Exhibit 10.20
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CREDIT AGREEMENT
AMONG
BOOKS-A-MILLION, INC. AND ITS SUBSIDIARIES,
AS BORROWERS
AND
BANK OF AMERICA, N.A.,
AS AGENT FOR THE LENDERS
AND
BANK OF AMERICA, N.A.,
AS LEAD ARRANGER AND BOOK MANAGER
AND
SUNTRUST BANK, N.A.,
AS SYNDICATION AGENT
AND
THE SEVERAL LENDERS FROM
TIME TO TIME PARTY HERETO
$100,000,000 REVOLVING CREDIT FACILITY
DATED AS OF JULY 1, 2002
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT ("this Agreement") is entered into as of the 1st day
of July, 2002, by and among BOOKS-A-MILLION, INC., a Delaware corporation
("BAM"), and its wholly owned subsidiaries AMERICAN WHOLESALE BOOK COMPANY,
INC., an Alabama corporation ("AWBC"), AMERICAN INTERNET SERVICE, INC., an
Alabama corporation ("AIS") and the wholly-owned subsidiaries of AIS,
▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC., an Alabama corporation ("▇▇▇.▇▇▇"), NET CENTRAL, INC.,
a Tennessee corporation ("NI"), and FAITHPOINT, INC. an Alabama corporation
("FAITHPOINT"); BAM, AWBC, AIS, ▇▇▇.▇▇▇, NI and FaithPoint are sometimes
together referred to as the "INITIAL PARTICIPATING ENTITIES"; the Initial
Participating Entities, together with all Persons that hereafter become
Participating Entities, being hereafter sometimes together referred to as the
"BORROWERS"), BANK OF AMERICA, N.A., a national banking association ("BofA"),
and the various lenders identified on the signature pages hereto (collectively,
with all other Persons that may from time to time hereafter become Lenders
hereunder by execution of an Assignment and Acceptance, the "LENDERS"); and BANK
OF AMERICA, N.A., a national banking association, as agent for the Lenders (the
"AGENT").
RECITALS
WHEREAS, the Borrowers have applied to the Lenders for a revolving credit
facility in an aggregate principal amount outstanding not to exceed $100,000,000
(the "REVOLVING CREDIT FACILITY"), the proceeds of which are to be used by the
Borrowers for general corporate purposes.
WHEREAS, the Lenders are willing to make the Revolving Credit Facility
available to the Borrowers only if, among other things, the Borrowers enter into
this Agreement and the other Credit Documents (as hereinafter defined).
NOW, THEREFORE, in consideration of the foregoing Recitals, and to induce
the Lenders to make the Revolving Credit Facility available, the parties hereby
agree as follows:
I. DEFINITIONS
1.1 Terms Defined in this Agreement. As used below in this Agreement, the
following capitalized terms shall have the following meanings, unless the
context expressly requires otherwise:
"AFFILIATE" means, with respect to any Person, another Person that, directly
or indirectly through one or more intermediaries, Controls, or is Controlled by,
or is under common Control with, such Person.
"AGENT" means Bank of America, N.A., in its capacity as described in Article
VII of this Agreement, its lawful corporate successors and any successor agent
appointed pursuant to Article VII hereof.
"AGREEMENT" means this Credit Agreement (including all schedules and
exhibits hereto), as originally in effect on the Closing Date and as thereafter
from time to time amended, supplemented, restated or otherwise modified and in
effect on such date.
"APPLICABLE COMMITMENT FEE RATE," "APPLICABLE LIBO RATE MARGIN," and
"APPLICABLE BASE RATE MARGIN" mean, with respect to any Revolving Credit Loan,
Swingline Loan, letter of credit fee, the Commitment Fee and any other rates or
fees to which such amounts are added or used to calculate such fees or rates,
the rates per annum set forth opposite the Fixed Charge Coverage Ratio at the
time of determination as set forth below:
Applicable Applicable Applicable
Base Rate LIBO Rate Commitment Fee
Fixed Charge Coverage Ratio Margin Margin Rate
--------------------------- ------ ------ ----
Greater than or equal to 2.0 to 1 0% 1.25% .25%
Less than 2.0 to 1 but greater than or equal to
1.75 to 1 0% 1.50% .25%
Less than 1.75 to 1 but greater than or equal to
1.625 to 1 0% 1.625% .25%
Less than 1.625 to 1 but greater than or equal
to 1.5 to 1 0% 1.75% .25%
Changes in the Applicable Commitment Fee Rate, Applicable LIBO Rate Margin and
Applicable Base Rate Margin shall be effective: (A) with respect to an increase
in such applicable rate or margin, as of the second (2nd) Business Day after the
day on which the financial statements and Compliance Certificate are required to
be delivered to the Agent and the Lenders pursuant to Sections 5.3.1 and 5.3.2
hereof, as the case may be; provided, however, that if such financial statements
and Compliance Certificate are not delivered to the Agent and the Lenders on or
before the date specified in such Section, such increase shall be effective as
of the date specified in such Section for delivery of the financial statements;
and (B) with respect to a decrease in such applicable rate or margin, as of the
later to occur of (1) the second (2nd) Business Day after the day on which such
financial statements are required to be delivered pursuant to Sections 5.3.1 and
5.3.2 hereof, as the case may be, and (2) the date on which such financial
statements are actually delivered to the Agent and the Lenders. If the financial
statements and Compliance Certificate are not are not delivered to the Agent and
the Lenders on or before the date specified in Sections 5.3.1 and 5.3.2, the
rates and margins determined hereunder shall automatically increase to the
highest rate and margin set forth above; provided, however, that nothing set
forth herein shall limit the Agent's or the Lenders' right to impose in addition
to such automatic increase, the Default Rate. As of the date of this Agreement,
the Fixed Charge Coverage Ratio is currently 1.65 to 1 and the Applicable LIBO
Rate Margin is therefore 1.625% and the Applicable Commitment Fee Rate is
therefore .25%.
"ASSET DISPOSITION" means any sale, assignment, transfer or other
disposition by any of the Borrowers or any of their Subsidiaries to any other
Person other than another Borrower of any of its assets, business units or other
Properties (including ownership interests in Subsidiaries), excluding sales of
inventory in the ordinary course of business.
"ASSIGNMENT AND ACCEPTANCE" means an Assignment and Acceptance in the form
of Schedule 8.11 (with blanks appropriately completed) delivered in connection
with an assignment of a portion of a Lender's interest under this Agreement
pursuant to Section 8.11.
"ASSUMPTION AGREEMENT" has the meaning attributed to that term in Section
1.3.6.
"BANKING DAY" means a Business Day, subject to the following additional
convention. As to notices or payments received by Agent on a Business Day at or
before noon Charlotte, North Carolina time, the Banking Day shall correspond to
the Business Day of receipt. As to notices or payments received by Agent on a
Business Day after noon Charlotte, North Carolina time, the Banking Day of
receipt shall be deemed to be the next following Business Day.
"BANKRUPTCY CODE" means Title 11 of the United States Code, as it may be
amended from time to time.
"BASE RATE" shall be the greater of: (a) the rate announced by Agent from
time to time as its prime rate of interest and is one of several interest rate
bases used by Agent and (b) the rate equal to the Fed Funds Rate plus .50%.
Lenders and Agent lend at rates both above and below Agent's prime rate and
Borrowers acknowledge that
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the Base Rate is not represented or intended to be the lowest or most favorable
rate of interest offered by any Lender or Agent.
"BASE RATE LOAN" means a Committed Loan for which BAM has elected
application of an interest rate based on the Base Rate.
"BEST OF BORROWERS' KNOWLEDGE" means the actual knowledge, information and
belief of the Chairman, Chief Executive Officer and Chief Financial Officer of
Borrowers, with no duty of inquiry.
"BOFA" means Bank of America, N.A., a national banking association, as a
Lender and its successors and assigns.
"BORROWERS" has the meaning attributed to that term in the preamble to this
Agreement.
"BORROWING NOTICE" has the meaning assigned in Section 2.5.1(b) hereof.
"BUSINESS DAY" means any day on which Agent is open for the conduct of
ordinary business; provided however, that when used in connection with
determining the LIBO Rate, the term "Business Day" shall exclude any day on
which banks are not open for dealings in U.S. Dollar deposits in the London
Interbank Market.
"CAPITAL LEASE" means a lease that would be characterized as a financed sale
or purchase under GAAP.
"CHANGE OF CONTROL" means the occurrence, after the Closing Date, of (i) any
Person or two or more Persons acting in concert (other than ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ or their respective spouses and lineal descendents or trusts
for the benefit of the foregoing) acquiring beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended), directly or indirectly, of
securities of BAM (or other securities convertible into such securities)
representing 50% or more of the combined voting power of all securities thereof
entitled to vote in the election of directors; or (ii) during any period of up
to 18 consecutive months, commencing after the Closing Date, individuals who at
the beginning of such 18-month period were directors of BAM ceasing for any
reason to constitute a majority of the Board of Directors thereof unless the
Persons replacing such individuals were nominated by the Board of Directors of
BAM.
"CLOSING DATE" means July 1, 2002.
"COMMITMENT" means, for any Lender, such Lender's Revolving Credit
Commitment.
"COMMITMENT FEE" has the meaning assigned thereto in Section 2.13.2.
"COMMITTED NOTE" means the promissory notes of the Borrowers in
substantially the form of Schedule 2.3, executed and delivered to the Lenders
with the Revolving Credit Commitments pursuant to Section 2.3 or, in connection
with an Assignment and Acceptance, pursuant to Section 8.11, together with any
amendments, modifications and supplements thereto and restatements thereof, in
whole or in part.
"COMMITTED LOANS" means the revolving credit loans described in Article II
hereof.
"CONSOLIDATED ENTITIES" means BAM and any other Person whose financial
statements are appropriately consolidated with BAM's financial statements under
GAAP.
"CONSOLIDATED NET INCOME" means, with reference to any period, the net
income of the Consolidated Entities (on a consolidated basis) for such period,
after deducting all operating expenses, provisions for all taxes and reserves
(including reserves for deferred income taxes) and all other proper deductions,
all determined in accordance with GAAP.
"CONTROL" or "CONTROLLED" means that a Person has the direct or indirect
power to conduct or govern the policies of another Person, whether this power
exists as a matter of right or through economic compulsion.
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"CREDIT DOCUMENTS" means, collectively, each writing delivered at any time
by Borrowers to Lenders or Agent relating to the Committed Loans, the Swingline
Loans, any Hedge Agreement, or to evidence or secure any of the Obligations.
"DEBT" means, without duplication, (i) the Obligations and all other
indebtedness, whether or not represented by bonds, debentures, notes or other
securities, for the repayment of borrowed money or for reimbursement of drafts
drawn or available to be drawn under letters of credit and banker's acceptances
issued for the account of such person, (ii) all indebtedness in excess of
$100,000 deferred for more than 180 days for the payment of the purchase price
of Property or assets (other than inventory) purchased, (iii) all obligations
under Capital Leases, (iv) all indebtedness secured by any mortgage or pledge
of, or Encumbrances on, Property of such person, whether or not the indebtedness
secured thereby shall have been assumed, and (v) Guaranteed Obligations.
"DEBT ISSUANCE" means the issuance or sale by any of the Borrowers or any of
their Subsidiaries of any Debt other than Debt allowed pursuant to Section
5.8.9.
"DEFAULT RATE" means a rate of interest equal to two percent per annum (200
basis points) in excess of the highest interest rate that would otherwise be
payable on the Obligations under the Credit Documents from time to time in the
absence of the existence of a default, or the maximum rate permitted by law,
whichever is less.
"EBITDAR" means, with respect to any fiscal period, the sum of Consolidated
Net Income after deducting therefrom portions of income properly attributable to
minority interests not collected in cash and before extraordinary items, losses
and gains on sale of assets, non-cash charges and gains related to FASB
Statement No. 133 (Accounting for Derivative Instruments and Hedging Activities)
and FASB Statement No. 142 (Goodwill and Other Intangible Assets) for such
period plus Interest Expense and expenses for taxes, depreciation, amortization
and Operating Lease Payments for such period, determined according to GAAP.
"ENCUMBRANCE" means any interest in Property in favor of one not the owner
thereof, whether voluntary or involuntary, including, but not limited to, (i)
the lien or security interest arising from a deed of trust, mortgage, pledge,
security agreement, conditional sale, Capital Lease, consignment, or bailment
for security purposes, and (ii) reservations, exceptions, encroachments,
easements, rights-of-way, covenants, conditions, restrictions, leases, and other
such title encumbrances.
"ENVIRONMENTAL LAWS" means the Federal Water Pollution Control Act (33
U.S.C. Section 1251 et seq.), Resource Conservation & Recovery Act (42 U.S.C.
Section 6901 et seq.), Safe Water Drinking Act (42 U.S.C. Section 3000(f) et
seq.), Toxic Substances Control Act (15 U.S.C. Section 261 et seq.), Clean Air
Act (42 U.S.C. Section 7401 et seq.), Comprehensive Environmental Response of
Compensation and Liability Act (42 U.S.C. Section 6901 et seq.) ("CERCLA") the
Environmental Protection Act, the Hazardous Materials Transportation Act (49
U.S.C. Section 1801 et seq.) and any other federal, state or municipal law, rule
or regulation relating to air emissions, water discharge, noise emissions, solid
or liquid waste disposal, hazardous or toxic waste or materials, or other
environmental or health matters.
"EQUITY ISSUANCE" means (i) the issuance, sale or other disposition by any
of the Borrowers or any of their Subsidiaries of its capital stock, any rights,
warrants or options to purchase or acquire any shares of its capital stock, or
any other security or instrument representing, convertible into or exchangeable
for an equity interest in the Borrowers or any of their Subsidiaries to any
Person other than another Borrower, and (ii) the receipt by any of the Borrowers
or any of their Subsidiaries of any capital contribution (whether or not
evidenced by any security or instrument); provided, however, that the term
Equity Issuance shall not include (a) any rights, warrants or options issued to
directors, consultants, officers or employees of the Borrowers or any of their
Subsidiaries pursuant to bona fide employee benefit plans established in the
ordinary course of business and any capital stock issued upon the exercise
thereof, (b) any capital contribution to any Subsidiary that is a Participating
Entity, to the extent made directly or indirectly by the Borrowers, or (c) any
capital stock or other equity securities issued or sold in connection with any
Permitted Acquisition or Permitted Investment and constituting all or a portion
of the applicable purchase price.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, including (unless the context otherwise requires) any
rules or regulations promulgated thereunder.
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"ERISA AFFILIATE" means any Person who for purposes of Title IV of ERISA is
a member of BAM's controlled group, or under common control with BAM, within the
meaning of Section 414 of the IRC, the regulations promulgated pursuant thereto
and the published revenue rulings issued thereunder.
"ERISA EVENT" means (i) the occurrence of a reportable event, within the
meaning of Section 4043 of ERISA, unless the 30-day notice requirement with
respect thereto has been waived by the PBGC; (ii) the provision by the
administrator of any Plan of a notice of intent to terminate such Plan, pursuant
to Section 404 1(a)(2) of ERISA (including any such notice with respect to a
plan amendment referred to in Section 4041(e) of ERISA); (iii) the cessation of
operations at a facility in the circumstances described in Section 4068(f) of
ERISA; (iv) the withdrawal by BAM or an ERISA Affiliate from a Multiple Employer
Plan during a plan year for which it was a substantial employer, as defined in
4001(a)(2) of ERISA; (v) the failure by BAM or any ERISA Affiliate to make a
material payment to a Plan required under Section 302(f)(1) of ERISA; (vi) the
adoption of an amendment to a Plan requiring the provision of initial or
additional security to such Plan, pursuant to Section 307 of ERISA; or (vii) the
institution by the PBGC of proceedings to terminate a Plan, pursuant to Section
4042 of ERISA, or the occurrence of any event or condition which might
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, a Plan.
"EVENT OF DEFAULT" means the occurrence of any of the events specified in
Section 6.1 hereof, as to which any requirement for notice or lapse of time has
been satisfied.
"FASB" means the Financial Accounting Standards Board.
"FED FUNDS RATE" means a fluctuating rate of interest equal to the Federal
Funds Rate as published in the "Money Rates" Section of The Wall Street Journal
(the "Index"). Any change in the rate will take effect on the effective date as
indicated in The Wall Street Journal. Interest will accrue on any day that is
not a Banking Day at the rate in effect on the immediately preceding Banking
Day.
"FIXED CHARGE COVERAGE RATIO" means, as of any date of determination the
ratio of EBITDAR for the four fiscal quarter period ending on such date to
Interest Expense plus Operating Lease Payments for such period.
"FLOATING RATE" means a floating rate of interest determined daily during
the term of all Swingline Loans or Loans made under the Peak Usage Tranche equal
to the sum of the LIBO Rate for a one month Interest Period plus the Applicable
LIBO Rate Margin.
"FUNDED DEBT" means all Debt of the Consolidated Entities, on a consolidated
basis.
"GAAP" means generally accepted accounting principles pronounced by the
Financial Accounting Standards Board or any successor thereto, as in effect from
time to time.
"GOVERNMENTAL AUTHORITY" means any governmental or quasi-governmental
entity, court or tribunal including, without limitation, any department,
commission, board, bureau, agency, administration, service or other
instrumentality of any foreign or domestic governmental entity.
"GUARANTEED OBLIGATIONS" of a Person means all guaranties, endorsements,
assumptions and other contingent obligations with respect to, or to purchase or
to otherwise pay or acquire, Debt of others, except the endorsement, in the
ordinary course of business, of checks and other instruments.
"HAZARDOUS SUBSTANCES" means those substances included from time to time
within the definition of hazardous substances, hazardous materials, toxic
substances, or solid waste under the Comprehensive Environmental Response
Compensation and Liability Act of 1980 as amended, 42 U.S.C. Section 9601 seq.;
the Resource Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901 et
seq.; the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et
seq.; the Clean Water Act, 33 U.S.C. Section 1251 et seq.; the Toxic Substances
Control Act, 15 U.S.C. Section 2601 et seq.; and in the regulations promulgated
pursuant to such acts and laws; and such other substances that are or become
regulated under any other Environmental Law.
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"HEDGE AGREEMENT" means any agreement between BAM and any Lender or any
Affiliate of a Lender now existing or hereafter entered into, which provides for
an interest rate or commodity swap, cap, floor, collar, forward foreign exchange
transaction, currency swap, cross-currency rate swap, currency option, or any
combination of, or option with respect to, these or similar transactions, for
the purpose of hedging BAM's exposure to fluctuations in interest rates,
currency valuations or commodity prices.
"INTEREST EXPENSE" shall mean all interest and fees incurred on Debt
(including obligations payable under Capital Leases attributable to interest) as
determined by GAAP during the period in question.
"INTEREST PAYMENT DATE" means, (i) as to Base Rate Loans and Swingline Loans
the first day of each April, July, October and January, and (ii) as to any LIBOR
Loan, the last day of the Interest Period applicable to such Loan; provided,
however, all interest accrued on each LIBOR Loan having an Interest Period of
greater than three months shall be payable (x) on the date that is three months
after the initial date of the Interest Period applicable to such LIBOR Loan and
(y) the last day of the Interest Period.
"INTEREST PERIOD" means as to any LIBOR Loan, the period commencing on (and
including) the date of such LIBOR Loan and ending on (but excluding) (i) the
seventh (7th) or fourteenth (14th) day thereafter, as Borrower may elect, or
(ii) the numerically corresponding day (or, if there is no numerically
corresponding day, on the last day) in the calendar month that is 1, 2, 3 or 6
months thereafter, as Borrowers may elect. Notwithstanding the foregoing: (x) if
any Interest Period would end on a day that is not a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless, such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day and (y) no
Interest Period with respect to any Loan shall end later than the Maturity Date.
Interest shall accrue from and including the first Banking Day of an Interest
Period to but excluding the last Banking Day of such Interest Period.
"IRC" means the Internal Revenue Code of 1986, as amended from time to time.
"ISSUING BANK" means, with respect to each Letter of Credit, BofA as
provided in Section 2.15.
"LAW" or "LAWS" means all applicable constitutional provisions, statutes,
codes, acts, ordinances, orders, judgments, decrees, injunctions, rules,
regulations, and requirements of all Governmental Authorities.
"LENDER" means (a) BofA in its capacity as a Lender and each Person listed
on the signature pages hereto and identified as a Lender and (b) each Person
that becomes an Assignee pursuant to the provisions of Section 8.11.
"LETTERS OF CREDIT" has the meaning assigned in Section 2.15 of this
Agreement.
"LETTER OF CREDIT DOCUMENTS" has the meaning assigned in Section 2.15.3 of
this Agreement.
"LETTER OF CREDIT LIABILITIES" has the meaning assigned in Section 2.15 of
this Agreement.
"LIABILITY" or "LIABILITIES" means, with respect to any Person, an
obligation, contingent or otherwise, that would be recorded or accrued under
GAAP as a liability of that Person including, but not limited to, any
nonrecourse obligation secured by Property of that Person.
"LIBO RATE" means, for any given Interest Period with respect to a given
LIBOR Loan, the rate per annum appearing on Telerate Page 3750 (or any successor
page) as the London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period for a term comparable to such Interest Period; provided,
that for purposes of a seven (7) day or fourteen (14) day Interest Period, the
rate shall be determined based on a (1) one month Interest Period. If for any
reason such rate is not available, the term LIBO Rate shall mean, for any given
Interest Period with respect to a given LIBOR Loan, the rate per annum appearing
on Reuters Screen LIBO Page as the London interbank offered rate for deposits in
Dollars at approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such Interest Period for a term comparable to such Interest Period;
provided, however, if more than one rate is specified on Reuters Screen LIBO
Page, the applicable rate shall be the arithmetic mean of all such rates.
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"LIBO RATE RESERVE PERCENTAGE" means the reserve percentage applicable
during any Interest Period (or if more than one such percentage shall be so
applicable, the daily average of such percentages for those days in such
Interest Period during which any such percentage shall be so applicable) under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental or other
marginal reserve requirement) for Lenders with respect to liabilities or assets
consisting of or including LIBOR Liabilities having a term equal to such
Interest Period.
"LIBOR LIABILITIES" means deposit liabilities incurred through the London
Interbank Market.
"LIBOR LOAN" means a Committed Loan for which BAM has elected application of
an interest rate based on the LIBO Rate.
"LOANS" or "LOAN" means the aggregate outstanding amount of all Committed
Loans and Swingline Loans and all extensions and renewals thereof and all
advances thereof, as the context may require.
"MARGIN STOCK" shall have the meaning attributed to that term in Regulation
U of the Federal Reserve Board, as amended.
"MATERIAL ADVERSE CHANGE" means any material and adverse change in the
business, Properties, or operations of the Consolidated Entities as a whole.
"MATERIAL ADVERSE EFFECT" means any event or condition which, singly or in
the aggregate with other events or conditions, materially and adversely affects
the business, Properties, or operations of the Consolidated Entities, as a
whole.
"MATURITY DATE" means July 1, 2005.
"MAXIMUM LAWFUL AMOUNT" means the maximum lawful amount of interest, loan
charges, commitment fees or other charges that may be assessed under Georgia law
or, if higher, under applicable federal law.
"NET CASH PROCEEDS" means (i) in the case of any Debt Issuance or Equity
Issuance, the aggregate cash payments received by the Borrowers and their
Subsidiaries less reasonable fees and expenses incurred by the Borrowers and
their Subsidiaries in connection therewith, and (ii) in the case of any Asset
Disposition, the aggregate amount of all cash payments received by the Borrowers
and their Subsidiaries in connection with such Asset Disposition less (x)
reasonable fees and expenses incurred by the Borrowers and their Subsidiaries in
connection therewith, and (y) any income or transfer Taxes paid or reasonably
estimated by the Borrowers to be payable by the Borrowers and their Subsidiaries
as a result of such Asset Disposition.
"NOTES" means any of the Committed Notes and the Swingline Note.
"OBLIGATIONS" means the obligations of Borrowers to the Swingline Lender to
repay the Swingline Loans, the obligations of Borrowers to Lenders to repay the
Committed Loans, interest and any fees and all other obligations of Borrowers
and the Consolidated Entities to Lenders and to Agent under this Agreement and
the other Credit Documents.
"OPERATING LEASES" means leases that are not Capital Leases.
"OPERATING LEASE PAYMENTS" shall mean all amounts payable under any
Operating Lease or rental agreement during the period in question.
"PARTICIPATING ENTITY" means any Subsidiary that (i) hereafter executes and
delivers to the Agent an Assumption Agreement and all other documents necessary
to assume joint and several liability as to the Obligations, (ii) is owned, in
both economic interest and voting rights, by BAM in an amount exceeding 50%, and
(iii) is owned by BAM in a proportion sufficient to allow BAM to Control the
Subsidiary, including the right to cause the
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Subsidiary to make lawful distributions of income, and the financial interest of
BAM therein is, in Agent's reasonable judgment, freely alienable by BAM through
a security interest granted therein or otherwise.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"PERMITTED ACQUISITION" means the acquisition (by asset purchase, stock
purchase, merger or otherwise, subject to the other requirements of this
definition set forth below) by BAM or another Consolidated Entity of the assets
of a Person in the ordinary course of business in an aggregate amount not to
exceed $15,000,000 (including any assumed Debt) in any single transaction or any
multiple transactions that occur during any twelve month period (provided that
such $15,000,000 amount shall be automatically, simultaneously and permanently
reduced on a dollar for dollar basis for all Permitted Investments made by the
Borrowers that are allowed pursuant to paragraph (i) of the definition of
Permitted Investments), which purchase meets all of the following additional
criteria:
(a) The form of the acquisition shall have been of the assets of any such
Person (by merger or otherwise) or, if for stock or other equity
interest, the target acquired shall become a Participating Entity
concurrently with the closing of the acquisition.
(b) BAM shall have delivered to Agent, prior to closing all acquisitions in
excess of $7,500,000, unaudited pro forma financial statements
demonstrating compliance with all covenants in this Agreement following
the acquisition (based on the assumption that the acquisition had
actually occurred as of the first day of the period for which such
covenants had most recently been calculated for the Consolidated
Entities, using the actual historical financial statements for the
target to be acquired and the actual historical financial statements for
the Consolidated Entities).
(c) The business of the Permitted Acquisition is in the same, or a
reasonably-related, complimentary, or ancillary line of business as the
Borrowers.
(d) The Permitted Acquisition shall have been approved by the Board of
Directors or other governing body of the company or business to be
acquired or holding the assets to be acquired.
"PERMITTED ENCUMBRANCES" means all of the following:
(a) taxes, assessments and other governmental charges that are not
delinquent or that are being contested in good faith by appropriate
proceedings duly pursued, and for which adequate reserves have been
established and are being maintained;
(b) mechanics', materialmen's, contractors', landlords' or other similar
liens arising in the ordinary course of business, securing obligations
that are not delinquent or that are being contested in good faith by
appropriate proceedings duly pursued, and for which adequate reserves
have been established and are being maintained;
(c) restrictions, exceptions, reservations, easements, conditions,
limitations and other matters of record other than Encumbrances that do
not materially adversely affect the value or utility of the Property
affected thereby or the use to which such Property is being put;
(d) Encumbrances and other matters approved in writing by the Required
Lenders;
(e) Purchase Money Security Interests, not exceeding the purchase price of
the Property securing the Encumbrance;
(f) the existing Encumbrances described in Exhibit A hereto; and
(g) other Encumbrances for obligations other than borrowed money not to
exceed in the aggregate at any one time $1,500,000.
8
"PERMITTED INVESTMENTS" means all of the following:
(a) direct obligations of, or obligations the payment of which is guaranteed
by, the United States of America or an interest in any trust or fund
that invests solely in such obligations or repurchase agreements,
properly secured, with respect to such obligations;
(b) direct obligations of agencies or instrumentalities of the United States
of America having a rating of A or higher by Standard & Poor's Ratings
Group or A2 or higher by ▇▇▇▇▇'▇ Investors Service, Inc.;
(c) a certificate of deposit issued by, or other interest-bearing deposits
with, a bank having its principal place of business in the United States
of America and having equity capital of not less than $250,000,000;
(d) certificates of deposit issued by, or other interest-bearing deposits
with, any other bank organized under the laws of the United States of
America or any state thereof, provided that such deposit is either (i)
insured by the Federal Deposit Insurance Corporation or (ii) properly
secured by such bank by pledging direct obligations of the United States
of America having a market value not less than the face amount of such
deposits;
(e) prime commercial paper maturing within 270 days of the acquisition
thereof and, at the time of acquisition, having a rating of A-1 or
higher by Standard & Poor's Ratings Group, or P-1 or higher by ▇▇▇▇▇'▇
Investors Service, Inc.;
(f) eligible banker's acceptances, repurchase agreements and tax-exempt
municipal bonds having a maturity of less than one year, in each case
having a rating of, or that is the full recourse obligation of a person
whose senior debt is rated, A or higher by Standard & Poor's Ratings
Group or A2 or higher by ▇▇▇▇▇'▇ Investors Service, Inc.;
(g) any other investment having a rating of A or higher or A-1 or higher by
Standard & Poor's Ratings Group or A2 or higher or P-1 or higher by
▇▇▇▇▇'▇ Investors Service, Inc;
(h) other investments made with the express prior written approval of the
Required Lenders;
(i) other investments related to the Borrowers' businesses; provided, that,
the total amount of such investments shall not exceed an amount equal to
the greater of (1) the difference between (a) 5% of the total aggregate
tangible assets of the Borrowers minus the cumulative amount of all
Permitted Acquisitions made by the Borrowers from the Closing Date to
the date of determination and (2) $2,500,000, unless approved in writing
by the Required Lenders.
"PERSON" (whether or not capitalized) means any individual, corporation,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization, government, limited liability company, governmental
agency or political subdivision thereof, or any other form of entity.
"PLAN" means any employee benefit or other plan established or maintained,
or to which contributions have been made, by BAM or any Subsidiary and covered
by Title IV of ERISA or to which Section 412 of the IRC applies.
"PRO RATA" or "PRO RATA SHARE" of any amount means, with respect to any
Lender at any time, the product of (i) such amount, multiplied by (ii) such
Lender's Revolving Credit Percentage at such time of the Revolving Credit
Facility; provided however, if at a time of determination there are principal
amounts outstanding under the Committed Loans, and if any Lender has failed to
fund any unrepaid Committed Loan that was funded by any other Lender or Lenders,
this apportionment shall be determined according to the respective total
principal amounts of the Committed Loans held by the respective Lenders rather
than by their Revolving Credit Commitments.
9
"PROPERTY" or "PROPERTIES" means any interest in any kind of property,
whether real, personal, or mixed, or tangible or intangible.
"PURCHASE MONEY DEBT" means a Liability that is secured by a Purchase Money
Security Interest.
"PURCHASE MONEY SECURITY INTEREST" means an Encumbrance on specific Property
(including the Encumbrance arising under a Capital Lease), provided that (i) the
Liability secured by any such Encumbrance shall have arisen at the time of the
acquisition thereof and shall not exceed 100% of the cost of the Property to the
entity acquiring the same, and (ii) each such Encumbrance shall attach only to
the Property acquired with the proceeds of the Liability secured thereby.
"REGULATORY CHANGE" means on or after the Closing Date, the adoption of any
applicable Law, rule or regulation, or any change in any applicable Law, rule or
regulation, 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.
"REIMBURSEMENT OBLIGATIONS" has the meaning assigned in Section 2.15.2 of
this Agreement.
"REQUIRED LENDERS" means, at any time, the Lenders owning or holding 66 2/3%
or more of the sum of (i) the then aggregate principal amount of the Revolving
Credit Commitments then outstanding plus (ii) the then aggregate Letter of
Credit Liabilities; or, if no Loans or Letters of Credits are then outstanding,
the Lenders with 66 2/3% or more of the aggregate of all Revolving Credit
Commitments at such time; or, provided, however, if any Lender has failed to
fund any unrepaid Committed Loan that was funded by any other Lender or Lenders,
this determination shall be made according to Lenders holding the required
percentage of principal amounts of the Committed Loans rather than by the
outstanding Revolving Credit Commitments.
"REVOLVING CREDIT COMMITMENT" means, with respect to any Lender at any time,
the obligations of such Lender to make Committed Loans pursuant to Section 2.5
hereof in the amount set forth under such Lender's name on its signature page
hereto under the caption "Revolving Credit Commitment" or if such Lender has
entered into one or more Assignment and Acceptances, the amount set forth for
such Lender at such time in the register maintained by the Agent pursuant to
Section 8.11 as such Lender's "Revolving Credit Commitment" as such amount may
be reduced at or prior to such time pursuant to the terms hereof.
"REVOLVING CREDIT FACILITY" means the revolving line of credit established
by the Lenders under Article II.
"REVOLVING CREDIT PERCENTAGE" means, with respect to any Lender at any time,
a fraction (expressed as a percentage) the numerator of which is the Revolving
Credit Commitment of such Lender at such time and denominator of which is the
Total Revolving Credit Commitment at such time; provided that if the Revolving
Credit Percentage of any Lender is to be determined after the Revolving Credit
Commitments have been terminated, then such Revolving Credit Percentage shall be
determined immediately prior (and without giving effect) to such termination.
"SHAREHOLDERS' EQUITY" shall have the meaning assigned to such term under
GAAP; excluding any non-cash charges or gains reflected on the Consolidated
Entities' income statement arising from adjustments required by FASB Statements
No 142 (Goodwill and Other Intangible Assets) and 133 (Accounting for Derivative
Instruments and Hedging Activities).
"SOLVENT" shall mean, as to any Person, that as of any date of
determination, (i) the then fair value of the assets of such Person is (a)
greater than the then total amount of Liabilities (including subordinated
Liabilities) of such Person and (b) greater than the amount that will be
required to pay such Person's probable liability on such Person's then existing
debts as they become absolute and matured, (ii) such Person's capital is not
unreasonably small in relation to its business, and (iii) such Person has not
incurred and does not intend to incur, or believe or reasonably should believe
that it will incur, debts beyond its ability to pay such debts as they become
due.
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"SUBSIDIARY" means any present or future corporation, joint venture, limited
liability company, or partnership, at least a majority of whose outstanding
voting stock or other voting securities or interests shall at the time be owned
directly or indirectly by any Borrower.
"SWINGLINE BORROWING NOTICE" has the meaning assigned in Section 2.16.3(b)
hereof.
"SWINGLINE LENDER" means Bank of American, N.A., a national banking
association.
"SWINGLINE LOAN" means a loan advanced under Section 2.16 hereof, and funded
under the Revolving Credit Loan.
"SWINGLINE NOTE" means the promissory note of the Borrowers in substantially
the form of Schedule 2.16.2 hereto executed and delivered to the Swingline
Lender, together with any amendments, modifications and supplements thereto and
restatements thereof.
"TAXES" means all taxes and assessments, whether general or special,
ordinary or extraordinary, or foreseen or unforeseen, which at any time may be
assessed, levied, confirmed or imposed on the Consolidated Entities or on any of
their Properties or assets or any part thereof or in respect of any of their
franchises, businesses, income or profits.
"TOTAL REVOLVING CREDIT COMMITMENT" means, at any time, the sum of the
Revolving Credit Commitments of all Lenders at such time.
"UNMATURED DEFAULT" means any event or condition that, but for the giving of
any required notice by Agent and/or the passing of time, would be an Event of
Default hereunder.
"UNUSED AMOUNT" shall mean with respect to each Lender, (a) the Commitment
of such Lender less (b) such Lender's pro rata share of outstanding Committed
Loans and Letter of Credit Liabilities. For purposes of determining the Unused
Amount, there shall be no reductions in the Commitment of a Lender (including
the Swingline Lender) for outstanding Swingline Loans.
1.2 Terms Generally.
1.2.1 Computations: Accounting Principles. Where the character or amount
of any asset or liability or item of income or expense is required to be
determined, or any consolidation or other accounting computation is required to
be made for the purposes of this Agreement, such determination or calculation,
to the extent applicable and except as otherwise specified in this Agreement,
shall be made in accordance with GAAP. If a change in GAAP after the date of
this Agreement would require a change affecting the calculation of any
requirement under this Agreement, then Agent and Borrowers shall negotiate in
good faith for the amendment of the affected requirements; provided, however,
until and unless such an amendment is agreed upon, the requirements of this
Agreement shall remain as written and compliance therewith shall be determined
according to GAAP as in effect prior to the change.
1.2.2 Gender and Number. Words used herein indicating, gender or number
shall be read as context may require.
1.2.3 References Include Successors. References herein to specific Laws,
regulatory bodies, parties or agreements also refer to any successor Laws,
regulatory bodies, and parties, and to all modifications, extensions, renewals
and restatements of agreements.
1.2.4 References to this Agreement. "Herein," "hereof' and words of
similar import refer to this Agreement as a whole and not to any particular
provision hereof, unless otherwise expressly stated.
1.2.5 Limitations of Knowledge. Certain representations and warranties
are made herein to the Best of Borrowers' Knowledge. These limitations reflect
only Borrowers' special interest in disclosing that no targeted diligence has
been performed as to these matters in connection with this Agreement.
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1.3 Participating Entities.
1.3.1 Attorney-in-Fact. Each Participating Entity, separately and
severally, hereby appoints and designates BAM as its agent and attorney-in-fact
to act on behalf of it for all purposes of the Credit Documents. BAM shall have
authority to exercise on behalf of each Participating Entity all rights and
powers that BAM deems necessary, incidental or convenient in connection with the
Credit Documents, including the authority to execute and deliver certificates,
documents, agreements and other instruments referred to or provided for in the
Credit Documents, request Revolving Credit Loans and elect interest rate options
hereunder, receive all proceeds of Revolving Credit Loans, give all notices,
approvals and consents required or requested from time to time by the Lenders
and take any other actions and steps that each Participating Entity could take
for its own account in connection with the Credit Documents from time to time,
it being the intent of each Participating Entity to grant to BAM plenary power
to act on behalf of each Participating Entity in connection with and pursuant to
the Credit Documents. The appointment of BAM as agent and attorney-in-fact for
each Participating Entity hereunder shall be coupled with an interest and be
irrevocable so long as any Credit Document shall remain in effect. Neither the
Agent nor the Lenders need obtain any Participating Entity's consent or approval
for any act taken by BAM pursuant to any Credit Document, and all such acts
shall bind and obligate BAM and each Participating Entity, jointly and
severally. Each Participating Entity forever waives and releases any claim
(whether now or hereafter arising) against the Lenders based on any claim of
BAM's lack of authority to act on behalf of each Participating Entity in
connection with the Credit Documents.
1.3.2 Liability Limitation. Each of the Participating Entities, and by
its acceptance of this Agreement, the Lenders hereby confirm that it is the
intention of all such Persons that this Agreement and the Obligations of each of
the Participating Entities hereunder not constitute a fraudulent transfer or
conveyance for purposes of the United States Federal Bankruptcy Code, the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar governmental requirement covering the protection of creditors' rights or
the relief of debtors to the extent applicable to this Agreement and the
Obligations of each of the Participating Entities hereunder. To effectuate the
foregoing intention, each of the Participating Entities, the Agent and the
Lenders hereby irrevocably agree that the Obligations and all of the other
liabilities of each of the Participating Entities under this Agreement shall be
limited to the maximum amount as will, after giving effect to such maximum
amount and all of the other contingent and fixed liabilities of such
Participating Entities that are relevant under such Laws, and after giving
effect to any collections from, any rights to receive contributions from, or any
payment made by or on behalf of any of the other Participating Entities in
respect of the Obligations of such other Participating Entities under this
Agreement, result in the Obligations and all of the other liabilities of each of
the Participating Entities under this Agreement not constituting a fraudulent
transfer or conveyance.
1.3.3 Informed Consent. Each Initial Participating Entity (i)
acknowledges that it has had full and complete access to the underlying papers
relating to the Obligations and all other papers executed by any person in
connection with the Obligations, has reviewed them and is fully aware of the
meaning and effect of their contents; (ii) is fully informed of all
circumstances that bear upon the risks of executing this Agreement and the other
Credit Documents that a diligent inquiry would reveal; (iii) has adequate means
to obtain from BAM on a continuing basis information concerning BAM's financial
condition and is not depending on the Agent or the Lenders to provide such
information, now or in the future; and (iv) agrees that neither the Agent nor
the Lenders shall have any obligation to advise or notify it or to provide it
with any data or information.
1.3.4 Joint and Several Obligations. Each Initial Participating Entity
hereby agrees that its obligations and liabilities with respect to the
Obligations are joint and several with BAM, continuing, absolute and
unconditional (subject to the provisions of Section 1.3.2). Without limiting the
generality of the foregoing, the obligations and liabilities of each Initial
Participating Entity with respect to the Obligations shall not be released,
discharged, impaired, modified or in any way affected by (i) the invalidity or
unenforceability of any Credit Document, (ii) the failure of the Agent or the
Lenders to give each Initial Participating Entity a copy of any notice given to
BAM, (iii) any modification, amendment or supplement of any obligation, covenant
or agreement contained in any Credit Document, (iv) any compromise, settlement,
release or termination of any obligation, covenant or agreement in any Credit
Document, (v) any waiver of payment, performance or observance by or in favor of
BAM of any obligation, covenant or agreement under any Credit Document, (vi) any
consent, extension, indulgence or other action or inaction, or any exercise or
non-exercise of any right, remedy or privilege with respect to any Credit
Document, (vii) the extension of time for payment or performance of any of the
Obligations, or (viii) any other
12
matter that might otherwise be raised in avoidance of, or in defense against an
action to enforce, the obligations of each Initial Participating Entity under
this Agreement, the Loans, the Notes or any other Credit Document.
1.3.5 Subrogation and Contribution Agreement. None of the Borrowers will
exercise any rights that it may have or acquire by way of subrogation under this
Agreement or any of the other Credit Documents or the Subrogation and
Contribution Agreement referred to below, by any payment made hereunder or under
any of the other Credit Documents or otherwise, until all the Obligations have
been paid in full and this Agreement has been terminated and is no longer
subject to reinstatement under this Agreement. If any amount shall be paid to a
Borrower on account of any such subrogation rights at any time when all of the
Obligations shall not have been paid in full and this Agreement terminated, such
amount shall be held in trust for the benefit of the Lenders and shall be paid
forthwith to the Lenders to be credited and applied upon the Obligations,
whether matured or unmatured, in accordance with the terms of the Credit
Documents. The Borrowers will not amend or waive any provision of the
Subrogation and Contribution Agreement dated the Closing Date entered into by
the Borrowers nor consent to any departure from such Subrogation and
Contribution Agreement, without having obtained the prior written consent of the
Required Lenders to such amendment, waiver or consent.
1.3.6 Assumption Agreement. Each Person that is to become after the
Closing Date a Participating Entity shall, at the time it is to become a
Participating Entity, execute and deliver to the Agent, in accordance with the
provisions of Section 3.3, an Assumption Agreement in the form attached hereto
as Schedule 1.3.6 ("Assumption Agreement").
II. LOANS
Concurrently with the execution of this Agreement, Lenders agree on a
several basis, and not on a joint basis, in accordance with their respective
Commitments, to make the Loans to Borrowers, under the following terms and
conditions:
2.1 Amount of Committed Loans. The principal indebtedness of Borrowers
to Lenders having a Revolving Credit Commitment under the Revolving Credit
Facility shall not exceed One Hundred Million and No/100 Dollars
($100,000,000.00) less the sum of (i) the outstanding principal balance of
Swingline Loans outstanding from time to time plus (ii) the Letter of Credit
Liabilities outstanding from time to time.
2.2 Use of Proceeds. The proceeds of the Loans shall be used by
Borrowers for general corporate purposes including (i) working capital, (ii)
capital expenditures, (iii) other lawful corporate purposes, and (iv) to
refinance certain existing Debt.
2.3 Committed Notes. Borrowers' obligations under the Committed Loans
shall be evidenced by Committed Notes in favor of the respective Lenders in the
form included as Schedule 2.3 hereto payable to each Lender for its Revolving
Credit Commitment.
2.4 Separate Commitments of Lenders. Borrowers acknowledge that each
Lender's Commitment to fund its portion of the Loans is made by each Lender
severally, and neither Agent nor any Lender shall be liable for the failure of
another Lender to timely perform under this Agreement.
2.5 Advances of Committed Loans. Subject to the terms and conditions of
this Agreement, Borrowers may borrow, repay and reborrow Committed Loans,
provided that the outstanding principal balance of the Committed Loans together
with the sum of the Letter of Credit Liabilities, the aggregate principal amount
of all outstanding Swingline Loans shall not at any time exceed the amounts
permitted under Section 2.1 above. The unpaid principal amount of all Loans
hereunder shall not exceed the Total Revolving Credit Commitment, and each
Committed Loan made hereunder shall be allocated pro rata among the Lenders
based upon their Revolving Credit Percentage. Committed Loans shall be disbursed
as follows:
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2.5.1 Committed Loans Advanced Pursuant to Borrowing Notices.
2.5.1(a) Applicability. Committed Loans may be LIBOR Loans, Base Rate
Loans, or a combination thereof, and the funding thereof shall be subject to
this Section 2.5.1.
2.5.1(b) Borrowing Notices. As long as Borrowers meet the conditions for
funding stated in this Agreement, BAM, on behalf of the Borrowers, may submit
requests for Committed Loans ("Borrowing Notices") to Agent. All requests shall
be made in writing (or by telephone, subject to such security procedures as
Agent may require from time to time, provided that all telephonic notices shall
be confirmed by written Borrowing Notices within one (1) Business Day) and shall
specify the proposed disbursement date for the requested Committed Loan; the
amount of the Committed Loan; the purpose of the Committed Loan (characterized
in accordance with Section 2.2 above); the type of Committed Loan, i.e., LIBOR
Loan or Base Rate Loan; and if a LIBOR Loan, the designated Interest Period.
Each Borrowing Notice shall irrevocably obligate Borrowers to accept the
Committed Loan requested thereby. Borrowing Notices shall be in the form of
Schedule 2.5.1(b) hereto or such other form as Agent may from time to time
require.
2.5.1(c) Funding of Committed Loans. As more specifically set forth
below, Lenders shall fund their respective portions of requested Committed Loans
on the next following Banking Day after the Banking Day of Agent's receipt of
the Borrowing Notice, in the case of Base Rate Loans, and on the third (3rd)
Banking Day following the Banking Day of Agent's receipt of the Borrowing
Notice, in the case of LIBOR Loans. All funds shall be disbursed directly into
an account maintained by BAM with Agent. Borrowers agree that if any Lender
elects to fund any requested Committed Loan(s) sooner after requested than is
required hereunder, the Lender may nevertheless use the entire response period
allowed hereunder upon receipt of any subsequent request, at the Lender's sole
option. Upon receipt of a Borrowing Notice, the Agent shall promptly notify each
Lender by telephone, telex, or telecopy of the contents thereof, the amount of
such Lender's portion of such Committed Loan and the applicable interest rate.
In the case of a Borrowing Notice for a Base Rate Loan which is received by the
Agent prior to noon Charlotte, North Carolina time, the Agent shall provide such
notice to each Lender not later than 1:00 p.m., Charlotte, North Carolina time
on the Business Day on which such notice is received. In the case of any other
Borrowing Notice which is received by the Agent prior to noon, Charlotte, North
Carolina time, the Agent shall provide such notice not later than 1:00 p.m.,
Charlotte, North Carolina time, on the Business Day on which such notice is
received. Subject to the satisfaction of all conditions precedent thereto as set
forth herein, each Lender shall, not later than 2:00 p.m., Charlotte, North
Carolina time, on the date specified in the Borrowing Notice, deposit with the
Agent, in federal or other immediately available funds, such Lender's respective
portion of the requested Committed Loan. Unless the Agent shall have received
prior notice from a Lender (by telephone or otherwise, such notice to be
promptly confirmed by telex, telecopy or other writing) that such Lender will
not make available such Lender's respective portion of such requested Committed
Loan, the Agent may assume that such Lender has made such amount available to
the Agent on the date of such Committed Loan in accordance with this Section,
and the Agent may, in reliance upon such assumption, make available to the
Borrower on such date a corresponding amount. If and to the extent such Lender
shall not have made such amount available to the Agent, such Lender and the
Borrower severally agree to repay to the Agent forthwith on demand (but without
duplication) such amount together with interest thereon for each day from the
date such amount is made available to the Borrower until the date such amount is
repaid to the Agent (i) with respect to the Borrower, at the interest rate
applicable at the time to such type of Committed Loan, or (ii) with respect to
the Lender, at the Fed Funds Rate. Such payment by the Borrower, however, shall
be without prejudice to its rights against such Lender. If such Lender shall
repay to the Agent such amount together with interest, such amount so repaid
shall constitute such Lender's Committed Loan for purposes of this Agreement,
which Committed Loan shall be deemed to have been made by such Lender on the
borrowing date applicable thereto, but without prejudice to the Borrower's
rights against such Lender.
2.5.1(d) Base Rate Loan Limitations. Individual Base Rate Loans shall be
in the minimum amount of One Hundred Thousand and No/100 Dollars ($100,000.00)
each or a larger integral multiple thereof. Any number of Base Rate Loans may be
outstanding at any one time.
2.5.1(e) LIBOR Loan Limitations. Individual LIBOR Loans shall be in the
minimum amount of Three Million and No/100 Dollars ($3,000,000.00) each or a
larger integral multiple of $1,000,000. No more than ten (10) Committed Loans
outstanding may be LIBOR Loans.
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2.5.1(f) Additional Limitation on LIBOR Interest Periods.
Notwithstanding anything to the contrary in this Agreement, if an Unmatured
Default or an Event of Default shall have occurred and be continuing, no
additional LIBOR Loans may be created or continued and no Base Rate Loan may be
converted into a LIBOR Loan.
2.5.1(g) Peak Usage Tranche. Notwithstanding anything to the contrary
set forth elsewhere herein (unless a specific reference to this Section 2.5.1(g)
is made): (i) a portion of the Revolving Credit Commitment of BofA equal to Five
Million and No/100 Dollars ($5,000,000.00) (the "Peak Usage Tranche") shall not
be included in the amount of the Commitments or Total Revolving Credit
Commitment for purposes of determining Pro Rata Share, Required Lenders, and
Revolving Credit Percentage, for any other Lenders from time to time and the
Peak Usage Tranche amount shall also not be included in the Commitments, Total
Revolving Credit Commitment or the Revolving Credit Commitment of BofA for
purposes of determining Pro Rata Share or Revolving Credit Percentage for BofA;
provided, however, that (A) the Peak Usage Tranche shall be included in such
amounts for purposes of determining the Unused Amount and the amount of and the
ratable share of each Lender of the Commitment Fee and (B) all principal amounts
actually outstanding under the Peak Usage Tranche shall be included in BofA's
Commitment and in the Total Revolving Credit Commitment Amount for purposes of
determining the Required Lenders; (ii) if at any time, the Borrowers make a
request for Loans, issuance of Letters of Credit or Swingline Loans, such that
(assuming such requested Loan was funded or Letter of Credit issued) the sum of
the outstanding principal balance of all Committed Loans, plus the Letter of
Credit Liabilities, plus the aggregate principal amount of all outstanding
Swingline Loans, would exceed Ninety-Five Million and No/100 Dollars
($95,000,000.00), then the portion in excess of said Ninety-Five Million and
No/100 Dollars ($95,000,000.00) shall be funded exclusively by BofA; provided,
however, BofA shall not fund any such amount in excess of the Peak Usage
Tranche; (iii) notwithstanding the type or class of loan or advance requested by
the Borrowers, all advances under the Peak Usage Tranche shall be in the form of
a revolving loan with interest accruing on such advances at the Floating Rate,
and none of the Peak Usage Tranche shall be used for the issuance of Letters of
Credit; (iv) once BofA has funded any of the Peak Usage Tranche, all payments or
prepayments (mandatory or voluntary) on the Committed Loans received by Agent
thereafter shall be applied first to the payment in full of the principal amount
of the outstanding Committed Loans applicable to the Peak Usage Tranche and all
accrued interest applicable thereto; and (v) once the Peak Usage Tranche and
interest associated therewith have been paid in full all other payments and
prepayment shall be applied pro rata among the Lenders as provided for elsewhere
in this Agreement.
2.5.2 Conversion of Committed Loans. BAM, on behalf of the Borrowers,
shall have the right, on prior irrevocable written notice to Agent given three
(3) Banking Days prior to the date of any requested conversion, to convert any
Base Rate Loan or LIBOR Loan into a Committed Loan of another type, or to
continue any LIBOR Loan for another Interest Period, subject in each case to the
following:
2.5.2(a) Application of Committed Loans. Each conversion shall be
effected by applying the proceeds of the new LIBOR Loan and/or Base Rate Loan,
as the case may be, to the Committed Loan (or portion thereof) being converted.
2.5.2(b) Notices of Conversions. Each notice pursuant to this subsection
2.5.2 shall be irrevocable and shall refer to this Agreement and specify the
identity and principal amount of the particular Committed Loan that BAM requests
be converted or continued; if such notice requests conversion, the date of such
conversion (which shall be a Business Day); and if a Loan is to be converted to
a LIBOR Loan or a LIBOR Loan is to be continued, the Interest Period with
respect thereto. No LIBOR Loan shall be converted at any time other than at the
end of the Interest Period applicable thereto, except in accordance with Section
2.11 hereof. Conversion notices shall be in the form attached as Schedule
2.5.1(b) hereto, marked to indicate a conversion.
2.5.3 Absence of Election. If BAM fails to give Agent notice to continue
any LIBOR Loan for a subsequent period, such LIBOR Loan (unless repaid) shall
automatically be converted into a Base Rate Loan. If BAM fails to specify in any
Borrowing Notice the type of borrowing or, in the case of a LIBOR Loan, the
applicable Interest Period, BAM will be deemed to have requested a Base Rate
Loan.
2.5.4 Implied Representations Upon Request for Committed Loan. Upon
making any request for any Committed Loans, Borrowers shall be deemed to have
warranted to Agent and Lenders that all conditions to funding set forth in
Article III hereof are satisfied.
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2.5.5 Advance Not Waiver. Any Lender's making of any Committed Loan that
it is not obligated to make under any provision of Article III hereof or any
other provision hereof shall not be construed as a waiver of the Lenders' right
to withhold future Committed Loans, declare an Event of Default, or otherwise
demand strict compliance with this Agreement, acting through Agent as permitted
by the terms hereof.
2.5.6 Draws by Debit Memorandum. Agent may cause Lenders to draw amounts
that may be available under the Committed Loan to pay any Obligation that is not
otherwise timely paid.
2.6 Interest. Interest shall accrue on each Loan as follows:
2.6.1 Base Rate Loans. Interest shall accrue on each Base Rate Loan at
an annual rate equal to the Base Rate plus the Applicable Base Rate Margin, said
rate to change contemporaneously with any change in either the Base Rate or the
Applicable Base Rate Margin.
2.6.2 LIBOR Loans. Interest shall accrue on each LIBOR Loan at a rate
equal to the LIBO Rate for the selected Interest Period plus the Applicable LIBO
Rate Margin.
2.6.3 Additional Interest on LIBOR Loans. In addition to the interest
described above, Borrowers shall pay to Lenders, if and so long as Lenders shall
be required under regulations of the Board of Governors of the Federal Reserve
System to maintain reserves with respect to liabilities or assets consisting of
or including LIBOR Liabilities, additional interest on the unpaid principal
amount of each LIBOR Loan, from the date of such advance until said principal
amount is paid in full, at an interest rate per annum equal at all times to the
remainder obtained by subtracting (i) the LIBO Rate for the Interest Period from
(ii) the rate obtained by dividing the LIBO Rate by a percentage equal to 100%
minus the LIBO Rate Reserve Percentage for such Interest Period. This additional
interest shall be payable on each date on which interest is payable. The amount
of additional interest shall be determined by each Lender, who shall notify
Borrowers and Agent thereof and whose determination shall be conclusive, absent
manifest error.
2.6.4 Calculation of Interest. Interest for Loans (other than Base Rate
Loans) shall be computed on the basis of a 360-day year counting the actual
number of days elapsed. Interest for Base Rate Loans shall be computed on the
basis of a 365 or 366 day year (as applicable) counting the actual number of
days elapsed. Interest shall accrue on the Business Day a Loan is extended and
shall accrue through the Banking Day prior to the Banking Day on which it is
repaid.
2.6.5 Default Rate. Notwithstanding the foregoing, upon (i) the
occurrence of an Event of Default pursuant to Sections 6.1.1, 6.1.6 or 6.1.7 and
during the continuation of such Event of Default, or (ii) the occurrence of any
other Event of Default hereunder of which a Borrower has notice and during the
continuance of such Event of Default, interest shall be charged at the Default
Rate, regardless of whether Lenders have elected to exercise any other remedies
available to Lenders, including, without limitation, acceleration of the
maturity of the outstanding principal of the Committed Loans. All such interest
shall be paid without demand on the Interest Payment Dates applicable to Base
Rate Loans.
2.6.6 Payment of Interest. Interest for Loans shall be due and payable
in arrears, without notice, on each Interest Payment Date.
2.6.7 Usury Savings Provision. It is the intention of the parties that
all charges under or in connection with this Agreement and the Obligations,
however denominated, and including (without limitation) all interest, commitment
fees, late charges and loan charges, shall be limited to the Maximum Lawful
Amount. Such charges hereunder shall be characterized and all provisions of the
Credit Documents shall be construed as to uphold the validity of charges
provided for therein to the fullest possible extent. Additionally, all charges
hereunder shall be spread over the full permitted term of the Obligations for
the purpose of determining the effective rate thereof to the fullest possible
extent, without regard to prepayment of or the right to prepay the Obligations.
If for any reason whatsoever, however, any charges paid or contracted to be paid
in respect of the Obligations shall exceed the Maximum Lawful Amount, then,
without any specific action by Lenders, Agent or Borrowers, the obligation to
pay such interest and/or other charges shall be reduced to the Maximum Lawful
Amount in effect from time to time and
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any amounts collected by Lenders that exceed the Maximum Lawful Amount shall be
applied to the reduction of the principal balance of the Obligations and/or
refunded to Borrowers so that at no time shall the interest or loan charges paid
or payable in respect of the Obligations exceed the Maximum Lawful Amount. This
provision shall control every other provision herein and in any and all other
agreements and instruments now existing or hereafter arising between Borrowers
and Lenders with respect to the Obligations.
2.7 Alternate Rate of Interest if LIBOR Unavailable. In the event, and
on each occasion, that on the date of commencement of any Interest Period for a
LIBOR Loan, a Lender shall have reasonably determined (i) that dollar deposits
in the amount of the requested principal amount of such LIBOR Loan are not
generally available in the London Interbank Market; (ii) that the rate at which
such dollar deposits are being offered will not adequately and fairly reflect
the cost to such Lender of making or maintaining such LIBOR Loan during such
Interest Period; or (iii) that reasonable means do not exist for ascertaining
the LIBO Rate, such Lender shall, as soon as practicable thereafter, give
written or telephonic notice of such determination to Borrowers. In the event of
any such determination, any request by Borrowers for a LIBOR Loan under this
Agreement shall, until the circumstances giving rise to such notice no longer
exist, be deemed to be a request for a Base Rate Loan. Each determination by
such Lender hereunder shall be conclusive absent manifest error.
2.8 Change in Circumstances.
2.8.1 Imposition of Requirements. Notwithstanding any other provision
herein, if after the date of this Agreement any change in applicable Laws or in
the interpretation or administration thereof by any Governmental Authority
charged with the interpretation or administration thereof (whether or not having
the force of Law) shall change the basis of taxation of payments to a Lender
under any LIBOR Loan made by the Lender or any other fees or amounts payable
hereunder (other than taxes imposed on the overall net income, gross receipts or
added value of a Lender by the country in which the Lender is located, or by the
jurisdiction in which a Lender has its principal office, or a jurisdiction in
which a Lender does business, or by any political subdivision or taxing
authority therein), or shall impose, modify or deem applicable any reserve
requirement, special deposit, insurance charge (including FDIC insurance on
LIBOR Liabilities) or similar requirement against assets of, deposits with or
for the account of, or credit extended by, a Lender or shall impose on a Lender
or the London Interbank Market any other condition affecting this Agreement or
LIBOR Loans made by a Lender, and the result of any of the foregoing shall be to
increase the cost to the Lender of making or maintaining its LIBOR Loan or to
reduce the amount of any sum received or receivable by a Lender hereunder
(whether of principal, interest or otherwise) in respect thereof by an amount
deemed by the affected Lender to be material, then Borrowers will pay to such
Lender such additional amount or amounts as will compensate the Lender for such
additional costs of reduction.
2.8.2 Other Changes. If either (i) the introduction of, or any change
in, or in the interpretation of, any United States or foreign Law; or (ii)
compliance with any directive, guidelines or request from any central bank or
other United States or foreign Governmental Authority (whether or not having the
force of law) promulgated or made after the date hereof, affects or would affect
the amount of capital required or expected to be maintained by a Lender (or any
lending office of a Lender) or any corporation directly or indirectly owning or
controlling a Lender (or any lending office of a Lender) based upon the
existence of this Agreement, and the Lender shall have determined that such
introduction, change or compliance has or would have the effect of reducing the
rate of return on the Lender's capital or on the capital of such owning or
controlling corporation as a consequence of its obligations hereunder (including
its Commitment) to a level below that which the Lender or such owning or
controlling corporation could have achieved but for such introduction, change or
compliance (after taking into account that Lender's policies or the policies of
such owning or controlling corporation, as the case may be, regarding capital
adequacy) by an amount deemed by the Lender (in its sole discretion) to be
material, then, from time to time, Borrowers shall pay to the Lender such
additional amount or amounts as will compensate the Lender for such reduction
attributable to making, funding and maintaining its Commitment and Loans
hereunder.
2.8.3 Computation of Amounts. A certificate of a Lender setting forth
the basis and method of computation of such amount or amounts specified in
Sections 2.8.1 and 2.8.2 hereof as shall be necessary to compensate the Lender
(or its participating banks) as specified above, as the case may be, shall be
delivered to Borrowers and shall be conclusive absent manifest error; provided
however, that Borrowers shall be responsible for compliance herewith and the
payment of increased costs only to the extent that (i) any change in Laws giving
rise to increased costs occurs after the date of this Agreement; and (ii) the
Lender gives notice of the change giving rise to
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increased costs within one hundred twenty (120) Business Days after the Lender
has, or with reasonable diligence should have had, knowledge of the change, or
else Lender can only collect costs from and after the date of the notice.
Subject to the foregoing, Borrowers shall pay the affected Lender the amount
shown as due on any such certificate within thirty (30) Business Days after its
receipt of such certificate.
2.8.4 No Duty to Contest. The protection of this Section 2.8 shall be
available to a Lender regardless of any possible contention of invalidity or
inapplicability of the Law or condition that shall have been imposed. Should a
Lender assess any charge to Borrowers under this Section 2.8, and provided that
Borrowers pay the assessment to the Lender, Borrowers may thereafter undertake,
at Borrowers' own expense any contest of the matters giving rise to the charge
that may, in the opinion of Borrowers' independent counsel issued to the
affected Lender, and concurred in by counsel to the Lender, have a reasonable
chance of success, provided further that the contest would not require the
assertion of any position contrary to a position taken by the Lender generally
with taxing authorities or any other involved parties and that there does not
exist any other circumstance that would disadvantage the Lender in the event of
such contest, as the affected Lender may determine in its discretion. The
affected Lender shall offer reasonable participation to Borrowers for the
purpose of enabling Borrowers to pursue the contest of such issue, with all
expenses, including fees and expenses of the affected Lender's counsel, to be
paid by Borrowers.
2.9 Change in Legality of LIBOR Loans. Notwithstanding anything to the
contrary herein contained, if any change in any Law or in interpretation thereof
by any Governmental Authority charged with the administration or interpretation
thereof shall make it unlawful for a Lender to make or maintain any LIBOR Loan
or to give effect to its obligations as contemplated hereby, then, by written
notice to Borrowers, the Lender may (i) declare that LIBOR Loans will not
thereafter be made by the Lender hereunder, whereupon Borrowers shall be
prohibited from requesting LIBOR Loans from the Lender hereunder unless such
declaration is subsequently withdrawn; and (ii) require that all outstanding
LIBOR Loans made by it be converted to Base Rate Loans, in which event (a) all
such LIBOR Loans shall be automatically converted to Base Rate Loans (but
without imposition of any additional charge that would normally become due under
Section 2.8 hereof and provided, that, the interest rate applicable to such Base
Rate Loans shall be equal to the sum of the Fed Funds Rate plus .50% plus the
Applicable Base Rate Margin) as of the effective date of such notice, and (b)
all payments and prepayments of principal that would otherwise have been applied
to repay the converted LIBOR Loans shall instead be applied to repay the Base
Rate Loans resulting from the conversion of such LIBOR Loans. For purposes of
this Section 2.9, a notice to Borrowers by the Lender pursuant to this Section
shall be effective, if lawful, on the last day of the then current Interest
Period; in all other cases, such notice shall be effective on the date of
receipt by Borrowers.
2.10 Principal Repayment.
2.10.1 Maturity Date. All remaining principal amounts outstanding under
the Committed Loans shall become due on the Maturity Date or the earlier
acceleration of the Committed Loans in accordance with the terms of this
Agreement.
2.10.2 Net Cash Proceeds from Debt Issuance. Promptly upon (and in any
event not later than two (2) Business Days after) its receipt thereof, the
Borrowers will prepay the outstanding principal amount of the Loans in an amount
equal to 100% of the Net Cash Proceeds from any Debt Issuance and will deliver
to the Agent, concurrently with such prepayment, a certificate signed by its
chief financial officer in form and substance satisfactory to the Agent and
setting forth the calculation of such Net Cash Proceeds.
2.10.3 Net Cash Proceeds from Asset Disposition. The Borrowers will
prepay the outstanding principal amount of the Loans in an amount equal to 100%
of the Net Cash Proceeds from any Asset Disposition other than those allowed or
provided for pursuant to Section 5.8.5. Such pre-payment shall be made within
two Business Days after Borrowers receipt of such Net Cash Proceeds. The
Borrowers will deliver to the Agent, concurrently with such prepayment, a
certificate signed by its chief financial officer in form and substance
satisfactory to the Agent and setting forth the calculation of such Net Cash
Proceeds.
2.10.4 Allocations of Prepayments. Each prepayment of the Loans made
pursuant to subsections 2.10.2 and 2.10.3 above shall be applied ratably among
the Lenders holding Loans in proportion to the principal amount held by each,
and with a corresponding reduction to the Commitments as provided in Section
2.17. At any time that any of the outstanding Obligations includes borrowing
under the Peak Usage Tranche, all prepayments shall be
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applied first to the payment to BofA of all Peak Usage Tranche borrowings. Each
prepayment made pursuant to subsections 2.10.2 and 2.10.3 above shall be applied
to prepay all Base Rate Loans before any LIBOR Loans are prepaid.
2.11 Prepayment of LIBOR Loans.
2.11.1 Notice of LIBOR Loan Prepayment. Borrowers may, upon three (3)
Banking Days' prior written notice to Agent, and upon payment of all applicable
premiums set forth in Section 2.11.3 hereof, prepay any outstanding LIBOR Loans
prior to any Interest Payment Date for such LIBOR Loans, in whole or in part.
Each notice of prepayment of any LIBOR Loan shall specify the date and amount of
such prepayment and shall be irrevocable.
2.11.2 Amount of LIBOR Loan Prepayment. Each partial prepayment of any
LIBOR Loan shall be in an aggregate principal amount which is the lesser of (i)
the then outstanding principal balance of the one or more LIBOR Loans to be
prepaid, or (ii) Five Million and No/100 Dollars ($5,000,000.00) or a larger
integral multiple of $1,000,000. Interest on the amount prepaid accrued to the
prepayment date shall be paid on such date.
2.11.3 LIBOR Loan Prepayment Premium. Upon prepayment of any LIBOR Loan
on a date other than the relevant Interest Payment Date for such borrowing,
Borrowers shall pay to Lenders, in addition to all other payments then due and
owing Lenders, premiums which shall be equal to an amount, if any, reasonably
determined by Agent to be the difference between the rate of interest then
applicable to the relevant LIBOR Loan and the yield Lenders would receive upon
reinvestment of so much of the relevant LIBOR Loans as is prepaid for the
remainder of the term of the relevant LIBOR Loan or Loans. Anything in this
Section 2.11.3 to the contrary notwithstanding, the premiums payable upon any
such prepayment shall not exceed the amount, if any, determined by Agent to be
the difference between the rate of interest then applicable to the relevant
LIBOR Loan and the yield that Lenders could receive upon reinvestment in the
"Floor Reinvestment" of so much of the relevant LIBOR Loan as is prepaid for the
remainder of the term of the relevant LIBOR Loan. For purposes hereof, "Floor
Reinvestment" shall mean an investment for the time period from the date of such
prepayment to the end of the relevant Interest Period applicable to such LIBOR
Loan at an interest rate per annum equal to the Fed Funds Rate on the date of
such prepayment. All determinations, estimates, assumptions, allocations and the
like required for the determination of such premiums shall be made by Agent in
good faith and shall be presumed correct absent manifest error.
2.12 Prepayment of Base Rate Loans. Borrower may at any time prepay any
outstanding Base Rate Loans prior to the Maturity Date in whole or in part
without premium or penalty on one Business Day's notice in amounts of at least
$250,000.
2.13 Lenders' Facility Fees.
2.13.1 Origination Fee. Borrowers shall pay to Agent for the account of
each Lender in accordance with its Pro Rata Share an origination fee for making
the Revolving Credit Facility available in the amount of $150,000.00 (i.e., 15
basis points of the Total Revolving Credit Commitment, including the Peak Usage
Tranche notwithstanding Section 2.5.1(g)). The origination fee shall be paid on
the Closing Date and is nonrefundable.
2.13.2 Commitment Fee. Borrowers shall pay to Agent for the account of
each Lender in accordance with its Pro Rata Share, a commitment fee (the
"Commitment Fee") for making the Revolving Credit Facility available. This fee
shall be computed at a per annum rate equal to the Applicable Commitment Fee
Rate times the daily average Unused Amount of each such Lender. The Commitment
Fee shall accrue at all times from the Closing Date until the Maturity Date and
shall be due and payable quarterly in arrears on the first day of each January,
April, July and October, commencing with the first such date to occur after the
Closing Date, and on the Maturity Date. The Commitment Fee shall be calculated
quarterly in arrears, and if there is any change in the Applicable Commitment
Fee Rate during any quarter, the actual daily amount shall be computed and
multiplied by the Applicable Commitment Fee Rate separately for each period
during such quarter that such Applicable Commitment Fee Rate was in effect. The
Commitment Fee shall accrue at all times, including at any time during which one
or more of the conditions in Article III is not met. This fee is not refundable.
The Commitment Fee shall be computed on based on an assumed 360 day year
counting the actual number of elapsed days.
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2.14 Agent's Fee. Borrowers shall pay an agency fee to Agent for the
Agent's own account, in the amounts and at the times specified in the letter
agreement dated May 1, 2002 between BAM and Agent. Such fees shall be fully
earned when paid and shall be nonrefundable for any reason whatsoever.
2.15 Letters of Credit. Subject to the terms and conditions of this
Agreement, Lenders' respective Revolving Credit Commitments may be utilized,
upon the request of BAM, on behalf of the Borrowers, for the issuance by the
Issuing Bank of letters of credit (the "Letters of Credit") for the account of
Borrowers for uses that would be permitted for the Committed Loans; provided
that in no event shall (i) the aggregate amount of all stated and undrawn
amounts under Letters of Credit (the "Letter of Credit Liabilities"), together
with the sum of the aggregate principal amount of the outstanding Committed
Loans and the Swingline Loans, exceed the amount stated in Section 2.1 hereof,
(ii) the outstanding aggregate amount of all Letter of Credit Liabilities exceed
in the aggregate Ten Million and No/100 Dollars ($10,000,000.00), (iii) the
expiration date of any Letter of Credit extend beyond the Maturity Date or (iv)
any of the Peak Usage Tranche be used for the issuance of Letters of Credit. The
following additional provisions shall apply to Letters of Credit:
2.15.1 Procedure for Issuance. Borrowers shall give Agent and the
Issuing Bank at least three (3) Business Days' irrevocable prior notice
(effective upon receipt) specifying (i) the Business Day (which shall be no
later than thirty (30) days preceding the Maturity Date) each Letter of Credit
is to be issued and (ii) describing in reasonable detail the proposed terms of
such Letter of Credit (including its beneficiary) and the nature of the
transactions or obligations proposed to be supported. On the same day that the
Agent receives such notice for issuance of Letters of Credit, the Agent shall
notify the other Lender or Lenders of receipt of such notice for issuance of
Letters of Credit. The Issuing Bank shall issue the Letter of Credit and will
make available to the beneficiary thereof the original of such Letter of Credit,
as directed by BAM. BofA shall be the Issuing Bank for any Letter of Credit
issued hereunder. BAM shall be the account party for each Letter of Credit,
including Letters of Credit issuable to a beneficiary having a claim or
potential claim against a Subsidiary of BAM.
2.15.2 Participation Among Lenders. On each day during the period
commencing with the issuance by the Issuing Bank of any Letter of Credit and
until such Letter of Credit shall have expired or been terminated or, if drawn
upon, until the resulting obligations of reimbursement (the "Reimbursement
Obligations") have been satisfied in full by Borrowers (whether by a borrowing
under this Agreement or otherwise), the Revolving Credit Commitment of each
Lender shall be deemed to be utilized for all purposes of this Agreement
(including, but not limited to, the calculation of availability and of the
nonuse fee) in an amount equal to such Lender's Pro Rata Share of the Letter of
Credit Liabilities associated with such Letter of Credit. Each Lender (other
than the Issuing Bank) agrees that, upon the issuance of any Letter of Credit,
it shall automatically be deemed to have acquired a participation in the Issuing
Bank's liability under such Letter of Credit in an amount equal to such Lender's
Pro Rata Share of such liability, and each Lender (other than the Issuing Bank)
thereby shall absolutely, unconditionally and irrevocably assume, as primary
obligor and not as surety, and shall be unconditionally obligated to the Issuing
Bank to pay and discharge when due, its Pro Rata Share of the Issuing Bank's
liability under such Letter of Credit.
2.15.3 Reimbursement Obligation. Upon receipt from the beneficiary of
any Letter of Credit of any demand for payment under such Letter of Credit, the
Issuing Bank shall promptly notify BAM of the amount to be paid by the Issuing
Bank as a result of such demand and the date on which payment is to be made by
the Issuing Bank to such beneficiary in respect of such demand. Borrowers hereby
unconditionally agree to pay and reimburse Agent for the account of the Issuing
Bank and the other Lenders Pro Rata with respect to the amount of each demand
for payment under such Letter of Credit at or prior to the date on which payment
is to be made by the Issuing Bank to the beneficiary under such Letter of
Credit, without presentment, demand, protest or other formalities of any kind.
Any amounts not so paid or borrowed as set forth in Section 2.15.4 below shall
bear interest at the rate(s) specified in the documents relating to the issuance
of the Letter of Credit (the "Letter of Credit Documents") or, if higher, at the
rate(s) specified on the Notes (including the Default Rate, if applicable).
2.15.4 Means of Reimbursement. Forthwith upon its receipt of a notice
referred to in Section 2.15.3 hereof, unless BAM shall promptly either (i)
advise Agent that BAM, on behalf of Borrowers, does not intend to obtain a
Committed Loan to finance its obligation to reimburse the Issuing Bank for the
amount of the related demand for payment or (ii) submit a Borrowing Notice as
provided in this Agreement sufficient to finance its obligation to reimburse the
Issuing Bank for the amount of the related demand for payment, BAM, on behalf of
Borrowers, shall be deemed to irrevocably have made a request for a Base Rate
Loan sufficient to reimburse the
20
Issuing Bank for the amount of the related demand for payment. Any such
Committed Loan shall only be advanced if Borrowers are entitled to obtain such a
Committed Loan pursuant to the terms hereof. If BAM fails to reimburse the
Issuing Bank for a demand for payment under a Letter of Credit by the date of
such payment (whether due to not being entitled for a Committed Loan requested
or deemed requested under this Section 2.15.4 or due to failure to reimburse the
Issuing Bank for such demand for payment, after advising Agent that it does not
intend to obtain a Loan to finance such obligation), Agent shall give each
Lender prompt notice of the amount of the demand for payment, specifying such
Lender's Pro Rata Share of the amount of the related demand for payment, and
Borrowers shall be deemed in default hereunder for breaching Section 2.15.3
above.
2.15.5 Payments by Lenders. Each Lender (other than the Issuing Bank)
shall pay to Agent for the account of the Issuing Bank in Dollars and in
immediately available funds, such Lender's Pro Rata Share of any payment under a
Letter of Credit upon notice by Agent to such Lender requesting such payment and
specifying such amount as provided in Section 2.15.4. Each such Lender's
obligation to make such payments to Agent for the account of the Issuing Bank
under this Section 2.15.5, and the Issuing Bank's right to receive the same,
shall be absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the failure of any other Lender to make its
payment under this Section 2.15.5, the financial condition of Borrowers, the
existence of any Unmatured Default or Event of Default or the termination of the
Revolving Credit Commitments. Each such payment to the Issuing Bank shall be
made without any offset, abatement, withholding or reduction whatsoever;
provided, nothing contained in the foregoing shall limit the Issuing Bank's
liability for its gross negligence or willful misconduct in improperly honoring
a draft drawn under a Letter of Credit.
2.15.6 Settlement Among Lenders. Upon the making of each payment by a
Lender to the Issuing Bank pursuant to Section 2.15.5 above in respect of any
Letter of Credit, such Lender shall, automatically and without any further
action on the part of Agent, the Issuing Bank or such Lender, acquire (i) a
participation in any amount equal to such payment in the Reimbursement
Obligation owing to the Issuing Bank by Borrowers under this Agreement and under
the Letter of Credit Documents relating to such Letter of Credit and (ii) a
participation in a percentage equal to such Lender's Pro Rata Share in any
interest or other amounts payable by Borrowers under such Letter of Credit
Documents and the other Credit Documents in respect of such Reimbursement
Obligation. Upon receipt by the Issuing Bank from or for the account of
Borrowers of any payment in respect of any Reimbursement Obligation or any such
interest or other amount (including by way of set-off or application of proceeds
of any collateral security) the Issuing Bank shall promptly pay to Agent for the
account of each Lender who shall have previously assumed a participation in such
payment under clause (ii) above, such Lender's Pro Rata Share of such payment,
each such payment by the Issuing Bank to be made in the same money and funds in
which received by the Issuing Bank. In the event any payment received by the
Issuing Bank and so paid to Lenders is rescinded or must otherwise be returned
by the Issuing Bank, each Lender shall, upon the request of the Issuing Bank
(through Agent), repay to the Issuing Bank (through Agent) the amount of such
payment paid to such Lender, with interest at the rate specified in Section
2.15.10.
2.15.7 Letter of Credit Fee. Borrowers shall pay to Agent for the
account of each Lender a letter of credit fee in respect of each Letter of
Credit on the daily average undrawn face amount of such Letter of Credit for the
period from and including the date of issuance of such Letter of Credit to and
including the date such Letter of Credit is drawn in full, expires or is
terminated (such fee to be non-refundable, to be paid in arrears on the first
day of each calendar quarter and on the Maturity Date and to be calculated, for
any day, after giving effect to any payments made under such Letter of Credit on
such day) in an amount equal to the Applicable LIBO Rate Margin in effect during
the relevant period. The Borrowers also agree to pay to the Agent, for the sole
account of the Issuing Bank, a fronting fee in respect of each Letter of Credit
on the daily average undrawn face amount of such Letter of Credit for the period
from and including the date of issuance of such Letter of Credit to and
including the date such Letter of Credit is drawn in full, expires or is
terminated (such fee to be non-refundable, to be paid in arrears on the first
day of each calendar quarter and on the Maturity Date and to be calculated, for
any day, after giving effect to any payments made under such Letter of Credit on
such day) in an amount equal to one-eighth of one percent (1/8%) per annum. All
calculations of Letter of Credit fees shall be based on an assumed 360 day year
counting the actual number of elapsed days. In addition to the foregoing,
Borrowers shall pay directly to the Issuing Bank for its own account, in
connection with each Letter of Credit issued, the customary issuance,
presentation, amendment, processing and other administrative fees and other
standard costs and charges of the Issuing Bank relating to letters of credit as
from time to time in effect. Such fees and charges are due and payable on demand
and are
21
nonrefundable. A statement of Issuing Bank's fees and charges as currently in
effect has been provided to Borrowers.
2.15.8 Letter of Credit Information. Upon the request of any Lender from
time to time, the Issuing Bank shall deliver any information reasonably
requested by such Lender with respect to each Letter of Credit then outstanding.
2.15.9 Conditions Relating to Letters of Credit. The issuance by the
Issuing Bank of each Letter of Credit shall be subject, in addition to the
conditions precedent set forth in Article III hereof (as though the issuance of
the Letter of Credit were the making of a Committed Loan), to the conditions
precedent that (i) such Letter of Credit shall be in such form, contain such
terms and support such transactions as shall be satisfactory to the Issuing Bank
consistent with its then current practices and procedures with respect to
letters of credit of the same type and (ii) Borrowers shall have executed and
delivered such applications, agreements and other instruments relating to such
Letter of Credit as the Issuing Bank shall have reasonably requested consistent
with its then current practices and procedures with respect to letters of credit
of the same type; provided that in the event of any conflict between any such
application, agreement or other instrument and the provisions of this Agreement,
the provisions of this Agreement shall control.
2.15.10 Payments Among Lenders. In the event that any Lender fails to
pay any amount required to be paid pursuant to this Section 2.15 when due, such
Lender shall pay interest to the Issuing Bank (through Agent) on such amount
from and including such due date to but excluding the date such payment is made
(i) during the period from and including such due date to but excluding the date
three Business Days thereafter, at a rate per annum equal to the Fed Funds Rate
(as in effect from time to time as determined by Agent) and (ii) thereafter, at
a rate per annum equal to the Base Rate plus 2.0%.
2.15.11 Modifications. The issuance by the Issuing Bank of any
modification or supplement to any Letter of Credit shall be subject to the same
conditions applicable under this Section 2.15 to the issuance of new Letters of
Credit, and no such modification or supplement shall be issued unless either (x)
the respective Letter of Credit as affected by such action would have complied
with such conditions had it originally been issued in such modified or
supplemented form or (y) each Lender shall have consented to such modification
or supplement.
2.15.12 Absolute Obligations of Borrowers. The obligations of Borrowers
under this Section 2.15 shall be unconditional and absolute and shall not be
affected, modified or impaired, upon the happening at any time or time to time
of any event, including any of the following, whether or not with notice to or
the consent of Borrowers:
2.15.12(a) the compromise, settlement, release, modification, amendment
(whether material or otherwise) or termination of any or all of the obligations,
conditions covenants or agreements of any Person in respect of any of the Credit
Documents;
2.15.12(b) the occurrence, or the failure by Agent, any Lender or any
other Person to give notice to Borrowers of the occurrence, of any Event of
Default or any default under any of the other Credit Documents;
2.15.12(c) the waiver of the payment, performance or observance of any
of the obligations, conditions, covenants or agreements of any Person contained
in any of the Credit Documents;
2.15.12(d) the extension of the time for performance of any other
obligations, covenants or agreements of any Person under or arising out of any
of the Credit Documents;
2.15.12(e) the taking or the omission of any of the actions referred to
in any of the Credit Documents;
2.15.12(f) any failure, omission or delay on the part of Agent, any
Lender, Borrowers or the beneficiary of any Letter of Credit to enforce, assert
or exercise any right, remedy, power or privilege conferred by this Agreement or
any of the Credit Documents, or any other act or acts on the part of Agent, any
Lender, Borrowers or the beneficiary of any Letter of Credit;
22
2.15.12(g) the voluntary or involuntary liquidation, dissolution, sale
or other disposition of all or substantially all the assets of, the marshaling
of assets and liabilities, receivership, insolvency, bankruptcy, assignment for
the benefit of creditors, reorganization, arrangement, composition with
creditors or readjustment of, or other similar proceedings which affect,
Borrowers or any other party to any of the Credit Documents;
2.15.12(h) any lack of validity or enforceability of this Agreement,
any Letter of Credit or any other Credit Document, or any allegation of
invalidity or unenforceability or any contest of such validity or
enforceability;
2.15.12(i) the existence of any claim, set-off, defense or other right
which Borrowers may have at any time against Agent, any Lender or any
beneficiary or any transferee of any Letter of Credit (or any persons or
entities for whom the Lender or any such beneficiary or transferee may be
acting), or any other Person, whether in connection with this Agreement or any
of the other Credit Documents or any of the transactions contemplated by any
Credit Document or any unrelated transaction;
2.15.12(j) any statement in any certificate or any other document
presented under any Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any such statement being untrue or inaccurate
in any respect whatsoever;
2.15.12(k) payment by the Issuing Bank under any Letter of Credit
against presentation of a demand or certificate which does not comply with the
terms of such Letter of Credit;
2.15.12(1) the release or discharge by operation of law of Borrowers
from the performance or observance of any obligation, covenant or agreement
contained in any of the Credit Documents; or
2.15.12(m) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing.
2.15.13 Indemnification. Without affecting Borrowers' liability under
any other provision of this Agreement, Borrowers agree to indemnify each of the
Issuing Bank, Agent and Lenders and their respective affiliates, directors,
officers, employees, attorneys and agents from, and hold each of them harmless
against, any and all losses, liabilities, damages or expenses incurred by any of
them in connection with or by reason of any actual or threatened investigation,
litigation or other proceeding (including, in respect of the Issuing Bank and
Agent, any such investigations, litigation or other proceeding between the
Issuing Bank or Agent and any Lender) relating to (a) the execution and delivery
of any Letter of Credit; (b) the use of the proceeds of any drawing under any
Letter of Credit; or (c) the transfer or substitution of, or payment or failure
to pay under, any Letter of Credit, including the reasonable fees and
disbursements of counsel incurred in connection with any such investigation,
litigation or other proceeding, but excluding damages, losses, liabilities or
expenses to the extent, but only to the extent, incurred by reason of the
willful misconduct or gross negligence of the Issuing Bank in determining
whether a document presented under any Letter of Credit complies with the terms
of such Letter of Credit. It shall not be a condition to any such
indemnification that the Issuing Bank, Agent or any Lender shall be a party to
any such investigations, litigation or other proceeding. Nothing in this Section
2.15.13 is intended to limit Borrowers' payment obligations under this
Agreement.
2.15.14 Assumption of Risk. Borrowers assume all risks of the acts or
omissions of any beneficiary of any Letter of Credit with respect to the use of
the Letter of Credit. None of Agent, any Lender nor any of their respective
affiliates, officers, directors, employees, attorneys or agents shall be liable
or responsible for: (a) the use which may be made of the Letter of Credit or for
any acts or omissions of any beneficiary of any Letter of Credit in connection
with such Letter of Credit; (b) the validity, sufficiency or genuineness of
documents presented to the Issuing Bank, or of any endorsement on such
documents, even if such documents should in fact prove to be in any or all
respects invalid, insufficient, fraudulent or forged; (c) payment by the Issuing
Bank against presentation of documents which do not comply with the terms of any
Letter of Credit, including failure of any documents to bear any reference or
adequate reference to such Letter of Credit; or (d) any other circumstances
whatsoever in making or failure to make payment under any Letter of Credit;
provided that Borrowers shall have a claim against the Issuing Bank to the
extent, but only to the extent, of any direct, as opposed to consequential,
damages suffered by Borrowers which Borrowers prove were caused by the Issuing
Bank's willful misconduct or gross negligence in determining whether a document
presented under any Letter of Credit complies with the terms of such Letter of
Credit. In
23
furtherance and not in limitation of the foregoing, the Issuing Bank may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary.
2.15.15 Reserves. The Borrowers acknowledge that the Issuing Bank will
be required by applicable rules and regulations of the Federal Reserve Board to
maintain reserves for its liability to honor draws made pursuant to a Letter of
Credit notwithstanding the obligation of the Lenders for a participation in such
Letter of Credit Liabilities. The Borrowers agree to reimburse the Issuing Bank
promptly for all additional costs incurred by reason of any Regulatory Change
that the Issuing Bank may hereafter incur solely by reason of its acting as
issuer of the Letters of Credit and its being required to reserve for such
liability, it being understood by the Borrowers that other interest and fees
payable under this Agreement do not include compensation of the Issuing Bank for
such reserves. The Issuing Bank shall furnish to the Borrowers, at the time of
the Issuing Bank's demand for payment of such additional costs, the computation
of such additional cost, which shall be conclusive absent demonstrable error,
provided that such computations are made on a reasonable basis. The Borrowers
shall pay to the Issuing Bank administrative and other fees, if any, in
connection with the Letters of Credit in such amounts and at such times as the
Issuing Bank and the Borrowers shall agree from time to time.
2.15.16 Applicability of ISP 98 and UCP. Unless otherwise expressly
agreed by the Issuing Bank and Borrowers, when a Letter of Credit is issued, (i)
the rules of the "International Standby Practices 1998" published by the
Institute of International Banking Law & Practice (or such later version thereof
as may be in effect at the time of issuance) shall apply to each standby Letter
of Credit, and (ii) the rules of the Uniform Customs and Practice for
Documentary Credits, as most recently published by the International Chamber of
Commerce (the "ICC") at the time of issuance (including the ICC decision
published by the Commission on Banking Technique and Practice on April 6, 1998
regarding the European single currency (euro)) shall apply to each commercial
Letter of Credit.
2.15.17 Issuing Bank's Right to Act. The Issuing Bank shall act on
behalf of Lenders with respect to any Letters of Credit issued by it and the
documents associated therewith until such time (and except for so long) as Agent
may agree at the request of the Required Lenders to act for the Issuing Bank
with respect thereto; provided, however, that the Issuing Bank shall have all of
the benefits and immunities (i) provided to Agent in Article VII with respect to
any acts taken or omissions suffered by the Issuing Bank in connection with
Letters of Credit issued by it or proposed to be issued by it and the
application and agreements for letters of credit pertaining to the Letters of
Credit as fully as if the term "Agent" as used in Article VII included the
Issuing Bank with respect to such acts or omissions, and (ii) as additionally
provided herein with respect to the Issuing Bank.
2.16 Swingline Loans. The Swingline Lender hereby agrees to extend to
Borrowers Swingline Loans in the aggregate amount not to exceed Fifteen Million
and No/100 Dollars ($15,000,000.00), on the following terms and conditions.
2.16.1 Use of Proceeds of Swingline Loans. Borrowers may use the
proceeds of Swingline Loans for any purpose permitted for the proceeds of the
Committed Loans under Section 2.2 of this Agreement.
2.16.2 Swingline Note. The Swingline Loans shall be evidenced by the
Swingline Note in the form included as Schedule 2.16.2 hereto payable to the
Swingline Lender.
2.16.3 Funding of Swingline Loans Advanced Pursuant to Borrowing
Notices.
2.16.3(a) Applicability. Except for Swingline Loans made pursuant to
Account Agreements as provided in Section 2.16.4 hereof, the funding of
Swingline Loans shall be subject to this Section 2.16.3.
2.16.3(b) Borrowing Notices. As long as Borrowers meet the conditions
for funding stated in this Agreement, BAM, on behalf of Borrowers, may submit
requests for Swingline Loans ("Swingline Borrowing Notices") to the Swingline
Lender. All requests shall be made in writing (or by telephone, subject to such
security procedures as the Swingline Lender may require from time to time,
provided that all telephonic notices shall be confirmed by written Swingline
Borrowing Notices within one (1) Business Day) and shall specify the proposed
date of the requested disbursement and the aggregate amount of such
disbursement. Each Swingline Borrowing
24
Notice shall irrevocably obligate Borrowers to accept the Swingline Loan
requested thereby. Swingline Borrowing Notices shall be in such form as the
Swingline Lender may from time to time require.
2.16.3(c) Funding of Swingline Loans. The Swingline Lender shall fund
Swingline Loans on the Business Day that BAM has requested as the day for
disbursement of the Swingline Loan, if the Swingline Lender receives such
Swingline Borrowing Notice before 2:00 p.m. Charlotte, North Carolina time on
the Business Day on which disbursement is requested. All funds shall be
disbursed directly into an account maintained by Borrower with the Swingline
Lender. Borrowers agree that if the Swingline Lender elects to fund any
requested Swingline Loan(s) sooner after requested than is required hereunder,
the Swingline Lender may nevertheless use the entire response period allowed
hereunder upon receipt of any subsequent request, at its sole option.
2.16.3(d) Swingline Loan Limitations. Individual Swingline Loans shall
be in the minimum amount of Fifty Thousand and No/100 Dollars ($50,000.00) each
or a larger integral multiple of Ten Thousand and No/100 Dollars ($10,000.00).
2.16.4 Funding of Swingline Loans Advanced Pursuant to Cash Management
Accounts. Borrower may have in effect from time to time separate agreements with
the Swingline Lender or its affiliates ("Account Agreements") establishing cash
management procedures that may involve the automatic disbursement of Swingline
Loans. The Account Agreements may be established using standardized forms that
do not address the specific circumstances of the Swingline Loan. To resolve
potential inconsistencies between this Agreement and Account Agreements, the
terms of this Agreement and of Account Agreements shall relate to one another as
follows:
2.16.4(a) Funding and Payment Procedures Controlled by Account
Agreements. The Account Agreements shall control this Agreement as to (i)
Section 2.16.3 hereof regarding funding procedures, and (ii) Interest Payment
Dates, to the extent that an Account Agreement may provide for such payment more
frequently than otherwise required under this Agreement.
2.16.4(b) Certain Provisions Controlled by this Agreement.
Notwithstanding any provision of an Account Agreement to the contrary, except as
provided above in Section 2.16.4(a) hereof, the provisions of this Agreement
shall control any Account Agreement to the extent that an Account Agreement may
be inconsistent with this Agreement.
2.16.4(c) Continuing Warranty Under Account Agreements. Because Account
Agreements may provide for the making of Swingline Loans without formal draw
requests from Borrowers, Borrowers agree that Borrowers' warranty under Section
2.16.5 hereof as to the satisfaction of all conditions to the right to receive
Swingline Loans shall be a continuing one during any period that such an Account
Agreement may be in effect. Therefore, any Swingline Loans funded by the
Swingline Lender pursuant to an Account Agreement after the failure of a
condition stated in Article III hereof shall be deemed made upon the affirmative
misrepresentation of Borrowers unless the Swingline Lender has received written
notice of and waived the failed condition in writing.
2.16.5 Implied Representations Upon Request for Swingline Loan. Upon
making any request for a Swingline Loan, Borrowers shall be deemed to have
warranted to the Swingline Lender that all conditions to funding are satisfied
as of the submission of the request to the Swingline Lender.
2.16.6 Advance Not Waiver. The Swingline Lender's making of any
Swingline Loan that it is not obligated to make under any provision of Article
III hereof or any other provision hereof shall not be construed as a waiver of
the Swingline Lender's right to withhold future Swingline Loans, notify Agent of
an Event of Default, or otherwise demand strict compliance with this Agreement.
2.16.7 Interest. Interest shall be charged and paid on each Swingline
Loan as follows:
2.16.7(a) Rate of Interest. Interest shall accrue on each Swingline
Loan at an annual rate equal to the Floating Rate, said rate to change
contemporaneously with any change in the Floating Rate due to either a change in
the LIBO Rate or the Applicable LIBO Rate Margin.
25
2.16.7(b) Calculation of Interest. Interest shall be computed on the
basis of a 360-day year counting the actual number of days elapsed.
2.16.7(c) Payment of Interest. Interest shall be due and payable in
arrears without notice on each Interest Payment Date.
2.16.7(d) Default Rate. Notwithstanding the foregoing, upon (i) the
occurrence of an Event of Default pursuant to Sections 6.1.1, 6.1.6 or 6.1.7 and
during the continuation of such Event of Default or (ii) the occurrence of any
other Event of Default hereunder of which a Borrower has notice and during the
continuance of such Event of Default until it is cured or waived, interest shall
be charged at the Default Rate, regardless of whether the Swingline Lender has
elected to exercise any other remedies available to it, including, without
limitation, acceleration of the maturity of the outstanding principal of the
Swingline Loans. All such interest shall be paid at the time of and as a
condition precedent to the curing of any such Event of Default to the extent any
right to cure is given in this Agreement.
2.16.7(e) Usury Savings Provision. It is the intention of the parties
that all charges under or in connection with this Agreement and the Obligations,
however denominated, and including (without limitation) all interest, commitment
fees, late charges and loan charges, shall be limited to the Maximum Lawful
Amount. Such charges hereunder shall be characterized and all provisions of the
Credit Documents shall be construed as to uphold the validity of charges
provided for therein. If for any reason whatsoever, however, any charges paid or
contracted to be paid in respect of the Swingline Loans shall exceed the Maximum
Lawful Amount, then, ipso facto the obligation to pay such interest and/or other
charges shall be reduced to the Maximum Lawful Amount in effect from time to
time, and any amounts collected by Lender that exceed the Maximum Lawful Amount
shall be applied to the reduction of the principal balance of the Swingline
Loans and/or refunded to Borrowers so that at no time shall the interest or loan
charges paid or payable in respect of the Swingline Loans exceed the Maximum
Lawful Amount. This provision shall control every other provision herein and in
any and all other agreements and instruments now existing or hereafter arising
between Borrowers and the Swingline Lender with respect to the Swingline Loans.
2.16.8 Repayment of Principal. All remaining principal, interest and
expenses outstanding under the Swingline Loans shall become due in full on the
Maturity Date or the earlier acceleration of the Committed Loans in accordance
with the terms of this Agreement. Borrowers may at any time prepay any
outstanding Swingline Loans in whole or in part without premium or penalty;
provided, that any such prepayment shall be in a minimum principal amount of
Fifty Thousand and No/100 Dollars ($50,000.00).
2.16.9 Procedures for Conversion to Committed Loans. At any time, upon
written notice given by the Agent, the Agent may, in its discretion, and without
Borrowers' consent, cause an advance to be made under the Committed Loans
sufficient to repay the outstanding Swingline Loans, even if an Event of Default
is then outstanding.
2.16.10 Procedures Among Lenders Upon Event of Default. Upon the
occurrence of an Event of Default, Lenders shall acquire participation interests
in the outstanding Swingline Loans as necessary to cause each Lender to own a
Pro Rata interest in the outstanding Swingline Loans, pursuant to such
documentation as Agent may deem necessary. The obligation of each Lender to
acquire such a participation interest shall be unconditional and, without
limiting the foregoing, shall remain in effect irrespective of (i) the
occurrence of any Event of Default or Unmatured Default, (ii) the financial
condition of Borrowers, the Agent, the Swingline Lender or any other Lender or
(iii) the termination or cancellation of the Commitments (provided that such
Swingline Loan was made prior to the date of such termination or cancellation).
The Swingline Loans shall thereafter be administered by Lenders and Agent as
though the Swingline Loans were amounts outstanding under the Committed Loans.
Additionally, to this end, upon the occurrence and continuation of an Event of
Default, Agent may, in its discretion, and without Borrowers' consent, cause an
advance to be made under the Committed Loans sufficient to repay the outstanding
Swingline Loans, even if an Event of Default is then outstanding.
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2.17 Reduction of Commitments.
2.17.1 Voluntary Reduction. At any time and from time to time after the
Closing Date, upon not less than one (1) Business Day's prior written notice to
the Agent, the Borrowers may terminate in whole or reduce in part the unutilized
portion of the Commitments that are in excess of all outstanding Swingline Loans
and the stated amount of all Letter of Credit Liabilities, provided that any
such partial reduction shall be in an aggregate amount of not less than
$1,000,000 or, if greater, an integral multiple thereof. The amount of any
termination or reduction made under this subsection 2.17.1 may not thereafter be
reinstated
2.17.2 Mandatory Reduction. The Commitments shall, on each date upon
which a prepayment of the Loans is required under subsections 2.10.2, 2.10.3 or
Section 5.20, be automatically and permanently reduced by an amount equal to the
amount of such required prepayment.
2.17.3 Ratable Reduction. Each reduction of the Commitments pursuant to
this Section 2.17 shall be applied first to the reduction and termination of the
Peak Usage Tranche and then ratably among the Lenders according to their
respective Commitments.
2.18 Withholding Tax Exemption. Each Lender that is not incorporated or
organized under the laws of the United States of America, or a state thereof,
shall, on or before the date such Lender becomes a party to this Agreement,
deliver to each of BAM and the Agent two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224, certifying in either case that such
Lender is entitled to receive payments under this Agreement and such Lender's
Note without deduction or withholding of any United States federal income taxes.
Each Lender that so delivers a Form 1001 or 4224 further undertakes to deliver
to each of BAM and the Agent two additional copies of such form (or a successor
form) on or before the date that such form expires (currently, three successive
calendar years for Form 1001 and one calendar year for Form 4224), becomes
obsolete or otherwise is required to be resubmitted as a condition to obtaining
an exemption from a required withholding or deduction of United States federal
income tax or after the occurrence of any event requiring a change in the most
recent forms so delivered by it, and such amendments thereto or extensions or
renewals thereof as may be reasonably requested by BAM or the Agent, in each
case certifying that such Lender is entitled to receive payments under this
Agreement and such Lender's Note without deduction or withholding of any United
States federal income taxes, unless an event (including without limitation any
change in treaty, Law or regulation) 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 Lender from duly
completing and delivering any such form with respect to it and such Lender
promptly advises BAM and the Agent that it is not capable of receiving payments
without any deduction or withholding of United States federal income tax.
III. CONDITIONS PRECEDENT
3.1 Conditions to Initial Advance. Lenders shall not be obligated to
make their initial Loans pursuant to this Agreement unless and until Borrowers
satisfy the following conditions:
3.1.1 Credit Documents. Borrowers shall have delivered to Agent the
following documents, fully executed and in form and substance acceptable to
Agent:
3.1.1(a) Credit Agreement. This Agreement.
3.1.1(b) Notes. The Notes made by Borrowers payable to the order of the
respective Lenders in the maximum principal amounts of the Lenders' respective
Revolving Credit Commitments and the Swingline Note.
3.1.1(c) Charters. Certified copies of the Borrowers' corporate
charters and all amendments thereto.
3.1.1(d) Bylaws. Certified copies of Bylaws for the Borrowers.
3.1.1(e) Certificates of Good Standing. Certificates of good standing
or existence, as applicable, issued as to the Consolidated Entities by the
Secretaries of State for the states of their domicile.
27
3.1.1(f) Foreign Qualification. Certificates of Qualification issued by
the Secretaries of State for each state in which a Consolidated Entity is
required to qualify as a foreign corporation.
3.1.1(g) Resolutions. Certified copies of Resolutions authorizing the
execution of all applicable Credit Documents on behalf of Borrowers.
3.1.1(h) Opinions of Borrowers' Counsel. Opinions of counsel to the
Consolidated Entities addressed to Agent and Lenders, addressing matters
reasonably required by Lenders, Agent and their counsel.
3.1.1(i) UCC Searches. UCC search reports on Borrowers from such
jurisdictions and filing offices as Lenders and Agent may require.
3.1.1(j) Closing Statement and Funding of Expenses. Loan Closing
Statement describing expenses and fees due in connection with the closing of the
Loans and payment thereof in immediately available funds.
3.1.1(k) Other Documents. Such other documents as Lenders or Agent may
reasonably require.
3.1.1(l) Completion of Exhibits and Schedules. The completion of all
exhibits and schedules to this Agreement, which shall be satisfactory to Agent,
in its sole discretion.
3.1.2 Additional Conditions. Borrowers shall have satisfied the
following additional conditions, to Lenders' and Agent's satisfaction:
3.1.2(a) Warranties. All warranties made in the Credit Documents must
be true in all material respects and shall be true in all material respects
taking into account the funding of the requested Loan.
3.1.2(b) Covenants. All covenants made in the Credit Documents must
have been complied with and shall have been complied with taking into account
the funding of the requested Loan.
3.1.2(c) Absence of Default. No Event of Default or Unmatured Default
shall exist under this Agreement.
3.1.2(d) No Adverse Change. There must be no Material Adverse Change
since February 2, 2002.
3.1.2(e) Ownership Structure. Lenders' satisfaction upon a review of
BAM's present corporate structure as set forth in Schedule 3.1.2(e) hereof.
3.2 Conditions to Subsequent Loans. Lenders shall not be obligated to
make any Loan unless all of the following conditions are satisfied as of the
time of the request and of funding:
3.2.1 Conditions to Initial Advance. All of the conditions in Section
3.1 hereof must have been satisfied.
3.2.2 Warranties. All warranties made in the Credit Documents must be
true in all material respects and shall be true in all material respects taking
into account the funding of the requested Loan.
3.2.3 Covenants. All covenants made in the Credit Documents must have
been complied with and shall have been complied with taking into account the
funding of the requested Loan.
3.2.4 Absence of Default. No Event of Default or Unmatured Default
shall exist under this Agreement.
3.3 Participating Entity. The Agent shall also have received on or
before any date after the Closing Date on which a person becomes a Participating
Entity (i) a copy of resolutions of the Board of Directors and, if necessary,
the shareholders, partners or members of such person certified as in full force
and effect on the date thereof by the Secretary or Assistant Secretary of such
person, authorizing such person's execution, delivery and performance of, the
Credit Documents and all other agreements and instruments that this Agreement
requires to be
28
executed, delivered and performed by such person; (ii) a copy of the
organizational documents of such person, certified as true and correct on and as
of the date on which Credit Documents are executed and delivered by such person;
(iii) certificates of good standing with respect to such person from the
appropriate Governmental Authorities in the jurisdiction under the Laws of which
such person is incorporated or formed; (iv) an opinion of counsel to such person
consistent with the form of the opinions of counsel to the Borrowers previously
delivered (with such changes therein as are appropriate in the circumstances) as
to the execution and delivery by such person of the Credit Documents and other
matters related thereto; (v) fully executed copies of all Credit Documents that
this Agreement requires to be executed or delivered (or both) by such person
(including a fully executed Assumption Agreement); (vi) UCC search reports on
such person from such jurisdictions and filing offices as Lenders and Agent may
require; and (vii) such additional supporting documents as the Agent, its
counsel or the Required Lenders may reasonably request.
IV. REPRESENTATIONS AND WARRANTIES
Each of the Borrowers represents and warrants to Lenders and Agent that:
4.1 Organization Powers, Existence, etc. (a) Each Consolidated Entity
is duly organized or formed, validly existing and in good standing under the
laws of the state in which it is incorporated or formed, (b) each Consolidated
Entity has the power and authority to own its Properties and assets and to carry
on its business as now being conducted, (c) each Consolidated Entity has the
power to execute, deliver and perform the Credit Documents to which it is a
party, (d) each Consolidated Entity is duly qualified to do business in each
state with respect to which the failure to be so qualified would have a Material
Adverse Effect and (e) except as set forth in Schedule 4.1 hereto, has not done
business under any other name, trade name or otherwise within the five years
immediately preceding the Closing Date.
4.2 Authorization of Borrowing, etc. The execution, delivery and
performance of the Credit Documents (a) have been duly authorized by all
requisite action and (b) will not violate any requirements of a Governmental
Authority, the certificate of incorporation or bylaws of any Consolidated
Entity, or any indenture, agreement or other instrument to which any
Consolidated Entity is a party, or by which any Consolidated Entity or any of
their Properties are bound, or be in conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under, any such
indenture, agreement or other instrument, or result in a Material Adverse
Change.
4.3 Liabilities. BAM has furnished to the Agent and the Lenders a copy
of the audited consolidated balance sheet of the Consolidated Entities dated as
of February 2, 2002 and a statement of changes in shareholders' equity and the
related statements of income and cash flow as of the fiscal year ended February
2, 2002. Such financial statements were prepared in conformity with GAAP
consistently applied throughout the period involved, are in accordance with the
books and records of the Consolidated Entities, are correct and complete and
present fairly the financial condition of the Consolidated Entities as of the
date of such financial statements, and, since the date of such financial
statements, no Material Adverse Change in the financial condition, business or
operations of any of the Consolidated Entities has occurred. None of the
Consolidated Entities has any Liabilities, Guaranteed Obligations or other
obligations or liabilities, direct or contingent, that are material in amount
other than the Liabilities reflected in such balance sheet and the notes
thereto.
4.4 Taxes. Each Consolidated Entity has filed or caused to be filed all
federal, state and local Tax returns that are required to be filed, and has paid
all Taxes as shown on said returns or on any assessment received by such
Consolidated Entity to the extent that such Taxes have become due. The Borrowers
have reserves which are believed by the officers of the Borrowers to be adequate
for the payment of additional Taxes for years which have not been audited by the
respective Tax authorities.
4.5 Litigation. There are no actions, suits or proceedings pending or,
to the Best of Borrowers' Knowledge, threatened against or affecting any
Consolidated Entity, by or before any Governmental Authority that involve any of
the transactions contemplated in this Agreement or the possibility of any
judgment or liability that may result in a Material Adverse Change; and no
Consolidated Entity is in default with respect to any material Governmental
Requirement which default could have a Material Adverse Effect.
29
4.6 Agreements. No Consolidated Entity is a party to any agreement or
instrument, or subject to any charter, partnership agreement or other corporate
or partnership restriction, that materially and adversely affects its business,
Properties or assets, operations or condition, financial or otherwise, or is in
default in the performance, observance or fulfillment of any of the obligations
contained in any agreement or instrument to which it is a party, which default
could have a Material Adverse Effect.
4.7 Use of Proceeds. None of the Borrowers intends to use any part of
the proceeds of the Loans for the purpose of purchasing or carrying any Margin
Stock or retiring any debt incurred to purchase or carry any Margin Stock or for
any other purpose that is not expressly authorized by this Agreement.
4.8 ERISA.
4.8.1 Prohibited Transactions. Provided each of the Lenders is entering
into the transactions herein contemplated for its own account and not in its
capacity as trustee or other fiduciary with respect to any Plan, the execution
and delivery of this Agreement and the issuance and delivery of the Notes as
contemplated hereby will not involve any prohibited transaction within the
meaning of ERISA or Section 4975 of the Internal Revenue Code, as amended.
4.8.2 Compliance. Based on ERISA and the regulations and published
interpretations thereunder, it is in compliance in all material respects with
the applicable provisions of ERISA.
4.8.3 Reportable Events. No "Reportable Event," as defined in Section
4043(b) of Title IV of ERISA, has occurred with respect to any plan maintained
by it.
4.8.4 Liabilities. No Consolidated Entity is currently or will become
subject to any liability (other than routine Plan expenses or contributions, if
timely paid), Tax or penalty whatsoever to any person whomsoever, which
liability, Tax or penalty is directly or indirectly related to any Plan
including, but not limited to, any penalty or liability arising under Title I or
Title IV of ERISA, any tax or penalty resulting from a loss of deduction under
Sections 404 or 419 of the Code, or any tax or penalty under Chapter 43 of the
Code, except such liabilities, taxes, or penalties (when taken as a whole) as
will not have a Material Adverse Effect on the Consolidated Entities, or upon
their financial condition, assets, business, operations, liabilities or
prospects; and
4.8.5 Funding. BAM and each ERISA Affiliate has made full and timely
payment of all amounts (i) required to be contributed under the terms of each
Plan and applicable Law and (ii) required to be paid as expenses of each Plan.
No Plan would have an "amount of unfunded benefit liabilities" (as defined in
Section 4001(a)(18) of ERISA) if such Plan were terminated as of the date on
which this representation and warranty is made.
4.9 Subsidiaries. BAM has no Subsidiaries other than AWBC, AIS,
▇▇▇.▇▇▇, NI and FaithPoint and each Participating Entity. AWBC, AIS, ▇▇▇.▇▇▇,
NI, FaithPoint, and each Participating Entity has no direct or indirect equity
ownership in any other person, except for the commitment to invest in the
Popular Group in the amount of $250,000. BAM's ownership interest in AWBC, AIS,
and any applicable Participating Entity and AIS's ownership interest in each of
▇▇▇.▇▇▇, NI and FaithPoint and any applicable Participating Entity is free and
clear of all Encumbrances, warrants, options, rights to purchase and other
interests of any person. All capital stock of AWBC, AIS, ▇▇▇.▇▇▇, NI and
FaithPoint and each Participating Entity has been duly authorized and validly
issued and is fully paid and non-assessable.
4.10 Principal Place of Business. The principal place of business and
chief executive office of the Borrowers are at its address shown in Section 8.1
and will not be changed from such address unless, not less than 10 days prior to
such change, the Borrowers shall have notified the Agent of the proposed change,
and in no event will any Borrower's (other than NI's) principal place of
business or chief executive office be located outside the State of Alabama.
4.11 Environmental Laws.
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4.11.1 Compliance. To the Best of Borrowers' Knowledge, all Properties
owned or used by the Borrowers, while under the custody, care and control of the
Borrowers, have been maintained in compliance in all material respects with all
Environmental Laws.
4.11.2 Notices. The Borrowers have not received any written
notification from any Governmental Authority with respect to current, existing
violations of any Environmental Laws, or pursuant to any of their respective
implementing regulations or state analogues to such laws or regulations.
4.11.3 Release. There has not been, at any location owned or used by
the Borrowers, any "Release" by the Borrowers, or anyone within the Borrowers'
control, or to the Best of Borrowers' Knowledge, any other person, of any
Hazardous Substances.
4.11.4 Transportation. To the Best of Borrowers' Knowledge, the
Borrowers have not sent or arranged for the transportation or disposal of
Hazardous Substances or wastes to a site which, pursuant to any Environmental
Law (i) has been placed, or is proposed (by the Environmental Protection Agency
or relevant state authority) to be placed, on the "National Priorities List" of
hazardous waste sites or its state equivalent, or (ii) is subject to a claim, an
administrative order or other request to take "removal" or "remedial" action (in
each case as defined in CERCLA) by any person.
4.11.5 UST's. The Borrowers have not used and do not use storage tanks
located on any Property owned or presently leased by the Borrowers, except for
the past use of an underground storage tank located at ▇▇▇▇▇▇ Drive and ▇▇▇▇▇
Road, Florence, Alabama, which tank has been removed and all soils tested and
passed for compliance with Environmental Laws.
4.11.6 Locations. All references to Property or locations "used" by
Borrowers shall mean, in the case of BAM's retail store locations, only that
portion of any Property or location within the exclusive control of BAM, and
shall not refer to any area used by BAM in common with others but not subject to
BAM's exclusive control.
4.12 Investment Company Act. No Consolidated Entity is an "investment
company" under the Investment Company Act of 1940, as amended.
4.13 Full Disclosure of Material Facts. Borrowers have fully advised
Lenders of all matters involving the financial condition, business, operations
and Properties of the Consolidated Entities that would be reasonably expected to
have a Material Adverse Effect. No information, exhibit, or report furnished or
to be furnished by Borrowers to Lenders in connection with this Agreement
contains, as of the date thereof, any misrepresentation of fact or failed or
will fail to state any material fact, the omission of which would render the
statements therein materially false or misleading.
4.14 Licenses. All material licenses, permits, accreditations and
approvals required by all Governmental Authorities necessary in order for each
retail store location operated by any of the Borrowers to be operated for its
intended purpose have been obtained and are in full force and effect. In
addition, the Consolidated Entities own all other licenses, permits, franchises,
registrations, patents, copyrights, trademarks, trade names or service marks, or
the rights to use the foregoing, that are necessary for the continued operation
of their business except for such licenses, permits, franchises, registrations,
patents, copyrights, trademarks, trade names or service marks, which, if not
held or owned, could not have a Material Adverse Effect.
4.15 Title to Properties. Each of the Borrowers has good and marketable
title to all its Properties and assets reflected on the balance sheet referred
to in Section 4.3 except for those matters shown on such balance sheet and
except for such Properties and assets as have been disposed of since the date of
said balance sheet as no longer used or useful in the conduct of its business or
as have been disposed of in the ordinary course of the business. All such
Properties and assets are free and clear of all Encumbrances, except Permitted
Encumbrances.
4.16 Enforceability. This Agreement and each of the other Credit
Documents, when duly executed and delivered by the Borrowers, as appropriate, in
accordance with the provisions of this Agreement, will constitute the legal,
valid and binding, joint and several, obligations of the Borrowers, enforceable
in accordance with their
31
respective terms, subject to the effect of bankruptcy, insolvency,
reorganization, receivership, moratorium and similar laws affecting the rights
and remedies of creditors generally.
4.17 Consents, Registrations, Approvals, etc. No registration with or
consent or approval of, or other action by, any Governmental Authority is
required for the execution, delivery and performance of this Agreement or the
other Credit Documents, or the borrowings under this Agreement, by the Borrowers
or any of them.
4.18 Solvency. Each of the Borrowers is Solvent, and none of the
Borrowers will, as a result of the transactions provided for herein (i) become
not Solvent, (ii) be left with unreasonably small capital, (iii) incur debts
beyond its ability to pay them as they mature or (iv) have Liabilities
(including reasonable contingencies) in excess of the fair saleable value of its
assets.
4.19 No Default. No Consolidated Entity is in default in any respect
that affects its business, Properties, operations, or condition, financial or
otherwise, under any indenture, mortgage, deed of trust, obligation to equity
holders, credit agreement, note, agreement, lease, sale agreement or other
instrument to which any Consolidated Entity is a party or by which its
Properties are bound, which default could have a Material Adverse Effect. To the
Best of Borrowers' Knowledge, no other party to any contract with any
Consolidated Entity under which a default could have a Material Adverse Effect
is in default or breach thereof and no circumstances exist which, with the
giving of notice and/or the passing of time would constitute such default or
breach. No Event of Default or Unmatured Default exists under this Agreement.
4.20 Compliance with Laws. No Consolidated Entity is in violation of
any Law to which it, its business or any of its Properties are subject, the
violation of which would likely have a Material Adverse Effect. Each
Consolidated Entity has obtained all licenses, permits, franchises, or other
governmental authorizations necessary to the ownership of its Properties or to
the conduct of its business, except for those which, if not obtained, could not
have a Material Adverse Effect. All such required material licenses are in full
force and effect on the date hereof and have not been revoked or suspended or
otherwise limited.
4.21 Accuracy of Projections. With respect to all business plans and
other forecasts and projections furnished by or on behalf of Borrowers and made
available to Lenders relating to the financial condition, business, operations
or Properties of the Consolidated Entities, all facts stated as such therein
were true and complete in all material respects as of the time made and all
estimates and assumptions were made in good faith and believed to be reasonable
at the time made. As of the Closing Date, nothing has come to the attention of
Borrowers that has changed its assessment of any such matters, except for
changes that could not have a Material Adverse Effect.
4.22 Labor Matters. No Consolidated Entity is subject to any collective
bargaining agreements or any decrees or orders requiring them to recognize, deal
with or employ any Person. No demand for collective bargaining has been asserted
against any Consolidated Entity by any union or organization. No Consolidated
Entity has experienced any strike, labor dispute, slowdown or work stoppage due
to labor dispute and, to the Best of Borrowers' Knowledge, there is no such
strike, dispute, slowdown or work stoppage threatened against any Consolidated
Entity that could have a Material Adverse Effect. All Consolidated Entities are
in compliance in all material respects with the Fair Labor Standards Act of
1938, as amended.
V. COVENANTS
Each of the Borrowers covenants that, during the term of this Agreement
(and thereafter where expressly stated herein):
5.1 Existence, Properties, etc. Each of the Borrowers shall, and (to
the extent of its right to do so) shall cause each other Consolidated Entity to
(a) do or cause to be done all things necessary to preserve and keep in full
force and effect its existence, rights and franchises and comply with all Laws
applicable to it and (b) at all times maintain, preserve and protect all
franchises and trade names and preserve all of its Property used or useful in
the conduct of its business and keep the same in good repair, working order and
condition, and from time to time make, or cause to be made, all needful and
proper repairs, renewals and replacements, betterments and improvements
32
thereto, so that the business carried on in connection therewith may be properly
and advantageously conducted at all times; and at all times keep its insurable
Properties adequately insured and maintain (i) insurance on its Properties to
such extent and against such risks, including fire, as is customary with
companies in the same or a similar business, (ii) necessary workmen's
compensation insurance and (iii) such other insurance (including liability
insurance) as may be required by Law or as may otherwise be customarily
maintained by companies in the same or a similar business.
5.2 Payment of Obligations, Taxes, etc. Each of the Borrowers shall,
and (to the extent of its right to do so) shall cause each Consolidated Entity
to, (a) pay its indebtedness and obligations in accordance with normal terms and
(b) pay and discharge or cause to be paid and discharged promptly all taxes,
assessments and other charges or levies of Governmental Authorities imposed upon
it or upon its income and profits or upon any of its Properties before the same
shall become in default, as well as all lawful claims for labor, materials and
supplies or otherwise, which, if unpaid, might become a Encumbrance upon such
Properties or any part thereof; provided, however, that the Borrowers and the
other Consolidated Entities shall not be required to pay and discharge or cause
to be paid and discharged any such indebtedness, obligation, tax, assessment,
charge, levy or claim so long as the validity thereof shall be duly pursued and
contested in good faith by appropriate proceedings and the Borrowers and the
Consolidated Entities shall maintain adequate reserves for such taxes,
indebtedness, obligations, assessments, charges, levies or claims during such
proceedings.
5.3 Financial Statements, Reports, etc. BAM shall deliver or cause to
be delivered to the Agent and each Lender:
5.3.1 Quarterly Financial Reports. Not later than 50 days after the end
of each first, second and third fiscal quarter, a copy of BAM's 10-Q as filed
with the Securities and Exchange Commission or if such filing is no longer
required, a balance sheet and a statement of revenues and expenses of BAM and
its Consolidated Entities on a consolidated basis and a statement of cash flow
of BAM and its Consolidated Entities on a consolidated basis for such fiscal
quarter and for the period beginning on the first day of the fiscal year and
ending on the last day of such fiscal quarter (in sufficient detail to indicate
the Borrowers' and each Consolidated Entity's compliance with the financial
covenants set forth in this Article), together with statements in comparative
form for the corresponding periods in the preceding fiscal year, and certified
by the president or chief financial officer of BAM; each certificate provided
pursuant to this clause (1) shall state that, except as disclosed in such
certificate (a) on the date of such certificate the representations and
warranties set forth in this Agreement and all the other Credit Documents are
true and correct in all material respects on and as of such date with the same
effect as though such representations and warranties had been made on such date,
and (b) no Event of Default or Unmatured Default has occurred and is continuing
as of such date or, if such certificate discloses that an Event of Default or
Unmatured Default has occurred and is continuing as of such date, such
certificate shall describe such Event of Default or Unmatured Default in
reasonable detail and state what action, if any, the Borrowers are taking or
propose to take with respect thereto.
5.3.2 Annual Financial Reports. Not later than 100 days after the end
of each fiscal year, a copy of BAM's 10-K as filed with the Securities and
Exchange Commission or if such filing is no longer required, financial
statements (including a balance sheet, a statement of revenues and expenses, a
statement of changes in shareholders' equity and a statement of cash flow) of
BAM and its Consolidated Entities on a consolidated and on a consolidating basis
for such fiscal year (in sufficient detail to indicate BAM's and each
Consolidated Entity's compliance with the financial covenants set forth in this
Article ), together with statements in comparative form for the preceding fiscal
year, and accompanied by an opinion of certified public accountants acceptable
to the Required Lenders, which opinion shall state in effect that such financial
statements (A) were audited using generally accepted auditing standards, (B)
were prepared in accordance with GAAP applied on a consistent basis, and (C)
present fairly the financial condition and results of operations of BAM and its
Consolidated Entities for the periods covered.
5.3.3 Compliance Certificate. Together with the financial statements
required by Sections 5.3.1 and 5.3.2 above a compliance certificate duly
executed by the president or chief financial officer of BAM in the form of
Exhibit B attached hereto ("Compliance Certificate").
33
5.3.4 Other Reports. Promptly upon receipt thereof, copies of all
reports, management letters and other documents submitted to the Borrowers or
any Consolidated Entity by independent accountants in connection with any annual
or interim audit of the books of the Borrowers or any Consolidated Entity made
by such accountants.
5.3.5 ERISA Events. Promptly after any Borrower knows or has reason to
know of the occurrence of any "reportable event" under Section 4043 of ERISA
applicable to any Borrower or other ERISA Affiliate, a certificate of the
president or chief financial officer of BAM setting forth the details as to such
"reportable event" and the action that such Borrower or other ERISA Affiliate
has taken or will take with respect thereto, and promptly after the filing or
receiving thereof, copies of all reports and notices that any Borrower or other
ERISA Affiliate files under ERISA with the Internal Revenue Service or the PBGC
or the United States Department of Labor.
5.3.6 Change in Accounting Policies. BAM shall promptly notify Agent in
writing upon any material change in accounting policies or financial reporting
practices on the part of any Consolidated Entity.
5.3.7 Additional Information. As soon as practicable, such other
information regarding the business affairs, financial condition or operations of
BAM or its Consolidated Entities as the Agent or the Required Lenders shall
reasonably request from time to time or at any time.
The Lenders shall have no obligation to make Loans or issue Letters of
Credit at any time at which the Borrowers or any of them is delinquent in the
preparation and delivery of any of the items described above, whether or not
such delinquency constitutes an Event of Default.
5.4 Litigation Notice. Each of the Borrowers shall, promptly after the
same shall have become known to any officer of such Borrower, notify the Agent
in writing of any action, suit or proceeding at law or in equity or by or before
any Governmental Authority that, if adversely determined, might impair the
ability of such Borrower or any other Consolidated Entity to perform its
obligations under this Agreement or any other Credit Document or might have a
Material Adverse Effect.
5.5 Default Notice. Each of the Borrowers shall promptly give notice in
writing to the Agent of the occurrence of (a) any Event of Default or Unmatured
Default, and (b) any event of default or any event which upon notice or lapse of
time or both would constitute such an event of default under any other document
or agreement to which the Borrowers or any other Consolidated Entity is a party
with entities other than the Lenders, which default would have a Material
Adverse Effect.
5.6 Further Assurances. Each of the Borrowers shall at its cost and
expense, upon the request of the Agent, duly execute and deliver, or cause to be
duly executed and delivered, to the Agent such further instruments and do and
cause to be done such further acts as may be reasonably necessary or proper in
the opinion of the Agent or its counsel to carry out more effectively the
provisions and purposes of the Credit Documents.
5.7 Insurance. Each Consolidated Entity shall at all times maintain in
force, and pay all premiums and costs related to, insurance coverages comparable
to the coverages maintained by similar businesses of comparable size.
5.8 Covenants Regarding Financial Condition. Except as otherwise
expressly provided in this Section 5.8, the Borrowers shall also cause and
require each of the Consolidated Entities, jointly and severally and on a
consolidated basis to observe and perform each of the covenants and agreements
of this section to be observed and performed by the Borrowers or any of them,
whether or not a specific reference is made to the Consolidated Entities in each
such covenant.
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The Borrowers, jointly and severally, covenant and agree that:
5.8.1 Fixed Charge Coverage Ratio. The Fixed Charge Coverage Ratio for
the Consolidated Entities on a consolidated basis for the immediately preceding
four fiscal quarters as of any date of determination shall not be less than 1.5
to 1.0.
5.8.2 Leverage Ratio. The Leverage Ratio for the Consolidated Entities
on a consolidated basis as of the end of the Consolidated Entities' (i) first
three fiscal quarters of each fiscal year shall not be greater than 4.0 to 1.0
and (ii) fiscal year shall not be greater than 3.25 to 1.0. Leverage Ratio means
the ratio of (A) the sum of (x) Funded Debt as of the date of determination plus
(y) the product of four times the Operating Lease Payments for the four fiscal
quarter period ending as of the date of determination to (B) EBITDAR for the
four fiscal quarter period ending as of the date of determination.
5.8.3 Minimum Shareholders' Equity. Shareholders' Equity for the
Consolidated Entities on a consolidated basis shall not on any date be less than
$104,018,000.00, plus (i) 50% of Consolidated Net Income (if positive and with
no reduction if negative), for each fiscal quarter (beginning with the fiscal
quarter ending on or about April 30, 2002 and each fiscal quarter thereafter)
and (ii) 100% of the Net Cash Proceeds from any Equity Issuance.
5.8.4 Investments and Loans. The Consolidated Entities on a
consolidated basis will not, directly or indirectly, purchase or otherwise
acquire any stock, security, obligation or evidence of indebtedness of, make any
capital contribution to, own any equity interest in, or make any loan or advance
to, any other person; provided, however, that it may acquire and continue to
hold (A) all stock of and own partnership interests in the persons that
constitute Consolidated Entities; (B) Permitted Investments; and (C) Permitted
Acquisitions.
5.8.5 Disposition of Assets. The Consolidated Entities on a
consolidated basis will not, at any time sell, lease, abandon, or otherwise
dispose of any assets (including the disposition of Net Cash Proceeds from any
insurance or condemnation proceeding in respect of such assets) without the
prior written consent of the Required Lenders other than (i) assets including,
but not limited to, past due account receivables, disposed of in the ordinary
course of business, (ii) assets sold or leased by the Borrowers or any of their
Subsidiaries to the Borrowers or any of their Subsidiaries (other than any
Subsidiaries that are not a Participating Entity), and (iii) assets sold or
otherwise disposed of by the Borrowers or their Subsidiaries the Net Cash
Proceeds of which do not exceed $5,000,000.00 in any fiscal year; provided,
however, that the Borrowers may, and may permit any of their Subsidiaries to,
(1) sell or otherwise dispose of their assets if (A) the Net Cash Proceeds of
such asset dispositions do not exceed $10,000,000 in the aggregate in any fiscal
year and (B) such Net Cash Proceeds are re-invested within 365 days of such
asset disposition in assets related to the business of the Borrowers and (2)
re-invest Net Cash Proceeds of any insurance or condemnation proceeding in
respect of any assets if such Net Cash Proceeds are re-invested in assets
related to the business of the Borrowers within 365 days of receipt.
5.8.6 [Intentionally Deleted].
5.8.7 Encumbrances. Borrowers will not, and will not permit any
Consolidated Entity, to incur, create, assume or permit to exist any Encumbrance
upon any of its accounts receivable, contract rights, chattel paper, inventory,
equipment, instruments, general intangibles or other personal or real property
of any character, whether now owned or hereafter acquired, other than
Encumbrances that constitute Permitted Encumbrances. Borrowers shall not and
shall not allow any Consolidated Entity to undertake a commitment of any kind in
favor of any Person (other than Lenders) (i) requiring that any or all of such
Consolidated Entity's Property be or remain unencumbered, or (ii) requiring that
a Consolidated Entity grant an Encumbrance (other than a Permitted Encumbrance)
in favor of any Person (other than Lenders) on a Consolidated Entity's Property
under any circumstances whatsoever.
5.8.8 Dividends and Distributions. BAM will not permit any Consolidated
Entity to be or become subject to any restrictions on the ability of such
Consolidated Entity to pay dividends or to make partnership distributions.
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5.8.9 Debts, Guaranties, and Other Obligations. No Consolidated Entity
shall incur, create, assume, or in any manner become or be liable with respect
to any Liability, except the following:
5.8.9(a) Obligations to Lenders. Any Obligations to Lenders under this
Agreement.
5.8.9(b) Endorsements. Endorsements of negotiable or similar
instruments for collection or deposit in the ordinary course of business.
5.8.9(c) Trade Liabilities. Trade payables and accruals from time to
time incurred in the ordinary course of business.
5.8.9(d) Taxes. Taxes, assessments, or other governmental charges that
are not delinquent or are being contested in good faith by appropriate action
promptly initiated and diligently conducted, if Borrowers have made the reserve
therefor required by GAAP.
5.8.9(e) Purchase Money Debt. Purchase Money Debt (including Capital
Leases) of all Consolidated Entities, in an amount not to exceed $15,000,000 in
the aggregate.
5.8.9(f) Accounting Accruals. Liabilities arising from reserves and
accruals required by GAAP that do not reflect liquidated and mature obligations
to third parties, including, but not limited to, current deferred income taxes.
5.8.9(g) Liabilities Among Borrowers. Liabilities incurred to other
Borrowers incurred in the ordinary course of business.
5.8.9(h) Other Liabilities. Any other unsecured Liabilities not to
exceed $5,000,000 in the aggregate.
5.9 Continuation of Current Business. Neither the Borrowers nor any
Consolidated Entity will engage in any business other than the business now
being conducted by it and other businesses reasonably complimentary to the sale
and distribution (retail and wholesale) of books, magazines and other
periodicals.
5.10 Cooperation; Inspection of Properties. The Borrowers shall, and
shall cause the Consolidated Entities to, permit the Lenders and their
representatives to inspect the Borrowers' and the Consolidated Entities'
Properties and assets (including all retail store locations), and to inspect,
review and audit the Borrowers' and the Consolidated Entities' books and records
from time to time and at any time, after reasonable notice and at reasonable
times. Such inspections shall be at the Lender's expense, unless an Unmatured
Default or an Event of Default exists, in which case, such inspection shall be
at the Borrowers' expense.
5.11 Use of Proceeds. The Borrowers shall use the proceeds of Loans
exclusively for general corporate purposes including (i) working capital, (ii)
capital expenditures, (iii) other lawful corporate purposes, (iv) to refinance
certain existing Debt and (v) to re-acquire outstanding capital stock of BAM up
to a total expenditure not to exceed $10,000,000.
5.12 Transactions with Affiliates. None of the Borrowers nor any other
Consolidated Entity will, directly or indirectly, enter into any lease or other
transaction with any Affiliate (other than a Borrower or another Consolidated
Entity) on terms that are less favorable to such Borrower or Consolidated Entity
entering into such lease or other transaction than those that are typical of
those obtained at the time from persons who are not Affiliates of such Borrower
or other Consolidated Entity.
5.13 Creation or Acquisition of Subsidiaries. The Borrowers may from
time to time create or acquire new Subsidiaries in accordance with this
Agreement, provided that promptly (and in any event within fifteen (15) Business
Days) after the creation or direct or indirect acquisition by any Borrower of
any such new Subsidiary, such new Subsidiary will execute and deliver to the
Agent an Assumption Agreement and all other documents necessary to cause it to
become a Participating Entity and, thus, become jointly and severally liable for
all the Obligations (subject to the limitations provided in the Assumption
Agreement).
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5.14 Name Changes. Borrowers shall give Agent at least thirty (30) days
prior written notice before any Consolidated Entity changes its name or begins
doing business under any trade name.
5.15 Compliance with Contractual Obligations. Each Consolidated Entity
will perform all of its obligations in respect of all material contracts to
which it is a party and will use its best efforts to keep, and to take all
action to keep, such contracts in full force and effect and not allow any such
contract to lapse or be terminated or any rights to renew such to be forfeited
or canceled, if such lapse, etc. could have a Material Adverse Effect; provided,
however, that any such contract may lapse or be terminated or such renewal
rights may be forfeited or canceled if in the reasonable business judgment of
the Consolidated Entities it is in their best interests to allow or cause such
lapse, termination, forfeiture or cancellation.
5.16 ERISA Information and Compliance. The Consolidated Entities shall
comply with ERISA and all other applicable Laws governing any pension or profit
sharing plan or arrangement to which they are a party. The Consolidated Entities
shall (i) upon request, provide Agent with copies of any annual report required
to be filed pursuant to ERISA with respect to any Plan or any other employee
benefit plan; (ii) notify Agent upon the occurrence of any ERISA Event or of any
additional act or condition arising in connection with any Plan which they
believe might constitute grounds for termination thereof by the PBGC or for the
appointment of a trustee to administer the Plan; and (iii) furnish to Agent,
promptly upon request, such additional information concerning any Plan or any
other employee benefit plan as Agent may request.
5.17 Assistance in Litigation. Borrowers covenant to, upon request,
cooperatively participate in any proceeding in which Borrowers are not an
adverse party to Lenders or Agent and which concerns Lenders' or Agent's rights
regarding the Obligations. Lenders and Agent covenant to, upon request,
cooperatively participate in any proceeding in which the Lenders and Agent are
not an adverse party to Borrowers and which concerns Borrowers' rights regarding
the Obligations.
5.18 Estoppel Letters. Borrowers covenant to provide Agent, within ten
(10) days after request, an estoppel letter stating (i) the balance of the
Obligations, (ii) whether Borrowers have any defenses to payment of the
Obligations, and (iii) the nature of any defenses to payment of the Obligations.
Such balance as presented for confirmation and the nonexistence of defenses
shall be presumed if Borrowers fail to respond to such a request within the
required period.
5.19 Environmental Matters.
5.19.1 Compliance With Environmental Laws. All Consolidated Entities
will (i) employ in connection with their operations, appropriate technology and
compliance procedures to maintain compliance with any applicable Environmental
Laws, the violation of which would reasonably be expected to have a Material
Adverse Effect, (ii) obtain and maintain any and all materials permits or other
permits required by applicable Environmental Laws in connection with its
operations, excepting only such permits, which could not by their absence cause
a Material Adverse Effect, and (iii) dispose of any and all Hazardous Substances
only at facilities and with carriers reasonably believed to possess valid
permits under any applicable Environmental Laws. All Consolidated Entities shall
use their best efforts to obtain all certificates required by Law to be obtained
by them from all contractors employed by them in connection with the transport
or disposal of any Hazardous Substances.
5.19.2 Remedial Work. If any investigation, site monitoring,
containment, clean-up, removal, restoration or other remedial work of any kind
or nature with respect to any Consolidated Entity's Properties is required to be
performed by them under any applicable Law or regulation, any judicial order, or
by any governmental or non-governmental entity or Person because of, or in
connection with, the current or future presence, suspected presence, release or
suspected release of a Hazardous Substance on or into the air, soil,
groundwater, surface water or soil vapor at, on, about, under, or within any of
a Consolidated Entity's Property (or any portion thereof), Borrowers shall
within 30 days after written demand for performance thereof (or such shorter
period of time as may be required under applicable Law, regulation, order or
agreement), commence and thereafter diligently prosecute to completion, all such
remedial work.
5.19.3 Indemnification of Lenders and Agent. Borrowers agree to
indemnify, defend (with counsel reasonably satisfactory to the indemnified party
or parties) and hold harmless Lenders and Agent against any loss,
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liability claim or expense, including attorneys' fees, that Lender or Agent may
incur as a result of the violation or alleged violation of any Environmental Law
by a Consolidated Entity or with respect to any other violation of Environmental
Laws with respect to any Consolidated Entity's Properties. This covenant shall
survive the repayment of the Obligations.
5.20 Sales and Leasebacks. No Consolidated Entity shall enter into any
arrangement, directly or indirectly, with any Person other than another
Consolidated Entity by which such Consolidated Entity shall sell or transfer any
of its Property, whether now owned or hereafter acquired, and by which a
Consolidated Entity shall then or thereafter rent or lease as lessee such
Property or any part thereof or other Property that it intends to use for
substantially the same purpose or purposes as the Property sold or transferred,
unless: (i) the value of the Property involved in any single such transaction or
the aggregate value of all Property involved in multiple such transactions since
the Closing Date, is less than $10,000,000, (ii) all such transactions are
entered into on commercially reasonable terms, (iii) Agent is given advance
notice thereof and (iv) in single transactions in excess of $5,000,000, Agent is
provided prior to such sale with an appraisal conducted by an appraiser
satisfactory to the Agent, obtained at the Borrowers' cost and expense,
demonstrating to the Agent's satisfaction that the sales price to be paid to
such Consolidated Entity is the fair market value of such Property. Promptly
upon (and in any event not later than two (2) Business Days after) closing of
any such permitted sale, a prepayment on the outstanding principal amount of the
Loans will be required from the Borrowers pursuant to 2.10.3, unless such
pre-payment is not required pursuant to the re-investment provisions of Section
5.8.5.
5.21 Change of Control. BAM shall not suffer or permit the occurrence
of a Change of Control, and BAM shall give the Agent prompt (and in no event
more than 2 Business Days written notice if any Person or two or more Persons
acting in concert (other than ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ or their
respective spouses and lineal descendents or trusts for the benefit of the
foregoing) enter into a contract or arrangement which upon consummation will
result in its acquisition of, or control over, securities of BAM (or other
securities convertible into such securities) representing 50% or more of the
combined voting power of all securities of BAM entitled to vote in the election
of directors.
5.22 Further Acquisitions, Mergers, Etc. Except for Permitted
Acquisitions and transactions involving only Consolidated Entities, no
Consolidated Entity shall (i) make an acquisition of any Person, (ii) enter into
any agreement to merge with or into any Person, (iii) merge, with or into or
consolidate with any Person, (iv) permit any Person to merge into any of them,
(v) otherwise reorganize or recapitalize, or (vi) sell, assign, lease, or
otherwise dispose of (whether in one transaction or in a series of transactions)
all or substantially all of their Property (whether now owned or hereafter
acquired).
5.23 Subsidiaries and Affiliates. No Consolidated Entity shall create
or acquire any direct or indirect Subsidiary or Affiliate or divest itself of
any material assets by transferring them to any existing Subsidiary or Affiliate
other than Participating Entities; nor shall Borrowers enter into any
partnership, joint venture, or similar arrangement, or otherwise make any
material change in its corporate structure, except that Borrowers may acquire
and create Participating Entities from time to time in the ordinary course of
business and Borrower may consummate its commitment to invest in The Popular
Group in the amount of Two Hundred Fifty Thousand and No/100 Dollars
($250,000.00).
5.24 Adverse Action With Respect to Plans. No Consolidated Entity shall
take any action to terminate any Plan which could reasonably result in a
material liability of a Consolidated Entity to any Person.
5.25 Constituent Document Amendments. No Consolidated Entity shall
amend its corporate charter or bylaws, articles of organization or operating
agreement, partnership agreement or other organizational documents, except as
necessary to accomplish corporate, company, partnership or other business entity
transactions that do not require Lenders' or Agent's specific approval or
transactions for which such approval is necessary and has been granted.
5.26 Adverse Transactions. No Consolidated Entity shall enter into any
transaction that materially and adversely affects or, to the best of its
knowledge, is likely to materially and adversely affect the Borrowers' ability
to repay the Obligations.
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5.27 Margin Securities. No Consolidated Entity shall own, purchase or
acquire (or enter into any contract to purchase or acquire) any "margin
security" as defined by any regulation of the Federal Reserve Board as now in
effect or as the same may hereafter be in effect.
5.28 Accounting Changes. Borrowers shall not change their fiscal year
or make any other significant change in consolidated or consolidating accounting
treatment and reporting practices, except as required or permitted by GAAP or
the Securities and Exchange Commission. Any change in fiscal year shall be
subject to Agent's prior written approval.
VI. EVENTS OF DEFAULT
6.1 Events of Default. Any of the following events shall be considered
an Event of Default under this Agreement:
6.1.1 Payments. Any Borrower shall default in the due payment of any
amount of the Obligations or any other amount owed to the Lenders or any of them
under or in connection with any of the Credit Documents and such default shall
continue unremedied for a period of 5 days; provided, however, that said 5 day
cure period shall not apply to payments due on the Maturity Date.
6.1.2 Immediate Covenant Defaults. Any Borrower shall default in the
observance or performance of any provision in Sections 5.3, 5.5, 5.8, 5.11,
5.12, 5.20, 5.21, 5.22, 5.23, 5.24, 5.25, 5.26 and 5.28.
6.1.3 Other Covenant Defaults. Any Borrower shall default in the
performance or observance of any provision of this Agreement, except those
otherwise specifically addressed in this Section 6.1, and shall not cure such
default within 30 days after the first to occur of (i) the date the Agent gives
written or telephonic notice of the default to BAM or (ii) the date any Borrower
otherwise has knowledge thereof.
6.1.4 Representations and Warranties. The Agent or the Required Lenders
shall determine that any statement, certification, representation or warranty
contained herein, or in any of the other Credit Documents or in any report,
financial statement, certificate or other instrument delivered to the Lenders or
the Agent by or on behalf of any Borrower, was misleading or untrue in any
material respect at the time it was made or deemed made.
6.1.5 Default on Other Debt. Default shall be made with respect to any
Debt of any Borrower or of any other Consolidated Entity when due or the
performance of any other obligation incurred in connection with any Debt of such
Borrower or other Consolidated Entity, if the effect of such default is to
accelerate the maturity of such Debt or to permit the holder thereof to cause
such Debt to become due prior to its stated maturity, or any such Debt shall not
be paid when due, if the aggregate amount of all such Debt involved exceeds
$5,000,000.
6.1.6 Voluntary Bankruptcy or Receivership Proceedings. Any Borrower or
any other Consolidated Entity shall (i) apply for or consent to the appointment
of a receiver, trustee, liquidator or other custodian of it or any of its
Properties or assets, (ii) fail or admit in writing its inability to pay its
debts generally as they become due, (iii) make a general assignment for the
benefit of creditors, (iv) suffer or permit an order for relief to be entered
against it in any proceeding under the federal Bankruptcy Code, or (v) file a
voluntary petition in bankruptcy, or a petition or an answer seeking an
arrangement with creditors or seeking to take advantage of any bankruptcy,
reorganization, insolvency, readjustment of debt, dissolution or liquidation law
or statute, or an answer admitting the material allegations of a petition filed
against it in any proceeding under any such law or statute, or if corporate or
partnership action shall be taken by any Borrower or any other Consolidated
Entity for the purpose of effecting any of the foregoing.
6.1.7 Involuntary Petitions. A petition shall be filed, without the
application, approval or consent of any Borrower or any other Consolidated
Entity, in any court of competent jurisdiction, seeking bankruptcy,
reorganization, rearrangement, dissolution or liquidation of such Borrower or
other Consolidated Entity or of all or a substantial part of the Properties or
assets of such Borrower or other Consolidated Entity, or seeking any other
relief under any law or statute of the type referred to in clause (v) of Section
6.1.6 above against such Borrower or other
39
Consolidated Entity, or the appointment of a receiver, trustee, liquidator or
other custodian of any Borrower or any other Consolidated Entity or of all or a
substantial part of the Properties or assets of such Borrower or any other
Consolidated Entity, and such petition shall not have been dismissed within 60
days after the filing thereof.
6.1.8 Other Proceedings. There shall occur the insolvency, dissolution,
liquidation or suspension of business of any Borrower or any other Consolidated
Entity or the issuance of a writ of execution, attachment or garnishment against
the assets of any Borrower or any other Consolidated Entity, and such writ of
execution, attachment or garnishment shall not be dismissed, discharged or
quashed within 30 days of issuance.
6.1.9 Material Agreement Default. Any Borrower or any other
Consolidated Entity shall default under any agreement material to the operation
of its business as conducted on the Closing Date or proposed to be conducted.
6.1.10 Judgments. Any final judgment or judgments for the payment of
money in excess of an aggregate of $500,000 shall be rendered against any
Borrower or any other Consolidated Entity and the same shall remain undischarged
for a period of 30 days during which execution shall not be effectively stayed.
6.1.11 Plan Termination Event. Any "Termination Event" with respect to
a Plan shall have occurred and, 30 days after BAM has notice thereof, (i) such
"Termination Event" shall still exist and (ii) the sum (determined as of the
date of occurrence of such "Termination Event") of the "Insufficiency" of such
Plan and the "Insufficiency" of any and all other Plans with respect to which a
"Termination Event" shall have occurred and then exist is equal to or greater
than $1,000,000.
6.1.12 Withdrawal Liability. BAM or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that it has incurred "Withdrawal
Liability" to such Multiemployer Plan in an amount which, when aggregated with
all other amounts required to be paid to Multiemployer Plans in connection with
"Withdrawal Liability" (determined as of the date of such notification), exceeds
$1,000,000 or requires payments exceeding $100,000 per annum.
6.1.13 Other ERISA Liability. BAM or any ERISA Affiliate shall have
been notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or is being terminated, within the meaning of Title IV
of ERISA, if solely as a result of such reorganization or termination the
aggregate annual contributions of BAM and its ERISA Affiliates to all
Multiemployer Plans which are then in reorganization or being terminated have
been or will be increased over the amounts contributed to such Multiemployer
Plans for the respective plan years which include the date hereof by an amount
exceeding $100,000.
6.1.14 Enforceability. This Agreement shall cease to be in full force
and effect or any Borrower or any Participating Entity shall take any action to
claim that this Agreement is not in full force and effect
6.1.15 Insolvency. Any Consolidated Entity's no longer being Solvent.
6.1.16 Change of Control. A Change of Control occurs as to any Borrower
or any Participating Entity.
6.2 Remedies. Upon the happening of any Event of Default:
6.2.1 Default Rate. Agent may declare the Obligations to thereafter
bear interest at the Default Rate.
6.2.2 Termination of Commitments. As provided elsewhere in this
Agreement, Lenders shall not be obligated to advance any additional Loans. Agent
may terminate the obligation of Lenders to advance any additional Loans or issue
any additional Letters of Credit by written notice to Borrowers, which formal
termination shall remain in effect notwithstanding any subsequent cure of the
Event of Default and whether or not the Loans are accelerated; provided,
however, that notwithstanding the above, if there shall occur an Event of
Default under Sections 6.1.6 or 6.1.7, then the obligation of the Lenders to
lend hereunder shall automatically terminate and any and all of the Obligations
shall be immediately due and payable without the necessity of any action by the
Agent or the Lenders or notice to the Agent or the Lenders.
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6.2.3 Acceleration. Agent may declare the entire principal amount of
all Obligations then outstanding, including interest accrued thereon, to be
immediately due and payable without presentment, demand, protest, notice of
protest, or dishonor or other notice of default of any kind, all of which are
hereby expressly waived.
6.2.4 Setoff. Upon the occurrence and during the continuance of any
Event of Default each Lender is hereby authorized at any time and from time to
time, without notice to the Borrowers or any of them (any such notice being
expressly waived by the Borrowers, but Lenders will use commercially reasonable
efforts to give Borrower notice of any such setoff promptly thereafter), to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by such Lender (including any branches, agencies or Affiliates of such Lender,
wherever located) to or for the credit or the account of the Borrowers or any of
them against any and all of the obligations of the Borrowers and each of them
now or hereafter existing under any of the Credit Documents, irrespective of
whether or not any demand shall have been made under the Credit Documents and
although such obligations may be unmatured. The Lenders agree promptly to notify
each affected Borrower after any such set-off and application, provided that the
failure to give such notice shall not affect the validity of such set-off and
application or impose any liability on the Lender. The rights of the Lenders
under this Section 6.2.4 are in addition to all other rights and remedies
(including other rights of set-off or pursuant to any banker's lien) that the
Lenders or any of them may have.
6.2.5 Other Remedies. Lenders and Agent may exercise any right that
they may have under any other document evidencing or securing the Obligations or
otherwise available to Lenders or Agent at law or equity.
6.2.6 Attorney-in-Fact. Borrowers hereby irrevocably appoint Agent as
Borrowers' attorney-in-fact to take any action to facilitate Agent's exercise of
remedies hereunder.
6.2.7 Letters of Credit. At the option of the Required Lenders, the
Issuing Bank and the Agent may treat all then outstanding Letters of Credit as
if drafts in the full amount available to be drawn thereunder had been properly
drawn thereunder and paid by the Issuing Bank and the Borrowers had failed or
refused to reimburse the Issuing Bank for the amount so paid within the time
permitted under this Agreement. The Borrowers shall, promptly upon demand of the
Agent, deposit in cash with the Agent an amount equal to the amount of all
Letter of Credit Liabilities then outstanding, as collateral security for the
repayment thereof, which deposit shall be held by the Agent under the provisions
of Section 8.29.
VII. AGENT
7.1 Appointment of Agent. Lenders hereby appoint Agent to act as
specified in this Article VII. Agent's duties hereunder are administrative and
ministerial in nature, and Agent's capacity is that of an independent contractor
for Lenders. Agent is not a trustee or other fiduciary for Lenders, and Agent
has no duties whatsoever to Lenders except as expressly set forth in this
Agreement.
7.2 Powers of Agent.
7.2.1 Administration of Loans. Except as otherwise provided in this
Section 7.2, Agent shall have the exclusive power and authority to (i) give all
consents and approvals, issue waivers and amendments, enforce the Credit
Documents (including, but not limited to, the power to enforce the Credit
Documents in any relevant case under the Bankruptcy Code) and otherwise take all
actions permitted of Agent under this Agreement or any other Credit Document,
(ii) give all consents and approvals, issue waivers and amendments, enforce the
Credit Documents (including, but not limited to, the power to enforce the Credit
Documents in any relevant case under the Bankruptcy Code) and otherwise take all
actions permitted of Lenders under this Agreement or any other Credit Document,
excepting only those matters that the Credit Documents specifically reserve for
the respective Lenders severally (such as the computation of LIBOR charges
unique to the circumstances of a given Lender), (iii) receive all payments,
notices and other deliveries and communications to be given Lenders or Agent
under this Agreement or any other Credit Document, and (iv) to perform such
actions as are incidental to any of the foregoing.
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7.2.2 Matters Reserved to Required Lenders. Absent the prior approval
of the Required Lenders, Agent shall not (i) waive or amend any provision of
this Agreement, (ii) approve any investments for which approval is necessary
under the definition of Permitted Investments or (iii) approve any acquisition
or merger for which approval is necessary under the definition of Permitted
Acquisitions.
7.2.3 Matters Reserved to all Lenders. Absent the prior approval of all
Lenders, Agent shall not forgive any principal included in the Obligations;
waive or amend any interest rate applicable to the Obligations; waive or amend
the Maturity Date; waive or amend the amount of any Lender's Commitment; waive
an Event of Default arising from non-payment of any principal or interest due on
the Obligations; accelerate the maturity of the Obligations; or amend the
definitions of Pro Rata Share or Required Lenders.
7.3 Duties of Agent.
7.3.1 Specific Duties of Agent: Standard of Care. Agent shall (i) remit
to each Lender, with reasonable promptness, the appropriate Pro Rata Share of
payments received or other amounts collected on account of the Obligations, (ii)
forward to Lenders, with reasonable promptness, counterparts or copies of
Borrowing Notices, financial reports and other information that may be delivered
to Agent by Borrowers pursuant to the requirements of the Credit Documents,
(iii) notify Lenders of any Unmatured Default or Event of Default known to
Agent, in accordance with Section 7.7 below, and (iv) otherwise administer the
Loans through the exercise of such of the powers granted herein as Agent deems
appropriate from time to time. Agent shall have no liability to Lenders for any
action or inaction relating to this Agreement or the other Credit Documents,
except for actual losses caused by its gross negligence or reckless or willful
misconduct.
7.3.2 Limitations on Agent's Duties. Agent shall not be obligated to
take any action hereunder or under any other Credit Document (i) if such action
would, in the opinion of Agent, be contrary to applicable Law, this Agreement or
the other Credit Documents, (ii) if it shall not first be specifically
indemnified to its satisfaction against any and all liability and expense that
may be incurred by it by reason of taking or continuing to take any such action,
(iii) if it would likely subject Agent to a tax in any jurisdiction where it is
not then subject to a tax, (iv) if it would likely require Agent to qualify to
do business in any jurisdiction where it is not then so qualified, unless Agent
receives security or indemnity satisfactory to it against any tax or other
liability in connection with such qualification or resulting from the taking of
such action in connection therewith, or (v) if it would likely subject Agent to
in personam jurisdiction in any location where it is not then so subject.
7.3.3 Agent's Right to Require Instructions in Performance of Duties.
If Agent, in its sole and absolute discretion, requests instructions from the
Required Lenders with respect to any act or action (including the failure to
act) in connection with this Agreement or any other Credit Document for which
the approval of the Required Lenders or all Lenders is not otherwise required,
Agent shall be entitled, at its option, to refrain from such action, or to
continue such inaction, unless and until Agent shall have received such
instructions, and Agent shall incur no liability by reason of so acting or
refraining from action. No Lender shall have any right of action whatsoever
against Agent as a result of Agent's acting or refraining from acting hereunder
or under any other Credit Document in accordance with the instructions of the
Required Lenders in such a case.
7.3.4 Agent's Reliance on Others in Performance of Duties. Agent shall
be entitled to rely, and shall be fully protected in relying, upon any note,
writing, resolution, notice, statement, consent, certificate, telex, teletype or
facsimile message, order or other documentary, teletransmission or telephone
message believed by it in good faith to be genuine and correct and to have been
signed, sent or made by the proper Person. Agent may consult with legal counsel
(including counsel for Borrowers), accountants and other experts selected by it
with respect to all matters pertaining to this Agreement and the other Credit
Documents and its duties hereunder and thereunder 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 such counsel (including counsel for Borrowers), accountants or
experts.
7.3.5 Sharing of Information. Except as otherwise expressly provided in
this Article VII, Agent shall have no duty or responsibility, either initially
or on a continuing basis, to provide any Lender with any credit or other
information concerning the business, prospects, operations, Properties,
financial or other condition or creditworthiness of the Consolidated Entities or
any other Person that may come into its possession, whether before
42
the making of the initial Loans or at any time or times thereafter. All notices
to be given to Borrowers by a Lender hereunder shall be concurrently given to
Agent and all other Lenders.
7.4 Indemnification of Agent. To the extent Agent is not reimbursed by
or on behalf of Borrowers, and without limiting the obligation of Borrowers to
do so, Lenders will reimburse and indemnify Agent, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including attorneys' fees and expenses and costs and expenses
in connection with the use of IntraLinks, Inc. or other similar information
transmission systems in connection with this Agreement) or disbursements of any
kind or nature whatsoever that may at any time (including at any time following
the indefeasible repayment in full of the Loans) be imposed on, incurred by or
asserted against Agent in any way relating to or arising out of this Agreement
or any other Credit Document or the transactions contemplated thereby or any
action taken or omitted by Agent under or in connection with any of the
foregoing, and in particular will reimburse Agent for out-of-pocket expenses
promptly upon demand by Agent therefor; provided, however, that no Lender shall
be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements finally
determined by a court of competent jurisdiction and not subject to any appeal or
pursuant to arbitration to have resulted from Agent's gross negligence or
reckless or willful misconduct. Agent may offset any amounts due Agent by any
Lender against obligations of Agent to that Lender.
7.5 No Representations by Agent. Each Lender acknowledges that neither
Agent nor any of its officers, directors, employees, attorneys, accountants or
agents has made any representation or warranty to it regarding the Consolidated
Entities, the Loans, or otherwise relating to this Agreement. Agent shall not be
responsible to any Lender for any recitals, statements, information,
representations or warranties herein or in any other Credit Document or in any
document, instrument, certificate or other writing delivered in connection
herewith or therewith or for the execution, effectiveness, genuineness,
validity, enforceability, perfection, priority or sufficiency of this Agreement
or any other Credit Document or the financial condition of the Consolidated
Entities or any other Person, or be required to make any inquiry concerning
either the performance or observance of any of the terms, provisions or
conditions of this Agreement or any other Credit Document, or the financial
condition of the Consolidated Entities or any other Person or the existence or
possible existence of any Unmatured Default or Event of Default.
7.6 Independent Investigations by Lenders. Each Lender acknowledges
that, independently and without reliance upon Agent or any other Lender and
based on such documents and information as it has deemed and may deem
appropriate, (i) it has made its own appraisal of and investigation into the
business, prospects, operations, Properties, financial and other condition and
creditworthiness of the Consolidated Entities in connection with its decision to
enter into this Agreement and extend credit to Borrowers hereunder, and (ii) it
will continue to make its own credit analysis, appraisals and decisions in
taking or not taking action hereunder.
7.7 Notice of Default. Agent shall not be deemed to have knowledge or
notice of the occurrence of any Unmatured Default or Event of Default, other
than any Unmatured Default or Event of Default arising out of the failure to pay
any principal, interest, fees or other amounts payable to Agent for the account
of Lenders, unless Agent has received written notice from Borrowers or a Lender
describing such Unmatured Default or Event of Default and stating that such
notice is a "notice of default." In the event that Agent receives such a notice,
Agent shall give notice thereof to Lenders as soon as reasonably practicable;
provided, however, that if any such notice has also been furnished to Lenders,
Agent shall have no obligation to notify Lenders with respect thereto. Each
Lender shall promptly give Agent such a notice upon its actual knowledge of an
Unmatured Default or an Event of Default; provided, however, that the failure of
any Lender to deliver such notice in the absence of gross negligence or reckless
or willful misconduct shall not affect its rights hereunder or under the other
Credit Documents.
7.8 Funding of Loans Pursuant to Borrowing Notices. Promptly following
receipt of notice from Agent that a Borrowing Notice has been submitted, and
provided that all conditions to funding are believed to have been satisfied,
each Lender shall transfer to a designated account with Agent that Lender's Pro
Rata Share of the requested funding. The transfer of funds shall occur within
the time required for funding under this Agreement; provided, however, no Lender
shall be obligated to fund a LIBOR Loan earlier than two (2) Business Days after
its receipt of notice of the borrowing from Agent. Should any Lender fail to
timely fund its Pro Rata Share of a requested Committed Loan, Agent may, but
shall be under no obligation whatsoever to, advance to Borrowers the defaulted
Lender's Pro Rata Share of the requested Loan. If such an advance is made, it
shall be deemed an advance
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by Agent for the account of the defaulting Lender and shall bear interest at the
rate applicable to the Loan funded by the advance, payable on demand.
7.9 Agent in its Individual Capacity. With respect to its Commitments,
and the Committed Loans made by it, Agent shall have the same rights and powers
under the Credit Documents as any other Lender or holder of a Note and may
exercise the same as though it were not performing the duties specified herein;
and the terms "Lenders," "Required Lenders," and any similar terms shall, unless
the context clearly otherwise indicates, include Agent in its individual
capacity as a Lender. Agent may accept deposits from, lend money to and
generally engage in any kind of banking, trust, financial advisory or other
business with the Consolidated Entities or any of their respective Affiliates as
if it were not performing the servicing duties specified herein, and may accept
fees and other consideration from Borrowers for services in connection with this
Agreement and otherwise without having to disclose or account for the same to
Lenders.
7.10 Holders. Agent may deem and treat the payee of any Note as the
holder thereof and Lender hereunder for all purposes hereof unless and until a
written notice of the assignment, transfer or endorsement thereof purportedly
executed by the payee, as the case may be, shall have been filed with Agent. Any
request, authority or consent of any Person that, at the time of making such
request or giving such authority or consent, is the holder of any Note according
to Agent's information, shall be conclusive and binding on any subsequent
holder, transferee, assignee or endorsee, as the case may be, of such Note or of
any Note or Notes issued in exchange therefor.
7.11 Successor Agent. Agent may resign at any time upon sixty (60)
days' prior written notice to Borrowers and Lenders; provided that any such
resignation by BofA shall also constitute its resignation as Issuing Bank and
Swingline Lender. Agent may be removed upon Agent's insolvency, liquidation or
the appointment of a receiver for Agent, by action of the Required Lenders, at
any time upon sixty (60) days' prior written notice to Borrowers and Agent. Such
resignation or removal, as the case may be, shall take effect upon the
appointment of a successor Agent as provided herein. The Required Lenders will
appoint from among Lenders a successor Agent. If no Default or Event of Default
exists, such appointment will be subject to Borrowers reasonable approval after
notice. If no successor Agent shall have been appointed within such sixty (60)
day period, Agent may appoint, after consulting with Lenders and Borrowers, a
successor agent from among Lenders, who shall serve as Agent, Issuing Bank and
Swingline Lender until such time, if any, as the Required Lenders shall have
appointed a successor Agent as provided hereinabove. Upon the written 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, Issuing Bank and Swingline Lender
and the respective terms "Agent," "Issuing Bank" and "Swingline Lender" shall
mean such successor Agent, Letter of Credit issuer and Swingline Lender, and the
retiring Agent's appointment, powers and duties as Agent shall be terminated and
the retiring Issuing Bank's and Swingline Lender's rights, powers and duties as
such shall be terminated, without any other or further act or deed on the part
of such retiring Issuing Bank or Swingline Lender or any other Lender, other
than the obligation of the successor Issuing Bank to issue letters of credit in
substitution for the Letters of Credit, if any, outstanding at the time of such
succession. After any retiring Agent's resignation as Agent, the provisions of
this Article shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent, Issuing Bank and Swingline Lender. If no
successor Agent has accepted appointment as Agent by the date which is sixty
(60) days following a retiring Agent's notice of resignation, the retiring
Agent's resignation shall nevertheless thereupon become effective and Lenders
shall perform all of the duties of Agent hereunder until such time, if any, as
the Required Lenders appoint a successor agent as provided for above.
7.12 Sharing of Payments, etc. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, set-off, counterclaim or
otherwise, obtain payment with respect to the Obligations which results in its
receiving more than its Pro Rata Share of the aggregate payments with respect to
all of the Obligations, then (a) such Lender shall be deemed to have
simultaneously purchased from the other Lenders a share in the Obligations so
that the amount of the Obligations held by each of Lenders shall continue to
equal their respective Pro Rata Shares, and (b) such other adjustments shall be
made from time to time as shall be equitable to insure that Lenders share such
payments ratably. No Lender shall exercise its banker's lien, set-off or other
right to accomplish such payment absent Agent's prior consent, not to be
unreasonably withheld.
7.13 Separate Liens on Collateral. Each Lender agrees with the other
Lenders that, with the exception of security interests in deposit accounts and
like property in the possession of a Lender as expressly provided for in
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this Agreement, it will not take or permit to exist any Encumbrance in its favor
on any Property of any of the Consolidated Entities.
7.14 Payments Between Agent and Lenders. All payments by Agent to any
Lender, and all payments by any Lender to Agent, under the terms of this
Agreement shall be made by wire transfer in immediately available funds to the
receiving party's address specified for notices in this Agreement. If any of
Lenders fail to pay when due any sum payable to Agent, then, except as otherwise
provided in Section 7.8 hereof, such sum shall bear interest until paid at the
interest rate per annum for overnight borrowing by the payee from the Federal
Reserve Bank for the period commencing on the date such payment was due and
ending on, but excluding, the date such payment is made.
7.15 Bankruptcy Provisions. Should any of the Consolidated Entities
become a party to a case under the Bankruptcy Code, each Lender shall be
entitled to file its own claim, to the extent such a filing may be necessary.
Agent shall review each claim before being filed by a Lender to assure that the
claim is filed on a basis consistent with Agent's records and Agent's legal
positions taken pursuant to this Agreement. Should any of the Consolidated
Entities become a party to a reorganization proceeding under the Bankruptcy
Code, each Lender shall be recognized as the holder of a separate claim for the
purpose of the approval or rejection of a Plan under 11 U.S.C. Section 1126, may
freely vote such claim, and the provisions of that Section shall control the
other provisions of this Agreement that otherwise require the consent of the
Required Lenders or all Lenders in certain circumstances. Agent shall continue
to administer the Loans on behalf of Lenders, as they may be amended by any
adopted Plan of Reorganization.
7.16 Procedures for Notices and Approvals. All notices given among
Lenders and Agent with respect to this Agreement or the other Credit Documents
shall be given in the manner provided in this Agreement. Additionally, should
Agent request Lenders' approval of any matter, each Lender shall respond in
writing within five (5) Business Days after the Business Day on which the
request was received. If a Lender fails to so respond, it shall be deemed to
have disapproved the action proposed by Agent.
7.17 Amendments to Article VII. No provision of this Article VII may be
amended or waived absent the prior written consent of all Lenders and Agent.
Borrowers' approval shall not be required for the amendment or waiver of any
provision of this Article VII; provided, however, Borrowers' written consent
shall be required for any amendment of this Article VII that would eliminate the
position of Agent or eliminate or restrict any right of approval specifically
granted to Borrowers in this Article VII.
VIII. GENERAL PROVISIONS
8.1 Notices. All communications relating to this Agreement or any of
the other Credit Documents shall be in writing and shall be effective when
delivered by (i) mail within 72 hours after such communication is deposited into
the mail with first class postage prepaid, addressed as specified in this
Section, (ii) overnight courier or special courier when delivered at the address
specified in this Section, or (iii) telecopier when such telecopy is transmitted
to the telecopier number specified in this Section:
If to Borrowers:
Books-A-Million, Inc.
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Hand Delivery:
Books-A-Million, Inc.
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to BofA, or Issuing Bank:
Bank of America, N.A.
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
GA1-006-13-15
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
With a Copy To:
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇, P.C.
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇/▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to Agent:
Bank of America, N.A.
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
GA1-006-13-15
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
and
Bank of America, N.A.
Attn: ▇▇▇▇▇ ▇▇▇▇
IL1-231-08-30
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
With a Copy To:
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇, P.C.
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇/▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to the other Lenders, at the address set forth on the signature
pages attached hereto. Any party may change its address for receipt of notice by
written direction to the other parties hereto.
8.2 Renewal, Extension, or Rearrangement. All provisions of this
Agreement relating to Obligations shall apply with equal force and effect to
each and all promissory notes executed hereafter which in whole or in part
represent a renewal, extension for any period, increase, or rearrangement of any
part of the Obligations originally represented by any part of such other
Obligations.
46
8.3 Application of Payments. Amounts received with respect to the
Obligations shall be applied (i) first, to any expenses due Lenders or Agent,
(ii) second, to accrued and unpaid interest under any of the Obligations, (iii)
third, to reduce the unpaid principal portion of the Obligations (other than
those arising from Hedge Agreements) in such manner as determined by Agent, and
(iv) fourth, to any Obligations arising under Hedge Agreements (apportioned pro
rata among them if more than one).
8.4 Counterparts. This Agreement may be executed in counterparts with
all signatures or by counterpart signature pages, and it shall not be necessary
that the signatures of all parties be contained on any one counterpart. Each
counterpart shall be deemed an original, but all of them together shall
constitute one and the same instrument.
8.5 Negotiated Document. This Agreement and the other Credit Documents
have been negotiated by the parties with full benefit of counsel and should not
be construed against any party as author.
8.6 Consent to Jurisdiction: Exclusive Venue. Each Borrower hereby
irrevocably consents to the jurisdiction of the United States District Court for
the Northern District of Georgia and of all Georgia state courts sitting in
▇▇▇▇▇▇ County, Georgia, for the purpose of any litigation to which Lenders or
Agent may be a party and which concerns this Agreement or the Obligations. It is
further agreed that venue for any such action shall lie exclusively with courts
sitting in ▇▇▇▇▇▇ County, Georgia unless Lenders and Agent agree to the contrary
in writing. This election applies only for the limited judicial proceedings that
may apply as set forth in the provision of this Agreement electing binding
arbitration for the resolution of disputes and does not impair the effect of
that provision in any way.
8.7 Not Partners: No Third Party Beneficiaries. The relationship of
Lenders and Borrowers is that of lenders and borrowers only, and neither is a
fiduciary, partner or joint venturer of the other for any purpose. This
Agreement has been executed for the sole benefit of Lenders, and no third party
is authorized to rely upon Lenders' rights or duties hereunder.
8.8 No Reliance on Lenders' Analysis. Borrowers acknowledge and
represent that, in connection with the Obligations, Borrowers have not relied
upon any financial projection, budget, assessment or other analysis by Lenders
or Agent upon any representation by Lenders as to the risks, benefits or
prospects of Borrowers' business activities or present or future capital needs
incidental thereto, all such considerations having been examined fully and
independently by Borrowers.
8.9 No Marshaling of Assets. Lenders and Agent may proceed against
collateral securing the Obligations and against parties liable therefor in such
order as they may elect, and neither Borrowers nor any surety or guarantor for
Borrowers nor any creditor of Borrowers shall be entitled to require Lenders or
Agent to marshal assets. The benefit of any rule of law or equity to the
contrary is hereby expressly waived.
8.10 Business Days. If any payment date under the Obligations falls on
a day that is not a Business Day, or if the last day of any notice period falls
on such a day, the payment shall be due and the notice period shall end on the
next following Business Day.
8.11 Participations and Assignments.
(a) At any time after the Closing Date each Lender may, with the prior
consent of the Borrowers (unless an Event of Default has occurred and is
continuing or the participation is to another Lender or an Affiliate of a
Lender) and the Agent, which consent shall not be unreasonably withheld, grant a
participation in such Lender's Note, Loans and interest in the Obligations and
the Credit Documents to any Person, and all communications with the Agent and
the Borrowers shall be solely with such Lender and not with any participant. The
Borrowers agree that any participant or subparticipant may exercise any and all
rights of banker's lien or set-off with respect to any Borrower, as fully as if
such participant or subparticipant had made a loan directly to such Borrower in
the amount of the participation or subparticipation given to such participant or
subparticipant in the Obligations and the Credit Documents. For purposes of this
Section 8.11 only, the Borrowers shall be deemed to be directly obligated to
each participant or subparticipant in the amount of its participating interest
in the amount of the principal of, and interest
47
on, the Obligations. Nothing contained in this section shall affect the Lenders'
right of set-off (under Section 6.2.4 or applicable Law) with respect to the
entire amount of the Obligations, notwithstanding any such participation or
subparticipation. The Lenders may divulge to any participant or subparticipant
all information, reports, financial statements, certificates and documents
obtained by the Lenders from any of the Borrowers or any other person under any
provisions of this Agreement or the other Credit Documents or otherwise.
(b) At any time after the Closing Date each Lender may, with the prior
consent of the Borrowers (unless an Event of Default has occurred and is
continuing or the assignment is to another Lender or an Affiliate of a Lender)
and the Agent, which consent shall not be unreasonably withheld, assign to one
or more banks or financial institutions all or a portion of its rights and
obligations under this Agreement (including all or a portion of the Note payable
to its order); provided, that (i) each such assignment shall be of a constant,
and not a varying, percentage of all of the assigning Lender's rights and
obligations under this Agreement, (ii) for each assignment involving the
issuance and transfer of Notes, the assigning Lender and the assignee shall
execute an Assignment and Acceptance and the Borrowers hereby consent to execute
a replacement Note or Notes to give effect to the assignment, (iii) the minimum
commitment which shall be assigned is $5,000,000 (or such lesser amount as may
remain outstanding) and (iv) such assignee shall have an office located in the
United States. Upon such execution, delivery, approval and acceptance, from and
after the effective date specified in each Assignment and Acceptance (x) the
assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder or under such Note or Notes have been assigned or
negotiated to it pursuant to such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder, as fully as if such assignee had been named
as a Lender in this Agreement, and of a holder of such Note or Notes, and (y)
the assignor shall, to the extent that rights and obligations hereunder or under
such Note or Notes have been assigned or negotiated by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its future
obligations under this Agreement. No assignee shall have the right to make any
further assignment of its rights and obligations except pursuant to this
Agreement. Any Lender that makes an assignment shall pay to the Agent a one-time
administrative fee of $3,500, which fee shall not be reimbursed by Borrowers.
(c) By executing and delivering an Assignment and Acceptance, the
Lender-assignor and the assignee thereunder confirm to and agree with each other
and the other parties hereto as follows: (i) the assignment made under such
Assignment and Acceptance is made under such Assignment and Acceptance without
recourse; (ii) such assignor makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrowers or any
other person or the performance or observance by the Borrowers or any other
person of any of its obligations under any Credit Document or any other
instrument or document furnished pursuant hereto; (iii) such assignee confirms
that it has received a copy of this Agreement, together with copies of all
financial statements delivered pursuant to this Agreement, and such other Credit
Documents and other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into such Assignment and
Acceptance; (iv) such assignee will, independently and without reliance upon the
Agent, the assignor or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement; (v) such
assignee appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement, the Note and the other
Credit Documents as are delegated to the Agent by the terms hereof and thereof,
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 Agreement are required to be performed by
it as a Lender and a holder of such Note.
(d) The Agent shall maintain at its address referred to herein a copy
of each Assignment and Acceptance delivered to and accepted by it.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender, the Agent shall give prompt notice thereof to the Borrowers.
8.12 Standard of Care: Limitation of Damages. Lenders and Agent shall
be liable to Borrowers only for matters arising from this Agreement or otherwise
related to the Obligations resulting from such Lender's or Agent's gross
negligence or reckless or willful misconduct, and liability for all other
matters is hereby waived. Lenders and Agent shall not in any event be liable to
Borrowers for special or consequential damages arising from this Agreement or
otherwise related to the Obligations.
48
8.13 Incorporation of Schedules. All Schedules and Exhibits referred to
in this Agreement are incorporated herein by this reference.
8.14 Indulgence Not Waiver. Lenders' or Agent's indulgence in the
existence of a default hereunder or any other departure from the terms of this
Agreement shall not prejudice Lenders' or Agent's rights to declare a default or
otherwise demand strict compliance with this Agreement.
8.15 Cumulative Remedies. The remedies provided Lenders and Agent in
this Agreement are not exclusive of any other remedies that may be available to
Lenders and Agent under any other document or at law or equity.
8.16 Amendment and Waiver in Writing. No provision of this Agreement
can be amended or waived, except by a statement in writing signed by the party
or parties against whom enforcement of the amendment or waiver is sought.
Waivers and amendments may be executed by Agent on behalf of Lenders, subject to
the requirements of Article VII hereof requiring the consent of some or all of
Lenders under certain circumstances.
8.17 Assignment. This Agreement shall be binding upon and inure to the
benefit of the respective successors and assigns of Borrowers and Lenders,
except that Borrowers shall not assign any rights or delegate any obligations
arising hereunder without the prior written consent of all of the Lenders. Any
attempted assignment or delegation by Borrowers without the required prior
consent shall be void.
8.18 Entire Agreement. This Agreement and the other written agreements
among Borrowers, Lenders and Agent represent the entire agreement between the
parties concerning the subject matter hereof, and all oral discussions and prior
agreements are merged herein. Provided, if there is a conflict between this
Agreement and any other document executed contemporaneously herewith with
respect to the Obligations, the provisions in this Agreement shall control.
8.19 Severability. Should any provision of this Agreement be declared
invalid or unenforceable for any reason, the remaining provisions hereof shall
remain in full effect.
8.20 Time of Essence. Time is of the essence of this Agreement, and all
dates and time periods specified herein shall be strictly observed.
8.21 Applicable Law. The validity, construction and enforcement of this
Agreement and all other documents executed with respect to the Obligations shall
be determined according to the internal laws and judicial decisions of the State
of Georgia.
8.22 Captions Not Controlling. Captions and headings have been included
in this Agreement for the convenience of the parties, and shall not be construed
as affecting the content of the respective Sections.
8.23 WAIVER OF JURY TRIAL. BORROWERS AND LENDERS EACH HEREBY WAIVES ANY
RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
(i) ARISING UNDER THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS OR (ii) IN
ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO IN RESPECT OF THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. BORROWERS
AND LENDER EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT
BORROWERS OR LENDERS MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS
AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
8.24 Facsimile Signatures. This Agreement may be executed by facsimile
signatures, and shall be effective when Agent has received telecopy
transmissions of the signature pages executed by all parties hereto;
49
provided, however, that all parties shall deliver original executed documents to
Agent promptly following the execution hereof.
8.25 Obligations Absolute. BAM hereby agrees that its obligations and
liabilities with respect to the Obligations are joint and several with the other
Borrowers (except as limited by the terms of Section 1.3 above and by the terms
of the Assumption Agreements executed by Participating Entities who become such
after the Closing Date), continuing, absolute and unconditional. Without
limiting the generality of the foregoing, the obligations and liabilities of BAM
with respect to the Obligations shall not be released, discharged, impaired,
modified or in any way affected by (a) the invalidity or unenforceability of any
Credit Document executed by any other person with respect to the Obligations,
(b) the failure of the Agent or the Lenders to give BAM a copy of any notice
given to any other person, (c) any modification, amendment or supplement of any
obligation, covenant or agreement contained in any Credit Document executed by
any other person with respect to the Obligations, (d) any compromise,
settlement, release or termination of any obligation, covenant or agreement in
any Credit Document executed with respect to the Obligations, (e) any waiver of
payment, performance or observance by or in favor of any Participating Entities
of any obligation, covenant or agreement under any Credit Document, (f) any
consent, extension, indulgence or other action or inaction, or any exercise or
non-exercise of any right, remedy or privilege with respect to any Credit
Document executed by any other person with respect to the Obligations, (g) the
extension of time for payment or performance of any Obligation by any
Participating Entities, or (h) the release or discharge of the Lenders' claims
against any Collateral now or at any time hereafter securing any of the
Obligations, or any Participating Entities by operation of law or otherwise.
8.26 Expenses. The Borrowers shall promptly pay all reasonable legal
fees and expenses (including reasonable fees and expenses of counsel for the
Agent), insurance premiums, recording, filing and transfer fees and taxes, and
other costs and expenses related to the Obligations or required by any of the
Credit Documents. If the Borrowers fail to pay any such cost or expense, the
Agent or the Lenders may, but shall have no obligation to, pay the same from the
Agent's or the Lenders' funds or by making a Loan advance for such purpose,
without notice to the Borrowers or any of them. The Borrowers shall reimburse
the Agent and the Lenders on demand for, and shall indemnify and hold the Agent
and the Lenders harmless from and against, all such costs and expenses paid by
the Agent or the Lenders and all other reasonable costs and expenses (including
the reasonable fees and disbursements of the Agent's counsel) of every kind
incurred by the Agent and the Lenders in connection with (i) the making or
collection of the Obligations, (ii) the preparation and review of the Credit
Documents (whether or not the transactions provided for in this Agreement shall
be consummated) and any other documents related thereto, (iii) the enforcement
of any of the Credit Documents and the defense of any claim, cross-claim or
counterclaim asserted against the Agent or the Lenders by any of the Borrowers
or any other person that relates to the Obligations or the Credit Documents and
(iv) the transactions provided for in the Credit Documents. The Borrowers shall
not be required to reimburse the Lenders (other than the Agent) for counsel fees
and expenses incurred in connection with the initial negotiation, execution and
delivery of the Credit Documents. Any amount paid or advanced by the Agent or
the Lenders under this section or the other Credit Documents shall bear interest
until paid at a rate equal to two percent (2%) in excess of the Base Rate in
effect from time to time, or the highest rate permitted by law, whichever is
less. The Borrowers shall pay all costs and expenses of performing and
satisfying their obligations under this Agreement. The Borrowers' obligations
under this Section 8.26 shall survive the payment in full of the Obligations and
the termination of this Agreement.
8.27 Indemnification. In consideration of the execution and delivery of
this Agreement by the Agent and each Lender and the extension of the
Commitments, and so long as the Agent and Lenders have fulfilled their
obligations hereunder, each of the Borrowers hereby indemnifies, exonerates and
holds the Agent and each Lender and each of their respective officers,
directors, employees and agents (collectively, the "Indemnified Parties") free
and harmless from and against any and all actions, causes of action, claims,
suits, losses, costs, liabilities and damages, and expenses incurred in
connection therewith (irrespective of whether any such Indemnified Party is a
party to the action for which indemnification hereunder is sought), including
reasonable attorneys' fees and disbursements (collectively, the "Indemnified
Liabilities"), incurred by the Indemnified Parties or any of them as a result
of, or arising out of, or relating to any of the following: (i) any transaction
financed or to be financed in whole or in part, directly or indirectly, with the
proceeds of any Loan; (ii) the entering into and performance of this Agreement
and any other Credit Document by any of the Indemnified Parties; (iii) any
investigation, litigation or proceeding related to any environmental cleanup,
audit, compliance or other matter relating to the protection of the environment
or the release by the Borrowers of any Hazardous Substances; or (iv) the
presence on or under, or the
50
escape, seepage, leakage, spillage, discharge, emission, discharging or releases
from, any real property owned or operated by the Borrowers thereof of any
Hazardous Substances (including any losses, liabilities, damages, injuries,
costs, expenses or claims asserted or arising under any environmental laws),
regardless of whether caused by, or within the control of, the Borrowers, except
for any such Indemnified Liabilities arising for the account of a particular
Indemnified Party by reason of the relevant Indemnified Party's gross negligence
or willful misconduct, and if and to the extent that the foregoing undertaking
may be unenforceable for any reason, the Borrowers hereby agree to make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable Law.
8.28 Confidentiality of Information. The Agent and the Lenders agree to
use their best efforts to hold in confidence and not disclose any written
information other than information (i) which was publicly known or otherwise
known to them, at the time of disclosure (except pursuant to disclosure in
connection with this Agreement), (ii) which subsequently becomes publicly known
through no act or omission by them, or (iii) which otherwise becomes known to
them, other than through disclosure by the Borrowers delivered or made available
by or on behalf of the Borrowers to them (including any non-public information
obtained) in connection with or pursuant to this Agreement which is proprietary
in nature and clearly marked or labeled as being confidential information,
provided that nothing herein shall prevent the Agent or any Lender from
delivering copies of any financial statements and other documents delivered to
the Agent or such Lender, and disclosing any other information disclosed to the
Agent or such Lender, by or on behalf of the Borrowers in connection with or
pursuant to this Agreement to (i) the Agent's, such Lender's or any Affiliate's
directors, officers, employees, agents and professional consultants, (ii) any
other Lender, (iii) any person to which such Lender sells or offers to sell an
interest (whether as a participation or as an assignment) in all or any part of
its Notes (which Person agrees to be bound by the provisions of this Section
8.28), (iv) any federal or state regulatory authority having jurisdiction over
the Agent or such Lender, and (v) any other Person to which such delivery or
disclosure may be necessary or appropriate (a) to effect compliance with any
Law, rule, regulation or order applicable to the Agent or such Lender, (b) in
response to any subpoena or other legal process, (c) in connection with any
litigation to which the Agent or such Lender is a party or (d) in order to
protect such Lender's investment in its Notes.
8.29 Termination. The termination of this Agreement shall not affect
any rights of the Borrowers, the Lenders or the Agent or any obligation of the
Borrowers, the Lenders or the Agent, arising prior to the effective date of such
termination, and the provisions hereof shall continue to be fully operative
until all transactions entered into or rights created or obligations incurred
prior to such termination have been fully disposed of, concluded or liquidated
and the Obligations arising prior to or after such termination have been
irrevocably paid in full. The rights granted to the Agent for the benefit of the
Lenders hereunder and under the other Credit Documents shall continue in full
force and effect, notwithstanding the termination of this Agreement, until all
of the Obligations have been paid in full after the termination hereof or the
Borrowers have furnished the Lenders with an indemnification satisfactory to the
Lenders with respect thereto. All representations, warranties, covenants,
waivers and agreements contained herein shall survive termination hereof until
payment in full of the Obligations unless otherwise provided herein.
Notwithstanding the foregoing, if after receipt of any payment of all or any
part of the Obligations, the Agent or the Lenders are for any reason compelled
to surrender such payment to any Person because such payment is determined to be
void or voidable as a preference, impermissible setoff, a diversion of trust
funds or for any other reason, this Agreement shall continue in full force and
the Borrowers shall be liable to, and shall indemnify and hold the Agent and the
Lenders harmless for, the amount of such payment surrendered until the Agent and
the Lenders shall have been finally and irrevocably paid in full. The provisions
of the foregoing sentence shall be and remain effective notwithstanding any
contrary action which may have been taken by the Agent or the Lenders in
reliance upon such payment, and any such contrary action so taken shall be
without prejudice to the Agent's or the Lenders' rights under this Agreement and
shall be deemed to have been conditioned upon such payment having become final
and irrevocable. If on any date on which the Borrowers wish to pay the
Obligations in full and terminate this Agreement, there are any outstanding
Letters of Credit, the Borrowers shall, unless otherwise agreed by the Required
Lenders in their sole discretion, make a cash prepayment to the Agent on such
date in an amount equal to the then-outstanding Letter of Credit Liabilities,
and the Agent shall hold such prepayment in an interest-bearing cash collateral
account in the name and under the sole control of the Agent (which account shall
bear interest at the Agent's then-current rate for such accounts) as security
for the Reimbursement Obligations and other Letter of Credit obligations. To the
extent allowed by law, such account shall not constitute an asset of the
Borrowers, or any of them, subject to their rights therein under this Section
8.29. The Agent shall from time to time debit such account for the payment of
the Letter of Credit Liabilities as the same become due and payable and shall
promptly refund
51
any excess funds (including interest) held in said account to the Borrowers if
and when no Letter of Credit Liabilities remain outstanding hereunder and all of
the Obligations have been paid in full. The Borrowers shall remain liable for
any Obligations in excess of the amounts paid from such account.
IN WITNESS WHEREOF, each of the Borrowers, the Lenders and the Agent
has caused this Credit Agreement to be executed and delivered by its duly
authorized corporate officer as of the day and year first above written.
BOOKS-A-MILLION, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇
--------------------------------
Its CFO
--------------------------------
NETCENTRAL, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Its President
--------------------------------
AMERICAN INTERNET SERVICE, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Its President
--------------------------------
AMERICAN WHOLESALE BOOK COMPANY, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------
Its CFO
--------------------------------
▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, inc.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Its President
--------------------------------
FAITHPOINT, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Its President
--------------------------------
52
BANK OF AMERICA, as Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------
Its Vice President
Hand Delivery Address:
IL 1-231-08-30
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
BANK OF AMERICA, N.A.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Its Senior Vice President
Commitment Amount: $35,000,000
Lending Office and Hand Delivery
Address:
GA1-006-13-15
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
AMSOUTH BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Its Senior Vice President
Commitment Amount: $10,000,000
Lending Office and Hand Delivery
Address:
AmSouth-Sonat Tower
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Mailing Address:
P. O. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
SUNTRUST BANK
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------
Its VP
--------------------------------
Commitment Amount: $25,000,000
Lending Office and Hand Delivery
Address:
STES-Corporate Banking/4th Floor
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
Mailcode-1909
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Mailing Address:
STES-Corporate Banking/4th Floor
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
Mailcode-1909
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
SOUTHTRUST BANK
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Its SVP
--------------------------------
Commitment Amount: $15,000,000
Lending Office and Hand Delivery
Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ FARGO BANK, N.A.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
--------------------------------
Its Vice President
--------------------------------
Commitment Amount: $15,000,000
Lending Office and Hand Delivery
Address:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
LIST OF EXHIBITS AND SCHEDULES
------------------------------
Exhibit A Permitted Encumbrances
Exhibit B Compliance Certificate
Schedule 1.3.6 Assumption Agreement
Schedule 2.3 Form of Committed Note
Schedule 2.5.1(b) Form of Borrowing Notice
Schedule 2.16.2 Form of Swingline Note
Schedule 3.1.2(e) Ownership Structure
Schedule 4.1 Exceptions to Doing Business
Schedule 8.11 Form of Assignment and Acceptance
1
EXHIBIT A
PERMITTED ENCUMBRANCES
Exhibit A
Page 1
EXHIBIT B
COMPLIANCE CERTIFICATE
Reference is made to that certain Credit Agreement between BOOKS-A-MILLION,
INC., a Delaware corporation ("BAM"), and its wholly owned subsidiaries AMERICAN
WHOLESALE BOOK COMPANY, INC., an Alabama corporation ("AWBC"), AMERICAN INTERNET
SERVICE, INC., an Alabama corporation ("AIS") and the wholly-owned subsidiaries
of AIS, ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC., an Alabama corporation ("▇▇▇.▇▇▇"), NET
CENTRAL, INC., a Tennessee corporation ("NI"), and FAITHPOINT, INC. an Alabama
corporation ("FAITHPOINT"); BAM, AWBC, AIS, ▇▇▇.▇▇▇, NI and FaithPoint are
sometimes together referred to as the "Borrowers"), BANK OF AMERICA, N.A., a
national banking association as agent for the lenders named therein (the
"Agent"), and the Lenders party thereto, dated as of July 1, 2002 (the "Credit
Agreement"). Capitalized terms used in this certificate and the Schedule
attached hereto, unless otherwise defined herein, have the meanings assigned to
them in the Credit Agreement.
The undersigned does hereby certify to the Agent as follows:
1. He/she is the duly elected and serving [chief financial office or
chief executive officer] of BAM.
2. He/she has reviewed the terms of the Credit Agreement and the other
Credit Documents and has made, or has caused to be made under his supervision, a
review of the transactions and conditions of the Borrowers and their
Consolidated Entities through the date on which this certificate is delivered to
the Agent and the Lenders. No Event of Default or Unmatured Default under the
Credit Agreement has occurred and is continuing as of the date this certificate
is delivered to the Agent and the Lenders, except as follows: [Give detailed
description or insert "none" if appropriate].
3. The computations relating to the Borrowers' financial condition set
forth on Schedule B-1 attached hereto were true and correct as of , 200 (such
date being the last day of the most recently ended fiscal calendar quarter) and
there has been no material adverse change in such amounts upon which such
computations are based through the date on which this certificate is delivered
to the Agent and the Lenders.
___________________ of
BOOKS-A-MILLION, INC.
Dated:_________________, 200___
EXHIBIT B
PAGE 2
BOOKS-A-MILLION, INC.
SCHEDULE 1 TO COMPLIANCE CERTIFICATE
SCHEDULE OF COMPLIANCE AS OF [FISCAL QUARTER END]
WITH PROVISIONS OF 5.8.1, 5.8.2, AND 5.8.3 OF THE CREDIT AGREEMENT
(IN THOUSANDS, EXCEPT % AND RATIOS)
ACTUAL 4 QTRS
1. SECTION 5.8.1 - FIXED CHARGE COVERAGE RATIO:
Consolidated Net Income before interest, taxes, depreciation &
amortization plus Operating Lease Payments
Interest Expense
Operating Lease Payments
Total Interest Expense and Operating Lease Payments --------------------
COVERAGE RATIO (NOT LESS THAN 1.50 TO 1) ====================
2. SECTION 5.8.2 - LEVERAGE RATIO:
Funded Debt
Add four times Operating Lease Payments
Adjusted debt --------------------
Consolidated Net Income before interest, taxes, depreciation &
amortization plus Operating Lease Payments
LEVERAGE RATIO (NOT MORE THAN 4.0 TO 1 AS OF END OF FIRST THREE FISCAL
QUARTERS AND NOT MORE THAN 3.25 TO 1 AS OF THE END OF EACH FISCAL
YEAR) =====================
3. SECTION 5.8.3 - MINIMUM SHAREHOLDER'S EQUITY:
Stockholders' Equity limitation as of 2/4/02
50% of positive net income since 2/4/02
Minimum net worth requirement
STOCKHOLDERS' EQUITY (AS OF QUARTER END) =====================
Exhibit B
Page 1
ADDENDUM TO
SCHEDULE 1 TO COMPLIANCE CERTIFICATE
SCHEDULE OF COMPLIANCE AS OF [FISCAL QUARTER END]
CALCULATION OF EBITDAR:
(IN 000S) FISCAL QTR. FISCAL QTR. FISCAL QTR. FISCAL QTR. TRALLING 4
DATE DATE DATE DATE QUARTERS
---------- ---------- ---------- ---------- ----------
Net Income
Plus Interest Expense
Plus Income Taxes
Plus Depreciation/Amortization
Plus Operating Lease Pmts.
Plus/Minus Extraordinary Items
Plus/Minus Losses or Gains on Sale of Assets
Plus/Minus Non-Cash FASB Charges or Gains
Minus Non-Cash Minority Interest Income
EBITDAR
Exhibit B
Page 2
SCHEDULE 1.3.6
FORM OF ASSUMPTION AGREEMENT
THIS ASSUMPTION AGREEMENT ("this Agreement") is entered into by BANK OF
AMERICA, N.A., a national banking association, as Agent for the Lenders
described below and the other undersigned entity (the "Assuming Entity") on
____________________, 20__.
RECITALS
A. Bank of America, N.A. and the several lenders from time to time
party thereto (collectively, the "Lenders") and Bank of America, N.A., as Agent
for the Lenders have entered into a certain Credit Agreement dated as of July 1,
2002 (the "Credit Agreement") with Books-A-Million, Inc., a Delaware corporation
("BAM"), and certain subsidiaries or affiliates thereof (collectively, the
"Borrowers").
B. Under the terms of the Credit Agreement the Lenders have made a
credit facility in the maximum principal amount of $100,000,000 available to the
Borrowers on the terms and conditions specified in the Credit Agreement (the
"Revolving Credit Facility").
C. The Assuming Entity desires, pursuant to Section 1.3 of the Credit
Agreement, to become obligated as a Borrower, jointly and severally, with all
other parties that are now Borrowers, with respect to the Credit Agreement, the
Notes and the other Obligations and to take all other action necessary to become
a Borrower and a Participating Entity, as defined in the Credit Agreement.
D. Capitalized terms used in this Agreement, unless otherwise defined
herein, have the meanings assigned to them in the Credit Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual agreements herein set forth, and to induce the Lenders to extend credit
under the Revolving Credit Facility, and in further consideration of the
substantial material benefit to accrue to the Assuming Entity from credit
extended and to be extended by the Lenders under the Revolving Credit Facility,
the parties hereto agree as follows:
1. The Assuming Entity hereby assumes, and agrees that it is and shall
be fully liable, jointly and severally with all parties that are now Borrowers,
for the Obligations, and all covenants, agreements, warranties and
representations with respect to the Revolving Credit Facility set forth in the
Credit Agreement and the Notes, and hereby agrees that it is and shall be a
party to, and a Borrower under the terms of, the Credit Agreement and the Notes,
with the same force and effect as would be the case if the Assuming Entity had
been named as a Borrower in and had executed and delivered the Credit Agreement
and the Notes to the Lenders on the Closing Date; provided, however, that its
liability with respect to the Obligations shall be limited as set forth in
Section 1.3.2 of the Credit Agreement.
2. The Assuming Entity acknowledges that it has had full and complete
access to the underlying papers relating to the Obligations and all other papers
available to any Borrower in connection with the Obligations, has reviewed them
and is fully aware of the meaning and effect of their contents. The Assuming
Entity is fully informed of all circumstances that bear upon the risks of
executing this Agreement and which a diligent inquiry would reveal. The Assuming
Entity has adequate means to obtain from the Borrowers on a continuing basis
information concerning the Borrowers' financial condition and is not depending
on the Agent to provide such information, now or in the future. The Assuming
Entity agrees that the Agent shall have no obligation to advise or notify the
Assuming Entity or to provide the Assuming Entity with any data or information,
except as may otherwise be required by the Credit Agreement. The execution and
delivery of this Agreement is not a condition precedent (and the Lenders have
not in any way implied that the execution of this Agreement is a condition
precedent) to the Lenders' making, extending or modifying any loan or any other
financial accommodation to or for the Assuming Entity other than under the
Credit Agreement.
Schedule 1.3.6
Page 1
3. The Assuming Entity hereby unconditionally agrees to pay and perform
all of the Obligations, whether now existing or hereafter incurred or arising
(subject to the proviso of Section 1 above).
4. The Assuming Entity hereby specifically acknowledges and agrees,
without limiting the generality of the other provisions of this Agreement, to be
bound by the terms and conditions specified in Section 1.3 of the Credit
Agreement.
5. The Assuming Entity hereby agrees that the obligations and
liabilities of the Assuming Entity with respect to the Obligations are joint and
several with the other Borrowers, continuing, absolute and unconditional
(subject to the proviso of Section 1 above). Without limiting the generality of
the foregoing, the obligations and liabilities of the Assuming Entity with
respect to the Obligations shall not be released, discharged, impaired, modified
or in any way affected by (a) the invalidity or unenforceability of any Credit
Document, (b) the failure of the Agent or the Lenders to give the Assuming
Entity a copy of any notice given to any other Borrower, (c) any modification,
amendment or supplement of any obligation, covenant or agreement contained in
any Credit Document, (d) any compromise, settlement, release or termination of
any obligation, covenant or agreement in any Credit Document, (e) any waiver of
payment, performance or observance by or in favor of any other Borrower of any
obligation, covenant or agreement under any Credit Document, (f) any consent,
extension, indulgence or other action or inaction, or any exercise or
non-exercise of any right, remedy or privilege with respect to any Credit
Document, (g) the extension of time for payment or performance of any of the
Obligations, or (h) any other matter that might otherwise be raised in avoidance
of, or in defense against an action to enforce, the obligations of the Assuming
Entity under this Agreement, the Revolving Credit Facility, the Credit
Agreement, the Notes or any other Credit Document.
6. The Assuming Entity covenants and agrees with the Agent as follows:
(a) The Assuming Entity will be bound by all of the
obligations, requirements and restrictions in the covenants contained
in the Credit Agreement.
(b) The Assuming Entity will not exercise any rights that it
may acquire by way of subrogation under this Agreement or the
Subrogation and Contribution Agreement referred to in clause (c) of
this Section 6, by any payment made hereunder or under any of the other
Credit Documents or otherwise, until all the Obligations have been paid
in full and the Credit Agreement has been terminated. If any amount
shall be paid to the Assuming Entity on account of any such subrogation
rights at any time when all of the Obligations shall not have been paid
in full and the Credit Agreement terminated, such amount shall be held
in trust for the benefit of the Agent and the Lenders and shall be paid
forthwith to the Agent to be credited and applied upon the Obligations,
whether matured or unmatured, in accordance with the terms of the
Credit Documents.
(c) The Assuming Entity will not amend or waive any provision
of the Subrogation and Contribution Agreement dated as of July 1, 2002,
nor consent to any departure by BAM or any other Participating Entity
from such Subrogation and Contribution Agreement, as amended, or from
any similar Subrogation and Contribution Agreements executed by other
Participating Entities relating to the Revolving Credit Facility,
without having obtained the prior written consent of the Required
Lenders to such amendment, waiver or consent.
7. The Assuming Entity hereby irrevocably consents to the jurisdiction
of the United States District Court for the Northern District of Georgia and of
all Georgia state courts sitting in ▇▇▇▇▇▇ County, Georgia, for the purpose of
any litigation to which Lenders or Agent may be a party and which concerns this
Agreement or the Obligations. It is further agreed that venue for any such
action shall lie exclusively with courts sitting in ▇▇▇▇▇▇ County, Georgia,
unless Lenders and Agent agree to the contrary in writing. This election applies
only for the limited judicial proceedings that may apply as set forth in the
provision of this Agreement electing binding arbitration for the resolution of
disputes and does not impair the effect of that provision in any way.
8. The Assuming Entity agrees that it is, and for all purposes of the
Credit Agreement, the Notes and the other Credit Documents shall be, a Borrower
and a Participating Entity.
Schedule 1.3.6
Page 2
9. This Agreement shall bind the Assuming Entity's successors and
assigns and shall inure to the benefit of, and be enforceable by, the Agent and
the Lenders and their respective successors and assigns. This Agreement may only
be waived, modified or amended by a written instrument signed by the party
against which the enforcement thereof is sought. This Agreement shall in all
respects be governed by, and construed in accordance with, the laws of the State
of Georgia. If any term of this Agreement shall be invalid or unenforceable, the
remainder of this Agreement shall remain in force and effect. This Agreement may
be executed in counterparts, each of which shall be deemed an original, but all
of which shall constitute one agreement. This Agreement and the other Credit
Documents constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede any inconsistent agreement with respects to
the subject matter hereof and thereof.
Schedule 1.3.6
Page 3
IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto on the date first written above.
BANK OF AMERICA, N.A., as Agent
By:
Its
[NAME OF ASSUMING ENTITY]
By:
Its
Schedule 1.3.6
Page 4
SCHEDULE 2.3
FORM OF COMMITTED NOTE
$__________ July 1, 2002
FOR VALUE RECEIVED, BOOKS-A-MILLION, INC., a Delaware corporation
("BAM"), and its wholly owned subsidiaries AMERICAN WHOLESALE BOOK COMPANY,
INC., an Alabama corporation ("AWBC"), AMERICAN INTERNET SERVICE, INC., an
Alabama corporation ("AIS") and the wholly-owned subsidiaries of AIS,
▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC., an Alabama corporation ("▇▇▇.▇▇▇"), NET CENTRAL, INC.,
a Tennessee corporation ("NI"), and FAITHPOINT, INC. an Alabama corporation
("FAITHPOINT"); BAM, AWBC, AIS, ▇▇▇.▇▇▇, NI and FaithPoint are sometimes
together referred to as "BORROWERS"), hereby jointly and severally promise to
pay to the order of [], a [] (along with its successors and assigns "Payee"),
the sum of _____________________ Dollars ($____________), or as much thereof as
may be outstanding from time to time, together with interest thereon as provided
in that Credit Agreement as of July 1, 2002 by and among Borrowers, Payee and
the several lenders from time to time party thereto and Bank of America, N. A.,
as agent, as it may be amended or restated from time to time (the "Credit
Agreement").
This Note evidences the "Committed Loans," as defined in the Credit
Agreement as may be made from time to time by Payee to Borrowers. Reference is
made to the Credit Agreement for the terms of payment of principal and interest
hereunder, for a description of the rights of the "Agent." as defined in the
Credit Agreement, to enforce this Note, and for additional provisions regarding
additional payments, prepayment, draws and other terms and conditions applicable
to the indebtedness evidenced by this Note. As provided in the Credit Agreement,
all remaining principal, interest and expenses outstanding hereunder or under
the Credit Agreement shall become finally due on the Maturity Date.
Interest hereunder shall be calculated as provided for in the Credit
Agreement. As also provided further in the Credit Agreement, the interest rate
required hereby shall not exceed the maximum rate permissible under applicable
law, and any amounts paid in excess of such rate shall be applied to reduce the
principal amount hereof or shall be refunded to the Borrowers, at the option of
the holder of this Note.
Subject to the provisions of the Credit Agreement, Borrowers may
borrow, repay and reborrow amounts hereunder from time to time, provided that
Borrowers are not in default hereunder or under the Credit Agreement and
provided that all conditions to Payee's obligation to fund advances as set forth
in the Credit Agreement are satisfied. Payee shall have no liability for its
refusal to advance funds hereunder following a determination that any condition
precedent to the making of an advance has not been satisfied.
Payee's records of the amounts advanced hereunder shall be conclusive
proof thereof, absent manifest error.
All amounts due under this Note are payable at par in lawful money of
the United States of America, at the principal place of business of the Agent in
Atlanta, Georgia, or at such other address as the Agent may direct.
The occurrence of an Event of Default under the Credit Agreement shall
constitute an Event of Default under this Note.
Upon the occurrence of an Event of Default, as defined above, the Payee
may, at its option and without notice (except as provided in the Credit
Agreement), acting through the Agent as provided in the Credit Agreement,
declare all principal and interest provided for under this Note, and any other
obligations of Borrowers to Payee, to be presently due and payable, and Payee
may enforce any remedies available to Payee under any documents securing or
evidencing debts of Borrowers to Payee. Payee may waive any default before or
after it occurs and may restore this Note in full effect without impairing the
right to declare it due for a subsequent default, this right being a continuing
one. Upon default, the remaining unpaid principal balance of the indebtedness
evidenced hereby and all expenses due Payee shall bear interest at the Default
Rate, as defined in the Credit Agreement.
All amounts received for payment of this Note shall be applied in
accordance with the Credit Agreement.
Schedule 2.3
Page 1
Borrowers and all sureties, guarantors, endorsers and other parties to
this Note hereby consent to any and all renewals, waivers, modifications, or
extensions of time (of any duration) that may be granted by Payee with respect
to this Note and severally waive demand, presentment. protest, notice of
dishonor, and all other notices that might otherwise be required by law, except
as set forth in the Credit Agreement. All parties hereto waive the defense of
impairment of collateral and all other defenses of suretyship, if applicable.
Borrowers and all sureties, guarantors, endorsers and other parties
hereto agree to pay reasonable attorneys' fees and all court and other costs
that Payee may incur in the course of efforts to collect the debt evidenced
hereby or to protect Payee's interest in any collateral securing the same, to
the extent permitted by the Credit Agreement.
The validity and construction of this Note shall be determined
according to the laws of Alabama applicable to contracts executed and performed
within that state and applicable federal law. If any provision of this Note
should for any reason be invalid or unenforceable, the remaining provisions
hereof shall remain in full effect.
Schedule 2.3
Page 2
Words used herein indicating gender or number shall be read as context
may require.
BOOKS-A-MILLION, INC.
By:
Its
Taxpayer's Identification Number:
NET CENTRAL, INC.
By:
Its
Taxpayer's Identification Number:
AMERICAN INTERNET SERVICE, INC.
By:
Its
Taxpayer's Identification Number:
AMERICAN WHOLESALE BOOK COMPANY, INC.
By:
Its
Taxpayer's Identification Number:
▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, inc.
By:
Its
Taxpayer's Identification Number:
Schedule 2.3
Page 3
FAITHPOINT, INC.
By:
Its
Taxpayer's Identification Number:
Schedule 2.3
Page 4
SCHEDULE 2.5.1(b)
FORM OF BORROWING NOTICE
TO: Bank of America, N.A., as Agent
LENDERS: Bank of America, N.A., AmSouth Bank, SunTrust Bank, ▇▇▇▇▇
Fargo Bank, N.A. and SouthTrust Bank
DATE: _______________,
BORROWERS: Books-A-Million, Inc., American Wholesale Book Company, Inc.,
Net Central, Inc., American Internet Service, Inc.,
▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, inc. and FaithPoint, Inc.
This notice is delivered under the Credit Agreement (the "Credit
Agreement") dated as of July 1, 2002, between Borrowers and Lenders. Terms
defined in the Credit Agreement have the same meanings when used -- unless
otherwise defined -- in this request.
Borrowers request a Loan under the Credit Agreement as follows:
Borrowing Date(1) _____________,______
Amount of Borrowing $___________________
Type of Borrowing(2) ____________________
For LIBOR Loans, the Interest Period(3) ____________________
Select one:
__________ The proceeds of the requested Loan shall be disbursed to
Borrowers as provided in the Credit Agreement.
__________ The proceeds of the requested LIBOR Loan shall be applied to
the payment of Borrowers' existing Base Rate Loan, this new
Loan being a conversion of a Base Rate Loan to a LIBOR Loan
-----------------
(1) Next Banking Day for Base Rate Loans, third following Banking Day for LIBOR
Loans.
(2) LIBOR, Base Rate Loan, SwingLine Loan or Peak Usage Tranche.
(3) 7 day, 14 day, 1, 2, 3 or 6 months.
Schedule 2.5.1(b)
Page 1
__________ The proceeds of the requested LIBOR Loan shall be applied to
the payment of the following LIBOR Loan, subject to all
requirements of the Credit Agreement, this new Committed Loan
being a conversion of a LIBOR Loan to a different LIBOR Loan:
Date: _____________________________________
Amount: ___________________________________
Interest Period: __________________________
__________ The proceeds of the requested Base Rate Loan shall be applied
to the payment of the following LIBOR Loan, subject to all
requirements of the Credit Agreement, this new Committed Loan
being a conversion of a LIBOR Loan to a Base Rate Loan:
Date: _____________________________________
Amount: ___________________________________
Interest Period: __________________________
If this draw request relates to an acquisition (for which such
calculations are required), attached hereto as Exhibit A are calculations of
financial covenants as they will exist both before and after the closing of the
acquisition. These calculations demonstrate continued compliance with all
financial covenants before and after the acquisition.
Borrowers certify that on the date hereof and on the date of the above
Borrowing Date, after giving effect to the requested Committed Loan, Peak Usage
Tranche or Swingline Loan, (a) all of the representations and warranties in the
Credit Documents will be true and correct in all material respects -- unless
they speak to a specific date or the facts on which they are based have been
changed by transactions contemplated or permitted by the Credit Agreement, (b)
no Event of Default or Unmatured Default will exist, and (c) all conditions to
Borrowers' right to receive the requested Committed Loan, Peak Usage Tranche or
Swingline Loan under the Credit Agreement have been satisfied.
BOOKS-A-MILLION, INC., on behalf of Borrowers
By: _________________________________________
(Name) ______________________________________
(Title) _____________________________________
Schedule 2.5.1(b)
Page 2
SCHEDULE 2.16.2
FORM OF SWINGLINE NOTE
$15,000,000.00 Atlanta, Georgia
July 1, 2002
FOR VALUE RECEIVED, BOOKS-A-MILLION, INC., a Delaware corporation
("BAM") and its wholly owned subsidiaries, AMERICAN WHOLESALE BOOK COMPANY,
INC., an Alabama corporation ("AWBC"), AMERICAN INTERNET SERVICE, INC., an
Alabama corporation ("AIS") and the wholly-owned subsidiaries of AIS,
▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC.; an Alabama corporation ("▇▇▇.▇▇▇"), NET CENTRAL, INC.,
a Tennessee corporation ("NI"), and FAITHPOINT, INC., an Alabama corporation
("FAITHPOINT"); BAM, AWBC, AIS, ▇▇▇.▇▇▇, NI and FaithPoint are sometimes
together referred to as the "BORROWERS"), hereby jointly and severally promise
to pay to the order of BANK OF AMERICA, N.A., a national banking association
(along with its successors and assigns, "Payee"), the sum of Fifteen Million and
No/100 Dollars ($15,000,000.00), or as much thereof as maybe outstanding from
time to time, together with interest thereon as provided in that Credit
Agreement dated as of July 1, 2002 among Borrowers, Payee and the several
lenders from time to time party thereto and Bank of America, N.A., as agent, as
it may be amended or restated from time to time (the "Credit Agreement").
This Note evidences the "Swingline Loans," as defined in the Credit
Agreement, as may be made from time to time by Payee to Borrowers. Reference is
made to the Credit Agreement for the terms of payment of principal and interest
hereunder, for a description of the rights of the "Agent." as defined in the
Credit Agreement, to enforce this Note, and for additional provisions regarding
additional payments, prepayment, draws and other terms and conditions applicable
to the indebtedness evidenced by this Note. As provided in the Credit Agreement,
(i) all remaining principal, interest and expenses outstanding hereunder or
under the Credit Agreement shall become finally due on the Maturity Date, (ii)
the sum of the outstanding principal balance hereunder and under the Revolving
Credit Facility may not exceed $100,000,000 in the aggregate at any time, and
(iii) the obligations hereunder are to be allocated to Lenders Pro Rata upon an
Event of Default.
Interest hereunder shall be calculated as provided in the Credit
Agreement. As also provided further in the Credit Agreement, the interest rate
required hereby shall not exceed the maximum rate permissible under applicable
law, and any amounts paid in excess of such rate shall be applied to reduce the
principal amount hereof or shall be refunded to the Borrowers, at the option of
the holder of this Note.
Subject to the provisions of the Credit Agreement, Borrowers may
borrow, repay and reborrow amounts hereunder from time to time, provided that
Borrowers are not in default hereunder or under the Credit Agreement and
provided that all conditions to Payee's obligation to fund advances as set forth
in the Credit Agreement are satisfied. Payee shall have no liability for its
refusal to advance funds hereunder following a determination that any condition
precedent to the making of an advance has not been satisfied.
Payee's records of the amounts advanced hereunder shall be conclusive
proof thereof, absent manifest error.
All amounts due under this Note are payable at par in lawful money of
the United States of America, at the principal place of business of the Agent in
Atlanta, Georgia, or at such other address as the Agent may direct.
The occurrence of an Event of Default under the Credit Agreement shall
constitute an Event of Default under this Note.
Upon the occurrence of an Event of Default, as defined above, the Payee
may, at its option and without notice (except as provided in the Credit
Agreement), acting through the Agent as provided in the Credit Agreement,
declare all principal and interest provided for under this Note, and any other
obligations of Borrowers to Payee, to be presently due and payable, and Payee
may enforce any remedies available to Payee under any documents securing or
evidencing debts of Borrowers to Payee. Payee may waive any default before or
after it occurs and may restore this Note in full effect without impairing the
right to declare it due for a subsequent default, this right being a
continuing one. Upon default, the remaining unpaid principal balance of the
indebtedness evidenced hereby and all expenses due Payee shall bear interest at
the Default Rate, as defined in the Credit Agreement.
All amounts received for payment of this Note shall be applied in
accordance with the Credit Agreement.
Borrowers and all sureties, guarantors, endorsers and other parties to
this Note hereby consent to any and all renewals, waivers, modifications, or
extensions of time (of any duration) that may be granted by Payee with respect
to this Note and severally waive demand, presentment, protest, notice of
dishonor, and all other notices that might otherwise be required by law, except
as set forth in the Credit Agreement. All parties hereto waive the defense of
impairment of collateral and all other defenses of suretyship, if applicable.
Borrowers and all sureties, guarantors, endorsers and other parties
hereto agree to pay reasonable attorneys' fees and all court and other costs
that Payee may incur in the course of efforts to collect the debt evidenced
hereby or to protect Payee's interest in any collateral securing the same, to
the extent permitted by the Credit Agreement.
The validity and construction of this Note shall be determined
according to the laws of Georgia applicable to contracts executed and performed
within that state and applicable federal law. If any provision of this Note
should for any reason be invalid or unenforceable, the remaining provisions
hereof shall remain in full effect.
Words used herein indicating gender or number shall be read as context
may require.
4
BOOKS-A-MILLION, INC.
By:
Its
Taxpayer's Identification Number:
NET CENTRAL, INC.
By:
Its
Taxpayer's Identification Number:
AMERICAN INTERNET SERVICE, INC.
By:
Its
Taxpayer's Identification Number:
AMERICAN WHOLESALE BOOK COMPANY, INC.
By:
Its
Taxpayer's Identification Number:
▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, inc.
By:
Its
Taxpayer's Identification Number:
Schedule 2.16.2
Page 1
FAITHPOINT, INC.
By:
Its
Taxpayer's Identification Number:
Schedule 2.16.2
Page 2
SCHEDULE 4.1
EXCEPTIONS TO DOING BUSINESS
Schedule 4.1
Page 1
SCHEDULE 3.1.2(e)
OWNERSHIP STRUCTURE
Schedule 3.1.2(e)
Page 1
SCHEDULE 8.11
FORM OF ASSIGNMENT AND ACCEPTANCE
DATED ___________________, 20_____
Reference is made to the Credit Agreement dated as of July 1, 2002 (the
"Agreement") among BOOKS-A-MILLION, INC., a Delaware corporation and certain of
its subsidiaries or affiliates ("Borrowers"), the Lenders (as defined in the
Agreement) and BANK OF AMERICA, N.A., as Agent for the Lenders ("Agent"). Unless
otherwise defined herein, terms defined in the Agreement are used herein with
the same meanings.
_______________ (the "Assignor") and __________ (the "Assignee") agree
as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchased and assumes from the Assignor, WITHOUT RECOURSE, a
__________%(4) interest in and to all of the Assignor's rights and obligations
under the Agreement as of the Effective Date (as defined below), including,
without limitation, such percentage interest in the Loans owing to the Assignor
on the Effective Date, and the Note held by the Assignor.
2. The Assignor (i) represents and warrants that, as of the date
hereof, the aggregate outstanding principal amount of the Loans owing to it
(without giving effect to assignments thereof which have not yet become
effective) is $____________; (ii) represents and warrants that it is the legal
and beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any adverse claim; (iii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Agreement or any of the Credit Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Agreement or any of the
Credit Documents or any other instrument or document furnished pursuant thereto;
(iv) makes no representation or warranty and assumes no responsibility with
respect to the financial condition of Borrowers or the performance or observance
by Borrowers of any of their obligations under the Agreement or any of the
Credit Documents or any other instrument or document furnished pursuant thereto
and (v) attaches the Note referred to in paragraph 1 above and requests that the
Agent exchange such Note for new Note(s) as follows: A Note, dated
_______________, 20____ in the principal amount of $_____________ payable to the
order of the Assignor, and a Note, dated _________________, 20_____, in the
principal amount of $________________ payable to the order of the Assignee.
3. The Assignee (i) confirms that it has received a copy of the
Agreement, together with copies of the financial statements referred to in
Section 5.3 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and without
reliance upon the Agent, the Assignor, or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the
Agreement; (iii) appoints and authorizes the Agent to take such actions on its
behalf and to exercise such powers under the Credit Documents as are delegated
to the Agent by the terms thereof, together with such powers as are reasonably
incidental thereto; (iv) agrees that it will perform in accordance with their
terms all of the obligations which by the terms of the Agreement are required to
be performed by the Lender; and (v) specifies as its address for notices the
office set forth beneath its name on the signature pages hereof.
4. The effective date for this Assignment and Acceptance shall be
________________________________ (the "Effective Date"). Following the execution
of this Assignment and Acceptance, it will be delivered to the Agent for
acceptance and recording by the Agent.
5. Upon such acceptance and recording, as of the Effective Date, (i)
the Assignee shall be a party to the Agreement and, to the extent provided in
this Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and under the Credit Documents and (ii) the Assignor shall, to the
extent provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Agreement.
------------------
(4) Specify percentage in no more than 4 decimal points.
Schedule 8.11
Page 1
6. Upon such acceptance and recording, from and after the Effective
Date, the Agent shall make all payments under the Agreement and Note in respect
of the interest assigned hereby (including, without limitation, all payments of
principal, interest, commitment fees and letter of credit fees with respect
thereto) to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under this Agreement and the Note for periods prior to
the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by and construed in
accordance with, the laws of the State of Georgia.
[NAME OF ASSIGNOR]
By:
Name:
Title:
Notice of Address:
After the Effective Date
Outstanding Loans:$
Schedule 8.11
Page 2
[NAME OF ASSIGNEE]
By:
Name:
Title:
Notice of Address:
After the Effective Date
Outstanding Loans:$
Accepted this _____ day of __________________, 20____
BANK OF AMERICA, N.A., as Agent
By:
Name:
Title:
Schedule 8.11
Page 3
