EXHIBIT 10.46
SECOND AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
dated as of January 22, 1999
among
FILENE'S BASEMENT, INC.,
as Borrower,
FILENE'S BASEMENT CORP.,
as Guarantor,
BANKBOSTON RETAIL FINANCE INC.
and
the other lending institutions listed on Schedule 1 hereto,
as Lenders,
BANKBOSTON RETAIL FINANCE INC.,
as Administrative Agent,
BANCBOSTON XXXXXXXXX XXXXXXXX INC.,
as Arranger
and
BANKBOSTON N.A.,
as Agent and L/C Issuer
TABLE OF CONTENTS
PAGE
1. DEFINITIONS AND RULES OF INTERPRETATION. 1
1.1. Rules of Interpretation. 19
2. THE REVOLVING CREDIT FACILITY. 20
2.1. Commitment to Lend. 20
2.2. Commitment Fee. 20
2.3. Reduction of Commitment. 20
2.4. The Revolving Credit Notes. 21
2.5. Interest on Revolving Credit Loans. 21
2.6. Requests for Revolving Credit Loans. 22
2.6.1. Loan Request. 22
2.6.2. Swing Line. 22
2.6.3. Temporary Suspension of Eurodollar Rate Options. 23
2.6.4. Reimbursement Obligations. 23
2.7. Conversion Options. 23
2.7.1. Conversion to Different Type of Revolving
Credit Loan. 23
2.7.2. Continuation of Type of Revolving Credit Loan. 24
2.7.3. Eurodollar Rate Loans. 24
2.8. Funds for Revolving Credit Loan. 24
2.8.1. Funding Procedures. 24
2.8.2. Advances by Administrative Agent. 25
2.9. Change in Borrowing Base. 25
2.10. Settlements; Failure to Make Funds Available. 25
2.10.1. Notice to Lenders. 25
2.10.2. Delinquent Banks. 26
2.10.3. Advances. 27
3. REPAYMENT OF THE REVOLVING CREDIT LOANS. 27
3.1. Maturity. 27
3.2. Mandatory Repayments of Revolving Credit Loans. 27
3.2.1. Outstandings in Excess of Commitment or
Borrowing Base. 27
3.2.2. Blocked Account Provisions. 27
4. LETTERS OF CREDIT. 29
4.1. Letter of Credit Commitments. 29
4.1.1. Commitment to Issue Letters of Credit. 29
4.1.2. Letter of Credit Applications. 30
4.1.3. Terms of Letters of Credit. 30
4.1.4. Reimbursement Obligations of Lenders. 31
4.1.5. Participations of Lenders. 31
4.2. Reimbursement Obligation of the Borrower. 31
4.3. Letter of Credit Payments. 32
4.4. Obligations Absolute. 32
4.5. Reliance by Issuer. 33
4.6. Letter of Credit Fee. 33
5. CERTAIN GENERAL PROVISIONS. 33
5.1. Fees. 33
5.2. Funds for Payments. 34
5.2.1. Payments to Administrative Agent. 34
5.2.2. No Offset, etc. 34
5.3. Computations. 34
5.4. Inability to Determine Eurodollar Rate. 35
5.5. Illegality. 35
5.6. Additional Costs, Etc. 35
5.7. Capital Adequacy. 36
5.8. Certificate. 37
5.9. Indemnity. 37
5.10. Interest After Default. 37
5.10.1. Overdue Amounts. 37
5.10.2. Amounts Not Overdue. 37
6. COLLATERAL SECURITY AND GUARANTIES. 38
6.1. Security of Borrower. 38
6.2. Guaranty and Security of Guarantor. 38
7. REPRESENTATIONS AND WARRANTIES. 38
7.1. Corporate Authority. 38
7.1.1. Incorporation; Good Standing. 38
7.1.2. Authorization. 38
7.1.3. Enforceability. 39
7.2. Governmental Approvals. 39
7.3. Title to Properties; Leases. 39
7.4. Financial Statements and Projections. 39
7.4.1. Financial Statements. 39
7.4.2. Projections. 39
7.5. No Material Changes, Etc. 40
7.6. Franchises, Patents, Copyrights, Etc. 40
7.7. Litigation. 40
7.8. No Materially Adverse Contracts, Etc. 40
7.9. Compliance with Other Instruments, Laws, Etc. 40
7.10. Tax Status. 41
7.11. No Event of Default. 41
7.12. Holding Company and Investment Company Acts. 41
7.13. Absence of Financing Statements, Etc. 41
7.14. Perfection of Security Interest. 41
7.15. Certain Transactions. 41
7.16. Employee Benefit Plans. 42
7.16.1. In General. 42
7.16.2. Terminability of Welfare Plans. 42
7.16.3. Guaranteed Pension Plans. 42
7.16.4. Multiemployer Plans. 42
7.17. Use of Proceeds. 43
7.17.1. Regulations U and X. 43
7.17.2. Ineligible Securities. 43
7.18. Environmental Compliance. 43
7.19. Subsidiaries, etc. 45
7.20. Bank Accounts. 45
7.21. Fiscal Quarters. 45
7.22. Chief Executive Office; Inventory Locations. 45
7.23. Insurance. 45
7.24. Year 2000 Problem. 45
7.25. Leases. 46
7.26. Full Disclosure. 46
8. AFFIRMATIVE COVENANTS OF THE BORROWER AND THE
GUARANTOR. 46
8.1. Punctual Payment. 46
8.2. Maintenance of Office. 46
8.3. Records and Accounts. 46
8.4. Financial Statements, Certificates and Information. 47
8.5. Notices. 49
8.5.1. Defaults. 49
8.5.2. Environmental Events. 49
8.5.3. Notification of Claim against Collateral. 49
8.5.4. Notice of Litigation and Judgments. 49
8.5.5. Notices Concerning Inventory Collateral. 50
8.6. Corporate Existence; Maintenance of Properties. 50
8.7. Insurance. 50
8.7.1. General Coverage. 50
8.7.2. Business Interruption Insurance. 50
8.7.3. Payment of Insurance Proceeds. 51
8.8. Taxes. 51
8.9. Inspection of Properties and Books, etc. 51
8.9.1. Exams. 51
8.9.2. Appraisals. 51
8.9.3. Environmental Assessments. 52
8.9.4. Communications with Accountants. 52
8.9.5. Mystery Shopping. 52
8.10. Compliance with Laws, Contracts, Licenses, and Permits. 53
8.11. Employee Benefit Plans. 53
8.12. Use of Proceeds. 53
8.13. Additional Mortgaged Property. 53
8.14. Bank Accounts. 54
8.15. Agency Account Letters; Credit Card Providers. 54
8.16. Inventory Restrictions. 54
8.17. Year 2000 Compliance. 54
8.18. POS System. 54
8.19. Further Assurances. 55
9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER AND THE GUARANTOR. 55
9.1. Restrictions on Indebtedness. 55
9.2. Restrictions on Liens. 56
9.3. Restrictions on Investments. 58
9.4. Distributions. 60
9.5. Merger, Consolidation and Disposition of Assets. 60
9.5.1. Mergers and Acquisitions. 60
9.5.2. Disposition of Assets. 60
9.6. Sale and Leaseback. 61
9.7. Compliance with Environmental Laws. 61
9.8. Employee Benefit Plans. 61
9.9. Bank Accounts. 62
9.10. Amendments to Monogram Agreement. 62
9.11. Transactions with Affiliates. 62
10. FINANCIAL COVENANTS OF THE BORROWER AND THE GUARANTOR. 63
10.1. Minimum EBITDA. 63
10.2. Minimum Accounts Payable to Eligible Inventory Ratio. 63
11. CLOSING CONDITIONS. 64
11.1. Loan Documents, etc. 64
11.2. Certified Copies of Charter Documents. 64
11.3. Corporate Action. 64
11.4. Incumbency Certificate. 64
11.5. Validity of Liens. 65
11.6. Perfection Certificates and UCC Search Results. 65
11.7. Certificates of Insurance. 65
11.8. Borrowing Base Report. 65
11.9. Solvency Certificate. 65
11.10. Opinion of Counsel. 65
11.11. Payment of Fees. 65
11.12. Minimum Excess Availability. 66
11.13. Agency Account Letters; Credit Card Providers. 66
12. CONDITIONS TO ALL BORROWINGS. 66
12.1. Representations True; No Event of Default. 66
12.2. No Legal Impediment. 66
12.3. Governmental Regulation. 66
12.4. Proceedings and Documents. 66
12.5. Borrowing Base Report. 67
13. EVENTS OF DEFAULT; ACCELERATION; ETC. 67
13.1. Events of Default and Acceleration. 67
13.2. Termination of Commitments. 70
13.3. Remedies. 71
13.4. Distribution of Collateral Proceeds. 71
14. SETOFF. 72
15. THE BANK AGENTS. 73
15.1. Authorization. 73
15.2. Employees and Bank Agents. 73
15.3. No Liability. 73
15.4. No Representations. 74
15.4.1. Generally. 74
15.4.2. Closing Documentation, etc. 74
15.5. Payments. 74
15.5.1. Payments to Bank Agents. 74
15.5.2. Distribution by Bank Agents. 75
15.5.3. Delinquent Banks. 75
15.6. Holders of Notes. 75
15.7. Indemnity. 75
15.8. Administrative Agent as Lender. 76
15.9. Resignation. 76
15.10. Notification of Defaults and Events of Default. 76
15.11. Duties in the Case of Enforcement. 76
15.12. Duties of Arranger. 77
16. EXPENSES. 77
17. INDEMNIFICATION. 78
18. SURVIVAL OF COVENANTS, ETC. 79
19. ASSIGNMENT AND PARTICIPATION. 79
19.1. Conditions to Assignment by Lenders. 79
19.2. Certain Representations and Warranties;Limitations;
Covenants. 79
19.3. Register. 81
19.4. New Notes. 81
19.5. Participations. 81
19.6. Disclosure. 81
19.7. Assignee or Participant Affiliated with the Borrower. 82
19.8. Miscellaneous Assignment Provisions. 82
19.9. Assignment by Borrower. 82
20. NOTICES, ETC. 83
21. GOVERNING LAW. 83
22. HEADINGS. 84
23. COUNTERPARTS. 84
24. ENTIRE AGREEMENT, ETC. 84
25. WAIVER OF JURY TRIAL. 84
26. CONSENTS, AMENDMENTS, WAIVERS, ETC. 84
27. SEVERABILITY. 85
28. TREATMENT OF CONFIDENTIAL INFORMATION. 85
28.1. Sharing of Information with Section 20 Subsidiary. 85
28.2. Confidentiality. 86
29. TRANSITIONAL ARRANGEMENTS 86
29.1. Prior Credit Agreement Superseded. 86
29.2. Return and Cancellation of Notes. 86
29.3. Interest and Fees Under Superseded Agreement. 86
EXHIBITS AND SCHEDULES
Exhibit A Form of Borrowing Base Report
Exhibit B Form of Revolving Credit Note
Exhibit C Form of Loan Request
Exhibit D Form of Compliance Certificate
Exhibit E Form of Assignment and Acceptance
Exhibit F Collateral Reports
Exhibit G Landlord Waiver
Schedule 1 Lenders; Commitments
Schedule 3.2.2(a) Blocked Account Provisions - Agency Account
Institutions
Schedule 3.2.2(b) Blocked Account Provisions - Credit Cards
Schedule 7.3 Title to Properties; Leases
Schedule 7.4.1 Contingent Liabilities
Schedule 7.4.2 Balance Sheets, Income and Cash Flow
Statements
Schedule 7.7 Litigation
Schedule 7.8 Materially Adverse Contracts
Schedule 7.9 Compliance with Laws
Schedule 7.10 Taxes
Schedule 7.14 Perfection
Schedule 7.15 Transactions with Affiliates
Schedule 7.18 Environmental Matters
Schedule 7.19 Joint Ventures; Partnerships
Schedule 7.20 Bank Accounts
Schedule 7.21 Borrower's Fiscal Quarters
Schedule 7.22 Location of Books and Records
Schedule 7.24 Year 2000 Compliance
Schedule 7.26 Documents and/or Statements filed with the
Securities and Exchange Commission
Schedule 8.15(a) Agency Agreements
Schedule 8.15(b) Credit Card Provider Notices
Schedule 9.1 Existing Indebtedness; Tax Audits
Schedule 9.2 Existing Liens
Schedule 9.3 Existing Investments
Schedule 9.5.2 Permitted Dispositions
SECOND AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
This SECOND AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
is made as of the 22nd day of January, 1999, by and among (a)
FILENE'S BASEMENT, INC. (the "Borrower"), a Massachusetts
corporation having its principal place of business at 00 Xxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000, (b) FILENE'S BASEMENT
CORP. (the "Guarantor"), a Massachusetts corporation having its
principal place of business at 00 Xxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxxxxxx 00000, (c) BANKBOSTON RETAIL FINANCE INC. ("BBRF")
and the other lending institutions listed on Schedule 1 hereto,
(d) BANKBOSTON RETAIL FINANCE INC. as agent for itself and such
other lending institutions (the "Administrative Agent") (e)
BANCBOSTON XXXXXXXXX XXXXXXXX INC. as syndication agent and
arranger for the Lenders (the "Arranger") and (f) BANKBOSTON,
N.A., as collateral agent for the Lenders (the "Agent") and as
Letter of Credit issuer (the "L/C Issuer").
WHEREAS, pursuant to an Amended and Restated Revolving
Credit and Term Loan Agreement dated as of January 30, 1998 (as
amended from time to time, the "Prior Credit Agreement") by and
among the Borrower, the Guarantor, BankBoston, N.A. and certain
lending institutions (collectively, the "Original Lenders") and
the Agent, the Original Lenders made available loans and other
extensions of credit to the Borrower; and
WHEREAS, the Borrower and the Guarantor have requested
certain amendments to the Prior Credit Agreement, and each of the
parties hereto are willing to amend certain provisions of the
Prior Credit Agreement on the terms and conditions set forth
herein; and
NOW, THEREFORE, the parties hereto agree that on the Closing
Date the Prior Credit Agreement is hereby amended and restated in
its entirety as set forth herein.
1. DEFINITIONS AND RULES OF INTERPRETATION.
1.1. Definitions.
The following terms shall have the meanings set forth in
this 1 or elsewhere in the provisions of this Credit Agreement
referred to below:
Accounts Payable. All liabilities of the Borrower for the
payment for inventory.
Accounts Receivable. All rights of the Borrower to payment
for goods sold, leased or otherwise marketed in the ordinary
course of business and all rights of the Borrower to payment for
services rendered in the ordinary course of business and all sums
of money or other proceeds due thereon pursuant to transactions
with account debtors, except for that portion of the sum of money
or other proceeds due thereon that relate to sales, use or
property taxes in conjunction with such transactions, recorded on
books of account in accordance with generally accepted accounting
principles.
Adjustment Date. The first day of the month immediately
following the month in which a Compliance Certificate is
delivered by the Borrower pursuant to 8.4(d) hereof.
Administrative Agent. BankBoston Retail Finance Inc.,
acting as agent for the Lenders.
Administrative Agent's Head Office. The Administrative
Agent's head office located at 00 Xxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, or at such other location as the
Administrative Agent may designate from time to time.
Affiliate. Any Person that would be considered to be an
affiliate of the Borrower under Rule 144(a) of the Rules and
Regulations of the Securities and Exchange Commission, as in
effect on the date hereof, if the Borrower were issuing
securities.
Agency Accounts. The depository accounts maintained by the
Guarantor, the Borrower and their Subsidiaries.
Agency Account Letters. The several Agency Account Letters
from the Guarantor and/or the Borrower, as the case may be, and
the Administrative Agent to the Agency Account Institutions, each
such letter to be in form and substance reasonably satisfactory
to the Administrative Agent.
Agency Account Institutions. The financial institutions
with which the Guarantor or the Borrower, as the case may be,
maintain Agency Accounts.
Agent. BKB, acting as collateral agent for the Lenders.
Applicable Margin. For each period commencing on an
Adjustment Date through the date immediately preceding the new
Adjustment Date (each a "Rate Adjustment Period"), the Applicable
Margin shall be the margin set forth below with respect to
EBITDA, as determined for the rolling twelve month period ending
on the last day of the fiscal quarter ended immediately preceding
the applicable Rate Adjustment Period and Excess Availability, as
determined at all times during the last forty-five days of the
fiscal quarter ended immediately preceding the applicable Rate
Adjustment Period.
Base
Rate Eurodollar Letter of
Lev EBITDA/ Excess Loans Rate Loans Credit Fees
el Availability
I EBITDA less than
or equal to 0.75% 2.75% 2.75%
$17,000,000
II EBITDA greater
than $17,000,000 0.50% 2.50% 2.50%
but less than or
equal to
$22,000,000
III EBITDA is greater
than $22,000,000 0.25% 2.25% 2.25%
but less than or
equal to
$25,000,000 and
Excess
Availability is
greater than
$20,000,000 plus
any Capital
Expenditures
Variance
IV EBITDA is greater
than $25,000,000 0.00% 2.00% 2.00%
and Excess
Availability is
greater than
$20,000,000 plus
any Capital
Expenditures
Variance
Notwithstanding the foregoing, (a) for Revolving Credit
Loans outstanding and the Letter of Credit Fees payable during
the period commencing on the Closing Date through the date on
which the Administrative Agent receives from the Borrower audited
financial statements for the fiscal year ended January 29, 2000,
the Applicable Margin shall be Level II set forth above, and (b)
if the Company fails to deliver any Compliance Certificate
pursuant to 8.4(d) hereof then, for the period commencing on the
next Adjustment Date to occur subsequent to such failure through
the date immediately following the date on which such Compliance
Certificate is delivered, the Applicable Margin shall be the
highest Applicable Margin set forth above. The Administrative
Agent shall notify the Borrower one day prior to making any
adjustment in the Applicable Margin which adversely affects the
Borrower. The Borrower's failure to satisfy both requirements
for Level IV or Level III, as the case may be, shall result in
the application of the next lower level for which the applicable
requirements are satisfied.
Arranger. BancBoston Xxxxxxxxx Xxxxxxxx, Inc.
Assignment and Acceptance. See 19.1.
Balance Sheet Date. February 1, 1998.
Bank Agents. Collectively, the Administrative Agent and the
Agent.
Bank Agents' Special Counsel. Xxxxxxx Xxxx LLP or such
other counsel as may be approved by the Administrative Agent.
Base Rate. The higher of (a) the annual rate of interest
announced from time to time by BKB at its head office in Boston,
Massachusetts, as its "base rate" and (b) one-half of one percent
(1/2%) above the Federal Funds Effective Rate. For the purposes
of this definition, "Federal Funds Effective Rate" shall mean for
any day, the rate per annum equal to the weighted average of the
rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day
that is a Business Day, the average of the quotations for such
day on such transactions received by BankBoston, N.A. from three
funds brokers of recognized standing selected by BankBoston, N.A.
Base Rate Loans. Those Revolving Credit Loans bearing
interest calculated by reference to the Base Rate.
BBRF. BankBoston Retail Finance Inc., in its individual
capacity.
BKB. BankBoston, N.A., a national banking association, in
its individual capacity.
Blocked Account. See 3.2.2 hereof.
Blocked Account Agreement. The Blocked Account Agreement,
dated as of the Original Closing Date, and amended and ratified
as of the Closing Date, among the Guarantor and/or the Borrower,
as the case may be, and the Agent, and in form and substance
satisfactory to the Administrative Agent.
Borrower. As defined in the preamble hereto.
Borrowing Base. At the relevant time of reference thereto,
an amount determined by the Administrative Agent by reference to
the most recent Borrowing Base Report delivered to the Lenders
and the Administrative Agent pursuant to 8.4(f), which is equal
to the sum of:
(a) 85% of Eligible Accounts Receivable; plus
(b) 70% of the Net Book Value of Eligible
Inventory for the months of October through June
inclusive and (ii) 73% of the Net Book Value of
Eligible Inventory for the months of July through
September inclusive; plus
(c) (i) 70% of the Maximum Drawing Amount of
documentary Letters of Credit for the months of October
through June inclusive and (ii) 73% of the Maximum
Drawing Amount of documentary Letters of Credit for the
months July through September inclusive, issued in
connection with the shipment of otherwise Eligible
Inventory; minus
(d) Reserves; plus
(e) Discretionary Amount.
The Administrative Agent may, in its Permitted Discretion,
from time to time, upon seven (7) days' prior notice to the
Borrower, (x) establish Reserves with respect to Eligible
Accounts Receivable to the extent that the arrangements under
which such Eligible Accounts Receivable arise were not in effect
on the Closing Date and the Administrative Agent reasonably
determines that: (i) the dilution with respect of the Accounts
Receivable (excluding Accounts Receivables owing from Credit Card
Providers existing as of the Closing Date) for any period has
increased in any material respect or may be reasonably
anticipated to increase in any material respect above historical
levels, or (ii) the general creditworthiness of account debtors
or other obligors of the Borrower has declined or (y) establish
Reserves with respect to Eligible Inventory to the extent that
the Administrative Agent reasonably determines that: (i) the
liquidation value of the Eligible Inventory, or any category
thereof, has decreased, or (ii) the nature of the inventory has
changed. In determining whether to establish Reserves, the
Administrative Agent may consider events, conditions,
contingencies or risks which are also considered in determining
Eligible Inventory or Eligible Accounts Receivable.
Upon the establishment by the Borrower of the new "Aisle 3"
concept described to the Lenders prior to the Closing Date, the
Administrative Agent shall appraise Eligible Inventory being sold
under such concept and shall establish advance rates with respect
to such Eligible Inventory, which shall not in any event exceed
85% of the liquidation value of such Eligible Inventory.
Borrowing Base Report. A Borrowing Base Report signed by
the chief financial officer of the Borrower or any other
authorized officer of the Borrower and in substantially the form
of Exhibit A hereto.
Business Day. Any day on which banking institutions in
Boston, Massachusetts and New York, New York, are open for the
transaction of commercial banking business and, in the case of
Eurodollar Rate Loans, also a day which is a Eurodollar Business
Day.
Capital Assets. Fixed assets, both tangible (such as land,
buildings, fixtures, machinery and equipment) and intangible
(such as patents, copyrights, trademarks, franchises and good
will); provided that Capital Assets shall not include any item
customarily charged directly to expense or depreciated over a
useful life of twelve (12) months or less in accordance with
generally accepted accounting principles.
Capital Expenditures. Amounts paid or indebtedness incurred
by the Guarantor, the Borrower or any of their Subsidiaries in
connection with (i) the purchase or lease by the Guarantor, the
Borrower or any of their Subsidiaries of Capital Assets that
would be required to be capitalized and shown on the balance
sheet of such Person in accordance with generally accepted
accounting principles or (ii) the lease of any assets by the
Borrower or any of its Subsidiaries as lessee under any synthetic
lease referred to in clause (vi) of the definition of the term
"Indebtedness" to the extent that such assets would have been
Capital Assets had the synthetic lease been treated for
accounting purposes as a Capitalized Lease.
Capital Expenditures Variance. A positive amount, if any,
determined initially on the Closing Date and thereafter
determined at the end of each fiscal quarter of the Borrower
equal to the cumulative amount by which projected Capital
Expenditures of the Borrower for the period from November 29,
1998 to the date of determination exceeds actual Capital
Expenditures by the Borrower during such period. The Borrower's
"projected Capital Expenditures" are (a) $7,334,000 for fiscal
December, 1998, and fiscal January, 1999, (b) the Capital
Expenditures as set forth in the projections described in 7.4.2
for fiscal year 2000 and (c) Capital Expenditures for any
subsequent fiscal year of the Borrower contained in projections
reasonably acceptable to the Administrative Agent.
Capitalized Leases. Leases under which the Guarantor, the
Borrower or any of their Subsidiaries is the lessee or obligor,
the discounted future rental payment obligations under which are
required to be capitalized on the balance sheet of the lessee or
obligor in accordance with generally accepted accounting
principles.
Cash Collateral Agreement. The cash collateral agreement,
dated as of the Original Closing Date and amended and ratified as
of the Closing Date among the Guarantor, the Borrower and the
Agent, such agreement to be in form and substance reasonably
satisfactory to the Administrative Agent.
CERCLA. See 7.18.
Closing Date. The first date on which the conditions set
forth in 11 have been satisfied and any Revolving Credit Loans
are to be made or any Letter of Credit is to be issued hereunder.
Code. The Internal Revenue Code of 1986, as amended.
Collateral. All of the property, rights and interests of
the Guarantor, the Borrower and their Subsidiaries that are or
are intended to be subject to the security interests and
mortgages created by the Security Documents.
Commitment. With respect to each Lender, the amount set
forth on Schedule 1 hereto as the amount of such Lender's
commitment to make Revolving Credit Loans to, and to participate
in the issuance, extension and renewal of Letters of Credit for
the account of, the Borrower, as the same may be reduced from
time to time pursuant to the provisions of this Credit Agreement;
or if such commitment is terminated pursuant to the provisions
hereof, zero.
Commitment Percentage. With respect to each Lender, the
percentage set forth on Schedule 1 hereto as such Lender's
percentage of the aggregate Commitments of all of the Lenders.
Compliance Certificate. See 8.4(d).
Consolidated or consolidated. With reference to any term
defined herein, shall mean that term as applied to the accounts
of the Guarantor, the Borrower and their Subsidiaries,
consolidated in accordance with generally accepted accounting
principles.
Consolidated Net Income (or Deficit). The consolidated net
income (or deficit) of the Guarantor and its Subsidiaries, after
deduction of all expenses, taxes, and other proper charges,
determined in accordance with generally accepted accounting
principles, after eliminating therefrom all extraordinary items
of income. Any tax refunds received by the Guarantor or any of
its Subsidiaries during any period shall not be included in
Consolidated Net Income.
Consolidated Total Interest Expense. For any period, the
aggregate amount of interest required to be paid or accrued by
the Guarantor and its Subsidiaries during such period on all
Indebtedness of the Guarantor and its Subsidiaries outstanding
during all or any part of such period, whether such interest was
or is required to be reflected as an item of expense or
capitalized, including payments consisting of interest in respect
of Capitalized Leases and including commitment fees, agency fees,
facility fees, balance deficiency fees and similar fees or
expenses in connection with the borrowing of money, but reduced
for any interest income paid to the Guarantor and its
Subsidiaries.
Conversion Request. A notice given by the Borrower to the
Administrative Agent of the Borrower's election to convert or
continue a Loan in accordance with 2.7.
Credit Agreement. This Second Amended and Restated
Revolving Credit Agreement, including the Schedules and Exhibits
hereto.
Credit Card Providers. The banks and finance companies
listed on Schedule 3.2.2(b) hereto.
Default. See 13.1.
Discretionary Amount. As at any date of determination, an
amount equal to or greater than zero determined by the
Administrative Agent in its sole and absolute discretion, but (a)
which shall not exceed 10% of the Borrowing Base (calculated
without reference to the Discretionary Amount), (b) which shall
not be greater than zero for a period of more than sixty
consecutive days and (c) which shall not be greater than zero for
more than three periods during any fiscal year of the Borrower or
within forty-five days after the end of the most recent period
during which such amount was greater than zero. For the
avoidance of doubt, the existence of the Discretionary Amount
shall not increase the Commitment of any Lender.
Distribution. The declaration or payment of any dividend on
or in respect of any shares of any class of capital stock of the
Guarantor or the Borrower, other than dividends payable solely in
shares of common stock of the Guarantor or the Borrower; the
purchase, redemption, or other retirement of any shares of any
class of capital stock of the Guarantor or the Borrower, directly
or indirectly through a Subsidiary of the Guarantor or the
Borrower or otherwise; the return of capital by the Guarantor or
the Borrower to its shareholders as such; or any other
distribution on or in respect of any shares of any class of
capital stock of the Guarantor or the Borrower.
Dollars or $. Dollars in lawful currency of the United
States of America.
Domestic Lending Office. Initially, the office of each
Lender designated as such in Schedule 1 hereto; thereafter, such
other office of such Lender, if any, located within the United
States that will be making or maintaining Base Rate Loans.
Drawdown Date. The date on which any Revolving Credit Loan
is made or is to be made, and the date on which any Revolving
Credit Loan is converted or continued in accordance with 2.7.
EBITDA. With respect to any fiscal period, an amount equal
to the sum of (a) Consolidated Net Income for such period plus
(b) depreciation and amortization for such period, plus (c)
without duplication, other non-cash charges (exclusive of current
period accruals) made in calculating Consolidated Net Income for
such period, plus (d) tax expense for such period, plus (e)
Consolidated Total Interest Expense during such period to the
extent deducted in the calculation of Consolidated Net Income for
such period, all as determined in accordance with generally
accepted accounting principles.
Eligible Accounts Receivable. The aggregate of the unpaid
portions of Accounts Receivable (net of any credits, rebates,
offsets, holdbacks or other adjustments or commissions payable to
third parties that are adjustments to such Accounts Receivable)
(a) that the Borrower reasonably and in good faith determines to
be collectible; (b) that are with account debtors that (i) are
not Affiliates of the Borrower, (ii) are Credit Card Providers
who have received a notice from the Borrower and the
Administrative Agent directing that all payments be made to the
Blocked Account, (iii) are not insolvent or involved in any case
or proceeding, whether voluntary or involuntary, under any
bankruptcy, reorganization, arrangement, insolvency, adjustment
of debt, dissolution, liquidation or similar law of any
jurisdiction and (iv) are, in the Administrative Agent's
reasonable judgment, creditworthy; (c) that are in payment of
obligations that have been fully performed and are not subject to
dispute or any other similar claims that would reduce the cash
amount payable therefor; (d) that are not subject to any pledge,
restriction, security interest or other lien or encumbrance other
than those created by the Loan Documents and Permitted Liens
which are subordinate to the liens of the Administrative Agent;
(e) in which the Agent has a valid and perfected first priority
security interest; (f) that are not outstanding for more than
five (5) Business Days past the date the applicable Credit Card
Provider is required to make payment and that are not outstanding
for more than ten (10) Business Days past the date of sale of the
underlying goods to a retail customer in the ordinary course of
business; (g) that are not due from an account debtor located in
Indiana, Minnesota or New Jersey unless such Borrower (A) has
received a certificate of authority to do business and is in good
standing in such state or (B) has filed a notice of business
activities report with the appropriate office or agency of such
state for the current year; (h) that are not due from any single
account debtor if more than fifteen percent (15%) of the
aggregate amount of all Accounts Receivable owing from such
account debtor would otherwise not be Eligible Accounts
Receivable; (i) that are payable in Dollars; (j) that are not
secured by a letter of credit unless the Administrative Agent has
a prior perfected security interest in such letters of credit;
and (k) that are not payable from an office outside of the United
States. General criteria for Eligible Accounts Receivable may be
established and revised by the Administrative Agent from time to
time with respect to Accounts Receivable owing under arrangements
which were not in effect on or have been materially altered since
the Closing Date.
Eligible Assignee. Any of (a) a commercial bank or finance
company organized under the laws of the United States, or any
State thereof or the District of Columbia, and having total
assets in excess of $500,000,000 and having a net worth in excess
of $50,000,000; (b) a savings and loan association or savings
bank organized under the laws of the United States, or any State
thereof or the District of Columbia, and having a net worth of at
least $100,000,000, calculated in accordance with generally
accepted accounting principles; (c) a commercial bank organized
under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development (the
"OECD"), or a political subdivision of any such country, and
having total assets in excess of $1,000,000,000, provided that
such bank is acting through a branch or agency located in the
country in which it is organized or another country which is also
a member of the OECD; (d) the central bank of any country which
is a member of the OECD; and (e) if, but only if, any Event of
Default has occurred and is continuing, any other bank, insurance
company, commercial finance company or other financial
institution approved by the Administrative Agent, such approval
not to be unreasonably withheld.
Eligible Inventory. With respect to the Borrower, finished
goods inventory owned by the Borrower; provided that Eligible
Inventory shall not include any inventory (a) held on
consignment, or not otherwise owned by the Borrower, (b) which is
damaged or is subject to any legal encumbrance other than
Permitted Liens, (c) which is not in the possession of the
Borrower unless (i) the Administrative Agent has received a
waiver from the party in possession (including, without
limitation, with respect to all consolidator locations) of such
inventory in form and substance reasonably satisfactory to the
Administrative Agent or (ii) such inventory is in transit from
one Permitted Inventory Location to another Permitted Inventory
Location, and the total duration of such transit time is not more
than three (3) Business Days, (d) which is subject to any lien,
encumbrance or security interest which is prior to the liens
granted to the Agent (other than landlord's or lessor's liens
under leases to which the Borrower is a party provided no amount
secured by such lien has become due and payable and not been
paid), (e) as to which appropriate Uniform Commercial Code
financing statements showing the Borrower as debtor and the Agent
as secured party have not been filed in the proper filing office
or offices in order to perfect the Agent's security interest
therein, (f) which has been shipped to a customer of the Borrower
regardless of whether such shipment is on a consignment basis,
(g) which is not located at a Permitted Inventory Location unless
such inventory is in transit from one Permitted Inventory
Location to another Permitted Inventory Location, and the total
duration of such transit time is not more than three (3) Business
Days. General criteria for Eligible Inventory may be established
and revised by the Administrative Agent from time to time if the
Administrative Agent reasonably determines that there has been a
substantive change in the shrinkage, character, composition or
mix, markdowns or retail markons and markups inconsistent with
prior period practice, industry standards or current business
plans.
For the period from the Closing Date through June 30, 1999,
the Administrative Agent may in its Permitted Discretion include
in Eligible Inventory (with an advance rate of up to 55% of Net
Book Value for Borrowing Base purposes and advances against such
category not exceeding $1,500,000) up to $3,000,000 of inventory
which generally complies with the requirements set forth above
for Eligible Inventory but consisting of shoes held for sale at
up to four "Aisle 3" Stores and (i) owned by Shoe Seller in which
the Borrower has a perfected first-priority lien securing the
obligations of Shoe Seller to the Borrower, all of which has been
assigned to the Agent and all of which is on terms and conditions
satisfactory to the Administrative Agent or (ii) owned by the
Borrower and consigned to Shoe Seller pursuant to consignment
arrangements satisfactory to the Administrative Agent, including
without limitation that the Borrower complies with 9-114 of the
Uniform Commercial Code and takes all other steps necessary to
maintain a perfected, first priority interest in such inventory
and, in either case, the Agent has received an acknowledgment by
Shoe Seller that the Agent has a first-priority perfected lien in
such inventory and all proceeds thereof, which proceeds shall be
subject to cash management arrangements satisfactory to the
Administrative Agent. The amount of shoe inventory included in
Eligible Inventory pursuant to this paragraph will be adjusted by
the Administrative Agent in its Permitted Discretion based upon,
among other things, the detailed weekly borrowing base reports
with respect to such inventory by location and appraisals
provided to the Administrative Agent. For purposes of this
paragraph, "Shoe Seller" means a company formed by Mr. Xxxx
Xxxxxxx for the purpose of operating retail shoe departments.
Employee Benefit Plan. Any employee benefit plan within the
meaning of 3(3) of ERISA maintained or contributed to by the
Borrower or any ERISA Affiliate, other than a Multiemployer Plan.
Environmental Laws. See 7.18(a).
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA Affiliate. Any Person which is treated as a single
employer with the Borrower under 414 of the Code.
ERISA Reportable Event. A reportable event with respect to
a Guaranteed Pension Plan within the meaning of 4043 of ERISA
and the regulations promulgated thereunder as to which the
requirement of notice has not been waived.
Eurocurrency Reserve Rate. For any day with respect to a
Eurodollar Rate Loan, the maximum rate (expressed as a decimal)
at which any lender subject thereto would be required to maintain
reserves under Regulation D of the Board of Governors of the
Federal Reserve System (or any successor or similar regulations
relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such
liabilities were outstanding. The Eurocurrency Reserve Rate
shall be adjusted automatically on and as of the effective date
of any change in the Eurocurrency Reserve Rate.
Eurodollar Business Day. Any day on which commercial banks
are open for international business (including dealings in Dollar
deposits) in London or such other Eurodollar interbank market as
may be selected by the Administrative Agent in its sole
discretion acting in good faith.
Eurodollar Lending Office. Initially, the office of each
Lender designated as such in Schedule 1 hereto; thereafter, such
other office of such Lender, if any, that shall be making or
maintaining Eurodollar Rate Loans.
Eurodollar Rate. For any Interest Period with respect to a
Eurodollar Rate Loan, the rate of interest equal to (i) the rate
per annum (rounded upwards to the nearest 1/16 of one percent) at
which the Reference Bank's Eurodollar Lending Office is offered
Dollar deposits two Eurodollar Business Days prior to the
beginning of such Interest Period in the interbank eurodollar
market where the eurodollar and foreign currency and exchange
operations of such Eurodollar Lending Office are customarily
conducted, for delivery on the first day of such Interest Period
for the number of days comprised therein and in an amount
comparable to the amount of the Eurodollar Rate Loan of the
Reference Bank to which such Interest Period applies, divided by
(ii) a number equal to 1.00 minus the Eurocurrency Reserve Rate,
if applicable.
Eurodollar Rate Loans. Those Revolving Credit Loans bearing
interest calculated by reference to the Eurodollar Rate.
Event of Default. See 13.1.
Excess Availability. As of any time of determination, the
amount by which the lesser of the Borrowing Base or Total
Commitment at such time exceeds the Total Facility Usage at such
time.
generally accepted accounting principles. (a) When used in
10, whether directly or indirectly through reference to a
capitalized term used therein, means (i) principles that are
consistent with the principles promulgated or adopted by the
Financial Accounting Standards Board and its predecessors, in
effect for the fiscal year ended on the Balance Sheet Date, and
(ii) to the extent consistent with such principles, the
accounting practice of the Guarantor and the Borrower reflected
in its financial statements for the year ended on the Balance
Sheet Date, and (b) when used in general, other than as provided
above, means principles that are (i) consistent with the
principles promulgated or adopted by the Financial Accounting
Standards Board and its predecessors, as in effect from time to
time, and (ii) consistently applied with past financial
statements of the Guarantor and the Borrower adopting the same
principles, provided that in each case referred to in this
definition of "generally accepted accounting principles" a
certified public accountant would, insofar as the use of such
accounting principles is pertinent, be in a position to deliver
an unqualified opinion (other than a qualification regarding
changes in generally accepted accounting principles) as to
financial statements in which such principles have been properly
applied.
Guaranteed Pension Plan. Any employee pension benefit plan
within the meaning of 3(2) of ERISA maintained or contributed to
by the Borrower or any ERISA Affiliate the benefits of which are
guaranteed on termination in full or in part by the PBGC pursuant
to Title IV of ERISA, other than a Multiemployer Plan.
Guarantor. As defined in the preamble hereof.
Guaranty. The Guaranty, dated as of May 23, 1996 and
amended and ratified as of the Closing Date, made by the
Guarantor in favor of the Lenders and the Agent pursuant to which
the Guarantor guaranties to the Lenders and the Agent the payment
and performance of the Obligations and in form and substance
satisfactory to the Lenders and the Administrative Agent.
Hazardous Substances. See 7.18(b).
Indebtedness. As to any Person and whether recourse is
secured by or is otherwise available against all or only a
portion of the assets of such Person and whether or not
contingent, but without duplication:
(i) every obligation of such Person for money
borrowed,
(ii) every obligation of such Person evidenced by
bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the
acquisition of property, assets or businesses,
(iii) every reimbursement obligation of such Person
with respect to letters of credit, bankers' acceptances or
similar facilities issued for the account of such Person,
(iv) every obligation of such Person issued or assumed
as the deferred purchase price of property or services
(including securities repurchase agreements but excluding
trade accounts payable or accrued liabilities arising in the
ordinary course of business which are not overdue or which
are being contested in good faith),
(v) every obligation of such Person under any
Capitalized Lease,
(vi) every obligation of such Person under any lease (a
"synthetic lease") treated as an operating lease under
generally accepted accounting principles and as a loan or
financing for U.S. income tax purposes,
(vii) all sales with recourse by such Person of (A)
accounts or general intangibles for money due or to become
due, (B) chattel paper, instruments or documents creating or
evidencing a right to payment of money or (C) other
receivables (collectively "receivables"), whether pursuant
to a purchase facility or otherwise, other than in
connection with the disposition of the business operations
of such Person relating thereto or a disposition of
defaulted receivables for collection and not as a financing
arrangement, and together with any obligation of such Person
to pay any discount, interest, fees, indemnities, penalties,
recourse, expenses or other amounts in connection therewith;
(viii) every obligation of such Person (an "equity
related purchase obligation") to purchase, redeem, retire or
otherwise acquire for value any shares of capital stock of
any class issued by such Person, any warrants, options or
other rights to acquire any such shares, or any rights
measured by the value of such shares, warrants, options or
other rights,
(ix) every obligation of such Person under any forward
contract, futures contract, swap, option or other financing
agreement or arrangement (including, without limitation,
caps, floors, collars and similar agreements), the value of
which is dependent upon interest rates, currency exchange
rates, commodities or other indices (a "derivative
contract"),
(x) every obligation in respect of Indebtedness of any
other entity (including any partnership in which such Person
is a general partner) to the extent that such Person is
liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except
to the extent that the terms of such Indebtedness provide
that such Person is not liable therefor and such terms are
enforceable under applicable law,
(xi) every obligation, contingent or otherwise, of such
Person guaranteeing, or having the economic effect of
guarantying or otherwise acting as surety for, any
obligation of a type described in any of clauses (i) through
(x) (the "primary obligation") of another Person (the
"primary obligor"), in any manner, whether directly or
indirectly, and including, without limitation, any
obligation of such Person (A) to purchase or pay (or advance
or supply funds for the purchase of) any security for the
payment of such primary obligation, (B) to purchase
property, securities or services for the purpose of assuring
the payment of such primary obligation, or (C) to maintain
working capital, equity capital or other financial statement
condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such primary obligation.
The "amount" or "principal amount" of any Indebtedness at
any time of determination represented by (u) any Indebtedness,
issued at a price that is less than the principal amount at
maturity thereof, shall be the amount of the liability in respect
thereof determined in accordance with generally accepted
accounting principles, (v) any Capitalized Lease shall be the
principal component of the aggregate of the rentals obligation
under such Capitalized Lease payable over the term thereof that
is not subject to termination by the lessee, (w) any sale of
receivables with recourse shall be the amount of unrecovered
capital or principal investment of the purchaser (other than the
Borrower or any of its wholly-owned Subsidiaries) thereof,
excluding amounts representative of yield or interest earned on
such investment, (x) any synthetic lease shall be the stipulated
loss value, termination value or other equivalent amount, (y) any
derivative contract shall be the maximum amount of any
termination or loss payment required to be paid by such Person if
such derivative contract were, at the time of determination, to
be terminated by reason of any event of default or early
termination event thereunder, whether or not such event of
default or early termination event has in fact occurred and (z)
any equity related purchase obligation shall be the maximum fixed
redemption or purchase price thereof inclusive of any accrued and
unpaid dividends to be comprised in such redemption or purchase
price. For the avoidance of doubt, it is agreed among the
parties hereto that, except as provided in clause (vi) above,
"Indebtedness" does not include obligations in respect of
operating leases.
Ineligible Securities. Securities which may not be
underwritten or dealt in by member banks of the Federal Reserve
System under Section 16 of the Banking Act of 1933 (12 U.S.C.
24, Seventh), as amended.
Interest Payment Date. (a) As to any Base Rate Loan, the
first Business Day of the calendar month which follows the
Drawdown Date thereof and (b) as to any Eurodollar Rate Loan, the
last day of the applicable Interest Period and, with respect to
any Interest Period of more than three (3) months, the date that
is three (3) months from the first day of such Interest Period.
Interest Period. With respect to each Revolving Credit
Loan, (a) initially, the period commencing on the Drawdown Date
of such Loan and ending on the last day of one of the periods set
forth below, as selected by the Borrower in a Loan Request (i)
for any Base Rate Loan, the last day of the calendar month; and
(ii) for any Eurodollar Rate Loan, 1, 2, 3 or 6 months; and (b)
thereafter, each period commencing on the day after the last day
of the next preceding Interest Period applicable to such
Revolving Credit Loan and ending on the last day of one of the
periods set forth above, as selected by the Borrower in a
Conversion Request; provided that all of the foregoing provisions
relating to Interest Periods are subject to the following:
(A) if any Interest Period with respect to a
Eurodollar Rate Loan would otherwise end on a day that
is not a Eurodollar Business Day, that Interest Period
shall be extended to the next succeeding Eurodollar
Business Day unless the result of such extension would
be to carry such Interest Period into another calendar
month, in which event such Interest Period shall end on
the immediately preceding Eurodollar Business Day;
(B) if any Interest Period with respect to a Base
Rate Loan would end on a day that is not a Business
Day, that Interest Period shall end on the next
succeeding Business Day;
(C) if the Borrower shall fail to give notice as
provided in 2.7, the Borrower shall be deemed to have
requested a conversion of the affected Eurodollar Rate
Loan to a Base Rate Loan and the continuance of all
Base Rate Loans as Base Rate Loans on the last day of
the then current Interest Period with respect thereto;
(D) any Interest Period relating to any
Eurodollar Rate Loan that begins on the last Eurodollar
Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the
calendar month at the end of such Interest Period)
shall end on the last Eurodollar Business Day of a
calendar month; and
(E) any Interest Period relating to any
Eurodollar Rate Loan that would otherwise extend beyond
the Maturity Date shall end on the Maturity Date.
International Standby Practices. With respect to any
standby Letter of Credit, International Standby Practices (ISP98)
as promulgated by the Institute of International Banking Law &
Practice, Inc., or any successor code of standby letter of credit
practices among banks adopted by the L/C Issuer in the ordinary
course of its business as a standby letter of credit issuer and
in effect at the time of issuance of such Letter of Credit.
Investments. All expenditures made and all liabilities
incurred (contingently or otherwise) for the acquisition of stock
or Indebtedness of, or for loans, advances, capital contributions
or transfers of property to, or in respect of any guaranties (or
other commitments as described under Indebtedness), or
obligations of, any Person. In determining the aggregate amount
of Investments outstanding at any particular time: (a) the amount
of any Investment represented by a guaranty shall be taken at not
less than the principal amount of the obligations guaranteed and
still outstanding; (b) there shall be included as an Investment
all interest accrued with respect to Indebtedness constituting an
Investment unless and until such interest is paid; (c) there
shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase,
redemption, retirement, repayment, liquidating dividend or
liquidating distribution); (d) there shall not be deducted in
respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise,
except that accrued interest included as provided in the
foregoing clause (b) may be deducted when paid; and (e) there
shall not be deducted from the aggregate amount of Investments
any decrease in the value thereof.
Landlord Waiver. A waiver from the lessor or sublessor of
property leased by the Borrower as lessee in substantially the
form of Exhibit G hereto or otherwise approved by the
Administrative Agent in its sole reasonable discretion.
L/C Issuer. BankBoston, N.A.
Leased Real Estate. See 7.18.
Lenders. BBRF and the other lending institutions listed on
Schedule 1 hereto and any other Person who becomes an assignee of
any rights and obligations of a Lender pursuant to 19.
Letter of Credit. See 4.1.1.
Letter of Credit Application. See 4.1.1.
Letter of Credit Participation. See 4.1.4.
Loan Documents. This Credit Agreement, the Notes, the
Letter of Credit Applications, the Letters of Credit and the
Security Documents.
Loan Request. See 2.6.
Loans. The Revolving Credit Loans.
Majority Lenders. As of any date, the Lenders holding at
least fifty-one percent (51%) of the outstanding principal amount
of the Notes on such date; and if no such principal is
outstanding, the Lenders whose aggregate Commitments constitutes
at least fifty-one percent (51%) of the Total Commitment.
Maturity Date. January 22, 2002.
Maximum Drawing Amount. The maximum aggregate amount that
the beneficiaries may draw at any time under outstanding Letters
of Credit, as such aggregate amount may be reduced from time to
time pursuant to the terms of the Letters of Credit.
Monogram Agreement. The Credit Card Program Agreement dated
as of July 20, 1995 among the Borrower, Monogram Credit Card Bank
of Georgia and General Electric Capital Corporation, as amended
and in effect on the Closing Date and as further amended in
accordance with the provisions of 9.10.
Mortgaged Property. Any Real Estate which is subject to any
Mortgage.
Mortgages. The several mortgages and deeds of trust, dated
as of May 23, 1996, and amended and ratified as of the Closing
Date, or otherwise delivered from the Borrower to the Agent with
respect to the leasehold interests of the Borrower in certain
Real Estate, as amended by the Security Documents Amendments.
Multiemployer Plan. Any multiemployer plan within the
meaning of 3(37) of ERISA maintained or contributed to by the
Borrower or any ERISA Affiliate.
Net Book Value. At the relevant time of reference thereto,
the net book value of Eligible Inventory determined on a first-in
first-out basis and in accordance with the retail method of
accounting and based upon the Borrower's historical markup and
markdown practices as in effect on the Closing Date.
Net Proceeds. With respect to any sale of any assets of the
Guarantor, the Borrower or any of their Subsidiaries, the gross
consideration received by the Guarantor, the Borrower or any of
their Subsidiaries from such sale, net of commissions, direct
sales costs, normal closing adjustments, income taxes
attributable to such sale and professional fees and expenses
incurred directly in connection therewith, to the extent the
foregoing are actually paid in connection with such sale.
Notes. The Revolving Credit Notes.
Obligations. All indebtedness, obligations and liabilities
of any of the Guarantor, the Borrower and their Subsidiaries to
any of the Lenders, the L/C Issuer, the Administrative Agent and
the Agent, individually or collectively, whether arising or
incurred under this Credit Agreement or any of the other Loan
Documents or in respect of any of the Loans made or Reimbursement
Obligations incurred or any of the Notes, Letter of Credit
Application, Letter of Credit or other instruments at any time
evidencing any thereof, or arising or incurred in connection with
any interest rate protection arrangements and obligations under
any lease provided by the Agent or any of its Affiliates,
existing on the date of this Credit Agreement or arising
thereafter, direct or indirect, joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated,
secured or unsecured, arising by contract, operation of law or
otherwise.
Operating Account. See 2.6.2.
Original Closing Date. May 23, 1996.
outstanding. With respect to the Loans, the aggregate
unpaid principal thereof as of any date of determination.
Owned Real Estate. See 7.18.
PBGC. The Pension Benefit Guaranty Corporation created by
4002 of ERISA and any successor entity or entities having
similar responsibilities.
Perfection Certificates. The Perfection Certificates as
defined in the Security Agreement.
Permitted Cash Collateral Investments. Investments of cash
collateral made in accordance with the provisions of 9.3 hereof
and the Cash Collateral Agreement in which the Agent has a first
priority perfected security interest.
Permitted Discretion. The Administrative Agent's reasonable
good faith judgment in consideration of any factor which (i)
could adversely affect the value of any Collateral; the ability
to realize upon the Collateral; the enforceability or priority of
the liens thereon or the amount that the Bank Agents and the
Lenders would be likely to receive (after giving consideration to
delays in payment and costs of enforcement) in the liquidation
thereof; (ii) materially increases the likelihood that the Bank
Agents and the Lenders would not receive payment for all of the
Obligations.
Permitted Liens. Liens, security interests and other
encumbrances permitted by 9.2.
Permitted Inventory Locations. The Stores and warehouse
facilities of the Borrower located in the United States of
America and listed on Schedule 7.22 hereto, as such Schedule 7.22
may be supplemented from time to time in accordance with the
provisions of 8.4(j), subject to receipt by the Administrative
Agent of a waiver in substantially the form of Exhibit G or in
such other form reasonably satisfactory to the Administrative
Agent, with respect to each inventory consolidator other than the
ones listed on the Schedule 7.22 on the Closing Date.
Person. Any individual, corporation, partnership, trust,
unincorporated association, business, or other legal entity, and
any government or any governmental agency or political
subdivision thereof.
POS System. See 8.18.
Prior Credit Agreement. See preamble.
RCRA. See 7.18(a).
Real Estate. All real property at any time owned or leased
(as lessee or sublessee) by the Guarantor, the Borrower or any of
their Subsidiaries.
Record. The grid attached to a Note, or the continuation of
such grid, or any other similar record, including computer
records, maintained by any Lender with respect to any Loan
referred to in such Note.
Reference Bank. BKB.
Reference Period. Any period of twelve consecutive months
(or such shorter period of one, two, three, four, five, six,
seven, eight, nine, ten, or eleven consecutive months as has
elapsed since the Closing Date).
Reimbursement Obligation. The Borrower's obligation to
reimburse the L/C Issuer and the Lenders on account of any
drawing under any Letter of Credit as provided in 4.2.
Reserves. As reasonably determined by the Administrative
Agent, such amounts as the Administrative Agent may from time to
time reasonably establish and revise, pursuant to its Permitted
Discretion, upon seven (7) days written notice to the Borrower
(a) to reflect events, conditions, contingencies or risks which
(i) adversely affect either (A) any Collateral included in the
Borrowing Base, the rights of the Bank Agents or any of the
Lenders in any Collateral included in the Borrowing Base or its
value or (B) the security interest and other rights of the Agent
or any of the Lenders in the Collateral included in the Borrowing
Base (including the enforceability, perfection and priority
thereof) or (ii) adversely affect in any material respect the
business or financial condition of the Borrower or any of its
Subsidiaries or (b) to reflect the belief (based upon a
comparison to historical information) of the Administrative Agent
that any Borrowing Base Report or other collateral report or
financial information furnished by or on behalf of the Borrower
to the Administrative Agent or any of the Lenders is or may have
been incomplete, inaccurate or misleading in any material
respect. Initial Reserves to be established as of the Closing
Date will include an amount equal to the sum of (x) the aggregate
amount of three (3) months' rent for all of the Borrower's stores
located in the states of Pennsylvania, Virginia and Washington,
provided that the foregoing shall not apply to such locations
where landlord waivers in form attached hereto as Exhibit G or
otherwise on terms reasonably acceptable to the Administrative
Agent have been received by the Administrative Agent and (y)
customer liability reserves equal to 50% of gift and merchandise
credits issued and outstanding during the last twelve months and
adjusted monthly. Reserves may include, but are not limited to:
rent, whether for personal or real property and, in the case of
rent fifteen or more days past due, whether or not a lessor's or
landlord's waiver, substantially in the form of Exhibit G or
otherwise reasonably acceptable to the Administrative Agent, has
been received by the Administrative Agent from such lessor or
landlord; payables based upon past due normal trade terms; taxes
and other governmental charges, whether ad valorem, personal or
real property or otherwise if the Administrative Agent reasonably
believes that the tax claims therefor may have priority over the
Agent's security interest in any of the Collateral or if the
Administrative Agent reasonably believes that such taxes or
governmental charges may adversely affect the recovery realized
on the Collateral; and any customs, duty, freight or other out-of-
pocket costs or expenses required or advisable to "land" any
Eligible Inventory the purchase of which is supported by a Letter
of Credit.
Revolving Credit Loans. Revolving credit loans made or to
be made by the Lenders to the Borrower pursuant to 2.
Revolving Credit Note Record. A Record with respect to a
Revolving Credit Note.
Revolving Credit Notes. See 2.4.
XXXX. See 7.18(a).
Section 20 Subsidiary. A Subsidiary of the bank holding
company controlling any Lender, which Subsidiary has been granted
authority by the Federal Reserve Board to underwrite and deal in
certain Ineligible Securities.
Security Agreement. The Security Agreement, dated as of May
23, 1996 and ratified and confirmed as of the Closing Date, among
the Borrower, the Guarantor and the Agent and in form and
substance satisfactory to the Administrative Agent.
Security Documents. The Guaranty, the Security Agreement,
the Mortgages, the Trademark Assignment, the Cash Collateral
Agreement, the Blocked Account Agreement, the Stock Pledge
Agreement and the Security Documents Amendments.
Security Documents Amendments. Collectively, the Security
Documents Amendment dated as of January 30, 1998, among the
Borrower, the Guarantor and the Agent, and the Security Documents
Amendment No. 2 dated as of the Closing Date, among the Borrower,
the Guarantor and the Agent, and in form and substance
satisfactory to the Administrative Agent.
Settlement. The making of, or receiving of payments, in
immediately available funds, by the Lenders, to the extent
necessary to cause each Lender's actual share of the outstanding
amount of Revolving Credit Loans to be equal to such Lender's
Commitment Percentage of the outstanding amount of such Revolving
Credit Loans, in any case where, prior to such event or action,
the actual share is not so equal.
Settlement Amount. See 2.10.1.
Settlement Date. (a) The Business Day immediately following
the Administrative Agent's becoming aware of the existence of an
Event of Default, (b) any Business Day on which the amount of
Revolving Credit Loans outstanding from BBRF in its individual
capacity and BBRF in its capacity as Administrative Agent plus
BBRF's Commitment Percentage of the sum of the Maximum Drawing
Amount and any Unpaid Reimbursement Obligations is equal to or
greater than BBRF's Commitment Percentage of the Total
Commitment, (c) the Business Day following notice by BBRF to the
Lenders of its intent to effect a Settlement, (d) any Business
Day on which (i) the amount of outstanding Revolving Credit Loans
decreases and (ii) the amount of BBRF's Revolving Credit Loans
outstanding equals zero Dollars ($0), (e) any day on which any
conversion of a Base Rate Loan to a Eurodollar Rate Loan occurs,
(f) the Maturity Date, (g) weekly, on a day to be determined by
the Administrative Agent and (h) the Drawdown Date relating to
any Loan Request.
Settling Bank. See 2.10.1.
Stock Pledge Agreement. The Stock Pledge Agreement, dated
as of May 23, 1996 and amended and ratified as of the Closing
Date, between the Guarantor and the Agent and in form and
substance satisfactory to the Administrative Agent.
Store. Any retail store currently owned or leased or
hereafter acquired or leased by the Guarantor, the Borrower or
any of their Subsidiaries.
Subsidiary. Any corporation, association, trust, or other
business entity of which the designated parent shall at any time
own directly or indirectly through a Subsidiary or Subsidiaries
at least a majority (by number of votes) of the outstanding
Voting Stock.
Supplemental Executive Retirement Plan. Collectively, (a)
the Supplementary Executive Retirement Plan of the Borrower
effective as of August 1, 1988, as amended by Amendment Number 1
dated as of August 1, 1988, by a Second Amendment dated as of
August 1, 1995 and by Amendment No. 3 dated January 7, 1997; (b)
the Executive Severance Plan for Xxxxxx Xxxxxx, dated as of
August, 1995; (c) the Executive Split Dollar Life Insurance
Agreement (Collateral Assignment Method) between the Borrower and
Xxxxxx Xxxxxx, dated June 5, 1994; (d) the Executive Severance
Plan for Xxxx Xxxxxxx, III, dated August, 1995; (e) the Executive
Split Dollar Life Insurance Agreement (Collateral Assignment
Method) between the Borrower and Xxxx Xxxxxxx, dated June 5,
1994; (f) the Executive Severance Plan Trust Agreement dated June
4, 1994 between the Guarantor and the trustee thereof; (g) the
Executive Severance Plan for Xxxxxx X. Xxxxxx, Esq., dated July
15, 1997; (h) the Executive Split Dollar Life Insurance Agreement
(Collateral Assignment Method) between the Borrower and Xxxxxx X.
Xxxxxx, Esq., dated July 15, 1997; and (i) plans of a similar
type and nature created after January 30, 1998 for the benefit of
W. Xxx Xxxxxxxxx.
Total Commitment. The sum of the Commitments of the
Lenders, as in effect from time to time.
Total Facility Usage. As of any time of determination, the
sum of (a) the Revolving Credit Loans outstanding, (b) the
Maximum Drawing Amount and (c) Unpaid Reimbursement Obligations.
Trademark Assignment. The Trademark Assignment, dated as of
May 23, 1996 and amended and ratified as of the Closing Date,
made by the Borrower in favor of the Agent and in form and
substance satisfactory to the Administrative Agent.
Type. As to any Revolving Credit Loan, its nature as a Base
Rate Loan or a Eurodollar Rate Loan.
Uniform Customs. With respect to any Letter of Credit, the
Uniform Customs and Practice for Documentary Credits (1993
Revision), International Chamber of Commerce Publication No. 500
or any successor version thereto adopted by the L/C Issuer in the
ordinary course of its business as a letter of credit issuer and
in effect at the time of issuance of such Letter of Credit.
Unpaid Reimbursement Obligation. Any Reimbursement
Obligation for which the Borrower does not reimburse the L/C
Issuer and the Lenders on the date specified in, and in
accordance with, 4.2.
Voting Stock. Stock or similar interests, of any class or
classes (however designated), the holders of which are at the
time entitled, as such holders, to vote for the election of a
majority of the directors (or persons performing similar
functions) of the corporation, association, trust or other
business entity involved, whether or not the right so to vote
exists by reason of the happening of a contingency.
1.1. Rules of Interpretation.
(a) A reference to any document or agreement
shall include such document or agreement as amended,
modified or supplemented from time to time in
accordance with its terms and the terms of this Credit
Agreement.
(b) The singular includes the plural and the
plural includes the singular.
(c) A reference to any law includes any amendment
or modification to such law.
(d) A reference to any Person includes its
permitted successors and permitted assigns.
(e) Accounting terms not otherwise defined herein
have the meanings assigned to them by generally
accepted accounting principles applied on a consistent
basis by the accounting entity to which they refer.
(f) The words "include", "includes" and
"including" are not limiting.
(g) All terms not specifically defined herein or
by generally accepted accounting principles, which
terms are defined in the Uniform Commercial Code as in
effect in the Commonwealth of Massachusetts, have the
meanings assigned to them therein, with the term
"instrument" being that defined under Article 9 of the
Uniform Commercial Code.
(h) Reference to a particular "" refers to that
section of this Credit Agreement unless otherwise
indicated.
(i) The words "herein", "hereof", "hereunder" and
words of like import shall refer to this Credit
Agreement as a whole and not to any particular section
or subdivision of this Credit Agreement.
(j) Unless otherwise expressly indicated, in the
computation of periods of time from a specified date to
a later specified date, the word "from" means "from and
including," the words "to" and "until" each mean "to
but excluding," and the word "through" means "to and
including."
(k) This Credit Agreement and the other Loan
Documents may use several different limitations, tests
or measurements to regulate the same or similar
matters. All such limitations, tests and measurements
are, however, cumulative and are to be performed in
accordance with the terms thereof. To the extent that
an inconsistency exists between the Credit Agreement
and any other Loan Document, the Credit Agreement shall
control.
(l) This Credit Agreement and the other Loan
Documents are the result of negotiation among, and have
been reviewed by counsel to, among others, the
Administrative Agent and the Borrower and are the
product of discussions and negotiations among all
parties. Accordingly, this Credit Agreement and the
other Loan Documents are not intended to be construed
against the Administrative Agent or any of the Lenders
merely on account of the Administrative Agent's or any
Lender's involvement in the preparation of such
documents.
2. THE REVOLVING CREDIT FACILITY.
2.1. Commitment to Lend.
Subject to the terms and conditions set forth in this
Credit Agreement, each of the Lenders severally agrees to
lend to the Borrower and the Borrower may borrow, repay, and
reborrow from time to time between the Closing Date and the
Maturity Date upon notice by the Borrower to the
Administrative Agent given in accordance with 2.6, such
sums as are requested by the Borrower up to a maximum
aggregate amount outstanding (after giving effect to all
amounts requested) at any one time equal to such Lender's
Commitment minus such Lender's Commitment Percentage of the
sum of the Maximum Drawing Amount and all Unpaid
Reimbursement Obligations, provided that the sum of the
outstanding amount of the Revolving Credit Loans (after
giving effect to all amounts requested) plus the Maximum
Drawing Amount and all Unpaid Reimbursement Obligations
shall not at any time exceed the lesser of (a) the Total
Commitment and (b) the Borrowing Base. The Revolving Credit
Loans shall be made pro rata in accordance with each
Lender's Commitment Percentage. Each request for a
Revolving Credit Loan hereunder shall constitute a
representation and warranty by the Borrower that the
conditions set forth in 11 and 12, in the case of the
initial Revolving Credit Loans to be made on the Closing
Date, and 12, in the case of all other Revolving Credit
Loans, have been satisfied on the date of such request.
2.2. Commitment Fee.
The Borrower agrees to pay to the Administrative Agent
for the accounts of the Lenders in accordance with their
respective Commitment Percentages a commitment fee
calculated at the rate of three-eighths of one percent
(3/8%) per annum on the average daily amount during each
calendar quarter or portion thereof from the Closing Date to
the Maturity Date by which the Total Commitment minus the
sum of the Maximum Drawing Amount and all Unpaid
Reimbursement Obligations exceeds the outstanding amount of
Revolving Credit Loans during such calendar quarter. The
commitment fee shall be payable quarterly in arrears on the
first day of each calendar quarter for the immediately
preceding calendar quarter commencing on the first such date
following the date hereof, with a final payment on the
Revolving Credit Maturity Date or any earlier date on which
the Commitments shall terminate.
2.3. Reduction of Commitment.
The Borrower shall have the right, at any time and from
time to time upon five (5) Business Days' written notice to
the Administrative Agent, to reduce by $5,000,000 or an
integral multiple of $1,000,000 or terminate entirely the
Total Commitment, whereupon the Commitments of the Lenders
shall be reduced pro rata in accordance with their
respective Commitment Percentages of the amount specified in
such notice, or as the case may be, terminated. Promptly
after receiving any notice of the Borrower delivered
pursuant to this 2.3, the Administrative Agent will notify
the Lenders of the substance thereof. If the Borrower
repays or prepays all outstanding Revolving Credit Loans and
the Total Commitment is terminated in its entirety by the
Borrower, whether in a single transaction or in a series of
related transactions or if the Borrower permanently reduces
the Total Commitment by an amount permitted under this 2.3,
the Borrower shall pay to the Administrative Agent for the
account of the Lenders in accordance with their Commitment
Percentages a premium in an amount calculated as follows:
(a) if such repayment or prepayment and
termination is concluded prior to the second
anniversary of the Closing Date, an amount equal to one-
half of one percent (1/2%) of the amount by which the
Total Commitment is reduced; and
(b) if such repayment or prepayment is concluded
after the second anniversary of the Closing Date, no
premium shall be payable.
Notwithstanding the foregoing, the Administrative Agent may waive
any premiums payable under this 2.3 to all Lenders in the event
that this Credit Agreement is replaced by a refinancing led by
the Administrative Agent. Notwithstanding the foregoing, no
premium shall be payable under this 2.3 to any Lender in the
event that the Borrower is acquired by a Person who is not an
Affiliate of the Guarantor, the Borrower or any of their
Subsidiaries.
2.4. The Revolving Credit Notes.
The Revolving Credit Loans shall be evidenced by
separate amended and restated promissory notes of the
Borrower in substantially the form of Exhibit B hereto (each
a "Revolving Credit Note"), dated as of the Closing Date (or
such other date as a Lender may become a party hereto in
accordance with 19 hereof) and completed with appropriate
insertions. One Revolving Credit Note shall be payable to
the order of each Lender in a principal amount equal to such
Lender's Commitment or, if less, the outstanding amount of
all Revolving Credit Loans made by such Lender, plus
interest accrued thereon, as set forth below. The Borrower
irrevocably authorizes each Lender to make or cause to be
made, at or about the time of the Drawdown Date of any
Revolving Credit Loan or at the time of receipt of any
payment of principal on such Lender's Revolving Credit Note,
an appropriate notation on such Lender's Revolving Credit
Note Record reflecting the making of such Revolving Credit
Loan or (as the case may be) the receipt of such payment.
The outstanding amount of the Revolving Credit Loans set
forth on such Lender's Revolving Credit Note Record shall,
absent manifest error, be prima facie evidence of the
principal amount thereof owing and unpaid to such Lender,
but the failure to record, or any error in so recording, any
such amount on such Lender's Revolving Credit Note Record
shall not limit or otherwise affect the obligations of the
Borrower hereunder or under any Revolving Credit Note to
make payments of principal of or interest on any Revolving
Credit Note when due.
2.5. Interest on Revolving Credit Loans.
Except as otherwise provided in 5.10,
(a) each Base Rate Loan shall bear interest for
the period commencing with the Drawdown Date thereof
and ending on the last day of the Interest Period with
respect thereto at the Base Rate plus the Applicable
Margin; and
(b) each Eurodollar Rate Loan shall bear interest
for the period commencing with the Drawdown Date
thereof and ending on the last day of the Interest
Period with respect thereto at the rate of the
Eurodollar Rate determined for such Interest Period
plus the Applicable Margin.
The Borrower promises to pay interest on each Revolving Credit
Loan in arrears on each Interest Payment Date with respect
thereto.
2.6. Requests for Revolving Credit Loans.
2.6.1. Loan Request.
The Borrower shall give to the Administrative
Agent written notice in the form of Exhibit C hereto
(or telephonic notice confirmed in a writing in the
form of Exhibit C hereto) of each Revolving Credit Loan
requested hereunder (a "Loan Request") (a) no later
than 11:00 a.m. (Boston time) on the proposed Drawdown
Date of any Base Rate Loan and (b) no later than 10:30
a.m. three (3) Eurodollar Business Days prior to the
proposed Drawdown Date of any Eurodollar Rate Loan.
Each such notice shall specify (i) the principal amount
of the Revolving Credit Loan requested, (ii) the
proposed Drawdown Date of such Revolving Credit Loan,
(iii) if such Revolving Credit Loan is a Eurodollar
Rate Loan, the Interest Period for such Revolving
Credit Loan and (iv) the Type of such Revolving Credit
Loan. Promptly upon receipt of any such notice, the
Administrative Agent shall notify each of the Lenders
thereof. Each Loan Request shall be irrevocable and
binding on the Borrower and shall obligate the Borrower
to accept the Revolving Credit Loan requested from the
Lenders on the proposed Drawdown Date. Each Loan
Request for a Base Rate Loan shall be in a minimum
aggregate amount of $100,000 or an integral multiple
thereof except that in the event that the
Administrative Agent has declined to make a Revolving
Credit Loan pursuant to 2.6.2, there shall be no
minimum amount required for a Base Rate Loan requested
in lieu of such advance by the Administrative Agent.
Each Loan Request for a Eurodollar Rate Loan shall be
in a minimum aggregate amount of $1,000,000 or an
integral multiple of $100,000 in excess thereof.
2.6.2. Swing Line.
Notwithstanding the notice and minimum amount
requirements set forth in 2.6.1 and the provisions of
2.8.1, but otherwise in accordance with the terms and
conditions of this Credit Agreement, the Administrative
Agent may, in its sole discretion and without
conferring with the Lenders, make up to $10,000,000 of
Revolving Credit Loans to the Borrower (a) by entry of
credits to the Borrower's operating account with the
Administrative Agent (the "Operating Account") to cover
checks or other charges which the Borrower has drawn or
made against such account or (b) in an amount as
otherwise requested by the Borrower. The Borrower
hereby requests and authorizes the Administrative Agent
to make from time to time such Revolving Credit Loans
by means of appropriate entries of such credits
sufficient to cover checks and other charges then
presented. The Borrower acknowledges and agrees that
the making of such Revolving Credit Loans shall, in
each case, be subject in all respects to the provisions
of this Credit Agreement as if they were Revolving
Credit Loans covered by a Loan Request including,
without limitation, the limitations set forth in 2.1
and the requirements that the applicable provisions of
11 and 12, in the case of Revolving Credit Loans made
on the Closing Date, and 12, in the case of all
Revolving Credit Loans, be satisfied. All actions
taken by the Administrative Agent pursuant to the
provisions of this 2.6.2 shall be conclusive and
binding on the Borrower absent the Administrative
Agent's gross negligence or willful misconduct. Prior
to a Settlement, interest payable on such Revolving
Credit Loans shall be for the account of the
Administrative Agent and payment of principal on such
Revolving Credit Loans shall be for the account of
BBRF.
2.6.3. Temporary Suspension of Eurodollar Rate
Options.
Notwithstanding 2.6.1, no Eurodollar Rate Loans
shall be made, and no Base Rate Loans may be converted
to Eurodollar Rate Loans, for a period (the "initial
period") of 30 days following the Closing Date unless
prior to the end of the initial period a satisfactory
syndication has been completed. If, following the end
of the initial period, no satisfactory syndication has
been completed, no Interest Period for any Eurodollar
Loan may have duration of more than one month, unless
such Interest Period commences after the earlier to
occur of the expiration of 60 days following the end of
the initial period and the completion of a satisfactory
syndication. The term "satisfactory syndication," as
used in this 2.6.3, means a syndication after which
BBRF's Commitment does not exceed $25,000,000.
2.6.4. Reimbursement Obligations.
In addition to requests pursuant to 2.6.1 and
2.6.2, the Borrower shall be deemed to have made a
request for a Revolving Credit Loan equal to the amount
of any Reimbursement Obligations under any Letter of
Credit which is presented to and honored by the L/C
Issuer. The Borrower acknowledges and agrees that the
making of such Revolving Credit Loans shall, in each
case be subject in all respects to the provisions of
this Credit Agreement as if they were Revolving Credit
Loans covered by a Loan Request.
2.7. Conversion Options.
2.7.1. Conversion to Different Type of Revolving
Credit Loan.
The Borrower may elect from time to time to
convert any outstanding Revolving Credit Loan to a
Revolving Credit Loan of another Type, provided that
(a) with respect to any such conversion of a Revolving
Credit Loan to a Base Rate Loan, the Borrower shall
give the Administrative Agent prior written notice of
such election no later than 11:00 a.m. (Boston time) on
the date of such election; (b) with respect to any such
conversion of a Base Rate Loan to a Eurodollar Rate
Loan, the Borrower shall give the Administrative Agent
prior written notice of such election no later than
10:30 a.m. (Boston time) three (3) Eurodollar Business
Days prior to the effectiveness of such election; (c)
with respect to any such conversion of a Eurodollar
Rate Loan into a Revolving Credit Loan of another Type,
such conversion shall, at the Borrower's option, either
be made on the last day of the Interest Period with
respect thereto or be made subject to the provisions of
5.9(c) of this Credit Agreement and (d) no Loan may be
converted into a Eurodollar Rate Loan when any Default
or Event of Default has occurred and is continuing. On
the date on which such conversion is being made each
Lender shall take such action as is necessary to
transfer its Commitment Percentage of such Revolving
Credit Loans to its Domestic Lending Office or its
Eurodollar Lending Office, as the case may be. All or
any part of outstanding Revolving Credit Loans of any
Type may be converted into a Revolving Credit Loan of
another Type as provided herein, provided that any
partial conversion shall be in an aggregate principal
amount of $1,000,000 or a whole multiple of $100,000.
Each Conversion Request relating to the conversion of a
Revolving Credit Loan to a Eurodollar Rate Loan shall
be irrevocable by the Borrower.
2.7.2. Continuation of Type of Revolving Credit
Loan.
Any Revolving Credit Loan of any Type may be
continued as a Revolving Credit Loan of the same Type
upon the expiration of an Interest Period with respect
thereto by compliance by the Borrower with the notice
provisions contained in 2.7.1; provided that no
Eurodollar Rate Loan may be continued as such when any
Default or Event of Default has occurred and is
continuing, but shall be automatically converted to a
Base Rate Loan on the last day of the first Interest
Period relating thereto ending during the continuance
of any Default or Event of Default of which officers of
the Administrative Agent active upon the Borrower's
account have actual knowledge. The Administrative
Agent shall notify the Lenders and the Borrower
promptly when any such automatic conversion
contemplated by this 2.7 is scheduled to occur.
2.7.3. Eurodollar Rate Loans.
Any conversion to or from Eurodollar Rate Loans
shall be in such amounts and be made pursuant to such
elections so that, after giving effect thereto, the
aggregate principal amount of all Eurodollar Rate Loans
having the same Interest Period shall not be less than
$1,000,000 or a whole multiple of $100,000 in excess
thereof.
2.8. Funds for Revolving Credit Loan.
2.8.1. Funding Procedures.
Not later than 1:00 p.m. (Boston time) on the
proposed Drawdown Date of any Revolving Credit Loans,
each of the Lenders will make available to the
Administrative Agent, at its Head Office, in
immediately available funds, the amount of such
Lender's Commitment Percentage of the amount of the
requested Revolving Credit Loans. Upon receipt from
one or more of the Lenders of such amount, and upon
receipt of the documents required by 11 and 12 and
the satisfaction of the other conditions set forth
therein, to the extent applicable, the Administrative
Agent will make available to the Borrower the aggregate
amount of such Revolving Credit Loans made available to
the Administrative Agent by the Lenders. The failure
or refusal of any Lender to make available to the
Administrative Agent at the aforesaid time and place on
any Drawdown Date the amount of its Commitment
Percentage of the requested Revolving Credit Loans
shall not relieve any other Lender from its several
obligation hereunder to make available to the
Administrative Agent the amount of such other Lender's
Commitment Percentage of any requested Revolving Credit
Loans.
2.8.2. Advances by Administrative Agent.
The Administrative Agent may, unless notified in
writing to the contrary by any Lender prior to a
Drawdown Date, assume that such Lender has made
available to the Administrative Agent on such Drawdown
Date the amount of such Lender's Commitment Percentage
of the Revolving Credit Loans to be made on such
Drawdown Date, and the Administrative Agent may (but it
shall not be required to), in reliance upon such
assumption, make available to the Borrower a
corresponding amount. If any Lender makes available to
the Administrative Agent such amount on a date after
such Drawdown Date, such Lender shall pay to the
Administrative Agent on demand an amount equal to the
product of (a) the average computed for the period
referred to in clause (c) below, of the weighted
average interest rate paid by the Administrative Agent
for federal funds acquired by the Administrative Agent
during each day included in such period, times (b) the
amount of such Lender's Commitment Percentage of such
Revolving Credit Loans, times (c) a fraction, the
numerator of which is the number of days that elapse
from and including such Drawdown Date to the date on
which the amount of such Lender's Commitment Percentage
of such Revolving Credit Loans shall become immediately
available to the Administrative Agent, and the
denominator of which is 365. A statement of the
Administrative Agent submitted to such Lender with
respect to any amounts owing under this paragraph shall
be, absent manifest error, prima facie evidence of the
amount due and owing to the Administrative Agent by
such Lender. If the amount of such Lender's Commitment
Percentage of such Revolving Credit Loans is not made
available to the Administrative Agent by such Lender
within three (3) Business Days following such Drawdown
Date, the Administrative Agent shall be entitled to
recover such amount from the Borrower on demand, with
interest thereon at the rate per annum applicable to
the Revolving Credit Loans made on such Drawdown Date;
provided that such Lender shall indemnify the
Administrative Agent and hold the Administrative Agent
harmless from and against any loss, cost or expense
(including loss of anticipated profits) that the
Administrative Agent may sustain or incur as a
consequence of the Borrower's repayment, upon the
Administrative Agent's demand, of such Revolving Credit
Loans, including any such loss or expense arising from
interest or fees payable by the Administrative Agent to
lenders of funds obtained by it in order to maintain
its Eurodollar Rate Loans.
2.9. Change in Borrowing Base.
The Borrowing Base shall be determined weekly (or at
such other interval as may be specified pursuant to 8.4(f))
by the Administrative Agent by reference to the Borrowing
Base Report delivered to the Lenders and the Administrative
Agent pursuant to 8.4(f).
2.10. Settlements; Failure to Make Funds Available.
2.10.1. Notice to Lenders.
On each Settlement Date, the Administrative Agent
shall, not later than 12:00 noon (Boston time), give
telephonic or facsimile notice (a) to the Lenders and
the Borrower of the respective outstanding amount of
Revolving Credit Loans made by the Administrative Agent
on behalf of the Lenders pursuant to 2.6.2 from the
immediately preceding Settlement Date through the close
of business on the prior day and (b) to the Lenders of
the amount (a "Settlement Amount") that each Lender
(the "Settling Bank") shall pay to effect a Settlement
of any Revolving Credit Loan. A statement of the
Administrative Agent submitted to the Lenders and the
Borrower with respect to any amounts owing under this
2.10 shall, absent manifest error, be prima facie
evidence of the amount due and owing. The Settling
Bank shall, not later than 2:00 p.m. (Boston time) on
such Settlement Date, effect a wire transfer of
immediately available funds to the Administrative Agent
in the amount of the Settlement Amount. All funds
advanced by any Lender as a Settling Bank pursuant to
this 2.10 shall for all purposes be treated as a
Revolving Credit Loan made by such Settling Bank to the
Borrower and all funds received by any Lender pursuant
to this 2.10 shall for all purposes be treated as
repayment of amounts owed with respect to Revolving
Credit Loans made by such Lender. In the event that
any bankruptcy, reorganization, liquidation,
receivership or similar cases or proceedings in which
the Borrower is a debtor prevent a Settling Bank from
making any Revolving Credit Loan to effect a Settlement
as contemplated hereby, such Settling Bank will make
such disposition and arrangements with the other
Lenders with respect to such Revolving Credit Loans,
either by way of purchase of participations,
distribution, pro tanto assignment of claims,
subrogation or otherwise as shall result in each
Lender's share of the outstanding Revolving Credit
Loans being equal, as nearly as may be, to such
Lender's Commitment Percentage of the outstanding
amount of the Revolving Credit Loans.
2.10.2. Delinquent Banks.
If any Lender makes available to the
Administrative Agent its Settlement Amount on a date
after such Settlement Date, such Lender shall pay to
the Administrative Agent on demand an amount equal to
the product of (a) the average computed for the period
referred to in clause (c) below, of the weighted
average interest rate paid by the Administrative Agent
for federal funds acquired by the Administrative Agent
during each day included in such period, times (b) the
amount of such Settlement Amount, times (c) a fraction,
the numerator of which is the number of days that
elapse from and including such Settlement Date to the
date on which the amount of such Settlement Amount
shall become immediately available to the
Administrative Agent, and the denominator of which is
360. A statement of the Administrative Agent submitted
to such Lender with respect to any amounts owing under
this paragraph shall be prima facie evidence of the
amount due and owing to the Administrative Agent by
such Lender. If such Lender's Settlement Amount is not
made available to the Administrative Agent by such
Lender within three (3) Business Days following such
Settlement Date the Administrative Agent shall be
entitled to recover such amount from the Borrower on
demand, with interest thereon at the rate per annum
applicable to the Revolving Credit Loans as of such
Settlement Date; provided that such Lender shall
indemnify the Administrative Agent and hold the
Administrative Agent harmless from and against any
loss, cost or expense (including loss of anticipated
profits) that the Administrative Agent may sustain or
incur as a consequence of the Borrower's repayment,
upon the Administrative Agent's demand, of such
Revolving Credit Loans, including any such loss or
expense arising from interest or fees payable by the
Administrative Agent to lenders of funds obtained by it
in order to maintain its Eurodollar Rate Loans.
2.10.3. Advances.
The failure or refusal of any Lender to make
available to the Administrative Agent at the aforesaid
time and place on any Settlement Date the amount of its
Settlement Amount (a) shall not relieve any other
Lender from its several obligations hereunder to make
available to the Administrative Agent the amount of
such other Lender's Settlement Amount and (b) shall not
impose upon such other Lender any liability with
respect to such failure or refusal or otherwise
increase the Commitment of such other Lender.
3. REPAYMENT OF THE REVOLVING CREDIT LOANS.
3.1. Maturity.
The Borrower promises to pay on the Maturity Date, and
there shall become absolutely due and payable on the
Maturity Date, all of the Revolving Credit Loans outstanding
on such date, together with any and all accrued and unpaid
interest thereon.
3.2. Mandatory Repayments of Revolving Credit Loans.
3.2.1. Outstandings in Excess of Commitment or
Borrowing Base.
If at any time the sum of the outstanding amount
of the Revolving Credit Loans, the Maximum Drawing
Amount and all Unpaid Reimbursement Obligations exceeds
the lesser of (a) the Total Commitment and (b) the
Borrowing Base, then the Borrower shall immediately pay
the amount of such excess to the Administrative Agent
for the respective accounts of the Lenders for
application: first, to any Unpaid Reimbursement
Obligations and any other Obligations then due and
payable; second, to the Revolving Credit Loans (first,
to the payment of those Revolving Credit Loans that are
Base Rate Loans and second, to the payment of, or at
the Borrower's option, cash collateralization in
accordance with the terms of the Cash Collateral
Agreement (which cash collateral may be invested in
Permitted Cash Collateral Investments) those Revolving
Credit Loans that are Eurodollar Rate Loans); third, to
provide to the L/C Issuer cash collateral (which cash
collateral may be invested in Permitted Cash Collateral
Investments) for Reimbursement Obligations as
contemplated by 4.2(b) and (c) and for any other
Obligations not then due and payable, provided,
however, that notwithstanding anything to the contrary
contained in this 3.2.1, any amounts which are to be
applied to the Revolving Credit Loans pursuant to this
3.2.1. shall, to the extent BBRF has advanced
Revolving Credit Loans to the Borrower pursuant to
2.6.2 hereof for which a Settlement has not occurred,
first be paid to BBRF to be applied to any Revolving
Credit Loans made by BBRF to the Borrower pursuant to
52.6.2 hereof and in which a Settlement has not, at the
time of such repayment, been effected. Each payment of
any Unpaid Reimbursement Obligations or prepayment of
Revolving Credit Loans shall be allocated among the
Lenders, in proportion, as nearly as practicable, to
each Reimbursement Obligation or (as the case may be)
the respective unpaid principal amount of each Lender's
Revolving Credit Note, with adjustments to the extent
practicable to equalize any prior payments or
repayments not exactly in proportion.
3.2.2. Blocked Account Provisions.
(a) Each of the Guarantor and its Subsidiaries
will (i) maintain a blocked depository account (the
"Blocked Account") with the Agent and under the control
of the Agent, as contemplated by the terms of the
Blocked Account Agreement and the Agent will maintain a
concentration account in the name of the Agent (the
"Concentration Account"), (ii) direct or has directed
(1) each Agency Account Institution in writing to cause
all funds in excess of the amount set forth opposite
such Agency Account Institutions' name on Schedule
3.2.2.(a) hereof (which amount is net of funds in the
process of transfer to the Agent) held by such Agency
Account Institution in the Agency Accounts to be
transferred daily (or such other more frequent period
as the Agent or the Guarantor or such Subsidiary
requests) to, and only to, the Agent for application to
the Revolving Credit Loans in accordance with this
3.2.2(a) and (2) each Person set forth on Schedule
3.2.2(b) hereto in writing to make all payments on or
with respect to any of the Collateral due or to become
due to the Guarantor or any of its Subsidiaries to the
Guarantor or such Subsidiary directly to the
Concentration Account in the name of the Agent, or
immediately endorse and deposit any such payments
received directly into the Concentration Account, with
each of the Guarantor and the Borrower agreeing that
any money, money orders, checks or other payments
received by the Guarantor or Borrower, as the case may
be, will be held by the Guarantor or Borrower, as the
case may be, in trust for the benefit of the Agent and
the Lenders and shall turn such proceeds promptly over
to the Agent in the identical form received (with
appropriate endorsements) by deposit to the
Concentration Account and (iii) direct in writing its
account debtors and obligors on instruments or other
obligors of the Guarantor or any of its Subsidiaries
with respect to any of the Collateral to make all
payments on or with respect to any of the Collateral
due or to become due to the Guarantor or any of its
Subsidiaries to the Guarantor or such Subsidiary
directly to the Concentration Account, or immediately
endorse and deposit any such payments received directly
into the Concentration Account, with each of the
Guarantor and the Borrower agreeing that any money,
money orders, checks or other payments received by the
Guarantor or Borrower, as the case may be, will be held
by the Guarantor or Borrower, as the case may be, in
trust for the benefit of the Agent and the Lenders and
shall turn such proceeds promptly over to the Agent in
the identical form received (with appropriate
endorsements) by deposit to the Concentration Account.
The Agent shall, pursuant to arrangements satisfactory
to the Agent, (i) one Business Day after the receipt by
the Agent of good collected funds constituting cash
proceeds from account debtors, obligors, or (as the
case may be) the Guarantor or such Subsidiary so
deposited in the Blocked Account, (ii) one Business Day
after the receipt by the Agent of any and all cash
proceeds from any Agency Account (or such later or
earlier date as the Agent determines that good
collected funds will be received by the Agent), and
(iii) on a provisional basis until final receipt of
good collected funds, apply all such cash proceeds
which were deposited to the Concentration Account in
the form of money, checks or like items first, to any
Unpaid Reimbursement Obligations and any other
Obligations then due and payable, second, to the
payment of any Revolving Credit Loans that are Base
Rate Loans, third, to the payment or, at the Borrower's
option, cash collateralization in accordance with the
terms of the Cash Collateral Agreement (which cash
collateral may be invested in Permitted Cash Collateral
Investments), of any Revolving Credit Loans that are
Eurodollar Rate Loans, and fourth, (A) so long as no
Default or Event of Default has occurred and is
continuing, to the credit of the Operating Account or
(B) from and after the occurrence and during the
continuance of a Default or an Event of Default, to the
cash collateralization in accordance with the terms of
the Cash Collateral Agreement (which cash collateral
may be invested in Permitted Cash Collateral
Investments) of (I) Letters of Credit in an amount
equal to 103% of the Maximum Drawing Amount and (II)
any other Obligations not then due and payable and
then, to the extent of any surplus, to the credit of
the Operating Account (it being understood that any
amounts which are to be applied to the Revolving Credit
Loans pursuant to this 3.2.2. shall, to the extent
BBRF has advanced Revolving Credit Loans to the
Borrower pursuant to 2.6.2 hereof for which a
Settlement has not occurred, first be paid to BBRF to
be applied to any Revolving Credit Loans made by BBRF
to the Borrower pursuant to 2.6.2 hereof and in which
a Settlement has not, at the time of such repayment,
been effected). For purposes of the foregoing
provisions of this 3.2.2, the Agent shall not be
deemed to have received any such cash proceeds on any
day unless received by the Agent before 3:00 p.m.
(Boston time) on such day. Each of the Guarantor and
its Subsidiaries further acknowledges and agrees that
any such provisional credit by the Agent shall be
subject to reversal if final collection in good
collected funds of the related item is not received by
the Agent in accordance with the Agent's customary
procedures and practices for collecting provisional
items. The parties hereto hereby agree that the
Borrower shall be permitted to retain on any day an
aggregate of $38,000 in cash in each Store (with the
Store located in Boston, Massachusetts entitled to
retain on any day an aggregate of $120,000 in cash).
Each of the Borrower, the Guarantor and their
Subsidiaries hereby agrees that all amounts received by
the Agent in the Blocked Account or the Concentration
Account will be the sole and exclusive property of the
Agent, for the accounts of the Lenders and the
Administrative Agent, to be applied in accordance with
this 3.2.2.
(b) The Guarantor and the Borrower jointly and
severally agree to pay to the Agent any and all
reasonable fees, costs and expenses which the Agent
incurs in connection with the opening and maintaining
of the Blocked Account or the Concentration Account and
the depositing for collection by the Agent of any check
or other item of payment. Absent gross negligence or
willful misconduct by the Agent, the Guarantor and the
Borrower jointly and severally agree to indemnify the
Agent and to hold the Agent harmless from and against
any loss, cost or expense sustained or incurred by the
Agent on account of any claims of third parties arising
in connection with the Agent's operation of the Blocked
Account or the Concentration Account or in respect of
the Blocked Account Agreement.
4. LETTERS OF CREDIT.
4.1. Letter of Credit Commitments.
4.1.1. Commitment to Issue Letters of Credit.
Subject to the terms and conditions hereof and the
execution and delivery by the Borrower of a letter of
credit application on the L/C Issuer's customary form
(a "Letter of Credit Application"), the L/C Issuer on
behalf of the Lenders and in reliance upon the
agreement of the Lenders set forth in 4.1.4 and upon
the representations and warranties of the Borrower
contained herein, agrees, in its individual capacity,
to issue, extend and renew for the account of the
Borrower one or more standby or documentary letters of
credit (individually, a "Letter of Credit"), in such
form as may be requested from time to time by the
Borrower and agreed to by the L/C Issuer; provided,
however, that, after giving effect to such request, (a)
the sum of the aggregate Maximum Drawing Amount and all
Unpaid Reimbursement Obligations shall not exceed
$25,000,000 at any one time and (b) the sum of (i) the
Maximum Drawing Amount on all Letters of Credit, (ii)
all Unpaid Reimbursement Obligations, and (iii) the
amount of all Revolving Credit Loans outstanding shall
not exceed the lesser of (A) the Total Commitment and
(B) the Borrowing Base. Each of the "Letters of
Credit" as defined in the Prior Credit Agreement shall
automatically be deemed to be a Letter of Credit issued
under this Credit Agreement for the account of the
Borrower on the Closing Date. Notwithstanding the
foregoing, the L/C Issuer shall have no obligation to
issue more than $5,000,000 in aggregate face amount
outstanding of Letters of Credit to support or secure
any Indebtedness of the Borrower or any of its
Subsidiaries to the extent that such Indebtedness was
incurred more than ten Business Days prior to the
proposed issuance date of such Letter of Credit, unless
in any such case the Borrower demonstrates to the
reasonable satisfaction of the L/C Issuer that (x) such
prior incurred Indebtedness was then fully secured by a
prior perfected and unavoidable security interest in
collateral provided by the Borrower or such Subsidiary
to the proposed beneficiary of such Letter of Credit or
(y) such prior incurred Indebtedness was then secured
or supported by a letter of credit issued for the
account of the Borrower or such Subsidiary and the
reimbursement obligation with respect to such letter of
credit was fully secured by a prior perfected and
unavoidable security interest in collateral provided to
the issuer of such letter of credit by the Borrower or
such Subsidiary or (z) the original agreement under
which such Indebtedness was incurred required the
delivery of such letter of credit and such requirement
was not conditioned on a change in the Borrower's
financial condition after the date of the original
agreement.
4.1.2. Letter of Credit Applications.
Each Letter of Credit Application shall be
completed to the satisfaction of the L/C Issuer. In
the event that any provision of any Letter of Credit
Application shall be inconsistent with any provision of
this Credit Agreement, then the provisions of this
Credit Agreement shall, to the extent of any such
inconsistency, govern.
4.1.3. Terms of Letters of Credit.
Each Letter of Credit issued, extended or renewed
hereunder shall, among other things, (a) provide for
the payment of sight drafts for honor thereunder when
presented in accordance with the terms thereof and when
accompanied by the documents described therein, and (b)
have an expiry date no later than the date which is no
later than one (1) year after the issuance date for
standby Letters of Credit and one hundred fifty (150)
days after the issuance date for documentary Letters of
Credit, provided, however, in the event the Borrower
requests a Letter of Credit be issued, extended or
renewed with an expiry date which will occur after the
date which is fourteen (14) days (or, if the Letter of
Credit is confirmed by a confirmer or otherwise
provides for one or more nominated persons, forty-five
(45) days) prior to the Maturity Date, the Borrower
shall, by not later than (a) forty-five (45) days prior
to the Maturity Date for standby Letters of Credit and
(b) twenty-one (21) days prior to the Maturity Date for
documentary Letters of Credit, deliver to the L/C
Issuer for the benefit of the Lenders, cash in the
amount of one hundred three percent (103%) of the
Maximum Drawing Amount, to be held as cash collateral
by the L/C Issuer for the Reimbursement Obligations
pursuant to the terms of the Cash Collateral Agreement
(which cash collateral may be invested in Permitted
Cash Collateral Investments). Each Letter of Credit so
issued, extended or renewed shall be subject to the
Uniform Customs or the International Standby Practices.
4.1.4. Reimbursement Obligations of Lenders.
Each Lender severally agrees that it shall be
absolutely liable, without regard to the occurrence of
any Default or Event of Default or any other condition
precedent whatsoever, to the extent of such Lender's
Commitment Percentage, to reimburse the L/C Issuer on
demand for the amount of each draft paid by the L/C
Issuer under each Letter of Credit to the extent that
such amount is not reimbursed by the Borrower pursuant
to 4.2 (such agreement for a Lender being called
herein the "Letter of Credit Participation" of such
Lender).
4.1.5. Participations of Lenders.
Each such payment made by a Lender shall be
treated as the purchase by such Lender of a
participating interest in the Borrower's Reimbursement
Obligation under 4.2 in an amount equal to such
payment. Each Lender shall share in accordance with
its participating interest in any interest which
accrues pursuant to 4.2.
4.2. Reimbursement Obligation of the Borrower.
In order to induce the L/C Issuer to issue, extend and
renew each Letter of Credit and the Lenders to participate
therein, the Borrower hereby agrees to reimburse or pay to
the L/C Issuer, for the account of the L/C Issuer or (as the
case may be) the Lenders, with respect to each Letter of
Credit issued, extended or renewed by the L/C Issuer
hereunder,
(a) except as otherwise expressly provided in
4.2(b) and (c), on each date that any draft presented
under such Letter of Credit is honored by the L/C
Issuer, or the L/C Issuer otherwise makes a payment
with respect thereto, (i) the amount paid by the L/C
Issuer under or with respect to such Letter of Credit,
and (ii) the amount of any taxes, fees, charges or
other costs and expenses whatsoever incurred by the L/C
Issuer or any Lender in connection with any payment
made by the L/C Issuer or any Lender under, or with
respect to, such Letter of Credit,
(b) upon the reduction (but not termination) of
the Total Commitment to an amount less than the Maximum
Drawing Amount, an amount equal to 103% of the
difference between the amount of the Maximum Drawing
Amount and the Total Commitment at such time, which
amount shall be held by the L/C Issuer for the benefit
of the Lenders and the L/C Issuer as cash collateral
for all Reimbursement Obligations in accordance with
the terms of the Cash Collateral Agreement (which cash
collateral may be invested in Permitted Cash Collateral
Investments), and
(c) upon the termination of the Total Commitment,
or the acceleration of the Reimbursement Obligations
with respect to all Letters of Credit in accordance
with 13, an amount equal to 103% of the then Maximum
Drawing Amount on all Letters of Credit, which amount
shall be held by the L/C Issuer for the benefit of the
Lenders and the L/C Issuer as cash collateral for all
Reimbursement Obligations in accordance with the terms
of the Cash Collateral Agreement (which cash collateral
may be invested in Permitted Cash Collateral
Investments).
Each such payment shall be made to the L/C Issuer at
the L/C Issuer's head office at 000 Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx, 00000, in immediately available funds.
Interest on any and all amounts remaining unpaid by the
Borrower under this 4.2 at any time from the date such
amounts become due and payable (whether as stated in this
4.2, by acceleration or otherwise) until payment in full
(whether before or after judgment) shall be payable to the
L/C Issuer on demand at the rate specified in 5.10 for
overdue principal on the Revolving Credit Loans.
4.3. Letter of Credit Payments.
If any draft shall be presented or other demand for
payment shall be made under any Letter of Credit, the L/C
Issuer shall notify the Borrower of the date and amount of
the draft presented or demand for payment and of the date
and time when it expects to pay such draft or honor such
demand for payment. If the Borrower fails to reimburse the
L/C Issuer as provided in 4.2 on or before the date that
such draft is paid or other payment is made by the L/C
Issuer, the L/C Issuer may at any time thereafter notify the
Lenders of the amount of any such Unpaid Reimbursement
Obligation. No later than 3:00 p.m. (Boston time) on the
Business Day next following the receipt of such notice, each
Lender shall make available to the L/C Issuer, at its Head
Office, in immediately available funds, such Lender's
Commitment Percentage of such Unpaid Reimbursement
Obligation, together with an amount equal to the product of
(a) the average, computed for the period referred to in
clause (c) below, of the weighted average interest rate paid
by the L/C Issuer for federal funds acquired by the L/C
Issuer during each day included in such period, times (b)
the amount equal to such Lender's Commitment Percentage of
such Unpaid Reimbursement Obligation, times (c) a fraction,
the numerator of which is the number of days that elapse
from and including the date the L/C Issuer paid the draft
presented for honor or otherwise made payment to the date on
which such Lender's Commitment Percentage of such Unpaid
Reimbursement obligation shall become immediately available
to the L/C Issuer, and the denominator of which is 360. The
responsibility of the L/C Issuer to the Borrower and the
Lenders shall be only to determine that the documents
(including each draft) delivered under each Letter of Credit
in connection with such presentment shall be in conformity
in all material respects with such Letter of Credit.
4.4. Obligations Absolute.
The Borrower's obligations under this 4 shall be
absolute and unconditional under any and all circumstances
and irrespective of the occurrence of any Default or Event
of Default or any condition precedent whatsoever or any
setoff, counterclaim or defense to payment which the
Borrower may have or have had against the L/C Issuer, any
Lender or any beneficiary of a Letter of Credit. The
Borrower further agrees with the L/C Issuer and the Lenders
that the L/C Issuer and the Lenders shall not be
responsible for, and the Borrower's Reimbursement
Obligations under 4.2 shall not be affected by, among other
things, the validity or genuineness of documents or of any
endorsements thereon, even if such documents should in fact
prove to be in any or all respects invalid, fraudulent or
forged, or any dispute between or among the Borrower, the
beneficiary of any Letter of Credit or any financing
institution or other party to which any Letter of Credit may
be transferred or any claims or defenses whatsoever of the
Borrower against the beneficiary of any Letter of Credit or
any such transferee. The L/C Issuer and the Lenders shall
not be liable for any error, omission, interruption or delay
in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter
of Credit unless caused by the L/C Issuer's or such Lender's
gross negligence or willful misconduct. The Borrower agrees
that any action taken or omitted by the L/C Issuer or any
Lender under or in connection with each Letter of Credit and
the related drafts and documents shall, absent the L/C
Issuer's or such Lender's gross negligence or willful
misconduct, be binding upon the Borrower and shall not
result in any liability on the part of the L/C Issuer or any
Lender to the Borrower.
4.5. Reliance by Issuer.
To the extent not inconsistent with 4.4, the L/C
Issuer shall be entitled to rely, and shall be fully
protected in relying upon, any Letter of Credit, draft,
writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document
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, independent
accountants and other experts selected by the L/C Issuer.
The L/C Issuer shall be fully justified in failing or
refusing to take any action under this Agreement unless it
shall first have received such advice or concurrence of the
Majority Lenders as it reasonably deems appropriate or it
shall first be indemnified to its reasonable 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 L/C Issuer shall in all cases be
fully protected in acting, or in refraining from acting,
under this Agreement in accordance with a request of the
Majority Lenders, and such request and any action taken or
failure to act pursuant thereto shall be binding upon the
Lenders and all future holders of the Revolving Credit Notes
or of a Letter of Credit Participation.
4.6. Letter of Credit Fee.
The Borrower shall pay a fee (in each case, a "Letter
of Credit Fee") to the L/C Issuer (a) in respect of each
standby Letters of Credit, calculated at the rate of the
Applicable Margin for letters of credit fees per annum on
the face amount of each such Letter of Credit and (b) in
respect of documentary Letters of Credit, in an amount equal
to one and one-half of one percent (1.50%) per annum of the
average daily Maximum Drawing Amount during each calendar
quarter or portion thereof, to be paid quarterly in arrears
on the first day of each calendar quarter for the
immediately preceding calendar quarter commencing on the
first such date following the date hereof, with a final
payment on the Maturity Date. The L/C Issuer shall, in
turn, remit to each Lender its pro rata portion of such
Letter of Credit Fees. In addition, the Borrower shall pay
to the L/C Issuer, for its own account, on the date of
issuance, or any extension or renewal of any Letter of
Credit and at such other time or times as such charges are
customarily made by the L/C Issuer, its standard issuance,
processing, negotiation, settlement, amendment and
administrative fees, determined in accordance with customary
fees and charges for similar facilities.
5. CERTAIN GENERAL PROVISIONS.
5.1. Fees.
The Borrower agrees to pay to the Arranger and the
Administrative Agent the fees as set forth in the letter
agreement dated as of the December 18, 1998 between the
Administrative Agent, the Arranger and the Borrower.
5.2. Funds for Payments.
5.2.1. Payments to Administrative Agent.
All payments of principal, interest, Reimbursement
Obligations, commitment fees, Letter of Credit Fees and
any other amounts due hereunder or under any of the
other Loan Documents shall be made to the
Administrative Agent, for the respective accounts of
the Lenders, the L/C Issuer or the Administrative
Agent, at the Administrative Agent's Head Office or at
such other location in the Boston, Massachusetts, area
that the Administrative Agent may from time to time
designate, in each case in immediately available funds.
The Borrower hereby authorizes the Administrative Agent
to debit its account with the Administrative Agent for
payment of any principal, interest, Reimbursement
Obligations, commitment fees, Letter of Credit Fees and
any other amounts due hereunder or under any of the
Loan Documents. The Administrative Agent shall debit
such accounts for the payment of such amounts on the
date which any of such amounts become due, whether at
the stated date of maturity or any accelerated date of
maturity or at any other date fixed for payment, and
shall promptly thereafter notify the Borrower of the
amount of such debit.
5.2.2. No Offset, etc.
All payments by the Borrower hereunder, under the
Notes and under any of the other Loan Documents shall
be made without setoff or counterclaim and free and
clear of and without deduction for any taxes, levies,
imposts, duties, charges, fees, deductions,
withholdings, compulsory loans, restrictions or
conditions of any nature now or hereafter imposed or
levied by any jurisdiction or any political subdivision
thereof or taxing or other authority therein unless the
Borrower is compelled by law to make such deduction or
withholding. If any such obligation is imposed upon
the Borrower with respect to any amount payable by it
hereunder or under any of the other Loan Documents, the
Borrower will pay to the Administrative Agent, for the
account of the Lenders or (as the case may be) the L/C
Issuer, the Administrative Agent or the Agent, on the
date on which such amount is due and payable hereunder
or under such other Loan Document, such additional
amount in Dollars as shall be necessary to enable the
Lenders, the L/C Issuer, the Administrative Agent or
the Agent to receive the same net amount which such
Person would have received on such due date had no such
obligation been imposed upon the Borrower. The
Borrower will deliver promptly to the Administrative
Agent certificates or other valid vouchers for all
taxes or other charges deducted from or paid with
respect to payments made by the Borrower hereunder or
under such other Loan Document.
5.3. Computations.
All computations of interest on the Loans and of
commitment fees, Letter of Credit Fees or other fees shall,
unless otherwise expressly provided herein, be based on a
360-day year and paid for the actual number of days elapsed.
Except as otherwise provided in the definition of the term
"Interest Period" with respect to Eurodollar Rate Loans,
whenever a payment hereunder or under any of the other Loan
Documents becomes due on a day that is not a Business Day,
the due date for such payment shall be extended to the next
succeeding Business Day, and interest shall accrue during
such extension. The outstanding amount of the Loans as
reflected on the Revolving Credit Note Records from time to
time shall be considered correct and binding on the Borrower
absent manifest error unless within ten (10) Business Days
after the Borrower's receipt of any notice from the
Administrative Agent or any of the Lenders of such
outstanding amount, the Borrower shall notify the
Administrative Agent or such Lender to the contrary.
5.4. Inability to Determine Eurodollar Rate.
In the event, prior to the commencement of any Interest
Period relating to any Eurodollar Rate Loan, the
Administrative Agent shall determine that adequate and
reasonable methods do not exist for ascertaining the
Eurodollar Rate that would otherwise determine the rate of
interest to be applicable to any Eurodollar Rate Loan during
any Interest Period, the Administrative Agent shall
forthwith give notice of such determination (which shall be
conclusive and binding on the Borrower and the Lenders) to
the Borrower and the Lenders. In such event (a) any Loan
Request or Conversion Request with respect to Eurodollar
Rate Loans shall be automatically withdrawn and shall be
deemed a request for Base Rate Loans, (b) each Eurodollar
Rate Loan will automatically, on the last day of the then
current Interest Period relating thereto, become a Base Rate
Loan, and (c) the obligations of the Lenders to make
Eurodollar Rate Loans shall be suspended until the
Administrative Agent, exercising reasonable due diligence
determines that the circumstances giving rise to such
suspension no longer exist, whereupon the Administrative
Agent shall so notify the Borrower and the Lenders.
5.5. Illegality.
Notwithstanding any other provisions herein, if any
present or future law, regulation, treaty or directive or in
the interpretation or application thereof shall make it
unlawful for any Lender to make or maintain Eurodollar Rate
Loans, such Lender shall forthwith give notice of such
circumstances to the Borrower and the other Lenders (which
notice shall be in writing if the Borrower so requests) and
thereupon (a) the commitment of such Lender to make
Eurodollar Rate Loans or convert Loans of another Type to
Eurodollar Rate Loans shall forthwith be suspended and (b)
such Lender's Loans (or portions thereof) then outstanding
as Eurodollar Rate Loans, if any, shall be converted
automatically to Base Rate Loans on the last day of each
Interest Period applicable to such Eurodollar Rate Loans or
within such earlier period as may be required by law. The
Borrower hereby agrees promptly to pay the Administrative
Agent for the account of such Lender, upon demand by such
Lender, any additional amounts necessary to compensate such
Lender for any costs incurred by such Lender in making any
conversion in accordance with this 5.5, including any
interest or fees payable by such Lender to lenders of funds
obtained by it in order to make or maintain its Eurodollar
Loans hereunder.
5.6. Additional Costs, Etc.
If any present or future applicable law, which
expression, as used herein, includes statutes, rules and
regulations thereunder and interpretations thereof by any
competent court or by any governmental or other regulatory
body or official charged with the administration or the
interpretation thereof and requests, directives,
instructions and notices at any time or from time to time
hereafter made upon or otherwise issued to any Lender or the
Administrative Agent by any central bank or other fiscal,
monetary or other authority (whether or not having the force
of law), shall:
(a) subject any Lender or the Administrative
Agent to any tax, levy, impost, duty, charge, fee,
deduction or withholding of any nature with respect to
this Credit Agreement, the other Loan Documents, any
Letters of Credit, such Lender's Commitment or the
Loans (other than taxes based upon or measured by the
income or profits of such Lender or the Administrative
Agent), or
(b) materially change the basis of taxation
(except for changes in taxes on income or profits) of
payments to any Lender of the principal of or the
interest on any Loans or any other amounts payable to
any Lender or the Administrative Agent under this
Credit Agreement, the Notes or any of the other Loan
Documents, or
(c) impose or increase or render applicable
(other than to the extent specifically provided for
elsewhere in this Credit Agreement) any special
deposit, reserve, assessment, liquidity, capital
adequacy or other similar requirements (whether or not
having the force of law) against assets held by, or
deposits in or for the account of, or Loans by, or
Letters of Credit issued by, or commitments of an
office of any Lender, or
(d) impose on any Lender or the Administrative
Agent any other conditions or requirements with respect
to this Credit Agreement, the other Loan Documents, any
Letters of Credit, the Loans, such Lender's Commitment,
or any class of Loans, Letters of Credit or commitments
of which any of the Loans or such Lender's Commitment
forms a part, and the result of any of the foregoing is
(i) to increase the cost to any Lender of making,
funding, issuing, renewing, extending or maintaining
any of the Loans or such Lender's Commitment or any
Letter of Credit, or
(ii) to reduce the amount of principal, interest,
Reimbursement Obligation or other amount payable to
such Lender or the Administrative Agent hereunder on
account of such Lender's Commitment, any Letter of
Credit or any of the Loans, or
(iii) to require such Lender or the L/C Issuer to
make any payment or to forego any interest or
Reimbursement Obligation or other sum payable
hereunder, the amount of which payment or foregone
interest or Reimbursement Obligation or other sum is
calculated by reference to the gross amount of any sum
receivable or deemed received by such Lender or the L/C
Issuer from the Borrower hereunder,
then, and in each such case, the Borrower will, within ten (10)
days following presentation by such Lender or (as the case may
be) the Administrative Agent or the L/C Issuer of a certificate
in accordance with 5.8, from time to time and as often as the
occasion therefor may arise, pay to such Lender, the
Administrative Agent or the L/C Issuer such additional amounts as
will be sufficient to compensate such Lender, the Administrative
Agent or L/C Issuer for such additional cost, reduction, payment
or foregone interest or Reimbursement Obligation or other sum.
5.7. Capital Adequacy.
If after the date hereof any Lender or the
Administrative Agent determines that (a) the adoption of or
change in any law, governmental rule, regulation, policy,
guideline or directive (whether or not having the force of
law) regarding capital requirements for banks or bank
holding companies or any change in the interpretation or
application thereof by a court or governmental authority
with appropriate jurisdiction, or (b) compliance by such
Lender or the Administrative Agent or any corporation
controlling such Lender or the Administrative Agent with any
law, governmental rule, regulation, policy, guideline or
directive (whether or not having the force of law) of any
such entity regarding capital adequacy, has the effect of
reducing the return on such Lender's or the Administrative
Agent's commitment with respect to any Loans to a level
below that which such Lender or the Administrative Agent
could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's on the
Administrative Agent's then existing policies with respect
to capital adequacy and assuming full utilization of such
entity's capital) by any amount deemed by such Lender or (as
the case may be) the Administrative Agent to be material,
then such Lender or the Administrative Agent may notify the
Borrower of such fact. To the extent that the amount of
such reduction in the return on capital is not reflected in
the Base Rate, the Borrower agrees to pay such Lender or (as
the case may be) the Administrative Agent for the amount of
such reduction in the return on capital within ten (10) days
following presentation by such Lender or (as the case may
be) the Administrative Agent of a certificate in accordance
with 5.8 hereof. Each Lender shall allocate such cost
increase among its customers in good faith and on an
equitable basis.
5.8. Certificate.
A certificate setting forth any additional amounts
payable pursuant to 5.6 or 5.7 and a brief explanation of
such amounts which are due, submitted by any Lender or the
Administrative Agent to the Borrower, shall be conclusive,
absent manifest error, that such amounts are due and owing.
5.9. Indemnity.
The Borrower agrees to indemnify each Lender and to
hold each Lender harmless from and against any loss, cost
or expense (including loss of anticipated profits) that such
Lender may sustain or incur as a consequence of (a) default
by the Borrower in payment of the principal amount of or any
interest on any Eurodollar Rate Loans as and when due and
payable, including any such loss or expense arising from
interest or fees payable by such Lender to lenders of funds
obtained by it in order to maintain its Eurodollar Rate
Loans, (b) default by the Borrower in making a borrowing or
conversion after the Borrower has given (or is deemed to
have given) a Loan Request, notice or a Conversion Request
relating thereto in accordance with 2.6 and 2.7 or (c) the
making of any payment of a Eurodollar Rate Loan or the
making of any conversion of any such Loan to a Base Rate
Loan on a day that is not the last day of the applicable
Interest Period with respect thereto, including interest or
fees payable by such Lender to lenders of funds obtained by
it in order to maintain any such Loans.
5.10. Interest After Default.
5.10.1. Overdue Amounts.
During the continuance of an Event of Default,
overdue principal and (to the extent permitted by
applicable law) interest on the Loans and all other
overdue amounts payable hereunder or under any of the
other Loan Documents shall bear interest compounded
monthly and payable on demand at a rate per annum equal
to two percent (2%) above the rate of interest
otherwise applicable to such Loans pursuant to 2.5,
until such amount shall be paid in full (after as well
as before judgment).
5.10.2. Amounts Not Overdue.
During the continuance of an Event of Default the
principal of the Revolving Credit Loans not overdue
shall, until such Event of Default has been cured or
remedied or such Event of Default has been waived by
the Majority Lenders pursuant to 26, bear interest at
a rate per annum equal to two percent (2%) above the
rate of interest otherwise applicable to such Revolving
Credit Loans pursuant to 2.5.
6. COLLATERAL SECURITY AND GUARANTIES.
6.1. Security of Borrower.
The Obligations shall be secured by a perfected first
priority security interest (subject only to Permitted Liens
entitled to priority under applicable law) in all of the
assets of the Borrower and its Subsidiaries, whether now
owned or hereafter acquired, pursuant to the terms of the
Security Documents to which the Borrower is a party.
6.2. Guaranty and Security of Guarantor.
The Obligations shall also be guaranteed pursuant to
the terms of the Guaranty. The obligations of the Guarantor
under the Guaranty shall be in turn secured by a perfected
first priority security interest (subject only to Permitted
Liens entitled to priority under applicable law) in all of
the assets of the Guarantor, whether now owned or hereafter
acquired, pursuant to the terms of the Security Documents to
which the Guarantor is a party.
7. REPRESENTATIONS AND WARRANTIES.
Each of the Guarantor and the Borrower represents and
warrants to the Lenders and the Bank Agents as follows:
7.1. Corporate Authority.
7.1.1. Incorporation; Good Standing.
Each of the Guarantor, the Borrower and their
Subsidiaries (a) is a corporation duly organized,
validly existing and in good standing under the laws of
its state of incorporation, (b) has all requisite
corporate power to own its property and conduct its
business as now conducted and as presently
contemplated, and (c) is in good standing as a foreign
corporation and is duly authorized to do business in
each jurisdiction where such qualification is necessary
except where a failure to be so qualified would not
have a materially adverse effect on the business,
assets or financial condition of the Guarantor, the
Borrower or such Subsidiary.
7.1.2. Authorization.
The execution, delivery and performance of this
Credit Agreement and the other Loan Documents to which
the Guarantor, the Borrower or any of their
Subsidiaries is or is to become a party and the
transactions contemplated hereby and thereby (a) are
within the corporate authority of such Person, (b) have
been duly authorized by all necessary corporate
proceedings, (c) do not conflict with or result in any
breach or contravention of any provision of law,
statute, rule or regulation to which the Guarantor, the
Borrower or any of their Subsidiaries is subject or any
judgment, order, writ, injunction, license or permit
applicable to the Guarantor, the Borrower or any of
their Subsidiaries and (d) do not conflict with any
provision of the corporate charter or bylaws of, or any
agreement or other instrument binding upon, the
Guarantor, the Borrower or any of their Subsidiaries.
7.1.3. Enforceability.
The execution and delivery of this Credit
Agreement and the other Loan Documents to which the
Guarantor, the Borrower or any of their Subsidiaries is
or is to become a party will result in valid and
legally binding obligations of such Person enforceable
against it in accordance with the respective terms and
provisions hereof and thereof, except as enforceability
is limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting
generally the enforcement of creditors' rights and
except to the extent that availability of the remedy of
specific performance or injunctive relief is subject to
the discretion of the court before which any proceeding
therefor may be brought.
7.2. Governmental Approvals.
The execution, delivery and performance by the
Guarantor, the Borrower and any of their Subsidiaries of
this Credit Agreement and the other Loan Documents to which
the Guarantor, the Borrower or any of their Subsidiaries is
or is to become a party and the transactions contemplated
hereby and thereby do not require the approval or consent
of, or filing with, any governmental agency or authority
other than those already obtained, and other than the filing
of UCC-1 financing statements, filings with the United
States Patent and Trademark Office and the Mortgages.
7.3. Title to Properties; Leases.
Except as indicated on Schedule 7.3 hereto, the
Guarantor, the Borrower and their Subsidiaries own all of
the assets reflected in the consolidated balance sheet of
the Guarantor and its Subsidiaries as at the Balance Sheet
Date or acquired since that date (except property and assets
sold or otherwise disposed of in the ordinary course of
business since that date or in accordance with the terms of
this Credit Agreement), subject to no rights of others,
including any mortgages, leases, conditional sales
agreements, title retention agreements, liens or other
encumbrances except Permitted Liens.
7.4. Financial Statements and Projections.
7.4.1. Financial Statements.
There has been furnished to the Administrative
Agent a consolidated balance sheet of the Guarantor and
its Subsidiaries as at the Balance Sheet Date, and a
consolidated statement of income of the Guarantor and
its Subsidiaries for the fiscal year then ended,
certified by Xxxxxx Xxxxxxxx LLP. Such balance sheet
and statement of income have been prepared in
accordance with generally accepted accounting
principles and fairly present the financial condition
of the Guarantor and its Subsidiaries as at the close
of business on the date thereof and the results of
operations for the fiscal year then ended. Except as
set forth on Schedule 7.4.1, there are no contingent
liabilities of the Guarantor or any of its Subsidiaries
as of such date involving material amounts, known to
the officers of the Borrower or the Guarantor, which
were not disclosed in such balance sheet and the notes
related thereto.
7.4.2. Projections.
Copies of the projections of the annual operating
budgets of the Guarantor, the Borrower and their
Subsidiaries on a consolidated basis, balance sheets,
income statements and cash flow statements for the 1999
fiscal year, have been delivered to the Administrative
Agent, all of which are attached hereto as Schedule
7.4.2. To the knowledge of the Guarantor, the Borrower
or any of their Subsidiaries, no facts exist that
(individually or in the aggregate) would result in any
material change in any of such projections. The
projections are based upon reasonable estimates and
assumptions, have been prepared on the basis of the
assumptions stated therein and reflect the reasonable
estimates of the Guarantor, the Borrower and their
Subsidiaries of the results of operations and other
information projected therein.
7.5. No Material Changes, Etc.
Since the Balance Sheet Date there has occurred no
materially adverse change in the financial condition or
business of the Guarantor and its Subsidiaries as shown on
or reflected in the consolidated balance sheet of the
Guarantor and its Subsidiaries as at the Balance Sheet Date,
or the consolidated statement of income for the fiscal year
then ended, other than changes in the ordinary course of
business that have not had any materially adverse effect
either individually or in the aggregate on the business or
financial condition of the Guarantor or any of its
Subsidiaries. Since the Balance Sheet Date, neither the
Guarantor nor the Borrower has made any Distribution.
7.6. Franchises, Patents, Copyrights, Etc.
Each of the Guarantor, the Borrower and their
Subsidiaries possesses all franchises, patents, copyrights,
trademarks, trade names, licenses and permits, and rights in
respect of the foregoing, adequate for the conduct of its
business substantially as now conducted without known
conflict with any rights of others.
7.7. Litigation.
Except as set forth in Schedule 7.7 hereto, there are
no actions, suits, proceedings or investigations of any kind
pending or threatened against the Guarantor, the Borrower or
any of their Subsidiaries before any court, tribunal or
administrative agency or board that, if adversely
determined, might, either in any case or in the aggregate,
materially adversely affect the properties, assets,
financial condition or business of the Guarantor, the
Borrower and their Subsidiaries or materially impair the
right of the Guarantor, the Borrower and their Subsidiaries,
considered as a whole, to carry on business substantially as
now conducted by them, or result in any substantial
liability not adequately covered by insurance, or for which
adequate reserves are not maintained on the consolidated
balance sheet of the Guarantor and its Subsidiaries, or
which question the validity of this Credit Agreement or any
of the other Loan Documents, or any action taken or to be
taken pursuant hereto or thereto.
7.8. No Materially Adverse Contracts, Etc.
Neither the Guarantor, the Borrower nor any of their
Subsidiaries is subject to any charter, corporate or other
legal restriction, or any judgment, decree, order, rule or
regulation that has or is expected in the future to have a
materially adverse effect on the business, assets or
financial condition of the Guarantor, the Borrower or any of
their Subsidiaries. Except as set forth on Schedule 7.8
hereto, neither the Guarantor, the Borrower nor any of their
Subsidiaries is a party to any contract or agreement that
has or is expected, in the judgment of the Guarantor's or
the Borrower's officers, to have any materially adverse
effect on the business of the Guarantor, the Borrower or any
of their Subsidiaries.
7.9. Compliance with Other Instruments, Laws, Etc.
Except as set forth on Schedule 7.9 hereto, neither the
Guarantor, the Borrower nor any of their Subsidiaries is in
violation of any provision of its charter documents, bylaws,
or any agreement or instrument to which it may be subject or
by which it or any of its properties may be bound or any
decree, order, judgment, statute, license, rule or
regulation, in any of the foregoing cases in a manner that
could result in the imposition of substantial penalties or
materially and adversely affect the financial condition,
properties or business of the Guarantor, the Borrower or any
of their Subsidiaries.
7.10. Tax Status.
The Guarantor, the Borrower and their Subsidiaries (a)
have made or filed all federal and state income and all
other tax returns, reports and declarations required by any
jurisdiction to which any of them is subject, (b) have paid
all taxes and other governmental assessments and charges
shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith and
by appropriate proceedings and (c) have set aside on their
books provisions reasonably adequate for the payment of all
taxes for periods subsequent to the periods to which such
returns, reports or declarations apply. Except as set forth
on Schedule 7.10, there are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any
jurisdiction, and the officers of the Borrower know of no
basis for any such claim.
7.11. No Event of Default.
No Default or Event of Default has occurred and is
continuing.
7.12. Holding Company and Investment Company Acts.
None of the Guarantor, the Borrower nor any of their
Subsidiaries is a "holding company", or a "subsidiary
company" of a "holding company", or an affiliate" of a
"holding company", as such terms are defined in the Public
Utility Holding Company Act of 1935; nor is it an
"investment company", or an "affiliated company" or a
"principal underwriter" of an "investment company", as such
terms are defined in the Investment Company Act of 1940.
7.13. Absence of Financing Statements, Etc.
Except with respect to Permitted Liens, there is no
financing statement, security agreement, chattel mortgage,
real estate mortgage or other document filed or recorded
with any filing records, registry or other public office,
that purports to cover, affect or give notice of any present
or possible future lien on, or security interest in, any
assets or property of the Guarantor, the Borrower or any of
their Subsidiaries or any rights relating thereto.
7.14. Perfection of Security Interest.
Except for required filings set forth on Schedule 7.14
hereto (which are to be made promptly after the Closing
Date), all filings, assignments, pledges and deposits of
documents or instruments have been made and all other
actions have been taken that are necessary or advisable,
under applicable law, to establish and perfect the Agent's
first priority (except with respect to Permitted Liens which
have priority under applicable law) security interest in the
Collateral. The Collateral and the Agent's rights with
respect to the Collateral are not subject to any setoff,
claims, withholdings or other defenses. The Guarantor and
Borrower are the owners of the Collateral free from any
lien, security interest, encumbrance and any other claim or
demand, except for Permitted Liens.
7.15. Certain Transactions.
Except as set forth on Schedule 7.15 hereto and except
for arm's length transactions pursuant to which the
Guarantor, the Borrower or any of their Subsidiaries makes
payments in the ordinary course of business upon terms no
less favorable than the Guarantor, the Borrower or such
Subsidiary could obtain from third parties, none of the
officers, directors, or employees of the Guarantor, the
Borrower or any of their Subsidiaries is presently a party
to any transaction with the Guarantor, the Borrower or any
of their Subsidiaries (other than for services as employees,
officers and directors), including any contract, agreement
or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or
from any officer, director or such employee or, to the
knowledge of the Guarantor or the Borrower, any corporation,
partnership, trust or other entity in which any officer,
director, or any such employee has a substantial interest or
is an officer, director, trustee or partner.
7.16. Employee Benefit Plans.
7.16.1. In General.
Each Employee Benefit Plan has been maintained and
operated in compliance in all material respects with
the provisions of ERISA and, to the extent applicable,
the Code, including but not limited to the provisions
thereunder respecting prohibited transactions. The
Borrower has heretofore delivered to the Administrative
Agent the most recently completed annual report, Form
5500, with all required attachments, and actuarial
statement required to be submitted under 103(d) of
ERISA, with respect to each Guaranteed Pension Plan.
7.16.2. Terminability of Welfare Plans.
Under each Employee Benefit Plan which is an
employee welfare benefit plan within the meaning of
3(1) or 3(2)(B) of ERISA, no benefits are due unless
the event giving rise to the benefit entitlement occurs
prior to plan termination (except as required by Title
I, Part 6 of ERISA). The Borrower or an ERISA
Affiliate, as appropriate, may terminate each such Plan
at any time (or at any time subsequent to the
expiration of any applicable bargaining agreement) in
the discretion of the Borrower or such ERISA Affiliate
without liability to any Person.
7.16.3. Guaranteed Pension Plans.
Each contribution required to be made to a
Guaranteed Pension Plan, whether required to be made to
avoid the incurrence of an accumulated funding
deficiency, the notice or lien provisions of 302(f) of
ERISA, or otherwise, has been timely made. No waiver
of an accumulated funding deficiency or extension of
amortization periods has been received with respect to
any Guaranteed Pension Plan. No liability to the PBGC
(other than required insurance premiums, all of which
have been paid) has been incurred by the Borrower or
any ERISA Affiliate with respect to any Guaranteed
Pension Plan and there has not been any ERISA
Reportable Event, or any other event or condition which
presents a material risk of termination of any
Guaranteed Pension Plan by the PBGC. Based on the
latest valuation of each Guaranteed Pension Plan (which
in each case occurred within twelve months of the date
of this representation), and on the actuarial methods
and assumptions employed for that valuation, the
aggregate benefit liabilities of all such Guaranteed
Pension Plans within the meaning of 4001 of ERISA did
not exceed the aggregate value of the assets of all
such Guaranteed Pension Plans, disregarding for this
purpose the benefit liabilities and assets of any
Guaranteed Pension Plan with assets in excess of
benefit liabilities.
7.16.4. Multiemployer Plans.
Neither the Borrower nor any ERISA Affiliate has
incurred any material liability (including secondary
liability) to any Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer
Plan under 4201 of ERISA or as a result of a sale of
assets described in 4204 of ERISA. Neither the
Borrower nor any ERISA Affiliate has been notified that
any Multiemployer Plan is in reorganization or
insolvent under and within the meaning of 4241 or
4245 of ERISA or that any Multiemployer Plan intends
to terminate or has been terminated under 4041A of
ERISA.
7.17. Use of Proceeds.
7.17.1. Regulations U and X.
The proceeds of the Loans shall be used solely for
working capital and general corporate purposes,
including, without limitation, capital expenditures for
new Store openings. The Borrower will obtain Letters
of Credit solely for working capital and general
corporate purposes. No portion of any Loan is to be
used, and no portion of any Letter of Credit is to be
obtained, for the purpose of purchasing or carrying any
"margin security" or "margin stock" as such terms are
used in Regulations U and X of the Board of Governors
of the Federal Reserve System, 12 C.F.R. Parts 221 and
224.
7.17.2. Ineligible Securities.
No portion of the proceeds of any Loans is to be
used, and no portion of any Letter of Credit is to be
obtained, for the purpose of knowingly purchasing, or
providing credit support for the purchase of, during
the underwriting or placement period or within 30 days
thereafter, any Ineligible Securities underwritten or
privately placed by a Section 20 Subsidiary.
7.18. Environmental Compliance.
Each of the Guarantor, the Borrower and their
Subsidiaries has taken all necessary steps to investigate
the past and present condition and usage of the Real Estate
owned by the Borrower, the Guarantor or such Subsidiary (the
"Owned Real Estate"), as the case may be, and the operations
conducted thereon and have taken all reasonable steps of a
lessee of real property (which steps may include reliance
upon the representations and warranties of lessors of such
real property) to investigate the past and present condition
and usage of the Real Estate so leased (the "Leased Real
Estate") and the operations conducted thereon, and, based
upon such diligent or, as the case may be, reasonable
investigation, has determined that, except as set forth on
Schedule 7.18:
(a) none of the Guarantor, the Borrower, their
Subsidiaries or any operator of the Owned Real Estate
or any operations thereon, and, to the actual knowledge
of the Guarantor, the Borrower or their Subsidiaries,
any operator of the Leased Real Estate or any
operations thereon, are in violation, or alleged
violation, of any judgment, decree, order, law,
license, rule or regulation pertaining to environmental
matters, including without limitation, those arising
under the Resource Conservation and Recovery Act
("RCRA"), the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 as amended
("CERCLA"), the Superfund Amendments and
Reauthorization Act of 1986 ("XXXX"), the Federal Clean
Water Act, the Federal Clean Air Act, the Toxic
Substances Control Act, or any state or local statute,
regulation, ordinance, order or decree relating to
health, safety or the environment (hereinafter
"Environmental Laws"), which violation would have a
material adverse effect on the environment or the
business, assets or financial condition of the
Guarantor, the Borrower or any of their Subsidiaries;
(b) neither the Guarantor, the Borrower nor any
of their Subsidiaries has received notice from any
third party including, without limitation: any federal,
state or local governmental authority, (i) that any one
of them has been identified by the United States
Environmental Protection Agency ("EPA") as a
potentially responsible party under CERCLA with respect
to a site listed on the National Priorities List, 40
C.F.R. Part 000 Xxxxxxxx X; (ii) that any hazardous
waste, as defined by 42 U.S.C. 6903(5), any hazardous
substances as defined by 42 U.S.C. 9601(14), any
pollutant or contaminant as defined by 42 U.S.C.
9601(33) and any toxic substances, oil or hazardous
materials or other chemicals or substances regulated by
any Environmental Laws ("Hazardous Substances") which
any one of them has generated, transported or disposed
of has been found at any site at which a federal, state
or local agency or other third party has conducted or
has ordered that the Guarantor, the Borrower or any of
their Subsidiaries conduct a remedial investigation,
removal or other response action pursuant to any
Environmental Law; or (iii) that it is or shall be a
named party to any claim, action, cause of action,
complaint, or legal or administrative proceeding (in
each case, contingent or otherwise) arising out of any
third party's incurrence of costs, expenses, losses or
damages of any kind whatsoever in connection with the
release of Hazardous Substances;
(c) (i) no portion of the Owned Real Estate or,
to the Guarantor's, the Borrower's or such Subsidiary's
actual knowledge, the Leased Real Estate, has been used
for the handling, processing, storage or disposal of
Hazardous Substances except in accordance with
applicable Environmental Laws; and no underground tank
or other underground storage receptacle for Hazardous
Substances is located on any portion of the Owned Real
Estate or, to the Guarantor's, the Borrower's or such
Subsidiary's actual knowledge, the Leased Real Estate;
(ii) in the course of any activities conducted by the
Guarantor, the Borrower, their Subsidiaries or
operators of its properties, no Hazardous Substances
have been generated or are being used on the Owned Real
Estate or, to the Guarantor's, the Borrower's or such
Subsidiary's actual knowledge, the Leased Real Estate
except in accordance with applicable Environmental
Laws; (iii) there have been no releases (i.e. any past
or present releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting,
escaping, disposing or dumping) or threatened releases
of Hazardous Substances on, upon, into or from the
properties of the Guarantor, the Borrower or their
Subsidiaries, which releases would have a material
adverse effect on the value of any of the Owned Real
Estate or adjacent properties or, to the Guarantor's,
the Borrower's or such Subsidiary's actual knowledge,
with respect to the Leased Real Estate or the
environment; (iv) to the best of the Guarantor's and
Borrower's knowledge, with respect to the Owned Real
Estate or, to the Guarantor's, the Borrower's or such
Subsidiary's actual knowledge, the Leased Real Estate,
there have been no releases on, upon, from or into any
real property in the vicinity of any of the Real Estate
which, through soil or groundwater contamination, may
have come to be located on, and which would have a
material adverse effect on the value of, the Real
Estate; and (v) in addition, any Hazardous Substances
that have been generated on any of the Owned Real
Estate or, to the Guarantor's, the Borrower's or such
Subsidiary's actual knowledge, the Leased Real Estate,
have been transported offsite only by carriers having
an identification number issued by the EPA, treated or
disposed of only by treatment or disposal facilities
maintaining valid permits as required under applicable
Environmental Laws, which transporters and facilities
have been and are, to the best of the Guarantor's and
the Borrower's knowledge, operating in compliance with
such permits and applicable Environmental Laws; and
(d) none of the Guarantor, the Borrower and their
Subsidiaries, any Mortgaged Property or any of the
other Owned Real Estate or, to the Guarantor's, the
Borrower's or such Subsidiary's actual knowledge, the
Leased Real Estate, is subject to any applicable
environmental law requiring the performance of
Hazardous Substances site assessments, or the removal
or remediation of Hazardous Substances, or the giving
of notice to any governmental agency or the recording
or delivery to other Persons of an environmental
disclosure document or statement by virtue of the
transactions set forth herein and contemplated hereby,
or as a condition to the recording of any Mortgage or
to the effectiveness of any other transactions
contemplated hereby.
7.19. Subsidiaries, etc.
The Borrower is a wholly-owned Subsidiary of the
Guarantor. Except for the Borrower, the Guarantor has no
Subsidiaries and the Borrower has no Subsidiaries. Except
as set forth on Schedule 7.19 hereto, neither the Guarantor,
the Borrower nor any of their Subsidiaries is engaged in any
joint venture or partnership with any other Person.
7.20. Bank Accounts.
Schedule 7.20 sets forth the account numbers and
location of all bank accounts of the Guarantor, the Borrower
or any of their Subsidiaries.
7.21. Fiscal Quarters.
Attached hereto as Schedule 7.21 is a list of each
fiscal quarter end of each of the Guarantor and the Borrower
from the Closing Date to the Maturity Date.
7.22. Chief Executive Office; Inventory Locations.
Each of the Guarantor's and the Borrower's chief
executive office is at 00 Xxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxxxxxx, at which location its corporate books and
records are kept. In addition, Schedule 7.22 hereto sets
forth the locations of the Borrower's Stores, the Borrower's
warehouses and additional locations where books and records
are kept. All Eligible Inventory is located solely at
Permitted Inventory Locations or shall be in transit between
Permitted Inventory Locations for a period not to exceed
three (3) Business Days.
7.23. Insurance.
The Guarantor, the Borrower and each of their
Subsidiaries maintains with financially sound and reputable
insurers insurance with respect to its properties and
business against such casualties and contingencies as are in
accordance with sound business practices.
7.24. Year 2000 Problem.
The Guarantor, the Borrower and each of their
Subsidiaries have reviewed the areas within their businesses
and operations which could be adversely affected by, and
have developed or are developing a program to address on a
timely basis, the "Year 2000 Problem" (i.e. the risk that
computer applications used by the Guarantor, the Borrower or
any of their Subsidiaries may be unable to recognize and
perform properly date-sensitive functions involving certain
dates prior to and any date after December 31, 1999). Based
upon such review, each of the Guarantor, the Borrower and
their Subsidiaries reasonably believes that the "Year 2000
Problem" will not have any materially adverse effect on the
business or financial condition of the Guarantor, the
Borrower or any of their Subsidiaries, except as set forth
on Schedule 7.24 hereto.
7.25. Leases.
The Store leases set forth on Schedule 7.22 hereto
represent all of the presently effective Store leases of the
Guarantor, Borrower and their Subsidiaries. None of the
Guarantor, the Borrower or their Subsidiaries are in default
or violation beyond any applicable notice and cure period,
or have received any notice or threat of cancellation, in
respect of any such lease to which such Person is a party.
The Guarantor, Borrower and their Subsidiaries hereby
authorize the Administrative Agent at any time and from time
to time to contact any of their landlords in order to
confirm the continued compliance of the Guarantor, the
Borrower or their Subsidiaries with the terms and conditions
of the relevant leases.
7.26. Full Disclosure.
The financial statements referred to in 7.4.1, the
warranties and representations and factual disclosures made
by the Guarantor and the Borrower in this Credit Agreement
and the other Loan Documents, and all documents or
statements filed with the Securities and Exchange Commission
since the Balance Sheet Date set forth on Schedule 7.26
hereto do not, taken as a whole, contain any untrue
statement of a material fact or omit a material fact
necessary to make the statements contained therein and
herein not materially misleading.
8. AFFIRMATIVE COVENANTS OF THE BORROWER AND THE GUARANTOR.
Each of the Guarantor and the Borrower covenants and agrees
that, so long as any Loan, Unpaid Reimbursement Obligation,
Letter of Credit or Note is outstanding or any Lender has any
obligation to make any Loans or the L/C Issuer has any obligation
to issue, extend or renew any Letters of Credit:
8.1. Punctual Payment.
The Borrower will duly and punctually pay or cause to
be paid the principal and interest on the Loans, all
Reimbursement Obligations, the Letter of Credit Fees, the
commitment fees and all other amounts provided for in this
Credit Agreement and the other Loan Documents to which the
Guarantor, the Borrower or any of their Subsidiaries is a
party, all in accordance with the terms of this Credit
Agreement and such other Loan Documents.
8.2. Maintenance of Office.
Each of the Guarantor and the Borrower will maintain
its chief executive office at 00 Xxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxxxxxx, or at such other place in the United States
of America as the Guarantor or the Borrower, as the case may
be, shall designate upon written notice to the
Administrative Agent, where notices, presentations and
demands to or upon the Guarantor or the Borrower in respect
of the Loan Documents to which the Guarantor or the Borrower
is a party may be given or made.
8.3. Records and Accounts.
Each of the Guarantor and the Borrower will (a) keep,
and cause each of its Subsidiaries to keep, true and
accurate records and books of account in which full, true
and correct entries will be made in accordance with
generally accepted accounting principles and (b) maintain
adequate accounts and reserves for all taxes (including
income taxes), depreciation, depletion, obsolescence and
amortization of its properties and the properties of its
Subsidiaries, contingencies, and other reserves.
8.4. Financial Statements, Certificates and
Information.
The Guarantor and the Borrower will deliver to each of
the Lenders:
(a) as soon as practicable, but in any event not
later than ninety-three (93) days after the end of each
fiscal year of the Guarantor and the Borrower, the
consolidated balance sheet of the Guarantor and its
Subsidiaries as at the end of such year, and the
related consolidated statement of income and
consolidated statement of cash flow for such year,
setting forth in comparative form the figures for the
previous fiscal year, and all such consolidated
statements to be in reasonable detail, prepared in
accordance with generally accepted accounting
principles, and certified without qualification by
Xxxxxx Xxxxxxxx LLP or by other independent certified
public accountants reasonably satisfactory to the
Administrative Agent, together with a written statement
from such accountants to the effect that they have read
a copy of this Credit Agreement, and that, in making
the examination necessary to said certification, they
have obtained no knowledge of any Default or Event of
Default, or, if such accountants shall have obtained
knowledge of any then existing Default or Event of
Default they shall disclose in such statement any such
Default or Event of Default; provided that such
accountants shall not be liable to the Lenders for
failure to obtain knowledge of any Default or Event of
Default;
(b) as soon as practicable, but in any event not
later than forty-eight (48) days after the end of each
of the first three fiscal quarters of the Guarantor and
the Borrower in any fiscal year of the Guarantor and
the Borrower, copies of the unaudited consolidated
balance sheet of the Guarantor and its Subsidiaries as
at the end of such quarter, and the related
consolidated statement of income and consolidated
statement of cash flow for the portion of the
Guarantor's fiscal year then elapsed, all in reasonable
detail and prepared in accordance with generally
accepted accounting principles, together with a
certification by the principal financial or accounting
officer of the Borrower that the information contained
in such financial statements fairly presents the
financial position of the Guarantor and its
Subsidiaries on the date thereof (subject to year-end
adjustments), which statements shall set forth in
comparative form the figures from the projections for
such quarter most recently delivered to the Lenders;
(c) as soon as practicable, but in any event
within thirty (30) days after the end of each fiscal
month, in each fiscal year of the Borrower, unaudited
monthly consolidated financial statements of the
Guarantor and its Subsidiaries for such fiscal month,
as well as a report of sales at each Store for such
fiscal month, compared to sales at such Store for the
same fiscal month of the previous fiscal year prepared
in accordance with generally accepted accounting
principles, together with a certification by the
principal financial or accounting officer of the
Borrower that the information contained in such
financial statements fairly presents the financial
condition of the Guarantor and its Subsidiaries on the
date thereof (subject to year-end adjustments), which
statements shall set forth in comparative form the
figures from the projections, if any, for such fiscal
month most recently delivered to the Lenders;
(d) simultaneously with the delivery of the
financial statements referred to in subsections (a) and
(b) above, a statement certified by the principal
financial or accounting officer of the Borrower in
substantially the form of Exhibit D (a "Compliance
Certificate") hereto and setting forth in reasonable
detail computations evidencing compliance with the
covenants contained in 10 and (if applicable)
reconciliations to reflect changes in generally
accepted accounting principles since the Balance Sheet
Date;
(e) within two (2) Business Days of the filing or
mailing thereof, copies of all material of a financial
nature filed with the Securities and Exchange
Commission or sent to the stockholders of the Borrower
or the Guarantor;
(f) on Wednesday of each week for the immediately
preceding calendar week or at such other time as the
Administrative Agent may reasonably request after
reasonable notice, a Borrowing Base Report setting
forth the Borrowing Base as at end of such calendar
week or other date so requested by the Administrative
Agent;
(g) from time to time upon the reasonable request
of the Administrative Agent, projections of the
Guarantor, the Borrower and their Subsidiaries updating
those projections delivered to the Lenders and referred
to in 7.4.2 or, if applicable, updating any later such
projections delivered in response to a request pursuant
to this 8.4(g);
(h) by not later than the last Business Day of
the Borrower's fiscal year, the Borrower's business
plan for the next fiscal year;
(i) as soon as practicable, but in any event not
later than ninety-three (93) days after the end of each
fiscal year of the Guarantor and the Borrower, the
consolidated balance sheet of the Guarantor and its
Subsidiaries as at the end of such year, and the
related consolidated statement of income and
consolidated statement of cash flow for such year,
setting forth in comparative form the figures from the
projections for such fiscal year most recently
delivered to the Lenders;
(j) not less than thirty (30) days prior to the
opening by the Borrower of any new Store or warehouse
facility at which Eligible Inventory is to be located,
a supplement to Schedule 7.22 hereto, listing any
additions or deletions to the list of Stores and
warehouse facilities of the Borrower located in the
United States, which supplement, together with Schedule
7.22 hereto and any prior supplements, shall be deemed
to constitute Schedule 7.22 for all purposes of this
Credit Agreement;
(k) the Collateral reports as further described
on and at the times specified in Exhibit F, all in a
form reasonably satisfactory to the Administrative
Agent; and
(l) from time to time such other financial data
and information (including accountants' management
letters) as the Administrative Agent or any Lender may
reasonably request.
8.5. Notices.
8.5.1. Defaults.
The Guarantor and the Borrower will promptly
notify the Administrative Agent in writing of the
occurrence of any Default (of which they have actual
knowledge) or Event of Default. If any Person shall
give any notice or take any other action in respect of
a claimed default (whether or not constituting an Event
of Default) under this Credit Agreement or any other
note, evidence of indebtedness, indenture or other
obligation to which or with respect to which the
Guarantor and the Borrower or any of their Subsidiaries
is a party or obligor, whether as principal, guarantor,
surety or otherwise, the Guarantor and the Borrower
shall give prompt written notice thereof to the
Administrative Agent, describing the notice or action
and the nature of the claimed default.
8.5.2. Environmental Events.
The Guarantor and the Borrower will promptly give
notice to the Administrative Agent (a) of any violation
of any Environmental Law that the Guarantor, the
Borrower or any of their Subsidiaries reports in
writing or is reportable by such Person in writing (or
for which any written report supplemental to any oral
report is made) to any federal, state or local
environmental agency and (b) upon becoming aware
thereof, of any inquiry, proceeding, investigation, or
other action, including a notice from any agency of
potential environmental liability, of any federal,
state or local environmental agency or board, that has
the potential to materially affect the assets,
liabilities, financial conditions or operations of the
Guarantor, the Borrower or any of their Subsidiaries,
or the Agent's mortgages, deeds of trust or security
interests pursuant to the Security Documents.
8.5.3. Notification of Claim against Collateral.
The Guarantor and the Borrower will, promptly upon
becoming aware thereof, notify the Bank Agents in
writing of any setoff, claims (including, with respect
to the Real Estate, environmental claims), withholdings
or other defenses in an amount in excess of $100,000 to
which any of the Collateral, or the Agent's rights with
respect to the Collateral, are subject.
8.5.4. Notice of Litigation and Judgments.
The Guarantor and the Borrower will, and will
cause each of their Subsidiaries to, give notice to the
Administrative Agent in writing within fifteen (15)
days of becoming aware of any litigation or proceedings
threatened in writing or any pending litigation and
proceedings affecting the Guarantor, the Borrower or
any of their Subsidiaries or to which the Guarantor,
the Borrower or any of their Subsidiaries is or becomes
a party involving an uninsured claim against the
Guarantor, the Borrower or any of their Subsidiaries
that could reasonably be expected to have a materially
adverse effect on the Guarantor, the Borrower or any of
their Subsidiaries and stating the nature and status of
such litigation or proceedings. The Guarantor and the
Borrower will, and will cause each of their
Subsidiaries to, give notice to the Administrative
Agent, in writing, in form and detail satisfactory to
the Administrative Agent, within ten (10) days of any
judgment not covered by insurance, final or otherwise,
against the Guarantor and the Borrower or any of their
Subsidiaries in an amount in excess of $1,000,000.
8.5.5. Notices Concerning Inventory Collateral.
The Borrower shall provide to the Bank Agents
prompt notice of (i) any change in the details of all
credit card arrangements to which the Borrower or any
of it Subsidiaries is from time to time a party,
including details relating to the Borrower's or such
Subsidiary's compliance with the terms of payment to
the Blocked Account of the proceeds of all credit card
charges for sales by the Borrower or such Subsidiary,
and (ii) any failure of the Borrower or any of its
Subsidiaries to pay rent at any location, which failure
continues for more than fifteen (15) days following the
day on which such rent is due and payable by the
Borrower or such Subsidiary.
8.6. Corporate Existence; Maintenance of Properties.
Each of the Guarantor and the Borrower will do or cause
to be done all things necessary to preserve and keep in full
force and effect its corporate existence, rights and
franchises and those of its Subsidiaries, except as
otherwise permitted by 9.5.1 hereof, and will not, and will
not cause or permit any of its Subsidiaries to, convert to a
limited liability company. Each (a) will cause all of its
properties and those of its Subsidiaries used or useful in
the conduct of its business or the business of its
Subsidiaries to be maintained and kept in good condition,
repair and working order and supplied with all necessary
equipment, (b) will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Guarantor or the
Borrower may be necessary so that the business carried on in
connection therewith may be properly and advantageously
conducted at all times, and (c) will, and will cause each of
its Subsidiaries to, continue to engage primarily in the
businesses now conducted by them and in related retail
businesses; provided that nothing in this 8.6 shall prevent
the Guarantor or the Borrower from discontinuing the
operation and maintenance of any of its properties or any of
those of its Subsidiaries (other than discontinuing the
operations of the Borrower) if such discontinuance is, in
the judgment of the Guarantor or the Borrower, as the case
may be, desirable in the conduct of its or their business
and that do not in the aggregate materially adversely affect
the business of the Guarantor, the Borrower and their
Subsidiaries on a consolidated basis.
8.7. Insurance.
8.7.1. General Coverage.
Each of the Guarantor and the Borrower will, and
will cause each of its Subsidiaries to, maintain with
financially sound and reputable insurers insurance with
respect to its properties and business against such
casualties and contingencies as shall be in accordance
with the general practices of businesses engaged in
similar activities in similar geographic areas and in
amounts, containing such terms, in such forms and for
such periods as may be reasonable and prudent and in
accordance with the terms of the Security Agreements.
The Borrower will maintain insurance on the Mortgaged
Properties in accordance with the terms of the
Mortgages. The Agent shall be named as loss payee and
additional insured on all such insurance policies.
8.7.2. Business Interruption Insurance.
Without limiting the generality of the foregoing,
each of the Guarantor and the Borrower will, and will
cause each of their Subsidiaries to, maintain, with
financially sound and reputable insurers business
interruption insurance with respect to their business
and each Store, including, without limitation, any
Store located in Boston, Massachusetts, against such
casualties and contingencies as shall be in accordance
with the general practices of businesses engaged in
similar activities in similar geographic areas and in
amounts containing such terms, in such forms and for
such periods as may be reasonable and prudent.
8.7.3. Payment of Insurance Proceeds.
Each of the Guarantor and Borrower will, and will
cause each of its Subsidiaries to, deposit all amounts
received under its insurance policies into the Blocked
Account for the Borrower.
8.8. Taxes.
Each of the Guarantor and the Borrower will, and will
cause each of its Subsidiaries to, duly pay and discharge,
or cause to be paid and discharged, before the same shall
become overdue, all taxes, assessments and other
governmental charges imposed upon it and its real
properties, sales and activities, or any part thereof, or
upon the income or profits therefrom, as well as all claims
for labor, materials, or supplies that if unpaid might by
law become a lien or charge upon any of its property;
provided that any such tax, assessment, charge, levy or
claim need not be paid if the validity or amount thereof
shall currently be contested in good faith by appropriate
proceedings and if the Guarantor, the Borrower or such
Subsidiary shall have set aside on its books adequate
reserves with respect thereto; and provided further that the
Guarantor, the Borrower and each of their Subsidiaries will
pay all such taxes, assessments, charges, levies or claims
forthwith upon the commencement of proceedings to foreclose
any lien that may have attached as security therefor.
8.9. Inspection of Properties and Books, etc.
8.9.1. Exams.
Three times each calendar year, or more frequently
as determined by the Administrative Agent pursuant to
its Permitted Discretion, each of the Guarantor and the
Borrower shall permit the Administrative Agent or its
designated representatives to conduct commercial
finance examinations and to visit and inspect any of
the properties of the Guarantor, the Borrower or any of
their Subsidiaries, to examine the books of account of
the Guarantor, the Borrower and their Subsidiaries (and
to make copies thereof and extracts therefrom), and to
discuss the affairs, finances, Collateral and accounts
of the Guarantor, the Borrower and their Subsidiaries
with, and to be advised as to the same by, its and
their officers, all at such reasonable times and
intervals as the Administrative Agent may reasonably
request, and, prior to the occurrence of a Default or
Event of Default, upon reasonable advance notice to the
Guarantor, the Borrower or such Subsidiary. All
reasonable expenses incurred by the Administrative
Agent with respect to any such examinations shall be
reimbursed by the Borrower in accordance with the terms
of 16.
8.9.2. Appraisals.
Three times each calendar year, or more frequently
as determined by the Administrative Agent pursuant to
its Permitted Discretion, the Administrative Agent may
obtain appraisal reports in form and substance and from
appraisers satisfactory to the Administrative Agent,
stating (a) the then current fair market, orderly
liquidation and forced liquidation values of all or any
portion of the inventory, equipment, real estate or
other assets owned by the Guarantor, the Borrower or
any of their Subsidiaries and (b) the then current
business value of each of the Guarantor, the Borrower
and their Subsidiaries. All such appraisals shall be
conducted and made at the expense of the Borrower. The
Borrower shall take all acts reasonably necessary to
cooperate with such appraisals. All reasonable
expenses incurred by the Administrative Agent with
respect to any such appraisals shall be reimbursed by
the Borrower in accordance with the terms of 16.
8.9.3. Environmental Assessments.
If an Event of Default shall have occurred and be
continuing, the Administrative Agent may, from time to
time, in its discretion for the purpose of assessing
and ensuring the value of any Mortgaged Property,
obtain one or more environmental assessments or audits
of such Mortgaged Property prepared by a
hydrogeologist, an independent engineer or other
qualified consultant or expert approved by the
Administrative Agent to evaluate or confirm (a) whether
any Hazardous Materials are present in the soil or
water at such Mortgaged Property and (b) whether the
use and operation of such Mortgaged Property complies
with all Environmental Laws; provided, however, the
Administrative Agent shall only be permitted to obtain
such assessments for Leased Real Estate to the extent
the conduct of such assessments does not violate the
terms of any lease agreement. Environmental assessments
may include without limitation detailed visual
inspections of such Mortgaged Property including any
and all storage areas, storage tanks, drains, dry xxxxx
and leaching areas, and the taking of soil samples,
surface water samples and ground water samples, as well
as such other investigations or analyses as the
Administrative Agent deems appropriate. All such
environmental assessments shall be conducted and made
at the expense of the Borrower.
8.9.4. Communications with Accountants.
Each of the Guarantor and the Borrower authorizes
the Administrative Agent, after consultation with the
Guarantor and the Borrower, and, if accompanied by the
Administrative Agent, the Lenders to communicate
directly with the Guarantor's and the Borrower's
independent certified public accountants and authorizes
such accountants to disclose to the Administrative
Agent and the Lenders any and all financial statements
and other supporting financial documents and schedules
including copies of any management letter with respect
to the business, financial condition and other affairs
of the Guarantor, the Borrower or any of their
Subsidiaries. At the request of the Administrative
Agent, the Guarantor or the Borrower, as the case may
be, shall deliver a letter addressed to such
accountants instructing them to comply with the
provisions of this 8.9.4.
8.9.5. Mystery Shopping.
The Administrative Agent may from time to time
conduct "mystery shopping" visits to any or all of the
Borrower's or any of its Subsidiaries' business
premises. The Administrative Agent shall provide to
the Borrower a copy of any written report of the
results of such "mystery shopping" issued by any third
party "mystery shopper" engaged by the Administrative
Agent. All reasonable expenses incurred by the
Administrative Agent with respect to such visits shall
be reimbursed by the Borrower pursuant to 16.
8.10. Compliance with Laws, Contracts, Licenses, and
Permits.
Each of the Guarantor and the Borrower will, and will
cause each of its Subsidiaries to, comply with (a) the
applicable laws and regulations wherever its business is
conducted, including all Environmental Laws, within five (5)
days following the Guarantor's, the Borrower's or such
Subsidiary's becoming aware thereof, except where the
failure to do so would not have a materially adverse effect
on the financial condition, properties or business of the
Guarantor, the Borrower or any of their Subsidiaries, (b)
the provisions of its charter documents and by-laws, (c) all
agreements and instruments by which it or any of its
properties may be bound and (d) all applicable final and
non-appealable decrees, orders, and judgments. If any
authorization, consent, approval, permit or license from any
officer, agency or instrumentality of any government shall
become necessary or required in order that the Guarantor,
the Borrower or any of their Subsidiaries may fulfill any of
its obligations hereunder or any of the other Loan Documents
to which the Guarantor, the Borrower or such Subsidiary is a
party, the Guarantor or the Borrower will, or (as the case
may be) will cause such Subsidiary to, immediately take or
cause to be taken all reasonable steps within the power of
the Guarantor, the Borrower or such Subsidiary to obtain
such authorization, consent, approval, permit or license and
furnish the Administrative Agent and the Lenders with
evidence thereof.
8.11. Employee Benefit Plans.
The Borrower will (a) promptly upon filing the same
with the Department of Labor or Internal Revenue Service
upon request of the Administrative Agent, furnish to the
Administrative Agent a copy of the most recent actuarial
statement required to be submitted under 103(d) of ERISA
and Annual Report, Form 5500, with all required attachments,
in respect of each Guaranteed Pension Plan and (b) promptly
upon receipt or dispatch, furnish to the Administrative
Agent any notice, report or demand sent or received in
respect of a Guaranteed Pension Plan under 302, 4041,
4042, 4043, 4063, 4065, 4066 and 4068 of ERISA, or in
respect of a Multiemployer Plan, under 4041A, 4202, 4219,
4242, or 4245 of ERISA.
8.12. Use of Proceeds.
The Borrower will use the proceeds of the Revolving
Credit Loans solely for working capital and general
corporate purposes, including, without limitation, for
capital expenditures for new Store openings. The Borrower
will obtain Letters of Credit solely for working capital and
general corporate purposes.
8.13. Additional Mortgaged Property.
If, after the Closing Date, the Guarantor, the Borrower
or any of their Subsidiaries acquires or leases for a term
in excess of five (5) years real estate used as a
manufacturing or warehouse facility or Store, the Guarantor
or the Borrower, as the case may be, shall, or shall cause
such Subsidiary to, forthwith deliver to the Administrative
Agent a fully executed mortgage or deed of trust over such
real estate (except to the extent such mortgage would
violate the terms of any lease agreement between the
Guarantor, the Borrower or any of their Subsidiaries as the
lessee and an independent third party as the lessor as to
any Leased Real Estate), in form and substance satisfactory
to the Administrative Agent (which form shall be in
substantially the same form as the existing Mortgages),
together with title insurance policies for Owned Real
Estate, surveys for Owned Real Estate, evidences of
insurances with the Agent named as loss payee and additional
insured, legal opinions and other documents and certificates
with respect to such real estate as required by the
Administrative Agent. Each of the Guarantor and the
Borrower further agrees that, following the taking of such
actions with respect to such real estate, the Agent shall
have for the benefit of the Lenders and the Administrative
Agent a valid and enforceable first priority mortgage or
deed of trust over such real estate, free and clear of all
defects and encumbrances except for Permitted Liens.
8.14. Bank Accounts.
Each of the Guarantor and the Borrower will, and will
cause each of its Subsidiaries to, together with the
employees, agents and other Persons acting on behalf of the
Guarantor and the Borrower or such Subsidiary, receive and
hold in trust for the Agent and the Lenders all payments
constituting proceeds of the Collateral which come into
their possession or under their control and, immediately
upon receipt thereof, deposit such payments in the form
received, with any appropriate endorsements, into any Agency
Account or the Blocked Account and will otherwise comply
with the requirements of 3.2.2 hereof.
8.15. Agency Account Letters; Credit Card Providers.
The Borrower shall execute Agency Account Letters with
each bank at which it establishes a bank account after the
Closing Date pursuant to 9.9 and notices to Credit Card
Providers as the Administrative Agent shall reasonably
request.
8.16. Inventory Restrictions.
The Borrower shall cause all Eligible Inventory to be
located at all times solely at Permitted Inventory
Locations, or if not, in transit between Permitted Inventory
Locations for a period not to exceed three (3) Business
Days, and to be sold or otherwise disposed of in the
ordinary course of such Borrower's business, or consistent
with past practices, in connection with the closing of any
Store or as otherwise permitted in 9.5.2. Prior to the
opening by the Borrower of any new Store or warehouse
facility at which Eligible Inventory is to be located, the
Borrower shall take all actions necessary or advisable as
requested by the Administrative Agent under applicable law,
to establish and perfect the Agent's security interest in
the Collateral located or to be located at such Store or
warehouse facility.
8.17. Year 2000 Compliance.
The Guarantor and the Borrower shall, and shall cause
each of their Subsidiaries to, perform all acts necessary to
ensure that the Guarantor, Borrower and their Subsidiaries
shall become Year 2000 Compliant in a timely manner. Such
acts will include, as and to the extent determined by the
Borrower and Guarantor on a reasonable basis to be
reasonably necessary and appropriate considering the nature
of the business and operations conducted by the Guarantor,
Borrower and their Subsidiaries, performing a comprehensive
review and assessment of all material systems of the
Guarantor, Borrower and their Subsidiaries and, if and as
reasonably necessary or appropriate, adopting a plan, with
itemized budget, if appropriate, for the remediation,
monitoring and testing of such systems. As used in this
8.17, the term "Year 2000 Compliant" means, with respect to
any Person, that all software, hardware, firmware,
equipment, goods or systems utilized by or material to the
business, operations or financial condition of such Person
will properly perform date sensitive functions before,
during and after the year 2000. The Guarantor and Borrower
shall, promptly upon request by the Administrative Agent or
Majority Lenders, provide to the Administrative Agent and
the Lenders such evidence of compliance by the Guarantor,
Borrower and their Subsidiaries with the terms of this
8.17, as the Administrative Agent or the Majority Lenders
may from time to time reasonably require.
8.18. POS System.
The Borrower will obtain a lease commitment on a
replacement point-of-sale cash register computer system, (a
"POS System") on terms and conditions reasonably acceptable
to the Administrative Agent in a minimum amount of
$5,000,000 by not later than May 31, 1999. Such POS System
shall be 75% completed by August 31, 1999, and the Borrower
shall have delivered evidence reasonably satisfactory to the
Administrative Agent of such implementation as the
Administrative Agent may reasonably request from time to
time.
8.19. Further Assurances.
Each of the Guarantor and the Borrower will, and will
cause each of its Subsidiaries to, cooperate with the
Lenders and the Administrative Agent and execute such
further instruments and documents as the Lenders or the
Administrative Agent shall reasonably request to carry out
to their satisfaction the transactions contemplated by this
Credit Agreement and the other Loan Documents.
9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER AND THE
GUARANTOR.
Each of the Guarantor and the Borrower covenants and agrees
that, so long as any Loan, Unpaid Reimbursement Obligation,
Letter of Credit or Note is outstanding or any Lender has any
obligation to make any Loans or the Administrative Agent has any
obligations to issue, extend or renew any Letters of Credit:
9.1. Restrictions on Indebtedness.
The Guarantor and the Borrower will not, and will not
permit any of their Subsidiaries to, create, incur, assume,
guarantee or be or remain liable, contingently or otherwise,
with respect to any Indebtedness other than:
(a) Indebtedness to the Lenders and the
Administrative Agent arising under any of the Loan
Documents or in respect of interest rate protection
arrangements;
(b) current liabilities of the Guarantor, the
Borrower or such Subsidiary incurred in the ordinary
course of business not incurred through (i) the
borrowing of money, or (ii) the obtaining of credit
except for credit on an open account basis customarily
extended and in fact extended in connection with normal
purchases of goods and services;
(c) Indebtedness in respect of taxes,
assessments, governmental charges (including any taxes,
assessments, governmental charges or levies arising or
resulting from the audits being conducted as of the
Closing Date by state revenue authorities or the
Internal Revenue Service and described on Schedule 9.1
hereto) or levies and claims for labor, materials and
supplies to the extent that payment therefor shall not
at the time be required to be made in accordance with
the provisions of 8.8;
(d) Indebtedness in respect of judgments or
awards that have been in force for less than the
applicable period for taking an appeal so long as
execution is not levied thereunder or in respect of
which the Guarantor, the Borrower or such Subsidiary
shall at the time in good faith be prosecuting an
appeal or proceedings for review and in respect of
which a stay of execution shall have been obtained
pending such appeal or review;
(e) endorsements for collection, deposit or
negotiation and warranties of products or services, in
each case incurred in the ordinary course of business;
(f) obligations under Capitalized Leases not
exceeding, in the aggregate, $10,000,000 minus the
amount of obligations under Capitalized Leases set
forth on Schedule 9.1 hereto at any time outstanding;
(g) Indebtedness incurred in connection with the
acquisition after the date hereof of any real or
personal property by the Guarantor, the Borrower or
such Subsidiary, provided that the aggregate principal
amount of such Indebtedness of the Guarantor, the
Borrower and their Subsidiaries shall not exceed the
aggregate amount of $3,000,000 at any one time;
(h) Indebtedness existing on the date hereof and
listed and described on Schedule 9.1 hereto, including,
but not limited to obligations under Capitalized Leases
listed and described thereon;
(i) Indebtedness, in an aggregate outstanding
amount not to exceed $1,000,000 at any time, to any
federal or state chartered bank which is an Agency
Account Institution (other than any of the Lenders) in
respect of overdrafts on demand deposit accounts
maintained with such bank;
(j) Indebtedness in respect of reserves
established on the books and records of the Guarantor
and the Borrower in accordance with generally accepted
accounting principles with respect to unresolved
litigation;
(k) Indebtedness consisting of guaranties by the
Guarantor or the Borrower of obligations or liabilities
of employees of either of the Guarantor or the
Borrower, to the extent that payment under such
guaranties is permitted by 9.3(f) hereof;
(l) Indebtedness of the Borrower to the
Guarantor, or the Guarantor to the Borrower;
(m) Indebtedness in respect of the Borrower's
obligations to fund the Supplemental Executive
Retirement Plan not to exceed $4,000,000 in the
aggregate on any day prior to the payment in full of
all the Obligations;
(n) Indebtedness (including guaranties of the
Borrower) in respect of the Monogram Agreement; and
(o) Indebtedness of the Borrower or the Guarantor
(including guaranties by the Borrower or the Guarantor)
in respect of the obligations of any Person, the
business of which Person is of strategic importance in
the business plan of the Borrower previously delivered
to the Administrative Agent and the Lenders, so long as
the maximum contingent or actual liability of the
Borrower and the Guarantor in respect of all such
Indebtedness, together with the Investments described
in 9.3(h), does not exceed $1,000,000 in the aggregate
at any one time.
9.2. Restrictions on Liens.
Neither the Guarantor nor the Borrower will, and
neither will permit any of its Subsidiaries to, (i) create
or incur or suffer to be created or incurred or to exist any
lien, encumbrance, mortgage, pledge, charge, restriction or
other security interest of any kind upon any of its property
or assets of any character whether now owned or hereafter
acquired, or upon the income or profits therefrom; (ii)
transfer any of such property or assets or the income or
profits therefrom for the purpose of subjecting the same to
the payment of Indebtedness or performance of any other
obligation in priority to payment of its general creditors;
(iii) acquire, or agree or have an option to acquire, any
property or assets upon conditional sale or other title
retention or purchase money security agreement, device or
arrangement; (iv) suffer to exist for a period of more than
sixty (60) days after the same shall have been due any
Indebtedness or claim or demand against it that if unpaid
might by law or upon bankruptcy or insolvency, or otherwise,
be given any priority whatsoever over its general creditors;
(v) sell, assign, pledge or otherwise transfer any accounts,
contract rights, general intangibles, chattel paper or
instruments, with or without recourse or (vi) enter into or
permit to exist any arrangement or agreement, enforceable
under applicable law, which directly or indirectly prohibits
the Guarantor, the Borrower or any of their Subsidiaries
from creating or incurring any lien, encumbrance, mortgage,
pledge, charge, restriction or other security interest other
than in favor of either Bank Agent for the benefit of the
Banks and the Bank Agents under the Loan Documents and other
than customary anti-assignment provisions in leases,
licensing and other agreements entered into by the Borrower
or such Subsidiary in the ordinary course of its business;
provided that the Guarantor, the Borrower and any Subsidiary
of the Guarantor or the Borrower may create or incur or
suffer to be created or incurred or to exist:
(a) liens in favor of the Guarantor or the
Borrower on all or part of the assets of Subsidiaries
of the Guarantor or the Borrower securing Indebtedness
owing by Subsidiaries of the Guarantor or the Borrower
to the Guarantor or the Borrower;
(b) liens to secure taxes, assessments and other
government charges in respect of obligations not
overdue or liens on properties to secure claims for
labor, material or supplies in respect of obligations
not overdue or otherwise discharged or bonded over
within sixty (60) days following the imposition of such
liens;
(c) deposits or pledges made in connection with,
or to secure payment of, workmen's compensation,
unemployment insurance, old age pensions or other
social security obligations;
(d) liens on properties in respect of judgments
or awards, the Indebtedness with respect to which is
permitted by 9.1(d);
(e) liens of carriers, warehousemen, mechanics
and materialmen, and other like liens on properties, in
existence less than 120 days from the date of creation
thereof in respect of obligations not overdue or
otherwise discharged or bonded over within sixty (60)
days following the imposition of such liens;
(f) encumbrances on Real Estate consisting of
easements, rights of way, zoning restrictions,
restrictions on the use of real property and defects
and irregularities in the title thereto, landlord's or
lessor's liens under leases to which the Guarantor or
the Borrower or a Subsidiary of the Guarantor or the
Borrower is a party, and other minor liens or
encumbrances none of which in the opinion of the
Guarantor or the Borrower interferes materially with
the use of the property affected in the ordinary
conduct of the business of the Guarantor, the Borrower
and their Subsidiaries, which defects do not
individually or in the aggregate have a materially
adverse effect on the business of the Guarantor or the
Borrower individually or of the Guarantor, the Borrower
and their Subsidiaries on a consolidated basis;
(g) liens existing on the date hereof and listed
on Schedule 9.2 hereto;
(h) purchase money security interests in or
purchase money mortgages on real or personal property
acquired after the date hereof to secure purchase money
Indebtedness of the type and amount permitted by
9.1(g), incurred in connection with the acquisition of
such property, which security interests or mortgages
cover only the real or personal property so acquired;
(i) liens and encumbrances on each Mortgaged
Property as and to the extent permitted by the Mortgage
applicable thereto;
(j) liens in favor of the Bank Agents for the
benefit of the Lenders and the Bank Agents under the
Loan Documents;
(k) liens (other than judgments and awards)
created by or resulting from any litigation or legal
proceeding which is currently being contested in good
faith by appropriate proceedings and with respect to
which adequate reserves (in accordance with generally
accepted accounting principles) have been set aside for
the payment thereof on the books and records of the
Guarantor and the Borrower, unless proceedings to
foreclose such liens have been commenced and have not
been withdrawn or bonded;
(l) security deposits and liens to secure
obligations owed to landlords or lessors under leases
or other rental agreements made in the ordinary course
of business and confined to the premises or property
rented;
(m) security interests in documents presented, or
in the goods to which such documents relate, in
connection with a Letter of Credit permitted by
9.1(a);
(n) liens created by Capitalized Leases up to the
amount permitted by 9.1(f);
(o) liens in favor of Monogram Credit Card Bank
of Georgia created by the Monogram Agreement as an
effect on the Closing Date; and
(p) liens arising from the consignment of goods
(where the Borrower is the consignee) consigned to the
Borrower in the ordinary course of business, consistent
with past practices, provided the net book value of
such consigned goods does not exceed $8,000,000 at any
one time.
9.3. Restrictions on Investments.
Neither the Guarantor nor the Borrower will, and
neither will permit any of its Subsidiaries to, make or
permit to exist or to remain outstanding any Investment
except Investments in:
(a) marketable direct or guaranteed obligations
of the United States of America that mature within one
(1) year from the date of purchase by the Borrower or
the Guarantor, so long as at the time of the making of
such Investment, there are no Revolving Credit Loans
outstanding except for Eurodollar Rate Loans that are
cash collateralized in accordance with the terms of the
Cash Collateral Agreement (which cash collateral may be
invested in Permitted Cash Collateral Investments);
(b) demand deposits, certificates of deposit,
bankers acceptances and time deposits of the Lenders
that mature within thirty (30) days from the date of
purchase by the Guarantor, the Borrower or such
Subsidiary, so long as at the time of the making of
such Investment, there are no Revolving Credit Loans
outstanding except for Eurodollar Rate Loans that are
cash collateralized in accordance with the terms of the
Cash Collateral Agreement (which cash collateral may be
invested in Permitted Cash Collateral Investments);
(c) securities commonly known as "commercial
paper" issued by the Lenders or a corporation organized
and existing under the laws of the United States of
America or any state thereof that at the time of
purchase have been rated and the ratings for which are
not less than "P 1" if rated by Xxxxx'x Investors
Services, Inc., and not less than "A 1" if rated by
Standard and Poor's, so long as at the time of the
making of such Investment, there are no Revolving
Credit Loans outstanding except for Eurodollar Rate
Loans that are cash collateralized in accordance with
the terms of the Cash Collateral Agreement (which cash
collateral may be invested in Permitted Cash Collateral
Investments);
(d) Investments existing on the date hereof and
listed on Schedule 9.3 hereto;
(e) Investments consisting of the Guaranty or
Investments by the Guarantor or the Borrower in
Subsidiaries of the Guarantor or the Borrower or
Investments by the Guarantor or the Borrower in each
other existing on the Closing Date;
(f) Investments consisting of loans and advances
to employees or guarantees of such loans and advances
for moving, entertainment, travel and other similar
expenses in the ordinary course of business not to
exceed $500,000 in the aggregate at any time
outstanding;
(g) Investments by the Borrower in a demand
deposit located at an Agency Account Institution,
provided that the amount of such Investments does not
exceed, in the aggregate, that amount set forth
opposite such Agency Account Institution's name on
Schedule 3.2.2(a); and
(h) other Investments of strategic importance to
the business plan of the Borrower previously delivered
to the Administrative Agent and the Lenders, the amount
of which, when combined with all outstanding
obligations permitted by 9.1(o), shall not exceed
$1,000,000 in the aggregate at any one time;
provided, however, that, with the exception of loans and
advances referred to in 9.3(d) - (h), (a) such Investments
will be considered Investments permitted by this 9.3 only
if such Investments are made through one of the Lenders, and
all actions have been taken to the satisfaction of the
Administrative Agent to provide to the Agent, for the
benefit of the Lenders and the Administrative Agent, a first
priority perfected security interest in all of such
Investments free of all encumbrances other than Permitted
Liens, and (b) such Investments are subject to the terms and
conditions of the Cash Collateral Agreement.
9.4. Distributions.
Neither the Guarantor nor the Borrower will make any
Distributions.
9.5. Merger, Consolidation and Disposition of
Assets.
9.5.1. Mergers and Acquisitions.
Neither the Guarantor nor the Borrower will, and
neither will permit any of its Subsidiaries to, become
a party to any merger or consolidation, or agree to or
effect any asset acquisition or stock acquisition
(other than the acquisition of assets in the ordinary
course of business consistent with past practices) or
open any new Stores except (a) the merger or
consolidation of one or more of the Subsidiaries of the
Borrower with and into the Borrower, (b) the merger or
consolidation of two or more Subsidiaries of the
Borrower, (c) the merger of the Borrower with the
Guarantor, (d) the Guarantor and/or the Borrower shall
be permitted to enter into an agreement to effect a
merger so long as (i) the Guarantor and/or the
Borrower, as the case may be, provide the Lenders with
written notice promptly after entering into such merger
agreement, which notice shall set forth the terms of
such agreement in reasonable detail; (ii) such merger
agreement provides for the indefeasible repayment in
full, in cash, of all of the Obligations and a
termination of the Total Commitment immediately upon
the consummation of the contemplated merger; and (iii)
the Guarantor or the Borrower, as the case may be,
shall incur no liability or expense under the terms of
the merger agreement, other than reasonable expenses
for professional fees related thereto or (e) subject to
the other requirements of this Credit Agreement, the
acquisition or opening of new Stores by the Borrower
provided that (i) the Borrower acquires or opens no
more than ten new Stores per fiscal year or, in the
case of the Borrower's fiscal year ended February 2001,
eleven new Stores and (ii) in the case of a stock
acquisition of new Stores, the acquired Person is
immediately merged with and into the Borrower with the
Borrower being the surviving entity.
9.5.2. Disposition of Assets.
Subject at all times to the requirements of
3.2.2, the Borrower and the Guarantor will not, and
will not permit any of its Subsidiaries to, become a
party to or agree to or effect any disposition of
assets, other than (a) the disposition of assets in the
ordinary course of business, consistent with past
practices, (b) the sale or other disposition of
furnishings, fixtures and equipment which have become
worn out, obsolete or no longer used or useful in the
ordinary course of business, (c) the disposition of
assets of any Store, including but not limited to
leasehold rights, fixtures and inventory, in connection
with the closing of such Store or any decision not to
open a Store in Montgomeryville, PA provided that the
aggregate amount of such dispositions shall not exceed
five percent (5%) of the consolidated assets of the
Borrower, the Guarantor and their Subsidiaries after
the Closing Date; (d) any sale or other disposition
described on Schedule 9.5.2 hereof; (e) the licensing
in the ordinary course of business of intangible
assets, including trade names, trademarks, service
marks and copyrights, of the Borrower, provided that
such licenses do not individually or in the aggregate
materially impair the usefulness and value of any of
such intangible asset(s) used or to be used in the
business or operations of the Borrower as now conducted
or as proposed to be conducted; and (f) the disposition
of assets constituting inventory in connection with the
discontinuation or partial discontinuation of a product
line, provided such inventory is disposed of in the
ordinary course of the Borrower's business operations
provided that such disposition shall not exceed five
percent (5%) of the consolidated inventory of the
Borrower, the Guarantor and their Subsidiaries. In the
event of a disposition of inventory or other assets
other than in the ordinary course of business,
consistent with past practices, which disposition is
permitted by this 9.5.2, the Agent shall release its
security interest and liens on, as the case may be,
such permitted disposed assets upon receipt and use by
the Agent of the Net Proceeds from such disposition to
prepay the Loans in accordance with the provisions of
3.2.2, provided that after such release no Default or
Event of Default shall exist.
9.6. Sale and Leaseback.
Neither the Guarantor nor the Borrower will, and will
not permit any of its Subsidiaries to, enter into any
arrangement, directly or indirectly, whereby the Guarantor,
the Borrower or any Subsidiary of the Guarantor or the
Borrower shall sell or transfer any property owned by it in
order then or thereafter to lease such property or lease
other property that the Guarantor or the Borrower or any
Subsidiary of the Guarantor or the Borrower intends to use
for substantially the same purpose as the property being
sold or transferred.
9.7. Compliance with Environmental Laws.
Neither the Guarantor nor the Borrower will, and
neither will permit any of its Subsidiaries to, in any
manner that would violate any Environmental Law or bring any
of the Real Estate in violation of any Environmental Law,
which violation would have a material adverse effect on the
business, assets or financial condition of the Guarantor,
the Borrower or any of their Subsidiaries after taking into
consideration any applicable business interruption
insurance, (a) use any of the Real Estate or any portion
thereof for the handling, processing, storage or disposal of
Hazardous Substances, (b) cause to be located on any of the
Real Estate any underground tank or other underground
storage receptacle for Hazardous Substances, (c) generate
any Hazardous Substances on any of the Real Estate, (d)
conduct any activity at any Real Estate or use any Real
Estate in any manner so as to cause a release (i.e.
releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching,
disposing or dumping) or threatened release of Hazardous
Substances on, upon or into the Real Estate or (e) otherwise
conduct any activity at any Real Estate or use any Real
Estate.
9.8. Employee Benefit Plans.
Neither the Borrower nor any ERISA Affiliate will:
(a) engage in any "prohibited transaction" within
the meaning of 406 of ERISA or 4975 of the Code which
could result in a material liability for the Borrower
or any of its Subsidiaries; or
(b) permit any Guaranteed Pension Plan to incur
an "accumulated funding deficiency", as such term is
defined in 302 of ERISA, whether or not such
deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension
Plan to an extent which, or terminate any Guaranteed
Pension Plan in a manner which, could result in the
imposition of a lien or encumbrance on the assets of
the Borrower or any of its Subsidiaries pursuant to
5302(f) or 4068 of ERISA; or
(d) permit or take any action which would result
in the aggregate benefit liabilities (within the
meaning of 4001 of ERISA) of all Guaranteed Pension
Plans exceeding the value of the aggregate assets of
such Plans, disregarding for this purpose the benefit
liabilities and assets of any such Plan with assets in
excess of benefit liabilities.
9.9. Bank Accounts.
Neither the Guarantor nor the Borrower will, and
neither will permit any of its Subsidiaries to, (a)
establish any bank accounts other than those listed on
Schedule 7.20 without providing prior written notice thereof
to the Bank Agents and complying with 8.15 hereof as it
relates to such bank account, (b) violate directly or
indirectly any Agency Account Agreement or Blocked Account
Agreement in favor of the Agent for the benefit of the
Lenders and the Administrative Agent with respect to such
account, or (c) deposit into any of the payroll accounts
listed on Schedule 7.20 any amounts in excess of amounts
necessary to pay current payroll obligations from such
accounts.
9.10. Amendments to Monogram Agreement.
The Borrower shall not amend the Monogram Agreement
unless such amendment (a) does not provide for any net
increase of any costs or expenses to the Borrower; (b) will
not cause a material adverse effect on the Collateral; and
(c) will not in any other manner materially adversely effect
the Administrative Agent or the Lenders, or the Borrower's
ability to perform its obligations hereunder or under the
other Loan Documents.
9.11. Transactions with Affiliates.
Neither the Guarantor nor the Borrower will, nor will
they permit any of their Subsidiaries to, enter into, or
cause, suffer or permit to exist any transaction or
agreement with any Affiliate except:
(a) employment agreements entered into in the
ordinary course of business by the Guarantor, the
Borrower or any of their Subsidiaries and loans and
advances to employees of the Guarantor, the Borrower or
any of their Subsidiaries in the ordinary course of
business for travel expenses, drawing accounts or other
similar business related expenses;
(b) any transaction or agreement having terms not
less favorable to the Guarantor, the Borrower and their
Subsidiaries than would be the case if such transaction
or agreement had been entered into with a Person that
is not an Affiliate, provided that the aggregate
potential value payable or receivable by the Guarantor,
the Borrower and their Subsidiaries in connection with
all such transactions during any fiscal year of the
Borrower (excluding transactions or agreements
exclusively among or between the Guarantor, the
Borrower and their Subsidiaries) shall not exceed
$500,000; and
(c) as set forth on Schedule 7.15.
10. FINANCIAL COVENANTS OF THE BORROWER AND THE GUARANTOR.
Each of the Guarantor and the Borrower covenants and agrees
that, so long as any Loan, Unpaid Reimbursement Obligation,
Letter of Credit or Note is outstanding or any Lender has any
obligation to make any Loans or the L/C Issuer has any obligation
to issue, extend or renew any Letters of Credit, and (a) Excess
Availability is less than the sum of $15,000,000 plus any Capital
Expenditures Variance at any time during the months of November
through March, inclusive, (as determined by the Administrative
Agent throughout such months) or (b) Excess Availability is less
than the sum of $10,000,000 plus any Capital Expenditures
Variance at any time during the months of April through October,
inclusive, (as determined by the Administrative Agent throughout
such months) the covenants in this Section 10 shall apply.
Compliance with 10.1 and 10.2 shall be tested on the most
recent monthly financial statements delivered by the Borrower and
the Guarantor pursuant to 8.4(c) immediately upon the
Administrative Agent's determination that Excess Availability is
less than the amounts specified above and shall thereafter be
continuously tested until the Administrative Agent determines
that Excess Availability has exceeded the amount specified above.
10.1. Minimum EBITDA.
The Guarantor and the Borrower will not, as of the end
of any Reference Period ending on any date or during any
period described in the table set forth below, permit EBITDA
for such period, to be less than the amount set forth
opposite such period in such table:
Period Amount
February 27, 1999 -$5,000,000
April 3, 1999 -$5,500,000
May 1, 1999 -$3,000,000
May 29, 1999 -$1,500,000
July 3, 1999 $1,000,000
July 31, 1999 -$1,000,000
August 28, 1999 -$2,000,000
October 2, 1999 $3,500,000
October 30, 1999 $9,000,000
November 27, 1999 $14,000,000
January 1, 2000 $23,000,000
January 29, 2000 $17,000,000
January 30, 2000 through October 28, 2000 $17,000,000
October 29, 2000 through November 3, 2001 $20,000,000
November 4, 2001 and thereafter $23,000,000
10.2. Minimum Accounts Payable to Eligible Inventory
Ratio.
The Guarantor and the Borrower will not permit the
ratio of Accounts Payable to Eligible Inventory at any time
for any month set forth in the table below to be less than
the amount set forth opposite such date:
Month Ending Ratio
January 28.0%
February 34.0%
March 34.0%
April 30.0%
May 31.5%
June 30.0%
July 27.0%
August 31.0%
September 30.0%
October 28.5%
November 29.5%
December 23.0%
11. CLOSING CONDITIONS.
The obligations of the Lenders to make the initial Revolving
Credit Loans and of the L/C Issuer to issue any initial Letters
of Credit shall be subject to the satisfaction of the following
conditions precedent:
11.1. Loan Documents, etc.
Each of the Loan Documents shall have been duly
executed and delivered by the respective parties thereto,
shall be in full force and effect and shall be in form and
substance satisfactory to each of the Lenders. Each Lender
shall have received a fully executed copy of each such
document.
11.2. Certified Copies of Charter Documents.
Each of the Lenders shall have received from the
Guarantor and the Borrower a copy, certified by a duly
authorized officer of such Person to be true and complete on
the Closing Date, of each of (a) its charter or other
incorporation documents as in effect on such date of
certification, and (ii) its by-laws as in effect on such
date.
11.3. Corporate Action.
All corporate action necessary for the valid execution,
delivery and performance by the Guarantor and the Borrower
of this Credit Agreement and the other Loan Documents to
which it is or is to become a party shall have been duly and
effectively taken, and evidence thereof satisfactory to the
Lenders shall have been provided to each of the Lenders.
11.4. Incumbency Certificate.
Each of the Lenders shall have received from the
Guarantor and the Borrower an incumbency certificate, dated
as of the Closing Date, signed by a duly authorized officer
of the Guarantor and the Borrower, and giving the name and
bearing a specimen signature of each individual who shall be
authorized: (a) to sign, in the name and on behalf of each
of the Guarantor and the Borrower, each of the Loan
Documents which the Guarantor or the Borrower is or is to
become a party; (b) in the case of the Borrower, to make
Loan Requests and Conversion Requests and to apply for
Letters of Credit; and (c) to give notices and to take other
action on its behalf under the Loan Documents.
11.5. Validity of Liens.
The Security Documents shall be effective to create in
favor of the Agent for the benefit of the Administrative
Agent and the Lenders a legal, valid and enforceable first
(except for Permitted Liens entitled to priority under
applicable law) security interest in and lien upon the
Collateral. All filings, recordings, deliveries of
instruments and other actions necessary or desirable in the
opinion of the Bank Agents to protect and preserve such
security interests shall have been duly effected. The Bank
Agents shall have received evidence thereof in form and
substance satisfactory to the Bank Agents.
11.6. Perfection Certificates and UCC Search Results.
The Administrative Agent shall have received from each
of the Guarantor and the Borrower an update of the
Perfection Certificate delivered by such Person on the
Original Closing Date certified to be true, correct and
complete by such Person and the results of UCC searches with
respect to the Collateral, indicating no liens other than
Permitted Liens and otherwise in form and substance
satisfactory to the Administrative Agent.
11.7. Certificates of Insurance.
The Administrative Agent shall have received (a) a
certificate of insurance from an independent insurance
broker dated as of the Closing Date, identifying insurers,
types of insurance, insurance limits, and policy terms, and
otherwise describing the insurance obtained in accordance
with the provisions of the Security Agreements and 8.7 and
(b) certified copies of all policies evidencing such
insurance (or certificates therefore signed by the insurer
or an agent authorized to bind the insurer).
11.8. Borrowing Base Report.
The Administrative Agent shall have received from the
Borrower the initial Borrowing Base Report dated as of
January 20, 1999 for the week ended January 16, 1999.
11.9. Solvency Certificate.
Each of the Lenders shall have received an officer's
certificate of the Guarantor and the Borrower dated as of
the Closing Date as to the solvency of the Guarantor and the
Borrower and their Subsidiaries following the consummation
of the transactions contemplated herein and in form and
substance reasonably satisfactory to the Administrative
Agent.
11.10. Opinion of Counsel.
Each of the Lenders and the Administrative Agent shall
have received a favorable legal opinion addressed to the
Lenders and the Administrative Agent, dated as of the
Closing Date, in form and substance satisfactory to the
Lenders and the Administrative Agent, from:
(a) Xxxxxxxx Xxxxx XxXxxxxx & Xxxxxxxxxxx LLP,
counsel to the Guarantor and the Borrower and its
Subsidiaries; and
(b) Xxxxxx Xxxxxx, Esq., in-house counsel to the
Guarantor and the Borrower.
11.11. Payment of Fees.
The Borrower shall have paid on the Closing Date to the
Lenders or the Administrative Agent, as appropriate, the
fees required pursuant to 5.1, as well as all reasonable
fees and expenses of the Administrative Agent, including,
without limitation, the fees and expenses of the Agent's
Special Counsel and the costs and expenses of appraisals,
commercial finance examinations and the Administrative
Agent's out-of-pocket expenses.
11.12. Minimum Excess Availability.
Excess Availability on the Closing Date shall not be
less than $18,500,000 plus the Capital Expenditures
Variance, which as of the Closing Date equals $3,305,836.
11.13. Agency Account Letters; Credit Card Providers.
The Borrower shall have delivered to the Administrative
Agent evidence that it has delivered notices to each Agency
Account Institution set forth on Schedule 8.15(a) hereto
concerning the Agent's interest for the benefit of the
Lenders and the Administrative Agent in such accounts and
notices to each of the Credit Card Providers listed on
Schedule 8.15(b) hereto.
12. CONDITIONS TO ALL BORROWINGS.
The obligations of the Lenders to make any Loan, and of the
L/C Issuer to issue, extend or renew any Letter of Credit, in
each case whether on or after the Closing Date, shall also be
subject to the satisfaction of the following conditions
precedent:
12.1. Representations True; No Event of Default.
Each of the representations and warranties of any of
the Guarantor, the Borrower and their Subsidiaries contained
in this Credit Agreement, the other Loan Documents or in any
document or instrument delivered pursuant to or in
connection with this Credit Agreement shall be true as of
the date as of which they were made and shall also be true
at and as of the time of the making of such Loan or the
issuance, extension or renewal of such Letter of Credit,
with the same effect as if made at and as of that time
(except to the extent of changes resulting from transactions
contemplated or permitted by this Credit Agreement and the
other Loan Documents and changes occurring in the ordinary
course of business that singly or in the aggregate are not
materially adverse, and to the extent that such
representations and warranties relate expressly to an
earlier date) and no Default or Event of Default shall have
occurred and be continuing.
12.2. No Legal Impediment.
No change shall have occurred in any law or regulations
thereunder or interpretations thereof that in the reasonable
opinion of any Lender in reliance on advice of counsel to
such Lender would make it illegal for such Lender to make
such Loan or to participate in the issuance, extension or
renewal of such Letter of Credit or in the reasonable
opinion of the Administrative Agent in reliance on advice of
counsel to the Administrative Agent would make it illegal
for the L/C Issuer to issue, extend or renew such Letter of
Credit.
12.3. Governmental Regulation.
Each Lender shall have received such statements in
substance and form reasonably satisfactory to such Lender as
such Lender shall require for the purpose of compliance with
any applicable regulations of the Comptroller of the
Currency or the Board of Governors of the Federal Reserve
System.
12.4. Proceedings and Documents.
All proceedings in connection with the transactions
contemplated by this Credit Agreement, the other Loan
Documents and all other documents incident thereto shall be
reasonably satisfactory in substance and in form to the
Lenders and to the Administrative Agent and the Agent's
Special Counsel, and the Lenders, the Administrative Agent
and such counsel shall have received all information and
such counterpart originals or certified or other copies of
such documents as they may reasonably request.
12.5. Borrowing Base Report.
The Administrative Agent shall have received the most
recent Borrowing Base Report required to be delivered to the
Administrative Agent in accordance with 8.4(f).
13. EVENTS OF DEFAULT; ACCELERATION; ETC.
13.1. Events of Default and Acceleration.
If any of the following events ("Events of Default" or,
if the giving of notice or the lapse of time or both is
required, then, prior to such notice or lapse of time,
"Defaults") shall occur:
(a) the Borrower shall fail to pay (i) any
principal of the Loans or any Reimbursement Obligation
when the same shall become due and payable, whether at
the stated date of maturity or any accelerated date of
maturity or at any other date fixed for payment or (ii)
any interest on the Loans within three (3) Business
Days following the date when the same shall become due
and payable, whether at the stated date of maturity or
any accelerated date of maturity or at any other date
fixed for payment;
(b) the Borrower shall fail to pay the commitment
fee, any Letter of Credit Fee, or other sums due
hereunder or under any of the other Loan Documents,
within five (5) Business Days following the date when
the same shall become due and payable, whether at the
stated date of maturity or any accelerated date of
maturity or at any other date fixed for payment;
(c) the Guarantor or the Borrower shall fail to
comply with any of its covenants contained in 8
(other than the covenants contained in 8.1 (which are
governed by 13.1(a) and (b)), 8.6(b) or 8.8 (only with
respect to state and local taxes, assessments, and
other governmental charges, which shall be contested in
good faith at the time)), 9 (other than the covenants
contained in 9.8) or 10 or any of the covenants
contained in any of the Mortgages (after all applicable
grace periods contained therein have elapsed);
(d) the Guarantor or the Borrower or any of their
Subsidiaries shall fail to perform any term, covenant
or agreement contained herein or in any of the other
Loan Documents (other than those specified elsewhere in
this 13.1) for thirty (30) days after written notice
of such failure has been given to the Guarantor or the
Borrower by the Administrative Agent or any Lender;
provided, however, that in the event that any such
failure to perform any such term, covenant or agreement
(other than the covenants contained in 8.8 (only with
respect to state and local taxes, assessments and other
governmental charges which shall be contested in good
faith at the time) and 9.8) is capable of cure and so
long as the Guarantor or the Borrower, as the case may
be, is using its best efforts to effect such cure, the
Guarantor or the Borrower, as the case may be, shall
have forty-five (45) days after the notice referred to
above has been given to cure such failure to perform;
and provided, further, that with respect to the
covenants contained in 8.6(b), in the event that any
such failure to perform such covenant is not
susceptible to cure within thirty (30) days and so long
as the Guarantor or the Borrower, as the case may be,
is using its best efforts to effect such cure, the
Guarantor or the Borrower, as the case may be, shall
have such additional time as may be necessary to cure
such failure to perform;
(e) any representation or warranty of the
Guarantor or the Borrower or any of their Subsidiaries
in this Credit Agreement or any of the other Loan
Documents or in any other document or instrument
delivered pursuant to or in connection with this Credit
Agreement shall prove to have been false or incorrect
in any material respect upon the date when made or
deemed to have been made or repeated;
(f) the Guarantor or the Borrower or any of their
Subsidiaries shall fail to pay when due, or within any
applicable period of grace, any obligation for borrowed
money or credit received or in respect of any
Capitalized Leases in excess of $250,000, or fail to
observe or perform any material term, covenant or
agreement contained in any agreement by which it is
bound, evidencing or securing borrowed money or credit
received or in respect of any Capitalized Leases in
excess of $250,000 for such period of time as would
permit (assuming the giving of appropriate notice if
required) the holder or holders thereof or of any
obligations issued thereunder to accelerate the
maturity thereof;
(g) the Guarantor or the Borrower or any of their
Subsidiaries shall make an assignment for the benefit
of creditors, or admit its inability to pay or
generally fail to pay its debts as they mature or
become due, or shall petition or apply for the
appointment of a trustee or other custodian, liquidator
or receiver of the Guarantor or the Borrower or any of
their Subsidiaries or of any substantial part of the
assets of the Guarantor or the Borrower or any of their
Subsidiaries or shall commence any case or other
proceeding relating to the Guarantor or the Borrower or
any of their Subsidiaries under any bankruptcy,
reorganization, arrangement, insolvency, readjustment
of debt, dissolution or liquidation or similar law of
any jurisdiction, now or hereafter in effect, or shall
take any action to authorize or in furtherance of any
of the foregoing, or if any such petition or
application shall be filed or any such case or other
proceeding shall be commenced against the Guarantor or
the Borrower or any of their Subsidiaries and the
Guarantor or the Borrower or any of their Subsidiaries
shall indicate its approval thereof, consent thereto or
acquiescence therein or such petition or application
shall not have been dismissed within ninety (90) days
following the filing thereof;
(h) a decree or order is entered appointing any
such trustee, custodian, liquidator or receiver or
adjudicating the Guarantor or the Borrower or any of
their Subsidiaries bankrupt or insolvent, or approving
a petition in any such case or other proceeding, or a
decree or order for relief is entered in respect of the
Guarantor or the Borrower or any Subsidiary in an
involuntary case under federal bankruptcy laws as now
or hereafter constituted;
(i) there shall remain in force, undischarged,
unsatisfied and unstayed, for more than sixty (60)
days, whether or not consecutive, any final judgment
against the Guarantor or the Borrower or any of their
Subsidiaries that, with other outstanding final
judgments, undischarged, against the Guarantor or the
Borrower or any of their Subsidiaries exceeds in the
aggregate $1,000,000 (net of insurance coverage to the
extent that the Guarantor or the Borrower has filed a
claim under applicable insurance policies and
reasonably and in good faith believes that the insurer
is obligated under the terms of such policy to pay such
judgment) at any one time;
(j) if any of the Loan Documents shall be
cancelled, terminated, revoked or rescinded or the
Agent's security interests, mortgages or liens in a
substantial portion of the Collateral shall cease to be
perfected, or shall cease to have the priority
contemplated by the Security Documents, in each case
otherwise than in accordance with the terms thereof or
with the express prior written agreement, consent or
approval of the Lenders, or any action at law, suit or
in equity or other legal proceeding to cancel, revoke
or rescind any of the Loan Documents shall be commenced
by or on behalf of the Guarantor or the Borrower or any
of their Subsidiaries party thereto or any of their
respective stockholders (other than the Guarantor's
stockholders), or any court or any other governmental
or regulatory authority or agency of competent
jurisdiction shall make a determination that, or issue
a judgment, order, decree or ruling to the effect that,
any one or more material provisions of the Loan
Documents is illegal, invalid or unenforceable in
accordance with the terms thereof;
(k) with respect to any Guaranteed Pension Plan,
an ERISA Reportable Event shall have occurred and the
Majority Lenders shall have determined in their
reasonable discretion that such event reasonably could
be expected to result in liability of the Borrower or
any of its Subsidiaries to the PBGC or such Guaranteed
Pension Plan in an aggregate amount exceeding
$5,000,000 and such event in the circumstances
occurring reasonably could constitute grounds for the
termination of such Guaranteed Pension Plan by the PBGC
or for the appointment by the appropriate United States
District Court of a trustee to administer such
Guaranteed Pension Plan; or a trustee shall have been
appointed by the United States District Court to
administer such Plan; or the PBGC shall have instituted
proceedings to terminate such Guaranteed Pension Plan;
(l) the Guarantor, the Borrower or any of their
Subsidiaries shall be enjoined, restrained or in any
way prevented by the order of any court or any
administrative or regulatory agency from conducting any
material part of its business and such order shall
continue in effect for more than thirty (30) days
(unless such incident is covered by business
interruption insurance and the Guarantor, the Borrower
or such Subsidiary has filed a claim under applicable
insurance policies and reasonably and in good faith
believes that the insurer is obligated under the terms
of such policy or policies to pay such claim);
(m) there shall occur any material damage to, or
loss, theft or destruction of, any Collateral, whether
or not insured, or any strike, lockout, labor dispute,
embargo, condemnation, act of God or public enemy, or
other casualty, which in any such case causes, for more
than thirty (30) consecutive days, the cessation or
substantial curtailment of revenue producing activities
at any facility of the Guarantor, the Borrower or any
of their Subsidiaries, and such occurrence has a
material adverse effect on the business, financial
condition or assets of the Guarantor, the Borrower or
any of their Subsidiaries;
(n) there shall occur the loss, suspension or
revocation of, or failure to renew, any license or
permit now held or hereafter acquired by the Guarantor,
the Borrower or any of their Subsidiaries if such loss,
suspension, revocation or failure to renew would have a
material adverse effect on the business or financial
condition of the Guarantor, the Borrower or such
Subsidiary;
(o) the Guarantor, the Borrower or any of their
Subsidiaries shall be indicted for a state or federal
crime classified as a felony, or any civil or criminal
action shall otherwise have been brought against the
Guarantor, the Borrower or any of their Subsidiaries, a
punishment for which in any such case could include the
forfeiture of any assets of the Guarantor, the Borrower
or such Subsidiary having a fair market value in excess
of $1,000,000; or
(p) (i) any person or group of persons (within
the meaning of Section 13 or 14 of the Securities
Exchange Act of 1934, as amended) shall have acquired
beneficial ownership (within the meaning of Rule 13d-3
promulgated by the Securities and Exchange Commission
under said Act) of thirty percent (30%) or more of the
outstanding shares of common stock of the Guarantor,
(ii) the Guarantor shall at any time legally or
beneficially own less than 100% of the capital stock of
the Borrower or (iii) during any period of twelve (12)
consecutive calendar months, individuals who were
directors of the Guarantor or the Borrower on the first
day of such period shall cease to constitute a majority
of the board of directors of the Guarantor or the
Borrower, as the case may be;
then, and in any such event, so long as the same may be
continuing, the Administrative Agent may, and upon the
request of the Majority Lenders shall, by notice in writing
to the Borrower declare all amounts owing to the Lenders
with respect to this Credit Agreement, the Notes and the
other Loan Documents and all Reimbursement Obligations to
be, and they shall thereupon forthwith become, immediately
due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby expressly
waived by the Borrower; provided that in the event of any
Event of Default specified in 13.1(g) or 13.1(h), all such
amounts shall become immediately due and payable
automatically and without any requirement of notice from the
Administrative Agent or any Lender.
13.2. Termination of Commitments.
If any one or more of the Events of Default specified
in 13.1(g) or 13.1(h) shall occur, any unused portion of
the credit hereunder shall forthwith terminate and each of
the Lenders shall be relieved of all further obligations to
make Revolving Credit Loans to the Borrower and the L/C
Issuer shall be relieved of all further obligations to
issue, extend or renew Letters of Credit. If any other
Event of Default shall have occurred and be continuing, the
Administrative Agent may and, upon the request of the
Majority Lenders, shall, by notice to the Borrower,
terminate the unused portion of the credit hereunder, and
upon such notice being given such unused portion of the
credit hereunder shall terminate immediately and each of the
Lenders shall be relieved of all further obligations to make
Loans and the L/C Issuer shall be relieved of all further
obligations to issue, extend or renew Letters of Credit. No
termination of the credit hereunder shall relieve the
Guarantor, Borrower or any of their Subsidiaries of any of
the Obligations.
13.3. Remedies.
In case any one or more of the Events of Default shall
have occurred and be continuing, and whether or not the
Administrative Agent shall have accelerated the maturity of
the Loans pursuant to 13.1, each Lender, if owed any amount
with respect to the Loans or the Reimbursement Obligations,
may, with the consent of the Majority Lenders but not
otherwise, proceed to protect and enforce its rights by suit
in equity, action at law or other appropriate proceeding,
whether for the specific performance of any covenant or
agreement contained in this Credit Agreement and the other
Loan Documents or any instrument pursuant to which the
Obligations to such Lender are evidenced, including as
permitted by applicable law the obtaining of the ex parte
appointment of a receiver, and, if such amount shall have
become due, by declaration or otherwise, proceed to enforce
the payment thereof or any other legal or equitable right of
such Lender. No remedy herein conferred upon any Lender or
the Administrative Agent or the holder of any Note or
purchaser of any Letter of Credit Participation is intended
to be exclusive of any other remedy and each and every
remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at
law or in equity or by statute or any other provision of
law.
13.4. Distribution of Collateral Proceeds.
In the event that, following the occurrence or during
the continuance of any Event of Default, the Bank Agents or
any Lender, as the case may be, applies any cash held
pursuant to the Cash Collateral Agreement or receives any
monies in connection with the enforcement of any of the
Security Documents or otherwise with respect to the
realization upon any of the Collateral, or by voluntary
payment, setoff in accordance with 14 hereof or otherwise,
such monies shall be distributed for application as follows
(it being understood that any amounts which are to be
applied to the Revolving Credit Loans pursuant to this 13.4
shall, to the extent BBRF has advanced Revolving Credit
Loans to the Borrower pursuant to 2.6.2 hereof for which a
Settlement has not occurred, first be paid to BBRF to be
applied to any Revolving Credit Loans made by BBRF to the
Borrower pursuant to 2.6.2 hereof and in which a Settlement
has not, at the time of such repayment, been effected):
(a) First, to the payment of, or (as the case may
be) the reimbursement of the Bank Agents and L/C Issuer
for or in respect of all reasonable costs, expenses,
disbursements and losses (to the extent such costs,
expenses, disbursements or losses are reimbursable
expenses by the Borrower pursuant to the terms of this
Credit Agreement) which shall have been incurred or
sustained by the Bank Agents or L/C Issuer in
connection with the collection of such monies by the
Bank Agents or L/C Issuer, as the case may be, for the
exercise, protection or enforcement by the Bank Agents
or L/C Issuer of all or any of the rights, remedies,
powers and privileges of the Bank Agents or L/C Issuer
on behalf of the Lenders under this Credit Agreement or
any of the other Loan Documents or in respect of the
Collateral or in support of any provision of adequate
indemnity to the Bank Agents or L/C Issuer against any
taxes or liens which by law shall have, or may have,
priority over the rights of the Bank Agents or L/C
Issuer to such monies;
(b) Second, to all other Obligations in such
order or preference as the Majority Lenders may
determine; provided, however, that distributions in
respect of Obligations owing to the Lenders with
respect to each type of Obligation such as interest,
principal, fees and expenses, shall be made among the
Lenders pro rata; and provided, further, that the
Administrative Agent may in its discretion make proper
allowance to take into account any Obligations not then
due and payable, such amounts to be cash collateralized
in accordance with the Cash Collateral Agreement (which
cash collateral may be invested in Permitted Cash
Collateral Investments) and Obligations with respect to
such interest rate protection arrangements and leases
between the Borrower or Guarantor and the
Administrative Agent or its Affiliates;
(c) Third, upon payment and satisfaction in full
or other provisions for payment in full satisfactory to
the Lenders and the Administrative Agent of all of the
Obligations, to the payment of any obligations required
to be paid pursuant to 9-504(1)(c) of the Uniform
Commercial Code of the Commonwealth of Massachusetts;
and
(d) Fourth, the excess, if any, shall be returned
to the Borrower or to such other Persons as are
entitled thereto.
14. SETOFF.
Regardless of the adequacy of any Collateral, during the
continuance of any Event of Default, any deposits or other sums
credited by or due from any of the Lenders, the Bank Agents or
the L/C Issuer to the Borrower and any securities or other
property of the Borrower in the possession of such Person may be
applied to or set off by any Lender, the Bank Agents or the L/C
Issuer, as the case may be, against the payment of Obligations
and any and all other liabilities, direct, or indirect, absolute
or contingent, due or to become due, now existing or hereafter
arising, of the Borrower to such Person. Each of the Lenders
agrees with each other Lender that (a) if an amount to be set off
is to be applied to Indebtedness of the Borrower to any Lender,
other than Indebtedness evidenced by the Notes held by any Lender
or constituting Reimbursement Obligations owed to any Lender,
such amount shall be applied ratably to such other Indebtedness
and to the Indebtedness evidenced by all such Notes held by any
Lender or constituting Reimbursement Obligations owed to any
Lender, and (b) if any Lender shall receive from the Borrower,
whether by voluntary payment, exercise of the right of setoff,
counterclaim, cross action, enforcement of the claim evidenced by
the Note held by, or constituting Reimbursement Obligations owed
to, any Lender by proceedings against the Borrower at law or in
equity or by proof thereof in bankruptcy, reorganization,
liquidation, receivership or similar proceedings, or otherwise,
and shall retain and apply to the payment of the Note held by
such Lender, or Reimbursement Obligations owed to, any Lender any
amount in excess of its ratable portion of the payments received
by all of the Lenders with respect to the Notes held by, and
Reimbursement Obligations owed to, all of the Lenders, such
Lender will make such disposition and arrangements with the other
Lenders with respect to such excess, either by way of
distribution, pro tanto assignment of claims, subrogation or
otherwise as shall result in each Lender receiving in respect of
the Note held by it or Reimbursement Obligations owed it, its
proportionate payment as contemplated by this Credit Agreement;
provided that if all or any part of such excess payment is
thereafter recovered from such Lender, such disposition and
arrangements shall be rescinded and the amount restored to the
extent of such recovery, but without interest.
15. THE BANK AGENTS.
15.1. Authorization.
(a) Each of the Bank Agents is authorized to take
such action on behalf of each of the Lenders and to
exercise all such powers as are hereunder and under any
of the other Loan Documents and any related documents
delegated to the Bank Agents, together with such powers
as are reasonably incident thereto, provided that no
duties or responsibilities not expressly assumed herein
or therein shall be implied to have been assumed by the
Bank Agents.
(b) The relationship between each of the Bank
Agents and each of the Lenders is that of an
independent contractor. The use of the term
"Administrative Agent" and "Agent" is for convenience
only and is used to describe, as a form of convention,
the independent contractual relationship between each
of the Bank Agents and each of the Lenders. Nothing
contained in this Credit Agreement nor the other Loan
Documents shall be construed to create an agency, trust
or other fiduciary relationship between either Bank
Agent and any of the Lenders.
(c) As an independent contractor empowered by the
Lenders to exercise certain rights and perform certain
duties and responsibilities hereunder and under the
other Loan Documents, each of the Bank Agents is
nevertheless a "representative" of the Lenders, as that
term is defined in Article 1 of the Uniform Commercial
Code, for purposes of actions for the benefit of the
Lenders and the Administrative Agent or the Agent, as
the case may be, with respect to all collateral
security and guaranties contemplated by the Loan
Documents. Such actions include the designation of the
Administrative Agent or the Agent, as the case may be,
as "secured party", "mortgagee" or the like on all
financing statements and other documents and
instruments, whether recorded or otherwise, relating to
the attachment, perfection, priority or enforcement of
any security interests, mortgages or deeds of trust in
collateral security intended to secure the payment or
performance of any of the Obligations, all for the
benefit of the Lenders and the Administrative Agent.
15.2. Employees and Bank Agents.
Each of the Bank Agents may exercise its powers and
execute its duties by or through employees or agents and
shall be entitled to take, and to rely on, advice of counsel
concerning all matters pertaining to its rights and duties
under this Credit Agreement and the other Loan Documents.
Each of the Bank Agents may utilize the services of such
Persons as such Bank Agent in its sole discretion may
reasonably determine, and all reasonable fees and expenses
of any such Persons shall be paid by the Borrower.
15.3. No Liability.
Neither of the Bank Agents nor any of their
shareholders, directors, officers or employees nor any other
Person assisting them in their duties nor any agent or
employee thereof, shall be liable for any waiver, consent or
approval given or any action taken, or omitted to be taken,
in good faith by it or them hereunder or under any of the
other Loan Documents, or in connection herewith or
therewith, or be responsible for the consequences of any
oversight or error of judgment whatsoever, except that the
Administrative Agent or Agent or such other Person, as the
case may be, may be liable for losses due to its willful
misconduct or gross negligence.
15.4. No Representations.
15.4.1. Generally.
The Bank Agents shall not be responsible for the
execution or validity or enforceability of this Credit
Agreement, the Notes, the Letters of Credit, any of the
other Loan Documents or any instrument at any time
constituting, or intended to constitute, collateral
security for the Notes, or for the value of any such
collateral security or for the validity, enforceability
or collectibility of any such amounts owing with
respect to the Notes, or for any recitals or
statements, warranties or representations made herein
or in any of the other Loan Documents or in any
certificate or instrument hereafter furnished to it by
or on behalf of the Guarantor, the Borrower or any of
their Subsidiaries, or be bound to ascertain or inquire
as to the performance or observance of any of the
terms, conditions, covenants or agreements herein or in
any instrument at any time constituting, or intended to
constitute, collateral security for the Notes or to
inspect any of the properties, books or records of the
Guarantor, the Borrower or any of their Subsidiaries.
The Bank Agents shall not be bound to ascertain whether
any notice, consent, waiver or request delivered to
them by the Guarantor, the Borrower or any holder of
any of the Notes shall have been duly authorized or is
true, accurate and complete. The Bank Agents have not
made nor do they now make any representations or
warranties, express or implied, nor do they assume any
liability to the Lenders with respect to the credit
worthiness or financial conditions of the Guarantor,
the Borrower or any of their Subsidiaries. Each Lender
acknowledges that it has, independently and without
reliance upon the Administrative Agent, Agent or any
other Lender, and based upon such information and
documents as it has deemed appropriate, made its own
credit analysis and decision to enter into this Credit
Agreement.
15.4.2. Closing Documentation, etc.
For purposes of determining compliance with the
conditions set forth in 11, each Lender that has
executed this Credit Agreement shall be deemed to have
consented to, approved or accepted, or to be satisfied
with, each document and matter either sent, or made
available, by the Bank Agents or the Arranger to such
Lender for consent, approval, acceptance or
satisfaction, or required thereunder to be consented to
or approved by or acceptable or satisfactory to such
Lender, unless an officer of the Administrative Agent
or the Arranger active upon the Borrower's account
shall have received notice from such Lender not less
than two days prior to the Closing Date specifying such
Lender's objection thereto and such objection shall not
have been withdrawn by notice to the Administrative
Agent or the Arranger to such effect on or prior to the
Closing Date.
15.5. Payments.
15.5.1. Payments to Bank Agents.
A payment by the Borrower to the Bank Agents
hereunder or any of the other Loan Documents for the
account of any Lender shall constitute a payment to
such Lender. Each of the Bank Agents agrees promptly
to distribute to each Lender such Lender's pro rata
share of payments received by the such Bank Agent for
the account of the Lenders except as otherwise
expressly provided herein or in any of the other Loan
Documents.
15.5.2. Distribution by Bank Agents.
If in the opinion of the Administrative Agent or
Agent the distribution of any amount received by it in
such capacity hereunder, under the Notes or under any
of the other Loan Documents might involve it in
liability, it may refrain from making distribution
until its right to make distribution shall have been
adjudicated by a court of competent jurisdiction. If a
court of competent jurisdiction shall adjudge that any
amount received and distributed by either Bank Agent is
to be repaid, each Person to whom any such distribution
shall have been made shall either repay to such Bank
Agent its proportionate share of the amount so adjudged
to be repaid or shall pay over the same in such manner
and to such Persons as shall be determined by such
court.
15.5.3. Delinquent Banks.
Notwithstanding anything to the contrary contained
in this Credit Agreement or any of the other Loan
Documents, any Lender that fails (a) to make available
to the Administrative Agent its pro rata share of any
Loan or to purchase any Letter of Credit Participation
or (b) to comply with the provisions of 14 with
respect to making dispositions and arrangements with
the other Lenders, where such Lender's share of any
payment received, whether by setoff or otherwise, is in
excess of its pro rata share of such payments due and
payable to all of the Lenders, in each case as, when
and to the full extent required by the provisions of
this Credit Agreement, shall be deemed delinquent (a
"Delinquent Bank") and shall be deemed a Delinquent
Bank until such time as such delinquency is satisfied.
A Delinquent Bank shall be deemed to have assigned any
and all payments due to it from the Borrower, whether
on account of outstanding Loans, Unpaid Reimbursement
Obligations, interest, fees or otherwise, to the
remaining nondelinquent Lenders for application to, and
reduction of, their respective pro rata shares of all
outstanding Loans and Unpaid Reimbursement Obligations.
The Delinquent Bank hereby authorizes the
Administrative Agent to distribute such payments to the
nondelinquent Lenders in proportion to their respective
pro rata shares of all outstanding Loans and Unpaid
Reimbursement Obligations. A Delinquent Bank shall be
deemed to have satisfied in full a delinquency when and
if, as a result of application of the assigned payments
to all outstanding Loans and Unpaid Reimbursement
Obligations of the nondelinquent Lenders, the Lenders'
respective pro rata shares of all outstanding Loans and
Unpaid Reimbursement Obligations have returned to those
in effect immediately prior to such delinquency and
without giving effect to the nonpayment causing such
delinquency.
15.6. Holders of Notes.
The Administrative Agent may deem and treat the payee
of any Note or the purchaser of any Letter of Credit
Participation as the absolute owner or purchaser thereof for
all purposes hereof until it shall have been furnished in
writing with a different name by such payee or by a
subsequent holder, assignee or transferee.
15.7. Indemnity.
The Lenders ratably agree hereby to indemnify and hold
harmless the Bank Agents and the L/C Issuer from and against
any and all claims, actions and suits (whether groundless or
otherwise), losses, damages, costs, expenses (including any
expenses for which the Bank Agents or L/C Issuer have not
been reimbursed by the Borrower as required by 16 and 17),
and liabilities of every nature and character arising out of
or related to this Credit Agreement, the Notes, or any of
the other Loan Documents or the transactions contemplated or
evidenced hereby or thereby, or the Bank Agents' or L/C
Issuer's actions taken hereunder or thereunder, except to
the extent that any of the same shall be directly caused by
the Bank Agents' or L/C Issuer's willful misconduct or gross
negligence.
15.8. Administrative Agent as Lender.
In its individual capacity, BBRF shall have the same
obligations and the same rights, powers and privileges in
respect to its Commitment and the Loans made by it, and as
the holder of any of the Notes and as the purchaser of any
Letter of Credit Participations, as it would have were it
not also the Administrative Agent.
15.9. Resignation.
Either Bank Agent may resign at any time by giving
sixty (60) days' prior written notice thereof to the Lenders
and the Borrower. Upon any such resignation, the Majority
Lenders shall have the right to appoint a successor
Administrative Agent or Agent, as the case may be. Unless a
Default or Event of Default shall have occurred and be
continuing, such successor Bank Agent shall be reasonably
acceptable to the Borrower. If no successor Bank Agent
shall have been so appointed by the Majority Lenders and
shall have accepted such appointment within thirty (30) days
after the retiring Bank Agent's giving of notice of
resignation, then the retiring Administrative Agent or Agent
may, on behalf of the Lenders, appoint a successor
Administrative Agent or Agent, as the case may be, which
shall be a financial institution having a rating of not less
than A or its equivalent by Standard & Poor's Corporation.
Upon the acceptance of any appointment as Administrative
Agent or Agent hereunder by a successor Bank Agent, such
successor Bank Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of
the retiring Bank Agent, and the retiring Bank Agent shall
be discharged from its duties and obligations hereunder.
After any retiring Bank Agent's resignation, the provisions
of this Credit Agreement and the other Loan Documents shall
continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as
Bank Agent.
15.10. Notification of Defaults and Events of
Default.
Each Lender hereby agrees that, upon learning of the
existence of a Default or an Event of Default, it shall
promptly notify the Administrative Agent thereof. The
Administrative Agent hereby agrees that upon receipt of any
notice under this 15.10 it shall promptly notify the other
Lenders of the existence of such Default or Event of
Default.
15.11. Duties in the Case of Enforcement.
In case one of more Events of Default have occurred and
shall be continuing, and whether or not acceleration of the
Obligations shall have occurred, the Administrative Agent
shall, if (a) so requested by the Majority Lenders and (b)
the Lenders have provided to the Administrative Agent such
additional indemnities and assurances against expenses and
liabilities as the Administrative Agent may reasonably
request, proceed to enforce the provisions of the Security
Documents authorizing the sale or other disposition of all
or any part of the Collateral and exercise all or any such
other legal and equitable and other rights or remedies as it
may have in respect of such Collateral. The Majority
Lenders may direct the Administrative Agent in writing as to
the method and the extent of any such sale or other
disposition, the Lenders hereby agreeing to indemnify and
hold the Bank Agents, harmless from all liabilities incurred
in respect of all actions taken or omitted in accordance
with such directions, provided that the Bank Agents need not
comply with any such direction to the extent that the Bank
Agents reasonably believe the Bank Agents' compliance with
such direction to be unlawful or commercially unreasonable
in any applicable jurisdiction.
15.12. Duties of Arranger.
The Arranger, in its capacity as Arranger, shall have
no duties or responsibilities and shall incur no
liabilities, under this Credit Agreement or any of the other
Loan Documents.
16. EXPENSES.
The Guarantor and the Borrower jointly and severally agree
to pay (a) the reasonable costs of producing and reproducing this
Credit Agreement, the other Loan Documents and the other
agreements and instruments mentioned herein; (b) any taxes
(including any interest and penalties in respect thereto) payable
by either Bank Agent, the L/C Issuer or any of the Lenders (other
than taxes based upon such Person's net income) on or with
respect to the transactions contemplated by this Credit Agreement
(the Guarantor and the Borrower hereby agreeing to indemnify each
Bank Agent, L/C Issuer and each Lender with respect thereto); (c)
the reasonable fees, expenses and disbursements of the Bank
Agents' Special Counsel, or any local counsel to the Bank Agents
incurred in connection with the preparation, administration or
interpretation of the Loan Documents and other instruments
mentioned herein, each closing hereunder, and amendments,
modifications, approvals, consents or waivers hereto or
hereunder, provided that the expenses incurred by the Bank
Agents' Special Counsel prior to the Closing Date in connection
with this clause (c) shall not exceed $75,000 plus disbursements;
(d) the reasonable fees, expenses and disbursements (but
excluding internal overhead costs and expenses) of the Bank
Agents incurred by the Bank Agents in connection with the
preparation, administration or interpretation of the Loan
Documents and other instruments mentioned herein, including all
title insurance premiums and appraisal charges; (e) any
reasonable fees, costs, expenses and bank charges, including bank
charges for returned checks, incurred by the Bank Agents in
establishing, maintaining or handling Agency Accounts, Blocked
Accounts and other accounts for the collection of any of the
Collateral; (f) all reasonable expenses incurred by the
Administrative Agent after the Closing Date pursuant to 8.9.1,
8.9.2 and 8.9.5 with respect to commercial finance examinations,
Collateral examinations, appraisals and mystery shopping visits,
provided that such expenses shall not, prior to the occurrence of
an Event of Default, exceed $60,000 plus out-of-pocket expenses
per annum; (g) all reasonable out-of-pocket expenses (including
without limitation reasonable attorneys' fees and costs, which
attorneys may be employees of any Lender, the Bank Agents or the
L/C Issuer, and reasonable consulting, accounting, appraisal,
investment banking and similar professional fees and charges)
incurred by any Lender, the Bank Agents or the L/C Issuer in
connection with (i) the enforcement of or preservation of any
rights under any of the Loan Documents against the Guarantor, the
Borrower or any of their Subsidiaries or the administration
thereof after the occurrence of a Default or Event of Default and
(ii) any litigation, proceeding or dispute whether arising
hereunder or otherwise, in any way related to any Lender's, any
Bank Agent's or the L/C Issuer's relationship with the Guarantor,
the Borrower or any of their Subsidiaries; (h) without
duplication, all reasonable expenses incurred by the Lenders
(including counsel and investment banking or financial consultant
fees) in connection with any investigation of any Default or
Event of Default, the enforcement and collection of the Notes and
in connection with any amendment or requested amendment of, or
waiver or consent under or with respect to any of the Loan
Documents, whether or not such amendment or waiver becomes
effective; and (i) all reasonable fees, expenses and
disbursements of any Lender or the Bank Agents incurred in
connection with UCC filings or mortgage recordings contemplated
by the Loan Documents and UCC searches conducted (i) prior to the
Closing Date, (ii) on one occasion after the Closing Date with
respect to any new UCC-1 filings and (iii) after the occurrence
of an Event of Default. The covenants of this 16 are joint and
several and shall survive payment or satisfaction of all other
Obligations.
17. INDEMNIFICATION.
Each of the Guarantor and the Borrower agrees to indemnify
and hold harmless the Bank Agents, the Arranger, the L/C Issuer
and the Lenders (and each of such Person's Subsidiaries,
affiliates, employees, officers, directors, agents, attorneys or
other advisors and shareholders) from and against any and all
claims, actions and suits whether groundless or otherwise, and
from and against any and all liabilities, losses, damages and
expenses of every nature and character arising out of this Credit
Agreement or any of the other Loan Documents or the transactions
contemplated hereby including, without limitation, (a) any actual
or proposed use by the Borrower of the proceeds of any of the
Loans or Letters of Credit, (b) the reversal or withdrawal of any
provisional credits granted by the Agent upon the transfer of
funds from Agency Accounts or Blocked Accounts or in connection
with the provisional honoring of checks or other items, (c) any
actual or alleged infringement of any patent, copyright,
trademark, service xxxx or similar right of the Guarantor or the
Borrower comprised in the Collateral, (d) the Guarantor or
Borrower entering into or performing this Credit Agreement or any
of the other Loan Documents or (e) with respect to the Guarantor
or the Borrower and their respective properties and assets, the
violation of any Environmental Law, the presence, disposal,
escape, seepage, leakage, spillage, discharge, emission, release
or threatened release of any Hazardous Substances or any action,
suit, proceeding or investigation brought or threatened with
respect to any Hazardous Substances (including, but not limited
to, claims with respect to wrongful death, personal injury or
damage to property), in each case including, without limitation,
the reasonable fees and disbursements of counsel and allocated
costs of internal counsel incurred in connection with any such
investigation, litigation or other proceeding; provided, however,
that such indemnity shall not apply to the portion, if any, of
such losses, claims, damages, liabilities or related expenses of
any Person seeking indemnification that is determined by a court
of competent jurisdiction by final and non-appealable judgment to
have resulted from the gross negligence or willful misconduct of
the Person seeking indemnification; and provided, further, that
such indemnity shall not apply to the portion, if any, of any
losses, claims, damages, liabilities or related expenses of any
Lender resulting directly from any breach by such Lender of its
obligations under this Credit Agreement. In litigation, or the
preparation therefor, the Lenders, the Arranger, the L/C Issuer
and the Bank Agents, shall be entitled to select their own
counsel and, in addition to the foregoing indemnity, the
Guarantor and the Borrower jointly and severally agree to pay
promptly the reasonable fees and expenses of such counsel;
provided, that BankBoston, N.A. and its Affiliates shall utilize
one counsel unless a conflict of interest requires additional
representation. If, and to the extent that the obligations of
Guarantor or the Borrower under this 17 are unenforceable for
any reason, the Guarantor and the Borrower each hereby agree to
make the maximum contribution to the payment in satisfaction of
such obligations which is permissible under applicable law. The
covenants contained in this 17 shall survive payment or
satisfaction in full of all other Obligations.
18. SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties
made herein, in the Notes, in any of the other Loan Documents or
in any documents or other papers delivered by or on behalf of the
Guarantor, the Borrower or any of their Subsidiaries pursuant
hereto shall be deemed to have been relied upon by the Lenders,
the L/C Issuer and the Bank Agents, notwithstanding any
investigation heretofore or hereafter made by any of them, and
shall survive the making by the Lenders of any of the Loans and
the issuance, extension or renewal of any Letters of Credit, as
herein contemplated, and shall continue in full force and effect
so long as any Letter of Credit or any amount due under this
Credit Agreement or the Notes or any of the other Loan Documents
remains outstanding or any Lender has any obligation to make any
Loans or the L/C Issuer has any obligation to issue, extend or
renew any Letter of Credit, and for such further time as may be
otherwise expressly specified in this Credit Agreement. All
statements contained in any certificate or other paper delivered
to any Lender, the L/C Issuer or either Bank Agent at any time by
or on behalf of the Guarantor, the Borrower or any of their
Subsidiaries pursuant hereto or in connection with the
transactions contemplated hereby shall constitute representations
and warranties by the Guarantor, the Borrower or such Subsidiary
hereunder.
19. ASSIGNMENT AND PARTICIPATION.
19.1. Conditions to Assignment by Lenders.
Except as provided herein, each Lender may assign to
one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Credit
Agreement (including all or a portion of its Commitment
Percentage and Commitment and the same portion of the Loans
at the time owing to it, the Notes held by it and its
participating interest in the risk relating to any Letters
of Credit); provided that (a) the Administrative Agent and,
so long as no Default or Event of Default has occurred and
is continuing, the Borrower shall have given their prior
written consent to such assignment, which consent will not
be unreasonably withheld, (b) each such assignment shall be
of a constant, and not a varying, percentage of all the
assigning Lender's rights and obligations under this Credit
Agreement, (c) each partial assignment shall be in an amount
that is not less than $10,000,000 (or the entire interest of
such assigning Lender, if less than $10,000,000), and (d)
the parties to such assignment shall execute and deliver to
the Administrative Agent, for recording in the Register (as
hereinafter defined), an Assignment and Acceptance,
substantially in the form of Exhibit E hereto (an
"Assignment and Acceptance"), together with any Notes
subject to such assignment. Upon such execution, delivery,
acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance, which effective
date shall be at least five (5) Business Days after the
execution thereof, (i) the assignee thereunder shall be a
party hereto and, to the extent provided in such Assignment
and Acceptance, have the rights and obligations of a Lender
hereunder, and (ii) the assigning Lender shall, to the
extent provided in such assignment and upon payment to the
Administrative Agent of the registration fee referred to in
19.3, be released from its obligations under this Credit
Agreement. The Borrower, the Administrative Agent and the
Lenders shall retain any claims or actions against the
assigning Lender to the extent that such claims or actions
accrued or arose prior to the effective date specified in
such Assignment and Acceptance.
19.2. Certain Representations and Warranties;
Limitations; Covenants.
By executing and delivering an Assignment and
Acceptance, the parties to the assignment thereunder confirm
to and agree with each other and the other parties hereto as
follows:
(a) other than the representation and warranty
that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any
adverse claim, the assigning Lender makes no
representation or warranty, express or implied, and
assumes no responsibility with respect to any
statements, warranties or representations made in or in
connection with this Credit Agreement or the execution,
legality, validity, enforceability, genuineness,
sufficiency or value of this Credit Agreement, the
other Loan Documents or any other instrument or
document furnished pursuant hereto or the attachment,
perfection or priority of any security interest or
mortgage,
(b) the assigning Lender makes no representation
or warranty and assumes no responsibility with respect
to the financial condition of the Guarantor, the
Borrower and their Subsidiaries or any other Person
primarily or secondarily liable in respect of any of
the Obligations, or the performance or observance by
the Guarantor, the Borrower and their Subsidiaries or
any other Person primarily or secondarily liable in
respect of any of the Obligations of any of their
obligations under this Credit Agreement or any of the
other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto;
(c) such assignee confirms that it has received a
copy of this Credit Agreement, together with copies of
the most recent financial statements referred to in
7.4 and 8.4 and such other documents and information
as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and
Acceptance;
(d) such assignee will, independently and without
reliance upon the assigning Lender, either Bank 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 decisions in taking or
not taking action under this Credit Agreement;
(e) such assignee represents and warrants that it
is an Eligible Assignee;
(f) such assignee appoints and authorizes the
Bank Agents to take such action as agent and collateral
agent on its behalf and to exercise such powers under
this Credit Agreement and the other Loan Documents as
are delegated to the Bank Agents by the terms hereof or
thereof, together with such powers as are reasonably
incidental thereto;
(g) such assignee agrees that it will perform in
accordance with their terms all of the obligations that
by the terms of this Credit Agreement are required to
be performed by it as a Lender;
(h) such assignee represents and warrants that it
is legally authorized to enter into such Assignment and
Acceptance; and
(i) such assignee acknowledges that it has made
arrangements with the assigning Lender satisfactory to
such assignee with respect to its pro rata share of
Letter of Credit Fees in respect of outstanding Letters
of Credit.
19.3. Register.
The Administrative Agent shall maintain a copy of each
Assignment and Acceptance delivered to it and a register or
similar list (the "Register") for the recordation of the
names and addresses of the Lenders and the Commitment
Percentage of, and principal amount of the Loans owing to
and Letter of Credit Participations purchased by, the
Lenders from time to time. The entries in the Register shall
be conclusive, in the absence of manifest error, and the
Borrower, the Administrative Agent and the Lenders may treat
each Person whose name is recorded in the Register as a
Lender hereunder for all purposes of this Credit Agreement.
The Register shall be available for inspection by the
Borrower and the Lenders at any reasonable time and from
time to time upon reasonable prior notice. Upon each such
recordation, the assigning Lender agrees to pay to the
Administrative Agent a registration fee in the sum of
$3,500.
19.4. New Notes.
Upon its receipt of an Assignment and Acceptance
executed by the parties to such assignment, together with
each Note subject to such assignment, the Administrative
Agent shall (a) record the information contained therein in
the Register, and (b) give prompt notice thereof to the
Borrower and the Lenders (other than the assigning Lender).
Within five (5) Business Days after receipt of such notice,
the Borrower, at its own expense, shall execute and deliver
to the Administrative Agent, in exchange for each
surrendered Note, a new Note to the order of such Eligible
Assignee in an amount equal to the amount assumed by such
Eligible Assignee pursuant to such Assignment and Acceptance
and, if the assigning Lender has retained some portion of
its obligations hereunder, a new Note to the order of the
assigning Lender in an amount equal to the amount retained
by it hereunder. Such new Notes shall provide that they are
replacements for the surrendered Notes, shall be in an
aggregate principal amount equal to the aggregate principal
amount of the surrendered Notes, shall be dated the
effective date of such Assignment and Acceptance and shall
otherwise be substantially in the form of the assigned
Notes. Within five (5) days of issuance of any new Notes
pursuant to this 19.4, the Borrower shall deliver an
opinion of counsel (which counsel may be the Borrower's
internal counsel), addressed to the Lenders and the
Administrative Agent, relating to the due authorization,
execution and delivery of such new Notes and the legality,
validity and binding effect thereof, in a form substantially
similar to the opinions of counsel delivered on the Closing
Date and otherwise in form and substance reasonably
satisfactory to the Lenders. The surrendered Notes shall be
cancelled and returned to the Borrower.
19.5. Participations.
Each Lender may sell participations to one or more
banks or other entities in all or a portion of such Lender's
rights and obligations under this Credit Agreement and the
other Loan Documents; provided that (a) any such sale or
participation shall not affect the rights and duties of the
selling Lender hereunder to the Borrower and (b) the only
rights granted to the participant pursuant to such
participation arrangements with respect to waivers,
amendments or modifications of the Loan Documents shall be
the rights to approve waivers, amendments or modifications
that would reduce the principal of or the interest rate on
any Loans, extend the term or increase the amount of the
Commitment of such Lender as it relates to such participant
or extend any regularly scheduled payment date for principal
or interest.
19.6. Disclosure.
Each of the Guarantor and the Borrower agrees that in
addition to disclosures made in accordance with standard and
customary banking practices any Lender may disclose
information obtained by such Lender pursuant to this Credit
Agreement to assignees or participants and potential
assignees or participants hereunder; provided that such
assignees or participants or potential assignees or
participants shall agree (a) to treat in confidence such
information unless such information otherwise becomes public
knowledge, (b) not to disclose such information to a third
party, except as required by law or legal process and (c)
not to make use of such information for purposes of
transactions unrelated to such contemplated assignment or
participation.
19.7. Assignee or Participant Affiliated with the
Borrower.
If any assignee Lender is an Affiliate of the Guarantor
or the Borrower, then any such assignee Lender shall have no
right to vote as a Lender hereunder or under any of the
other Loan Documents for purposes of granting consents or
waivers or for purposes of agreeing to amendments or other
modifications to any of the Loan Documents or for purposes
of making requests to the Administrative Agent pursuant to
13.1 or 13.2, and the determination of the Majority
Lenders shall for all purposes of this Credit Agreement and
the other Loan Documents be made without regard to such
assignee Lender's interest in any of the Loans. If any
Lender sells a participating interest in any of the Loans or
Reimbursement Obligations to a participant, and such
participant is the Guarantor or the Borrower or an Affiliate
of the Guarantor or the Borrower, then such transferor
Lender shall promptly notify the Administrative Agent of the
sale of such participation. A transferor Lender shall have
no right to vote as a Lender hereunder or under any of the
other Loan Documents for purposes of granting consents or
waivers or for purposes of agreeing to amendments or
modifications to any of the Loan Documents or for purposes
of making requests to the Administrative Agent pursuant to
13.1 or 13.2 to the extent that such participation is
beneficially owned by the Guarantor or the Borrower or any
Affiliate of the Guarantor or the Borrower, and the
determination of the Majority Lenders shall for all purposes
of this Credit Agreement and the other Loan Documents be
made without regard to the interest of such transferor
Lender in the Loans to the extent of such participation.
19.8. Miscellaneous Assignment Provisions.
Any assigning Lender shall retain its rights to be
indemnified pursuant to 17 with respect to any claims or
actions arising prior to the date of such assignment. If
any assignee Lender is not incorporated under the laws of
the United States of America or any state thereof, it shall,
prior to the date on which any interest or fees are payable
hereunder or under any of the other Loan Documents for its
account, deliver to the Borrower and the Administrative
Agent certification as to its exemption from deduction or
withholding of any United States federal income taxes.
Anything contained in this 19 to the contrary
notwithstanding, any Lender may at any time pledge all or
any portion of its interest and rights under this Credit
Agreement (including all or any portion of its Notes) to any
of the twelve Federal Reserve Banks organized under 4 of
the Federal Reserve Act, 12 U.S.C. 341. No such pledge or
the enforcement thereof shall release the pledgor Lender
from its obligations hereunder or under any of the other
Loan Documents.
19.9. Assignment by Borrower.
Neither the Guarantor nor the Borrower shall assign or
transfer any of its rights or obligations under any of the
Loan Documents without the prior written consent of each of
the Lenders.
20. NOTICES, ETC.
Except as otherwise expressly provided in this Credit
Agreement, all notices and other communications made or required
to be given pursuant to this Credit Agreement or the Notes or any
Letter of Credit Applications shall be in writing and shall be
delivered in hand, mailed by United States registered or
certified first class mail, postage prepaid, sent by overnight
courier, or sent by telegraph, telecopy, facsimile or telex and
confirmed by delivery via courier or postal service, addressed as
follows:
(a) if to the Guarantor or the Borrower, at 00 Xxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000, Attention: President
and a separate copy to Xxxxxx Xxxxxx, Esq., at the
Borrower's address, with a copy to Xxxxxx Xxxxxxxxxxx, Esq.,
Xxxxxxxx Xxxxx XxXxxxxx & Zinnershine LLP, 00 Xxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000, or at such other address for
notice as the Guarantor or the Borrower shall last have
furnished in writing to the Person giving the notice;
(b) if to either Bank Agent or the L/C Issuer, at 00
Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, XXX,
Attention: Xxxxxxxxx X. Xxxxx, Managing Director, with a
copy to Xxxxx X. Xxxxxx, Esq., Xxxxxxx Xxxx LLP, 000 Xxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 or such other address
for notice as such Person shall last have furnished in
writing to the Person giving the notice; and
(c) if to any Lender, at such Lender's address set
forth on Schedule 1 hereto, or such other address for notice
as such Lender shall have last furnished in writing to the
Person giving the notice.
Any such notice or demand shall be deemed to have been duly
given or made and to have become effective (i) if delivered by
hand, overnight courier or facsimile to a responsible officer of
the party to which it is directed, at the time of the receipt
thereof by such officer or the sending of such facsimile and (ii)
if sent by registered or certified first-class mail, postage
prepaid, on the third Business Day following the mailing thereof.
21. GOVERNING LAW.
THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY
PROVIDED THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS
UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR
ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF SAID COMMONWEALTH OF MASSACHUSETTS (EXCLUDING THE LAWS
APPLICABLE TO CONFLICTS OR CHOICE OF LAW). EACH OF THE GUARANTOR
AND THE BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS
CREDIT AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE
BROUGHT IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY
FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE NONEXCLUSIVE
JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH
SUIT BEING MADE UPON GUARANTOR OR THE BORROWER BY MAIL AT THE
ADDRESS SPECIFIED IN 20. EACH OF THE GUARANTOR AND THE BORROWER
HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO
THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS
BROUGHT IN AN INCONVENIENT COURT.
22. HEADINGS.
The captions in this Credit Agreement are for convenience of
reference only and shall not define or limit the provisions
hereof.
23. COUNTERPARTS.
This Credit Agreement and any amendment hereof may be
executed in several counterparts and by each party on a separate
counterpart, each of which when executed and delivered shall be
an original, and all of which together shall constitute one
instrument. In proving this Credit Agreement it shall not be
necessary to produce or account for more than one such
counterpart signed by the party against whom enforcement is
sought.
24. ENTIRE AGREEMENT, ETC.
The Loan Documents and any other documents executed in
connection herewith or therewith express the entire understanding
of the parties with respect to the transactions contemplated
hereby. Neither this Credit Agreement nor any term hereof may be
changed, waived, discharged or terminated, except as provided in
26.
25. WAIVER OF JURY TRIAL.
Each of the Guarantor and the Borrower hereby waives its
right to a jury trial with respect to any action or claim arising
out of any dispute in connection with this Credit Agreement, the
Notes or any of the other Loan Documents, any rights or
obligations hereunder or thereunder or the performance of which
rights and obligations. Except as prohibited by law, each of the
Guarantor and the Borrower hereby waives any right it may have to
claim or recover in any litigation referred to in the preceding
sentence any special, exemplary, punitive or consequential
damages or any damages other than, or in addition to, actual
damages. Each of the Guarantor and the Borrower (a) certifies
that no representative, agent or attorney of any Lender or the
Bank Agents has represented, expressly or otherwise, that such
Lender or either Bank Agent would not, in the event of
litigation, seek to enforce the foregoing waivers and (b)
acknowledges that the Bank Agents and the Lenders have been
induced to enter into this Credit Agreement, the other Loan
Documents to which it is a party by, among other things, the
waivers and certifications contained herein.
26. CONSENTS, AMENDMENTS, WAIVERS, ETC.
Any consent or approval required or permitted by this Credit
Agreement to be given by all of the Lenders may be given, and any
term of this Credit Agreement, the other Loan Documents or any
other instrument related hereto or mentioned herein may be
amended, and the performance or observance by the Guarantor or
the Borrower or any of their Subsidiaries of any terms of this
Credit Agreement, the other Loan Documents or such other
instrument or the continuance of any Default or Event of Default
may be waived (either generally or in a particular instance and
either retroactively or prospectively) with, but only with, the
written consent of the Borrower and the written consent of the
Majority Lenders. Notwithstanding the foregoing, the rate of
interest on the Notes (other than interest accruing pursuant to
5.10.2 following the effective date of any waiver by the
Majority Lenders of the Default or Event of Default relating
thereto), the term of the Notes, the amount of the Commitments of
the Lenders, and the amount of commitment fee or Letter of Credit
Fees hereunder may not be changed without the written consent of
the Borrower and the written consent of each Lender affected
thereby; the Borrower's Obligations under the Credit Agreement to
pay principal and/or interest on account of the Loans may not be
forgiven in whole or in part without the written consent of all
of the Lenders and the Borrower; the Maturity Date may not be
extended without the written consent of all of the Lenders and
the Borrower; this 26 may not be changed without the written
consent of all of the Lenders and the Borrower; the definition of
Majority Lenders may not be amended without the written consent
of all of the Lenders and the Borrower; the release of any
Guarantor or the release of any Collateral (other than releases
required by applicable law or in connection with dispositions
permitted under 9.5.2), if the aggregate value of all such
Collateral released from and after the Closing Date exceeds 5% of
the consolidated total assets of the Guarantor, the Borrower and
their Subsidiaries, may not be consented to without the consent
of all of the Lenders; the percentages of Eligible Accounts
Receivable, Eligible Inventory and Maximum Drawing Amounts for
Letters of Credit under the definition of Borrowing Base may not
be increased without the written consent of all of the Lenders;
the amount of any Letter of Credit Fees payable for the L/C
Issuer's account and 15 may not be amended without the written
consent of the Administrative Agent, the L/C Issuer and the
Borrower; and the amount of the Agent's fee under 5.1 may not be
amended without the written consent of the Administrative Agent.
No waiver shall extend to or affect any obligation not expressly
waived or impair any right consequent thereon. No course of
dealing or delay or omission on the part of either Bank Agent or
any Lender in exercising any right shall operate as a waiver
thereof or otherwise be prejudicial thereto. No notice to or
demand upon the Borrower shall entitle the Borrower to other or
further notice or demand in similar or other circumstances.
Nothing contained in 4.5 or 15.1 shall be deemed to waive or
impair any claims that the Borrower may have against any of the
Lenders for any failure by such Lender to comply with its
obligations under this Credit Agreement.
27. SEVERABILITY.
The provisions of this Credit Agreement are severable and if
any one clause or provision hereof shall be held invalid or
unenforceable in whole or in part in any jurisdiction, then such
invalidity or unenforceability shall affect only such clause or
provision, or part thereof, in such jurisdiction, and shall not
in any manner affect such clause or provision in any other
jurisdiction, or any other clause or provision of this Credit
Agreement in any jurisdiction.
28. TREATMENT OF CONFIDENTIAL INFORMATION.
28.1. Sharing of Information with Section 20 Subsidiary.
The Borrower acknowledges that from time to time
financial advisory, investment banking and other services
may be offered or provided to the Borrower or one or more of
its Subsidiaries, in connection with this Credit Agreement
or otherwise, by a Section 20 Subsidiary. The Borrower, for
itself and each of its Subsidiaries, hereby authorizes (a)
such Section 20 Subsidiary to share with the Administrative
Agent and each Lender any information delivered to such
Section 20 Subsidiary by the Borrower or any of its
Subsidiaries, and (b) the Administrative Agent and each
Lender to share with such Section 20 Subsidiary any
information delivered to the Administrative Agent or such
Lender by the Borrower or any of its Subsidiaries pursuant
to this Credit Agreement, or in connection with the decision
of such Lender to enter into this Credit Agreement; it being
understood, in each case, that any such Section 20
Subsidiary receiving such information shall be bound by the
confidentiality provisions of this Credit Agreement. Such
authorization shall survive the payment and satisfaction in
full of all of Obligations. In no event shall any Lender or
the Administrative Agent be obligated or required to return
any materials furnished to it or any Section 20 Subsidiary
by the Borrower or any of its Subsidiaries. The obligations
of each Lender under this 28 shall supersede and replace
the obligations of such Lender under any confidentiality
letter in respect of this financing signed and delivered by
such Lender to the Borrower prior to the date hereof and
shall be binding upon any assignee of, or purchaser of any
participation in, any interest in any of the Loans or
Reimbursement Obligations from any Lender.
28.2. Confidentiality.
Each of the parties hereto acknowledges and agrees
that, pursuant to the Credit Agreement and the other Loan
Documents and the transactions contemplated hereby and
thereby, it may be the recipient of proprietary and
confidential information of the other parties hereto (any
such information, the "Confidential Information").
Each of the parties hereto agrees that it will hold any
Confidential Information of any other party hereto in
confidence and will not disclose such Confidential
Information other than (a) to its employees or professional
advisors to the extent necessary for them to perform their
duties as employees or professional advisors, (b)
disclosures by any of the Lenders in accordance with
standard and customary practices, (c) to the extent
permitted by 19.6, (d) in the event that such party may be
required to effect such disclosure by order of a court of
competent jurisdiction, (e) any Confidential Information
which is or becomes general public knowledge for a reason
other than such party's failure to comply with the
provisions of this 28 or (f) disclosures by any of the
Lenders to affiliates of such Lender, which affiliates shall
be bound by the provisions of this 28.2. Moreover, each of
the Administrative Agent and the Lenders is hereby expressly
permitted by the Guarantor and the Borrower to refer to any
of the Borrower and its Subsidiaries in connection with any
advertising, promotion or marketing undertaken by the Agent
or such Lender and, for such purpose, the Administrative
Agent or the Lender may utilize any logo or other
distinctive symbol associated with the Borrower or any of
its Subsidiaries or any of their businesses.
29. TRANSITIONAL ARRANGEMENTS
29.1. Prior Credit Agreement Superseded.
This Credit Agreement shall on the Closing Date
supersede the Prior Credit Agreement in its entirety, except
as provided in this 29. On the Closing Date, the rights
and obligations of the parties evidenced by the Prior Credit
Agreement shall be evidenced by this Credit Agreement and
the other Loan Documents, all liens on the Collateral
securing the Obligations under the Prior Credit Agreement
prior to the Closing Date shall continue to secure the
Obligations on and after the Closing Date, the Agent under
the Prior Credit Agreement shall continue to serve as Agent
under this Credit Agreement, the other Loan Documents, and
all related UCC financing statements, the " Loans" as
defined in the Prior Credit Agreement of those Lenders party
to the Prior Credit Agreement shall be converted to
Revolving Credit Loans as defined herein with such Lenders
hereby assigning to the other Lenders such amounts as
necessary to reduce such Lender's outstanding Loans to its
Commitment Percentage of all outstanding Loans, and all
outstanding letters of credit issued by the Agent for the
account of the Borrower prior to the Closing Date shall, for
the purposes of this Credit Agreement, be Letters of Credit.
The execution of Loan Documents on the Closing Date does not
constitute a novation with respect to the Obligations or the
Loan Documents. Those Lenders not party to the prior Credit
Agreement shall by wire transfer to the Agent purchase the
assigned Loans and make additional Loans on the Closing Date
in accordance with their respective Commitment Percentages
and the provisions of this Credit Agreement.
29.2. Return and Cancellation of Notes.
As soon as reasonably practicable after its receipt of
its Notes hereunder on the Closing Date, the Lenders party
to the Prior Credit Agreement will promptly return to the
Borrower, marked "Substituted" or "Cancelled", as the case
may be, any notes of the Borrower held by such Lenders
pursuant to the Prior Credit Agreement.
29.3. Interest and Fees Under Superseded Agreement.
All interest and fees and expenses and amounts payable
under 6.9 of the Prior Credit Agreement, if any, owing or
accruing under or in respect of the Prior Credit Agreement
through the Closing Date shall be calculated as of the
Closing Date (prorated in the case of any fractional
periods), and shall be paid on the Closing Date.
IN WITNESS WHEREOF, the undersigned have duly executed this
Credit Agreement as a sealed instrument as of the date first set
forth above.
FILENE'S BASEMENT, INC.
By: /s/ Xxxxxx X. Xxxxxx
_________________________________
Xxxxxx X. Xxxxxx,
Executive Vice President
and Chief Financial Officer
FILENE'S BASEMENT CORP.
By: /s/ Xxxxxx X. Xxxxxx
_________________________________
Xxxxxx X. Xxxxxx,
Executive Vice President
and Chief Financial Officer
BANKBOSTON RETAIL FINANCE INC.,
individually and as Administrative
Agent
By: /s/ Xxxxxxxxx X. Xxxxx
_________________________________
Name: Xxxxxxxxx X. Xxxxx
Title: Director
BANKBOSTON, N.A.,
as Agent and L/C Issuer
By: /s/ Xxxxxxxxx X. Xxxxx
_________________________________
Name: Xxxxxxxxx X. Xxxxx
Title: Director
BANCBOSTON XXXXXXXXX XXXXXXXX INC.,
as Arranger
By: /s/ Xxxxxxx Xxxxxxx
_________________________________
Name: Xxxxxxx Demunna
Title: Managing Director
Signature Page to
Filene's Basement
Credit Agreement
XXXXXX FINANCIAL, INC.
By:__/s/ Xxxxxx X. Gibbons_____
Name:Xxxxxx X. Xxxxxxx
Title: Vice President
Signature Page to
Filene's Basement
Credit Agreement
FINOVA CAPITAL CORPORATION
By:_/s/ M.P. Sadiler_______
Name: X.X. Xxxxxxx
Title: Senior Vice President
Signature Page to
Filene's Basement
Credit Agreement
FIRST SOURCE FINANCIAL, LLP
by FIRST SOURCE FINANCIAL, INC.,
its Agent/Manager
By:_/s/ Xxxxxx X. Forzano_____
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
Signature Page to
Filene's Basement
Credit Agreement
FOOTHILL CAPITAL CORPORATION
By:__/s/ Xxxxx X. Cook_____
Name: Xxxxx X. Xxxx
Title: Vice President
Signature Page to
Filene's Basement
Credit Agreement
LASALLE BUSINESS CREDIT, INC.
By:_/s/ Xxxxx George_________________
Name: Xxxxx Xxxxxx
Title: Vice President
Signature Page to
Filene's Basement
Credit Agreement
NATIONAL CITY COMMERCIAL FINANCE, INC.
By:_/s/ Xxxxxxx X. Cooper______
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
Signature Page to
Filene's Basement
Credit Agreement
THE CIT GROUP/BUSINESS CREDIT, INC.
By:_/s/ Xxxxxxxxx X. Lynch_____
Name: Xxxxxxxxx X. Xxxxx
Title: Vice President
