EXHIBIT 10.1
SECOND AMENDMENT TO AMENDED AND RESTATED
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DEBTOR-IN-POSSESSION AND EXIT CREDIT AGREEMENT
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SECOND AMENDMENT TO AMENDED AND RESTATED DEBTOR-IN-POSSESSION AND
EXIT CREDIT AGREEMENT dated as of November 18, 2005 (this "Amendment"), among
FOOTSTAR, INC., a debtor and debtor-in-possession, a Delaware corporation,
having its chief executive office at 000 XxxXxxxxx Xxxxxxxxx, Xxxxxx, XX 00000,
as Lead Borrower for the Borrowers, being said FOOTSTAR, INC. and FOOTSTAR
CORPORATION, a debtor and debtor-in-possession, a Texas corporation, having its
principal place of business at 000 XxxXxxxxx Xxxxxxxxx, Xxxxxx, XX 00000; FLEET
NATIONAL BANK and the other financial institutions party to the Credit Agreement
as hereinafter defined (collectively, the "Lenders"); FLEET NATIONAL BANK, as
Administrative Agent and Swingline Lender, a national banking association having
a place of business at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000; FLEET
RETAIL GROUP, INC. (formerly known as Fleet Retail Finance Inc.), as Collateral
Agent for the Lenders, a Delaware corporation having its principal place of
business at 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000; and GENERAL ELECTRIC
CAPITAL CORPORATION, as syndication agent (in such capacity, the "Syndication
Agent").
WHEREAS, the Borrowers, the Lenders, the Administrative Agent, the
Collateral Agent and the Syndication Agent are parties to a certain Amended and
Restated Debtor-In-Possession and Exit Credit Agreement dated as of June 25,
2004 (as amended and in effect from time to time, the "Credit Agreement"),
pursuant to which the Lenders have extended credit to the Borrowers on the terms
and subject to the conditions set forth therein;
WHEREAS, the Borrowers, the Lenders, the Administrative Agent, the
Collateral Agent and the Syndication Agent have agreed, on the terms and
conditions set forth herein, to amend certain provisions of the Credit
Agreement; and
WHEREAS, capitalized terms which are used herein without definition
and which are defined in the Credit Agreement shall have the same meanings
herein as in the Credit Agreement.
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
ss.1. Amendment and Restatement of the Credit Agreement. Each of the
Borrowers, the Lenders, the Administrative Agent, the Collateral Agent and the
Syndication Agent hereby agrees that upon (a) the occurrence of the Exit
Facility Date under and as defined in the Credit Agreement and (b) the
satisfaction of each of the conditions precedent set forth in Section 5.1 of the
Amended and Restated Exit Credit Agreement attached hereto as Exhibit A (the
"Amended and Restated Credit Agreement"), the terms and conditions of the Credit
Agreement shall be amended and restated in their entirety and replaced with the
terms and conditions set forth in the Amended and Restated Credit Agreement.
Upon the satisfaction of clauses (a) and (b) above, the Amended and Restated
Credit Agreement shall, except as expressly provided therein, supersede the
Credit Agreement in its entirety and all rights and obligations of the Lenders
shall be subsumed within and be governed by the Amended and Restated Credit
Agreement.
ss.2. Representations and Warranties. Each of the Loan Parties hereby
represents and warrants to the Agents and the Lenders as of the date hereof, and
as of any date on which the conditions set forth in Section 3 below are met, as
follows:
(a) The execution and delivery by each of the Loan Parties of this
Amendment and all other instruments and agreements required to be executed and
delivered by such Loan Party in connection with the transactions contemplated
hereby or referred to herein, including, without limitation, the Amended and
Restated Credit Agreement (collectively, the "Amendment Documents"), and the
performance by each of the Loan Parties of any of its obligations and agreements
under the Amendment Documents and the Credit Agreement and the other Loan
Documents, as amended hereby, are within the corporate or other authority of
such Loan Party, have been authorized by all necessary corporate proceedings on
behalf of such Loan Party and do not and will not contravene any provision of
law or such Loan Party's charter, other incorporation or organizational papers,
by-laws or any stock provision or any amendment thereof or of any indenture,
agreement, instrument or undertaking binding upon such Loan Party.
(b) Each of the Amendment Documents, the Credit Agreement and the
other Loan Documents, as amended hereby, to which any Loan Party is a party
constitute legal, valid and binding obligations of such Person, enforceable in
accordance with their terms, except as limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting generally
the enforcement of creditors' rights.
(c) Other than the United States Bankruptcy Court presiding over the
Borrowers' Chapter 11 cases (the "Bankruptcy Court"), no approval or consent of,
or filing with, any governmental agency or authority is required to make valid
and legally binding the execution, delivery or performance by the Loan Parties
of the Amendment Documents, the Credit Agreement or any other Loan Documents, as
amended hereby, or the consummation by the Loan Parties of the transactions
among the parties contemplated hereby and thereby or referred to herein.
(d) Except to the extent of changes resulting from transactions
contemplated or permitted by the Credit Agreement and the other Loan Documents,
changes occurring in the ordinary course of business and to the extent that such
representations and warranties relate expressly to an earlier date and after
giving effect to the provisions hereof, the representations and warranties
contained in Article IV of the Credit Agreement, after giving effect to this
Amendment, also are correct in all material respects as of the date hereof.
(e) Each of the Loan Parties has performed and complied in all
material respects with all terms and conditions herein required to be performed
or complied with by it prior to or at the time hereof, and as of the date
hereof, after giving effect to the provisions of this Amendment and the other
Amendment Documents, there exists no Default or Event of Default.
(f) Each of the Loan Parties hereby acknowledges and agrees that the
representations and warranties contained in this Amendment shall constitute
representations and warranties as referred to in Section 8.1(c) of the Credit
Agreement.
ss.3. Effectiveness. This Amendment shall become effective as of the
date first written above (the "Effective Date") upon the satisfaction of each of
the following conditions, in each case in a manner satisfactory in form and
substance to the Administrative Agent and the Lenders:
(a) This Amendment shall have been duly executed and delivered by
each of the Loan Parties, the Administrative Agent, the Collateral Agent, the
Syndication Agent and each of the Lenders and shall be in full force and effect;
(b) The Administrative Agent shall have received from the Borrowers,
for the pro rata accounts of the Lenders, an amendment fee in the amount of
$150,000;
(c) The Administrative Agent shall have received such other items,
documents, agreements, items or actions as the Administrative Agent may
reasonably request in order to effectuate the transactions contemplated hereby;
and
(d) The Bankruptcy Court shall have entered an order, in form and
substance satisfactory to the Administrative Agent, authorizing the Borrowers to
enter into this Amendment.
ss.4. Miscellaneous Provisions.
(a) Each of the Loan Parties hereby ratifies and confirms all of its
Obligations to the Agents and the Lenders under the Credit Agreement, as amended
hereby, and the other Loan Documents, including, without limitation, the Loans,
and each of the Loan Parties hereby affirms its absolute and unconditional
promise to pay to the Lenders and the Agents the Loans, reimbursement
obligations and all other amounts due or to become due and payable to the
Lenders and the Agents under the Credit Agreement and the other Loan Documents,
as amended hereby. Except as expressly amended hereby, each of the Credit
Agreement and the other Loan Documents shall continue in full force and effect.
This Amendment and the Credit Agreement shall hereafter be read and construed
together as a single document, and all references in the Credit Agreement, any
other Loan Document or any agreement or instrument related to the Credit
Agreement shall hereafter refer to the Credit Agreement as amended by this
Amendment.
(b) Without limiting the expense reimbursement requirements set forth
in Section 10.3 of the Credit Agreement, the Loan Parties agree to pay on demand
all costs and expenses, including reasonable attorneys' fees, of the Agents
incurred in connection with this Amendment.
(c) THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK EXCLUDING THE LAWS APPLICABLE TO
CONFLICTS OR CHOICE OF LAW (EXCEPT SECTION 5.1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW).
(d) This Amendment may be executed in any number of counterparts, and
all such counterparts shall together constitute but one instrument. In making
proof of this Amendment it shall not be necessary to produce or account for more
than one counterpart signed by each party hereto by and against which
enforcement hereof is sought.
[Remainder of page intentionally left blank.]
IN WITNESS WHEREOF, the undersigned have duly executed this Amendment
as a sealed instrument as of the date first set forth above.
FOOTSTAR, INC.,
as Lead Borrower and as a Borrower
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President, Finance
FOOTSTAR CORPORATION,
as a Borrower
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President, Finance
BANK OF AMERICA, N.A. (successor in interest to Fleet
National Bank), as Administrative Agent, as Swingline
Lender and as Issuing Bank
By: /s/ Xxxxx Vercanteren
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Name: Xxxxx Vercanteren
Title: Director
BANK OF AMERICA, N.A. (successor in interest to Fleet
Retail Group, Inc.),
as Collateral Agent
By: /s/ Xxxxx Vercanteren
--------------------------------------------------
Name: Xxxxx Vercanteren
Title: Director
GENERAL ELECTRIC CAPITAL CORPORATION,
as Syndication Agent and as a Lender
By: /s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
Title: Duly Authorized Signatory
THE CIT GROUP/BUSINESS CREDIT, INC.,
as a Lender
By: /s/ Xxxxxx Xxxxxx
---------------------------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
AMSOUTH BANK,
as a Lender
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Attorney-in-Fact
NATIONAL CITY BUSINESS CREDIT, INC.,
as a Lender
By: /s/ Xxx Xxxxxx
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Name: Xxx Xxxxxx
Title: Director
Exhibit A
[See Attached]
AMENDED AND RESTATED
EXIT CREDIT AGREEMENT
dated as of
[___________ __, 200_]
among
FOOTSTAR, INC.,
as Lead Borrower for
FOOTSTAR, INC.
and
FOOTSTAR CORPORATION,
The LENDERS Party Hereto,
BANK OF AMERICA, N.A.,
as Administrative Agent and Swingline Lender,
BANK OF AMERICA, N.A.,
as Collateral Agent,
GENERAL ELECTRIC CAPITAL CORPORATION
as Syndication Agent,
--------------------------------------------
BANK OF AMERICA, N.A. and GECC CAPITAL MARKETS GROUP, INC.,
as Co-Lead Arrangers
TABLE OF CONTENTS
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Page
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ARTICLE I.........................................................................................................2
Definitions.......................................................................................................2
SECTION 1.1 Defined Terms......................................................................2
SECTION 1.2 Terms Generally...................................................................29
SECTION 1.3 Accounting Terms; GAAP............................................................29
ARTICLE II.......................................................................................................29
Amount and Terms of Credit.......................................................................................29
SECTION 2.1 Commitments of the Lenders........................................................29
SECTION 2.2 Limitations on Revolving Loans....................................................30
SECTION 2.3 Making of Revolving Loans.........................................................30
SECTION 2.4 Overadvances......................................................................31
SECTION 2.5 Swingline Loans...................................................................31
SECTION 2.6 Letters of Credit.................................................................32
SECTION 2.7 Settlements Among Lenders.........................................................36
SECTION 2.8 Notes; Repayment of Loans.........................................................37
SECTION 2.9 Interest on Revolving Loans.......................................................38
SECTION 2.10 Default Interest..................................................................38
SECTION 2.11 Certain Fees......................................................................38
SECTION 2.12 Unused Line Fees..................................................................38
SECTION 2.13 Letter of Credit Fees.............................................................38
SECTION 2.14 Nature of Fees....................................................................39
SECTION 2.15 Total Commitment; Termination or Reduction of Commitments.........................39
SECTION 2.16 Alternate Rate of Interest........................................................39
SECTION 2.17 Conversion and Continuation of Loans..............................................40
SECTION 2.18 Mandatory Prepayment; Commitment Termination; Cash Collateral.....................41
ii
SECTION 2.19 Optional Prepayment of Revolving Loans; Reimbursement of Lenders..................42
SECTION 2.20 Maintenance of Loan Account; Statements of Account................................43
SECTION 2.21 Cash Receipts.....................................................................44
SECTION 2.22 Application of Payments...........................................................44
SECTION 2.23 Increased Costs...................................................................44
SECTION 2.24 Change in Legality................................................................45
SECTION 2.25 Payments; Sharing of Setoff.......................................................45
SECTION 2.26 Taxes.............................................................................47
SECTION 2.27 Security Interests in Collateral..................................................48
SECTION 2.28 Mitigation Obligations; Replacement of Lenders....................................49
ARTICLE III......................................................................................................49
[Intentionally Omitted].................................................................................49
ARTICLE IV.......................................................................................................50
Representations and Warranties...................................................................................50
SECTION 4.1 Organization; Powers..............................................................50
SECTION 4.2 Authorization; Enforceability.....................................................50
SECTION 4.3 Governmental Approvals; No Conflicts..............................................50
SECTION 4.4 Financial Condition...............................................................50
SECTION 4.5 Properties........................................................................51
SECTION 4.6 Litigation and Environmental Matters..............................................52
SECTION 4.7 No Default; Compliance with Laws and Agreements...................................52
SECTION 4.8 Investment and Holding Company Status.............................................53
SECTION 4.9 Taxes.............................................................................53
SECTION 4.10 ERISA.............................................................................53
SECTION 4.11 Disclosure........................................................................53
SECTION 4.12 Subsidiaries......................................................................54
SECTION 4.13 Insurance.........................................................................54
SECTION 4.14 Labor Matters.....................................................................54
SECTION 4.15 Security Documents................................................................54
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SECTION 4.16 Federal Reserve Regulations.......................................................55
SECTION 4.17 Pre-petition and Administrative Claims and Liens..................................55
SECTION 4.18 Consummation of the Bankruptcy Plan...............................................55
ARTICLE V........................................................................................................55
Conditions.......................................................................................................55
SECTION 5.1 Conditions Precedent to Exit Facility Date........................................55
SECTION 5.2 Conditions Precedent to Each Revolving Loan and Each Letter of Credit.............57
ARTICLE VI.......................................................................................................58
Affirmative Covenants............................................................................................58
SECTION 6.1 Financial Statements and Other Information........................................58
SECTION 6.2 Notices of Material Events........................................................60
SECTION 6.3 Information Regarding Collateral..................................................61
SECTION 6.4 Existence; Conduct of Business....................................................61
SECTION 6.5 Payment of Obligations............................................................61
SECTION 6.6 Maintenance of Properties.........................................................61
SECTION 6.7 Insurance.........................................................................62
SECTION 6.8 Casualty and Condemnation.........................................................62
SECTION 6.9 Books and Records; Inspection and Audit Rights; Appraisals........................62
SECTION 6.10 Compliance with Laws..............................................................63
SECTION 6.11 Use of Proceeds and Letters of Credit.............................................63
SECTION 6.12 Additional Subsidiaries; After Acquired Real Estate...............................63
SECTION 6.13 Further Assurances................................................................64
ARTICLE VII......................................................................................................65
Negative Covenants...............................................................................................65
SECTION 7.1 Indebtedness and Other Obligations................................................65
SECTION 7.2 Liens.............................................................................66
iv
SECTION 7.3 Fundamental Changes...............................................................66
SECTION 7.4 Investments; Loans; Advances; Guarantees and Acquisitions.........................67
SECTION 7.5 Asset Sales; Blocked Sales; Transfers.............................................68
SECTION 7.6 Restricted Payments; Certain Payments of Indebtedness.............................69
SECTION 7.7 Transactions with Affiliates......................................................70
SECTION 7.8 Restrictive Agreements............................................................70
SECTION 7.9 Amendment of Material Documents...................................................70
SECTION 7.10 Additional Subsidiaries...........................................................70
SECTION 7.11 Excess Availability...............................................................70
SECTION 7.12 Fixed Charge Coverage Ratio.......................................................71
SECTION 7.13 Maximum Capital Expenditures......................................................71
SECTION 7.14 Sale and Leaseback Transactions...................................................71
ARTICLE VIII.....................................................................................................71
Events of Default................................................................................................71
SECTION 8.2 When Continuing...................................................................74
SECTION 8.3 Remedies on Default...............................................................74
SECTION 8.4 Application of Proceeds...........................................................74
ARTICLE IX.......................................................................................................75
The Agents.......................................................................................................75
SECTION 9.1 Administration by Administrative Agent............................................75
SECTION 9.2 The Collateral Agent..............................................................75
SECTION 9.3 Sharing of Excess Payments........................................................75
SECTION 9.4 Agreement of Required Lenders.....................................................76
SECTION 9.5 Liability of Agents...............................................................76
SECTION 9.6 Reimbursement and Indemnification.................................................77
SECTION 9.7 Rights of Agents..................................................................77
SECTION 9.8 Independent Lenders and Issuing Bank..............................................78
SECTION 9.9 Notice of Transfer................................................................78
SECTION 9.10 Successor Agent...................................................................78
SECTION 9.11 Reports and Financial Statements..................................................78
SECTION 9.12 Syndication Agent and Co-Lead Arrangers...........................................78
SECTION 9.13 Public Announcements..............................................................78
v
ARTICLE X........................................................................................................79
Miscellaneous....................................................................................................79
SECTION 10.1 Notices...........................................................................79
SECTION 10.2 Waivers; Amendments...............................................................79
SECTION 10.3 Expenses; Indemnity; Damage Waiver................................................81
SECTION 10.4 Designation of Lead Borrower as Borrowers' Agent..................................83
SECTION 10.5 Successors and Assigns............................................................84
SECTION 10.6 Survival..........................................................................86
SECTION 10.7 Counterparts; Integration; Effectiveness..........................................87
SECTION 10.8 Severability......................................................................87
SECTION 10.9 Right of Setoff...................................................................87
SECTION 10.10 Governing Law; Jurisdiction; Consent to Service of Process........................87
SECTION 10.11 WAIVER OF JURY TRIAL..............................................................88
SECTION 10.12 Headings..........................................................................88
SECTION 10.13 Interest Rate Limitation..........................................................88
SECTION 10.14 Additional Waivers................................................................89
SECTION 10.15 Replacement Note..................................................................90
SECTION 10.16 Confidentiality...................................................................90
SECTION 10.17 Existing Credit Agreement.........................................................91
vi
EXHIBITS
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A Assignment and Acceptance
B Final Order
C-1 Revolving Notes
C-2 Swingline Note
D Borrowing Request
E-1 Opinion of Outside Counsel to Loan Parties
E-2 Opinion of Inhouse Counsel to Loan Parties
F Compliance Certificate
G Borrowing Base Certificate
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SCHEDULES
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1.1(a) Pricing Grid - Revolving Loans
1.1(b) Lenders and Commitments
1.1(c) Existing Letters of Credit
1.2 Fiscal Periods
2.17 Interest Rate Option Notice
4.5(c)(i) Title to Properties; Real Estate Owned
4.5(c)(ii) Leased Properties
4.6 Disclosed Matters
4.12 Subsidiaries
4.13 Insurance
5.1 Holding Companies
6.1(j) Financial Reporting Requirements
7.1 Existing Indebtedness
7.2 Existing Liens
7.4 Existing Investments
viii
AMENDED AND RESTATED EXIT
CREDIT AGREEMENT
----------------
THIS AMENDED AND RESTATED EXIT CREDIT AGREEMENT dated as of
[_________ __. 200_] among FOOTSTAR, INC., a Delaware corporation, having its
chief executive office at 000 XxxXxxxxx Xxxxxxxxx, Xxxxxx, XX 00000, as Lead
Borrower for the Borrowers, being said FOOTSTAR, INC., and FOOTSTAR CORPORATION,
a Texas corporation, having its principal place of business at 000 XxxXxxxxx
Xxxxxxxxx, Xxxxxx, XX 00000 and the LENDERS party hereto; BANK OF AMERICA, N.A.
(successor in interest by merger to Fleet National Bank), as Administrative
Agent and Swingline Lender, a national banking association having a place of
business at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000; BANK OF AMERICA,
N.A. (successor in interest to Fleet Retail Group, Inc. f/k/a Fleet Retail
Finance Inc.), as Collateral Agent for the Lenders, a national banking
association having its principal place of business at 00 Xxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000; and GENERAL ELECTRIC CAPITAL CORPORATION, as syndication
agent (in such capacities, the "Syndication Agent"); in consideration of the
mutual covenants herein contained and benefits to be derived herefrom.
WHEREAS, the Borrowers, the Agents, the Syndication Agent and certain
other lending institutions were parties to a certain Debtor-In-Possession Credit
Agreement dated as of March 4, 2004 (as amended, the "DIP Credit Agreement");
and
WHEREAS, the Borrowers, the Agents, the Syndication Agent and certain
other lending institutions amended and restated the DIP Credit Agreement
pursuant to a certain Amended and Restated Debtor-In-Possession Credit Agreement
dated as of May 11, 2004 (as amended, the "First Amended and Restated Credit
Agreement"); and
WHEREAS, the Borrowers, the Agents, the Syndication Agent and certain
other lending institutions amended and restated the First Amended and Restated
Credit Agreement pursuant to a certain Amended and Restated Debtor-In-Possession
and Exit Credit Agreement dated as of June 25, 2004 (as amended and in effect as
of the date hereof, the "Existing Credit Agreement"); and
WHEREAS, the Borrowers have requested, among other things, that the
Existing Credit Agreement be amended and restated on the terms and conditions
set forth herein.
NOW, THEREFORE, in consideration of the foregoing, the mutual
covenants and agreements set forth herein below, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree that on the Exit Facility Date, the Existing Credit
Agreement shall be amended and restated in its entirety by this Agreement, the
terms of which are as follows:
1
ARTICLE I
Definitions
SECTION 1.1 Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:
"ACH" shall mean automated clearing house transfers.
"Account" shall mean any right to payment for goods sold or leased or
for services rendered, whether or not earned by performance, or any right to
payment for credit extended for goods sold or leased or services rendered.
"Accounting Restatement Matter" shall mean that certain restatement
of the accounts payable, the retained earnings and net income of the Lead
Borrower and its Subsidiaries for prior fiscal periods through September 28,
2002.
"Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) determined in accordance with the following
formula:
LIBO Rate
---------------------------------
1.00 - LIBOR Reserve Requirements
"Administrative Agent" means Bank of America, in its capacity as
administrative agent for the Lenders hereunder, together with its successors and
assigns in such capacity.
"Affiliate" means, with respect to a specified Person, another Person
that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Agents" means collectively, the Administrative Agent and the
Collateral Agent.
"Agreement" means this agreement as amended from time to time in
accordance with the terms hereof.
"Alternate Base Rate" shall mean, for any day, the higher of (a) the
annual rate of interest then most recently announced publicly by Bank of America
at its head office in Boston, Massachusetts as its "Base Rate" and (b) the
Federal Funds Effective Rate in effect on such day plus 1/2 of 1% (0.50%) per
annum. If for any reason the Administrative Agent shall have determined in its
reasonable commercial judgment (which determination shall be conclusive absent
manifest error) that it is unable to ascertain the Federal Funds Effective Rate
for any reason, including the inability or failure of the Administrative Agent
to obtain sufficient quotations thereof in accordance with the terms hereof, the
Alternate Base Rate shall be determined without regard to clause (b) of the
first sentence of this definition, until the circumstances giving rise to such
inability no longer exist. Any change in the Alternate Base Rate due to a change
in Bank of America's Base Rate or the Federal Funds Effective Rate shall be
effective on the effective date of such change in Bank of America's Base Rate or
the Federal Funds Effective Rate, respectively.
2
"Applicable Margin" means with respect to Revolving Loans, the rates
for Base Rate Loans and Eurodollar Loans set forth on the Pricing Grid attached
hereto as Schedule 1.1(a). The Applicable Margin shall be adjusted quarterly as
of the first day of each fiscal quarter based upon the average Excess
Availability for the immediately preceding fiscal quarter, provided that upon
the occurrence and continuance of an Event of Default, the Applicable Margin
shall be immediately increased to Level IV. Notwithstanding anything to the
contrary, upon written notice from the Administrative Agent after the occurrence
and during the continuance of any Event of Default, interest shall accrue at the
rate set forth in Section 2.10. No downward adjustment of the Applicable Margin
hereunder shall be permitted if there shall exist any Default or Event of
Default at the time of such proposed downward adjustment.
"Appraisal Percentage" shall mean (a) 90% for the period commencing
on the Exit Facility Date through and including the six month anniversary of the
Exit Facility Date, (b) 87.5% for the period commencing on the day following the
six month anniversary of the Exit Facility Date through and including the one
year anniversary of the Exit Facility Date, and (c) 85% thereafter.
"Appraised Value" means the net appraised liquidation value of the
Loan Parties' Inventory (expressed as a percentage of the Cost of such
Inventory) as determined from time to time (subject to the last sentence of
Section 6.9 herein) by the Administrative Agent, in accordance with its standard
procedures with the assistance of an independent appraiser engaged by the
Agents.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 10.5), and accepted by the Administrative Agent,
in the form of Exhibit A or any other form approved by the Administrative Agent.
"Availability Reserves" means such reserves as the Agents from time
to time determine in their commercially reasonable discretion as being
appropriate to reflect the impediments which may prevent the Collateral Agent
from realizing upon the Collateral. Without limiting the generality of the
foregoing, Availability Reserves may include (but are not limited to) reserves
based on (i) rent due under real property leases but not yet paid; (ii) Gift
Certificates and Merchandise Credit Liability (not to exceed 50% of the
outstanding amount thereof); (iii) layaways and customer deposits; (iv) customs,
duties, and other costs to release Eligible In-Transit Inventory which is being
imported into the United States to the extent not paid; (v) outstanding taxes
and other governmental charges, including, ad valorem, real estate, personal
property, and other taxes which might have priority over the interests of the
Collateral Agent in the Collateral and either which have not been paid when due
(unless such taxes are the subject of a bona fide dispute and are supported by
funded reserves) or which the Agents, in their discretion, believe may impede
the Collateral Agent's ability to realize upon the Collateral; and (vi) reserves
based upon 100% of the weighted average discount offered at retail with respect
to Inventory owned by any Loan Party and being sold in locations which are in
the process of being liquidated and closed.
3
"Bank of America" means Bank of America, N.A., a national banking
association, and its successors and assigns.
"Bankruptcy Code" means Title 11, U.S.C., as amended from time to
time and the Federal Rules of Bankruptcy Procedure, as amended from time to
time.
"Bankruptcy Court" means the United States Bankruptcy Court for the
Southern District of New York and any other court having competent jurisdiction
over the Reorganization Cases, the Debtors or any of their assets.
"Bankruptcy Plan" means a plan (within the meaning of the Bankruptcy
Code) proposed in the Reorganization Cases which is confirmed by a Final Order
of the Bankruptcy Court and is in form and substance satisfactory to the
Administrative Agent.
"Base Rate Loan" shall mean any Loan bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"Blocked Accounts" shall have the meaning assigned to it in the
Security Agreements.
"Board" means the Board of Governors of the Federal Reserve System of
the United States of America.
"Borrower Security Agreement" means the Security Agreement among the
Borrowers and the Collateral Agent for the benefit of the Agents, the Issuing
Banks and the Lenders.
"Borrowers" means, jointly and severally, the parties named as
Borrowers in the preamble hereto.
"Borrowing" shall mean the incurrence of (a) Loans of a single Type,
on a single date and having, in the case of Eurodollar Loans, a single Interest
Period or (b) a Swingline Loan.
"Borrowing Base" means, at any time of calculation by the Agents,
without duplication, is the result of:
(i) the Receivables Advance Rate times the face amount of
Eligible Receivables (as set forth in the most recent Borrowing Base
Certificate required to be delivered in accordance with Section
6.1(e)), but excluding the portion of such product in excess of
$25,000,000 attributable to Accounts due from Kmart Corporation or any
of its Affiliates; plus
4
(ii) the lesser of (a) the Appraisal Percentage times the sum of
the Appraised Value of Eligible Inventory (other than the Eligible L/C
Inventory) and the Appraised Value of Eligible In-Transit Inventory;
or (b) the applicable Inventory Advance Rate times the sum of the Cost
of Eligible Inventory (other than Eligible L/C Inventory) and the Cost
of Eligible In-Transit Inventory (in each case of (a) and (b), as set
forth in the most recent Borrowing Base Certificate required to be
delivered in accordance with Section 6.1(e) and net of Inventory
Reserves applicable thereto); plus
(iii) the L/C Inventory Advance Rate times the Eligible L/C
Inventory, net of Inventory Reserves applicable thereto (as set forth
in the most recent Borrowing Base Certificate required to be delivered
in accordance with Section 6.1(e)); minus
(iv) the amount of all Availability Reserves.
"Borrowing Base Certificate" has the meaning assigned to such term in
Section 6.1(e).
"Borrowing Request" means a request by the Lead Borrower on behalf of
the Borrowers for a Borrowing in accordance with Section 2.3.
"Breakage Costs" shall have the meaning set forth in Section 2.19(b).
"Business Day" means any day that is not a Saturday, Sunday or other
day on which commercial banks in New York, New York are authorized or required
by law to remain closed, provided that, when used in connection with a
Eurodollar Loan, the term "Business Day" shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.
"Capital Expenditures" means, without duplication for any period, (a)
the additions to property, plant and equipment and other capital expenditures of
the Lead Borrower and its Subsidiaries that are (or would be) set forth in a
consolidated statement of cash flows of the Lead Borrower and its Subsidiaries
for such period prepared in accordance with GAAP and (b) Capital Lease
Obligations incurred by the Borrowers during such period; provided that Capital
Expenditures shall exclude any additions to property, plant, and equipment to
the extent paid for with proceeds of insurance received with respect to any
casualty relating thereto.
"Capital Lease Obligations" of any Person means the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Cash Collateral Account" means an interest-bearing account
established by the Borrowers with the Collateral Agent at Bank of America under
the sole and exclusive dominion and control of the Collateral Agent designated
as the "Footstar Cash Collateral Account".
"CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. ss. 9601 et seq.
5
"Change in Control" shall be deemed to have occurred if, after the
Exit Facility Date and other than in accordance with and pursuant to a
Bankruptcy Plan, (i) any person or group (within the meaning of Rule 13d-5 of
the Securities and Exchange Commission as in effect on the date hereof) shall
become the beneficial owner (within the meaning of Rule 13d-3 of such Commission
as in effect on the date hereof) of voting securities (including any options,
rights or warrants to purchase, and any securities convertible into or
exchangeable for, voting securities) of the Lead Borrower representing 35% or
more of the voting power represented by all outstanding securities of the Lead
Borrower; (ii) a majority of the seats (other than vacant seats) on the board of
directors of the Lead Borrower shall at any time be occupied by persons who were
neither (a) nominated by the management of the Lead Borrower, nor (b) appointed
by directors so nominated; or (iii) unless the disposition thereof is permitted
by Section 7.5 hereof, the Lead Borrower fails to legally or beneficially own,
directly or indirectly, 100% on a fully-diluted basis of the capital stock and
other equity interests in each of the Loan Parties which it wholly owns on the
date hereof or any Subsidiary it hereafter forms or acquires; provided, however,
that any of the above-mentioned items which occur pursuant to the Bankruptcy
Plan shall not constitute a Change in Control.
"Change in Law" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender or the Issuing
Bank (or, for purposes of Section 2.23(b), by any lending office of such Lender
or by such Lender's or the Issuing Bank's holding company, if any) with any
request, guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
"Charges" has the meaning provided therefor in Section 10.13.
"Co-Lead Arrangers" means the Administrative Agent and GECC Capital
Markets Group, Inc. and their respective successors and assigns.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Collateral" means any and all "Collateral" as defined in any
applicable Security Document.
"Collateral Agent" means Bank of America, in its capacity as
collateral agent under the Security Documents.
"Commercial Letter of Credit" means any Letter of Credit issued for
the purpose of providing the primary payment mechanism in connection with the
purchase of any materials, goods or services by the Borrowers in the ordinary
course of business of the Borrowers.
"Commitment" shall mean, with respect to each Lender, the aggregate
commitment of such Lender in the amount equal to its Commitment Percentage of
the Total Commitment or as may subsequently be set forth in the Register from
time to time, as the same may be reduced from time to time pursuant to Section
2.15.
6
"Commitment Percentage" shall mean, with respect to each Lender, that
percentage of the Commitments of all Lenders hereunder in the amount set forth
opposite its name on Schedule 1.1(b) hereto or as may subsequently be set forth
in the Register from time to time, as the same may be reduced from time to time
pursuant to Section 2.15.
"Compliance Certificate" has the meaning set forth in Section 6.1(d).
"Consummation Date" means the date of substantial consummation (as
defined in Section 1101 of the Bankruptcy Code and which for purposes of this
Agreement shall be no later than the effective date) of a Bankruptcy Plan
confirmed by a Final Order.
"Control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise.
The terms "Controlling" and "Controlled" have meanings correlative thereto.
"Cost" means the average cost of goods available for sale, as
reported on the Borrowers' stock ledger, based upon the Borrowers' accounting
practices which are in effect on the date of this Agreement. "Cost" does not
include inventory capitalization costs or other non-purchase price charges
(except for freight to the extent treated consistently with the Borrower's past
practices) used in the Lead Borrower's calculation of cost of goods sold.
"Credit Extensions" as of any day, shall be equal to the sum of (a)
the principal balance of all Loans then outstanding, and (b) the then amount of
the Letter of Credit Outstandings.
"DDA" shall have the meaning assigned to it in the Security
Agreements.
"Debtor" means any Loan Party who has commenced a proceeding pursuant
to Chapter 11 of the Bankruptcy Code.
"Default" means any event or condition that constitutes an Event of
Default or that upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"DIP Credit Agreement" has the meaning set forth in the preamble
hereto.
"Dollars" or "$" refers to lawful money of the United States of
America.
"EBITDA" means, with respect to the Lead Borrower and its
Subsidiaries for any period, without duplication, an amount equal to the Net
Income of such Persons for such period plus the following to the extent deducted
in calculating such Net Income: (i) Interest Charges of such Persons for such
period, (ii) the provision for federal, state, local and foreign income taxes
payable by such Persons for such period and (iii) the amount of depreciation,
amortization expense and non-cash restructuring charges (including asset
impairment charges) deducted in determining such Net Income.
7
"Eligible Credit Card Receivables" means, as of the date of
determination thereof, Accounts due to a Loan Party on a non-recourse basis
(other than standard chargebacks and standard fees due to the credit card issuer
or processor) from (i) Visa, MasterCard, American Express Co., Discover, or JCB,
and (ii) other credit card issuers and/or processors reasonably acceptable to
the Agents as arise in the ordinary course of business for the purchase of
merchandise or services which have been earned by performance; provided that,
none of the following shall be deemed to be Eligible Credit Card Receivables:
(a) Accounts that are past due or Accounts that have been outstanding
for more than seven days from the date of sale;
(b) Accounts with respect to which a Loan Party does not have good,
valid and marketable title thereto, free and clear of any Lien (other than Liens
granted to the Collateral Agent, for its benefit and the ratable benefit of the
Secured Parties, pursuant to the Security Documents);
(c) Accounts that are not subject to a first priority security
interest in favor of the Collateral Agent, for the benefit of itself and the
Secured Parties (it being the intent that standard fees due by the Loan Parties
and standard chargebacks in the ordinary course by such credit card issuers
and/or processors shall not be deemed violative of this clause);
(d) Accounts which are disputed, are with recourse, or with respect
to which a claim, counterclaim, offset or chargeback has been asserted (to the
extent of such claim, counterclaim, offset or chargeback); and
(e) Accounts which the Agents determine in their reasonable
commercial judgment to be unlikely to be collected.
"Eligible Host Store Receivables" means, as of the date of
determination thereof, Accounts and payment intangibles owed to a Loan Party by
a Host Store on account of the retail sale of Inventory by a Loan Party at the
subject Host Store (net of rent, fees, and other amounts due and payable to the
subject account debtor under the subject lease, license, or other agreement
between such Loan Party and the subject Host Store) in which account receivable
the Collateral Agent has a first and only valid and perfected priority security
interest; provided that, none of the following shall be deemed to be Eligible
Host Store Receivables:
(a) All Accounts of any Host Store other than Kmart Corporation or
its Affiliates, any part of whose Accounts due to any Loan Party is more than
seven days past due in accordance with the payment terms of the lease, license,
or other agreement between such Loan Party and the subject Host Store;
(b) All Accounts of Kmart Corporation or its Affiliates, any part of
whose Accounts due to any Loan Party is more than three Business Days past due
in accordance with the payment terms of the Kmart Agreement;
8
(c) any Account as to which any one or more of the following events
has occurred with respect to the account debtor: death or judicial declaration
of incompetency; the filing by or against such Person of a request or petition
for liquidation, reorganization, arrangement, adjustment of debts, adjudication
as a bankrupt, or other relief under the bankruptcy, insolvency, or similar laws
of the United States, any state or territory thereof, or any foreign
jurisdiction, now or hereafter in effect; the making of any general assignment
by such Person for the benefit of creditors; the appointment of a receiver or
trustee for such Person or for any of the assets of such Person, including,
without limitation, the appointment of or taking possession by a "custodian", as
defined in the Bankruptcy Code; the institution by or against such Person of any
other type of insolvency proceeding (under the bankruptcy laws of the United
States or elsewhere) or of any formal or informal proceeding for the dissolution
or liquidation of, settlement of claims against, or winding up of affairs of,
such Person; the sale, assignment, or transfer of all or substantially all of
the assets of such Person; the inability to pay or the nonpayment by such Person
of its debts generally as they become due; or the cessation of the business of
such Person as a going concern (each an "Insolvency Event"), provided, however,
that Accounts which were created after the date of the occurrence of an
Insolvency Event with respect to the applicable account debtor shall not be
deemed to be ineligible solely as a result of the occurrence of such Insolvency
Event;
(d) Any Account, to the extent of any disputed amount or amount
claimed by the subject account debtor as being subject to any chargeback,
offset, or contra or is otherwise disputed;
(e) Any Account owed by any account debtor located in Indiana,
Minnesota, or Vermont (or any other state having requirements similar to those
set forth below) unless the relevant Loan Party (i) has received a certificate
of authority to do business, if applicable, and is in good standing in such
jurisdiction and (ii), if applicable, has filed a Notice of Business Activities
Report with the appropriate state offices for the then current year; and
(f) Accounts which the Agents determine in their reasonable
commercial judgment to be unlikely to be collected.
"Eligible In-Transit Inventory" shall mean, as of the date of
determination thereof, without duplication of other Eligible Inventory or any
Eligible L/C Inventory, Inventory being delivered from outside the United States
or Puerto Rico which is then being shipped for receipt within 60 days at a
warehouse facility of a Loan Party (a) not yet received at the Borrowers'
distribution centers, (b) which has been consigned to a Loan Party (along with
delivery to a Loan Party or its representative of the documents of title with
respect thereto), (c) as to which a customs broker agency agreement, reasonably
satisfactory to the Agents, is in effect, and (d) which otherwise would
constitute Eligible Inventory within the definition thereof.
"Eligible Inventory" shall mean, as of the date of determination
thereof, without duplication as to Eligible In-Transit Inventory or Eligible L/C
Inventory, items of Meldisco Eligible Inventory of the Loan Parties that are
finished goods, merchantable and readily saleable to the public in the ordinary
course; provided that, none of the following shall be Eligible Inventory:
9
(a) Inventory that is not owned solely by a Loan Party or the Loan
Parties do not have good and valid title thereto; Inventory that is leased or on
consignment but not owned by a Loan Party; or, unless otherwise agreed to by the
Agents in their discretion on terms acceptable to the Agents, Inventory that is
owned by the Loan Parties but that is leased or on consignment;
(b) Inventory (including any portion thereof in transit from vendors)
that is not located at a warehouse facility used by a Loan Party in the ordinary
course or at a property that is owned or leased by a Loan Party; provided,
however, that it is agreed by the parties hereto that the following shall
constitute Eligible Inventory: (i) Inventory distributed by Kmart Corporation
for a Loan Party from a distribution facility used by a Loan Party pursuant to a
services agreement, which services agreement shall be in form and substance
reasonably satisfactory to the Administrative Agent and (ii) Inventory
distributed by a third party logistic provider, provided that such third party
logistic provider has entered into a warehouseman's waiver agreement with the
applicable Loan Party, which warehouseman's waiver agreement shall be in form
and substance reasonably satisfactory to the Administrative Agent;
(c) Inventory that represents (A) goods damaged, defective or
otherwise unmerchantable, (B) goods that do not conform in all material respects
to the representations and warranties contained in this Agreement or any of the
Security Documents, or (C) goods to be returned to the vendor;
(d) Inventory that is not located in the United States of America
(excluding territories and possessions thereof other than Puerto Rico);
(e) Inventory that is not subject to a perfected first-priority
security interest in favor of the Collateral Agent for the benefit of the
Secured Parties;
(f) Inventory which consists of samples, labels, bags, packaging, and
other similar non-merchandise categories;
(g) Inventory as to which insurance in compliance with the provisions
of Section 6.7 hereof is not in effect; and
(h) Inventory which has been sold but not yet delivered.
"Eligible L/C Inventory" shall mean, as of the date of determination
thereof, without duplication of any Eligible Inventory or Eligible In-Transit
Inventory, Inventory (a) not yet received at the Borrowers' distribution
centers, (b) the purchase of which is supported by a Commercial Letter of Credit
having an expiry within 60 days of such date of determination, (c) as to which a
customs broker agency agreement, reasonably satisfactory to the Agents, is in
effect, and (d) which upon receipt by the applicable Loan Party would otherwise
constitute Eligible Inventory.
"Eligible Receivables" means, as of the date of determination, (a)
Eligible Credit Card Receivables, (b) Eligible Host Store Receivables, and (c)
Eligible Wholesale Receivables.
10
"Eligible Wholesale Receivables" means as of the date of
determination, without duplication as to Eligible Host Store Receivables or
Eligible Credit Card Receivables, the Accounts of any Loan Party at such date,
created in the ordinary course of business from sales of Inventory on account;
provided that, none of the following shall be deemed to be Eligible Wholesale
Receivables:
(a) any Account not payable in Dollars;
(b) any Account which, at the date of issuance of the invoice
therefor, was by its terms payable more than 60 days after shipment of the
related Inventory or otherwise reasonably acceptable in writing to the Agents;
(c) any Account which remains unpaid for more than 90 days past the
original contractual invoice date of such Account;
(d) any Account due from any Loan Party or Affiliate of any Loan
Party;
(e) any Account with respect to all or part of which a check,
promissory note, draft, trade acceptance or other instrument for the payment of
money has been presented for payment and returned uncollected for any reason;
(f) any Account as to which any one or more of the following events
has occurred with respect to the account debtor: death or judicial declaration
of incompetency; the filing by or against such Person of a request or petition
for liquidation, reorganization, arrangement, adjustment of debts, adjudication
as a bankrupt, or other relief under the bankruptcy, insolvency, or similar laws
of the United States, any state or territory thereof, or any foreign
jurisdiction, now or hereafter in effect; the making of any general assignment
by such Person for the benefit of creditors; the appointment of a receiver or
trustee for such Person or for any of the assets of such Person, including,
without limitation, the appointment of or taking possession by a "custodian", as
defined in the Bankruptcy Code; the institution by or against such Person of any
other type of insolvency proceeding (under the bankruptcy laws of the United
States or elsewhere) or of any formal or informal proceeding for the dissolution
or liquidation of, settlement of claims against, or winding up of affairs of,
such Person; the sale, assignment, or transfer of all or substantially all of
the assets of such Person; the inability to pay or the nonpayment by such Person
of its debts generally as they become due; the cessation of the business of such
Person as a going concern; or, in the Agents' commercial judgment,
unsatisfactory general financial performance or credit standing or likelihood of
unsatisfactory general financial performance or credit standing in the near
future;
11
(g) any Account due from an account debtor incorporated under the
laws of any jurisdiction other than the United States of America or Puerto Rico
or any political subdivision of any of the foregoing or whose principal place of
business, residence or domicile or substantially all of whose assets is located
outside of the United States of America or Puerto Rico, unless such Account is
backed by U.S. Government insurance or a letter of credit issued or confirmed by
a bank organized under the laws of the United States of America or a State
thereof and having capital, surplus, and undivided profits in excess of
$500,000,000 (so long as such letter of credit has been delivered to the
Collateral Agent as additional Collateral under the Security Documents);
(h) all Accounts of any account debtor if more than 25% of the
aggregate amount of Accounts of such account debtor are ineligible pursuant to
clause (c) above;
(i) the disputed portion of any Account as to which there is any
unresolved dispute, defense, offset, counterclaim or other deduction with or by
the respective account debtor (or the full portion of such Account if the
account debtor is representing that it will not pay any portion of the
undisputed amount of such Account due to such disputed portion);
(j) any Account as to which either (i) the perfection, enforceability
or validity of the Collateral Agent's security interest in such Receivable, or
(ii) the Collateral Agent's right or ability to obtain direct payment to the
Collateral Agent, for the benefit of the Lenders, of the proceeds of such
Receivables, is governed by any federal or state statutory requirements other
than those of the UCC and the Bankruptcy Code;
(k) any Account as to which the Collateral Agent, for the benefit of
the Lenders, does not have a valid and enforceable first priority security
interest, subject to no other Liens;
(l) any Account representing an obligation for goods sold on
consignment, on approval or on a sale-or-return basis or subject to any other
repurchase or return arrangement;
(m) any Account for which the Loan Parties do not have in place a
wholesale accounts receivable accounting system, including without limitation
agings reporting, reasonably acceptable to the Collateral Agent; and
(n) any Account which the Agents determine in their reasonable
commercial judgment to be unlikely to be collected.
"Environmental Indemnity" means the Environmental Compliance and
Indemnity Agreement among the Borrowers and the Agents, in form and substance
satisfactory to the Agents.
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by or with any Governmental
Authority, relating in any way to the environment, preservation or reclamation
of natural resources, handling, treatment, storage, disposal, Release or
threatened Release of any Hazardous Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or
otherwise (including any liability for damages, natural resource damage, costs
of environmental remediation, administrative oversight costs, fines, penalties
or indemnities), of any Borrower directly or indirectly resulting from or based
upon (a) violation of any Environmental Law, (b) the generation, use, handling,
12
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of
any Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Lead Borrower, is treated as a single
employer under Section 414(b) or (c) of the Code or, solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which the 30-day notice period is waived); (b) the existence
with respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Lead Borrower or any of its ERISA Affiliates of
any liability under Title IV of ERISA with respect to the termination of any
Plan; (e) the receipt by the Lead Borrower or any ERISA Affiliate from the PBGC
or a plan administrator of any notice relating to an intention to terminate any
Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence
by the Lead Borrower or any of its ERISA Affiliates of any liability with
respect to the withdrawal or partial withdrawal from any Plan or Multiemployer
Plan; or (g) the receipt by the Lead Borrower or any ERISA Affiliate of any
notice, or the receipt by any Multiemployer Plan from the Lead Borrower or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.
"Eurodollar Borrowing" shall mean a Borrowing comprised of Eurodollar
Loans.
"Eurodollar Loan" shall mean any Loan bearing interest at a rate
determined by reference to the Adjusted LIBO Rate in accordance with the
provisions of Article II.
"Event of Default" has the meaning assigned to such term in Section
8.1.
"Excess Availability" means, as of any date of determination, the
result of (a) the lesser of the Borrowing Base or the Commitments minus (b) the
sum of (i) the outstanding Credit Extensions and (ii) all then held checks,
accounts payable which are beyond payment practices followed by the Loan Parties
as of the Exit Facility Date and consistent with past practices, and overdrafts.
"Excluded Taxes" means, with respect to the Agents, any Lender, the
Issuing Bank or any other recipient of any payment to be made by or on account
of any obligation of the Borrowers hereunder, (a) income or franchise taxes
imposed on (or measured by) its gross or net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
13
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which any Borrower is located and (c) in the case
of a Foreign Lender (other than an assignee pursuant to a request by a Borrower
under Section 2.28(b), any withholding tax that is imposed on amounts payable to
such Foreign Lender at the time such Foreign Lender becomes a party to this
Agreement (or designates a new lending office) or is attributable to such
Foreign Lender's failure to comply with Section 2.26(e), except to the extent
that such Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts from the Borrowers with respect to such withholding tax pursuant to
Section 2.26(a).
"Existing Credit Agreement" has the meaning set forth in the preamble
hereto.
"Existing Letters of Credit" means the outstanding Letters of Credit
under the Original Credit Agreement which were rolled into the DIP Credit
Agreement, further rolled into the First Amended and Restated Credit Agreement
and further rolled into the Existing Credit Agreement as listed on Schedule
1.1(c) hereto.
"Exit Facility Date" means the date on which all of the conditions
precedent under Section 5.1 are satisfied (or waived in accordance with Section
10.2).
"Facility Guarantee" means the Guaranty executed by the Facility
Guarantors in favor of the Collateral Agent for the benefit of the Agents, the
Issuing Banks and the Lenders.
"Facility Guarantors" means all Subsidiaries of each Borrower now
existing or hereafter created (other than Foreign Subsidiaries and Unrestricted
Subsidiaries).
"Facility Guarantors Collateral Documents" means the Facility
Guarantee, the Guarantor Security Agreement, and all other security agreements,
mortgages, pledge agreements, deeds of trust, and other instruments, documents
or agreements executed and delivered by any Facility Guarantor from time to time
to secure the Facility Guarantee.
"Federal Funds Effective Rate" means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on such Business Day by the
Federal Reserve Bank of New York, or, if such day is not a Business Day, the
next succeeding Business Day, or, if such rate is not so published for any day
that is a Business Day, the average (rounded upwards, if necessary, to the next
1/100 of 1%) of the quotations for such day for such transactions received by
Bank of America from three Federal funds brokers of recognized standing selected
by it.
"Fee Letter" means, the letter entitled "Fee Letter" among the
Borrowers, Fleet National Bank and others dated as of March 4, 2004, as such
letter may from time to time be amended or amended and restated by the parties
thereto.
14
"Final Borrowing Order" means an order, in form attached as Exhibit B
hereto or otherwise satisfactory to the Agents, entered in the Reorganization
Cases after notice and a final hearing pursuant to Rule 4001(c) of the Federal
Rules of Bankruptcy Procedure and applicable local rules, which is a Final
Order, and which order authorizes the creation of the credit facilities
contemplated by this Agreement, as such order may from time to time be amended
with the written consent of the Agents, the Co-Lead Arrangers and the Required
Lenders.
"Final Order" means an order or judgment of the Bankruptcy Court as
entered on the docket of the Clerk of the Bankruptcy Court, that has not been
reversed, stayed, modified or amended and as to which the time to appeal,
petition for certiorari, reargument or rehearing has expired and no proceeding
for certiorari, reargument or rehearing is pending or if an appeal, reargument,
petition for certiorari, or rehearing has been sought, the order or judgment of
the Bankruptcy Court has been affirmed by the highest court to which the order
was appealed, from which the reargument or rehearing was sought, or certiorari
has been denied and the time to take any further appeal or to seek certiorari or
further reargument or rehearing has expired.
"Financial Officer" means the treasurer, assistant treasurer, senior
vice president of financial reporting, senior vice president of finance, chief
financial officer, the chief administrative officer or the controller of the
Lead Borrower.
"First Amended and Restated Credit Agreement" has the meaning set
forth in the preamble hereto.
"Fiscal Period" means the accounting periods of the Borrowers based
upon the Borrowers' accounting practices which are in effect on the date of this
Agreement, such fiscal periods being reflected on Schedule 1.2 hereto.
"Fixed Charge Coverage Ratio" means, for any period of four
consecutive fiscal quarters, the ratio of (a) the result of (i) EBITDA minus
(ii) cash payments for all income taxes paid during such period, minus (iv)
non-financed Capital Expenditures made during such period (to the extent not
already deducted in the calculation of EBITDA) to (b) Total Debt Service.
"Foreign Lender" means any Lender that is organized under the laws of
a jurisdiction other than the United States of America or any State thereof or
the District of Columbia.
"Foreign Subsidiary" means any Subsidiary that is organized under the
laws of a jurisdiction other than the United States of America or any State
thereof or Puerto Rico or the District of Columbia.
"GAAP" means generally accepted accounting principles in the United
States of America.
"Gift Certificate and Merchandise Credit Liability" means, at any
time, the aggregate face value at such time of (a) outstanding gift certificates
and gift cards of the Loan Parties entitling the holder thereof to use all or a
portion of the certificate to pay all or a portion of the purchase price for any
Inventory, and (b) outstanding merchandise credits of the Loan Parties.
15
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, whether primary or otherwise, and including any obligation of the
guarantor, direct or indirect, (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or other obligation or
to purchase (or to advance or supply funds for the purchase of) any security for
the payment thereof, (b) to purchase or lease property, securities or services
for the purpose of assuring the owner of such Indebtedness or other obligation
of the payment thereof, (c) to maintain working capital, equity capital or any
other financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or other obligation or (d)
as an account party in respect of any letter of credit or letter of guaranty
issued to support such Indebtedness or obligation, provided that the term
"Guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business.
"Guarantor Security Agreement" means the Security Agreement among the
Facility Guarantors and the Collateral Agent for the benefit of the Agents, the
Issuing Banks and the Lenders.
"Hazardous Materials" means all explosive or radioactive substances
or wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law, including any material listed as a hazardous substance under
Section 101(14) of CERCLA.
"Hedging Agreement" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement, or
other interest or currency exchange rate or commodity price hedging arrangement.
"Host Store" means any Person which operates retail stores at which
any Loan Party operates retail shoe departments as so-called "licensed
departments".
"Host Store Eligible Inventory" means Eligible Inventory which is
footwear held for sale in the ordinary course of business by the Loan Parties in
Host Stores or through related other selling channels at retail.
16
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding current
accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all Guarantees by such Person of
Indebtedness of others (including, without limitation, under any Synthetic
Leases), (h) all Capital Lease Obligations of such Person, (i) all obligations,
contingent or otherwise, of such Person as an account party in respect of
letters of credit and letters of guaranty (j) all obligations, contingent or
otherwise, of such Person in respect of bankers' acceptances, (k) the
liquidation value of all preferred capital stock and other equity interests of
such Person which are subject to mandatory sinking fund payments, mandatory
redemption or other acceleration at any time from the date hereof to the date
which is 90 days after the Termination Date, and (l) the principal and interest
portions of all rental obligations of such Person under any Synthetic Lease, tax
retention operating lease, off-balance sheet loan or similar off-balance sheet
financing where such transaction is considered borrowed money indebtedness for
tax purposes but is classified as an operating lease in accordance with GAAP.
The Indebtedness of any Person shall include the Indebtedness of any other
entity (including any partnership in which such Person is a general partner) to
the extent 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 the
terms of such Indebtedness provide that such Person is not liable therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Indemnitee" has the meaning provided therefor in Section 10.3(b).
"Interest Charges" means, for any period, with respect to any Person,
the sum of (a) all interest, premium payments, debt discount, fees, charges and
related expenses of such Person in connection with borrowed money (including
capitalized interest) or in connection with the deferred purchase price of
assets, in each case to the extent treated as interest in accordance with GAAP,
and (b) the portion of rent expense of such Person with respect to such period
under capital leases that is treated as interest in accordance with GAAP.
"Interest Payment Date" means (a) with respect to any Base Rate Loan
(including any Swingline Loan, if applicable), the last day of each calendar
month, (b) with respect to any Eurodollar Loan (including any Swingline Loan, if
applicable), the last day of each calendar quarter and the last day of the
Interest Period applicable to the Borrowing of which such Loan is a part, and
(c) the day each Loan is due (whether at maturity or by acceleration or
otherwise).
17
"Interest Period" means, with respect to any Eurodollar Borrowing,
the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months thereafter, as the Lead Borrower may elect, or, with respect to any
Swingline Loan, if applicable, the period commencing on the date of such
Swingline Loan and ending on the day agreed to for the last day of such Interest
Period between the Lead Borrower and the Swingline Lender, provided that, in
each case (a) if any Interest Period would end on a day other than a Business
Day, such Interest Period shall be extended to the next succeeding Business Day
unless such next succeeding Business Day would fall in the next calendar month,
in which case such Interest Period shall end on the next preceding Business Day,
and (b) any Interest Period that commences on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the last calendar month of such Interest Period) shall end on the last
Business Day of the last calendar month of such Interest Period, and (c) any
Interest Period which would otherwise end after the Maturity Date shall end on
the Maturity Date. For purposes hereof, the date of a Borrowing initially shall
be the date on which such Borrowing is made and thereafter shall be the
effective date of the most recent conversion or continuation of such Borrowing.
"Inventory" has the meaning assigned to such term in the Security
Agreements.
"Inventory Advance Rate" means the following percentages for the
periods indicated for the types of Inventory indicated:
Meldisco Eligible Inventory:
--------------------------------------------- -------------------------------
Period Inventory Advance Rate
--------------------------------------------- -------------------------------
January of each year 68%
--------------------------------------------- -------------------------------
February through May of each year 76%
--------------------------------------------- -------------------------------
June through December of each year 78%
--------------------------------------------- -------------------------------
"Inventory Reserves" means such reserves as may be established from
time to time by the Agents in the Agents' commercially reasonable discretion
with respect to the determination of the salability, at retail, of the Eligible
Inventory or which reflect such other factors as affect the market value of the
Eligible Inventory. Without limiting the generality of the foregoing, Inventory
Reserves may include (but are not limited to) reserves based on (i)
obsolescence; (ii) seasonality; (iii) Shrink; (iv) imbalance; (v) change in
Inventory character; (vi) change in Inventory composition; (vii) change in
Inventory mix; (viii) markdowns (both permanent and point of sale); and (ix)
retail markons and markups inconsistent with prior period practice and
performance; industry standards; current business plans; or advertising calendar
and planned advertising events.
"Issuing Bank" means Bank of America and any successor to Bank of
America in such capacity. The Issuing Bank may, in its discretion, arrange for
one or more Letters of Credit to be issued by Affiliates of the Issuing Bank, in
which case the term "Issuing Bank" shall include any such Affiliate with respect
to Letters of Credit issued by such Affiliate, if acceptable to Lead Borrower.
"Kmart Agreement" means the Amended and Restated Master Agreement
dated as of August 24, 2005, between Kmart Corporation, Sears Holdings
Corporation and the Lead Borrower, as may be amended or modified from time to
time in accordance with Section 7.9.
18
"Kmart-Related Default" means the occurrence of any of the following:
(a) the failure of (i) Kmart Corporation to make any payment in full required to
be made to any Loan Party or (ii) any Loan Party to make any payment in full
required to be made to Kmart Corporation, in either case within ten Business
Days after the same is due under the Kmart Agreement, (b) ten Business Days
after the occurrence of any material breach by (i) Kmart Corporation or any of
its Affiliates or (ii) any Loan Party under the Kmart Agreement, in either case
if such breach is not cured within such ten Business Day period, (c) the taking
of any action by the Borrowers or any of their Subsidiaries (i) to terminate the
Kmart Agreement, or (ii) to materially modify the Kmart Agreement (except, in
either case, with the prior written consent of the Agents, the Co-Lead Arrangers
and the Required Lenders), or (d) the termination by Kmart Corporation or any of
its Affiliates of the Kmart Agreement.
"L/C Disbursement" means a payment made by the Issuing Bank pursuant
to a Letter of Credit.
"L/C Inventory Advance Rate" means 50%.
"Lead Borrower" means Footstar, Inc., a Delaware corporation.
"Lender" shall mean each Person having a Commitment as set forth on
Schedule 1.1(b) hereto and each assignee that becomes a party to this Agreement
as set forth in Section 10.5.
"Letter of Credit" shall mean (a) a letter of credit that is (i)
issued pursuant to this Agreement for the account of any Borrower, (ii) a
Standby Letter of Credit or Commercial Letter of Credit, (iii) issued in
connection with the purchase of Inventory by any Borrower and for other purposes
for which a Borrower has historically obtained letters of credit, or for any
other purpose that is reasonably acceptable to the Administrative Agent, and
(iv) in form and substance reasonably satisfactory to the Issuing Bank, and (b)
the Existing Letters of Credit.
"Letter of Credit Fees" shall mean the fees payable in respect of
Letters of Credit pursuant to Section 2.13.
"Letter of Credit Outstandings" shall mean, at any time, the sum of
(a) with respect to Letters of Credit outstanding at such time, the aggregate
maximum undrawn amount that then is or at any time thereafter may become
available for drawing or payment thereunder plus (b) all amounts theretofore
drawn or paid under Letters of Credit for which the Issuing Bank has not then
been indefeasibly reimbursed.
"LIBO Rate" means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate of interest (rounded upwards, if necessary to the next
1/16 of 1%) which represents the offered rate for deposits in U.S. Dollars, for
a period of time comparable to such Interest Period, which appears on the
Telerate page 3750 (or the successor or replacement thereof) as of 11:00 a.m.
(London time) on that day that is two Business Days preceding the first day of
such Interest Period; provided, however, that if the rate described above does
not appear on the Telerate System on any applicable interest determination date,
the LIBO Rate for such Interest Period shall be the rate (rounded upwards as
19
described above, if necessary) for deposits in dollars for a period
substantially equal to such Interest Period shown on the Reuters Page "LIBO" (or
such other page as may replace the LIBO Page on that service for the purpose of
displaying such rates), as of 11:00 a.m. (London Time) on that day that is two
Business Days prior to the beginning of such Interest Period. If both the
Telerate and Reuters systems are unavailable, then the LIBO Rate for any
Interest Period will be determined on the basis of the offered rates for
deposits in U.S. Dollars for a period of time comparable to such Interest Period
which are offered by four major banks in the London interbank market at
approximately 11:00 a.m. (London time) on that day that is two Business Days
preceding the first day of such Interest Period, as selected by the Agent. The
principal London office of each of four major London banks will be requested to
provide a quotation of its Dollar deposit offered rate. If at least two such
quotations are provided, the rate for that date will be the arithmetic mean of
the quotations. If fewer than two quotations are provided as requested, the rate
for that date will be determined on the basis of the rates quoted for loans in
Dollars to leading European banks for a period of time comparable to such
Interest Period offered by major banks in New York City at approximately 11:00
a.m. (New York City) time on that day that is two Business Days preceding the
first day of such Interest Period. In the event that the Administrative Agent is
unable to obtain any such quotation as provided above, it will be deemed that
the LIBO Rate for the proposed Interest Period cannot be determined and is
therefore unavailable. The Administrative Agent shall give notice to the Lead
Borrower of the LIBO Rate as determined for each Eurodollar Borrowing and such
notice shall be conclusive and binding, absent manifest error.
"LIBOR Reserve Requirements" means for any day as applied to a
Eurodollar Borrowing, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on such day
(including basic, supplemental, marginal and emergency reserves under any
regulations of the Board of Governors of the Federal Reserve System or other
Governmental Authority having jurisdiction with respect thereto) dealing with
reserve requirements prescribed for eurocurrency funding (currently referred to
as "Eurocurrency Liabilities" in Regulation D of such Board) maintained by a
member bank of the Federal Reserve System.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Loan Account" has the meaning provided therefor in Section 2.20.
"Loan Documents" means this Agreement, the Notes, the Environmental
Indemnity, the Letters of Credit, the Fee Letter, all Borrowing Base
Certificates, the Borrower Security Agreement, the Facility Guarantee, the
Guarantor Security Agreement, the Patent Security Agreement, the Trademark
Security Agreement, the other Security Documents, any documents or agreements
required by the Security Documents, and any other instrument or agreement
executed and delivered in connection therewith.
20
"Loan Party" or "Loan Parties" means the Borrowers and the Facility
Guarantors.
"Loans" shall mean all loans (including, without limitation,
Revolving Loans and Swingline Loans) at any time made to the Borrowers or for
account of the Borrowers pursuant to this Agreement.
"Margin Stock" has the meaning assigned to such term in Regulation U.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, property, assets, or condition, financial or otherwise, of
the Lead Borrower and its Subsidiaries considered as a whole, (b) the ability of
the Lead Borrower or any Subsidiary to perform any of its obligations under any
Loan Document to which it is or will be a party, or (c) the validity or
enforceability of this Agreement or any of the other Loan Documents or any of
the material rights or remedies of the Administrative Agent, the Collateral
Agent or the Lenders hereunder or thereunder.
"Material Agreements" means (i) the Kmart Agreement; and (ii) any
other agreement material to the business of the Loan Parties, the termination,
rejection or loss of which would reasonably be expected to result in a Material
Adverse Effect, including without limitation any material agreements with Host
Stores.
"Material Indebtedness" means post-Petition Date Indebtedness (other
than the Loans and Letters of Credit) of any one or more of the Loan Parties in
an aggregate principal amount exceeding $15,000,000. For purposes of determining
the amount of Material Indebtedness at any time, the "principal amount" of the
obligations in respect of any Hedging Agreement at such time shall be the
maximum aggregate amount that a Loan Party would be required to pay if such
Hedging Agreement were terminated at that time.
"Maturity Date" means the earlier to occur of (a) November 30, 2008
and (b) thirty (30) days prior to the termination of the Kmart Agreement in
accordance with Article 4.2 of the Kmart Agreement.
"Maximum Rate" has the meaning provided therefor in Section 10.13.
"Meldisco Eligible Inventory" means Eligible Inventory (a) which is
Host Store Eligible Inventory, or (b) held for sale on account in the ordinary
course of business at wholesale by the Loan Parties.
"Meldisco Stores" means stores selling Meldisco Eligible Inventory at
retail.
"Meldisco Subsidiaries" means the Subsidiaries of the Lead Borrower
comprising the Meldisco division which sell Meldisco Eligible Inventory at
retail.
"Minority Lenders" has the meaning provided therefor in Section
10.2(c).
21
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Net Income" means, for any period, with respect to any Person, the
net income of such Person (excluding extraordinary gains but including
extraordinary losses) for that period.
"New Lending Office" has the meaning set forth in Section 2.26(e).
"Noncompliance Notice" has the meaning provided therefor in Section
2.5(b).
"Notes" shall mean (i) the promissory notes of the Borrowers
substantially in the form of Exhibit C-1, each payable to the order of a Lender,
evidencing the Revolving Loans, and (ii) the promissory note of the Borrowers
substantially in the form of Exhibit C-2, payable to the Swingline Lender,
evidencing the Swingline Loans.
"Obligations" means (a) the due and punctual payment by the Loan
Parties of the following, whether now existing or hereafter arising: (i) the
principal of, and interest (whether or not allowed in the Reorganization Cases)
on the Loans, when and as due, whether at maturity, by acceleration, upon one or
more dates set for prepayment or otherwise, (ii) each payment required to be
made by the Loan Parties under this Agreement in respect of any Letter of
Credit, when and as due, including payments in respect of reimbursement of
disbursements, interest thereon, fees on account thereof and obligations to
provide cash collateral and (iii) all other monetary obligations, including
fees, costs, expenses and indemnities, whether primary, secondary, direct,
contingent, fixed or otherwise, of the Loan Parties to the Secured Parties under
this Agreement and the other Loan Documents, including without limitation
attorneys fees and expenses, (b) the due and punctual payment and performance of
all the covenants, agreements, obligations and liabilities, whether now existing
or hereafter arising, of each Loan Party under or pursuant to this Agreement,
and the other Loan Documents, (c) the due and punctual payment and performance
of all covenants, agreements, obligations and liabilities, whether now existing
or hereafter arising, relating to any Hedging Agreements with any Lender or
Affiliate thereof, whether now existing or hereafter arising, to the extent
permitted hereunder, and (d) the due and punctual payment and performance of all
covenants, agreements, obligations and liabilities, whether now existing or
hereafter arising, relating to any transaction with either Agent, or any of
their respective Affiliates, which arises out of any cash management,
depository, investment, letter of credit, interest rate protection or other
Hedging Agreement, equipment leasing or other banking or financial services
provided by any such Person, as each may be amended from time to time.
"Original Credit Agreement" means that certain Credit Agreement dated
as of October 18, 2002 among the Borrowers, the Lenders party thereto, Fleet
National Bank, as administrative agent and swingline lender, Fleet Retail
Finance Inc. (now known as Bank of America, N.A., as successor in interest to
Fleet Retail Group, Inc.), as collateral agent, Congress Financial Corporation
and Xxxxx Fargo Retail Finance, LLC, as syndication agents, JPMorgan Chase Bank,
as documentation agent, and Back Bay Capital Funding LLC, as term lender, as the
same has been modified, amended, supplemented or restated from time to time.
22
"Other Taxes" means any and all current or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made under any Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, any Loan
Document.
"Overadvance" means, at any time of calculation, a circumstance in
which Excess Availability is less than zero.
"Patent Security Agreement" means the Patent Security Agreement among
certain Loan Parties and the Collateral Agent for the benefit of the Agents, the
Issuing Banks and the Lenders.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"Perfection Certificate" means a certificate in the form of Annex 1
to the Security Agreements or any other form approved by the Collateral Agent.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet due or are being
contested in compliance with Section 6.5;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, landlord's and other like Liens imposed by law, arising in the
ordinary course of business and securing obligations that are not overdue by
more than 60 days or are being contested in compliance with Section 6.5;
(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other social
security laws or regulations;
(d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature, in each case in the ordinary course of
business;
(e) judgment liens in respect of judgments that do not constitute an
Event of Default under clause (k) of Article VIII; and
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary course
of business that do not secure any monetary obligations and do not materially
detract from the value of the affected property or interfere with the ordinary
conduct of business of the Borrowers or any Subsidiary;
provided that, except as provided in any one or more of clauses (a) through (f)
above, the term "Permitted Encumbrances" shall not include any Lien securing
Indebtedness.
23
"Permitted Overadvance" means an Overadvance determined by the
Administrative Agent, in its reasonable discretion, which is made to maintain,
protect or preserve the Collateral and/or the Lenders' rights under the Loan
Documents; provided that Permitted Overadvances shall not (i) exceed the lesser
of (A) five percent of the sum of the then Borrowing Base, or (B) Ten Million
Dollars ($10,000,000), in the aggregate outstanding at any time or (ii) remain
outstanding for more than 30 consecutive Business Days (with no less than five
Business Days between each such 30-day period), unless in case of clause (ii),
the Required Supermajority Lenders otherwise agree, or (iii) be permitted to
occur more than three times in any twelve month period; and provided further
that the foregoing shall not (1) modify or abrogate any of the provisions of
Section 2.6(f) hereof regarding the Lenders' obligations with respect to L/C
Disbursements, or (2) result in any claim or liability against the
Administrative Agent (regardless of the amount of any Overadvance) for
"inadvertent Overadvances" (i.e. where an Overadvance results from changed
circumstances beyond the control of the Administrative Agent (such as a
reduction in the collateral value)), and further provided that in no event shall
the Administrative Agent make an Overadvance, if immediately after giving effect
thereto, the principal amount of the Credit Extensions would exceed the
Commitments.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Petition Date" means March 2, 2004.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Lead
Borrower or any ERISA Affiliate is (or, if such plan were terminated, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in Section
3(5) of ERISA.
"Projections" has the meaning set forth in Section 4.4(b).
"Real Estate" means all land, together with the buildings,
structures, parking areas, and other improvements thereon, and fixtures relating
thereto, now or hereafter owned or leased by any Loan Party (including, but not
limited to, acquired and/or utilized pursuant to an industrial revenue or
development bond structure), including all easements, rights-of-way, and similar
rights relating thereto, and all leases, tenancies, and occupancies thereof.
"Receivables Advance Rate" means 85%.
"Register" has the meaning set forth in Section 10.5(c).
"Regulation U" means Regulation U of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.
"Regulation X" means Regulation X of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.
24
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Release" has the meaning set forth in Section 101(22) of CERCLA.
"Reorganization Cases" means the collective reference to the cases of
the Debtors pursuant to Chapter 11 of the Bankruptcy Code pending in the
Bankruptcy Court (Docket No. 22350 et. seq. (jointly administered)).
"Required Lenders" means, at any time, three (3) or more Lenders
having Commitments in excess of 50% of the Total Commitments, or if the
Commitments have been terminated, three (3) or more Lenders whose percentage of
the outstanding Credit Extensions (after settlement and repayment of all
Swingline Loans by the Lenders and after taking into account each Lender's
Commitment Percentage of the Letter of Credit Outstandings) aggregate in excess
of 50% of all such Credit Extensions.
"Required Supermajority Lenders" shall mean, at any time, Lenders
having Commitments outstanding representing at least 66 and 2/3% of the Total
Commitments outstanding or if the Commitments have been terminated, Lenders
whose percentage of the outstanding Credit Extensions aggregate (after
settlement and repayment of all Swingline Loans by the Lenders and after taking
into account each Lender's Commitment Percentage of the Letter of Credit
Outstandings) not less than 66 and 2/3% of all such Credit Extensions.
"Reserves" means all (if any) Inventory Reserves and Availability
Reserves.
"Restricted Payment" means any dividend or other distribution
(whether in cash, securities or other property) with respect to any shares of
any class of capital stock or other equity interests of any Loan Party or any
Subsidiary, or any payment (whether in cash, securities or other property),
including any sinking fund or similar deposit, on account of the purchase,
redemption, retirement, acquisition, cancellation or termination of any such
shares of capital stock or other equity interests of any Loan Party or any
Subsidiary or any option, warrant or other right to acquire any such shares of
capital stock of any Loan Party or any Subsidiary; provided however, that
payments due and payable from time to time to Kmart Corporation or any of its
Affiliates under the Kmart Agreement shall not constitute a Restricted Payment
hereunder.
"Revolving Loans" means all Revolving Loans at any time made by a
Lender pursuant to Section 2.1.
"Revolving Note" has the meaning set forth in Section 2.8.
"Rite Aid East Coast Subsidiaries" means the Subsidiaries identified
as "Rite Aid East Coast" on Schedule 4.12.
"S&P" means Standard & Poor's.
25
"Secured Parties" has the meaning assigned to such term in the
Security Agreements.
"Security Agreements" means the Borrower Security Agreement and the
Guarantor Security Agreement.
"Security Documents" means the Facility Guarantee, the Borrower
Security Agreement, the Guarantor Security Agreement, the Trademark Security
Agreement, the Patent Security Agreement, the other Facility Guarantors
Collateral Documents, and each other security agreement, or other instrument or
document executed and delivered pursuant to Section 6.12 or pursuant to any of
the other Loan Documents to secure any of the Obligations.
"Settlement Date" has the meaning provided in Section 2.7(b) hereof.
"Shrink" means Inventory which has been lost, misplaced, stolen, or
is otherwise unaccounted for.
"Standby Letter of Credit" means any Letter of Credit other than a
Commercial Letter of Credit.
"Subsidiary" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held, or (b) that is, as of such date,
otherwise Controlled, by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent.
"Synthetic Lease" means any lease or other agreement for the use or
possession of property creating obligations which do not appear as Indebtedness
on the balance sheet of the lessee thereunder but which, upon the insolvency or
bankruptcy of such Person, may be characterized as Indebtedness of such lessee
without regard to the accounting treatment.
"Swingline Lender" means Bank of America, in its capacity as lender
of Swingline Loans hereunder, together with its successors and assigns in such
capacity.
"Swingline Limit" means $25,000,000 (or such other amount as may be
established in accordance with this Agreement).
"Swingline Loan" shall mean a Loan made by the Swingline Lender to
the Borrowers pursuant to Section 2.5 hereof.
"Swingline Note" has the meaning set forth in Section 2.8.
26
"Syndication Agent" means General Electric Capital Corporation.
"Taxes" means any and all current or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Temporary Cash Investments" means each of the following:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are backed by
the full faith and credit of the United States of America), in each case
maturing within one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from the
date of acquisition thereof and having, at such date of acquisition, a credit
rating of A-1 from S&P or P-1 from Moody's;
(c) investments in certificates of deposit, banker's acceptances and
time deposits maturing within 180 days from the date of acquisition thereof
issued or guaranteed by or placed with, and demand deposit and money market
deposit accounts issued or offered by, any domestic office of any commercial
bank organized under the laws of the United States of America or any State
thereof that has a combined capital and surplus and undivided profits of not
less than $500,000,000;
(d) fully collateralized repurchase agreements with a term of not
more than 30 days for securities described in clause (a) above (without regard
to the limitation on maturity contained in such clause) and entered into with a
financial institution satisfying the criteria described in clause (c) above or
with any primary dealer; and
(e) Federal agency securities and/or United States government
sponsored enterprises with maturities not to exceed 270 days from the date of
acquisition thereof;
provided that, notwithstanding the foregoing, no such Temporary Cash Investments
shall be permitted unless such Temporary Cash Investments are pledged to the
Collateral Agent as additional collateral for the Obligations pursuant to such
agreements as may be reasonably required by the Collateral Agent.
"Termination Date" shall mean the earliest to occur of (i) the
Maturity Date, (ii) the date on which the maturity of the Loans is accelerated
and the Commitments are terminated pursuant to Section 8.1 hereof, or (iii) the
date on which all Obligations are indefeasibly paid in full in cash in Dollars,
no Letters of Credit remain outstanding and the Commitments have been
terminated.
"Total Commitment" means the sum of the Commitments of the Lenders to
make Loans in an aggregate amount not to exceed $100,000,000.
27
"Total Debt Service" means, with respect to the Lead Borrower and its
Subsidiaries for any period, the sum, without duplication, of (a) Total Interest
Expense for such period plus (b) any and all scheduled repayments of principal
during such period in respect of Indebtedness (other than Indebtedness incurred
hereunder) that becomes due and payable or that are to become due and payable
during such period pursuant to any agreement or instrument to which the Lead
Borrower or any of its Subsidiaries is a party relating to (i) the borrowing of
money or the obtaining of credit, including the issuance of notes or bonds, (ii)
the deferred purchase price of assets (other than trade payables incurred in the
ordinary course of business), (iii) in respect of any Synthetic Leases or any
capital leases, (iv) in respect of any reimbursement obligations in respect of
letters of credit or bankers acceptances due and payable during such period, and
(v) Indebtedness of the type referred to above of another Person guaranteed by
the Lead Borrower or any of its Subsidiaries.
"Total Interest Expense" means, without duplication, with respect to
the Lead Borrower and its Subsidiaries for any period, the aggregate amount of
interest required to be paid or accrued as an expense by the Lead Borrower and
its Subsidiaries during such period on all Indebtedness of the Lead Borrower 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 any
capitalized lease or any Synthetic Lease, and including unused commitment fees,
balance deficiency fees and similar ongoing fees or expenses in connection with
the borrowing of money.
"Trademark Security Agreement" means the Trademark Security Agreement
among certain Loan Parties and the Collateral Agent for the benefit of the
Agents, the Issuing Banks and the Lenders.
"Type", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate.
"UCC" means the Uniform Commercial Code as presently in effect from
time to time in any jurisdiction applicable to any Loan Party.
"Unrestricted Subsidiary" means a Subsidiary of a Loan Party
designated while no Default or Event of Default exists by the Lead Borrower's
board of directors as such, provided that no Subsidiary may be designated as an
Unrestricted Subsidiary unless (a) it is a Foreign Subsidiary with none of its
assets included in the calculation of Borrowing Base immediately prior to such
Subsidiary's being designated as an Unrestricted Subsidiary or (b) a closed
single store Subsidiary which is dormant and not engaged in any business
operations and have no assets.
"Unused Line Fee" has the meaning set forth in Section 2.12.
"Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
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SECTION 1.2 Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.3 Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect on the Exit Facility Date.
ARTICLE II
Amount and Terms of Credit
--------------------------
SECTION 2.1 Commitments of the Lenders.
(a) Each Lender, severally and not jointly with any other Lender,
agrees, upon the terms and subject to the conditions herein set forth in this
Agreement including without limitation, the conditions set forth in Article V
and the limitations set forth in Section 2.2, to extend credit to the Borrowers
on a revolving basis, in the form of Revolving Loans and Letters of Credit and
in an amount not to exceed the lesser of (i) such Lender's Commitment or (ii)
such Lender's Commitment Percentage of the Borrowing Base.
(b) Each Borrowing of Revolving Loans (other than Swingline Loans)
shall be made by the Lenders pro rata in accordance with their respective
Commitments. The failure of any Lender to make any Revolving Loan shall neither
relieve any other Lender of its obligation to fund its Loan in accordance with
the provisions of this Agreement nor increase the obligation of any such other
Lender.
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SECTION 2.2 Limitations on Revolving Loans . The obligations of the
Lenders to make Revolving Loans pursuant to Section 2.1 shall be subject to the
following limitations:
(a) The aggregate outstanding amount of the Credit Extensions shall
not at any time exceed the Total Commitments.
(b) The aggregate outstanding amount of the Credit Extensions shall
not at any time exceed the sum of the Commitments, as reduced by the Borrowers
from time to time pursuant to Section 2.15.
(c) No Lender has any obligation to make any Revolving Loan if,
immediately after giving effect thereto, an Overadvance would exist.
(d) Subject to all of the other provisions of this Agreement,
Revolving Loans that are repaid may be reborrowed prior to the Termination Date.
No new Credit Extension, however, shall be made to the Borrowers after the
Termination Date.
SECTION 2.3 Making of Revolving Loans. (a) Except as set forth in
Sections 2.16 and 2.24, Revolving Loans (other than Swingline Loans) by the
Lenders shall be either Base Rate Loans or Eurodollar Loans as the Lead Borrower
on behalf of the Borrowers may request subject to and in accordance with this
Section 2.3. All Revolving Loans made pursuant to the same Borrowing shall,
unless otherwise specifically provided herein, be Revolving Loans of the same
Type. Each Lender may fulfill its Commitment with respect to any Revolving Loan
by causing any lending office of such Lender to make such Revolving Loan; but
any such use of a lending office shall not affect the obligation of the
Borrowers to repay such Revolving Loan in accordance with the terms of the
applicable Note. Each Lender shall not, subject to its overall policy
requirements and office availability, select a lending office which would result
in the payment of increased costs by the Borrowers pursuant to Section 2.23 and
will, if any said office was selected, use reasonable efforts to transfer the
Revolving Loan to a different office to avoid such increased costs under Section
2.23. Subject to the other provisions of this Section 2.3 and the provisions of
Section 2.24, Borrowings of Revolving Loans of more than one Type may be
incurred at the same time, but no more than five (5) Borrowings of Eurodollar
Loans may be outstanding at any time.
(b) The Lead Borrower shall give the Administrative Agent two
Business Days' prior telephonic and written notice (such written notice to
include an updated Borrowing Base Certificate and to be in the form attached as
Exhibit D hereto) of each Borrowing of Eurodollar Loans and same Business Day
notice of each Borrowing of Base Rate Loans. Any such notice, to be effective,
must be received by the Administrative Agent not later than 11:00 a.m., Boston
time, on the second Business Day in the case of Eurodollar Loans prior to, and
on the same Business Day in the case of Base Rate Loans as, the date on which
such Borrowing is to be made. Such notice shall be irrevocable and shall specify
the amount of the proposed Borrowing (which shall be in an integral multiple of
$500,000, but not less than $500,000) and the date thereof (which shall be a
Business Day) and shall contain disbursement instructions. Such notice shall
specify whether the Borrowing then being requested is to be a Borrowing of Base
Rate Loans or Eurodollar Loans and, if Eurodollar Loans, the Interest Period
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with respect thereto. If no election of Interest Period is specified in any such
notice for a Borrowing of Eurodollar Loans, such notice shall be deemed a
request for an Interest Period of one month. If no election is made as to the
Type of Loan, such notice shall be deemed a request for Borrowing of Base Rate
Loans. The Administrative Agent shall promptly notify each Lender of its
proportionate share of such Borrowing, the date of such Borrowing, the Type of
Borrowing being requested and the Interest Period or Interest Periods applicable
thereto, as appropriate. On the borrowing date specified in such notice, each
Lender shall make its share of the Borrowing available at the office of the
Administrative Agent at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, no
later than 2:00 p.m., Boston time, in immediately available funds and such
Borrowing shall then be made available to the Borrowers by the Administrative
Agent. Unless the Administrative Agent shall have received notice from a Lender
prior to the proposed date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's share of such Borrowing, the
Administrative Agent may assume that such Lender has made such share available
on such date in accordance with this Section and may, in reliance upon such
assumption, make available to the Borrowers a corresponding amount. In such
event, if a Lender has not in fact made its share of the applicable Borrowing
available to the Administrative Agent, then the applicable Lender and the
Borrowers severally agree to pay to the Administrative Agent forthwith on demand
such corresponding amount with interest thereon, for each day from and including
the date such amount is made available to the Borrowers to but excluding the
date of payment to the Administrative Agent, at (i) in the case of such Lender,
the greater of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation or (ii) in the case of the Borrowers, the interest rate applicable
to Base Rate Loans. If such Lender pays such amount to the Administrative Agent,
then such amount shall constitute such Lender's Revolving Loan included in such
Borrowing. Upon receipt of the funds made available by the Lenders to fund any
Borrowing hereunder, the Administrative Agent shall disburse such funds in the
manner specified in the notice of borrowing delivered by the Lead Borrower.
SECTION 2.4 Overadvances. The Agents and the Lenders have no
obligation to make any Loan or to provide any Letter of Credit if an Overadvance
would result. The Administrative Agent may, in its discretion, make Permitted
Overadvances without the consent of the Lenders and each Lender shall be bound
thereby. If any Permitted Overadvance is made, the Administrative Agent shall
promptly notify the Lenders. Any Permitted Overadvances may constitute Swingline
Loans. The making of any Permitted Overadvance is for the benefit of the
Borrowers; such Permitted Overadvances constitute Revolving Loans and
Obligations. The making of any such Permitted Overadvances on any one occasion
shall not obligate the Administrative Agent or any Lender to make or permit any
Permitted Overadvances on any other occasion or to permit such Permitted
Overadvances to remain outstanding.
SECTION 2.5 Swingline Loans. (a) The Swingline Lender is authorized
by the Lenders to make Swingline Loans up to the Swingline Limit plus the
Permitted Overadvances in the aggregate outstanding at any time, upon a notice
of Borrowing received by the Administrative Agent and the Swingline Lender
(which notice shall be submitted by 1:00 p.m., Boston time, on the Business Day
on which such Swingline Loan is requested) (or later, if the Swingline Lender
agrees in its discretion). Swingline Loans shall be subject to periodic
settlement with the Lenders under Section 2.7 below and shall bear interest at
the rate specified in Section 2.10(c) below.
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(b) Subject to Article V hereof, upon the Lead Borrower's request,
Swingline Loans will be made by the Swingline Lender for administrative
convenience. The Swingline Lender shall make Swingline Loans in reliance upon
the Borrowers' actual or deemed representations under Section 5.3 that the
applicable conditions for borrowing are satisfied. Swingline Loans may also be
made (i) as Permitted Overadvances, or (ii) if the conditions for borrowing
under Section 5.3 cannot be fulfilled. In the case of clause (ii), the Borrowers
shall give immediate notice thereof to the Administrative Agent and the
Swingline Lender (a "Noncompliance Notice"), and the Administrative Agent shall
promptly provide each Lender with a copy of the Noncompliance Notice. If the
conditions for borrowing under Section 5.3 cannot be fulfilled, the Required
Lenders may direct the Swingline Lender to, and the Swingline Lender thereupon
shall, cease making Swingline Loans (other than Permitted Overadvances) until
such conditions can be satisfied or are waived in accordance with Section 10.2
hereof. Unless the Required Lenders so direct the Swingline Lender, the
Swingline Lender may, but is not obligated to, continue to make Swingline Loans
beginning one Business Day after the Noncompliance Notice is furnished to the
Lenders. Notwithstanding the foregoing, no Swingline Loans shall be made
pursuant to this subsection (b) (other than Permitted Overadvances) if,
immediately after giving effect thereto, an Overadvance would exist.
SECTION 2.6 Letters of Credit. (a) Upon the terms and subject to the
conditions herein set forth, the Lead Borrower on behalf of the Borrowers may
request the Issuing Bank, at any time and from time to time after the date
hereof and prior to the Termination Date, to issue, and subject to the terms and
conditions contained herein, the Issuing Bank shall issue, for the account of
the Borrowers, one or more Letters of Credit; provided that no Letter of Credit
shall be issued if after giving effect to such issuance (i) the aggregate Letter
of Credit Outstandings shall exceed $40,000,000, or (ii) the aggregate Credit
Extensions (or any part thereof) would exceed the applicable limitations set
forth in Section 2.2; and provided, further, that no Letter of Credit shall be
issued if the Issuing Bank shall have received notice from the Administrative
Agent or the Required Lenders that the conditions to such issuance have not been
met. The parties hereto acknowledge that pursuant to the Original Credit
Agreement, Fleet National Bank (predecessor to Bank of America) issued the
Existing Letters of Credit which remain outstanding. The parties hereto agree
that such Existing Letters of Credit shall constitute Letters of Credit of the
Issuing Bank under this Agreement and the Issuing Bank shall be entitled to
reimbursement of L/C Disbursements, Letter of Credit Fees and other rights with
respect thereto pursuant to the terms of this Agreement as if originally issued
hereunder.
(b) Each Standby Letter of Credit shall expire at or prior to the
close of business on the earlier of (i) the date one year after the date of the
issuance of such Letter of Credit (or, in the case of any renewal or extension
thereof, one year after such renewal or extension) and (ii) the date that is
five Business Days prior to the Maturity Date, provided that each Standby Letter
of Credit may, upon the request of the Lead Borrower, include a provision
whereby such Letter of Credit shall be renewed automatically for additional
consecutive periods of 12 months or less (but not beyond the date that is five
Business Days prior to the Maturity Date) unless the Issuing Bank notifies the
beneficiary thereof at least 30 days prior to the then-applicable expiration
date that such Letter of Credit will not be renewed.
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(c) Each Commercial Letter of Credit shall expire at or prior to the
close of business on the earlier of (i) the date 180 days after the date of the
issuance of such Commercial Letter of Credit and (ii) the date that is five
Business Days prior to the Maturity Date.
(d) Drafts drawn under each Letter of Credit shall be reimbursed by
the Borrowers in dollars on the same Business Day of any such drawing by paying
to the Issuing Bank (or, if a Default or Event of Default then exists, the
Administrative Agent) an amount equal to such drawing not later than 1:00 p.m.,
Boston time, on (i) the date that the Borrowers shall have received notice of
such payment, if such notice is received prior to 10:00 a.m., Boston time, on
such date, or (ii) the Business Day immediately following the day that the
Borrowers receive such notice, if such notice is received after 10:00 a.m.,
Boston time on the day of receipt, provided that the Lead Borrower may, subject
to the conditions to borrowing set forth herein, request in accordance with
Section 2.3 (and subject to the limitations of Section 2.3(c)) that such payment
be financed with a Revolving Loan consisting of a Base Rate Loan or Swingline
Loan in an equivalent amount and, to the extent so financed, the Borrowers'
obligation to make such payment shall be discharged and replaced by the
resulting Base Rate Loan or Swingline Loan. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
notify the Administrative Agent and the Borrowers by telephone (confirmed by
telecopy) of such demand for payment and whether the Issuing Bank has made or
will make payment thereunder, provided that any failure to give or delay in
giving such notice shall not relieve the Borrowers of their obligation to
reimburse the Issuing Bank and the Lenders with respect to any such payment.
(e) Immediately upon the issuance of any Letter of Credit by the
Issuing Bank (or the amendment of a Letter of Credit increasing the amount
thereof), and without any further action on the part of the Issuing Bank, the
Issuing Bank shall be deemed to have sold to each Lender, and each such Lender
shall be deemed unconditionally and irrevocably to have purchased from the
Issuing Bank, without recourse or warranty, an undivided interest and
participation, to the extent of such Lender's Commitment Percentage, in such
Letter of Credit, each drawing thereunder and the obligations of the Borrowers
under this Agreement and the other Loan Documents with respect thereto. Upon any
change in the Commitments pursuant to Section 10.5, it is hereby agreed that
with respect to all Letter of Credit Outstandings, there shall be an automatic
adjustment to the participations hereby created, as applicable, to reflect the
new Commitment Percentages of the assigning and assignee Lenders. Any action
taken or omitted by the Issuing Bank under or in connection with a Letter of
Credit, if taken or omitted in the absence of gross negligence or willful
misconduct, shall not create for the Issuing Bank any resulting liability to any
Lender.
33
(f) If the Issuing Bank shall make any L/C Disbursement, then, unless
the Borrowers shall reimburse the Issuing Bank in full on the date such payment
is made, the unpaid amount thereof shall bear interest, for each day from and
including the date such payment is made to but excluding the date that the
Borrowers reimburse the Issuing Bank therefor, at the rate per annum from time
to time applicable to Base Rate Loans which are Revolving Loans, provided that,
if the Borrowers fail to reimburse such Issuing Bank when due pursuant to
paragraph (d) of this Section, then Section 2.10 shall apply. Interest accrued
pursuant to this paragraph shall be for the account of the Issuing Bank, except
that interest accrued on and after the date of payment or reimbursement, as
applicable, by any Lender pursuant to paragraph (g) of this Section to the Agent
for the account of the Issuing Bank or the Lenders, as applicable, shall be for
the account of such Lender to the extent of such payment or reimbursement.
(g) In the event that the Issuing Bank makes any L/C Disbursement and
the Borrowers shall not have reimbursed such amount in full to the Issuing Bank
pursuant to this Section 2.6, the Issuing Bank shall promptly notify the
Administrative Agent, which shall promptly notify each Lender of such failure,
and each Lender shall promptly and unconditionally pay to the Administrative
Agent for the account of the Issuing Bank the amount of such Lender's Commitment
Percentage of such unreimbursed payment in dollars and in same day funds. If and
to the extent any Lender shall not have so made its Commitment Percentage of the
amount of such payment or reimbursement available to the Administrative Agent,
such Lender agrees to pay to the Administrative Agent for the account of the
Issuing Bank or the Lenders, as applicable, forthwith on demand, such amount,
together with interest thereon, for each day from such date until the date such
amount is paid to the Administrative Agent at the Federal Funds Effective Rate.
Each Lender agrees to fund its Commitment Percentage of such unreimbursed
payment or reimbursement notwithstanding a failure to satisfy any applicable
lending conditions or the provisions of Sections 2.2 or 2.6, or the occurrence
of the Termination Date. The failure of any Lender to make available to the
Administrative Agent its Commitment Percentage of any such unreimbursed payment
or reimbursement under any Letter of Credit shall neither relieve any Lender of
its obligation hereunder to make available to the Issuing Bank its Commitment
Percentage of any such unreimbursed payment or reimbursement on the date
required, as specified above, nor increase the obligation of such other Lender.
Whenever any Lender has made payments to the Administrative Agent for the
account of the Issuing Bank in respect of any reimbursement obligation for any
Letter of Credit, and has not been reimbursed therefor, such Lender shall be
entitled to share ratably in all payments and collections thereafter received on
account of such reimbursement obligation.
(h) Whenever the Borrowers desire that the Issuing Bank issue a
Letter of Credit (or the amendment, renewal or extension of an outstanding
Letter of Credit), the Lead Borrower shall give to the Issuing Bank (if Bank of
America is not the Issuing Bank) and the Administrative Agent at least two
Business Days' prior written (including telegraphic, telex, facsimile,
electronic, internet or cable communication) notice (or such shorter period as
may be agreed upon in writing by the Issuing Bank and the Lead Borrower)
specifying the date on which the proposed Letter of Credit is to be issued,
amended, renewed or extended (which shall be a Business Day), the stated amount
of the Letter of Credit so requested, the expiration date of such Letter of
Credit, the name and address of the beneficiary thereof, and the provisions
thereof. If requested by the Issuing Bank, the Borrowers shall also submit a
letter of credit application on the Issuing Bank's standard form in connection
with any request for the issuance, amendment, renewal or extension of a Letter
of Credit.
34
(i) The obligations of the Borrowers to reimburse the Issuing Bank
for any L/C Disbursement shall be unconditional and irrevocable and shall be
paid in accordance with the terms of this Agreement under all circumstances,
including, without limitation (it being understood that any such payment by the
Borrowers shall be without prejudice to, and shall not constitute a waiver of,
any rights the Borrowers might have or might acquire as a result of the payment
by the Issuing Bank of any draft or the reimbursement by the Borrowers thereof):
(i) any lack of validity or enforceability of any Letter of Credit; (ii) the
existence of any claim, setoff, defense or other right which the Borrowers may
have at any time against a beneficiary of any Letter of Credit or against any of
the Lenders, whether in connection with this Agreement, the transactions
contemplated herein or any unrelated transaction; (iii) any draft, demand,
certificate or other document presented under any Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect; (iv) payment by the Issuing
Bank of any Letter of Credit against presentation of a demand, draft or
certificate or other document which does not comply with the terms of such
Letter of Credit; (v) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing, that might, but for the provisions of this
Section, constitute a legal or equitable discharge of, or provide a right of
setoff against, the Borrowers' obligations hereunder; or (vi) the fact that any
Event of Default shall have occurred and be continuing. None of the
Administrative Agent, the Lenders, the Issuing Bank or any of their Affiliates
shall have any liability or responsibility by reason of or in connection with
the issuance or transfer of any Letter of Credit or any payment or failure to
make any payment thereunder (irrespective of any of the circumstances referred
to in the preceding sentence), or any error, omission, interruption, loss or
delay in transmission or delivery of any draft, notice or other communication
under or relating to any Letter of Credit (including any document required to
make a drawing thereunder), any error in interpretation of technical terms or
any consequence arising from causes beyond the control of the Issuing Bank,
provided that the foregoing shall not be construed to excuse the Issuing Bank
from liability to the Borrowers to the extent of any direct damages (as opposed
to consequential damages, claims in respect of which are hereby waived by the
Borrowers to the extent permitted by applicable law) suffered by the Borrowers
that are caused by the Issuing Bank's failure to exercise care when determining
whether drafts and other documents presented under a Letter of Credit comply
with the terms thereof. The parties hereto expressly agree that, in the absence
of bad faith, gross negligence, or willful misconduct on the part of the Issuing
Bank (as finally determined by a court of competent jurisdiction), the Issuing
Bank shall be deemed to have exercised care in each such determination. In
furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented that appear on their
face to be in compliance with the terms of a Letter of Credit, the Issuing Bank
may, in its sole discretion, either accept and make payment upon such documents
without responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.
(j) If any Event of Default shall occur and be continuing: on the
Business Day that the Borrowers receive notice from the Administrative Agent or
the Required Lenders demanding the deposit of cash collateral pursuant to this
paragraph, the Borrowers shall deposit in the Cash Collateral Account an amount
in cash equal to 105% of the Letter of Credit Outstandings as of such date plus
any accrued and unpaid interest thereon; each such deposit shall be held by the
Collateral Agent as Collateral for the payment and performance of the
35
Obligations of the Borrowers under this Agreement; the Collateral Agent shall
have exclusive dominion and control, including the exclusive right of
withdrawal, over such Cash Collateral Account; other than any interest earned on
the investment of such deposits, which investments shall be made at the option
and sole discretion of the Collateral Agent at the request of the Borrowers and
at the Borrowers' risk and expense, such deposits shall not bear interest;
interest or profits, if any, on such investments shall accumulate in such
account; and moneys in such Cash Collateral Account shall be applied by the
Collateral Agent to reimburse the Issuing Bank for payments on account of
drawings under Letters of Credit for which it has not been reimbursed and, to
the extent not so applied, shall be held for the satisfaction of the
reimbursement obligations of the Borrowers for the Letter of Credit Outstandings
at such time or, if the Loans have matured or the maturity of the Loans has been
accelerated, be applied to satisfy other Obligations of the Borrowers under this
Agreement.
SECTION 2.7 Settlements Among Lenders. (a) The Swingline Lender may
(but shall not be obligated to), at any time, on behalf of the Borrowers (which
hereby authorize the Swingline Lender to act on their behalf in that regard)
request the Administrative Agent to cause the Lenders to make Revolving Loans in
an aggregate amount equal to the below-described portion of the outstanding
amount of Swingline Loans made in accordance with Section 2.5 (the "Swingline
Amount") in accordance with this Section 2.7, which request may be made
regardless of whether the conditions set forth in Article V have been satisfied.
Upon such request, if at the time of such request the Commitments exceed the
aggregate outstanding principal amount of the Credit Extensions, each Lender
shall make available to the Administrative Agent the proceeds of a Revolving
Loan for the account of the Swingline Lender in an amount equal to its
Commitment Percentage of the Swingline Amount (or, if less than the Swingline
Amount, of the aggregate unutilized amount of the Commitments). If the Swingline
Lender requires a Revolving Loan to be made by the applicable Lenders as
described above and the request therefor is received prior to 1:00 p.m., Boston
time, on a Business Day, such transfers shall be made in immediately available
funds no later than 3:00 p.m., Boston time, that day; and, if the request
therefor is received after 1:00 p.m., Boston time, then no later than 12:00
Noon, Boston time, on the next Business Day. The obligation of each applicable
Lender to transfer such funds is irrevocable, unconditional and without recourse
to or warranty by the Administrative Agent or the Swingline Lender. If and to
the extent any applicable Lender shall not have so made its transfer to the
Administrative Agent, such Lender agrees to pay to the Administrative Agent,
forthwith on demand, such amount, together with interest thereon, for each day
from such date until the date such amount is paid to the Administrative Agent at
the Federal Funds Effective Rate.
(b) The amount of each Lender's Commitment Percentage of outstanding
Revolving Loans (excluding Swingline Loans) shall be computed weekly (or more
frequently in the Administrative Agent's discretion) and shall be adjusted
upward or downward based on all Revolving Loans (excluding Swingline Loans) and
repayments of Revolving Loans (excluding Swingline Loans) received by the
Administrative Agent as of 12:00 Noon, Boston time, on the first Business Day
following the end of the period specified by the Administrative Agent (such
date, the "Settlement Date").
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(c) The Administrative Agent shall deliver to each of the Lenders
promptly after the Settlement Date a summary statement of the amount of
outstanding Revolving Loans (excluding Swingline Loans) for the period and the
amount of repayments received for the period. As reflected on the summary
statement: (x) the Administrative Agent shall transfer to each Lender its
applicable Commitment Percentage of repayments, and (y) each Lender shall
transfer to the Administrative Agent (as provided below), or the Administrative
Agent shall transfer to each Lender, such amounts as are necessary to ensure
that, after giving effect to all such transfers, the amount of Revolving Loans
(excluding Swingline Loans) made by each Lender shall be equal to such Lender's
Commitment Percentage outstanding as of such Settlement Date. If the summary
statement requires transfers to be made to the Administrative Agent by the
Lenders and is received prior to 1:00 p.m., Boston time, on a Business Day, such
transfers shall be made in immediately available funds no later than 3:00 p.m.,
Boston time, that day; and, if received after 1:00 p.m., Boston time, then no
later than 3:00 p.m., Boston time, on the next Business Day. The obligation of
each Lender to transfer such funds is irrevocable, unconditional and without
recourse to or warranty by the Administrative Agent. If and to the extent any
Lender shall not have so made its transfer to the Administrative Agent, such
Lender agrees to pay to the Administrative Agent, forthwith on demand such
amount, together with interest thereon, for each day from such date until the
date such amount is paid to the Administrative Agent at the Federal Funds
Effective Rate.
SECTION 2.8 Notes; Repayment of Loans. (a) The Revolving Loans made
by each Lender shall if requested by the relevant Lender be evidenced by a
revolving note (each, a "Revolving Note") duly executed on behalf of the
Borrowers, dated the Exit Facility Date, in substantially the form attached
hereto as Exhibit C-1, payable to the order of each such Lender in an aggregate
principal amount equal to such Lender's Commitment. The Swingline Loans made by
the Swingline Lender shall if requested by the Swingline Lender be evidenced by
a revolving note (the "Swingline Note") duly executed on behalf of the
Borrowers, dated the Exit Facility Date, in substantially the form attached
hereto as Exhibit C-2, payable to the order of the Swingline Lender in an
aggregate principal amount equal to $25,000,000. Neither the original nor a copy
of a Revolving Note or Swingline Note shall be required, however, to establish
or prove the Obligations evidenced thereby.
(b) The outstanding principal balance of all Swingline Loans shall be
repaid no later than the earlier of (i) 7 days after the date the Swingline Loan
is made, (ii) the Termination Date, or (iii) on the date otherwise requested by
the Swingline Lender in accordance with the provisions of Section 2.7(a). The
outstanding principal balance of all other Obligations shall be payable on the
Termination Date (subject to earlier repayment and/or cash collateralization as
provided herein). Each Note shall bear interest from the date thereof on the
outstanding principal balance thereof as set forth in this Article II. Each
Lender is hereby authorized by the Borrowers to endorse on a schedule attached
to each Note delivered to such Lender (or on a continuation of such schedule
attached to such Note and made a part thereof), or otherwise to record in such
Lender's internal records, an appropriate notation evidencing the date and
amount of each Revolving Loan from such Lender, each payment and prepayment of
principal of any such Revolving Loan, each payment of interest on any such
Revolving Loan and the other information provided for on such schedule;
provided, however, that the failure of any Lender to make such a notation or any
error therein shall not affect the obligation of the Borrowers to repay the
Revolving Loans made by such Lender in accordance with the terms of this
Agreement and the applicable Notes.
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SECTION 2.9 Interest on Revolving Loans. (a) Subject to Section 2.10,
each Base Rate Loan shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 365 or 366 days, as applicable) at a rate
per annum that shall be equal to the then Alternate Base Rate, plus the
Applicable Margin for Base Rate Loans.
(b) Subject to Section 2.10, each Eurodollar Loan shall bear interest
(computed on the basis of the actual number of days elapsed over a year of 360
days) at a rate per annum equal, during each Interest Period applicable thereto,
to the Adjusted LIBO Rate for such Interest Period, plus the Applicable Margin
for Eurodollar Loans.
(c) Subject to Section 2.10, each Swingline Loan shall bear interest
on the outstanding principal amount thereof, for each day during the Interest
Period therefor (if applicable), at a rate per annum equal to the then Alternate
Base Rate, plus the Applicable Margin for Base Rate Loans.
(d) Accrued interest on all Revolving Loans shall be payable in
arrears on each Interest Payment Date applicable thereto, at maturity (whether
on the Maturity Date or by acceleration or otherwise), after such maturity on
demand and (with respect to Eurodollar Loans) upon any repayment or prepayment
thereof (on the amount prepaid).
SECTION 2.10 Default Interest. Effective upon the occurrence of any
Event of Default and at all times thereafter while such Event of Default is
continuing, at the option of the Administrative Agent or upon the direction of
the Required Lenders, interest shall accrue on all outstanding Revolving Loans
(after as well as before judgment, as and to the extent permitted by law) at a
rate per annum (computed on the basis of the actual number of days elapsed over
a year of 360 days) equal to the Applicable Margin in effect from time to time
plus 2.00% per annum, and such interest shall be payable on demand.
SECTION 2.11 Certain Fees. The Borrowers shall pay to the
Administrative Agent, for the account of the Administrative Agent and the
Lenders, as applicable, the fees set forth in the Fee Letter as and when payment
of such fees is due as therein set forth.
SECTION 2.12 Unused Line Fees. In addition to any other fee provided
herein or in the Fee Letter to be paid by the Borrowers on account of the
Revolving Loans, the Borrowers shall pay to the Administrative Agent, for the
account of the Lenders, an unused line fee (the "Unused Line Fee") equal to
0.30% per annum (on the basis of actual days elapsed in a year of 360 days) of
the average difference, during the calendar month just ended (or relevant period
with respect to the payment being made on the Termination Date) between (i) the
aggregate Commitments of the Lenders and (ii) the aggregate outstanding amount
of the Credit Extensions. The Unused Line Fee so accrued in any calendar month
shall be payable in arrears on the first Business Day of the immediately
succeeding calendar quarter, except that all Unused Line Fees so accrued as of
the Termination Date shall be payable on the Termination Date.
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SECTION 2.13 Letter of Credit Fees. (a) The Borrowers shall pay the
Administrative Agent, for the account of the Lenders, to the extent of their
required participations therein, as applicable, on the last day of each calendar
quarter, in arrears, a fee (each, a "Letter of Credit Fee") equal to the
following per annum percentages of the average face amount of the following
categories of Letters of Credit outstanding during the subject quarter:
(i) Standby Letters of Credit: The Applicable Margin for
Eurodollar Loans.
(ii) Commercial Letters of Credit: The percentage equal to one
third of the Applicable Margin for Eurodollar Loans.
(iii) After the occurrence and during the continuance of an Event
of Default, at the option of the Administrative Agent or upon the
direction of the Required Lenders, the Letter of Credit Fee shall be
increased by an amount equal to two percent (2%) per annum.
(b) The Borrowers shall pay to the Administrative Agent, for the
account of the Issuing Bank, and in addition to all Letter of Credit Fees
otherwise provided for hereunder, a fronting fee of 0.125% of the face amount of
each Commercial Letter of Credit, due and payable as a condition of the issuance
of each Commercial Letter of Credit, and such other fees and charges in
connection with the issuance, negotiation, settlement, amendment and processing
of each Letter of Credit issued by the Issuing Bank as are customarily imposed
by the Issuing Bank from time to time in connection with letter of credit
transactions.
SECTION 2.14 Nature of Fees. All fees shall be paid on the dates due,
in immediately available funds, to the Administrative Agent, for the respective
accounts of the Administrative Agent, the Issuing Bank, and the Lenders, as
provided herein. Once paid, all fees shall be fully earned and shall not be
refundable under any circumstances, absent manifest error.
SECTION 2.15 Total Commitment; Termination or Reduction of
Commitments. (a) Upon at least two Business Days' prior written notice to the
Administrative Agent, the Borrowers may at any time in whole permanently
terminate, or from time to time in part permanently reduce, the Commitments.
Each such reduction shall be in the principal amount of $5,000,000 or any
integral multiple thereof. Each such reduction or termination shall (i) be
applied ratably to the Commitments of each Lender, and (ii) be irrevocable when
written notice thereof is given. At the effective time of each such reduction or
termination, the Borrowers shall pay to the Administrative Agent for application
as provided herein (i) all Unused Line Fees accrued on the amount of the
Commitments so terminated or reduced through the date thereof, and (ii) any
amount by which the Credit Extensions outstanding on such date exceed the amount
to which the Commitments are to be reduced effective on such date, in each case
pro rata based on the amount prepaid.
SECTION 2.16 Alternate Rate of Interest. If prior to the commencement
of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate for such Interest Period, pursuant
to the definition of LIBO Rate set forth herein; or
(b) the Administrative Agent is advised by the Required Lenders that
the Adjusted LIBO Rate for such Interest Period will not adequately and fairly
reflect the cost to such Lenders (or Lender) of making or maintaining their
Revolving Loans (or its Revolving Loan) included in such Borrowing for such
Interest Period;
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then the Administrative Agent shall give notice thereof to the Borrowers and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrowers and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Borrowing
Request that requests the conversion of any Borrowing to, or continuation of any
Borrowing as, a Eurodollar Borrowing shall be ineffective and (ii) if any
Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made
as a Borrowing of Base Rate Loans.
SECTION 2.17 Conversion and Continuation of Loans. The Lead Borrower
on behalf of the Borrowers shall have the right at any time, on three Business
Days' prior irrevocable telephonic notice to the Administrative Agent (which
telephonic notice, to be effective, must be received by the Administrative Agent
not later than 11:00 a.m., Boston time, on the third Business Day preceding the
date of any conversion and, at the Administrative Agent's request, shall
thereafter be confirmed in writing in form attached as Schedule 2.17 hereto),
(x) to convert any outstanding Borrowings of Revolving Loans (but in no event
Swingline Loans) of one Type (or a portion thereof) to a Borrowing of Revolving
Loans of the other Type or (y) to continue an outstanding Borrowing of
Eurodollar Loans for an additional Interest Period, subject to the following:
(a) no Borrowing of Revolving Loans may be converted into, or
continued as, Eurodollar Loans at any time when an unwaived Event of Default has
occurred and is continuing (nothing contained herein being deemed to obligate
the Borrowers to incur Breakage Costs upon the occurrence of an Event of Default
unless the Obligations are accelerated);
(b) if less than a full Borrowing of Revolving Loans is converted,
such conversion shall be made pro rata among the Lenders in accordance with the
respective principal amounts of the Revolving Loans comprising such Borrowing
held by such Lenders immediately prior to such refinancing;
(c) the aggregate principal amount of Revolving Loans being converted
into or continued as Eurodollar Loans shall be in an integral of $500,000 and at
least $5,000,000;
(d) each Lender shall effect each conversion by applying the proceeds
of its new Eurodollar Loan or Base Rate Loan, as the case may be, to its
Revolving Loan being so converted;
(e) the Interest Period with respect to a Borrowing of Eurodollar
Loans effected by a conversion or in respect to the Borrowing of Eurodollar
Loans being continued as Eurodollar Loans shall commence on the date of
conversion or the expiration of the current Interest Period applicable to such
continuing Borrowing, as the case may be;
(f) a Borrowing of Eurodollar Loans may be converted only on the last
day of an Interest Period applicable thereto;
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(g) each request for a conversion or continuation of a Borrowing of
Eurodollar Loans which fails to state an applicable Interest Period shall be
deemed to be a request for an Interest Period of one month; and
(h) no more than five Borrowings of Eurodollar Loans may be
outstanding at any time.
If the Lead Borrower does not give notice to convert any Borrowing of Eurodollar
Loans, or does not give notice to continue, or does not have the right to
continue, any Borrowing as Eurodollar Loans, in each case as provided above,
such Borrowing shall automatically be converted to a Borrowing of Base Rate
Loans at the expiration of the then-current Interest Period. The Administrative
Agent shall, after it receives notice from the Lead Borrower, promptly give each
Lender notice of any conversion, in whole or part, of any Revolving Loan made by
such Lender.
SECTION 2.18 Mandatory Prepayment; Commitment Termination; Cash
Collateral. The outstanding Obligations shall be subject to mandatory prepayment
as follows:
(a) If at any time Excess Availability is less than zero, the
Borrowers will immediately upon notice from the Administrative Agent (i) prepay
the Revolving Loans in an amount necessary to ensure that Excess Availability is
not less than zero, with payments first being applied to Swingline Loans, and
then to Revolving Loans, and (ii) if, after giving effect to the prepayment in
full of all outstanding Revolving Loans, Excess Availability is less than zero,
deposit cash into the Cash Collateral Account in an amount equal to 105% of the
Letters of Credit Outstanding. Thereafter, provided no Event of Default then
exists and the Borrower is then in compliance with the cash collateral
requirements set forth in the preceding sentence, subject to the conditions set
forth in Section 5.3, cash collateral may be released to the Borrowers upon the
Lead Borrower's request and shall be utilized by the Borrowers prior to any
further Revolving Loans being made.
(b) The Revolving Loans shall be repaid daily in accordance with the
provisions of Section 5.3 prior to an Event of Default and Section 6.2 after an
Event of Default, as applicable, of the Security Agreements.
(c) Subject to the foregoing, outstanding Base Rate Loans shall be
prepaid before outstanding Eurodollar Loans are prepaid. Each partial prepayment
of Eurodollar Loans shall be in an integral multiple of $500,000. Any prepayment
of Eurodollar Loans other than on the last day of an Interest Period applicable
thereto shall be accompanied by all "Breakage Costs" (as defined below)
associated therewith. No partial prepayment of a Borrowing of Eurodollar Loans
shall result in the aggregate principal amount of the Eurodollar Loans remaining
outstanding pursuant to such Borrowing being less than $5,000,000. Any
prepayment of the Revolving Loans shall not permanently reduce the Commitments.
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(d) All amounts required to be applied to Revolving Loans hereunder
or under Section 5.2 prior to an Event of Default or Section 6.2 after an Event
of Default of the Security Agreements, as applicable (other than Swingline
Loans) shall be applied ratably in accordance with each Lender's Commitment
Percentage.
(e) Upon the Termination Date, the credit facilities provided
hereunder shall be terminated in full and the Borrowers shall pay, in full
indefeasibly in cash in Dollars, all outstanding Loans and all other outstanding
Obligations.
SECTION 2.19 Optional Prepayment of Revolving Loans; Reimbursement of
Lenders. (a) The Borrowers shall have the right at any time and from time to
time to prepay outstanding Revolving Loans in whole or in part, (x) with respect
to Eurodollar Loans, upon at least two Business Days' prior written, telex or
facsimile notice to the Administrative Agent prior to 11:00 a.m., Boston time,
and (y) with respect to Base Rate Loans, on the same Business Day if written,
telex or facsimile notice is received by the Administrative Agent prior to 1:00
p.m., Boston time, subject to the following limitations:
(i) Subject to Section 2.18, all prepayments shall be paid to the
Administrative Agent for application, first, to the prepayment of
outstanding Swingline Loans, and second, to the prepayment of other
outstanding Revolving Loans ratably in accordance with each Lender's
Commitment Percentage.
(ii) Subject to the foregoing, outstanding Base Rate Loans shall
be prepaid before outstanding Eurodollar Loans are prepaid. Each
partial prepayment of Eurodollar Loans shall be in an integral
multiple of $500,000. No prepayment of Eurodollar Loans shall be
permitted pursuant to this Section 2.19 other than on the last day of
an Interest Period applicable thereto, unless the Borrowers
simultaneously reimburse the Lenders for all "Breakage Costs" (as
defined below) associated therewith. No partial prepayment of a
Borrowing of Eurodollar Loans shall result in the aggregate principal
amount of the Eurodollar Loans remaining outstanding pursuant to such
Borrowing being less than $5,000,000.
(iii) Each notice of prepayment shall specify the prepayment
date, the principal amount and Type of the Loans to be prepaid and, in
the case of Eurodollar Loans, the Borrowing or Borrowings pursuant to
which such Revolving Loans were made. Each notice of prepayment shall
be irrevocable and shall commit the Borrowers to prepay such Revolving
Loan by the amount and on the date stated therein. The Administrative
Agent shall, promptly after receiving notice from the Borrowers
hereunder, notify each Lender of the principal amount and Type of the
Revolving Loans held by such Lender which are to be prepaid, the
prepayment date and the manner of application of the prepayment.
(b) The Borrowers shall reimburse each Lender on written demand for
any loss incurred or to be incurred by it in the reemployment of the funds
released (i) resulting from any prepayment (for any reason whatsoever,
including, without limitation, conversion to Base Rate Loans or acceleration by
virtue of, and after, the occurrence of an Event of Default) of any Eurodollar
Loan or, if applicable, Swingline Loan required or permitted under this
Agreement, if such Revolving Loan is prepaid other than on the last day of the
Interest Period for such Revolving Loan or (ii) in the event that after the Lead
Borrower delivers a notice of borrowing under Section 2.3 in respect of
42
Eurodollar Loans or in respect of Swingline Loans having an Interest Period,
such Revolving Loans are not made on the first day of the Interest Period
specified in such notice of borrowing for any reason other than a breach by such
Lender of its obligations hereunder or the delivery of any notice pursuant to
Section 2.16. Such loss shall be the amount as reasonably determined by such
Lender as the excess, if any, of (A) the amount of interest which would have
accrued to such Lender on the amount so paid or not borrowed at a rate of
interest equal to the Adjusted LIBO Rate for such Eurodollar Loan or the
agreed-to rate for such Swingline Loan, for the period from the date of such
payment or failure to borrow to the last day (x) in the case of a payment or
refinancing with Base Rate Loans other than on the last day of the Interest
Period for such Loan, of the then current Interest Period for such Revolving
Loan or (y) in the case of such failure to borrow, of the Interest Period for
such Revolving Loan which would have commenced on the date of such failure to
borrow, over (B) the amount of interest which would have accrued to such Lender
on such amount by placing such amount on deposit for a comparable period with
leading banks in the London interbank market (collectively, "Breakage Costs").
Any Lender demanding reimbursement for such loss shall deliver to the Borrowers
from time to time one or more certificates setting forth the amount of such loss
as determined by such Lender and setting forth in reasonable detail the manner
in which such amount was determined.
(c) In the event the Borrowers fail to prepay any Revolving Loan on
the date specified in any prepayment notice delivered pursuant to Section
2.19(a), the Borrowers on written demand by any Lender shall pay to the
Administrative Agent for the account of such Lender any amounts required to
compensate such Lender for any loss incurred by such Lender as a result of such
failure to prepay, including, without limitation, any loss, cost or expenses
incurred by reason of the acquisition of deposits or other funds by such Lender
to fulfill deposit obligations incurred in anticipation of such prepayment. Any
Lender demanding such payment shall deliver to the Borrowers from time to time
one or more certificates setting forth the amount of such loss as determined by
such Lender and setting forth in reasonable detail the manner in which such
amount was determined.
(d) Whenever any partial prepayment of Revolving Loans is to be
applied to Swingline Loans or Eurodollar Loans, such Swingline Loans or
Eurodollar Loans shall be prepaid in the chronological order of their Interest
Payment Dates.
SECTION 2.20 Maintenance of Loan Account; Statements of Account. (a)
The Administrative Agent shall maintain an account on its books in the name of
the Borrowers (the "Loan Account") which will reflect (i) all Swingline Loans
and all loans and advances made by the Lenders to the Borrowers or for the
Borrowers' account, including the Loans, (ii) all L/C Disbursements, fees and
interest that have become payable as herein set forth, and (iii) any and all
other Obligations that have become payable.
(b) The Loan Account will be credited with all amounts received by
the Administrative Agent from the Borrowers or from others for the Borrowers'
account, including without limitation all amounts received pursuant to Section
5.1 of the Borrower Security Agreement and the Guarantor Security Agreement, and
the amounts so credited shall be applied as set forth in Section 5.2 prior to an
Event of Default or Section 6.2 after an Event of Default, as applicable, of the
43
Borrower Security Agreement and the Guarantor Security Agreement. After the end
of each month, the Administrative Agent shall send to the Borrowers a statement
accounting for the charges, loans, advances and other transactions occurring
among and between the Administrative Agent, the Lenders and the Borrowers during
that month. The monthly statements shall, absent manifest error, be an account
stated, which is final, conclusive and binding on the Borrowers.
SECTION 2.21 Cash Receipts. Notwithstanding anything in this
Agreement to the contrary, cash receipts will be handled in accordance with, and
subject to, the terms of Section 5.1, 5.2 and 6.2, as applicable, of the
Security Agreements.
SECTION 2.22 Application of Payments. Notwithstanding anything in
this Agreement to the contrary, all payments on the Obligations shall be applied
in the manner set forth in Section 5.2 prior to an Event of Default or Section
6.2 after an Event of Default, as applicable, of the Security Agreements.
SECTION 2.23 Increased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Lender or any holding
company of any Lender (except any such reserve requirement reflected
in the Adjusted LIBO Rate) or the Issuing Bank; or
(ii) impose on any Lender or the Issuing Bank or the London
interbank market any other condition affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit or
participation therein;
and the result of any of the foregoing shall be to increase the actual cost to
such Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the actual cost to such Lender
or the Issuing Bank of participating in, issuing or maintaining any Letter of
Credit or to reduce the amount of any sum received or receivable by such Lender
or the Issuing Bank hereunder (whether of principal, interest or otherwise),
then the Borrowers will pay to such Lender or the Issuing Bank, as the case may
be, such additional amount or amounts as will compensate such Lender or the
Issuing Bank, as the case may be, for such additional costs incurred or
reduction suffered.
(b) If any Lender or the Issuing Bank determines that any Change in
Law regarding capital requirements has or would have the effect of reducing the
rate of return on such Lender's or the Issuing Bank's capital or on the capital
of such Lender's or the Issuing Bank's holding company, if any, as a consequence
of this Agreement or the Loans made by, or participations in Letters of Credit
held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a
level below that which such Lender or the Issuing Bank or such Lender's or the
Issuing Bank's holding company could have achieved but for such Change in Law
(taking into consideration such Lender's or the Issuing Bank's policies and the
policies of such Lender's or the Issuing Bank's holding company with respect to
capital adequacy), then from time to time the Borrowers will pay to such Lender
or the Issuing Bank, as the case may be, such additional amount or amounts as
will compensate such Lender or the Issuing Bank or such Lender's or the Issuing
Bank's holding company for any such reduction suffered.
44
(c) A certificate of a Lender or the Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or the Issuing Bank or its
holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section and setting forth in reasonable detail the manner in which such
amount or amounts were determined shall be delivered to the Borrowers and shall
be conclusive absent manifest error. The Borrowers shall pay such Lender or the
Issuing Bank, as the case may be, the amount shown as due on any such
certificate within ten (10) Business Days after receipt thereof.
(d) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's or the Issuing Bank's right to demand such compensation.
SECTION 2.24 Change in Legality. (a) Notwithstanding anything to the
contrary contained elsewhere in this Agreement, if (x) any Change in Law shall
make it unlawful for a Lender to make or maintain a Eurodollar Loan or to give
effect to its obligations as contemplated hereby with respect to a Eurodollar
Loan or (y) at any time any Lender determines in its reasonable commercial
judgment that the making or continuance of any of its Eurodollar Loans has
become impracticable as a result of a contingency occurring after the date
hereof which materially adversely affects the London interbank market or the
position of such Lender in the London interbank market, then, by written notice
to the Borrowers, such Lender may (i) declare that Eurodollar Loans will not
thereafter be made by such Lender hereunder, whereupon any request by the
Borrowers for a Eurodollar Borrowing shall, as to such Lender only, be deemed a
request for a Base Rate Loan unless such declaration shall be subsequently
withdrawn; and (ii) require that all outstanding Eurodollar Loans made by it be
converted to Base Rate Loans, in which event all such Eurodollar Loans shall be
automatically converted to Base Rate Loans as of the effective date of such
notice as provided in paragraph (b) below. In the event any Lender shall
exercise its rights under clause (i) or (ii) of this paragraph (a), all payments
and prepayments of principal which would otherwise have been applied to repay
the Eurodollar Loans that would have been made by such Lender or the converted
Eurodollar Loans of such Lender shall instead be applied to repay the Base Rate
Loans made by such Lender in lieu of, or resulting from the conversion of, such
Eurodollar Loans.
(b) For purposes of this Section 2.24, a notice to the Borrowers by
any Lender pursuant to paragraph (a) above shall be effective, if lawful, and if
any Eurodollar Loans shall then be outstanding, on the last day of the
then-current Interest Period; and otherwise such notice shall be effective on
the date of receipt by the Borrowers.
SECTION 2.25 Payments; Sharing of Setoff. (a) The Borrowers shall
make each payment required to be made by it hereunder or under any other Loan
Document (whether of principal, interest, fees or reimbursement of drawings
under Letters of Credit, or of amounts payable under Sections 2.19(b), 2.23 or
2.26, or otherwise) prior to 1:00 p.m., Boston time, on the date when due, in
immediately available funds, without setoff or counterclaim. Any amounts
received after such time on any date may, in the reasonable commercial judgment
45
of the Administrative Agent, be deemed to have been received on the next
succeeding Business Day for purposes of calculating interest thereon. All such
payments shall be made to the Administrative Agent at its offices at 000 Xxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, except payments to be made directly to the
Issuing Bank (if other than the Administrative Agent) as expressly provided
herein and except that payments pursuant to Sections 2.19(b), 2.23 and 2.26
shall be made directly to the Persons entitled thereto and payments pursuant to
other Loan Documents shall be made to the Persons specified therein. The
Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment under any Loan Document shall be due on a day
that is not a Business Day, except with respect to Eurodollar Borrowings, the
date for payment shall be extended to the next succeeding Business Day, and, in
the case of any payment accruing interest, interest thereon shall be payable for
the period of such extension. All payments under each Loan Document shall be
made in dollars.
(b) If at any time insufficient funds are received by and available
to the Administrative Agent to pay fully all amounts of principal, unreimbursed
drawings under Letters of Credit, interest and fees then due with respect to all
Loans hereunder, such funds shall be applied pursuant to Section 5.2 prior to an
Event of Default or 6.2 after an Event of Default, as applicable, of the
Security Agreements.
(c) If any Lender shall, by exercising any right of setoff or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans or participations in drawings under Letters of
Credit or Swingline Loans resulting in such Lender's receiving payment of a
greater proportion of the aggregate amount of its Loans and participations in
drawings under Letters of Credit and Swingline Loans and accrued interest
thereon than the proportion received by any other Lender, then, subject to the
provisions and rights to payment under Section 5.2 prior to an Event of Default
or Section 6.2 after an Event of Default, as applicable, of the Security
Agreements, the Lender receiving such greater proportion shall purchase (for
cash at face value) participations in the Loans and participations in drawings
under Letters of Credit and Swingline Loans of other Lenders to the extent
necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans and participations in drawings under
Letters of Credit and Swingline Loans, provided that (i) if any such
participations are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and the purchase
price restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrowers pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or participations
in drawings under Letters of Credit to any assignee or participant, other than
to the Borrowers or any Affiliate thereof (as to which the provisions of this
paragraph shall apply). The Borrowers consent to the foregoing and agree, to the
extent they may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against the Borrowers rights of setoff and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of the Borrowers
in the amount of such participation.
46
(d) Unless the Administrative Agent shall have received notice from
the Borrowers prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or the Issuing Bank
hereunder that the Borrowers will not make such payment, the Administrative
Agent may assume that the Borrowers have made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute to the
Lenders or the Issuing Bank, as the case may be, the amount due. In such event,
if the Borrowers have not in fact made such payment, then each of the Lenders or
the Issuing Bank, as the case may be, severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender or Issuing Bank with interest thereon, for each day from and including
the date such amount is distributed to it to but excluding the date of payment
to the Administrative Agent, at the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to be made
by it pursuant to this Agreement, then the Administrative Agent may, in its
discretion (notwithstanding any contrary provision hereof), apply any amounts
thereafter received by the Administrative Agent for the account of such Lender
to satisfy such Lender's obligations under such Sections until all such
unsatisfied obligations are fully paid.
SECTION 2.26 Taxes. (a) Any and all payments by or on account of any
obligation of the Borrowers hereunder or under any other Loan Document shall be
made free and clear of and without deduction for any Indemnified Taxes or Other
Taxes, provided that if the Borrowers shall be required to deduct any
Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
the Administrative Agent, Lender or Issuing Bank (as the case may be) receives
an amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrowers shall make such deductions and (iii) the Borrowers
shall pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law.
(b) In addition, the Borrowers shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrowers shall indemnify the Administrative Agent, each
Lender and the Issuing Bank, within 10 Business Days after written demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by
the Administrative Agent, such Lender or the Issuing Bank, as the case may be,
on or with respect to any payment by or on account of any obligation of the
Borrowers hereunder or under any other Loan Document (including Indemnified
Taxes or Other Taxes imposed or asserted on or attributable to amounts payable
under this Section) and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or
liability delivered to the Borrowers by a Lender or the Issuing Bank, or by the
Administrative Agent on its own behalf or on behalf of a Lender or the Issuing
Bank setting forth in reasonable detail the manner in which such amount was
determined, shall be conclusive absent manifest error.
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(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrowers to a Governmental Authority, the Borrowers shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction in withholding tax shall deliver to the Borrowers and the
Administrative Agent two copies of either United States Internal Revenue Service
Form 1001 or Form 4224, or, in the case of a Foreign Lender's claiming exemption
from or reduction in U.S. Federal withholding tax under Section 871(h) or 881(c)
of the Code with respect to payments of "portfolio interest", a Form W-8, or any
subsequent versions thereof or successors thereto (and, if such Foreign Lender
delivers a Form W-8, a certificate representing that such Foreign Lender is not
a bank for purposes of Section 881(c) of the Code, is not a 10-percent
shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of the
Borrowers and is not a controlled foreign corporation related to the Borrowers
(within the meaning of Section 864(d)(4) of the Code)), properly completed and
duly executed by such Foreign Lender claiming complete exemption from or reduced
rate of, U.S. Federal withholding tax on payments by the Borrowers under this
Agreement and the other Loan Documents. Such forms shall be delivered by each
Foreign Lender on or before the date it becomes a party to this Agreement (or,
in the case of a transferee that is a participation holder, on or before the
date such participation holder becomes a transferee hereunder) and on or before
the date, if any, such Foreign Lender changes its applicable lending office by
designating a different lending office (a "New Lending Office"). In addition,
each Foreign Lender shall deliver such forms promptly upon the obsolescence or
invalidity of any form previously delivered by such Foreign Lender.
Notwithstanding any other provision of this Section 2.26(e), a Foreign Lender
shall not be required to deliver any form pursuant to this 2.26(e) that such
Foreign Lender is not legally able to deliver.
(f) The Borrowers shall not be required to indemnify any Foreign
Lender or to pay any additional amounts to any Foreign Lender in respect of U.S.
Federal withholding tax pursuant to paragraph (a) or (c) above to the extent
that the obligation to pay such additional amounts would not have arisen but for
a failure by such Foreign Lender to comply with the provisions of paragraph (e)
above. Should a Lender become subject to Taxes because of its failure to deliver
a form required hereunder, the Borrowers shall, at such Lender's expense, take
such steps as such Lender shall reasonably request to assist such Lender to
recover such Taxes.
SECTION 2.27 Security Interests in Collateral. To secure their
Obligations under this Agreement and the other Loan Documents, the Borrowers and
the Facility Guarantors shall grant to the Collateral Agent, for its benefit and
the ratable benefit of the other Secured Parties (but subject to the provisions
of Section 5.2 prior to an Event of Default and Section 6.2 after an Event of
Default of the Security Agreements, as applicable), a first-priority security
interest in all of the Collateral and a first-priority security and mortgage
interest in all of the Real Estate (subject to, however, with respect to the
Mahwah, New Jersey Real Estate, a prior security interest in favor of the first
mortgagee in an amount of no greater than $8,000,000 in principal and the
consent of the first mortgagee) and to the Security Documents.
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SECTION 2.28 Mitigation Obligations; Replacement of Lenders. (a) If
any Lender requests compensation under Section 2.23, or if the Borrowers are
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.26, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the
reasonable commercial judgment of such Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Section 2.23 or 2.26,
as the case may be, in the future and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender. The Borrowers hereby agree to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment;
provided, however, that the Borrowers shall not be liable for such costs and
expenses of a Lender requesting compensation if (i) such Lender becomes a party
to this Agreement on a date after the Exit Facility Date and (ii) the relevant
Change in Law occurs on a date prior to the date such Lender becomes a party
hereto.
(b) If any Lender requests compensation under Section 2.23, or if the
Borrowers are required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.26,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrowers may, at their sole expense and effort, upon notice to such Lender and
the Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.5), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment), provided that (i) the Borrowers
shall have received the prior written consent of the Administrative Agent, the
Issuing Bank and Swingline Lender, which consent shall not unreasonably be
withheld, (ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and participations in unreimbursed drawings
under Letters of Credit and Swingline Loans, accrued interest thereon, accrued
fees and all other amounts payable to it hereunder, from the assignee (to the
extent of such outstanding principal and accrued interest and fees) or the
Borrowers (in the case of all other amounts) and (iii) in the case of any such
assignment resulting from a claim for compensation under Section 2.23 or
payments required to be made pursuant to Section 2.26, such assignment will
result in a reduction in such compensation or payments. A Lender shall not be
required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the
Borrowers to require such assignment and delegation cease to apply.
ARTICLE III
[Intentionally Omitted].
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ARTICLE IV
Representations and Warranties
------------------------------
In order to induce the Lenders to make the Loans and to issue and/or
participate in the Letters of Credit, each Loan Party represents and warrants to
the Agents and the Lenders that:
SECTION 4.1 Organization; Powers. Each Loan Party is duly organized
and validly existing under the laws of the jurisdiction of its incorporation,
has all requisite power and authority to carry on its business as now conducted
and, except where the failure to do so, individually or in the aggregate, would
not reasonably be expected to result in a Material Adverse Effect, is qualified
to do business in every jurisdiction where such qualification is required, and
is in good standing in the jurisdiction of its incorporation and in every
jurisdiction where such qualification is required.
SECTION 4.2 Authorization; Enforceability. The transactions
contemplated hereby and by the other Loan Documents to be entered into by each
Loan Party are within such Loan Party's corporate powers and have been duly
authorized by all necessary corporate and, if required, stockholder action. This
Agreement has been duly executed and delivered by each Loan Party that is a
party hereto and constitutes, and each other Loan Document to which any Loan
Party is a party, when executed and delivered by such Loan Party, will
constitute, a legal, valid and binding obligation of such Loan Party (as the
case may be), enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.
SECTION 4.3 Governmental Approvals; No Conflicts. The transactions to
be entered into contemplated by the Loan Documents (a) do not require any
consent or approval of, registration or filing with, or any other action by, any
Governmental Authority, except for such as have been obtained or made and are in
full force and effect and except filings and recordings necessary to perfect
Liens created under the Loan Documents, (b) will not violate any applicable law
or regulation or the charter, by-laws or other organizational documents of any
Loan Party or any order of any Governmental Authority, (c) will not violate or
result in a default under any indenture, agreement or other instrument binding
upon any Loan Party or its assets, or give rise to a right thereunder to require
any payment to be made by any Loan Party where such violation or default would
be reasonably likely to result in a Material Adverse Effect, and (d) will not
result in the creation or imposition of any Lien on any asset of any Loan Party,
except Liens created under the Loan Documents.
SECTION 4.4 Financial Condition. (a) The Lead Borrower has heretofore
furnished to the Lenders the consolidated balance sheet, and statements of
income, stockholders' equity, and cash flows for the Lead Borrower and its
Subsidiaries as of and for the fiscal year ended January 1, 2005, setting forth
in each case in comparative form the figures for the previous fiscal year, all
audited (in the case of such consolidated statements) and reported on by Amper,
Politziner & Xxxxxx PC (without a qualification or exception as to the scope of
such audit). Such financial statements present fairly, in all material respects,
the financial position, results of operations and cash flows of the Lead
Borrower and its Subsidiaries as of such dates and for such periods in
accordance with GAAP. Since the date of such audited financial statements, there
50
have been no changes in the assets, liabilities, financial condition, business
or prospects of the Borrowers other than changes in the ordinary course of
business, the effect of which would not reasonably be likely to have a Material
Adverse Effect, proceedings in the Reorganization Cases and the transactions
approved by the Bankruptcy Court. Since the delivery of the financial statements
reflecting financial condition pursuant to the Bankruptcy Plan approved by the
Agents, there have been no changes in the assets, liabilities, financial
condition, business or prospects of the Borrowers other than changes in the
ordinary course of business, the effect of which would not reasonably be likely
to have a Material Adverse Effect, other than those expressly contemplated by
such Bankruptcy Plan. The Fiscal Periods of the Lead Borrower and its
Subsidiaries are as set forth in Schedule 1.2.
(b) The Lead Borrower has reviewed the projections for future results
of operations of the Lead Borrower and its Subsidiaries for the period through
December 30, 2006 on a quarterly basis, and, to the extent required by Agent,
for such period on a monthly basis, in each case provided to the Agents prior to
the Exit Facility Date (collectively, the "Projections"), and the Lead Borrower
hereby certifies to the Administrative Agent and the Lenders that the
Projections were made in good faith upon reasonable assumptions at the time of
their preparation, which assumptions are on the date of this Agreement still
reasonable on the date hereof.
SECTION 4.5 Properties. (a) Except as disclosed in Schedules
4.5(c)(i) and 4.5(c)(ii), each Loan Party has good title to, or valid leasehold
interests in, and the right to use, all assets, including without limitation all
assets reflected on its consolidated balance sheet as at December 29, 2003 or
acquired since that date (except assets sold or otherwise disposed of since that
date to the extent permitted by this Agreement or the Existing Credit Agreement
or approved by the Bankruptcy Court), subject to no Liens except as permitted
hereunder. Each Loan Party which operates in a Host Store or other third party
retail location, whether pursuant to a Material Agreement or otherwise, owns all
of the Inventory and other Collateral purportedly owned by it as reflected in
the financial statements delivered to the Lenders from time to time hereunder
(including without limitation all such Collateral included in the Borrowing
Base), and all proceeds thereof, notwithstanding the fact that such Inventory,
other Collateral and proceeds thereof may be located in a Host Store or other
third party retail location.
(b) Each Loan Party owns, or is licensed to use, all trademarks,
trade names, copyrights, patents and other intellectual property material to its
business, and the use thereof by the Loan Parties does not infringe upon the
rights of any other Person, except for any such infringements that, individually
or in the aggregate, would not reasonably be expected to result in a Material
Adverse Effect. As of the Exit Facility Date, all trademarks or service marks
owned by any Loan Party are owned by either Apache Minnesota Xxxx XxXx, Inc.,
Footstar Corporation, Athletic Attic of Texas, Inc. or Nevada Feet, Inc. and all
patents owned by any of the Loan Parties are owned by Footstar Corporation. As
of the Exit Facility Date, the only Loan Parties which need to be a signatory to
the Trademark Security Agreement are Apache Minnesota Xxxx XxXx, Inc., Footstar
Corporation, Athletic Attic of Texas, Inc. and Nevada Feet, Inc., and the
Borrowers shall not permit any other Loan Parties to register or own any
trademarks or service marks unless such Loan Parties become parties to the
Trademark Security Agreement pursuant to an instrument reasonably acceptable to
the Agents. As of the Exit Facility Date, the only Loan Party which needs to be
a signatory to the Patent Security Agreement is Footstar Corporation, and the
Borrowers shall not permit any other Loan Parties to register or own any patents
unless such Loan Parties become parties to the Patent Security Agreement
pursuant to an instrument reasonably acceptable to the Agents.
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(c) Schedule 4.5(c)(i) sets forth the address (including county) of
all Real Estate that is owned by the Loan Parties as of the Exit Facility Date,
together with a list of the holders of any mortgage or other Lien thereon.
Schedule 4.5(c)(ii) sets forth the address (including county) of all Real Estate
that is leased by the Loan Parties as of the Exit Facility Date, together with a
list of the names and addresses of the Landlords for such leased properties if
used as distribution centers.
(d) No Inventory is directly purchased from any Person by any of the
Subsidiaries. No Subsidiaries incur any Indebtedness or trade liabilities or
vendor payables with respect to their respective Inventory or otherwise, except
trade liabilities owed to Footstar Corporation for such Inventory. No
post-Petition trade payables owed by any Loan Party with respect to third party
warehousemen are past due.
(e) The only business of Footstar HQ, LLC is and shall remain the
business of owning the Real Estate located in Mahwah, New Jersey. Footstar HQ,
LLC does not and will not engage in any other business activities and does not
and will not hold any other assets. Each Rite Aid East Coast Subsidiary is and
shall remain an Unrestricted Subsidiary.
SECTION 4.6 Litigation and Environmental Matters. (a) There are no
actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of any Borrower, threatened
against or affecting any Loan Party (i) as to which there is a reasonable
probability of an adverse determination and that, if adversely determined, would
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect (other than those set forth on Schedule 4.6 or disclosed
in the Bankruptcy Plan) or (ii) that involve any of the Loan Documents.
(b) Except for the matters set forth on Schedule 4.6 and except with
respect to any other matters that, individually or in the aggregate, would not
reasonably be expected to result in a Material Adverse Effect, no Loan Party (i)
has failed to comply with any Environmental Law or to obtain, maintain or comply
with any permit, license or other approval required under any Environmental Law,
(ii) has become subject to any Environmental Liability, (iii) has received
notice of any claim with respect to any Environmental Liability or (iv) knows of
any basis for any Environmental Liability.
(c) Since the date of this Agreement, there has been no change in the
status of the matters set forth on Schedule 4.6 that, individually or in the
aggregate, has resulted in, or would reasonably be expected to result in, a
Material Adverse Effect.
SECTION 4.7 No Default; Compliance with Laws and Agreements. No
Default has occurred and is continuing. Each Loan Party is in compliance with
all laws, regulations and orders of any Governmental Authority applicable to it
or its property and all indentures, material agreements and other instruments
binding upon it or its property, except where the failure to do so, individually
52
or in the aggregate, would not reasonably be expected to result in a Material
Adverse Effect. Each of the Material Agreements and each other material
agreement contemplated thereby and entered into in connection therewith is in
full force and effect, has not been amended or modified (except to the extent
permitted hereunder) and no default exists thereunder on the part of the Lead
Borrower or any of its Subsidiaries or, to the knowledge of the Lead Borrower or
any of its Subsidiaries, on the part of any third parties party to such
agreements or any of their affiliates. The Lead Borrower has been assigned all
of the right, title and interest of Melville Corporation under the Kmart
Agreement and the Lead Borrower has not assigned any of such right, title and
interest thereunder to any Person.
SECTION 4.8 Investment and Holding Company Status. No Loan Party is
(a) an "investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940 or (b) a "holding company" as defined in, or
subject to regulation under, the Public Utility Holding Company Act of 1935.
SECTION 4.9 Taxes. Each Loan Party has timely filed or caused to be
filed all tax returns and reports required to have been filed and has paid or
caused to be paid all taxes required to have been paid by it, except (a) taxes
that are being contested in good faith by appropriate proceedings, for which
such Loan Party has set aside on its books adequate reserves, and as to which no
Lien has arisen, (b) as otherwise limited or prohibited by the Bankruptcy Code
as a result of the commencement of the Debtors' Chapter 11 cases, or (c) to the
extent that the failure to do so would not reasonably be expected to result in a
Material Adverse Effect.
SECTION 4.10 ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, would reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed by more
than $500,000 the fair market value of the assets of such Plan, and the present
value of all accumulated benefit obligations of all underfunded Plans (based on
the assumptions used for purposes of Statement of Financial Accounting Standards
No. 87) did not, as of the date of the most recent financial statements
reflecting such amounts, exceed by more than $1,000,000 the fair market value of
the assets of all such underfunded Plans.
SECTION 4.11 Disclosure. The Borrowers have disclosed to the Lenders
all agreements, instruments and corporate or other restrictions to which any
Loan Party is subject, and all other matters known to any of them, that,
individually or in the aggregate, would reasonably be expected to result in a
Material Adverse Effect. None of any of the reports, financial statements,
certificates or other information furnished by or on behalf of any Loan Party to
the Administrative Agent or any Lender in connection with the negotiation of
this Agreement or any other Loan Document or delivered hereunder or thereunder
(as modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; it being understood that that all audited and
unaudited financial statements provided prior to the date hereof are subject to
change; provided that no Loan Party makes any such representation or warranty
with respect to information related to the Accounting Restatement Matter and the
financial statements being restated in connection therewith.
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SECTION 4.12 Subsidiaries. Schedule 4.12 sets forth the name of,
state of incorporation of, and the ownership interest of each Loan Party in,
each of the Subsidiaries of the Loan Parties as of the Exit Facility Date. Each
Unrestricted Subsidiary that is identified on Schedule 4.12 as a "Closed Store",
is and shall remain dormant, is and shall remain no longer engaged in any active
business and holds and will hold no assets. The Loan Parties are not party to
any joint venture, general or limited partnership, or limited liability company,
or any other business ventures or entities, except as listed on Schedule 4.12 or
as hereafter agreed to in writing by the Agents in their commercially reasonable
discretion. All of the Subsidiaries listed on Schedule 4.12 (as required to be
updated hereunder from time to time pursuant to Section 6.1) are Facility
Guarantors, except for the Foreign Subsidiaries (as identified thereon) and the
Unrestricted Subsidiaries (identified as "Closed" thereon).
SECTION 4.13 Insurance. Schedule 4.13 sets forth a description of all
insurance maintained by or on behalf of the Borrowers and their Subsidiaries as
of the Exit Facility Date. As of the Exit Facility Date, all premiums in respect
of such insurance that are due and payable have been paid.
SECTION 4.14 Labor Matters. As of the Exit Facility Date, there are
no strikes, lockouts or slowdowns against any Loan Party pending or, to the
knowledge of the Borrowers, threatened. The hours worked by and payments made to
employees of the Loan Parties have not been in violation of the Fair Labor
Standards Act or any other applicable federal, state, local or foreign law
dealing with such matters to the extent that any such violation would reasonably
be expected to have a Material Adverse Effect. All payments due from any Loan
Party, or for which any claim may be made against any Loan Party, on account of
wages and employee health and welfare insurance and other benefits, have been
paid or accrued as a liability on the books of such member. The consummation of
the transactions contemplated by the Loan Documents will not give rise to any
right of termination or right of renegotiation on the part of any union under
any collective bargaining agreement to which any Loan Party is bound.
SECTION 4.15 Security Documents. From and after the Exit Facility
Date, the Security Documents create in favor of the Collateral Agent, for the
ratable benefit of the Secured Parties, a legal, valid and enforceable security
or mortgage interest in the Collateral, and the Security Documents (and the UCC
filings contemplated thereunder) constitute the creation of a fully perfected
first priority Lien on, and security or mortgage interest, in, as applicable,
all right, title and interest of the Loan Parties thereunder in such Collateral,
in each case prior and superior in right to any other Person except for the
Permitted Encumbrances. Each of the Loan Parties hereby acknowledges and agrees
that all references to the "Credit Agreement" contained in each of the Security
Documents shall hereby be deemed to be references to this Agreement and each of
the Obligations under this Agreement shall be secured by the liens granted in
favor of the Collateral Agent for the benefit of the Secured Parties pursuant to
the Security Documents.
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SECTION 4.16 Federal Reserve Regulations. (a) No Loan Party is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of buying or carrying Margin Stock.
(b) No part of the proceeds of any Loan or any Letter of Credit will
be used, whether directly or indirectly, and whether immediately, incidentally
or ultimately, (i) to buy or carry Margin Stock or to extend credit to others
for the purpose of buying or carrying Margin Stock or to refund indebtedness
originally incurred for such purpose or (ii) for any purpose that entails a
violation of, or that is inconsistent with, the provisions of the Regulations of
the Board, including Regulation U or X.
(c) Less than 5% of the assets of the Borrowers on a consolidated
basis consists of Margin Stock.
SECTION 4.17 Pre-petition and Administrative Claims and Liens. On or
after the Exit Facility Date, there are no pre-petition or administrative claims
or Liens with respect to the Borrowers or any of their assets other than those
expressly contemplated by the Bankruptcy Plan to survive the consummation
thereof.
SECTION 4.18 Consummation of the Bankruptcy Plan. On or after the
Exit Facility Date, the Bankruptcy Plan has become effective and has been
consummated in accordance with the terms thereof; a Final Order of the
Bankruptcy Court confirming such Bankruptcy Plan has been entered, has not been
reversed, modified, amended or stayed (except for modifications consented to or
approved by the Agents in writing), and remains in full force and effect; except
as otherwise agreed in writing by the Agents, all appeal periods relating
thereto have expired; and, except as otherwise agreed in writing by the Agents,
no appeals therefrom are outstanding.
ARTICLE V
Conditions
----------
SECTION 5.1 Conditions Precedent to Exit Facility Date. Following the
Consummation Date, the obligation of the Lenders to make each Loan and of the
Issuing Bank to issue each Letter of Credit is subject to the fulfillment (or
adequate provision for fulfillment or waiver reasonably satisfactory to the
Agents) of the following conditions precedent:
(a) The Agents (or their counsel) shall have received from each party
hereto other than the Lenders a counterpart of this Agreement signed on behalf
of such party (which may include telecopy transmission of a signed signature
page of this Agreement).
(b) The Agents (or their counsel) shall have received from each Loan
Party a counterpart of each Security Agreement to which such Loan Party is party
signed on behalf of such Loan Party (which may include telecopy transmission of
a signed signature page of any such Security Document).
(c) No Default or Event of Default shall have occurred and be
continuing.
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(d) The Borrowers' Bankruptcy Plan, as confirmed, shall have been in
form and substance satisfactory to the Agents. The Bankruptcy Court shall have
approved any amendments or modifications to the Bankruptcy Plan and entered any
and all related orders requested or approved by the Agents in connection
therewith, and no other amendments or modifications thereto shall have occurred
except as shall have been consented to by the Agents or the Required Lenders, as
appropriate. All conditions precedent to the consummation of the Bankruptcy Plan
shall have been met (or the waiver thereof shall have been consented to by the
Agents) and the substantial consummation of the Bankruptcy Plan shall have
occurred or shall be scheduled to occur but for the initial Loans under the Exit
Facility to be made on the Exit Facility Date. The Final Order of the Bankruptcy
Court confirming the Bankruptcy Plan shall not have been reversed, modified,
amended, or stayed, shall be in full force and effect, and, unless otherwise
agreed by the Agents, all appeal periods relating to the Final Order shall have
expired, and, unless otherwise agreed by the Agents, no appeals from the Final
Order shall be outstanding. Except as consented to by the Agents, the Bankruptcy
Court's retention of jurisdiction under the Final Order shall not govern the
enforcement of the Loan Documents or Security Documents from and after the Exit
Facility Date, or any rights or remedies relating thereto. With respect to
provisions of this Agreement which permit matters provided for in the Bankruptcy
Plan, such permission is granted only to the extent such matters are clearly
disclosed and expressly provided for in the Bankruptcy Plan.
(e) The Agents shall have received updated projections for future
results of operations of the Lead Borrower and its Subsidiaries for a period of
twelve months commencing on the Exit Facility Date, which projections shall be
in form and substance satisfactory to the Agents and shall demonstrate average
Excess Availability during such period in an amount not less than twenty-five
percent (25%) of the average Borrowing Base for such period after taking into
account minimum Excess Availability requirements.
(f) After giving effect to the Loans to be made and Letters of Credit
to be issued hereunder on the Exit Facility Date and the application of the
proceeds thereof, Excess Availability shall be at least $40,000,000.
(g) On or before the Exit Facility Date, the Agents shall have
received a favorable written opinion (addressed to each Agent and the Lenders
and dated the Exit Facility Date) of (i) Weil, Gotshal & Xxxxxx LLP, bankruptcy
counsel for the Loan Parties; and (ii) Xxxx Xxxxxxxx, inhouse assistant general
counsel for Footstar Corporation; in each case substantially in the same form
and substance of the legal opinions delivered to the Agents in connection with
the Existing Credit Agreement but also covering such matters relating to the
Loan Parties, this Agreement or the transactions contemplated hereby (including
with respect to the enforceability and perfection (such perfection opinions to
be limited to the laws of New York, Delaware, Texas, Florida and Massachusetts)
of the Collateral Agent's security interests) as the Agents shall reasonably
request.
(h) The Agents shall have received good standing certificates from
each of the Borrowers and certificates of the secretary or assistant secretary
of each of the Borrowers, certifying as to the legal existence of the Loan
Parties and as to resolutions authorizing the Total Commitment and the
transactions contemplated by this Agreement and other legal matters relating to
each of the Borrowers, and stating that the charters and bylaws of each of the
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Borrowers certified in connection with the closing of the Original Credit
Agreement, the First Amended and Restated Credit Agreement and the Existing
Credit Agreement remain unmodified and in full force and effect; provided that
prior to the Final Borrowing Order the Agents shall have received such
additional documents and certificates as the Agents or their counsel may
reasonably request relating to the organization, existence and good standing of
each Loan Party, the authorization of the transactions contemplated by the Loan
Documents and any other legal matters relating to the Loan Parties, the Loan
Documents or the transactions contemplated thereby, all in form and substance
reasonably satisfactory to the Agents and their counsel.
(i) The Agents shall have received the Borrowers' audited
consolidated balance sheet and related statements of operations, stockholders'
equity and cash flows as required pursuant to Section 6.1(a).
(j) The Agents shall have received such other items, documents,
agreements or actions as the Agents may reasonably request in order to
effectuate the transactions contemplated hereby.
SECTION 5.2 Conditions Precedent to Each Revolving Loan and Each
Letter of Credit. In addition to those conditions described in Section 5.1 the
obligation of the Lenders to make each Revolving Loan and of the Issuing Bank to
issue each Letter of Credit, is subject to the following conditions precedent:
(a) Notice. The Administrative Agent shall have received a notice
with respect to such Borrowing or issuance, as the case may be, as required by
Article II.
(b) Representations and Warranties. All representations and
warranties contained in this Agreement and the other Loan Documents or otherwise
made in writing in connection herewith or therewith shall be true and correct in
all material respects on and as of the date of each Borrowing or the issuance of
each Letter of Credit hereunder with the same effect as if made on and as of
such date, other than representations and warranties that relate solely to an
earlier date.
(c) No Default. On the date of each Borrowing hereunder and the
issuance of each Letter of Credit, the Loan Parties shall be in compliance with
all of the terms and provisions set forth herein and in the other Loan Documents
to be observed or performed and no Default or Event of Default shall have
occurred and be continuing.
(d) Borrowing Base Certificate. The Administrative Agent shall have
received the timely delivery of the most recently required Borrowing Base
Certificate, with such Borrowing Base Certificate including schedules as
reasonably required by the Administrative Agent.
The request by the Borrowers for, and the acceptance by the Borrowers of, each
extension of credit hereunder shall be deemed to be a representation and
warranty by the Borrowers that the conditions specified in this Section 5.2 have
been satisfied at that time and that after giving effect to such extension of
credit no Overadvance shall exist. The conditions set forth in this Section 5.2
are for the sole benefit of the Administrative Agent and each Lender and may be
waived by the Administrative Agent in whole or in part (unless instructed in
writing otherwise by the Required Lenders) without prejudice to the
Administrative Agent or any Lender.
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ARTICLE VI
Affirmative Covenants
---------------------
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been indefeasibly paid in full and all Letters of Credit shall have expired or
terminated and all L/C Disbursements shall have been reimbursed, each Loan Party
covenants and agrees with the Agents and the Lenders that:
SECTION 6.1 Financial Statements and Other Information. The Borrowers
will furnish to the Agents:
(a) within 90 days after the end of each fiscal year, its
consolidated balance sheet and related statements of operations, stockholders'
equity and cash flows as of the end of and for such year, setting forth in each
case in comparative form the figures for the previous fiscal year, all audited
(in the case of such consolidated statements) and reported on by Amper,
Politziner & Xxxxxx PC or other independent public accountants of recognized
national standing (without a qualification or exception as to the scope of such
audit, unless, Amper, Politziner & Xxxxxx PC is not the issuer thereof) to the
effect that such consolidated financial statements present fairly in all
material respects the financial condition and results of operations of the Lead
Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied; and within 90 days after the end of each fiscal year of
the Lead Borrower, an updated Perfection Certificate if required pursuant to
Section 4.2 of the Security Agreements;
(b) within 45 days after the end of each fiscal quarter of the Lead
Borrower, its consolidated balance sheet and related statements of operations,
stockholders' equity and cash flows as of the end of and for such fiscal quarter
and the elapsed portion of the fiscal year, all certified by one of its
Financial Officers as presenting fairly in all material respects the financial
condition and results of operations of the Lead Borrower and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied, subject to normal year end audit adjustments and the absence of
footnotes;
(c) within 45 days after the end of each fiscal month, the internally
prepared unaudited consolidated and consolidating by division balance sheets and
related statement of operations of the Borrowers and the internally prepared
unaudited consolidated statement of cash flows of the Borrowers, each as of the
end of and for such fiscal month and the elapsed portion of the fiscal year,
together with a comparison to the results for the same period in the immediately
preceding fiscal year, all certified by one of the Lead Borrower's Financial
Officers as presenting fairly in all material respects the financial condition
and results of operations of the Borrowers on a consolidated basis and of each
such division (if applicable) in accordance with GAAP consistently applied,
subject to normal year end audit adjustments, the absence of footnotes;
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(d) concurrently with any delivery of financial statements under
clause (a) or (b) above, a certificate of a Financial Officer of the Lead
Borrower in the form of Exhibit F (each, a "Compliance Certificate"): (w)
certifying as to whether a Default has occurred and, if a Default has occurred,
specifying the details thereof and any action taken or proposed to be taken with
respect thereto; (x) setting forth reasonably detailed calculations with respect
to the definition of "Applicable Margin" and demonstrating compliance with
Section 7.11 (whether or not the provisions of Section 7.11 are then
applicable), and (y) stating whether any change in GAAP or in the application
thereof has occurred since the date of the Borrowers financial statements
referred to in Section 4.4 and, if any such change has occurred, specifying the
effect of such change on the financial statements accompanying such certificate;
(e) on or before the second Tuesday after the Saturday end of (i)
each fiscal week or (ii) to the extent that Excess Availability is greater than
or equal to $40,000,000 at any time and only for so long as Excess Availability
is greater than or equal to $40,000,000, each fiscal month, a certificate in the
form of Exhibit G (the "Borrowing Base Certificate"); provided that, if an Event
of Default exists, such Borrowing Base Certificate shall be furnished more
frequently as required by the Agents. Each such Borrowing Base Certificate shall
show the Borrowing Base as of the close of business on the Saturday of the week
ending 10 days prior to the Tuesday date such Borrowing Base Certificate is
required to be delivered as provided above, with each such report and each
Borrowing Base Certificate to be certified as complete and correct on behalf of
the Borrowers by a Financial Officer of the Lead Borrower;
(f) concurrently with the delivery of any financial statements under
clause (a) above, a statement of the firm of independent public accountants
which reported on such statements as to whether anything has come to their
attention to cause them to believe that any Default existed on the date of such
statements; provided that the foregoing shall not be construed to require that
such accountants conduct any investigation outside the regular course of their
audit;
(g) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by any
Loan Party with the Securities and Exchange Commission, or any Governmental
Authority succeeding to any or all of the functions of said Commission, or with
any national securities exchange, as the case may be;
(h) promptly upon receipt thereof, copies of all reports submitted to
any Loan Party by independent certified public accountants in connection with
each annual, interim or special audit of the books of the Loan Parties or any of
their Subsidiaries made by such accountants, including any management letter
commenting on the Loan Parties' internal controls submitted by such accountants
to management in connection with their annual audit;
(i) the financial and collateral reports described on Schedule 6.1(j)
hereto within 5 Business Days after the times set forth in such Schedule;
(j) other than pursuant to the Kmart Agreement, notice of any
intended sale (other than inventory in the ordinary course of business) or other
disposition of assets (including, without limitation, sales or dispositions of
Real Estate, 20 or more store closings at any time) of any Loan Party permitted
hereunder, in any such case, to the extent that the assets being sold or
otherwise disposed of have a value equal to or greater than $5,000,000 in the
aggregate, or incurrence of any Indebtedness permitted hereunder at least five
Business Days prior to the date of consummation of such sale or disposition,
store closing or incurrence of such Indebtedness; and
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(k) promptly but in any event within 10 Business Days or such later
time as agreed to by the Agents, following any request therefor, such other
information, financial forecasts and projections, regarding the operations,
business affairs and financial condition of any Loan Party, or compliance with
the terms of any Loan Document, as the Agents or any Lender may reasonably
request.
SECTION 6.2 Notices of Material Events. The Borrowers will furnish to
the Agents prompt written notice of the following:
(a) the occurrence of any Default or Event of Default;
(b) the filing or commencement of any action, suit or proceeding by
or before any arbitrator or Governmental Authority against or affecting any Loan
Party or any Affiliate thereof that, if adversely determined, would reasonably
be expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together with
any other ERISA Events that have occurred, would reasonably be expected to
result in a Material Adverse Effect;
(d) any other development that results in, or would reasonably be
expected to result in, a Material Adverse Effect;
(e) any change in any Borrower's executive officers;
(f) any failure by any Loan Party to pay rent at any of such Loan
Party's locations, which failure continues for more than 15 days following the
day on which such rent first came due;
(g) the discharge by any Borrower of their present independent
accountants or any withdrawal or resignation by such independent accountants;
and
(h) any change in the business, expected prospects, operations, or
financial affairs of any Loan Party that would reasonably be expected to result
in a Material Adverse Effect; and
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Lead Borrower setting
forth the details of the event or development requiring such notice and, if
applicable, any action taken or proposed to be taken with respect thereto.
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SECTION 6.3 Information Regarding Collateral. (a) To the extent of
any change since the closing of the Existing Credit Agreement, the Lead Borrower
will furnish to the Agents prompt written notice of any change (i) in any Loan
Party's corporate name or in any trade name used to identify it in the conduct
of its business or in the ownership of its properties, (ii) in the location of
any Loan Party's chief executive office, its principal place of business, any
office in which it maintains books or records relating to Collateral owned by it
or any office or facility at which Collateral owned by it is located (including
the establishment of any such new office or facility), (iii) in any Loan Party's
identity or corporate structure or jurisdiction of incorporation or formation or
corporate identification number, (iv) in any Loan Party's Federal Taxpayer
Identification Number. The Lead Borrower also agrees promptly to notify the
Agents if any material portion of the Collateral is damaged or destroyed.
(b) Each year, at the time of delivery of annual financial statements
with respect to the preceding fiscal year pursuant to clause (a) of Section 6.1,
the Lead Borrower shall deliver to the Agents a certificate of a Financial
Officer of the Lead Borrower setting forth the information required pursuant to
Section 2 of the Perfection Certificate or confirming that there has been no
change in such information since the date of the Perfection Certificate
delivered on the Exit Facility Date or the date of the most recent certificate
delivered pursuant to this Section.
SECTION 6.4 Existence; Conduct of Business. Each Loan Party will, and
will cause each of the Subsidiaries to, do or cause to be done all things
necessary to comply with its respective charter, certificate of incorporation,
articles of organization, and/or other organizational documents, as applicable;
and by-laws and/or other instruments which deal with corporate governance, and
to preserve, renew and keep in full force and effect its legal existence and the
rights, licenses, permits, privileges, franchises, patents, copyrights,
trademarks and trade names material to the conduct of its business, provided
that the foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 7.3.
SECTION 6.5 Payment of Obligations. Each Loan Party will, and will
cause each of the Subsidiaries to, pay its post-Petition Date Indebtedness and
other obligations, including tax liabilities, before the same shall become
delinquent or in default, except where (a) the validity or amount thereof is
being contested in good faith by appropriate proceedings, (b) such Loan Party or
such Subsidiary has set aside on its books adequate reserves with respect
thereto in accordance with GAAP, (c) such contest effectively suspends
collection of the contested obligation and enforcement of any Lien securing such
obligation and (d) the failure to make payment pending such contest would not
reasonably be expected to result in a Material Adverse Effect. Nothing contained
herein shall be deemed to limit the rights of the Agents with respect to
determining Reserves pursuant to this Agreement. Without limitation of the
foregoing, each Loan Party will, and will cause each of its Subsidiaries to, pay
all post-Petition obligations when due and owing to any third party warehousemen
storing any of the Inventory of any Loan Party.
SECTION 6.6 Maintenance of Properties. Each Loan Party will, and will
cause each of the Subsidiaries to, keep and maintain all property material to
the conduct of its business in good working order and condition, ordinary wear
and tear excepted and with the exception of store closings and asset
dispositions permitted hereunder.
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SECTION 6.7 Insurance. (a) Each Loan Party shall (i) maintain
insurance with financially sound and reputable insurers licensed in the United
States and rated by A.M. Best Company, Inc. with a rating of at least A- or
reasonably acceptable to the Administrative Agent (or, to the extent consistent
with prudent business practice, a program of self-insurance approved by the
Administrative Agent) on such of its property and in at least such amounts and
against at least such risks as is customary with companies in the same or
similar businesses operating in the same or similar locations, including public
liability insurance against claims for personal injury or death occurring upon,
in or about or in connection with the use of any properties owned, occupied or
controlled by it (including the insurance required pursuant to the Security
Documents); (ii) maintain such other insurance as may be required by law; and
(iii) furnish to the Administrative Agent, upon written request, full
information as to the insurance carried.
(b) Fire and extended coverage policies maintained with respect to
any Collateral shall be endorsed or otherwise amended to include (i) a
non-contributing mortgage clause (regarding improvements to real property) and
lenders' loss payable clause and endorsement (regarding personal property), in
form and substance reasonably satisfactory to the Collateral Agent, which
endorsements or amendments shall provide that the insurer shall pay all proceeds
otherwise payable to the Loan Parties under the policies directly to the
Collateral Agent, (ii) a provision to the effect that none of the Loan Parties,
the Administrative Agent, the Collateral Agent, or any other party shall be a
coinsurer and (iii) such other provisions as the Collateral Agent may reasonably
require from time to time to protect the interests of the Lenders. Commercial
general liability policies shall be endorsed to name the Collateral Agent as an
additional insured with respect to liability any Agent incurs arising out of the
business operations of the Loan Parties. Each such policy referred to in this
paragraph also shall provide that it shall not be canceled, modified or not
renewed (i) by reason of nonpayment of premium except upon not less than 30
days' prior written notice thereof by the insurer to the Collateral Agent
(giving the Collateral Agent the right to cure defaults in the payment of
premiums) or (ii) for any other reason except upon not less than 60 days' prior
written notice thereof by the insurer to the Collateral Agent. The Borrowers
shall deliver to the Collateral Agent, prior to the cancellation, modification
or nonrenewal of any such policy of insurance, a copy of a renewal or
replacement policy (or other evidence of renewal of a policy previously
delivered to the Collateral Agent) together with evidence satisfactory to the
Collateral Agent of payment of the premium therefor.
SECTION 6.8 Casualty and Condemnation. Each Borrower will furnish to
the Agents and the Lenders prompt written notice of any casualty or other
insured damage to any material portion of any Collateral or the commencement of
any action or proceeding for the taking of any material portion of the
Collateral or any part thereof or interest therein under power of eminent domain
or by condemnation or similar proceeding.
SECTION 6.9 Books and Records; Inspection and Audit Rights;
Appraisals.
(a) Each Loan Party will, and will cause each of the Subsidiaries to,
keep proper books of record and account in which full, true and correct entries
are made of all dealings and transactions in relation to its business and
activities. Each Loan Party will, and will cause each of the Subsidiaries to,
permit the Agents or any representatives designated by any Agent, upon
reasonable prior notice (unless an Event of Default exists in which case no
notice shall be required), to visit during business hours and inspect its
properties, to examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with its officers and independent
accountants, all at such reasonable times and as often as reasonably requested.
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(b) Each Loan Party will, and will cause each of the Subsidiaries to,
from time to time upon the request of the Agents or the Required Lenders through
the Agents, permit any Agent or professionals (including investment bankers,
consultants, accountants, lawyers and appraisers) retained by the Agents to
conduct appraisals, commercial finance examinations and other evaluations,
including, without limitation, of (i) the Borrowers' practices in the
computation of the Borrowing Base and (ii) the assets included in the Borrowing
Base and related financial information such as, but not limited to, sales, gross
margins, payables, accruals and reserves, and pay the reasonable fees and
expenses of the Agents or such professionals with respect to such evaluations
and appraisals. Without limiting the foregoing, the Agents will not undertake in
the aggregate more than four such commercial finance examinations, four
inventory appraisals, one real estate appraisal and one intellectual property
appraisal each fiscal year (unless an Event of Default exists in which case the
number of each of the foregoing shall not be limited).
SECTION 6.10 Compliance with Laws. Each Loan Party will, and will
cause each of the Subsidiaries to, comply with all laws, rules, regulations and
orders of any Governmental Authority applicable to it or its property,
including, without limitation, the Bankruptcy Code and the local rules and
orders of the Bankruptcy Court, except where the failure to do so, individually
or in the aggregate, would not reasonably be expected to result in a Material
Adverse Effect.
SECTION 6.11 Use of Proceeds and Letters of Credit. The proceeds of
Loans made hereunder and Letters of Credit issued hereunder will be used only
(a) to refinance the Indebtedness of the Borrowers incurred in connection with
the Existing Credit Agreement and the Liens securing the same, and (b) for
working capital and general corporate purposes provided that the Borrowers shall
not use the proceeds of any Loan for any purpose that is prohibited under the
Bankruptcy Code or this Agreement, and provided further that nothing contained
herein shall prejudice or prevent the Agents and the Lenders in any way from
objecting, for any reason, to any requests or applications made by the Debtors
to the Bankruptcy Court. No part of the proceeds of any Loan will be used,
whether directly or indirectly, for any purpose that entails a violation of any
of the Regulations of the Board, including Regulations U and X.
SECTION 6.12 Additional Subsidiaries; After Acquired Real Estate. If
any additional Subsidiary is formed or acquired after the Exit Facility Date,
the Lead Borrower will notify the Agents and the Lenders thereof and (a) if such
Subsidiary is not a Foreign Subsidiary, the Borrowers will cause such Subsidiary
to be wholly owned by a Loan Party and become a Loan Party hereunder and a party
to each applicable Security Document in the manner provided therein within 10
Business Days after such Subsidiary is formed or acquired and promptly take such
actions to create and perfect Liens on such Subsidiary's assets to secure the
Obligations as the Agents shall reasonably request and (b) the Borrower will
cause all shares of capital stock and other equity interests of such Subsidiary
and Indebtedness of such Subsidiary owed to any Loan Party to be pledged (and
corresponding stock or other transfer powers to be delivered) within 10 Business
Days after such Subsidiary is formed or acquired (except that, if such
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Subsidiary is a Foreign Subsidiary, shares of stock of such Subsidiary to be
pledged may be limited to 65% of the outstanding shares of voting stock of such
Subsidiary). With respect to any owned fee interest in any real property having
a value (together with improvements thereof) of at least $500,000 acquired after
the Exit Facility Date by any Loan Party, such Loan Party shall promptly (i)
execute and deliver a first priority mortgage or deed of trust, as applicable,
in favor of the Collateral Agent, for the benefit of the other Secured Parties,
covering such real property, (ii) provide the Collateral Agent with (x) title
and extended coverage insurance covering such real property in an amount at
least equal to the appraised value of such real property as well as a current
ALTA survey thereof, together with a surveyor's certificate and (y) any consents
or estoppels reasonably deemed necessary or advisable by the Collateral Agent in
connection with such mortgage or deed of trust, each of the foregoing in form
and substance reasonably satisfactory to the Collateral Agent and (iii) if
requested by the Collateral Agent, deliver to the Collateral Agent legal
opinions relating to the matters described above, which opinions shall be in
form and substance, and from counsel, reasonably satisfactory to the Collateral
Agent.
SECTION 6.13 Further Assurances. (a) The Borrowers will cause each
Loan Party to execute any and all further documents, financing statements,
agreements and instruments, and take all such further actions (including the
filing and recording of financing statements and other documents), that may be
required under any applicable law, or which any Agent or the Required Lenders
may reasonably request, to effectuate the transactions contemplated by the Loan
Documents or to grant, preserve, protect or perfect the Liens created or
intended to be created by the Security Documents or the validity or priority of
any such Lien, all at the expense of the Loan Parties. The Borrowers will cause
the Loan Parties to provide to the Agents, from time to time upon request,
evidence reasonably satisfactory to the Agents as to the perfection and priority
of the Liens created or intended to be created by the Security Documents.
(b) If any material assets are acquired by any Loan Party after the
Exit Facility Date (other than assets constituting Collateral under the Security
Agreements that become subject to the Lien of the Security Agreements upon
acquisition thereof), the Lead Borrower will notify the Agents and the Lenders
thereof, and the Borrowers will cause the Loan Parties to cause such assets to
be subjected to a Lien securing the Obligations and will take such actions as
shall be necessary or reasonably requested by any Agent or the Required Lenders
to grant and perfect such Liens, including actions described in paragraph (a) of
this Section, all at the expense of the Loan Parties.
(c) The Borrowers shall cause each of its customs brokers to deliver
an agreement to the Administrative Agent, substantially in the form previously
approved by the Administrative Agent, covering such matters as the
Administrative Agent may reasonably require. If any Loan Party enters into an
agreement with any Host Store after the Exit Facility Date, the Loan Parties
shall deliver to the Administrative Agent a Host Store Notification (as
contemplated by the Security Agreements).
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ARTICLE VII
Negative Covenants
------------------
Until the Commitments have expired or terminated and the principal of
and interest on each Loan and all fees payable hereunder have been indefeasibly
paid in full and all Letters of Credit have expired or terminated and all L/C
Disbursements shall have been reimbursed, each Loan Party covenants and agrees
with the Agents and the Lenders that:
SECTION 7.1 Indebtedness and Other Obligations. (a) The Loan Parties
will not, and will not permit any Subsidiary to, create, incur, assume or permit
to exist any Indebtedness, except:
(i) Indebtedness created under the Loan Documents;
(ii) Indebtedness contemplated by the Bankruptcy Plan;
(iii) Indebtedness of any Loan Party to any other Loan Party;
(iv) Guarantees by any Loan Party of Indebtedness permitted
hereunder of any other Loan Party;
(v) purchase money Indebtedness of any Loan Party to finance the
acquisition of any tangible personal property constituting capital
assets acquired after the Exit Facility Date, including without
limitation Capital Lease Obligations, provided that (A) the aggregate
principal amount of Indebtedness permitted by this clause (v) shall
not exceed $10,000,000 at any time outstanding and (B) both before and
after giving effect to such Indebtedness, no Default or Event of
Default shall exist or reasonably be likely to result therefrom;
(vi) renewals, extensions, refinancings and refundings of
Indebtedness permitted by this Section 7.1 provided, however, that any
such renewal, extension, refinancing or refunding does not increase
the aggregate principal amount of such Indebtedness and is otherwise
on terms no more restrictive or less favorable to such Loan Party;
(vii) a sale and leaseback transaction permitted pursuant to
Section 7.14 to the extent such transaction would constitute
Indebtedness;
(viii) unsecured Indebtedness not otherwise permitted under this
Section 7.1; provided, however, that the aggregate outstanding
principal amount of all such unsecured Indebtedness shall not exceed
$15,000,000 at any time; and
(ix) refinancing of the first mortgage note with respect to the
real property located in New Jersey at 000 XxxXxxxxx Xxxxxxxxx;
provided, however, that any such refinancing is on terms no less
favorable to the applicable Loan Party.
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(b) Except as contemplated by the Bankruptcy Plan, none of the Loan
Parties will, nor will they permit any Subsidiary to, issue any preferred stock
or be or become liable in respect of any obligation (contingent or otherwise) to
purchase, redeem, retire, acquire or make any other payment in respect of (1)
any shares of capital stock of any Loan Party or (2) any option, warrant or
other right to acquire any such shares of capital stock.
SECTION 7.2 Liens. The Loan Parties will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Lien on any property
or asset now owned or hereafter acquired by it, or assign or sell any income or
revenues (including accounts receivable) or rights in respect of any thereof,
except:
(a) Liens created under the Loan Documents;
(b) Permitted Encumbrances;
(c) Liens contemplated by the Bankruptcy Plan and extensions,
replacements and renewals of such obligations (but no increases thereof);
(d) any Lien existing on the Exit Facility Date on any property or
asset (other than Inventory and Accounts and proceeds thereof) of any Loan Party
set forth in Schedule 7.2, provided that (i) such Lien shall not apply to any
other property or asset of any Loan Party and (ii) such Lien shall secure only
those obligations that it secures as of the Exit Facility Date and extensions,
replacements and renewals of such obligations (but no increases thereof);
(e) Liens securing Indebtedness permitted by Section 7.1(a)(v)
incurred to finance the acquisition of capital assets after the Exit Facility
Date, provided that (i) such Liens and the Indebtedness secured thereby are
incurred prior to or within 90 days after such acquisition, (ii) the
Indebtedness secured thereby does not exceed 100% of the cost of acquiring such
capital assets and (iii) such Liens shall not apply to any other property or
assets of any of the Loan Parties;
(f) purchase money Liens granted by any Loan Party (including in
connection with Capital Lease Obligations of any Loan Party securing
Indebtedness permitted under Section 7.1(a)(v)) and limited in each case to the
property purchased with the proceeds of such purchase money Indebtedness or
subject to such Capital Lease Obligation;
(g) any Lien securing the renewal, extension, refinancing or
refunding of any Indebtedness secured by any Lien permitted by this Section 7.2
without any change in the assets subject to such Lien and to the extent such
renewal, extension, refinancing or refunding is permitted by Section 7.1(a)(vi);
and
(h) Liens securing sale and leaseback transactions permitted under
Section 7.14.
SECTION 7.3 Fundamental Changes. (a) The Loan Parties will not merge
into or consolidate with any other Person, or permit any other Person to merge
into or consolidate with it, or liquidate or dissolve, except that, if at the
time thereof and immediately after giving effect thereto no Default shall have
occurred and be continuing, (i) any Subsidiary (other than a Foreign Subsidiary
66
or an Unrestricted Subsidiary) may merge into a Borrower in a transaction in
which a Borrower is the surviving corporation, and (ii) any Subsidiary that is
not a Borrower may merge into any Subsidiary that is not a Borrower, provided
that any such merger involving a Person that is not a wholly owned Subsidiary
immediately prior to such merger shall not be permitted unless also permitted by
Section 7.4.
(b) The Loan Parties will not engage to any material extent in any
business other than businesses of the type conducted by the Loan Parties on the
date of execution of this Agreement and businesses reasonably related thereto.
SECTION 7.4 Investments; Loans; Advances; Guarantees and
Acquisitions. The Loan Parties will not purchase, hold or acquire (including
pursuant to any merger with any Person that was not a wholly owned Subsidiary
prior to such merger) any capital stock, evidences of indebtedness or other
securities (including any option, warrant or other right to acquire any of the
foregoing) of, make or permit to exist any loans or advances to, guarantee any
obligations of, or make or permit to exist any investment or any other interest
in, any other Person, or purchase or otherwise acquire (in one transaction or a
series of transactions) any assets of any other Person, except:
(a) Temporary Cash Investments;
(b) Investments existing on the date hereof by the Lead Borrower and
its Subsidiaries in their Subsidiaries, provided that all Subsidiaries of the
Lead Borrower (other than Foreign Subsidiaries and Unrestricted Subsidiaries)
are Facility Guarantors hereunder and all equity interests of all Subsidiaries
are pledged pursuant to the Borrower Security Agreement or the Guarantor
Security Agreement (but not more than 65% of Foreign Subsidiaries);
(c) equity investments, loans or advances made by any Loan Party to
any other Loan Party, provided that all such loans and advances made by any Loan
Party shall be evidenced by a promissory note, and further provided that any
such equity, investments, loans and advances shall be pledged to the Collateral
Agent pursuant to the Security Documents;
(d) investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers, in each case in the ordinary course of business;
(e) investments existing on the Exit Facility Date, and set forth in
detail on Schedule 7.4, to the extent such investments would not be permitted
under any other clause of this Section;
(f) loans or advances to employees for the purpose of travel,
entertainment or relocation in the ordinary course of business in an amount not
to exceed $200,000 to any employee or $2,000,000 in the aggregate at any time
outstanding;
(g) Guarantees constituting Indebtedness permitted by Section 7.1;
(h) notes received in connection with asset dispositions permitted
under Section 7.5; and
(i) investments not otherwise permitted under this Agreement in an
aggregate outstanding amount not to exceed $5,000,000.
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SECTION 7.5 Asset Sales; Blocked Sales; Transfers. The Loan Parties
will not, and will not permit any of the Subsidiaries to, sell, transfer, lease
or otherwise dispose of any asset, including any capital stock or other equity
interests, nor will the Loan Parties permit any of the Subsidiaries to issue any
additional shares of its capital stock or other ownership interest in such
Subsidiary, except:
(a) sales of (i) Inventory, or (ii) used or surplus equipment or
(iii) Temporary Cash Investments, in each case in the ordinary course of
business;
(b) sales, transfers and dispositions among the Loan Parties;
provided that such sales, transfers or dispositions shall be made in compliance
with Section 7.7;
(c) provided that no Default or Event of Default exists or shall
result after giving effect thereto, sales or other dispositions of other
Inventory of the Loan Parties not in the ordinary course of business in
connection with the closure of up to 15% per annum of all stores open on the
first day of the relevant fiscal year; provided that (i) any such sales or
dispositions at any one time comprising more than 5% of all stores open on the
first day of any fiscal year shall be on terms and conditions and for such
consideration as shall be reasonably acceptable to the Administrative Agent as
consented to in writing prior to such sale or disposition (such consent not to
be unreasonably withheld or delayed), (ii) any such sales or dispositions shall
be conducted by the Borrowers and/or professional liquidators reasonably
acceptable to the Administrative Agent pursuant to agency agreements in form and
substance reasonably satisfactory to the Administrative Agent; and (iii) the
Loan Parties shall cause all of the net cash proceeds of such sale or
disposition (and other consideration) to be remitted to the Administrative Agent
for application to the Obligations in accordance with Section 5.2 or Section 6.2
of the Security Agreements, as applicable; and
(d) any sales or other dispositions of assets, business or operations
by any Loan Party to any other Loan Party;
(e) any sale or other disposition of the Real Estate located at 000
XxxXxxxxx Xxxx., Xxxxxx, Xxx Xxxxxx;
(f) provided that no Default or Event of Default exists or shall
result after giving effect thereto, any other asset disposition for fair market
value, payable in cash upon such sale; provided, however, that with respect to
any such asset disposition pursuant to this clause (f), (i) the aggregate
consideration received during any fiscal year for all such asset dispositions
shall not exceed $5,000,000 and (ii) Net Cash Proceeds of such asset disposition
are applied to the payment of the Obligations as set forth herein; and
(g) (i) a true lease or sublease of Real Estate not constituting
Indebtedness hereunder and not constituting a sale and leaseback transaction and
(ii) a sale of assets pursuant to a sale and leaseback transaction permitted
under Section 7.14;
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provided that all sales, transfers, leases and other dispositions permitted by
this Section 7.5 shall be made at arm's length and for fair value and further
provided that the authority granted under clause (c) may be terminated in whole
or in part by the Agents upon the occurrence and during the continuance of any
Event of Default.
SECTION 7.6 Restricted Payments; Certain Payments of Indebtedness.
(a) The Loan Parties will not, and will not permit any Subsidiary to, declare or
make, or agree to pay or make, directly or indirectly, any Restricted Payment,
except:
(i) the Loan Parties may declare and pay dividends with respect
to their equity interests to any Loan Party which is a Subsidiary of
any of the Borrowers whether or not a Default or Event of Default
exists;
(ii) as long as no Default or Event of Default exists and is
continuing, the Loan Parties may make distributions to the Lead
Borrower to the extent necessary to pay indemnities, accounting, legal
and other professional fees, and other similar general and
administrative expenses incurred by the Lead Borrower for itself and
the Loan Parties;
(iii) the Loan Parties may make distributions to the Lead
Borrower to the extent necessary to pay corporate taxes incurred by
the Lead Borrower for itself and the Loan Parties; and
(iv) the Lead Borrower may pay dividends and/or repurchase its
outstanding common stock, provided that no Default or Event of Default
shall exist or shall result after giving effect thereto and further
provided that (A) Excess Availability (after satisfaction of the
requirements set forth in Section 7.11 herein) shall be in an amount
greater than or equal to forty percent (40%) of the Borrowing Base,
both before and after giving effect thereto, calculated on a pro forma
basis for the following twelve month period, (B) the Lead Borrower
delivers to the Agents an officers' certificate which certifies that
the Lead Borrower is solvent both before and after giving effect
thereto, and (C) the Lead Borrower delivers to the Agents an officers'
certificate which demonstrates, in form satisfactory to the Agents,
that the Fixed Charge Coverage Ratio for the period of four (4)
consecutive fiscal quarters most recently ended prior to any such
repurchase is greater than 1.10 to 1.00.
(b) The Loan Parties will not, and will not permit any Subsidiary to,
make or agree to pay or make, directly or indirectly, any payment or other
distribution (whether in cash securities or other property) of or in respect of
principal of or interest on any Indebtedness, or any payment or other
distribution (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any Indebtedness,
except:
(i) payments due from time to time hereunder;
(ii) payment of the Indebtedness of the Borrowers incurred in
connection with the Existing Credit Agreement; and
(iii) payments of regularly scheduled interest and principal as
and when due in respect of any Indebtedness permitted under Section
7.1.
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SECTION 7.7 Transactions with Affiliates. The Loan Parties will not,
and will not permit any Subsidiary to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) transactions in the ordinary course of business that are
at prices and on terms and conditions not less favorable to the Loan Parties or
such Subsidiary than could be obtained on an arm's-length basis from unrelated
third parties, and (b) transactions between or among the Loan Parties not
involving any other Affiliate.
SECTION 7.8 Restrictive Agreements. The Loan Parties will not, and
will not permit any Subsidiary to, directly or indirectly, enter into, incur or
permit to exist any agreement or other arrangement that prohibits, restricts or
imposes any condition upon (a) the ability of the Loan Parties or any Subsidiary
to create, incur or permit to exist any Lien upon any of its property or assets
or (b) the ability of any Subsidiary to pay dividends or other distributions
with respect to any shares of its capital stock or to make or repay loans or
advances to the Loan Parties or any other Subsidiary or to guarantee
Indebtedness of the Loan Parties or any other Subsidiary, provided that (i) the
foregoing shall not apply to restrictions and conditions imposed by law or by
any Loan Document, (ii) clause (a) of the foregoing shall not apply to
restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness and (iii) clause
(a) of the foregoing shall not apply to customary provisions in leases
restricting the assignment or subleasing thereof.
SECTION 7.9 Amendment of Material Documents. The Loan Parties will
not, and will not permit any Subsidiary to, amend, modify or waive any of its
rights under (a) its certificate of incorporation, by-laws or other
organizational documents, (b) the Kmart Agreement, (c) any other Material
Agreements, unless such amendment, modification or waiver thereunder does not
materially adversely affect the Loan Parties taken as a whole or materially
adversely affect the interests of the Lenders under the Loan Documents (as
determined by the Agents in their commercially reasonable discretion), or (d)
any other material instruments, documents or agreements, unless such amendment,
modification or waiver does not materially adversely affect the Loan Parties
taken as a whole or materially adversely affect the interests of the Lenders
under the Loan Documents.
SECTION 7.10 Additional Subsidiaries. The Loan Parties will not, and
will not permit any Subsidiary to, create any additional Subsidiary unless the
investment with respect thereto is permitted pursuant to Section 7.4 and the
requirements of Section 6.12 are satisfied contemporaneously therewith.
SECTION 7.11 Excess Availability. The Lead Borrower and its
Subsidiaries shall maintain at all times Excess Availability in an amount
greater than or equal to (a) five percent (5%) of the Borrowing Base for the
period commencing on the Exit Facility Date through the one year anniversary of
the Exit Facility Date and (b) ten percent (10%) of the Borrowing Base
thereafter.
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SECTION 7.12 Fixed Charge Coverage Ratio. If at any time after the
Exit Facility Date Excess Availability is less than twenty percent (20%) of the
Borrowing Base, the Borrowers shall not permit the Fixed Charge Coverage Ratio
as determined as of any date of determination, for any period of four (4)
consecutive fiscal quarters of the Lead Borrower and its Subsidiaries ending on
such date, or if such date is not a fiscal quarter end date, the period of four
(4) consecutive fiscal quarters most recently ended (in each case treated as a
single accounting period), to be less than 1.10 to 1.00 for such four fiscal
periods.
SECTION 7.13 Maximum Capital Expenditures Neither the Lead Borrower
nor any of its Subsidiaries shall make or agree to make, or incur any
obligations with respect to, any Capital Expenditures in excess of $17,000,000
any fiscal year.
SECTION 7.14 Sale and Leaseback Transactions. The Loan Parties shall
not, nor shall they permit any of their Subsidiaries to, enter into any sale and
leaseback transaction if, after giving effect to such sale and leaseback
transaction, the aggregate fair market value of all properties covered by sale
and leaseback transactions would exceed $20,000,000 in the aggregate.
ARTICLE VIII
Events of Default
-----------------
SECTION 8.1 If any of the following events ("Events of Default")
shall occur:
(a) the Loan Parties shall fail to pay any principal of any Loan or
any reimbursement obligation in respect of any L/C Disbursement when and as the
same shall become due and payable, whether at the due date thereof or at a date
fixed for prepayment thereof or otherwise;
(b) the Loan Parties shall fail to pay any interest on any Loan or
any fee or any other amount (other than an amount referred to in clause (a) of
this Article) payable under this Agreement or any other Loan Document within
five Business Days after the time such amount shall become due and payable;
(c) any representation or warranty made or deemed made by or on
behalf of any Loan Party in or in connection with any Loan Document or any
amendment or modification thereof or waiver thereunder, or in any report,
certificate, financial statement or other document furnished pursuant to or in
connection with any Loan Document or any amendment or modification thereof or
waiver thereunder, shall prove to have been incorrect in any material respect
when made or deemed made;
(d) the Loan Parties shall fail to observe or perform any covenant,
condition or agreement contained in Section 5.1 or Section 5.2 of the Borrower
Security Agreement or the Guarantor Security Agreement, or Section 6.1, 6.2,
6.7, 6.9, or 6.11 of this Agreement, or in Article VII of this Agreement;
provided that a default in the delivery of any Borrowing Base Certificate under
Section 6.1(e) which is required to be delivered weekly shall not constitute an
Event of Default unless and until the same continues unremedied for two Business
Days (provided such two Business Day grace period shall not be available for the
remedy of any such default more than four times during any fiscal year of the
Lead Borrower);
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(e) any Loan Party shall fail to observe or perform any covenant,
condition or agreement contained in any Loan Document (other than those
specified in clause (a), (b), (c), or (d) of this Article), and such failure
shall continue unremedied for a period of 20 days after the earlier of notice
thereof from the Administrative Agent to the Lead Borrower (which notice will be
given at the request of any Lender) or the actual knowledge thereof by the Lead
Borrower;
(f) any Loan Party (i) shall fail to make any payment (whether of
principal or interest and regardless of amount) in respect of any Material
Indebtedness when and as the same shall become due and payable (after giving
effect to the expiration of any grace or cure period set forth therein), or (ii)
shall otherwise be in default in respect of any Material Indebtedness the result
of which default under this subsection (ii) is to permit such Material
Indebtedness to become due prior to its stated maturity (after giving effect to
any grace or cure period therein or written waiver thereof);
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables or
permits (with or without the giving of notice, the lapse of time or both) the
holder or holders of any such Material Indebtedness or any trustee or agent on
its or their behalf to cause any such Material Indebtedness to become due, or to
require the prepayment, repurchase, redemption or defeasance thereof, prior to
its scheduled maturity; or any default by any Loan Party or any other event or
condition occurs that results in any third party (other than a Loan Party) under
any of the Material Agreements (excluding the Kmart Agreement) having the right
to terminate such Material Agreement; any default by any third party (other than
any Loan Party) under any of the Material Agreements (excluding the Kmart
Agreement) which would reasonably be likely to result in a Material Adverse
Effect; or the occurrence of any Kmart-Related Default;
(h) any Loan Party shall become unable, admit in writing its
inability or fail generally to pay its post-Petition debts as they become due;
(i) any judgment for injunctive relief that results in, or creates a
material risk of resulting in, a Material Adverse Effect, or one or more
judgments for the payment of money in an aggregate amount in excess of
$15,000,000, in each case shall be rendered against any Loan Party or any
combination thereof and the same shall remain undischarged for a period of 30
consecutive days during which execution shall not be effectively stayed; or any
action shall be legally taken by a judgment creditor to attach or levy upon any
material assets of any Loan Party to enforce any such judgment;
(j) an ERISA Event shall have occurred that, in the reasonable
commercial opinion of the Required Lenders, when taken together with all other
ERISA Events that have occurred, could reasonably be expected to result in
liability of the Loan Parties in an aggregate amount exceeding $15,000,000;
72
(k) (i) any challenge by or on behalf of any Loan Party to the
validity of any Loan Document or the applicability or enforceability of any Loan
Document strictly in accordance with the subject Loan Document's terms or which
seeks to void, avoid, limit, or otherwise adversely affect any security interest
created by or in any Loan Document or any payment made pursuant thereto;
(ii) any challenge by or on behalf of any other Person to the
validity of any Loan Document or the applicability or enforceability of
any Loan Document strictly in accordance with the subject Loan
Document's terms or which seeks to void, avoid, limit, or otherwise
adversely affect any security interest created by or in any Loan
Document or any payment made pursuant thereto, in each case, as to
which an order or judgment has been entered adverse to the Agents and
the Lenders;
(iii) any Lien purported to be created under any Security
Document shall cease to be, or shall be asserted by any Loan Party not
to be, a valid and perfected Lien on any Collateral, with the priority
required by the applicable Security Document, except as a result of the
sale or other disposition of the applicable Collateral in a transaction
permitted under the Loan Documents;
(l) a Change in Control shall occur;
(m) the occurrence of any uninsured loss (not inclusive of a
reasonable deductible) to any material portion of the Collateral;
(n) the indictment of, or institution of any legal process or
proceeding against, any Loan Party, under any federal, state, municipal, and
other civil or criminal statute, rule, regulation, order, or other requirement
having the force of law where the relief, penalties, or remedies sought or
available include the forfeiture of any material property of any Loan Party
and/or the imposition of any stay or other order, the effect of which could
reasonably be to restrain in any material way the conduct by the Loan Parties,
taken as a whole, of their business in the ordinary course;
(o) except as permitted under Section 7.5(c), the determination by
any Loan Party, whether by vote of such Loan Party's board of directors or
otherwise to: suspend the operation of any material portion of the Loan Parties'
business taken as a whole in the ordinary course, liquidate all or a material
portion of the Loan Parties' assets or store locations, or employ an agent or
other third party to conduct any so-called store closing, store liquidation or
"Going-Out-Of-Business" sales on any material portion of the Loan Parties'
business;
(p) the Bankruptcy Court or another court of competent jurisdiction
shall enter any order amending, supplementing, altering, staying, suspending,
vacating, rescinding or otherwise modifying the Final Borrowing Order (unless
consented to by the Agents or the Required Lenders, as may be appropriate) in a
manner which could result in a Material Adverse Effect; or
(q) the Lead Borrower or any of its Subsidiaries or any of the
Facility Guarantors (i) shall make an assignment for the benefit of creditors,
(ii) shall be adjudicated bankrupt or insolvent, (iii) shall seek the
appointment of, or be the subject of an order appointing, a trustee, custodian,
liquidator or receiver as to all or part of its assets, (iv) shall commence,
approve or consent to, or be the subject of any case of proceeding under any
bankruptcy, reorganization or similar law and, in the case of an involuntary
case or proceeding, such case or proceeding is not dismissed within thirty (30)
days following the commencement thereof, or (v) shall be the subject of an order
or decree for relief in an involuntary case under federal bankruptcy law;
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then, and in every such event, and at any time thereafter during the continuance
of such event, the Administrative Agent may and at the request of the Required
Lenders shall, by notice to the Lead Borrower, take either or both of the
following actions, at the same or different times: (i) terminate the Commitments
and any obligation, if any, to make Swingline Loans, and thereupon the
Commitments and any obligation, if any, to make Swingline Loans shall terminate
immediately, and (ii) declare the Loans then outstanding to be due and payable
in whole (or in part, in which case any principal not so declared to be due and
payable may thereafter be declared to be due and payable), and thereupon the
principal of the Loans so declared to be due and payable, together with accrued
interest thereon and all fees and other obligations of the Borrowers accrued
hereunder, shall become due and payable immediately, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Loan Parties; provided that in the event of any Event of Default specified
in clauses (p) and (q) above, all such amounts shall become immediately due and
payable automatically and without any requirement of notice from the
Administrative Agent or any Lender.
SECTION 8.2 When Continuing. For all purposes under this Agreement,
each Default and Event of Default that has occurred shall be deemed to be
continuing at all times thereafter unless it either (a) is cured or corrected to
the reasonable written satisfaction of the Lenders in accordance with Section
10.2, or (b) is waived in writing by the Lenders in accordance with Section
10.2.
SECTION 8.3 Remedies on Default. In case any one or more of the
Events of Default shall have occurred and be continuing, and whether or not the
maturity of the Loans shall have been accelerated pursuant hereto, the
Administrative Agent may, and shall upon the request of the Required Lenders,
proceed to protect and enforce its rights and remedies under this Agreement, the
Notes or any of the other Loan Documents by suit in equity, action at law or
other appropriate proceeding, whether for the specific performance of any
covenant or agreement contained in this Agreement and the other Loan Documents
or any instrument pursuant to which the Obligations are evidenced, and, if such
amount shall have become due, by declaration or otherwise, proceed to enforce
the payment thereof or any other legal or equitable right of the Agents or the
Lenders. No remedy herein 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.
SECTION 8.4 Application of Proceeds. After the occurrence of an Event
of Default and acceleration of the Obligations, all proceeds realized from any
Loan Party or on account of any Collateral shall be applied in the manner set
forth in Section 6.2 of the Security Agreements. All amounts required to be
applied to Revolving Loans hereunder (other than Swingline Loans) shall be
applied ratably in accordance with each Lender's Commitment Percentage.
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ARTICLE IX
The Agents
----------
SECTION 9.1 Administration by Administrative Agent. The general
administration of the Loan Documents shall be by the Administrative Agent. The
Lenders, the Collateral Agent and the Issuing Bank each hereby irrevocably
authorizes the Administrative Agent (i) to enter into the Loan Documents to
which it is a party and (ii) at its discretion, to take or refrain from taking
such actions as agent on its behalf and to exercise or refrain from exercising
such powers under the Loan Documents and the Notes as are delegated by the terms
hereof or thereof, as appropriate, together with all powers reasonably
incidental thereto. The Administrative Agent shall have no duties or
responsibilities except as set forth in this Agreement and the remaining Loan
Documents.
SECTION 9.2 The Collateral Agent. Each Lender, the Administrative
Agent and the Issuing Bank hereby irrevocably (i) designate Bank of America as
Collateral Agent under this Agreement and the other Loan Documents, (ii)
authorize the Collateral Agent to enter into the Security Documents and the
other Loan Documents to which it is a party and to perform its duties and
obligations thereunder and (iii) agree and consent to all of the provisions of
the Security Documents. All Collateral shall be held or administered by the
Collateral Agent (or its duly-appointed agent) for its benefit and for the
ratable benefit of the other Secured Parties, but subject to the terms of
Section 5.2 prior to an Event of Default or Section 6.2 after an Event of
Default of the Security Agreements, as applicable. Any proceeds received by the
Collateral Agent from the foreclosure, sale, lease or other disposition of any
of the Collateral and any other proceeds received pursuant to the terms of the
Security Documents or the other Loan Documents shall be paid over to the
Administrative Agent for application as provided in Sections 2.18 or 8.4 hereof
or Section 5.2 prior to an Event of Default or Section 6.2 after an Event of
Default of the Security Agreements, as applicable.
SECTION 9.3 Sharing of Excess Payments. Each of the Lenders, the
Agents and the Issuing Bank agrees that if it shall, through the exercise of a
right of banker's lien, setoff or counterclaim against the Loan Parties,
including, but not limited to, a secured claim under Section 506 of the
Bankruptcy Code or other security or interest arising from, or in lieu of, such
secured claim and received by such Lender, any Agent or the Issuing Bank under
any applicable bankruptcy, insolvency or other similar law, or otherwise, obtain
payment in respect of the Obligations owed it (an "excess payment") as a result
of which such Lender, such Agent or the Issuing Bank has received payment of any
Loans or other Obligations outstanding to it in excess of the amount that it
would have received if all payments at any time applied to the Loans and other
Obligations had been applied in the order of priority set forth in Section 5.2
75
prior to an Event of Default or Section 6.2 after an Event of Default of the
Security Agreements, as applicable, then such Lender, Agent or the Issuing Bank
shall promptly purchase at par (and shall be deemed to have thereupon purchased)
from the other Lenders, such Agent and the Issuing Bank, as applicable, a
participation in the Loans and Obligations outstanding to such other Persons, in
an amount determined by the Administrative Agent in good faith as the amount
necessary to ensure that the economic benefit of such excess payment is
reallocated in such manner as to cause such excess payment and all other
payments at any time applied to the Loans and other Obligations to be
effectively applied in the order of priority set forth in Section 5.2 prior to
an Event of Default or Section 6.2 after an Event of Default of the Security
Agreements, as applicable; provided, that if any such excess payment is
thereafter recovered or otherwise set aside such purchase of participations
shall be correspondingly rescinded (without interest). The Loan Parties
expressly consent to the foregoing arrangements and agrees that any Lender, any
Agent or the Issuing Bank holding (or deemed to be holding) a participation in
any Loan or other Obligation may exercise any and all rights of banker's lien,
setoff or counterclaim with respect to any and all moneys owing by such Loan
Party to such Lender, such Agent or the Issuing Bank as fully as if such Lender,
Agent or the Issuing Bank held a Note and was the original obligee thereon, in
the amount of such participation.
SECTION 9.4 Agreement of Required Lenders. (a) Upon any occasion
requiring or permitting an approval, consent, waiver, election or other action
on the part of only the Required Lenders, action shall be taken by the Agents
for and on behalf or for the benefit of all Lenders upon the direction of the
Required Lenders, and any such action shall be binding on all Lenders, and (ii)
upon any occasion requiring or permitting an approval, consent, waiver, election
or other action on the part of the Required Supermajority Lenders, action shall
be taken by the Agents for and on behalf or for the benefit of all Lenders upon
the direction of the Required Supermajority Lenders and any such action shall be
binding on all Lenders. No amendment, modification, consent, or waiver shall be
effective except in accordance with the provisions of Section 10.2.
(b) Upon the occurrence of an Event of Default, the Agents shall
(subject to the provisions of Section 10.2) take such action with respect
thereto as may be reasonably directed by the Required Lenders; provided that
unless and until the Agents shall have received such directions, the Agents may
(but shall not be obligated to) take such action as it shall deem advisable in
the best interests of the Lenders. In no event shall the Agents be required to
comply with any such directions to the extent that the Agents believe that the
Agents' compliance with such directions would be unlawful.
SECTION 9.5 Liability of Agents. (a) Each of the Agents, when acting
on behalf of the Lenders and the Issuing Bank, may execute any of its respective
duties under this Agreement by or through any of its respective officers, agents
and employees, and none of the Agents nor their respective directors, officers,
agents or employees shall be liable to the Lenders or the Issuing Bank or any of
them for any action taken or omitted to be taken in good faith, or be
responsible to the Lenders or the Issuing Bank or to any of them for the
consequences of any oversight or error of judgment, or for any loss, except to
the extent of any liability imposed by law by reason of such Agent's own gross
negligence or willful misconduct. The Agents and their respective directors,
officers, agents and employees shall in no event be liable to the Lenders or the
Issuing Bank or to any of them for any action taken or omitted to be taken by
them pursuant to instructions received by them from the Required Lenders or the
Required Supermajority Lenders, as applicable, or in reliance upon the advice of
counsel selected by it. Without limiting the foregoing, none of the Agents, nor
any of their respective directors, officers, employees, or agents shall be
responsible to any Lender or the Issuing Bank for the due execution, validity,
genuineness, effectiveness, sufficiency, or enforceability of, or for any
statement, warranty or representation in, this Agreement, any Loan Document or
any related agreement, document or order, or shall be required to ascertain or
to make any inquiry concerning the performance or observance by any Loan Party
of any of the terms, conditions, covenants, or agreements of this Agreement or
any of the Loan Documents.
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(b) None of the Agents nor any of their respective directors,
officers, employees, or agents shall have any responsibility to the Loan Parties
on account of the failure or delay in performance or breach by any Lender (other
than by the Agent in its capacity as a Lender) or the Issuing Bank of any of
their respective obligations under this Agreement or the Notes or any of the
Loan Documents or in connection herewith or therewith.
(c) The Administrative Agent and the Collateral Agent, in such
capacities hereunder, shall be entitled to rely on any communication,
instrument, or document reasonably believed by such person to be genuine or
correct and to have been signed or sent by a person or persons believed by such
person to be the proper Person or Persons, and, such Person shall be entitled to
rely on advice of legal counsel, independent public accountants, and other
professional advisers and experts selected by such Person.
SECTION 9.6 Reimbursement and Indemnification. Each Lender agrees (i)
to reimburse (x) each Agent for such Lender's Commitment Percentage of any
expenses and fees incurred by such Agent for the benefit of the Lenders or the
Issuing Bank under this Agreement, the Notes and any of the Loan Documents,
including, without limitation, counsel fees and compensation of agents and
employees paid for services rendered on behalf of the Lenders or the Issuing
Bank, and any other expense incurred in connection with the operations or
enforcement thereof not reimbursed by the Loan Parties (except as otherwise
provided in the Borrower Security Agreement and Guarantor Security Agreement),
and (y) each Agent for such Lender's Commitment Percentage of any expenses of
such Agent incurred for the benefit of the Lenders or the Issuing Bank that the
Loan Parties have agreed to reimburse pursuant to Section 10.3 and has failed to
so reimburse (except as otherwise provided in the Borrower Security Agreement
and Guarantor Security Agreement), and (ii) to indemnify and hold harmless the
Agents and any of their directors, officers, employees, or agents (each, an
"Indemnified Party"), on demand, in the amount of such Lender's Commitment
Percentage, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses, or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by, or
asserted against it or any of them in any way relating to or arising out of this
Agreement, the Notes or any of the Loan Documents or any action taken or omitted
by it or any of them under this Agreement, the Notes or any of the Loan
Documents to the extent not reimbursed by the Loan Parties (except such as shall
result from such Indemnified Party's respective gross negligence, bad faith or
willful misconduct).
SECTION 9.7 Rights of Agents. It is understood and agreed that Bank
of America shall have the same rights and powers hereunder (including the right
to give such instructions) as the other Lenders and may exercise such rights and
powers, as well as its rights and powers under other agreements and instruments
to which it is or may be party, and engage in other transactions with the
Borrowers, as though they were not the Administrative Agent or the Collateral
Agent, respectively, of the Lenders under this Agreement.
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SECTION 9.8 Independent Lenders and Issuing Bank. The Lenders and the
Issuing Bank each acknowledge that they have decided to enter into this
Agreement and to make the Loans or issue the Letters of Credit hereunder based
on their own analysis of the transactions contemplated hereby and of the
creditworthiness of the Loan Parties and agrees that the Agents shall bear no
responsibility therefor.
SECTION 9.9 Notice of Transfer. The Agents may deem and treat a
Lender party to this Agreement as the owner of such Lender's portion of the
Loans for all purposes, unless and until, and except to the extent, an
Assignment and Acceptance shall have become effective as set forth in Section
10.5(b).
SECTION 9.10 Successor Agent. Any Agent may resign at any time by
giving five Business Days' written notice thereof to the Lenders, the Issuing
Bank, the other Agents and the Lead Borrower. Upon any such resignation of any
Agent, the Required Lenders shall have the right to appoint a successor Agent,
which so long as there is no Default, or Event of Default, shall be reasonably
satisfactory to the Lead Borrower (whose consent shall not be unreasonably
withheld or delayed). If no successor Agent shall have been so appointed by the
Required Lenders and shall have accepted such appointment, within 30 days after
the retiring Agent's giving of notice of resignation, the retiring Agent may, on
behalf of the Lenders, the other Agents and the Issuing Bank, appoint a
successor Agent which shall be (i) a commercial bank (or affiliate thereof)
organized under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of a least $100,000,000, (ii) or a
Lender capable of complying with all of the duties of such Agent (and the
Issuing Bank), hereunder (in the opinion of the retiring Agent and as certified
to the Lenders in writing by such successor Agent) which, in the case of (i) and
(ii) above, so long as there is no Default, or Event of Default, shall be
reasonably satisfactory to the Lead Borrower (whose consent shall not be
unreasonably withheld or delayed). Upon the acceptance of any appointment as
Agent by a successor Agent, such successor Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the retiring
Agent and the retiring Agent shall be discharged from its duties and obligations
under this Agreement. After any retiring Agent's resignation hereunder as such
Agent, the provisions of this Article IX shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was such Agent under this
Agreement.
SECTION 9.11 Reports and Financial Statements. Promptly after receipt
thereof from the Borrowers, the Administrative Agent shall remit to each Lender
and the Collateral Agent copies of all financial statements and Borrowing Base
Certificates required to be delivered by the Borrowers hereunder and all
commercial finance examinations and appraisals of the Collateral received by the
Administrative Agent.
SECTION 9.12 Syndication Agent and Co-Lead Arrangers. Except as may
be expressly provided in this Agreement, the Co-Lead Arrangers and the
Syndication Agent shall have no powers, rights, duties, responsibilities or
liabilities with respect to this Agreement and the other Loan Documents.
SECTION 9.13 Public Announcements. The Administrative Agent, the
Collateral Agent, the Syndication Agent and the Co-Lead Arrangers shall have the
right to publicize information in respect of the financing described herein
(including their respective roles in the structuring and financing thereof)
subject to the Borrowers' prior reasonable approval of the form and content
thereof (which approval shall not be unreasonably withheld, conditioned or
delayed).
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ARTICLE X
Miscellaneous
-------------
SECTION 10.1 Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to any Loan Party, to it at Footstar, Inc., 000 XxxXxxxxx
Xxxxxxxxx, Xxxxxx, Xxx Xxxxxx 00000, Attention: Xxxxxxx Xxxxx (Telecopy No.
(201-934-2642), Xxxx Xxxxxxxx, Esquire (Telecopy No. (000) 000-0000) and Xxxxxxx
Xxxxx (Telecopy No. (201-934-4967) with a copy to Weil, Gotshal & Xxxxxx,
Attention: Xxxx Xxxxx, Esquire (Telecopy No. (000) 000-0000);
(b) if to the Administrative Agent, the Issuing Bank or the Swingline
Lender, to Bank of America, N.A., 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, Attention: Xxx Xxxx (Telecopy No. (000) 000-0000) and Xxxxx
Xxxxxxxxxxx (Telecopy No. (000) 000-0000), with a copy to Xxxxxxx XxXxxxxxx LLP,
000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xxxxxx X.X. Xxxxx,
Esquire (Telecopy No. (000) 000-0000);
(c) if to the Collateral Agent, to Bank of America, N.A., 00 Xxxxx
Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xxx Xxxx (Telecopy
No. (000) 000-0000) and Xxxxx Xxxxxxxxxxx (Telecopy No. (000) 000-0000), with a
copy to Xxxxxxx XxXxxxxxx LLP, 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000,
Attention: Xxxxxx X.X. Xxxxx, Esquire (Telecopy No. (000) 000-0000);
(d) if to any other Lender, to it at its address (or telecopy number)
set forth on the signature pages hereto or on any Assignment and Acceptance for
such Lender.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 10.2 Waivers; Amendments. (a) No failure or delay by the
Agents, the Issuing Bank or any Lender in exercising any right or power
hereunder or under any other Loan Document shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Agents, the Issuing Bank and the
Lenders hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of any Loan Document or consent to any departure by any Loan Party
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section, and then such waiver or consent shall be
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effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether the Agents, any Lender or the Issuing Bank may
have had notice or knowledge of such Default at the time.
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except, in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by the Borrowers and the Required Lenders or, in the case of any
other Loan Document, pursuant to an agreement or agreements in writing entered
into by the Agents and the Loan Parties that are parties thereto, in each case
with the consent of the Required Lenders, provided that no such agreement shall
(i) increase the Commitment of any Lender without the written consent of such
Lender or increase the Total Commitment above an aggregate amount of
$100,000,000, as applicable, without the written consent of each Lender affected
thereby or increase the Swingline Limit without the consent of each Lender, (ii)
reduce the principal amount of any Loan or L/C Disbursement or reduce the rate
of interest thereon, or reduce any fees payable hereunder, without the written
consent of each Lender affected thereby, (iii) postpone the scheduled date of
payment of the principal amount of any Loan or L/C Disbursement, or any interest
thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse
any such payment, or postpone the scheduled date of expiration of the
Commitments, or the Maturity Date without the written consent of each Lender
affected thereby, (iv) change Section 2.18 hereof or Section 5.1, 5.2 or 6.2 of
the Borrower Security Agreement or the Guarantor Security Agreement, without the
written consent of each Lender, (v) change Section 2.1 or Section 2.2 without
the written consent of each Lender affected thereby; (vi) change any of the
provisions of this Section 10.2 or the definition of the term "Required Lenders"
or "Required Supermajority Lenders" or any other provision of any Loan Document
specifying the number or percentage of Lenders required to waive, amend or
modify any rights thereunder or make any determination or grant any consent
thereunder, without the written consent of each Lender, (vii) release any Loan
Party from its obligations under any Loan Document, or limit its liability in
respect of such Loan Document, without the written consent of each Lender,
(viii) except for sales described in Section 7.5 or as permitted in the Security
Documents, release any material portion of the Collateral from the Liens of the
Security Documents, without the written consent of each Lender, (ix) change the
definition of the term "Borrowing Base" or any component definition thereof if
as a result thereof the amounts available to be borrowed by the Borrowers would
be increased, without the written consent of each Lender, provided that the
foregoing shall not limit the discretion of the Administrative Agent to change,
establish or eliminate any Reserves, (x) change the definition of the term
"Excess Availability" as set forth in Section 1.1 or modify the provisions of
Section 7.11 without the written consent of each Lender, (xi) increase or
otherwise change the definition of the Permitted Overadvance, without the
written consent of each Lender, (xii) subordinate the Obligations hereunder, or
the Liens granted hereunder or under the other Loan Documents, to any other
Indebtedness or Lien, as the case may be without the prior written consent of
each Lender, or (xiii) modify the Fee Letter without the written consent of the
Administrative Agent, and provided further that no such agreement shall amend,
modify or otherwise affect the rights or duties of the Agents or the Issuing
Bank without the prior written consent of the Agents or the Issuing Bank, as the
case may be.
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(c) Notwithstanding anything to the contrary contained in this
Section 10.2, in the event that the Borrowers request that this Agreement or any
other Loan Document be modified, amended or waived in a manner which would
require the consent of the Lenders pursuant to Sections 10.2(b) and such
amendment is approved by the Required Lenders, but not by the requisite
percentage of the Lenders, the Borrowers, and the Required Lenders shall be
permitted to amend this Agreement without the consent of the Lender or Lenders
which did not agree to the modification or amendment requested by the Borrowers
(such Lender or Lenders, collectively the "Minority Lenders") to provide for (w)
the termination of the Commitment of each of the Minority Lenders, (x) the
addition to this Agreement of one or more other financial institutions, or an
increase in the Commitment of one or more of the Required Lenders, so that the
aggregate Commitments after giving effect to such amendment shall be in the same
amount as the aggregate Commitments immediately before giving effect to such
amendment, (y) if any Loans are outstanding at the time of such amendment, the
making of such additional Loans by such new or increasing Lender or Lenders, as
the case may be, as may be necessary to repay in full the outstanding Loans
(including principal, interest, and fees) of the Minority Lenders immediately
before giving effect to such amendment and (z) such other modifications to this
Agreement or the Loan Documents as may be appropriate and incidental to the
foregoing.
(d) No notice to or demand on any Loan Party shall entitle any Loan
Party to any other or further notice or demand in the same, similar or other
circumstances. Each holder of a Note shall be bound by any amendment,
modification, waiver or consent authorized as provided herein, whether or not a
Note shall have been marked to indicate such amendment, modification, waiver or
consent and any consent by a Lender, or any holder of a Note, shall bind any
Person subsequently acquiring a Note, whether or not a Note is so marked. No
amendment to this Agreement shall be effective against the Borrowers unless
signed by the Borrowers.
SECTION 10.3 Expenses; Indemnity; Damage Waiver. (a) The Loan Parties
shall jointly and severally pay (i) all reasonable out-of-pocket expenses
incurred by the Agents and their Affiliates, including the reasonable fees,
charges and disbursements of counsel for the Agents, outside consultants for the
Agents, appraisers, for commercial finance examinations and environmental site
assessments, in connection with the syndication of the credit facilities
provided for herein, the preparation and administration of the Loan Documents or
any amendments, modifications or waivers of the provisions thereof (whether or
not the transactions contemplated hereby or thereby shall be consummated), (ii)
all reasonable out-of-pocket expenses incurred by the Issuing Bank in connection
with the issuance, amendment, renewal or extension of any Letter of Credit or
any demand for payment thereunder, and (iii) all reasonable out-of-pocket
expenses incurred by the Agents, the Issuing Bank or any Lender, including the
reasonable fees, charges and disbursements of any counsel and any outside
consultants for the Agents, the Issuing Bank or any Lender, for appraisers,
commercial finance examinations, and environmental site assessments, in
connection with the enforcement or protection of its rights in connection with
the Loan Documents, including its rights under this Section, or in connection
with the Loans made or Letters of Credit issued hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit; provided that the
Lenders who are not the Agents or the Issuing Bank shall be entitled to
reimbursement for no more than one counsel representing all such Lenders (absent
a conflict of interest in which case the Lenders may engage and be reimbursed
for additional counsel).
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(b) The Loan Parties shall, jointly and severally, indemnify the
Agents, the Issuing Bank and each Lender, and each Related Party of any of the
foregoing Persons (each such Person being called an "Indemnitee") against, and
hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the reasonable and documented fees,
charges and disbursements of any counsel for any Indemnitee, incurred by or
asserted against any Indemnitee arising out of, in connection with, or as a
result of (i) the execution or delivery of any Loan Document or any other
agreement or instrument contemplated hereby, the performance by the parties to
the Loan Documents of their respective obligations thereunder or the
consummation of the transactions contemplated by the Loan Documents or any other
transactions contemplated hereby, (ii) any Loan or Letter of Credit or the use
of the proceeds therefrom (including any refusal by the Issuing Bank to honor a
demand for payment under a Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of such Letter
of Credit), (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property currently or formerly owned or operated by any
Loan Party or any of the Subsidiaries, or any Environmental Liability related in
any way to any Loan Party or any of the Subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto, provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses resulted from the bad
faith, gross negligence or willful misconduct of such Indemnitee or any
Affiliate of such Indemnitee (or of any officer, director, employee, advisor or
agent of such Indemnitee or any such Indemnitee's Affiliates).
(c) To the extent that any Loan Party fails to pay any amount
required to be paid by it to the Agents or the Issuing Bank under paragraph (a)
or (b) of this Section, each Lender severally agrees to pay to the Agents or the
Issuing Bank, as the case may be, such Lender's pro rata share (determined as of
the time that the applicable unreimbursed expense or indemnity payment is
sought) of such unpaid amount, provided that the unreimbursed expense or
indemnified loss, claim, damage, liability or related expense, as the case may
be, was incurred by or asserted against the Agents or the Issuing Bank. For
purposes hereof, a Lender's "pro rata share" shall be determined based upon its
share of the Total Commitments at the time.
(d) To the extent permitted by applicable law, no Loan Party shall
assert, and each hereby waives, any claim against any Indemnitee, on any theory
of liability, for special, indirect, consequential or punitive damages (as
opposed to direct or actual damages) arising out of, in connection with, or as a
result of, this Agreement or any agreement or instrument contemplated hereby,
the transactions contemplated by the Loan Documents, any Loan or Letter of
Credit or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable promptly
after written demand therefor.
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SECTION 10.4 Designation of Lead Borrower as Borrowers' Agent. (a)
Each Borrower hereby irrevocably designates and appoints the Lead Borrower as
that Borrower's agent to obtain Loans and Letters of Credit hereunder, the
proceeds of which shall be available to each Borrower for those uses as those
set forth herein. As the disclosed principal for its agent, each Borrower shall
be obligated to the Agents and each Lender on account of Loans so made and
Letters of Credit so issued hereunder as if made directly by the Lenders to that
Borrower, notwithstanding the manner by which such Loans and Letters of Credit
are recorded on the books and records of the Lead Borrower and of any Borrower.
(b) Each Borrower recognizes that credit available to it hereunder is
in excess of and on better terms than it otherwise could obtain on and for its
own account and that one of the reasons therefor is its joining in the credit
facility contemplated herein with all other Borrowers. Consequently, each
Borrower hereby assumes and agrees to discharge all Obligations of all other
Borrowers as if the Borrower so assuming were each other Borrower.
(c) The Lead Borrower shall act as a conduit for each Borrower
(including itself, as a "Borrower") on whose behalf the Lead Borrower has
requested a Loan.
(i) The Lead Borrower shall cause the transfer of the proceeds of
each Loan to the (those) Borrower(s) on whose behalf such Loan was
obtained. Neither the Agents nor any Lender shall have any obligation
to see to the application of such proceeds.
(ii) If, for any reason, and at any time during the term of this
Agreement,
(A) any Borrower, including the Lead Borrower, as agent for
the Borrowers, shall be unable to, or prohibited from carrying
out the terms and conditions of this Agreement (as determined by
the Administrative Agent in the Administrative Agent's
commercially reasonable discretion); or
(B) the Administrative Agent deems it inexpedient (in the
Administrative Agent's sole and absolute discretion) to continue
making Loans and cause Letters of Credit to be issued to or for
the account of any particular Borrower, or to channel such Loans
and Letters of Credit through the Lead Borrower,
then the Lenders may make Loans directly to, and cause the issuance of
Letters of Credit directly for the account of such of the Borrowers as
the Administrative Agent determines to be expedient, which Loans may
be made without regard to the procedures otherwise included herein.
(d) In the event that the Administrative Agent determines to forgo
the procedures included herein pursuant to which Loans and Letters of Credit are
to be channeled through the Lead Borrower, then the Administrative Agent may
designate one or more of the Borrowers to fulfill the financial and other
reporting requirements otherwise imposed herein upon the Lead Borrower.
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(e) Each of the Borrowers shall remain liable to the Agents and the
Lenders for the payment and performance of all Obligations (which payment and
performance shall continue to be secured by all Collateral granted by each of
the Borrowers) notwithstanding any determination by the Administrative Agent to
cease making Loans or causing Letters of Credit to be issued to or for the
benefit of any Borrower.
(f) The authority of the Lead Borrower to request Loans on behalf of,
and to bind, the Borrowers, shall continue unless and until the Administrative
Agent acts as provided in subparagraph (c), above, or the Administrative Agent
actually receives
(i) written notice of: (i) the termination of such authority,
and (ii) the subsequent appointment of a successor Lead Borrower, which
notice is signed by the respective Presidents of each Borrower (other
than the President of the Lead Borrower being replaced) then eligible
for borrowing under this Agreement; and
(ii) written notice from such successive Lead Borrower (i)
accepting such appointment; (ii) acknowledging that such removal and
appointment has been effected by the respective Presidents of such
Borrowers eligible for borrowing under this Agreement; and (iii)
acknowledging that from and after the date of such appointment, the
newly appointed Lead Borrower shall be bound by the terms hereof, and
that as used herein, the term "Lead Borrower" shall mean and include
the newly appointed Lead Borrower.
SECTION 10.5 Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby (including any
Affiliate of the Issuing Bank that issues any Letter of Credit), except that no
Loan Party may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender (and any such
attempted assignment or transfer without such consent shall be null and void).
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their respective successors and
assigns permitted hereby (including any Affiliate of the Issuing Bank that
issues any Letter of Credit) and, to the extent expressly contemplated hereby,
the Related Parties of each of the Agents, the Issuing Bank and the Lenders) any
legal or equitable right, remedy or claim under or by reason of this Agreement.
(b) Any Lender may assign to one or more assignees (other than a Loan
Party or an Affiliate thereof) all or a portion of its rights and obligations
under this Agreement (including all or a portion of its Commitment and the Loans
at the time owing to it), provided that (i) except in the case of an assignment
to a Lender or an Affiliate of a Lender, each of the Lead Borrower (but only if
no Default then exists or only if not assigned to an entity on an approved list
delivered to the Lead Borrower by the Agents in connection with their execution
and delivery of this Agreement), the Agents and the Issuing Bank must give their
prior written consent to such assignment (which consent shall not be
unreasonably withheld or delayed), (ii) except in the case of an assignment to a
Lender or an Affiliate of a Lender, or an assignment of the entire remaining
amount of the assigning Lender's Commitment or Loans, the amount of the
Commitment or Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
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$5,000,000 unless the Administrative Agent and Lead Borrower (but only if no
Default then exists) otherwise consents, (iii) each partial assignment shall be
made as an assignment of a proportionate part of all the assigning Lender's
rights and obligations, and (iv) the parties to each assignment shall execute
and deliver to the Administrative Agent an Assignment and Acceptance, and, after
completion of the syndication of the Loans, together with a processing and
recordation fee of $3,500. Subject to acceptance and recording thereof pursuant
to paragraph (d) of this Section, from and after the effective date specified in
each Assignment and Acceptance the assignee thereunder shall be a party hereto
and, to the extent of the interest assigned by such Assignment and Acceptance,
have the rights and obligations of a Lender under this Agreement, and the
assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all of the
assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Section 10.3). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this paragraph shall
be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (e) of
this Section.
(c) The Administrative Agent, acting for this purpose as an agent of
the Loan Parties, shall maintain at one of its offices in Boston, Massachusetts
a copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans and L/C Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be conclusive and the Loan Parties, the Administrative Agent,
the Issuing Bank and the Lenders may treat each Person whose name is recorded in
the Register pursuant to the terms hereof as a Lender hereunder for all purposes
of this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Lead Borrower, the Issuing Bank and any Lender,
at any reasonable time and from time to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the processing and recordation
fee referred to in paragraph (b) of this Section and any written consent to such
assignment required by paragraph (b) of this Section, the Administrative Agent
shall accept such Assignment and Acceptance and record the information contained
therein in the Register. No assignment shall be effective for purposes of this
Agreement unless it has been recorded in the Register as provided in this
paragraph.
(e) Any Lender may, without the consent of the Loan Parties, the
Agents, and the Issuing Bank, sell participations to one or more banks or other
entities other than a Loan Party or Affiliate thereof (a "Participant") in all
or a portion of such Lender's rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it),
provided that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Loan Parties, the
Agents, the Issuing Bank and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
85
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation in the Commitments, the Loans and the
Letters of Credit Outstandings shall provide that such Lender shall retain the
sole right to enforce the Loan Documents and to approve any amendment,
modification or waiver of any provision of the Loan Documents, provided that
such agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 10.2(b) that affects such Participant.
Subject to paragraph (f) of this Section, the Loan Parties agree that each
Participant shall be entitled to the benefits of Sections 2.23, 2.25 and 2.26
and to the obligation of Section 2.28 to the same extent as if it were a Lender
and had acquired its interest by assignment pursuant to paragraph (b) of this
Section. To the extent permitted by law, each Participant also shall be entitled
to the benefits of Section 10.9 as though it were a Lender, provided such
Participant agrees to be subject to Section 2.25(c) as though it were a Lender.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.23 or 2.26 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the Lead
Borrower's prior written consent. A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 2.26 unless
(i) the Lead Borrower is notified of the participation sold to such Participant
and such Participant agrees, for the benefit of the Borrowers, to comply with
Section 2.26(f) as though it were a Lender and (ii) such Participant is eligible
for exemption from the withholding tax referred to therein, following compliance
with Section 2.26(f).
(g) Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement to secure obligations
of such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest, provided that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto.
SECTION 10.6 Survival. All covenants, agreements, representations and
warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of the Loan Documents and the making of any Loans and issuance of any
Letters of Credit, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that the Agents, the Issuing Bank or any
Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
so long as the Commitments have not expired or terminated. The provisions of
Sections 2.23, 2.26 and 10.3 and Article IX shall survive and remain in full
force and effect regardless of the consummation of the transactions contemplated
hereby, the repayment of the Loans, the expiration or termination of the Letters
of Credit and the Commitments or the termination of this Agreement or any
provision hereof.
86
SECTION 10.7 Counterparts; Integration; Effectiveness. This Agreement
may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement, the other
Loan Documents and any separate letter agreements with respect to fees payable
to the Agents constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 5.1, this Agreement shall become effective when it shall
have been executed by the Agents and the Lenders and when the Administrative
Agent shall have received counterparts hereof that, when taken together, bear
the signatures of each of the other parties hereto, and thereafter shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 10.8 Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 10.9 Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other obligations at any time
owing by such Lender or Affiliate to or for the credit or the account of the
Loan Parties against any of and all the obligations of the Loan Parties now or
hereafter existing under this Agreement held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement and
although such obligations may be matured or unmatured or otherwise fully
secured. The rights of each Lender under this Section are in addition to other
rights and remedies (including other rights of setoff) that such Lender may
have. Each Lender agrees promptly to notify the Lead Borrower and the
Administrative Agent after any such setoff and application made by such Bank,
provided, that the failure to give such notice shall not affect the validity of
such setoff and application. ANY AND ALL RIGHTS TO REQUIRE THE ADMINISTRATIVE
AGENT OR THE COLLATERAL AGENT TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO
ANY OTHER COLLATERAL WHICH SECURES ANY OF THE OBLIGATIONS PRIOR TO THE EXERCISE
BY THE LENDERS OF THEIR RIGHT OF SET-OFF UNDER THIS SECTION ARE HEREBY
KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.
SECTION 10.10 Governing Law; Jurisdiction; Consent to Service of
Process.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK EXCLUDING THE LAWS APPLICABLE TO
CONFLICTS OR CHOICE OF LAW (EXCEPT SECTION 5.1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW).
87
(b) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 10.1. Nothing in this
Agreement or any other Loan Document will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
(c) Each Borrower hereby submits to the nonexclusive jurisdiction of
the United States District Court for the Southern District of New York and the
District of Massachusetts and of any New York State court sitting in New York
City or any Massachusetts state court for purposes of all legal proceedings
arising out of or relating to this Agreement or the transactions contemplated
hereby. Each Borrower irrevocably waives, to the fullest extent permitted by
law, any objection which it may now or hereafter have to the laying of the venue
of any such proceeding brought in such a court and any claim that any such
proceeding brought in such a court has been brought in an inconvenient forum.
SECTION 10.11 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION 10.12 Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 10.13 Interest Rate Limitation. Notwithstanding anything
herein to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges and other amounts that are treated as interest
on such Loan under applicable law (collectively the "Charges"), shall exceed the
maximum lawful rate (the "Maximum Rate") that may be contracted for, charged,
taken, received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.
88
SECTION 10.14 Additional Waivers. (a) The Obligations are the joint
and several obligations of each Loan Party. To the fullest extent permitted by
applicable law, the obligations of each Loan Party hereunder shall not be
affected by (i) the failure of any Agent or any other Secured Party to assert
any claim or demand or to enforce or exercise any right or remedy against any
other Loan Party under the provisions of this Agreement, any other Loan Document
or otherwise, (ii) any rescission, waiver, amendment or modification of, or any
release from any of the terms or provisions of, this Agreement, any other Loan
Document, or any other agreement, including with respect to any other Borrower
of the Obligations under this Agreement, or (iii) the failure to perfect any
security interest in, or the release of, any of the security held by or on
behalf of the Collateral Agent or any other Secured Party.
(b) The obligations of each Loan Party hereunder shall not be subject
to any reduction, limitation, impairment or termination for any reason (other
than the indefeasible payment in full in cash of the Obligations), including any
claim of waiver, release, surrender, alteration or compromise of any of the
Obligations, and shall not be subject to any defense or set-off, counterclaim,
recoupment or termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of each Loan Party hereunder shall
not be discharged or impaired or otherwise affected by the failure of any Agent
or any other Secured Party to assert any claim or demand or to enforce any
remedy under this Agreement, any other Loan Document or any other agreement, by
any waiver or modification of any provision of any thereof, by any default,
failure or delay, willful or otherwise, in the performance of the Obligations,
or by any other act or omission that may or might in any manner or to any extent
vary the risk of any Loan Party or that would otherwise operate as a discharge
of any Loan Party as a matter of law or equity (other than the indefeasible
payment in full in cash of all the Obligations).
(c) To the fullest extent permitted by applicable law, each Loan
Party waives any defense based on or arising out of any defense of any other
Loan Party or the unenforceability of the Obligations or any part thereof from
any cause, or the cessation from any cause of the liability of any other Loan
Party, other than the indefeasible payment in full in cash of all the
Obligations. The Collateral Agent and the other Secured Parties may, at their
election, foreclose on any security held by one or more of them by one or more
judicial or nonjudicial sales, accept an assignment of any such security in lieu
of foreclosure, compromise or adjust any part of the Obligations, make any other
accommodation with any other Loan Party, or exercise any other right or remedy
available to them against any other Loan Party, without affecting or impairing
in any way the liability of any Loan Party hereunder except to the extent that
all the Obligations have been indefeasibly paid in full in cash. Pursuant to
applicable law, each Loan Party waives any defense arising out of any such
election even though such election operates, pursuant to applicable law, to
impair or to extinguish any right of reimbursement or subrogation or other right
or remedy of such Loan Party against any other Loan Party, as the case may be,
or any security.
89
(d) Upon payment by any Loan Party of any Obligations, all rights of
such Loan Party against any other Loan Party arising as a result thereof by way
of right of subrogation, contribution, reimbursement, indemnity or otherwise
shall in all respects be subordinate and junior in right of payment to the prior
indefeasible payment in full in cash of all the Obligations, as more
particularly set forth in the Indemnity, Subrogation and Contribution Agreement
entered into amongst the Loan Parties. In addition, any indebtedness of any Loan
Party now or hereafter held by any other Loan Party is hereby subordinated in
right of payment to the prior payment in full of the Obligations. None of the
Loan Parties will demand, xxx for, or otherwise attempt to collect any such
indebtedness. If any amount shall erroneously be paid to any Loan Party on
account of (a) such subrogation, contribution, reimbursement, indemnity or
similar right or (b) any such indebtedness of any Loan Party, such amount shall
be held in trust for the benefit of the Secured Parties and shall forthwith be
paid to the Collateral Agent to be credited against the payment of the
Obligations, whether matured or unmatured, in accordance with the terms of the
Loan Documents.
SECTION 10.15 Replacement Note. Upon receipt of an appropriate and
reasonably acceptable affidavit of an officer of the affected Bank as to the
loss, theft, destruction or mutilation of any Note or of any other Loan Document
which is not of public record and, in the case of any such mutilation, upon
surrender and cancellation of such Note or other Loan Document and receipt of
the indemnity described below, the Borrowers will, and will cause other Loan
Parties to, issue, in lieu thereof, a replacement Note or other Loan Document in
the same principal amount (as to any Note) and in any event of like tenor and
upon such issuance the original Note or other Loan Document shall be deemed
cancelled. In connection with any such issuance of a replacement Note or other
Loan Document, the affected Lender shall issue a written indemnification in
favor of the Loan Parties with respect to such lost, stolen or destroyed Note or
other Loan Document in form and substance reasonably satisfactory to the Loan
Parties.
SECTION 10.16 Confidentiality. Each of the Agents, the Issuing Bank
and the Lenders agrees to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (a) to its and its
Affiliates' directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or any other Loan Document or the enforcement of rights hereunder or thereunder,
(f) subject to an agreement containing provisions substantially the same as
those of this Section, to any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this
Agreement and any actual or prospective counterparty or advisors to any swap or
derivative transactions relating to the Loan Parties and the Obligations, (g)
with the consent of the Loan Parties, or (h) to the extent such Information (i)
becomes publicly available other than as a result of a breach of this Section or
(ii) becomes available to the Agents, the Issuing Bank or any Lender on a
nonconfidential basis from a source other than the Loan Parties. For the
purposes of this Section, the term "Information" means all information received
90
from the Loan Parties relating to their business, other than any such
information that is available to the Agents, the Issuing Bank or any Lender on a
nonconfidential basis prior to disclosure by the Loan Parties, provided that, in
the case of information received from the Loan Parties after the date hereof,
such information is clearly identified at the time of delivery as confidential.
Any Person required to maintain the confidentiality of Information as provided
in this Section shall be considered to have complied with its obligation to do
so if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information. Notwithstanding the foregoing, effective from the date
of commencement of discussions concerning this Agreement, each party and each of
its employees, representatives or other agents may disclose to any and all
Persons, without limitation of any kind, the tax treatment and tax structure of
this Agreement and all materials of any kind, including opinions or other tax
analyses, that have been provided to it by any other party relating to such tax
treatment and tax structure.
SECTION 10.17 Existing Credit Agreement. This Agreement shall
supersede the Existing Credit Agreement in its entirety, except as provided in
this ss.10.17. On the Exit Facility Date, the rights and obligations of the
parties under the Existing Credit Agreement which remain Lenders hereunder shall
be subsumed within and be governed by this Agreement. This Agreement does not
extinguish the obligations for the payment of money outstanding under the
Existing Credit Agreement or discharge or release the obligations under the
Existing Credit Agreement or the lien or priority of any mortgage, pledge,
security agreement or any other security therefor. Nothing herein contained
shall be construed as a substitution or novation of the obligations outstanding
under the Existing Credit Agreement or instruments securing the same, except as
modified hereby or by instruments executed concurrently herewith. Nothing
expressed or implied in this Agreement shall be construed as a release or other
discharge of the Borrowers or the Facility Guarantors under the Existing Credit
Agreement from any of its obligations and liabilities thereunder. The Borrowers
and the Facility Guarantors hereby confirm and agree that (a) except as modified
hereby or by instruments executed concurrently herewith, each loan document to
which it is a party and executed in connection with the Existing Credit
Agreement shall constitute a "Loan Document" under this Agreement, and shall
continue to be in full force and effect and is hereby ratified and confirmed in
all respects, except that on and after the Exit Facility Date, all references in
any such Loan Document to the "Security Agreement," "Credit Agreement,"
"thereto," "thereof," "thereunder" or words of like import referring to the
Existing Credit Agreement shall mean the Existing Credit Agreement, as amended
and restated by this Agreement, (b) to the extent that any such Loan Document
purports to assign or pledge to the Collateral Agent a security interest in or
lien on, any Collateral as security for the obligations of the Borrowers and the
Facility Guarantors from time to time existing in respect of the Existing Credit
Agreement and the Loan Documents, such pledge, assignment and/or grant of the
security interest or lien is hereby ratified and confirmed in all respects, and
(c) the UCC financing statements previously filed in connection with the
Existing Credit Agreement and the other Security Documents shall remain in full
force and effect and shall apply as of the Exit Facility Date with respect to
the Obligations hereunder.
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IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
as a sealed instrument as of the date first set forth above.
FOOTSTAR, INC.,
as Lead Borrower and as a Borrower
By:
------------------------------------
Name:
Title:
FOOTSTAR CORPORATION,
as a Borrower
By:
------------------------------------
Name:
Title:
00
XXXX XX XXXXXXX, N.A. (successor in
interest to Fleet National Bank), as
Administrative Agent, as Swingline
Lender and as Issuing Bank
By:
-----------------------------------
Name:
Title:
BANK OF AMERICA, N.A. (successor in
interest to Fleet Retail Group, Inc.),
as Collateral Agent
By:
-----------------------------------
Name:
Title:
GENERAL ELECTRIC CAPITAL CORPORATION,
as Syndication Agent and as a Lender
By:
-----------------------------------
Name:
Title:
THE CIT GROUP/BUSINESS CREDIT, INC.,
as a Lender
By:
------------------------------------
Name:
Title:
AMSOUTH BANK,
as a Lender
By:
------------------------------------
Name:
Title:
NATIONAL CITY BUSINESS CREDIT, INC.,
as a Lender
By:
-----------------------------------
Name:
Title:
93
SCHEDULE 1.1(a)
---------------
PRICING GRID - REVOLVING LOANS
------------------------------
----------------- ------------------------------------------------ ------------------------- -------------------------
Applicable Margin Applicable Margin
Level Average Excess Availability for Eurodollar Loans for Base Rate Loans
----------------- ------------------------------------------------ ------------------------- -------------------------
I Greater than or equal to $50,000,000 1.75% 0.0%
----------------- ------------------------------------------------ ------------------------- -------------------------
II Greater than or equal to $35,000,000 and less 2.00% 0.25%
than $50,000,000
----------------- ------------------------------------------------ ------------------------- -------------------------
III Greater than or equal to $20,000,000 and less 2.25% 0.50%
than $35,000,000
----------------- ------------------------------------------------ ------------------------- -------------------------
IV Less than $20,000,000 2.50% 0.50%
----------------- ------------------------------------------------ ------------------------- -------------------------
SCHEDULE 1.1 - LENDERS AND COMMITMENTS - EXIT FACILITY
------------------------------------------------------
--------------------------------------------------------------------------------
LENDERS: COMMITMENTS COMMITMENT PERCENTAGE
--------------------------------------------------------------------------------
Bank of America, N.A. $28,424,202 28.424202%
--------------------------------------------------------------------------------
General Electric Capital Corporation $28,424,202 28.424202%
--------------------------------------------------------------------------------
The CIT Group/Business Credit, Inc. $18,949,468 18.949468%
--------------------------------------------------------------------------------
AmSouth Bank $13,264,628 13.264628%
--------------------------------------------------------------------------------
National City Business Credit, Inc. $10,937,500 10.937500%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TOTAL COMMITMENT $100,000,000 100.0%
--------------------------------------------------------------------------------
