Exhibit 4.1
CREDIT AGREEMENT
$160,000,000
Among
WICKES INC. (formerly Wickes Lumber Company) (the "Borrower"),
as Borrower
EACH OF THE FINANCIAL INSTITUTIONS
INITIALLY A SIGNATORY HERETO,
TOGETHER WITH THOSE ASSIGNEES
PURSUANT TO SECTION 11.6 HEREOF ("Lenders"),
as Lenders
BANKBOSTON, N.A.,
as Administrative Agent (the "Agent")
and as Issuing Bank
and
NATIONSBANK, N.A., (the "Documentation Agent")
as Documentation Agent
and
BANCBOSTON XXXXXXXXX XXXXXXXX INC. (the "Syndication Agent"),
as Syndication Agent and Arranger
Dated as of February 17, 1999
TABLE OF CONTENTS
Page
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ARTICLE 1. DEFINITIONS 1
1.1. General Definitions. 1
1.2. Accounting Terms and Determinations. 21
1.3. Other Defined Terms. 21
ARTICLE 2. REVOLVING LOANS 21
2.1. Commitments. 21
2.2. Borrowing of Revolving Loans. 22
2.3. Settlement of Lender Advances and Repayments. 25
2.4. Periodic Settlement of Agent Advances and Repayments. 25
2.5. Defaulting Lenders. 26
2.6. Mandatory Payments; Reduction of Commitments. 27
2.7. Maintenance of Loan Account; Statements of Account. 27
2.8. Payment Procedures. 28
2.9. Collection of Accounts. 28
2.10.Application of Payments. 29
ARTICLE 3. LETTERS OF CREDIT 29
3.1. Issuance of Letters of Credit. 29
3.2. Terms of Letters of Credit. 30
3.3. Lenders' Participation. 30
3.4. Notice of Issuance. 31
3.5. Payment of Amounts Drawn Under Letters of Credit. 31
3.6. Payment by Lenders. 32
3.7. Nature of Issuing Bank's Duties. 32
3.8. Obligations Absolute. 33
ARTICLE 4. INTEREST, FEES AND EXPENSES 34
4.1. Interest on Base Rate Loans. 34
4.2. Interest on Eurodollar Rate Loans. 35
4.3. Interest After Event of Default. 36
4.4. Reimbursement of Expenses. 36
4.5. Unused Line Fee. 36
4.6. Letter of Credit Fees. 36
4.7. Special Provisions Relating to Eurodollar Rate Loans. 38
4.8. Indemnification in Certain Events. 41
4.9. Net Payments. 42
4.10.Affected Lenders. 43
4.11.Sharing of Payments. 44
4.12.Calculations. 45
ARTICLE 5. CONDITIONS PRECEDENT 45
5.1. Conditions Precedent to Effectiveness. 45
5.2. Conditions Precedent to Effectiveness and to Each Revolving Loan
and Letter of Credit. 47
ARTICLE 6. REPRESENTATIONS AND WARRANTIES 47
6.1. Organization and Qualification. 47
6.2. Authority. 48
6.3. Enforceability. 48
6.4. No Conflict. 48
6.5. Consents and Filings. 48
6.6. Financial Data. 48
6.7. Subsidiaries. 49
6.8. No Judgment or Litigation. 49
6.9. No Defaults. 49
6.10.Labor Matters. 49
6.11.Compliance with Law. 50
6.12.ERISA. 50
6.13.Compliance with Environmental Laws. 51
6.14.Intellectual Property. 51
6.15.Licenses and Permits. 52
6.16.Title to Property. 52
6.17.Investment Company. 52
6.18.Taxes and Tax Returns. 52
6.19.Material Contracts. 53
6.20.Affiliate Transactions. 53
6.21.Accuracy and Completeness of Information. 54
6.22.Recording Taxes. 54
6.23.Solvency. 54
0.00.Xx Change. 54
6.25.Year 2000 Problem. 54
ARTICLE 7. AFFIRMATIVE COVENANTS 55
7.1. Financial Reporting. 55
7.2. Collateral Reporting. 57
7.3. Notification Requirements. 58
7.4. Corporate Existence. 61
7.5. ERISA. 61
7.6. Environmental and Other Matters. 61
7.7. Insurance; Casualty Loss. 62
7.8. Taxes. 63
7.9. Compliance With Laws. 63
7.10.Use of Proceeds. 63
7.11.Fiscal Year. 64
7.12.Intellectual Property. 64
7.13.Maintenance of Property. 64
7.14.Books and Records; Inspections; Field Audits. 64
7.15.Further Assurances. 65
7.16.Secured Interest Rate Agreements. 65
ARTICLE 8. NEGATIVE COVENANTS 65
8.1. Unused Availability. 65
8.2. Minimum Tangible Capital Funds. 65
8.3. [Reserved] 66
8.4. Capital Expenditures. 66
8.5. Additional Indebtedness. 66
8.6. Liens. 67
8.7. Sale of Assets. 68
8.8. Corporate Changes. 69
8.9. Guaranties. 69
8.10.Restricted Payments. 69
0.00.Xxxxxxxxxxx. 70
8.12.Affiliate Transactions. 71
8.13.Prohibited Transactions Under ERISA. 71
8.14.Additional Bank Accounts. 72
8.15.Excess Cash. 73
8.16.Material Amendments of Material Contracts. 73
8.17.Additional Negative Pledges. 73
8.18.Additional Subsidiaries; Acquisitions. 73
8.19.Hedging Transactions. 75
8.20.Activities of Subsidiaries. 76
ARTICLE 9. EVENTS OF DEFAULT AND REMEDIES 76
9.1. Events of Default. 76
9.2. Acceleration and Cash Collateralization. 78
9.3. Rescission of Acceleration. 78
9.4. Remedies. 78
9.5. Right of Setoff. 79
9.6. License for Use of Software and Other Intellectual Property.
79
9.7. Deficiencies; Remedies Cumulative. 80
ARTICLE 10. THE AGENT 80
10.1. Appointment of Agent. 80
10.2. Nature of Duties of Agent, Documentation Agent and Syndication
Agent. 81
10.3. Lack of Reliance on Agent. 81
10.4. Certain Rights of the Agent. 82
10.5. Reliance by Agent. 82
10.6. Indemnification of Agent. 82
10.7. The Agent in its Individual Capacity. 82
10.8. Holders of Notes. 83
10.9. Successor Agent. 83
10.10.Collateral Matters. 84
10.11.Actions with Respect to Defaults. 85
00.00.Xxxxxxxx of Information. 86
10.13.Syndication Agent. 86
00.00.Xx Liability for Interest Rate Agreements or Lumber Hedging
Agreements. 86
ARTICLE 11. MISCELLANEOUS 86
11.1. SUBMISSION TO JURISDICTION; WAIVERS. 86
11.2. [RESERVED]. 87
11.3. GOVERNING LAW. 87
11.4. Delays; Partial Exercise of Remedies. 87
11.5. Notices. 88
11.6. Assignability. 88
11.7. Confidentiality. 91
11.8. Indemnification. 92
11.9. Entire Agreement; Successors and Assigns. 92
11.10.Amendments and Waivers. 93
11.11.Nonliability of Agent and Lenders. 94
11.12.Independent Nature of Lenders' Rights. 94
11.13.Counterparts. 94
11.14.Effectiveness. 94
11.15.Severability. 94
11.16.Headings Descriptive. 94
11.17.Maximum Rate. 95
11.18.JURY TRIAL. 95
ANNEX, EXHIBITS AND SCHEDULES
Annex I Lenders and Commitment Amounts
Exhibit A Form of Revolving Note
Exhibit B Form of Compliance Certificate
Exhibit C Form of Borrowing Base Certificate
Exhibit D Form of Collateral Access Agreement
Exhibit E Form of Notice of Borrowing
Exhibit F Form of Assignment and Assumption Agreement
Exhibit G Form of Notice of Continuation
Exhibit H Form of Notice of Conversion
Exhibit I [Reserved]
Exhibit J Authorized Officers
Exhibit K Blocked Account Agreement
Exhibit L Concentration Account Agreement
Schedule A Closing Documents List
Schedule B Disclosure Schedule
Schedule 8.7 Permitted Real Estate and Related Asset Sales
THIS CREDIT AGREEMENT (the "Credit Agreement") is entered into as of
February 17, 1999 among WICKES INC. (formerly Wickes Lumber Company), a Delaware
corporation (and any permitted successor or assign, the "Borrower"), and each of
those financial institutions identified as Lenders on Annex I hereto (together
with each of their successors and assigns, referred to individually as a
"Lender" and collectively as the "Lenders"), BANKBOSTON, N.A., acting as agent
for the Lenders in the manner and to the extent described in Article 10 hereof
(in such capacity, the "Agent"), BANCBOSTON XXXXXXXXX XXXXXXXX INC., as
Syndication Agent and Arranger (the "Syndication Agent"), NATIONSBANK, N.A., as
Documentation Agent (the "Documentation Agent"), and BANKBOSTON, N.A., as issuer
of letters of credit (in such capacity, the "Issuing Bank").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, the Borrower has requested that the Lenders, the Agent, the
Syndication Agent, the Documentation Agent and the Issuing Bank enter into this
Credit Agreement in order to make Revolving Loans to the Borrower in an
aggregate amount of up to $160,000,000 and to provide Letters of Credit to the
Borrower to refinance certain existing indebtedness of the Borrower, provide for
the Borrower's ongoing working capital requirements, acquisitions (to the extent
permitted herein), general business requirements and capital expenditure
requirements;
NOW, THEREFORE, the Borrower, the Lenders, the Issuing Bank, the
Documentation Agent, the Syndication Agent and the Agent hereby agree as
follows:
ARTICLE 1. DEFINITIONS
1.1. General Definitions.
As used herein, the following terms shall have the meanings herein
specified (to be equally applicable to both the singular and plural forms of the
terms defined):
Accounts shall mean "Accounts" as defined in the Security Agreement.
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Acquisition shall mean (a) the acquisition of all or substantially all of the
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assets of a Person, or of all or substantially all of any business or division
of a Person, (b) the acquisition of in excess of 50% of the capital stock,
partnership interests, membership interests or equity of any Person or (c) a
merger or consolidation or any other combination with another Person.
Adjusted Eurodollar Rate shall mean, with respect to each Interest Period for
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any Eurodollar Rate Loan, the rate obtained by dividing (i) the Eurodollar Rate
for such Interest Period by (ii) a percentage equal to 1 minus the stated
maximum rate (stated as a decimal) of all reserves, if any, required to be
maintained against "Eurocurrency liabilities" as specified in Regulation D (or
against any other category of liabilities which includes deposits by reference
to which the interest rate on Eurodollar Rate Loans is determined or any
category of extensions of credit or other assets which includes loans by a
non-United States office of any Lender to United States residents).
Adjusted Interest Expense shall mean Interest Expense, excluding interest which
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is paid in kind or is otherwise not paid or payable in cash.
Affiliate shall mean, with respect to any Person, any Person which directly or
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indirectly controls, is controlled by, or is under common control with, such
Person or any Subsidiary of such Person or any Person who is a director or
officer of such Person or any Subsidiary of such Person. For purposes of this
definition, "control" shall mean the possession, directly or indirectly, of the
power to (i) vote ten percent (10%) or more of the securities having ordinary
voting power for the election of directors of such Person or (ii) direct or
cause the direction of management and policies of a business, whether through
the ownership of voting securities, by contract or otherwise and either alone or
in conjunction with others or any group.
Affiliate Transaction shall have the meaning given to such term in Section 8.12
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hereof.
Agent shall mean BKB as provided in the preamble to this Credit Agreement or any
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successor to BKB.
Agent Advance shall mean a Revolving Loan made by the Agent to the Borrower
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pursuant to Section 2.2 hereof.
Agent's Fee Letter shall mean that certain letter dated December 29, 1998
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between the Agent and the Borrower providing for the payment of certain fees in
connection with the Credit Agreement.
Applicable Lending Office shall mean, with respect to each Lender, such Lender's
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Eurodollar Lending Office in the case of a Eurodollar Rate Loan, and such
Lender's Domestic Lending Office in the case of a Base Rate Loan.
Assignment and Assumption Agreement shall mean an assignment and assumption
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agreement entered into by an assigning Lender and an assignee Lender, and
accepted by the Agent, in accordance with Section 11.6, substantially in the
form of Exhibit F.
Auditors shall mean a nationally-recognized firm of independent public
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accountants selected by the Borrower and satisfactory to the Agent in its sole
discretion. For purposes of this Credit Agreement, the Borrower's current firm
of independent public accountants, Pricewaterhouse Coopers, shall be deemed to
be satisfactory to the Agent.
Base Rate shall mean the higher of (a) the rate which BKB announces from time to
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time at its head office in Boston, Massachusetts, as its "base rate", and (b)
one-half of one percent (0.50%) above the Federal Funds Rate. The Base Rate is
a reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. BKB and each of the Lenders may make
commercial loans or other loans at rates of interest at, above or below the Base
Rate.
Base Rate Loan shall mean a Revolving Loan that bears interest as provided in
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Section 4.1 hereof.
Base Rate Spread shall have the meaning given to such term in Section 4.1
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hereof.
Benefit Plan shall mean a defined benefit plan as defined in Section 3(3) of
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ERISA (other than a Multiemployer Plan) for which the Borrower, any Subsidiary
or any ERISA Affiliate is, or within the immediately preceding six (6) years
was, an "employer" as defined in Section 3(5) of ERISA.
BKB shall mean BankBoston, N.A., a national banking association, in its
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individual capacity.
BKB Account shall have the meaning given to such term in Section 2.9 hereof.
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Blocked Account shall have the meaning given to such term in Section 2.9 hereof.
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Blocked Account Agreement shall have the meaning given to such term in Section
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2.9 hereof.
Blocked Account Bank shall have the meaning given to such term in Section 2.9
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hereof.
Borrower shall mean Wickes Inc., a Delaware corporation and any permitted
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successor or assign.
Borrowing shall mean a borrowing of Revolving Loans of the same Type on the same
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day.
Borrowing Base shall have the meaning given to such term in Section 2.1 hereof.
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Borrowing Base Certificate shall have the meaning given to such term in Section
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7.2 hereof.
Business Day shall mean any day on which banking institutions in Boston,
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Massachusetts and Chicago, Illinois, are open for the transaction of banking
business and, in the case of Eurodollar Rate Loans, also a day which is a
Eurodollar Business Day.
Capital Expenditures shall mean, for any period, the sum of (a) all expenditures
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capitalized for financial statement purposes plus, without duplication, (b) the
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entire principal amount of any debt (including obligations under capitalized
leases) assumed or incurred in connection with any such expenditures; provided
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that "Capital Expenditures" shall in no event include any portion of the
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purchase price paid in connection with the acquisition of any Person (including
through the purchase of a majority of the capital stock or other ownership
interests of such Person or through merger or consolidation) to the extent
allocable to property, plant or equipment. Notwithstanding the foregoing,
"Capital Expenditures" shall not include insurance proceeds from a Casualty Loss
applied to the repair or replacement of the property affected by such Casualty
Loss.
Cash Equivalents shall mean any of the following, so long as the Agent has a
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perfected security interest therein: (i) securities issued, guarantied or
insured by the United States or any of its agencies with maturities of not more
than one year from the date acquired; (ii) certificates of deposit with
maturities of not more than one year from the date acquired issued by a U.S.
federal or state chartered commercial bank of recognized standing, which has
capital and unimpaired surplus in excess of $200,000,000 and which bank or its
holding company has a short-term commercial paper rating of at least A-1 or the
equivalent by Standard & Poor's Corporation and at least P-1 or the equivalent
by Xxxxx'x Investors Services, Inc.; (iii) reverse repurchase agreements with
terms of not more than seven (7) days from the date acquired, for securities of
the type described in (i) above and entered into only with commercial banks
having the qualifications described in (ii) above; (iv) commercial paper, other
than commercial paper issued by the Borrower or any of its Affiliates, issued by
any Person incorporated under the laws of the United States or any state thereof
and rated at least A-1 or the equivalent thereof by Standard & Poor's
Corporation or at least P-1 or the equivalent thereof by Xxxxx'x Investors
Service, Inc., in each case with maturities of not more than one year from the
date acquired; and (v) investments in money market funds registered under the
Investment Company Act of 1940, as amended, which have net assets of at least
$200,000,000 and at least eighty-five percent (85%) of whose assets consist of
securities and other obligations of the type described in clauses (i) through
(iv) above.
Casualty Loss shall have the meaning given to such term in Section 7.7 hereof.
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Change of Control shall mean the occurrence of one or more of the following
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events: (i) any sale, lease, exchange or other transfer (in one transaction or
a series of related transactions) of all or substantially all of the assets of
the Borrower to any Person or group of related Persons (a "Group") for purposes
of Section 13(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), together with any Affiliates thereof, other than pursuant to a
transaction the sole purpose and effect of which is to change the Borrower's
jurisdiction of incorporation to another state within the United States;
(ii) the approval by the holders of capital stock of the Borrower of any plan or
proposal for the liquidation or dissolution of the Borrower; or (iii) the
acquisition in one or more transactions of beneficial ownership (within the
meaning of Rule 13d-3 under the Exchange Act) by any Person or Group (other than
Riverside Group, Inc. or its Affiliates (collectively, "Riverside")) of any
securities of the Borrower such that, as a result of such acquisition, such
Person or Group beneficially owns (within the meaning of Rule 13d-3 under the
Exchange Act), directly or indirectly, at least thirty percent (30%) of the
Borrower's then outstanding voting securities entitled to vote on a regular
basis for a majority of the Board of Directors or other equivalent governing
body thereof, unless at such times Riverside beneficially owns an amount of
voting securities greater than the amount so held by such Person or Group.
Closing Date shall mean February 17, 1999.
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Closing Documents List shall mean the Closing Documents List attached hereto as
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Schedule A.
Code shall have the meaning given to such term in Section 1.3.
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Collateral shall mean any and all assets and rights and interests in or to
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property of the Borrower pledged from time to time as security for the
Obligations whether now owned or hereafter acquired, including, without
limitation, all of the Accounts, Inventory and Intangibles of the Borrower.
Collateral Access Agreements shall mean any landlord waivers, mortgagee waivers,
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bailee letters or any similar acknowledgment agreements of any warehouseman or
processor in possession of Inventory, in each case similar in substance to
Exhibit D or Exhibit I, as applicable, or as otherwise required by the Agent or
the Majority Lenders.
Collateral Documents shall mean all contracts, instruments and other documents
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now or hereafter executed and delivered in connection with this Credit
Agreement, pursuant to which mortgages, liens and/or security interests are
granted to the Agent in the Collateral for the benefit of the Lenders and the
Issuing Bank.
Collections shall mean all cash, funds, checks, notes, instruments and any other
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form of remittance tendered by account debtors in payment of Accounts.
Commitment of any Lender shall mean the amount set forth opposite such Lender's
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name on Annex I, as such annex may be amended from time to time, under the
heading "Commitment," as such amount may be reduced from time to time pursuant
to the terms of this Credit Agreement.
Concentration Account Agreement shall have the meaning given to such term in
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Section 2.9 hereof.
Consolidated Entity shall mean the Borrower and each of its Subsidiaries which
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would be consolidated with the Borrower for purposes of financial reporting.
Consolidated Net Income shall mean for any period the consolidated net income of
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the Consolidated Entity for such period.
Consolidated Net Worth shall mean the excess of the consolidated assets of the
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Consolidated Entity over the consolidated liabilities of the Consolidated
Entity.
Contingency Account shall have the meaning given to such term in Section 8.14
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hereof.
Contingent Obligation of any Person shall mean any direct or indirect guaranty
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or other contractual obligation, contingent or otherwise, of such Person with
respect to any Indebtedness or other obligation or liability of another,
including any such Indebtedness, obligation or liability directly or indirectly
guaranteed, endorsed (other than for collection or deposit in the ordinary
course of business), co-made or discounted or sold with recourse by such Person,
or in respect of which such Person is otherwise directly or indirectly liable,
including any contractual obligations (contingent or otherwise) arising through
any agreement to purchase, repurchase, or otherwise acquire such Indebtedness,
obligation or liability or any security therefor, or to provide funds for the
payment or discharge thereof (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise), or to maintain solvency, assets,
level of income, or other financial condition, or to make payment other than for
value received.
Covered Taxes shall have the meaning given to such term in Section 4.9(a)
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hereof.
Credit Agreement shall mean this credit agreement, as the same may be modified,
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amended, extended, restated or supplemented from time to time.
Credit Documents shall mean, collectively, this Credit Agreement, the Revolving
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Notes, the Letters of Credit, each of the Collateral Documents and all other
documents, agreements, instruments, opinions and certificates, now or hereafter
executed and delivered in connection herewith or therewith, as the same may be
modified, amended, extended, restated or supplemented from time to time.
Credit Parties shall mean, collectively, the Borrower and any other parties
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(other than the Lenders, the Agent, the Syndication Agent, the Documentation
Agent and the Issuing Bank) to the Credit Documents (other than the Collateral
Access Agreements, the Blocked Account Agreements and the opinions).
Default shall mean an event, condition or default which with the giving of
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notice, the passage of time or both would be an Event of Default.
Defaulting Lender shall have the meaning given to such term in Section 2.5
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hereof.
Disbursement Account shall have the meaning given to such term in Section 2.2(c)
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hereof.
Disbursement Account Bank shall have the meaning given to such term in Section
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2.2(c) hereof.
Documentation Agent shall mean NationsBank, N.A., as provided in the preamble to
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this Credit Agreement.
DOL shall mean the United States Department of Labor and any successor
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department or agency.
Dollars and the sign $ shall each mean freely transferable lawful money of the
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United States.
Domestic Lending Office shall mean, with respect to any Lender, the office of
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such Lender specified as its "Domestic Lending office" opposite its name on
Annex I hereto, as such annex may be amended from time to time.
EBITDA shall mean, in any fiscal period, the Consolidated Net Income (other than
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extraordinary items of the Consolidated Entity for such period), (i) plus the
amount of all Interest Expense, income tax expense, depreciation and
amortization, including amortization of any goodwill or other intangibles for
such period, (ii) plus losses and minus gains (to the extent not duplicative)
attributable to any fixed asset sales occurring during such period, (iii) plus,
only when calculating EBITDA for a period which includes a part of fiscal 1998,
Restructuring Expenses attributable to such period, (iv) plus all non-recurring
and extraordinary expenses of the Consolidated Entity occurring during such
period as reasonably determined by the Agent, and (v) plus or minus (as the case
may be) any other non-cash charges which have been subtracted or added, as the
case may be, in calculating Consolidated Net Income for such period.
Eligible Accounts Receivable shall mean Accounts of the Borrower payable in
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Dollars and deemed by the Agent in its Permitted Discretion to be eligible for
inclusion in the calculation of the Borrowing Base. In determining the amount
to be so included, the face amount of such Accounts shall be reduced by the
amount of all returns, discounts, claims, credits, charges, or other allowances
and by the aggregate amount of all reserves, limits and deductions provided for
in this definition and elsewhere in this Credit Agreement. Unless otherwise
approved in writing by the Agent, no Account shall be deemed to be an Eligible
Account Receivable if:
(a) the Account arises out of a sale made by the Borrower to an
Affiliate; or
(b) the Account is unpaid more than thirty (30) days after the
original payment due date; provided, however, that the aggregate amount of
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all invoices providing for payment in the second or third month following
the month of purchases relating to such invoices that may constitute
Eligible Accounts Receivable shall not exceed twenty percent (20%) of total
Eligible Accounts Receivable at any one time; provided, further, that any
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Account that is unpaid more than one hundred twenty (120) days following
the date of purchase shall in no event be an Eligible Accounts Receivable;
or
(c) the Account is owing by an account debtor (or any Affiliate
thereof) with respect to which twenty percent (20%) or more, in face
amount, of all Accounts from such account debtor (or any Affiliate thereof)
are unpaid more than sixty (60) days past the original payment due date; or
(d) (i) the account debtor is also a creditor of the Borrower,
(ii) the account debtor has disputed its liability on, or the account debt-
or has made any claim with respect to, such Account or any other Account
due from such account debtor to the Borrower, which has not been resolved
or (iii) the Account otherwise is or may become subject to any right of
setoff by the account debtor; provided, that any Account deemed ineligible
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pursuant to this clause (d) shall only be ineligible to the extent of the
amount owed by the Borrower to the account debtor, the amount of such
dispute or claim, or the amount of such setoff, as applicable; or
(e) the account debtor has commenced a voluntary case under the
federal bankruptcy laws, as now constituted or hereafter amended, or made
an assignment for the benefit of creditors, or a decree or order for relief
has been entered by a court having jurisdiction over the account debtor in
an involuntary case under the federal bankruptcy laws, as now constituted
or hereafter amended, or any other petition or other application for relief
under the federal bankruptcy laws has been filed by or against the account
debtor, or the account debtor has filed a certificate of dissolution under
applicable state law or shall be liquidated, dissolved or wound-up, or
shall authorize or commence any action or proceeding for dissolution,
winding-up or liquidation, or the account debtor has failed, suspended
business, declared itself to be insolvent, is generally not paying its
debts as they become due or has consented to or suffered a receiver,
trustee, liquidator or custodian to be appointed for it or for all or a
significant portion of its assets or affairs, unless the payment of
Accounts from such account debtor is secured in a manner satisfactory to
the Agent or, if the Account from such account debtor arises subsequent to
a decree or order for relief with respect to such account debtor under the
federal bankruptcy laws, as now or hereafter in effect, the Agent shall
have determined that the timely payment and collection of such Account will
not be impaired; or
(f) the sale is to an account debtor outside of the continental
United States or Canada (other than the Province of Quebec), unless the
account debtor thereon has supplied the Borrower with an irrevocable letter
of credit in form and substance satisfactory to the Agent, issued by a
financial institution satisfactory to the Agent and which has been duly
transferred to the Agent (together with sufficient documentation to permit
direct draws by the Agent); or
(g) the sale to the account debtor is on a xxxx-and-hold, guarantied
sale, sale-and-return, sale on approval or consignment basis or made pursu-
ant to any other written agreement providing for repurchase or return; or
(h) the Agent determines in its Permitted Discretion that collection
of such Account is uncertain or that such Account may not be paid by reason
of the account debtor's financial inability to pay; or
(i) the account debtor is the United States of America or any depart-
ment, agency or instrumentality thereof, unless the Borrower duly assigns
its rights to payment of such Account to the Agent pursuant to the Assign-
ment of Claims Act of 1940, as amended (31 U.S.C. 3727 et seq.); or
(j) the goods giving rise to such Account have not been shipped and
delivered to and accepted by the account debtor or the services giving rise
to such Account have not been performed by the Borrower and accepted by the
account debtor or the Account otherwise does not represent a final sale; or
(k) the Account does not comply with all applicable legal require-
ments, including, where applicable, the Federal Consumer Credit Protection
Act, the Federal Truth in Lending Act and Regulation Z of the Board of
Governors of the Federal Reserve System, in each case as amended; or
(l) the Agent does not have a valid and perfected first priority
security interest in such Account or the Account does not otherwise conform
to the representations and warranties contained in the Credit Agreement or
the other Credit Documents; or
(m) the Account is subject to any security deposit, progress payment
or other similar advance made by or for the benefit of the applicable
account debtor; or
(n) a portion of such Account is subject to any retainage or similar
amount that the account debtor may hold back or retain pending approval of
the Borrower's performance or any other contingency, but solely to the
extent of such portion; or
(o) a portion of such Account consists of finance or delinquency
charges, but solely to the extent of such portion; or
(p) the Account is subject to any reserve established by the
Borrower, but solely to the extent of such reserve.
Eligible Inventory shall mean items of Inventory of the Borrower held for sale
-------------------
in the ordinary course (but not packing or shipping materials or maintenance
supplies) deemed by the Agent in its Permitted Discretion to be eligible for
inclusion in the calculation of the Borrowing Base. In determining the amount
to be so included, the amount of such Inventory shall be valued at the lower of
cost or market on a basis consistent with the Borrower's current and historical
accounting practice or as otherwise acceptable to the Agent. Unless otherwise
approved in writing by the Agent, Inventory shall not be deemed Eligible
Inventory if:
(a) it is not owned solely by the Borrower or the Borrower does not
have good, valid and marketable title thereto; or
(b) it is not located on property owned or leased by the Borrower or
in a contract warehouse or other third party location, subject in each case
to a Collateral Access Agreement executed by the lessor, the contract xxxx-
xxxxxxxx or the other third party, as the case may be (together with any
related filings or notices required by the Agent), and segregated or other-
wise separately identifiable from goods of others, if any, stored on the
premises; or
(c) it is not subject to a perfected first priority Lien in favor of
the Agent, except for Liens for unpaid rent or normal and customary xxxx-
housing and common carrier charges not more than thirty (30) days past due;
or
(d) it is not located in the continental United States or Canada
(other than Quebec); or
(e) it is goods returned or rejected by the Borrower's customers or
goods in transit to third parties (other than to warehouse sites covered by
Collateral Access Agreements); or
(f) it is work in process to the extent that such work in process at
any time exceeds $2,000,000; or
(g) it is obsolete or slow moving, or does not otherwise conform to
the representations and warranties contained in the Credit Documents; or
(h) it is held by the Borrower on consignment; or
(i) it consists of tools or other property held for rental to other
Persons.
Equipment shall have the meaning provided in the Code as in effect on the date
---------
hereof.
ERISA shall mean the Employee Retirement Income Security Act of 1974, as amended
-----
from time to time, and any successor statute thereto and all final or temporary
regulations promulgated thereunder and published and generally applicable
rulings entitled to precedential effect.
ERISA Affiliate shall mean any entity required at any relevant time to be
----------------
aggregated with the Borrower or any Subsidiary under Sections 414(b), (c), (m)
or (o) of the Internal Revenue Code.
Eurodollar Business Day shall mean any Business Day on which commercial banks
------------------------
are open for international business (including dealings in Dollar deposits) in
London or such other eurodollar interbank market as may be selected by the Agent
in its sole discretion acting in good faith.
Eurodollar Lending Office shall mean, with respect to any Lender, the office of
-------------------------
such Lender specified as its "Eurodollar Lending Office" opposite its name on
Annex I, as such annex may be amended from time to time (or, if no such office
is specified, its Domestic Lending office), or such other office or Affiliate of
such Lender as such Lender may from time to time specify to the Borrower and the
Agent.
Eurodollar Rate shall mean, with respect to the Interest Period for each
----------------
Eurodollar Rate Loan comprising part of the same Borrowing, an interest rate per
annum equal to the rate (rounded upward to the nearest whole multiple of
one-sixteenth (1/16) of one percent (1.00%) per annum, if such rate is not such
a multiple) of the offered quotation, if any, to first class banks in the
Eurodollar market by BKB for U.S. dollar deposits of amounts in immediately
available funds comparable to the principal amount of the Eurodollar Rate Loan
for which the Eurodollar Rate is being determined with maturities comparable to
the Interest Period for which such Eurodollar Rate will apply as of
approximately 10:00 A.M. Boston time two (2) Eurodollar Business Days prior to
the commencement of such Interest Period.
Eurodollar Rate Loan shall mean a Revolving Loan that bears interest as provided
--------------------
in Section 4.2 hereof.
Eurodollar Rate Spread shall have the meaning given to such term in Section 4.2
----------------------
hereof.
Event(s) of Default shall have the meaning provided for in Article 9 of this
--------------------
Credit Agreement.
Existing Advances shall mean the loans, investments and advances between the
------------------
Borrower and its Subsidiaries in existence as of the Closing Date and described
on Schedule B hereto.
Expenses shall mean all present and future expenses incurred by or on behalf of
--------
the Agent and the Syndication Agent in connection with the Credit Agreement, any
other Credit Document or otherwise related hereto or thereto, whether incurred
heretofore or hereafter, which expenses shall include, without being limited to,
the cost of record searches, the fees and expenses of attorneys (including the
allocated cost of internal counsel) and paralegals, all costs and expenses
incurred by the Agent in opening bank accounts and lockboxes, depositing checks,
receiving and transferring funds (whether pursuant to the automated clearing
house or otherwise), and any charges imposed on the Agent due to insufficient
funds of deposited checks and the Agent's standard fee relating thereto,
collateral examination fees and expenses, fees and expenses of accountants,
appraisers or other consultants, experts or advisors employed or retained by the
Agent, fees and expenses incurred by the Agent and the Syndication Agent in
connection with the assignments of or sales of participations in the Revolving
Loans, fees and taxes relative to the filing of financing statements, costs of
preparing and recording Collateral Documents, all expenses, costs and fees set
forth in Article 4 of this Credit Agreement, all other fees and expenses
required to be paid pursuant to the Agent's Fee Letter and all fees and expenses
incurred in connection with releasing Collateral and the amendment, enforcement
or termination of any of the Credit Documents.
Expiration Date shall mean June 30, 2003.
---------------
Fairness Conditions shall have the meaning given to such term in Section 8.12
--------------------
hereof.
Federal Funds Rate shall mean, for any period, a fluctuating interest rate per
-------------------
annum equal, for each day during such period, to the weighted average of the
rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal Funds brokers of
recognized standing selected by it.
Fees shall mean, collectively, the Unused Line Fee, the Letter of Credit Fees,
----
the Issuing Bank Fees, fees charged from time to time by BKB for maintaining the
BKB Account and other accounts for the Borrower, and the other fees provided for
in the Agent's Fee Letter or otherwise payable to the Agent, the Syndication
Agent, the Issuing Bank or the Lenders.
Financial Statements shall mean the consolidated (and, if requested,
----------------------
consolidating) balance sheets, statements of operations, statements of cash
flows and statements of changes in stockholders' equity/deficit of the Borrower
for the period specified.
Foreign Lender shall mean any Lender organized under the laws of a jurisdiction
---------------
outside of the United States.
Funding Bank shall have the meaning given to such term in Section 4.8 hereof.
------------
GAAP shall mean generally accepted accounting principles in the United States as
----
in effect from time to time.
GLC shall mean GLC Division, Inc., a Delaware corporation and a wholly-owned
---
Subsidiary of the Borrower.
Governing Documents shall mean, as to any Person, the certificate or articles of
-------------------
incorporation and by-laws or other organizational or governing documents of such
Person.
Governmental Authority shall mean any nation or government, any state or other
----------------------
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
Highest Lawful Rate shall mean, at any given time during which any obligations
--------------------
shall be outstanding hereunder, the maximum non-usurious interest rate, if any,
that at any time or from time to time may be contracted for, taken, reserved,
charged or received on the Obligations owing under this Credit Agreement, under
the laws of the State of Massachusetts (or the law of any other jurisdiction
whose laws may be mandatorily applicable notwithstanding other provisions of
this Credit Agreement and the other Credit Documents), in any case after taking
into account, to the extent permitted by applicable law, any and all relevant
payments or charges under this Credit Agreement and any other Credit Documents
executed in connection herewith, and any available exemptions, exceptions and
exclusions.
Indebtedness shall mean, with respect to any Person, (a) all indebtedness of
------------
such Person for borrowed money or for the deferred purchase price of property or
services (other than trade liabilities incurred in the ordinary course of
business and payable in accordance with customary practices) or which is
evidenced by a note, bond, debenture or similar instrument, (b) all obligations
of such Person under capital leases, (c) all obligations of such Person in
respect of letters of credit, banker's acceptances or similar obligations issued
or created for the account of such Person, (d) liabilities arising under
Interest Rate Agreements and Lumber Hedging Agreements of such Person, (e) all
Contingent Obligations of such Person and (f) all liabilities secured by any
Lien on any property owned by such Person even though such Person has not
assumed or otherwise become liable for the payment thereof.
Indenture shall mean the Indenture with respect to the Senior Subordinated
---------
Notes, dated as of October 15, 1993, between the Borrower and Marine Midland
Bank, N.A., as trustee, as amended, supplemented or otherwise modified from time
to time with the prior written consent of the Majority Lenders.
Intangibles shall mean "Intangibles" as defined in the Security Agreement.
-----------
Interest Coverage Ratio shall mean, with respect to any period, the ratio of
------------------------
EBITDA for such period to Adjusted Interest Expense of the Consolidated Entity
for such period.
Interest Expense shall mean, with respect to any Person, the aggregate
-----------------
consolidated interest expense of such Person in respect of Indebtedness
determined on a consolidated basis, including, without limitation, amortization
of original issue discount on any Indebtedness and of all fees payable in
connection with the incurrence of such Indebtedness (to the extent included in
interest expense), the interest portion of any deferred payment obligation and
the interest component of any capital lease obligations.
Interest Period shall mean for any Eurodollar Rate Loan the period commencing on
---------------
the date of such Borrowing and ending on the last day of the period selected by
the Borrower pursuant to the provisions below. The duration of each such
Interest Period shall be one, two, three or six months, in each case as the
Borrower may, in an appropriate Notice of Borrowing, Notice of Continuation or
Notice of Conversion, select; provided, however, that the Borrower may not
-------- -------
select any Interest Period that ends after the Expiration Date. Whenever the
last day of any Interest Period would otherwise occur on a day other than a
Business Day, the last day of such Interest Period shall be extended to occur on
the next succeeding Business Day, provided that if such extension would cause
--------
the last day of such Interest Period to occur in the next following calendar
month, the last day of such Interest Period shall occur on the next preceding
Business Day.
Interest Rate Agreement shall mean any interest rate protection agreement,
-------------------------
interest rate future, interest rate option, interest rate swap, interest rate
cap or other interest rate hedge or arrangement under which the Borrower or any
Subsidiary is a party or beneficiary.
Internal Revenue Code shall mean the Internal Revenue Code of 1986, as amended
----------------------
from time to time, and any successor statute thereto and all final or temporary
rules and regulations promulgated thereunder and published, generally applicable
rulings entitled to precedential effect to the extent such rules, regulations or
rulings are effective and applicable hereto.
Internal Revenue Service or IRS shall mean the United States Internal Revenue
---------------------------------
Service and any successor agency.
Inventory shall mean "Inventory" as defined in the Security Agreement.
---------
Investment shall mean all expenditures made and all liabilities incurred
----------
(contingently or otherwise) for or in connection with the acquisition of stock
(or other equity interests) or Indebtedness of, or for loans, advances, capital
contributions or transfers of property to, or in respect of any guaranties (or
other commitments as described under Indebtedness) of obligations of, any
Person. In determining the aggregate amount of Investments outstanding at any
particular time, (i) the amount of any Investment represented by a guaranty
shall be taken at not less than the principal amount of the obligations
guarantied and still outstanding; (ii) there shall be deducted in respect of
each such Investment any amount received as a return of capital (but only by
repurchase, redemption, retirement, repayment, liquidating dividend or
liquidating distribution); (iii) there shall not be deducted in respect of any
Investment any amounts received as earnings on such Investment, whether as
dividends, interest or otherwise; and (iv) there shall not be deducted from the
aggregate amount of Investments any decrease in the market value thereof.
Issuing Bank shall mean BKB or any Lender that is acceptable to the Agent which
------------
has agreed to issue a Letter of Credit for the account of the Borrower under
this Credit Agreement.
Issuing Bank Fees shall have the meaning given to such term in Section 4.6
-------------------
hereof.
Lender and Lenders shall have the respective meanings provided in the preamble
------ -------
to this Credit Agreement.
Lender Advance shall mean a Revolving Loan made by the Lenders to the Borrower
---------------
pursuant to Section 2.2 hereof.
Letter of Credit Fee Percentage shall have the meaning given to such term in
---------------------------------
Section 4.6 hereof.
Letter of Credit Fees shall mean the fees payable to the Agent for the benefit
----------------------
of the Agent and the Lenders by the Borrower under and pursuant to Section 4.6
hereof.
Letter of Credit Obligations shall mean, at any time, the sum of (i) the
-------------------------------
aggregate undrawn amount of all Letters of Credit outstanding at such time, plus
----
(ii) the aggregate amount of all drawings under Letters of Credit for which the
Issuing Bank has not at such time been reimbursed, plus (iii) the aggregate
----
amount of all payments made by each Lender to the Issuing Bank with respect to
such Lender's participation in Letters of Credit as provided in Section 3.3
hereof for which the Borrower has not at such time reimbursed the Lenders,
whether by way of a Revolving Loan or otherwise.
Letter of Credit Request shall have the meaning given to such term in Section
--------------------------
3.4 hereof.
Letters of Credit shall mean all letters of credit (whether documentary or
-------------------
stand-by and whether for the purchase of inventory, equipment or otherwise)
issued for the account of the Borrower pursuant to Article 3 hereof and all
amendments, renewals, extensions or replacements thereof.
Lien(s) shall mean any lien, claim, charge, pledge, security interest, deed of
-------
trust, mortgage, other encumbrance or other arrangement having the practical
effect of the foregoing or other preferential arrangement of any other kind and
shall include the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement.
Loan Account shall have the meaning given to such term in Section 2.7 hereof.
------------
LTC shall mean Lumber Trademark Company, an Illinois corporation and a
---
wholly-owned Subsidiary of the Borrower.
LTC Sublicense Agreement shall mean that certain Amended and Restated Trademark
-------------------------
Sublicense Agreement, dated as of March 18, 1994, between the Borrower and LTC,
together with the replacement license agreement referred to on Schedule B, in
-----------
each case as such agreement may be amended from time to time with the consent of
the Agent.
Lumber Hedging Account shall mean an account maintained by the Borrower and
------------------------
approved by the Agent at an appropriate financial institution in connection with
the purchase by the Borrower of Lumber Hedging Agreements.
Lumber Hedging Agreement shall mean any lumber futures contract or similar
--------------------------
agreement or arrangement entered into by the Borrower as traded on the Chicago
Mercantile Exchange or any comparable exchanges, designed to protect the
Borrower against fluctuations in the price of lumber actually used in the
ordinary course of the Borrower's business.
Maintenance Capital Expenditures shall mean, for any period, the sum of all
---------------------------------
Capital Expenditures made by the Borrower for (i) the maintenance and repair of
any property, facilities or equipment and (ii) the replacement of any obsolete
property, facilities or equipment.
Majority Lenders shall mean, at any time, those Lenders (i) then owed or holding
----------------
in the aggregate at least fifty-one percent (51%) of the Total Commitments or
(ii) if the Commitments are terminated, those Lenders then owed or holding in
the aggregate at least fifty-one percent (51%) of the outstanding principal
amount of Revolving Loans (or if the Commitments are terminated and no Revolving
Loans are outstanding, those Lenders then holding at least fifty-one percent
(51%) of the aggregate participation interests in Letters of Credit then
outstanding).
Material Adverse Effect shall mean a material adverse effect on (i) the
-------------------------
business, prospects, operations, results of operations, assets, liabilities or
condition (financial or otherwise) of any Credit Party, (ii) any Credit Party's
ability to perform its obligations under the Credit Documents to which it is a
party, or (iii) the rights and remedies of the Agent, the Issuing Bank or the
Lenders under any Credit Document.
Material Contract shall mean any contract (including, without limitation, the
------------------
Indenture, the LTC Sublicense Agreement or other arrangement (other than the
Credit Documents), whether written or oral, to which the Borrower or any of the
Subsidiaries is a party as to which the breach, nonperformance, cancellation or
failure to renew by any party thereto could have a Material Adverse Effect.
Multiemployer Plan shall mean a "multiemployer plan" as defined in Section
-------------------
4001(a)(3) of ERISA and (i) which is, or within the immediately preceding six
(6) years was, contributed to by the Borrower, any Subsidiary or any ERISA
Affiliate or (ii) with respect to which the Borrower or any Subsidiary may incur
any liability.
Net Cash Proceeds shall mean, with respect to any sale or other disposition of
------------------
assets, the total cash proceeds received in connection therewith less all
advisory fees, legal costs, closing costs, commissions and other out-of-pocket
expenses reasonably incurred in connection therewith.
Notice of Borrowing shall have the meaning given to such term in Section 2.2
---------------------
hereof.
Notice of Continuation shall have the meaning given to such term in Section
------------------------
4.7(a) hereof.
Notice of Conversion shall have the meaning given to such term in Section 4.7(b)
--------------------
hereof.
Obligations shall mean the unpaid principal of and interest on (including
-----------
interest accruing on or after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Borrower, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding) the Revolving Loans, any reimbursement obligation
or indemnity of the Borrower on account of Letters of Credit (including
obligations to Lenders as participants in the letter of credit exposure of the
Issuing Bank under Section 3.3 hereof) or any accommodation extended with
respect to applications for Letters of Credit, the Fees, the Expenses, any
payment obligation of the Borrower to BKB or any other Lender in connection with
any Secured Interest Rate Agreement (whether such obligation arises under
Section 7.16 hereof, the agreement governing such Secured Interest Rate
Agreement or otherwise) and all other obligations and liabilities of the
Borrower to the Agent, the Syndication Agent, the Issuing Bank or to the
Lenders, whether direct or indirect, absolute or contingent, due or to become
due, or now existing or hereafter incurred, which may arise under, out of, or in
connection with, the Credit Agreement, the Notes, any other Credit Document and
any other document made, delivered or given in connection herewith or therewith,
and each other obligation and liability, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred, whether
on account of principal, interest, fees, indemnities, costs or expenses
(including, without limitation, all fees and disbursements of counsel to the
Agent, the Syndication Agent, the Issuing Bank or to the Lenders) that are
required to be paid by the Borrower to the Lenders, the Agent, the Syndication
Agent or the Issuing Bank pursuant to the terms of the Credit Agreement or any
of the other Credit Documents.
PBGC shall mean the Pension Benefit Guaranty Corporation and any Person
----
succeeding to the functions thereof.
Permitted Discretion shall mean the Agent's judgment exercised in good faith
---------------------
based upon its consideration of any factor which the Agent believes in good
faith: (i) will or could adversely affect the value of any Collateral, the
enforceability or priority of the Agent's Liens thereon or the amount which the
Agent and the Lenders would be likely to receive (after giving consideration to
delays in payment and costs of enforcement) in the liquidation of such
Collateral; (ii) suggests that any collateral report or financial information
delivered to the Agent by any Person on behalf of the Borrower is incomplete,
inaccurate or misleading in any material respect; (iii) materially increases the
likelihood of a bankruptcy, reorganization or other insolvency proceeding
involving the Borrower or any of its Subsidiaries or any of the Collateral, or
(iv) creates or reasonably could be expected to create a Default or Event of
Default. In exercising such judgment, the Agent may consider such factors
already included in or tested by the definition of Eligible Accounts Receivable
or Eligible Inventory, as well as any of the following: (i) the financial and
business climate of the Borrower's industry and general macroeconomic
conditions, (ii) changes in collection history and dilution with respect to the
Accounts, (iii) changes in demand for, and pricing of, Inventory, (iv) changes
in any concentration of risk with respect to Accounts and Inventory, (v) changes
in turnover statistics with respect to Inventory and/or Accounts, including
actual versus historical and projected, and (vi) any other factors that change
the credit risk of lending to the Borrower on the security of the Accounts and
Inventory. The burden of establishing lack of good faith hereunder shall be on
the Borrower.
Person shall mean any individual, sole proprietorship, partnership, limited
------
liability company, joint venture, trust, unincorporated organization,
association, corporation, institution, entity, party or government (including
any division, agency or department thereof), and, as applicable, the successors,
heirs and assigns of each.
Plan shall mean any employee benefit plan, program or arrangement, whether oral
----
or written, maintained or contributed to by the Borrower or any Subsidiary, or
with respect to which the Borrower or any Subsidiary may incur liability.
Pledge Agreement shall mean that certain Pledge Agreement, dated as of the
-----------------
Closing Date, pursuant to which the Borrower pledges to the Agent all of the
issued and outstanding shares of capital stock of GLC, Wickes International
Holding Corporation and LTC owned by the Borrower as security for the
Obligations, as the same may be amended, restated, supplemented or otherwise
modified from time to time.
Proportionate Share shall mean, with respect to any Lender, (i) a fraction
--------------------
(expressed as a percentage), the numerator of which shall be the amount of such
Lender's Commitment and the denominator of which shall be the Total Commitments
or, (ii) if the Commitments are terminated, a fraction the numerator of which
shall be the principal amount of such Lender's Revolving Loans outstanding and
the denominator of which shall be the aggregate principal amount of all
Revolving Loans of all Lenders then outstanding, or (iii) if the Commitments are
terminated and no Revolving Loans are outstanding, a fraction the numerator of
which shall be such Lender's aggregate participation interests, pursuant to
Section 3.3, in the Letters of Credit then outstanding and the denominator of
which shall be the Letter of Credit Obligations.
Purchase Money Liens shall mean liens on any item of Equipment acquired after
----------------------
the date of this Credit Agreement, provided that: (i) each such lien shall
--------
attach only to the property to be acquired; (ii) a description is furnished to
the Agent for any property so acquired, the purchase price of which is greater
than $250,000; and (iii) the debt incurred in connection with such acquisitions
shall not exceed the amount of the purchase price of such items of Equipment
then being financed.
Real Estate shall mean all real property owned or leased by the Borrower,
------------
together with all fixtures, improvements and other structures thereon.
Reduced Rate shall have the meaning given to such term in Section 4.9(b) hereof,
------------
relating to backup withholding tax.
Regulation D shall mean Regulation D of the Board of Governors of the Federal
-------------
Reserve System as from time to time in effect and any successor thereto.
Reportable Event shall mean any of the events described in Section 4043 of ERISA
----------------
and the regulations thereunder.
Requirement of Law shall mean, as to any Person, the Governing Documents of such
------------------
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
Restructuring Expenses shall mean all reserves established or expenses incurred
----------------------
during fiscal 1998 and shown on the Statement of Operations included in the
Financial Statements for fiscal 1998 as restructuring and unusual items.
Retiree Health Plan shall mean an "employee welfare benefit plan" within the
---------------------
meaning of Section 3(l) of ERISA that provides benefits to persons after
termination of employment, other than as required by Section 601 of ERISA.
Revolving Loans shall have the meaning given to such term in Section 2.1 hereof,
---------------
any of which Revolving Loans may be a Eurodollar Rate Loan or a Base Rate Loan.
Revolving Note shall mean a promissory note of the Borrower payable to the order
--------------
of any Lender, in the form of Exhibit A, evidencing the aggregate Indebtedness
of the Borrower to such Lender resulting from the Revolving Loans made by such
Lender or acquired by such Lender pursuant to Section 11.6 hereof, as the same
may from time to time be amended, restated, supplemented or otherwise modified.
Security Agreement shall mean the Security Agreement, dated the Closing Date,
-------------------
between the Agent and the Borrower, as such agreement may be amended, restated,
supplemented or otherwise modified from time to time.
Secured Interest Rate Agreement shall mean an Interest Rate Agreement (other
---------------------------------
than any Total Rate of Return Swap) (i) between the Borrower and (A) any Lender
or (B) any Affiliate of any Lender; provided, that, in the case of this clause
--------
(B), each Lender has agreed to indemnify its Affiliates from any losses incurred
due to the failure of the Borrower to pay any amounts owed to such Affiliate in
connection with such Interest Rate Agreement, and (ii) that, in the Permitted
Discretion of the Agent, is intended to protect the Borrower from fluctuations
in interest rates and is otherwise satisfactory to the Agent.
Senior Subordinated Notes shall mean the Borrower's 11-5/8% Senior Subordinated
--------------------------
Notes due 2003, issued pursuant to the Indenture, as amended, supplemented or
otherwise modified from time to time with the prior written consent of the
Majority Lenders.
Settlement Date shall have the meaning given to such term in Section 2.4 hereof.
---------------
Subsidiary shall mean as to any Person, a corporation, partnership or other
----------
entity of which shares of stock or other ownership interests having ordinary
voting power (other than stock or such other ownership interests having such
power only by reason of the happening of a contingency) to elect a majority of
the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise qualified, all references to a "Subsidiary" or
to "Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries
of the Borrower.
Syndication Agent shall mean BancBoston Xxxxxxxxx Xxxxxxxx Inc., as provided in
-----------------
the preamble to this Credit Agreement.
Tangible Capital Funds shall mean at any time the outstanding principal amount
-----------------------
of the Senior Subordinated Notes plus Consolidated Net Worth minus the book
----
value of all intangible assets of the Borrower and its Subsidiaries, including,
without limitation, transaction costs, goodwill, intellectual property and
deferred tax assets.
Termination Event shall mean (i) a Reportable Event with respect to any Benefit
-----------------
Plan or Multiemployer Plan; (ii) the withdrawal of the Borrower, any Subsidiary
or any ERISA Affiliate from a Benefit Plan during a plan year in which such
entity was a "substantial employer" as defined in Section 4001(a)(2) of ERISA;
(iii) the providing of notice of intent to terminate a Benefit Plan in a
distress termination described in Section 4041(c) of ERISA; (iv) the institution
by the PBGC of proceedings to terminate a Benefit Plan or Multiemployer Plan;
(v) any event or condition (a) which might constitute grounds under Section 4042
of ERISA for the termination of, or the appointment of a trustee to administer,
any Benefit Plan or Multiemployer Plan, or (b) that may result in termination of
a Multiemployer Plan pursuant to Section 4041A of ERISA; or (vi) the partial or
complete withdrawal within the meaning of Sections 4203 and 4205 of ERISA, of
the Borrower, any Subsidiary or any ERISA Affiliate from a Multiemployer Plan.
Total Commitments shall mean the sum of the Commitments of all the Lenders,
------------------
which shall not exceed $160,000,000.
Total Rate of Return Swap shall mean an Interest Rate Agreement with one or more
-------------------------
Lenders having a maximum credit exposure of $10,000,000 and other terms approved
by the Agent (which approval shall not be unreasonably withheld), the sole use
of which shall be to facilitate the acquisition of Senior Subordinated Notes at
a discount and pay for the expenses related thereto.
Type shall mean, in reference to a Revolving Loan, that it is a Eurodollar Rate
----
Loan or a Base Rate Loan.
Unused Availability shall mean, on any date, the lesser of the Total Commitments
-------------------
and the Borrowing Base, less the sum of (i) the Letter of Credit Obligations on
such date and (ii) the aggregate outstanding principal balance of the Revolving
Loans on such date.
Unused Line Fee shall have the meaning given to such term in Section 4.5 hereof.
---------------
1.2. Accounting Terms and Determinations.
Unless otherwise defined or specified herein, all accounting terms
used in this Credit Agreement shall be construed in accordance with GAAP,
applied on a basis consistent in all material respects with the Financial
Statements delivered to the Agent on or before the Closing Date. All accounting
determinations for purposes of determining compliance with Sections 8.1, 8.2 and
8.4 hereof shall be made in accordance with GAAP as in effect on the Closing
Date and applied on a basis consistent in all material respects with the audited
Financial Statements delivered to the Agent on or before the Closing Date. The
Financial Statements required to be delivered hereunder from and after the
Effective Date, and all financial records, shall be maintained in accordance
with GAAP. If GAAP shall change from the basis used in preparing the audited
Financial Statements delivered to the Agent on or before the Closing Date, the
certificates required to be delivered pursuant to Section 7.1 demonstrating
compliance with the covenants contained herein shall, at the election of the
Borrower or upon the request of the Majority Lenders, include calculations
setting forth the adjustments necessary to demonstrate how the Borrower is in
compliance with the financial covenants based upon GAAP as in effect on the
Closing Date.
1.3. Other Defined Terms.
Terms not otherwise defined herein which are defined in the Uniform
Commercial Code as in effect in the State of Massachusetts (the "Code") shall
have the meanings given them in the Code. The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Credit Agreement shall
refer to this Credit Agreement as a whole and not to any particular provision of
this Credit Agreement, and references to Article, Section, Annex, Schedule,
Exhibit and like references are references to this Credit Agreement unless
otherwise specified.
ARTICLE 2. REVOLVING LOANS
2.1. Commitments.
Subject to the terms and conditions set forth in this Credit
Agreement, on and after the Closing Date and to and excluding the Expiration
Date, each Lender severally agrees to make loans and advances to the Borrower
("Revolving Loans") in an amount not to exceed at any time its Proportionate
Share of the lesser of the Total Commitments and the Borrowing Base minus, in
each case, the then outstanding Letter of Credit Obligations. "Borrowing Base"
shall mean the sum of:
(A) eighty-five percent (85%) of Eligible Accounts Receivable,
plus
----
(B) sixty percent (60%) of Eligible Inventory, minus
-----
(C) the aggregate amount of reserves, if any, established by the
Agent;
The Agent, in the exercise of its Permitted Discretion, may (i) establish and
increase or decrease reserves against Eligible Accounts Receivable and Eligible
Inventory, (ii) reduce the advance rates provided for in this definition, or
restore such advance rates to any level equal to or below the advance rates in
effect as of the date of this Credit Agreement, and (iii) impose additional
restrictions (or eliminate such additional restrictions) to the standards of
eligibility set forth in the definitions of "Eligible Accounts Receivable" and
"Eligible Inventory." The reserves against Eligible Accounts Receivable and
Eligible Inventory will be adjusted monthly, or at more frequent intervals as
determined by the Agent. Revolving Loans may be repaid and reborrowed.
2.2. Borrowing of Revolving Loans.
It is contemplated that Revolving Loans will be made available to the
Borrower by the Lenders ("Lender Advances") and, in the circumstances described
in Section 2.2(b), from the Agent acting on behalf of the Lenders ("Agent
Advances"). The Borrower hereby agrees to execute and deliver to each Lender a
Revolving Note in the form of Exhibit A to evidence the Revolving Loans made to
the Borrower by such Lender.
(a) Lender Advances of Revolving Loans. Subject to the determination
----------------------------------
by the Agent and the Lenders that the conditions for Borrowing contained in
Section 5.2 are satisfied, upon notice from the Borrower to the Agent
("Notice of Borrowing"), Lender Advances of Revolving Loans shall be made
to the extent of each Lender's Proportionate Share of the requested Borrow-
ing; provided that in no event will any Lender be obligated to have Revolv-
ing Loans outstanding in excess of such Lender's Commitment less such
Lender's Proportionate Share of outstanding Letter of Credit Obligations.
The Notice of Borrowing shall specify whether the requested Borrowing is of
Base Rate Loans or Eurodollar Rate Loans.
(b) Agent Advances of Revolving Loans. The Agent is authorized by
---------------------------------
by the lenders, but is not obligated, to make Agent Advances consisting
only of Base Rate Loans (i) upon a Notice of Borrowing received by the
Agent, or (ii) upon advice received by the Agent on a Business Day from the
Disbursement Account Bank of the face amount of checks drawn on the Dis-
bursement Account, which have been or will be presented for payment on that
day minus the amount of funds then available in the Disbursement Account,
-----
pursuant to Section 2.2(c), or (iii) to fund the Borrower's wire transfer
requirements. Agent Advances (together with all other Revolving Loans and
all Letter of Credit Obligations outstanding) may not at any time exceed
the amount available for borrowing under Section 2.1. Agent Advances shall
be subject to periodic settlement, which shall be no less frequently than
weekly, with the Lenders under Section 2.4. Agent Advances of Base Rate
Loans may be made only in the following circumstances:
(i) For administrative convenience, the Agent may, but is not
obligated to, make Agent Advances in reliance upon the Borrower's
actual or deemed representations under Section 5.2 that the conditions
for borrowing are satisfied.
(ii) If the conditions for borrowing under Section 5.2 cannot be
fulfilled, the Borrower shall in its Notice of Borrowing or otherwise
give immediate notice thereof to the Agent, with a copy to each of the
Lenders, and the Agent may, but is not obligated to, continue to make
Agent Advances for fifteen (15) Business Days from the date the Agent
first receives such notice, or until sooner instructed by the Majority
Lenders to cease; provided that the Agent provides the Lenders prompt-
--------
ly with a copy of such Notice of Borrowing or other notice delivered
by the Borrower to the Agent of the Borrower's failure to satisfy the
conditions for borrowing under Section 5.2.
(c) Disbursement of Revolving Loans. Revolving Loans, whether made
-------------------------------
as Lender Advances or Agent Advances, subject to the terms and conditions
of this Credit Agreement, will be made as follows:
(i) The Borrower has informed the Agent that it has decided to
open an account (the "Disbursement Account") with BKB (the "Disburse-
ment Account Bank") for the purpose of paying trade payables and
other operating expenses. The Agent is authorized to transmit pro-
ceeds of Revolving Loans upon advice received by the Agent from the
Disbursement Account Bank, as described in Section 2.2(b), directly
to the Disbursement Account. In the absence of contrary instructions
from the Borrower, such advice from the Disbursement Account Bank will
be deemed a sufficient Notice of Borrowing for an Agent Advance of
Base Rate Loans.
(ii) It is contemplated that Revolving Loans be made available to
fund the Borrower's Letter of Credit Obligations, as described in Sec-
tion 3.5, and such Revolving Loans may be made available by the Agent
directly to the Issuing Bank upon notice from the Issuing Bank of un-
funded Letter of Credit Obligations.
(iii) The Agent will make requested Revolving Loans available as
instructed in a Notice of Borrowing, and in the absence of such
instructions, shall transmit the proceeds of such requested Revolving
Loans directly to the Disbursement Account.
(d) Notices of Borrowing; Minimum Amounts. Notice of Borrowing for
-------------------------------------
(i)Lender Advances of Base Rate Loans shall be given not later than Noon
Boston time on the same Business Day of the proposed Borrowing and (ii)
Agent Advances of Base Rate Loans shall be given not later than 3:00 P.M.
Boston time on the same Business Day of the proposed Borrowing. Notice of
Borrowing for Eurodollar Rate Loans shall be given not later than 5:00 P.M.
Boston time on the third Business Day prior to the proposed Borrowing.
(i) Notices of Borrowing may be given under this Section by
telephone or facsimile transmission, and, if by telephone, promptly
confirmed in writing substantially in the form of Exhibit E. Once
given, a Notice of Borrowing is irrevocable by and binding on the
Borrower.
(ii) The Borrower shall specify in each Notice of Borrowing
whether the conditions for the requested Borrowing are satisfied and
whether the requested Borrowing is of Base Rate Loans or Eurodollar
Rate Loans. The Borrower may request one or more Borrowings on the
same Business Day. Each such Borrowing shall, unless otherwise spe-
cifically provided herein, consist entirely of Revolving Loans of the
same Type and, if such Borrowing is to consist of Eurodollar Rate
Loans, shall be in an aggregate amount for all Lenders of not less
than $1,000,000 or an integral multiple of $100,000 in excess thereof.
The right of the Borrower to choose Eurodollar Rate Loans is subject
to the provisions of Section 4.7.
(iii) On or prior to the Closing Date, the Borrower will provide to
the Agent a list, with specimen signatures, of officers authorized to
request Revolving Loans, substantially in the form attached as Exhibit
J to this Credit Agreement. The Agent is entitled to rely upon such
list until it is replaced by the Borrower. The Agent shall have no
duty to verify the authenticity of the signature appearing on any
Notice of Borrowing or other writing delivered hereunder and, with
respect to an oral request for Revolving Loans, the Agent shall have
no duty to verify the identity of any individual representing himself
as one of the officers authorized to make such request on behalf of
the Borrower. Neither the Agent nor any of the Lenders shall incur
any liability to the Borrower as a result of acting upon any tele-
phonic notice the Agent believes in good faith to have been given by a
duly authorized officer or other individual authorized to request Re-
volving Loans on behalf of the Borrower or for otherwise acting in
good faith.
2.3. Settlement of Lender Advances and Repayments.
The Agent shall give each Lender prompt notice by telephone or
facsimile transmission of a Notice of Borrowing that requests Lender Advances of
Revolving Loans. No later than 3:00 P.M. Boston time on the date designated for
the Borrowing, each Lender, for the account of its Applicable Lending Office,
shall make available to the Agent at the Agent's address its Proportionate Share
of such Borrowing in immediately available funds. Unless the Agent receives
contrary written notice prior to the date of any such Borrowing of Revolving
Loans, it is entitled to assume that each Lender will make available its
Proportionate Share of the Borrowing and in reliance upon that assumption, but
without any obligation to do so, may advance such Proportionate Share on behalf
of the Lender.
2.4. Periodic Settlement of Agent Advances and Repayments.
(a) The Settlement Date. The amount of Revolving Loans and the amount
-------------------
of each Lender's Proportionate Share of Revolving Loans shall be computed
weekly (or more frequently in the Agent's discretion) and shall be adjusted
upward or downward based on all Revolving Loans (including Agent Advances)
and repayments of Revolving Loans received by the Agent as of 5:00 P.M.
Boston time on the last Business Day of the period specified by the Agent
(such date, the "Settlement Date").
(b) Summary Statements; Settlements. The Agent shall deliver to each
-------------------------------
of the Lenders promptly after the Settlement Date a summary statement of
the amount of outstanding Revolving Loans (including Agent Advances) for
the period and the amount of repayments received for the period. As re-
flected on the summary statement: (i) the Agent shall transfer to each
Lender its allocated share of interest and Unused Line Fee and its Propor-
tionate Share of repayments; and (ii) each Lender shall transfer to the
Agent (as provided below), or the Agent shall promptly transfer to each
Lender, such amounts as are necessary to insure that, after giving effect
to all such transfers, the amount of Revolving Loans made by each Lender
shall be equal to such Lender's Proportionate Share of the aggregate amount
of Revolving Loans outstanding as of such Settlement Date. If the summary
statement requires transfers to be made to the Agent by the Lenders and is
received prior to 12:00 Noon Boston time on a Business Day, such transfers
shall be made in immediately available funds no later than 3:00 P.M. Boston
time that day; and, if received after 12:00 Noon Boston time, then no later
than 3:00 P.M. Boston time on the next Business Day. The obligation of
each Lender to transfer such funds is irrevocable, unconditional and with-
out recourse to or warranty by the Agent.
(c) Distribution of Interest and Unused Line Fees. Interest on the
---------------------------------------------
Revolving Loans (including Agent Advances) together with the amount of the
Unused Line Fee, shall be allocated by the Agent to each Lender in accord-
ance with the Proportionate Share of Revolving Loans actually funded by and
repaid to each Lender, and shall accrue from and including the date such
Revolving Loans are so advanced and to but excluding the date such Revolv-
ing Loans are either repaid by the Borrower or actually settled under this
Section. Promptly after the end of each month (or, with respect to
interest on Eurodollar Rate Loans, promptly after such interest is received
by the Agent), the Agent shall distribute to each Lender its allocated
share of the interest and the Unused Line Fee accrued during that month.
2.5. Defaulting Lenders.
(a) A Lender who fails to pay the Agent its Proportionate Share of
any Revolving Loans (including Agent Advances) made available by the Agent
on such Lender's behalf, or who fails to pay any other amount owing by it
to the Agent, is a "Defaulting Lender." The Agent may recover all such
amounts owing by a Defaulting Lender on demand. If the Defaulting Lender
does not pay such amounts on the Agent's demand, the Agent shall promptly
notify the Borrower and the Borrower shall pay such amounts within five (5)
Business Days. In addition, the Defaulting Lender or the Borrower shall
pay the Agent interest on such amount for each day from the date it was
made available by the Agent to the Borrower to the date it is recovered by
the Agent at a rate per annum equal to (x) the overnight Federal Funds
Rate, if paid by the Defaulting Lender, or (y) the then applicable rate of
interest calculated under Section 4.1, if paid by the Borrower; plus, in
----
each case, the Expenses and losses, if any, incurred as a result of the
Defaulting Lender's failure to perform its obligations.
(b) The failure of any Lender to fund its Proportionate Share of any
Revolving Loan (including Agent Advances) shall not relieve any other Lend-
er of its obligation to fund its Proportionate Share of such Revolving
Loan. Conversely, no Lender shall be responsible for the failure of
another Lender to fund its Proportionate Share of a Revolving Loan.
(c) The Agent shall not be obligated to transfer to a Defaulting
Lender any payments made by the Borrower to the Agent for the Defaulting
Lender's benefit; nor shall a Defaulting Lender be entitled to the sharing
of any payments hereunder. Amounts payable to a Defaulting Lender shall
instead be paid to or retained by the Agent. The Agent may hold and, in
its discretion, re-lend to the Borrower the amount of all such payments
received or retained by it for the account of such Defaulting Lender. For
purposes of voting or consenting to matters with respect to the Credit
Documents, such Defaulting Lender shall be deemed not to be a "Lender" and
such Lender's Commitment shall be deemed to be zero (0). The operation of
this Section shall not be construed to increase or otherwise affect the
Commitment of any Lender, or relieve or excuse the performance by the
Borrower of its duties and obligations hereunder.
2.6. Mandatory Payments; Reduction of Commitments.
(a) The aggregate balance of Revolving Loans and all Letter of Credit
Obligations outstanding at any time in excess of the lesser of the Total
---------------
Commitments and the Borrowing Base shall be immediately due and payable
without the necessity of any demand.
(b) If the Borrower or any of its Subsidiaries receives after the
Closing Date any proceeds from the issuance of common stock (other than
stock issued to the Borrower or any of its Subsidiaries), preferred stock,
partnership or other similar interests or equity or securities convertible
into equity, the Borrower shall pay to the Agent, as and when received by
the Borrower or such Subsidiary and as a mandatory prepayment of the Re-
volving Loans (but not in reduction of the Total Commitments), a sum equal
to fifty percent (50%) of the proceeds thereof, net of reasonable and
customary fees and expenses incurred in connection with such issuance.
The mandatory prepayment contained in this clause (b) shall not constitute
a consent by the Lenders to the issuance of any securities otherwise pro-
hibited by this Agreement.
(c) On the Expiration Date, the Commitment of each Lender shall auto-
matically reduce to zero and may not be reinstated. Upon seven (7) days'
notice to the Agent and each Lender, the Borrower may reduce or terminate
the unused portion of the Total Commitments at any time and from time to
time in whole or in part. Each such reduction of the Total Commitments must
be in an amount not less than $1,000,000 (and in increments of $500,000
thereafter). Once reduced, no portion of the Total Commitments may be re-
instated.
2.7. Maintenance of Loan Account; Statements of Account.
The Agent shall maintain an account on its books in the name of the
Borrower (the "Loan Account") in which the Borrower will be charged with all
loans and advances made by the Lenders to the Borrower or for the Borrower's
account, including the Revolving Loans and all Letter of Credit Obligations, the
Fees, the Expenses and any other Obligations. The Loan Account will be credited
with all amounts received by the Agent from the Borrower or from others for the
Borrower's account, including all amounts received in the BKB Account from the
Blocked Account Banks. After the end of each month, the Agent shall send the
Borrower a statement accounting for the charges, loans, advances and other
transactions occurring among and between the Agent, the Lenders and the Borrower
during that month. The monthly statements shall, absent manifest error, be an
account stated, which is final, conclusive and binding on the Borrower.
2.8. Payment Procedures.
Payments of interest, Fees and Expenses shall be made not later than
2:00 P.M. Boston time on the day when due, in immediately available Dollars, to
the Agent at its address set forth in Section 11.5 hereof. The Borrower hereby
authorizes the Agent to charge the Loan Account with the amount of all payments
to be made hereunder and under the other Credit Documents, including all Fees
and Expenses, as and when such payments become due. The Borrower's obligations
to the Lenders with respect to such payments shall be discharged by making such
payments to the Agent pursuant to this Section or by charging the Loan Account.
2.9. Collection of Accounts.
(a) All Collections and other amounts received by the Borrower from
any account debtor, in addition to all other cash received from any other
source (including, without limitation, upon sales of Collateral or other
property permitted hereunder (unless remitted directly to the Agent)),
shall upon receipt be deposited into an account (each, a "Blocked Account")
opened by the Borrower at a financial institution selected by the Borrower
and acceptable to the Agent (each, a "Blocked Account Bank"). The Borrower
shall use its best efforts to cause each Blocked Account Bank to enter into
an agreement with the Borrower and the Agent substantially in the form of
Exhibit K to this Credit Agreement (each, a "Blocked Account Agreement"),
provided that, with respect to any Blocked Account not subject to a Blocked
--------
Account Agreement, the Agent may require the Borrower to close such Blocked
Account and have all funds therein transferred to the BKB Account and all
future Collections which would otherwise be deposited in such Blocked
Account deposited in another Blocked Account which is subject to a Blocked
Account Agreement. Deposits in each Blocked Account shall be transferred
via the automated clearing house system each Business Day into an account
(the "BKB Account") maintained by the Agent at BKB and established pursuant
to a concentration account agreement entered into among the Borrower, the
Agent and BKB substantially in the form of Exhibit L to the this Credit
Agreement (the "Concentration Account Agreement"). Where applicable, such
transfers shall be subject to the terms and conditions of the relevant
Blocked Account Agreement. The Borrower shall accurately report all
amounts deposited in the Blocked Accounts to ensure the proper transfer of
funds as set forth above.
(b) The Borrower may request that the Agent close Blocked Accounts
and/or open new Blocked Accounts (or, in either case, permit the Borrower
to do so), subject to the execution and delivery to the Agent of appropri-
ate Blocked Account Agreements (unless expressly waived by the Agent) con-
sistent with the provisions of this Section 2.9 and otherwise satisfactory
to the Agent.
2.10. Application of Payments.
All amounts received in the BKB Account from the Blocked Account Banks
shall be credited to the Loan Account. If an Event of Default has occurred and
is continuing, all amounts received by the Agent in the BKB Account or otherwise
shall be applied in the following order: first, to the payment of any Fees,
-----
Expenses or other Obligations (exclusive of principal and interest) due and
payable to the Agent under any of the Credit Documents or otherwise, including
amounts advanced by the Agent on behalf of the Lenders pursuant to Section
2.4(b); second, to the payment of any Fees, Expenses or other Obligations due
------
and payable to the Issuing Bank under any of the Credit Documents; third, to the
-----
ratable payment of any Fees, Expenses or other Obligations due and payable to
the Syndication Agent or the Lenders under any of the Credit Documents other
than those obligations specifically referred to in this Section 2.10; fourth, to
------
the ratable payment of interest due on the Revolving Loans; fifth, to the
-----
ratable payment of all principal due on the Revolving Loans and Obligations in
an amount not exceeding $5,000,000 owing under or in connection with the Secured
Interest Rate Agreements; and sixth, the payment of Obligations owing under or
-----
in connection with the Secured Interest Rate Agreements in an amount in excess
of $5,000,000. Any payment received hereunder as a distribution in any
proceeding referred to in Section 9.1(f) shall, unless paid with respect to
amounts specifically owing to the Agent, the Syndication Agent or the Issuing
Bank, be distributed and applied to the payment of the amounts due hereunder and
under the Revolving Notes ratably in accordance with such amounts (or, if a
court of competent jurisdiction shall otherwise specify, as specified by such
court).
ARTICLE 3. LETTERS OF CREDIT
3.1. Issuance of Letters of Credit.
Subject to the terms and conditions of this Credit Agreement, on and
after the Closing Date and to and including the thirtieth (30th) day prior to
the Expiration Date, the Issuing Bank shall issue Letters of Credit hereunder at
the request of the Borrower and for its account, as more specifically described
below. The Issuing Bank shall not issue any Letter of Credit for the account of
the Borrower if at the time of such requested issuance:
(a) The face amount of such requested Letter of Credit, when added to
the Letter of Credit Obligations then outstanding, would cause the Letter
of Credit Obligations to exceed (i) $10,000,000 or, (ii) when added to the
aggregate amount of Revolving Loans and all Letter of Credit Obligations
then outstanding would cause the sum of the aggregate amount of Revolving
Loans and Letter of Credit obligations then outstanding to exceed the
lesser of (x) the Total Commitments and (y) the Borrowing Base then in
effect;
(b) Any order, judgment or decree of any Governmental Authority or
arbitrator shall purport by its terms to enjoin or restrain the Issuing
Bank from issuing such Letter of Credit or any Requirement of Law applic-
able to the Agent or the Issuing Bank or any request or directive (whether
or not having the force of law) from any Governmental Authority with juris-
diction over the Agent or the Issuing Bank shall prohibit, or request that
the Agent or the Issuing Bank refrain from, the issuance of letters of
credit generally or such Letter of Credit in particular or shall impose
upon the Agent or the Issuing Bank with respect to such Letter of Credit
any restriction or reserve or capital requirement (for which the Agent or
the Issuing Bank is not otherwise compensated) not in effect as of the
Closing Date, or any unreimbursed loss, cost or expense which was not
applicable, in effect or known to the Agent or the Issuing Bank as of the
Closing Date and which the Agent or the Issuing Bank deems in good faith
to be material to it; or
(c) A default of any Lender's obligations to fund under Section 3.5
exists, or any Lender is a Defaulting Lender under Section 2.5, unless the
Agent and the Issuing Bank have entered into satisfactory arrangements with
the Borrower to eliminate the Agent's and the Issuing Bank's risk with
respect to such Lender, including cash collateralization of such Lender's
Proportionate Share of the Letter of Credit Obligations.
3.2. Terms of Letters of Credit.
The Letters of Credit shall be in a form customarily issued by the
Issuing Bank or in such other form as has been approved by the Issuing Bank. At
the time of issuance, the amount and the terms and conditions of each Letter of
Credit, and of any drafts or acceptances thereunder, shall be subject to
approval by the Agent and the Borrower. In no event may the term of any standby
Letter of Credit issued hereunder exceed 360 days nor the term of any
documentary Letter of Credit exceed 120 days, and all Letters of Credit issued
hereunder shall expire no later than the date that is five (5) Business Days
prior to the Expiration Date. Any Letter of Credit containing an automatic
renewal provision shall also contain a provision pursuant to which,
notwithstanding any other provisions thereof, it shall expire no later than the
date that is five (5) days prior to the Expiration Date.
3.3. Lenders' Participation.
Immediately upon issuance or amendment by the Issuing Bank of any
Letter of Credit in accordance with the procedures set forth in Section 3.1,
each Lender shall be deemed to have irrevocably and unconditionally purchased
and received from the Issuing Bank, without recourse or warranty, an undivided
interest and participation to the extent of such Lender's Proportionate Share
(based upon its Commitment) in the liability with respect to such Letter of
Credit (including, without limitation, all obligations of the Borrower with
respect thereto, other than amounts owing to the Issuing Bank consisting of
Issuing Bank Fees) and any security therefor or guaranty pertaining thereto.
3.4. Notice of Issuance.
Whenever the Borrower desires the issuance of a Letter of Credit, the
Borrower shall deliver to the Agent a written notice no later than 1:00 P.M.
Boston time at least five (5) Business Days (or such shorter period as may be
agreed to by the Issuing Bank) in advance of the proposed date of issuance,
which written notice shall be in such form as may be required from time to time
by the Agent and the Issuing Bank (a "Letter of Credit Request"). The
transmittal by the Borrower of each Letter of Credit Request shall be deemed to
be a representation and warranty by the Borrower that the Letter of Credit may
be issued in accordance with and will not violate any of the requirements of
Section 3.1. Prior to the date of issuance of each Letter of Credit, the
Borrower shall provide to the Agent a precise description of the documents and
the text of any certificate to be presented by the beneficiary of such Letter of
Credit which if presented by such beneficiary on or prior to the expiration date
of the Letter of Credit would require the Issuing Bank to make payment under the
Letter of Credit. The Issuing Bank, in its reasonable judgment, may require
changes in any such documents and certificates. No Letter of Credit shall
require payment against a conforming draft to be made thereunder prior to the
second Business Day (under the laws of the jurisdiction of the Issuing Bank)
after the date on which such draft is presented, together with all documents
and/or certificates required to be presented in connection therewith under the
terms of the applicable Letter of Credit. A Letter of Credit Request may be
given in writing or electronically and, if requested by the Agent, with prompt
confirmation in writing. Any electronic Letter of Credit Request shall be
deemed to have been prepared by, or under the supervision of the chief financial
officer of the Borrower. The Agent shall promptly provide the aforementioned
Letter of Credit Request, document description and proposed text of
certification to the Issuing Bank.
3.5. Payment of Amounts Drawn Under Letters of Credit.
In the event of any drawing under any Letter of Credit by the
beneficiary thereof, the Issuing Bank shall notify the Agent, which shall notify
the Borrower of such draw, not later than 11:00 A.M. Boston time on the Business
Day immediately prior to the date on which the Issuing Bank intends to honor
such drawing. The Borrower will be deemed to have concurrently given a Notice
of Borrowing to the Agent for Revolving Loans in the amount of and at the time
of such drawing. Subject to satisfaction or waiver of the conditions specified
in Article 5 hereof and the other terms and conditions of Borrowings contained
herein, the Lenders shall be obligated to, on the date of such drawing, make
Revolving Loans in the amount of such drawing, the proceeds of which shall be
applied directly by the Agent to reimburse the Issuing Bank for the amount of
such drawing or payment. If for any reason, proceeds of such Revolving Loans
are not received by the Issuing Bank on such date in an amount equal to the
amount of such drawing, the Borrower shall be obligated to and shall reimburse
the Issuing Bank, on the Business Day (under the laws of the jurisdiction of the
Issuing Bank) immediately following the date of such drawing, in an amount in
immediately available funds equal to the excess of the amount of such drawing
over the amount of such Revolving Loans, if any, which are so received, plus
accrued interest on such amount at the rate set forth in Section 4.1 hereof.
3.6. Payment by Lenders.
To the extent that Revolving Loans are not made in an amount
sufficient to reimburse the Issuing Bank in full for the amount of any draw, the
Agent shall promptly notify each Lender of the unreimbursed amount of such
drawing and of such Lender's respective participation therein. Each Lender
shall make available to the Agent for the benefit of the Issuing Bank an amount
equal to such Lender's respective participation in immediately available funds,
not later than 1:00 P.M. Boston time on the Business Day (under the laws of the
jurisdiction of the Issuing Bank) after the date notified by the Agent. In the
event that any Lender fails to make available to the Agent the amount of such
Lender's participation in such Letter of Credit as provided in this Section 3.6,
the Issuing Bank shall be entitled to recover such amount on demand from such
Lender together with interest at the Federal Funds Rate for the first three (3)
Business Days while such amount remains unpaid and thereafter at the Base Rate.
The Agent shall distribute to each other Lender which has paid all amounts
payable by it under this Section 3.6 with respect to any Letter of Credit issued
by the Issuing Bank such other Lender's Proportionate Share of all payments
subsequently received by the Agent from the Borrower in reimbursement of
drawings honored by the Issuing Bank under such Letter of Credit when such
payments are received.
3.7. Nature of Issuing Bank's Duties.
In determining whether to pay under any Letter of Credit, the Issuing
Bank shall be responsible only to determine that the documents and certificates
required to be delivered under that Letter of Credit have been delivered and
that they comply on their face with the requirements of that Letter of Credit.
As between the Borrower, the Issuing Bank and each other Lender, the Borrower
assumes all risks of the acts and omissions of the Issuing Bank (except to the
extent that it is finally judicially determined that such acts or omissions were
the result of the Issuing Bank's gross negligence or willful misconduct), or
misuse of the Letters of Credit by the respective beneficiaries of such Letters
of Credit. In furtherance and not in limitation of the foregoing, neither the
Issuing Bank, the Agent nor any of the other Lenders shall be responsible
(i) for the validity, sufficiency, accuracy, genuineness or legal effects of any
document submitted by any party in connection with the application for and
issuance of or any drawing honored under such Letters of Credit even if it
should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged, (ii) for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign any
such Letter of Credit, or the rights or benefits thereunder or proceeds thereof,
in whole or in part, which may prove to be invalid or ineffective for any
reason, (iii) for failure of the beneficiary of any such Letter of Credit to
strictly comply with conditions required in order to draw upon such Letter of
Credit, (iv) for errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex, telecopy or
otherwise, whether or not they be in cipher, (v) for errors in interpretation of
technical terms, (vi) for any loss or delay in the transmission or otherwise of
any document required in order to make a drawing under any such Letter of
Credit, or of the proceeds thereof, (vii) for the misapplication by the
beneficiary of any such Letter of Credit of the proceeds of any drawing honored
under such Letter of Credit, and (viii) for any consequences arising from causes
beyond the control of the Issuing Bank, the Agent or the other Lenders. None of
the above shall affect, impair, or prevent the vesting of any of the Issuing
Bank's rights or powers hereunder. Any action taken or omitted to be taken by
the Issuing Bank under or in connection with any Letter of Credit, if taken or
omitted in the absence of gross negligence or willful misconduct, shall not
create for the Issuing Bank any liability to the Borrower, the Agent or any
Lender.
3.8. Obligations Absolute.
The obligations of the Borrower to reimburse the Issuing Bank for
drawings honored under the Letters of Credit and the obligations of the Lenders
under Section 3.6 hereof shall be unconditional and irrevocable and shall be
paid strictly in accordance with the terms of this Credit Agreement under all
circumstances including, without limitation, the following circumstances:
(a) any lack of validity or enforceability of any Letter of Credit;
(b) the existence of any claim, set-off, defense or other right which
the Borrower or any Affiliate of the Borrower may have at any time against
a beneficiary or any transferee of any Letter of Credit (or any Persons or
entities for whom any such beneficiary or transferee may be acting), the
Issuing Bank, any Lender or any other Person, whether in connection with
this Credit Agreement, the transactions contemplated herein or any unrelat-
ed transaction;
(c) any draft, demand, certificate or any other documents presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or in-
accurate in any respect;
(d) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Credit Documents;
(e) payment by the Issuing Bank under 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;
(f) failure of any drawing under a Letter of Credit or any non-
application or misapplication by the beneficiary of the proceeds of any
drawing; or
(g) the fact that a Default or an Event of Default shall have occurr-
ed and be continuing;
provided, however, that the Borrower shall have no obligation to reimburse the
-------- -------
Issuing Bank, and the Lenders shall have no obligation under Section 3.6 hereof,
in the event of the Issuing Bank's willful misconduct or gross negligence in
determining whether documents presented under the Letter of Credit comply with
the terms of such Letter of Credit.
ARTICLE 4. INTEREST, FEES AND EXPENSES
4.1. Interest on Base Rate Loans.
Subject to the provisions of Section 4.3 hereof, interest on Base Rate
Loans shall be payable monthly on the last day of each month at an interest rate
per annum equal to the Base Rate plus the Base Rate Spread. The "Base Rate
Spread" shall be equal to the percentage per annum set forth below opposite the
Interest Coverage Ratio maintained by the Consolidated Entity for the
Consolidated Entity's most recently ended four full fiscal quarters for which
Financial Statements of the Consolidated Entity have been delivered to the Agent
pursuant to Section 7.1(a) or 7.1(c), as applicable:
Ratio Base Rate Spread
------------- ----------------
2.25 to 1.00 0%
------------- ----------------
1.75 to 1.00
and 0.25%
2.25 to 1.00
------------- ----------------
1.50 to 1.00 0.50%
and
1.75 to 1.00
------------- ----------------
1.50 to 1.00 0.75%
------------- ----------------
In the event of any change in the Base Rate, the rate hereunder shall change,
effective as of the day the Base Rate changes. In the event of any change in
the Interest Coverage Ratio of the Consolidated Entity for the most recently
ended four full fiscal quarters of the Consolidated Entity, the Base Rate Spread
shall change effective as of the first day of the first calendar month beginning
after the date on which the most recent Financial Statements of the Consolidated
Entity were delivered to the Agent pursuant to Section 7.1(a) or 7.1(c), as
applicable, or if such Financial Statements were not delivered on a timely
basis, on the day following the ultimate delivery thereof. Each determination
by the Agent of an interest rate hereunder shall be conclusive and binding for
all purposes, absent manifest error. Notwithstanding the foregoing (but subject
to Section 4.3) the Base Rate Spread shall be one-half of one percent (0.50%)
until the delivery of the Financial Statements for the fiscal quarter ending
June 26, 1999.
4.2. Interest on Eurodollar Rate Loans.
Subject to the provisions of Section 4.3 hereof, interest on
Eurodollar Rate Loans shall be payable on the last day of each Interest Period
with respect to such Eurodollar Rate Loan (and, with respect to Eurodollar Rate
Loans having an Interest Period in excess of three months, on the last day of
each three month interval during such Interest Period), at the date of
conversion of such Eurodollar Rate Loan (or a portion thereof) to a Base Rate
Loan and at maturity of such Eurodollar Rate Loan at an interest rate per annum
equal during the Interest Period for such Eurodollar Rate Loan to the Adjusted
Eurodollar Rate for the Interest Period in effect for such Eurodollar Rate Loan
plus the Eurodollar Rate Spread. The "Eurodollar Rate Spread" shall be equal to
the percentage per annum set forth below opposite the Interest Coverage Ratio
maintained by the Consolidated Entity for the Consolidated Entity's most
recently ended four full fiscal quarters for which Financial Statements of the
Consolidated Entity have been delivered to the Agent pursuant to Section 7.1(a)
or 7.1(c), as applicable, as calculated on the date two (2) Business Days prior
to the commencement of the applicable Interest Period:
Ratio Eurodollar Rate Spread
------------- ----------------------
2.25 to 1.00 1.50%
------------- ----------------------
1.75 to 1.00
and 1.75%
2.25 to 1.00
------------- ----------------------
1.50 to 1.00
and 1.75 to 2.00%
1.00
------------- ----------------------
1.50 to 1.00 2.25%
------------- ----------------------
After maturity of any Eurodollar Rate Loan (whether by acceleration or
otherwise), interest with respect to such Eurodollar Rate Loan shall be payable
upon demand. In the event of any change in the Interest Coverage Ratio of the
Consolidated Entity for the most recently ended four full fiscal quarters of the
Consolidated Entity, the Eurodollar Rate Spread shall change effective as of the
first day of the first Interest Period beginning after the date on which the
most recent Financial Statements of the Consolidated Entity were delivered to
the Agent pursuant to Section 7.1(a) or 7.1(c), as applicable, or if such
Financial Statements were not delivered on a timely basis, on the day following
the ultimate delivery thereof. The Agent upon determining the Adjusted
Eurodollar Rate for any Interest Period shall promptly notify the Borrower and
the Lenders by telephone (confirmed promptly in writing) or in writing thereof.
Each determination by the Agent of an interest rate hereunder shall be
conclusive and binding for all purposes, absent manifest error. Notwithstanding
the foregoing (but subject to Section 4.3) the Eurodollar Rate Spread shall be
two percent (2.00%) until the delivery of the Financial Statements for the
fiscal quarter ending June 26, 1999.
4.3. Interest After Event of Default.
Following the occurrence and during the continuance of an Event of
Default interest on the Revolving Loans shall be payable on demand and interest
shall accrue at a rate per annum equal to the rate at which the Revolving Loans
are bearing interest pursuant to Sections 4.1 and 4.2 above, plus two percent
(2.00%) per annum. In the event of any change in said applicable interest rate,
the rate hereunder shall change, effective as of the day the applicable interest
rate changes, so as to remain two percent (2.00%) per annum above the then
applicable interest rate.
4.4. Reimbursement of Expenses.
(a) The Borrower shall promptly reimburse the Agent and the Syndica-
tion Agent for all Expenses of the Agent and the Syndication Agent as the
same are incurred by the Agent and the Syndication Agent and upon receipt
of invoices therefor and, if requested by the Borrower, such reasonable
backup materials and information as the Borrower shall reasonably request.
(b) After the occurrence and during the continuance of a Default, the
Borrower shall promptly reimburse the Agent and the Lenders for all costs,
fees and expenses incurred by each of them in connection with any workout,
restructuring, renegotiation or refinancing of the Loans and the other
Obligations under the Credit Agreement and the other Credit Documents.
4.5. Unused Line Fee.
Promptly following the last Business Day of each calendar quarter
hereafter and on the Expiration Date, the Borrower shall pay to the Agent for
the pro rata benefit of each of the Lenders a non-refundable fee equal to the
weighted average amount during such quarter by which the Total Commitments
exceed the sum of (a) the aggregate face amount of outstanding Letters of Credit
and (b) the aggregate outstanding principal balance of the Revolving Loans,
multiplied by one-quarter of one percent (0.25%) per annum (the "Unused Line
Fee").
4.6. Letter of Credit Fees.
(a) Promptly following the last Business Day of each calendar quarter
hereafter and on the Expiration Date, the Borrower shall pay to the Agent
for the pro rata benefit of the Lenders a non-refundable fee (the "Letter
of Credit Fee"), in an amount equal to the Letter of Credit Fee Percentage
of the daily weighted average amount of outstanding Letter of Credit Oblig-
ations during the immediately preceding quarter. The "Letter of Credit Fee
Percentage" shall be equal to the percentage set forth below opposite the
Interest Coverage Ratio maintained by the Consolidated Entity for the Con-
solidated Entity's most recently ended four full fiscal quarters for which
Financial Statements of the Consolidated Entity have been delivered to the
Agent pursuant to Section 7.1(a) or 7.1(c), as applicable:
Ratio Letter of Credit Fee
Percentage
------------- --------------------
2.25 to 1.00 1.50%
------------- --------------------
1.75 to 1.00
and 1.75%
2.25 to 1.00
------------- --------------------
1.50 to 1.00
and 1.75 to 2.00%
1.00
------------- --------------------
1.50 to 1.00 2.25%
------------- --------------------
In the event of any change in the Interest Coverage Ratio of the
Consolidated Entity for the most recently ended four full fiscal
quarters of the Consolidated Entity, the Letter of Credit Fee
Percentage shall change effective for Letters of Credit issued on or
after the first day of the first calendar month beginning after the
date on which the most recent Financial Statements of the Consolidated
Entity were delivered to the Agent pursuant to Section 7.1(a) or
7.1(c), as applicable, or if such Financial Statements were not
delivered on a timely basis, on the day following the ultimate
delivery thereof. For the avoidance of doubt, the Letter of Credit
Fee Percentage shall not change with respect to any Letters of Credit
issued and outstanding prior to the effective day of such change. In
addition, prior to the issuance of each Letter of Credit, the Borrower
will pay to the Issuing Bank a fronting fee (the "Issuing Bank Fee")
equal to one-quarter of one percent (0.25%) times the maximum amount
that may be drawn under such Letter of Credit (calculated on a per
annum basis for the term of such Letter of Credit). Each
determination by the Agent of Letter of Credit Fees and Issuing Bank
Fees hereunder shall be conclusive and binding for all purposes,
absent manifest error. Notwithstanding the foregoing (but subject to
clause (b) below), the Letter of Credit Fee Percentage shall be two
percent (2.00%) until the delivery of the Financial Statements for the
fiscal quarter ending June 26, 1999.
(b) Letter of Credit Fees on Letter of Credit Obligations outstanding
as of the date an Event of Default occurs, and at all times thereafter
until the earlier of the date upon which (i) all Obligations have been paid
and satisfied in full or (ii) such Event of Default shall no longer be
continuing, shall be payable on demand at a rate equal to the rate at which
the Letter of Credit Fees are charged pursuant to Section 4.6(a) above,
plus two percent (2.00%).
4.7. Special Provisions Relating to Eurodollar Rate Loans.
(a) Continuation. With respect to any Borrowing consisting of Euro-
------------
dollar Rate Loans, the Borrower may (so long as no Default or Event of De-
fault has occurred and is continuing), subject to the provisions of Section
4.7(c), elect to maintain such Borrowing or any portion thereof as consist-
ing of Eurodollar Rate Loans by selecting a new Interest Period for such
Borrowing, which new Interest Period shall commence on the last day of the
immediately preceding Interest Period. Each selection of a new Interest
Period shall be made by notice given not later than 12:00 P.M. Boston time
on the third Business Day prior to the date of any such continuation relat-
ing to Eurodollar Rate Loans, by the Borrower to the Agent. Such notice by
the Borrower of a continuation (a "Notice of Continuation") shall be by
telephone or facsimile transmission, and if by telephone, promptly con-
firmed in writing substantially in the form of Exhibit G,in each case
specifying (i) the date of such continuation, (ii) the Type of Revolving
Loans subject to such continuation, (iii) the aggregate amount of Revolving
Loans subject to such continuation and (iv) the duration of the selected
Interest Period. The Borrower may elect to maintain more than one Borrow-
ing consisting of Eurodollar Rate Loans by combining such Borrowings into
one Borrowing and selecting a new Interest Period pursuant to this Section
4.7(a); provided, however, that each of the Borrowings so combined shall
-------- -------
consist Revolving Loans having Interest Periods ending on the same date.
If the Borrower shall fail to select a new Interest Period for any Borrow-
ing consisting of Eurodollar Rate Loans in accordance with this Section
4.7(a), such Revolving Loans will automatically, on the last day of the
then existing Interest Period therefor, convert into Base Rate Loans. The
Agent shall give each Lender prompt notice by telephone or facsimile trans-
mission of each Notice of Continuation.
(b) Conversion. The Borrower may on any Business Day (so long as no
----------
Default or Event of Default has occurred and is continuing), upon notice
(each such notice, a "Notice of Conversion") given to the Agent, and
subject to the provisions of Section 4.7(c), convert the entire amount of
or a portion of all Revolving Loans of one Type comprising the same Borrow-
ing into Revolving Loans of another Type; provided, however, that any con-
-------- -------
version of any Eurodollar Rate Loans into Revolving Loans of another Type
shall be made on, and only on, the last day of an Interest Period for such
Eurodollar Rate Loans and, upon conversion of any Base Rate Loans into
Revolving Loans of another Type, the Borrower shall pay accrued interest to
the date of conversions on the principal amount converted. Each such
Notice of Conversion shall be given not later than 12:00 P.M. Boston time
on the Business Day prior to the date of any proposed conversion into Base
Rate Loans and on the third Business Day prior to the date of any proposed
conversion into Eurodollar Rate Loans. Subject to the restrictions
specified above, each Notice of Conversion shall be by telephone or
facsimile transmission, and if by telephone, promptly confirmed in writing
substantially in the form of Exhibit H, in each case specifying (i) the
requested date of such conversion, (ii) the Type of Revolving Loans to be
converted, (iii) the portion of such Type of Revolving Loan to be
converted, (iv) the Type of Revolving Loan such Revolving Loans are to be
converted into and (v) if such conversion is into Eurodollar Rate Loans,
the duration of the Interest Period of such Revolving Loan. Each
conversion shall be in an aggregate amount for the Revolving Loans of all
Lenders of not less than $1,000,000 or an integral multiple of $100,000 in
excess thereof. The Borrower may elect to convert the entire amount of or
a portion of all Revolving Loans of one Type comprising more than one
Borrowing into Revolving Loans of another Type by combining such Borrowings
into one Borrowing consisting of Revolving Loans of another Type; provided,
--------
however, that if the Borrowings so combined consist of Eurodollar Rate
-------
Loans, such Revolving Loans shall have Interest Periods ending on the same
date.
(c) Certain Limitations on Eurodollar Rate Loans. The right of the
--------------------------------------------
Borrower to maintain, select, continue or convert Eurodollar Rate Loans
shall be limited as follows:
(i) If the Agent determines that adequate and fair means do not
exist for ascertaining the Eurodollar Rate for Eurodollar Rate Loans
comprising any requested Borrowing, continuation or conversion, the
right of the Borrower to select or maintain Eurodollar Rate Loans for
such Borrowing or any subsequent Borrowing shall be suspended until
the Agent shall notify the Borrower and the Lenders that the circum-
stances causing such suspension no longer exist, and each Revolving
Loan comprising such Borrowing shall be made as a Base Rate Loan.
(ii) If the Majority Lenders shall, at least one Business Day
before the date of any requested Borrowing, continuation or conver-
sion, notify the Agent that the Eurodollar Rate for Revolving Loans
comprising such Borrowing will not adequately reflect the cost to such
Lenders of making or funding their respective Revolving Loans for such
Borrowing, the right of the Borrower to select Eurodollar Rate Loans
for such Borrowing shall be suspended until the Agent shall notify the
Borrower and the Lenders that the circumstances causing such suspen-
sion no longer exist, and each Revolving Loan comprising such Borrow-
ing shall be made as a Base Rate Loan.
(iii) If at any time any Lender determines (which determination
shall, absent manifest error, be conclusive and binding on all
parties) that the making, continuation or conversion of any Revolving
Loan as a Eurodollar Rate Loan has become unlawful or impermissible by
reason of compliance by that Lender with any law, governmental rule,
regulation or order of any Governmental Authority (whether or not
having the force of law or would result in costs or penalties), then,
and in any such event, such Lender may give notice of that determina-
tion in writing, to the Borrower and the Agent and the Agent shall
promptly transmit the notice to each other Lender. Until such Lender
gives notice otherwise, the right of the Borrower to select Eurodollar
Rate Loans from that Lender shall be suspended and each Eurodollar
Rate Loan outstanding from that Lender shall automatically and immedi-
ately convert to a Base Rate Loan.
(iv) There shall not be outstanding at any one time more than an
aggregate of twelve (12) Revolving Loans which consist of Eurodollar
Rate Loans.
(d) Compensation.
------------
(i) Each Notice of Continuation and Notice of Conversion shall
be irrevocable by and binding on the Borrower. In the case of any
Borrowing, continuation or conversion that the related Notice of
Borrowing, Notice of Continuation or Notice of Conversion specifies is
to be comprised of Eurodollar Rate Loans, the Borrower shall indemnify
each Lender against any loss, cost or expense incurred by such Lender
as a result of any failure to fulfill, on or before the date for such
Borrowing, continuation or conversion specified in such Notice of
Borrowing, Notice of Continuation or Notice of Conversion, the applic-
able conditions set forth in Article 5, including, without limitation,
any loss (excluding loss of anticipated profits), cost or expense
incurred by reason of the liquidation or re-employment of deposits or
other funds acquired by such Lender to fund the Revolving Loan to be
made by such Lender as part of such Borrowing, continuation or con-
version.
(ii) If any payment of principal of, or conversion or continuation
of, any Eurodollar Rate Loan is made other than on the last day of the
Interest Period for such Loan as a result of a payment, prepayment,
conversion or continuation of such Loan or acceleration of the
maturity of the Revolving Notes pursuant to Article 9 hereof or for
any other reason, the Borrower shall, upon demand by any Lender (with
a copy of such demand to the Agent), pay to the Agent for the account
of such Lender any amounts required to compensate such Lender for any
additional losses, costs or expenses which it may reasonably incur as
a result of such payment, including, without limitation, any loss
(including loss of anticipated profits), cost or expense incurred by
reason of the liquidation or re-employment of deposits or other funds
acquired by any Lender to fund or maintain such Loan.
(iii) Calculation of all amounts payable to a Lender under this
Section 4.7(d) shall be made as though such Lender elected to fund all
Eurodollar Rate Loans by purchasing U.S. dollar deposits in its Euro-
dollar Lending Office's interbank eurodollar market.
4.8. Indemnification in Certain Events.
If after the Closing Date, either (i) any change in or in the
interpretation of any law or regulation is introduced, including, without
limitation, with respect to reserve requirements, applicable to the Agent, any
of the Lenders or any banking or financial institution from whom any of the
Lenders borrows funds or obtains credit (a "Funding Bank"), or (ii) the Agent, a
Funding Bank or any of the Lenders complies with any future guideline or request
from any central bank or other Governmental Authority or (iii) the Agent, a
Funding Bank or any of the Lenders determines that the adoption of any
applicable law, rule or regulation regarding capital adequacy, or any change
therein, or any change in the interpretation or administration thereof by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof has or would have the effect described
below, or the Agent, a Funding Bank or any of the Lenders complies with any
request or directive regarding capital adequacy (whether or not having the force
of law) of any such authority, central bank or comparable agency, and in the
case of any event set forth in this clause (iii), such adoption, change or
compliance has or would have the direct or indirect effect of reducing the rate
of return on any of the Lenders' capital as a consequence of its obligations
hereunder to a level below that which such Lender could have achieved but for
such adoption, change or compliance (taking into consideration the Agent's or
any applicable Funding Bank's or Lender's policies as the case may be with
respect to capital adequacy) by an amount deemed by such Lender to be material,
and any of the foregoing events described in clauses (i), (ii) or (iii)
increases the cost to the Agent, the Issuing Bank or any of the Lenders of
(A) funding or maintaining the Total Commitments or (B) issuing, making or
maintaining any Letter of Credit or of purchasing or maintaining any
participation therein, or reduces the amount receivable in respect thereof by
the Agent, the Issuing Bank or any Lender, then the Borrower shall upon demand
by the Agent, pay to the Agent, for the account of each applicable Lender or, as
applicable, the Issuing Bank or a Funding Bank, additional amounts sufficient to
indemnify the Lenders against such increase in cost or reduction in amount
receivable. A certificate as to the amount of such increased cost and setting
forth in reasonable detail the calculation thereof shall be submitted to the
Borrower by the Agent, or the applicable Lender, Issuing Bank or Funding Bank,
and shall be conclusive absent manifest error.
4.9. Net Payments.
(a) All payments by the Borrower hereunder to or for the benefit of
any Lender, the Issuing Bank, the Syndication Agent or the Agent shall be
made without setoff, counterclaim or other defense. Except as provided in
Section 4.9(b), all such payments will be made free and clear of, and with-
out deduction or withholding for, any present or future taxes, levies,
imposts, duties, fees, assessments, or other charges of whatever nature now
or hereafter imposed by any jurisdiction or by any political subdivision or
taxing authority thereof or therein with respect to such payments (but
excluding any tax imposed on or measured by the net income or profits of
the Lender, the Issuing Bank, the Syndication Agent or the Agent, as the
case may be, pursuant to the laws of the jurisdictions in which it is
domiciled) together with all interest, penalties or similar liabilities
with respect thereto (collectively, "Covered Taxes"). If the Borrower
shall be required by law to deduct any Covered Taxes from any sum payable
hereunder to any Lender, the Issuing Bank, the Syndication Agent or the
Agent, (A) the sum payable shall be increased as may be necessary so that
after making all required deductions of Covered Taxes (including deductions
of Covered Taxes applicable to additional sums payable under this Section
4.9) such Lender, the Issuing Bank, the Syndication Agent or the Agent, as
the case may be, receives an amount equal to the sum it would have received
had no such deductions been made, (B) the Borrower shall make such deduc-
tions and (C) the Borrower shall pay the full amount so deducted to the
relevant taxation authority or other authority in accordance with applic-
able law. The Borrower shall furnish to the Agent within forty-five (45)
days after the date the payment of any Covered Taxes is due certified
copies of tax receipts evidencing such payment by the Borrower. The
Borrower agrees to indemnify and hold harmless the Lender, the Issuing
Bank, the Syndication Agent and the Agent and reimburse each of them, as
the case may be, for the amount of any Covered Taxes so levied or imposed
and paid by them.
(b) Each Foreign Lender shall deliver to the Agent and the Borrower
(i) two valid, duly completed copies of IRS Form 1001 or 4224 or successor
applicable form, as the case may be, and any other required form, certify-
ing in each case that such Foreign Lender is entitled to receive payments
under this Credit Agreement or the Revolving Notes payable to it without
deduction or withholding of any United States federal income taxes or with
such withholding imposed at a reduced rate (the "Reduced Rate"), and (ii) a
valid, duly completed IRS Form W-8 or W-9 or successor applicable form, as
the case may be, to establish an exemption from United States backup with-
holding tax. Each such Foreign Lender shall also deliver to the Agent and
the Borrower two further copies of said Form 1001 or 4224 and W-8 or W-9,
or successor applicable forms, or other manner of required certification,
as the case may be, on or before the date that any such form expires or
becomes obsolete or otherwise is required to be resubmitted as a condition
to obtaining an exemption from a required withholding of United States
federal income tax or entitlement to having such withholding imposed at the
Reduced Rate or after the occurrence of any event requiring a change in the
most recent form previously delivered by it to the Borrower and the Agent,
and such extensions or renewals thereof as may reasonably be requested by
the Borrower and the Agent, certifying (i) in the case of a Form 1001 or
4224 that such Foreign Lender is entitled to receive payments under this
Credit Agreement or the Revolving Notes payable to it without deduction or
withholding of any United States federal income taxes, unless in any such
case any change in a tax treaty to which the United States is a party, or
any change in law or regulation of the United States or official interpret-
ation thereof has occurred after the Closing Date and prior to the date on
which any such delivery would otherwise be required that renders all such
forms inapplicable or that would prevent such Foreign Lender from duly
completing and delivering any such form with respect to it, and such
Foreign Lender advises the Borrower and the Agent that it is not capable of
receiving payments without any deduction or withholding at the Reduced
Rate, or (ii) in the case of a Form W-8 or W-9, establishing an exemption
from United States backup withholding tax.
4.10. Affected Lenders.
If the Borrower is obligated to pay to any Lender any amount under
Sections 4.8 or 4.9 hereof or if any Lender is a Defaulting Lender, the Borrower
may, if no Default or Event of Default then exists, replace such Lender with
another lender acceptable to the Agent, and such Lender hereby agrees to be so
replaced subject to the following:
(a) The obligations of the Borrower hereunder to the Lender to be
replaced (including such increased or additional costs incurred from the
date of notice to the Borrower of such increase or additional costs through
the date such Lender is replaced hereunder) shall be paid in full to such
Lender concurrently with such replacement;
(b) The replacement Lender shall be a bank or other financial insti-
tution that is not subject to such increased costs which caused the Borrow-
er's election to replace any Lender hereunder, and each such replacement
Lender shall execute and deliver to the Agent such documentation satisfact-
ory to the Agent pursuant to which such replacement Lender is to become a
party hereto, conforming to the provisions of Section 11.6 hereof, with a
Commitment equal to that of the Lender being replaced and shall make Re-
volving Loans in the aggregate principal amount equal to the aggregate out-
standing principal amount of the Revolving Loans of the Lender being re-
placed (or that would be outstanding if such Lender were not a Defaulting
Lender);
(c) Upon such execution of such documents referred to in clause (b)
and repayment of the amounts referred to in clause (a), the replacement
lender shall be a "Lender" with a Commitment as specified hereinabove and
the Lender being replaced shall cease to be a "Lender" hereunder, except
with respect to indemnification provisions under this Credit Agreement,
which shall survive as to such replaced Lender;
(d) The Agent shall reasonably cooperate in effectuating the replace-
ment of any Lender under this Section 4.10, but at no time shall the Agent
be obligated to initiate any such replacement;
(e) Any Lender replaced under this Section 4.10 shall be replaced at
the Borrower's sole cost and expense and at no cost or expense to the Agent
or any of the Lenders; and
(f) If Borrower proposes to replace any Lender pursuant to this
Section 4.10 because the Lender seeks reimbursement under either Section
4.8 or 4.9, then it must also replace any other Lender who seeks similar
levels of reimbursement (as a percentage of such Lender's Commitment) under
such Sections.
4.11. Sharing of Payments.
If any Lender shall obtain any payment (whether voluntary,
involuntary, through the exercise of any right of set-off or otherwise) on
account of the Revolving Loans made by it or its participation in the Letter of
Credit obligations in excess of its Proportionate Share of payments on account
of the Revolving Loans or Letter of Credit Obligations obtained by all the
Lenders, such Lender shall forthwith purchase from the other Lenders such
participations in the Revolving Loans made by them or in their participation in
Letters of Credit as shall be necessary to cause such purchasing Lender to share
the excess payment ratably with each of them; provided, however, that if all or
-------- -------
any portion of such excess payment is thereafter recovered from such purchasing
Lender, such purchase from each Lender shall be rescinded and each such Lender
shall repay to the purchasing Lender the purchase price to the extent of such
recovery together with an amount equal to such Lender's ratable share (according
to the proportion of (i) the amount of such Lender's required repayment to
(ii) the total amount so recovered from the purchasing Lender) of any interest
or other amount paid or payable by the purchasing Lender in respect to the total
amount so recovered. The Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section 4.11 may, to the
fullest extent permitted by law, exercise all of its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of the Borrower in the amount of such
participation.
4.12. Calculations.
All calculations of (a) interest hereunder and (b) fees, including,
without limitation, Unused Line Fees, Letter of Credit Fees and Issuing Bank
Fees shall be made by the Agent, on the basis of a year of 360 days, except
(i) in the case of Base Rate Loans and (ii) if such computation would cause the
interest and fees chargeable hereunder to exceed the Highest Lawful Rate, in
which cases calculations shall be made by the Agent on the basis of a year of
365/366 days, in each case to the extent applicable for the actual number of
days elapsed (including the first day but excluding the last day) occurring in
the period for which such interest or fees are payable. Each determination by
the Agent of an interest rate or payment hereunder shall be conclusive and
binding for all purposes, absent manifest error.
ARTICLE 5. CONDITIONS PRECEDENT
5.1. Conditions Precedent to Effectiveness.
This Credit Agreement shall be effective upon the satisfaction of the
following conditions precedent and the conditions set forth in Section 5.2:
(a) Closing Documents List. The Agent, on behalf of the Lenders,
----------------------
shall have received duly executed originals of each of the agreements,
opinions, reports, approvals, consents, certificates and other documents
set forth on the Closing Documents List attached hereto as Schedule A.
(b) Material Adverse Change. (i) No change, occurrence, event or
-----------------------
development or event involving a prospective change that is reasonably
likely to have a Material Adverse Effect shall have occurred and be
continuing, (ii) there shall not have occurred a substantial impairment of
the financial markets generally that is reasonably likely to materially and
adversely affect the transactions contemplated hereby, in each case as
determined by the Agent and each Lender in its sole discretion, and (iii)
there shall not have occurred a change in any law or regulation (or the
implementation of any law or regulation) affecting any of the Lenders that
is reasonably likely to materially increase the cost and expense to such
Lender of acting as a Lender hereunder.
(c) Fees and Expenses. The Agent and each of the Lenders shall have
-----------------
received payment in full of those Fees and Expenses referred to in the
Agent's Fee Letter and in Article 4 hereof payable to them on or before the
Closing Date (or an irrevocable authorization to pay such Fees or Expenses
and other fees and expenses out of the proceeds of the initial Revolving
Loans).
(d) Unused Availability. The Borrowing Base Certificate delivered at
-------------------
the time of closing shall demonstrate that Unused Availability on the Clos-
ing Date, after giving effect to any Revolving Loans to be made and Letters
of Credit to be issued on such date, shall be at least $15,000,000.
(e) Consents and Approvals. Except for (i) the filing of Uniform
----------------------
Commercial Code financing statements, (ii) consents or authorizations which
have been obtained or filings which have been made, and which in either
case are in full force and effect or (iii) consents or authorizations the
failure to obtain or filings the failure to make could not reasonably be
expected to have a Material Adverse Effect, no consent or authorization of,
permit from, filing with or other act by or in respect of, any Governmental
Authority or any other Person shall be required in connection with the
borrowings hereunder, the grant of the Liens pursuant to the Credit Docu-
ments, or the continuing operations of the Borrower, the enforcement of the
Agent's or the Lenders' rights under the Credit Documents, or with the
execution, delivery, performance, validity or enforceability of this Credit
Agreement, the Revolving Notes, the other Credit Documents, the Indenture
or any other documents executed in connection herewith or therewith.
(f) Material Litigation. No material litigation shall have been
-------------------
instituted against the Borrower, and no material litigation shall have been
instituted by any Person (including, but not limited to, the Borrower)
relating to the transactions contemplated by the Credit Agreement.
(g) Existing Indebtedness. The terms and conditions of any Indebted-
---------------------
ness (including, without limitation, maturities, interest rates, prepayment
and redemption requirements, covenants, defaults, remedies, security
provisions and subordination provisions) of the Borrower to remain out-
standing after the Closing Date shall be satisfactory to the Lenders in all
respects, and the Lenders shall be satisfied that the Borrower is not
subject to any material contractual obligations or other restrictions that
would be violated by the transactions contemplated by this Credit
Agreement, the other Credit Documents or the Indenture.
(h) Additional Documents. The Borrower shall have executed and
--------------------
delivered to the Agent and the Lenders all documents which the Agent or any
Lender determines are reasonably necessary to consummate the transactions
contemplated hereby.
5.2. Conditions Precedent to Effectiveness and to Each Revolving Loan
and Letter of Credit.
The occurrence of the Closing Date and the obligation to make any
Revolving Loan or to issue any Letter of Credit on any date, shall be subject to
the condition precedent that, both before and after giving effect thereto and,
in the case of Revolving Loans, to the application of the proceeds therefrom,
the following statements shall be true to the satisfaction of the Agent (and
each request for a borrowing of a Revolving Loan and request for a Letter of
Credit, and the acceptance by the Borrower of the proceeds of such Revolving
Loan or issuance of such Letter of Credit, shall constitute a representation and
warranty by the Borrower to the Lenders that on the date of such Revolving Loan
or issuance of such Letter of Credit before and after giving effect thereto and
to the application of the proceeds therefrom such statements are true):
(a) All representations and warranties contained in this Credit
Agreement and the other Credit Documents shall be true and correct on and
as of the date of such Notice of Borrowing or Letter of Credit Request as
if then made, other than representations and warranties that relate solely
to an earlier date;
(b) No Default or Event of Default shall have occurred and be
continuing, or would result from the making of the requested Revolving Loan
or the issuance of the requested Letter of Credit; and
(c) No event has occurred which has had or could reasonably be
expected to have a Material Adverse Effect.
ARTICLE 6. REPRESENTATIONS AND WARRANTIES
To induce the Agent, the Syndication Agent, the Lenders and the
Issuing Bank to enter into this Credit Agreement and to make available the
credit facilities contemplated hereby, the Borrower, with respect to itself and
each of its Subsidiaries, hereby represents and warrants to the Agent, the
Syndication Agent, the Lenders and the Issuing Bank as follows:
6.1. Organization and Qualification.
The Borrower and each of its Subsidiaries (i) is a corporation duly
organized, validly existing and in good standing under the laws of the state of
its incorporation, (ii) has the power and authority to own its properties and
assets and to transact the businesses in which it presently is, or proposes to
be, engaged and (iii) is duly qualified and is authorized to do business and is
in good standing in each jurisdiction where it presently is, or proposes to be,
engaged in business and where the failure to be so qualified and authorized
could have a Material Adverse Effect. Schedule B lists all jurisdictions in
----------
which the Borrower and its Subsidiaries are qualified to do business as foreign
corporations as of the Closing Date.
6.2. Authority.
The Borrower and each of its Subsidiaries has the requisite corporate
power and authority to execute, deliver and perform each of the Credit Documents
to which it is a party. All corporate action necessary for the execution,
delivery and performance of any of the Credit Documents has been taken.
6.3. Enforceability.
This Credit Agreement and each Credit Document is the legal, valid and
binding obligation of the Borrower or of any Subsidiary of the Borrower which is
a party thereto, enforceable in accordance with its terms.
6.4. No Conflict.
The execution, delivery and performance of each Credit Document by the
Borrower or any of its Subsidiaries are not in contravention of any Requirement
of Law or any indenture, contract, lease, agreement, instrument or other
commitment to which it is a party or by which it or any of its properties are
bound and will not, except as contemplated herein, result in the imposition of
any Liens upon any of its properties.
6.5. Consents and Filings.
No consent, authorization, permit or filing is required in connection
with the execution, delivery and performance of this Credit Agreement or any
Credit Document, or the continuing operations of the Borrower and its
Subsidiaries, except (i) those that have been obtained or made and (ii) filings
necessary to create, perfect or retain the perfection of Liens against the
Collateral.
6.6. Financial Data.
The Borrower has furnished to the Lenders the following Financial
Statements, which have been prepared in accordance with GAAP (except, in the
case of (ii) below, with respect to footnotes) consistently applied throughout
the periods involved: (i) balance sheets as of, and statements of operations,
shareholder's equity and cash flows for the fiscal year ended December 27, 1997
audited by independent certified public accountants, and accompanied by an
unqualified opinion thereof and (ii) unaudited balance sheets as of, and
unaudited statements of operations, shareholder's equity and cash flows for the
period ending fiscal December 26, 1998. Since the date of these Financial
Statements, there have been no adverse changes in the condition, financial or
otherwise, of the Borrower as shown on the balance sheet of the Borrower
described above, other than changes in the ordinary course of business. In
addition, the Borrower has furnished to the Lenders certain financial data which
include projections. The assumptions upon which the projections were based were
reasonable at the time such projections were prepared and are reasonable as of
the Closing Date, and such projections were prepared by the Borrower in good
faith.
6.7. Subsidiaries.
The only direct or indirect Subsidiaries of the Borrower as of the
Closing Date are those listed on Schedule B. The Borrower is the record and
----------
beneficial owner of all of the shares of capital stock of each of the
Subsidiaries listed on Schedule B. There are no proxies, irrevocable or
----------
otherwise, with respect to such shares, and no equity securities of any of the
Subsidiaries are or may become required to be issued by reason of any options,
warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into or exchangeable
for, shares of any capital stock of any Subsidiary, and there are no contracts,
commitments, understandings or arrangements by which any Subsidiary is or may
become bound to issue additional shares of its capital stock or securities
convertible into or exchangeable for such shares. All of such shares so owned
by the Borrower are owned by them free and clear of any Liens.
6.8. No Judgment or Litigation.
Except as set forth on Schedule B, no judgments, orders, writs or
----------
decrees are outstanding against the Borrower or any of the Subsidiaries nor is
there now pending or, to the best of the Borrower's knowledge after diligent
inquiry, threatened any litigation, contested claim, investigation, arbitration,
or governmental proceeding by or against the Borrower or any of the
Subsidiaries, in any case which could have a Material Adverse Effect.
6.9. No Defaults.
Neither the Borrower nor any of the Subsidiaries is in default under
any term of any Material Contract. The Borrower knows of no dispute regarding
any Material Contract.
6.10. Labor Matters.
(a) There are no controversies pending or, to the best of the Borrow-
er's knowledge after diligent inquiry, threatened between the Borrower or
any of the Subsidiaries and any of their respective employees which, in any
case, could have a Material Adverse Effect.
(b) Neither the Borrower nor any of the Subsidiaries is engaged in
any unfair labor practice which could have a Material Adverse Effect.
There is (i) no unfair labor practice complaint pending against the Borrow-
er or any of the Subsidiaries or, to the best knowledge of the Borrower,
threatened against any of them, before the National Labor Relations Board,
and no grievance or significant arbitration proceeding arising out of or
under collective bargaining agreements is so pending against the Borrower
or any of the Subsidiaries or, to the best knowledge of the Borrower,
threatened against any of them, (ii) no strike, labor dispute, slowdown or
stoppage pending against either of the Borrower or any of the Subsidiaries
or, to the best knowledge of the Borrower, threatened against any of them
and (iii) no union representation question with respect to the employees
of the Borrower or any Subsidiaries and no union organizing activities.
6.11. Compliance with Law.
Neither the Borrower nor any of the Subsidiaries has violated or
failed to comply with any Requirement of Law or any requirement of any self
regulatory organization which could have a Material Adverse Effect.
6.12. ERISA.
None of the Borrower, any Subsidiary and any ERISA Affiliate maintains
or contributes to any Plan other than those listed on Schedule B. Each Plan has
----------
been and is being maintained and funded in accordance with its terms and in
compliance with all provisions of ERISA and the Code applicable thereto. The
Borrower, each of the Subsidiaries and each ERISA Affiliate have fulfilled all
obligations related to the minimum funding standards of ERISA and the Internal
Revenue Code for each Plan, are in compliance with the currently applicable
provisions of ERISA and of the Internal Revenue Code and have not incurred any
liability (other than routine liability for premiums) under Title IV of ERISA.
No Termination Event has occurred nor has any other event occurred that may
result in a Termination Event. No event or events have occurred in connection
with which the Borrower, any of the Subsidiaries, any ERISA Affiliate, any
fiduciary of a Plan or any Plan, directly or indirectly, could be subject to any
liability, individually or in the aggregate, under ERISA, the Internal Revenue
Code or any other Requirement of Law or under any agreement, instrument,
statute, rule of law or regulation pursuant to or under which any such entity
has agreed to indemnify or is required to indemnify any person against liability
incurred under, or for a violation or failure to satisfy the requirements of,
any such statute, regulation or order. The Borrower has delivered or caused to
be delivered to the Agent: (i) a copy of each Plan (or, where any such plan is
not in writing, a complete description thereof) (and, if applicable, related
trust agreements or other funding instruments) and all amendments thereto, all
written interpretations thereof and written descriptions thereof that have been
distributed to employees or former employees of the Borrower or the
Subsidiaries; (ii) the most recent determination letter issued by the Internal
Revenue Service with respect to each Plan; (iii) for the three most recent plan
years, Annual Reports on Form 5500 Series required to be filed with any
governmental agency for each Plan; (iv) all actuarial reports prepared for the
last three plan years for each Plan; (v) a listing of all Multiemployer Plans,
with the aggregate amount of the most recent annual contributions required to be
made by the Borrower or any ERISA Affiliate to each such plan and copies of the
collective bargaining agreements requiring such contributions; (vi) any
information that has been provided to the Borrower or any ERISA Affiliate
regarding withdrawal liability under any Multiemployer Plan; and (vii) the
aggregate amount of the most recent annual payments made to former employees of
the Borrower or any ERISA Affiliate under any Retiree Health Plan.
6.13. Compliance with Environmental Laws.
(i) The operations of the Borrower and each of the Subsidiaries are
not in violation of any applicable federal, state or local environmental, health
and safety statutes, regulations, directions, ordinances, criteria and
guidelines; (ii) the Borrower has not received notice that any of the operations
of the Borrower or any of the Subsidiaries is the subject of any judicial or
administrative proceeding alleging the violation of any federal, state or local
environmental, health or safety statute, regulation, direction, ordinance,
criteria or guideline; (iii) none of the operations of the Borrower or any of
the Subsidiaries is the subject of any federal, state or local investigation
involving allegations or potential allegations that the Borrower or any of the
Subsidiaries disposed of any hazardous or toxic waste, substance or constituent
or other pollutant, contaminant or substance (including, without limitation,
petroleum) at any site that may require remedial action, or any federal, state
or local investigation evaluating whether any remedial action is needed to
respond to a release or threatened release of any hazardous or toxic waste,
substance or constituent, or other pollutant, contaminant or substance
(including, without limitation, petroleum) into the environment; (iv) neither
the Borrower nor any of the Subsidiaries have filed any notice under any
federal, state or local law indicating past or present treatment, storage or
disposal of a hazardous waste or reporting a spill or release or threatened
release of a hazardous or toxic waste, substance or constituent, or other
pollutant, contaminant or substance (including, without limitation, petroleum)
into the environment; and (v) neither the Borrower nor any of the Subsidiaries
has any contingent liability of which the Borrower has knowledge or reasonably
should have knowledge in connection with any release or threatened release of
any hazardous or toxic waste, substance or constituent, or other pollutant,
contaminant or substance (including, without limitation, petroleum) into the
environment, nor has the Borrower or any of the Subsidiaries received any
notice, letter or other indication of potential liability arising from the
disposal of any hazardous or toxic waste, substance or constituent or other
pollutant, contaminant or substance (including, without limitation, petroleum)
into the environment which, in any such case referred to in this Section 6.13 or
in the aggregate, could have a Material Adverse Effect.
6.14. Intellectual Property.
The Borrower possesses or has the legal right to use such assets,
licenses, patents, patent applications, copyrights, service marks, trademarks
(including, without limitation, the "'W' and design") and trade names as are
necessary or advisable to continue to conduct its present and proposed business
activities and such assets, licenses, patents, patent applications, copyrights,
service marks, trademarks and trade names are valid and in full force and
effect. The Borrower does not own any federally registered patents, copyrights,
service marks, trademarks or tradenames.
6.15. Licenses and Permits.
The Borrower and each of the Subsidiaries have obtained and hold in
full force and effect, all franchises, licenses, leases, permits, certificates,
authorizations, qualifications, easements, rights of way and other rights and
approvals which are necessary or advisable for the operation of its businesses
as presently conducted and as proposed to be conducted, except those with
respect to which the failure to so obtain and hold would not have a Material
Adverse Effect. Neither of the Borrower nor any of the Subsidiaries is in
violation of the terms of any such franchise, license, lease, permit,
certificate, authorization, qualification, easement, right of way, right or
approval.
6.16. Title to Property.
All Real Estate is identified on Schedule B. The Borrower has good
----------
and marketable title in fee simple to, or a valid leasehold interest in, all its
Real Estate, and good title to all its other property, and none of such property
is subject to any Lien except as permitted by Section 8.6.
6.17. Investment Company.
Neither the Borrower nor any of the Subsidiaries is (i) an investment
company (nor as of the Closing Date is the Borrower or any of its Subsidiaries
controlled by an investment company) within the meaning of the Investment
Company Act of 1940, as amended, (ii) a holding company or a Subsidiary company
of a holding company, or an Affiliate of a holding company or of a Subsidiary
company of a holding company, within the meaning of the Public Utility Holding
Company Act of 1935, as amended, or (iii) subject to any other law which
purports to regulate or restrict its ability to borrow money or to consummate
the transactions contemplated by this Credit Agreement or the other Credit
Documents or to perform its obligations hereunder or thereunder.
6.18. Taxes and Tax Returns.
(a) Except as set forth on Schedule B, the Borrower and the Subsidi-
----------
aries (and any affiliated group of which the Borrower or any of the Sub-
sidiaries are now or have been members) has timely filed (inclusive of any
permitted extensions) with the appropriate taxing authorities all returns
(including, without limitation, information returns) in respect of taxes
required to be filed through the Closing Date and will timely file (in-
clusive of any permitted extensions) any such returns required to be filed
on and after the Closing Date. The information filed is complete and
accurate in all material respects. All deductions taken by the Borrower as
reflected in such income tax returns have been taken in accordance with
applicable laws and regulations, except deductions that may have been dis-
allowed but are being challenged in good faith and for which adequate
reserves have been made in accordance with GAAP. Except as specified in
Schedule B, neither the Borrower nor any of the Subsidiaries, nor any
----------
group of which the Borrower or any of the Subsidiaries are now or were
members, have requested any extension of time within which to file returns
(including without limitation information returns) in respect of any taxes.
(b) All taxes, assessments, fees and other governmental charges in
respect of periods beginning prior to the Closing Date, have been timely
paid, or will be timely paid, or an adequate reserve has been established
therefor, as set forth in Schedule B or in the Financial Statements, and
----------
neither the Borrower nor any of the Subsidiaries has any liability for
taxes in excess of the amounts so paid or reserves so established.
(c) Except as set forth in Schedule B, no deficiencies for taxes have
----------
been claimed, proposed or assessed by any taxing or other Governmental
Authority against the Borrower or any of their Subsidiaries and no tax
liens have been filed. Except as set forth in Schedule B, there are no
----------
pending or, to the best of the Borrower's knowledge, threatened audits,
investigations or claims for or relating to any liability in respect of
taxes, and there are no matters under discussion with any governmental
authorities with respect to taxes which are likely to result in a material
additional liability for taxes. Either the federal income tax returns of
the Borrower have been audited by the Internal Revenue Service and such
audits have been closed, or the period during which any assessments may be
made by the Internal Revenue Service has expired without waiver or
extension, for all years up to and including the fiscal year ended 1992.
Except as set forth in Schedule B, no extension of a statute of limitations
----------
relating to taxes, assessments, fees or other governmental charges is in
effect with respect to the Borrower or the Subsidiaries.
(d) Except as set forth on Schedule B, neither the Borrower nor any
----------
of its Subsidiaries has any obligation under any written or oral tax shar-
ing agreement or agreement regarding payments in lieu of taxes.
6.19. Material Contracts.
Schedule B contains a true, correct and complete list of all the
-----------
Material Contracts currently in effect on the Closing Date. None of the
Material Contracts contains any burdensome restrictions on the Borrower or any
of its Subsidiaries or any of their respective properties. All of the Material
Contracts are in full force and effect, and no defaults currently exist
thereunder.
6.20. Affiliate Transactions.
Except as set forth on Schedule B, neither the Borrower nor any
----------
Subsidiary is a party to or bound by any agreement or arrangement (whether oral
or written) to which any Affiliate of the Borrower or any Subsidiary is a party
except (i) in the ordinary course of and pursuant to the reasonable requirements
of the Borrower's or such Subsidiary's business and (ii) upon fair and
reasonable terms no less favorable to the Borrower and such Subsidiary than it
could obtain in a comparable arm's-length transaction with an unaffiliated
Person.
6.21. Accuracy and Completeness of Information.
All factual information furnished by or on behalf of the Borrower or
any of the Subsidiaries in writing to the Agent, any Lender or the Auditors for
purposes of or in connection with this Credit Agreement or any Credit Documents,
or any transaction contemplated hereby or thereby is or will be true and
accurate in all material respects on the date as of which such information is
dated or certified and not incomplete by omitting to state any material fact
necessary to make such information not misleading at such time.
6.22. Recording Taxes.
All mortgage recording taxes, recording fees and other charges payable
in connection with the filing and recording of the Credit Documents have either
been paid in full by the Borrower or arrangements for the payment of such
amounts satisfactory to the Agent shall have been made.
6.23. Solvency.
The fair saleable value of the assets of the Borrower exceeds all its
probable liabilities, including those incurred or to be incurred pursuant to
this Credit Agreement, the other Credit Documents, the Senior Subordinated Notes
and the Indenture. The Borrower (i) does not have unreasonably small capital in
relation to the business in which it is or proposes to be engaged and (ii) has
not incurred, and does not believe that it will incur, after giving effect to
the transactions contemplated by this Credit Agreement, debts beyond its ability
to pay as such debts become due.
6.24. No Change.
There has been no development or event nor any prospective development
or event, which has had or could reasonably be expected to have a Material
Adverse Effect.
6.25. Year 2000 Problem.
The Borrower and its Subsidiaries have reviewed the areas within their
businesses and operations which could be adversely affected by, and have
developed or are developing a program to address on a timely basis, the "Year
2000 Problem" (i.e. the risk that computer applications used by the Borrower or
any of its Subsidiaries may be unable to recognize and perform properly date-
sensitive functions involving certain dates prior to and any date after December
31, 1999). Based upon such review, the Borrower reasonably believes that the
"Year 2000 Problem" will not have a Material Adverse Effect on the business or
financial condition of the Borrower or any of its Subsidiaries.
ARTICLE 7. AFFIRMATIVE COVENANTS
Until termination of this Credit Agreement and payment and
satisfaction of all obligations due hereunder:
7.1. Financial Reporting.
The Borrower shall timely deliver to each Lender the following
information:
(a) Annual Financial Statements. As soon as available, but not later
---------------------------
than ninety (90) days after each fiscal year end: (i) the annual audited
Financial Statements of the Consolidated Entity; (ii) a comparison in
reasonable detail to the prior year audited Financial Statements; (iii) the
Auditors' unqualified opinion, "Management Letter" and statement indicating
that the Auditors have not obtained knowledge of the existence of any De-
fault or Event of Default during their audit; (iv) a narrative discussion
of the consolidated financial condition and results of operations and the
consolidated liquidity and capital resources of the Consolidated Entity for
such fiscal year, prepared by the chief financial officer of the Borrower;
and (v) a compliance certificate substantially in the form of Exhibit B
with an attached schedule of calculations (A) demonstrating compliance with
the financial covenants set forth in Sections 8.1, 8.2 and 8.4 and (B) set-
ting forth the Interest Coverage Ratio of the Consolidated Entity for the
most recently completed four full fiscal quarters of the Consolidated
Entity. To the extent that the Borrower's annual report on Form 10-K con-
tains any of the foregoing items, the Lenders will accept the Borrower's
Form 10-K in lieu of such items.
(b) Projections. Not later than forty-five (45) days after each fis-
-----------
cal year end, monthly projections of Borrower's financial condition and
results of operations for the next succeeding fiscal year, together with
annual projections for the next two succeeding fiscal years, in each case
containing projected consolidating balance sheets, statements of oper-
ations, statements of cash flows and statements of changes in shareholders
equity, together with a statement in reasonable detail setting forth the
assumptions upon which such projections are based.
(c) Quarterly Financial Statements. As soon as available, but not
------------------------------
later than forty-five (45) days after the end of each of the first three
fiscal quarters: (i) Financial Statements of the Consolidated Entity as of
the fiscal quarter then ended, and for the fiscal year to date; (ii) a
comparison in reasonable detail to the Financial Statements for the corre-
sponding periods of the prior fiscal year; (iii) the certification of the
chief executive officer or chief financial officer of the Borrower that
such Financial Statements have been prepared in accordance with GAAP (other
than with respect to footnotes and subject to year-end audit adjustments);
(iv) a narrative discussion of the consolidated financial condition and
results of operations and the consolidated liquidity and capital resources
of the Consolidated Entity for such fiscal quarter and fiscal year to date,
prepared by the chief financial officer of the Borrower; and (v) a compli-
ance certificate substantially in the form of Exhibit B with an attached
schedule of calculations (A) demonstrating compliance with the financial
covenants set forth in Sections 8.1, 8.2 and 8.4 and (B) setting forth the
Interest Coverage Ratio of the Consolidated Entity for the most recently
completed four full fiscal quarters of the Consolidated Entity. To the
extent that the Borrower's quarterly report on Form 10-Q contains any of
the foregoing items, the Lenders will accept the Borrower's Form 10-Q in
lieu of such items.
(d) Monthly Financial Statements. As soon as available, but not
----------------------------
later than thirty (30) days after the end of each of the fiscal months of
January, February, April, May, July, August, October and November and with-
in forty-five (45) days after the end of each of the fiscal months of
March, June, September and December: (i) a balance sheet for the Consol-
idated Entity as at the end of such month and for the fiscal year to date
and statements of operations and cash flows for such month and for the
fiscal year to date; (ii) a comparison to the balance sheet, statement of
operations and statement of cash flows for the same periods in the prior
year; (iii) a certification by the chief executive officer or chief
financial officer of the Borrower that such balance sheet, statement of
operations and statement of cash flows have been prepared in accordance
with GAAP (other than with respect to footnotes and subject to year-end
audit adjustments); and (iv) a compliance certificate substantially in the
form of Exhibit B with an attached schedule of calculations demonstrating
compliance with the financial covenants set forth in Sections 8.1, 8.2 and
8.4.
(e) Monthly Comparison to Prior Projections. As soon as available,
---------------------------------------
but not later than thirty (30) days after the end of each of the fiscal
months of January, February, April, May, July, August, October and November
and within forty-five (45) days after the end of each of the fiscal months
of March, June, September and December, a comparison of actual results of
operations, cash flow and capital expenditures for the Borrower for such
month and for the period from the beginning of the current fiscal year
through the end of such month with amounts previously projected for those
periods (see Section 7.1(b)) and with actual results for corresponding
periods in the previous fiscal year.
(f) Tax Returns. A copy of the state and federal income tax returns
-----------
of the Borrower and each of its Subsidiaries within thirty (30) days after
they are filed with the appropriate taxing authorities, if and when
requested by any Lender.
(g) Public Filings. Promptly upon the earlier of the mailing or
--------------
filings thereof, copies of all 00-Xx, 00-Xx, 0-Xx, proxy statements, annual
reports, quarterly reports, registration statements and any other filings
or other communications made by the Borrower to holders of its publicly
traded securities or the Securities Exchange Commission from time to time
pursuant to the Securities Exchange Act of 1934, as amended, or the
Securities Act of 1933, as amended.
7.2. Collateral Reporting.
The Borrower shall timely deliver to the Agent (and each Lender in the
case of Borrowing Base Certificates required to be delivered pursuant to
clause (a)(i)(1) below) the following certificates and reports:
(a) Weekly Borrowing Base Certificates.
----------------------------------
(i) Weekly, before 12:00 noon Boston time on the second Business
Day of each week, and at any other time requested by the Agent, (1) a
borrowing base certificate (the "Borrowing Base Certificate"), which
shall be: (A) completed substantially in the form of Exhibit C,
detailing the Borrower's Eligible Accounts Receivable and Eligible
Inventory as of each Friday of the immediately preceding week (or as
of such other date as the Agent may request), (B) prepared by or under
the supervision of the Borrower's chief executive officer or chief
financial officer and certified by such officer subject only to
adjustment upon completion of the normal year-end audit of physical
inventory and (C) attached to such additional schedules and other
information as the Agent may request; and (2) (X) an Accounts Receiv-
able reconciliation report (beginning balance plus sales minus collec-
tions minus credits plus or minus adjustments), (Y) a report detailing
Inventory balances by category and (Z) an accounts payable balance and
book overdraft report, in each case as of Saturday of the immediately
preceding week. The Agent may, but shall not be obligated to, rely on
each Borrowing Base Certificate and any other schedules or reports in
determining the eligibility of Accounts and Inventory.
(ii) Monthly, before 12:00 noon Boston time on the ninth Business
Day of each fiscal month, and at any other time requested by the
Agent, (1) a Borrowing Base Certificate which shall be: (A) completed
substantially in the form of Exhibit C, detailing (x) the Borrower's
Eligible Accounts Receivable and Eligible Inventory as of the last day
of the immediately preceding fiscal month (the "Monthly Report") and
(y) the Borrower's Eligible Accounts Receivable and Eligible Inventory
as of the last day of the immediately preceding fiscal month, (B) pre-
pared by or under the supervision of the Borrower's chief executive
officer or chief financial officer and certified by such officer
subject only to adjustment upon completion of the normal year-end
audit of physical inventory, and (C) attached to such additional
schedules and other information as the Agent may request (including,
without limitation, an accounts receivable agings report for the prior
fiscal month); and (2) (W) an Accounts Receivable summary agings
report by location, (X) an Accounts Receivable summary agings report
for the Borrower's top twenty customer accounts, (Y) a report of
Inventory balances by location (including third party locations) and
(Z) an accounts payable agings report (when available from the Borrow-
er's computerized recordkeeping system), in each case as of the last
day of the immediately preceding fiscal month. The Agent may, but
shall not be obligated to, rely on each Borrowing Base Certificate and
any other schedules or reports in determining the eligibility of
Accounts and Inventory.
(b) Further Assurances. When requested by the Agent (or by a Lender
------------------
through the Agent), any further information regarding the Collateral,
business affairs and financial condition of the Borrower or any of its Sub-
sidiaries.
7.3. Notification Requirements.
The Borrower shall timely give the Agent and each of the Lenders the
following notices:
(a) Notice of Defaults. Promptly, and in any event within two (2)
------------------
Business Days after becoming aware of the occurrence of a Default or Event
of Default, a certificate of the chief executive officer or chief financial
officer of the Borrower specifying the nature thereof and the Borrower's
proposed response thereto, each in reasonable detail.
(b) Proceedings or Adverse Changes. Promptly, and in any event with-
------------------------------
in five (5) Business Days after the Borrower becomes aware of (i) any
proceeding being instituted or threatened to be instituted by or against
the Borrower or any of its Subsidiaries in any federal, state, local or
foreign court or before any commission or other regulatory body (federal,
state, local or foreign), (ii) any order, judgment or decree in excess of
$1,000,000 being entered against the Borrower or any of its Subsidiaries or
any of their respective properties or assets or (iii) any actual or
prospective change, development or event which, in any such case, has had
or could reasonably be expected to have a Material Adverse Effect, a
written statement describing such proceeding, order, judgment, decree,
change, development or event and any action being taken with respect
thereto by the Borrower or any such Subsidiary.
(c) ERISA Notices.
-------------
(i) within ten (10) days after the Borrower, any Subsidiary or
any ERISA Affiliate knows or has reason to know that a Termination
Event has occurred, a written statement of the chief financial officer
of the Borrower describing such Termination Event and the action, if
any, which the Borrower or other such entities have taken, are taking
or propose to take with respect thereto, and when known, any action
taken or threatened by the Internal Revenue Service, DOL or PBGC with
respect thereto;
(ii) within ten (10) days after the Borrower, any Subsidiary or
any ERISA Affiliate knows or has reason to know that a prohibited
transaction (as defined in Sections 406 of ERISA and 4975 of the
Internal Revenue Code) has occurred, a statement of the chief
financial officer of the Borrower describing such transaction and the
action which the Borrower or other such entities have taken, are
taking or propose to take with respect thereto;
(iii) within thirty (30) days after the filing thereof with the
DOL, Internal Revenue Service or PBGC, copies of each annual report
(form 5500 series), including Schedule 3 thereto, filed with respect
to each Benefit Plan;
(iv) within thirty (30) days after receipt by the Borrower, any
Subsidiary or any ERISA Affiliate of each actuarial report for any
Benefit Plan or Multiemployer Plan and each annual report for any
Multiemployer Plan, copies of each such report;
(v) within three (3) days after the filing thereof with the
Internal Revenue Service, a copy of each funding waiver request filed
with respect to any Benefit Plan and all communications received by
the Borrower, any Subsidiary or any ERISA Affiliate with respect to
such request;
(vi) within ten (10) days upon the occurrence thereof, notifi-
cation of any increase in the benefits of any existing Plan or the
establishment of any new Plan or the commencement of contributions to
any Plan to which the Borrower, any Subsidiary or any ERISA Affiliate
was not previously contributing;
(vii) within three (3) days after receipt by the Borrower, any
Subsidiary or any ERISA Affiliate of the PBGC's intention to terminate
a Benefit Plan or to have a trustee appointed to administer a Benefit
Plan, copies of each such notice;
(viii) within ten (10) days after receipt by the Borrower, any
Subsidiary or any ERISA Affiliate of any favorable or unfavorable
determination letter from the Internal Revenue Service regarding the
qualification of a Plan under Section 401(a) of the Internal Revenue
Code, copies of each such letter;
(ix) within ten (10) days after receipt by the Borrower, any
Subsidiary or any ERISA Affiliate of a notice regarding the imposition
of withdrawal liability, copies of each such notice;
(x) within ten (10) days after the Borrower, any Subsidiary or
any ERISA Affiliate fail to make a required installment or any other
required payment under Section 412 of the Internal Revenue Code on or
before the due date for such installment or payment, a notification of
such failure; and
(xi) within three (3) days after the Borrower, any Subsidiary or
any ERISA Affiliate knows (a) a Multiemployer Plan has been
terminated, (b) the administrator or plan sponsor of a Multiemployer
Plan intends to terminate a Multiemployer Plan, or (c) the PBGC has
instituted or will institute proceedings under Section 4042 of ERISA
to terminate a Multiemployer Plan, a written statement setting forth
any such event or information.
For purposes of this Section 7.3(c), the Borrower, any Subsidiary and any
ERISA Affiliate shall be deemed to know all facts known by the admin-
istrator of any Plan of which such entity is the plan sponsor.
(d) Environmental and Health and Safety Notices; Violations of Law.
-------------------------------------------
Promptly, and in any event within ten (10) Business Days after receipt by
the Borrower or any of its Subsidiaries of any formal or informal notice,
complaint or order alleging actual or prospective violation of any environ-
mental, health or safety Requirement of Law or any other Requirement of Law
which could have a Material Adverse Effect, or alleging responsibility for
a cleanup, a copy of such notice, complaint, or order and a written state-
ment describing any action being taken with respect thereto by the Borrower
or any such Subsidiary.
(e) Material Contracts. Promptly, and in any event within ten (10)
------------------
Business Days after any Material Contract of the Borrower or any of its
Subsidiaries is terminated or amended or any new Material Contract is
entered into, a written statement describing such event, with copies of
amendments or new contracts, and an explanation of any actions being taken
with respect thereto.
(f) Interest Rate Agreements and Lumber Hedging Agreements. The
-----------------------------------------------------------
Borrower shall provide the Agent, (i) promptly, and in any event within
five (5) Business Days after a default by any party under any Interest Rate
Agreement or Lumber Hedging Agreement, with a written statement describing
such default and an explanation of any actions being taken with respect
thereto, and (ii) with such other information regarding any Interest Rate
Agreements or Lumber Hedging Agreements as the Agent may reasonably
request.
7.4. Corporate Existence.
The Borrower shall, and shall cause each of the Subsidiaries to, (i)
maintain its corporate existence (except that Subsidiaries may merge with each
other and with the Borrower (provided that the Borrower is the surviving entity)
with the prior written consent of the Agent, maintain in full force and effect
all licenses, bonds, franchises, leases, trademarks and qualifications to do
business, and all patents, contracts and other rights necessary or advisable to
the profitable conduct of their businesses, (ii) continue in, and limit their
operations to, the same general lines of business as presently conducted by it
and (iii) comply with all Requirements of Law, except those Requirements of Law
the failure to so comply with would not have a Material Adverse Effect.
7.5. ERISA.
The Borrower shall establish, maintain and operate all Plans to comply
in all material respects with the provisions of ERISA, Internal Revenue Code,
and all other Requirements of Law, other than to the extent that Borrower is in
good faith contesting by appropriate proceedings the validity or application of
any such provision, law, rule, regulation or interpretation.
7.6. Environmental and Other Matters.
The Borrower and its Subsidiaries will conduct their businesses so as
to comply in all material respects with all applicable federal, state or local
environmental laws, regulations, directions, ordinances, criteria and
guidelines, including, without limitation, environmental, land use, occupational
safety or health laws, regulations, directions, ordinances, criteria,
guidelines, requirements or permits in all jurisdictions in which any of them is
or may at any time be doing business, except to the extent that the Borrower or
any of the Subsidiaries are contesting, in good faith by appropriate legal
proceedings, any such law, regulation, direction, ordinance, criteria,
guideline, or interpretation thereof or application thereof; provided, further,
-------- -------
that the Borrower and each of the Subsidiaries shall comply with the order of
any court or other Governmental Authority relating to such laws unless the
Borrower or the Subsidiaries shall currently be prosecuting an appeal or
proceedings for review and shall have secured a stay of enforcement or execution
postponing enforcement or execution pending such appeal or proceedings for
review. The Borrower shall promptly take all actions necessary to prevent the
imposition of any Liens on any of its properties arising out of or related to
any environmental matters. At the request of the Agent, and at the sole cost
and expense of the Borrower, the Borrower shall provide the Agent with any
additional information or reports relating to environmental matters and any
potential related liability resulting therefrom as the Agent may reasonably
request. In addition, the Borrower shall provide the Agent, at the Borrower's
sole cost and expense, with copies of any environmental audits, surveys or
reports conducted in connection with the purchase or sale by the Borrower of any
real property.
7.7. Insurance; Casualty Loss.
The Borrower agrees to maintain, and to cause each of the Subsidiaries
to maintain, public liability insurance, third party property damage insurance
and casualty insurance on the Collateral under such policies of insurance, with
such insurance companies, in such amounts and covering such risks as are at all
times satisfactory to the Agent in its commercially reasonable judgment. All
liability policies of the Borrower and its Subsidiaries are to name the Agent as
an additional insured and all casualty policies covering the Collateral are to
name the Agent as the loss payee in case of loss and are to contain such other
provisions as the Agent may reasonably require to fully protect the Agent's
interest in the Collateral and to any payments to be made under such policies.
The Borrower shall provide written notice to the Lenders of the occurrence of
any of the following events within five (5) Business Days after the occurrence
of such event: any asset or property owned or used by the Borrower or any of the
Subsidiaries is (i) damaged or destroyed, or suffers any other loss, or (ii)
condemned, confiscated or otherwise taken, in whole or in part, or the use
thereof is otherwise diminished so as to render impracticable or unreasonable
the use of such asset or property for the purposes to which such asset or
property were used immediately prior to such condemnation, confiscation or
taking, by exercise of the powers of condemnation or eminent domain or
otherwise, and in either case the amount of the damage, destruction, loss or
diminution in value which is in excess of $1,000,000 (collectively, a "Casualty
Loss"; provided, however, that for purposes of the definition of Capital
-------- -------
Expenditures only, "Casualty Loss" shall mean any of the foregoing regardless of
the amount of the damage, destruction, loss or diminution in value). The
Borrower shall diligently file and prosecute its claim or claims for any award
or payment in connection with a Casualty Loss. In the event of a Casualty Loss,
the Borrower shall pay to the Agent, promptly upon receipt thereof, any and all
insurance proceeds and payments received by the Borrower or any of the
Subsidiaries on account of damage, destruction, loss, condemnation or eminent
domain proceedings. The Agent may, at its election and in its sole discretion,
either (a) apply the proceeds realized from Casualty Losses to payment of
accrued and unpaid interest or outstanding principal under the Revolving Loans
or (b) pay such proceeds to the Borrower to be used to repair, replace or
rebuild the asset or property or portion thereof that was the subject of the
Casualty Loss. After the occurrence and during the continuance of an Event of
Default, (i) no settlement on account of any such Casualty Loss shall be made
without the consent of the Majority Lenders and (ii) the Agent may participate
in any such proceedings and the Borrower shall deliver to the Agent such
documents as may be requested by the Agent to permit such participation and
shall consult with the Agent, its attorneys and agents in the making and
prosecution of such claim or claims. The Borrower hereby irrevocably authorizes
and appoints the Agent its attorney-in-fact, after the occurrence and
continuance of an Event of Default, to collect and receive for any such award or
payment and to file and prosecute such claim or claims, which power of attorney
shall be irrevocable and shall be deemed to be coupled with an interest, and the
Borrower shall, upon demand of the Agent, make, execute and deliver any and all
assignments and other instruments sufficient for the purpose of assigning any
such award or payment to the Agent for the benefit of the Lenders, free and
clear of any encumbrances of any kind or nature whatsoever.
7.8. Taxes.
The Borrower agrees to pay, when due, and to cause each of the
Subsidiaries to pay when due, all taxes lawfully levied or assessed against the
Borrower, any Subsidiary or any of the Collateral before any penalty or interest
accrues thereon; provided, however, that, unless such taxes have become a
-------- -------
federal tax or ERISA Lien on any of the assets of the Borrower or any
Subsidiary, no such tax need be paid if the same is being contested, in good
faith, by appropriate proceedings promptly instituted and diligently conducted
and if an adequate reserve or other appropriate provision shall have been made
therefor as required in order to be in conformity with GAAP.
7.9. Compliance With Laws.
The Borrower agrees to comply, and to cause each of the Subsidiaries
to comply, with all Requirements of Law applicable to the Collateral or any part
thereof, or to the operation of its business, unless (a) the Borrower contests
any such Requirements of Law in a reasonable manner and in good faith or (b) any
such non-compliance would not have a Material Adverse Effect.
7.10. Use of Proceeds.
The Revolving Loans made to the Borrower hereunder shall be used by
the Borrower solely (i) to repay outstanding Indebtedness of the Borrower on the
Closing Date, (ii) for working capital, general business and capital expenditure
requirements of the Borrower, including, without limitation, payment of Letter
of Credit Obligations, (iii) to the limited extent contemplated by Section
8.18(c) hereof and (iv) to pay Fees and Expenses. The Borrower shall not use
any portion of the proceeds of any such Loans for the purpose of purchasing or
carrying any "margin stock" (as defined in Regulations T and U of the Board of
Governors of the Federal Reserve System) in any manner which violates the
provisions of Regulation T, U or X of said Board of Governors or for any other
purpose in violation of any applicable statute or regulation, or of the terms
and conditions of this Credit Agreement.
7.11. Fiscal Year.
The Borrower agrees to maintain its fiscal year as a year ending on
the last Saturday in December unless required by law, in which case the Borrower
will give the Agent at least thirty (30) days prior written notice thereof.
7.12. Intellectual Property.
The Borrower shall do and cause to be done all things necessary to
preserve and keep in full force and effect all registrations of patents,
copyrights, trademarks, service marks and other marks, trade names or other
trade rights that are necessary for the operation of the business of the
Borrower (including, without limitation, the "'W' and design" and "Wickes"
trademarks).
7.13. Maintenance of Property.
The Borrower agrees to keep, and to cause each of the Subsidiaries to
keep, all property useful and necessary to its respective businesses in good
working order and condition (ordinary wear and tear excepted) in accordance with
their past operating practices and not to commit or suffer any waste with
respect to any of its properties.
7.14. Books and Records; Inspections; Field Audits.
The Borrower shall maintain books and records pertaining to the
Collateral in such detail, form and scope as is consistent with good business
practice, and agrees that such books and records will reflect the Lenders'
interest in its Accounts. The Agent or its agents may (or, if requested by the
Majority Lenders, shall) enter upon the premises of the Borrower at any time and
from time to time, during normal business hours and upon reasonable notice under
the circumstances, and at any time at all on and after the occurrence of a
Default which continues beyond the expiration of any grace or cure period
applicable thereto, and which has not otherwise been waived, for the purposes of
(i) inspecting and verifying the Collateral, (ii) inspecting and/or copying (at
the Borrower's expense) any and all records pertaining thereto, and (iii)
discussing the affairs, finances and business of the Borrower with any officers,
employees and directors of the Borrower or with the Auditors. Without limiting
the foregoing, the Agent (or its agents) may enter upon the premises of the
Borrower (and representatives of the Lenders shall be permitted to accompany the
Agent or its agents), no less frequently than twice per year, during normal
business hours and upon reasonable notice under the circumstances, for the
purposes of conducting field examinations of the Collateral.
7.15. Further Assurances.
The Borrower shall take, and shall cause each of the Subsidiaries to
take, all such further actions and execute all such further documents and
instruments as the Agent may at any time reasonably determine in its sole
discretion to be necessary or desirable to further carry out and consummate the
transactions contemplated by the Credit Documents, to cause the execution,
delivery and performance of the Credit Documents to be duly authorized and to
perfect or protect the Liens (and the priority status thereof) of the Agent on
the Collateral.
7.16. Secured Interest Rate Agreements.
To the extent any Lender reimburses any of its Affiliates for the
failure of the Borrower to pay any amounts owed to such Affiliate in connection
with any Secured Interest Rate Agreement, the Borrower shall promptly pay such
Lender such reimbursed amount and such reimbursed amount shall be an Obligation
of the Borrower hereunder until paid in full.
ARTICLE 8. NEGATIVE COVENANTS
Until termination of the Credit Agreement and payment and satisfaction
of all Obligations due hereunder, the Borrower agrees that:
8.1. Unused Availability.
The Borrower shall not permit Unused Availability (as reflected in the
Borrowing Base Certificate most recently delivered from time to time hereunder)
to be less than $15,000,000 at any time that the most recently delivered
quarterly Financial Statements show the Interest Coverage Ratio was greater than
or equal to 1.25 to 1.00 for the four consecutive fiscal quarters ended on the
date of such Financial Statements, and the Borrower shall not permit Unused
Availability (as reflected on the Borrowing Base Certificate most recently
delivered from time to time hereunder) to be less than $25,000,000 at any time
that the most recently delivered quarterly Financial Statements show the
Interest Coverage Ratio was less than 1.25 to 1.00 for the four consecutive
fiscal quarters ended on the date of such Financial Statements.
8.2. Minimum Tangible Capital Funds.
The Borrower shall not permit Tangible Capital Funds at any time to be
less than $60,000,000 plus fifty percent (50%) of Consolidated Net Income for
each of the Borrower's fiscal years then ended commencing with the fiscal year
ended December 25, 1999 and without giving effect to any fiscal year in which
Consolidated Net Income is negative.
8.3. [Reserved]
8.4. Capital Expenditures.
The Borrower shall not make payments for Capital Expenditures in
excess of $8,500,000 during its 1999 fiscal year or $6,000,000 during any fiscal
year thereafter. To the extent that the Borrower does not use all or any
portion of the amounts allowed for payments for Capital Expenditures under this
Section 8.4 during any fiscal year, it may be carried forward to the immediately
following fiscal year and used for Capital Expenditures during such immediately
following fiscal year. The Borrower shall not make any Capital Expenditures
that are not reasonably related to the businesses conducted on the Closing Date
by the Borrower.
8.5. Additional Indebtedness.
The Borrower shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, incur, create, assume or suffer to exist any
Indebtedness other than:
(a) Indebtedness arising under this Credit Agreement and the other
Credit Documents;
(b) Indebtedness under the Senior Subordinated Notes and the
Indenture;
(c) Indebtedness under Interest Rate Agreements (including the Total
Rate of Return Swap) and Lumber Hedging Agreements, in each case the terms
and conditions of which are satisfactory to the Agent, including, with
respect to each Lumber Hedging Agreement, the matching of term and notional
amount thereof with an actual written price/purchase commitment entered
into between Borrower and one of its customers; provided that the number of
Lumber Hedging Agreements outstanding at any one time shall not exceed 160;
(d) Indebtedness described on Schedule B and any refinancing of such
----------
Indebtedness; provided that the aggregate principal amount of such Indebt-
--------
edness is not increased and such refinancing is on terms and conditions no
more restrictive than the terms and conditions of the Indebtedness being
refinanced;
(e) Indebtedness incurred or assumed in connection with Acquisitions
permitted by Section 8.18 in amounts and on terms acceptable to the Agent;
and
(f) other Indebtedness not to exceed $5,000,000 in the aggregate
outstanding at any one time, such Indebtedness to be from parties and to
have terms and conditions satisfactory to the Agent.
8.6. Liens.
The Borrower shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, mortgage, assign, pledge, transfer, create, incur,
assume, suffer to exist or otherwise permit any Lien or judgment (whether as a
result of a purchase money or title retention transaction, or other security
interest, or otherwise) to exist on any of its property, assets, revenues or
goods, whether real, personal or mixed, whether now owned or hereafter acquired,
except for:
(a) Liens granted to the Agent by the Borrower pursuant to any Credit
Document;
(b) Liens listed on Schedule B;
----------
(c) Purchase Money Liens;
(d) Pre-existing Liens on fixed assets acquired pursuant to Section
8.18 hereof, so long as such Liens attach only to the specific assets so
acquired;
(e) Liens of warehousemen, mechanics, materialmen, workers, repair-
men, common carriers, landlords and other similar Liens arising by
operation of law or otherwise for amounts that are not yet due and payable
or which are being diligently contested in good faith by the Borrower by
appropriate proceedings;
(f) Attachment or judgment Liens individually or in the aggregate not
in excess of $1,000,000 (exclusive of (i) any amounts that are duly bonded
to the reasonable satisfaction of the Agent or (ii) any amount adequately
covered by insurance as to which the insurance company has not disclaimed
or disputed in writing its obligations for coverage);
(g) Liens for taxes, assessments or other governmental charges not
yet due and payable or which are being diligently contested in good faith
by the Borrower by appropriate proceedings, provided that in any such case
--------
an adequate reserve is being maintained by the Borrower for the payment of
same;
(h) Deposits or pledges to secure obligations under workmen's compen-
sation, social security or similar laws, or under unemployment insurance
not to exceed an aggregate of $1,000,000 outstanding at any one time;
(i) Deposits or pledges to secure bids, tenders, contracts (other
than contracts for the payment of money), leases, statutory obligations,
surety and appeal bonds, utility payments and other obligations of like
nature arising in the ordinary course of business not to exceed an aggre-
gate of $2,000,000 outstanding at any one time;
(j) Easements, rights-of-way, restrictions and other similar encum-
brances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not materially
detract from the value of the property subject thereto or materially inter-
fere with the ordinary conduct of the business of the Borrower or any Sub-
sidiary;
(k) Liens on cash or securities maintained in any Lumber Hedging
Account in favor of the financial institution at which such account is
maintained; provided that the amount of such cash and the market value of
--------
such securities are acceptable to the Agent;
(l) Extensions and renewals of the foregoing permitted Liens;
provided that the aggregate amount secured by such extended or renewed
--------
Liens is not increased and such extended or renewed Liens are on terms and
conditions no more restrictive than the terms and conditions of the Liens
being extended or renewed; and
(m) Liens on real estate with a market value of no more than
$15,000,000 and Liens on Accounts and Inventory (fully subordinated to the
Liens of the Agent pursuant to a subordination agreement satisfactory to
the Agent), in each case securing obligations under the Total Rate of
Return Swap.
8.7. Sale of Assets.
The Borrower shall not, and shall not permit any of its Subsidiaries
to, without the prior consent of the Agent, directly or indirectly, sell, lease,
assign, transfer or otherwise dispose of any assets other than (i) Inventory in
the ordinary course of business, (ii) individual items of property with a fair
market value of less than $500,000 in the aggregate during any fiscal year and
(iii) obsolete or worn out property disposed of in the ordinary course of
business, so long as, with respect to subsections (ii) and (iii) above, (a) all
such dispositions are for fair value, (b) all cash received for all such
dispositions is used to repay the Revolving Loans, and (c) the aggregate
consideration for such dispositions is paid in full in cash at the time of
disposition; provided that, with respect to any such disposition of assets
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otherwise permitted hereunder, the Borrower may receive a promissory note from
the purchaser thereof in an amount equal to no greater than twenty percent (20%)
of the aggregate consideration for such disposition so long as (i) such
promissory note has a final maturity date no greater than two years from the
date of such disposition, (ii) each such promissory note is pledged to the Agent
as additional security for the repayment of the Obligations, and (iii) the
outstanding aggregate principal amount of all such promissory notes received by
the Borrower pursuant to this Section 8.7 does not at any time exceed
$1,000,000. Notwithstanding the foregoing, the Borrower may sell the Real
Estate and other capital assets listed on Schedule 8.7 (subject to clauses (a)
and (c) above); provided that, the Net Cash Proceeds thereof are used by the
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Borrower to either (i) make Acquisitions permitted by Section 8.18(c), (ii)
acquire other capital assets to be used by the Borrower in the conduct of the
Borrower's business as presently conducted or (iii) repay the Revolving Loans.
8.8. Corporate Changes.
The Borrower, shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, merge, consolidate or otherwise alter or modify the
Borrower's or any Subsidiary's Governing Documents (unless such alteration or
modification would not have a Material Adverse Effect), corporate names, mailing
addresses, principal places of business, structure, status or existence, or
enter into or engage in any operation or activity materially different from that
presently being conducted by the Borrower or Subsidiary; provided that, with the
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consent of the Agent (who shall notify each Lender), any Subsidiary may be
merged or consolidated with or into the Borrower (provided that the Borrower
shall be the continuing or surviving corporation) or any wholly-owned
Subsidiary.
8.9. Guaranties.
The Borrower shall not, and shall not permit any of its Subsidiaries
to, incur any Contingent Obligations or, without limiting the foregoing,
directly or indirectly, assume, guaranty, endorse, or otherwise become liable
upon the obligations of any other Person, including, without limitation, any
Subsidiary or Affiliate of the Borrower, except (i) by the endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business, (ii) by the giving of indemnities in connection
with the sale of Inventory or other asset dispositions permitted hereunder and
(iii) in connection with the incurrence of Indebtedness permitted to be incurred
pursuant to Section 8.5 hereof.
8.10. Restricted Payments.
The Borrower shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, (a) declare or pay any dividend (other than
dividends payable solely in common stock of the Borrower) on, or make any
payment on account of, or set apart assets for a sinking or other analogous fund
for, the purchase, redemption, defeasance, retirement or other acquisition of,
any shares of any class of capital stock of the Borrower or any of its
Subsidiaries or any warrants, options or rights to purchase any such capital
stock, whether now or hereafter outstanding, or make any other distribution in
respect thereof, either directly or indirectly, whether in cash or property or
in obligations of the Borrower or any of its Subsidiaries except that any
Subsidiary may declare and pay dividends to the Borrower or any other wholly-
owned Subsidiary; or (b) make any optional payment or prepayment on or
redemption (including, without limitation, by making payments to a sinking or
analogous fund) or repurchase of any Indebtedness (other than Indebtedness
pursuant to this Credit Agreement) including the Senior Subordinated Notes;
provided that any Subsidiary may make payments on account of Indebtedness owing
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to the Borrower or any other Subsidiary; or (c) during the continuance of any
Event of Default, make any payment to an Affiliate (other than salary, other
employment compensation or wages owing to such Affiliate) with respect to
management, consulting or other like fees.
8.11. Investments.
The Borrower shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, make any Investment in any Person, whether in cash,
securities, or other property of any kind including, without limitation, any
Subsidiary or Affiliate of the Borrower, other than:
(a) Advances or loans made in the ordinary course of business to
employees of the Borrower or its Subsidiaries for travel, entertainment,
relocation and similar expenses not to exceed $750,000 in the aggregate
outstanding at any one time;
(b) Existing Advances;
(c) Cash Equivalents;
(d) Interest-bearing demand or time deposits (including certificates
of deposit) which are insured by the Federal Deposit Insurance Corporation
("FDIC") or a similar federal insurance program; provided, however, that
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the Borrower may, in the ordinary course of its business, maintain in its
disbursement accounts from time to time amounts in excess of then applic-
able FDIC or other program insurance limits;
(e) Promissory notes received by the Borrower as provided in
Section 8.7;
(f) Such other Investments not to exceed $2,500,000 in the aggregate
at any time outstanding as the Agent may approve in writing in its sole
discretion;
(g) To the extent permitted under Section 8.18(c) hereof; and
(h) Charged-back Accounts pertaining to goods returned or rejected by
a customer, which Accounts are acquired by the Borrower to the extent
required by the Borrower's Credit Card Plan Agreement with National City
Bank, Columbus or any other credit card agreements.
8.12. Affiliate Transactions.
(a) The Borrower shall not, and shall not permit any of its Sub-
sidiaries to, directly or indirectly, enter into any transaction not
described on Schedule B with (including, without limitation, the purchase,
sale or exchange of property or the rendering of any service to) any Sub-
sidiary or Affiliate of the Borrower ("Affiliate Transaction") except in
the ordinary course of and pursuant to the reasonable requirements of the
Borrower's or such Subsidiary's business, as the case may be, and upon fair
and reasonable terms no less favorable to the Borrower or such Subsidiary
than could be obtained in a comparable arm's-length transaction with an
unaffiliated Person (the "Fairness Conditions").
(b) Notwithstanding Section 8.12(a) above, the Borrower shall not,
and shall not permit any of its Subsidiaries to, enter into Affiliate
Transactions with aggregate consideration in excess of $250,000 in any
fiscal year unless a majority of the members of the Board of Directors of
the Borrower who are not officers, employees or Affiliates of the Borrower
or any of its Subsidiaries shall have determined, prior to the time the
Borrower or such Subsidiary, as the case may be, enters into such Affiliate
Transactions, that such Affiliate Transactions satisfy the Fairness
Conditions and such determination is evidenced by a resolution of the Board
of Directors or a committee thereof; provided that, the Borrower shall not,
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and shall not permit any of its Subsidiaries to, enter into Affiliate
Transactions with aggregate consideration in excess of $500,000 in any
fiscal year unless, in addition to the requirements set forth above, the
Borrower delivers to the Agent, at least thirty (30) days prior to the time
the Borrower or such Subsidiary enters into such Affiliate Transactions, a
detailed summary of all material terms, provisions and conditions thereof.
8.13. Prohibited Transactions Under ERISA.
The Borrower shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly:
(a) Engage, or permit any ERISA Affiliate to engage in any prohibited
transaction which could result in a civil penalty or excise tax described
in Sections 406 of ERISA or 4975 of the Internal Revenue Code for which a
statutory or class exemption is not available or a private exemption has
not been previously obtained from the DOL;
(b) permit to exist with respect to any Benefit Plan any accumulated
funding deficiency (as defined in Sections 302 of ERISA and 412 of the
Internal Revenue Code), whether or not waived;
(c) fail, or permit any ERISA Affiliate to fail, to pay timely
required contributions or annual installments due with respect to any
waived funding deficiency to any Benefit Plan;
(d) terminate, or permit any ERISA Affiliate to terminate, any
Benefit Plan where such event would result in any liability of the
Borrower, any Subsidiary or any ERISA Affiliate under Title IV of ERISA;
(e) fail, or permit any ERISA Affiliate to fail, to make any required
contribution or payment to any Multiemployer Plan;
(f) fail, or permit any ERISA Affiliate to fail, to pay any required
installment or any other payment required under Section 412 of the Internal
Revenue Code on or before the due date for such installment or other
payment;
(g) amend, or permit any ERISA Affiliate to amend, a Plan resulting
in an increase in current liability for the plan year such that either of
the Borrower, any Subsidiary or any ERISA Affiliate is required to provide
security to such Plan under Section 401(a)(29) of the Internal Revenue
Code;
(h) withdraw, or permit any ERISA Affiliate to withdraw, from any
Multiemployer Plan where such withdrawal may result in any liability of any
such entity under Title IV of ERISA; or
(i) allow any representation made in Section 6.12 to be untrue at any
time during the term of this Credit Agreement.
8.14. Additional Bank Accounts.
The Borrower shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, open, maintain or otherwise have any checking,
savings or other accounts at any bank or other financial institution, or any
other account where money is or may be deposited or maintained with any Person,
other than the Disbursement Account, Lumber Hedging Accounts and the Blocked
Accounts and other accounts set forth on Schedule B. Notwithstanding the
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foregoing, until such time as the Agent otherwise directs, the Borrower may open
and maintain an additional bank account (the "Contingency Account") to be used
exclusively for funding the emergency cash needs of its facilities; provided
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that (i) no single facility receive in excess of $1,000 from the Contingency
Account in any given month and (ii) no group of facilities receive in excess of
$10,000 in the aggregate from the Contingency Account in any given month.
8.15. Excess Cash.
The Borrower shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, maintain in the aggregate in all of the checking,
savings or other accounts (other than the Disbursement Account, the Blocked
Accounts, the BKB Account, Lumber Hedging Accounts and the payroll accounts) of
the Borrower or elsewhere, total cash balances and Investments permitted by
Section 8.11 hereof in excess of $150,000 at any time during which any Revolving
Loans are outstanding hereunder, of which amount no more than $5,000 may be
maintained in the Contingency Account at any time.
8.16. Material Amendments of Material Contracts.
The Borrower shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, without the prior written consent of the Majority
Lenders, amend, modify, cancel or terminate or permit the amendment,
modification, cancellation or termination of, the Indenture, the Senior
Subordinated Notes, or any other Material Contract, unless, with respect to such
other Material Contracts only, such amendment, modification, cancellation or
termination would not have a Material Adverse Effect.
8.17. Additional Negative Pledges.
The Borrower shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective, or permit any of the Subsidiaries to create or otherwise cause
or suffer to exist or become effective, directly or indirectly, (i) any
prohibition or restriction (including any agreement to provide equal and ratable
security to any other Person in the event a Lien is granted to or for the
benefit of the Agent and the Lenders) on the creation or existence of any Lien
upon any assets of the Borrower or the Subsidiaries or (ii) any contractual
obligation which may restrict or inhibit the Agent's rights or ability to sell
or otherwise dispose of the Collateral or any part thereof after the occurrence
of an Event of Default.
8.18. Additional Subsidiaries; Acquisitions.
(a) The Borrower shall not, and shall not permit any of its Sub-
sidiaries to, directly or indirectly, form or acquire any new Subsidiaries.
(b) The Borrower shall not, and shall not permit any of its Sub-
sidiaries to make any Acquisitions except as permitted by Section 8.18(c)
hereof.
(c) Notwithstanding Section 8.18(a) and 8.18(b) hereof, but subject
to all of the other provisions of this Credit Agreement and the other
Credit Documents, the Borrower may from time to time make Acquisitions if:
(i) The Agent shall have received (A) such duly executed and
delivered agreements, instruments and documents as the Agent shall
request in order to create in favor of the Agent a security interest
in the types of property in which a security interest has been granted
to the Agent under the Security Agreement so acquired to secure the
Obligations, and (B) such lien searches relating to the property being
acquired as the Agent shall request;
(ii) If such Acquisition is an Acquisition of stock or other
equity interests in a Person, (A) the Borrower acquires one hundred
percent (100%) of the stock and other equity interests of such Person
and (B) such Person is merged with and into the Borrower or liquidated
immediately upon the consummation of such Acquisition with the
Borrower being the sole surviving Person;
(iii) At the time of such Acquisition, no Default and no Event of
Default exists, or would exist upon the consummation thereof;
(iv) The Borrower has demonstrated in writing to the satisfaction
of the Agent that the business to be acquired has had positive EBITDA
(adjusted to give effect for the Borrower's business plan for such
business as reasonably approved by the Agent) for the period of four
(4) fiscal quarters then most recently ended;
(v) The Borrower has demonstrated in writing to the satisfaction
of the Agent that following the consummation of the Acquisition the
Borrower will be in pro forma compliance with Sections 8.1 and 8.2;
(vi) The Borrower has completed its due diligence review of the
business to be acquired;
(vii) The Borrower shall have received the Majority Lenders' prior
written consent if the Total Consideration for such Acquisition or
series of related Acquisitions is or could be in excess of
$15,000,000;
(viii) The Revolving Loans made for the purpose of funding Acquisi-
tions in the then current calendar year will not exceed $30,000,000
after giving effect to such Acquisition;
(ix) The board of directors or shareholders, or in the case of a
Person that is not a corporation, a corresponding governing body, of
the Person whose stock or assets are being acquired has approved the
Acquisition.
(x) The structure of the Acquisition, including any seller notes
and all other assumed debt is on terms acceptable to the Agent;
(xi) The assets so acquired are located in the United States or
Canada (other than the Province of Quebec) or, if such acquisition is
structured as a purchase of stock, the Person so acquired is organized
under the laws of a state in the United States, and the assets owned
by such Person located in the United States or Canada (other than the
Province of Quebec);
(xii) The Borrower updates the schedules hereto and to each of the
other Loan Documents, as applicable, provided, in no event may any
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schedule be updated in a manner that would reflect or evidence a
Default or Event of Default;
(xiii) The target of the Acquisition is engaged in a line of
business that is reasonably related to the Borrower's line of
business as presently conducted by the Borrower; and
(xiv) such other conditions as the Agent reasonably requests are
satisfied.
"Total Consideration" means the total consideration paid with respect
to any Acquisition, including without limitation, (v) all payments made in cash
and property, (w) the amount paid or to be paid pursuant to non-compete
agreements, so-called earn-out agreements and consulting agreements, (x) the
amount of debt and other liabilities assumed and/or incurred (including in the
case of an acquisition of stock or other equity interests, the amount of debt
and other liabilities of the Person to be acquired), (y) anticipated capital
expenditures related to an Acquisition and identified to the Agent prior to the
consummation of such Acquisition and (z) the amount of all transaction fees.
To the extent that assets acquired by the Borrower pursuant to this
Section 8.18(c) would otherwise consist of or include Eligible Accounts or
Eligible Inventory, the dollar amount of such Eligible Accounts and Eligible
Inventory (after application of applicable advance rates) will be included in
calculating the Borrowing Base only following the satisfactory completion of an
examination by the Agent.
8.19. Hedging Transactions.
The Borrower shall not, and shall not permit any of its Subsidiaries
to, engage in any speculative hedging or similar transactions (other than
Interest Rate Agreements and Lumber Hedging Agreements, to the extent otherwise
permitted hereunder).
8.20. Activities of Subsidiaries.
(a) LTC. The Borrower shall not permit LTC to engage in any business
---
or activity (including, without limitation, the incurrence of Indebtedness
or trade liabilities)with any Person (other than the Borrower in connection
with the LTC Sublicense Agreement). Notwithstanding Section 8.11(f),
Borrower shall not make any Investment on or after the Closing Date in LTC.
(b) GLC. The Borrower shall not permit GLC to engage in any business
---
or activity (including, without limitation, the incurrence of any
Indebtedness or trade liabilities) other than the ownership and operation
of building material supply centers (and activities reasonably related
thereto). Notwithstanding Section 8.11(f), Borrower shall not make any
Investment on or after the Closing Date in GLC.
(c) Wickes International. The Borrower shall not permit Wickes
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International Holding Corporation to engage in any business or activity
(including, without limitation, the incurrence of Indebtedness or trade
liabilities) with any Person (other than the ownership of the Investment
in Riverside International Corporation that is outstanding on the Closing
Date). Notwithstanding Section 8.11(f), Borrower shall not make any
Investment on or after the Closing Date in Wickes International Holding
Corporation or any Person that is now or hereafter becomes a Subsidiary
of Wickes International Holding Corporation.
ARTICLE 9. EVENTS OF DEFAULT AND REMEDIES
9.1. Events of Default.
The occurrence of any of the following events shall constitute an
Event of Default hereunder:
(a) failure of the Borrower to pay (i) any interest, Fees, Expenses
or other Obligations (other than principal) within three (3) Business Days
of when due, in each case whether at stated maturity, by acceleration, or
otherwise, or (ii) any principal when due, whether at stated maturity, by
acceleration or otherwise;
(b) failure of the Borrower to perform, comply with or observe any
term, covenant or agreement applicable to it contained in the Pledge
Agreement, the Security Agreement or in Sections 7.1(a), 7.1(c), 7.1(d),
7.2(a), 7.3, 7.4, 7.7 or 7.10 or Article 8 hereof;
(c) any representation or warranty made or deemed to be made by the
Borrower in this Credit Agreement or in any other Credit Document (and in
any statement or certificate given in writing under this Credit Agreement
or any other Credit Document), shall be false or misleading in any material
respect when made or deemed to be made;
(d) failure of the Borrower to comply with any provisions contained
in this Credit Agreement or any other Credit Document, other than as set
forth in Section 9.1(a), 9.1(b) and 9.1(c) hereof, and such failure shall
continue without cure for a period of thirty (30) consecutive days after
notice thereof is given to the Borrower by the Agent or the Majority
Lenders;
(e) dissolution, liquidation, winding up or cessation of the
Borrower's businesses, or the failure of the Borrower to meet its debts as
they mature, or the calling of one or more meetings of the Borrower's major
creditors for purposes of obtaining a moratorium on payment or a compromise
of the Borrower's debts;
(f) the insolvency of any Credit Party or the commencement by or
against any Credit Party of any bankruptcy, insolvency, arrangement,
reorganization, receivership or similar proceedings under any federal or
state law and, in the event any such proceeding is commenced against a
Credit Party, such proceeding is not dismissed within thirty (30) days;
(g) the occurrence of a Change of Control;
(h) the occurrence of a default or event of default (in each case
which shall continue beyond the expiration of any applicable grace periods)
which permits, or could permit, the acceleration of the maturity of any
note, agreement or instrument evidencing any other Indebtedness of the
Borrower or any of the Subsidiaries, and the aggregate principal amount of
all such Indebtedness with respect to which a default or an event of
default has occurred, or the maturity of which is permitted to be
accelerated, exceeds $2,500,000; or
(i) any material covenant, agreement or obligation of any party
contained in or evidenced by any of the Credit Documents shall cease to be
enforceable in accordance with its terms, or any party (other than the
Agent, the Syndication Agent or the Lenders) to any Credit Document shall
deny or disaffirm, its obligations under any of the Credit Documents, or
any Credit Document shall be cancelled, terminated, revoked or rescinded
without the express prior written consent of the Agent, or any action or
proceeding shall have been commenced by any Person (other than the Agent,
the Syndication Agent or any Lender) seeking to cancel, revoke, rescind or
disaffirm the obligations of any party to any Credit Document, or any court
or other Governmental Authority shall issue a judgment, order, decree or
ruling to the effect that any of the obligations of any party to any Credit
Document are illegal, invalid or unenforceable.
9.2. Acceleration and Cash Collateralization.
Upon the occurrence and during the continuance of an Event of Default,
the Agent may take any or all of the following actions, without prejudice to the
rights of the Agent or any Lender to enforce its claims against the Borrower:
(a) Acceleration. Upon the written request of the Majority Lenders,
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and by delivery of written notice to the Borrower from the Agent, all
Obligations shall be declared to be immediately due and payable (except
with respect to any Event of Default set forth in Section 9.1(f) hereof, in
which case all Obligations shall automatically become immediately due and
payable without the necessity of any request of the Majority Lenders or
notice or other demand to the Borrower) without presentment, demand,
protest or any other action or obligation of the Agent or any Lender.
(b) Termination of Commitments. Upon the written request of the
--------------------------
Majority Lenders, and by delivery of written notice to the Borrower from
the Agent, the Commitments of all the Lenders shall be immediately
terminated.
(c) Cash Collateralization. On demand of the Agent or the Majority
-----------------------
Lenders the Borrower shall immediately deposit with the Agent for each
Letter of Credit then outstanding, cash or Cash Equivalents in an
amount equal to one hundred ten percent (110%) of the greatest amount
drawable thereunder.
9.3. Rescission of Acceleration.
After acceleration of the maturity of the Revolving Loans, if the
Borrower pays all accrued interest and all principal due (other than by reason
of the acceleration) and all Defaults and Events of Default are otherwise waived
in accordance with Section 11.10, the Majority Lenders may elect in their sole
discretion, to rescind the acceleration and return any cash collateral. (This
Section is intended only to bind all of the Lenders to a decision of the
Majority Lenders and not to confer any right on the Borrower, even if the
described conditions for the Majority Lenders' election may be met.)
9.4. Remedies.
Upon the occurrence and during the continuance of an Event of Default,
the Agent may do any or all of the following:
(a) remove all documents, instruments, files and records (including
the copying of any computer records) relating to the Accounts or use (at
the expense of the Borrower) such supplies or space of the Borrower at the
Borrower's place of business necessary to properly administer and collect
the Accounts thereon;
(b) accelerate or extend the time of payment, compromise, issue
credits, or bring suit on the Accounts (in the name of the Borrower or the
Lenders) and otherwise administer and collect the Accounts;
(c) sell, assign and deliver the Accounts and any returned, reclaimed
or repossessed merchandise, with or without advertisement, at public or
private sale, for cash, on credit or otherwise; and
(d) foreclose the security interests created pursuant to the Credit
Documents by any available judicial or non-judicial procedure, and take
possession of any or all of the Collateral without judicial process and
enter any premises where any Collateral may be located for the purpose of
taking possession of or removing the same.
Any Lender may bid or become a purchaser at any sale, free from any right of
redemption, which right is expressly waived by the Borrower. If notice of
intended disposition of any Collateral is required by law, it is agreed that
five (5) Business Days notice shall constitute reasonable notification. The
Borrower will assemble the Collateral and make it available to the Agent at such
locations as the Agent may specify, whether at the premises of the Borrower or
elsewhere, and will make available to the Agent the premises and facilities of
the Borrower for the purpose of the Agent's taking possession of, removing or
putting the Collateral in saleable form.
9.5. Right of Setoff.
In addition to and not in limitation of all rights of offset that any
Lender or the Issuing Bank may have under applicable law, upon the occurrence of
any Event of Default, and whether or not any Lender or the Issuing Bank has made
any demand or the obligations of any Credit Party have matured, each Lender and
the Issuing Bank shall have the right to appropriate and apply to the payment of
the Obligations of such Credit Party all deposits and other obligations then or
thereafter owing by such Lender or the Issuing Bank to such Credit Party. Each
Lender or the Issuing Bank exercising such rights shall notify the Agent thereof
and any amount received as a result of the exercise of such rights shall be
shared in accordance with Section 4.11.
9.6. License for Use of Software and Other Intellectual Property.
Unless expressly prohibited by the licensor thereof, if any, the Agent
is hereby granted a license to use all computer software programs, data bases,
processes and materials used by the Borrower in connection with its businesses
or in connection with the Collateral. The Agent agrees not to use any such
license prior to the occurrence of an Event of Default without giving the
Borrower prior notice.
9.7. Deficiencies; Remedies Cumulative.
The cash proceeds resulting from the Agent's exercise of any of the
foregoing rights shall be applied by the Agent and the Lenders in accordance
with Section 2.10. The Borrower shall remain liable to the Agent and the
Lenders for any deficiencies, and the Agent and the Lenders in turn agree to
remit to the Borrower or its successors or assigns, any surplus resulting
therefrom. The foregoing remedies are not intended to be exhaustive and the
full or partial exercise of any of them shall not preclude the full or partial
exercise of any other available remedy under the Credit Agreement, under any
other Credit Document, at equity or at law.
ARTICLE 10. THE AGENT
10.1. Appointment of Agent.
(a) Each Lender hereby designates BKB as Agent to act as herein
specified. Each Lender hereby irrevocably authorizes, and each holder of
any Revolving Note or participation in any Letter of Credit by the
acceptance of a Revolving Note or participation shall be deemed irrevocably
to authorize, the Agent to take such action on its behalf under the
provisions of this Credit Agreement and the Revolving Notes and any other
instruments and agreements referred to herein and to exercise such powers
and to perform such duties hereunder and thereunder as are specifically
delegated to or required of the Agent by the terms hereof and thereof and
such other powers as are reasonably incidental thereto. The Agent shall
hold all Collateral and all payments of principal, interest, Fees, charges
and Expenses received pursuant to this Credit Agreement or any other
Credit Document for the benefit of the Lenders to be distributed as
provided herein. The Agent may perform any of its duties hereunder by or
through its agents or employees.
(b) The provisions of this Article 10 are solely for the benefit of
the Agent and the Lenders, and none of the Credit Parties shall have any
rights as a third party beneficiary of any of the provisions hereof (other
than Section 10.9). In performing its functions and duties under this
Agreement, the Agent shall act solely as agent of the Lenders and does not
assume and shall not be deemed to have assumed any obligation toward or
relationship of agency or trust with or for any Credit Party.
10.2. Nature of Duties of Agent, Documentation Agent and
Syndication Agent.
(a) The Agent shall have no duties or responsibilities except those
expressly set forth in this Credit Agreement and the other Credit
Documents. Neither the Agent nor any of its officers, directors, employees
or agents shall be liable for any action taken or omitted by it as such
hereunder or in connection herewith, unless caused by its or their gross
negligence or willful misconduct. The duties of the Agent shall be
mechanical and administrative in nature; the Agent shall not have by reason
of this Credit Agreement or the other Credit Documents a fiduciary
relationship in respect of any Lender; and nothing in this Credit Agreement
or the other Credit Documents, expressed or implied, is intended to or
shall be so construed as to impose upon the Agent any obligations in
respect of this Credit Agreement or the other Credit Documents except as
expressly set forth herein or therein.
(b) Neither the Documentation Agent nor the Syndication Agent will have
any duties, obligations, rights or remedies under this Credit Agreement or
any of the other Credit Documents by virtue of its being named as
documentation agent or syndication agent hereunder.
10.3. Lack of Reliance on Agent.
(a) Independently and without reliance upon the Agent, each Lender, to
the extent it deems appropriate, has made and shall continue to make (i)
its own independent investigation of the financial or other condition and
affairs of each Credit Party in connection with the taking or not taking of
any action in connection herewith and (ii) its own appraisal of the
creditworthiness of each Credit Party, and, except as expressly provided in
this Agreement, the Agent shall have no duty or responsibility, either
initially or on a continuing basis, to provide any Lender with any credit
or other information with respect thereto, whether coming into its
possession before the making of the Revolving Loans or at any time or times
thereafter.
(b) The Agent shall not be responsible to any Lender for any recitals,
statements, information, representations or warranties herein or in any
document, certificate or other writing delivered in connection herewith or
for the execution, effectiveness, genuineness, validity, enforceability,
collectibility, priority or sufficiency of this Credit Agreement or the
Revolving Notes or the financial or other condition of any Credit Party.
The Agent shall not be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of
this Credit Agreement or the Revolving Notes, or the financial condition of
any Credit Party, or the existence or possible existence of any Default or
Event of Default, unless specifically requested to do so in writing by any
Lender.
10.4. Certain Rights of the Agent.
The Agent shall have the right to request instructions from the
Majority Lenders at any time. If the Agent shall request instructions from the
Majority Lenders with respect to any act or action (including the failure to
act) in connection with this Credit Agreement, the Agent shall be entitled to
refrain from such act or taking such action unless and until the Agent shall
have received instructions from the Majority Lenders, and the Agent shall not
incur liability to any Person by reason of so refraining. Without limiting the
foregoing, no Lender shall have any right of action whatsoever against the Agent
as a result of the Agent acting or refraining from acting hereunder in
accordance with the instructions of the Majority Lenders.
10.5. Reliance by Agent.
The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, statement, certificate,
telex, teletype or telecopier message, cablegram, radiogram, order or other
documentary, teletransmission or telephone message believed by it to be genuine
and correct and to have been signed, sent or made by the proper person. The
Agent may consult with legal counsel (including counsel for the Borrower with
respect to matters concerning the Borrower), independent public accountants
(including the Borrower's independent public accountants) and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken by it in good faith in accordance with the advice of, or information
provided by, such counsel, accountants or experts.
10.6. Indemnification of Agent.
To the extent the Agent is not reimbursed and indemnified by the
Borrower, each Lender will reimburse and indemnify the Agent, in proportion to
its respective Commitment, for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including counsel fees and disbursements) or disbursements of any kind or
nature whatsoever (including all Expenses) which may be imposed on, incurred by
or asserted against the Agent in performing its duties hereunder, in any way
relating to or arising out of this Agreement, provided that, no Lender shall be
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liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Agent's gross negligence or willful misconduct.
10.7. The Agent in its Individual Capacity.
With respect to its obligation to lend under this Credit Agreement,
the Revolving Loans made by it and the Revolving Notes issued to it, and its
participation in Letters of Credit issued hereunder, the Agent shall have the
same rights and powers hereunder as any other Lender or holder of a Revolving
Note or participation interests and may exercise the same as though it was not
performing the duties specified herein; and the terms "Lenders," "Majority
Lenders," "holders of Revolving Notes," or any similar terms shall, unless the
context clearly otherwise indicates, include the Agent in its individual
capacity. The Agent may accept deposits from, lend money to, acquire equity
interests in, and generally engage in any kind of banking, trust, financial
advisory or other business with the Borrower or any Affiliate of the Borrower as
if it were not performing the duties specified herein, and may accept fees and
other consideration from the Borrower for services in connection with this
Credit Agreement and otherwise without having to account for the same to the
Lenders.
10.8. Holders of Notes.
The Agent may deem and treat the payee of any Revolving Note as the
owner thereof for all purposes hereof unless and until a written notice of the
assignment or transfer thereof shall have been filed with the Agent. Any
request, authority or consent of any Person who, at the time of making such
request or giving such authority or consent, is the holder of any Revolving
Note, shall be conclusive and binding on any subsequent holder, transferee or
assignee of such Revolving Note or of any Revolving Note or Revolving Notes
issued in exchange therefor.
10.9. Successor Agent.
(a) The Agent may, upon five (5) Business Days' written notice to the
Lenders and the Borrower, resign at any time (effective upon the
appointment of a successor Agent pursuant to the provisions of this Section
10.9). Such resignation of the Agent shall also operate as a resignation of
BKB as Issuing Bank. Upon any such resignation, the Majority Lenders shall
have the right, upon five (5) days' notice and approval by the Borrower
(which approval shall not be unreasonably withheld), to appoint a successor
Agent which shall also serve as successor Issuing Bank. If no successor
Agent (i) shall have been so appointed by the Majority Lenders, and (ii)
shall have accepted such appointment, within thirty (30) days after the
retiring Agent's giving of notice of resignation, then, upon five (5) days'
notice, the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent, which shall also serve as successor Issuing Bank.
(b) Upon the acceptance of any appointment as Agent hereunder 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 Credit Agreement. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Article 10 shall
inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent under this Credit Agreement.
(c) In the event of a material breach by the Agent of its duties
hereunder, the Agent may be removed by the Majority Lenders (other than the
Agent in its individual capacity and without giving effect to any Revolving
Loans or Commitments made by the Agent in its individual capacity) for
cause and the provisions of this Section 10.9 shall apply to the
appointment of a successor Agent. Removal of BKB as Agent shall also
operate as a removal of BKB as Issuing Bank.
10.10. Collateral Matters.
(a) Each Lender authorizes and directs the Agent to enter into the
Collateral Documents for the benefit of the Lenders. Each Lender hereby
agrees, and each holder of any Revolving Note by the acceptance thereof
will be deemed to agree, that, except as otherwise set forth herein, any
action taken by the Majority Lenders in accordance with the provisions of
this Credit Agreement or the Collateral Documents, and the exercise by the
Majority Lenders of the powers set forth herein or therein, together with
such other powers as are reasonably incidental thereto, shall be authorized
and binding upon all of the Lenders. The Agent is hereby authorized on
behalf of all of the Lenders, without the necessity of any notice to or
further consent from any Lender, from time to time prior to an Event of
Default, to take any action with respect to any Collateral or Collateral
Documents which may be necessary to perfect and maintain perfected the
security interest in and liens upon the Collateral granted pursuant to the
Collateral Documents.
(b) The Lenders hereby authorize the Agent, at its option and in its
discretion, to release any Lien granted to or held by the Agent upon any
Collateral (i) upon termination of the Commitments of all Lenders and
payment and satisfaction of all of the Obligations at any time arising
under or in respect of this Credit Agreement or the Credit Documents or
the transactions contemplated hereby or thereby, (ii) constituting property
being sold or disposed of if the Borrower certifies to the Agent that the
sale or disposition is made in compliance with Section 8.7 hereof (and the
Agent may rely conclusively on any such certificate, without further
inquiry) or (iii) if approved, authorized or ratified in writing by the
Majority Lenders, unless such release is required to be approved by all of
the Lenders hereunder. Upon request by the Agent at any time, the Lenders
will confirm in writing the Agent's authority to release particular types
or items of Collateral pursuant to this Section 10.10.
(c) Upon any sale and transfer of Collateral which is expressly
permitted pursuant to the terms of this Credit Agreement, or consented to
in writing by the Majority Lenders or all of the Lenders, as applicable,
and upon at least five (5) Business Days' prior written request by the
Borrower, the Agent shall (and is hereby irrevocably authorized by the
Lenders to) execute such documents as may be necessary to evidence the
release of the Liens granted to the Agent for the benefit of the Lenders
herein or pursuant hereto upon the Collateral that was sold or transferred;
provided that (i) the Agent shall not be required to execute any such
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document on terms which, in the Agent's opinion, would expose the Agent to
liability or create any obligation or entail any consequence other than the
release of such Liens without recourse or warranty and (ii) such release
shall not in any manner discharge, affect or impair the Obligations or any
Liens upon (or obligations of the Borrower or any Subsidiary in respect of)
all interests retained by the Borrower or any Subsidiary, including
(without limitation) the proceeds of the sale, all of which shall continue
to constitute part of the Collateral. In the event of any sale or transfer
of Collateral, or any foreclosure with respect to any of the Collateral,
the Agent shall be authorized to deduct all of the Expenses reasonably
incurred by the Agent from the proceeds of any such sale, transfer or
foreclosure.
(d) The Agent shall have no obligation whatsoever to the Lenders or to
any other Person to assure that the Collateral exists or is owned by the
Borrower or any Subsidiary or is cared for, protected or insured or that
the Liens granted to the Agent herein or pursuant hereto have been properly
or sufficiently or lawfully created, perfected, protected or enforced or
are entitled to any particular priority, or to exercise or to continue
exercising at all or in any manner or under any duty of care, disclosure or
fidelity any of the rights, authorities and powers granted or available to
the Agent in this Section 10.10 or in any of the Collateral Documents, it
being understood and agreed that in respect of the Collateral, or any act,
omission or event related thereto, the Agent may act in any manner it may
deem appropriate, in its sole discretion, given the Agent's own interest in
the Collateral as one of the Lenders and that the Agent shall have no duty
or liability whatsoever to the Lenders, except for its gross negligence or
willful misconduct.
10.11. Actions with Respect to Defaults.
In addition to the Agent's right to take actions on its own accord as
permitted under this Credit Agreement and the other Credit Documents, the Agent
shall take such action with respect to a Default or Event of Default as shall be
directed by the Majority Lenders; provided that until the Agent shall have
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received such directions, the Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable and in the best interests of the
Lenders.
10.12. Delivery of Information.
The Agent shall not be required to deliver to any Lender originals or
copies of any documents, instruments, notices, communications or other
information received by the Agent from the Borrower, any Subsidiary, the
Majority Lenders, any Lender or any other Person under or in connection with
this Credit Agreement or any other Credit Document except (i) as specifically
provided in this Credit Agreement or any other Credit Document and (ii) as
specifically requested from time to time in writing by any Lender with respect
to a specific document, instrument, notice or other written communication
received by and in the possession of the Agent at the time of receipt of such
request and then only in accordance with such specific request.
10.13. Syndication Agent.
The Borrower, the Agent, the Issuing Bank and each Lender acknowledge
that, other than any rights expressly reserved to the Syndication Agent under
this Credit Agreement, the Syndication Agent has no obligations hereunder and
shall not be responsible or accountable to any other party hereto for any action
or failure to act hereunder.
10.14. No Liability for Interest Rate Agreements or Lumber Hedging
Agreements.
In no event shall the Agent have any liability to the Borrower or any
Lender for any losses incurred under or in connection with any Interest Rate
Agreement or Lumber Hedging Agreement.
11.
ARTICLE 11. MISCELLANEOUS
11.1. SUBMISSION TO JURISDICTION; WAIVERS.
THE BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS TO
WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN
RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS
OF THE STATE OF MASSACHUSETTS, THE COURTS OF THE UNITED STATES OF AMERICA
FOR THE DISTRICT OF MASSACHUSETTS AND APPELLATE COURTS FROM ANY THEREOF;
(b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH
COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH ACTION OR PROCEEDING BEING BROUGHT IN AN INCONVENIENT
COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING
MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL
(OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO THE
BORROWER AT ITS ADDRESS SET FORTH IN SECTION 11.5 OR AT SUCH OTHER ADDRESS
OF WHICH THE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO;
(d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE
RIGHT TO XXX IN ANY OTHER JURISDICTION;
(e) WAIVES THE RIGHT TO ASSERT ANY SETOFF, COUNTERCLAIM OR CROSS-CLAIM
IN RESPECT OF, AND ALL STATUTES OF LIMITATIONS WHICH MAY BE RELEVANT TO,
SUCH ACTION OR PROCEEDING; AND
(f) WAIVES DUE DILIGENCE, DEMAND, PRESENTMENT AND PROTEST AND ANY
NOTICES THEREOF AS WELL AS NOTICE OF NONPAYMENT.
11.2. [RESERVED].
11.3. GOVERNING LAW.
THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS CREDIT AGREEMENT
SHALL BE GOVERNED BY THE LAWS OF THE STATE OF MASSACHUSETTS WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
11.4. Delays; Partial Exercise of Remedies.
No delay or omission of the Agent, the Issuing Bank or the Lenders to
exercise any right or remedy hereunder, whether before or after the happening of
any Event of Default, shall impair any such right or shall operate as a waiver
thereof or as a waiver of any such Event of Default. No single or partial
exercise by the Agent, the Issuing Bank or the Lenders of any right or remedy
shall preclude any other or further exercise thereof, or preclude any other
right or remedy.
11.5. Notices.
Except as otherwise provided herein, all notices and correspondences
hereunder shall be in writing and sent by certified or registered mail, return
receipt requested, or by overnight delivery service, with all charges prepaid,
if to the Agent, the Syndication Agent or the Issuing Bank, then to BankBoston,
N.A., Asset Based Finance, 000 Xxxxxxx Xxxxxx, Xxxx Xxxx XX BOS 01-09-08,
Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xxxx Xxxxx, if to any Lender, then to
such Lender's address for notice set forth on Annex I, and if to the Borrower,
then to the Borrower at 000 X. Xxxxxxxx Xxxxx, Xxxxxx Xxxxx, Xxxxxxxx 00000,
Attention: Chief Financial Officer, with a copy to Holland & Knight LLP, 00
Xxxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxxxxx, Xxxxxxx 00000, Attention:
T. Xxxxxxx Xxxxxx, or by facsimile transmission, promptly confirmed in writing
sent by first class mail, if to the Agent, the Syndication Agent or the Issuing
Bank, at (000) 000-0000, if to any Lender, then to such Lender's facsimile
number set forth on Annex I, and if to the Borrower at (000) 000-0000, with a
copy to Holland & Knight LLP at (000) 000-0000, Attention: Xxxxxxx X.
Xxxxxxxxx, or, in any such case, to another location designated in accordance
with this Section 11.5. All such notices and correspondence shall be deemed
given (i) if sent by certified or registered mail or by overnight delivery
service, when received at the above stated addresses or when delivery is refused
and (ii) if sent by facsimile transmission, when receipt of such transmission is
acknowledged.
11.6. Assignability.
(a) The Borrower shall not have the right to assign or delegate this
Credit Agreement or any interest therein except with the prior written
consent of the Agent and each Lender.
(b) Any Lender may make, carry or transfer Revolving Loans at, to or
for the account of, any of its branch offices or the office of an Affiliate
of such Lender except to the extent such transfer would result in increased
costs to the Borrower.
(c) A Lender may, with the consent of the Agent and, prior to the
occurrence of an Event of Default, with the consent of the Borrower (which
may not be unreasonably withheld), assign to one or more banks or other
financial institutions all or a portion of its rights and obligations under
this Credit Agreement and the Revolving Notes; provided that (i) for each
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such assignment, the parties thereto shall execute and deliver to the
Agent, for its acceptance and recording in the Register (as defined below),
an Assignment and Assumption Agreement, together with any Revolving Note or
Revolving Notes subject to such assignment and a processing and recordation
fee of $3,500, (ii) no such assignment shall be for less than $10,000,000
of a Lender's Commitment or, if less, the entire amount of such Lender's
Commitment and (iii) the consent of the Agent and the Borrower shall not be
required in connection with an assignment to an Affiliate. Upon execution
and delivery of the Assignment and Assumption Agreement to the Agent, from
and after the date specified as the effective date in the Assignment and
Assumption Agreement, (x) the assignee thereunder shall be a party hereto,
and, to the extent that rights and obligations hereunder have been assigned
to it pursuant to such Assignment and Assumption Agreement, such assignee
shall have the rights and obligations of a Lender hereunder and (y) the
assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and
Assumption Agreement, relinquish its rights (other than any rights it may
have pursuant to Section 11.8 hereof which will survive) and be released
from its obligations under this Credit Agreement (and, in the case of an
Assignment and Assumption Agreement covering all or the remaining portion
of an assigning Lender's rights and obligations under this Credit
Agreement, such Lender shall cease to be a party hereto).
(d) By executing and delivering an Assignment and Assumption Agreement,
the assignee thereunder confirms and agrees as follows: (i) other than as
provided in such Assignment and Assumption Agreement, the assigning Lender
makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Credit Agreement,
the Revolving Notes or any other instrument or document furnished pursuant
hereto, (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or any other Credit Parties or the performance or observance by
the Borrower or any other Credit Parties of any of its obligations under
this Credit Agreement or any other instrument or document furnished
pursuant hereto, (iii) such assignee confirms that it has received a copy
of this Credit Agreement, together with copies of the Financial Statements
referred to in Section 7.1 hereof and such other documents and information
as it has deemed appropriate to make its own credit analysis and decision
to enter into such Assignment and Assumption Agreement, (iv) such assignee
will, independently and without reliance upon the Agent, such assigning
Lender or any other Lender and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Credit Agreement, (v)
such assignee appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers under this Credit Agreement
as are delegated to the Agent by the terms hereof, together with such
powers as are reasonably incidental thereto and (vi) such assignee agrees
that it will perform in accordance with their terms all of the obligations
which by the terms of this Credit Agreement are required to be performed by
it as a Lender.
(e) The Agent shall maintain at its address referred to in Section 11.5
hereof a copy of each Assignment and Assumption Agreement delivered to and
accepted by it and a register for the recordation of the names and
addresses of the Lenders and the Commitments of, and principal amount of
the Revolving Loans owing to, each Lender from time to time (the
"Register"). The entries in the Register shall be conclusive and binding
for all purposes, absent manifest error, and the Borrower, the Agent and
the Lenders may treat each Person whose name is recorded in the Register as
a Lender hereunder for all purposes of this Agreement. The Register and
copies of each Assignment and Assumption shall be available for inspection
by the Borrower or any Lender at any reasonable time and from time to time
upon reasonable prior notice.
(f) Upon its receipt of an Assignment and Assumption Agreement executed
by an assigning Lender, together with the Revolving Note or Revolving Notes
subject to such assignment, the Agent shall, if such Assignment and
Assumption Agreement has been completed and is in substantially the form of
Exhibit F hereto, (i) accept such Assignment and Assumption Agreement, (ii)
record the information contained therein in the Register and (iii) give
prompt notice thereof to the Borrower. Within five (5) Business Days after
its receipt of such notice, the Borrower shall execute and deliver to the
Agent in exchange for the surrendered Revolving Note or Revolving Notes a
new Revolving Note or Revolving Notes to the order of the assignee in an
amount equal to the Commitment or Commitments assumed by it pursuant to
such Assignment and Assumption Agreement and, if the assigning Lender has
retained a Commitment or Commitments hereunder, a new Revolving Note or
Revolving Notes to the order of the assigning Lender in an amount equal to
the Commitment or Commitments retained by it hereunder. Such new Revolving
Note or Revolving Notes shall re-evidence the Indebtedness outstanding
under the old Revolving Note or Revolving Notes and shall be in an
aggregate principal amount equal to the aggregate principal amount of such
surrendered Revolving Note or Revolving Notes, and shall otherwise be in
substantially the form of the Revolving Note or Revolving Notes subject to
such assignments.
(g) Each Lender may sell participations (without the consent of the
Agent, the Borrower or any other Lender) to one or more parties in or to
all or a portion of its rights and obligations under this Credit Agreement
(including, without limitation, all or a portion of its Commitment, the
Revolving Loans owing to it and the Revolving Note or Revolving Notes held
by it); provided that (i) such Lender's obligations under this Credit
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Agreement (including, without limitation, its Commitment to the Borrower
hereunder) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iii) such Lender shall remain the holder of any such
Revolving Note for all purposes of this Credit Agreement, (iv) the
Borrower, the Agent, and the other Lenders shall continue to deal solely
and directly with such Lender in connection with such Lender's rights and
obligations under this Credit Agreement and (v) such Lender shall not
transfer, grant, assign or sell any participation under which the
participant shall have rights to approve any amendment or waiver of this
Credit Agreement except to the extent such amendment or waiver would (A)
extend the final maturity date or the date for the payments of any
installment of fees or principal or interest of any Revolving Loans or
Letter of Credit reimbursement obligations in which such participant is
participating, (B) reduce the amount of any installment of principal of the
Revolving Loans or Letter of Credit reimbursement obligations in which such
participant is participating, (C) reduce the interest rate applicable to
the Revolving Loans or Letter of Credit reimbursement obligations in which
such participant is participating, or (D) reduce any Fees payable
hereunder.
(h) Each Lender agrees that, without the prior written consent of the
Borrower and the Agent, it will not make any assignment hereunder in any
manner or under any circumstances that would require registration or
qualification of, or filings in respect of, any Revolving Loan, Revolving
Note or other obligation under the securities laws of the United States of
America or of any jurisdiction.
(i) In connection with the efforts of any Lender to assign its rights
or obligations or to participate interests, such Lender may disclose any
information in its possession regarding the Borrower and its Subsidiaries.
11.7. Confidentiality.
Each Lender agrees that it will use its reasonable best efforts not to
disclose without the prior consent of the Borrower (other than to its
Affiliates, employees, auditors, or counsel, or to another Lender if the
disclosing Lender or such disclosing Lender's holding or parent company in its
sole discretion determines that any such party should have access to such
information) any information with respect to the Borrower or any of its
Subsidiaries, which is furnished pursuant to this Credit Agreement and which is
designated by the Borrower to the Lenders in writing as confidential, provided,
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that any Lender may disclose any such information (a) as has become generally
available to the public, (b) as may be required or appropriate in any report,
statement or testimony submitted to any Governmental Authority having or
claiming to have jurisdiction over such Lender, (c) as may be required or
appropriate in response to any summons or subpoena or in connection with any
litigation, (d) in order to comply with any Requirement of Law, and (e) to any
prospective or actual transferee or participant in connection with any
contemplated transfer or participation of any of the Revolving Notes or
Commitment or any interest therein by such Lender.
11.8. Indemnification.
The Borrower shall and hereby agrees to indemnify, defend and hold
harmless the Agent, the Syndication Agent, the Issuing Bank and each of the
Lenders and their respective directors, officers, agents, employees and counsel
from and against (a) any and all losses, claims, damages, liabilities,
deficiencies, judgments or expenses incurred by any of them (except to the
extent that it is finally judicially determined to have resulted from their own
gross negligence or willful misconduct) arising out of or by reason of any
litigation, investigations, claims or proceedings which arise out of or are in
any way related to (i) this Credit Agreement or the transactions contemplated
hereby, (ii) the issuance of the Letters of Credit, (iii) the failure of the
Issuing Bank to honor a drawing under any Letter of Credit, as a result of any
act or omission, whether rightful or wrongful, of any present or future de jure
or de facto government or Governmental Authority, (iv) any actual or proposed
use by the Borrower of the proceeds of the Revolving Loans or (v) the Agent's,
the Syndication Agent's, the Issuing Bank's or the Lenders', entering into this
Credit Agreement, the other Credit Documents or any other agreements and
documents relating hereto, including, without limitation, amounts paid in
settlement, court costs and the fees and disbursements of counsel incurred in
connection with any such litigation, investigation, claim or proceeding or any
advice rendered in connection with any of the foregoing and (b) any such losses,
claims, damages, liabilities, deficiencies, judgments or expenses incurred in
connection with any remedial or other action taken by the Borrower or any of the
Lenders in connection with compliance by the Borrower or any of the
Subsidiaries, or any of their respective properties, with any federal, state or
local environmental laws, acts, rules, regulations, orders, directions,
ordinances, criteria or guidelines. If and to the extent that the obligations
of the Borrower hereunder are unenforceable for any reason, the Borrower hereby
agrees to make the maximum contribution to the payment and satisfaction of such
Obligations which is permissible under applicable law. The Borrower's
Obligations hereunder shall survive any termination of this Credit Agreement and
the other Credit Documents and the payment in full of the obligations, and are
in addition to, and not in substitution of, any other of their Obligations set
forth in this Credit Agreement. In addition, the Borrower shall, upon demand,
pay to the Agent and any Lender all costs and expenses (including the reasonable
fees and disbursements of counsel and other professionals) paid or incurred by
the Agent or such Lender in (i) enforcing or defending its rights under or in
respect of this Credit Agreement, the other Credit Documents or any other
document or instrument now or hereafter executed and delivered in connection
herewith, (ii) in collecting the Revolving Loans, (iii) in foreclosing or
otherwise collecting upon the Collateral or any part thereof and (iv) obtaining
any legal, accounting or other advice in connection with any of the foregoing.
11.9. Entire Agreement; Successors and Assigns.
This Credit Agreement and the other Credit Documents constitute the
entire agreement among the Borrower, the Agent, the Syndication Agent and the
Lenders, supersedes any prior agreements among them, and shall bind and benefit
the Borrower and the Lenders and their respective successors and permitted
assigns.
11.10. Amendments and Waivers.
No amendment or waiver of any provision of this Credit Agreement, any
part of Schedule B, or any other Credit Document shall be effective unless in
writing and signed by the Majority Lenders (or by the Agent on their behalf),
except that:
(a) the consent of all the Lenders is required to (i) increase the
Total Commitments, the Commitment of any Lender or the advance rates set
forth in Section 2.1, (ii) reduce the principal of, or interest on, the
Revolving Notes, any Letter of Credit reimbursement obligations or any Fees
hereunder (other than Fees that are exclusively for the account of the
Agent or the Issuing Bank), (iii) postpone any date fixed for any payment
in respect of principal of, or interest on, the Revolving Notes, any Letter
of Credit reimbursement obligations or any Fees hereunder, (iv) change the
percentage of the Commitments, or any minimum requirement necessary for the
Lenders or the Majority Lenders to take any action hereunder, (v) amend or
waive this Section 11.10(a), or change the definitions of Majority Lenders,
(vi) amend the "Unused Availability" levels set forth in Section 8.1 or
(vii) except as otherwise expressly provided in this Credit Agreement, and
other than in connection with the financing, refinancing, sale or other
disposition of any asset of the Borrower permitted under this Credit
Agreement, release any Liens in favor of the Lenders on a substantial
portion of the Collateral (which for purposes hereof shall mean Collateral
having a book value of more than $5,000,000); and
(b) the consent of the Agent or the Issuing Bank, as the case may be,
shall be required for any amendment, waiver or consent affecting the rights
or duties of the Agent or the Issuing Bank under any Credit Document, in
addition to the consent of the Lenders otherwise required by this section.
Notwithstanding any of the foregoing to the contrary, the consent of
the Borrower shall not be required for any amendment, modification or
waiver of the provisions of Article 10 (other than Section 10.9). The
Borrower and the Lenders hereby authorize the Agent to modify (i) this
Credit Agreement by unilaterally amending or supplementing Annex I to
reflect assignments of the Commitments and (ii) any of the Collateral
Documents by unilaterally amending or supplementing any of the
schedules thereto to reflect any addition to, or change in the status
of, any of the collateral expressly permitted thereunder. If the
Agent seeks the consent of a Lender under this Section 11.10 or any
consent or approval of any Lender under any other provision hereof or
of any other Credit Document and such Lender does not respond within
ten (10) days, such failure to respond shall constitute such Lender's
consent or approval.
11.11. Nonliability of Agent and Lenders.
The relationship between the Borrower and the Lenders, the Agent and
the Syndication Agent shall be solely that of borrower and lender. None of the
Agent, the Syndication Agent or any Lender shall have any fiduciary
responsibilities to the Borrower. None of the Agent, the Syndication Agent or
any Lender undertakes any responsibility to the Borrower to review or inform the
Borrower of any matter in connection with any phase of the Borrower's business
or operations.
11.12. Independent Nature of Lenders' Rights.
The amounts payable at any time hereunder to each Lender under such
Lender's Revolving Note or Notes shall be a separate and independent debt.
11.13. Counterparts.
This Credit Agreement may be executed in any number of counterparts
and by the different parties hereto in separate counterparts, each of which when
so executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.
11.14. Effectiveness.
This Credit Agreement shall become effective on the date on which all
of the parties hereto shall have signed a copy hereof (whether the same or
different copies) and shall have delivered the same to the Agent or, in the case
of the Lenders, shall have given to the Agent written, telecopied or telex
notice (actually received) at such office that the same has been signed and
mailed to it.
11.15. Severability.
In case any provision in or obligation under this Credit Agreement or
the Revolving Notes or the other Credit Documents shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.
11.16. Headings Descriptive.
The headings of the several sections and subsections of this Credit
Agreement, and the Table of Contents, are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of this
Credit Agreement.
11.17. Maximum Rate.
Notwithstanding anything to the contrary contained elsewhere in this
Credit Agreement or in any other Credit Document, the Borrower, the Agent and
the Lenders hereby agree that all agreements among them under this Credit
Agreement and the other Credit Documents, whether now existing or hereafter
arising and whether written or oral, are expressly limited so that in no
contingency or event whatsoever shall the amount paid, or agreed to be paid, to
the Agent or any Lender for the use, forbearance, or detention of the money
loaned to the Borrower and evidenced hereby or thereby or for the performance or
payment of any covenant or obligation contained herein or therein, exceed the
Highest Lawful Rate. If due to any circumstance whatsoever, fulfillment of any
provisions of this Credit Agreement or any of the other Credit Documents at the
time performance of such provision shall be due shall exceed the Highest Lawful
Rate, then, automatically, the obligation to be fulfilled shall be modified or
reduced to the extent necessary to limit such interest to the Highest Lawful
Rate, and if from any such circumstance and Lender should ever receive anything
of value deemed interest by applicable law which would exceed the Highest Lawful
Rate, such excessive interest shall be applied to the reduction of the principal
amount then outstanding hereunder or on account of any other then outstanding
obligations and not to the payment of interest, or if such excessive interest
exceeds the principal unpaid balance then outstanding hereunder and such other
then outstanding obligations, such excess shall be refunded to the Borrower.
All sums paid or agreed to be paid to the Agent or any Lender for the use,
forbearance, or detention of the obligations and other Indebtedness of the
Borrower to the Agent or any Lender shall, to the extent permitted by applicable
law, be amortized, prorated, allocated and spread throughout the full term of
such Indebtedness until payment in full so that the actual rate of interest on
account of all such Indebtedness does not exceed the Highest Lawful Rate
throughout the entire term of such Indebtedness. The terms and provisions of
this Section shall control every other provision of this Credit Agreement and
all agreements among the Borrower, the Agent and the Lenders.
11.18. JURY TRIAL.
THE BORROWER, THE AGENT, THE SYNDICATION AGENT, THE ISSUING BANK AND
THE LENDERS EACH HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING ARISING OUT OF THIS CREDIT AGREEMENT, THE CREDIT DOCUMENTS OR
ANY OTHER AGREEMENTS OR TRANSACTIONS RELATED HERETO OR THERETO.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the parties hereto have caused this Credit
Agreement to be executed and delivered by their proper and duly authorized
officers as of the date set forth above.
BORROWER:
--------
WICKES INC.,
a Delaware corporation
By /s/ Xxxxx Xxxxxxx
--------------------------------------------
Its Vice President
--------------------------------------------
AGENT:
-----
BANKBOSTON, N.A.,
as Agent
By /s/ Xxxx X. Xxxxx
--------------------------------------------
Its Vice President
--------------------------------------------
SYNDICATION AGENT:
-----------------
BANCBOSTON XXXXXXXXX XXXXXXXX INC.,
as Syndication Agent and Arranger
By
---------------------------------------------
Its
---------------------------------------------
DOCUMENTATION AGENT:
--------------------
NATIONSBANK, N.A.,
as Documentation Agent
By /s/ X. X. Xxxxxx
-------------------------------------------
Its Senior Vice President
------------------------------------------
ISSUING BANK:
------------
BANKBOSTON, N.A.
By /s/ Xxxx X. Xxxxx
--------------------------------------------
Its Vice President
-------------------------------------------
LENDERS:
-------
BANKBOSTON, N.A.
By /s/ Xxxx X. Xxxxx
--------------------------------------------
Its Vice President
-------------------------------------------
FOOTHILL CAPITAL CORPORATION
By /s/ M. P. Saddelack
--------------------------------------------
Its Senior Vice President
------------------------------------------
NATIONSBANK, N.A.
By /s/ X. X. Xxxxxx
------------------------------------------
Its Senior Vice President
------------------------------------------
LASALLE NATIONAL BANK
By /s/ Xxxxxxxxxxx X. Xxxxxxxx
------------------------------------------
Its Senior Vice President
-----------------------------------------
THE CIT GROUP/BUSINESS CREDIT, INC.
By /s/ Xxxxxxxx X. Xxxxxx
-------------------------------------------
Its Vice President
------------------------------------------
FLEET CAPITAL CORPORATION
By /s/ Art Xxxxxxxxx
-------------------------------------------
Its Vice President
------------------------------------------
CONGRESS FINANCIAL CORPORATION
(CENTRAL)
By /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------------
Its Senior Vice President
------------------------------------------
AMERICAN NATIONAL BANK AND TRUST
COMPANY OF CHICAGO
By /s/ Xxxxx X. Xxxxx
------------------------------------------
Its Vice President
-----------------------------------------
ANNEX I
LENDERS AND COMMITMENT AMOUNTS
Name and Address of Lender Commitment
-------------------------- ----------
BANKBOSTON, N.A. $30,000,000
Domestic Lending Office:
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Eurodollar Lending Office:
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Address for Notices:
BankBoston, N.A.
Asset Based Finance
000 Xxxxxxx Xxxxxx
Mail Stop MA BOS 01-09-08
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx X. Xxxxx
Facsimile: (000) 000-0000
FOOTHILL CAPITAL CORPORATION $25,000,000
Domestic Lending Office:
00000 Xxxxx Xxxxxx Xxxxxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Eurodollar Lending Office:
00000 Xxxxx Xxxxxx Xxxxxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Address for Notices:
Foothill Capital Corporation
00000 Xxxxx Xxxxxx Xxxxxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxxxx
Facsimile: (000) 000-0000
NATIONSBANK, N.A. $25,000,000
Domestic Lending Office:
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Eurodollar Lending Office:
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Address for Notices:
NationsBank, N.A.
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
LASALLE NATIONAL BANK $17,500,000
Domestic Lending Office:
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Eurodollar Lending Office:
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Address for Notices:
LaSalle National Bank
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
THE CIT GROUP/BUSINESS CREDIT, INC. $17,500,000
Domestic Lending Office:
00 Xxxxx XxXxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Eurodollar Lending Office:
00 Xxxxx XxXxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Address for Notices:
The CIT Group/Business Credit, Inc.
00 Xxxxx XxXxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxx
Facsimile: (000) 000-0000
FLEET CAPITAL CORPORATION $15,000,000
Domestic Lending Office:
____________________________
____________________________
Eurodollar Lending Office:
____________________________
____________________________
Address for Notices:
Fleet Capital Corporation
____________________________
____________________________
Attention: ___________________
Facsimile: (___) ___-____
CONGRESS FINANCIAL CORPORATION $15,000,000
(CENTRAL)
Domestic Lending Office:
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Eurodollar Lending Office:
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Address for Notices:
Congress Financial Corporation
(Central)
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxx
Facsimile: (000) 000-0000
AMERICAN NATIONAL BANK AND TRUST $15,000,000
COMPANY OF CHICAGO
Domestic Lending Office:
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Eurodollar Lending Office:
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Address for Notices:
American National Bank and Trust
Company of Chicago
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxx
Facsimile: (000) 000-0000
Total Commitments: $160,000,000.00
