1
EXHIBIT NO. 10.90
--------------------------------------------------------------------------------
$130,000,000
LOAN AND SECURITY AGREEMENT
DATED AS OF MAY 31, 2001
AMONG
GOODY'S FAMILY CLOTHING, INC., SYDOOG, INC., TREBOR OF TN, INC.
GOFAMCLO, INC., GFCFS, LLC, GOODY'S MS, L.P., GOODY'S IN, L.P.,
GFCTX, L.P., GFCTN, L.P. AND GFCGA, L.P.
(EACH, A BORROWER AND COLLECTIVELY, THE BORROWERS)
AND
THE FINANCIAL INSTITUTIONS PARTY
HERETO FROM TIME TO TIME
(COLLECTIVELY, THE LENDERS),
THE CIT GROUP/BUSINESS CREDIT, INC.
(THE AGENT),
AND
GMAC COMMERCIAL CREDIT LLC
(THE CO-AGENT)
--------------------------------------------------------------------------------
5
2
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS............................................................................................1
SECTION 1.1 DEFINITIONS..................................................................................1
SECTION 1.2 OTHER REFERENTIAL PROVISIONS................................................................30
SECTION 1.3 EXHIBITS AND SCHEDULES......................................................................32
ARTICLE II. REVOLVING CREDIT LOANS...............................................................................32
SECTION 2.1 REVOLVING CREDIT LOANS......................................................................32
SECTION 2.2 MANNER OF BORROWING REVOLVING CREDIT LOANS..................................................32
SECTION 2.3 REPAYMENT OF REVOLVING CREDIT LOANS.........................................................34
SECTION 2.4 REVOLVING CREDIT NOTE.......................................................................34
ARTICLE III. LETTER OF CREDIT FACILITY...........................................................................34
SECTION 3.1 ISSUANCE....................................................................................34
SECTION 3.2 ADVANCES AUTOMATIC; PARTICIPATIONS..........................................................35
SECTION 3.3 CASH COLLATERAL.............................................................................35
SECTION 3.4 FEES AND EXPENSES...........................................................................36
SECTION 3.5 REQUEST FOR INCURRENCE OF LETTER OF CREDIT OBLIGATIONS......................................37
SECTION 3.6 OBLIGATION ABSOLUTE.........................................................................37
SECTION 3.7 INDEMNIFICATION; NATURE OF LENDERS' DUTIES..................................................37
ARTICLE IV. GENERAL LOAN PROVISIONS..............................................................................39
SECTION 4.1 INTEREST....................................................................................39
SECTION 4.2 FEES........................................................................................41
SECTION 4.3 MANNER OF PAYMENT...........................................................................42
SECTION 4.4 LOAN ACCOUNTS: STATEMENTS OF ACCOUNT........................................................43
SECTION 4.5 TERMINATION OF AGREEMENT....................................................................43
SECTION 4.6 MAKING OF ADVANCES..........................................................................44
SECTION 4.7 SETTLEMENT AMONG LENDERS....................................................................45
SECTION 4.8 CHANGED CIRCUMSTANCES.......................................................................48
SECTION 4.9 OBLIGATIONS ABSOLUTE........................................................................49
SECTION 4.10 BORROWERS' REPRESENTATIVE...................................................................50
SECTION 4.11 AGENT ADVANCES..............................................................................50
SECTION 4.12 OVERADVANCES................................................................................51
SECTION 4.13 FUNDING LOSSES..............................................................................52
SECTION 4.14 JOINT AND SEVERAL LIABILITY.................................................................52
SECTION 4.15 WAIVER OF SURETYSHIP DEFENSES...............................................................54
ARTICLE V. CONDITIONS PRECEDENT..................................................................................54
SECTION 5.1 CONDITIONS PRECEDENT TO REVOLVING CREDIT LOANS..............................................54
SECTION 5.2 ALL ADVANCES; LETTERS OF CREDIT.............................................................56
ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF BORROWERS..........................................................57
SECTION 6.1 REPRESENTATIONS AND WARRANTIES..............................................................57
SECTION 6.2 SURVIVAL OF REPRESENTATION AND WARRANTIES, ETC..............................................67
ARTICLE VII. SECURITY INTEREST...................................................................................67
SECTION 7.1 SECURITY INTEREST...........................................................................67
SECTION 7.2 CONTINUED PRIORITY OF SECURITY INTEREST.....................................................68
SECTION 7.3 REVISED ARTICLE 9 OF THE UCC................................................................69
ARTICLE VIII. COLLATERAL COVENANTS...............................................................................70
i
3
SECTION 8.1 COLLECTIONS; PAYMENTS.......................................................................70
SECTION 8.2 INSPECTION, VERIFICATION AND NOTIFICATION...................................................72
SECTION 8.3 INVENTORY COVENANTS.........................................................................73
SECTION 8.4 RETURNED INVENTORY..........................................................................74
SECTION 8.5 OWNERSHIP AND DEFENSE OF TITLE..............................................................74
SECTION 8.6 INSURANCE...................................................................................74
SECTION 8.7 LOCATION OF OFFICES AND COLLATERAL..........................................................76
SECTION 8.8 RECORDS RELATING TO COLLATERAL..............................................................76
SECTION 8.9 INTENTIONALLY OMITTED.......................................................................77
SECTION 8.10 INFORMATION AND REPORTS.....................................................................77
SECTION 8.11 LANDLORD AND OTHER WAIVERS..................................................................78
SECTION 8.12 WAREHOUSEMAN AGREEMENTS.....................................................................79
SECTION 8.13 CONTROL LETTERS.............................................................................79
ARTICLE IX. AFFIRMATIVE COVENANTS................................................................................80
SECTION 9.1 PRESERVATION OF CORPORATE EXISTENCE AND SIMILAR MATTERS.....................................80
SECTION 9.2 COMPLIANCE WITH APPLICABLE LAW..............................................................80
SECTION 9.3 MAINTENANCE OF PROPERTY.....................................................................80
SECTION 9.4 CONDUCT OF BUSINESS.........................................................................81
SECTION 9.5 INSURANCE...................................................................................81
SECTION 9.6 PAYMENT OF TAXES AND CLAIMS.................................................................81
SECTION 9.7 ACCOUNTING METHODS AND FINANCIAL RECORDS....................................................81
SECTION 9.8 USE OF PROCEEDS.............................................................................81
SECTION 9.9 HAZARDOUS WASTE AND SUBSTANCES; ENVIRONMENTAL REQUIREMENTS..................................81
SECTION 9.10 FURTHER ASSURANCES..........................................................................82
ARTICLE X. INFORMATION...........................................................................................82
SECTION 10.1 FINANCIAL STATEMENTS........................................................................82
SECTION 10.2 BORROWER INTERCOMPANY DEBT..................................................................83
SECTION 10.3 OFFICER'S CERTIFICATE.......................................................................83
SECTION 10.4 COPIES OF OTHER REPORTS.....................................................................84
SECTION 10.5 NOTICE OF LITIGATION AND OTHER MATTERS......................................................84
SECTION 10.6 ERISA.......................................................................................85
SECTION 10.7 ACCURACY OF INFORMATION.....................................................................85
SECTION 10.8 REVISIONS OR UPDATES TO SCHEDULES...........................................................85
ARTICLE XI. NEGATIVE COVENANTS...................................................................................85
SECTION 11.1 FINANCIAL COVENANTS.........................................................................86
SECTION 11.2 INDEBTEDNESS FOR MONEY BORROWED.............................................................86
SECTION 11.3 GUARANTIES..................................................................................86
SECTION 11.4 INVESTMENTS AND ACQUISITIONS................................................................86
SECTION 11.5 CAPITAL EXPENDITURES........................................................................86
SECTION 11.6 RESTRICTED DISTRIBUTIONS AND PAYMENTS.......................................................86
SECTION 11.7 MERGER, CONSOLIDATION AND SALE OF ASSETS....................................................87
SECTION 11.8 TRANSACTIONS WITH AFFILIATES................................................................88
SECTION 11.9 LIENS.......................................................................................88
SECTION 11.10 OPERATING LEASES............................................................................88
SECTION 11.11 BENEFIT PLANS...............................................................................88
SECTION 11.12 SALES AND LEASEBACKS........................................................................88
SECTION 11.13 CAPITAL STRUCTURE AND BUSINESS..............................................................88
SECTION 11.14 NO IMPAIRMENT OF INTERCOMPANY TRANSFERS.....................................................88
SECTION 11.15 NO SPECULATIVE TRANSACTIONS.................................................................88
ii
4
ARTICLE XII. DEFAULT.............................................................................................88
SECTION 12.1 EVENTS OF DEFAULT...........................................................................88
SECTION 12.2 REMEDIES....................................................................................91
SECTION 12.3 APPLICATION OF PROCEEDS.....................................................................93
SECTION 12.4 MISCELLANEOUS PROVISION CONCERNING REMEDIES.................................................94
SECTION 12.5 TRADEMARK LICENSE...........................................................................94
ARTICLE XIII. ASSIGNMENTS........................................................................................95
SECTION 13.1 SUCCESSORS AND ASSIGNS; PARTICIPATIONS......................................................95
SECTION 13.2 REPRESENTATION OF LENDERS...................................................................98
ARTICLE XIV. THE AGENT AND THE CO-AGENT..........................................................................98
SECTION 14.1 APPOINTMENT OF AGENT........................................................................98
SECTION 14.2 DELEGATION OF DUTIES........................................................................98
SECTION 14.3 EXCULPATORY PROVISIONS......................................................................98
SECTION 14.4 RELIANCE BY AGENT...........................................................................99
SECTION 14.5 NOTICE OF DEFAULT...........................................................................99
SECTION 14.6 NON-RELIANCE ON AGENT AND OTHER LENDERS.....................................................99
SECTION 14.7 INDEMNIFICATION............................................................................100
SECTION 14.8 AGENT AND CO-AGENT IN THEIR INDIVIDUAL CAPACITY............................................100
SECTION 14.9 SUCCESSOR AGENT............................................................................100
SECTION 14.10 NOTICES FROM AGENT TO LENDERS..............................................................101
ARTICLE XV. MISCELLANEOUS.......................................................................................101
SECTION 15.1 NOTICES....................................................................................101
SECTION 15.2 EXPENSES...................................................................................102
SECTION 15.3 STAMP AND OTHER TAXES......................................................................103
SECTION 15.4 SETOFF; PRO RATA PARTICIPATION.............................................................103
SECTION 15.5 LITIGATION.................................................................................104
SECTION 15.6 WAIVER OF RIGHTS...........................................................................105
SECTION 15.7 REVERSAL OF PAYMENTS.......................................................................106
SECTION 15.8 INJUNCTIVE RELIEF..........................................................................106
SECTION 15.9 ACCOUNTING MATTERS.........................................................................106
SECTION 15.10 AMENDMENTS.................................................................................106
SECTION 15.11 ASSIGNMENT.................................................................................108
SECTION 15.12 PERFORMANCE OF EACH BORROWER'S DUTIES......................................................108
SECTION 15.13 INDEMNIFICATION............................................................................108
SECTION 15.14 ALL POWERS COUPLED WITH INTEREST...........................................................108
SECTION 15.15 SURVIVAL...................................................................................108
SECTION 15.16 SEVERABILITY OF PROVISIONS.................................................................109
SECTION 15.17 GOVERNING LAW..............................................................................109
SECTION 15.18 COUNTERPARTS...............................................................................109
SECTION 15.19 REPRODUCTION OF DOCUMENTS..................................................................109
SECTION 15.20 TERM OF AGREEMENT..........................................................................109
iii
5
EXHIBITS
EXHIBIT A FORM OF REVOLVING CREDIT NOTE
EXHIBIT B FORM OF NOTICE OF PROPOSED ADVANCE/CONVERSION/
CONTINUATION
EXHIBIT C FORM OF BORROWING BASE CERTIFICATE
EXHIBIT D FORM OF OPINION OF COUNSEL TO BORROWERS
EXHIBIT E [INTENTIONALLY OMITTED]
EXHIBIT F FORM OF POWER OF ATTORNEY
EXHIBIT G FORM OF ASSIGNMENT AND TRANSFER AGREEMENT
EXHIBIT H FORM OF OFFICER'S CERTIFICATE
EXHIBIT I FORM OF SECRETARY'S CERTIFICATE
EXHIBIT J FORM OF PLEDGE AGREEMENT (INVESTMENT ACCOUNT)
EXHIBIT K FORM OF BLOCKED ACCOUNT AGREEMENT
iv
6
SCHEDULES
SCHEDULE 2.2: Authorized Officers
SCHEDULE 6.1(a): Organization; Power; Qualification; FEIN
SCHEDULE 6.1(b): Subsidiaries and Ownership of the Borrower
SCHEDULE 6.1(e): Business Description
SCHEDULE 6.1(f): Compliance with Law; Government Approvals
SCHEDULE 6.1(g): Titles to Properties
SCHEDULE 6.1(h): Liens
SCHEDULE 6.1(i): Indebtedness and Guaranties
SCHEDULE 6.1(j): Litigation
SCHEDULE 6.1(k): Tax Returns and Payments
SCHEDULE 6.1(m): Financial Statements
SCHEDULE 6.1(o): Benefit Plans; ERISA
SCHEDULE 6.1(r): Solvency
SCHEDULE 6.1(s): Inventory
SCHEDULE 6.1(u): Chief Executive Office
SCHEDULE 6.1(v): Real Property
SCHEDULE 6.1(w): Corporate and Fictitious Names
SCHEDULE 6.1(z): Employee Relations
SCHEDULE 6.1(aa): Intellectual Property
SCHEDULE 6.1(bb): Trade Names
SCHEDULE 6.1(cc): Brokers
SCHEDULE 6.1(dd): Insurance
SCHEDULE 6.1(ee): Deposit and Disbursement Accounts
SCHEDULE 6.1(ff): Government Contracts
SCHEDULE 6.1(gg): Trade Relations
SCHEDULE 6.1(hh): Agreements and other Documents
SCHEDULE 9.8: Use of Proceeds
SCHEDULE 11.6: Restricted Distributions and Payments
v
7
LOAN AND SECURITY AGREEMENT
Dated as of May 31, 2001
GOODY'S FAMILY CLOTHING, INC., a Tennessee corporation ("GFC") SYDOOG,
INC., a Delaware corporation ("SYDOOG"), TREBOR OF TN, INC., a Tennessee
corporation ("Trebor"), GOFAMCLO, INC., a Delaware corporation ("GOFAMCLO"),
GFCFS, LLC, a Delaware limited liability company ("GFCFS"), GOODY'S MS, L.P., a
Tennessee limited partnership ("GMS"), GOODY'S IN, L.P., a Tennessee limited
partnership ("GIN"), GFCTX, L.P., a Tennessee limited partnership ("GFCTX"),
GFCTN, L.P., a Tennessee limited partnership ("GFCTN") and GFCGA, L.P, a
Tennessee limited partnership ("GFCGA"; and together with GFC, SYDOOG, Trebor,
GOFAMCLO, GFCFS, GMS, GIN, GFCTX, AND GFCTN, the "Borrowers" and each, a
"Borrower"), the financial institutions party to this Agreement from time to
time (collectively, the "Lenders"), and THE CIT GROUP/BUSINESS CREDIT, INC., a
New York corporation (the "Agent") and GMAC COMMERCIAL CREDIT LLC, a New York
limited liability company, as co-agent and documentation agent (collectively,
the "Co-Agent") agree as follows:
RECITALS: The Borrowers have requested that Lenders make, and the
Lenders desire to make, available to the Borrowers, a revolving credit facility
in an aggregate amount up to $130,000,000 (including a letter of credit subline
in an aggregate amount of up to $95,000,000), upon the terms and subject to the
conditions set forth herein.
DEFINITIONS
DEFINITIONS.
For the purposes of this Agreement:
"Accounts" means and includes, as to any Person, all of such
Person's then owned or existing and future acquired or arising (a) accounts (as
defined in the UCC), and any and all other receivables (whether or not
specifically listed on schedules furnished to Agent), including, without
limitation, all accounts created by, or arising from, all of any Borrower's
sales, leases, rentals or other dispositions of goods or renditions of services
to its customers, including but not limited to, those accounts arising from
sales, leases, rentals or other dispositions of goods or rendition of services
made under any of the trade names, logos or styles of any Borrower, or through
any division of any Borrower; (b) any and all instruments, documents, chattel
paper (including electronic chattel paper) (all as defined in the UCC),
Contracts, Contract Rights, acceptances, and tax refunds; (c) unpaid seller's
rights (including rescission, replevin, reclamation, repossession and stoppage
in transit) relating to the foregoing
1
8
or arising therefrom; (d) rights to any goods represented by any of the
foregoing, including rights to returned, reclaimed or repossessed goods; (e)
reserves and credit balances arising in connection with or pursuant hereto; (f)
guarantees, supporting obligations, payment intangibles and letter of credit
rights (all as defined in the UCC); (g) insurance policies or rights relating to
any of the foregoing; (h) general intangibles pertaining to any and all of the
foregoing (including all rights to payment including those arising in connection
with bank and non-bank credit card receivables) and including books and records
and any electronic media and software relating thereto; (i) notes, deposits or
property of Account Debtors securing the obligations of any such Account Debtors
to the Borrowers; and (j) cash and non-cash proceeds (as defined in the UCC) of
any and all the foregoing.
"Account Debtor" means a Person who is obligated on an Account.
"Acquire", as applied to any Business Unit or Investment, means the acquiring or
acquisition of such Business Unit or Investment by purchase, exchange, issuance
of stock or other securities, or by merger, reorganization or any other method.
"Administrative Management Fee" shall have the meaning assigned to such term in
SECTION 4.2(B).
"Advance" means an amount or amounts advanced by the Lenders to the Borrowers
under the Revolving Credit Facility pursuant to ARTICLE 2 hereof.
"Affiliate" means, with respect to a Person, (a) any partner, officer, five
percent (5%) or more shareholder, manager, director or managing agent of such
Person or such Person's Affiliates, (b) any spouse, parent, siblings, children
or grandchildren (by birth or adoption) of such Person; and (c) any other Person
(other than a Subsidiary) that, (i) directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
such given Person, (ii) directly or indirectly beneficially owns or holds 10% or
more of any class of voting stock or partnership or other voting interest of
such Person or any Subsidiary of such Person, or (iii) 10% or more of the voting
stock or partnership or other voting interest of which is directly or indirectly
beneficially owned or held by such Person or a Subsidiary of such Person. The
term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through ownership of voting securities or partnership or other voting
interest, by contract or otherwise; provided, however, that the term "Affiliate"
shall specifically exclude the Agent and each Lender.
"Agent" means The CIT Group/Business Credit, Inc., a New York corporation, and
any successor agent appointed pursuant to SECTION 14.9 hereof.
2
9
"Agent's Office" means the office of the Agent specified in or determined in
accordance with the provisions of SECTION 15.1(C) hereof.
"Agreement" means and includes this Loan and Security Agreement, including all
Schedules, Exhibits and other attachments hereto, and all amendments,
modifications and supplements hereto and thereto.
"Agreement Date" means the date as of which this Agreement is dated.
"Anniversary Date" shall mean the Initial Anniversary Date and the same date in
every year thereafter.
"Applicable Law" means all applicable provisions of constitutions, statutes,
rules, regulations and orders of all governmental bodies and of all orders and
decrees of all courts and arbitrators, including, without limitation, applicable
Environmental Laws.
"Applicable Margin" shall mean the percentage per annum set forth below opposite
the Average Revolving Credit Loans for the respective interest rate option
below, to be determined quarterly based on the daily average outstanding amount
of the Revolving Credit Loans for the immediately preceding calendar quarter:
Average Revolving
Credit Loans Applicable Margin
----------------- -------------------------------------
Prime Option LIBOR Option
---------------------------------------------------------------------------
Less than $25 million 0% 1.75%
---------------------------------------------------------------------------
$25 million or greater but less
than $50 million 0% 2.00%
---------------------------------------------------------------------------
$50 million or greater 0% 2.25%
---------------------------------------------------------------------------
The adjustment to the Applicable Margin, if any, shall be effective on
the first Business Day of the then current calendar quarter (the "Adjustment
Date"). Each Applicable Margin shall be effective from one Adjustment Date until
the day before the next Adjustment Date. Any adjustment in the Applicable Margin
shall be applicable to all existing Revolving Credit Loans outstanding, as well
as, any new Advances made or issued.
3
10
"Appraised GOB Value" shall mean the net "going out of business" value of the
relevant Inventory determined from time to time pursuant to an appraisal
conducted by an appraiser satisfactory to Agent, in its sole discretion, which
appraisals shall be conducted in accordance with the terms of SECTION 8.3
hereof.
"Assignment and Transfer" means an assignment and transfer, substantially in the
form of EXHIBIT G hereto, assigning all or a portion of a Lender's interests,
rights and obligations under this Agreement pursuant to SECTION 13.1.
"Audited Financial Statements" shall have the meaning assigned to such term in
SECTION 10.1(A) hereof.
"Availability" means, at any time, the amount by which (a) the amount calculated
in clause (b) of the definition of Borrowing Base at such time, exceeds (b) the
aggregate outstanding amount of all Secured Obligations at such time including,
without limitation, the amount of the Revolving Credit Loans outstanding at such
time, but excluding the Letter of Credit Reserve.
"Availability Reserve" means such reserve or reserves as the Agent may establish
or deem necessary from time to time in the exercise of its reasonable credit
judgment including, without limitation, as a result of (i) any reserve
established by Agent, in its discretion, pursuant to SECTIONS 8.1 AND 8.11
hereof, (ii) any negative forecasts and/or trends in the business, industry,
prospects, profits, operation or financial condition of the Borrowers or (iii)
any other issues circumstances or facts that could otherwise negatively impact
the Borrowers or the business, prospects, profits, operations, industry,
financial condition or assets of the Borrowers.
"Availability Shortfall" means that Availability, as measured by Agent at any
time and from time to time during the term hereof, is less than $25,000,000.
"Benefit Plan" or "Plan" means an "employee benefit plan" as defined in Section
3(3) of ERISA (other than a Multi-Employer Plan) in respect of which a Borrower
or any Related Company is, or with respect to defined benefit plans (as defined
under ERISA) within the immediately preceding six years was, an "employer" as
defined in Section 3(5) of ERISA, including such plans as may be established
after the Agreement Date.
"Blocked Account" means an account of a Borrower maintained by it with a
Clearing Bank pursuant to a Blocked Account Agreement.
"Blocked Account Agreement" means an agreement among a Borrower, the Agent and a
Clearing Bank, substantially in the form attached hereto as EXHIBIT K,
concerning the
4
11
collection, treatment and remission of payments or other deposits which
represent the proceeds of Collateral.
"Borrower" and "Borrowers" shall have the meanings ascribed to such terms in
the preamble of this Agreement.
"Borrower Intercompany Debt" means, as to any Borrower, the amount(s) owed by
such Borrower to any other Borrower with respect to intercompany transactions,
without set-off for any corresponding amount(s) of any Borrower Intercompany
Debt owed to such Borrower.
"Borrowing Base" means at any time an amount equal to the lesser of:
(I) $130,000,000 MINUS (II) AN AMOUNT EQUAL TO THE SUM OF (A)
THE LETTER OF CREDIT RESERVE, AND (B) THE AMOUNT OF ANY AVAILABILITY RESERVES,
OR
(I) AN AMOUNT EQUAL TO THE SUM OF (A) SIXTY-FIVE PERCENT
(65%) OF THE BORROWER'S ELIGIBLE INVENTORY, (B) SIXTY-FIVE PERCENT (65%) OF
THE AGGREGATE FACE AMOUNT OF DOCUMENTARY LETTERS OF CREDIT (WHICH FOR
PURPOSES OF THIS CLAUSE (B) SHALL EXCLUDE THOSE AMOUNTS INCLUDED IN ELIGIBLE
INVENTORY PURSUANT TO CLAUSE (H)(A)(2) OF THE DEFINITION
OF ELIGIBLE INVENTORY), AND (C) EIGHTY-FIVE PERCENT (85%) OF THE BORROWER'S
ELIGIBLE ACCOUNTS; MINUS (II) AN AMOUNT EQUAL TO THE SUM OF (A) THE LETTER OF
CREDIT RESERVE, (B) FIFTY PERCENT (50%) OF THE SUM OF (1) THE AGGREGATE FACE
AMOUNT OF GIFT CERTIFICATES, AND (2) THE AGGREGATE AMOUNT OF IN-STORE
CREDITS FOR ALL BORROWERS, AND (C) THE AMOUNT OF ANY AVAILABILITY RESERVES.
"Borrowing Notice" shall have the meaning assigned to such term in SECTION
2.2(A)(I) hereof.
"Borrowing Base Certificate" means a certificate in the form attached hereto as
EXHIBIT C.
"Business Day" means any day other than a Saturday, Sunday or other day on which
either the office of Chase Manhattan Bank, N.A., in New York, New York or the
Agent's office in Atlanta, Georgia is authorized to close.
"Business Unit" means the assets constituting the business or a division or
operating unit thereof of any Person.
"Capital Expenditures" means, with respect to any Person, all expenditures made
and liabilities incurred for the acquisition of assets (other than assets which
constitute a Business Unit) which are not, in accordance with GAAP, treated as
expense items for such Person in the year made or incurred or as a prepaid
expense applicable to a future year or years.
5
12
"Capitalized Lease" means a lease that is required to be capitalized for
financial reporting purposes in accordance with GAAP.
"Capitalized Lease Obligation" means Indebtedness represented by obligations
under a Capitalized Lease, and the amount of such Indebtedness shall be the
capitalized amount of such obligations determined in accordance with GAAP.
"Cash Collateral" means collateral consisting of cash or Cash Equivalents on
which the Agent, for the benefit of itself as Agent and the Lenders, has a first
priority Lien.
"Cash Collateral Account" shall have the meaning assigned to such term in
SECTION 3.3(A) hereof.
"Cash Equivalents" means
(A) MARKETABLE DIRECT OBLIGATIONS ISSUED OR UNCONDITIONALLY GUARANTEED BY THE
UNITED STATES GOVERNMENT OR ISSUED BY ANY AGENCY THEREOF AND BACKED
BY THE FULL FAITH AND CREDIT OF THE UNITED STATES, IN EACH CASE MATURING
WITHIN ONE YEAR FROM THE DATE OF ACQUISITION THEREOF;
COMMERCIAL PAPER MATURING NO MORE THAN ONE YEAR FROM THE DATE ISSUED AND,
AT THE TIME OF ACQUISITION THEREOF, HAVING A RATING OF AT LEAST A-2 FROM
STANDARD & POOR'S CORPORATION OR AT LEAST P-1
FROM ▇▇▇▇▇'▇ INVESTORS SERVICE, INC.;
CERTIFICATES OF DEPOSIT OR BANKERS' ACCEPTANCES ISSUED IN DOLLAR DENOMINATIONS
AND MATURING WITHIN ONE YEAR FROM THE DATE OF ISSUANCE THEREOF ISSUED BY ANY
COMMERCIAL BANK ORGANIZED UNDER THE LAWS OF THE UNITED STATES OF AMERICA OR ANY
STATE THEREOF OR THE DISTRICT OF COLUMBIA HAVING COMBINED CAPITAL AND SURPLUS
OF NOT LESS THAN $250,000,000.00 AND, UNLESS ISSUED BY THE AGENT OR A LENDER,
NOT SUBJECT TO SET-OFF OR OFFSET RIGHTS IN FAVOR OF SUCH BANK ARISING FROM ANY
BANKING RELATIONSHIP WITH SUCH BANK; AND
REPURCHASE AGREEMENTS IN FORM AND SUBSTANCE AND FOR AMOUNTS SATISFACTORY TO
THE AGENT WITH A TERM OF NOT MORE THAN SEVEN DAYS FOR UNDERLYING SECURITIES
OF THE TYPES DESCRIBED IN CLAUSES (A), (B) AND (C) ABOVE, ENTERED INTO WITH
ANY FINANCIAL INSTITUTION MEETING THE QUALIFICATIONS SPECIFIED IN CLAUSE (C).
"Charges" means all Federal, state, county, city, municipal, local, foreign or
other governmental taxes (including, without limitation, taxes owed to PBGC at
the time due and payable), levies, assessments, charges, liens, claims or
encumbrances upon or relating to (i) the Collateral, (ii) the Secured
Obligations, (iii) the employees, payroll, income or gross receipts of a
Borrower, (iv) the ownership or use of any assets by a Borrower, or (v) any
other aspect of a Borrower's business.
"Chase Manhattan Bank Rate" shall mean the rate of interest per annum announced
by Chase Manhattan Bank, N.A. from time to time as its prime rate in effect at
its principal office in the City of New York. Such rate is not intended to be
the lowest rate of interest charged by Chase Manhattan Bank, N.A. to its
borrowers.
6
13
"Clearing Bank" means any banking institution with which a Blocked Account has
been established pursuant to an Blocked Account Agreement.
"Co-Agent" means GMAC Commercial Credit LLC, a New York limited liability
company, and any successor agent thereto.
"Code" means the Internal Revenue Code of 1986, as amended from time to time.
"Collateral" means and includes all of each Borrower's right, title and interest
in and to each of the following (whether in the name of such Borrower or under
any of such Borrower's Trade Names), wherever located and whether now or
hereafter existing or now owned or hereafter acquired or arising:
(B) ALL ACCOUNTS,
(C) ALL CONTRACTS RELATING TO ACCOUNTS, INVENTORY AND OTHER COLLATERAL,
ALL CONTRACT RIGHTS RELATING TO ACCOUNTS, INVENTORY AND OTHER COLLATERAL,
ALL DEPOSIT ACCOUNTS,
ALL INVENTORY,
ALL INVESTMENT PROPERTY,
ALL OTHER GOODS AND PROPERTY (OTHER THAN REAL ESTATE, LEASEHOLD IMPROVEMENTS
AND EQUIPMENT, FURNITURE AND FIXTURES), WHETHER OR NOT DELIVERED,
INCLUDING, WITHOUT LIMITATION, SUCH OTHER GOODS AND PROPERTY (I) THE SALE
OR LEASE OF WHICH GIVES OR PURPORTS TO GIVE RISE TO ANY ACCOUNT OR OTHER
COLLATERAL, INCLUDING, BUT NOT LIMITED TO, ALL INVENTORY AND OTHER MERCHANDISE
RETURNED OR REJECTED BY OR REPOSSESSED FROM CUSTOMERS, OR (II) SECURING ANY
ACCOUNT OR OTHER COLLATERAL, INCLUDING, WITHOUT LIMITATION,
ALL RIGHTS AS AN UNPAID VENDOR OR LIENOR (INCLUDING, WITHOUT LIMITATION,
STOPPAGE IN TRANSIT, REPLEVIN AND RECLAMATION) WITH RESPECT TO SUCH OTHER
GOODS AND PROPERTIES,
ALL MORTGAGES, DEEDS TO SECURE DEBT AND DEEDS OF TRUST ON REAL OR PERSONAL
PROPERTY, GUARANTIES, LEASES, SECURITY AGREEMENTS, AND OTHER AGREEMENTS
AND PROPERTY WHICH, IN EACH SUCH CASE, SECURE OR RELATE TO ANY COLLATERAL,
OR ARE ACQUIRED FOR THE PURPOSE OF SECURING AND ENFORCING
ANY ITEM THEREOF,
ALL DOCUMENTS OF TITLE, POLICIES AND CERTIFICATES OF INSURANCE, SECURITIES,
CHATTEL PAPER AND OTHER DOCUMENTS AND INSTRUMENTS EVIDENCING OR PERTAINING TO
ANY AND ALL ITEMS OF COLLATERAL,
ALL FILES, CORRESPONDENCE, COMPUTER PROGRAMS, TAPES, DISCS AND RELATED DATA
PROCESSING SOFTWARE WHICH CONTAIN INFORMATION IDENTIFYING OR PERTAINING TO ANY
OF THE COLLATERAL OR ANY ACCOUNT DEBTOR, OR SHOWING THE AMOUNTS THEREOF OR
PAYMENTS THEREON OR OTHERWISE NECESSARY OR HELPFUL IN THE REALIZATION THEREON
OR THE COLLECTION THEREOF,
ALL CASH DEPOSITED WITH THE AGENT OR ANY LENDER OR ANY AFFILIATE OF THE AGENT
OR ANY LENDER OR WHICH THE AGENT, FOR THE BENEFIT OF THE LENDERS, OR ANY
LENDER OR SUCH AFFILIATE IS ENTITLED TO RETAIN OR OTHERWISE POSSESS AS
COLLATERAL PURSUANT TO THE PROVISIONS OF THIS AGREEMENT OR ANY OF THE SECURITY
DOCUMENTS OR ANY AGREEMENT RELATING TO ANY LETTERS OF CREDIT, AND
ANY AND ALL PRODUCTS AND PROCEEDS OF THE FOREGOING (INCLUDING, BUT NOT
LIMITED TO, ANY CLAIM TO ANY ITEM REFERRED TO IN THIS DEFINITION, AND ANY
CLAIM AGAINST ANY THIRD PARTY FOR LOSS OF, DAMAGE TO OR DESTRUCTION OF ANY
OR ALL OF, THE COLLATERAL OR FOR PROCEEDS PAYABLE UNDER, OR
7
14
UNEARNED PREMIUMS WITH RESPECT TO, POLICIES OF INSURANCE) IN WHATEVER FORM,
INCLUDING, BUT NOT LIMITED TO, CASH, NEGOTIABLE INSTRUMENTS AND OTHER
INSTRUMENTS FOR THE PAYMENT OF MONEY, CHATTEL PAPER,
SECURITY AGREEMENTS AND OTHER DOCUMENTS.
"Collection Account" means the Agent's account at, The Chase Manhattan Bank,
N.A., New York, New York.
"Collection Report" means a report delivered by the Borrowers to the Agent, from
time to time, pursuant to the provisions of SECTION 8.10(A).
"Commitment" means, as to each Lender, the amount set forth opposite such
Lender's name on the signature pages hereof, representing such Lender's
obligation, upon and subject to the terms and conditions of this Agreement
(including the applicable provisions of SECTION 13.1), to make Revolving Credit
Loans and to purchase participations in Letters of Credit or, from and after the
date hereof, in the Register (as defined in SECTION 13.1(D)) representing such
Lender's obligation to make Revolving Credit Loans and to purchase
participations in Letters of Credit.
"Commitment Fee" means the fee of $50,000 paid by the Borrowers to the Agent
pursuant to and in connection with the execution by the Borrowers of the
Commitment Letter.
"Commitment Letter" shall mean the Commitment Letter dated April 9, 2001 issued
by the Agent to, and accepted by, the Borrowers as the same may be amended prior
to the Effective Date.
"Commitment Percentage" means, as to any Lender, the percentage of the Revolving
Credit Facility obtained by dividing such Lender's Commitment by the amount of
the Revolving Credit Facility.
"Common Stock" means the shares of common stock, no par value, of GFC.
"Concentration Account" means the Borrowers' account at First Tennessee Bank, or
such other bank satisfactory to the Agent, which is subject to a Blocked Account
Agreement with the Borrowers and Agent and is used by the Borrowers for the
purpose of collecting and depositing receipts from each of the Borrower's store
accounts.
"Consolidated Balance Sheet" shall mean a consolidated balance sheet for the
Borrowers and their consolidated Subsidiaries, eliminating all inter-company
transactions and Liabilities and prepared in accordance with GAAP.
8
15
"Contaminant" means any waste, pollutant, hazardous substance, toxic substance,
hazardous waste, special waste, petroleum or petroleum-derived substance or
waste, or any constituent of any such substance or waste.
"Contracts" shall mean, as to any Person, all "contracts" as such term is
defined in the Uniform Commercial Code, including, without limitation, all of
such Person's then owned or existing and future acquired or arising contracts,
undertakings, or agreements (other than rights evidenced by chattel paper,
documents or instruments as such terms are defined in the Uniform Commercial
Code) in or under which such Person may now or hereafter have any right, title
or interest, including, without limitation, any agreement relating to Inventory,
the terms of payment or the terms of performance of any Account or any other
Collateral.
"Contract Rights" means and includes, as to any Person, all of such Person's
then owned or existing and future acquired or arising rights under Contracts not
yet fully performed and not evidenced by an instrument or chattel paper, to the
extent that the same may lawfully be assigned.
"Control Letter" means an acknowledgement from, or an agreement between Agent
and (i) the issuer of uncertificated securities with respect to uncertificated
securities in the name of any Borrower, (ii) a securities intermediary with
respect to securities, whether certificated or uncertificated, securities
entitlements and other financial assets held in a securities account in the name
of any Borrower, (iii) a futures commission merchant or clearing house, as
applicable, with respect to commodity accounts and commodity contracts held by
any Borrower, or (iv) a credit card company with respect to collections of and
payments upon customer credit card transactions, whereby, among other things,
the issuer, securities intermediary, futures commission merchant or credit card
company disclaims any security interest in the applicable financial assets,
acknowledges the Lien of Agent, on behalf of itself and Lenders, on such
financial assets, and agrees to follow the instructions or entitlement orders of
Agent without further consent by the affected Borrower.
"Cost" shall mean with respect to Eligible Inventory of a Borrower, the lower of
cost or market value of such Eligible Inventory as determined in accordance with
GAAP.
"Default" means any of the events specified in SECTION 12.1 which with the
passage of time or giving of notice or both would constitute an Event of
Default.
"Default Margin" means two percent (2%) per annum.
"Disbursement Account" means an account maintained by and in the name of a
Borrower with a Disbursing Bank for the purposes of depositing proceeds of
Advances.
9
16
"Disbursing Bank" means any commercial bank within which a Borrower maintains a
Disbursement Account after the Effective Date.
"Deposit Accounts" means all demand, time, savings, passbook, money market or
like depository account and all certificates of deposit, maintained with a bank,
savings and loan association, credit union or like organization (other than an
account evidenced by a certificate of deposit that is an instrument under the
Uniform Commercial Code) to which proceeds of Collateral are deposited.
"Documentary Letter of Credit" means any documentary letter of credit issued or
authorized to be issued by an Issuing Bank for the account of a Borrower
pursuant to ARTICLE 3 hereof.
"Dollar" and "$" means freely transferable United States dollars.
"ERISA" means the Employee Retirement Income Security Act of 1974, as in effect
from time to time, and any successor statute.
"Early Termination Date" shall mean any date, prior to the first (1st) annual
anniversary of the Effective Date, on which the Borrowers terminate this
Agreement or the Revolving Credit Facility pursuant to SECTION 4.5.
"Early Termination Fee" shall mean the fee the Agent, on behalf of the Lenders,
is entitled to charge the Borrowers, in the event of a voluntary termination by
the Borrowers of the Revolving Credit Facility or this Agreement prior to the
first (1st) annual anniversary of the Effective Date, which shall be an amount
equal to (a) the amount of the Revolving Credit Facility multiplied by (b)
one-half of one percent (.50%).
"Effective Date" means the later of (a) the Agreement Date, and (b) the first
date on which all of the conditions set forth in ARTICLE 5 shall have been
fulfilled.
"Effective Interest Rate" means each rate of interest per annum on the Revolving
Credit Loans in effect from time to time pursuant to the provisions of SECTION
4.1.
"Eligible Accounts" of a Borrower, shall mean the unpaid
portion of any credit card receivable payable in Dollars to such Borrower
provided that, unless otherwise approved in writing by the Agent, no credit card
receivable shall be deemed to be an Eligible Account of a Borrower unless it
meets all of the following requirements: (a) such Account arises from the sale
of goods, is owned by such Borrower and represents a complete bona fide
transaction which requires no further act under any circumstances on the part of
such Borrower to make such Account payable by the
10
17
Account Debtor; (b) such Account is not unpaid more than five (5) Business Days
after the date of the date of determination of eligibility thereof; (c) such
Account and the underlying contract does not contravene any laws, rules or
regulations applicable thereto including, without limitation, rules and
regulations relating to truth-in-lending, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection practices and privacy
and no party to the underlying contract is in violation of any such laws, rules
or regulation; (d) such Account is a valid, legally enforceable obligation of
the Account Debtor with respect thereto and is not subject to any present, or
contingent offset, deduction or counterclaim, dispute or other defense on the
part of such Account Debtor (other than the customary right of return of
Inventory which has not been exercised by a customer); (e) such Account is
subject to the Security Interest, which is perfected as to such Account, and is
subject to no other Lien whatsoever and the goods, the sale of which gave rise
to the Accounts, were not at the time of the sale subject to any Lien
whatsoever; (f) such Borrower is not in breach of any express or implied
representations or warranty with respect to the goods, the sale of which gave
rise to such Account nor in breach of any representation or warranty, covenant
or other agreement contained in the Loan Documents with respect to such Account;
and (g) any other requirements deemed necessary by the Agent in its reasonable
credit judgment and which are customary either in the commercial finance
industry or in the lending practices of the Agent.
"Eligible Assignee" means (i) a commercial bank organized under the laws of the
United States, or any State thereof, having total assets in excess of
$500,000,000.00 or any commercial finance or asset based lending affiliate of
any such commercial bank; (ii) a savings and loan association or savings bank
organized under the laws of the United States, or any State thereof, having a
net worth of at least $250,000,000.00 calculated in accordance with GAAP; and
(iii) any Lender listed on the signature page of this Agreement; provided in
each case that the representations contained in SECTIONS 13.1(C) and 13.2 hereof
shall be applicable with respect to such institution or Lender.
"Eligible Inventory" of a Borrower means items of Inventory of such Borrower
held for sale in the ordinary course of the business of such Borrower (but not
including packaging, shipping materials or maintenance supplies) which are
deemed by the Agent in the exercise of its reasonable credit judgment to be
eligible for inclusion in the calculation of the Borrowing Base. Unless
otherwise approved in writing by the Agent, no Inventory shall be deemed to be
Eligible Inventory of a Borrower unless it meets all of the following
requirements: (a) such Inventory is owned by such Borrower, is subject to the
Security Interest, which is perfected as to such Inventory, and is not subject
to any claim or reclamation, adverse claim, interest or right of equal or
superior priority to the Security Interest or any other Lien whatsoever; (b)
such Inventory consists of finished goods; (c) such Inventory is in good
condition and meets all standards applicable to such goods for their use or sale
imposed by any Person having regulatory authority over such matters; (d) such
Inventory is currently either usable or saleable, at prices approximating at
least
11
18
the Cost thereof, in the normal course of such Borrower's business; (e) such
Inventory is located at one of the locations listed in SCHEDULE 6.1(S) (as such
Schedule may be updated from time to time by the Borrower and delivered to the
Agent), none of which is a closed store location, or is in-transit inventory
pursuant to clause (h) below; (f) such Inventory is in the possession and
control of the Borrower and not any third party except for Inventory which is
located in a warehouse or other facility leased by such Borrower, provided that,
not later than ninety (90) days after the Effective Date or the first date on
which Inventory is located at such facility, the warehouseman or lessor has
delivered to the Agent a waiver and consent in form and substance satisfactory
to the Agent; (g) such Inventory is determined by the Agent, in its reasonable
business judgment, to constitute adequate Collateral to support the Advance
requested by such Borrower; (h) such Inventory does not include any outbound
freight, in-transit inventory (unless such inventory is (A) in the case of
inventory in-transit from a supplier to any Borrower (1) inventory in which such
Borrower has title and which is insured to the full value thereof, or (2) Agent
has possession and control of the applicable Documentary Letters of Credit and
the related documentation including, without limitation, any negotiable bills of
lading properly endorsed or non-negotiable bills of lading, or (B) inventory
in-transit between any of Borrowers' stores or between any of Borrowers'
distribution centers and any of Borrowers' stores), inventory loads, or
estimated shrinkage; (i) such Borrower is not in breach of any express or
implied representation or warranty with respect to either the Inventory in
general or to the Eligible Inventory; (j) such Inventory was not produced in
violation of the Fair Labor Standards Act and subject to the so-called "hot
goods" provision contained in Title 29, Chapter 8, U.S.C. ss.215(a), and (k)
such Inventory is not determined by the Agent it its reasonable credit judgment
to be ineligible for any other reason.
"Environmental Laws" means all federal, state, local and foreign laws now or
hereafter in effect relating to pollution or protection of the environment,
including laws relating to emissions, discharges, Releases or threatened
Releases of pollutants, Contaminants, chemicals, or industrial, toxic or
hazardous substances or wastes into the environment (including, without
limitation, ambient air, surface water, ground water, or land), or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, removal, transport, or handling of pollutants, Contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes, and any and
all regulations, written notices or demand letters issued, entered, promulgated
or approved thereunder; such laws and regulations include but are not limited to
the Resource Conservation and Recovery Act, 42 ▇.▇.▇.▇▇. 6901 et seq., as
amended; the Comprehensive Environmental Response, Compensation and Liability
Act, 42 ▇.▇.▇.▇▇. 6901 et seq., as amended; the Toxic Substances Control Act, 15
U.S.C. ss. 2601 et seq., as amended; the Clean Air Act, 46 ▇.▇.▇.▇▇. 7401 et
seq., as amended; and state and federal lien and environmental cleanup programs.
12
19
"Environmental Lien" means a Lien in favor of any governmental entity for (a)
any liability under Environmental Laws or (b) damages arising from, or costs
incurred by such governmental entity in response to, a Release or threatened
Release of Contaminant into the environment.
"Environmental Liabilities" shall mean, with respect to any Person, all
liabilities, obligations, responsibilities, response, remedial and removal
costs, investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all fees, disbursements and expenses of counsel, experts and
consultants), fines, penalties, sanctions and interest incurred as a result of
or related to any claim, suit, action, investigation, proceeding or demand by
any Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law, arising under or related to
any Environmental Laws, Environmental Permits, or in connection with any Release
or threatened Release or presence of a Hazardous Material whether on, at, in,
under, from or about or in the vicinity of any real or personal property.
"Environmental Permits" shall mean all permits, licenses, authorizations,
certificates, approvals, registrations or other written documents required by
any Governmental Authority under any Environmental Laws.
"Event of Default" means any of the events specified in SECTION 12.1, provided
that any requirement for notice or lapse of time or any other express condition
has occurred or been satisfied.
"Facility Fee" shall have the meaning assigned to such term in SECTION 4.2(A).
"Financial Officer" means the chief financial officer, chief accounting officer,
Treasurer or Controller of a Borrower, or an officer in a comparable position at
any Borrower.
"Financing Statements" means and includes all UCC financing statements required
by Agent and executed by a Borrower, in form and substance satisfactory to the
Agent for the purpose of perfecting a security interest in the personal property
Collateral.
"Fiscal Month" shall mean each of the twelve (12) monthly accounting periods of
the Borrowers comprising their Fiscal Year.
"Fiscal Quarter" shall mean each of the quarterly accounting periods of the
Borrowers comprising their Fiscal Year.
13
20
"Fiscal Year" shall mean each of the fiscal years of the Borrowers ending on the
Saturday nearest to the last day of January.
"Form 10-K" means the Borrowers' annual report on Form 10-K and the accompanying
consolidated financial statements filed with the Securities and Exchange
Commission.
"Form 10-Q" means, for any given Fiscal Quarter, the Borrowers' quarterly report
on Form 10-Q and the accompanying consolidated financial statements filed with
the Securities and Exchange Commission.
"GAAP" means accounting principles generally accepted in the United States
consistently applied and maintained throughout the period indicated and
consistent with the prior financial practice of the Person referred to.
"Governmental Approvals" means all authorizations, consents, approvals, licenses
and exemptions of, registrations and filings with, and reports to, all
governmental bodies, whether federal, state, local or foreign national or
provincial and all agencies thereof.
"Governmental Authority" shall mean any nation or government, any state or other
political subdivision thereof, and any agency, department or other entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guaranty," "Guaranteed" or to "Guarantee" as applied to any obligation of
another Person shall mean and include
(A) A GUARANTY (OTHER THAN BY ENDORSEMENT OF NEGOTIABLE INSTRUMENTS FOR
COLLECTION IN THE ORDINARY COURSE OF BUSINESS), DIRECTLY OR INDIRECTLY, IN ANY
MANNER, OF ANY PART OR ALL OF SUCH OBLIGATION OF SUCH OTHER PERSON, AND
AN AGREEMENT DIRECT OR INDIRECT, CONTINGENT OR OTHERWISE, AND WHETHER OR NOT
CONSTITUTING A GUARANTY, THE PRACTICAL EFFECT OF WHICH IS TO ASSURE THE PAYMENT
OR PERFORMANCE (OR PAYMENT OF DAMAGES IN THE EVENT OF NONPERFORMANCE) OF ANY
PART OR ALL OF SUCH OBLIGATION OF SUCH OTHER PERSON WHETHER BY (I) THE PURCHASE
OF SECURITIES OR OBLIGATIONS, (II) THE PURCHASE, SALE OR LEASE (AS LESSEE OR
LESSOR) OF PROPERTY OR THE PURCHASE OR SALE OF SERVICES PRIMARILY FOR THE
PURPOSE OF ENABLING THE OBLIGOR WITH RESPECT TO SUCH OBLIGATION TO MAKE ANY
PAYMENT OR PERFORMANCE (OR PAYMENT OF DAMAGES IN THE EVENT OF NONPERFORMANCE)
OF OR ON ACCOUNT OF ANY PART OR ALL OF SUCH OBLIGATION OR TO ASSURE THE OWNER
OF SUCH OBLIGATION AGAINST LOSS, (III) THE SUPPLYING OF FUNDS TO, OR IN ANY
OTHER MANNER INVESTING IN, THE OBLIGOR WITH RESPECT TO SUCH OBLIGATION, (IV)
REPAYMENT OF AMOUNTS DRAWN DOWN BY BENEFICIARIES OF LETTERS OF CREDIT, OR (V)
THE SUPPLYING OF FUNDS TO OR INVESTING IN A PERSON ON ACCOUNT OF ALL OR ANY
PART OF SUCH PERSON'S OBLIGATION UNDER A GUARANTY OF ANY OBLIGATION OR
INDEMNIFYING OR HOLDING HARMLESS, IN ANY WAY, SUCH PERSON AGAINST
ANY PART OR ALL OF SUCH OBLIGATIONS.
14
21
"Indebtedness" of any Person means, without duplication, (a) Liabilities, (b)
all obligations for money borrowed or for the deferred purchase price of
property or services or in respect of Reimbursement Obligations under letters of
credit, (c) all obligations represented by bonds, debentures, notes and accepted
drafts that represent extensions of credit, (d) Capitalized Lease Obligations,
(e) all obligations (including, during the noncancellable term of any lease in
the nature of a title retention agreement, all future payment obligations under
such lease discounted to their present value in accordance with GAAP) secured by
any Lien to which any property or asset owned or held by such Person is subject,
whether or not the obligation secured thereby shall have been assumed by such
Person, (f) all obligations of other Persons which such Person has Guaranteed,
including, but not limited to, all obligations of such Person consisting of
recourse liability with respect to accounts receivable sold or otherwise
disposed of by such Person, and (g) in the case of a Borrower (without
duplication), the Revolving Credit Loans.
"Initial Anniversary Date" shall mean the fifth (5th) anniversary of the
Effective Date.
"Intellectual Property" means, as to any Person, all of such Person's then owned
existing and future acquired or arising patents, patent rights, copyrights,
works which are the subject of copyrights, trademarks, service marks, trade
names, patent, trademark and service ▇▇▇▇ applications, and all licenses and
rights related to any of the foregoing and all other rights under any of the
foregoing, all extensions, renewals reissues, divisions, continuations and
continuations-in-part of any of the foregoing and all rights to ▇▇▇ for past,
present and future infringements of any of the foregoing.
"Interest Payment Date" means the first (1st) day of each calendar month
commencing on the first day of the month immediately following the Effective
Date and continuing thereafter until the Secured Obligations have been
irrevocably paid in full.
"Inventory" means, as to any Person, all "inventory" as defined in the Uniform
Commercial Code including, without limitation, all of such Person's then owned
or existing and future acquired or arising (a) inventory, merchandise, goods and
other personal property intended for sale or lease or for display or
demonstration, (b) work in process, (c) raw materials and other materials and
supplies of every nature and description used or which might be used in
connection with the manufacture, packing, shipping, advertising, selling,
leasing or furnishing of the foregoing or otherwise used or consumed in the
conduct of business, and (d) documents evidencing, and general intangibles
relating to, any of the foregoing.
"Investment" means, with respect to any Person: (a) the direct or indirect
purchase or acquisition of any beneficial interest in, any share of capital
stock of, evidence of Indebtedness of or other security issued by any other
Person, (b) any loan, advance or extension of credit to, or contribution to the
capital of, any other Person, excluding
15
22
advances to employees in the ordinary course of business for business expenses,
(c) any Guaranty of the obligations of any other Person, or (d) any commitment
or option to take any of the actions described in CLAUSES (A), (B) or (C) above.
"Investment Accounts" means the UBS Investment Account and the Salomon
Investment Account.
"Investment Property" means, as to any Person, all "investment property", as
defined in the Uniform Commercial Code, including, without limitation, (i) all
securities, whether certificated or uncertificated, including, but not limited
to, stocks, bonds, interests in limited liability companies, partnership
interests, treasuries, certificates of deposit, and mutual fund shares; (ii) all
securities entitlements of such Person, including, but not limited to, the
rights of such Person to any securities accounts, any brokerage accounts and the
financial assets held by a financial intermediary in such accounts and any free
credit balance or other money owing by any financial intermediary with respect
to such accounts; (iii) all securities accounts and brokerage accounts of such
Person; (iv) all commodity contracts of such Person; and (v) all commodity
accounts held by such Person.
"IRS" means the Internal Revenue Service or any successor agency thereto.
"Issuing Bank" means any banking institution which is an issuer of a Letter of
Credit and its successors and assigns hereunder.
"Lender" means at any time any financial institution party to this Agreement at
such time, including any such Person becoming a party hereto pursuant to the
provisions of ARTICLE 13, and its successors and assigns, and "Lenders" means at
any time all of the financial institutions party to this Agreement at such time,
including any such Persons becoming parties hereto pursuant to the provisions of
ARTICLE 13, and their successors and assigns.
"Letter of Credit" means any Documentary Letter of Credit or Standby Letter of
Credit.
"Letter of Credit Amount" means, with respect to any Letter of Credit, the
aggregate maximum amount at any time available for drawing under such Letter of
Credit.
"Letter of Credit Default Margin" means 2.00% per annum.
"Letter of Credit Facility" means the amount of $95,000,000.
"Letter of Credit Obligations" means, at any time, the sum of (a) the aggregate
Reimbursement Obligations of all of the Borrowers at such time, PLUS (b) the
aggregate Letter of Credit Amount of Letters of Credit outstanding at such time,
PLUS (c) the
16
23
aggregate Letter of Credit Amount of Letters of Credit the issuance of which has
been authorized by the Agent and the Issuing Bank pursuant to SECTION 3.1 but
that have not yet been issued, in each case as determined by the Agent.
"Letter of Credit Reserve" means, at any time, the aggregate Letter of Credit
Obligations at such time, excluding Letter of Credit Obligations that are fully
secured by Cash Collateral.
"Liabilities" means, as at the end of any fiscal period, all liabilities
determined in accordance with GAAP and included on a balance sheet.
"LIBOR" shall mean at any time of determination, and subject to availability,
for each interest period, the applicable London Interbank Offered Rate paid in
London on dollar deposits from other banks determined as follows: (1) first, as
determined by the Agent based upon information presented on Telerate Systems at
Page 3750 as of 11:00 a.m. (London Time) or, if not then available, then (2) as
quoted by Chase Manhattan Bank, N.A., or, if not then available, then (3) as
published under "Money Rates" in the New York City edition of the Wall Street
Journal or, if there is no such publication or statement therein as to LIBOR,
then (4) in any publication used in the New York City financial community.
LIBOR shall be adjusted automatically (i) at the beginning of the applicable
LIBOR Period, or (ii) on the first day of any LIBOR Period following the
conversion or continuation of such LIBOR Advance.
"LIBOR Advance" shall mean those Revolving Credit Loans for which a Borrower has
elected to use LIBOR for interest rate computations.
"LIBOR Option" shall mean (a) until the three (3) month anniversary of the
Effective Date, a fixed rate for the LIBOR Period equal to the LIBOR for such
period plus two percent (2.00%) per annum, and (b) after the three (3) month
anniversary of the Effective Date and subject to the requirements set forth in
the definition of Applicable Margin, a fixed rate for the LIBOR Period equal to
the LIBOR for such period plus the Applicable Margin.
"LIBOR Period" means, with respect to each LIBOR Advance, the
period commencing on the date of the making of, continuation of, or conversion
to such LIBOR Advance and ending one, two, or three months thereafter, as the
Borrower may elect in the applicable Borrowing Notice; provided that:
17
24
(a) any LIBOR Period that would otherwise end on a day that is
not a Business Day shall, subject to the provisions of CLAUSE (C) below, be
extended to the next succeeding Business Day, unless such Business Day falls in
the next calendar month, in which case such LIBOR Period shall end on the
immediately preceding Business Day;
(b) any LIBOR Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such LIBOR Period) shall, subject to CLAUSE
(C) below, end on the last Business Day of a calendar month;
(c) any LIBOR Period that would otherwise end after the
Termination Date shall end on the Termination Date; and
(d) notwithstanding CLAUSE (C) above, no LIBOR Period shall
have a duration of less than one (1) month and, if any applicable LIBOR Period
would be for a shorter period, such LIBOR Period shall not be available
hereunder.
"Lien" as applied to the property of any Person means: (a) any mortgage, deed to
secure debt, deed of trust, lien, pledge, charge, lease constituting a
Capitalized Lease Obligation, conditional sale or other title retention
agreement, or other security interest, security title or encumbrance of any kind
in respect of any property of such Person or upon the income and profits
therefrom, (b) any arrangement, express or implied, under which any property of
such Person is transferred, sequestered or otherwise identified for the purpose
of subjecting the same to the payment of Indebtedness or performance of any
other obligation in priority to the payment of the general, unsecured creditors
of such Person, and (c) the filing of, or any agreement to give, any financing
statement under the UCC of any state or its equivalent in any jurisdiction.
"Loan Account" and "Loan Accounts" shall have the meanings ascribed thereto in
SECTION 4.4(A).
"Loan Documents" means collectively this Agreement, the Notes, the Security
Documents and each other instrument, agreement or document executed by any
Borrower or any Affiliate or Subsidiary of any Borrower in connection with this
Agreement whether prior to, on or after the Effective Date and each other
instrument, agreement or document referred to herein or contemplated hereby, all
in form and substance acceptable to the Agent.
"Margin Stock" means margin stock as defined in Section 221.1(h) of Regulation
U, as the same may be amended or supplemented from time to time.
18
25
"Materially Adverse Effect" means, with respect to any Person, a materially
adverse effect upon such Person's business, assets, liabilities, condition
(financial or otherwise), results of operations or business prospects, and in
addition, with respect to a Borrower, includes a materially adverse effect upon
such Borrower's ability to perform its obligations hereunder or under any other
Loan Document to which it is a party or upon the enforceability of such
obligations against such Borrower.
"Minimum Commitment" shall have the meaning ascribed to such term in SECTION
13.1(B) hereof.
"Money Borrowed" means, as applied to Indebtedness, (a) Indebtedness for money
borrowed, (b) Indebtedness, whether or not in any such case the same was for
money borrowed, (i) represented by notes payable and drafts accepted, that
represent extensions of credit, (ii) constituting obligations evidenced by
bonds, debentures, notes or similar instruments, or (iii) upon which interest
charges are customarily paid (other than trade Indebtedness) or that was issued
or assumed as full or partial payment for property, (c) Indebtedness that
constitutes a Capitalized Lease Obligation, (d) Indebtedness that is such by
virtue of CLAUSE (F) of the definition thereof, but only to the extent that the
obligations Guaranteed are obligations that would constitute Indebtedness for
Money Borrowed and (e) obligations in respect of mandatory redeemable capital
stock, if any, of any Borrower.
"Multi-employer Plan" means a "multi-employer plan" as defined in Section
4001(a)(3) of ERISA to which a Borrower or a Related Company is required to
contribute or has contributed within the immediately preceding six years.
"Net Outstandings" of any Lender means, at any time, the sum of (a) all amounts
paid by such Lender to the Agent in respect of Revolving Credit Loans or
otherwise under this Agreement, MINUS (b) all amounts paid by the Agent to such
Lender which are received by the Agent and which, pursuant to this Agreement,
are paid over to such Lender for application in reduction of the outstanding
principal balance of the Revolving Credit Loans or the Letter of Credit
Obligations.
"Net Income" or "Net Loss" means, as applied to any Person, the net income (or
net loss) of such Person for the period in question after giving effect to
deduction of or provision for all operating expenses, all taxes and reserves
(including reserves for deferred taxes and all other proper deductions), all
determined in accordance with GAAP, provided that there shall be excluded: (a)
the net income (or net loss) of any Person accrued prior to the date it becomes
a Subsidiary of, or is merged into or consolidated with, the Person whose Net
Income is being determined or a Subsidiary of such Person, (b) the net income
(or net loss) of any Person in which the Person whose Net Income is being
determined or any Subsidiary of such Person has an ownership interest, except,
in the case of net income, to the extent that any such income has actually been
received by such Person or such
19
26
Subsidiary in the form of cash dividends or similar distributions, (c) any
restoration of any contingency reserve, except to the extent that provision for
such reserve was made out of income during such period, (d) any net gains or
losses on the sale or other disposition, not in the ordinary course of business,
of Investments, Business Units and other capital assets, provided that there
shall also be excluded any related charges for taxes thereon, (e) any net gain
arising from the collection of the proceeds of any insurance policy, (f) any
write-up of any asset, and (g) any other extraordinary item.
"Net Worth" of any Person means the total shareholders' equity (including
capital stock, additional paid-in capital and retained earnings, after deducting
treasury stock) which would appear as such on a balance sheet of such Person
prepared in accordance with GAAP.
"Non-Ratable Loan" means a Revolving Credit Loan made by the Settlement Lender
in accordance with the provisions of SECTION 4.7(B)(II).
"Notes" means the Revolving Credit Notes.
"Operating Lease" shall have the meaning assigned to such term in SECTION 11.10
hereof.
"Operating Lease Obligations" means, with respect to an Operating Lease for a
Borrower, as of any date, an amount equal to (a) the monthly lease payment for
such Operating Lease including, without limitation, any percentage rent,
additional rent, escalation payments, and any other payments by such Borrower to
any lessor under an Operating Lease relating to common area maintenance,
operating expenses, real estate taxes, insurance or any other expenses allocated
to the Borrower as tenant under such Operating Lease multiplied times (b) the
number of months then remaining in the current term of such Operating Lease.
"Overadvance" means any advance made pursuant to SECTION 4.12 hereof.
"Overextension" shall have the meaning assigned to such term in SECTION 2.3(B)
hereof.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor agency.
"Permitted Guaranties" means (a) those described on SCHEDULE 6.1(I), or (b)
guarantees of Permitted Obligations.
"Permitted Indebtedness for Money Borrowed" means (a) the
Indebtedness to Lenders arising under this Agreement, (b) the Indebtedness set
forth on SCHEDULE 6.1(I) hereof, (c) Borrowers Intercompany Debt, and (d) other
Indebtedness (including Purchase Money Indebtedness) in an aggregate amount
outstanding at any time for all
20
27
Borrowers not to exceed $45,000,000; provided that (i) at the time of the
incurrence of such Indebtedness no Default or Event of Default exists or shall
occur therefrom, (ii) no Lien shall be created or be permitted to exist on the
Collateral, (iii) except for Capitalized Lease Obligations, the aggregate net
proceeds thereof are applied to reduce the outstanding amount of the Secured
Obligations (other than contingent obligations) including, without limitation,
the Revolving Credit Loans, in accordance with SECTION 4.1(B); provided,
however, that (y) such reduction shall not be a permanent reduction in the
principal amount of the Revolving Credit Facility and (z) the Borrowers shall
not incur any liability for LIBOR breakage costs as described in SECTION
4.1(A)(III) in the event such proceeds are used to prepay LIBOR Advances; and
(iv) if the Indebtedness with respect to any real estate being financed and
mortgages shall be less than 50% of the fair market value of such real estate,
then the terms of such Indebtedness shall not prohibit a second lien or mortgage
thereon.
"Permitted Investments" means (a) those Investments set forth
on ANNEX II hereto upon the terms set forth therein; (b) premiums on
split-dollar life insurance paid by any Borrower, not to exceed in the aggregate
for all Borrowers $4,000,000 per Fiscal Year during the term hereof; and (c)
Investments in other Borrowers; provided that, if such Borrower is to be a new
Subsidiary of any Borrower, (i) Borrowers provide Agent with at least thirty
(30) days prior written notice thereof of the intent to organize such new
Subsidiary, and (ii) Borrowers cause each new Subsidiary to (A) execute and
deliver (1) a written instrument in form and substance satisfactory to the
Agent, (2) an amendment to this Agreement or (3) such other documents as may
reasonably be determined by Agent to be necessary or desirable, to add such
Subsidiary as a "Borrower" hereunder, (B) take whatever other actions, including
without limitation, the execution of a revolving credit note (substantially in
the form of Exhibit A hereto) or allonges to the existing Notes, and any UCC-1
Financing Statements, necessary or advisable in the opinion of the Agent and as
otherwise may be requested by Agent, and, (C) deliver such proof of corporate
action, incumbency of officers, opinions of counsel and other documents as is
consistent with those delivered by the other Borrowers at the Closing.
"Permitted Liens" means: (a) Liens securing taxes, assessments and other
governmental charges or levies (excluding any Lien imposed pursuant to any of
the provisions of ERISA) or the claims of materialmen, suppliers, mechanics,
carriers, warehousemen or landlords for labor, materials, supplies or rentals
incurred in the ordinary course of business, but in all cases, only if payment
shall not at the time be required to be made in accordance with SECTION 9.6, and
(b) Liens consisting of deposits or pledges made in the ordinary course of
business in connection with, or to secure payment of utility payments, bids,
tenders, contracts (other than contracts for payment of money), obligations
under workers' compensation, unemployment insurance or similar legislation or
under surety or performance bonds, in each case arising in the ordinary course
of business; (c) Liens
21
28
constituting encumbrances in the nature of zoning restrictions, easements and
rights or restrictions of record on the use of the Real Estate, which in the
reasonable credit judgment of the Agent do not materially detract from the value
of Real Estate or impair the use thereof in the business of the applicable
Borrower; (d) Liens securing Permitted Obligations; (e) Liens arising out of or
resulting from any judgment or award, the time for the appeal or petition for
rehearing of which shall not have expired, or in respect of which the applicable
Borrower is fully protected by insurance or in respect of which such Borrower
shall at any time in good faith be prosecuting an appeal or proceeding for a
review and in respect of which a stay of execution pending such appeal or
proceeding for review shall have been secured, and as to which appropriate
reserves have been established on the books of such Borrower; (f) Liens that may
arise as a result of layaways with respect to Inventory; (g) Liens not attaching
to any Collateral; and (h) Liens listed on SCHEDULE 6.1(H).
"Permitted Obligations" means the aggregate amount of outstanding Purchase Money
Indebtedness, Operating Lease Obligations, and Permitted Indebtedness for Money
Borrowed which, and only to the extent, is incurred subject to the provisions of
this Agreement, including without limitation, SECTION 11.2.
"Permitted Stock Repurchases" means repurchases by the GFC of its Common Stock,
pursuant to the terms of the current repurchase program adopted by its Board of
Directors in June 1999, which repurchases shall not exceed in the aggregate,
during the term of this Revolving Credit Facility or any extension thereof,
$13,000,000; provided further, that before and after giving effect to each
repurchase of Common Stock no Event of Default or Availability Shortfall exists
or will result therefrom.
"Person" means an individual, corporation, partnership, association, trust or
unincorporated organization, or a government or any agency, division,
department, or political subdivision thereof.
"Pledge Agreements" means the Salomon Pledge Agreement and the UBS Pledge
Agreement.
"Power of Attorney" means the Power of Attorney substantially in the form of
EXHIBIT F hereto, executed and delivered by each Borrower to Agent
contemporaneously herewith, as the same may be amended, modified or supplemented
from time to time.
"Prime Advance" shall mean those Revolving Credit Loans for which a Borrower has
elected to use the Prime Option for interest rate computations.
"Prime Option" shall mean an annual rate of interest equal to the Chase
Manhattan Bank Rate plus the Applicable Margin.
22
29
"Purchase Money Indebtedness" means Indebtedness created to finance or refinance
the payment of all or any part of the purchase price (not in excess of the fair
market value thereof) of any tangible asset, other than Collateral, incurred at
the time of or within ten (10) days prior to or after the acquisition of such
tangible asset and secured only by Purchase Money Liens.
"Purchase Money Lien" means any Lien securing Purchase Money Indebtedness, but
only if such Lien shall at all times be confined solely to the tangible asset
(other than Collateral) which was financed or refinanced through the incurrence
of the Purchase Money Indebtedness secured by such Lien.
"Qualified Representation" means a representation and warranty in
this Agreement which contains a materiality qualifier or that is by its express
terms qualified as to materiality.
"Real Estate" means all of each Borrower's now or hereafter owned or leased
estates in real property, including, without limitation, all fees, leaseholds
and future interests, together with all of such Borrower's now or hereafter
owned or leased interests in the improvements and emblements thereon, the
fixtures attached thereto and the easements appurtenant thereto, including,
without limitation, the real property described on SCHEDULE 6.1(V).
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System (or any successor), as the same may be amended or supplemented
from time to time.
"Reimbursement Agreement" means, with respect to a Letter of Credit, such form
of application therefor and form of reimbursement agreement therefor (whether in
a single document or several documents) as the Issuing Bank may employ in the
ordinary course of business for its own account, with such modifications thereto
as may be agreed upon by an Issuing Bank and a Borrower, provided that such
application and agreement and any modifications thereto are not inconsistent
with the terms of this Agreement.
"Reimbursement Obligations" means the reimbursement or repayment obligations of
a Borrower to an Issuing Bank pursuant to ARTICLE 3 or pursuant to a
Reimbursement Agreement with respect to amounts that have been drawn under
Letters of Credit.
"Related Company" means, as to any Person, any (a) corporation which is a member
of the same controlled group of corporations (within the meaning of Section
414(b) of the Code) as such Person, (b) partnership or other trade or business
(whether or not incorporated) under common control (within the meaning of
Section 414(c) of the Code)
23
30
with such Person, or (c) member of the same affiliated service group (within the
meaning of Section 414(m) of the Code) as such Person or any corporation
described in CLAUSE (A) above or any partnership, trade or business described in
CLAUSE (B) above.
"Release" means release, spill, emission, leaking, pumping, injection, deposit,
disposal, discharge, dispersal, leaching or migration into the indoor or outdoor
environment or into or out of any property, including the movement of
Contaminants through or in the air, soil, surface water or groundwater.
"Remedial Action" means actions required under Environmental Laws to (i) clean
up, remove, treat or in any other way address Contaminants in the indoor or
outdoor environment; (ii) prevent the Release or threat of Release or minimize
the further Release of Contaminants so they do not migrate or endanger or
threaten to endanger public health or welfare or the indoor or outdoor
environment; or (iii) perform pre-remedial studies and investigations and
post-remedial monitoring and care.
"Replacement Letters of Credit" shall have the meaning assigned to such term in
SECTION 3.3(B) hereof.
"Required Lenders" means, at any time, any combination of Lenders whose
Commitment Percentages at such time aggregate at least sixty-six and two-thirds
percent (662/3%).
"Restricted Distribution" by any Person means (a) its retirement, redemption,
purchase, or other acquisition for value of any capital stock or other equity
securities or partnership interests issued by such Person, (b) the declaration
or payment of any dividend or distribution on or with respect to any such
securities or partnership interests, except to another Borrower, (c) any loan or
advance by such Person to, or other investment by such Person in, the holder of
any of such securities or partnership interests, and (d) any other payment by
such Person in respect of such securities or partnership interests.
"Restricted Payment" means (a) any retirement, redemption, repurchase,
prepayment or other acquisition, or the setting aside of any money for a
sinking, defeasance or other analogous fund for any such retirement, redemption,
repurchase, prepayment or other acquisition, prior to the stated maturity
thereof or prior to the due date of any regularly scheduled installment or
amortization payment with respect thereto, of any Indebtedness of a Person
(other than the Secured Obligations and trade debt), (b) the payment by any
Person of the principal amount of or interest on any Indebtedness (other than
trade debt) owing to an Affiliate of such Person, and (c) the payment of any
management, consulting or similar fee by any Person to an Affiliate of such
Person, except for management compensation arrangements (i) approved in writing
by, or by resolutions of, the Compensation Committee of the Board of Directors
with respect to the executive officers
24
31
of the Borrowers and (ii) approved by the appropriate executive officers of the
Borrowers with respect to the other officers of the Borrowers.
"Revolving Credit Facility" means, as the context requires, either (a) the
principal amount equal to $130,000,000 or (b) the credit facility for the
Revolving Credit Loans, evidenced by this Agreement and the other Loan
Documents.
"Revolving Credit Loans" means, as measured at any time, the aggregate
outstanding amount of the Advances made to all of the Borrowers pursuant to
Section 2.1.
"Revolving Credit Notes" means the Revolving Credit Notes made by the Borrowers
payable to the order of a Lender evidencing the obligation of each Borrower to
pay the aggregate unpaid principal amount of the Revolving Credit Loans made to
it by such Lender (and any promissory note or notes that may be issued from time
to time in substitution, renewal, extension, replacement or exchange therefor
whether payable to such Lender or to a different Lender in connection with a
Person becoming a Lender after the Effective Date or otherwise) substantially in
the form of EXHIBIT A hereto, with all blanks properly completed, either as
originally executed or as the same may from time to time be supplemented,
modified, amended, renewed, extended or refinanced.
"Salomon Investment Account" means the Borrowers' investment brokerage account
with ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, Inc. existing as of the date hereof.
"Salomon Pledge Agreement" means that certain Pledge Agreement dated as of even
date herewith, executed by the GFC, in favor of Agent, pledging to Agent, for
the benefit of itself and the Lenders, all of its right, title and interest in
and to the Salomon Investment Account and all financial assets and other
properties of GFC and the Borrowers held therein.
"Schedule of Inventory" means a schedule delivered by the Borrowers to the
Agent, from time to time, pursuant to the provisions of SECTION 8.10(B).
"Secured Obligations" means, in each case whether now in existence or hereafter
arising, (a) the principal of, and interest and premium, if any, on, the
Revolving Credit Loans, (b) the Reimbursement Obligations and all other
obligations of any Borrower to the Agent or any Lender arising in connection
with the issuance of Letters of Credit, and (c) all indebtedness, liabilities,
obligations, covenants and duties of any Borrower to the Agent or to the Lenders
of every kind, nature and description arising under or in respect of this
Agreement, the Notes, or any of the other Loan Documents, or any other document
between such Borrower and Agent or Lender whether direct or indirect, absolute
or contingent, due or not due, contractual or tortious, liquidated or
unliquidated, and whether or not evidenced by any note, and whether or not for
the payment of money, including
25
32
without limitation, fees required to be paid pursuant to ARTICLE 4 and expenses
required to be paid or reimbursed pursuant to SECTION 15.2.
"Security Documents" means each of the following:
(B) THE PLEDGE AGREEMENTS;
THE CONTROL LETTERS;
THE FINANCING STATEMENTS;
(d) the Blocked Account Agreements;
(e) the Warehouseman Agreements; and
(f) each other agreement, document, instrument
or writing executed and delivered by any Borrower or any other Person
securing the Secured Obligations.
"Security Interest" means the valid and perfected first priority Liens of the
Agent, for the benefit of the Agent and the Lenders, on and in the Collateral
effected hereby or by any of the Security Documents or pursuant to the terms
hereof or thereof.
"Settlement Date" means each Business Day after the Effective Date selected by
the Agent in its sole discretion subject to and in accordance with the
provisions of SECTION 4.7(B)(I) as of which a Settlement Report is delivered by
the Agent and on which settlement is to be made among the Lenders in accordance
with the provisions of SECTION 4.7.
"Settlement Lender" means, for the purposes of SECTION 4.7, the Agent in its
capacity as a Lender.
"Settlement Report" means each report, substantially in the form agreed to by
Agent and Lenders, prepared by the Agent and delivered to each Lender and
setting forth, among other things, as of the Settlement Date indicated thereon
and as of the next preceding Settlement Date, the aggregate principal balance of
all Revolving Credit Loans outstanding, each Lender's Commitment Percentage
thereof, each Lender's Net Outstandings and all Non-Ratable Loans made, and all
payments of principal, interest and fees received by the Agent from a Borrower
during the period beginning on such next preceding Settlement Date and ending on
such Settlement Date.
"Standby Letter of Credit" means any letter of credit (other than a Documentary
Letter of Credit) issued by an Issuing Bank for the account of a Borrower
pursuant to ARTICLE 3 hereof.
26
33
"Store Accounts" means each of the Borrowers' store bank accounts set forth on
SCHEDULE 6.1(EE) hereto.
"Subordinated Borrower Intercompany Debt" means, at any time
or from time to time, with respect to any Borrower with a negative stockholders'
equity, partnership capital or member equity (each as calculated in accordance
with GAAP), that amount of Borrower Intercompany Debt equal to the negative
equity or capital of such Borrower.
"Subsidiary"
(C) WHEN USED TO DETERMINE THE RELATIONSHIP OF A PERSON TO ANOTHER
PERSON, MEANS A PERSON OF WHICH AN AGGREGATE OF 50% OR MORE OF THE
STOCK OF ANY CLASS OR CLASSES OR 50% OR MORE OF OTHER OWNERSHIP
INTERESTS IS OWNED OF RECORD OR BENEFICIALLY BY SUCH OTHER PERSON, OR
BY ONE OR MORE SUBSIDIARIES OF SUCH OTHER PERSON, OR BY SUCH OTHER PERSON AND
ONE OR MORE SUBSIDIARIES OF SUCH PERSON,
if the holders of such stock, or other ownership interests, (A) are
ordinarily, in the absence of contingencies, entitled to vote for the
election of a majority of the directors (or other individuals performing
similar functions) of such Person, even though the right so to vote has been
suspended by the happening of such a contingency, or (B) are entitled, as
such holders, to vote for the election of a majority of the directors (or
individuals performing similar functions) of such Person,
whether or not the right so to vote exists by reason
of the happening of a contingency,
or in the case of such other ownership interests, if such
ownership interests constitute a majority voting interest, and
WHEN USED WITH RESPECT TO A PLAN, ERISA OR A PROVISION OF THE CODE
PERTAINING TO EMPLOYEE BENEFIT PLANS, ALSO MEANS ANY CORPORATION, TRADE OR
BUSINESS (WHETHER OR NOT INCORPORATED) WHICH IS UNDER COMMON CONTROL WITH A
BORROWER AND IS TREATED AS A SINGLE EMPLOYER WITH SUCH BORROWER UNDER SECTION
414(B) OR (C) OF THE CODE AND THE REGULATIONS THEREUNDER.
"Tangible Net Worth" means, as applied to any Person, the Net
Worth of such Person at the time in question, after deducting therefrom the
amount of all intangible items reflected therein, including all unamortized debt
discount and expense, unamortized research and development expense, unamortized
deferred charges, goodwill, Intellectual Property, unamortized excess cost of
investment in Subsidiaries over equity at dates of acquisition, and all similar
items which should properly be treated as intangibles in accordance with GAAP.
"Termination Date" means the first to occur of (a) the Initial Anniversary Date
or any Anniversary Date, upon one hundred fifty (150) days written notice by
Agent to the Borrowers prior to any such date, (b) at any time upon one hundred
twenty (120) days prior written notice from the Borrowers to the Agent; (c) the
date that Agent elects pursuant to SECTION 12.2 hereof to terminate this
Agreement and the Borrowers' right to receive Advances and accommodations for
Letters of Credit or (d) the tenth (10th) Anniversary Date.
27
34
"Termination Event" means (a) a "Reportable Event" as defined in Section 4043(b)
of ERISA, but excluding any such event as to which the provision for 30 days'
notice to the PBGC is waived under applicable regulations, (b) the filing of a
notice of intent to terminate a Benefit Plan or the treatment of a Benefit Plan
amendment as a termination under Section 4041 of ERISA, or (c) the institution
of proceedings to terminate a Benefit Plan by the PBGC under Section 4042 of
ERISA or the appointment of a trustee to administer any Benefit Plan.
"Title IV Plan" means a Benefit Plan which is subject to Title IV of ERISA.
"Total Liabilities" means, as at the end of any fiscal period, total Liabilities
determined in accordance with GAAP and included on the latest Consolidated
Balance Sheet.
"Trade Names" shall have the meaning assigned to such term in SECTION 6.1(BB)
hereof.
"UBS Investment Account" means the Borrowers' investment brokerage account with
UBS ▇▇▇▇▇ ▇▇▇▇▇▇ existing as of the date hereof.
"UBS Pledge Agreement" means that certain Pledge Agreement dated as of even date
herewith, executed by the GFC, in favor of Agent, pledging to Agent, for the
benefit of itself and the Lenders, all of its right, title and interest in and
to the UBS Investment Account and all financial assets and other properties of
GFC and the Borrowers held therein.
"UCC" and "Uniform Commercial Code" means the Uniform Commercial Code as in
effect from time to time in the relevant jurisdiction.
"Unfunded Vested Accrued Benefits" means with respect to any Plan at any time,
the amount (if any) by which
(D) THE PRESENT VALUE OF ALL VESTED NON-FORFEITABLE BENEFITS UNDER SUCH PLAN
EXCEEDS
(E) THE FAIR MARKET VALUE OF ALL PLAN ASSETS ALLOCABLE TO SUCH BENEFITS, ALL
DETERMINED AS OF THEN MOST RECENT VALUATION DATE FOR SUCH PLAN.
"Unused Line Fee" shall have the meaning assigned to such term in SECTION
4.2(C).
"Warehouseman Agreement" shall have the meaning assigned to such term in SECTION
8.12.
"Year 2000 Compliant" as to any Person means that all software, embedded
microchips and other processing capabilities utilized by such Person or its key
vendors or customers and material to the business operations or financial
condition of such Person, are able to
28
35
interpret and manipulate data on and involving all calendar dates correctly and
without causing any abnormal ending scenario, including in relation to dates in
and after the calendar year 2000.
29
36
OTHER REFERENTIAL PROVISIONS.
(F) ALL DEFINED TERMS IN THIS AGREEMENT, THE EXHIBITS AND SCHEDULES HERETO
SHALL HAVE THE SAME MEANINGS WHEN USED IN ANY OTHER LOAN DOCUMENT, UNLESS THE
CONTEXT SHALL REQUIRE OTHERWISE.
(G) EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, ALL ACCOUNTING TERMS
NOT SPECIFICALLY DEFINED OR SPECIFIED HEREIN SHALL HAVE THE MEANINGS
GENERALLY ATTRIBUTED TO SUCH TERMS UNDER GAAP INCLUDING, WITHOUT
LIMITATION, APPLICABLE STATEMENTS AND INTERPRETATIONS ISSUED BY THE
FINANCIAL ACCOUNTING STANDARDS BOARD AND BULLETINS, OPINIONS,
INTERPRETATIONS AND STATEMENTS ISSUED BY THE AMERICAN INSTITUTE OF
CERTIFIED PUBLIC ACCOUNTANTS OR ITS
COMMITTEES. ALL FINANCIAL COMPUTATIONS HEREUNDER SHALL BE
COMPUTED, UNLESS OTHERWISE SPECIFICALLY PROVIDED HEREIN, IN
ACCORDANCE WITH GAAP CONSISTENTLY APPLIED. THAT CERTAIN TERMS OR
COMPUTATIONS ARE EXPLICITLY MODIFIED BY THE PHRASE "IN ACCORDANCE
WITH GAAP" SHALL IN NO WAY BE
CONSTRUED TO LIMIT THE FOREGOING.
(H) ALL PERSONAL PRONOUNS USED IN THIS AGREEMENT, WHETHER USED IN THE
MASCULINE, FEMININE OR NEUTER GENDER, SHALL INCLUDE ALL OTHER
GENDERS; THE SINGULAR SHALL INCLUDE THE PLURAL, AND THE PLURAL SHALL
INCLUDE THE SINGULAR. IN ANY CIRCUMSTANCE WHERE USE OF THE TERM "THE
BORROWER" AS OPPOSED
TO THE TERM "THE BORROWERS," OR VICE VERSA, WOULD LIMIT, DIMINISH OR
OTHERWISE IMPAIR OR NEGATIVELY AFFECT ANY OF LENDERS' RIGHTS
HEREUNDER, THE PLURAL SHALL BE SUBSTITUTED FOR THE SINGULAR, OR VICE
VERSA, IN SUCH MANNER AS WILL RESULT IN THE MAINTENANCE OR
ENLARGEMENT OF LENDERS' RIGHTS
HEREUNDER OR PURSUANT HERETO. BY WAY OF EXAMPLE, BUT NOT IN
LIMITATION, IF A REFERENCE TO "THE BORROWERS' PROPERTY" WOULD
OTHERWISE BE CONSTRUED AS REFERRING ONLY TO PROPERTY WHICH IS
JOINTLY OWNED BY ALL THE BORROWERS, SUCH REFERENCE SHALL INSTEAD BE
CONSTRUED AS REFERRING TO THE AGGREGATE
TOTAL OF EACH BORROWER'S PROPERTY.
(I) THE WORDS "HEREOF," "HEREIN" AND "HEREUNDER" AND WORDS OF SIMILAR IMPORT
WHEN USED IN THIS AGREEMENT SHALL REFER TO THIS AGREEMENT AS A WHOLE AND NOT TO
ANY PARTICULAR PROVISIONS OF THIS AGREEMENT.
(J) TITLES OF ARTICLES AND SECTIONS IN THIS AGREEMENT ARE FOR
CONVENIENCE ONLY, DO NOT CONSTITUTE PART OF THIS AGREEMENT AND
NEITHER LIMIT NOR AMPLIFY THE PROVISIONS OF THIS AGREEMENT, AND
ALL REFERENCES IN THIS AGREEMENT TO ARTICLES, SECTIONS,
SUBSECTIONS, PARAGRAPHS, CLAUSES, SUBCLAUSES,
SCHEDULES OR EXHIBITS SHALL REFER TO THE CORRESPONDING ARTICLE,
SECTION, SUBSECTION, PARAGRAPH, CLAUSE OR SUBCLAUSE OF, OR SCHEDULE
OR EXHIBIT ATTACHED TO, THIS AGREEMENT, UNLESS SPECIFIC REFERENCE IS
MADE TO THE ARTICLES, SECTIONS OR OTHER SUBDIVISIONS OR DIVISIONS OF,
OR TO SCHEDULES OR EXHIBITS TO, ANOTHER DOCUMENT OR INSTRUMENT.
(K) EACH DEFINITION OF A DOCUMENT IN THIS AGREEMENT SHALL INCLUDE SUCH DOCUMENT
AS AMENDED, MODIFIED, SUPPLEMENTED OR RESTATED FROM TIME TO TIME IN ACCORDANCE
WITH THE TERMS OF THIS AGREEMENT.
(L) EXCEPT WHERE SPECIFICALLY RESTRICTED, REFERENCE TO A PARTY TO A LOAN
DOCUMENT INCLUDES THAT PARTY AND ITS PERMITTED SUCCESSORS AND ASSIGNS PERMITTED
HEREUNDER OR UNDER SUCH LOAN DOCUMENT.
(M) UNLESS OTHERWISE SPECIFICALLY STATED, WHENEVER A TIME IS REFERRED TO IN THIS
AGREEMENT OR IN ANY OTHER LOAN DOCUMENT, SUCH TIME SHALL BE THE LOCAL TIME IN
THE CITY IN WHICH THE PRINCIPAL OFFICE OF AGENT IS LOCATED.
30
37
(N) WHENEVER THE PHRASE "TO THE KNOWLEDGE OF A BORROWER" OR WORDS OF SIMILAR
IMPORT RELATING TO THE KNOWLEDGE OF A BORROWER ARE USED HEREIN, SUCH PHRASE
SHALL MEAN AND REFER TO (I) THE ACTUAL KNOWLEDGE OF THE PRESIDENT, CHIEF
EXECUTIVE OFFICER, CHIEF OPERATING OFFICER, CHIEF FINANCIAL OFFICER OR OTHER
EXECUTIVE OFFICER, OR (II) THE KNOWLEDGE THAT SUCH OFFICERS WOULD HAVE OBTAINED
IF THEY HAD ENGAGED IN GOOD FAITH IN THE DILIGENT PERFORMANCE OF THEIR DUTIES
AND AFTER DUE INQUIRY.
(O) THE TERM "INCLUDING" SHALL NOT BE LIMITING OR EXCLUSIVE, UNLESS SPECIFICALLY
INDICATED TO THE CONTRARY. THE TERMS "REASONABLE," "REASONABLY" AND THE LIKE,
WHEN USED IN REFERENCE TO A DECISION, CONDUCT OR THE DISCRETION OF THE AGENT OR
A LENDER, SHALL MEAN AND REFER TO THE REASONABLENESS OF THE CONDUCT, DECISION OR
DISCRETION AT ISSUE OF AN AGENT OR A LENDER IN A POSITION EQUIVALENT TO THAT OF
THE AGENT OR LENDER, INCLUDING WITHOUT LIMITATION THE NORMAL AND CUSTOMARY
CONCERNS OF AN AGENT OR A LENDER INCLUDING, WITHOUT LIMITATION, IMPAIRMENT OF
COLLATERAL, AND THE TIMELINESS OF
A BORROWER'S COMPLIANCE WITH PAYMENT OBLIGATIONS.
(P) THE TERMS ACCOUNTS, CHATTEL PAPER, DOCUMENTS, EQUIPMENT, INSTRUMENTS,
GENERAL INTANGIBLES AND INVENTORY, AS AND WHEN USED (WITHOUT BEING CAPITALIZED)
IN THIS AGREEMENT OR THE SECURITY DOCUMENTS, SHALL HAVE THE MEANINGS GIVEN THOSE
TERMS IN THE UNIFORM COMMERCIAL CODE.
31
38
EXHIBITS AND SCHEDULES. All Exhibits and Schedules attached hereto are by
reference made a part hereof.
REVOLVING CREDIT LOANS
REVOLVING CREDIT LOANS. Upon the terms and subject to the conditions of, and in
reliance upon the representations and warranties made under, this Agreement,
each Lender agrees, severally, but not jointly, to make Advances to the
Borrowers from time to time from the Effective Date to but not including the
Termination Date, as requested or deemed requested by the Borrowers in
accordance with the terms of SECTION 2.2, in amounts equal to such Lender's
Commitment Percentage of each such Advance requested or deemed requested
hereunder up to an aggregate amount at any one time outstanding equal to such
Lender's Commitment Percentage of the Borrowing Base; provided, however, that,
the aggregate principal amount of all outstanding Revolving Credit Loans (after
giving effect to the Advances requested) shall not exceed the Borrowing Base. It
is expressly understood and agreed that, the Lenders may and at present intend
to use the Borrowing Base as a maximum ceiling on Revolving Credit Loans to the
Borrowers; provided, however, that, the parties agree that, should the Revolving
Credit Loans exceed the ceiling so determined or any other limitation set forth
in this Agreement, such Revolving Credit Loans shall nevertheless constitute
Secured Obligations and, as such, shall be entitled to all benefits thereof and
security therefor. The principal amount of any Advance which is repaid pursuant
to SECTION 2.3(C) may be reborrowed by the Borrowers, subject to the terms and
conditions of this Agreement, in accordance with the terms of this SECTION 2.1.
The Agent's and each Lender's books and records reflecting the date and the
amount of each Advance and each repayment of principal thereof shall constitute
prima facie evidence of the accuracy of the information contained therein,
subject to the provisions of SECTION 4.7.
MANNER OF BORROWING REVOLVING CREDIT LOANS. Borrowings under the Revolving
Credit Facility shall be made as follows:
(Q) REQUESTS FOR ADVANCES. A REQUEST FOR AN ADVANCE SHALL BE
MADE, OR SHALL BE DEEMED TO BE MADE, IN THE FOLLOWING MANNER:
a Financial Officer of the Borrowers (or another authorized officer designated
by a Financial Officer of the Borrowers and listed on SCHEDULE 2.2 hereto)
shall deliver to the Agent a Notice of Proposed
Advance/Conversion/Continuation, in the form of EXHIBIT B hereto (the
"Borrowing Notice") with respect to a Prime Advance, not later than 11:00 a.m.
(Atlanta time) on the Business Day of the proposed Prime Advance, and with
respect to a LIBOR Advance, so long as no
Default or Event of Default exists or would occur as a result of such an
Advance, not later than 11:00 a.m. on the second (2nd) Business Day prior to
the Business Day of the proposed LIBOR Advance. The Borrowing Notice shall
contain the information requested therein including, without limitation, a
statement that an Advance is requested, the amount of the proposed Advance,
the date of the proposed Advance and whether it is a Prime Advance or a LIBOR
Advance or a combination thereof. Unless the Agent has received notice in
accordance with the provisions of SECTION 4.6(C) that a Lender will not make
available to the Agent such Lender's ratable portion because of a
Default or Event of Default, the Agent shall use commercially reasonable
efforts to disburse the proceeds of each Advance not later than 3:30 p.m.
on the Business Day a Borrowing Notice is received with respect to a
Prime Advance and
32
39
not later than 3:30 p.m. on the
second (2nd) Business Day following the receipt of a Borrowing Notice with
respect to a LIBOR Advance. The Borrowing Notice shall be given in accordance
with the provisions of SECTION 4.1 hereof; provided, however, that upon
written notice from Agent, the Borrowers Representative shall thereafter
include in each Borrowing Notice the amount of Availability after giving
effect to such requested Advance, subject to SECTION 4.3 hereof, failure to
pay any amount required to be paid under this Agreement, the Notes or any
other Loan Documents (whether as principal, interest, fees, costs or any other
such Secured Obligations, but excluding the amounts in SUBSECTION (III) of this
SECTION 2.2) by the due date set forth in SECTION 4.3 hereof, shall be deemed
to be a request for an Advance on such due date in the amount required to pay
such amount, unless payment is otherwise made by the Borrowers,
(A) the receipt by the Agent of notification from an Issuing Bank to the effect
that a drawing has been made under a Letter of Credit and that a Borrower has
failed to reimburse the Issuing Bank therefor in accordance with the terms of
the Letter of Credit, the Reimbursement Agreement and ARTICLE 3,
or (B) the receipt by Agent of a demand for reimbursement by a Clearing Bank
pursuant to the provisions of any Blocked Account Agreement, shall be deemed to
be a request for an Advance on the date such notification or demand is received
in the amount set forth in such notice or demand.
(R) NOTIFICATION TO LENDERS. UNLESS THE AGENT HAS ELECTED PERIODIC SETTLEMENTS
PURSUANT TO Section 4.7, THE AGENT SHALL PROMPTLY NOTIFY THE LENDERS OF ANY
BORROWING NOTICE DELIVERED OR DEEMED GIVEN PURSUANT TO THIS Section 2.2(a) BY
12:00 NOON (ATLANTA TIME) ON THE PROPOSED ADVANCE DATE WITH
RESPECT TO ANY ADVANCE. THE NOTICE FROM THE AGENT TO THE LENDERS SHALL SET FORTH
THE INFORMATION CONTAINED IN THE APPLICABLE BORROWING NOTICE. NOT LATER THAN
1:30 P.M. (ATLANTA TIME) ON THE PROPOSED ADVANCE DATE, EACH LENDER WILL MAKE
AVAILABLE TO THE AGENT, FOR THE ACCOUNT OF THE BORROWERS, AT THE AGENT'S OFFICE
IN FUNDS IMMEDIATELY AVAILABLE TO THE AGENT, AN AMOUNT EQUAL TO SUCH LENDER'S
COMMITMENT PERCENTAGE OF THE ADVANCE TO BE MADE ON
SUCH ADVANCE DATE.
(S) CONVERSION/CONTINUATION OF ADVANCES. PRIME ADVANCES SHALL CONTINUE AS PRIME
ADVANCES UNLESS AND UNTIL SUCH PRIME ADVANCES ARE CONVERTED INTO LIBOR ADVANCES
PURSUANT TO A BORROWING NOTICE, PROVIDED THAT, AT SUCH TIME, NO EVENT OF DEFAULT
EXISTS. EACH LIBOR ADVANCE SHALL CONTINUE AS A LIBOR
ADVANCE UNTIL THE END OF THE LIBOR PERIOD, AT WHICH TIME SUCH LIBOR ADVANCE
SHALL BE AUTOMATICALLY CONVERTED INTO A PRIME ADVANCE UNLESS THE BORROWERS SHALL
HAVE GIVEN THE AGENT A BORROWING NOTICE REQUESTING THAT, AT THE END OF THE LIBOR
PERIOD, SUCH LIBOR ADVANCE EITHER BE CONVERTED INTO
A PRIME ADVANCE OR, SO LONG AS NO EVENT OF DEFAULT EXISTS OR WILL
OCCUR FROM THE EXTENSION THEREOF, CONTINUE AS A LIBOR ADVANCE FOR
THE NEXT LIBOR PERIOD. ANY CONVERSION OF ANY LIBOR ADVANCE SHALL BE
MADE ON, AND ONLY ON, THE LAST DAY OF THE LIBOR PERIOD APPLICABLE
THERETO AND THE BORROWERS SHALL GIVE AGENT A BORROWING NOTICE PRIOR TO THE DATE
OF THE REQUESTED CONVERSION OR CONTINUATION COMPLYING WITH THE TIMING AND
INFORMATIONAL REQUIREMENTS SET FORTH IN Section 2.2(a) HEREOF AND, IN ADDITION,
SPECIFYING:
(i) the requested date, which shall be a Business Day, of such
conversion or continuation,
(ii) the aggregate amount and type of converted or continued Advance,
and
33
40
(iii) the amount and type(s) of Advance(s) into which such Advance is
to be converted or continued.
(T) DISBURSEMENT OF LOANS. EACH BORROWER HEREBY IRREVOCABLY AUTHORIZES THE
AGENT TO DISBURSE THE PROCEEDS OF EACH ADVANCE REQUESTED,
OR DEEMED TO BE REQUESTED, PURSUANT TO THIS Section 2.2 AS FOLLOWS:
the proceeds of each Advance requested under SECTION 2.2(A)(I) shall be
disbursed by the Agent in Dollars in immediately available funds, (A) in the
case of the initial Advance, in accordance with notice from the Borrowers to
the Agent referred to in SECTION 5.1(C)(XIII), and (B) in the case of each
subsequent Advance, by wire transfer to the Disbursement Account, or by wire
transfer to such other account as designated in writing by the Borrowers at
least two (2) Business Days prior to the borrowing date of such proposed
Advance, the proceeds of each Advance deemed requested under SECTION 2.2 (A)(II)
OR (III) or (IV) shall be disbursed by the Agent by way of direct payment of the
relevant interest or Secured Obligation, as the case may be, and
the proceeds of each Advance deemed requested under SECTION 2.2(A)(V) shall be
disbursed by the Agent directly to the Clearing Bank on behalf of the applicable
Borrower.
REPAYMENT OF REVOLVING CREDIT LOANS. The Revolving Credit Loans will be repaid
as follows:
(U) WHETHER OR NOT ANY DEFAULT OR EVENT OF DEFAULT HAS OCCURRED, THE OUTSTANDING
PRINCIPAL AMOUNT OF ALL THE REVOLVING CREDIT LOANS IS DUE AND PAYABLE, AND SHALL
BE REPAID BY THE BORROWERS IN FULL, NOT LATER THAN THE TERMINATION DATE;
(V) IF AT ANY TIME THE AGGREGATE OUTSTANDING UNPAID PRINCIPAL AMOUNT OF THE
REVOLVING CREDIT LOANS EXCEEDS THE BORROWING BASE IN EFFECT AT SUCH TIME (SUCH
EXCESS REFERRED TO HEREIN AS AN "OVEREXTENSION"), THE BORROWERS SHALL REPAY THE
REVOLVING CREDIT LOANS IN AN AMOUNT SUFFICIENT TO REDUCE THE AGGREGATE UNPAID
PRINCIPAL AMOUNT OF SUCH REVOLVING CREDIT LOANS BY AN AMOUNT EQUAL TO THE
OVEREXTENSION, TOGETHER WITH ACCRUED AND UNPAID INTEREST ON THE AMOUNT OF THE
OVEREXTENSION TO THE DATE OF REPAYMENT; AND
(W) THE BORROWERS HEREBY INSTRUCT THE AGENT TO REPAY THE REVOLVING CREDIT LOANS
OUTSTANDING ON ANY DAY IN AN AMOUNT EQUAL TO THE AMOUNT RECEIVED BY THE AGENT ON
SUCH DAY PURSUANT TO Section 8.1(b).
REVOLVING CREDIT NOTE. Each Lender's Revolving Credit Loans and the joint and
several obligation of the Borrowers to repay such Revolving Credit Loans shall
also be evidenced by a Revolving Credit Note payable to the order of such
Lender. Each Revolving Credit Note shall be dated the Effective Date and be duly
and validly executed and delivered by the Borrowers.
LETTER OF CREDIT FACILITY
ISSUANCE. Subject to the terms and conditions of the Agreement, Agent and the
Lenders agree to incur, from time to time prior to the Termination Date, upon
the request of the Borrowers and for the Borrowers' account, Letter of Credit
Obligations by causing Letters of Credit to be issued (by a bank or other
legally authorized Person selected by and acceptable to Agent in its sole
discretion (each, an "Issuing Bank")) for the Borrowers' account and guaranteed
by Agent; provided, however, that if the Issuing Bank is a Lender, then such
Letters of Credit shall not be
34
41
guaranteed by Agent but rather each Lender shall, subject to the terms and
conditions hereinafter set forth, purchase (or be deemed to have purchased) risk
participations in all such Letters of Credit issued with the written consent of
Agent, as more fully described in SECTION 3.2(B)(II) below. The aggregate amount
of all such Letter of Credit Obligations shall not at any time exceed the lesser
of (i) the Letter of Credit Facility, or (ii) the Borrowing Base less the
aggregate outstanding principal balance of the Revolving Credit Loans. No such
Letter of Credit shall have an expiry date which is more than one year following
the date of issuance thereof, and neither Agent nor the Lenders shall be under
any obligation to incur Letter of Credit Obligations in respect of, or purchase
risk participations in, any Letter of Credit having an expiry date which is
later than five (5) Business Days prior to the Termination Date.
ADVANCES AUTOMATIC; PARTICIPATIONS.
(X) IN THE EVENT THAT AGENT OR ANY LENDER SHALL MAKE ANY PAYMENT ON OR
PURSUANT TO ANY LETTER OF CREDIT OBLIGATION, SUCH PAYMENT SHALL THEN
BE DEEMED AUTOMATICALLY TO CONSTITUTE A REVOLVING CREDIT LOAN UNDER
Section 2.1 OF THE AGREEMENT REGARDLESS OF WHETHER A DEFAULT OR
EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING AND
NOTWITHSTANDING THE BORROWERS' FAILURE TO SATISFY THE CONDITIONS
PRECEDENT SET FORTH IN Article 5, AND EACH
LENDER SHALL BE OBLIGATED TO PAY AN AMOUNT CALCULATED BY APPLYING
SUCH LENDER'S COMMITMENT PERCENTAGE TO THE AGGREGATE AMOUNT OF SUCH
PAYMENT. THE FAILURE OF ANY LENDER TO MAKE AVAILABLE TO AGENT FOR
AGENT'S OWN ACCOUNT AN AMOUNT EQUIVALENT TO A LENDER'S COMMITMENT
PERCENTAGE AS TO ANY SUCH
REVOLVING CREDIT LOAN OR PAYMENT BY AGENT UNDER OR IN RESPECT OF A
LETTER OF CREDIT SHALL NOT RELIEVE ANY OTHER LENDER OF ITS OBLIGATION
HEREUNDER TO MAKE AVAILABLE TO AGENT AN AMOUNT EQUIVALENT TO SUCH
OTHER LENDER'S COMMITMENT PERCENTAGE WITH RESPECT THERETO, BUT NO
BREACH BY A LENDER SHALL
CAUSE AN INCREASE IN ANY OTHER LENDER'S COMMITMENT PERCENTAGE.
(Y) IF IT SHALL BE ILLEGAL OR UNLAWFUL FOR THE BORROWERS TO INCUR
REVOLVING CREDIT LOANS IN THE CIRCUMSTANCES CONTEMPLATED BY PARAGRAPH
(A) ABOVE BECAUSE OF AN EVENT OF DEFAULT DESCRIBED IN Section 12.1(g)
OR (h) OR OTHERWISE OR IF IT SHALL BE ILLEGAL OR UNLAWFUL FOR ANY
LENDER TO BE DEEMED TO HAVE ASSUMED A RATABLE SHARE OF THE
REIMBURSEMENT OBLIGATIONS OWED TO AN ISSUING BANK, OR IF THE ISSUING
BANK IS A LENDER, THEN (I) IMMEDIATELY AND
WITHOUT FURTHER ACTION WHATSOEVER, EACH LENDER SHALL BE DEEMED TO
HAVE IRREVOCABLY AND UNCONDITIONALLY PURCHASED FROM AGENT (OR
SUCH ISSUING BANK, AS THE CASE MAY BE) AN UNDIVIDED INTEREST AND
PARTICIPATION IN AN AMOUNT EQUIVALENT TO SUCH LENDER'S
COMMITMENT PERCENTAGE (BASED ON THE
COMMITMENTS) OF THE LETTER OF CREDIT OBLIGATIONS IN RESPECT OF ALL
LETTERS OF CREDIT THEN OUTSTANDING AND (II) THEREAFTER, IMMEDIATELY
UPON ISSUANCE OF ANY LETTER OF CREDIT, EACH LENDER SHALL BE DEEMED TO
HAVE IRREVOCABLY AND UNCONDITIONALLY PURCHASED FROM AGENT (OR SUCH
ISSUING BANK, AS THE CASE
MAY BE) AN UNDIVIDED INTEREST AND PARTICIPATION IN AN AMOUNT
EQUIVALENT TO SUCH LENDER'S COMMITMENT PERCENTAGE (BASED ON THE
COMMITMENTS) OF THE LETTER OF CREDIT OBLIGATIONS WITH RESPECT TO
SUCH LETTER OF CREDIT ON THE DATE OF SUCH ISSUANCE. EACH LENDER
SHALL FUND ITS PARTICIPATION IN ALL
PAYMENTS OR DISBURSEMENTS MADE UNDER THE LETTERS OF CREDIT IN THE SAME
MANNER AS PROVIDED IN THE AGREEMENT WITH RESPECT TO REVOLVING CREDIT
LOANS AS SET OUT IN Section 2.2(b) HEREOF.
CASH COLLATERAL.
35
42
IF ANY LETTER OF CREDIT OBLIGATIONS, WHETHER OR NOT THEN DUE AND PAYABLE, SHALL
FOR ANY REASON BE OUTSTANDING ON THE TERMINATION DATE OR AN EVENT OF DEFAULT
SHALL HAVE OCCURRED, THE BORROWERS SHALL, AT THE REQUEST OF THE AGENT, EITHER
(I) PROVIDE CASH COLLATERAL THEREFOR IN THE MANNER DESCRIBED ABOVE, OR (II)
CAUSE ALL SUCH LETTERS OF CREDIT AND GUARANTIES THEREOF TO BE CANCELED AND
RETURNED, OR (III) DELIVER A STAND-BY LETTER (OR LETTERS) OF CREDIT IN
GUARANTEE OF SUCH LETTER OF CREDIT OBLIGATIONS, WHICH STAND-BY LETTER (OR
LETTERS) OF CREDIT SHALL BE OF LIKE TENOR AND DURATION AS, AND BE IN AN AMOUNT
EQUAL TO 101% OF THE AGGREGATE THEN AVAILABLE TO BE DRAWN UNDER, THE LETTERS OF
CREDIT TO WHICH SUCH OUTSTANDING LETTER OF CREDIT OBLIGATIONS RELATE AND SHALL
BE ISSUED BY A PERSON, AND SHALL BE SUBJECT TO SUCH TERMS AND CONDITIONS, AS ARE
BE SATISFACTORY TO AGENT IN ITS SOLE DISCRETION (THE "REPLACEMENT LETTERS OF
CREDIT"). IF THE BORROWERS ARE REQUIRED TO PROVIDE CASH COLLATERAL FOR ANY
LETTER OF CREDIT OBLIGATIONS PURSUANT TO THE FIRST SENTENCE OF THIS Section 3.3,
THE BORROWERS WILL PAY TO AGENT, FOR THE BENEFIT OF THE LENDERS, CASH OR CASH
EQUIVALENTS IN AN AMOUNT EQUAL TO 101% OF THE MAXIMUM AMOUNT THEN AVAILABLE TO
BE DRAWN UNDER EACH LETTER OF CREDIT OUTSTANDING. SUCH FUNDS OR CASH EQUIVALENTS
SHALL BE HELD BY AGENT IN A CASH COLLATERAL ACCOUNT (THE "CASH COLLATERAL
ACCOUNT") MAINTAINED AT A BANK OR FINANCIAL INSTITUTION ACCEPTABLE TO AGENT.
THE CASH COLLATERAL ACCOUNT SHALL BE IN THE NAME OF THE BORROWERS AND SHALL BE
PLEDGED TO, AND SUBJECT TO THE CONTROL OF, AGENT, FOR THE BENEFIT OF AGENT AND
LENDERS, IN A MANNER SATISFACTORY TO AGENT. EACH BORROWER HEREBY PLEDGES AND
GRANTS TO AGENT, ON BEHALF OF ITSELF AND LENDERS, A SECURITY INTEREST IN ALL
SUCH FUNDS AND CASH EQUIVALENTS HELD IN ANY CASH COLLATERAL ACCOUNT FROM TIME
TO TIME AND ALL PROCEEDS THEREOF, AS SECURITY FOR THE PAYMENT OF ALL AMOUNTS
DUE IN RESPECT OF THE LETTER OF CREDIT OBLIGATIONS AND OTHER SECURED
OBLIGATIONS, WHETHER OR NOT THEN DUE. THIS AGREEMENT SHALL CONSTITUTE A SECURITY
AGREEMENT UNDER APPLICABLE LAW.
(Z) FROM TIME TO TIME AFTER FUNDS ARE DEPOSITED IN THE CASH COLLATERAL ACCOUNT
BY THE BORROWERS, WHETHER BEFORE OR AFTER THE TERMINATION DATE, AGENT MAY APPLY
SUCH FUNDS OR CASH EQUIVALENTS THEN HELD IN THE CASH COLLATERAL ACCOUNT TO THE
PAYMENT OF ANY AMOUNTS, IN SUCH ORDER AS AGENT MAY ELECT, AS SHALL BE OR SHALL
BECOME DUE AND PAYABLE BY THE BORROWERS TO LENDERS WITH RESPECT TO SUCH LETTER
OF CREDIT OBLIGATIONS OF THE BORROWERS AND, UPON
THE SATISFACTION IN FULL OF ALL LETTER OF CREDIT
OBLIGATIONS, TO ANY OTHER SECURED OBLIGATIONS THEN DUE AND PAYABLE.
(AA) NO BORROWER NOR ANY PERSON CLAIMING ON BEHALF OF OR THROUGH ANY BORROWER
SHALL HAVE ANY RIGHT TO WITHDRAW ANY OF THE FUNDS OR CASH EQUIVALENTS HELD IN
THE CASH COLLATERAL ACCOUNT, EXCEPT THAT UPON THE TERMINATION OR SATISFACTION IN
FULL OF ALL LETTER OF CREDIT OBLIGATIONS AND THE PAYMENT OF ALL AMOUNTS PAYABLE
BY THE BORROWERS TO LENDERS IN RESPECT THEREOF, ANY FUNDS REMAINING IN THE CASH
COLLATERAL ACCOUNT SHALL BE HELD AND APPLIED TO OTHER SECURED OBLIGATIONS THEN
DUE AND OWING AND UPON PAYMENT IN FULL OF ALL SECURED OBLIGATIONS, ANY REMAINING
AMOUNT SHALL BE PAID TO THE BORROWERS OR AS OTHERWISE REQUIRED BY LAW.
FEES AND EXPENSES. The Borrowers, jointly and severally, agree to pay to Agent,
for the benefit of the Lenders, as compensation to such Lenders for Letter of
Credit Obligations incurred hereunder, (a) all costs and expenses incurred by
Agent or any Lender on account of such Letter of Credit Obligations, and (b) for
each month during which any Letter of Credit Obligation shall remain
outstanding, an amount equal to the fee set forth in SECTION 4.2(D) hereof. Such
fee shall be paid to Agent, for the benefit of the Lenders, in accordance with
the terms of SECTION 4.2(D).
36
43
REQUEST FOR INCURRENCE OF LETTER OF CREDIT OBLIGATIONS. The Borrowers shall give
Agent at least two (2) Business Days prior written or electronic notice
requesting approval of the issuance, or a guarantee, of any Letter of Credit,
specifying the date such Letter of Credit Obligation is to be incurred,
identifying the beneficiary to which such Letter of Credit Obligation relates
and describing the nature of the transactions proposed to be supported thereby.
The notice shall be accompanied by the form of the Letter of Credit (which shall
be acceptable to the Issuing Bank) to be guaranteed. Notwithstanding anything
contained herein to the contrary, Letter of Credit applications by the Borrowers
and approvals by Agent may be made and transmitted pursuant to electronic codes
and security measures mutually agreed upon and established by and among such
Borrower, Agent and the Issuing Bank.
OBLIGATION ABSOLUTE. The obligation of the Borrowers to reimburse Agent and the
Lenders for payments made with respect to any Letter of Credit Obligation shall
be absolute, unconditional and irrevocable, without necessity of presentment,
demand, protest or other formalities, and the obligations of each Lender to make
payments to Agent with respect to Letters of Credit shall be unconditional and
irrevocable. Such obligations of the Borrowers and the Lenders to Agent shall be
paid strictly in accordance with the terms hereof under all circumstances
including the following circumstances:
ANY LACK OF VALIDITY OR ENFORCEABILITY OF ANY LETTER OF CREDIT OR THIS AGREEMENT
OR THE OTHER LOAN DOCUMENTS OR ANY OTHER AGREEMENT; THE EXISTENCE OF ANY CLAIM,
SET-OFF, DEFENSE OR OTHER RIGHT WHICH ANY BORROWER OR ANY OF ITS AFFILIATES OR
ANY LENDER MAY AT ANY TIME HAVE AGAINST A BENEFICIARY OR ANY TRANSFEREE OF ANY
LETTER OF CREDIT (OR ANY PERSONS OR ENTITIES FOR WHOM ANY SUCH TRANSFEREE MAY BE
ACTING), AGENT, ANY LENDER, OR ANY OTHER PERSON, WHETHER IN CONNECTION WITH THE
AGREEMENT, THE LETTER OF CREDIT, THE TRANSACTIONS CONTEMPLATED HEREIN OR THEREIN
OR ANY UNRELATED TRANSACTION (INCLUDING ANY UNDERLYING TRANSACTION BETWEEN SUCH
BORROWER OR ANY OF ITS AFFILIATES AND THE BENEFICIARY FOR WHICH THE LETTER OF
CREDIT WAS PROCURED); ANY DRAFT, DEMAND, CERTIFICATE OR ANY OTHER DOCUMENT
PRESENTED UNDER ANY LETTER OF CREDIT PROVING TO BE FORGED, FRAUDULENT, INVALID
OR INSUFFICIENT IN ANY RESPECT OR ANY STATEMENT THEREIN BEING UNTRUE OR
INACCURATE IN ANY RESPECT; PAYMENT BY AGENT OR ANY ISSUING BANK UNDER ANY LETTER
OF CREDIT OR GUARANTY THEREOF AGAINST PRESENTATION OF A DEMAND, DRAFT OR
CERTIFICATE OR OTHER DOCUMENT WHICH DOES NOT COMPLY WITH THE TERMS OF SUCH
LETTER OF CREDIT OR SUCH GUARANTY; ANY OTHER CIRCUMSTANCE OR HAPPENING
WHATSOEVER, WHICH IS SIMILAR TO ANY OF THE FOREGOING; OR THE FACT THAT A DEFAULT
OR AN EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING.
INDEMNIFICATION; NATURE OF LENDERS' DUTIES.
(BB) IN ADDITION TO AMOUNTS PAYABLE BY THE BORROWERS TO AGENT AND
LENDERS AS ELSEWHERE PROVIDED IN THIS AGREEMENT, THE BORROWERS
HEREBY, JOINTLY AND SEVERALLY, AGREE TO PAY AND TO PROTECT,
INDEMNIFY, AND SAVE HARMLESS AGENT AND EACH LENDER FROM AND
AGAINST ANY AND ALL CLAIMS, DEMANDS,
LIABILITIES, DAMAGES, LOSSES, COSTS, CHARGES AND EXPENSES (INCLUDING
ATTORNEYS' FEES AND, AFTER AND DURING THE CONTINUANCE OF AN EVENT OF
DEFAULT, ALLOCATED COSTS OF INTERNAL COUNSEL) WHICH AGENT OR ANY
LENDER MAY INCUR OR BE SUBJECT TO AS A CONSEQUENCE, DIRECT OR
INDIRECT, OF (I) THE ISSUANCE
OF ANY LETTER OF CREDIT OR GUARANTY THEREOF, OR (II) THE FAILURE OF
AGENT OR ANY LENDER SEEKING INDEMNIFICATION OR OF ANY ISSUING BANK TO
HONOR A DEMAND FOR PAYMENT UNDER ANY LETTER OF CREDIT OR GUARANTY
THEREOF AS A RESULT OF ANY ACT OR OMISSION, WHETHER RIGHTFUL
37
44
OR WRONGFUL, OF ANY PRESENT OR FUTURE DE JURE OR DE FACTO GOVERNMENT OR
GOVERNMENTAL AUTHORITY, IN EACH CASE OTHER THAN TO THE EXTENT SOLELY AS
A RESULT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF AGENT OR SUCH
LENDER (AS FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION).
(CC) AS BETWEEN AGENT AND ANY LENDER AND THE BORROWERS, THE BORROWERS,
JOINTLY AND SEVERALLY, HEREBY ASSUME ALL RISKS OF THE ACTS AND
OMISSIONS OF, OR MISUSE OF ANY LETTER OF CREDIT BY BENEFICIARIES OF ANY
LETTER OF CREDIT. IN FURTHERANCE AND NOT IN LIMITATION OF THE
FOREGOING, TO THE FULLEST EXTENT PERMITTED BY LAW NEITHER AGENT NOR ANY
LENDER SHALL BE RESPONSIBLE: (I) FOR THE FORM, VALIDITY, SUFFICIENCY,
ACCURACY, GENUINENESS OR LEGAL EFFECT OF ANY DOCUMENT ISSUED BY ANY
PARTY IN CONNECTION WITH THE APPLICATION FOR AND ISSUANCE OF ANY LETTER
OF CREDIT, EVEN IF IT SHOULD IN FACT PROVE TO BE IN ANY OR ALL RESPECTS
INVALID, INSUFFICIENT, INACCURATE, FRAUDULENT OR FORGED; (II) FOR THE
VALIDITY OR SUFFICIENCY OF ANY INSTRUMENT TRANSFERRING OR ASSIGNING OR
PURPORTING TO TRANSFER OR ASSIGN ANY LETTER OF CREDIT OR THE RIGHTS OR
BENEFITS THEREUNDER OR PROCEEDS THEREOF, IN WHOLE OR IN PART, WHICH MAY
PROVE TO BE INVALID OR INEFFECTIVE FOR ANY REASON; (III) FOR FAILURE OF
THE BENEFICIARY OF ANY LETTER OF CREDIT TO COMPLY FULLY WITH CONDITIONS
REQUIRED IN ORDER TO DEMAND PAYMENT UNDER SUCH LETTER OF CREDIT;
PROVIDED THAT, IN THE CASE OF ANY PAYMENT BY AGENT UNDER ANY LETTER OF
CREDIT OR GUARANTY THEREOF, AGENT SHALL BE LIABLE TO THE EXTENT SUCH
PAYMENT WAS MADE SOLELY AS A RESULT OF ITS GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT (AS FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION)
IN DETERMINING THAT THE DEMAND FOR PAYMENT UNDER SUCH LETTER OF CREDIT
OR GUARANTY THEREOF COMPLIES ON ITS FACE WITH ANY APPLICABLE
REQUIREMENTS FOR A DEMAND FOR PAYMENT UNDER SUCH LETTER OF CREDIT OR
GUARANTY THEREOF; (IV) FOR ERRORS, OMISSIONS, INTERRUPTIONS OR DELAYS
IN TRANSMISSION OR DELIVERY OF ANY MESSAGES, BY MAIL, CABLE, TELEGRAPH,
TELEX OR OTHERWISE, WHETHER OR NOT THEY BE IN CIPHER; (V) FOR ERRORS IN
INTERPRETATION OF TECHNICAL TERMS; (VI) FOR ANY LOSS OR DELAY IN THE
TRANSMISSION OR OTHERWISE OF ANY DOCUMENT REQUIRED IN ORDER TO MAKE A
PAYMENT UNDER ANY LETTER OF CREDIT OR GUARANTY THEREOF OR OF THE
PROCEEDS THEREOF; (VII) FOR THE APPLICATION OF THE PROCEEDS OF ANY
DRAWING UNDER ANY LETTER OF CREDIT OR GUARANTY THEREOF; AND (VIII) FOR
ANY CONSEQUENCES ARISING FROM CAUSES BEYOND THE CONTROL OF AGENT OR ANY
LENDER. NONE OF THE ABOVE SHALL AFFECT, IMPAIR, OR PREVENT THE VESTING
OF ANY OF AGENT'S OR ANY LENDER'S RIGHTS OR POWERS HEREUNDER OR UNDER
THE OTHER LOAN DOCUMENTS.
(DD) NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT OR TO EXPAND ANY
WAIVERS, COVENANTS OR INDEMNITIES MADE BY ANY BORROWER IN FAVOR OF
ANY ISSUING BANK IN ANY LETTER OF CREDIT APPLICATION, REIMBURSEMENT
AGREEMENT OR SIMILAR DOCUMENT, INSTRUMENT OR AGREEMENT BETWEEN SUCH
BORROWER AND SUCH ISSUING BANK.
38
45
GENERAL LOAN PROVISIONS
INTEREST.
(EE) GENERAL INTEREST PROVISIONS.
Interest. The Borrowers, jointly and severally, agree to pay interest to Agent
on the aggregate amount of the Revolving Credit Loans from time to time
outstanding, for the ratable benefit of Lenders, in accordance with the type of
Advance being made by each Lender, in arrears on each applicable Interest
Payment Date, for the relevant period at a rate equal to (A) for Prime Advances,
the Prime Option, or (B) for LIBOR Advances, the LIBOR Option. The LIBOR Option
may be exercised by a Borrower for all, or any portion, of the outstanding
amounts under the Revolving Credit Facility pursuant to SECTION 2.2 hereof. The
Borrowers shall not be entitled to select, convert to or continue LIBOR Option
Advances under the Revolving Credit Facility if a Default or Event of Default
exists hereunder. In the event of any change in the Chase Manhattan Bank Rate,
the rate of the Prime Option shall change as of the first day of the first month
following such change and shall be based on the Chase Manhattan Bank Rate in
effect on the last day of the immediately preceding month.
LIBOR Advance Limitations. The LIBOR elections must be for $5,000,000 or whole
multiples thereof and in no event may the Borrowers have in the aggregate more
than six (6) LIBOR Advances outstanding at one time. If a LIBOR election is not
timely made or cannot be made, or if LIBOR cannot be determined, then the Agent
shall use the Prime Option to compute interest.
LIBOR Breakage Costs. In addition, the Borrowers are, jointly and severally,
liable for, and shall pay to the Agent, for the benefit of the Lenders, upon the
written request of the Agent, as reimbursement to the Agent and/or the Lenders
for any loss, costs or expenses incurred by the Agent, the Lenders or both as a
result of: (A) any payment or prepayment on a date other than the last day of a
LIBOR Period for such LIBOR Advance, or (B) any failure of the Borrowers to
borrow a LIBOR Advance on the date for such borrowing specified in the relevant
notice, a prepayment fee calculated at the rate of three-quarters of one percent
(.75%) per annum of the face amount of the LIBOR Advance so paid or prepaid,
from the period from the date of receipt of such payment or prepayment, or the
date of such failure to borrow, to the last day of such LIBOR Period (the
"Breakage Fee"). The determination by the Agent, the Lenders, or both, of the
Breakage Fee, when set forth in a written notice to the Borrowers, containing
their respective calculations thereof in reasonable detail, shall be conclusive
on the Borrowers, in the absence of manifest error. Calculation of all amounts
payable to the Agent, the Lenders or both under this paragraph with regard to
LIBOR Advances shall be made as though the Agent, the Lenders or both had
actually funded the LIBOR Advances through the purchase of deposits in the
relevant market and currency, as the case may be, bearing interest at the rate
applicable to such LIBOR Advances in an amount equal to the amount of the LIBOR
Advances and having a maturity comparable to the relevant interest period;
provided, however, that the Agent and the Lenders may fund each of the LIBOR
Advances in any manner the Agent and the Lenders see fit and the foregoing
assumption shall be used only for calculation of amounts payable under this
paragraph.
APPLICATION OF PROCEEDS TO LOANS. SUBJECT TO Section 12.3 HEREOF, THE AGENT
AND THE LENDERS SHALL APPLY ALL PROCEEDS OF COLLATERAL AND ALL OTHER AMOUNTS
RECEIVED BY IT FROM OR ON BEHALF OF THE BORROWERS (I) FIRST, TO THE AGENT TO
PAY ALL COSTS AND EXPENSES INCLUDING, WITHOUT LIMITATION, INDEMNIFIED AMOUNTS,
THAT HAVE NOT BEEN REIMBURSED TO AGENT BY THE BORROWERS OR THE
39
46
LENDERS, INCLUDING INTEREST THEREON, IF ANY; (II) SECOND, TO THE AGENT TO PAY
ANY FEES DUE THE AGENT HEREUNDER, INCLUDING INTEREST THEREON, IF ANY; (III)
THIRD, TO THE LENDERS FOR ANY INDEMNIFIED AMOUNTS AND COSTS AND EXPENSES PAID TO
OR REIMBURSED TO THE AGENT; (IV) FOURTH, TO THE LENDERS TO PAY ANY UNPAID
PRINCIPAL AND ACCRUED INTEREST ON THE REVOLVING CREDIT LOANS AND THE OTHER
SECURED OBLIGATIONS THEN OUTSTANDING WHICH PAYMENTS SHALL BE APPLIED (A)
INITIALLY TO THE PRIME ADVANCES OUTSTANDING TO THE BORROWERS, AND (B)
SUBSEQUENTLY TO LIBOR ADVANCES OUTSTANDING TO THE BORROWERS; PROVIDED, HOWEVER,
UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, THE AGENT AND THE LENDERS MAY APPLY
ALL SUCH AMOUNTS RECEIVED BY IT TO THE PAYMENT OF SECURED OBLIGATIONS IN SUCH
MANNER AND IN SUCH ORDER AS THE AGENT MAY ELECT IN ITS REASONABLE CREDIT
JUDGMENT. IN THE EVENT THAT ANY SUCH AMOUNTS ARE APPLIED TO REVOLVING CREDIT
LOANS WHICH ARE LIBOR ADVANCES, SUCH APPLICATION SHALL BE TREATED AS A
PREPAYMENT OF SUCH LOANS AND THE AGENT AND THE LENDERS SHALL BE ENTITLED TO
INDEMNIFICATION PURSUANT TO Section 4.1(a)(iii).
(FF) NON-BUSINESS DAY PAYMENTS. IF ANY PAYMENT ON THE REVOLVING CREDIT
LOANS BECOMES DUE AND PAYABLE ON A DAY OTHER THAN A BUSINESS DAY, THE
MATURITY THEREOF WILL BE EXTENDED TO THE NEXT SUCCEEDING BUSINESS DAY
AND, WITH RESPECT TO PAYMENTS OF PRINCIPAL, INTEREST THEREON SHALL BE
PAYABLE AT THEN APPLICABLE RATE DURING ANY SUCH EXTENSION.
(GG) DEFAULT INTEREST. FROM AND AFTER THE OCCURRENCE OF AN EVENT OF
DEFAULT, THE UNPAID PRINCIPAL AMOUNT OF EACH SECURED OBLIGATION SHALL
BEAR INTEREST WHILE SUCH EVENT OF DEFAULT IS CONTINUING AT A RATE PER
ANNUM EQUAL TO THE DEFAULT MARGIN PLUS THE PRIME OPTION, PAYABLE ON
DEMAND. THE INTEREST RATE PROVIDED FOR IN THIS Section 4.1(d) SHALL TO
THE EXTENT PERMITTED BY APPLICABLE LAW ALSO APPLY TO AND ACCRUE ON THE
AMOUNT OF ANY JUDGMENT ENTERED WITH RESPECT TO ANY SECURED OBLIGATION
AND SHALL CONTINUE TO ACCRUE AT SUCH RATE DURING ANY PROCEEDING
DESCRIBED IN Section 12.1(g) OR (h).
(HH) COMPUTATION. THE INTEREST RATES PROVIDED FOR IN THIS Section 4.1
SHALL BE COMPUTED ON THE BASIS OF A YEAR OF 360 DAYS AND THE ACTUAL
NUMBER OF DAYS ELAPSED.
(II) MAXIMUM RATE. IT IS NOT INTENDED BY THE LENDERS, AND NOTHING
CONTAINED IN THIS AGREEMENT OR ANY NOTE SHALL BE DEEMED, TO ESTABLISH
OR REQUIRE THE PAYMENT OF A RATE OF INTEREST IN EXCESS OF THE MAXIMUM
RATE PERMITTED BY APPLICABLE LAW (THE "MAXIMUM RATE"). IF, IN ANY
MONTH, THE EFFECTIVE INTEREST RATE, ABSENT SUCH LIMITATION, WOULD HAVE
EXCEEDED THE MAXIMUM RATE, THEN THE EFFECTIVE INTEREST RATE FOR THAT
MONTH SHALL BE THE MAXIMUM RATE, AND IF, IN FUTURE MONTHS, THE
EFFECTIVE INTEREST RATE WOULD OTHERWISE BE LESS THAN THE MAXIMUM RATE,
THEN THE EFFECTIVE INTEREST RATE SHALL REMAIN AT THE MAXIMUM RATE UNTIL
SUCH TIME AS THE AMOUNT OF INTEREST PAID HEREUNDER EQUALS THE AMOUNT OF
INTEREST WHICH WOULD HAVE BEEN PAID IF THE SAME HAD NOT BEEN LIMITED BY
THE MAXIMUM RATE. IN THIS CONNECTION, IN THE EVENT THAT, UPON PAYMENT
IN FULL OF THE SECURED OBLIGATIONS, THE TOTAL AMOUNT OF INTEREST PAID
OR ACCRUED UNDER THE TERMS OF THIS AGREEMENT IS LESS THAN THE TOTAL
AMOUNT OF INTEREST WHICH WOULD HAVE BEEN PAID OR ACCRUED IF THE
EFFECTIVE INTEREST RATE HAD AT ALL TIMES BEEN IN EFFECT, THEN THE
BORROWERS SHALL, TO THE EXTENT PERMITTED BY APPLICABLE LAW, PAY TO THE
LENDERS AN AMOUNT EQUAL TO THE DIFFERENCE BETWEEN (I) THE LESSER OF (A)
THE AMOUNT OF INTEREST WHICH WOULD HAVE BEEN CHARGED IF THE MAXIMUM
RATE HAD, AT ALL TIMES, BEEN IN EFFECT AND (B) THE AMOUNT OF INTEREST
WHICH WOULD HAVE ACCRUED HAD THE
40
47
EFFECTIVE INTEREST RATE, AT ALL TIMES, BEEN IN EFFECT, AND (II) THE
AMOUNT OF INTEREST ACTUALLY PAID OR ACCRUED UNDER THIS AGREEMENT. IN
THE EVENT THE LENDERS RECEIVE, COLLECT OR APPLY AS INTEREST ANY SUM IN
EXCESS OF THE MAXIMUM RATE, SUCH EXCESS AMOUNT SHALL BE APPLIED TO THE
REDUCTION OF THE PRINCIPAL BALANCE OF THE APPLICABLE SECURED
OBLIGATION, AND, IF NO SUCH PRINCIPAL IS THEN OUTSTANDING, SUCH EXCESS
OR PART THEREOF REMAINING SHALL BE PAID TO THE BORROWERS.
FEES.
(JJ) FACILITY FEE. IN CONSIDERATION FOR DOCUMENTING, EXTENDING AND
CLOSING THE REVOLVING CREDIT FACILITY AND COMMITTING THE FUNDS WITH
RESPECT THERETO, ON THE EFFECTIVE DATE, THE BORROWERS SHALL PAY TO THE
AGENT, FOR THE RATABLE BENEFIT OF ITSELF AND THE LENDERS, A FACILITY
FEE IN THE AMOUNT OF (X) ONE-HALF OF ONE PERCENT (.50%) OF THE
PRINCIPAL AMOUNT OF THE REVOLVING CREDIT FACILITY LESS (Y) AN AMOUNT
EQUAL TO (1) THE COMMITMENT FEE LESS (2) ALL OUT-OF-POCKET COSTS AND
EXPENSES (INCLUDING REASONABLE FEES AND EXPENSES OF OUTSIDE LEGAL
COUNSEL) (THE "FACILITY FEE") INCURRED IN CONNECTION WITH THE
PREPARATION, EXECUTION AND CLOSING OF THIS TRANSACTION, WHICH FEE SHALL
BE FULLY EARNED AND NON-REFUNDABLE AS OF THE EFFECTIVE DATE.
(KK) ADMINISTRATIVE MANAGEMENT FEE. AS ADDITIONAL CONSIDERATION FOR THE
AGENT'S ONGOING COSTS AND EXPENSES OF MONITORING AND AUDITING THE
COLLATERAL, BOOKS AND RECORDS AND ADMINISTERING THE REVOLVING CREDIT
FACILITY, THE BORROWERS AGREE TO PAY TO THE AGENT THE AMOUNT OF $25,000
PER ANNUM DURING THE TERM OF THIS REVOLVING CREDIT FACILITY, AND ANY
EXTENSION THEREOF (EACH AN "ADMINISTRATIVE MANAGEMENT FEE"). THE
ADMINISTRATIVE MANAGEMENT FEE SHALL BE PAYABLE IN EQUAL QUARTERLY
INSTALLMENTS DURING EACH YEAR OF THE TERM OF THE REVOLVING CREDIT
FACILITY, AND ANY EXTENSION THEREOF, COMMENCING ON THE EFFECTIVE DATE.
EACH ADMINISTRATIVE MANAGEMENT FEE SHALL BE FULLY EARNED ON THE
EFFECTIVE DATE AND EACH ANNUAL ANNIVERSARY THEREAFTER DURING THE TERM
OR ANY EXTENSION THEREOF.
(LL) UNUSED LINE FEE. AS ADDITIONAL COMPENSATION FOR THE COSTS AND
RISKS IN MAKING THE REVOLVING CREDIT FACILITY AVAILABLE TO THE
BORROWERS, THE BORROWERS AGREE TO PAY TO THE AGENT, FOR THE RATABLE
BENEFIT OF THE LENDERS, IN ARREARS, ON THE FIRST (1ST) BUSINESS DAY OF
EACH MONTH WITH RESPECT TO THE IMMEDIATELY PRIOR MONTH, DURING THE TERM
HEREOF OR ANY EXTENSION THEREOF, A FEE OF ONE QUARTER OF ONE PERCENT
(.25%) PER ANNUM OF THE FOLLOWING AMOUNTS(THE "UNUSED LINE FEE"):
upon the commencement of the Revolving Credit Facility and thereafter and for so
long as the aggregate outstanding amount of the Revolving Credit Loans and the
Letter of Credit Obligations are less than or equal to $100,000,000, the amount
equal to the difference between (i) $100,000,000, and (ii) the sum of the
average daily outstanding balances of the Revolving Credit Loans and the Letter
of Credit Obligations during such period. if, during the immediately prior
month, the aggregate outstanding amount of the Revolving Credit Loans and the
Letter of Credit Obligations at any time exceed $100,000,000 but are less than
or equal to $115,000,000, then thereafter through the Termination Date, the
amount equal to the difference between
41
48
(i) $115,000,000, and (ii) the sum of the average daily outstanding balances of
the Revolving Credit Loans and the Letter of Credit Obligations during such
period. if, during the immediately prior month, the aggregate outstanding amount
of the Revolving Credit Loans and the Letter of Credit Obligations at any time
exceed $115,000,000, then thereafter through the Termination Date, the amount
equal to the difference between (i) $130,000,000, and (ii) the sum of the
average daily outstanding balances of the Revolving Credit Loans and the Letter
of Credit Obligations during such period.
(MM) LETTER OF CREDIT CHARGES AND FEES. THE BORROWERS AGREE TO PAY TO
AGENT, (I) ALL CHARGES IMPOSED ON THE AGENT OR ANY LENDER BY THE
ISSUING BANK IN CONNECTION WITH ANY LETTER OF CREDIT OR GUARANTY
THEREOF INITIALLY AT THE RATES SET FORTH ON ANNEX I HERETO, WHICH
CHARGES SHALL NOT BE SUBJECT TO CHANGE UNTIL ONE (1) YEAR AFTER THE
CLOSING DATE, AND PROVIDED FURTHER, THAT DURING THE TERM HEREOF, SUCH
CHARGES SHALL NOT INCREASE BY MORE THAN TWENTY-FIVE PERCENT (25%) PER
ANNUM OVER THE THEN CURRENT CHARGES, AND (II) FOR THE RATABLE BENEFIT
OF THE LENDERS AS COMPENSATION TO THE LENDERS FOR ISSUING GUARANTIES IN
SUPPORT OF LETTERS OF CREDIT, A FEE OF (A) ONE PERCENT (1.00%) PER
ANNUM OF THE FACE AMOUNT OF EACH DOCUMENTARY LETTER OF CREDIT PAYABLE
IN ARREARS ON THE FIRST BUSINESS DAY OF EACH MONTH WITH RESPECT TO THE
IMMEDIATELY PRECEDING MONTH UNTIL ALL SUCH LETTER OF CREDIT OBLIGATIONS
HAVE BEEN PAID OR OTHERWISE SATISFIED, AND (B) ONE AND ONE-HALF PERCENT
(1.50%) PER ANNUM OF THE FACE AMOUNT OF EACH STANDBY LETTER OF CREDIT
PAYABLE IN ARREARS ON THE FIRST BUSINESS DAY OF EACH MONTH WITH RESPECT
TO THE IMMEDIATELY PRECEDING MONTH UNTIL ALL SUCH LETTER OF CREDIT
OBLIGATIONS HAVE BEEN PAID OR OTHERWISE SATISFIED (EACH FEE IN CLAUSE
(II) A "LETTER OF CREDIT FEE" AND COLLECTIVELY THE "LETTER OF CREDIT
FEES"). UPON THE OCCURRENCE AND DURING THE CONTINUATION OF AN EVENT OF
DEFAULT, THE FOREGOING LETTER OF CREDIT FEES SHALL BE INCREASED BY AN
AMOUNT EQUAL TO THE LETTER OF CREDIT DEFAULT MARGIN.
(NN) EARLY TERMINATION FEE. IF FOR ANY REASON THIS AGREEMENT IS
VOLUNTARILY TERMINATED BY ANY BORROWER OR THE REVOLVING CREDIT LOANS
HEREUNDER ARE VOLUNTARILY REPAID (EXCLUDING REVOLVING CREDIT LOAN
PAYMENTS IN THE ORDINARY COURSE OF BUSINESS), ON AN EARLY TERMINATION
DATE, IN VIEW OF THE IMPRACTICALITY AND EXTREME DIFFICULTY OF
ASCERTAINING ACTUAL DAMAGES AND BY MUTUAL AGREEMENT OF THE PARTIES AS
TO A REASONABLE CALCULATION OF LENDERS' LOST PROFITS AS A RESULT
THEREOF, THE BORROWERS AGREE TO PAY TO AGENT, FOR THE RATABLE BENEFIT
OF THE LENDERS, UPON THE EFFECTIVE DATE OF SUCH TERMINATION OR
PREPAYMENT OF ALL OF THE REVOLVING CREDIT LOANS, THE EARLY TERMINATION
FEE.
MANNER OF PAYMENT.
(OO) NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN AND EXCEPT FOR THE
LETTER OF CREDIT CHARGES SET FORTH IN ANNEX I HERETO, WHICH WILL BE
BILLED BY THE ISSUING BANK, AGENT SHALL INVOICE THE BORROWER ON A
MONTHLY BASIS FOR ALL INTEREST, FEES, COSTS AND EXPENSES DUE AND
PAYABLE IN ACCORDANCE WITH THE LOAN DOCUMENTS AND SUCH PAYMENTS SHALL
BE DUE AND MADE WITHIN FIVE (5) BUSINESS DAYS OF RECEIPT BY THE
BORROWERS OF SUCH INVOICE, RECEIPT OF WHICH IS TO BE DETERMINED IN
ACCORDANCE WITH THE PROVISIONS SET FORTH IN Section 15.1 HEREOF;
PROVIDED, HOWEVER, THAT BORROWER'S LIABILITY FOR SUCH AMOUNTS SHALL NOT
BE EXCUSED OR TERMINATED BY THE FAILURE OF BORROWER TO RECEIVE SUCH
INVOICES OR FOR ANY OTHER REASON WHATSOEVER OTHER THAN PAYMENT THEREOF.
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN Section 8.1(b), EACH PAYMENT
(INCLUDING PREPAYMENTS) BY THE BORROWERS ON ACCOUNT OF THE PRINCIPAL OF
OR INTEREST ON THE REVOLVING CREDIT LOANS OR OF ANY OTHER AMOUNTS
PAYABLE TO THE LENDERS UNDER THIS AGREEMENT OR ANY NOTE SHALL BE
MADE NOT LATER THAN 1:00 P.M. (ATLANTA TIME) ON THE DATE SPECIFIED FOR
PAYMENT UNDER THIS AGREEMENT TO THE AGENT, FOR THE ACCOUNT OF THE
LENDERS, AT THE AGENT'S OFFICE, IN DOLLARS, IN IMMEDIATELY AVAILABLE
FUNDS AND SHALL BE
42
49
MADE WITHOUT ANY SETOFF, COUNTERCLAIM OR DEDUCTION
WHATSOEVER. ANY PAYMENT RECEIVED AFTER 1:00 P.M. (ATLANTA TIME) ON SUCH
DAY SHALL BE DEEMED TO HAVE BEEN MADE ON THE NEXT SUCCEEDING BUSINESS
DAY.
IN THE EVENT THAT THE BORROWERS SHALL FAIL TO PAY THE AMOUNTS INVOICED WITHIN
THE TIME PERIOD SET FORTH IN Section 4.3(a), THE BORROWERS HEREBY IRREVOCABLY
AUTHORIZE EACH LENDER AND EACH AFFILIATE OF SUCH LENDER AND EACH PARTICIPANT
HEREIN TO CHARGE ANY ACCOUNT OF THE BORROWERS MAINTAINED WITH SUCH LENDER OR
WITH SUCH AFFILIATE OR PARTICIPANT WITH SUCH AMOUNTS AS MAY BE NECESSARY FROM
TIME TO TIME TO PAY ANY SECURED OBLIGATIONS (WHETHER OR NOT OWED TO SUCH LENDER,
AFFILIATE OR PARTICIPANT) WHICH ARE NOT PAID WHEN DUE, AND THE PROCEEDS THEREOF
SHALL BE APPLIED AS SET FORTH IN Section 4.1(b).
LOAN ACCOUNTS: STATEMENTS OF ACCOUNT.
(PP) EACH LENDER SHALL OPEN AND MAINTAIN ON ITS BOOKS A LOAN ACCOUNT IN
THE BORROWERS' NAME (EACH, A "LOAN ACCOUNT"). EACH LOAN ACCOUNT SHALL
SHOW AS DEBITS THERETO EACH ADVANCE MADE UNDER THIS AGREEMENT BY SUCH
LENDER TO THE BORROWERS AND AS CREDITS THERETO ALL PAYMENTS RECEIVED BY
SUCH LENDER AND APPLIED TO THE PRINCIPAL OF SUCH REVOLVING CREDIT LOANS
OUTSTANDING TO THE BORROWERS, SO THAT THE BALANCE OF THE LOAN ACCOUNT
AT ALL TIMES REFLECTS THE PRINCIPAL AMOUNT DUE SUCH LENDER FROM THE
BORROWERS.
(QQ) THE AGENT SHALL MAINTAIN ON ITS BOOKS A CONTROL ACCOUNT FOR THE
BORROWERS IN WHICH SHALL BE RECORDED (I) THE AMOUNT OF EACH
DISBURSEMENT MADE HEREUNDER TO THE BORROWERS, (II) THE AMOUNT OF ANY
PRINCIPAL OR INTEREST DUE OR TO BECOME DUE FROM THE BORROWERS
HEREUNDER, AND (III) THE AMOUNT OF ANY SUM RECEIVED BY THE AGENT
HEREUNDER FROM THE BORROWERS AND EACH LENDER'S RATABLE SHARE THEREIN.
(RR) THE ENTRIES MADE IN THE ACCOUNTS PURSUANT TO subsections (a) AND
(b) SHALL BE prima facie EVIDENCE, IN THE ABSENCE OF MANIFEST ERROR, OF
THE EXISTENCE AND AMOUNTS OF THE OBLIGATIONS OF THE BORROWERS THEREIN
RECORDED AND IN CASE OF DISCREPANCY BETWEEN SUCH ACCOUNTS, IN THE
ABSENCE OF MANIFEST ERROR, THE ACCOUNTS MAINTAINED PURSUANT TO
subsection (b) SHALL BE CONTROLLING.
(SS) THE AGENT WILL ACCOUNT TO THE BORROWERS MONTHLY WITH A STATEMENT
OF REVOLVING CREDIT LOANS, CHARGES AND PAYMENTS MADE TO AND BY THE
BORROWERS PURSUANT TO THIS AGREEMENT, AND SUCH ACCOUNTS RENDERED BY THE
AGENT SHALL BE DEEMED FINAL, BINDING AND CONCLUSIVE, SAVE FOR MANIFEST
ERROR, UNLESS THE AGENT IS NOTIFIED BY THE BORROWERS IN WRITING TO THE
CONTRARY WITHIN FORTY-FIVE (45) DAYS OF THE DATE THE ACCOUNT WAS
RECEIVED BY THE BORROWERS. SUCH NOTICE BY THE BORROWERS SHALL BE DEEMED
AN OBJECTION TO ONLY THOSE ITEMS SPECIFICALLY OBJECTED TO THEREIN.
FAILURE OF THE AGENT TO RENDER SUCH ACCOUNT SHALL IN NO WAY AFFECT THE
RIGHTS OF THE AGENT OR OF THE LENDERS HEREUNDER.
SECTION 1.2 TERMINATION OF AGREEMENT. On the Termination Date, the
Borrowers shall pay to the Agent, for the account of the Lenders, in same day
funds, an amount equal to all Secured Obligations then outstanding, including,
without limitation, all (i) accrued interest thereon, (ii) all accrued fees
provided for hereunder, and (iii) any amounts payable to the Agent and the
Lenders pursuant to SECTIONS 4.1, 4.2, 4.8, 15.2, 15.3 and 15.12, and, in
addition thereto, shall deliver to the Agent, in respect of each outstanding
Letter of Credit, either the Replacement Letter of Credit or the Cash Collateral
as provided in SECTION 3.3. Following a notice of termination as provided for in
this SECTION 4.5 and upon payment in full of the amounts specified
43
50
in this SECTION 4.5, this Agreement shall be terminated and the Agent, the
Lenders and the Borrowers shall have no further obligations to any other party
hereto except for the obligations to the Agent and the Lenders pursuant to
SECTION 15.12 hereof.
MAKING OF ADVANCES.
(A) NATURE OF OBLIGATIONS OF LENDERS TO MAKE ADVANCES. THE OBLIGATIONS
OF THE LENDERS UNDER THIS AGREEMENT TO MAKE ADVANCES ARE SEVERAL AND
ARE NOT JOINT OR JOINT AND SEVERAL.
(b) Assumption by Agent. Subject to the provisions of SECTION 4.7 and
notwithstanding the occurrence or continuance of a Default or Event of Default
or other failure of any condition to the making of Advances hereunder subsequent
to the Advances to be made on the Effective Date, unless the Agent shall have
received notice from a Lender in accordance with the provisions of SECTION
4.6(C) prior to a proposed borrowing date that such Lender will not make
available to the Agent such Lender's ratable portion of the amount to be
borrowed on such date, the Agent may assume that such Lender will make such
portion available to the Agent in accordance with SECTION 2.2(A), and the Agent
may, in reliance upon such assumption, make available to the Borrowers on such
date a corresponding amount. If and to the extent such Lender shall not make
such ratable portion available to the Agent, such Lender and the Borrowers
severally agree to repay to the Agent forthwith on demand such corresponding
amount (the "Make-Whole Amount"), together with interest thereon for each day
from the date such amount is made available to the Borrowers until the date such
amount is repaid to the Agent at the Effective Interest Rate or, if lower,
subject to SECTION 4.1(C), the Maximum Rate. If such Lender shall repay to the
Agent such corresponding amount, the amount so repaid shall constitute such
Lender's Commitment Percentage of the Advance made on such borrowing date for
purposes of this Agreement. The failure of any Lender to make available its
Commitment Percentage of any Advance shall not (without regard to whether the
Borrowers shall have returned the amount thereof to the Agent in accordance with
this SECTION 4.6) relieve it or any other Lender of its obligation, if any,
hereunder to make its Commitment Percentage of such Advance available on such
borrowing date, but no Lender shall be responsible for the failure of any other
Lender to make available its Commitment Percentage of such Advance on the
borrowing date.
(C) DELEGATION OF AUTHORITY TO AGENT.
Without limiting the generality of SECTION 14.1, each Lender expressly
authorizes the Agent to determine on behalf of such Lender (A) any reduction or
increase of advance rates applicable to the Borrowing Base, so long as such
advance rates do not at any time exceed the rates set forth in the Borrowing
Base definition, (B) the creation or elimination of any reserves (other than the
Letter of Credit Reserve) against the Revolving Credit Facility and the
Borrowing Base, and (C) whether or not Inventory shall be deemed to constitute
Eligible Inventory. Such authorization may be withdrawn by the Required Lenders
by giving the Agent written notice of such withdrawal signed by the Required
Lenders; provided, however, that unless otherwise agreed by the Agent such
withdrawal of authorization shall not become effective until the thirtieth
(30th) Business Day after receipt of such notice by the Agent. Thereafter, the
Required Lenders shall
44
51
jointly instruct the Agent in writing regarding such matters with such frequency
as the Required Lenders shall jointly determine.
Unless and until the Agent shall have received written notice from the Required
Lenders that because of a Default or Event of Default the Required Lenders do
not intend to make available to the Agent such Lenders' ratable share of
Advances made after the effective date of such notice, the Agent shall be
entitled to continue to make the assumptions described in SECTION 4.6(B). After
receipt of the notice described in the preceding sentence, which shall become
effective on the third (3rd) Business Day after receipt of such notice by the
Agent unless otherwise agreed by the Agent, the Agent shall be entitled to make
the assumptions described in SECTION 4.6(B) as to any Advances as to which it
has not received a written notice to the contrary prior to 11:00 a.m. (Atlanta
time) on the Business Day next preceding the day on which the Advance is to be
made. The Agent shall not be required to make any Advance as to which it shall
have received notice from a Lender (which notice will be given to the Borrowers)
of such Lender's intention not to make its ratable portion of such Advance
available to the Agent. Any withdrawal of authorization under this SECTION
4.6(C) shall not affect the validity of any Advances made prior to the
effectiveness thereof.
SETTLEMENT AMONG LENDERS.
(B) REVOLVING CREDIT LOANS. IT IS AGREED THAT EACH LENDER'S NET
OUTSTANDINGS ARE INTENDED BY THE LENDERS TO BE EQUAL AT ALL TIMES TO
SUCH LENDER'S COMMITMENT PERCENTAGE OF THE AGGREGATE PRINCIPAL AMOUNT
OF ALL REVOLVING CREDIT LOANS OUTSTANDING. NOTWITHSTANDING SUCH
AGREEMENT, THE SEVERAL AND NOT JOINT OBLIGATION OF EACH LENDER TO FUND
ADVANCES MADE IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT RATABLY IN
ACCORDANCE WITH SUCH LENDER'S COMMITMENT PERCENTAGE AND EACH LENDER'S
RIGHT TO RECEIVE ITS RATABLE SHARE OF PRINCIPAL PAYMENTS ON REVOLVING
CREDIT LOANS IN ACCORDANCE WITH ITS COMMITMENT PERCENTAGE, THE LENDERS
AGREE THAT IN ORDER TO FACILITATE THE ADMINISTRATION OF THIS AGREEMENT
AND THE LOAN DOCUMENTS THAT SETTLEMENT AMONG THEM MAY TAKE PLACE ON A
PERIODIC BASIS IN ACCORDANCE WITH THE PROVISIONS OF THIS Section 4.7.
(C) SETTLEMENT PROCEDURES AS TO REVOLVING CREDIT LOANS. TO THE EXTENT
AND IN THE MANNER HEREINAFTER PROVIDED IN THIS Section 4.7, SETTLEMENT
AMONG THE LENDERS AS TO REVOLVING CREDIT LOANS MAY OCCUR PERIODICALLY
ON SETTLEMENT DATES DETERMINED FROM TIME TO TIME BY THE AGENT, WHICH
MAY OCCUR BEFORE OR AFTER THE OCCURRENCE OR DURING THE CONTINUANCE OF A
DEFAULT OR EVENT OF DEFAULT AND WHETHER OR NOT ALL OF THE CONDITIONS
SET FORTH IN Section 5.2 HAVE BEEN MET. ON EACH SETTLEMENT DATE
PAYMENTS SHALL BE MADE BY OR TO THE SETTLEMENT LENDER AND THE OTHER
LENDERS IN THE MANNER PROVIDED IN THIS
Section 4.7 IN ACCORDANCE WITH THE SETTLEMENT REPORT DELIVERED BY
THE AGENT PURSUANT TO THE PROVISIONS OF THIS Section 4.7 IN RESPECT OF
SUCH SETTLEMENT DATE SO THAT AS OF EACH SETTLEMENT DATE, AND AFTER
GIVING EFFECT TO THE TRANSACTIONS TO TAKE PLACE ON SUCH SETTLEMENT
DATE, EACH LENDER'S NET OUTSTANDINGS SHALL EQUAL SUCH LENDER'S
COMMITMENT PERCENTAGE OF THE REVOLVING CREDIT LOANS OUTSTANDING.
(i) Selection of Settlement Dates. If the Agent elects, in its
discretion, but subject to the consent of the Settlement
Lender, to settle accounts among the Lenders with respect to
principal amounts of Revolving Credit Loans less frequently
than each Business Day, then the Agent shall designate
periodic Settlement Dates which may occur on any Business Day
after the Effective Date;
45
52
provided, however, that the Agent shall designate as a
Settlement Date any Business Day which is an Interest Payment
Date; and provided further, that a Settlement Date shall occur
at least once during each seven-day period. The Agent shall
designate a Settlement Date by delivering to each Lender a
Settlement Report not later than 12:00 noon (Atlanta time) on
the proposed Settlement Date, which Settlement Report shall be
with respect to the period beginning on the next preceding
Settlement Date and ending on such designated Settlement Date.
(ii) Non-Ratable Loans and Payments. Between Settlement Dates,
the Agent shall request and the Settlement Lender may (but
shall not be obligated to) advance to the Borrowers out of the
Settlement Lender's own funds, the entire principal amount of
any Advance requested or deemed requested pursuant to SECTION
2.2(A) (any such Advance being referred to as a "Non-Ratable
Loan"). The making of each Non-Ratable Loan by the Settlement
Lender shall be deemed to be a purchase by the Settlement
Lender of a 100% participation in each other Lender's
Commitment Percentage of the amount of such Non-Ratable Loan.
All payments of principal, interest and any other amount with
respect to such Non-Ratable Loan shall be payable to and
received by the Agent for the account of the Settlement
Lender. Upon demand by the Settlement Lender, with notice
thereof to the Agent, each other Lender shall pay to the
Settlement Lender, as the repurchase of such participation, an
amount equal to 100% of such Lender's Commitment Percentage of
the principal amount of such Non-Ratable Loan. Any payments
received by the Agent between Settlement Dates which in
accordance with the terms of this Agreement are to be applied
to the reduction of the outstanding principal balance of
Revolving Credit Loans, shall be paid over to and retained by
the Settlement Lender for such application, and such payment
to and retention by the Settlement Lender shall be deemed, to
the extent of each other Lender's Commitment Percentage of
such payment, to be a purchase by each such other Lender of a
participation in the Revolving Credit Loans (including the
repurchase of participations in Non-Ratable Loans) held by the
Settlement Lender. Upon demand by another Lender, with notice
thereof to the Agent, the Settlement Lender shall pay to the
Agent, for the account of such other Lender, as a repurchase
of such participation, an amount equal to such other Lender's
Commitment Percentage of any such amounts (after application
thereof to the repurchase of any participations of the
Settlement Lender in such other Lender's Commitment Percentage
of any Non-Ratable Loans) paid only to the Settlement Lender
by the Agent.
Net Decrease in Outstandings. If on any Settlement Date the increase, if any,
in the dollar amount of any Lender's Net Outstandings which is required to
comply with the first sentence of SECTION 4.7(A) is less than such Lender's
Commitment Percentage of amounts received by the Agent but paid only to the
Settlement Lender since the next preceding Settlement Date, such Lender and
the Agent, in their respective records, shall apply such Lender's Commitment
Percentage of such amounts to the increase in such Lender's Net
Outstandings, and the Settlement Lender shall pay to the Agent, for the
account of such Lender, the excess allocable to such Lender.
46
53
Net Increase in Outstandings. If on any Settlement Date the increase, if any, in
the dollar amount of any Lender's Net Outstandings which is required to comply
with the first sentence of SECTION 4.7(A) exceeds such Lender's Commitment
Percentage of amounts received by the Agent but paid only to the Settlement
Lender since the next preceding Settlement Date, such Lender and the Agent, in
their respective records, shall apply such Lender's Commitment Percentage of
such amounts to the increase in such Lender's Net Outstandings, and such Lender
shall pay to the Agent, for the account of the Settlement Lender, any excess.
No Change in Outstandings. If a Settlement Report indicates that no Revolving
Credit Loans have been made during the period since the next preceding
Settlement Date, then such Lender's Commitment Percentage of any amounts
received by the Agent but paid only to the Settlement Lender shall be paid by
the Settlement Lender to the Agent, for the account of such Lender. If a
Settlement Report indicates that the increase in the dollar amount of a Lender's
Net Outstandings which is required to comply with the first sentence of SECTION
4.7(A) is exactly equal to such Lender's Commitment Percentage of amounts
received by the Agent but paid only to the Settlement Lender since the next
preceding Settlement Date, such Lender and the Agent, in their respective
records, shall apply such Lender's Commitment Percentage of such amounts to the
increase in such Lender's Net Outstandings.
Return of Payments. If any amounts received by the Settlement Lender in respect
of the Secured Obligations are later required to be returned or repaid by the
Settlement Lender to the Borrowers or any other obligor or their respective
representatives or successors in interest, whether by court order, settlement or
otherwise, in excess of the Settlement Lender's Commitment Percentage of all
such amounts required to be returned by all Lenders, each other Lender shall,
upon demand by the Settlement Lender with notice to the Agent, pay to the Agent
for the account of the Settlement Lender, an amount equal to the excess of such
Lender's Commitment Percentage of all such amounts required to be returned by
all Lenders over the amount, if any, returned directly by such Lender. Payments
to Agent, Lenders.
Payment by any Lender to the Agent shall be made not later than 1:00 p.m.
(Atlanta time) on the Business Day such payment is due, provided that if such
payment is due on demand by another Lender, such demand is made on the paying
Lender not later than 11:00 a.m. (Atlanta time) on such Business Day. Payment by
the Agent to any Lender shall be made by wire transfer, promptly following the
Agent's receipt of funds for the account of such Lender and in the type of funds
received by the Agent, provided that if the Agent receives such funds at or
prior to 1:00 p.m. (Atlanta time), the Agent shall pay such funds to such Lender
by 2:00 p.m. (Atlanta time) on such Business Day. If a demand for payment is
made after the applicable time set forth above, the payment due shall be made by
2:00 p.m. (Atlanta time) on the first Business Day following the date of such
demand.
If a Lender shall, at any time, fail to make any payment to the Agent required
hereunder, the Agent may, but shall not be required to, retain payments that
would otherwise be made to such Lender hereunder and apply such payments to such
Lender's defaulted obligations hereunder, at such time, and in such order, as
the Agent may elect in its sole discretion.
47
54
With respect to the payment of any funds under this SECTION 4.7(B), whether from
the Agent to a Lender or from a Lender to the Agent, the party failing to make
full payment when due pursuant to the terms hereof shall, upon demand by the
other party, pay such amount together with interest on such amount at the Prime
Option.
(D) SETTLEMENT OF OTHER SECURED OBLIGATIONS. ALL OTHER AMOUNTS RECEIVED
BY THE AGENT ON ACCOUNT OF, OR APPLIED BY THE AGENT TO THE PAYMENT OF,
ANY SECURED OBLIGATION OWED TO THE LENDERS (INCLUDING, WITHOUT
LIMITATION, FEES PAYABLE TO THE LENDERS PURSUANT TO Sections 4.2(c) AND
(d) AND PROCEEDS FROM THE SALE OF, OR OTHER REALIZATION UPON, ALL OR
ANY PART OF THE COLLATERAL FOLLOWING AN EVENT OF DEFAULT) THAT ARE
RECEIVED BY THE AGENT ON OR PRIOR TO 1:00 P.M. (ATLANTA TIME) ON A
BUSINESS DAY WILL BE PAID BY THE AGENT TO EACH LENDER ON THE SAME
BUSINESS DAY, AND ANY SUCH AMOUNTS THAT ARE RECEIVED BY THE AGENT AFTER
1:00 P.M. (ATLANTA TIME) WILL BE PAID BY THE AGENT TO EACH LENDER ON
THE FOLLOWING BUSINESS DAY. UNLESS OTHERWISE STATED HEREIN, THE AGENT
SHALL DISTRIBUTE FEES PAYABLE TO THE LENDERS PURSUANT TO Sections
4.2(c) AND (d) RATABLY TO THE LENDERS BASED ON EACH LENDER'S COMMITMENT
PERCENTAGE AND SHALL DISTRIBUTE PROCEEDS FROM THE SALE OF, OR OTHER
REALIZATION UPON, ALL OR ANY PART OF THE COLLATERAL FOLLOWING AN EVENT
OF DEFAULT RATABLY TO THE LENDERS BASED ON THE AMOUNT OF THE SECURED
OBLIGATIONS THEN OWING TO EACH LENDER.
CHANGED CIRCUMSTANCES.
(E) EACH BORROWER AGREES THAT IF (I) ANY LAW HEREAFTER IN EFFECT OR
(II) ANY REQUEST, GUIDELINE OR DIRECTIVE OF ANY GOVERNMENTAL AUTHORITY
(WHETHER OR NOT HAVING THE FORCE OF LAW AND WHETHER OR NOT FAILURE TO
COMPLY THEREWITH WOULD BE UNLAWFUL) NOT IN EFFECT AS OF THE EFFECTIVE
DATE WITH RESPECT TO ANY LAW NOW OR HEREAFTER IN EFFECT (AND WHETHER OR
NOT ANY SUCH LAW IS PRESENTLY APPLICABLE TO ANY LENDER) OR THE
INTERPRETATION OR ADMINISTRATION THEREOF BY ANY GOVERNMENTAL AUTHORITY,
SHALL EITHER (Y)(A) IMPOSE, AFFECT, MODIFY OR DEEM APPLICABLE ANY
RESERVE, SPECIAL DEPOSIT, CAPITAL MAINTENANCE OR SIMILAR REQUIREMENT
AGAINST ANY ADVANCE, (B) IMPOSE ON SUCH LENDER ANY OTHER CONDITION
REGARDING ANY ADVANCE, THIS AGREEMENT, ANY NOTE OR THE FACILITIES
PROVIDED HEREUNDER, OR (C) RESULT IN ANY REQUIREMENT REGARDING CAPITAL
ADEQUACY (INCLUDING ANY RISK-BASED CAPITAL GUIDELINES) AFFECTING SUCH
LENDER BEING IMPOSED OR MODIFIED OR DEEMED APPLICABLE TO SUCH LENDER OR
(Z) SUBJECT SUCH LENDER TO ANY TAXES ON THE RECORDING, REGISTRATION,
NOTARIZATION OR OTHER FORMALIZATION OF THE REVOLVING CREDIT LOANS OR
ANY NOTE, AND THE RESULT OF ANY EVENT REFERRED TO IN CLAUSE (I) OR (II)
ABOVE SHALL BE TO INCREASE THE COST TO SUCH LENDER OF MAKING, FUNDING
OR MAINTAINING ANY ADVANCE OR TO REDUCE THE AMOUNT OF ANY SUM
RECEIVABLE BY SUCH LENDER OR SUCH LENDER'S RATE OF RETURN ON CAPITAL
WITH RESPECT TO ANY ADVANCE TO A LEVEL BELOW THAT WHICH SUCH LENDER
COULD HAVE ACHIEVED BUT FOR SUCH IMPOSITION, MODIFICATION OR DEEMED
APPLICABILITY (TAKING INTO CONSIDERATION SUCH LENDER'S POLICIES WITH
RESPECT TO CAPITAL ADEQUACY) BY AN AMOUNT DEEMED BY SUCH LENDER (IN THE
GOOD FAITH EXERCISE OF ITS REASONABLE DISCRETION AND CONSISTENT WITH
CUSTOMARY INDUSTRY PRACTICE) TO BE MATERIAL, THEN, UPON DEMAND BY SUCH
LENDER, EACH BORROWER SHALL IMMEDIATELY PAY TO SUCH LENDER ADDITIONAL
AMOUNTS WHICH SHALL BE SUFFICIENT TO COMPENSATE SUCH LENDER FOR SUCH
INCREASED COST, TAX OR REDUCED RATE OF RETURN. A CERTIFICATE OF SUCH
LENDER TO THE BORROWERS CLAIMING COMPENSATION UNDER THIS Section 4.8
SHALL BE FINAL, CONCLUSIVE AND BINDING ON ALL PARTIES FOR ALL PURPOSES
IN THE ABSENCE OF MANIFEST ERROR. SUCH
48
55
CERTIFICATE SHALL SET FORTH THE NATURE OF THE OCCURRENCE GIVING RISE TO SUCH
COMPENSATION, THE ADDITIONAL AMOUNT OR AMOUNTS TO BE PAID TO IT HEREUNDER AND
THE METHOD BY WHICH SUCH AMOUNTS WERE DETERMINED. IN DETERMINING SUCH AMOUNT,
SUCH LENDER MAY USE ANY REASONABLE AVERAGING AND ATTRIBUTION METHODS.
(F) IF THE INTRODUCTION OF OR ANY CHANGE IN OR IN THE INTERPRETATION OF
(IN EACH CASE, AFTER THE DATE HEREOF) ANY LAW OR REGULATION MAKES IT
UNLAWFUL, OR ANY GOVERNMENTAL AUTHORITY ASSERTS, AFTER THE DATE HEREOF,
THAT IT IS UNLAWFUL, FOR ANY LENDER TO PERFORM ITS OBLIGATIONS
HEREUNDER TO MAKE LIBOR ADVANCES TO FUND OR MAINTAIN LIBOR ADVANCES
HEREUNDER, SUCH LENDER SHALL NOTIFY THE AGENT OF SUCH EVENT AND THE
AGENT SHALL NOTIFY THE BORROWERS OF SUCH EVENT, AND THE RIGHT OF THE
BORROWERS TO SELECT LIBOR ADVANCES FOR ANY SUBSEQUENT INTEREST PERIOD
OR IN CONNECTION WITH ANY SUBSEQUENT CONVERSION OF ANY ADVANCE SHALL BE
SUSPENDED UNTIL THE AGENT SHALL NOTIFY THE BORROWERS THAT THE
CIRCUMSTANCES CAUSING SUCH SUSPENSION NO LONGER EXIST, AND THE
BORROWERS SHALL FORTHWITH PREPAY IN FULL ALL LIBOR ADVANCES THEN
OUTSTANDING AND SHALL PAY ALL INTEREST ACCRUED THEREON THROUGH THE DATE
OF SUCH PREPAYMENT OR CONVERSION, UNLESS THE BORROWERS, WITHIN THREE
(3) BUSINESS DAYS AFTER SUCH NOTICE FROM THE AGENT, REQUESTS THE
CONVERSION OF ALL OUTSTANDING LIBOR ADVANCES INTO PRIME ADVANCES;
PROVIDED THAT, IF THE DATE OF SUCH REPAYMENT OR PROPOSED CONVERSION IS
NOT THE LAST DAY OF THE INTEREST PERIOD APPLICABLE TO SUCH LIBOR
ADVANCES, THE BORROWERS SHALL ALSO PAY ANY AMOUNT DUE PURSUANT TO
Section 4.1(a)(iii).
(G) IF THE AGENT SHALL, AT LEAST ONE (1) BUSINESS DAY BEFORE THE DATE
OF ANY REQUESTED ADVANCE OR THE EFFECTIVE DATE OF ANY CONVERSION OR
CONTINUATION OF AN EXISTING ADVANCE TO BE MADE OR CONTINUED AS OR
CONVERTED INTO A LIBOR ADVANCE (EACH SUCH REQUESTED ADVANCE MADE AND/OR
TO BE CONVERTED OR TO CONTINUED, A "PENDING ADVANCE"), NOTIFY THE
BORROWERS THAT THE LIBOR ADVANCE WILL NOT ADEQUATELY REFLECT THE COST
TO THE LENDERS OF MAKING OR FUNDING SUCH PENDING ADVANCE AS A LIBOR
ADVANCE OR THAT LIBOR IS NOT DETERMINABLE FROM ANY INTEREST RATE
REPORTING SERVICE OF RECOGNIZED STANDING, THEN THE RIGHT OF THE
BORROWERS TO SELECT LIBOR ADVANCES FOR SUCH PENDING ADVANCE, ANY
SUBSEQUENT ADVANCES IN CONNECTION WITH ANY SUBSEQUENT CONVERSION OR
CONTINUATION OF ANY ADVANCE SHALL BE SUSPENDED UNTIL THE AGENT SHALL
NOTIFY THE BORROWERS THAT THE CIRCUMSTANCES CAUSING SUCH SUSPENSION NO
LONGER EXIST, AND PENDING ADVANCES AND EACH SUCH SUBSEQUENT ADVANCE
REQUESTED TO BE MADE, CONTINUED OR CONVERTED SHALL BE MADE OR CONTINUED
AS, OR CONVERTED INTO A PRIME ADVANCE.
OBLIGATIONS ABSOLUTE. Each Borrower agrees that the Secured Obligations will be
paid strictly in accordance with the terms of the Loan Documents, regardless of
any law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of the Agent or any Lender with
respect thereto. All Secured Obligations shall be conclusively presumed to have
been created in reliance hereon. The liabilities of each Borrower under this
Agreement shall be absolute and unconditional irrespective of:
(H) ANY CHANGE IN THE TIME, MANNER OR PLACE OF PAYMENT OF, ON IN ANY OTHER TERM
OF, ALL OR ANY PART OF THE SECURED OBLIGATIONS, OR ANY OTHER AMENDMENT OR
WAIVER THEREOF OR ANY CONSENT TO DEPARTURE THEREFROM, INCLUDING, BUT NOT
LIMITED TO, ANY INCREASE IN THE SECURED OBLIGATIONS RESULTING FROM THE
EXTENSION OF ADDITIONAL CREDIT TO ANY BORROWER OR OTHERWISE;
49
56
(I) ANY TAKING, EXCHANGE, RELEASE OR NON-PERFECTION OF ANY COLLATERAL
OR ANY OTHER COLLATERAL SECURING THE SECURED OBLIGATIONS, OR ANY
RELEASE, AMENDMENT OR WAIVER OF, OR CONSENT TO OR DEPARTURE FROM, ANY
GUARANTY FOR ALL OR ANY OF THE SECURED OBLIGATIONS;
(J) ANY CHANGE, RESTRUCTURING OR TERMINATION OF THE CORPORATE STRUCTURE
OR EXISTENCE OF ANY BORROWER; OR
(K) ANY OTHER CIRCUMSTANCE WHICH MIGHT OTHERWISE CONSTITUTE A DEFENSE
AVAILABLE TO, OR A DISCHARGE OF, ANY BORROWER OR ANY GUARANTOR, OTHER
THAN PAYMENT OR SATISFACTION OF THE SECURED OBLIGATIONS OR TO THE
EXTENT OF ANY LOSS RESULTING FROM THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF THE AGENT, ANY LENDER OR THE ISSUING BANK, AS DETERMINED
BY THE FINAL NON-APPEALABLE JUDGMENT OF A COURT OF COMPETENT
JURISDICTION.
BORROWERS' REPRESENTATIVE. Each of the Borrowers hereby appoints GFCFS as, and
GFCFS shall act under this Agreement as, the agent, attorney-in-fact and legal
representative of the Borrowers for all purposes hereunder, including, without
limitation, requesting Advances and receiving account statements and other
notices and communications to the Borrowers (or any of them) from the Agent or
any Lender. Accordingly, the parties agree that any and all actions to be taken
hereunder by the Borrowers may be taken by GFCFS for and on behalf of the
Borrowers, and any and all notices and communications permitted or required to
be made by the Agent or any Lender hereunder to the Borrowers, shall be deemed
made to all of the Borrowers if delivered to GFCFS. The Agent and the Lenders
may rely, and shall be fully protected in relying, on any Borrowing Notice,
request for a Letter of Credit, disbursement instruction, report, information or
any other notice or communication made or given by GFCFS, whether in its own
name, on behalf of any other Borrower or on behalf of "the Borrowers", and
neither the Agent nor any Lender shall have any obligation to make any inquiry
or request any confirmation from or on behalf of any other Borrower as to the
binding effect on it of any such notice, request, instruction, report,
information, other notice or communications, provided that the provisions of
this SECTION 4.10 shall not be construed so as to preclude any Borrower from
taking other actions permitted to be taken by "a Borrower" hereunder. GFCFS may
from time to time tender to Agent or Lenders, representations or performance of
covenants hereunder and take actions in respect of other matters on behalf of
the Borrowers, and any such representations, performance or actions by GFCFS, if
accepted by Agent or Lenders, as the case may be, shall (irrespective of whether
the particular matter is otherwise authorized elsewhere herein) be conclusively
deemed done with the authorization of and on behalf of one or more of the
Borrowers, as the circumstances and the specific action taken may indicate.
Agent and any Lender may in all cases rely on communications from, and
representations and actions taken by, GFCFS as though given, delivered, made or
taken by or from one or more of the Borrowers, and all such communications,
representations and actions shall be binding upon any and every Borrower in
whose behalf such communications, representations or actions were purportedly
taken by GFCFS. Notwithstanding anything to the contrary herein, nothing in this
SECTION 4.10 shall be deemed to grant GFCFS the authority to execute any
amendment of any Loan Document on behalf of any Borrower.
AGENT ADVANCES.
(L) THE AGENT HEREBY IS AUTHORIZED BY THE BORROWERS AND THE LENDERS,
FROM TIME TO TIME IN THE AGENTS' SOLE DISCRETION, (I) AFTER THE
OCCURRENCE OF A DEFAULT OR AN EVENT OF
50
57
DEFAULT (BUT WITHOUT CONSTITUTING A WAIVER OF SUCH DEFAULT OR EVENT OF
DEFAULT), OR (II) AT ANY TIME THAT ANY OF THE OTHER APPLICABLE
CONDITIONS PRECEDENT SET FORTH IN Section 5.2 HAVE NOT BEEN SATISFIED,
TO MAKE ADVANCES TO THE BORROWERS ON BEHALF OF THE LENDERS WHICH THE
AGENT, IN GOOD FAITH, DETERMINES IS NECESSARY (A) TO PRESERVE OR
PROTECT THE COLLATERAL, OR ANY PORTION THEREOF, (B) TO ENHANCE THE
LIKELIHOOD OF REPAYMENT OF THE SECURED OBLIGATIONS, OR (C) TO PAY ANY
OTHER AMOUNT CHARGEABLE TO THE BORROWERS PURSUANT TO THE TERMS OF THIS
AGREEMENT, INCLUDING COSTS, FEES, AND EXPENSES (ANY OF THE ADVANCES
DESCRIBED IN THIS Section 4.11 BEING HEREINAFTER REFERRED TO AS "AGENT
ADVANCES").
(M) THE AGENT ADVANCES SHALL BE REPAYABLE ON DEMAND AND SECURED BY THE
COLLATERAL, SHALL CONSTITUTE ADVANCES AND SECURED OBLIGATIONS
HEREUNDER, AND SHALL BEAR INTEREST ON THE PRIME RATE BASIS.
OVERADVANCES.
(N) THE AGENT MAY MAKE VOLUNTARY OVERADVANCES WITHOUT THE WRITTEN
CONSENT OF THE REQUIRED LENDERS FOR INTEREST, FEES OR EXPENSES DUE TO
LENDERS IN ACCORDANCE WITH THE PROVISIONS HEREOF. IF THE CONDITIONS FOR
BORROWING UNDER Section 5.2 CANNOT BE FULFILLED, THE AGENT MAY, BUT IS
NOT OBLIGATED TO, KNOWINGLY AND INTENTIONALLY CONTINUE TO MAKE ADVANCES
(INCLUDING AGENT ADVANCES) TO THE BORROWERS, AT THE REQUEST OF A
BORROWER, NOTWITHSTANDING SUCH FAILURE OF CONDITION(S), SO LONG AS, AT
ANY TIME, EITHER (I) THE AGGREGATE AMOUNT OF THEN OUTSTANDING REVOLVING
CREDIT LOANS WOULD NOT EXCEED THE BORROWING BASE BY MORE THAN AN AMOUNT
EQUAL TO TEN PERCENT (10%) OF THE AMOUNT OF THE REVOLVING CREDIT
FACILITY AND EACH SUCH OVERADVANCE IS LIMITED TO A TERM OF THIRTY (30)
DAYS, OR (II) (A) THE AGGREGATE AMOUNT OF OUTSTANDING REVOLVING CREDIT
LOANS WOULD NOT EXCEED THE BORROWING BASE BY MORE THAN THE AMOUNT
PROPOSED BY THE AGENT AND AGREED TO BY THE REQUIRED LENDERS, AND (B)
SUCH OVERADVANCES ARE MADE PURSUANT TO A PLAN (PROPOSED BY THE AGENT AND
AGREED TO BY THE REQUIRED LENDERS) FOR THE ELIMINATION OF SUCH
OVERADVANCES BUT IN ANY EVENT FOR NO MORE THAN A TERM OF THIRTY (30)
DAYS. THE FOREGOING PROVISIONS ARE FOR THE SOLE AND EXCLUSIVE BENEFIT
OF THE AGENT AND THE LENDERS AND ARE NOT INTENDED TO, AND SHALL NOT BE
CONSTRUED TO, CREATE ANY OBLIGATIONS OF THE AGENT OR ANY LENDER TO THE
BORROWERS WITH RESPECT TO OVERADVANCES OR OTHERWISE BENEFIT THE
BORROWERS IN ANY WAY. THE OVERADVANCES AND AGENT ADVANCES, AS
APPLICABLE, THAT ARE MADE PURSUANT TO THIS AGREEMENT SHALL BE SUBJECT
TO THE SAME TERMS AND CONDITIONS AS ANY OTHER ADVANCE OR OTHER LOAN, AS
APPLICABLE, EXCEPT THAT THE RATE OF INTEREST APPLICABLE THERETO SHALL
BE THE PRIME OPTION; PROVIDED, HOWEVER, THAT THE MAKING OF ANY
OVERADVANCE SHALL NOT CONSTITUTE A WAIVER OF ANY DEFAULT OR EVENT OF
DEFAULT THEN IN EXISTENCE OR ARISING THEREFROM.
(O) IN THE EVENT THE AGENT OBTAINS ACTUAL KNOWLEDGE THAT THE
AGGREGATE AMOUNT OF OUTSTANDING REVOLVING CREDIT LOANS EXCEEDS THE AMOUNT
PERMITTED BY THE PRECEDING PARAGRAPH, REGARDLESS OF THE AMOUNT OF OR REASON FOR
SUCH EXCESS, THE AGENT SHALL NOTIFY THE LENDERS AS SOON AS PRACTICABLE (AND
PRIOR TO MAKING ANY (OR ANY FURTHER) INTENTIONAL OVERADVANCES (EXCEPT FOR AND
EXCLUDING AMOUNTS CHARGED TO THE APPLICABLE LOAN ACCOUNT FOR INTEREST, FEES, OR
EXPENSES) UNLESS THE AGENT DETERMINES THAT PRIOR NOTICE WOULD RESULT IN IMMINENT
HARM TO THE COLLATERAL OR ITS VALUE), AND THE LENDERS THEREUPON SHALL, TOGETHER
WITH THE AGENT, JOINTLY DETERMINE THE TERMS OF ARRANGEMENTS THAT SHALL BE
IMPLEMENTED WITH THE BORROWERS INTENDED TO REDUCE, WITHIN A REASONABLE TIME, THE
OUTSTANDING PRINCIPAL AMOUNT OF THE REVOLVING CREDIT LOANS OF THE BORROWERS
51
58
TO AN AMOUNT PERMITTED BY THE PRECEDING PARAGRAPH. IN THE EVENT ANY
LENDER DISAGREES OVER THE TERMS OF REDUCTION AND/OR REPAYMENT OF ANY
OVERADVANCE, THE TERMS OF REDUCTION AND/OR REPAYMENT THEREOF SHALL BE
IMPLEMENTED ACCORDING TO THE DETERMINATION OF THE REQUIRED LENDERS.
(P) EACH LENDER SHALL BE OBLIGATED TO SETTLE WITH THE AGENT AS PROVIDED IN
Section 4.7 FOR THE AMOUNT OF SUCH LENDER'S RATABLE SHARE OF ANY OVEREXTENSION
REPORTED TO SUCH LENDER, ANY OVERADVANCES MADE AS PERMITTED UNDER THIS Section
4.12, AND ANY OVEREXTENSION RESULTING FROM THE CHARGING TO THE APPLICABLE LOAN
ACCOUNT INTEREST, FEES, OR EXPENSES.
(Q) ANY AND ALL OVERADVANCES MADE BY THE AGENT (I) SHALL BE REPAID UPON
THE DEMAND OF THE AGENT (EXCEPT AS SET FORTH IN Section 4.12(a)(ii)
WHICH AMOUNTS SHALL BE REPAID PURSUANT TO A PLAN FOR REPAYMENT AS
DESCRIBED IN Section 4.12(a)(ii) ABOVE), (II) BE SECURED BY THE
COLLATERAL, AND (III) CONSTITUTE ADVANCES AND SECURED OBLIGATIONS
HEREUNDER.
FUNDING LOSSES. The Borrowers shall compensate each Lender, upon written demand
(which demand shall set forth in reasonable detail the basis for requesting such
amounts, and which demand shall, absent demonstrable or manifest error, be
final, conclusive and binding on all parties), for all losses, expenses and
liabilities which such Lender may sustain:
(R) IF THE BORROWERS FAIL TO FULFILL ON OR BEFORE THE DATE SPECIFIED IN
ANY BORROWING NOTICE GIVEN PURSUANT TO Section 2.2 THE APPLICABLE
CONDITIONS SET FORTH IN Article 5 AND, AS A RESULT, A REQUESTED LIBOR
ADVANCE IS NOT MADE ON THE DATE SPECIFIED IN SUCH NOTICE OF BORROWING,
OR IF THE BORROWERS FAIL TO CONTINUE OR CONVERT A LIBOR BORROWING AFTER
GIVING NOTICE THEREOF PURSUANT TO Section 2.2; OR
(S) IF ANY CONVERSION, REPAYMENT OR PREPAYMENT OF A LIBOR ADVANCE
OCCURS ON A DATE WHICH IS NOT THE LAST DAY OF THE LIBOR PERIOD
APPLICABLE THERETO.
JOINT AND SEVERAL LIABILITY.
(a) Joint and Several Liability. Each of the Borrowers
acknowledges that (i) it is a co-borrower hereunder and shall be jointly
and severally, with the other Borrowers, directly and unconditionally
liable to the Agent and the Lenders for the Secured Obligations, (ii)
each of the Secured Obligations shall be secured by all of the
Collateral, (iii) each of the Borrowers shall have the obligations of
co-maker with respect to the Loans, the Notes, and the Secured
Obligations, it being agreed that the advances to each Borrower inure to
the benefit of all Borrowers, and (iv) the Agent and the Lenders are
relying on such joint and several liability of the Borrowers as
co-makers in extending the Loans hereunder. Each Borrower hereby
unconditionally and irrevocably agrees that upon default in the payment
when due (whether at stated maturity, by acceleration or otherwise) of
any principal of, or interest on, any Loan or other Secured Obligation
payable by it to the Agent or any Lender, it will forthwith pay the
same, without notice of demand. Notwithstanding anything to the contrary
contained in this Agreement, the Agent shall be entitled to rely upon
any telephonic request for Advances received by it from any Borrower on
behalf of all Borrowers, shall be entitled to rely upon any other
request, notice or other communication received by it from any Borrower
on
52
59
behalf of all Borrowers, and shall be entitled to treat its giving of
any notice hereunder pursuant to SECTION 15.1 hereof as notice to each
and all Borrowers.
(b) No Modification or Release of Obligations. No payment or
payments made by any of the Borrowers or any other Person or received or
collected by the Agent or any Lender from any of the Borrowers or any
other Person by virtue of any action or proceeding or any set-off-or
appropriation or application at any time or from time to time in
reduction of or in payment of the Secured Obligations shall be deemed
(except to the extent Secured Obligations are satisfied) to modify,
release or otherwise affect the liability of each Borrower under this
Agreement, which shall remain liable for the Secured Obligations until
the Secured Obligations are paid in full and the Revolving Credit
Facility is terminated.
53
60
WAIVER OF SURETYSHIP DEFENSES. Each Borrower agrees that the joint and several
liability of the Borrowers provided for in SECTION 4.14 shall not be impaired or
affected by any modification, supplement, extension or amendment or any contract
or Agreement to which the other Borrowers may hereafter agree (other than an
Agreement signed by the Agent and all of the Lenders specifically releasing such
liability), nor by any delay, extension of time, renewal, compromise or the
indulgence granted by the Agent with respect to any of the Secured Obligations,
nor by any other agreements or arrangements whatever with any other Borrower or
with anyone else, and each Borrower hereby waives all notice of such delay,
extension, release, substitution, renewal, compromise or other indulgence,
hereby consenting to be bound thereby as fully and effectively as if it had
expressly agreed thereto in advance. The liability of each Borrower is direct
and unconditional as to all of the Secured Obligations, and may be enforced
without requiring the Agent first to resort to any other right, remedy or
security. Each Borrower hereby expressly waives promptness, diligence, notice of
acceptance and any other notice with respect to any of the Secured Obligations,
the Revolving Credit Notes, this Agreement, or any other Loan Document, and any
requirement that the Agent protect, secure, ▇▇▇▇▇▇▇▇, perfect or insure any lien
or any property subject thereto (except to the extent required by Applicable Law
or this Agreement) or exhaust any right or take any action against any Borrower
or any other Person or any collateral, including any rights which may be
conferred under applicable law permitting any Person after the Secured
Obligations become due, to demand that the Agent first commence proceedings
against any other obligor to collect such amounts, the failure of which by the
Agent to commence such proceedings would discharge such Person from its
obligations.
CONDITIONS PRECEDENT
CONDITIONS PRECEDENT TO REVOLVING CREDIT LOANS. Notwithstanding any other
provision of this Agreement, the initial Advance will not be made, nor will any
initial Letter of Credit be issued, until the fulfillment of each of the
following conditions prior to or contemporaneously with the making of the first
to be made of such Advances (unless waived in writing by the Agent):
FEES AND EXPENSES. THE BORROWERS SHALL HAVE PAID ALL OF THE FEES AND ALL
EXPENSES PAYABLE ON THE EFFECTIVE DATE REFERRED TO HEREIN, INCLUDING, WITHOUT
LIMITATION, THE FACILITY FEE, THE ADMINISTRATIVE MANAGEMENT FEE AND ALL
OUT-OF-POCKET COSTS AND EXPENSES INCURRED IN CONNECTION WITH THE PREPARATION,
EXECUTION AND CLOSING OF THIS AGREEMENT AND THE TRANSACTION.
SECURITY INTERESTS. THE AGENT SHALL HAVE RECEIVED SATISFACTORY EVIDENCE THAT THE
AGENT (FOR THE BENEFIT OF ITSELF AND THE LENDERS) HAS A VALID AND PERFECTED
FIRST PRIORITY SECURITY INTEREST AS OF THE EFFECTIVE DATE IN ALL OF THE
COLLATERAL, SUBJECT ONLY TO PERMITTED LIENS.
CLOSING DOCUMENTS. THE AGENT SHALL HAVE RECEIVED EACH OF THE FOLLOWING
DOCUMENTS, ALL OF WHICH SHALL BE SATISFACTORY IN FORM AND SUBSTANCE TO THE AGENT
AND ITS COUNSEL AND TO THE LENDERS:
Loan Agreement. This Agreement, duly executed and delivered by each Borrower and
each Lender;
Secretary's Certificate. A certificate of the Secretary or
Assistant Secretary of each Borrower in the form attached hereto as EXHIBIT I
with the required attachments thereto;
Good Standing Certificates. A certificate evidencing the good standing of each
Borrower in the jurisdiction of its incorporation and each other foreign
jurisdiction where it is authorized to do business;
54
61
Financial Statements; Projections. Copies of all financial statements and
Projections referred to in SECTION 6.1(M) and meeting the requirements thereof;
Legal Opinions. Signed opinions of Swidler, Berlin, Shereff, Friedman, LLP,
general counsel to the Borrowers (with respect to all states other than the
following local counsel states) and of local counsel to the Borrowers in
Alabama, Arkansas, Indiana, Kentucky, North Carolina, South Carolina, Tennessee,
Texas and Virginia, substantially in the form attached hereto as EXHIBIT D;
Payoff Letters. A Payoff Letter from First Tennessee Bank National Association,
in connection with the Borrowers' existing credit facility;
Financing Statements. The Financing Statements duly executed and delivered by
the Borrowers and acknowledgment copies evidencing the filing of such
Financing Statements in each jurisdiction where such filing may be necessary or
appropriate to perfect the Security Interest;
Insurance. Certificates or binders of insurance relating to each of the policies
of insurance covering any of the Collateral together with loss payable clauses
which comply with the terms of SECTION 8.6;
Officers' Certificate. A certificate of the Chief Executive Officer, Chief
Operating Officer or a Financial Officer of the Borrowers in the form attached
hereto as EXHIBIT H;
Borrowing Base Certificate. Certified originals of a Borrowing Base Certificate
in the form attached hereto as EXHIBIT C;
Power of Attorney. An original of the Power of Attorney in the form attached
hereto as EXHIBIT F, as executed by each Borrower in favor of Agent;
Cash Management Agreements. A Blocked Account Agreement, with respect to the
Concentration Account, duly executed by a Borrower and the Clearing Bank party
thereto;
Initial Borrowing Notice. An initial Borrowing Notice from the Borrowers to the
Agent requesting the initial Advance and a letter from the Borrowers to the
Agent requesting the initial Letters of Credit, each specifying the method of
disbursement;
Schedules of Inventory. A Schedule of Inventory prepared as of the Closing Date
in accordance with SECTION 8.10(B)(I);
Environmental Reports. Copies of all of the most recent existing reports from a
qualified environmental engineering firm or other qualified consultant
acceptable to the Agent with respect to investigations and audits of all Real
Estate;
Ancillary Documents. Copies of each of the other Loan Documents duly executed by
the parties thereto, together with evidence satisfactory to the Agent of the due
authorization and binding effect of each such Loan Document on such party;
[Intentionally Omitted];
Inventory Appraisal. An appraisal of all Inventory, including the Eligible
Inventory, prepared at the Borrowers' cost and expense by appraisers selected
and retained by the Agent, establishing an appraisal value for Inventory that
indicates an Appraised GOB Value of such Inventory at
levels satisfactory to the Agent; [Intentionally Omitted];
[Intentionally Omitted]; and
General. Such other documents and instruments as the Agent or any Lender may
reasonably request.
NOTES. EACH LENDER SHALL HAVE RECEIVED A REVOLVING CREDIT NOTE DULY EXECUTED AND
DELIVERED BY EACH BORROWER, IN THE FORM ATTACHED HERETO AS Exhibit A, AND
COMPLYING WITH THE TERMS OF Sections 2.4.
55
62
OTHER SECURITY DOCUMENTS. THE AGENT SHALL HAVE RECEIVED EACH SECURITY DOCUMENT
(OTHER THAN THE BLOCKED ACCOUNT AGREEMENTS FOR THE STORE ACCOUNTS AND THE
WAREHOUSEMAN AGREEMENTS), DULY EXECUTED BY THE BORROWERS AND SUCH OTHER PARTIES
THERETO.
AVAILABILITY. THE AGENT SHALL BE PROVIDED WITH EVIDENCE SATISFACTORY TO IT,
CONFIRMED BY A CERTIFICATE OF A FINANCIAL OFFICER OF THE BORROWERS, THAT AS OF
MAY 5, 2001, AFTER GIVING EFFECT TO THE INITIAL ADVANCE AND THE ISSUANCE OF ANY
LETTERS OF CREDIT ON THE EFFECTIVE DATE, AVAILABILITY IS NOT LESS THAN
$90,000,000 AND THAT EACH BORROWER'S INDEBTEDNESS IS BEING TIMELY PAID IN A
MANNER CONSISTENT WITH ITS USUAL BUSINESS PRACTICES.
NO INJUNCTIONS, ETC. NO ACTION, PROCEEDING, INVESTIGATION, REGULATION OR
LEGISLATION SHALL HAVE BEEN INSTITUTED, THREATENED OR PROPOSED BEFORE ANY COURT,
GOVERNMENTAL AGENCY OR LEGISLATIVE BODY TO ENJOIN, RESTRAIN, OR PROHIBIT, OR TO
OBTAIN DAMAGES IN RESPECT OF, OR WHICH IS RELATED TO OR ARISES OUT OF THIS
AGREEMENT OR THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY OR WHICH,
IN THE AGENT'S REASONABLE DISCRETION, WOULD MAKE IT INADVISABLE TO CONSUMMATE
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
MATERIAL ADVERSE CHANGE. AS OF THE EFFECTIVE DATE, AND EXCEPT AS DISCLOSED IN
THE UNAUDITED FINANCIAL STATEMENTS DESCRIBED IN Section 6.1(m), THERE SHALL NOT
HAVE OCCURRED ANY CHANGE WHICH IS MATERIALLY ADVERSE, IN THE LENDERS' SOLE
DISCRETION, TO THE ASSETS, LIABILITIES, BUSINESSES, OPERATIONS, CONDITION
(FINANCIAL OR OTHERWISE) OR PROSPECTS OF THE BORROWERS FROM THOSE PRESENTED BY
THE UNAUDITED FINANCIAL STATEMENTS DESCRIBED IN Section 6.1(m).
RELEASE OF SECURITY INTERESTS. THE AGENT SHALL HAVE RECEIVED EVIDENCE
SATISFACTORY TO IT OF THE RELEASE AND TERMINATION OF ALL LIENS OTHER THAN
PERMITTED LIENS.
[INTENTIONALLY OMITTED].
[INTENTIONALLY OMITTED]
ALL ADVANCES; LETTERS OF CREDIT. At the time of making of each Advance,
including the initial Advance and all subsequent Advances, and the issuance of
each Letter of Credit:
(I) EACH OF THE REPRESENTATIONS AND WARRANTIES, OTHER THAN THE QUALIFIED
REPRESENTATIONS, SHALL BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS, AND (II)
EACH OF THE QUALIFIED REPRESENTATIONS SHALL BE TRUE AND CORRECT, IN EACH CASE AT
SUCH TIME BOTH WITH AND WITHOUT GIVING EFFECT TO THE ADVANCE TO BE MADE AT SUCH
TIME AND THE APPLICATION OF THE PROCEEDS THEREOF,
(T) NO EVENT SHALL HAVE OCCURRED AND BE CONTINUING, OR WOULD RESULT
FROM THE MAKING OF ANY ADVANCE OR THE INCURRENCE OF ANY LETTER OF
CREDIT OBLIGATION, AS THE CASE MAY BE, WHICH CONSTITUTES A DEFAULT OR
AN EVENT OF DEFAULT;
(U) EACH OF THE CONDITIONS SET FORTH IN Section 5.1(a) THROUGH (i)
(OTHER THAN Section 5.1(c)(xviii) AND 5.1(f)) SHALL CONTINUE TO BE
SATISFIED BY THE BORROWERS AS OF SUCH DATE.
THE CORPORATE ACTIONS OF EACH BORROWER, INCLUDING SHAREHOLDER APPROVAL IF
NECESSARY, TO AUTHORIZE THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE BORROWINGS HEREUNDER SHALL REMAIN IN
FULL FORCE AND EFFECT AND THE INCUMBENCY OF OFFICERS SHALL BE AS STATED IN THE
CERTIFICATES OF INCUMBENCY DELIVERED PURSUANT TO Section 5.1(c)(ii) OR AS
SUBSEQUENTLY MODIFIED AND REFLECTED IN A CERTIFICATE OF INCUMBENCY DELIVERED TO
THE AGENT, AND
(V) EACH REQUEST AND DEEMED REQUEST FOR ANY ADVANCE OR FOR THE
INCURRENCE OF ANY LETTER OF CREDIT OBLIGATION HEREUNDER SHALL BE DEEMED
TO BE A CERTIFICATION BY EACH BORROWER TO THE AGENT AND THE LENDERS AS
TO THE MATTERS SET FORTH IN Section 5.2(a) AND (d) AND THE AGENT MAY,
WITHOUT WAIVING EITHER CONDITION, CONSIDER THE CONDITIONS
56
63
SPECIFIED IN Sections 5.2(a) AND (d) FULFILLED AND A REPRESENTATION BY
SUCH BORROWER TO SUCH EFFECT MADE, IF NO WRITTEN NOTICE TO THE CONTRARY
IS RECEIVED BY THE AGENT PRIOR TO THE MAKING OF THE ADVANCE THEN TO BE
MADE.
REPRESENTATIONS AND WARRANTIES OF BORROWERS
REPRESENTATIONS AND WARRANTIES. Each Borrower represents and warrants to the
Agent and to the Lenders as follows:
ORGANIZATION; POWER; QUALIFICATION; FEIN. EACH BORROWER AND EACH OF ITS
SUBSIDIARIES IS DULY ORGANIZED OR FORMED, VALIDLY EXISTING AND IN GOOD STANDING
UNDER THE LAWS OF THE JURISDICTION OF ITS INCORPORATION OR FORMATION, HAS THE
LEGAL POWER AND AUTHORITY TO OWN ITS PROPERTIES AND TO CARRY ON ITS BUSINESS AS
NOW BEING AND HEREAFTER PROPOSED TO BE CONDUCTED AND IS DULY QUALIFIED AND
AUTHORIZED TO DO BUSINESS IN EACH JURISDICTION IN WHICH FAILURE TO BE SO
QUALIFIED AND AUTHORIZED WOULD HAVE A MATERIALLY ADVERSE EFFECT. THE
JURISDICTIONS IN WHICH SUCH BORROWER IS QUALIFIED TO DO BUSINESS AS A FOREIGN
CORPORATION ARE LISTED ON Schedule 6.1(a). Schedule 6.1(a) LISTS THE FEDERAL
EMPLOYER IDENTIFICATION NUMBER OF EACH BORROWER AND EACH SUBSIDIARY.
SUBSIDIARIES AND OWNERSHIP OF EACH BORROWER. EACH BORROWER'S SUBSIDIARIES, AND
ITS OWNERSHIP INTERESTS THEREIN, ARE SET FORTH ON Schedule 6.1(b). EXCEPT AS SET
FORTH ON Schedule 6.1(b), EACH BORROWER OWNS 100% OF ALL SUCH SUBSIDIARIES. THE
OUTSTANDING STOCK OF EACH BORROWER AND EACH OF ITS SUBSIDIARIES HAS BEEN DULY
AND VALIDLY ISSUED AND IS FULLY PAID AND NON-ASSESSABLE BY EACH BORROWER AND
SUCH SUBSIDIARY AND THE NUMBER AND OWNERS OF SUCH SHARES OF CAPITAL STOCK OF
EACH BORROWER (EXCEPT FOR GFC) ARE SET FORTH ON Schedule 6.1(b). EXCEPT AS SET
FORTH ON Schedule 6.1(b), THERE ARE NO OUTSTANDING RIGHTS TO PURCHASE, OPTIONS,
WARRANTS OR SIMILAR RIGHTS OR AGREEMENTS PURSUANT TO WHICH ANY BORROWER (EXCEPT
FOR GFC) MAY BE REQUIRED TO ISSUE, SELL, REPURCHASE OR REDEEM ANY OF ITS STOCK
OR OTHER EQUITY SECURITIES OR ANY STOCK OR OTHER EQUITY SECURITIES OF ITS
SUBSIDIARIES.
AUTHORIZATION OF AGREEMENT, NOTES, LOAN DOCUMENTS AND BORROWING. EACH BORROWER
HAS THE RIGHT AND POWER AND HAS TAKEN ALL NECESSARY ACTION TO AUTHORIZE THE
EXECUTION, DELIVERY AND PERFORMANCE OF EACH OF THE LOAN DOCUMENTS TO WHICH IT IS
A PARTY IN ACCORDANCE WITH THEIR RESPECTIVE TERMS. EACH OF THE LOAN DOCUMENTS TO
WHICH IT IS A PARTY HAVE BEEN DULY EXECUTED AND DELIVERED BY THE DULY AUTHORIZED
OFFICERS OF EACH BORROWER, AND EACH IS, OR WHEN EXECUTED AND DELIVERED IN
ACCORDANCE WITH THIS AGREEMENT WILL BE, A LEGAL, VALID AND BINDING OBLIGATION OF
SUCH BORROWER, ENFORCEABLE IN ACCORDANCE WITH ITS TERMS.
COMPLIANCE OF AGREEMENT, NOTES, LOAN DOCUMENTS AND BORROWING WITH LAWS, ETC. THE
EXECUTION, DELIVERY AND PERFORMANCE OF EACH OF THE LOAN DOCUMENTS TO WHICH EACH
BORROWER IS A PARTY IN ACCORDANCE WITH ITS RESPECTIVE TERMS AND THE BORROWINGS
HEREUNDER DO NOT AND WILL NOT, BY THE PASSAGE OF TIME, THE GIVING OF NOTICE OR
OTHERWISE, require any Governmental Approval or violate any applicable law
relating to such Borrower or any of its Subsidiaries, conflict with, result in a
breach of or constitute a default under (A) the articles or certificate of
incorporation or by-laws of such Borrower, (B) any indenture, material agreement
or other instrument to which such Borrower is a party or by which any of its
property may be bound or (C) any Governmental Approval relating to such
Borrower, or,
57
64
result in or require the creation or imposition of any Lien upon or with respect
to any property now owned or hereafter acquired by such Borrower other than the
Security Interest.
BUSINESS. EACH BORROWER IS ENGAGED PRINCIPALLY IN THE BUSINESS DESCRIBED ON
Schedule 6.1(e).
COMPLIANCE WITH LAW; GOVERNMENTAL APPROVALS.
Except as set forth in SCHEDULE 6.1(F), each Borrower has all material
Governmental Approvals, including permits relating to federal, state and local
Environmental Laws, ordinances and regulations, required by any Applicable Law
for it to conduct its business, each of which is in full force and effect, is
final and not subject to review on appeal and is not the subject of any pending
or, to the knowledge of such Borrower, threatened attack by direct or collateral
proceeding, and is in compliance with each material Governmental Approval
applicable to it and in compliance with all other material Applicable Laws
relating to it, including, without being limited to, all material Environmental
Laws and all material occupational health and safety laws applicable to such
Borrower or its properties,
except for instances of noncompliance which would not, singly or in the
aggregate, cause a Default or Event of Default or have a Materially Adverse
Effect on such Borrower and its Subsidiaries as a whole and in respect of which
reserves in respect of such Borrower's or its Subsidiary's reasonably
anticipated liability therefor have been established on the books of such
Borrower or the Subsidiary, as applicable.
58
65
Without limiting the generality of the above, except as disclosed on a report
delivered pursuant to SECTION 5.1(C)(XV) or with respect to matters which could
not reasonably be expected to have, singly or in the aggregate, a Materially
Adverse Effect on such Borrower:
the operations of such Borrower and each of its Subsidiaries complies in all
material respects with all applicable environmental, health and safety
requirements of Applicable Law;
such Borrower and each of its Subsidiaries has obtained all applicable
environmental, health and safety permits required under Applicable Law, and all
permits are in good standing and such Borrower and each of its Subsidiaries is
in compliance in all material respects with all terms and conditions of such
permits;
neither such Borrower nor any of its Subsidiaries nor any of their respective
present or past property or operations are subject to any order from or
agreement with any public authority or private party respecting (x) any
environmental, health or safety requirements of Applicable Law, (y) any Remedial
Action required of such Borrower or such Subsidiary, or (z) any liabilities and
costs arising from the Release or threatened Release of a Contaminant into the
environment;
none of the operations of such Borrower or of any of its Subsidiaries is subject
to any judicial or administrative proceeding alleging a violation of any
environmental, health or safety requirement of Applicable Law;
to their knowledge, none of the present nor past operations of such Borrower or
any of its Subsidiaries is the subject of any investigation by any public
authority evaluating whether any Remedial Action is needed to respond to a
Release or threatened Release of a Contaminant into the environment;
neither such Borrower nor any of its Subsidiaries has filed any notice under any
requirement of Applicable Law indicating past or present treatment, storage or
disposal of a hazardous waste, as that term is defined under 40 CFR Part 261 or
any state equivalent; neither such Borrower nor any of its Subsidiaries has
filed any notice under any requirement of Applicable Law reporting a Release of
a Contaminant into the environment;
except in compliance in all material respects with applicable Environmental
Laws, during the course of such Borrower's or any of its Subsidiaries' ownership
of or operations on the Real Estate, to the best of such Borrower's knowledge,
there have been no (1) generation, treatment, recycling, storage or disposal of
hazardous waste, as that term is defined under 40 CFR Part 261 or any state
equivalent, (2) use of underground storage tanks or surface impoundments, (3)
use of asbestos-containing materials, or (4) use of polychlorinated biphenyls
(PCB) used in hydraulic oils, electrical transformers or other equipment on the
Real Estate;
neither such Borrower nor any of its Subsidiaries has entered into any
negotiations or agreements with any Person (including, without limitation, any
prior owner of any of the Real Estate or other property of such Borrower or any
of its Subsidiaries) relating to any Remedial Action or environmentally-related
claim;
59
66
neither such Borrower nor any of its Subsidiaries has received any notice or
claim to the effect that it is or may be liable to any Person as a result of the
Release or threatened Release of a Contaminant into the environment;
neither such Borrower nor any of its Subsidiaries has any material contingent
liability in connection with any Release or threatened Release of any
Contaminant into the environment;
no Environmental Lien has attached to any of the owned Real Estate or other
property of such Borrower or of any of its Subsidiaries, or, to the knowledge of
any Borrower or any Subsidiary thereof, any of the leased Real Estate;
the presence and condition of all asbestos-containing material which is on or
part of the owned Real Estate or, to the knowledge of any Borrower or any
Subsidiary thereof, on or part of any of the leased Real Estate (excluding any
raw materials used in the manufacture of products or products themselves) do not
violate in any material respect any currently applicable requirement of
Applicable Law;
neither such Borrower nor any of its Subsidiaries manufactures, distributes or
sells, and has not, in the past 20 years, manufactured, distributed or sold,
products which contain asbestos-containing material; and
(A) such Borrower hereby acknowledges and agrees that Agent
(i) is not now, and has not ever been, in control of any of
the Real Estate or any of such Borrower's affairs, and (ii)
does not have the capacity through the provisions of the Loan
Documents or otherwise to influence such Borrower's conduct
with respect to the ownership, operation or management of any
of its Real Estate or compliance with Environmental Laws or
Environmental Permits.
SCHEDULE 6.1(F) sets forth each written notice received by any Borrower or
Subsidiary of a material violation of any Environmental Laws and occupational
health and safety laws applicable to such Borrower, any of its respective
Subsidiaries or any of their respective properties.
TITLES TO PROPERTIES. EXCEPT AS SET FORTH IN Schedule 6.1(g), EACH BORROWER AND
EACH OF ITS SUBSIDIARIES IS THE SOLE OWNER OF AND HAS GOOD AND MARKETABLE FEE
SIMPLE TITLE TO OR A VALID LEASEHOLD INTEREST IN ALL ITS OWNED REAL ESTATE, IS
THE SOLE OWNER OF AND HAS VALID AND LEGAL TITLE TO OR A VALID LEASEHOLD INTEREST
IN ALL PERSONAL PROPERTY AND ASSETS USED IN OR NECESSARY TO THE CONDUCT OF ITS
BUSINESS.
(W) LIENS. EXCEPT AS SET FORTH IN Schedule 6.1(h), NONE OF THE
PROPERTIES AND ASSETS OWNED BY ANY BORROWER OR ANY SUBSIDIARY,
INCLUDING, WITHOUT LIMITATION, THE COLLATERAL, IS SUBJECT TO
ANY LIEN, EXCEPT PERMITTED LIENS. OTHER THAN THE FINANCING
STATEMENTS, NO FINANCING STATEMENT UNDER THE UCC OF ANY STATE
WHICH NAMES ANY BORROWER OR ANY SUBSIDIARY AS DEBTOR AND WHICH
HAS NOT BEEN TERMINATED HAS BEEN FILED IN ANY STATE OR OTHER
JURISDICTION, AND NO BORROWER OR ANY OF THEIR RESPECTIVE
SUBSIDIARIES HAS SIGNED ANY SUCH FINANCING STATEMENT OR ANY
SECURITY AGREEMENT AUTHORIZING ANY SECURED PARTY THEREUNDER TO
FILE ANY SUCH FINANCING STATEMENT, EXCEPT TO PERFECT THOSE
LIENS LISTED IN Schedule 6.1(h).
60
67
(I) INDEBTEDNESS AND GUARANTIES. SET FORTH ON Schedule 6.1(i) IS A
COMPLETE AND CORRECT LISTING OF ALL OF EACH BORROWER'S AND EACH OF ITS
SUBSIDIARIES' (I) INDEBTEDNESS FOR MONEY BORROWED AND (II) GUARANTIES.
EACH BORROWER AND EACH OF ITS SUBSIDIARIES HAS PERFORMED AND IS IN
COMPLIANCE WITH ALL OF THE MATERIAL TERMS AND PROVISIONS OF SUCH
INDEBTEDNESS AND GUARANTIES AND ALL INSTRUMENTS AND AGREEMENTS RELATING
THERETO AND NO DEFAULT OR EVENT OF DEFAULT OR EVENT OR CONDITION WHICH,
WITH NOTICE OR LAPSE OF TIME OR BOTH, WOULD CONSTITUTE SUCH A DEFAULT
OR EVENT OF DEFAULT, EXISTS WITH RESPECT TO SUCH INDEBTEDNESS OR
GUARANTIES OR RELATED INSTRUMENTS OR AGREEMENTS.
(J) LITIGATION. EXCEPT AS SET FORTH ON Schedule 6.1(j), THERE ARE NO ACTIONS,
SUITS OR PROCEEDINGS PENDING (NOR, TO THE KNOWLEDGE OF ANY BORROWER, ARE THERE
ANY ACTIONS, SUITS OR PROCEEDINGS THREATENED, NOR IS THERE ANY BASIS THEREFOR)
AGAINST OR IN ANY OTHER WAY RELATING ADVERSELY TO OR AFFECTING ANY BORROWER OR
ANY SUBSIDIARY OR ANY OF THEIR RESPECTIVE PROPERTIES, OR WHICH CHALLENGE ANY
BORROWER'S RIGHT OR POWER TO ENTER INTO OR PERFORM ANY OF ITS OBLIGATIONS UNDER
THE LOAN DOCUMENTS TO WHICH IT IS A PARTY, OR THE VALIDITY OR ENFORCEABILITY OF
ANY LOAN DOCUMENT OR ANY ACTION TAKEN THEREUNDER, IN ANY COURT OR BEFORE ANY
ARBITRATOR OF ANY KIND OR BEFORE OR BY ANY GOVERNMENTAL BODY, WHICH,
INDIVIDUALLY OR IN THE AGGREGATE, COULD REASONABLY BE EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT ON ANY BORROWER AND ITS SUBSIDIARIES, AS A WHOLE.
(K) TAX RETURNS AND PAYMENTS. EXCEPT AS SET FORTH ON Schedule 6.1(k) AND FOR
IMMATERIAL TAXES, ALL UNITED STATES FEDERAL, STATE AND LOCAL AS WELL AS FOREIGN
NATIONAL, PROVINCIAL AND LOCAL AND OTHER TAX RETURNS OF EACH BORROWER AND EACH
OF ITS SUBSIDIARIES REQUIRED BY APPLICABLE LAW TO BE FILED HAVE BEEN DULY FILED,
AND ALL UNITED STATES FEDERAL, STATE AND LOCAL AND FOREIGN NATIONAL, PROVINCIAL
AND LOCAL AND OTHER TAXES, ASSESSMENTS AND OTHER GOVERNMENTAL CHARGES OR LEVIES
UPON SUCH BORROWER AND EACH OF ITS SUBSIDIARIES AND SUCH BORROWER'S AND ANY OF
ITS SUBSIDIARIES' PROPERTY, INCOME, PROFITS AND ASSETS WHICH ARE DUE AND PAYABLE
HAVE BEEN PAID, EXCEPT ANY SUCH NONPAYMENT WHICH IS AT THE TIME PERMITTED UNDER
Section 9.6. THE CHARGES, ACCRUALS AND RESERVES ON THE BOOKS OF EACH BORROWER
AND EACH OF ITS SUBSIDIARIES IN RESPECT OF UNITED STATES FEDERAL, STATE AND
LOCAL AND FOREIGN NATIONAL, PROVINCIAL AND LOCAL TAXES FOR ALL FISCAL YEARS AND
PORTIONS THEREOF SINCE THE ORGANIZATION OF SUCH BORROWER ARE IN THE JUDGMENT OF
SUCH BORROWER ADEQUATE, AND SUCH BORROWER KNOWS OF NO REASON TO ANTICIPATE ANY
ADDITIONAL ASSESSMENTS FOR ANY OF SUCH YEARS WHICH, SINGLY OR IN THE AGGREGATE,
COULD REASONABLY BE EXPECTED TO HAVE A MATERIALLY ADVERSE EFFECT ON SUCH
BORROWER. PROPER AND ACCURATE AMOUNTS HAVE BEEN WITHHELD BY EACH BORROWER FROM
ITS RESPECTIVE EMPLOYEES FOR ALL PERIODS IN FULL COMPLIANCE WITH ALL APPLICABLE
FEDERAL, STATE, LOCAL AND FOREIGN LAW AND SUCH WITHHOLDINGS HAVE BEEN TIMELY
PAID TO THE RESPECTIVE GOVERNMENTAL AUTHORITIES. Schedule 6.1(k) SETS FORTH AS
OF THE EFFECTIVE DATE THOSE TAXABLE YEARS FOR WHICH ANY BORROWER'S TAX RETURNS
ARE CURRENTLY BEING AUDITED BY THE IRS OR ANY OTHER APPLICABLE GOVERNMENTAL
AUTHORITY AND ANY ASSESSMENTS OR ASSESSMENTS THREATENED IN WRITING IN CONNECTION
WITH SUCH AUDIT, OR OTHERWISE CURRENTLY OUTSTANDING. EXCEPT AS DESCRIBED ON
Schedule 6.1(k), AS OF THE EFFECTIVE DATE, NO BORROWER HAS EXECUTED OR FILED
WITH THE IRS OR ANY OTHER GOVERNMENTAL AUTHORITY ANY AGREEMENT OR OTHER DOCUMENT
EXTENDING, OR HAVING THE EFFECT OF EXTENDING, THE PERIOD FOR ASSESSMENT OR
COLLECTION OF ANY CHARGES. EXCEPT AS DISCLOSED IN Schedule 6.1(k) HERETO, NO
BORROWER OR ANY OF ITS RESPECTIVE PREDECESSORS ARE LIABLE FOR ANY CHARGES:
61
68
(A) UNDER ANY AGREEMENT (INCLUDING ANY TAX SHARING AGREEMENTS) OR (B) TO ANY
BORROWER'S KNOWLEDGE, AS A TRANSFEREE. AS OF THE EFFECTIVE DATE, NO BORROWER HAS
AGREED OR BEEN REQUESTED TO MAKE ANY ADJUSTMENT UNDER CODE SECTION 481(A), BY
REASON OF A CHANGE IN ACCOUNTING METHOD OR OTHERWISE, WHICH WOULD HAVE A
MATERIALLY ADVERSE EFFECT.
(L) BURDENSOME PROVISIONS. NO BORROWER OR ANY OF ITS RESPECTIVE SUBSIDIARIES IS
A PARTY TO ANY INDENTURE, AGREEMENT, LEASE OR OTHER INSTRUMENT, OR SUBJECT TO
ANY CHARTER OR CORPORATE RESTRICTION, GOVERNMENTAL APPROVAL OR APPLICABLE LAW
COMPLIANCE WITH THE TERMS OF WHICH COULD REASONABLY BE EXPECTED TO HAVE A
MATERIALLY ADVERSE EFFECT ON ANY BORROWER AND ITS SUBSIDIARIES, TAKEN AS A
WHOLE.
(M) FINANCIAL STATEMENTS.
The Borrowers have furnished to the Agent and the Lenders a copy of (A)
Borrowers' Form 10-K containing the Consolidated Balance Sheet as at February 3,
2001, and the related statements of income, cash flow and retained earnings for
the Fiscal Year then ended, and (B) its unaudited balance sheet as at May 5,
2001, and the related unaudited statement of income for the three (3) Fiscal
Months then ended, copies of all of which financial statements are attached
hereto as SCHEDULE 6.1(M). Such financial statements are complete and correct
and present fairly and in all material respects in accordance with GAAP, the
financial position of the Borrowers, on a consolidated basis, as at the dates
thereof and the results of operations of the Borrowers, on a consolidated basis,
for the periods then ended (except with respect to interim financial statements,
for the omission of footnotes and normal year-end adjustments). Except as
disclosed or reflected in such financial statements, no Borrower has any
material liabilities, contingent or otherwise, and there were no material
unrealized or anticipated losses of such Borrower required to be accrued,
reserved for, or disclosed in the foregoing financial statements. The Borrowers
have furnished to the Agent and the Lenders copies of the projections, dated May
30, 2001, for the period through and including February 2, 2002 (the
"Projections"). The Projections have been prepared by the Borrowers in light of
the past operations of the business of the Borrowers and their Subsidiaries and
represent, as of the respective dates thereof, the good faith opinion of the
Borrowers and its senior management concerning the most probable course of the
business of the Borrowers and their Subsidiaries.
(N) ADVERSE CHANGE. SINCE THE DATE OF THE FINANCIAL STATEMENTS DESCRIBED IN
clause (i) OF Section 6.1(m) AND OTHER THAN AS DISCLOSED IN THE UNAUDITED
FINANCIAL STATEMENTS DESCRIBED IN clause (ii) OF Section 6.1(m), (I) NO CHANGE
IN THE BUSINESS, ASSETS, LIABILITIES, CONDITION (FINANCIAL OR OTHERWISE),
RESULTS OF OPERATIONS OR BUSINESS PROSPECTS OF ANY BORROWER HAS OCCURRED THAT
HAS HAD, OR MAY HAVE, A MATERIALLY ADVERSE EFFECT, AND (II) NO EVENT HAS
OCCURRED OR FAILED TO OCCUR WHICH HAS HAD, OR MAY HAVE, A MATERIALLY ADVERSE
EFFECT.
(O) BENEFIT PLANS; ERISA. NO BORROWER OR ANY RELATED COMPANY MAINTAINS OR
CONTRIBUTES TO ANY BENEFIT PLAN OTHER THAN THOSE LISTED ON Schedule 6.1(o). EACH
BENEFIT PLAN IS IN SUBSTANTIAL COMPLIANCE WITH ERISA TO THE EXTENT THAT ERISA IS
APPLICABLE, AND NO BORROWER OR ANY RELATED COMPANY HAS RECEIVED ANY NOTICE FROM
ANY GOVERNMENTAL AUTHORITY, THE BORROWER'S INDEPENDENT PUBLIC ACCOUNTANTS OR ANY
ADMINISTRATOR OR INSURER UNDER SUCH BENEFIT PLAN ASSERTING THAT A BENEFIT PLAN
IS NOT IN COMPLIANCE WITH ERISA. NO MATERIAL LIABILITY TO THE PBGC OR TO A
MULTIEMPLOYER PLAN HAS BEEN, OR IS EXPECTED BY ANY BORROWER TO BE, INCURRED BY
SUCH BORROWER OR ANY
62
69
RELATED COMPANY. COPIES OF ALL SUCH LISTED BENEFIT PLANS, TOGETHER WITH A COPY
OF THE LATEST FORM 5500 (IF ANY) FOR EACH SUCH BENEFIT PLAN, HAVE BEEN DELIVERED
TO AGENT. NO BORROWER OR ANY RELATED COMPANY HAS FAILED TO MAKE ANY CONTRIBUTION
OR PAY ANY AMOUNT DUE AS REQUIRED BY EITHER SECTION 412 OF THE CODE OR SECTION
302 OF ERISA OR THE TERMS OF ANY SUCH BENEFIT PLAN. NO BORROWER OR ANY RELATED
COMPANY HAS ENGAGED IN A PROHIBITED TRANSACTION, AS DEFINED IN SECTION 4975 OF
THE CODE, IN CONNECTION WITH ANY BENEFIT PLAN, WHICH WOULD SUBJECT SUCH BORROWER
TO A MATERIAL TAX ON PROHIBITED TRANSACTIONS IMPOSED BY SECTION 4975 OF THE
CODE. EXCEPT AS SET FORTH IN Schedule 6.1(o): (I) NO TITLE IV PLAN HAS ANY
UNFUNDED VESTED ACCRUED BENEFITS IN EXCESS OF $0.00; (II) NO ERISA EVENT OR
EVENT DESCRIBED IN SECTION 4062(E) OF ERISA WITH RESPECT TO ANY TITLE IV PLAN
HAS OCCURRED OR IS REASONABLY EXPECTED TO OCCUR; (III) THERE ARE NO PENDING, OR
TO THE KNOWLEDGE OF ANY BORROWER, THREATENED CLAIMS (OTHER THAN CLAIMS FOR
BENEFITS IN THE NORMAL COURSE), SANCTIONS, ACTIONS OR LAWSUITS, ASSERTED OR
INSTITUTED AGAINST ANY BENEFIT PLAN OR ANY PERSON AS FIDUCIARY OR SPONSOR OF ANY
BENEFIT PLAN; (IV) NO BORROWER OR ANY RELATED COMPANY HAS INCURRED OR REASONABLY
EXPECTS TO INCUR ANY LIABILITY AS A RESULT OF A COMPLETE OR PARTIAL WITHDRAWAL
FROM A MULTIEMPLOYER PLAN; (V) WITHIN THE LAST FIVE YEARS NO TITLE IV PLAN WITH
UNFUNDED VESTED ACCRUED BENEFITS EQUAL TO OR EXCEEDING $0.00 HAS BEEN
TRANSFERRED OUTSIDE OF THE "CONTROLLED GROUP" (WITHIN THE MEANING OF SECTION
4001(A)(14) OF ERISA) OF SUCH BORROWER OR ANY RELATED COMPANY; AND (VI) NO
LIABILITY UNDER ANY TITLE IV PLAN HAS BEEN SATISFIED WITH THE PURCHASE OF A
CONTRACT FROM AN INSURANCE COMPANY THAT IS NOT RATED AAA BY THE STANDARD &
POOR'S CORPORATION OR THE EQUIVALENT BY ANOTHER NATIONALLY RECOGNIZED RATING
AGENCY.
(P) ABSENCE OF DEFAULTS. NO BORROWER OR ANY OF ITS SUBSIDIARIES IS IN
DEFAULT UNDER ITS ARTICLES OR CERTIFICATE OF INCORPORATION OR, IN ANY
MATERIAL RESPECT, UNDER ITS BY-LAWS AND NO EVENT HAS OCCURRED, WHICH
HAS NOT BEEN REMEDIED, CURED OR WAIVED, WHICH CONSTITUTES A DEFAULT OR
AN EVENT OF DEFAULT, OR WHICH CONSTITUTES, OR WHICH WITH THE PASSAGE OF
TIME OR GIVING OF NOTICE OR BOTH WOULD CONSTITUTE, A DEFAULT OR EVENT
OF DEFAULT BY ANY BORROWER OR ANY OF ITS SUBSIDIARIES UNDER ANY
MATERIAL AGREEMENT (OTHER THAN THIS AGREEMENT) OR JUDGMENT, DECREE OR
ORDER TO WHICH ANY BORROWER OR ANY OF ITS SUBSIDIARIES IS A PARTY OR BY
WHICH ANY BORROWER, ANY OF ITS SUBSIDIARIES OR ANY BORROWER'S OR ANY OF
ITS SUBSIDIARIES' PROPERTIES MAY BE BOUND OR WHICH WOULD REQUIRE ANY
BORROWER OR ANY OF ITS SUBSIDIARIES TO MAKE ANY PAYMENT UNDER ANY OF
THE FOREGOING PRIOR TO THE SCHEDULED MATURITY DATE THEREFOR.
(Q) ACCURACY AND COMPLETENESS OF INFORMATION. ALL SCHEDULES HERETO AND
ALL MATERIAL WRITTEN INFORMATION, REPORTS AND OTHER PAPERS AND DATA
PRODUCED BY OR ON BEHALF OF EACH BORROWER AND FURNISHED TO THE AGENT OR
ANY LENDER WERE, AT THE TIME THE SAME WERE SO FURNISHED, COMPLETE AND
CORRECT IN ALL MATERIAL RESPECTS, TO THE EXTENT NECESSARY TO GIVE THE
RECIPIENT A TRUE AND ACCURATE KNOWLEDGE OF THE SUBJECT MATTER. NO
DOCUMENT FURNISHED OR WRITTEN STATEMENT MADE TO THE AGENT OR ANY LENDER
BY ANY BORROWER IN CONNECTION WITH THE NEGOTIATION, PREPARATION OR
EXECUTION OF THIS AGREEMENT OR ANY OF THE LOAN DOCUMENTS CONTAINS OR
WILL CONTAIN ANY UNTRUE STATEMENT OF A FACT MATERIAL TO THE
CREDITWORTHINESS OF ANY BORROWER OR OMITS OR WILL OMIT TO STATE A
MATERIAL FACT NECESSARY IN ORDER TO MAKE THE STATEMENTS CONTAINED
THEREIN NOT MISLEADING.
63
70
(R) SOLVENCY. EXCEPT AS SET FORTH ON Schedule 6.1(r) HERETO, IN EACH
CASE AFTER GIVING EFFECT TO THE INDEBTEDNESS REPRESENTED BY THE
REVOLVING CREDIT LOANS OUTSTANDING TO EACH BORROWER AND TO BE INCURRED
BY EACH BORROWER, THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, EACH
BORROWER IS SOLVENT, HAVING ASSETS OF A FAIR SALABLE VALUE WHICH
EXCEEDS THE AMOUNT REQUIRED TO PAY ITS DEBTS AS THEY BECOME ABSOLUTE
AND MATURED (INCLUDING CONTINGENT, SUBORDINATED, UNMATURED AND
UNLIQUIDATED LIABILITIES BUT EXCLUDING SUBORDINATED BORROWER
INTERCOMPANY DEBT), AND EACH BORROWER IS ABLE TO AND ANTICIPATES THAT
IT WILL BE ABLE TO MEET ITS DEBTS (EXCLUDING SUBORDINATED BORROWER
INTERCOMPANY DEBT) AS THEY MATURE AND HAS ADEQUATE CAPITAL TO CONDUCT
THE BUSINESS IN WHICH IT IS OR PROPOSES TO BE ENGAGED.
(S) INVENTORY. ALL INVENTORY INCLUDED IN ANY BORROWING BASE CERTIFICATE
DELIVERED TO THE AGENT PURSUANT TO Section 8.10(d) MEETS THE CRITERIA
ENUMERATED IN THE DEFINITIONS OF ELIGIBLE INVENTORY, EXCEPT AS
DISCLOSED IN SUCH BORROWING BASE CERTIFICATE OR IN A SUBSEQUENT
BORROWING BASE CERTIFICATE OR AS OTHERWISE SPECIFICALLY DISCLOSED IN
WRITING TO THE AGENT. ALL ELIGIBLE INVENTORY IS IN GOOD CONDITION,
MEETS ALL STANDARDS IMPOSED BY ANY GOVERNMENTAL AGENCY OR DEPARTMENT OR
DIVISION THEREOF HAVING REGULATORY AUTHORITY OVER SUCH GOODS, THEIR USE
OR SALE, AND IS CURRENTLY EITHER USABLE OR SALEABLE IN THE NORMAL
COURSE OF A BORROWER'S BUSINESS, EXCEPT TO THE EXTENT RESERVED AGAINST
IN THE FINANCIAL STATEMENTS DELIVERED PURSUANT TO Section 6.1(m) AND
Article 10 OR AS DISCLOSED ON A SCHEDULE OF INVENTORY DELIVERED TO THE
AGENT PURSUANT TO Section 8.10(b). THE AGENT MAY RELY ON ALL
STATEMENTS, WARRANTIES OR REPRESENTATIONS MADE IN ANY SCHEDULE OF
INVENTORY IN DETERMINING WHICH ITEMS OF INVENTORY LISTED IN SUCH
SCHEDULE ARE TO BE DEEMED ELIGIBLE INVENTORY. SET FORTH ON Schedule
6.1(s) IS THE (I) ADDRESS (INCLUDING STREET, CITY, COUNTY AND STATE) OF
EACH FACILITY AT WHICH INVENTORY IS LOCATED, (II) THE APPROXIMATE COST
VALUE OF THE INVENTORY LOCATED AT EACH SUCH FACILITY, (III) IF THE
FACILITY IS LEASED OR IS A THIRD PARTY WAREHOUSE OR PROCESSOR LOCATION,
THE NAME OF THE LANDLORD OR SUCH THIRD PARTY WAREHOUSEMAN OR PROCESSOR,
AND (IV) IF THE INVENTORY IS CONSIGNED, ALL OUTSTANDING CONSIGNMENT AND
MEMO CONTRACT AGREEMENTS TO WHICH SUCH BORROWER IS A PARTY. ALL
INVENTORY IS LOCATED ON THE PREMISES SET FORTH ON Schedule 6.1(s) OR IS
IN TRANSIT TO ONE OF SUCH LOCATIONS, EXCEPT AS OTHERWISE DISCLOSED IN
WRITING TO THE AGENT; NO BORROWER HAS LOCATED INVENTORY AT PREMISES
OTHER THAN THOSE SET FORTH ON Schedule 6.1(s) AT ANY TIME DURING THE
FOUR MONTHS IMMEDIATELY PRECEDING THE AGREEMENT DATE. NO INVENTORY IS
SUBJECT TO ANY LIENS OTHER THAN PERMITTED LIENS.
(T) ACCOUNTS.
Each Account reflected in the computations included in any Borrowing Base
Certificate meets the criteria enumerated in the definition "Eligible Accounts,"
except as disclosed in such Borrowing Base Certificate or as disclosed in a
timely manner in a subsequent Borrowing Base Certificate or otherwise in writing
to the Administrative Agent. No Borrower has any knowledge of any fact or
circumstance not disclosed to the Agent in a Borrowing Base Certificate or
otherwise in writing which would impair the validity or collectibility of any
otherwise Eligible Account of $50,000 or more or of otherwise Eligible Accounts
which (regardless of the individual amount thereof) aggregate $100,000 or more.
(U) CHIEF EXECUTIVE OFFICE. THE CHIEF EXECUTIVE OFFICE AND PRINCIPAL
PLACE OF BUSINESS OF EACH BORROWER AND THE BOOKS AND RECORDS RELATING
TO THE COLLATERAL ARE LOCATED AT THE ADDRESS OR ADDRESSES SET FORTH ON
Schedule 6.1(u). EXCEPT AS SET FORTH ON
64
71
Schedule 6.1(u) NO BORROWER HAS MAINTAINED ITS CHIEF EXECUTIVE OFFICE
OR BOOKS AND RECORDS RELATING TO THE COLLATERAL AT ANY OTHER ADDRESS AT
ANY TIME DURING THE FIVE YEARS IMMEDIATELY PRECEDING THE AGREEMENT
DATE.
(V) REAL PROPERTY. NO BORROWER OWNS REAL ESTATE OR LEASES REAL ESTATE
OTHER THAN THAT REAL ESTATE DESCRIBED ON Schedule 6.1(v).
(W) CORPORATE AND FICTITIOUS NAMES. EXCEPT AS OTHERWISE DISCLOSED ON
Schedule 6.1(w), DURING THE FIVE-YEAR PERIOD PRECEDING THE AGREEMENT
DATE, NO BORROWER OR ANY PREDECESSOR THEREOF HAS BEEN KNOWN AS OR USED
ANY CORPORATE OR FICTITIOUS NAME OTHER THAN THE CORPORATE NAME OF EACH
BORROWER ON THE EFFECTIVE DATE.
(X) FEDERAL RESERVE REGULATIONS. NO BORROWER OR ANY OF ITS SUBSIDIARIES
IS ENGAGED AND NONE WILL ENGAGE, PRINCIPALLY OR AS ONE OF ITS IMPORTANT
ACTIVITIES, IN THE BUSINESS OF EXTENDING CREDIT FOR THE PURPOSE OF
"PURCHASING" OR "CARRYING" ANY "MARGIN STOCK" (AS EACH OF THE QUOTED
TERMS IS DEFINED OR USED IN REGULATION U OF THE BOARD OF GOVERNORS OF
THE FEDERAL RESERVE SYSTEM). NO BORROWER OWNS ANY MARGIN STOCK AND NO
PART OF THE PROCEEDS OF ANY OF THE ADVANCES WILL BE USED FOR SO
PURCHASING OR CARRYING MARGIN STOCK OR, IN ANY EVENT, FOR ANY PURPOSE
WHICH VIOLATES, OR WHICH WOULD BE INCONSISTENT WITH, THE PROVISIONS OF
REGULATION T, U OR X OF SUCH BOARD OF GOVERNORS. IF REQUESTED BY THE
AGENT OR ANY LENDER, EACH BORROWER WILL FURNISH TO THE AGENT AND THE
LENDERS A STATEMENT OR STATEMENTS IN CONFORMITY WITH THE REQUIREMENTS
OF SAID REGULATION T, U OR X TO THE FOREGOING EFFECT.
(Y) GOVERNMENT REGULATION. NO BORROWER IS AN "INVESTMENT COMPANY" OR A
COMPANY "CONTROLLED" BY AN "INVESTMENT COMPANY" (AS EACH OF THE QUOTED
TERMS IS DEFINED OR USED IN THE INVESTMENT COMPANY ACT OF 1940, AS
AMENDED). NO BORROWER IS SUBJECT TO REGULATION UNDER THE PUBLIC UTILITY
HOLDING COMPANY ACT OF 1935, THE FEDERAL POWER ACT, OR ANY OTHER
FEDERAL OR STATE STATUTE THAT RESTRICTS OR LIMITS ITS ABILITY TO INCUR
INDEBTEDNESS OR TO PERFORM ITS OBLIGATIONS HEREUNDER. ASSUMING THE
ACCURACY OF THE REPRESENTATIONS SET FORTH IN Section 13.2 HEREUNDER,
THE MAKING OF THE REVOLVING CREDIT LOANS AND THE ADVANCES BY LENDERS TO
EACH BORROWER, THE INCURRENCE OF THE LETTER OF CREDIT OBLIGATIONS ON
BEHALF OF EACH BORROWER, THE APPLICATION OF THE PROCEEDS THEREOF AND
REPAYMENT THEREOF AND THE CONSUMMATION OF THE RELATED TRANSACTIONS WILL
NOT VIOLATE ANY PROVISION OF ANY SUCH STATUTE OR ANY RULE, REGULATION
OR ORDER ISSUED BY THE SECURITIES AND EXCHANGE COMMISSION.
(Z) EMPLOYEE RELATIONS. EACH BORROWER AND EACH OF ITS SUBSIDIARIES HAS
ADEQUATE RELATIONS WITH ITS EMPLOYEES AND IS NOT, EXCEPT AS SET FORTH
ON Schedule 6.1(z), PARTY TO ANY COLLECTIVE BARGAINING AGREEMENT NOR
HAS ANY LABOR UNION BEEN RECOGNIZED AS THE REPRESENTATIVE OF ANY
BORROWER'S OR ANY OF ITS SUBSIDIARIES' EMPLOYEES, AND NO BORROWER IS
AWARE OF ANY PENDING, THREATENED OR CONTEMPLATED STRIKES, WORK STOPPAGE
OR OTHER MATERIAL LABOR DISPUTES INVOLVING SUCH BORROWER'S OR ANY OF
ITS SUBSIDIARIES' EMPLOYEES.
(AA) INTELLECTUAL PROPERTY. Schedule 6.1(aa) SETS FORTH A CORRECT AND
COMPLETE LIST OF ALL INTELLECTUAL PROPERTY OWNED BY EACH BORROWER OR
WHICH ANY BORROWER HAS THE RIGHT TO USE. EACH BORROWER OWNS OR
POSSESSES ALL INTELLECTUAL PROPERTY REQUIRED TO CONDUCT ITS BUSINESS AS
NOW AND PRESENTLY PLANNED TO BE CONDUCTED. NONE OF THE INTELLECTUAL
PROPERTY IS SUBJECT TO ANY LICENSING AGREEMENT OR SIMILAR ARRANGEMENT
EXCEPT AS SET FORTH ON Schedule 6.1(aa) OR AS ENTERED INTO IN THE SALE
OR DISTRIBUTION OF
65
72
THE APPLICABLE BORROWERS' INVENTORY IN THE ORDINARY COURSE OF BUSINESS.
TO THE BEST OF EACH BORROWER'S KNOWLEDGE, NONE OF THE INTELLECTUAL
PROPERTY INFRINGES ON OR CONFLICTS WITH ANY OTHER PERSON'S PROPERTY,
AND NO OTHER PERSON'S PROPERTY INFRINGES ON OR CONFLICTS WITH THE
INTELLECTUAL PROPERTY.
(BB) TRADE NAMES. ALL TRADE NAMES UNDER WHICH ANY BORROWER
SELLS INVENTORY, CREATES ACCOUNTS, TO WHICH INSTRUMENTS IN
PAYMENT OF ACCOUNTS ARE MADE PAYABLE, OR UNDER WHICH IT OWNS
OR LEASES THE OTHER COLLATERAL (COLLECTIVELY, "TRADE NAMES")
ARE LISTED ON Schedule 6.1(bb). THE TRADE NAMES ARE MERELY
TRADE NAMES OR DIVISIONS OF A BORROWER. ALL INVENTORY AND
OTHER COLLATERAL HELD UNDER THE TRADE NAMES IS OWNED SOLELY
AND EXCLUSIVELY BY A BORROWER, AND NO OTHER PERSON HAS ANY
LIEN (OTHER THAN PERMITTED LIENS) OR OTHER INTEREST IN ANY OF
THE INVENTORY OR OTHER COLLATERAL, INCLUDING, WITHOUT
LIMITATION, ANY SALES OR PROCEEDS THEREOF, WHETHER SUCH SALES
OF INVENTORY ARE MADE IN THE NAME OF A BORROWER OR IN THE NAME
OF ANY OF THE TRADE NAMES.
BROKERS. EXCEPT AS DISCLOSED ON Schedule 6.1 (cc), NO BROKER OR FINDER ACTING ON
BEHALF OF ANY BORROWER BROUGHT ABOUT THE OBTAINING, MAKING OR CLOSING OF THE
REVOLVING CREDIT FACILITY OR ANY ADVANCES HEREUNDER OR THE RELATED TRANSACTIONS,
AND NO BORROWER HAS ANY OBLIGATION TO ANY PERSON IN RESPECT OF ANY FINDER'S OR
BROKERAGE FEES IN CONNECTION HEREWITH.
INSURANCE. Schedule 6.1(dd) LISTS ALL COMMERCIAL INSURANCE POLICIES OF ANY
NATURE MAINTAINED, AS OF THE EFFECTIVE DATE, FOR CURRENT OCCURRENCES BY EACH
BORROWER, AS WELL AS A SUMMARY OF THE MATERIAL TERMS OF EACH SUCH POLICY.
DEPOSIT AND DISBURSEMENT ACCOUNTS. Schedule 6.1(ee) LISTS ALL BANKS AND OTHER
FINANCIAL INSTITUTIONS AT WHICH ANY BORROWER MAINTAINS DEPOSITS AND/OR OTHER
ACCOUNTS AS OF THE EFFECTIVE DATE, INCLUDING ANY DISBURSEMENT ACCOUNTS, AND SUCH
SCHEDULE CORRECTLY IDENTIFIES THE NAME, ADDRESS AND TELEPHONE NUMBER OF EACH
DEPOSITORY, THE NAME IN WHICH THE ACCOUNT IS HELD, A DESCRIPTION OF THE PURPOSE
OF THE ACCOUNT, AND THE COMPLETE ACCOUNT NUMBER.
(CC) GOVERNMENT CONTRACTS. EXCEPT AS SET FORTH IN Schedule
6.1(ff), AS OF THE EFFECTIVE DATE, NO BORROWER IS A PARTY TO
ANY CONTRACT OR AGREEMENT WITH THE FEDERAL GOVERNMENT OR ANY
STATE OR MUNICIPAL GOVERNMENT AND THE ACCOUNTS ARE NOT SUBJECT
TO THE FEDERAL ASSIGNMENT OF CLAIMS ACT, AS AMENDED (31 U.S.C.
SECTION 3727) OR ANY SIMILAR STATE OR LOCAL LAW.
TRADE RELATIONS. EXCEPT AS SET FORTH IN Schedule 6.1(gg), THERE EXISTS
NO ACTUAL OR, TO THE KNOWLEDGE OF ANY BORROWER, THREATENED TERMINATION
OR CANCELLATION OF, OR ANY MATERIAL ADVERSE MODIFICATION OR CHANGE IN
THE BUSINESS RELATIONSHIP OF ANY BORROWER WITH ANY SUPPLIER MATERIAL TO
ITS OPERATIONS.
AGREEMENTS AND OTHER DOCUMENTS. As of the Effective Date, each
Borrower has made available to the Agent or its counsel, on behalf of Lenders,
for their review, accurate and complete copies (or summaries) of all of the
following agreements or documents to which it is subject and each of which are
listed on SCHEDULE 6.1(HH): supply agreements and purchase agreements not
terminable by the applicable Borrower within sixty (60) days following written
notice issued by such Borrower and involving transactions in excess of
$1,000,000 per annum; and any lease of equipment or Real Estate having a
remaining term of one year or longer and requiring aggregate rental and other
payments in excess of $500,000 per annum; and
66
73
as of the Effective Date, each Borrower has made available to the Agent or
its counsel, on behalf of Lenders, accurate and complete copies of (A) licenses
and permits held by such Borrower, the absence of which could be reasonably
likely to have a Materially Adverse Effect; (B) instruments or documents
evidencing Indebtedness of such Borrower and any security interest granted by
such Borrower with respect thereto; and (C) instruments and agreements
evidencing the issuance of any equity securities, warrants, rights or options to
purchase equity securities of such Borrower (except with respect to GFC).
(DD) YEAR 2000 COMPLIANT. EACH BORROWER AND EACH OF ITS
SUBSIDIARIES IS YEAR 2000 COMPLIANT.
SURVIVAL OF REPRESENTATION AND WARRANTIES, ETC. All representations and
warranties set forth in this ARTICLE 6 and all statements contained in any
certificate, financial statement, or other agreements or documents, delivered by
or on behalf of any Borrower pursuant to or in connection with this Agreement or
any of the Loan Documents at the Closing (and any such representation, warranty
or statement made in or in connection with any amendment subsequent thereto)
shall constitute representations and warranties made under this Agreement. All
representations and warranties made under this Agreement shall be made or deemed
to be made at and as of the Agreement Date, at and as of the Effective Date and
at and as of the date of each Advance, except that representations and
warranties which, by their terms are applicable only to one such date shall be
deemed to be made only at and as of such date. All representations and
warranties made or deemed to be made under this Agreement shall survive and not
be waived by the execution and delivery of this Agreement, any investigation
made by or on behalf of the Lenders or any borrowing hereunder.
SECURITY INTEREST
SECURITY INTEREST.
(EE) TO SECURE THE PAYMENT, OBSERVANCE AND PERFORMANCE OF THE
SECURED OBLIGATIONS, EACH BORROWER HEREBY MORTGAGES, PLEDGES
AND ASSIGNS ALL OF THE COLLATERAL OF SUCH BORROWER TO THE
AGENT, FOR THE BENEFIT OF ITSELF AS AGENT AND THE LENDERS, AND
GRANTS TO THE AGENT, FOR THE BENEFIT OF ITSELF AS AGENT AND
THE LENDERS, A CONTINUING FIRST PRIORITY SECURITY INTEREST IN,
AND A CONTINUING LIEN UPON, THE COLLATERAL.
(FF) AS ADDITIONAL SECURITY FOR ALL OF THE SECURED
OBLIGATIONS, EACH BORROWER GRANTS TO THE AGENT, FOR THE
BENEFIT OF ITSELF AND THE LENDERS, A SECURITY INTEREST IN, AND
ASSIGNS TO THE AGENT, FOR THE BENEFIT OF ITSELF AS AGENT AND
THE LENDERS, ALL OF EACH AND EVERY BORROWER'S RIGHT, TITLE AND
INTEREST IN AND TO, ANY DEPOSITS OR OTHER SUMS AT ANY TIME
CREDITED BY OR DUE FROM EACH LENDER AND EACH AFFILIATE OF A
LENDER TO A BORROWER, OR CREDITED BY OR DUE FROM ANY
PARTICIPANT OF ANY LENDER TO A BORROWER, WITH THE SAME RIGHTS
THEREIN AS IF THE DEPOSITS OR OTHER SUMS WERE CREDITED BY OR
DUE FROM SUCH LENDER. EACH BORROWER HEREBY AUTHORIZES EACH
LENDER AND EACH AFFILIATE OF SUCH LENDER AND EACH PARTICIPANT
TO PAY OR DELIVER TO THE AGENT, FOR THE ACCOUNT OF THE
LENDERS, WITHOUT ANY NECESSITY ON THE AGENT'S OR ANY LENDER'S
PART TO RESORT TO OTHER SECURITY OR SOURCES OF REIMBURSEMENT
FOR THE SECURED OBLIGATIONS, AT ANY TIME DURING THE
CONTINUATION OF ANY EVENT OF DEFAULT OR IN THE EVENT THAT THE
AGENT, ON BEHALF OF THE LENDERS, SHOULD MAKE DEMAND FOR
PAYMENT HEREUNDER AND WITHOUT FURTHER NOTICE TO SUCH BORROWER
(SUCH NOTICE BEING EXPRESSLY WAIVED), ANY OF THE AFORESAID
DEPOSITS
67
74
(GENERAL OR SPECIAL, TIME OR DEMAND, PROVISIONAL OR
FINAL) OR OTHER SUMS FOR APPLICATION TO ANY SECURED
OBLIGATION, IRRESPECTIVE OF WHETHER ANY DEMAND HAS BEEN MADE
OR WHETHER SUCH SECURED OBLIGATION IS MATURE, AND THE RIGHTS
GIVEN THE AGENT, THE LENDERS, THEIR AFFILIATES AND
PARTICIPANTS HEREUNDER ARE CUMULATIVE WITH SUCH PERSON'S OTHER
RIGHTS AND REMEDIES, INCLUDING OTHER RIGHTS OF SET-OFF. THE
AGENT WILL PROMPTLY NOTIFY THE BORROWERS OF ITS RECEIPT OF ANY
SUCH FUNDS FOR APPLICATION TO THE SECURED OBLIGATIONS, BUT
FAILURE TO DO SO WILL NOT AFFECT THE VALIDITY OR
ENFORCEABILITY THEREOF. THE AGENT MAY GIVE NOTICE OF THE ABOVE
GRANT OF A SECURITY INTEREST IN AND ASSIGNMENT OF THE
AFORESAID DEPOSITS AND OTHER SUMS, AND AUTHORIZATION, TO, AND
MAKE ANY SUITABLE ARRANGEMENTS WITH, ANY LENDER, ANY SUCH
AFFILIATE OF ANY LENDER OR PARTICIPANT FOR EFFECTUATION
THEREOF, AND EACH BORROWER HEREBY IRREVOCABLY APPOINT AGENT AS
ITS ATTORNEY TO COLLECT ANY AND ALL SUCH DEPOSITS OR OTHER
SUMS TO THE EXTENT ANY SUCH PAYMENT IS NOT MADE TO THE AGENT
OR ANY LENDER BY SUCH LENDER, AFFILIATE OR PARTICIPANT.
CONTINUED PRIORITY OF SECURITY INTEREST.
(GG) THE SECURITY INTEREST GRANTED BY EACH BORROWER SHALL AT
ALL TIMES BE VALID, PERFECTED AND ENFORCEABLE AGAINST SUCH
BORROWER AND ALL THIRD PARTIES IN ACCORDANCE WITH THE TERMS OF
THIS AGREEMENT, AS SECURITY FOR THE SECURED OBLIGATIONS, AND
THE COLLATERAL SHALL NOT AT ANY TIME BE SUBJECT TO ANY LIENS
THAT ARE PRIOR TO, ON A PARITY WITH OR JUNIOR TO THE SECURITY
INTEREST, OTHER THAN PERMITTED LIENS.
(HH) EACH BORROWER SHALL, AT ITS COST AND EXPENSE, TAKE ALL
ACTION THAT MAY BE NECESSARY OR DESIRABLE, OR THAT THE AGENT
MAY REASONABLY REQUEST, SO AS AT ALL TIMES TO MAINTAIN THE
VALIDITY, PERFECTION, ENFORCEABILITY AND RANK OF THE SECURITY
INTEREST IN THE COLLATERAL IN CONFORMITY WITH THE REQUIREMENTS
OF Section 7.2(a), OR TO ENABLE THE AGENT AND THE LENDERS TO
EXERCISE OR ENFORCE THEIR RIGHTS HEREUNDER, INCLUDING, BUT NOT
LIMITED TO:
paying all taxes, assessments and other claims lawfully levied or assessed on
any of the Collateral, except to the extent that such taxes, assessments and
other claims constitute Permitted Liens, or are being contested in good faith in
appropriate proceedings and have been adequately reserved for in such Borrower's
financial statements, using all reasonable efforts to obtain mechanics'
releases, subordinations or waivers and, subject to SECTION 8.11 hereof,
obtaining any landlords', warehousemen' and mortgagees' releases, subordinations
or waivers, if required pursuant to the terms hereof, and, delivering to the
Agent, for the benefit of the Lenders, endorsed or accompanied by such
instruments of assignment as the Agent may specify, and stamping or marking, in
such manner as the Agent may specify, any and all chattel paper, instruments,
letters and advices of guaranty and documents evidencing or forming a part of
the Collateral, and executing and delivering financing statements, pledges,
designations, hypothecations, notices and assignments in each case in form and
substance satisfactory to the Agent relating to the creation, validity,
perfection, maintenance or continuation of the Security Interest under the
Uniform Commercial Code or other Applicable Law.
(II) THE AGENT IS HEREBY AUTHORIZED TO FILE ONE OR MORE
FINANCING OR CONTINUATION STATEMENTS OR AMENDMENTS THERETO
WITHOUT THE SIGNATURE OF OR IN THE NAME OF A BORROWER FOR ANY
PURPOSE DESCRIBED IN Section 7.2(b), INCLUDING, WITHOUT
LIMITATION, ANY SUCH FINANCING OR CONTINUATION STATEMENTS AS
AGENT DEEMS NECESSARY IN
68
75
ITS SOLE DISCRETION IN ORDER TO COMPLY WITH REVISED ARTICLE 9
OF THE UCC AND THE UNIFORM COMMERCIAL CODE IN OTHER
JURISDICTIONS WHERE COLLATERAL IS LOCATED. THE AGENT WILL GIVE
THE APPLICABLE BORROWER NOTICE OF THE FILING OF ANY SUCH
STATEMENTS OR AMENDMENTS, WHICH NOTICE SHALL SPECIFY THE
LOCATIONS WHERE SUCH STATEMENTS OR AMENDMENTS WERE FILED. A
CARBON, PHOTOGRAPHIC, XEROGRAPHIC OR OTHER REPRODUCTION OF
THIS AGREEMENT OR OF ANY OF THE SECURITY DOCUMENTS OR OF ANY
FINANCING STATEMENT FILED IN CONNECTION WITH THIS AGREEMENT IS
SUFFICIENT AS A FINANCING STATEMENT.
REVISED ARTICLE 9 OF THE UCC. THE PARTIES ACKNOWLEDGE AND AGREE TO THE FOLLOWING
PROVISIONS OF THIS AGREEMENT IN ANTICIPATION OF THE POSSIBLE APPLICATION, IN ONE
OR MORE JURISDICTIONS TO THE TRANSACTIONS CONTEMPLATED HEREBY, OF THE REVISED
ARTICLE 9 OF THE UCC IN THE FORM OR SUBSTANTIALLY IN THE FORM APPROVED BY THE
AMERICAN LAW INSTITUTE AND THE NATIONAL CONFERENCE OF COMMISSIONERS ON UNIFORM
STATE LAW AND CONTAINED IN THE 1999 OFFICIAL TEXT OF REVISED ARTICLE 9 ("REVISED
ARTICLE 9").
(A) ATTACHMENT. IN APPLYING THE LAW OF ANY JURISDICTION IN
WHICH REVISED ARTICLE 9 IS IN EFFECT, (I) THE COLLATERAL SHALL
INCLUDE THOSE CATEGORIES OF ASSETS SET FORTH IN THE DEFINITION
OF COLLATERAL WHETHER OR NOT WITHIN THE SCOPE OF REVISED
ARTICLE 9, AND (II) THOSE ASSETS WITHIN THE SCOPE OF REVISED
ARTICLE 9 SHALL HAVE THE DEFINITIONS AS SET FORTH IN REVISED
ARTICLE 9.
(B) PERFECTION BY FILING. AGENT MAY AT ANY TIME AND FROM TIME
TO TIME, PURSUANT TO THE PROVISIONS OF THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS, FILE FINANCING STATEMENTS, CONTINUATION
STATEMENTS AND AMENDMENTS THERETO THAT DESCRIBE THE COLLATERAL
AND WHICH CONTAIN OTHER INFORMATION REQUIRED BY PART 5 REVISED
ARTICLE 9 FOR THE SUFFICIENCY OR FILING OFFICE ACCEPTANCE OF
ANY FINANCING STATEMENT, CONTINUATION STATEMENT OR AMENDMENT,
INCLUDING WHETHER EACH BORROWER IS AN ORGANIZATION, THE TYPE
OF ORGANIZATION AND ANY ORGANIZATION IDENTIFICATION NUMBER
ISSUED TO SUCH BORROWER. EACH BORROWER AGREES TO FURNISH ANY
SUCH INFORMATION TO AGENT PROMPTLY UPON REQUEST. ANY SUCH
FINANCING STATEMENTS, CONTINUATION STATEMENTS OR AMENDMENTS
MAY BE SIGNED BY AGENT ON BEHALF OF ANY BORROWER, AS PROVIDED
IN THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AND MAY BE
FILED AT ANY TIME IN ANY JURISDICTION WHETHER OR NOT REVISED
ARTICLE 9 IS THEN IN EFFECT IN THAT JURISDICTION.
(C) OTHER PERFECTION ETC. BORROWERS SHALL AT ANY TIME AND FROM
TIME TO TIME, WHETHER OR NOT REVISED ARTICLE 9 IS IN EFFECT IN ANY
PARTICULAR JURISDICTION, TAKE SUCH STEPS AS AGENT MAY REASONABLY
REQUEST FOR AGENT (A) TO OBTAIN AN ACKNOWLEDGMENT, IN FORM AND
SUBSTANCE SATISFACTORY TO AGENT, OF ANY BAILEE HAVING POSSESSION OF ANY
OF THE COLLATERAL THAT THE BAILEE HOLDS SUCH COLLATERAL FOR AGENT, (B)
TO OBTAIN "CONTROL" OF ANY INVESTMENT PROPERTY, DEPOSIT ACCOUNTS,
LETTER-OF-CREDIT RIGHTS OR ELECTRONIC CHATTEL PAPER (AS SUCH TERMS ARE
DEFINED IN REVISED ARTICLE 9 WITH CORRESPONDING PROVISIONS IN REV.
SS.SS.9-104, 9-105, 9-106 AND 9-107 RELATING TO WHAT CONSTITUTES
"CONTROL" FOR SUCH ITEMS OF COLLATERAL), WITH ANY AGREEMENTS
ESTABLISHING CONTROL TO BE IN FORM AND SUBSTANCE SATISFACTORY TO AGENT,
AND (C) OTHERWISE TO INSURE THE CONTINUED PERFECTION AND PRIORITY OF
AGENT'S SECURITY INTEREST IN ANY OF THE COLLATERAL AND OF THE
PRESERVATION OF ITS RIGHTS THEREIN, WHETHER IN ANTICIPATION AND
FOLLOWING THE EFFECTIVENESS OR REVISED ARTICLE 9 IN ANY JURISDICTION.
76
(D) SAVINGS CLAUSE. NOTHING CONTAINED IN THIS Section 7.3
SHALL BE CONSTRUED TO NARROW THE SCOPE OF AGENT'S SECURITY INTEREST IN
ANY OF THE COLLATERAL OR THE PERFECTION OR PRIORITY THEREOF OR TO
IMPAIR OR OTHERWISE LIMIT ANY OF THE RIGHTS, POWERS, PRIVILEGES OR
REMEDIES OF AGENT OR ANY OTHER LENDER HEREUNDER EXCEPT AS (AND THEN
ONLY TO THE EXTENT) MANDATED BY REVISED ARTICLE 9 TO THE EXTENT THEN
APPLICABLE.
COLLATERAL COVENANTS
Until the Revolving Credit Facility has been terminated and all the Secured
Obligations have been paid in full, unless the Required Lenders shall otherwise
consent in the manner provided in SECTION 15.9:
COLLECTIONS; PAYMENTS.
(a) Blocked Accounts/Lockboxes.
(i) Borrowers shall establish and maintain, at
their expense, blocked accounts or lockboxes and related
blocked accounts (either, a "Blocked Account"), as Agent shall
request, with such banks as are reasonably acceptable to Agent
into which Borrowers shall promptly deposit, and direct their
Account Debtors to directly remit, all payments on Accounts
and all payments constituting proceeds of Inventory or other
Collateral in the form in which such payments are made,
whether by cash, check, credit card sales drafts, credit card
sales, charge slips or other manner. Without limiting the
intent of the foregoing, Borrowers shall (x) within ninety
(90) days after the Closing, deliver to the Agent, Blocked
Account Agreements, duly executed by the Borrowers and each
Clearing Bank, with respect to Store Accounts comprising 75%
of the number of the Borrowers' stores, (y) use commercially
reasonable efforts to deliver to the Agent within forty-five
(45) days thereafter, Blocked Account Agreements, duly
executed by the Borrowers and each Clearing Bank, with respect
to such remaining existing Store Accounts, and (z) as to any
Store Accounts established after the Effective Date (for which
the Borrowers shall give the Agent prior written notice
thereof), use commercially reasonable efforts to deliver to
the Agent a Blocked Account Agreement, duly executed by the
Borrowers and each Clearing Bank, prior to, or simultaneously
with, the establishment of each such account. If the Borrowers
are unable to obtain Blocked Account Agreements with respect
to any Store Accounts, Agent may, at its option, establish a
reserve against the Borrowing Base sufficient,
70
77
based upon the determination of the Agent in its sole
discretion, to insure that there will be no impairment of the
Collateral.
(ii) Each Blocked Account Agreement shall provide
for, among other things, (i) that all items received or
deposited into such Blocked Account are the collateral of
Agent, (ii) that such bank has no lien upon, or right to
setoff against, such Blocked Account, the items received for
deposit therein, or the funds from time to time on deposit
therein, and (iii) that such bank will, at such time as Agent
shall direct, wire, or otherwise transfer, in next day funds,
on a daily basis to the Collection Account, all funds received
or deposited into such Blocked Account. Until such time as
Agent shall notify a Clearing Bank otherwise in accordance
with the next sentence of this SECTION 8.1(A), Agent shall
instruct each Clearing Bank to transfer the funds on deposit
in the Blocked Account to such operating bank account of
Borrowers as Borrowers may specify in writing to Agent (each
an "Operating Account"). Upon the occurrence of (i) an Event
of Default, or event which, with notice or passage of time, or
both, would constitute an Event of Default, or (ii) an
Availability Shortfall, Agent may, without notice to the
Borrowers, give instructions to each Clearing Bank to transfer
to the Collection Account all funds received or deposited into
each such Blocked Account ("Sweep Instructions"). Subject to
the rights of the Borrowers hereunder, Borrowers agree that
all deposits made in, and payments made to, a Blocked Account
and other funds received and collected by Agent, whether on
the Accounts or as proceeds of Inventory or other Collateral
or otherwise shall be the collateral of Agent, subject to the
sole dominion and control of the Agent.
(B) FOR PURPOSES OF (I) CALCULATING THE AMOUNT OF AVAILABILITY TO
BORROWERS AND (II) CALCULATING INTEREST ON SECURED OBLIGATIONS,
PAYMENTS OR OTHER FUNDS RECEIVED IN THE COLLECTION ACCOUNT ("COLLECTION
ACCOUNT RECEIPTS") WILL BE APPLIED (CONDITIONED UPON FINAL COLLECTION)
TO THE SECURED OBLIGATIONS ONE (1) BUSINESS DAY FOLLOWING THE DATE OF
RECEIPT OF GOOD AND IMMEDIATELY AVAILABLE FUNDS IN THE COLLECTION
ACCOUNT (THE "COLLECTION PERIOD"), PROVIDED THAT THE COLLECTION ACCOUNT
RECEIPTS AND NOTICE THEREOF ARE RECEIVED IN ACCORDANCE WITH AGENT'S
USUAL AND CUSTOMARY PRACTICES AS IN EFFECT FROM TIME TO TIME AND BY
1:00 P.M. (ATLANTA TIME) OR, AT AGENT'S DISCRETION, WITHIN SUFFICIENT
TIME TO CREDIT BORROWERS' LOAN ACCOUNT ON SUCH DAY, AND IF NOT, THEN ON
THE SECOND SUCCEEDING BUSINESS DAY AFTER RECEIPT IN THE COLLECTION
ACCOUNT. UNTIL SUCH TIME AS AGENT GIVES SWEEP INSTRUCTIONS TO THE
CLEARING BANKS, AGENT SHALL BE ENTITLED TO CHARGE BORROWERS AN
ADMINISTRATIVE FEE EQUIVALENT TO THE INTEREST AGENT WOULD HAVE EARNED
AND RECEIVED FOR THE COLLECTION PERIOD HAD THE FUNDS DEPOSITED IN THE
BLOCKED ACCOUNT ON SUCH DAY BEEN TRANSFERRED FROM THE BLOCKED ACCOUNT
TO THE COLLECTION ACCOUNT ON SUCH DAY, WHICH FEE SHALL BE EQUAL TO (A)
THE NET SALES, AS REPORTED IN THE MONTHLY FINANCIAL STATEMENTS REQUIRED
TO BE DELIVERED TO THE AGENT PURSUANT TO Section 10.1(b) HEREOF, FOR
EACH SUCH FISCAL MONTH DURING THE TERM HEREOF, MULTIPLIED BY (B) A
71
78
RATE EQUAL TO 75% OF THE ONE-MONTH LIBOR AT THE END OF THE THEN CURRENT
FISCAL MONTH, AND DIVIDED BY (C) 360.
(C) BORROWERS AND ALL OF THEIR AFFILIATES, SUBSIDIARIES, SHAREHOLDERS,
DIRECTORS, EMPLOYEES OR AGENTS SHALL, ACTING AS TRUSTEE FOR AGENT,
RECEIVE, AS THE PROPERTY OF AGENT, ANY MONIES, CHECKS, NOTES, DRAFTS,
CREDIT CARD SALES DRAFTS, CREDIT CARD SALES OR CHARGE SLIPS OR
RECEIPTS, OR ANY OTHER PAYMENT RELATING TO AND/OR PROCEEDS OF ACCOUNTS
OR OTHER COLLATERAL WHICH COME INTO THEIR POSSESSION OR UNDER THEIR
CONTROL AND IMMEDIATELY UPON RECEIPT THEREOF, SHALL DEPOSIT OR CAUSE
THE SAME TO BE DEPOSITED IN THE BLOCKED ACCOUNTS, OR REMIT THE SAME OR
CAUSE THE SAME TO BE REMITTED, IN KIND, TO AGENT. IN NO EVENT SHALL THE
SAME BE COMMINGLED WITH BORROWERS' OWN FUNDS. BORROWERS AGREE TO
REIMBURSE AGENT ON DEMAND FOR ANY AMOUNTS OWED OR PAID TO ANY CLEARING
BANK OR ANY OTHER BANK OR PERSON INVOLVED IN THE TRANSFER OF FUNDS TO
OR FROM THE BLOCKED ACCOUNTS ARISING OUT OF AGENT'S PAYMENTS TO OR
INDEMNIFICATION OF SUCH BANK OR PERSON. THE OBLIGATION OF BORROWERS TO
REIMBURSE AGENT, FOR SUCH AMOUNTS PURSUANT TO THIS Section 8.1 SHALL
SURVIVE THE TERMINATION OR NON-RENEWAL OF THIS AGREEMENT.
(D) IT IS EXPRESSLY AGREED BY EACH BORROWER THAT, ANYTHING HEREIN TO
THE CONTRARY NOTWITHSTANDING, SUCH BORROWER SHALL REMAIN LIABLE UNDER
EACH OF ITS CONTRACTS, LICENSES AND OTHER AGREEMENTS, DOCUMENTS AND
INSTRUMENTS EVIDENCING INVENTORY, ACCOUNTS AND THE OTHER COLLATERAL TO
OBSERVE AND PERFORM ALL THE CONDITIONS AND OBLIGATIONS TO BE OBSERVED
AND PERFORMED BY IT THEREUNDER. NEITHER AGENT NOR ANY LENDER SHALL HAVE
ANY OBLIGATION OR LIABILITY UNDER ANY SUCH CONTRACT, LICENSE OR
AGREEMENT BY REASON OF OR ARISING OUT OF THIS AGREEMENT OR THE GRANTING
HEREIN OF A SECURITY INTEREST THEREIN OR THE RECEIPT BY AGENT OR ANY
LENDER OF ANY PAYMENT RELATING TO ANY SUCH CONTRACT, LICENSE OR
AGREEMENT PURSUANT HERETO. NEITHER AGENT NOR ANY LENDER SHALL BE
REQUIRED OR OBLIGATED IN ANY MANNER TO PERFORM OR FULFILL ANY OF THE
OBLIGATIONS OF ANY BORROWER UNDER OR PURSUANT TO ANY SUCH CONTRACT,
LICENSE OR AGREEMENT, OR TO MAKE ANY PAYMENT, OR TO MAKE ANY INQUIRY AS
TO THE NATURE OR THE SUFFICIENCY OF ANY PAYMENT RECEIVED BY IT OR THE
SUFFICIENCY OF ANY PERFORMANCE BY ANY PARTY UNDER ANY SUCH CONTRACT,
LICENSE OR AGREEMENT, OR TO PRESENT OR FILE ANY CLAIMS, OR TO TAKE ANY
ACTION TO COLLECT OR ENFORCE ANY PERFORMANCE OR THE PAYMENT OF ANY
AMOUNTS WHICH MAY HAVE BEEN ASSIGNED TO IT OR TO WHICH IT MAY BE
ENTITLED AT ANY TIME OR TIMES.
(E) FOR AGENT'S FURTHER SECURITY, EACH BORROWER AGREES THAT AGENT SHALL
HAVE A SPECIAL PROPERTY RIGHT AND SECURITY INTEREST IN ALL OF SUCH
BORROWER'S BOOKS AND RECORDS PERTAINING TO THE COLLATERAL AND, UPON THE
OCCURRENCE AND DURING THE CONTINUANCE OF ANY EVENT OF DEFAULT, SUCH
BORROWER SHALL DELIVER AND TURN OVER ANY SUCH BOOKS AND RECORDS TO
AGENT OR TO ITS REPRESENTATIVES AT ANY TIME ON DEMAND OF AGENT. PRIOR
TO THE OCCURRENCE OF A DEFAULT OR EVENT OF DEFAULT AND UPON NOTICE FROM
AGENT, EACH BORROWER SHALL PERMIT ANY REPRESENTATIVE OF AGENT TO
INSPECT SUCH BOOKS AND RECORDS AND SHALL PROVIDE PHOTOCOPIES THEREOF TO
AGENT, FOR THE BENEFIT OF AGENT AND LENDERS, AS MORE SPECIFICALLY SET
FORTH IN THIS AGREEMENT.
INSPECTION, VERIFICATION AND NOTIFICATION. The Agent and each
Lender (by any of their officers, employees or agents) shall have the right at
any time or times to (a) visit the properties of each Borrower and its
Subsidiaries, inspect the Collateral and the other assets of
72
79
such Borrower and its Subsidiaries and inspect and make extracts from the books
and records of such Borrower and its Subsidiaries, including but not limited to
management letters, prepared by independent accountants, all during customary
business hours at such premises; (b) discuss such Borrower's and its
Subsidiaries' business, assets, liabilities, financial condition, results of
operations and business prospects, insofar as the same are reasonably related to
the rights of the Agent or the Lenders hereunder or under any of the Loan
Documents, with such Borrower's and its Subsidiaries' (i) principal officers and
(ii) any other Person (except that any such discussion with any third parties
shall be conducted in accordance with the Agent's or such Lender's standard
operating procedures relating to the maintenance of the confidentiality of
confidential information of borrowers); (c) verify the validity, amount,
quantity, value and condition of, or any other matter relating to, the Accounts,
Inventory or any of the other Collateral in person or by mail, telephone,
telegraph or otherwise and in this connection to review, audit and make extracts
from all records and files related to any of the Collateral except that, with
respect solely to field audits, so long as no Availability Shortfall or Event of
Default has occurred, field audits shall be limited to one (1) per year;
provided, however, that in either of such events, Agent shall have the right to
conduct such field audits, at Borrowers' cost and expense and at such times as
Agent determines to be necessary in its discretion; and (d) on and after an
Event of Default, to notify the Account Debtors or obligors under any Accounts,
of the assignment of such Collateral to the Agent, for the benefit of the
Lenders, and to direct such Account Debtor or obligors to make payment of all
amounts due or to become due thereunder directly to the Agent, for the account
of the Lenders, and, upon such notification and at the expense of such Borrower,
to enforce collection of any such Accounts and to adjust, settle or compromise
the amount or payment thereof, in the same manner and to the same extent as such
Borrower might have done. Each Borrower will deliver to the Agent, for the
benefit of the Lenders, any instrument necessary for it or any Lender to obtain
records from any service bureau maintaining records on behalf of such Borrower
INVENTORY COVENANTS.
(JJ) ALL SALES OF INVENTORY WILL BE MADE IN COMPLIANCE WITH
ALL REQUIREMENTS OF APPLICABLE LAW.
(KK) SUBJECT TO Section 15.2(d) HEREOF, EACH BORROWER SHALL
PERMIT THE AGENT OR ANY LENDER TO AUDIT, INSPECT, REVIEW AND
EVALUATE, AT AGENTS OR SUCH LENDER'S SOLE COST AND EXPENSE,
SUCH BORROWER'S INVENTORY, PROPERTIES AND FACILITIES ON A
MONTHLY BASIS DURING THE FIRST YEAR OF THE TERM HEREOF AND,
THEREAFTER, AS OFTEN AS THE AGENT MAY REQUEST AT ITS
DISCRETION.
(LL) EACH BORROWER SHALL NOTIFY THE AGENT IN WRITING PROMPTLY
UPON, BUT IN NO EVENT LATER THAN THREE (3) BUSINESS DAYS
AFTER, LEARNING OF ANY ELIGIBLE INVENTORY WITH A VALUE IN
EXCESS OF $2,500,000 THAT BECOMES, OR THE BORROWER BELIEVES
WILL BECOME, INELIGIBLE, AND OF THE CAUSE OF SUCH
INELIGIBILITY, EXCEPT FOR ANY SUCH CIRCUMSTANCE OCCURRING IN
THE ORDINARY COURSE OF BUSINESS WHICH HAS BEEN APPROPRIATELY
RESERVED AGAINST, AS REFLECTED IN FINANCIAL STATEMENTS
PREVIOUSLY DELIVERED TO THE AGENT AND THE LENDERS PURSUANT TO
Section 6.1(m) OR Article 10.
(MM) NO BORROWER SHALL CONSIGN INVENTORY TO ANY PERSON EXCEPT
AS DISCLOSED IN THE SCHEDULE OF INVENTORY DELIVERED
IMMEDIATELY AFTER SUCH CONSIGNMENT.
(NN) EACH BORROWER SHALL PERMIT THE AGENT OR AN AGENT OR
REPRESENTATIVE THEREOF, TO CONDUCT APPRAISALS OF THE INVENTORY
AT THE COST AND EXPENSE OF THE
73
80
BORROWERS AND AT SUCH TIMES AS AGENT DETERMINES TO BE
NECESSARY IN ITS DISCRETION, IF AT ANY TIME DURING THE TERM
HEREOF (I) AVAILABILITY IS LESS THAN $20,000,000 OR (II) AN
EVENT OF DEFAULT HAS OCCURRED.
RETURNED INVENTORY. The Security Interest in the Inventory shall, without
further act, attach to the cash and non-cash proceeds resulting from the sale or
other disposition thereof and to all Inventory which is returned to any Borrower
by customers or is otherwise recovered.
OWNERSHIP AND DEFENSE OF TITLE.
(OO) EXCEPT FOR PERMITTED LIENS, EACH BORROWER SHALL AT ALL
TIMES BE THE SOLE OWNER OR LESSEE OF EACH AND EVERY ITEM OF
COLLATERAL AND SHALL NOT CREATE ANY LIEN ON, OR SELL, LEASE,
EXCHANGE, ASSIGN, TRANSFER, PLEDGE, HYPOTHECATE, GRANT A
SECURITY INTEREST OR SECURITY TITLE IN OR OTHERWISE DISPOSE
OF, ANY OF THE COLLATERAL OR ANY INTEREST THEREIN, EXCEPT FOR
GIFT CERTIFICATES, LAYAWAYS, AND IN-STORE CREDITS AND SALES OF
INVENTORY IN THE ORDINARY COURSE OF BUSINESS, FOR CASH OR ON
OPEN ACCOUNT OR ON TERMS OF PAYMENT ORDINARILY EXTENDED TO ITS
CUSTOMERS, AND EXCEPT AS OTHERWISE EXPRESSLY PERMITTED UNDER
THIS AGREEMENT. THE INCLUSION OF "PROCEEDS" OF THE COLLATERAL
UNDER THE SECURITY INTEREST SHALL NOT BE DEEMED A CONSENT BY
THE AGENT OR THE LENDERS TO ANY OTHER SALE OR OTHER
DISPOSITION OF ANY PART OR ALL OF THE COLLATERAL.
(PP) EACH BORROWER SHALL DEFEND ITS TITLE, AND USE
COMMERCIALLY REASONABLE EFFORTS TO DEFEND ITS LEASEHOLD
INTEREST IN AND TO, AND THE SECURITY INTEREST IN, THE
COLLATERAL AGAINST THE CLAIMS AND DEMANDS OF ALL PERSONS.
(QQ) IN ADDITION TO, AND NOT IN DEROGATION OF, THE FOREGOING
AND THE REQUIREMENTS OF ANY OF THE SECURITY DOCUMENTS, EACH
BORROWER SHALL (I) PROTECT AND PRESERVE ALL PROPERTIES
MATERIAL TO ITS BUSINESS, INCLUDING INTELLECTUAL PROPERTY AND
MAINTAIN ALL TANGIBLE PROPERTY IN GOOD AND WORKABLE CONDITION
IN ALL MATERIAL RESPECTS, WITH REASONABLE ALLOWANCE FOR WEAR
AND TEAR, AND (II) FROM TIME TO TIME MAKE OR CAUSE TO BE MADE
ALL NEEDED AND APPROPRIATE REPAIRS, RENEWALS, REPLACEMENTS AND
ADDITIONS TO SUCH PROPERTIES NECESSARY FOR THE CONDUCT OF ITS
BUSINESS, SO THAT THE BUSINESS CARRIED ON IN CONNECTION
THEREWITH MAY BE PROPERLY AND ADVANTAGEOUSLY CONDUCTED AT ALL
TIMES.
SECTION 1.3 INSURANCE.
(A) EACH BORROWER SHALL AT ALL TIMES MAINTAIN INSURANCE ON THE
INVENTORY AND OTHER COLLATERAL, CUSTOMARY AND APPROPRIATE TO
THE NATURE OF SUCH COLLATERAL, INCLUDING, WITHOUT LIMITATION,
COVERAGE AGAINST LOSS OR DAMAGE BY FIRE, THEFT, BURGLARY, LOSS
IN TRANSIT AND SUCH OTHER HAZARDS AS THE AGENT SHALL
REASONABLY SPECIFY, IN AMOUNTS NOT TO EXCEED THOSE OBTAINABLE
AT COMMERCIALLY REASONABLE RATES AND UNDER POLICIES ISSUED BY
INSURERS ACCEPTABLE TO THE AGENT IN THE EXERCISE OF ITS
REASONABLE JUDGMENT. ALL PREMIUMS ON SUCH INSURANCE SHALL BE
PAID BY SUCH BORROWER AND COPIES OF THE POLICIES DELIVERED TO
THE AGENT. EACH BORROWER WILL NOT USE OR PERMIT THE INVENTORY
TO BE USED IN VIOLATION OF ANY APPLICABLE LAW OR IN ANY MANNER
WHICH MIGHT RENDER VOID OR INAPPLICABLE ANY INSURANCE
COVERAGE.
(B) ALL INSURANCE POLICIES REQUIRED UNDER Section 8.6(a) SHALL
NAME THE AGENT, FOR THE BENEFIT OF THE LENDERS, AS AN
ADDITIONAL INSURED AND SHALL CONTAIN LOSS PAYABLE CLAUSES IN
THE FORM SUBMITTED TO EACH BORROWER BY THE AGENT, OR OTHERWISE
IN FORM AND SUBSTANCE SATISFACTORY TO THE AGENT, NAMING THE
AGENT, FOR THE BENEFIT OF THE LENDERS, AS LOSS PAYEE, AS ITS
INTERESTS MAY APPEAR, AND PROVIDING THAT:
74
81
all proceeds thereunder relating to Collateral in excess of $250,000 shall be
made payable to the Agent, for the benefit of the Lenders; provided, however,
that so long as no Default or Event of Default has occurred and all of such
proceeds are used to repair, replace or restore the Collateral, insurance
proceeds from any loss not exceeding $2,500,000 on an individual basis or
$7,000,000 on an aggregate basis during each year of the term hereof shall be
paid over to the Borrowers for replacement of the damaged or destroyed
collateral; no such insurance shall be affected by any act or neglect of the
insurer or owner (other than a Borrower) of the property described in such
policy, and such policy and loss payable clauses may not be canceled, amended or
terminated unless at least 30 days prior written notice is given to the Agent
(or such lesser notice period with respect to non-payment of premiums, but in no
event less than ten (10) days).
(C) ANY PROCEEDS OF INSURANCE REFERRED TO IN THIS Section 8.6
WHICH ARE PAID TO THE AGENT IN CONNECTION WITH THE COLLATERAL,
FOR THE ACCOUNT OF THE LENDERS, SHALL, UNLESS AN EVENT OF
DEFAULT HAS OCCURRED, BE APPLIED TO REBUILD, RESTORE OR
REPLACE THE DAMAGED OR DESTROYED PROPERTY IN A DILIGENT AND
EXPEDITIOUS MANNER WITH MATERIALS AND WORKMANSHIP OF
SUBSTANTIALLY THE SAME QUALITY AS EXISTED BEFORE THE LOSS,
DAMAGE OR DESTRUCTION. ON OR AFTER AN EVENT OF DEFAULT
HEREUNDER, SUCH PROCEEDS SHALL BE APPLIED AT THE ELECTION OF
THE REQUIRED LENDERS, IN THEIR SOLE DISCRETION, (I) TO THE
PAYMENT OR PREPAYMENT OF THE SECURED OBLIGATIONS OR (II) TO
REBUILD, RESTORE OR REPLACE THE DAMAGED OR DESTROYED PROPERTY.
(D) EACH BORROWER IRREVOCABLY MAKES, CONSTITUTES AND APPOINTS
AGENT (AND ALL OFFICERS, EMPLOYEES OR AGENTS DESIGNATED BY
AGENT), SO LONG AS ANY EVENT OF DEFAULT SHALL HAVE OCCURRED
AND BE CONTINUING AS SUCH BORROWER'S TRUE AND LAWFUL AGENT AND
ATTORNEY-IN-FACT FOR THE PURPOSE OF MAKING, SETTLING AND
ADJUSTING CLAIMS UNDER SUCH "ALL RISK" POLICIES OF INSURANCE,
ENDORSING THE NAME OF SUCH BORROWER ON ANY CHECK OR OTHER ITEM
OF PAYMENT FOR THE PROCEEDS OF SUCH "ALL RISK" POLICIES OF
INSURANCE AND FOR MAKING ALL DETERMINATIONS AND DECISIONS WITH
RESPECT TO SUCH "ALL RISK" POLICIES OF INSURANCE; PROVIDED,
HOWEVER, THAT IN THE EVENT THAT ANY CLAIM WHICH IS OR COULD BE
MADE UNDER ANY OF SUCH INSURANCE POLICIES EXCEEDS $2,000,000
NO SUCH CLAIM SHALL BE SETTLED, COMPROMISED OR FINALLY
DETERMINED, EXCEPT WITH THE PRIOR WRITTEN CONSENT OF AGENT.
AGENT SHALL HAVE NO DUTY TO EXERCISE ANY RIGHTS OR POWERS
GRANTED TO IT PURSUANT TO THE FOREGOING POWER-OF-ATTORNEY.
EACH BORROWER SHALL PROMPTLY NOTIFY AGENT OF ANY LOSS, DAMAGE,
OR DESTRUCTION TO THE COLLATERAL IN THE AMOUNT OF $2,000,000
OR MORE, WHETHER OR NOT COVERED BY INSURANCE. AFTER DEDUCTING
FROM SUCH INSURANCE PROCEEDS THE EXPENSES, IF ANY, INCURRED BY
AGENT IN THE COLLECTION OR HANDLING THEREOF, AGENT SHALL APPLY
SUCH PROCEEDS AS SET FORTH IN subsection (c) OF THIS Section
8.6; PROVIDED THAT, IF NO EVENT OF DEFAULT HAS OCCURRED, AGENT
SHALL FIRST APPLY THE PROCEEDS TO REDUCE THE OUTSTANDING
PRINCIPAL BALANCE OF THE REVOLVING CREDIT LOANS (WHICH
APPLICATION SHALL NOT RESULT IN A PERMANENT REDUCTION OF THE
REVOLVING CREDIT FACILITY) AND UPON SUCH APPLICATION, AGENT
SHALL ESTABLISH A RESERVE AGAINST THE BORROWING BASE IN AN
AMOUNT EQUAL TO THE AMOUNT OF SUCH PROCEEDS SO APPLIED (THE
"INSURANCE RESERVE"). THEREAFTER, SUCH FUNDS SHALL BE MADE
AVAILABLE TO SUCH BORROWER TO PROVIDE FUNDS TO REPLACE,
REPAIR, RESTORE OR REBUILD THE COLLATERAL AS FOLLOWS: (I) SUCH
BORROWER SHALL REQUEST AN ADVANCE IN THE AMOUNT REQUESTED TO
BE RELEASED; (II) SO LONG AS THE CONDITIONS SET FORTH IN
Article 2 AND Section 5.2 HAVE BEEN MET, THE LENDERS SHALL
MAKE
75
82
SUCH ADVANCE; AND (III) THE INSURANCE RESERVE ESTABLISHED WITH
RESPECT TO SUCH INSURANCE PROCEEDS SHALL BE REDUCED BY THE
AMOUNT OF SUCH ADVANCE.
LOCATION OF OFFICES AND COLLATERAL.
(E) NO BORROWER WILL CHANGE THE LOCATION OF ITS CHIEF
EXECUTIVE OFFICE OR THE PLACE WHERE IT KEEPS ITS BOOKS AND
RECORDS RELATING TO THE COLLATERAL OR CHANGE ITS NAME, ITS
IDENTITY OR CORPORATE STRUCTURE IN ANY MANNER WHICH MIGHT MAKE
ANY FINANCING STATEMENT OR OTHER UCC AMENDMENT, ASSIGNMENT OR
CONTINUATION STATEMENT FILED IN CONNECTION HEREWITH SERIOUSLY
MISLEADING WITHIN THE MEANING OF SECTION 9-402(7) OF THE
UNIFORM COMMERCIAL CODE OR ANY OTHER THEN APPLICABLE PROVISION
OF THE UNIFORM COMMERCIAL CODE OF ANY OTHER RELEVANT
JURISDICTION, WITHOUT GIVING THE AGENT SIXTY (60) DAYS PRIOR
WRITTEN NOTICE THEREOF AND COMPLYING WITH THE REQUIREMENTS AND
CONDITIONS OF Section 8.7(d), PROVIDED, HOWEVER, THAT
BORROWERS WITH CHIEF EXECUTIVE OFFICES IN THE STATE OF
DELAWARE MAY RELOCATE THEIR CHIEF EXECUTIVE OFFICE TO ANOTHER
LOCATION IN THE STATE OF DELAWARE UPON FIVE (5) BUSINESS DAYS
PRIOR WRITTEN NOTICE TO THE AGENT.
(F) ALL INVENTORY, OTHER THAN INVENTORY IN TRANSIT TO ANY SUCH
LOCATION, WILL AT ALL TIMES BE KEPT BY EACH BORROWER AT ONE OF
THE LOCATIONS SET FORTH IN Schedule 6.1(s) AND SHALL NOT,
WITHOUT GIVING THE AGENT AT LEAST THIRTY (30) DAYS PRIOR
WRITTEN NOTICE AND COMPLYING WITH THE REQUIREMENTS AND
CONDITIONS OF Section 8.7(d) HEREOF, BE REMOVED THEREFROM
EXCEPT (I) TO ANOTHER LOCATION ON Schedule 6.1(s), OR (II) FOR
SALES OF INVENTORY PERMITTED UNDER Section 8.5(a).
(G) IF ANY INVENTORY IS IN THE POSSESSION OR CONTROL OF ANY OF
ANY BORROWER'S AGENTS OR PROCESSORS, EACH BORROWER SHALL
NOTIFY SUCH AGENTS OR PROCESSORS OF THE SECURITY INTEREST AND,
UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, SHALL INSTRUCT
THEM (AND CAUSE THEM TO ACKNOWLEDGE SUCH INSTRUCTION) TO HOLD
ALL SUCH INVENTORY FOR THE ACCOUNT OF THE AGENT, FOR THE
BENEFIT OF THE LENDERS, SUBJECT TO THE INSTRUCTIONS OF THE
AGENT.
(H) AFTER AGENT'S WRITTEN ACKNOWLEDGMENT THAT ANY REASONABLE
ACTION REQUESTED BY AGENT IN CONNECTION WITH ANY CHANGES
COVERED BY Sections 8.7(a) or (b), INCLUDING CONTINUATION OF
THE PERFECTION OF ANY LIENS IN FAVOR OF AGENT, ON BEHALF OF
THE AGENT AND THE LENDERS, IN ANY COLLATERAL, HAS BEEN
COMPLETED OR TAKEN, EACH BORROWER MAY CHANGE THE LOCATION OF
ITS COLLATERAL OR THE LOCATION WHERE IT KEEPS ITS BOOKS AND
RECORDS RELATING TO THE COLLATERAL, PROVIDED THAT ANY SUCH NEW
LOCATION SHALL BE IN THE CONTINENTAL UNITED STATES, OR CHANGE
ITS NAME, ITS IDENTITY OR ITS CORPORATE STRUCTURE. NO BORROWER
SHALL CHANGE ITS FISCAL YEAR TO A YEAR ENDING IN ANY DAY OTHER
THAN THE FISCAL YEAR END OF THE BORROWERS.
RECORDS RELATING TO COLLATERAL.
(I) EACH BORROWER WILL AT ALL TIMES (I) KEEP COMPLETE AND
ACCURATE RECORDS OF INVENTORY ON A BASIS CONSISTENT WITH PAST
PRACTICES OF SUCH BORROWER, ITEMIZING AND DESCRIBING THE KIND,
TYPE AND QUANTITY OF INVENTORY AND SUCH BORROWER'S COST
THEREFOR AND A CURRENT PRICE LIST FOR SUCH INVENTORY, AND
(II) KEEP COMPLETE AND ACCURATE RECORDS OF ALL OTHER
COLLATERAL.
(J) EACH BORROWER WILL TAKE A PHYSICAL AUDIT OF ALL INVENTORY,
WHEREVER LOCATED, AT LEAST ANNUALLY.
(K) NO BORROWER WILL USE, REPRESENT OR HOLD OUT THE TRADE
NAMES IN A CORPORATE MANNER OR USE ANY DESIGNATION THAT WOULD
IDENTIFY THE TRADE NAMES AS A CORPORATION
76
83
OR OTHER SEPARATE ENTITY OR ORGANIZATION (I.E. "INC.", "CORP."
OR "LIMITED" SHALL NOT BE USED) BUT SHALL ONLY USE SUCH NAMES
SO THAT IT WILL BE CLEARLY UNDERSTOOD THAT THEY ARE MERELY
TRADE NAMES OF SUCH BORROWER.
INTENTIONALLY OMITTED.
INFORMATION AND REPORTS.
(L) COLLECTION REPORTS. EACH BORROWER SHALL DELIVER TO THE
AGENT NO LATER THAN THIRTY (30) DAYS AFTER THE END OF EACH
FISCAL MONTH OF SUCH BORROWER, AS OF THE LAST BUSINESS DAY OF
SUCH BORROWER'S IMMEDIATELY PRECEDING FISCAL MONTH, COPIES OF
BANK STATEMENTS WITH RESPECT TO THE CONCENTRATION ACCOUNT AND
SUCH OTHER INFORMATION REGARDING RECEIPTS, EXPENDITURES AND
DEPOSIT ACCOUNT BALANCES AS THE AGENT MAY REQUEST. EACH
BORROWER SHALL IMMEDIATELY (I) NOTIFY THE AGENT OF ANY
CHANGES, ADDITIONS OR DELETIONS TO Schedule 6.1(ee), AND (II)
PREPARE AND DELIVER A NEW Schedule 6.1(ee) REFLECTING SUCH
CHANGES, ADDITIONS AND DELETIONS.
(M) SCHEDULE OF INVENTORY. EACH BORROWER SHALL MAINTAIN A
PERPETUAL METHOD OF INVENTORY CONTROL. EACH BORROWER SHALL
DELIVER TO THE AGENT (I) ON OR BEFORE THE EFFECTIVE DATE A
SCHEDULE OF INVENTORY AS OF MAY 5, 2001, LISTING THE LOCATION
OF INVENTORY AND THE COST THEREOF, AS SET FORTH IN THE
CONSOLIDATED BALANCE SHEET AS OF SUCH DATE, (II) NO LATER THAN
FIFTEEN (15) BUSINESS DAYS AFTER THE END OF EACH FISCAL MONTH
(OTHER THAN THE LAST FISCAL MONTH OF THE FISCAL YEAR) OF SUCH
BORROWER THEREAFTER A SCHEDULE OF INVENTORY AS OF THE LAST DAY
OF THE IMMEDIATELY PRECEDING FISCAL MONTH OF SUCH BORROWER,
LISTING THE LOCATION OF INVENTORY AND THE COST THEREOF, AS SET
FORTH IN THE CONSOLIDATED BALANCE SHEET AS OF SUCH DATE, AND
(III) NO LATER THAN THIRTY-FIVE (35) BUSINESS DAYS AFTER THE
END OF EACH FISCAL YEAR OF SUCH BORROWER DURING THE TERM
HEREOF A SCHEDULE OF INVENTORY AS OF THE LAST DAY OF THE LAST
FISCAL MONTH OF THE FISCAL YEAR OF SUCH BORROWER, LISTING THE
LOCATION OF INVENTORY AND THE COST THEREOF, AS SET FORTH IN
THE CONSOLIDATED BALANCE SHEET AS OF SUCH DATE. EACH
BORROWER'S INVENTORY RECORDS SHALL BE BASED UPON AND EVIDENCE
THE RESULTS OF PHYSICAL INVENTORY COUNTS CONDUCTED NO LESS
FREQUENTLY THAN ANNUALLY. UPON THE REQUEST OF THE AGENT, EACH
BORROWER SHALL DELIVER TO THE AGENT, COPIES OF THE RESULTS OF
ANY PHYSICAL INVENTORY COUNT SHOWING IN REASONABLE DETAIL THE
LOCATIONS OF AND VALUES FOR SPECIFIC ITEMS OF INVENTORY AND
SUCH OTHER INFORMATION AND SUPPORTING DOCUMENTS REGARDING
INVENTORY THAT THE AGENT DEEMS NECESSARY.
(N) BORROWING BASE CERTIFICATE. THE BORROWERS SHALL DELIVER TO
THE AGENT (I) WITHIN FIFTEEN (15) BUSINESS DAYS AFTER THE END
OF EACH FISCAL MONTH OF THE BORROWERS (OTHER THAN THE LAST
FISCAL MONTH OF THE FISCAL YEAR), A BORROWING BASE CERTIFICATE
PREPARED AS OF THE CLOSE OF BUSINESS OF THE LAST DAY OF THE
FISCAL MONTH, AND (II) WITHIN FIFTEEN (15) BUSINESS DAYS AFTER
THE END OF THE FISCAL YEAR A PRELIMINARY BORROWING BASE
CERTIFICATE, AND WITHIN THIRTY-FIVE (35) BUSINESS DAYS AFTER
THE END OF THE FISCAL YEAR A FINAL BORROWING BASE CERTIFICATE,
EACH PREPARED AS OF THE LAST DAY OF THE FISCAL YEAR.
(O) NOTICE OF DIMINUTION OF VALUE. EACH BORROWER SHALL GIVE
PROMPT NOTICE TO THE AGENT OF ANY MATTER OR EVENT WHICH HAS
RESULTED IN, OR MAY RESULT IN, THE DIMINUTION IN EXCESS OF
$2,500,000 WITH RESPECT TO INVENTORY AND ANY OTHER COLLATERAL,
EXCEPT FOR ANY SUCH DIMINUTION IN THE VALUE OF ANY ACCOUNTS OR
INVENTORY IN THE ORDINARY COURSE OF BUSINESS WHICH HAS BEEN
APPROPRIATELY RESERVED AGAINST, AS REFLECTED IN FINANCIAL
77
84
STATEMENTS PREVIOUSLY DELIVERED TO THE AGENT AND THE LENDERS
PURSUANT TO Section 6.1(m) OR Article 10.
ADDITIONAL INFORMATION. THE AGENT MAY IN ITS REASONABLE DISCRETION FROM TIME TO
TIME REQUEST THAT THE BORROWERS DELIVER THE SCHEDULES, CERTIFICATES OR REPORTS
DESCRIBED IN Sections 8.10(a) through (d) MORE OR LESS OFTEN AND ON DIFFERENT
SCHEDULES THAN SPECIFIED IN SUCH SECTIONS AND THE BORROWERS WILL COMPLY WITH
SUCH REQUESTS. THE BORROWERS WILL ALSO FURNISH TO THE AGENT AND EACH LENDER SUCH
OTHER INFORMATION WITH RESPECT TO THE COLLATERAL AS THE AGENT OR SUCH LENDER MAY
FROM TIME TO TIME REASONABLY REQUEST.
(P) CERTIFICATION. EACH OF THE SCHEDULES DELIVERED TO THE
LENDER PURSUANT TO THIS Section 8.10 SHALL BE CERTIFIED BY A
FINANCIAL OFFICER OF THE BORROWERS TO BE TRUE, CORRECT AND
COMPLETE AS OF THE DATE INDICATED THEREON.
LANDLORD AND OTHER WAIVERS. Each Borrower shall timely and fully pay and
perform, in all material respects, its obligations under all leases and other
agreements with respect to each leased location where any Collateral is or may
be located.
(a) In the event that at any time during the term of this
Agreement, an Availability Shortfall or an Event of Default has
occurred, then, at the request of Agent, the Borrowers shall obtain
from each landlord and mortgagee of a location where Collateral is
stored or held, waiver and consent agreements, satisfactory in form and
substance to the Agent. If the Borrowers are unable to obtain a waiver
and consent from a landlord or mortgagee of a location where Collateral
is stored or held, Agent may, at its option, establish a reserve
against the Borrowing Base sufficient, based upon the determination of
the Agent in its sole discretion, to insure that there will be no
impairment of the Collateral, which, absent an Event of Default, shall
be no more than one month's rent for each location for which the
Borrowers are unable to obtain a waiver and consent. Notwithstanding
anything to the contrary herein, (y) if such waiver and consent is
subsequently obtained, the Agent shall release the reserve and (z) if a
reserve has been established because of an Availability Shortfall, then
if subsequent to such occurrence, Availability shall exceed $25,000,000
for a consecutive ninety (90) day period, then on and after such period
and for so long as Availability remains above $25,000,000, the Agent
shall release such reserve until such time as another Availability
Shortfall shall have occurred.
(b) In the event that at any time during the term of this
Agreement, any Borrower defaults with respect to the payment of rent
under any lease of Real Estate where Collateral is stored or held, then
at the request of the Agent, each such Borrower shall obtain from the
landlord and mortgagee a waiver and consent agreement satisfactory in
form and substance to the Agent. If the Borrowers are unable to obtain
a waiver and consent in such case, Agent may, at its option, establish
a reserve against the Borrowing Base sufficient, based upon the
determination of the Agent in its sole discretion, to insure that there
will be no impairment of the Collateral, provided that, if the
Borrowers shall cure such defaults pursuant to the terms of the
applicable lease, the Agent shall release any such applicable reserve.
78
85
(c) Nothing contained in this SECTION 8.11 shall impair
or otherwise modify any of Agent's rights under this Agreement,
including, without limitation, Agent's rights pursuant to the
respective definitions of "Eligible Inventory" and "Borrowing Base."
WAREHOUSEMAN AGREEMENTS.
(a) Borrowers shall use commercially reasonable efforts
to obtain from each warehouseman of a location where Collateral is
stored or held, waiver and consent agreements (each, a "Warehouseman
Agreement"), satisfactory in form and substance to the Agent. If the
Borrowers are unable to obtain a Warehouseman Agreement with respect to
a location where Collateral is stored or held, Agent may, at its
option, establish a reserve against the Borrowing Base sufficient,
based upon the determination of the Agent in its sole discretion, to
insure that there will be no impairment of the Collateral, which,
absent an Event of Default, shall be no more than one month's rent for
each location for which the Borrowers are unable to obtain a
Warehouseman Agreement. Notwithstanding anything to the contrary
herein, (x) if such Warehouseman Agreement is subsequently obtained the
Agent shall release such reserve and (y) if a reserve has been
established because of an Availability Shortfall, then if subsequent to
such occurrence, Availability shall exceed $25,000,000 for a
consecutive ninety (90) day period, then on and after such period and
for so long as Availability remains above $25,000,000, the Agent shall
release such reserve until such time as another Availability Shortfall
shall have occurred. Without limiting the intent of the foregoing,
within thirty (30) days after the Closing, the Borrowers shall use
commercially reasonable efforts to deliver to the Agent, Warehouseman
Agreements, duly executed by the Borrowers and each warehouseman of a
location where Collateral is stored or held.
(b) Nothing contained in this SECTION 8.12 shall impair
or otherwise modify any of Agent's rights under this Agreement,
including, without limitation, Agent's rights pursuant to the
respective definitions of "Eligible Inventory" and "Borrowing Base."
79
86
CONTROL LETTERS. TO THE EXTENT THAT AGENT HAS NOT RECEIVED A CONTROL
LETTER FROM THOSE PARTIES SET FORTH IN THE DEFINITION THEREOF WITH RESPECT TO
ANY BORROWER'S SECURITIES OR COMMODITIES ACCOUNTS OR ANY OF BORROWERS' CREDIT
CARD PROCESSING PROGRAMS AND THE FINANCIAL ASSETS HELD THEREIN, ON OR PRIOR TO
THE EFFECTIVE DATE, BORROWERS SHALL DELIVER TO THE AGENT AS SOON AS PRACTICABLE
BUT, IN ANY EVENT, WITHIN THIRTY (30) DAYS AFTER THE EFFECTIVE DATE, A CONTROL
LETTER EXECUTED BY THE BORROWERS AND THE FINANCIAL INTERMEDIARY OR CREDIT CARD
PROCESSOR WITH RESPECT THERETO. AS TO ANY SUCH ACCOUNTS OR CREDIT CARD
PROCESSING PROGRAMS ESTABLISHED AFTER THE EFFECTIVE DATE (FOR WHICH THE
BORROWERS SHALL GIVE THE AGENT PRIOR WRITTEN NOTICE WITH RESPECT TO A SECURITIES
ACCOUNT AND AT LEAST THIRTY (30) DAYS PRIOR WRITTEN NOTICE THEREOF WITH RESPECT
TO A CREDIT CARD PROGRAM), UPON THE REASONABLE REQUEST OF AGENT, BORROWERS SHALL
USE COMMERCIALLY REASONABLE EFFORTS TO DELIVER TO THE AGENT A CONTROL LETTER
EXECUTED BY THE BORROWERS AND THE FINANCIAL INTERMEDIARY OR CREDIT CARD
PROCESSOR PRIOR TO, OR SIMULTANEOUSLY WITH, THE ESTABLISHMENT OF SUCH ACCOUNT OR
PROGRAM. IF THE BORROWERS ARE UNABLE TO OBTAIN A CONTROL LETTER WITH RESPECT TO
SUCH ACCOUNT OR PROGRAM, AGENT MAY, AT ITS OPTION, ESTABLISH A RESERVE AGAINST
THE BORROWING BASE SUFFICIENT, BASED UPON THE DETERMINATION OF THE AGENT IN ITS
SOLE DISCRETION, TO INSURE THAT THERE WILL BE NO IMPAIRMENT OF THE COLLATERAL.
AFFIRMATIVE COVENANTS
Until the Revolving Credit Facility has been terminated and all the Secured
Obligations have been paid in full, unless the Required Lenders shall otherwise
consent in the manner provided for in SECTION 15.9, each Borrower will, and will
cause each of its Subsidiaries to:
PRESERVATION OF CORPORATE EXISTENCE AND SIMILAR MATTERS. Preserve and maintain
its corporate existence, rights, franchises, licenses and privileges in the
jurisdiction of its incorporation and qualify and remain qualified as a foreign
corporation and authorized to do business in each jurisdiction in which the
character of its properties or the nature of its business requires such
qualification or authorization, except where the failure to do so would not have
a Materially Adverse Effect on such Borrower and its Subsidiaries taken as a
whole.
COMPLIANCE WITH APPLICABLE LAW. Comply in all material respects with all
Applicable Laws relating to such Borrower or any Subsidiary, except to the
extent being contested in good faith by appropriate procedures and for which
reserves in respect of such Borrower's or Subsidiary's reasonably anticipated
liability have been established in accordance with GAAP.
MAINTENANCE OF PROPERTY. In addition to, and not in derogation of, the
requirements of the Security Documents,
PROTECT AND PRESERVE ALL PROPERTIES MATERIAL TO ITS BUSINESS,
INCLUDING, WITHOUT LIMITATION, INTELLECTUAL PROPERTY, AND MAINTAIN IN
GOOD REPAIR, WORKING ORDER AND CONDITION IN ALL MATERIAL RESPECTS, WITH
REASONABLE ALLOWANCE FOR WEAR AND TEAR, ALL TANGIBLE PROPERTIES, AND
FROM TIME TO TIME MAKE OR CAUSE TO BE MADE ALL NEEDED AND APPROPRIATE
REPAIRS, RENEWALS, REPLACEMENTS AND ADDITIONS TO SUCH PROPERTIES
NECESSARY FOR THE CONDUCT OF ITS BUSINESS, SO THAT
80
87
THE BUSINESS CARRIED ON IN CONNECTION THEREWITH MAY BE PROPERLY AND
ADVANTAGEOUSLY CONDUCTED AT ALL TIMES.
CONDUCT OF BUSINESS. At all times engage only in the same fields of business of
such Borrower as the businesses conducted on the Effective Date.
INSURANCE. Maintain, in addition to the coverage required by SECTION 8.6 and the
Security Documents, insurance with responsible insurance companies against such
risks and in such amounts as is customarily maintained by similar businesses or
as may be required by Applicable Law, including, without limitation, public
liability, product liability, third party property damage and business
interruption insurance, and from time to time deliver to the Agent or any Lender
upon its request a detailed list of the insurance then in effect, stating the
names of the insurance companies, the amounts and rates of the insurance, the
dates of the expiration thereof and the properties and risks covered thereby.
PAYMENT OF TAXES AND CLAIMS. Pay or discharge when due (a) all Charges and other
taxes, assessments and governmental levies imposed upon it or upon its income or
profits or upon any properties belonging to it, except that real property ad
valorem taxes shall be deemed to have been so paid or discharged if the same are
paid before they become delinquent, and (b) all lawful claims of materialmen,
mechanics, carriers, warehousemen and landlords for labor, materials, supplies
and rentals which, if unpaid, might become a Lien on any properties of such
Borrower; except that this SECTION 9.6 shall not require the payment or
discharge of any Charge which is being contested in good faith by appropriate
proceedings and for which reserves in respect of the reasonably anticipated
liability therefor have been appropriately established.
ACCOUNTING METHODS AND FINANCIAL RECORDS. Maintain a system of accounting, and
keep such books, records and accounts (which shall be true and complete in all
material respects), as may be required or as may be necessary to permit the
preparation of financial statements in accordance with GAAP consistently
applied.
USE OF PROCEEDS.
(Q) USE THE PROCEEDS OF THE INITIAL ADVANCE UNDER THE
REVOLVING CREDIT FACILITY TO (I) REFINANCE AND PAY OFF THE
TOTAL OUTSTANDING AMOUNTS DUE AS INDICATED ON Schedule 9.8 AND
TO FUND CERTAIN OF THE FEES AND EXPENSES ASSOCIATED WITH THE
EXTENSION OF THE REVOLVING CREDIT FACILITY, AND (II) ALL
SUBSEQUENT ADVANCES ONLY FOR WORKING CAPITAL PURPOSES OR AS IS
OTHERWISE EXPRESSLY AUTHORIZED HEREIN, INCLUDING, WITHOUT
LIMITATION, PERMITTED STOCK REPURCHASES AND CAPITAL
EXPENDITURES PURSUANT TO Section 11.5 HEREOF; AND
(R) NOT USE ANY PART OF SUCH PROCEEDS TO PURCHASE OR, TO CARRY
OR REDUCE OR RETIRE OR REFINANCE ANY CREDIT INCURRED TO
PURCHASE OR CARRY, ANY MARGIN STOCK (WITHIN THE MEANING OF
REGULATION U OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE
SYSTEM) OR, IN ANY EVENT, FOR ANY PURPOSE WHICH WOULD INVOLVE
A VIOLATION OF SUCH REGULATION U OR OF REGULATION T OR X OF
SUCH BOARD OF GOVERNORS, OR FOR ANY PURPOSE PROHIBITED BY LAW
OR BY THE TERMS AND CONDITIONS OF THIS AGREEMENT.
HAZARDOUS WASTE AND SUBSTANCES; ENVIRONMENTAL REQUIREMENTS.
(S) IN ADDITION TO, AND NOT IN DEROGATION OF, THE REQUIREMENTS
OF Section 9.2 AND OF THE SECURITY DOCUMENTS, SUBSTANTIALLY
COMPLY WITH ALL ENVIRONMENTAL LAWS AND ALL APPLICABLE LAWS
RELATING TO OCCUPATIONAL HEALTH AND SAFETY (EXCEPT FOR
INSTANCES OF NONCOMPLIANCE THAT ARE BEING CONTESTED IN GOOD
FAITH BY APPROPRIATE PROCEEDINGS IF
81
88
RESERVES IN RESPECT OF SUCH BORROWER'S OR SUCH SUBSIDIARY'S
REASONABLY ANTICIPATED LIABILITY THEREFOR HAVE BEEN
APPROPRIATELY ESTABLISHED), PROMPTLY NOTIFY THE AGENT OF ITS
RECEIPT OF ANY WRITTEN NOTICE OF A VIOLATION OF ANY SUCH
ENVIRONMENTAL LAWS OR OTHER SUCH APPLICABLE LAWS AND INDEMNIFY
AND HOLD THE AGENT AND THE LENDERS HARMLESS FROM ALL
ENVIRONMENTAL LIABILITIES INCURRED BY OR IMPOSED UPON THE
AGENT OR ANY LENDER ON ACCOUNT OF SUCH BORROWER'S FAILURE TO
PERFORM ITS OBLIGATIONS UNDER THIS Section 9.9.
(T) SUCH BORROWER SHALL NOT CAUSE OR PERMIT A RELEASE OF ANY
CONTAMINANT ON, AT, IN, UNDER, ABOVE, TO, FROM OR ABOUT ANY OF
THE REAL ESTATE WHERE SUCH RELEASE WOULD (A) VIOLATE IN ANY
RESPECT, OR FORM THE BASIS FOR ANY ENVIRONMENTAL LIABILITIES
UNDER, ANY ENVIRONMENTAL LAWS OR ENVIRONMENTAL PERMITS OR (B)
OTHERWISE ADVERSELY IMPACT THE VALUE OR MARKETABILITY OF ANY
OF THE REAL ESTATE OR ANY OF THE COLLATERAL, OTHER THAN SUCH
VIOLATIONS OR IMPACTS WHICH COULD NOT REASONABLY BE EXPECTED
TO HAVE A MATERIALLY ADVERSE EFFECT ON SUCH BORROWER.
FURTHER ASSURANCES. Upon the request of the Agent, to duly execute and deliver,
or cause to be duly executed and delivered, to the Agent such further
instruments and do and cause to be done such further acts as may be necessary in
the reasonable opinion of the Agent to carry out the express provisions of this
Agreement or any other Loan Document.
INFORMATION
Until the Revolving Credit Facility has been terminated and all the
Secured Obligations have been paid in full, unless the Required Lenders shall
otherwise consent in the manner set forth in SECTION 15.9, the Borrowers will
furnish to the Agent and to each Lender at the offices then designated for such
notices pursuant to SECTION 15.1:
FINANCIAL STATEMENTS.
(U) AUDITED YEAR-END-STATEMENTS. AS SOON AS AVAILABLE, BUT IN
ANY EVENT WITHIN ONE HUNDRED FIVE (105) DAYS AFTER THE END OF
EACH FISCAL YEAR, COPIES OF THE BORROWERS' FORM 10-K
CONTAINING THE CONSOLIDATED BALANCE SHEET AS AT THE END OF
SUCH FISCAL YEAR AND THE RELATED STATEMENTS OF INCOME,
SHAREHOLDERS' EQUITY AND CASH FLOW FOR SUCH FISCAL YEAR, IN
EACH CASE SETTING FORTH IN COMPARATIVE FORM THE FIGURES FOR
THE PREVIOUS FISCAL YEAR AND, IN THE CASE OF THE CONSOLIDATED
BALANCE SHEET, WHICH FINANCIAL STATEMENTS SHALL INCLUDE AN
UNQUALIFIED OPINION OF THE INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS THAT SUCH FINANCIAL STATEMENTS PRESENT FAIRLY THE
FINANCIAL POSITION OF THE BORROWERS AS AT THE END OF AND FOR
SUCH FISCAL YEAR (THE "AUDITED FINANCIAL STATEMENTS").
(V) MONTHLY FINANCIAL STATEMENTS. AS SOON AS AVAILABLE, BUT IN
ANY EVENT WITHIN FORTY (40) DAYS AFTER THE END OF EACH FISCAL
MONTH (OTHER THAN AT ANY FISCAL QUARTER END OR AT FISCAL YEAR
END, IN WHICH CASE SUCH MONTHLY FINANCIAL STATEMENTS SHALL BE
DELIVERED AT THE TIME SUCH QUARTERLY OR ANNUAL FINANCIAL
STATEMENTS ARE DELIVERED), COPIES OF THE UNAUDITED
CONSOLIDATED BALANCE SHEET AS AT THE END OF SUCH FISCAL MONTH
AND THE RELATED UNAUDITED INCOME STATEMENT FOR SUCH FISCAL
MONTH AND FOR THE PORTION OF THE FISCAL YEAR THROUGH SUCH
FISCAL MONTH, IN EACH CASE SETTING FORTH IN COMPARATIVE FORM
THE FIGURES FOR THE PREVIOUS FISCAL YEAR (INCLUDING, WITHOUT
82
89
LIMITATION, A COMPARISON TO THE THEN CURRENT PROJECTED BUDGET
FIGURES FOR THE CURRENT FISCAL YEAR), CERTIFIED BY THE
FINANCIAL OFFICER AS PRESENTING FAIRLY THE FINANCIAL CONDITION
AND RESULTS OF OPERATIONS OF THE BORROWERS AND THEIR
SUBSIDIARIES AS AT THE DATE THEREOF AND FOR THE PERIODS ENDED
ON SUCH DATE, SUBJECT TO NORMAL QUARTERLY AND YEAR END
ADJUSTMENTS. SUCH FINANCIAL STATEMENTS SHALL BE COMPLETE AND
CORRECT IN ALL MATERIAL RESPECTS AND PREPARED IN ACCORDANCE
WITH GAAP (EXCEPT FOR THE OMISSION OF FOOTNOTES AND NORMAL
QUARTERLY AND YEAR-END ADJUSTMENTS) APPLIED CONSISTENTLY
THROUGHOUT THE PERIODS REFLECTED THEREIN.
(W) QUARTERLY FINANCIAL STATEMENTS. AS SOON AS AVAILABLE, BUT
IN ANY EVENT WITHIN FIFTY (50) DAYS AFTER THE END OF EACH
FISCAL QUARTER OTHER THAN THE FOURTH FISCAL QUARTER, COPIES OF
THE BORROWERS' FORM 10-Q CONTAINING THE UNAUDITED CONSOLIDATED
BALANCE SHEET AS AT THE END OF SUCH FISCAL QUARTER AND THE
RELATED UNAUDITED INCOME STATEMENT FOR SUCH FISCAL QUARTER AND
FOR THE PORTION OF THE FISCAL YEAR THROUGH SUCH FISCAL
QUARTER, IN EACH CASE SETTING FORTH IN COMPARATIVE FORM THE
FIGURES FOR THE PREVIOUS FISCAL YEAR, CERTIFIED BY THE
FINANCIAL OFFICER AS PRESENTING FAIRLY THE FINANCIAL CONDITION
AND RESULTS OF OPERATIONS OF THE BORROWERS AND THEIR
SUBSIDIARIES AS AT THE DATE THEREOF AND FOR THE PERIODS ENDED
ON SUCH DATE, SUBJECT TO NORMAL YEAR END ADJUSTMENTS. SUCH
FINANCIAL STATEMENTS SHALL BE COMPLETE AND CORRECT IN ALL
MATERIAL RESPECTS AND PREPARED IN ACCORDANCE WITH GAAP (EXCEPT
FOR THE OMISSION OF FOOTNOTES AND NORMAL YEAR-END ADJUSTMENTS)
APPLIED CONSISTENTLY THROUGHOUT THE PERIODS REFLECTED THEREIN.
(X) FINANCIAL BUDGETS. AS SOON AS AVAILABLE, BUT IN ANY EVENT
WITHIN NINETY (90) DAYS AFTER EACH FISCAL YEAR END DURING THE
TERM HEREOF, A FINANCIAL BUDGET, PREPARED BY THE BORROWERS ON
A CONSOLIDATED BASIS, CONSISTING OF MONTHLY CONSOLIDATED
BALANCE SHEETS, CASH FLOW STATEMENTS AND INCOME STATEMENTS OF
THE BORROWERS, REFLECTING PROJECTED BORROWINGS HEREUNDER AND
SETTING FORTH THE ASSUMPTIONS ON WHICH SUCH FINANCIAL BUDGET
WAS PREPARED, COVERING THE ONE-YEAR PERIOD COMMENCING ON THE
FIRST DAY OF SUCH FISCAL YEAR AND IN EACH CASE APPROVED BY THE
BOARD OF DIRECTORS OF THE BORROWER'S REPRESENTATIVE NO LATER
THAN NINETY (90) DAYS AFTER THE LAST BUSINESS DAY OF EACH
FISCAL YEAR.
BORROWER INTERCOMPANY DEBT. EACH BORROWER SHALL, AS PART OF THE QUARTERLY
FINANCIAL STATEMENTS FURNISHED TO AGENT, REPORT SEPARATELY TO AGENT THE
RESPECTIVE AMOUNTS OF BORROWER INTERCOMPANY DEBT AND SUBORDINATED BORROWER
INTERCOMPANY DEBT OWED BY AND OWED TO SUCH BORROWER, AND SUCH RESPECTIVE AMOUNTS
SHALL NOT BE OFFSET AGAINST EACH OTHER FOR SUCH SEPARATE REPORTING PURPOSES NOR
SHALL THEY BE OFFSET AGAINST EACH OTHER FOR FULL OR PARTIAL PAYMENT OR
SATISFACTION EXCEPT IN ACCORDANCE WITH Section 11.6 HEREUNDER. OFFICER'S
CERTIFICATE. TOGETHER WITH EACH DELIVERY OF FINANCIAL STATEMENTS REQUIRED BY
Section 10.1(a), (b) AND (c), A CERTIFICATE OF THE PRESIDENT OR FINANCIAL
OFFICER OF THE BORROWERS (A) STATING THAT, BASED ON AN EXAMINATION SUFFICIENT TO
ENABLE HIM TO MAKE AN INFORMED STATEMENT, NO DEFAULT OR EVENT OF DEFAULT EXISTS
OR, IF SUCH IS NOT THE CASE, SPECIFYING SUCH DEFAULT OR EVENT OF DEFAULT AND ITS
NATURE, WHEN IT OCCURRED, WHETHER IT IS CONTINUING AND THE STEPS BEING TAKEN BY
THE BORROWERS WITH RESPECT TO SUCH DEFAULT OR EVENT OF DEFAULT, AND (B) SETTING
FORTH THE CALCULATIONS NECESSARY TO ESTABLISH WHETHER OR NOT
83
90
THE BORROWERS WERE IN COMPLIANCE WITH THE COVENANTS CONTAINED IN Sections 11.1,
11.5 AND 11.10 AS OF THE DATE OF SUCH STATEMENTS.
COPIES OF OTHER REPORTS.
(a) Promptly upon receipt thereof, copies of any
management letters and any other reports disclosing any deficiencies or
weaknesses with respect to the Borrowers submitted to any Borrower or
its Board of Directors by its independent public accountants.
(B) AS SOON AS PRACTICABLE, COPIES OF ALL FINANCIAL STATEMENTS AND
REPORTS THAT ANY BORROWER SHALL SEND TO ITS SHAREHOLDERS GENERALLY AND
OF ALL REGISTRATION STATEMENTS AND ALL REGULAR OR PERIODIC REPORTS
WHICH ANY BORROWER SHALL FILE WITH THE SECURITIES AND EXCHANGE
COMMISSION OR ANY SUCCESSOR COMMISSION.
(C) FROM TIME TO TIME AND AS SOON AS REASONABLY PRACTICABLE FOLLOWING
EACH REQUEST, SUCH FORECASTS, DATA, CERTIFICATES, REPORTS, STATEMENTS,
OPINIONS OF COUNSEL, DOCUMENTS OR FURTHER INFORMATION REGARDING THE
BUSINESS, ASSETS, LIABILITIES, FINANCIAL CONDITION, RESULTS OF
OPERATIONS OR BUSINESS PROSPECTS OF THE BORROWERS AND THEIR
SUBSIDIARIES AS THE AGENT OR ANY LENDER MAY REASONABLY REQUEST AND THAT
THE BORROWERS HAVE OR (EXCEPT IN THE CASE OF LEGAL OPINIONS RELATING TO
THE PERFECTION OR PRIORITY OF THE SECURITY INTEREST) WITHOUT
UNREASONABLE EXPENSE CAN OBTAIN; PROVIDED, HOWEVER, THAT THE LENDERS
SHALL, TO THE EXTENT REASONABLY PRACTICABLE, COORDINATE EXAMINATIONS OF
THE BORROWERS' RECORDS BY THEIR RESPECTIVE INTERNAL AUDITORS. THE
RIGHTS OF THE AGENT AND THE LENDERS UNDER THIS Section 10.4 ARE IN
ADDITION TO AND NOT IN DEROGATION OF THEIR RIGHTS UNDER ANY OTHER
PROVISION OF THIS AGREEMENT OR OF ANY OTHER LOAN DOCUMENT.
(D) IF REQUESTED BY THE AGENT OR ANY LENDER, SUCH BORROWER WILL FURNISH
TO THE AGENT AND THE LENDERS STATEMENTS IN CONFORMITY WITH THE
REQUIREMENTS OF FEDERAL RESERVE FORM G-3 OR U-1 REFERRED TO IN
REGULATION U OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM.
NOTICE OF LITIGATION AND OTHER MATTERS. PROMPT NOTICE OF:
(Y) THE COMMENCEMENT, TO THE EXTENT THE BORROWERS ARE AWARE OF THE
SAME, OF ALL PROCEEDINGS AND INVESTIGATIONS BY OR BEFORE ANY
GOVERNMENTAL OR NON-GOVERNMENTAL BODY AND ALL ACTIONS AND PROCEEDINGS
IN ANY COURT OR BEFORE ANY ARBITRATOR AGAINST OR IN ANY OTHER WAY
RELATING TO OR AFFECTING ANY BORROWER, ANY OF ITS SUBSIDIARIES OR ANY
OF ANY BORROWER'S OR ANY OF ITS SUBSIDIARIES' PROPERTIES, ASSETS OR
BUSINESSES, WHICH MIGHT, SINGLY OR IN THE AGGREGATE, RESULT IN THE
OCCURRENCE OF A DEFAULT OR AN EVENT OF DEFAULT, OR HAVE A MATERIAL
ADVERSE EFFECT ON SUCH BORROWER AND ITS SUBSIDIARIES, TAKEN AS A WHOLE,
(Z) WITHOUT IN ANY WAY LIMITING subsection (a) HEREOF, THE COMMENCEMENT
AGAINST ANY BORROWER OR ANY OF THEIR RESPECTIVE SUBSIDIARIES OF ANY
INVOLUNTARY BANKRUPTCY PROCEEDING, IMMEDIATELY UPON RECEIPT BY ANY OF
THEM OF NOTICE OF COMMENCEMENT THEREOF OR PLEADINGS WITH RESPECT
THERETO,
(AA) ANY AMENDMENT OF THE ARTICLES OF INCORPORATION OR BY-LAWS OF SUCH
BORROWER OR ANY OF ITS SUBSIDIARIES,
(BB) ANY CHANGE IN THE BUSINESS, ASSETS, LIABILITIES, FINANCIAL
CONDITION, RESULTS OF OPERATIONS OR BUSINESS PROSPECTS OF ANY BORROWER
OR ANY OF ITS SUBSIDIARIES WHICH
84
91
HAS HAD OR IS REASONABLY LIKELY TO HAVE, SINGLY OR IN THE AGGREGATE, A
MATERIALLY ADVERSE EFFECT ON SUCH BORROWER OR ITS SUBSIDIARIES, TAKEN
AS A WHOLE, AND ANY CHANGE IN THE CHIEF EXECUTIVE OFFICER, PRESIDENT OR
CHIEF FINANCIAL OFFICER OF SUCH BORROWER, AND
(CC) ANY DEFAULT OR EVENT OF DEFAULT OR ANY EVENT WHICH CONSTITUTES OR
WHICH WITH THE PASSAGE OF TIME OR GIVING OF NOTICE OR BOTH WOULD
CONSTITUTE A DEFAULT OR EVENT OF DEFAULT BY SUCH BORROWER OR ANY OF ITS
SUBSIDIARIES UNDER ANY MATERIAL AGREEMENT (OTHER THAN THIS AGREEMENT)
TO WHICH SUCH BORROWER OR ANY OF ITS SUBSIDIARIES IS A PARTY OR BY
WHICH SUCH BORROWER, ANY OF ITS SUBSIDIARIES OR ANY OF SUCH BORROWER'S
OR ANY OF ITS SUBSIDIARIES' PROPERTIES MAY BE BOUND.
ERISA. AS SOON AS POSSIBLE AND IN ANY EVENT WITHIN 30 DAYS AFTER SUCH BORROWER
KNOWS, OR HAS REASON TO KNOW, THAT:
(DD) ANY TERMINATION EVENT WITH RESPECT TO A PLAN HAS OCCURRED OR WILL
OCCUR, OR
(EE) THE AGGREGATE PRESENT VALUE OF THE UNFUNDED VESTED ACCRUED
BENEFITS UNDER ALL PLANS IS EQUAL TO AN AMOUNT IN EXCESS OF $0, OR (FF)
SUCH BORROWER OR ANY OF ITS SUBSIDIARIES IS IN "DEFAULT" (AS DEFINED IN
SECTION 4219(C)(5) OF ERISA) WITH RESPECT TO PAYMENTS TO A
MULTIEMPLOYER PLAN REQUIRED BY REASON OF SUCH BORROWER'S OR SUCH
SUBSIDIARY'S COMPLETE OR PARTIAL WITHDRAWAL (AS DESCRIBED IN SECTION
4203 OR 4205 OF ERISA) FROM SUCH MULTIEMPLOYER PLAN, A CERTIFICATE OF
THE PRESIDENT OR A FINANCIAL OFFICER OF SUCH BORROWER SETTING FORTH THE
DETAILS OF SUCH EVENT AND THE ACTION WHICH IS PROPOSED TO BE TAKEN WITH
RESPECT THERETO, TOGETHER WITH ANY NOTICE OR FILING WHICH MAY BE
REQUIRED BY THE PBGC OR OTHER AGENCY OF THE UNITED STATES GOVERNMENT
WITH RESPECT TO SUCH EVENT.
ACCURACY OF INFORMATION. All written information, reports, statements and other
papers and data furnished to the Agent or any Lender, whether pursuant to this
ARTICLE 10 or any other provision of this Agreement or of any other Loan
Document, shall be, at the time the same is so furnished, complete and correct
in all material respects to the extent necessary to give the Agent and the
Lenders true and accurate knowledge of the subject matter.
REVISIONS OR UPDATES TO SCHEDULES. Should any of the information or disclosures
provided on any of the Schedules originally attached hereto become outdated or
incorrect in any material respect, such Borrower shall deliver to the Agent and
the Lenders as part of the officer's certificate required pursuant to SECTION
10.3 such revisions or updates to such Schedule(s) as may be necessary or
appropriate to update or correct such Schedule(s), provided that no such
revisions or updates to any Schedule(s) shall be deemed to have amended,
modified or superseded such Schedule(s) as originally attached hereto, or to
have cured any breach of warranty or representation resulting from the
inaccuracy or incompleteness of any such Schedule(s), unless and until the
Required Lenders in the exercise of their reasonable credit judgment, shall have
accepted in writing such revisions or updates to such Schedule(s).
85
92
NEGATIVE COVENANTS
Until the Revolving Credit Facility has been terminated and
all the Secured Obligations have been paid in full, unless the Required Lenders
shall otherwise consent in the manner set forth in SECTION 15.9, no Borrower
will directly or indirectly: FINANCIAL COVENANTS.
Breach the following financial covenant:
(a) Minimum Tangible Net Worth. For any Fiscal Quarter in which an
Availability Shortfall occurs and for each Fiscal Quarter thereafter, the
Borrowers shall not permit their consolidated Tangible Net Worth, as measured on
the last day of each such Fiscal Quarter, to be less than an amount equal to the
sum of (i) $175,950,000, PLUS (ii) seventy-five percent (75%) of the Net Income
(but not Net Loss) for each of the Fiscal Quarters commencing with the second
Fiscal Quarter of Fiscal Year 2001 through and including the Fiscal Quarter then
being measured; provided, however, if, subsequent to such Availability
Shortfall, Availability shall exceed $25,000,000 for a consecutive ninety (90)
day period, then on and after such period and for so long as Availability
remains above $25,000,000, the Borrowers shall be not required to comply with
the foregoing covenant until such time as another Availability Shortfall shall
have occurred.
INDEBTEDNESS FOR MONEY BORROWED. CREATE, ASSUME, OR OTHERWISE BECOME OR
REMAIN OBLIGATED IN RESPECT OF, OR PERMIT OR SUFFER TO EXIST OR TO BE CREATED,
ASSUMED OR INCURRED OR TO BE OUTSTANDING ANY INDEBTEDNESS FOR MONEY BORROWED,
EXCEPT FOR PERMITTED INDEBTEDNESS FOR MONEY BORROWED.
GUARANTIES. BECOME OR REMAIN LIABLE WITH RESPECT TO ANY GUARANTY OF ANY
OBLIGATION OF ANY OTHER PERSON, EXCEPT FOR PERMITTED GUARANTIES.
INVESTMENTS AND ACQUISITIONS. ACQUIRE, AFTER THE AGREEMENT DATE, ANY BUSINESS
UNIT OR INVESTMENT OR, AFTER SUCH DATE, PERMIT ANY INVESTMENT TO BE OUTSTANDING
OTHER THAN PERMITTED INVESTMENTS.
CAPITAL EXPENDITURES. MAKE ANY CAPITAL EXPENDITURES, PROVIDED HOWEVER,
THAT THE BORROWERS MAY MAKE OR INCUR CAPITAL EXPENDITURES DURING THE TERM HEREOF
SO LONG AS BEFORE AND AFTER GIVING EFFECT TO SUCH CAPITAL EXPENDITURES NO EVENT
OF DEFAULT OR AVAILABILITY SHORTFALL EXISTS OR WILL OCCUR AS A RESULT THEREOF.
RESTRICTED DISTRIBUTIONS AND PAYMENTS.
Declare or make any Restricted Distribution or Restricted Payment, other than
(a) Restricted Distributions or Restricted Payments described on SCHEDULE 11.6,
(b) Permitted Stock Repurchases and (c) Borrower Intercompany Debt, provided
however that, following an Event of Default, the portion of Borrower
Intercompany Debt that constitutes Subordinated Borrower Intercompany Debt shall
not be fully or partially paid, nor fully or partially satisfied by set-off, and
each and every Borrower, as both present and potential obligor and obligee,
expressly and specifically consents and agrees (i) to treatment of some or all
of their respective Borrower Intercompany Debt as Subordinated Borrower
Intercompany Debt in accordance herewith, and (ii) that the Subordinated
Borrower Intercompany Debt is hereby subordinated to the full and final
indefeasible payment of the Secured Obligations.
86
93
MERGER, CONSOLIDATION AND SALE OF ASSETS.
Merge or consolidate with any other Person or sell, lease or transfer or
otherwise dispose of all or a substantial portion of its assets to any Person,
including its stock or the capital stock of any of its Subsidiaries, other than
(i) sales of Inventory in the ordinary course of business; (ii) transfer of
assets between Borrowers in the ordinary course of business, (iii) combinations
or mergers of two or more Borrowers, or (iv) a liquidation or dissolution of any
Borrower (other than GFC) resulting in a liquidating distribution to another
Borrower, provided that, with respect to clauses (iii) and (iv) of this SECTION
11.7, the Agent has received at least thirty (30) days prior written notice
thereof.
87
94
TRANSACTIONS WITH AFFILIATES. EFFECT ANY TRANSACTION WITH ANY AFFILIATE
(OTHER THAN TRANSACTIONS BETWEEN OR AMONG THE BORROWERS) ON A BASIS LESS
FAVORABLE TO ANY BORROWER THAN WOULD BE THE CASE IF SUCH TRANSACTION HAD BEEN
EFFECTED WITH A PERSON NOT AN AFFILIATE WITHOUT THE EXPRESS PRIOR WRITTEN
CONSENT OF THE AGENT.
LIENS. CREATE, ASSUME OR PERMIT OR SUFFER TO EXIST OR TO BE CREATED OR ASSUMED
ANY LIEN ON ANY OF THE COLLATERAL, OTHER THAN PERMITTED LIENS.
OPERATING LEASES. ENTER INTO ANY LEASE OTHER THAN A CAPITALIZED LEASE
(AN "OPERATING LEASE"), WHICH WOULD CAUSE THE AGGREGATE AMOUNT OF THE BORROWERS'
PAYMENT OBLIGATIONS UNDER ITS OPERATING LEASE OBLIGATIONS (OTHER THAN
OBLIGATIONS WITH RESPECT TO LEASES OF STORES (AND RENEWALS AND SUBSTITUTIONS
THEREOF)) AND CAPITALIZED LEASE OBLIGATIONS TO EXCEED $10,000,000 IN THE
AGGREGATE DURING ANY FISCAL YEAR DURING THE TERM HEREOF.
BENEFIT PLANS. PERMIT OR TAKE ANY ACTION WHICH WOULD RESULT IN THE AGGREGATE
PRESENT VALUE OF UNFUNDED VESTED ACCRUED BENEFITS UNDER ALL BENEFIT PLANS OF
SUCH BORROWER TO EXCEED $0.00 OR PERMIT ANY CONDITION TO EXIST IN CONNECTION
WITH ANY BENEFIT PLAN WHICH MIGHT CONSTITUTE GROUNDS FOR THE PBGC TO INSTITUTE
PROCEEDINGS TO HAVE SUCH BENEFIT PLAN TERMINATED OR A TRUSTEE APPOINTED TO
ADMINISTER SUCH BENEFIT PLAN, AND ANY OTHER CONDITION, EVENT OR TRANSACTION WITH
RESPECT TO ANY BENEFIT PLAN WHICH COULD RESULT IN THE INCURRENCE BY SUCH
BORROWER OF ANY MATERIAL LIABILITY, FINE OR PENALTY.
SALES AND LEASEBACKS. ENTER INTO ANY SYNTHETIC LEASE OR ANY ARRANGEMENT WITH ANY
PERSON PROVIDING FOR SUCH BORROWER'S LEASING FROM SUCH PERSON ANY REAL OR
PERSONAL PROPERTY WHICH HAS BEEN OR IS TO BE SOLD OR TRANSFERRED, DIRECTLY OR
INDIRECTLY, BY SUCH BORROWER TO SUCH PERSON.
CAPITAL STRUCTURE AND BUSINESS. (A) MAKE ANY MATERIAL CHANGES IN ANY OF ITS
BUSINESS OBJECTIVES, PURPOSES OR OPERATIONS WHICH COULD REASONABLY BE EXPECTED
TO MATERIALLY AND ADVERSELY AFFECT THE REPAYMENT OF THE REVOLVING CREDIT LOANS
OR ANY OF THE OTHER SECURED OBLIGATIONS OR COULD REASONABLY BE EXPECTED TO
RESULT IN A MATERIALLY ADVERSE EFFECT ON SUCH BORROWER AND ITS SUBSIDIARIES AS A
WHOLE, (B) CHANGE ITS FISCAL YEAR OR (C) AMEND ITS CHARTER OR BYLAWS IN A MANNER
WHICH WOULD ADVERSELY AFFECT AGENT OR LENDERS OR SUCH BORROWER'S DUTY OR ABILITY
TO REPAY THE SECURED OBLIGATIONS.
NO IMPAIRMENT OF INTERCOMPANY TRANSFERS. DIRECTLY OR INDIRECTLY ENTER INTO OR
BECOME BOUND BY ANY AGREEMENT, INSTRUMENT, INDENTURE OR OTHER OBLIGATION (OTHER
THAN THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS) WHICH COULD DIRECTLY OR
INDIRECTLY RESTRICT, PROHIBIT OR REQUIRE THE CONSENT OF ANY PERSON WITH RESPECT
TO (A) THE PAYMENT OF DIVIDENDS OR DISTRIBUTIONS TO ANY BORROWER, (B) THE
PAYMENT OF ANY INDEBTEDNESS OR OTHER OBLIGATION OWED TO ANY BORROWER OR (C) THE
MAKING OR REPAYMENT OF INTERCOMPANY LOANS BY A SUBSIDIARY OF ANY BORROWER TO
SUCH BORROWER.
NO SPECULATIVE TRANSACTIONS. ENGAGE IN ANY TRANSACTION INVOLVING COMMODITY
OPTIONS, FUTURES CONTRACTS OR SIMILAR TRANSACTIONS, EXCEPT SOLELY TO HEDGE
AGAINST FLUCTUATIONS IN THE PRICES OF COMMODITIES OWNED OR PURCHASED BY IT AND
THE VALUES OF FOREIGN CURRENCIES RECEIVABLE OR PAYABLE BY IT AND INTEREST SWAPS,
CAPS OR COLLARS.
DEFAULT
EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default,
whatever the reason for such event and whether it shall be voluntary or
involuntary or be effected by operation
88
95
of law or pursuant to any judgment or order of any court or any order, rule or
regulation of any governmental or non-governmental body:
(GG) DEFAULT IN PAYMENT. ANY BORROWER SHALL DEFAULT IN ANY
PAYMENT OF PRINCIPAL OF OR INTEREST ON ANY REVOLVING CREDIT
LOANS OR ANY NOTE WHEN AND AS DUE (WHETHER AT MATURITY, BY
REASON OF ACCELERATION OR OTHERWISE).
(HH) OTHER PAYMENT DEFAULT. ANY BORROWER SHALL DEFAULT IN THE
PAYMENT, AS AND WHEN DUE, OF PRINCIPAL OF OR INTEREST ON, ANY
OTHER SECURED OBLIGATION, AND SUCH DEFAULT SHALL CONTINUE FOR
A PERIOD OF TEN (10) DAYS AFTER WRITTEN NOTICE THEREOF HAS
BEEN GIVEN TO SUCH BORROWER BY THE AGENT.
(II) MISREPRESENTATION. ANY REPRESENTATION OR WARRANTY, OTHER
THAN A QUALIFIED REPRESENTATION, MADE OR DEEMED TO BE MADE BY
ANY BORROWER UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT,
OR ANY AMENDMENT HERETO OR THERETO, SHALL AT ANY TIME PROVE TO
HAVE BEEN INCORRECT OR MISLEADING IN ANY MATERIAL RESPECT WHEN
MADE. ANY QUALIFIED REPRESENTATION MADE OR DEEMED TO BE MADE
BY ANY BORROWER UNDER THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR ANY AMENDMENT HERETO OR THERETO, SHALL AT ANY
TIME PROVE TO HAVE BEEN INCORRECT OR MISLEADING WHEN MADE.
(JJ) DEFAULT IN PERFORMANCE. ANY BORROWER SHALL DEFAULT IN THE
PERFORMANCE OR OBSERVANCE OF ANY TERM, COVENANT, CONDITION OR
AGREEMENT TO BE PERFORMED BY SUCH BORROWER, CONTAINED IN,
ARTICLES 7 or 11;
ARTICLES 8, 9, or 10 and such default, if such default is capable of being
cured, shall continue for a period of ten (10) Business Days after written
notice of such default has been given to such Borrower by Agent; or
any other provision of this Agreement (other than as specifically provided for
otherwise in this SECTION 12.1) and such default, if capable of being cured,
shall continue for a period of 30 days after written notice thereof has been
given to such Borrower by the Agent.
(KK) INDEBTEDNESS CROSS-DEFAULT. WITH RESPECT TO PERMITTED INDEBTEDNESS
FOR MONEY BORROWED (OTHER THAN BORROWER INTERCOMPANY DEBT),
Any Borrower or any subsidiary thereof shall fail to pay when due and payable
the principal of or interest on any Indebtedness (other than the Revolving
Credit Facility) in an amount outstanding in excess of $1,000,000. the maturity
of any such Indebtedness, individually or in the aggregate with other such
Indebtedness, in a principal amount exceeding $1,000,000 shall have (A) been
accelerated in accordance with the provisions of any indenture, contract or
instrument providing for the creation of or concerning such Indebtedness, or (B)
been required to be prepaid prior to the stated maturity thereof, or any event
shall have occurred and be continuing which would permit any holder or holders
of such Indebtedness, any trustee or agent acting on behalf of such holder or
holders or any other Person so to accelerate such maturity, and any Borrower or,
such Subsidiary shall have failed to cure such default prior to the expiration
of any applicable cure or grace period.
(LL) OTHER CROSS-DEFAULTS. ANY BORROWER OR ANY OF ITS SUBSIDIARIES
SHALL DEFAULT IN THE PAYMENT WHEN DUE, OR IN THE PERFORMANCE OR
OBSERVANCE, OF ANY OBLIGATION OR CONDITION OF ANY AGREEMENT, CONTRACT
OR LEASE (OTHER THAN THIS AGREEMENT, THE SECURITY DOCUMENTS OR ANY SUCH
AGREEMENT, CONTRACT OR LEASE RELATING TO PERMITTED INDEBTEDNESS FOR
MONEY BORROWED) IF THE EXISTENCE OF ANY SUCH DEFAULTS, SINGLY OR IN
89
96
THE AGGREGATE, COULD IN THE REASONABLE JUDGMENT OF THE AGENT HAVE A
MATERIALLY ADVERSE EFFECT.
(MM) VOLUNTARY BANKRUPTCY PROCEEDING. ANY BORROWER OR ANY OF ITS
SUBSIDIARIES SHALL (I) COMMENCE A VOLUNTARY CASE UNDER THE FEDERAL
BANKRUPTCY LAWS (AS NOW OR HEREAFTER IN EFFECT), (II) FILE A PETITION
SEEKING TO TAKE ADVANTAGE OF ANY OTHER LAWS, DOMESTIC OR FOREIGN,
RELATING TO BANKRUPTCY, INSOLVENCY, REORGANIZATION, WINDING UP OR
COMPOSITION FOR ADJUSTMENT OF DEBTS, (III) CONSENT TO OR FAIL TO
CONTEST IN A TIMELY AND APPROPRIATE MANNER ANY PETITION FILED AGAINST
IT IN AN INVOLUNTARY CASE UNDER SUCH BANKRUPTCY LAWS OR OTHER LAWS,
(IV) APPLY FOR OR CONSENT TO, OR FAIL TO CONTEST IN A TIMELY AND
APPROPRIATE MANNER, THE APPOINTMENT OF, OR THE TAKING OF POSSESSION BY,
A RECEIVER, CUSTODIAN, TRUSTEE, OR LIQUIDATOR OF ITSELF OR OF A
SUBSTANTIAL PART OF ITS PROPERTY, DOMESTIC OR FOREIGN, (V) ADMIT IN
WRITING ITS INABILITY TO PAY ITS DEBTS AS THEY BECOME DUE, (VI) MAKE A
GENERAL ASSIGNMENT FOR THE BENEFIT OF CREDITORS, OR (VII) TAKE ANY
CORPORATE ACTION FOR THE PURPOSE OF AUTHORIZING ANY OF THE FOREGOING.
(NN) INVOLUNTARY BANKRUPTCY PROCEEDING. A CASE OR OTHER PROCEEDING
SHALL BE COMMENCED AGAINST ANY BORROWER OR ANY OF ITS SUBSIDIARIES IN
ANY COURT OF COMPETENT JURISDICTION SEEKING (I) RELIEF UNDER THE
FEDERAL BANKRUPTCY LAWS (AS NOW OR HEREAFTER IN EFFECT) OR UNDER ANY
OTHER LAWS, DOMESTIC OR FOREIGN, RELATING TO BANKRUPTCY, INSOLVENCY,
REORGANIZATION, WINDING UP OR ADJUSTMENT OF DEBTS, (II) THE APPOINTMENT
OF A TRUSTEE, RECEIVER, CUSTODIAN, LIQUIDATOR OR THE LIKE OF ANY
BORROWER, ANY OF ITS SUBSIDIARIES OR OF ALL OR ANY SUBSTANTIAL PART OF
THE ASSETS, DOMESTIC OR FOREIGN, OF SUCH BORROWER OR ANY OF ITS
SUBSIDIARIES, AND SUCH CASE OR PROCEEDING SHALL CONTINUE UNDISMISSED OR
UNSTAYED FOR A PERIOD OF 60 CONSECUTIVE CALENDAR DAYS, OR AN ORDER
GRANTING THE RELIEF REQUESTED IN SUCH CASE OR PROCEEDING AGAINST SUCH
BORROWER OR ANY OF ITS SUBSIDIARIES (INCLUDING, BUT NOT LIMITED TO, AN
ORDER FOR RELIEF UNDER SUCH FEDERAL BANKRUPTCY LAWS) SHALL BE ENTERED.
(OO) LOAN DOCUMENTS. ANY EVENT OF DEFAULT OR EVENT OF DEFAULT UNDER ANY
OTHER LOAN DOCUMENT SHALL OCCUR OR ANY BORROWER SHALL DEFAULT IN THE
PERFORMANCE OR OBSERVANCE OF ANY MATERIAL TERM, COVENANT, CONDITION OR
AGREEMENT CONTAINED IN, OR THE PAYMENT OF ANY OTHER SUM COVENANTED TO
BE PAID BY SUCH BORROWER UNDER, ANY SUCH LOAN DOCUMENT OR ANY PROVISION
OF THIS AGREEMENT, OR OF ANY OTHER LOAN DOCUMENT AFTER DELIVERY THEREOF
HEREUNDER, SHALL FOR ANY REASON CEASE TO BE VALID AND BINDING, OTHER
THAN A NONMATERIAL PROVISION RENDERED UNENFORCEABLE BY OPERATION OF
LAW, OR SUCH BORROWER OR OTHER PARTY THERETO (OTHER THAN THE AGENT OR A
LENDER) SHALL SO STATE IN WRITING, OR THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, AFTER DELIVERY THEREOF HEREUNDER, SHALL FOR ANY REASON (OTHER
THAN ANY ACTION TAKEN INDEPENDENTLY BY THE AGENT OR A LENDER AND EXCEPT
TO THE EXTENT PERMITTED BY THE TERMS THEREOF) CEASE TO CREATE A VALID,
PERFECTED AND, EXCEPT AS OTHERWISE EXPRESSLY PERMITTED HEREIN, FIRST
PRIORITY LIEN ON, OR SECURITY INTEREST IN, ANY OF THE COLLATERAL
PURPORTED TO BE COVERED THEREBY.
(PP) JUDGMENT. ANY JUDGMENT OR ORDER FOR THE PAYMENT OF MONEY WARRANT,
WRIT OF ATTACHMENT, EXECUTION OR SIMILAR PROCESS WHICH EXCEEDS IN
AMOUNT OR VALUE $1,000,000 INDIVIDUALLY OR IN THE AGGREGATE SHALL BE
ENTERED AGAINST ANY BORROWER BY ANY COURT AND SUCH JUDGMENT, ORDER,
WARRANT, WRIT OF ATTACHMENT, EXECUTION OR SIMILAR PROCESS SHALL
CONTINUE UNDISCHARGED OR UNSTAYED FOR THIRTY (30) DAYS.
90
97
(QQ) ERISA. (I) ANY TERMINATION EVENT WITH RESPECT TO A BENEFIT PLAN
SHALL OCCUR THAT, AFTER TAKING INTO ACCOUNT THE EXCESS, IF ANY, OF (A)
THE PRESENT VALUE ON SUCH DAY OF ALL VESTED NONFORFEITABLE BENEFITS
UNDER SUCH OTHER PLAN, OVER (B) THE FAIR MARKET VALUE OF THE ASSETS OF
ANY OTHER BENEFIT PLAN WITH RESPECT TO WHICH A TERMINATION EVENT OCCURS
ON THE SAME DAY (BUT ONLY TO THE EXTENT THAT SUCH EXCESS IS THE
PROPERTY OF A BORROWER), RESULTS IN AN UNFUNDED VESTED ACCRUED BENEFIT
IN EXCESS OF $0.00, OR (II) ANY PLAN SHALL INCUR AN "ACCUMULATED
FUNDING DEFICIENCY" (AS DEFINED IN SECTION 412 OF THE CODE OR SECTION
302 OF ERISA) FOR WHICH A WAIVER HAS NOT BEEN OBTAINED IN ACCORDANCE
WITH THE APPLICABLE PROVISIONS OF THE CODE AND ERISA, OR (III) ANY
BORROWER IS IN "DEFAULT" (AS DEFINED IN SECTION 4219(C)(5) OF ERISA)
WITH RESPECT TO PAYMENTS TO A MULTIEMPLOYER PLAN RESULTING FROM SUCH
BORROWER'S COMPLETE OR PARTIAL WITHDRAWAL (AS DESCRIBED IN SECTION 4203
OR 4205 OF ERISA) FROM SUCH MULTIEMPLOYER PLAN.
(RR) QUALIFIED AUDITS. THE INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
RETAINED BY THE BORROWERS OR ANY BORROWER SHALL REFUSE TO DELIVER AN
OPINION IN ACCORDANCE WITH Section 10.1(a) WITH RESPECT TO THE ANNUAL
FINANCIAL STATEMENTS OF THE BORROWERS OR SUCH BORROWER. CHANGE OF
CONTROL. IF GFC SHALL CEASE TO OWN, DIRECTLY OR INDIRECTLY, 100% OF THE
OUTSTANDING CAPITAL STOCK OF, OR OTHER EQUITY OR OWNERSHIP INTEREST IN,
ANY OTHER BORROWER AND ANY OF THEIR RESPECTIVE SUBSIDIARIES.
(SS) MATERIAL ADVERSE CHANGE. THERE OCCURS ANY ACT, OMISSION, EVENT,
UNDERTAKING OR CIRCUMSTANCE OR SERIES OF ACTS, OMISSIONS, EVENTS,
UNDERTAKINGS OR CIRCUMSTANCES WHICH HAVE, OR WOULD HAVE, EITHER
INDIVIDUALLY OR IN THE AGGREGATE, A MATERIALLY ADVERSE EFFECT.
REMEDIES.
(TT) AUTOMATIC ACCELERATION AND TERMINATION OF FACILITIES. UPON THE
OCCURRENCE OF AN EVENT OF DEFAULT SPECIFIED IN Section 12.1(g) OR (h),
(I) THE PRINCIPAL OF AND THE INTEREST ON THE REVOLVING CREDIT LOANS AND
ANY NOTE AT THE TIME OUTSTANDING, AND ALL OTHER AMOUNTS OWED TO THE
AGENT OR THE LENDERS UNDER THIS AGREEMENT OR ANY OF THE LOAN DOCUMENTS
AND ALL OTHER SECURED OBLIGATIONS, SHALL THEREUPON BECOME DUE AND
PAYABLE WITHOUT PRESENTMENT, DEMAND, PROTEST, OR OTHER NOTICE OF ANY
KIND, ALL OF WHICH ARE EXPRESSLY WAIVED, ANYTHING IN THIS AGREEMENT OR
ANY OF THE LOAN DOCUMENTS TO THE CONTRARY NOTWITHSTANDING, AND (II) THE
REVOLVING CREDIT FACILITY AND THE RIGHT OF ANY BORROWER TO REQUEST
BORROWINGS UNDER THIS AGREEMENT SHALL IMMEDIATELY TERMINATE.
(UU) OTHER REMEDIES. IF ANY EVENT OF DEFAULT SHALL HAVE OCCURRED, AND
DURING THE CONTINUANCE OF ANY SUCH EVENT OF DEFAULT, THE AGENT MAY
WITHOUT NOTICE, AND AT THE DIRECTION OF THE REQUIRED LENDERS IN THEIR
SOLE AND ABSOLUTE DISCRETION SHALL, DO ANY OF THE FOLLOWING:
declare the principal of and interest on the Revolving Credit Loans and any Note
at the time outstanding, and all other amounts owed to the Agent or the Lenders
under this Agreement or any of the Loan Documents and all other Secured
Obligations, to be forthwith due and payable, whereupon the same shall
immediately become due and payable without presentment, demand, protest or other
notice of any kind, all of which are expressly waived, anything in this
Agreement or the Loan Documents to the contrary notwithstanding;
91
98
terminate the Revolving Credit Facility and any other right of the Borrowers to
request borrowings hereunder; notify, or request the Borrowers to notify, in
writing or otherwise, any Account Debtor or obligor with respect to any one or
more of the Accounts to make payment to the Agent, for the benefit of the
Lenders, or any agent or designee of the Agent, at such address as may be
specified by the Agent and if, notwithstanding the giving of any notice, any
Account Debtor or other such obligor shall make payments to any Borrower, such
Borrower shall hold all such payments it receives in trust for the Agent, for
the account of the Lenders, without commingling the same with other funds or
property of, or held by, such Borrower, and shall deliver the same to the Agent
or any such agent or designee of the Agent immediately upon receipt by such
Borrower in the identical form received, together with any necessary
endorsements; settle or adjust disputes and claims directly with Account Debtors
and other obligors on Accounts for amounts and on terms which the Agent
reasonably considers advisable and in all such cases only the net amounts
received by the Agent, for the account of the Lenders, in payment of such
amounts, after deductions of costs and reasonable attorneys' fees, shall
constitute Collateral and no Borrower shall have any further right to make any
such settlements or adjustments or to accept any returns of merchandise; through
self-help, without notice, demand or judicial or other process, enter upon any
premises in which Collateral including without limitation, any Inventory, may be
located and, without resistance or interference by any Borrower, take physical
possession of any or all thereof and maintain such possession on such premises
or move the same or any part thereof to such other place or places as the Agent
shall choose, without being liable to such Borrower on account of any loss,
damage or depreciation that may occur as a result thereof, so long as the Agent
shall act reasonably and in good faith; require each Borrower to and each
Borrower shall, at its own cost and expense and without charge to the Agent or
any Lender, assemble the Collateral including without limitation, the Inventory,
and maintain or deliver it into the possession of the Agent or any agent or
representative of the Agent at such place or places as the Agent may designate
and as are reasonably convenient to both the Agent and such Borrower; at the
expense of each Borrower, cause any of the Collateral to be placed in a public
or field warehouse, and the Agent shall not be liable to such Borrower on
account of any loss, damage or depreciation that may occur as a result thereof,
so long as the Agent shall act reasonably and in its reasonable credit judgment;
through self-help and without notice, demand or judicial or other process, and
without payment of any rent or any other charge, enter any or all of each
Borrower's premises and, without breach of the peace, until the Agent, on behalf
of the Lenders, completes the enforcement of its rights in the Collateral, take
possession of such premises or place custodians in exclusive control thereof,
remain on such premises and use the same and any of such Borrower's Collateral,
for the purpose of (A) preparing any Inventory for disposition and disposing
thereof and (B) collecting any Account, and the Agent for the benefit of the
Lenders is hereby granted, effective upon an Event of Default, a license or
sublicense and all other rights as may be necessary, appropriate or desirable to
use the proprietary rights in connection with the foregoing, and the rights of
such Borrower under all licenses, sublicenses and franchise agreements shall
inure to the Agent for the benefit of the Lenders (provided, however, that any
use of any federally
92
99
registered trademarks as to any goods shall be subject to the control as to the
quality of such goods of the owner of such trademarks and the goodwill of the
business symbolized thereby); exercise any and all of its rights under any and
all of the Security Documents; apply any Collateral consisting of cash to the
payment of the Secured Obligations in accordance with SECTION 12.3 hereof or in
any order in which the Agent, on behalf of the Lenders, may elect or use such
cash in connection with the exercise of any of its other rights hereunder or
under any of the Security Documents; establish or cause to be established one or
more Lockboxes or other arrangement for the deposit of proceeds of Accounts,
and, in such case, each Borrower shall cause to be forwarded to the Agent at the
Agent's Office, on a daily basis, copies of all checks and other items of
payment and deposit slips related thereto deposited in such Lockboxes, together
with Collection Reports in accordance with SECTION 8.10(A), in form and
substance satisfactory to the Agent; and exercise all of the rights and remedies
of a secured party under the Uniform Commercial Code and under any other
Applicable Law, including, without limitation, the right, without notice except
as specified below and with or without taking the possession thereof, to sell
the Collateral or any part thereof in one or more parcels at public or private
sale, at any location chosen by the Agent, for cash, on credit or for future
delivery, and at such price or prices and upon such other terms as are
commercially reasonable. Each Borrower agrees that, to the extent notice of sale
shall be required by law, at least ten (10) days notice to such Borrower of the
time and place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification, but notice given in any other
reasonable manner or at any other reasonable time shall constitute reasonable
notification. The Agent shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. The Agent may adjourn any public
or private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned.
APPLICATION OF PROCEEDS. All proceeds from each sale of, or other realization
upon, all or any part of the Collateral following an Event of Default shall be
applied or paid over as follows:
(VV) FIRST: TO THE PAYMENT OF ALL COSTS AND EXPENSES INCURRED IN
CONNECTION WITH SUCH SALE OR OTHER REALIZATION, INCLUDING ATTORNEYS'
FEES AND EXPENSES ACTUALLY INCURRED (INCLUDING, WITHOUT LIMITATION, THE
EXPENSES AND OTHER ALLOCATED COSTS OF INTERNAL COUNSEL),
(WW) SECOND: TO THE PAYMENT OF THE SECURED OBLIGATIONS AND THE CREATION
OF A FUND IN AN AMOUNT EQUAL TO THE LETTER OF CREDIT RESERVE, WHICH
FUND SHALL BE HELD BY AGENT, FOR THE BENEFIT OF ITSELF AND THE LENDERS,
AS SECURITY FOR AND APPLIED TO THE PAYMENT OF ANY AMOUNTS WHICH MAY
THEREAFTER BECOME DUE UNDER THE LETTER OF CREDIT FACILITY (WITH EACH
BORROWER REMAINING LIABLE FOR ANY DEFICIENCY), OR ANY ORDER THAT AGENT
MAY ELECT AND,
(XX) THIRD: THE BALANCE (IF ANY) OF SUCH PROCEEDS SHALL BE PAID TO THE
BORROWERS, SUBJECT TO ANY DUTY IMPOSED BY LAW, OR OTHERWISE TO
WHOMSOEVER SHALL BE ENTITLED THERETO.
EACH BORROWER SHALL REMAIN LIABLE AND WILL PAY, ON DEMAND, ANY DEFICIENCY
REMAINING IN RESPECT OF THE SECURED OBLIGATIONS, TOGETHER WITH INTEREST THEREON
AT A
93
100
RATE PER ANNUM EQUAL TO THE HIGHEST RATE THEN PAYABLE HEREUNDER ON SUCH SECURED
OBLIGATIONS, WHICH INTEREST SHALL CONSTITUTE PART OF THE SECURED OBLIGATIONS.
MISCELLANEOUS PROVISION CONCERNING REMEDIES.
(YY) RIGHTS CUMULATIVE. THE RIGHTS AND REMEDIES OF THE AGENT AND THE
LENDERS UNDER THIS AGREEMENT, THE NOTES AND EACH OF THE LOAN DOCUMENTS
SHALL BE CUMULATIVE AND NOT EXCLUSIVE OF ANY RIGHTS OR REMEDIES WHICH
IT OR THEY WOULD OTHERWISE HAVE. IN EXERCISING SUCH RIGHTS AND REMEDIES
THE AGENT AND THE LENDERS MAY BE SELECTIVE AND NO FAILURE OR DELAY BY
THE AGENT OR ANY LENDER IN EXERCISING ANY RIGHT SHALL OPERATE AS A
WAIVER OF IT, NOR SHALL ANY SINGLE OR PARTIAL EXERCISE OF ANY POWER OR
RIGHT PRECLUDE ITS OTHER OR FURTHER EXERCISE OR THE EXERCISE OF ANY
OTHER POWER OR RIGHT.
(ZZ) WAIVER OF MARSHALING. EACH BORROWER HEREBY WAIVES ANY RIGHT TO
REQUIRE ANY MARSHALING OF ASSETS AND ANY SIMILAR RIGHT.
(AAA) LIMITATION OF LIABILITY. NOTHING CONTAINED IN THIS Article 12 OR
ELSEWHERE IN THIS AGREEMENT OR IN ANY OF THE LOAN DOCUMENTS SHALL BE
CONSTRUED AS REQUIRING OR OBLIGATING THE AGENT, ANY LENDER OR ANY AGENT
OR DESIGNEE OF THE AGENT OR ANY LENDER TO MAKE ANY DEMAND, OR TO MAKE
ANY INQUIRY AS TO THE NATURE OR SUFFICIENCY OF ANY PAYMENT RECEIVED BY
IT, OR TO PRESENT OR FILE ANY CLAIM OR NOTICE OR TAKE ANY ACTION, WITH
RESPECT TO ANY ACCOUNT OR ANY OTHER COLLATERAL OR THE MONIES DUE OR TO
BECOME DUE THEREUNDER OR IN CONNECTION THEREWITH, OR TO TAKE ANY STEPS
NECESSARY TO PRESERVE ANY RIGHTS AGAINST PRIOR PARTIES, AND THE AGENT,
THE LENDERS AND THEIR AGENTS OR DESIGNEES SHALL HAVE NO LIABILITY TO
ANY BORROWER FOR ACTIONS TAKEN PURSUANT TO THIS Article 12, ANY OTHER
PROVISION OF THIS AGREEMENT OR ANY OF THE LOAN DOCUMENTS SO LONG AS THE
AGENT OR SUCH LENDER SHALL ACT REASONABLY AND IN ITS REASONABLE CREDIT
JUDGMENT.
(BBB) APPOINTMENT OF RECEIVER. IN ANY ACTION UNDER THIS Article 12, THE
AGENT SHALL BE ENTITLED DURING THE CONTINUANCE OF AN EVENT OF DEFAULT
TO THE APPOINTMENT OF A RECEIVER, WITHOUT NOTICE OF ANY KIND
WHATSOEVER, TO TAKE POSSESSION OF ALL OR ANY PORTION OF THE COLLATERAL
AND TO EXERCISE SUCH POWER AS THE COURT SHALL CONFER UPON SUCH
RECEIVER.
(CCC) POWER OF ATTORNEY. EACH BORROWER SHALL EXECUTE AND DELIVER TO THE
AGENT, AND AGENT, FOR THE BENEFIT OF ITSELF AND THE LENDERS, SHALL HAVE
THE RIGHTS AND POWERS GRANTED AND AUTHORIZED BY SUCH BORROWER PURSUANT
TO, THE POWER OF ATTORNEY ATTACHED HERETO AS Exhibit F.
TRADEMARK LICENSE. Each Borrower hereby grants to the Agent, for the benefit of
the Lenders, to the extent of such Borrower's rights therein and to the extent
permitted by the various license agreements relating thereto, the nonexclusive
right and license, on and after an Event of Default, to use the trademarks and
tradenames or other Intellectual Property set forth on SCHEDULES 6.1(AA) and
6.1(BB) and any other such trademark, tradename or property then used by such
Borrower, for the purposes set forth in SECTION 12.2(B)(VIII) and for the
purpose of enabling the Agent to realize on the Collateral and to permit any
purchaser of any portion of the Collateral through a foreclosure sale or any
other exercise of the Agent's rights and remedies under the Loan Documents to
use, sell or otherwise dispose of the Collateral bearing any such trademark.
Such right and license is granted free of charge, without the requirement that
any monetary payment whatsoever be made to such Borrower or any other Person by
the Agent. Each Borrower hereby represents, warrants, covenants and agrees that,
except as set forth in the
94
101
license agreements, it presently has, and shall continue to have, the right,
without the approval or consent of others, to grant the license set forth in
this SECTION 12.5.
ASSIGNMENTS
SUCCESSORS AND ASSIGNS; PARTICIPATIONS.
(DDD) THIS AGREEMENT SHALL BE BINDING UPON AND INURE TO THE BENEFIT OF
EACH BORROWER, THE LENDERS, THE AGENT, ALL FUTURE HOLDERS OF THE NOTES,
AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS, EXCEPT THAT NO BORROWER
MAY ASSIGN OR TRANSFER ANY OF ITS RIGHTS OR OBLIGATIONS UNDER THIS
AGREEMENT WITHOUT THE PRIOR WRITTEN CONSENT OF EACH LENDER, AND ANY
SUCH ATTEMPTED ASSIGNMENT OR TRANSFER BY ANY BORROWER EXCEPT IN STRICT
COMPLIANCE WITH THE PROVISIONS HEREOF SHALL BE NULL AND VOID, AND OF NO
FORCE OR EFFECT.
(EEE) EACH LENDER MAY ASSIGN TO ONE OR MORE ELIGIBLE ASSIGNEES ALL OR A
PORTION OF ITS INTERESTS, RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT
(INCLUDING, WITHOUT LIMITATION, ALL OR A PORTION OF THE REVOLVING
CREDIT LOANS AT THE TIME OWING TO IT AND THE NOTES HELD BY IT);
PROVIDED, HOWEVER, THAT (I) EACH SUCH ASSIGNMENT SHALL BE OF A
CONSTANT, AND NOT A VARYING, PERCENTAGE OF ALL THE ASSIGNING LENDER'S
RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT, (II) THE AMOUNT OF THE
COMMITMENT OF THE ASSIGNING LENDER THAT IS SUBJECT TO EACH SUCH
ASSIGNMENT (DETERMINED AS OF THE DATE THE ASSIGNMENT AND TRANSFER WITH
RESPECT TO SUCH ASSIGNMENT IS DELIVERED TO THE AGENT) SHALL IN NO EVENT
BE LESS THAN $10,000,000 (THE "MINIMUM COMMITMENT"), (III) IN THE CASE
OF A PARTIAL ASSIGNMENT, THE AMOUNT OF THE COMMITMENT THAT IS RETAINED
BY THE ASSIGNING LENDER (DETERMINED AS OF THE DATE THE ASSIGNMENT AND
TRANSFER WITH RESPECT TO SUCH ASSIGNMENT IS DELIVERED TO THE AGENT)
SHALL IN NO EVENT BE LESS THAN THE MINIMUM COMMITMENT, (IV) THE PARTIES
TO EACH SUCH ASSIGNMENT SHALL EXECUTE AND DELIVER TO THE AGENT, FOR ITS
ACCEPTANCE AND RECORDING IN THE REGISTER (AS HEREINAFTER DEFINED) AN
ASSIGNMENT AND TRANSFER, TOGETHER WITH ANY NOTE OR NOTES SUBJECT TO
SUCH ASSIGNMENT AND SUCH ASSIGNEE'S COMMITMENT PERCENTAGE OF THE
AGENT'S SYNDICATION EXPENSES, (V) SUCH ASSIGNMENT SHALL NOT, WITHOUT
THE CONSENT OF EACH BORROWER, REQUIRE ANY BORROWER TO FILE A
REGISTRATION STATEMENT WITH THE SECURITIES AND EXCHANGE COMMISSION OR
APPLY TO OR QUALIFY THE REVOLVING CREDIT LOANS OR THE NOTES UNDER THE
BLUE SKY LAWS OF ANY STATE, (VI) THE REPRESENTATION CONTAINED IN
Section 13.2 HEREOF SHALL BE TRUE WITH RESPECT TO ANY SUCH PROPOSED
ASSIGNEE AND (VII) SUCH LENDER PROVIDES NOTICE TO EACH BORROWER OF THE
IDENTITY OF THE ELIGIBLE ASSIGNEE. UPON SUCH EXECUTION, DELIVERY,
ACCEPTANCE AND RECORDING, FROM AND AFTER THE EFFECTIVE DATE SPECIFIED
IN EACH ASSIGNMENT AND TRANSFER, WHICH EFFECTIVE DATE SHALL BE AT LEAST
FIVE (5) BUSINESS DAYS AFTER THE EXECUTION THEREOF, (X) THE ASSIGNEE
THEREUNDER SHALL BE A PARTY HERETO AND, TO THE EXTENT PROVIDED IN SUCH
ASSIGNMENT AND TRANSFER, HAVE THE RIGHTS AND OBLIGATIONS OF A LENDER
HEREUNDER, AND (Y) THE LENDER ASSIGNOR THEREUNDER SHALL, TO THE EXTENT
PROVIDED IN SUCH ASSIGNMENT, BE RELEASED FROM ITS OBLIGATIONS UNDER
THIS AGREEMENT.
(FFF) BY EXECUTING AND DELIVERING AN ASSIGNMENT AND TRANSFER, THE
LENDER ASSIGNOR THEREUNDER AND THE ASSIGNEE THEREUNDER CONFIRM TO AND
AGREE WITH EACH OTHER AND THE OTHER PARTIES HERETO AS FOLLOWS: (I)
OTHER THAN THE REPRESENTATION AND WARRANTY
95
102
THAT IT IS THE LEGAL AND BENEFICIAL OWNER OF THE INTEREST BEING
ASSIGNED THEREBY FREE AND CLEAR OF ANY ADVERSE CLAIM, SUCH LENDER
ASSIGNOR MAKES NO REPRESENTATION OR WARRANTY AND ASSUMES NO
RESPONSIBILITY WITH RESPECT TO ANY STATEMENTS, WARRANTIES OR
REPRESENTATIONS MADE IN OR IN CONNECTION WITH THIS AGREEMENT OR THE
EXECUTION, LEGALITY, VALIDITY, ENFORCEABILITY, GENUINENESS, SUFFICIENCY
OR VALUE OF THIS AGREEMENT OR ANY OTHER INSTRUMENT OR DOCUMENT
FURNISHED PURSUANT HERETO; (II) SUCH LENDER ASSIGNOR MAKES NO
REPRESENTATION OR WARRANTY AND ASSUMES NO RESPONSIBILITY WITH RESPECT
TO THE FINANCIAL CONDITION OF ANY BORROWER OR THE PERFORMANCE OR
OBSERVANCE BY ANY BORROWER OF ANY OF ITS OBLIGATIONS UNDER THIS
AGREEMENT OR ANY OTHER INSTRUMENT OR DOCUMENT FURNISHED PURSUANT
HERETO; (III) SUCH ASSIGNEE CONFIRMS THAT IT HAS RECEIVED A COPY OF
THIS AGREEMENT, TOGETHER WITH COPIES OF THE FINANCIAL STATEMENTS
REFERRED TO IN Section 6.1(m) 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 TRANSFER; (IV) SUCH ASSIGNEE
WILL, INDEPENDENTLY AND WITHOUT RELIANCE UPON THE AGENT, SUCH LENDER
ASSIGNOR OR ANY OTHER LENDER, AND BASED ON SUCH DOCUMENTS AND
INFORMATION AS IT SHALL DEEM APPROPRIATE AT THE TIME, CONTINUE TO MAKE
ITS OWN CREDIT DECISIONS IN TAKING OR NOT TAKING ACTION UNDER THIS
AGREEMENT; (V) SUCH ASSIGNEE CONFIRMS THAT IT IS AN ELIGIBLE ASSIGNEE;
(VI) SUCH ASSIGNEE APPOINTS AND AUTHORIZES THE AGENT TO TAKE SUCH
ACTION AS AGENT ON ITS BEHALF AND TO EXERCISE SUCH POWERS UNDER THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS AS ARE DELEGATED TO THE AGENT BY
THE TERMS HEREOF AND THEREOF, TOGETHER WITH SUCH POWERS AS ARE
REASONABLY INCIDENTAL THERETO; AND (VII) SUCH ASSIGNEE AGREES THAT IT
WILL PERFORM IN ACCORDANCE WITH THEIR TERMS ALL OF THE OBLIGATIONS
WHICH BY THE TERMS OF THIS AGREEMENT ARE REQUIRED TO BE PERFORMED BY IT
AS A LENDER.
(GGG) THE AGENT SHALL MAINTAIN A COPY OF EACH ASSIGNMENT AND TRANSFER
DELIVERED TO IT AND A REGISTER FOR THE RECORDATION OF THE NAMES AND
ADDRESSES OF THE LENDERS AND THE COMMITMENT PERCENTAGE OF, AND
PRINCIPAL AMOUNT OF THE REVOLVING CREDIT LOANS OWING TO, EACH LENDER
FROM TIME TO TIME (THE "REGISTER"). THE ENTRIES IN THE REGISTER SHALL
BE CONCLUSIVE, IN THE ABSENCE OF MANIFEST ERROR, AND EACH BORROWER, THE
AGENT AND THE LENDERS MAY TREAT EACH PERSON WHOSE NAME IS RECORDED IN
THE REGISTER AS A LENDER HEREUNDER FOR ALL PURPOSES OF THIS AGREEMENT.
THE REGISTER SHALL BE AVAILABLE FOR INSPECTION BY THE BORROWER OR ANY
LENDER AT ANY REASONABLE TIME AND FROM TIME TO TIME UPON REASONABLE
PRIOR NOTICE.
(HHH) UPON ITS RECEIPT OF AN ASSIGNMENT AND TRANSFER EXECUTED BY AN
ASSIGNING LENDER AND AN ELIGIBLE ASSIGNEE TOGETHER WITH ANY NOTE OR
NOTES SUBJECT TO SUCH ASSIGNMENT AND THE WRITTEN CONSENT TO SUCH
ASSIGNMENT, THE AGENT SHALL, IF SUCH ASSIGNMENT AND TRANSFER HAS BEEN
COMPLETED AND IS IN THE FORM OF Exhibit G, (I) ACCEPT SUCH ASSIGNMENT
AND TRANSFER, (II) RECORD THE INFORMATION CONTAINED THEREIN IN THE
REGISTER, (III) GIVE PROMPT NOTICE THEREOF TO THE LENDERS AND EACH
BORROWER, AND (IV) PROMPTLY DELIVER A COPY OF SUCH ASSIGNMENT AND
TRANSFER TO EACH BORROWER. WITHIN FIVE (5) BUSINESS DAYS AFTER RECEIPT
OF NOTICE, EACH BORROWER SHALL EXECUTE AND DELIVER TO THE AGENT IN
EXCHANGE FOR THE SURRENDERED NOTE OR NOTES, A NEW NOTE OR NOTES TO THE
ORDER OF SUCH ELIGIBLE ASSIGNEE IN AMOUNTS EQUAL TO THE COMMITMENT
PERCENTAGE ASSUMED BY SUCH ELIGIBLE ASSIGNEE PURSUANT TO SUCH
ASSIGNMENT AND TRANSFER AND A NEW NOTE OR NOTES TO THE ORDER OF THE
ASSIGNING LENDER IN AN AMOUNT EQUAL TO THE
96
103
COMMITMENT RETAINED BY IT HEREUNDER. SUCH NEW NOTE OR NOTES SHALL BE IN
AN AGGREGATE PRINCIPAL AMOUNT EQUAL TO THE AGGREGATE PRINCIPAL AMOUNT
OF SUCH SURRENDERED NOTE OR NOTES, SHALL BE DATED THE EFFECTIVE DATE OF
SUCH ASSIGNMENT AND TRANSFER AND SHALL OTHERWISE BE IN SUBSTANTIALLY
THE FORM OF THE ASSIGNED NOTES DELIVERED TO THE ASSIGNOR LENDER.
ASSIGNOR LENDERS SHALL CANCEL AND RETURN THE OLD NOTE OR NOTES TO THE
BORROWERS' PROMPTLY AFTER DELIVERY OF THE NEW NOTE OR NOTES TO THE
APPLICABLE LENDERS.
(III) EACH LENDER MAY, WITHOUT THE CONSENT OF ANY BORROWER, SELL
PARTICIPATIONS TO ONE OR MORE BANKS OR OTHER ENTITIES IN ALL OR A
PORTION OF ITS RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT (INCLUDING,
WITHOUT LIMITATION, ALL OR A PORTION OF ITS COMMITMENTS HEREUNDER AND
THE REVOLVING CREDIT LOANS OWING TO IT AND THE NOTES HELD BY IT);
PROVIDED, HOWEVER, THAT (I) EACH SUCH PARTICIPATION SHALL BE IN AN
AMOUNT NOT LESS THAN THE MINIMUM COMMITMENT, (II) SUCH LENDER'S
OBLIGATIONS UNDER THIS AGREEMENT (INCLUDING, WITHOUT LIMITATION, ITS
COMMITMENTS HEREUNDER) SHALL REMAIN UNCHANGED, (III) SUCH LENDER SHALL
REMAIN SOLELY RESPONSIBLE TO THE OTHER PARTIES HERETO FOR THE
PERFORMANCE OF SUCH OBLIGATIONS, (IV) SUCH LENDER SHALL REMAIN THE
HOLDER OF THE NOTES HELD BY IT FOR ALL PURPOSES OF THIS AGREEMENT, (V)
EACH BORROWER, THE AGENT AND THE OTHER LENDERS SHALL CONTINUE TO DEAL
SOLELY AND DIRECTLY WITH SUCH LENDER IN CONNECTION WITH SUCH LENDER'S
RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT; PROVIDED, THAT SUCH LENDER
MAY AGREE WITH ANY PARTICIPANT THAT SUCH LENDER WILL NOT, WITHOUT SUCH
PARTICIPANT'S CONSENT, AGREE TO OR APPROVE ANY WAIVERS OR AMENDMENTS
WHICH WOULD REDUCE THE PRINCIPAL OF OR THE INTEREST RATE ON ANY
REVOLVING CREDIT LOANS, EXTEND THE TERM OR INCREASE THE AMOUNT OF THE
COMMITMENTS OF SUCH PARTICIPANT, REDUCE THE AMOUNT OF ANY FEES TO WHICH
SUCH PARTICIPANT IS ENTITLED, EXTEND ANY SCHEDULED PAYMENT DATE FOR
PRINCIPAL OR RELEASE COLLATERAL SECURING THE REVOLVING CREDIT LOANS
(OTHER THAN COLLATERAL DISPOSED OF PURSUANT TO THE TERMS OF THIS
AGREEMENT OR THE SECURITY DOCUMENTS), AND (VI) ANY SUCH DISPOSITION
SHALL NOT, WITHOUT THE CONSENT OF SUCH BORROWER, REQUIRE SUCH BORROWER
TO FILE A REGISTRATION STATEMENT WITH THE SECURITIES AND EXCHANGE
COMMISSION TO APPLY TO QUALIFY THE REVOLVING CREDIT LOANS OR THE NOTES
UNDER THE BLUE SKY LAW OF ANY STATE.
(JJJ) ANY LENDER MAY, IN CONNECTION WITH ANY ASSIGNMENT, PROPOSED
ASSIGNMENT, PARTICIPATION OR PROPOSED PARTICIPATION PURSUANT TO THIS
Section 13.1, DISCLOSE TO THE ASSIGNEE, PARTICIPANT, PROPOSED ASSIGNEE
OR PROPOSED PARTICIPANT, ANY INFORMATION RELATING TO EACH BORROWER
FURNISHED TO SUCH LENDER BY OR ON BEHALF OF SUCH BORROWER; PROVIDED
THAT, PRIOR TO ANY SUCH DISCLOSURE, EACH SUCH-ASSIGNEE, PROPOSED
ASSIGNEE, PARTICIPANT OR PROPOSED PARTICIPANT SHALL AGREE WITH SUCH
BORROWER OR SUCH LENDER (WHICH IN THE CASE OF AN AGREEMENT WITH ONLY
SUCH LENDER, SUCH BORROWER SHALL BE RECOGNIZED AS A THIRD PARTY
BENEFICIARY THEREOF) TO PRESERVE THE CONFIDENTIALITY OF ANY
CONFIDENTIAL INFORMATION RELATING TO SUCH BORROWER RECEIVED FROM SUCH
LENDER.
(KKK) EACH BORROWER SHALL ASSIST ANY LENDER PERMITTED TO SELL
ASSIGNMENTS OR PARTICIPATIONS UNDER THIS Section 13.1 AS REASONABLY
REQUIRED TO ENABLE THE ASSIGNING OR SELLING LENDER TO EFFECT ANY SUCH
ASSIGNMENT OR PARTICIPATION, INCLUDING, WITHOUT LIMITATION, (I) PROMPT
ASSISTANCE IN THE PREPARATION OF AN INFORMATION MEMORANDUM AND THE
VERIFICATION OF THE COMPLETENESS AND ACCURACY OF THE INFORMATION
CONTAINED THEREIN; (II) PREPARATION OF OFFERING MATERIALS AND
PROJECTIONS BY SUCH BORROWER AND ITS
97
104
ADVISORS; (III) PROVIDING THE AGENT WITH ALL INFORMATION REASONABLY
DEEMED NECESSARY BY AGENT TO SUCCESSFULLY COMPLETE THE SYNDICATION,
INCLUDING, WITHOUT LIMITATION, FINANCIAL INFORMATION, EVALUATIONS AND
PROJECTIONS; (IV) CONFIRMATION AS TO THE ACCURACY AND COMPLETENESS OF
SUCH OFFERING MATERIALS, INFORMATION AND PROJECTIONS; (V) PARTICIPATION
OF SUCH BORROWER'S SENIOR MANAGEMENT IN MEETINGS AND CONFERENCE CALLS
WITH POTENTIAL LENDERS AT SUCH TIMES AND PLACES AS AGENT MAY REASONABLE
REQUEST; AND (VI) THE EXECUTION AND DELIVERY OF ANY AND ALL AGREEMENTS,
NOTES AND OTHER DOCUMENTS AND INSTRUMENTS AS SHALL BE REQUESTED.
NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, ANY AND ALL MEETINGS
BETWEEN THE BORROWER AND POTENTIAL ASSIGNEES OR PARTICIPANTS SHALL BE
HELD IN KNOXVILLE, TENNESSEE.
REPRESENTATION OF LENDERS. Each Lender hereby represents that it will make each
Advance hereunder as a commercial loan for its own account in the ordinary
course of its business; provided, however, that subject to SECTION 13.1 hereof,
the disposition of the Notes or other evidence of the Secured Obligations held
by any Lender shall at all times be within its exclusive control.
THE AGENT AND THE CO-AGENT
APPOINTMENT OF AGENT. Each of the Lenders hereby irrevocably designates and
appoints The CIT Group/Business Credit, Inc. as the Agent of such Lender, and
GMAC Commercial Credit LLC, as the Co-Agent of such Lender, under this Agreement
and the other Loan Documents. Each such Lender irrevocably authorizes Agent, as
the Agent for such Lender to take such action on its behalf under the provisions
of this Agreement and the other Loan Documents and to exercise such powers and
perform such duties as are expressly delegated to the Agent by the terms of this
Agreement and such other Loan Documents, including, without limitation, to make
determinations as to the eligibility of Accounts and Inventory and to adjust the
advance ratios contained in the definition of "Borrowing Base" (so long as such
advance ratios, as adjusted, do not exceed those set forth in the definition of
"Borrowing Base"), together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement or such other Loan Documents, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein and therein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or the other Loan Documents or otherwise exist against the Agent.
DELEGATION OF DUTIES. The Agent may execute any of its duties under this
Agreement and the other Loan Documents by or through agents or attorneys-in-fact
and shall be entitled to advice of counsel concerning all matters pertaining to
such duties. The Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by it with reasonable care.
EXCULPATORY PROVISIONS. Neither the Agent, the Co-Agent, nor any of their
respective trustees, officers, directors, employees, agents, attorneys-in-fact
or Affiliates shall be (i) liable to any Lender (or any Lender's participants)
for any action lawfully taken or omitted to be taken by it or such Person under
or in connection with this Agreement or the other Loan Documents (except for its
or such Person's own gross negligence or willful misconduct), or (ii)
responsible in any
98
105
manner to any Lender (or any Lender's participants) for any recitals,
statements, representations or warranties made by any Borrower or any officer
thereof contained in this Agreement or the other Loan Documents or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agent under or in connection with, this Agreement or the
other Loan Documents or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or the other Loan Documents or
for any failure of any Borrower to perform its obligations hereunder or
thereunder. Neither the Agent nor the Co-Agent shall be under any obligation to
any Lender to ascertain or to inquire as to the observance or performance of any
of the agreements contained in, or conditions of, this Agreement, or to inspect
the properties, books or records of any Borrower.
RELIANCE BY AGENT. The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any Note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Borrowers), independent accountants and other experts
selected by the Agent. The Agent may deem and treat the payee of any Note as the
owner thereof for all purposes unless such Note shall have been transferred in
accordance with SECTION 13.1. The Agent shall be fully justified in failing or
refusing to take any action under this Agreement and the other Loan Documents
unless it shall first receive such advice or concurrence of the Required Lenders
(or the unanimous consent of the Lenders with respect to the matters set forth
in SECTION 15.9(B)) as it deems appropriate or it shall first be indemnified to
its satisfaction by the Lenders against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
The Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement and the Notes in accordance with a request of the
Required Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all future holders of
the Notes.
NOTICE OF DEFAULT. The Agent shall not be deemed to have knowledge or notice of
the occurrence of any Default or Event of Default hereunder unless the Agent has
received notice from a Lender or a Borrower referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default". In the event that the Agent receives such a notice, the
Agent shall promptly give notice thereof to the Lenders. The Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders; provided that unless and until the
Agent shall have received such directions, the Agent may (but shall not be
obligated to) continue making Advances to any Borrower on behalf of the Lenders
in reliance on the provisions of SECTION 4.6 and take such other action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders.
NON-RELIANCE ON AGENT AND OTHER LENDERS. Each Lender expressly acknowledges that
neither the Agent, the Co-Agent, nor any of their respective officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by the Agent hereinafter
taken, including any review of the affairs of each Borrower, shall be deemed to
constitute any representation or warranty by the Agent to any Lender. Each
Lender represents to the Agent that it has, independently and without reliance
upon the Agent or any other Lender, and based on such documents and information
as it has deemed appropriate, made
99
106
its own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of each Borrower and made its
own decision to make its Advances hereunder and enter into this Agreement. Each
Lender also represents that it will, independently and without reliance upon the
Agent 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 analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigation as it deems necessary
to inform itself as to the business, operations, property, financial and other
condition and creditworthiness of each Borrower. Except for notices, reports and
other documents expressly required to be furnished to the Lenders by the Agent
hereunder or by the other Loan Documents, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, financial and other condition or
creditworthiness of each Borrower which may come into the possession of the
Agent or any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
INDEMNIFICATION. The Lenders agree to indemnify the Agent and the Co-Agent in
their respective capacities as such (to the extent not reimbursed by a Borrower
and without limiting the obligation of each Borrower to do so), ratably
according to their respective Commitment Percentages, from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at any
time (including, without limitation, at any time following the payment of the
Notes) be imposed on, incurred by or asserted against the Agent in any way
relating to or arising out of this Agreement or the other Loan Documents, or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the Agent under
or in connection with any of the foregoing; provided that no Lender shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from the Agent's or the Co-Agent's gross negligence or willful
misconduct or resulting solely from transactions or occurrences that occur at a
time after such Lender has assigned all of its interests, rights and obligations
under this Agreement pursuant to SECTION 13.1 or, in the case of a Lender to
which an assignment is made hereunder pursuant to SECTION 13.1, at a time before
such assignment. The agreements in this subsection shall survive the payment of
the Notes, the Secured Obligations and all other amounts payable hereunder and
the termination of this Agreement.
AGENT AND CO-AGENT IN THEIR INDIVIDUAL CAPACITY. The Agent, the Co-Agent and
their respective Affiliates may make loans to, accept deposits from and
generally engage in any kind of business with each Borrower and its Subsidiaries
as though they were not the Agent and Co-Agent hereunder. With respect to its
Commitment, the Advances made or renewed by it and any Note issued to it and any
Letter of Credit issued by it, the Agent shall have and may exercise the same
rights and powers under this Agreement and the other Loan Documents and is
subject to the same obligations and liabilities as and to the extent set forth
herein and in the other Loan Documents for any other Lender. The terms "Lenders"
or "Required Lenders" or any other term shall, unless the context clearly
otherwise indicates, include the Agent and Co-Agent in their individual
capacities as a Lender or one of the Required Lenders.
SUCCESSOR AGENT. The Agent may resign as Agent by providing thirty (30) days
written notice to the Lenders. If the Agent shall resign or be removed as Agent
under this Agreement, then the
100
107
Required Lenders shall appoint from among the Lenders a successor agent for the
Lenders, which successor agent shall, so long as no Default or Event of Default
shall have occurred, be subject to the approval of the Borrowers (which approval
shall not be unreasonably withheld), whereupon such successor agent shall
succeed to the rights, powers and duties of the Agent, and the term "Agent"
shall mean such successor agent effective upon its appointment, and the former
Agent's rights, powers and duties as Agent shall be terminated, without any
other or further act or deed on the part of such former Agent or any of the
parties to this Agreement or any holders of the Notes. After any Agent's
resignation or removal hereunder as Agent, the provisions of SECTION 14.7 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement.
NOTICES FROM AGENT TO LENDERS. The Agent shall promptly, upon receipt thereof,
forward to the Co-Agent and each Lender copies of any written notices, reports
or other information supplied to it by any Borrower (but which such Borrower is
not required to supply directly to the Co-Agent or the Lenders).
MISCELLANEOUS
NOTICES.
(LLL) METHOD OF COMMUNICATION. EXCEPT AS SPECIFICALLY PROVIDED IN THIS
AGREEMENT OR IN ANY OF THE LOAN DOCUMENTS, ALL NOTICES AND THE
COMMUNICATIONS HEREUNDER AND THEREUNDER SHALL BE IN WRITING OR BY
TELEPHONE, SUBSEQUENTLY CONFIRMED IN WRITING. NOTICES IN WRITING SHALL
BE DELIVERED PERSONALLY OR SENT BY E-MAIL, CERTIFIED OR REGISTERED
MAIL, POSTAGE PRE-PAID, OR BY OVERNIGHT COURIER, TELEX OR FACSIMILE
TRANSMISSION AND SHALL BE DEEMED RECEIVED IN THE CASE OF PERSONAL
DELIVERY, WHEN DELIVERED, IN THE CASE OF MAILING, WHEN RECEIPTED FOR,
IN THE CASE OF OVERNIGHT DELIVERY, ON THE NEXT BUSINESS DAY AFTER
DELIVERY TO THE COURIER, AND IN THE CASE OF E-MAIL, TELEX AND FACSIMILE
TRANSMISSION, UPON TRANSMITTAL, PROVIDED THAT IN THE CASE OF NOTICES TO
THE AGENT, NOTICE SHALL BE DEEMED TO HAVE BEEN GIVEN ONLY WHEN SUCH
NOTICE IS ACTUALLY RECEIVED BY THE AGENT. A TELEPHONIC NOTICE TO THE
AGENT, AS UNDERSTOOD BY THE AGENT, WILL BE DEEMED TO BE THE CONTROLLING
AND PROPER NOTICE IN THE EVENT OF A DISCREPANCY WITH OR FAILURE TO
RECEIVE A CONFIRMING WRITTEN NOTICE.
(MMM) ADDRESSES FOR NOTICES. NOTICES TO ANY PARTY SHALL BE SENT TO IT
AT THE FOLLOWING ADDRESSES, OR ANY OTHER ADDRESS OF WHICH ALL THE OTHER
PARTIES ARE NOTIFIED IN WRITING
If to any Borrower: Goody's Family Clothing, Inc.
▇▇▇ ▇▇▇▇▇'▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Executive Vice President
▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.,
Vice President and General Counsel
Facsimile No.: (▇▇▇)▇▇▇-▇▇▇▇
101
108
With a copy to: ▇▇▇▇▇▇▇ Berlin Shereff ▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇)▇▇▇-▇▇▇▇
If to the Agent: The CIT Group/Business Credit, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn.: Mr. ▇▇▇▇▇ ▇▇▇▇▇▇,
Vice President
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇., Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to a Lender: At the address of such Lender set
forth on the signature page hereof.
(NNN) AGENT'S OFFICE. THE AGENT HEREBY DESIGNATES ITS OFFICE LOCATED AT
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, OR ANY
SUBSEQUENT OFFICE WHICH SHALL HAVE BEEN SPECIFIED FOR SUCH PURPOSE BY
WRITTEN NOTICE TO THE BORROWERS, AS THE OFFICE TO WHICH PAYMENTS DUE
ARE TO BE MADE AND AT WHICH ADVANCES WILL BE DISBURSED.
EXPENSES. Each Borrower, jointly and severally, agrees to pay or reimburse on
demand all reasonable costs and expenses incurred by the Agent or, following an
Event of Default, the Co-Agent or any Lender, including, without limitation, the
reasonable fees and disbursements of counsel, in connection with (a) the
negotiation, preparation, execution, delivery, administration, enforcement and
termination of this Agreement and each of the other Loan Documents, whenever the
same shall be executed and delivered, including, without limitation (i) the
out-of-pocket costs and expenses incurred in connection with the administration
and interpretation of this Agreement and the other Loan Documents; (ii) the
costs and expenses of appraisals of the Collateral, subject to the limitations
on appraisals set forth in SECTION 8.3(E) hereof; (iii) the costs and expenses
of lien and title searches and title insurance; (iv) the costs and expenses of
environmental reports with respect to the Real Estate; (v) taxes, fees and other
charges for recording the Mortgages, filing the Financing Statements and
continuations and the costs and expenses of taking other actions to perfect,
protect, and continue the Security Interests including, without limitation, the
filing of any such financing or continuation statements as Agent deems necessary
in its sole discretion in order to comply with Revised Article 9 of the UCC and
of the Uniform Commercial Code in other jurisdictions where Collateral is
located; (b) the preparation, execution and delivery of any waiver, amendment,
supplement or consent by the Agent and the Lenders relating to this Agreement or
any of the Loan Documents; (c) sums paid or incurred to pay any amount or take
any action required of the Borrowers under the Loan Documents that any
102
109
Borrower fails to pay or take; (d) on and after an Availability Shortfall or an
Event of Default, the reasonable out-of-pocket costs of field audits,
inspections and verifications of the Collateral by the Agent and the Lenders,
including, without limitation, standard per diem fees charged by the Agent and
the Lenders for each auditor and travel, lodging, and meals in connection
therewith, at or prior to the date on which a Person becomes a Lender except
that, so long as no Availability Shortfall or Event of Default has occurred,
field audits shall be limited to one (1) per year; provided, however, that in
either of such events, Agent shall have the right to conduct such field audits,
at Borrowers' cost and expense and at such times as Agent determines to be
necessary in its discretion; (e) costs and expenses of forwarding loan proceeds,
collecting checks and other items of payment, and establishing and maintaining
each Disbursement Account, Blocked Account and Lockbox; (f) costs and expenses
of preserving and protecting the Collateral; (g) consulting, after the
occurrence of a Default, with one or more Persons, including appraisers,
accountants and lawyers, concerning the value of any Collateral for the Secured
Obligations or related to the nature, scope or value of any right or remedy of
the Agent or any Lender hereunder or under any of the Loan Documents, including
any review of factual matters in connection therewith, which expenses shall
include the fees and disbursements of such Persons; and (h) reasonable costs and
expenses paid or incurred to obtain payment of the Secured Obligations, enforce
the Security Interests, sell or otherwise realize upon the Collateral, and
otherwise enforce the provisions of the Loan Documents, or to prosecute or
defend any claim in any way arising out of, related to or connected with, this
Agreement or any of the Loan Documents, which expenses shall include the
reasonable fees and disbursements of counsel and of experts and other
consultants retained by the Agent or any Lender.
The foregoing shall not be construed to limit any other provisions of the Loan
Documents regarding costs and expenses to be paid by a Borrower. Subject to
SECTION 4.3 hereof, each Borrower hereby authorizes the Agent and the Lenders to
debit the Borrower's Loan Accounts (by increasing the principal amount of the
Revolving Credit Loan) in the amount of any such costs and expenses owed by such
Borrower when due.
STAMP AND OTHER TAXES. Each Borrower will pay any and all stamp, registration,
recordation and similar taxes, fees or charges and shall indemnify the Agent and
the Lenders against any and all liabilities with respect to or resulting from
any delay in the payment or omission to pay any such taxes, fees or charges,
which may be payable or determined to be payable in connection with the
execution, delivery, performance or enforcement of this Agreement and any of the
Loan Documents or the perfection of any rights or security interest thereunder,
including, without limitation, the Security Interest.
SETOFF; PRO RATA PARTICIPATION.
(OOO) IN ADDITION TO ANY RIGHTS NOW OR HEREAFTER GRANTED UNDER
APPLICABLE LAW AND NOT BY WAY OF LIMITATION OF ANY SUCH RIGHTS, DURING
THE CONTINUANCE OF ANY EVENT OF DEFAULT, EACH LENDER, ANY PARTICIPANT
WITH SUCH LENDER IN THE REVOLVING CREDIT LOANS AND EACH AFFILIATE OF
EACH LENDER ARE HEREBY AUTHORIZED BY EACH BORROWER AT ANY TIME OR FROM
TIME TO TIME, WITHOUT NOTICE TO SUCH BORROWER OR TO ANY OTHER PERSON,
ANY SUCH NOTICE BEING HEREBY EXPRESSLY WAIVED, TO SET OFF AND TO
APPROPRIATE AND TO APPLY ANY AND ALL DEPOSITS (GENERAL OR SPECIAL,
INCLUDING, BUT NOT LIMITED TO, INDEBTEDNESS EVIDENCED BY CERTIFICATES
OF DEPOSIT, WHETHER MATURED OR UNMATURED) AND ANY OTHER INDEBTEDNESS AT
ANY TIME HELD OR OWING BY ANY LENDER OR ANY AFFILIATE OF ANY LENDER OR
ANY PARTICIPANT
103
110
TO OR FOR THE CREDIT OR THE ACCOUNT OF SUCH BORROWER AGAINST AND ON
ACCOUNT OF THE SECURED OBLIGATIONS IRRESPECTIVE OR WHETHER OR NOT THE
AGENT OR SUCH LENDER SHALL HAVE MADE ANY DEMAND UNDER THIS AGREEMENT OR
ANY OF THE LOAN DOCUMENTS, OR THE AGENT OR SUCH LENDER SHALL HAVE
DECLARED ANY OR ALL OF THE SECURED OBLIGATIONS TO BE DUE AND PAYABLE AS
PERMITTED BY Section 12.2 AND ALTHOUGH SUCH SECURED OBLIGATIONS SHALL
BE CONTINGENT OR UNMATURED.
(PPP) IF ANY LENDER SHALL OBTAIN PAYMENT OF ANY PRINCIPAL OF OR
INTEREST ON ANY REVOLVING CREDIT LOANS MADE BY IT OR ON ANY OTHER
SECURED OBLIGATION OWING TO SUCH LENDER THROUGH THE EXERCISE OF ANY
RIGHT OF SET-OFF, BANKER'S LIEN OR COUNTERCLAIM OR SIMILAR RIGHT OR
OTHERWISE, IT SHALL PROMPTLY SO NOTIFY THE AGENT (WHICH SHALL PROMPTLY
NOTIFY THE OTHER LENDERS). IF, AS A RESULT OF SUCH PAYMENT, SUCH LENDER
SHALL HAVE RECEIVED A GREATER PERCENTAGE OF THE PRINCIPAL OF OR
INTEREST ON ANY REVOLVING CREDIT LOAN TO SUCH LENDER THAN THE
PERCENTAGE RECEIVED BY ANY OTHER LENDER OR LENDERS IN RESPECT OF THE
PRINCIPAL OF OR INTEREST ON ANY REVOLVING CREDIT LOAN OWING TO SUCH
OTHER LENDER OR LENDERS, IT SHALL, AT THE REQUEST OF SUCH OTHER LENDER
OR LENDERS, PROMPTLY PURCHASE FROM SUCH OTHER LENDER OR LENDERS
PARTICIPATIONS IN (OR, IF AND TO THE EXTENT SPECIFIED BY SUCH FIRST
LENDER, DIRECT INTERESTS IN) THE PRINCIPAL OF OR INTEREST ON REVOLVING
CREDIT LOANS OWING TO SUCH OTHER LENDERS IN SUCH AMOUNTS, AND MAKE SUCH
OTHER ADJUSTMENTS FROM TIME TO TIME AS SHALL BE EQUITABLE, TO THE END
THAT SUCH FIRST LENDER AND SUCH OTHER LENDER OR LENDERS (SUCH FIRST
LENDER AND SUCH OTHER LENDER OR LENDERS BEING COLLECTIVELY REFERRED TO
AS THE "SHARING LENDERS") SHALL SHARE THE BENEFIT OF SUCH EXCESS
PAYMENT (NET OF ANY EXPENSES WHICH MAY BE INCURRED BY SUCH FIRST LENDER
IN OBTAINING OR PRESERVING SUCH EXCESS PAYMENT) PRO RATA IN ACCORDANCE
WITH THE UNPAID AMOUNTS OF SUCH OBLIGATIONS OWING TO EACH OF THE
SHARING LENDERS. TO SUCH END ALL THE SHARING LENDERS SHALL MAKE
APPROPRIATE ADJUSTMENTS AMONG THEMSELVES (BY THE RESALE OF
PARTICIPATIONS SOLD OR OTHERWISE) IF SUCH PAYMENT IS RESCINDED OR MUST
OTHERWISE BE RESTORED.
(QQQ) EACH BORROWER AGREES THAT ANY LENDER SO PURCHASING A
PARTICIPATION IN OBLIGATIONS HEREUNDER OF SUCH BORROWER TO ANOTHER
LENDER OR OTHER LENDERS MAY EXERCISE ANY AND ALL RIGHTS OF SET-OFF,
BANKERS' LIEN, COUNTERCLAIM OR SIMILAR RIGHTS WITH RESPECT TO SUCH
PARTICIPATION AS FULLY AS IF SUCH FIRST LENDER WERE A DIRECT HOLDER OF
OBLIGATIONS OF SUCH BORROWER IN THE AMOUNT OF SUCH PARTICIPATION.
NOTHING CONTAINED HEREIN SHALL REQUIRE ANY LENDER TO EXERCISE ANY SUCH
RIGHT OR SHALL AFFECT THE RIGHT OF ANY LENDER TO EXERCISE, AND RETAIN
THE BENEFITS OF EXERCISING, ANY SUCH RIGHT WITH RESPECT TO ANY OTHER
INDEBTEDNESS OR OBLIGATION OF SUCH BORROWER.
(RRR) IF UNDER ANY APPLICABLE BANKRUPTCY, INSOLVENCY OR OTHER SIMILAR
LAW, ANY LENDER RECEIVES A SECURED CLAIM IN LIEU OF A SET-OFF TO WHICH
Section 15.4(b) HEREOF APPLIES, SUCH LENDER SHALL TO THE EXTENT
PRACTICABLE, EXERCISE ITS RIGHTS IN RESPECT OF SUCH SECURED CLAIM IN A
MANNER CONSISTENT WITH THE RIGHTS OF THE LENDERS ENTITLED UNDER THIS
Section 15.4 TO SHARE IN THE BENEFITS OF ANY RECOVERY ON SUCH SECURED
CLAIM.
LITIGATION. EACH BORROWER, THE AGENT, THE CO-AGENT AND EACH LENDER HEREBY
KNOWINGLY, INTENTIONALLY AND VOLUNTARILY WAIVES TRIAL BY JURY IN ANY ACTION OR
PROCEEDING OF ANY KIND OR NATURE IN ANY COURT IN WHICH AN ACTION MAY BE
COMMENCED BY OR AGAINST ANY BORROWER,
104
111
THE AGENT, THE CO-AGENT AND SUCH LENDER ARISING OUT OF THIS AGREEMENT, THE
COLLATERAL OR ANY ASSIGNMENT THEREOF OR BY REASON OF ANY OTHER CAUSE OR DISPUTE
WHATSOEVER BETWEEN ANY BORROWER AND THE AGENT, THE CO-AGENT OR ANY LENDER OF ANY
KIND OR NATURE. EACH BORROWER, THE AGENT, THE CO-AGENT AND THE LENDERS HEREBY
AGREE THAT THE FEDERAL COURT OF THE NORTHERN DISTRICT OF GEORGIA SHALL HAVE
NONEXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN
ANY BORROWER AND THE AGENT OR SUCH LENDER, PERTAINING DIRECTLY OR INDIRECTLY TO
THIS AGREEMENT OR THE LOAN DOCUMENTS OR TO ANY MATTER ARISING THEREFROM. EACH
BORROWER EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY
ACTION OR PROCEEDING COMMENCED IN SUCH COURTS, HEREBY WAIVING PERSONAL SERVICE
OF THE SUMMONS AND COMPLAINT, OR OTHER PROCESS OR PAPERS ISSUED THEREIN AND
AGREEING THAT SERVICE OF SUCH SUMMONS AND COMPLAINT OR OTHER PROCESS OR PAPERS
MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH BORROWER AT THE
ADDRESS OF SUCH BORROWER SET FORTH IN SECTION 15.1. SHOULD SUCH BORROWER FAIL TO
APPEAR OR ANSWER ANY SUMMONS, COMPLAINT, PROCESS OR PAPERS SO SERVED WITHIN 30
DAYS AFTER THE RECEIPT THEREOF (AS THE TERM RECEIPT IS DEFINED IN SECTION 15.1
HEREOF), IT SHALL BE DEEMED IN DEFAULT AND AN ORDER AND/OR JUDGMENT MAY BE
RENDERED AGAINST IT AS DEMANDED OR PRAYED FOR IN SUCH SUMMONS, COMPLAINT,
PROCESS OR PAPERS. THE NONEXCLUSIVE CHOICE OF FORUM SET FORTH IN THIS SECTION
SHALL NOT BE DEEMED TO PRECLUDE THE ENFORCEMENT OF ANY JUDGMENT OBTAINED IN SUCH
FORUM OR THE TAKING OF ANY ACTION UNDER THIS AGREEMENT TO ENFORCE SAME IN ANY
APPROPRIATE JURISDICTION.
WAIVER OF RIGHTS. EACH BORROWER HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY
WAIVES ALL RIGHTS WHICH BORROWER HAS UNDER CHAPTER 14 OF TITLE 44 OF THE
OFFICIAL CODE OF GEORGIA OR UNDER ANY SIMILAR PROVISION OF APPLICABLE LAW TO
NOTICE AND TO A JUDICIAL HEARING PRIOR TO THE ISSUANCE OF A WRIT OF POSSESSION
ENTITLING THE AGENT OR ANY LENDER, OR THE SUCCESSORS AND ASSIGNS OF THE AGENT OR
SUCH LENDER TO POSSESSION OF THE COLLATERAL UPON EVENT OF DEFAULT. WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING AND WITHOUT LIMITING ANY OTHER RIGHT
WHICH THE AGENT OR THE LENDERS MAY HAVE, THE BORROWER CONSENTS THAT IF AGENT OR
ANY LENDER FILES A PETITION FOR AN IMMEDIATE WRIT OF POSSESSION IN COMPLIANCE
WITH SECTIONS ▇▇-▇▇-▇▇▇ AND ▇▇-▇▇-▇▇▇ OF THE OFFICIAL CODE OF GEORGIA OR UNDER
ANY SIMILAR PROVISION OF APPLICABLE LAW, AND THIS WAIVER OR A COPY HEREOF IS
ALLEGED IN SUCH PETITION AND ATTACHED THERETO, THE COURT BEFORE WHICH SUCH
PETITION IS FILED MAY DISPENSE WITH ALL RIGHTS AND PROCEDURES HEREIN WAIVED AND
MAY ISSUE FORTHWITH AN IMMEDIATE WRIT OF POSSESSION IN ACCORDANCE WITH CHAPTER
14 OF TITLE 44 OF THE OFFICIAL CODE OF GEORGIA OR IN ACCORDANCE WITH ANY SIMILAR
PROVISION OF APPLICABLE LAW, WITHOUT THE NECESSITY OF AN
105
112
ACCOMPANYING BOND AS OTHERWISE REQUIRED BY SECTION ▇▇-▇▇-▇▇▇ OF THE OFFICIAL
CODE OF GEORGIA OR BY ANY SIMILAR PROVISION UNDER APPLICABLE LAW. EACH BORROWER
HEREBY ACKNOWLEDGES THAT IT HAS READ AND FULLY UNDERSTANDS THE TERMS OF THIS
WAIVER AND THE EFFECT HEREOF.
REVERSAL OF PAYMENTS. The Agent, the Co-Agent and each Lender shall have the
continuing and exclusive right to apply, reverse and re-apply any and all
payments to any portion of the Secured Obligations in a manner consistent with
the terms of this Agreement. To the extent a Borrower makes a payment or
payments to the Agent, for the account of the Co-Agent or the Lenders, or the
Co-Agent or any Lender receives any payment or proceeds of the Collateral for
such Borrower's benefit, which payment(s) or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or proceeds received, the Secured Obligations or part
thereof intended to be satisfied shall be revived and continued in full force
and effect, as if such payment or proceeds had not been received by the Agent,
the Co-Agent or such Lender, and shall constitute a Prime Advance.
INJUNCTIVE RELIEF. Each Borrower recognizes that, in the event such Borrower
fails to perform, observe or discharge any of its obligations or liabilities
under this Agreement, any remedy at law may prove to be inadequate relief to the
Agent, the Co-Agent and the Lenders; therefore, such Borrower agrees that if any
Event of Default shall have occurred and be continuing, the Agent, the Co-Agent
and the Lenders, if the Agent, the Co-Agent or any Lender so requests, shall be
entitled to temporary and permanent injunctive relief without the necessity of
proving actual damages.
ACCOUNTING MATTERS. All financial and accounting calculations, measurements and
computations made for any purpose relating to this Agreement, including, without
limitation, all computations utilized by any Borrower to determine whether it is
in compliance with any covenant contained herein, shall, unless this Agreement
otherwise provides or unless Required Lenders shall otherwise consent in
writing, be performed in accordance with GAAP (except for normal year-end
adjustments and quarterly adjustments).
AMENDMENTS.
(SSS) EXCEPT AS SET FORTH IN subsection (b) BELOW, ANY TERM, COVENANT,
AGREEMENT OR CONDITION OF THIS AGREEMENT OR ANY OF THE LOAN DOCUMENTS
MAY BE AMENDED OR WAIVED, AND ANY DEPARTURE THEREFROM MAY BE CONSENTED
TO BY THE REQUIRED LENDERS, IF, BUT ONLY IF, SUCH AMENDMENT, WAIVER OR
CONSENT IS IN WRITING SIGNED BY THE REQUIRED LENDERS AND, IN THE CASE
OF AN AMENDMENT (OTHER THAN AN AMENDMENT DESCRIBED IN Section
15.10(d)), BY THE BORROWERS, AND IN ANY SUCH EVENT, THE FAILURE TO
OBSERVE, PERFORM OR DISCHARGE ANY SUCH TERM, COVENANT, AGREEMENT OR
CONDITION (WHETHER SUCH AMENDMENT IS EXECUTED OR SUCH WAIVER OR CONSENT
IS GIVEN BEFORE OR AFTER SUCH FAILURE) SHALL NOT BE CONSTRUED AS A
BREACH OF SUCH TERM, COVENANT, AGREEMENT OR CONDITION OR AS A DEFAULT
OR AN EVENT OF DEFAULT. UNLESS OTHERWISE SPECIFIED IN SUCH WAIVER OR
CONSENT, A WAIVER OR CONSENT GIVEN HEREUNDER SHALL BE EFFECTIVE ONLY IN
THE SPECIFIC INSTANCE AND FOR THE SPECIFIC PURPOSE FOR WHICH GIVEN. IN
THE EVENT THAT ANY SUCH WAIVER OR AMENDMENT IS REQUESTED BY THE
BORROWERS, THE AGENT AND THE LENDERS MAY REQUIRE AND CHARGE A FEE IN
CONNECTION THEREWITH AND
106
113
CONSIDERATION THEREOF IN SUCH AMOUNT AS SHALL BE DETERMINED BY THE
AGENT AND THE REQUIRED LENDERS IN THEIR REASONABLE DISCRETION.
(TTT) EXCEPT AS OTHERWISE SET FORTH IN THIS AGREEMENT, WITHOUT THE
PRIOR UNANIMOUS WRITTEN CONSENT OF THE LENDERS,
no amendment, consent or waiver shall affect the amount or extend the time of
the obligation of the Lenders to make Advances or extend the originally
scheduled time or times of payment of the principal of any Revolving Credit
Loans or alter the time or times of payment of interest on any Revolving Credit
Loans or the amount of the Revolving Credit Facility, the commitment of any
Lender or the rate of interest thereon or the amount of any fee payable
hereunder or permit any subordination of the principal or interest on such
loans, permit the subordination of the Security Interests in any material
Collateral or amend the provisions of ARTICLE 12 or of this SECTION 15.10(B), no
Collateral shall be released by the Agent other than as specifically permitted
in this Agreement, except to the extent expressly provided herein, the
definition "Borrowing Base" shall not be amended, and neither the Agent nor any
Lender shall consent to any amendment to or waiver of the amortization, deferral
or subordination provisions of any instrument or agreement evidencing or
relating to obligations of any Borrower that are expressly subordinate to any of
the Secured Obligations if such amendment or waiver would be adverse to the
Lenders in their capacities as Lenders hereunder;
provided, however, that anything herein to the contrary
notwithstanding, Required Lenders shall have the right to waive any
Default or Event of Default and the consequences hereunder of such
Default or Event of Default, provided that such Default or Event of
Default does not arise under Section 12.1(g) or (h) or out of a breach
of, or failure to perform or observe any term, covenant or condition of
this Agreement or any other Loan Document (other than the provisions of
Article 12 of this Agreement), the amendment of which requires the
unanimous consent of the Lenders. The Required Lenders shall have the
right, with respect to any Default or Event of Default that may be
waived by them, to enter into an agreement with the Borrowers providing
for the forbearance from the exercise of any remedies provided
hereunder or under the other Loan Documents without waiving any Default
or Event of Default.
107
114
(UUU) THE MAKING OF ADVANCES HEREUNDER BY THE LENDERS DURING THE
EXISTENCE OF A DEFAULT OR EVENT OF DEFAULT SHALL NOT BE DEEMED TO
CONSTITUTE A WAIVER OF SUCH DEFAULT OR EVENT OF DEFAULT.
(VVV) NOTWITHSTANDING ANY PROVISION OF THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS TO THE CONTRARY, NO CONSENT, WRITTEN OR OTHERWISE, OF THE
BORROWER SHALL BE NECESSARY OR REQUIRED IN CONNECTION WITH ANY
AMENDMENT TO Article 14 (EXCEPT TO THE EXTENT PROVIDED IN Section 14.9)
OR Section 4.7 PROVIDED, HOWEVER, AGENT SHALL PROVIDE COPIES OF SUCH
AMENDMENT TO THE BORROWERS.
ASSIGNMENT. All the provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns, except that no Borrower may assign or transfer any of its rights under
this Agreement.
PERFORMANCE OF EACH BORROWER'S DUTIES. Each Borrower's obligations under this
Agreement and each of the Loan Documents shall be performed by such Borrower at
its own cost and expense. Upon the occurrence of a Default or Event of Default
(as those terms are defined herein and in any of the other Loan Documents) under
any of the Loan Documents, if a Borrower shall fail to do any act or thing which
they have covenanted to do under this Agreement or any of the Loan Documents,
the Agent, on behalf of the Lenders, may (but shall not be obligated to) do the
same or cause it to be done, at such Borrower's cost and expense, either in the
name of the Agent or the Lenders or in the name and on behalf of such Borrower,
and such Borrower hereby irrevocably authorizes the Agent so to act.
INDEMNIFICATION. Each Borrower agrees to reimburse the Agent, the Co-Agent and
the Lenders for all costs and expenses, including reasonable counsel fees and
disbursements, incurred, and to indemnify and hold the Agent, the Co-Agent and
the Lenders harmless from and against all losses suffered by, the Agent, the
Co-Agent or any Lender in connection with (i) the exercise by the Agent, the
Co-Agent or any Lender of any right or remedy granted to it under this Agreement
or any of the Loan Documents, (ii) any claim, and the prosecution or defense
thereof, arising out of or in any way connected with this Agreement or any of
the Loan Documents, and (iii) the collection or enforcement of the Secured
Obligations or any of them, in each case, other than such costs, expenses and
liabilities arising out of the Agent's, the Co-Agent's or any Lender's gross
negligence or willful misconduct.
ALL POWERS COUPLED WITH INTEREST. All powers of attorney and other
authorizations granted to the Agent, the Co-Agent and the Lenders and any
Persons designated by the Agent, the Co-Agent or the Lenders pursuant to any
provisions of this Agreement or any of the Loan Documents shall be deemed
coupled with an interest and shall be irrevocable so long as any of the Secured
Obligations remain unpaid or unsatisfied.
SURVIVAL. Notwithstanding any termination of this Agreement, (a) until all
Secured Obligations have been irrevocably paid in full or otherwise satisfied,
the Agent, for the benefit of the Lenders, shall retain its Security Interest
and shall retain all rights under this Agreement and each of the Security
Documents with respect to such Collateral as fully as though this Agreement had
not been terminated, (b) the indemnities to which the Agent, the Co-Agent and
the Lenders are entitled under the provisions of this ARTICLE 15 and any other
provision of this Agreement and the Loan Documents shall continue in full force
and effect and shall protect the Agent, the Co-Agent and the Lenders against
events arising after such termination as well as before, and (c) in connection
with the termination of this Agreement and the release and termination of the
Security Interests, the Agent, on behalf of itself as agent, the Co-Agent and
the Lenders, may
108
115
require such assurances and indemnities as it shall reasonably deem necessary or
appropriate to protect the Agent, the Co-Agent and the Lenders against loss on
account of such release and termination, including, without limitation, with
respect to credits previously applied to the Secured Obligations that may
subsequently be reversed or revoked.
SEVERABILITY OF PROVISIONS. Any provision of this Agreement or any Loan Document
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective only to the extent of such prohibition or
unenforceability without invalidating the remainder of such provision or the
remaining provisions hereof or thereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
GOVERNING LAW. This Agreement and the Notes shall be construed in accordance
with and governed by the law of the State of Georgia.
COUNTERPARTS. This Agreement may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and shall be binding upon all
parties, their successors and assigns, and all of which taken together shall
constitute one and the same agreement.
REPRODUCTION OF DOCUMENTS. This Agreement, each of the Loan Documents and all
documents relating thereto, including, without limitation, (a) consents, waivers
and modifications that may hereafter be executed, (b) documents received by the
Agent, the Co-Agent or any Lender, and (c) financial statements, certificates
and other information previously or hereafter furnished to the Agent, the
Co-Agent or any Lender, may be reproduced by the Agent, the Co-Agent or such
Lender by any photographic, photostatic, microfilm, microcard, miniature
photographic or other similar process and such Person may destroy any original
document so produced. Each party hereto stipulates that, to the extent permitted
by Applicable Law, any such reproduction shall be as admissible in evidence as
the original itself in any judicial or administrative proceeding (whether or not
the original shall be in existence and whether or not such reproduction was made
by the Agent, the Co-Agent or such Lender in the regular course of business),
and any enlargement, facsimile or further reproduction of such reproduction
shall likewise be admissible in evidence.
TERM OF AGREEMENT. This Agreement shall remain in effect from the Agreement Date
through the Termination Date and thereafter until all Secured Obligations shall
have been irrevocably paid and satisfied in full. No termination of this
Agreement shall affect the rights and obligations of the parties hereto arising
prior to such termination.
109
116
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers in several counterparts all as of the
day and year first written above.
BORROWERS:
GOODY'S FAMILY CLOTHING, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------------------
Title: Chairman & CEO
---------------------------------------
SYDOOG, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
----------------------------------------
Title: President
---------------------------------------
TREBOR OF TN, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Title: President
---------------------------------------
GOFAMCLO, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
----------------------------------------
Title: President
---------------------------------------
110
117
GFCFS, LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Title: President
---------------------------------------
111
118
GOODY'S MS, L.P.
BY: TREBOR OF TN, INC., ITS GENERAL PARTNER
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Title: President
---------------------------------------
GOODY'S IN, L.P.
BY: TREBOR OF TN, INC., ITS GENERAL PARTNER
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Title: President
---------------------------------------
GFCTX, L.P.
BY: TREBOR OF TN, INC., ITS GENERAL PARTNER
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Title: President
---------------------------------------
112
119
GFCTN, L.P.
BY: TREBOR OF TN, INC., ITS GENERAL PARTNER
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Title: President
---------------------------------------
GFCGA, L.P.
BY: TREBOR OF TN, INC., ITS GENERAL PARTNER
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Title: President
---------------------------------------
AGENT:
THE CIT GROUP/BUSINESS CREDIT, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Title: EVP
---------------------------------------
CO-AGENT:
GMAC COMMERCIAL CREDIT LLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------
Title: SVP
---------------------------------------
LENDERS:
113
120
Commitment Amount $40,000,000 THE CIT GROUP/BUSINESS CREDIT, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Title: EVP
---------------------------------------
Commitment Amount $30,000,000 GMAC COMMERCIAL CREDIT LLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------
Title: SVP
---------------------------------------
1290 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount $15,000,000 AMSOUTH BANK
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------------
Title: Attorney-in Fact
---------------------------------------
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
Commitment Amount $25,000,000 PNC BANK, NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------
Title: AVP
---------------------------------------
114
121
1600 Market Street, 31st floor
Philadelphia, Pennsylvania 19103
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount $10,000,000 FIRST TENNESSEE BANK NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Title: SVP
---------------------------------------
▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Senior Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment Amount $10,000,000 ORIX FINANCIAL SERVICES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇
----------------------------------------
Title: Senior Vice President
---------------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
115
122
ANNEX I
For a period of one year from the Closing Date, the processing charges*
for the issuance by Agent of each of the Letters of Credit on behalf of the
Borrowers shall be as follows:
$50 - Open
$40 - Cable
$40 - Amendments
$15 - Cable
$30 - Payments
$25 - Discrepancies
* Excludes special delivery expenses (including, without limitation, courier
fees) payable by Borrower.
116
123
ANNEX II
PERMITTED INVESTMENTS
Permitted investments with rating of "A", "A-1" or "P-1" Investment Limit
(with maximum maturities of 1 year, unless otherwise stated) ----------------
A. Repurchase Agreements - Federal Government issues,
with a term of not more than seven (7) days Unlimited Repurchase
Agreements - Non-Federal Government issues, with a term of not more
than seven (7) days Unlimited
B. U.S. Treasury or Agency bills, notes, bonds, etc Unlimited
C. Tax Exempt municipal and tax advantage securities Limited
D. Corporate Bonds and Notes Limited
E. Bankers Acceptances or Bank Certificates of Deposits Unlimited
F. Commercial Paper, with a term of not more than ninety (90) days Unlimited
G. Money market funds or tax free money market funds
substantially all of which assets consists of securities
of the type described above Unlimited
H. Investments redeemable upon not more that seven (7) days' notice
(Variable rate demand notes; Corporate tax exempt notes) Limited
I. Money Market preferreds (AA minimum credit quality) Limited
(Permitted Investments that are Limited cannot exceed the greater of $5 million
or $15% of the entire investment portfolio with any one Company or Entity in the
aggregate for all types of Permitted Investments as listed above in A through
I.)
117
124
EXHIBIT A
TO LOAN AND SECURITY AGREEMENT
FORM OF REVOLVING CREDIT NOTE
$_________________ May ___, 2001
FOR VALUE RECEIVED, each of the undersigned Borrowers, parties to that
certain Loan and Security Agreement dated May ___, 2001 (as amended, restated,
supplemented or otherwise modified from time to time, the "Loan Agreement"),
HEREBY PROMISES TO PAY, jointly and severally, to the order of THE CIT
GROUP/BUSINESS CREDIT, INC., a New York corporation (the "Lender") or its
assigns at Lender's offices in Atlanta, Georgia, or at such other place as the
holder of this Revolving Credit Note (this "Revolving Credit Note") may
designate from time to time in writing, in lawful money of the United States of
America and in immediately available funds, ____________ DOLLARS ($___________)
or, if less, the Revolving Credit Loans outstanding to such Borrower pursuant to
Section 2.1 of the Loan Agreement. All capitalized terms, unless otherwise
defined herein, shall have the respective meanings assigned to such terms in the
Loan Agreement.
This Revolving Credit Note is issued pursuant to the Loan Agreement
among Borrowers, the financial institutions party thereto from time to time and
Lender, as agent and lender thereunder, and is subject to, and entitled to, all
provisions and benefits of, and is secured by the Collateral as provided in, the
Loan Documents, to which Loan Documents reference is hereby made for a statement
of all of the terms and conditions under which the loans evidenced hereby were
made.
The Borrowers jointly and severally promise to pay the principal amount
of the indebtedness evidenced hereby in the amount and on the dates specified in
the Loan Agreement. The Borrowers jointly and severally promise to pay the
interest due from such Borrower on the unpaid principal amount of this Revolving
Credit Note outstanding from the date hereof until such principal amount is paid
in full at such interest rates and at such times as are specified in the Loan
Agreement.
If any payment on this Revolving Credit Note becomes due and payable on
a day other than a Business Day, the maturity thereof shall be extended to the
next succeeding Business Day and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during such
extension.
Upon and after the occurrence of an Event of Default and the expiration
of all cure periods applicable thereto, this Revolving Credit Note may, as
provided in the Loan Agreement, and without demand, notice or legal process of
any kind, be declared, and immediately shall become, due and payable.
Presentment for payment, demand, presentment, protest and notice of
demand, notice of dishonor, notice of nonpayment and notice of protest are
hereby waived by each Borrower.
No delay or failure on the part of Lender in the exercise of any right
or remedy hereunder, under the Loan Agreement or any other Loan Document or at
law or in equity, shall operate as a waiver thereof, and no single or partial
exercise by Lender of any right or remedy hereunder, under the Loan Agreement or
any
118
125
other Loan Document or at law or in equity shall preclude or estop another or
further exercise thereof or the exercise of any other right or remedy.
Time is of the essence of this Revolving Credit Note.
The Borrowers hereby jointly and severally agree to pay on demand all
costs and expenses incurred in collecting the Secured Obligations hereunder or
in enforcing or attempting to enforce any of Lender's rights hereunder and under
the Loan Documents, including, without limitation, reasonable attorneys' fees
and expenses actually incurred if collected by or through an attorney whether or
not suit is filed.
THE PROVISIONS OF SECTION 15.5 OF THE LOAN AGREEMENT ARE HEREBY
EXPRESSLY INCORPORATED HEREIN.
THIS REVOLVING CREDIT NOTE HAS BEEN EXECUTED, DELIVERED AND ACCEPTED AT
ATLANTA, GEORGIA, AND SHALL BE INTERPRETED, GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO CONFLICTS OF LAW PROVISIONS) OF
THE STATE OF GEORGIA.
BORROWER:
GOODY'S FAMILY CLOTHING, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
SYDOOG, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
TREBOR OF TN, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
119
126
GOFAMCLO, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
GFCFS, LLC
By:
-----------------------------------------
Name:
---------------------------------------
Its:
----------------------------------------
GOODY'S MS, L.P.
BY: TREBOR OF TN, INC., ITS GENERAL PARTNER
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
GOODY'S IN, L.P.
BY: TREBOR OF TN, INC., ITS GENERAL PARTNER
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
GFCTX, L.P.
BY: TREBOR OF TN, INC., ITS GENERAL PARTNER
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
120
127
GFCTN, L.P.
BY: TREBOR OF TN, INC., ITS GENERAL PARTNER
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
GFCGA, L.P.
BY: TREBOR OF TN, INC., ITS GENERAL PARTNER
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
121
