the Borrower; and promptly deliver to the Administrative Agent
and the Collateral Agent a duplicate original copy of such policy or policies.
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(d) In connection with the covenants set forth in this Section 5.02,
it is understood and agreed that:
(i) neither the Administrative Agent, the Lenders, the Issuing Bank,
nor their agents or employees shall be liable for any loss or damage insured
by the insurance policies required to be maintained under this Section 5.02,
it being understood that (A) the Borrower and the other Loan Parties shall
look solely to their insurance companies or any other parties other than the
aforesaid parties for the recovery of such loss or damage and (B) such
insurance companies shall have no rights of subrogation against the
Administrative Agent, the Collateral Agent, the Lenders, the Issuing Bank or
their agents or employees. If, however, the insurance policies do not provide
waiver of subrogation rights against such parties, as required above, then the
Borrower hereby agrees, to the extent permitted by law, to waive its right of
recovery, if any, against the Administrative Agent, the Collateral Agent, the
Lenders, the Issuing Bank and their agents and employees; and
(ii) the designation of any form, type or amount of insurance
coverage by the Administrative Agent, the Collateral Agent or the Required
Lenders under this Section 5.02 shall in no event be deemed a representation,
warranty or advice by the Administrative Agent, the Collateral Agent or the
Lenders that such insurance is adequate for the purposes of the business of
the Borrower and the Subsidiaries or the protection of their properties and
the Administrative Agent, the Collateral Agent and the Required Lenders shall
have the right from time to time to require the Borrower and the other Loan
Parties to keep other insurance in such form and amount as the Administrative
Agent, the Collateral Agent or the Required Lenders may reasonably request,
provided that such insurance shall be obtainable on commercially reasonable
terms.
SECTION 5.03. Obligations and Taxes. Pay its Indebtedness and other
material obligations promptly and in accordance with their terms and pay and
discharge promptly when due all 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 delinquent or in default, as well as all
lawful claims for labor, materials and supplies or otherwise which, if unpaid,
might give rise to a Lien upon such properties or any part thereof; provided,
however, that such payment and discharge shall not be required with respect to
any such obligation, tax, assessment, charge, levy or claim so long as the
validity or amount thereof shall be contested in good faith by appropriate
proceedings and the Borrower shall have set aside on its books adequate reserves
with respect thereto and such contest operates to suspend collection of the
contested obligation, tax, assessment charge, levy or claim and enforcement of a
Lien.
SECTION 5.04. Financial Statements, Reports, etc. In the case of
Holdings and the Borrower, furnish to the Administrative Agent and each Lender:
(a) within 95 days after the end of each fiscal year, its
consolidated and consolidating balance sheets and related consolidated and
consolidating statements of operations and consolidated statements of
shareholders' equity and cash flows showing the financial condition of
Holdings and its consolidated subsidiaries as of the close of such fiscal year
and the results of its operations and the operations of such subsidiaries
during such year, all audited (in the case of such consolidated and
consolidating statements) by any "Big 6" accounting firm or other independent
public accountants of recognized national standing reasonably acceptable to
the Required Lenders, and accompanied by an opinion of such accountants (which
shall not contain any "going concern" or other materially adverse
qualification) to the effect that such consolidated financial statements
fairly present the financial condition and results of operations of Holdings
on a consolidated basis in accordance with GAAP consistently applied;
(b) within 50 days after the end of each of the first three fiscal
quarters of each fiscal year, its consolidated and consolidating balance
sheets and related consolidated and consolidating statements of operations and
consolidated statements of shareholders' equity and cash flows showing the
financial condition
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of Holdings and its consolidated subsidiaries as of the close of such fiscal
quarter and the results of its operations and the operations of such
subsidiaries during such fiscal quarter and the then elapsed portion of the
fiscal year, all certified by one of its Financial Officers as fairly
presenting the financial condition and results of operations of Holdings on a
consolidated basis in accordance with GAAP consistently applied, subject to
the absence of footnotes and normal year-end reserves, accruals and audit
adjustments;
(c) concurrently with any delivery of financial statements under (a)
or (b) above, a certificate of a Financial Officer (i) certifying that no
Event of Default or Default has occurred or, if such an Event of Default or
Default has occurred, specifying the nature and extent thereof and any
corrective action taken or proposed to be taken with respect thereto, (ii)
setting forth computations in reasonable detail satisfactory to the
Administrative Agent demonstrating compliance with the covenants contained in
Sections 6.08, 6.12, 6.13 and 6.14, (iii) setting forth each Designated
Payment made during the most recent fiscal quarter and calculations of the
Designated Payment Amount as of the beginning and end of such quarter and (iv)
setting forth notice, if applicable, of any change in the Applicable
Percentage based upon the Applicable Fixed Charge Coverage Ratio;
(d) concurrently with any delivery of financial statements under
paragraph (a) above, a certificate of the accounting firm opining on such
statements (which certificate may be limited to accounting matters and
disclaim responsibility for legal interpretations) certifying (i) whether in
connection with its audit examination any Default or Event of Default has come
to its attention and, if such event has come to its attention, the nature and
extent thereof and (ii) that based on its audit examination and its review of
the computations referred to in clause (ii) of paragraph (c) above, nothing
has come to its attention that leads it to believe that the information
contained in the certificate delivered therewith pursuant to paragraph (c)
above is not correct; provided that the requirements of this clause (d) shall
be subject to any limitations and qualifications adopted after the date hereof
by any professional association or organization or any Governmental Authority,
in each case that affects the content of, or ability of accounting firms to
deliver, certificates of the type contemplated by this paragraph;
(e) promptly after the same become publicly available or are filed
or distributed, as applicable, copies of all periodic and other reports, proxy
statements and other materials filed by Holdings or the Borrower or any
Subsidiary 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, or distributed to the holders of the
Senior Notes or any other Indebtedness with a then outstanding principal
amount of $15,000,000 or more (or any trustee, agent or representative for any
such holders) or to Holdings' shareholders, as the case may be;
(f) within one Business Day after receipt of notice or knowledge
thereof, any change (or prospective change) in the rating of the Obligations
or the Senior Notes by ▇▇▇▇▇'▇ or S&P;
(g) no later than 60 days after the first day of each fiscal year of
Holdings, a budget in the form approved by the Board of Directors of Holdings
for such fiscal year, and which will be generally in the format of the budget
delivered to the Administrative Agent prior to the Closing Date; and
(h) promptly, from time to time, such other information regarding
the operations, business affairs and financial condition of Holdings and the
Borrower or any Subsidiary, or compliance with the terms of any Loan Document,
as the Administrative Agent or any Lender may reasonably request.
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SECTION 5.05. Litigation and Other Notices. Furnish to the
Administrative Agent and each Lender prompt written notice of the following:
(a) any Event of Default or Default, specifying the nature and
extent thereof and the corrective action (if any) proposed to be taken with
respect thereto;
(b) the filing or commencement of, or any threat or notice of
intention of any person to file or commence, any action, suit or proceeding,
whether at law or in equity or by or before any Governmental Authority,
against the Borrower or any Affiliate thereof which could reasonably be
expected to result in a Material Adverse Effect; and
(c) any other development that has resulted in, or could reasonably
be expected to result in, a Material Adverse Effect.
SECTION 5.06. Employee Benefits. (a) Comply in all material respects
with the applicable provisions of ERISA and the Code and (b) furnish to the
Administrative Agent (i) as soon as possible after, and in any event within 30
days after any Responsible Officer of the Borrower or any ERISA Affiliate knows
or has reason to know that, any Reportable Event has occurred that alone or
together with any other Reportable Event could reasonably be expected to result
in liability of the Borrower to the PBGC in an aggregate amount exceeding
$5,000,000, a statement of a Financial Officer setting forth details as to such
Reportable Event and the action that the Borrower proposes to take with respect
thereto, together with a copy of the notice, if any, of such Reportable Event
given to the PBGC, (ii) promptly after receipt thereof, a copy of any notice
that the Borrower or any ERISA Affiliate may receive from the PBGC relating to
the intention of the PBGC to terminate any Plan or Plans (other than a Plan
maintained by an ERISA Affiliate that is considered an ERISA Affiliate only
pursuant to subsection (m) or (o) of Code Section 414) or to appoint a trustee
to administer any such Plan, (iii) within 10 days after the due date for filing
with the PBGC pursuant to Section 412(n) of the Code a notice of failure to make
a required installment or other payment with respect to a Plan, a statement of a
Financial Officer setting forth details as to such failure and the action that
the Borrower proposes to take with respect thereto, together with a copy of any
such notice given to the PBGC and (iv) promptly and in any event within 30 days
after receipt thereof by the Borrower or any ERISA Affiliate from the sponsor of
a Multiemployer Plan, a copy of each notice received by the Borrower or any
ERISA Affiliate concerning (A) the imposition of Withdrawal Liability or (B) a
determination that a Multiemployer Plan is, or is expected to be, terminated or
in reorganization, both within the meaning of Title IV of ERISA.
SECTION 5.07. Maintaining Records; Access to Properties and
Inspections. Maintain all financial records in accordance with GAAP and permit
any representatives designated by any Lender, upon reasonable prior notice, to
visit and inspect the financial records and the properties of Holdings, the
Borrower or any Subsidiary at reasonable times (during normal business hours)
and as often as requested and to make extracts from and copies of such financial
records, and permit any representatives designated by any Lender to discuss the
affairs, finances and condition of Holdings, the Borrower or any Subsidiary with
the officers thereof and independent accountants therefor; provided that any
such visitation and inspection rights shall be exercised in a reasonable manner
that does not disrupt the business activities of the Borrower and its
Subsidiaries.
SECTION 5.08. Use of Proceeds. Use the proceeds of the Loans and
request the issuance of Letters of Credit only for the purposes set forth in the
preamble to this Agreement.
SECTION 5.09. Further Assurances. (a) Execute any and all further
documents, financing statements, agreements and instruments, and take all
further action (including filing Uniform Commercial Code and other financing
statements, mortgages and deeds of trust) that may be required under applicable
law, or which the Required Lenders, the Administrative Agent or the Collateral
Agent may reasonably request, in order to effectuate the transactions
contemplated by the Loan Documents and in order to grant, preserve, protect and
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perfect the validity and priority of the security interests created or intended
to be created by the Security Documents.
(b) Cause each Subsidiary (including any Subsidiary that becomes a
Subsidiary after the date hereof, but excluding (i) any Foreign Subsidiary so
long as such Foreign Subsidiary has not entered into any Guarantee with respect
to the Senior Notes or any other Indebtedness of the Borrower and (ii) any
Excluded Subsidiary that has not ceased to qualify as an "Excluded Subsidiary")
to undertake the obligations of and to become a Subsidiary Guarantor pursuant to
the Guarantee Agreement and a party to the Indemnity, Subrogation and
Contribution Agreement, the Pledge Agreement and the Security Agreement pursuant
to one or more instruments or agreements satisfactory in form and substance to
the Collateral Agent and thereupon take such actions pursuant to Section 5.09(a)
and the applicable Security Documents as shall be necessary to grant, preserve,
protect and perfect the validity and priority of the security interests created
or intended to be created thereby. In addition, the Borrower shall, or shall
cause its Subsidiaries to, (i) pledge all capital stock of any such Subsidiary
that is owned by the Borrower or any other Subsidiary to the Collateral Agent
for the benefit of the Secured Parties pursuant to the Pledge Agreement (or
supplement to the Pledge Agreement) satisfactory in form and substance to the
Collateral Agent; provided that any such pledge of the capital stock of a
Foreign Subsidiary may exclude shares of such capital stock representing 35% of
the ordinary voting power represented by all the outstanding shares of capital
stock of such Foreign Subsidiary so long as such Foreign Subsidiary has not
entered into any Guarantee with respect to the Senior Notes or any other
Indebtedness of the Borrower; and (ii) cause all intercompany Indebtedness
between or among any of Holdings, the Borrower and the Subsidiaries, to the
extent evidenced by promissory notes, to be pledged to the Collateral Agent for
the benefit of the Secured Parties pursuant to the Pledge Agreement (or
supplement to the Pledge Agreement) satisfactory in form and substance to the
Collateral Agent; provided that any such Indebtedness owing to a Foreign
Subsidiary that is not required to be a party to the Pledge Agreement, as
provided above, need not be so pledged by such Foreign Subsidiary.
SECTION 5.10. Environmental Matters. (a) Promptly give notice to the
Administrative Agent upon becoming aware of (i) any violation of any
Environmental Law, (ii) any claim, inquiry, proceeding, investigation or other
action, including a request for information or a notice of an actual or
threatened Environmental Claim or (iii) the discovery of the Release of any
Hazardous Material at, on, under or from any of the properties owned or occupied
by the Borrower or any Subsidiary in excess of reportable or allowable
standards, threshold amounts or levels under any Environmental Law, or in a
manner or amount that could reasonably be expected to result in liability under
any Environmental Law.
(b) Upon discovery of the presence on any of the properties owned or
occupied by the Borrower or any Subsidiary of any Hazardous Material that is in
violation of, or that could reasonably be expected to result in liability under,
any Environmental Law, take all necessary steps to initiate and expeditiously
complete all Remedial Action to eliminate any such adverse effect, and keep the
Administrative Agent informed of such actions and the results thereof.
ARTICLE VI. NEGATIVE COVENANTS
Each of Holdings and the Borrower covenants and agrees with each
Lender that, so long as this Agreement shall remain in effect and until the
Commitments have been terminated and the principal of and interest on each Loan,
all Fees and all other expenses or amounts payable under any Loan Document have
been paid in full and all Letters of Credit have been cancelled or have expired
and all amounts drawn thereunder
- 43 -
have been reimbursed in full, unless the Required Lenders shall otherwise
consent in writing, neither Holdings nor the Borrower will, nor will they cause
or permit any of the Subsidiaries to:
SECTION 6.01. Indebtedness. Incur, create, assume or permit to exist
any Indebtedness, except:
(a) the Obligations;
(b) Indebtedness of the Borrower under the Senior Notes and of
Holdings and the Subsidiaries under Guarantees of the Senior Notes;
(c) other Indebtedness existing on the Closing Date to the extent
set forth on Schedule 6.01;
(d) Indebtedness the net proceeds of which are used substantially
concurrently with the incurrence thereof to refinance Indebtedness described
in paragraph (c) above so long as (i) such refinancing Indebtedness is in an
aggregate principal amount not greater than the aggregate principal amount of
the Indebtedness being refinanced plus the amount of any prepayment premiums
required to be paid thereon, (ii) such Indebtedness has a later final maturity
and a longer weighted average life than the Indebtedness being refinanced and
is not subject to prepayment, redemption or repurchase requirements not
applicable to the Indebtedness being refinanced, (iii) the covenants, events
of default and other provisions thereof (including, if the Indebtedness being
refinanced is subordinated, the subordination provisions thereof) shall be no
less favorable to the Borrower or the Lenders than those contained in the
Indebtedness being refinanced and (iv) such Indebtedness is not secured or
guaranteed except to the extent the Indebtedness being refinanced was secured
or guaranteed;
(e) Indebtedness of the Borrower incurred to finance the acquisition
of equipment or machinery, in each case, in the ordinary course of business
(or to refinance Indebtedness incurred for such purpose);
(f) Capital Lease Obligations of the Borrower in an aggregate
principal amount at any time outstanding not to exceed $30,000,000;
(g) additional mortgage Indebtedness of the Borrower incurred after
the Closing Date, maturing after the Revolving Credit Maturity Date and
incurred to finance the acquisition or improvement of real property (or to
refinance Indebtedness incurred for such purpose) in an aggregate principal
amount at any time outstanding not to exceed $30,000,000;
(h) Indebtedness of the Borrower in respect of industrial revenue
bonds (or incurred to refinance industrial revenue bonds);
(i) Indebtedness of Holdings consisting of Guarantees of obligations
of the Borrower and its Subsidiaries in an aggregate amount at any time
outstanding not to exceed $20,000,000 (such limitation of amount to be
determined excluding Guarantees by Holdings of the Senior Notes);
(j) intercompany Indebtedness, including open accounts, incurred by
Holdings from the Borrower for the purposes and to the extent such amounts
could be paid as dividends to Holdings in compliance with clause (b) or (c) of
Section 6.08, so long as such Indebtedness is repaid with dividends permitted
thereunder;
- 44 -
(k) intercompany Indebtedness, including open accounts, incurred by
the Borrower from the Subsidiaries or by Subsidiaries from the Borrower or
from other Subsidiaries in compliance with clause (f) or (g) of Section 6.04;
(l) unsecured Indebtedness of the Borrower in an aggregate principal
amount at any time outstanding not to exceed $50,000,000 on terms no less
favorable to the Borrower than those set forth in this Agreement with respect
to the Loans;
(m) to the extent not creating an Event of Default under paragraph
(p) of Article VII, any Indebtedness arising under a Permitted Receivables
Facility;
(n) Indebtedness under Rate Protection Agreements entered into to
hedge interest rate risks relating to Indebtedness permitted under this
Agreement, currency exchange rate risks relating to revenues or liabilities in
foreign currencies or commodity price risks relating to raw materials and
other commodities used in the businesses conducted by the Borrower and its
Subsidiaries;
(o) Indebtedness consisting of obligations on performance, surety or
appeal bonds in an aggregate amount at any time outstanding not to exceed
$5,000,000;
(p) Indebtedness consisting of promissory notes issued to dealers as
consideration for the purchase from such dealers of Stores and related assets;
and
(q) Indebtedness arising from acquisitions made in reliance upon
clause (b) of Section 6.04, to the extent expressly permitted by sub-clause
(ii) thereof.
SECTION 6.02. Liens. Create, incur, assume or permit to exist any
Lien on any property or assets (including stock or other securities of any
person, including any Subsidiary) now owned or hereafter acquired by it or on
any income or revenues or rights in respect of any thereof, except:
(a) Liens on property or assets of the Borrower and its Subsidiaries
existing on the Closing Date and set forth in Schedule 6.02; provided that
such Liens shall secure only (i) those obligations which they secure on the
Closing Date and (ii) refinancings of such obligations in compliance with
clause (d) of Section 6.01;
(b) any Lien created under the Loan Documents;
(c) any Lien existing on any property or asset prior to the
acquisition thereof by the Borrower or any Subsidiary; provided that (i) such
Lien is not created in contemplation of or in connection with such
acquisition, and (ii) such Lien does not apply to any other property or assets
of the Borrower or any Subsidiary;
(d) Liens for taxes, assessments or governmental charges or levies
not yet due or which are being contested in compliance with Section 5.03;
(e) Liens imposed by law that do not secure Indebtedness for
borrowed money and were incurred in the ordinary course of business, such as
carriers', warehousemen's, mechanic's, materialmen's, repairmen's or other
like Liens arising in the ordinary course of business; provided that such
Liens either (i) do not in the aggregate materially detract from the value of
the property or assets to which such Liens apply or materially impair the use
thereof in the operation of the business of Holdings, the Borrower and the
Subsidiaries or (ii) are being contested in compliance with Section 5.03;
- 45 -
(f) Liens upon equipment, machinery or real property (including
improvements thereto and fixtures thereon), assets subject to Capital Lease
Obligations and assets financed with industrial revenue bonds; provided that
(i) such Liens only secure Indebtedness permitted under clause (e), (f), (g)
or (h), as applicable, of Section 6.01, (ii) in the case of any such Liens
securing Indebtedness permitted by clause (e), (g) or (h) of Section 6.01,
such Liens are incurred, and such Indebtedness is created, within 180 days
after the acquisition or construction of the assets financed thereby and (iii)
in each case, such Liens do not encumber any other assets or properties;
(g) [Intentionally Omitted]
(h) leases or subleases granted to other persons not materially
interfering with the conduct of the business of the Borrower and its
Subsidiaries taken as a whole;
(i) easements, licenses, rights-of-way, zoning or other
restrictions, encroachments and other similar charges or encumbrances, and
minor title deficiencies, statutory and common law landlords' liens under
leases to which Holdings, the Borrower or any of its Subsidiaries is a party,
in each case not securing Indebtedness and not materially interfering with the
conduct of the business of Holdings, the Borrower or any of its Subsidiaries;
(j) Liens (other than any Lien imposed by ERISA) for worker's
compensation, unemployment compensation and other forms of government
insurance incurred in the ordinary course of business;
(k) Liens to secure (i) performance of tenders, statutory
obligations, bids, leases and contracts or other similar obligations (other
than for borrowed money) entered into in the ordinary course of business or
(ii) obligations on surety or appeal bonds, provided that the obligations
secured by such Liens (and, to the extent (without duplication) the value of
cash or property (other than Letters of Credit) forming a part of the security
with respect to such surety or appeal bonds exceeds the obligations so
secured, the amount of such excess) do not exceed in the aggregate $5,000,000;
(l) Liens arising from precautionary Uniform Commercial Code
financing statement filings regarding operating leases otherwise permitted
hereunder;
(m) any interest or title of a lessor under any operating lease of
property to, or of any consignor of goods consigned to, or any creditor of any
consignee in goods consigned to such consignee by, the Borrower or any of its
Subsidiaries, in each case in the ordinary course of business;
(n) Liens arising out of judgments or awards, which have been in
existence for less than 45 days from the date of creation thereof or which
have been stayed or bonded pending appeal or fully covered by insurance
(subject to applicable deductibles) and for which no enforcement action has
been commenced, provided that the aggregate amount of all such judgments or
awards (and, to the extent (without duplication) the value of cash or property
(other than Letters of Credit) forming a part of the security with respect to
such judgment or award exceeds the obligations so secured, the amount of such
excess) does not exceed $5,000,000 at any time outstanding;
(o) transactions under the Permitted Receivables Facility shall be
permitted; and
(p) Liens securing obligations under any Rate Protection Agreement
consisting solely of an assignment of the Borrower's rights under such Rate
Protection Agreement.
SECTION 6.03. Sale and Lease-Back Transactions. Enter into any
arrangement, directly or indirectly, with any person whereby it shall sell or
transfer any property, real or personal, used or useful in its
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business, whether now owned or hereafter acquired, and thereafter rent or lease
such property or other property which it intends to use for substantially the
same purpose or purposes as the property being sold or transferred; provided
that the Borrower and its Subsidiaries may enter into Permitted Sale-Leaseback
Transactions so long as the aggregate amount of proceeds received from all
Permitted Sale-Leaseback Transactions consummated on or after the Closing Date
do not exceed $25,000,000.
SECTION 6.04. Investments, Loans and Advances; Certain Acquisitions.
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, or
purchase, lease or otherwise acquire (in one transaction or a series of related
transactions) any property or assets outside the ordinary course of business,
except:
(a) cash and Cash Equivalents;
(b) acquisitions by the Borrower of the capital stock of a Person
(the "Issuer") or of property or assets outside the ordinary course of
business; provided, that (i) the aggregate consideration paid in connection
with all such acquisitions does not exceed the sum of (A) $75,000,000 of cash
consideration and (B) common stock issued by Holdings with an aggregate fair
market value (determined at the time of each such acquisition) not exceeding
$150,000,000, provided that the aggregate amount of consideration paid under
clauses (A) and (B) above combined shall not exceed $175,000,000; (ii) any
Indebtedness of the Issuer, or with recourse to any such property or assets,
existing at the time of such acquisition is eliminated or repaid at such time,
except that such Indebtedness shall not be required to be eliminated or repaid
to the extent that (A) such Indebtedness is either mortgage Indebtedness
secured only by real property, improvements thereto and fixtures thereon or
unsecured Indebtedness that is not revolving in nature and is on terms no more
restrictive than those contained in this Agreement and (B) the amount that
would be required to be paid in order to eliminate or repay such Indebtedness
at the time of such acquisition is treated as cash consideration paid in
connection with such acquisition for purposes of determining compliance with
clause (i)(A) above but shall in any event not exceed $25,000,000; (iii) the
aggregate amount of contingent obligations (quantified as the amount that
would be required to be set forth in audited financial statements or footnotes
thereto prepared in accordance with GAAP as of the date of the applicable
acquisition) of all Issuers so acquired, and arising out of all property and
assets so acquired, shall not exceed $10,000,000; (iv) the Issuer shall be
engaged in, or the property and assets acquired shall be used in connection
with, the same or related (ancillary or complementary) line of business as the
Borrower, (v) all necessary governmental approvals and third party consents
for the acquisition have been obtained without imposing burdensome conditions,
all appeal periods have expired and there shall be no governmental or judicial
action, pending or threatened, restraining or imposing burdensome conditions
on such acquisition, (vi) after giving effect to the acquisition, and on a pro
forma basis (including the financial results of the Borrower and the
Subsidiaries and the Issuer or the property and assets to be acquired, as the
case may be, and giving pro forma effect to any Indebtedness to be incurred in
connection with such acquisition) for the period of four consecutive fiscal
quarters ending immediately prior to such acquisition, no Event of Default or
Default shall have occurred and be continuing and the Borrower shall have
delivered to the Administrative Agent a certificate of a Financial Officer
certifying compliance with the conditions set forth in this clause (vi) and
setting forth pro forma calculations demonstrating such compliance, (vii) in
the case of any such acquisition of capital stock, the Issuer shall become a
Subsidiary Guarantor under the Guarantee Agreement; (viii) liens and other
security interests in the capital stock and other assets acquired in such
acquisition are created as required under Section 5.09; and (ix) any
acquisition of capital stock of an Issuer, whereby as a result of such
acquisition the Issuer shall become a Non Wholly Owned Subsidiary or a Foreign
Subsidiary, shall comply with the further limitations in Section 6.04(f) below
and Section 6.11.
(c) the Borrower and the Subsidiaries (other than Excluded
Subsidiaries) may acquire and hold Dealer Notes in an aggregate principal
amount at any time outstanding not to exceed $30,000,000;
- 47 -
(d) loans and advances by the Borrower to employees of the Borrower
or the Subsidiaries (i) to finance the acquisition of common stock in Holdings
in an aggregate amount at any time outstanding not to exceed $5,000,000 or
(ii) in the ordinary course of business, including with respect to travel and
relocation expenses;
(e) investments in joint ventures, partnerships and similar persons
that are not Subsidiaries in an aggregate amount at any time outstanding not
to exceed $5,000,000;
(f) investments by the Borrower in Subsidiaries, including
Subsidiaries formed after the date hereof; provided that (i) all such
Subsidiaries shall be Wholly Owned Subsidiaries or, subject to Section 6.11,
Non Wholly Owned Subsidiaries, in either case owned directly by the Borrower,
(ii) all such Subsidiaries are Subsidiary Guarantors and the capital stock,
intercompany Indebtedness and assets of such Subsidiaries are subject to Liens
granted under the Security Documents to secure the Obligations, in each case
to be extent required by Section 5.09(b), (iii) in the case of any such
investment that constitutes an acquisition of any capital stock of a person
that is not a Subsidiary at the time of such investment, such acquisition is
made in compliance with clause (b) of Section 6.04, (iv) the aggregate amount
of investments in Foreign Subsidiaries at any time outstanding shall not
exceed $40,000,000, and (v) no additional investments shall be made in any
Excluded Subsidiary;
(g) investments consisting of intercompany Indebtedness of the
Borrower to a Subsidiary (other than an Excluded Subsidiary) or of a
Subsidiary (other than an Excluded Subsidiary) to another Subsidiary (other
than an Excluded Subsidiary); provided that (i) each such Subsidiary satisfies
the conditions set forth in clauses (i) and (ii) of paragraph (f) above and
(ii) any such intercompany Indebtedness of a Foreign Subsidiary that is owed
to a Subsidiary that is not a Foreign Subsidiary shall be considered an
investment by the Borrower in such Foreign Subsidiary for purposes of clause
(iv) of paragraph (f) above;
(h) loans and advances by the Borrower to Holdings made in
compliance with paragraph (j) of Section 6.01;
(i) accounts receivable owing to the Borrower and the Subsidiaries
arising in the ordinary course of business;
(j) any non-cash consideration received by the Borrower or any
Subsidiary in connection with any asset disposition permitted by clause (iv)
of Section 6.05(b);
(k) investments by Holdings in the common stock of the Borrower;
(l) the foregoing shall not be construed to prevent (i) Restricted
Payments expressly permitted under Section 6.08 or (ii) the purchase or
acquisition of Senior Notes in accordance with Section 6.09(b); and
(m) the investments existing on the Closing Date and set forth in
Schedule 6.04.
SECTION 6.05. Mergers, Consolidations and Sales of Assets. (a) Merge
into or consolidate with any other person, or permit any other person to merge
into or consolidate with it, or sell, transfer, lease or otherwise dispose of
(in one transaction or in a series of transactions) all or any part of its
assets (whether now owned or hereafter acquired), including any capital stock of
any Subsidiary, provided, however, that if at the time thereof and immediately
after giving effect thereto no Default or Event of Default shall have occurred
and be continuing, (i) any Subsidiary of the Borrower may be liquidated into or
may merge into or with the Borrower in a transaction in which the Borrower is
the surviving corporation, (ii) any Subsidiary of the Borrower may merge into or
with or consolidate with any Wholly Owned Subsidiary of the Borrower in a
transaction in which the surviving entity is a Wholly Owned Subsidiary of the
Borrower, provided in each case
- 48 -
that (x) no Person other than the Borrower or a Wholly Owned Subsidiary of the
Borrower receives any consideration and (y) in the event that any Loan Party is
a party to such merger or consolidation and is not the surviving entity, the
surviving entity shall, simultaneously with such merger or consolidation, assume
all the obligations of such Loan Party hereunder and under the other Loan
Documents, and (iii) any Excluded Subsidiary may be liquidated or may sell,
transfer or otherwise dispose of its assets to the Borrower or to another
Subsidiary.
(b) Notwithstanding the provisions of paragraph (a) above:
(i) the Borrower and its Subsidiaries may sell inventory in the
ordinary and customary course of business;
(ii) Holdings, the Borrower and its Subsidiaries may make
investments permitted by Section 6.04 and Restricted Payments permitted by
Section 6.08;
(iii) the Borrower may sell receivables and, to the extent permitted
by the terms of a Permitted Receivables Facility, purchase receivables from
its dealers so long as such receivables are promptly sold, in either case for
cash pursuant to a Permitted Receivables Facility;
(iv) the Borrower and its Subsidiaries may sell or otherwise dispose
of equipment and other tangible personal property in the ordinary and
customary course of business that is worn out, damaged or obsolete;
(v) the Borrower and its Subsidiaries may enter into Permitted
Sale-Leaseback Transactions to the extent permitted under Section 6.03;
(vi) the Borrower and its Subsidiaries may sell, transfer or
otherwise dispose of assets to each other; and
(vii) the Borrower and its Subsidiaries may sell, transfer or
otherwise dispose of assets; provided that (A) such dispositions are made for
fair value, (B) such dispositions do not include any Collateral and (C) after
giving effect to any such sale, transfer or disposition the aggregate fair
market value of all assets disposed of on and after the Closing Date in
reliance upon this clause (vii) would not exceed 10% of the Consolidated Total
Assets determined by reference to the most recent quarterly or annual balance
sheet of the Borrower which precedes such sale, transfer or disposition that
is delivered to the Administrative Agent pursuant to Section 5.04.
SECTION 6.06. Transactions with Stockholders and Affiliates.
Directly or indirectly enter into or permit to exist any transaction (including
the purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder of 5% or more of any class of equity securities of
Holdings or with any Affiliate of any such holder or of Holdings, other than in
the ordinary course of business and on terms and conditions that are
substantially as favorable to Holdings, the Borrower and the Subsidiaries as
could be obtained in an arm's-length transaction at the time from persons who
are not such holders or Affiliates; provided that the foregoing restriction
shall not apply to (a) transactions between or among the Borrower and its Wholly
Owned Subsidiaries made in compliance with the other provisions of this
Agreement, (b) Restricted Payments permitted by Section 6.08, (c) the
performance of the Kathwari Employment Agreement, as in effect on the date
hereof, in accordance with its terms or (d) transactions under and in accordance
with a Permitted Receivables Facility.
SECTION 6.07. Business of Holdings, Borrower and Subsidiaries.
Engage at any time in any business or business activity other than the business
currently conducted by the Borrower and its Subsidiaries
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and business activities reasonably related, supportive or incidental thereto.
Without limiting the generality of the foregoing, Holdings will not engage in
any business or business activity other than the ownership of the capital stock
of the Borrower.
SECTION 6.08. Restricted Payments. Declare or pay, directly or
indirectly, any dividend or make any other distribution (by reduction of capital
or otherwise), whether in cash, property, securities or a combination thereof,
with respect to any shares of its capital stock, or directly or indirectly
redeem, purchase, retire or otherwise acquire for value any shares of capital
stock of Holdings, the Borrower or any Subsidiary, or any options, warrants or
other rights to acquire such shares of capital stock, or set aside any amount
for any such purpose, or make any payment pursuant to any tax sharing
arrangement (any such dividend, distribution, redemption, purchase, retirement,
other acquisition or tax sharing payment being referred to as a "Restricted
Payment"), except that:
(a) any Subsidiary may declare or pay dividends and make other
distributions on its capital stock to, or make tax sharing payments to, the
Borrower or to another Wholly Owned Subsidiary;
(b) the Borrower may pay cash dividends to, or make tax sharing
payments to, Holdings in the amounts and at the times necessary to permit
Holdings to make payments required to be made by it in respect of federal and
state income taxes, franchise taxes and any other administrative governmental
charges incurred in the ordinary course of business, or to repay loans made by
the Borrower to Holdings for such purposes; provided that any tax refund
received by Holdings shall be paid to the Borrower;
(c) the Borrower may pay cash dividends to Holdings in the amounts
and at the times necessary to permit Holdings to make payments required to be
made by it in respect of directors' fees and expenses, costs of maintaining
its corporate existence, operating expenses incurred in the ordinary course of
business and other similar corporate overhead costs and expenses, or to repay
loans made by the Borrower to Holdings for the foregoing purposes; provided
that the aggregate amount of dividends paid in reliance upon this clause (c)
(excluding dividends to repay loans made by the Borrower for the foregoing
purposes), plus the aggregate amount of loans made by the Borrower to Holdings
for the foregoing purposes, shall not exceed $1,000,000 during any fiscal year
of the Borrower;
(d) the Borrower may pay cash dividends to Holdings so long as the
proceeds thereof are used promptly by Holdings to repurchase shares of common
stock of Holdings from dealers, managers and employees of the Borrower
pursuant to the terms of any agreements entered into with the holders of such
common stock in connection with the issuance thereof; provided that (i) no
Default or Event of Default has occurred and is continuing at the time of, or
would result from, such dividend and (ii) the aggregate amount of dividends
paid in reliance upon this clause (d) during any fiscal year of Holdings shall
not exceed the sum of $1,000,000 plus the aggregate amount of capital
contributions made by Holdings to the Borrower during such fiscal year with
the net proceeds from the issuance by Holdings to employees of the Borrower of
additional shares of common stock of Holdings;
(e) the Borrower may pay cash dividends to Holdings so long as the
proceeds thereof are limited to amounts necessary to pay, and are used
promptly by Holdings to pay, (i) compensation due to employees of the Borrower
pursuant to stock appreciation rights, bonus plans or other equity or
incentive achievement plans for such employees or judgments against Holdings;
provided that no Default or Event of Default has occurred and is continuing at
the time of, or would result from, such dividend for the purposes referred to
in this clause (i); or (ii) indemnification payments due from Holdings to
directors of Holdings;
(f) during any fiscal quarter (i) Holdings may make Restricted
Payments in cash that are treated as Designated Payments and do not result in
the aggregate amount of Designated Payments made in such quarter exceeding the
Designated Payment Amount as of the commencement of such quarter, and (ii) the
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Borrower may pay cash dividends to Holdings in the amounts and at the times
that Holdings makes Restricted Payments in accordance with clause (i) of this
clause (f); provided that no Default or Event of Default has occurred and is
continuing at the time of, or would result from, any such dividends or other
Restricted Payments; and
(g) Holdings may make Restricted Payments in cash not otherwise
permitted by this Section 6.08, and the Borrower may pay cash dividends to
Holdings in the amounts and at the times that Holdings makes such Restricted
Payments; provided that (i) no Default or Event of Default has occurred and is
continuing at the time of, or would result from, any such Restricted Payment
and (ii) the aggregate (cumulative) amount of Restricted Payments made in
reliance upon this clause (g) shall not exceed $15,000,000.
SECTION 6.09. Limitations Regarding Senior Notes. (a) Enter into any
amendment or modification of any of the Senior Note Documents, or waive any
rights thereunder; provided that the foregoing shall not apply to (i) the
amendments and modifications contemplated by the Registration Statement on Form
S-3 (Registration No. 33-85578), as amended and in effect on the date hereof,
filed by Holdings and certain Subsidiaries with the Securities and Exchange
Commission (it being understood that amendments to such Registration Statement
that change the amount of compensation payable to consenting holders or
disclosure matters, but do not affect the amendments and modifications
contemplated to be made to the Senior Note Documents, shall not be construed to
affect the ability to make such amendments and modifications pursuant to this
clause (i)), and (ii) amendments, modifications and waivers that could not
reasonably be expected to adversely affect the rights or interests of the
Lenders.
(b) Prepay, redeem, purchase, retire or otherwise acquire for value,
directly or indirectly, any of the Senior Notes, except that the Borrower may
prepay, redeem or purchase Senior Notes for cash consideration; provided that
(i) no Default or Event of Default has occurred and is continuing at the time
of, or would result from, such prepayment, redemption or purchase and (ii) any
Senior Notes so acquired shall not be resold or reissued.
SECTION 6.10. Amendment of Constituent Documents. Amend, modify or
change its certificate or articles of incorporation (or other constitutive
documents) or by-laws, or any shareholders' agreement or other agreement with
respect to its capital stock, or enter into any new agreement with respect to
its capital stock, except any such amendment, modification, change or new
agreement that could not reasonably be anticipated to adversely affect the
rights or interests of the Lenders; or enter into any tax sharing agreement,
other than intercompany tax sharing agreements among any of Holdings, the
Borrower and the Subsidiaries that do not provide for any payments that would
not be permitted hereunder if such parties had not entered into such tax sharing
agreements.
SECTION 6.11. Subsidiaries. Have any Subsidiaries other than (a) in
the case of Holdings, the Borrower and its Subsidiaries, and (b) in the case of
the Borrower (i) Subsidiaries that are Wholly Owned Subsidiaries existing on the
Closing Date or created or acquired after the Closing Date in compliance with
this Agreement or (ii) Non Wholly Owned Subsidiaries acquired after the date
hereof in compliance with this Agreement; provided that the total aggregate
amount of all investments in Non Wholly Owned Subsidiaries (including capital
contributions, loans and advances to such Subsidiaries) by Persons other than
the Borrower and its Subsidiaries shall not at any time exceed $10,000,000.
SECTION 6.12. Consolidated Net Worth. Permit Consolidated Net Worth
at any time to be less than the sum of (a) $180,000,000, plus (b) 50% of
Consolidated Net Income (determined after adjusting such Consolidated Net Income
to add any non-cash charges deducted in calculating such Consolidated Net
Income, to the extent resulting from the grant, exercise or cancellation of
stock options or warrants) for each fiscal quarter of the Borrower for which
Consolidated Net Income (as so adjusted) is positive, commencing with
- 51 -
the fiscal quarter ended September 30, 1996, plus (c) 50% of any increase in
Consolidated Net Worth after September 30, 1996, attributable to capital
contributions or the issuance of additional shares of capital stock.
SECTION 6.13. Consolidated Fixed Charge Coverage Ratio. Permit the
Consolidated Fixed Charge Coverage Ratio for any period of four consecutive
fiscal quarters of the Borrower ended on or after September 30, 1996, to be less
than 2.5 to 1.
SECTION 6.14. Leverage Ratio. Permit the Leverage Ratio at any time
to be greater than 0.55 to 1.
SECTION 6.15. Fiscal Year. Permit its fiscal year to end on a date
other than June 30.
SECTION 6.16. Limitations Regarding Capital Stock. Issue any capital
stock (including by way of sales of treasury stock) or any options or warrants
to purchase, or securities convertible into, capital stock, except (a) Holdings
may issue additional shares of its common stock in transactions that do not
result in a Change in Control, (b) Holdings may issue options and warrants to
purchase shares of its common stock pursuant to existing compensation plans or
any future compensation plans approved by the Board of Directors of Holdings,
(c) the Borrower may issue additional shares of its capital stock to Holdings,
(d) subsidiaries may issue additional shares of capital stock to the Borrower
and (e) to qualify directors to the extent required by applicable law.
ARTICLE VII. EVENTS OF DEFAULT
In case of the happening of any of the following events ("Events of
Default"):
(a) any representation or warranty made or deemed made in or in
connection with any Loan Document or the borrowings or issuances of Letters of
Credit hereunder, or any representation, warranty, statement or information
contained in any report, certificate, financial statement or other instrument
furnished in connection with or pursuant to any Loan Document, shall prove to
have been false or misleading in any material respect when so made, deemed
made or furnished;
(b) default shall be made in the payment of any principal of any
Loan 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;
(c) default shall be made in the reimbursement with respect to any
L/C Disbursement or the payment of any Fee or any interest on any Loan or on
L/C Disbursement or any other amount (other than an amount referred to in (b)
above) due under any Loan Document, when and as the same shall become due and
payable, and such default shall continue unremedied for a period of three
Business Days;
(d) default shall be made in the due observance or performance by
Holdings, the Borrower or any Subsidiary of any covenant, condition or
agreement contained in Section 5.01(a), or 5.08 or in Article VI;
(e) default shall be made in the due observance or performance by
Holdings, the Borrower or any Subsidiary of any covenant, condition or
agreement contained in any Loan Document (other than those specified in (b),
(c) or (d) above) and such default shall continue unremedied for a period of
(i) in the case of a default under Section 5.05, three Business Days after any
Responsible Officer of the Borrower has actual knowledge of any matter
required to be disclosed to the Administrative Agent and the Lenders pursuant
to
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such Section that has not been so disclosed or (ii) in the case of any other
such default, 30 days after notice thereof from the Administrative Agent or
any Lender to the Borrower;
(f) Holdings, the Borrower or any Subsidiary shall (i) fail to pay
any principal or interest, regardless of amount, due in respect of any
Indebtedness in a principal amount in excess of $5,000,000, when and as the
same shall become due and payable, or (ii) fail to observe or perform any
other term, covenant, condition or agreement contained in any agreement or
instrument evidencing or governing any such Indebtedness referred to in clause
(i) if the effect of any failure referred to in this clause (ii) is to cause,
or to permit the holder or holders of such Indebtedness or a trustee on its or
their behalf (with or without the giving of notice, the lapse of time or both)
to cause, such Indebtedness to become due prior to its stated maturity;
(g) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i)
relief in respect of Holdings, the Borrower or any Subsidiary (other than an
Excluded Subsidiary), or of a substantial part of the property or assets of
Holdings, the Borrower or a Subsidiary (other than an Excluded Subsidiary),
under Title 11 of the United States Code, as now constituted or hereafter
amended, or any other Federal or state bankruptcy, insolvency, receivership or
similar law, (ii) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for Holdings, the Borrower or
any Subsidiary (other than an Excluded Subsidiary) or for a substantial part
of the property or assets of Holdings, the Borrower or a Subsidiary (other
than an Excluded Subsidiary) or (iii) the winding-up or liquidation of
Holdings, the Borrower or any Subsidiary (other than an Excluded Subsidiary);
and such proceeding or petition shall continue undismissed for 60 days or an
order or decree approving or ordering any of the foregoing shall be entered;
(h) Holdings, the Borrower or any Subsidiary (other than an Excluded
Subsidiary) shall (i) voluntarily commence any proceeding or file any petition
seeking relief under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other Federal or state bankruptcy, insolvency,
receivership or similar law, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or the filing of
any petition described in (g) above, (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for Holdings, the Borrower or any Subsidiary (other than an
Excluded Subsidiary) or for a substantial part of the property or assets of
Holdings, the Borrower or any Subsidiary (other than an Excluded Subsidiary),
(iv) file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for the
benefit of creditors, (vi) become unable, admit in writing its inability or
fail generally to pay its debts as they become due or (vii) take any corporate
action for the purpose of effecting any of the foregoing;
(i) one or more judgments for the payment of money in an aggregate
amount in excess of $5,000,000 shall be rendered against Holdings, the
Borrower, any Subsidiary (other than an Excluded Subsidiary) or any
combination thereof and the same shall remain undischarged for a period of 30
consecutive days during which execution shall not be effectively stayed, or
any action shall be legally taken by a judgment creditor to levy upon assets
or properties of Holdings, the Borrower or any Subsidiary (other than an
Excluded Subsidiary) to enforce any such judgment;
(j) (i) a Reportable Event or Reportable Events, or a failure to
make a required installment or other payment (within the meaning of Section
412(n)(1) of the Code), shall have occurred with respect to any Plan or Plans
that reasonably could be expected to result in liability of the Borrower to
the PBGC or to a Plan in an aggregate amount exceeding $5,000,000 and, within
30 days after the reporting of any such Reportable Event to the Administrative
Agent or after the receipt by the Administrative Agent of a statement required
pursuant to Section 5.06(b)(iii) hereof, the Administrative Agent shall have
notified the Borrower in writing that (A) the Required Leaders have made a
determination that, on the basis of such Reportable Event
- 53 -
or Reportable Events or the failure to make a required payment, there are
reasonable grounds for the termination of such Plan or Plans by the PBGC, the
appointment by the appropriate United States district court of a trustee to
administer such Plan or Plans or the imposition of a lien in favor of a Plan
and (B) as a result thereof an Event of Default exists hereunder; or (ii) a
trustee shall be appointed by a United States district court to administer any
such Plan or Plans; or (iii) the PBGC shall institute proceedings (including
giving notice of intent thereof) to terminate any such Plan or Plans;
(k) (i) the Borrower or any ERISA Affiliate shall have been notified
by the sponsor of a Multiemployer Plan that it has incurred Withdrawal
Liability to such Multiemployer Plan, (ii) the Borrower or such ERISA
Affiliate does not have reasonable grounds for contesting such Withdrawal
Liability or is not contesting such Withdrawal Liability in a timely and
appropriate manner and (iii) the amount of such Withdrawal Liability specified
in such notice, when aggregated with all other amounts required to be paid to
Multiemployer Plans in connection with Withdrawal Liabilities (determined as
of the date or dates of such notification), either (A) exceeds $5,000,000 or
requires payments exceeding $1,000,000 in any year or (B) is less than
$5,000,000 but any Withdrawal Liability payment remains unpaid 30 days after
such payment is due;
(l) the Borrower or any ERISA Affiliate shall have been notified by
the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of
ERISA, if solely as a result of such reorganization or termination the
aggregate annual contributions of the Borrower and its ERISA Affiliates to all
Multiemployer Plans that are then in reorganization or have been or are being
terminated have been or will be increased over the amounts required to be
contributed to such Multiemployer Plans for their most recently completed plan
years by an amount exceeding $1,000,000;
(m) at any time after the Closing Date (i) any security interest
purported to be created by any Security Document shall cease to be, or shall
be asserted by the Borrower or any other Loan Party not to be, a valid,
perfected, first priority (except as otherwise expressly provided in this
Agreement or such Security Document) security interest in the securities,
assets or properties covered thereby, except to the extent that any such loss
of perfection or priority results from the failure of the Collateral Agent to
maintain possession of certificates representing securities pledged under the
Pledge Agreement and except to the extent that such loss is covered by a
lender's title insurance policy and the related insurer promptly after such
loss shall have acknowledged in writing that such loss is covered by such
title insurance policy, and (ii) the aggregate fair market value of the
Collateral affected by the circumstances described in clause (i) above exceeds
$2,500,000;
(n) at any time after the Closing Date, the Guarantee Agreement
shall cease to be, or shall be asserted by any Guarantor not to be, a valid,
binding and enforceable agreement;
(o) there shall have occurred a Change in Control;
(p) the Borrower shall be required to purchase receivables, or make
any payments in respect of indemnities, pursuant to a Permitted Receivables
Facility or pursuant to a facility that previously was a Permitted Receivables
Facility, and the aggregate amount (in respect of all Permitted Receivables
Facilities) of all such purchases and payments after the Closing Date exceeds
$5,000,000; or
(q) it is discovered that (i) Hazardous Materials have been
transported from any of the Properties or generated, treated, stored or
disposed of at, on or under any of the Properties in a manner that has
resulted in, or could reasonably be anticipated to result in, an Environmental
Claim, or (ii) the Borrower or any of its Subsidiaries has retained or assumed
any liability, contractually, by operation of law or otherwise, with respect
to the generation, treatment, storage or disposal of Hazardous Materials, and,
in any
- 54 -
such case described in clause (i) or (ii) above, the Administrative Agent
shall have notified the Borrower in writing that the Required Lenders have
determined that such Environmental Claims and other liabilities, in the
aggregate, have resulted in, or could reasonably be anticipated to result in,
a Material Adverse Effect and, as a result thereof, an Event of Default exists
hereunder;
then, and in every such event (other than an event with respect to the Borrower
described in paragraph (g) or (h) above), and at any time thereafter during the
continuance of such event, the Administrative Agent may, and at the request of
the Required Lenders shall, by notice to the Borrower, take either or both of
the following actions, at the same or different times: (i) terminate forthwith
the Commitments and (ii) declare the Loans then outstanding to be forthwith due
and payable in whole or in part, whereupon the principal of the Loans so
declared to be due and payable, 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, anything contained herein or
in any other Loan Document to the contrary notwithstanding; and in any event
with respect to the Borrower described in paragraph (g) or (h) above, the
Commitments shall automatically terminate and the principal of the Loans then
outstanding, 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, including the obligation to provide cash collateral pursuant to
Section 2.20(j), shall automatically become due and payable, without
presentment, demand, protest or any other notice of any kind, all of which are
hereby expressly waived by the Borrower, anything contained herein or in any
other Loan Document to the contrary notwithstanding.
ARTICLE VIII. THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
In order to expedite the transactions contemplated by this
Agreement, The Chase Manhattan Bank is hereby appointed to act as Administrative
Agent and Collateral Agent on behalf of the Lenders and the Issuing Bank (for
purposes of this Article VIII, the Administrative Agent and the Collateral Agent
are referred to collectively as the "Agents"). Each of the Lenders and each
assignee of any such Lender hereby irrevocably authorizes the Agents to take
such actions on behalf of such Lender or assignee or the Issuing Bank and to
exercise such powers as are specifically delegated to the Agents by the terms
and provisions hereof and of the other Loan Documents, together with such
actions and powers as are reasonably incidental thereto. The Administrative
Agent is hereby expressly authorized by the Lenders and the Issuing Bank,
without hereby limiting any implied authority, (a) to receive on behalf of the
Lenders and the Issuing Bank all payments of principal of and interest on the
Loans, all payments in respect of L/C Disbursements and all other amounts due to
the Lenders hereunder, and promptly to distribute to each Lender or the Issuing
Bank its proper share of each payment so received; (b) to give notice on behalf
of each of the Lenders to the Borrower of any Event of Default specified in this
Agreement of which the Administrative Agent has actual knowledge acquired in
connection with its agency hereunder; and (c) to distribute to each Lender
copies of all notices, financial statements and other materials delivered by the
Borrower pursuant to this Agreement as received by the Administrative Agent.
Without limiting the generality of the foregoing, the Agents are hereby
expressly authorized to execute any and all documents (including releases) with
respect to the Collateral and the rights of the Secured Parties with respect
thereto, as contemplated by and in accordance with the provisions of this
Agreement and the Security Documents.
Neither the Agents nor any of their respective directors, officers,
employees or agents shall be liable as such for any action taken or omitted by
any of them except for its or his own gross negligence or wilful misconduct, or
be responsible for any statement, warranty or representation herein or the
contents of any document delivered in connection herewith, or be required to
ascertain or to make any inquiry concerning the performance or observance by the
Borrower or any other Loan Party of any of the terms, conditions, covenants or
agreements contained in any Loan Document. The Agents shall not be responsible
to the Lenders for the due
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execution, genuineness, validity, enforceability or effectiveness of this
Agreement or any other Loan Documents or other instruments or agreements. The
Agents shall in all cases be fully protected in acting, or refraining from
acting, in accordance with written instructions signed by the Required Lenders
and, except as otherwise specifically provided herein, such instructions and any
action or inaction pursuant thereto shall be binding on all the Lenders. Each
Agent shall, in the absence of knowledge to the contrary, be entitled to rely on
any instrument or document believed by it in good faith to be genuine and
correct and to have been signed or sent by the proper person or persons. Neither
the Agents nor any of their respective directors, officers, employees or agents
shall have any responsibility to the Borrower or any other Loan Party on account
of the failure of or delay in performance or breach by any Lender or the Issuing
Bank of any of its obligations hereunder or to any Lender or the Issuing Bank on
account of the failure of or delay in performance or breach by any other Lender
or the Issuing Bank or the Borrower or any other Loan Party of any of their
respective obligations hereunder or under any other Loan Document or in
connection herewith or therewith. Each of the Agents may execute any and all
duties hereunder by or through agents or employees and shall be entitled to rely
upon the advice of legal counsel selected by it with respect to all matters
arising hereunder and shall not be liable for any action taken or suffered in
good faith by it in accordance with the advice of such counsel.
The Lenders hereby acknowledge that neither Agent shall be under any
duty to take any discretionary action permitted to be taken by it pursuant to
the provisions of this Agreement unless it shall be requested in writing to do
so by the Required Lenders.
Subject to the appointment and acceptance of a successor Agent as
provided below, either Agent may resign at any time by notifying the Lenders and
the Borrower. Upon any such resignation, the Required Lenders shall have the
right to appoint a successor reasonably acceptable to the Borrower (it being
understood that any Lender is deemed to be acceptable to the Borrower). If no
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Agent gives notice
of its resignation, then the retiring Agent may, on behalf of the Lenders,
appoint a successor Agent reasonably acceptable to the Borrower (it being
understood that any Lender is deemed to be acceptable to the Borrower) which
shall be either a Lender or a bank with an office in New York, New York, having
a combined capital and surplus of at least $500,000,000 or an Affiliate of any
such bank. Upon the acceptance of any appointment as Agent hereunder by a
successor bank, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent and the retiring
Agent shall be discharged from its duties and obligations hereunder. After the
Agent's resignation hereunder, the provisions of this Article and Section 9.05
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as Agent.
With respect to the Loans made or Letters of Credit issued by it
hereunder, each Agent in its individual capacity and not as Agent shall have the
same rights and powers as any other Lender and may exercise the same as though
it were not an Agent, and the Agents and their Affiliates may accept deposits
from, lend money to and generally engage in any kind of business with the
Borrower or any Subsidiary or other Affiliate thereof as if it were not the an
Agent.
Each Lender agrees (i) to reimburse the Agents, on demand, in the
amount of its Pro Rata Percentage of any expenses incurred for the benefit of
the Lenders by the Agents, including counsel fees and compensation of agents and
employees paid for services rendered on behalf of the Lenders, which shall not
have been reimbursed by the Borrower and (ii) to indemnify and hold harmless
each Agent and any of its directors, officers, employees or agents, on demand,
in the amount of such Pro Rata Percentage, from and against any and all
liabilities, taxes, 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 in its capacity as Agent
or any of them in any way relating to or arising out of this Agreement or any
other Loan Document or any action taken or omitted by it or any of them under
this Agreement or any other Loan Document, to the extent the same shall not have
been reimbursed by the Borrower; provided that no Lender
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shall be liable to an Agent for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the gross negligence or wilful misconduct of such
Agent or any of its directors, officers, employees or agents.
Each Lender acknowledges that it has, independently and without
reliance upon the Agents or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Agents or any other Lender and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement or any other Loan Document, any related
agreement or any document furnished hereunder or thereunder.
ARTICLE IX. MISCELLANEOUS
SECTION 9.01. Notices. Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by telecopy, as follows:
(a) if to the Borrower or Holdings, to it at Ethan ▇▇▇▇▇ Drive,
Danbury, CT 06811, Attention of Chief Financial Officer or Treasurer (Telecopy
No. (▇▇▇) ▇▇▇-▇▇▇▇), with copies to (i) in the case of any notice or
communication other than routine notices and communications under Article II,
the attention of General Counsel at the aforesaid address and (ii) in the case
of any notice or communication relating to a Default or an Event of Default,
▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, Esq. (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇);
(b) if to the Administrative Agent, to The Chase Manhattan Bank Loan
and Agency Services Group, One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇, Attention of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇), with a copy to
The Chase Manhattan Bank, at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇
▇. ▇▇▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇); and
(c) if to a Lender, to it at its address (or telecopy number) set
forth in Schedule 2.01 or in the Assignment and Acceptance pursuant to which
such Lender shall have become a party hereto.
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
date of receipt if delivered by hand or overnight courier service or sent by
telecopy or on the date five Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section 9.01 or in accordance with
the latest unrevoked direction from such party given in accordance with this
Section 9.01.
SECTION 9.02. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Borrower or Holdings herein and in
the certificates or other instruments prepared or delivered in connection with
or pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders and the Issuing Bank and shall survive the
making by the Lenders of the Loans and the issuance of Letters of Credit by the
Issuing Bank, regardless of any investigation made by the Lenders or the Issuing
Bank or on their behalf, and shall continue in full force and effect as long as
the principal of or any accrued interest on any Loan or any Fee or any other
amount payable under this Agreement or any other Loan Document is outstanding
and unpaid or any Letter of Credit is outstanding and so long as the Commitments
have not been terminated.
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SECTION 9.03. Binding Effect. This Agreement shall become effective
when it shall have been executed by the Borrower, Holdings and the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto, and the conditions to effectiveness set forth in
Section 4.02 have been satisfied or waived, and thereafter shall be binding upon
and inure to the benefit of the parties hereto and their respective permitted
successors and assigns.
SECTION 9.04. Successors and Assigns. (a) Whenever in this Agreement
any of the parties hereto is referred to, such reference shall be deemed to
include the permitted successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of the Borrower, Holdings, the
Administrative Agent, the Issuing Bank or the Lenders that are contained in this
Agreement shall bind and inure to the benefit of their respective successors and
assigns.
(b) Each Lender may assign to one or more assignees all or a portion
of its interests, rights and obligations under this Agreement (including all or
a portion of its Commitment and the Loans at the time owing to it); provided,
however, that (i) except in the case of an assignment to a Lender or an
Affiliate of such Lender, the Borrower and the Administrative Agent (and, in the
case of any assignment of a Revolving Credit Commitment, the Issuing Bank and
the Swingline Lender) must give their prior written consent to such assignment
(which consent shall not be unreasonably withheld), (ii) the amount of the
Commitment of the assigning Lender subject to each such assignment of less than
all its Commitment (determined as of the date the Assignment and Acceptance with
respect to such assignment is delivered to the Administrative Agent) shall not
be less than $5,000,000, (iii) the parties to each such assignment shall execute
and deliver to the Administrative Agent an Assignment and Acceptance, together
with a processing and recordation fee of $3,500 and (iv) the assignee, if it
shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire. Upon acceptance and recording pursuant to
paragraph (e) of this Section 9.04, from and after the effective date specified
in each Assignment and Acceptance, which effective date shall be at least five
Business Days after the execution thereof, (A) the assignee thereunder shall be
a party hereto and, to the extent of the interest assigned by such Assignment
and Acceptance, have the rights and obligations of a Lender under this Agreement
and (B) the assigning Lender thereunder shall, to the extent of the interest
assigned by 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 but shall
continue to be entitled to the benefits of Sections 2.11, 2.13, 2.17 and 9.05,
as well as to any Fees accrued for its account and not yet paid).
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim and that
its Revolving Credit Commitment, and the outstanding balance of its Revolving
Loans, in each case without giving effect to assignments thereof which have not
become effective, are as set forth in such Assignment and Acceptance, (ii)
except as set forth in (i) above, such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement, or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement, any other Loan Document or any other instrument or
document furnished pursuant hereto, or the financial condition of the Borrower
or any Subsidiary or the performance or observance by the Borrower or any
Subsidiary of any of its obligations under this Agreement, any other Loan
Document or any other instrument or document furnished pursuant hereto; (iii)
such assignee represents and warrants that it is legally authorized to enter
into such Assignment and Acceptance; (iv) such assignee confirms that it has
received a copy of this Agreement, together with copies of the most recent
financial statements, if any, delivered pursuant to Section 5.04 and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (v) such
assignee will independently and without reliance upon the
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Administrative Agent, the Collateral Agent, such assigning Lender or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement; (vi) such assignee appoints and authorizes the
Administrative Agent and the Collateral 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 and the Collateral Agent, respectively, by the terms
hereof, together with such powers as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with their terms
all the obligations which by the terms of this Agreement are required to be
performed by it as a Lender.
(d) The Administrative Agent, acting for this purpose as an agent of
the Borrower, shall maintain at one of its offices in The City of New York 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 Commitment of,
and principal amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the "Register"). The entries in the Register shall be
conclusive and the Borrower, the Administrative Agent, the Issuing Bank, the
Collateral Agent and the Lenders may treat each person whose name is recorded in
the Register pursuant to the terms hereof as a Lender hereunder for all purposes
of this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower, the Issuing Bank, the Collateral Agent
and any Lender, at any reasonable time and from time to time upon reasonable
prior notice.
(e) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, an Administrative Questionnaire
completed in respect of the assignee (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) above and, if required, the written consent of the Borrower, the Swingline
Lender, the Issuing Bank and the Administrative Agent to such assignment, the
Administrative Agent shall (i) accept such Assignment and Acceptance, (ii)
record the information contained therein in the Register and (iii) give prompt
notice thereof to the Lenders, the Issuing Bank and the Swingline Lender. No
assignment shall be effective unless it has been recorded in the Register as
provided in this paragraph (e).
(f) Each Lender may without the consent of the Borrower, the
Swingline Lender, the Issuing Bank or the Administrative Agent sell
participations to one or more banks or other entities in all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans owing to it); provided, however, that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, (iii) the participating banks or other entities shall be
entitled to the benefit of the cost protection provisions contained in Sections
2.11, 2.13 and 2.17 to the same extent as if they were Lenders and (iv) the
Borrower, the Administrative Agent, the Issuing Bank and the Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement, and such Lender shall
retain the sole right to enforce the obligations of the Borrower relating to the
Loans or L/C Disbursements and to approve any amendment, modification or waiver
of any provision of this Agreement (other than amendments, modifications or
waivers decreasing any fees payable hereunder or the amount of principal of or
the rate at which interest is payable on the Loans, extending any scheduled
principal payment date or date fixed for the payment of interest on the Loans,
changing or extending the Commitments or releasing all or substantially all the
Collateral).
(g) Any Lender or participant may, in connection with any assignment
or participation or proposed assignment or participation pursuant to this
Section 9.04, disclose to the assignee or participant or proposed assignee or
participant any information relating to any Loan Party furnished to such Lender
by or on behalf of the Borrower; provided that, prior to any such disclosure of
information designated by the Borrower as confidential, each such assignee or
participant or proposed assignee or participant shall execute an agreement
whereby such assignee or participant shall agree (subject to customary
exceptions) to preserve the confidentiality
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of such confidential information on terms no less restrictive than those
applicable to the Lenders pursuant to Section 9.16.
(h) Any Lender may at any time assign all or any portion of its
rights under this Agreement to a Federal Reserve Bank to secure extensions of
credit by such Federal Reserve Bank to such Lender; provided that no such
assignment shall release a Lender from any of its obligations hereunder or
substitute any such Bank for such Lender as a party hereto. In order to
facilitate such an assignment to a Federal Reserve Bank, the Borrower shall, at
the request of the assigning Lender, duly execute and deliver to the assigning
Lender a promissory note or notes evidencing the Loans made to the Borrower by
the assigning Lender hereunder.
(i) Neither Holdings nor the Borrower shall assign or delegate any
of its rights or duties hereunder without the prior written consent of the
Administrative Agent, the Issuing Bank and each Lender, and any attempted
assignment without such consent shall be null and void.
(j) In the event that S&P, ▇▇▇▇▇'▇ or ▇▇▇▇▇▇▇▇'▇ BankWatch (or
InsuranceWatch Ratings Service, in the case of Lenders that are insurance
companies (or Best's Insurance Reports, if such insurance company is not rated
by Insurance Watch Ratings Service)) shall, after the date that any Lender
becomes a Lender, downgrade the long-term certificate deposit ratings of such
Lender, and the resulting ratings shall be below BBB-, Baa3 and C (or BB, in the
case of a Lender that is an insurance company (or B, in the case of an insurance
company not rated by InsuranceWatch Ratings Service)), then the Issuing Bank or
the Swingline Lender shall have the right, but not the obligation, at its own
expense, upon notice to such Lender and the Administrative Agent, to replace (or
to request the Borrower to use its reasonable efforts to replace) such Lender
with an assignee (in accordance with and subject to the restrictions contained
in paragraph (b) above), and such Lender hereby agrees to transfer and assign
without recourse (in accordance with and subject to the restrictions contained
in paragraph (b) above) all its interests, rights and obligations in respect of
its Revolving Credit Commitment to such assignee; provided, however, that (i) no
such assignment shall conflict with any law, rule and regulation or order of any
Governmental Authority and (ii) the Issuing Bank or the Swingline Lender or such
assignee, as the case may be, shall pay to such Lender in immediately available
funds on the date of such assignment the principal of and interest accrued to
the date of payment on the Loans made by such Lender hereunder and all other
amounts accrued for such Lender's account or owed to it hereunder.
SECTION 9.05. Expenses; Indemnity. (a) The Borrower agrees to pay
all out-of-pocket expenses reasonably incurred by the Administrative Agent, the
Collateral Agent, the Issuing Bank and the Swingline Lender in connection with
the preparation and administration of this Agreement and the other Loan
Documents or in connection with any amendments, modifications or waivers of the
provisions hereof or thereof (whether or not the transactions hereby
contemplated shall be consummated) or incurred by the Administrative Agent, the
Collateral Agent, the Issuing Bank or any Lender in connection with the
enforcement or protection of their rights in connection with this Agreement and
the other Loan Documents or in connection with the Loans made or Letters of
Credit issued hereunder, including the reasonable fees, charges and
disbursements of Cravath, Swaine & ▇▇▇▇▇, counsel for the Administrative Agent
and the Collateral Agent, and, in connection with any such enforcement or
protection, the reasonable fees, charges and disbursements of not more than one
other counsel for the Administrative Agent, the Collateral Agent, the Issuing
Bank and the Lenders in each jurisdiction where enforcement is sought.
(b) The Borrower agrees to indemnify the Administrative Agent, the
Collateral Agent, each Lender and the Issuing Bank, each Affiliate of any of the
foregoing persons and each of their respective directors, officers, employees
and agents (each such person being called an "Indemnitee") against, and to hold
each Indemnitee harmless from, any and all losses, claims, damages, liabilities
and related expenses, including reasonable counsel fees, charges and
disbursements, incurred by or asserted against any Indemnitee arising out of, in
any way connected with, or as a result of (i) the execution or delivery of this
Agreement or any other
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Loan Document or any agreement or instrument contemplated thereby, the
performance by the parties thereto of their respective obligations thereunder or
the consummation of the Transactions and the other transactions contemplated
thereby, (ii) the use of the proceeds of the Loans or issuance of Letters of
Credit, (iii) any claim, litigation, investigation or proceeding relating to any
of the foregoing, whether or not any Indemnitee is a party thereto, or (iv) any
actual or alleged presence or Release of Hazardous Materials on any property
owned or operated by the Borrower or any of the Subsidiaries, or any
Environmental Claim related in any way to the Borrower or the Subsidiaries;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
resulted from the gross negligence or wilful misconduct of such Indemnitee.
(c) The provisions of this Section 9.05 shall remain operative and
in full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the expiration of the Commitments, the expiration
of any Letter of Credit, the invalidity or unenforceability of any term or
provision of this Agreement or any other Loan Document, or any investigation
made by or on behalf of the Administrative Agent, the Collateral Agent, any
Lender or the Issuing Bank. All amounts due under this Section 9.05 shall be
payable on written demand therefor.
SECTION 9.06. Right of Setoff. If an Event of Default shall have
occurred and be continuing, 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 such Lender to or
for the credit or the account of the Borrower against any of and all the
obligations of the Borrower now or hereafter existing under this Agreement and
other Loan Documents held by such Lender, irrespective of whether or not such
Lender shall have made any demand under this Agreement or such other Loan
Document and although such obligations may be unmatured. The rights of each
Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.
SECTION 9.07. APPLICABLE LAW. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS (OTHER THAN LETTERS OF CREDIT AND AS EXPRESSLY SET FORTH IN OTHER LOAN
DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK. EACH LETTER OF CREDIT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF
CREDIT, OR IF NO SUCH LAWS OR RULES ARE DESIGNATED, THE UNIFORM CUSTOMS AND
PRACTICE FOR DOCUMENTARY CREDITS (1993 REVISION), INTERNATIONAL CHAMBER OF
COMMERCE, PUBLICATION NO. 500 (THE "UNIFORM CUSTOMS") AND, AS TO MATTERS NOT
GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF THE STATE OF NEW YORK.
SECTION 9.08. Waivers; Amendment. (a) No failure or delay of the
Administrative Agent, the Collateral Agent, any Lender or the Issuing Bank in
exercising any power or right hereunder or under any Loan Document shall operate
as a waiver thereof, nor shall any single or partial exercise of any such right
or power, or any abandonment or discontinuance of steps to enforce such a right
or power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Administrative Agent, the
Collateral Agent, the Issuing Bank and the Lenders hereunder and under the other
Loan Documents are cumulative and are not exclusive of any rights or remedies
which they would otherwise have. No waiver of any provision of this Agreement or
any other Loan Document or consent to any departure by the Borrower, Holdings or
any other Loan Party therefrom shall in any event be effective unless the same
shall be permitted by paragraph (b) below, and then such waiver or consent shall
be effective only in the specific instance and for the purpose for which given.
No notice or demand on the Borrower or Holdings in
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any case shall entitle the Borrower or Holdings to any other or further notice
or demand in similar or other circumstances.
(b) Neither this Agreement, the other Loan Documents, nor any
provision thereof may be waived, amended or modified except pursuant to an
agreement or agreements in writing entered into by the Borrower, Holdings and
the Required Lenders; provided, however, that no such agreement shall (i)
decrease the principal amount of, or extend the maturity of or any scheduled
principal payment date or date for the payment of any interest on any Loan or
any date for reimbursement of an L/C Disbursement, or waive or excuse any such
payment or any part thereof, or decrease the rate of interest on any Loan or L/C
Disbursement, without the prior written consent of each Lender affected thereby,
(ii) change or extend the Commitment or decrease or extend the date for payment
of any of the Fees of any Lender without the prior written consent of such
Lender, or (iii) amend or modify the provisions of Section 2.14 or 2.15, the
provisions of this Section, the definition of "Required Lenders" or any
provision of any Loan Document that by its terms expressly requires the consent
or approval of all the Lenders, or release all or any substantial part of the
Collateral, without the prior written consent of each Lender; provided further
that no such agreement shall amend, modify or otherwise affect the rights or
duties of the Administrative Agent, the Collateral Agent, the Issuing Bank or
the Swingline Lender hereunder or under any other Loan Document without the
prior written consent of the Administrative Agent, the Collateral Agent, the
Issuing Bank or the Swingline Lender.
SECTION 9.09. Interest Rate Limitation. Notwithstanding anything
herein to the contrary, if at any time the interest rate applicable to any Loan
or participation in any L/C Disbursement, together with all fees, charges and
other amounts which are treated as interest on such Loan or participation in
such L/C Disbursement under applicable law (collectively the "Charges"), shall
exceed the maximum lawful rate (the "Maximum Rate") which may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan or
participation in accordance with applicable law, the rate of interest payable in
respect of such Loan or participation hereunder, together with all Charges
payable in respect thereof, shall be limited to the Maximum Rate and, to the
extent lawful, the interest and Charges that would have been payable in respect
of such Loan or participation but were not payable as a result of the operation
of this Section shall be cumulated and the interest and Charges payable to such
Lender in respect of other Loans or participations or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.
SECTION 9.10. Entire Agreement. This Agreement and the other Loan
Documents constitute the entire contract between the parties relative to the
subject matter hereof. Any previous agreement among the parties with respect to
the subject matter hereof is superseded by this Agreement and the other Loan
Documents. Nothing in this Agreement or in the other Loan Documents, expressed
or implied, is intended to confer upon any party other than the parties hereto
and thereto any rights, remedies, obligations or liabilities under or by reason
of this Agreement or the other Loan Documents.
SECTION 9.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS
APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 9.11.
- 62 -
SECTION 9.12. Severability. In the event any one or more of the
provisions contained in this Agreement or in any other Loan Document should be
held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby. The parties shall endeavor
in good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
SECTION 9.13. Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original but all of which when taken together shall
constitute a single contract, and shall become effective as provided in Section
9.03. Delivery of an executed signature page to this Agreement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Agreement.
SECTION 9.14. Headings. Article and Section headings and the Table
of Contents used herein are for convenience of reference only, are not part of
this Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
SECTION 9.15. Jurisdiction; Consent to Service of Process. (a) Each
of Holdings and the Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New York State
court or Federal court of the United States of America sitting in New York City,
and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement or the other Loan Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that any Lender may otherwise have to bring any action or proceeding
relating to this Agreement or the other Loan Documents against the Borrower,
Holdings or their respective properties in the courts of any jurisdiction.
(b) Each of Holdings and the Borrower hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this agreement or
the other Loan Documents in any New York State or Federal court. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 9.16. Confidentiality. The Administrative Agent, the
Collateral Agent, the Issuing Bank and each of the Lenders agrees to keep
confidential (and to use its best efforts to cause its respective agents and
representatives to keep confidential) the Information (as defined below) and all
copies thereof, extracts therefrom and analyses or other materials based
thereon, except that the Administrative Agent, the Collateral Agent, the Issuing
Bank or any Lender shall be permitted to disclose Information (a) to such of its
respective officers, directors, employees, agents and representatives as need to
know such Information, (b) to the extent requested by any regulatory authority,
(c) to the extent otherwise required by applicable laws and regulations or by
any subpoena or similar legal process, (d) in connection with any suit, action
or proceeding relating to the enforcement of its rights hereunder or under the
other Loan Documents, (e) to any other party to this Agreement or (f) to the
extent such Information (i) becomes publicly available other than as a result of
a
- 63 -
breach of this Agreement or (ii) becomes available to the Administrative Agent,
the Issuing Bank, any Lender or the Collateral Agent on a nonconfidential basis
from a source other than the Borrower or Holdings. For the purposes of this
Section, "Information" shall mean all financial statements, certificates,
reports, agreements and information (including all analyses, compilations and
studies prepared by the Administrative Agent, the Collateral Agent, the Issuing
Bank or any Lender based on any of the foregoing) that are received from the
Borrower or Holdings and related to the Borrower or Holdings, any shareholder of
the Borrower or Holdings or any employee, customer or supplier of the Borrower
or Holdings, other than any of the foregoing that were available to the
Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender on a
nonconfidential basis prior to its disclosure thereto by the Borrower or
Holdings, and which are in the case of Information provided after the date
hereof, clearly identified at the time of delivery as confidential. The
provisions of this Section 9.16 shall remain operative and in full force and
effect regardless of the expiration and term of this Agreement.
SECTION 9.17. Release of Collateral. Notwithstanding any contrary
provision herein or in any other Loan Document, the Collateral Agent shall
acknowledge the termination of the Security Documents and, at the Borrower's
expense, release the Collateral from the Liens and security interests thereunder
at such time as (a) the Senior Notes are rated Baa3 (or better) by ▇▇▇▇▇'▇ and
BBB- (or better) by S&P and (b) no Default or Event of Default has occurred and
is continuing. For purposes of the foregoing, the Collateral Agent may rely upon
a certificate signed by a Financial Officer of the Borrower as to satisfaction
of the conditions set forth in clauses (a) and (b) of the preceding sentence,
attaching letters or other communications from ▇▇▇▇▇'▇ and S&P confirming the
matters set forth in such clause (a). Any such termination and release shall not
require the consent of any Lender. Any such release shall be without recourse
to, or representation or warranty by, the Collateral Agent. Upon any such
termination and release, the representations, warranties and agreements of
Holdings and the Borrower hereunder with respect to the Security Documents and
the Collateral, including those set forth in Section 3.19, Section 5.09 (except
with respect to the Guarantee Agreement) and clause (m) of Article VII, shall
cease to have any force and effect.
SECTION 9.18. Defaulting Lender. If any Lender shall refuse to make
any Loan required to be made by it hereunder or to fund its participation in any
L/C Disbursement or Swingline Loan hereunder, or shall notify the Borrower or
the Administrative Agent in writing that it does not intend to make any such
Loan or fund any such participation, in either case as a result of any takeover
of such Lender by any regulatory authority or agency (any such Lender, a
"Defaulting Lender"), then, unless and until such Defaulting Lender retracts in
writing any such notice and cures all defaults on its part in respect of the
funding of its Pro Rata Percentage of all outstanding Loans, L/C Disbursements
and Swingline Loans, (a) any of the Borrower, the Administrative Agent, the
Issuing Bank and the Swingline Lender may require such Defaulting Lender to
transfer and assign all of its interests, rights and obligations under this
Agreement to an assignee in the same manner and effect as provided in Section
2.18(a), the provisions of which shall apply, mutatis mutandis, to any such
assignment, (b) such Defaulting Lender shall not be entitled to exercise any
right of setoff under Section 9.06 and (c) to the maximum extent permitted by
applicable law, such Defaulting Lender shall be deemed not to be a "Lender", the
Revolving Credit Commitment of such Defaulting Lender shall be deemed not to be
in effect and such Defaulting Lender's Revolving Credit Exposure shall be deemed
not to exist, in each case solely for purposes of the definition of the term
"Required Lenders" and determining whether any waiver, amendment or modification
has been approved by the requisite Lenders in accordance with Section 9.08 or
any other applicable provision of the Loan Documents. In no event shall the
provisions of this Section be construed to release any Defaulting Lender from
its obligations hereunder to any other party hereto, including its obligations
to make Loans and participate in Letters of Credit and Swingline Loans, and such
provisions shall not prejudice any claims, or be construed to waive any rights,
including any rights to bring legal proceedings against such Defaulting Lender,
which the Administrative Agent, any Lender, the Issuing Bank or any Loan Party
may have against such Defaulting Lender as a result of any failure by such
Defaulting Lender to honor its obligations under this Agreement.
- 64 -
SECTION 9.19. Release of Mortgages. The Lenders hereby consent to
the discharge and release of the Mortgaged Properties from the Liens created
under the Mortgages. Promptly after the Restatement Effective Date, the
Collateral Agent shall (at the Borrower's expense) take all necessary actions,
including but not limited to the execution and filing of mortgage releases, as
the Borrower shall reasonably request to effectuate such discharge and release.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
ETHAN ▇▇▇▇▇ INC.,
by
/s/ ▇. ▇▇▇▇▇▇ Kathwari
Name: ▇. ▇▇▇▇▇▇ Kathwari
Title: President
ETHAN ▇▇▇▇▇ INTERIORS INC.,
by
/s/ ▇. ▇▇▇▇▇▇ Kathwari
Name: ▇. ▇▇▇▇▇▇ Kathwari
Title: President
THE CHASE MANHATTAN BANK, individually
and as Administrative Agent, Collateral Agent and
Swingline Lender,
by
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
BANK OF MONTREAL,
by
/s/ ▇▇▇▇ Pole
Name: ▇▇▇▇ Pole
Title: Director
- 65 -
THE BANK OF NEW YORK,
by
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Vice President
THE FIRST NATIONAL BANK OF BOSTON,
by
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Director
FLEET NATIONAL BANK,
by
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: AVP
THE FUJI BANK, LIMITED, NEW YORK
BRANCH,
by
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President & Manager
▇▇▇▇▇▇ BANK LTD, NEW YORK BRANCH,
by
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: VP
by
/s/ ▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
- 66 -
SAKURA BANK,
by
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
SANWA BANK,
by
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Assistant Vice President
WACHOVIA BANK, [of Georgia]
by
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: SVP
YASUDA TRUST & BANKING CO., LTD.,
by
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
- 67 -
EXHIBIT A
ADMINISTRATIVE QUESTIONNAIRE
Please accurately complete the following information and return via FAX to the
attention of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ at the Loan and Agency Services Group, as soon as
possible.
FAX Number: ▇▇▇-▇▇▇-▇▇▇▇
LEGAL NAME TO APPEAR IN DOCUMENTATION:
GENERAL INFORMATION - DOMESTIC LENDING OFFICE:
Institution Name:_______________________________________________________________
Street Address:_________________________________________________________________
City, State, Zip Code:__________________________________________________________
GENERAL INFORMATION - EURODOLLAR LENDING OFFICE:
Institution Name:_______________________________________________________________
Street Address:_________________________________________________________________
City, State, Zip Code:__________________________________________________________
CONTRACTS/NOTIFICATION METHODS:
CREDIT CONTACTS:
Primary Contact:________________________________________________________________
Street Address:_________________________________________________________________
City, State, Zip Code:__________________________________________________________
Phone Number:___________________________________________________________________
FAX Number:_____________________________________________________________________
Backup Contact:_________________________________________________________________
Street Address:_________________________________________________________________
City, State, Zip Code:__________________________________________________________
Phone Number:___________________________________________________________________
FAX Number:_____________________________________________________________________
TAX WITHHOLDING:
Non Resident Alien ____ Y ____ N
* Form 4224 Enclosed
-1-
Tax ID Number
CONTACTS/NOTIFICATION METHODS:
ADMINISTRATIVE CONTACTS--BORROWINGS, PAYDOWNS, INTEREST, FEES, ETC.
Contact:________________________________________________________________________
Street Address:_________________________________________________________________
City, State, Zip Code:__________________________________________________________
Phone Number:___________________________________________________________________
FAX Number:_____________________________________________________________________
BID LOAN NOTIFICATION:
Contact:________________________________________________________________________
Street Address:_________________________________________________________________
City, State, Zip Code:__________________________________________________________
Phone Number:___________________________________________________________________
FAX Number:_____________________________________________________________________
PAYMENT INSTRUCTIONS:
Name of Bank where funds are to be transferred:_________________________________
Routing Transit/ABA number of Bank where funds are to be transferred:___________
Name of Account, if applicable:_________________________________________________
Account Number:_________________________________________________________________
Additional Information:_________________________________________________________
MAILINGS:
Please specify who should receive financial information:________________________
Name:___________________________________________________________________________
Street Address:_________________________________________________________________
City, State, Zip Code:__________________________________________________________
-2-
It is very important that all of the above information is accurately filled in
and returned promptly. If there is someone other than yourself who should
receive this questionnaire, please notify us of their name and FAX number and we
will FAX them a copy of the questionnaire. If you have any questions, please
call me at ▇▇▇-▇▇▇-▇▇▇▇.
-3-
EXHIBIT B
[FORM OF]
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Amended and Restated Credit Agreement dated as of
December 4, 1996 (the "Credit Agreement"), among Ethan ▇▇▇▇▇ Inc., a Delaware
corporation, as borrower (the "Borrower"), Ethan ▇▇▇▇▇ Interiors Inc., a
Delaware corporation ("Holdings"), the financial institutions named therein, as
lenders (the "Lenders"), the Issuing Bank (such term and each other capitalized
term used but not defined herein shall have the meaning assigned to it in the
Credit Agreement and the other Loan Documents, as applicable) and The Chase
Manhattan Bank, as administrative agent (in such capacity, the "Administrative
Agent"), for the Lenders.
1. The Assignor hereby sells and assigns, without recourse, to the
Assignee, and the Assignee hereby pur chases and assumes, without recourse, from
the Assignor, effective as of the Effective Date set forth below, the interests
set forth below (the "Assigned Interest") in the Assignor's rights and
obligations under the Credit Agreement, including, without limitation, the
percentages and amounts set forth below of (i) the Revolving Credit Commitment
of the Assignor on the Effective Date, (ii) the Revolving Loans owing to the
Assignor which are out standing on the Effective Date, together with unpaid
interest accrued on such assigned Revolving Loans to the Effective Date, (iii)
participations in Letters of Credit acquired from the Issuing Bank which are
outstanding on the Effective Date, (iv) participations in Swingline Loans
acquired from the Swingline Lender which are outstanding on the Effective Date
and (v) the Fees accrued to the Effective Date for the account of the Assignor.
Each of the Assignor and the Assignee hereby makes and agrees to be bound by all
the representations, warranties and agree ments set forth in Section 9.04(c) of
the Credit Agreement, a copy of which has been received by each such party. From
and after the Effective Date (x) the Assignee shall be a party to and be bound
by the provisions of the Credit Agreement and, to the extent of the interests
assigned by this Assignment and Acceptance, have the rights and obli gations of
a Lender thereunder and under the Loan Documents and (y) the Assignor shall, to
the extent of the inter ests assigned by this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Credit
Agreement.
2. This Assignment and Acceptance is being delivered to the Administrative
Agent together with (i) if the Assignee is organized under the laws of a
jurisdiction outside the United States, the forms specified in Section 2.17(g)
of the Credit Agreement, duly completed and executed by such Assignee, (ii) if
the Assignee is not already a Lender under the Credit Agreement, an
Administrative Questionnaire in the form of Exhibit A to the Credit Agreement
and (iii) a processing and recordation fee of $3,500.
3. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of New York.
Date of Assignment:_______________________________________________________
Legal Name of Assignor:___________________________________________________
Legal Name of Assignee:___________________________________________________
Assignee's Address for Notices:___________________________________________
Effective Date of Assignment
(may not be fewer than 5 Business
Days after the Date of Assignment):_______________________________________
-1-
Percentage Assigned of
Revolving Credit
Commitment and Revolving
Credit Exposure (set
forth, to at least 8
decimals, as a percentage
of the aggregate Revolving
Credit Commitments
Commitment Principal Amount Assigned of all Lenders thereunder)
---------- ------------------------- --------------------------
Revolving Credit: $____________ ____________%
Fees Assigned (if any): $____________ ____________%
The terms set forth above are
hereby agreed to:
________________, as Assignor,
By:___________________________
Name:_________________________
Title:________________________
________________, as Assignor,
By:___________________________
Name:_________________________
Title:________________________
-2-
Consented to by:
ETHAN ▇▇▇▇▇ INC., if required,
By:___________________________
Name:_________________________
Title:________________________
THE CHASE MANHATTAN BANK, if
required, as Administrative Agent,
Swingline Lender and Collateral Agent,
By:___________________________
Name:_________________________
Title:________________________
-3-
EXHIBIT C
[FORM OF]
BORROWING REQUEST
The Chase Manhattan Bank, as Administrative Agent
for the Lenders referred to below,
▇/▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Bank
1 Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
[Date]
Dear Ladies and Gentlemen:
The undersigned, Ethan ▇▇▇▇▇ Inc. (the "Company"), refers to the
$100,000,000 Amended and Restated Credit Agreement, dated as of December 4, 1996
(as amended or modified from time to time, the "Agreement"), among the Company,
Ethan ▇▇▇▇▇ Interiors Inc., the Lenders parties thereto and The Chase Manhattan
Bank, as Administrative Agent, Collateral Agent and Swingline Lender.
Capitalized terms used and not otherwise defined herein shall have the meanings
assigned to such terms in the Agreement.
The Company hereby gives you notice pursuant to Section 2.03 of the
Agreement that it requests a Borrowing under the Agreement, and in that
connection sets forth below the terms on which such Borrowing is requested to be
made:
(A) Date of Borrowing (which is a Business Day)
-------------
(B) Principal amount of Borrowing1/
-------------
(C) Interest rate basis2/
-------------
(D) Interest Period and the last day thereof3/
-------------
----------
1/ In the case of an ABR Borrowing, not less than $500,000 (and in
integral multiples of $100,000) or greater than the Total Revolving
Credit Commitment then available. In the case of a Eurodollar
Borrowing, not less than $500,000 (and in integral multiples of
$500,000) or greater than the Total Revolving Credit Commitment then
available.
2/ Eurodollar Borrowing or ABR Borrowing.
3/ Which shall be subject to the definition of "Interest Period" and end
not later than the Revolving Credit Maturity Date.
-1-
Upon acceptance of any or all of the Loans made by the Lenders in response
to this request, the Company shall be deemed to have represented and warranted
that the conditions specified in paragraphs (b) and (c) of Section 4.01 of the
Agreement have been satisfied. Any amounts borrowed shall be deposited in The
Chase Manhattan Bank account number [ ].
Very truly yours,
ETHAN ▇▇▇▇▇ INC.,
by
Name:
Title [Financial Officer]
-2-
EXHIBIT D
[FORM OF]
NOTE
New York, New York
[Date]
FOR VALUE RECEIVED, the undersigned, ETHAN ▇▇▇▇▇ INC., a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of
_______________________________ (the "Lender"), at the office of The Chase
Manhattan Bank (the "Administrative Agent") at 1 Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, on the Revolving Credit Maturity Date (as
defined in the Amended and Restated Credit Agreement dated as of December 4,
1996 (as amended or modified from time to time, the "Credit Agreement"), among
the Borrower, Ethan ▇▇▇▇▇ Interiors Inc., a Delaware corporation, the Lenders
named therein, and the Administrative Agent) the aggregate unpaid principal
amount of all Loans made to the Borrower by the Lender pursuant to the Credit
Agreement, in lawful money of the United States of America in immediately
available funds, and to pay interest on the principal amount hereof from time to
time outstanding, in like funds, at said office, at the rate or rates per annum
and payable on the dates provided in the Credit Agreement.
The Borrower promises to pay interest, on demand, on any overdue principal
and, to the extent permitted by law, overdue interest from their due dates at
the rate or rates provided in the Credit Agreement.
The Borrower hereby waives diligence, presentment, demand, protest and
notice of any kind whatsoever. The nonexercise by the holder of any of its
rights hereunder in any particular instance shall not constitute a waiver
thereof in that or any subsequent instance.
All borrowings evidenced by this Note and all payments and prepayments of
the principal hereof and interest hereon and the respective dates thereof shall
be endorsed by the holder hereof on the schedule attached hereto and made a part
hereof or on a continuation thereof that shall be attached hereto and made a
part hereof, or otherwise recorded by such holder in its internal records;
provided, however, that the failure of the holder hereof to make such a notation
or any error in such a notation shall not affect the obligations of the Borrower
under this Note.
This Note is one of the Notes referred to in the Credit Agreement, which,
among other things, contains provisions for the acceleration of the maturity
hereof upon the happening of certain events, for optional and mandatory
prepayment of the principal hereof prior to the maturity hereof and for the
amendment or waiver of certain provisions of the Credit Agreement, all upon the
terms and conditions therein specified. This Note is (i) secured as provided in
the Security Documents (as defined in the Credit Agreement) and (ii) guaranteed
pursuant to the Guarantee Agreement (as defined in the Credit Agreement). This
Note shall be governed by, and construed in accordance with, the laws of the
State of New York.
ETHAN ▇▇▇▇▇ INC.,
By:___________________________________
Name:_________________________________
Title:________________________________
-1-
Loans and Payments
Payments
Amount and -------------------- Unpaid Principal Name of Person
Date Type of Loan Principal Interest Balance of Note Making Notation
---- ------------ --------- -------- --------------- ---------------
-2-
SCHEDULE 1.01
MORTGAGED PROPERTIES
Amount of Insurance
Location Title Number Form of Ownership for Premium Purposes
1. Title No. N9300-1073 (2) Fee $10,008,000 Real Property
Danbury, Connecticut 9,927,000 Equipment
(headquarters and store)
2. Title No. N9300-1073 (31) Fee $ 5,404,000 Real Property
Spruce Pine, NC 11,000,000 Machinery
SCHEDULE 2.01
COMMITMENTS
Name and Address of Bank Commitment
The Chase Manhattan Bank $12,000,000
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention of: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Bank of Montreal 10,000,000
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention of: ▇▇▇▇ Pole
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
The Bank of New York 10,000,000
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention of: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
The First National Bank of Boston 10,000,000
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention of: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Fleet Bank 10,000,000
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention of: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
The Fuji Bank, Limited 10,000,000
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention of: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇/8
▇▇▇▇▇▇ Bank 10,000,000
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention of: ▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
The Sakura Bank, Limited 7,000,000
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention of: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
The Sanwa Bank, Limited 7,000,000
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention of: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Wachovia Bank 7,000,000
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention of: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
The Yasuda Trust and Banking Co., Ltd. 7,000,000
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention of: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Total $100,000,000
============
SCHEDULE 3.08
SUBSIDIARIES AND EXCLUDED SUBSIDIARIES
%Ownership By Jurisdiction of
Subsidiaries Ethan ▇▇▇▇▇ Inc. Organization
------------ ---------------- ------------
Andover Wood Products, Inc. 100% Maine
Ethan ▇▇▇▇▇ Manufacturing Corporation 100% Delaware
Ethan ▇▇▇▇▇ Finance Corporation 100% Delaware
Ethan ▇▇▇▇▇ (Canada) 100% Canada
%Ownership By Jurisdiction of
Excluded Subsidiaries Ethan ▇▇▇▇▇ Inc. Organization
--------------------- ---------------- ------------
Baumritter Corporation 100% Delaware
Baumritter Corporation 100% New York
Carriage House Furniture Inc. 100% Delaware
EA Enterprises Inc. 100% Florida
Ethan ▇▇▇▇▇ Adco Inc. 100% New York
Ethan ▇▇▇▇▇ Furniture Realty & Mfg. 100% New York
Corporation
Ethan ▇▇▇▇▇ Services Inc. 100% New York
KEA International Inc. 100% New York
Knob Creek, Inc. 100% North Carolina
Lake Avenue Associates Inc. 100% Connecticut
Manor House, Inc. 100% Delaware
Northeast Consolidated Inc. 100% Vermont
Riverside Water Works Inc. 100% Vermont
Ethan ▇▇▇▇▇ Foreign Sales
Corporation 100% U.S. Virgin
Islands
SCHEDULE 3.09
LITIGATION
None.
SCHEDULE 3.17
ENVIRONMENTAL MATTERS
Environmental Matters addressed in:
3.17(a) No exceptions
3.17(b) No exceptions
3.17(c) No exceptions
3.17(d) No exceptions, except as disclosed in Schedule 3.09
SCHEDULE 3.18
INSURANCE
1. Comprehensive General Liability insurance on an "occurrence"
basis, including but not limited to, the following coverages:
premises/operations; explosion and collapse hazard;
products/completed operations; broad form property damage;
blanket contractual liability; independent contractor's and
personal injury. Limits are no less than $1,000,000 for
injuries or death to one or more persons or damage to property
resulting from any one occurrence subject to a $1,000,000
annual aggregate for Products and Completed Operations. Such
insurance policy may have a deductible or self insured
retention of not greater than $250,000 each occurrence.
2. Automobile Liability insurance, including, but not limited to,
coverage for owned, non-owned and hired automobiles with limits
of no less than $1,000,000 per occurrence. Appropriate no-fault
insurance provisions. Such insurance policy may have a
deductible or self insuring retention of not greater than
$250,000 per occurrence.
3. Workers Compensation insurance and any other forms of insurance
with the Borrower is required by law to provide providing
statutory benefits covering losses resulting from injury,
sickness, disability or death of the employees of the Borrower.
Such insurance policy may have a deductible or self insured
retention of not greater than $250,000 per occurrence.
4. Employers Liability coverage with limits no less than
$1,000,000 per occurrence per employee or per accident. Such
insurance policy may have a deductible or self insured
retention of not greater than $250,000 per occurrence.
5. Umbrella Excess Liability insurance on an "occurrence" basis
providing coverage not less than $10,000,000 per occurrence
over and above the coverage provided by the policies described
in above paragraphs (1), (2) and (3).
6. Property Coverage, including direct damage and business
interruption, on an "all risk" replacement cost basis in an
amount no less than $622,265,000 for all locations other than
stores, and $2,500,000 per store. All Risk coverage shall
include, but not be limited to, loss or damage by fire,
lightning, windstorm, hail explosion, riot, civil commotion,
aircraft, vehicles, smoke, earthquake, flood and the periods
covered by blanket boiler and machinery insurance. Such
insurance may have a deductible or self insured retention not
greater than $100,000 each occurrence or an annual aggregate
deductible of $150,000.
7. Directors & Officers liability coverage, including both
Corporate Indemnity and Personal Reimbursement coverage, shall
be carried with a minimum limit of $10,000,000. Corporate
Reimbursement retention shall not exceed, with respect to the
$10,000,000 limit, an amount of $350,000, or, with respect to
the $5,000,000 IPPO sublimit, an amount of $750,000.
8. Crime coverage, including employee fidelity, on-premises and
off-premises coverage, in the amount of $5,000,000 for the
employee fidelity and $1,000,000 for each of the premises
exposures. Such insurance may have a deductible or self insured
retention not greater than $25,000.
SCHEDULE 3.20
REAL PROPERTY
Form of
Location Title Number (Type of Property) Ownership
---------------------------------------- ---------
1. Title No. N9300-1073(2) Fee
Danbury, Connecticut (headquarters and store)
Fairfield County
2. Title No. N9300-1073(3) Fee
▇▇▇▇▇▇, Connecticut (distribution warehouse and home
delivery center)
Fairfield County
3. Title No. N9300-1073(4) Fee
Plant City, Florida (home delivery center)
Hillsborough County
4. Title No. N9300-1073(5) Fee
Dahlonega, Georgia (manufacturing facility)
▇▇▇▇▇▇▇ County
5. Title No. N9300-1073(6) Fee
Kentland, Indiana (distribution warehouse)
Newtown County
6. Title No. (See N9300-1073(37) (below) Fee
Whiteside City, Illinois (manufacturing facility)
Whiteside County
(FOR SALE)
7. Title No. N9300-1073(8) Fee (Property owned
Andover, Maine (manufacturing facility) by Andover Wood
Oxford County Products, Inc.)
8. Title No. N9300-1073(10) Fee
South Ashburnham, Massachusetts (manufacturing
facility)
Worcester County
(FOR SALE)
9. Title No. N9300-1073(11) Fee
Livonia, Michigan (store)
▇▇▇▇▇ County
10. Title No. N9300-1073(13) Fee
Passaic, New Jersey (manufacturing facility and
distribution warehouse)
Passaic County
Form of
Location Title Number (Type of Property) Ownership
---------------------------------------- ---------
11. Title No. N9300-1073 (15) Fee
Asheville (Woodfin), North Carolina
(manufacturing facility and office building)
Buncombe County
12. Title No. N9300-1073(15) Fee
Old Fort (Pine Valley), North Carolina
(manufacturing facility and distribution warehouse)
▇▇▇▇▇▇▇▇ County
13. Title No. N9300-1073(17) Fee
Greensboro, North Carolina (store)
Guilford County
(FOR SALE)
14. Title No. N9300-1073(19) Fee
Maiden, North Carolina (manufacturing facility and
distribution warehouse)
Catawba County
15. Title No. N9300-1073(20) Fee
Union City, Pennsylvania (manufacturing facility)
Erie County
16. Title No. N9300-1073(21) Fee
Bridgewater, Virginia (manufacturing facility)
Rockingham County
17. Title No. Fee
Barton, Vermont (manufacturing facility and
distribution warehouse)
Orleans County
18. Title No. N9300-1073(23) Fee
Randolph, Vermont (main manufacturing facility)
Orange County
19. Title No. N9300-1073(24) Fee
Randolph, Vermont (manufacturing facility)
Orange County
(FOR SALE)
Form of
Location Title Number (Type of Property) Ownership
---------------------------------------- ---------
20. Title No. N9300-1073(25) Fee
Morgantown, West Virginia (store)
Monrongalia County
21. Title No. N9300-1073(26) Fee
East Palestine, Ohio (manufacturing facility)
Columbia County
22. Title No. N9300-1073(27) Fee
Boonville, New York (manufacturing facility)
Oneida County
23. Title No. N9300-1073(28) Fee
Frewsburg, New York (manufacturing facility)
Chautauqua County
24. Title No. N9300-1073(29) Fee
Mayville (Falconer), New York (manufacturing
facility and distribution warehouse)
Chautauqua County
25. Title No. N9300-1073(30) Fee (Property owned
Morganton, North Carolina (manufacturing by Knob Creek,
facility) ▇▇▇▇▇ County Inc.)
(FOR SALE)
26. Title No. N9300-1073(31) Fee
Spruce Pine, North Carolina (manufacturing
facility) ▇▇▇▇▇▇▇▇ County
27. Title No. N9300-1073(32) Fee
Eldred, Pennsylvania (manufacturing facility)
▇▇▇▇▇▇ County
28. Title No. N9300-1073(33) Fee
Beecher Falls, Vermont (manufacturing facility
and distribution warehouse)
Essex County
29. Title No. N9300-1073(46) Fee
Stewartstown, New Hampshire (vacant land)
Coos County
Form of
Location Title Number (Type of Property) Ownership
---------------------------------------- ---------
30. Quebec, Canada (land only) Fee (Part of
Beecher Falls,
Vermont site)
31. Title No. N9300-1073(34) Fee
Island Pond, Vermont (Brighton) (manufacturing
facility) Essex County
32. Title No. N9300-1073(35) Fee
Atoka, Oklahoma (manufacturing facility and
distribution warehouse)
Atoka County
33. Title No. N9300-1073(39) Fee
Birmingham, Alabama (Lot 2A) (vacant land)
Jefferson County
(FOR SALE)
34. Title No. N9300-1073(40) Fee
Coral Springs, Florida (vacant land)
Broward County
(FOR SALE)
35. Title No. N9300-1073(41) Fee
Dudley, Massachusetts (manufacturing facility)
Worcester County
36. Title No. N9300-1073(45) Fee
Middleburg Heights, Ohio (store)
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ (store) Fee
Brevard County
38. Orlando, Florida (store) Fee
Orange County
39. Danbury, Connecticut (Ethan ▇▇▇▇▇ Inn -- hotel) Fee (Property owned
Fairfield County by Lake Avenue
Associates
Inc.)
40. Kennesaw, Georgia (Store) Fee
▇▇▇▇ County
41. Kansas City, Kansas (Store) Fee
▇▇▇▇▇▇▇ County
Form of
Location Title Number (Type of Property) Ownership
---------------------------------------- ---------
42. North Point, Georgia (Store) Fee
▇▇▇▇▇▇ County
43. Grand Blanc, Michigan (Store) Fee
Genessen County
SCHEDULE 6.01
EXISTING INDEBTEDNESS
All of the Indebtedness listed under items 1-3 below may be refinanced or
renewed in accordance with Section 6.01(d) of the Credit Agreement.
1. Ethan ▇▇▇▇▇ Inn Mortgage loan in a principal amount outstanding not
exceeding $1,659,085 as of March 10, 1995.
2. Melbourne and Orlando, Florida, Stores Mortgage loan in a principal
amount outstanding not exceeding $278,015 as of March 10, 1995.
3. Grand Blanc, Michigan, Store Mortgage loan in a principal amount
outstanding not exceeding $170,361 as of March 10, 1995.
SCHEDULE 6.02
EXISTING LIENS
All of the Liens set forth in items 1 through 3 below may be renewed or
extended subject to Section 6.01(d) of this Agreement.
1. (See Schedules 4(A) and 4(B) to the Perfection Certificate, Annex 2 to
the Security Agreement)
2. Permitted Encumbrances as set forth in that title insurance policy or
title commitment delivered with respect to each Mortgaged Property.
3. Liens securing the Indebtedness described in items 1 through 3 of
Schedule 6.01 to this Agreement.
SCHEDULE 6.04
EXISTING INVESTMENTS
1. Ownership of the Subsidiaries as set forth in Schedule 3.08.
2. 50% limited partnership interest in ▇▇-▇▇ Properties, a Florida
partnership.