$175,000,000
REVOLVING CREDIT FACILITY AGREEMENT
among
ACE HARDWARE CORPORATION,
as Company,
THE NORTHERN TRUST COMPANY,
as Administrative Agent,
BANK OF AMERICA, NATIONAL ASSOCIATION,
as Syndication Agent,
SUNTRUST BANK,
as Documentation Agent,
and the Banks named herein
May 2, 2000
TABLE OF CONTENTS
Page
Section 1. Definitions and Accounting 1
1.1. Defined Terms 1
1.2. Accounting 11
Section 2. The Loans 11
2.1. The Revolving Loans 11
2.2. The Bid Loans 12
2.3. Notice of Borrowings 14
2.4. Changes of Commitments 14
2.5. Fees 17
2.6. Lending Offices 18
2.7. Several Obligations; Remedies Independent 18
2.8. Loan Accounts 18
2.9. Voluntary Conversion or Continuation of Loans 18
Section 3. Payments of Principal and Interest 19
3.1. Repayment of Loans 19
3.2. Prepayments of Loans 19
3.3. Interest 19
Section 4. Payments; Pro Rata Treatment; Computations; Etc. 20
4.1. Payments 20
4.2. Pro Rata Treatment 20
4.3. Computations 21
4.4. Minimum Amounts 21
4.5. Certain Notices 22
4.6. Non-Receipt of Funds by the Agent 23
4.7. Set-off and Sharing of Payments, Etc. 23
Section 5. Yield, Capital Maintenance and Taxes Provisions 24
5.1. Additional Costs 24
5.2. Limitation on Types of Loans 25
5.3. Illegality 26
5.4. Treatment of Affected Loans 26
5.5. Compensation 27
5.6. Taxes 27
5.7. Change of Applicable Lending Office. 29
5.8. Substitution of Bank 29
Section 6. Conditions Precedent 29
6.1. Initial Loan 29
6.2. Initial and Subsequent Loans 30
6.3. Bid Loans 30
Section 7. Representations and Warranties 30
7.1. Corporate Existence and Related Matters 30
7.2. Financial Condition 30
7.3. Litigation 31
7.4. No Breach 31
7.5. Corporate Power and Action; Binding Effect 31
7.6. Approvals 31
7.7. Margin Stock 31
7.8. ERISA 32
7.9. Taxes 32
7.10. Investment Company Act 33
7.11. Credit Agreements 33
7.12. Environmental Laws 33
7.13. Subsidiaries, Etc. 33
7.14. Liens 34
7.15. Subordination. 34
7.16. Compliance with Laws. 34
Section 8. Covenants 34
8.1. Financial Statements and other Information 34
8.2. Litigation 35
8.3. Corporate Existence, Etc. 36
8.4. Insurance 36
8.5. Business Combinations and Asset Dispositions 36
8.6. Limitation on Liens 38
8.7. Acquisitions 38
8.8. Lines of Business 39
8.9. No Change in Subordination Terms, etc. 39
8.10. Use of Proceeds 39
8.11. Financial Covenants. 39
8.12. Restrictions on Transactions with Affiliates 39
8.13. Issuance of Stock by Subsidiaries 40
8.14. Compliance with ERISA 40
8.15. Cooperative Status 40
Section 9. Events of Xxxxxxx 00
Xxxxxxx 00. The Agent 42
10.1. Appointment, Powers and Immunities 42
10.2. Reliance by Agent 43
10.3. Defaults 43
10.4. Rights as a Bank 43
10.5. Indemnification 43
10.6. Non-Reliance on Agent and other Banks 44
10.7. Failure to Act 44
10.8. Resignation or Removal of Agent 44
10.9. Documentation and Syndication Agent 45
Section 11. Miscellaneous 45
11.1. Waiver 45
11.2. Notices 45
11.3. Expenses, Etc. 45
11.4. Amendments, Etc. 46
11.5. Successors and Assigns 46
11.6. Assignments and Participations 46
11.7. Survival 48
11.8. Captions 48
11.9. Counterparts 48
11.10. Confidentiality 48
11.11. Governing Law 48
11.12. Waiver of Jury Trial 48
11.13. No Fiduciary Relationship 48
11.14. Consent To Jurisdiction 49
11.15. Company Indemnification 49
Schedule 1 - Commitments and Information Concerning Banks
Schedule 2 - Authorized Officers of the Company
Schedule 3 - Existing Debt, Credit and Refinanced Debt Agreements
Schedule 4 - Subsidiaries
Schedule 5 - Subordination Provisions
Schedule 6 - Schedule of Liens
Schedule 7 - ERISA Matters
Exhibit A - Form of Revolving Note
Exhibit B - Form of Bid Loan Note
Exhibit C - Form of Request for Bid Loans
Exhibit D - Form of Offer to Make Bid Loans
Exhibit E - Form of Notice of Eurodollar or Alternate Base Borrowing
Exhibit F - Form of Notice of Conversion or Continuation
Exhibit G - Form of Opinion of Counsel to the Company
Exhibit H - Form of Accession Agreement
Exhibit I - Form of Assignment Agreement
REVOLVING CREDIT FACILITY AGREEMENT
-----------------------------------
REVOLVING CREDIT FACILITY AGREEMENT ("Agreement") dated as
of May 2, 2000 among ACE HARDWARE CORPORATION, a Delaware
corporation (the "Company"), each of the financial institutions
named under the caption "Banks" on the signature pages hereof
that is a signatory hereto (individually, a "Bank" and,
collectively, the "Banks"), THE NORTHERN TRUST COMPANY, as
administrative agent for the Banks (in such capacity, together
with its successors in such capacity, the "Agent"), BANK OF
AMERICA, NATIONAL ASSOCIATION, as the Syndication Agent and
SUNTRUST BANK, as the Documentation Agent.
WHEREAS, the Company has requested that the Banks provide a
five-year revolving credit facility in an aggregate amount of
$175,000,000 at any time outstanding, and the Banks are willing
to make such loans upon the terms hereof.
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. Definitions and Accounting.
1.1. Defined Terms. As used herein, the following terms shall
have the following meanings (terms defined in this Section 1.1 or
in other provisions of this Agreement in the singular to have
correlative meanings when used in the plural and vice versa):
"Accession Agreement" shall have the meaning attributed to
that term in Section 2.4(a)(v) hereto.
"Adjusted Net Earnings" shall mean Consolidated Net Earnings
plus amounts deducted in the calculation thereof for
depreciation, amortization, interest expense, and lease expense,
all determined in accordance with GAAP.
"Affiliate" shall mean any Person directly or indirectly
controlling, controlled by, or under direct or indirect common
control with, the Company, except a Subsidiary. A Person shall
be deemed to control another Person if such controlling Person
owns 10% or more of the Voting Stock (or other ownership
interest) of the controlled Person or possesses, directly or
indirectly, the power to direct or cause the direction of the
management or policies of such controlled Person, whether through
the ownership of voting securities, by contract or otherwise.
"Alternate Base Rate" shall mean for each day such interest
rate per annum as shall be equal to the highest of (a) the Prime
Rate on such day and (b) the Fed Funds Rate from time to time
plus 0.5%.
"Alternate Base Rate Loan" shall mean any Loan bearing
interest based upon the Alternate Base Rate.
"Applicable Lending Office" shall mean, for each Bank and
for each type of Loan (other than a Bid Loan), the "Applicable
Lending Office" of such Bank (or of an affiliate of such Bank)
designated on Schedule 1 hereto or such other office of such Bank
(or of an affiliate of such Bank) as such Bank may from time to
time specify to the Agent and the Company as the office by which
its Loans (other than a Bid Loan) of any type are to be made and
maintained and, in the case of a Bid Loans, the office of such
Bank (or an affiliate of such Bank) specified in the relevant
Offer to Make Bid Loans.
"Applicable Margin" shall mean, for any period, the
applicable of the following percentages per annum in effect with
respect to such period as the ratio of Debt to EBITDA as
determined in accordance with Section 8.11(b) shall fall within
the indicated ranges:
Debt to EBITDA Ratio
Level I Level II Level III Level IV
Ratio =1.25:1.0 >1.25:1.0 >1.75:1.0 >2.25:1.0
but but
=1.75:1.0 =2.25:1.0
Facility Fee .10% .125% .15% .20%
LIBOR Rate .40% .525% .65% .80%
plus
For purposes of determining the Applicable Margin, Debt to EBITDA
shall be calculated by the Company as of the end of each of its
fiscal quarters and shall be reported to the Agent pursuant to a
certificate executed by a senior financial officer of the Company
and delivered concurrently with the certificate required by
Section 8.1 hereof. The Applicable Margin shall be adjusted, if
necessary, effective on and after the first Business Day after
the date of receipt by the Agent of the certificate required to
be delivered pursuant to Section 8.1 hereof; provided, however,
that if such certificate, together with the financial statements
to which such certificate relates, are not delivered by the
required delivery date, then Level IV pricing shall apply until
the date such certificate is actually delivered and unless it
indicates that a lower Level is applicable. Notwithstanding the
foregoing, Level II pricing shall apply until the fiscal quarter
ended on June 30, 2000 unless Level IV pricing is applicable
because the Company fails to deliver the certificate as provided
herein.
"Authorized Officer" shall mean (a) in the case of the
Company, its president, chief executive officer, vice president -
finance or treasurer, any Person designated as an "Authorized
Officer" of the Company in Schedule 2 attached hereto or any
other Person designated as an "Authorized Officer" of the Company
for the purpose of this Agreement in an officer's certificate
executed by the Company's secretary, assistant secretary or vice
president - finance and delivered to the Agent, and (b) in the
case of each Bank, any officer of such Bank designated as its
"Authorized Officer" in Schedule 1 or any officer of such Bank
designated its "Authorized Officer" for the purpose of this
Agreement in a certificate executed by one of its Authorized
Officers. Any action taken under this Agreement on behalf of the
Company by any individual who on or after the date of this
Agreement shall have been an Authorized Officer of the Company
and whom the Agent or any Bank in good faith believes to be a
Authorized Officer of the Company at the time of such action
shall be binding on the Company even though such individual shall
have ceased to be an Authorized Officer of the Company, and any
action taken under this Agreement on behalf of any Bank by any
individual who on or after the date of this Agreement shall have
been an Authorized Officer of such Bank and whom the Company in
good faith believes to be an Authorized Officer of such Bank at
the time of such action shall be binding on such Bank even though
such individual shall have ceased to be an Authorized Officer of
such Bank.
"Bid Loan" shall mean any Loan borrowed pursuant to Section
2.2 hereto.
"Bid Loan Note" shall mean a promissory note executed by the
Company payable to a Bank pursuant to Section 2.8(b) in
substantially the form of Exhibit B hereto, evidencing Bid Loans.
"Business Day" shall mean any day (a) on which commercial
banks are not authorized or required to close in Chicago,
Illinois, or (b) if such day relates to a borrowing of, a payment
or prepayment of principal or of interest on, or an Interest
Period for, or any notice in respect of, a Eurodollar Loan, a day
which is also a day on which dealings in Dollar deposits are
carried out in the London interbank market.
"Capital Lease Obligations" shall mean, as to any Person,
the obligations of such Person which are required to be accounted
for as capital leases on a balance sheet of such Person under
GAAP and, for purposes of this Agreement, the amount of such
obligations shall be the capitalized amount thereof, determined
in accordance with GAAP.
"Change in Control" means the acquisition by a Person, or
two or more Persons acting in concert, of beneficial ownership
(within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934) of 20% or
more of the outstanding Voting Stock of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Commitments" shall mean, as to each Bank, the obligation of
such Bank to make Alternate Base Rate Loans and Eurodollar Loans
in an aggregate amount at any time outstanding up to the amount
specified for such Bank in Schedule 1.
"Consolidated Net Earnings" shall mean:
(a) consolidated gross revenues of the Company and its
Subsidiaries less
(b) all operating and non-operating expenses of the
Company and its Subsidiaries including all charges of a
proper character (including any restructuring charges,
current and deferred taxes on income, provision for taxes on
unremitted foreign earnings which are included in gross
revenues, and current additions to reserves),
but not including in gross revenues:
(i) any extraordinary gains (net of expenses and
taxes applicable thereto) resulting from the sale,
conversion or other disposition of capital assets in
excess of extraordinary losses resulting from the sale,
conversion or other disposition of capital assets
(i.e., assets other than current assets);
(ii) any gains resulting from the write-up of
assets;
(iii) any earnings or losses attributable to the
equity owned by the Company or any Subsidiary of any
Person which is not a Subsidiary;
(iv) any earnings of any Person acquired by the
Company or any Subsidiary through purchase, merger or
consolidation or otherwise for any period prior to the
date of acquisition; or
(v) any deferred credit representing the excess of
equity in any Subsidiary at the date of acquisition
over the cost of the investment in such Subsidiary;
all determined in accordance with GAAP.
"Continue", "Continuation" and "Continued" shall refer to
the continuation pursuant to Section 2.9 hereof of a Eurodollar
Loan as a Eurodollar Loan from one Interest Period to the next
Interest Period.
"Convert", "Conversion" and "Converted" shall refer to a
conversion pursuant to Section 2.9 hereof of Alternate Base Rate
Loans into Eurodollar Loans, or of Eurodollar Loans into
Alternate Base Rate Loans.
"Debt" of any Person means, without duplication, (a) all
indebtedness for borrowed money; (b) all obligations issued,
undertaken or assumed as the deferred purchase price of property
or services (other than trade payables entered into, and accruals
(including accruals for patronage dividends payable in cash)
arising, in the ordinary course of business on ordinary terms);
(c) all non-contingent reimbursement or payment obligations with
respect to Surety Instruments; (d) all obligations evidenced by
notes, bonds, debentures or similar instruments, including
obligations so evidenced incurred in connection with the
acquisition of property, assets or businesses; (e) all
indebtedness created or arising under any conditional sale or
other title retention agreement, or incurred as financing, in
either case with respect to property acquired by the Person (even
though the rights and remedies of the seller under such agreement
in the event of default are limited to repossession or sale of
such property, in which case the amount of the Debt with respect
thereto shall be equal to the fair market value of such
property); (f) all Capital Lease Obligations; (g) all
indebtedness referred to in clauses (a) through (f) above secured
by (or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) any Lien upon or in
property (including accounts and contracts rights) owned by such
Person, even though such Person has not assumed or become liable
for the payment of such Debt; provided, the amount of such Debt
for this clause (g) shall be the amount stipulated in any
agreement or instrument evidencing such Person's obligation);
(h) obligations arising in connection with the transfer of an
interest in accounts or notes receivable which transfer
constitutes a true sale, including securitizations and (i) all
Guaranty Obligations in respect of indebtedness or obligations of
others of the kinds referred to in clauses (a) through (h) above;
provided, "Debt" of the Company and its Subsidiaries shall not,
in any case, include obligations in respect of Patronage
Indebtedness.
"Default" shall mean an Event of Default or an event which
with notice or lapse of time or both would become an Event of
Default.
"Documentation Agent" means SunTrust Bank, together with its
successors and assigns in such capacity.
"Dollars" and "$" shall mean lawful money of the United
States of America.
"EBITDA" means Consolidated Net Earnings plus amounts
deducted in the calculation thereof for interest expense, charges
against income for foreign, federal, state and local taxes,
depreciation and amortization, all determined in accordance with
GAAP.
"Environmental Laws" shall mean all federal, state and local
laws, including statutes, regulations, ordinances, codes, rules
and other governmental restrictions and requirements, relating to
the discharge of air pollutants, water pollutants or process
waste water or otherwise relating to the environment or hazardous
substances or the treatment, processing, storage, disposal,
release, transport or other handling thereof, including, but not
limited to, the federal Solid Waste Disposal Act, the federal
Clean Air Act, the federal Clean Water Act, the federal
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, the federal Toxic Substances Control Act,
regulations of the Nuclear Regulatory Agency, and regulations of
any state department of natural resources or state environmental
protection agency, in each case as now or at any time hereafter
in effect.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended from time to time.
"ERISA Affiliate" shall mean any corporation or trade or
business which is a member of the same controlled group of
corporations (within the meaning of Section 414(b) of the Code)
as the Company or is under common control (within the meaning of
Section 414(c) of the Code) with the Company.
"Eurodollar Loan" shall mean any Loan bearing interest based
upon the LIBOR Base Rate.
"Event of Default" shall have the meaning attributed to such
term in Section 9 hereof.
"Excluded Asset Dispositions" means the Company's (a) fee
simple sale or sale and leaseback pursuant to an operating lease
of (i) the Company's headquarters, consisting of two buildings
with a common address of 0000 Xxxxxxxxxx Xxxxx and 0000
Xxxxxxxxxx Xxxxx, xxxxxxxxxxxx, xx Xxx Xxxxx, Xxxxxxxx and
(ii) retail support centers located in Hanover, Maryland,
Huntersville, North Carolina and Rocklin, California only;
(b) sale or other disposition of its stock ownership in OurHouse,
Inc.; (c) sales of retail locations owned by the Company if and
only if the cash proceeds of such sale received by the Company
equal or exceed the Company's net investment in each such sold
retail location; and (d) sales or transfers of its entire
ownership position in any joint venture in which the Company is
an investor if and only if the cash proceeds of such sale
received by the Company equal or exceed the Company's net
investment in such joint venture.
"Fixed Charge Coverage Ratio" shall mean, for the period of
determination, the ratio of (a) its Adjusted Net Earnings for
such period to (b) the sum of interest expense, lease expense and
scheduled principal payments made by the Company and its
Subsidiaries on a consolidated basis on all Debt and Patronage
Indebtedness for such period, all determined in accordance with
GAAP.
"Fed Funds Rate" shall mean for each day the rate per annum
(rounded upwards, if necessary, to the nearest 1/100th of 1%)
equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York in the Composite Closing
Quotation for U.S. Government Securities on such day, provided,
that (a) if the day for which such rate is to be determined is
not a Business Day, the Fed Funds Rate for such day shall be such
rate on such transaction for the next preceding Business Day as
so published on the next succeeding Business Day, and (b) if such
rate is not so published for any date, the Fed Funds Rate for
such day shall be the average rate charged to the Agent on such
day on such transactions as determined by the Agent.
"GAAP" shall mean generally accepted accounting principles
as in effect at the time of the preparation of the consolidated
financial statements of the Company and its Subsidiaries referred
to in Section 7.2.
"Guaranty Obligation" means, as to any Person, any direct or
indirect liability of that Person, whether or not contingent,
with or without recourse, without duplication, with respect to
any Debt, lease, dividend, letter of credit or other obligation
(the "primary obligations") of another Person (the "primary
obligor"), including any obligation of that Person (a) to
purchase, repurchase or otherwise acquire such primary
obligations or any security therefor, (b) to advance or provide
funds for the payment or discharge of any such primary
obligation, or to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or
solvency or any balance sheet item, level of income or financial
condition of the primary obligor, (c) to purchase property,
securities or services primarily for the purpose of assuring the
owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation, or
(d) otherwise to assure or hold harmless the holder of any such
primary obligation against loss in respect thereof. The amount
of any Guaranty Obligations shall be deemed to be the lower of
(y) an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Guaranty Obligation
is made and (z) the maximum amount for which such guaranteeing
Person may be liable pursuant to the terms of the instrument
embodying such Guaranty Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing
Person may be liable are not stated or determinable, in which
case the amount of such Guaranty Obligation shall be such
guaranteeing Person's reasonably anticipated liability in respect
thereof; provided that any determination of the amount of the
Guaranty Obligations of the Company and its Subsidiaries shall
exclude the following: (i) standby letters of credit issued at
the request of the Company having an aggregate face amount not in
excess of $20,000,000, (ii) any obligation of the Company or any
Subsidiary arising from the guaranty or discount or sale with the
guaranty or endorsement of the Company or any Subsidiary of any
obligation evidenced by or contained in a note payable to the
order of the Company, any Subsidiary or third party lender which
has been executed and delivered by a dealer-member of the Company
or any Subsidiary to the extent that the aggregate amount of such
obligations referred to in this clause (ii) does not at any time
exceed $50,000,000, and (iii) any obligation of the Company or
any Subsidiary arising from the guaranty or the discount or sale
with the guaranty or endorsement of the Company or any Subsidiary
of any obligation evidenced by or contained in a note payable to
the order of the Company, any Subsidiary or third party lender
which has been executed and delivered by a franchisee of the
Company or any Subsidiary to the extent that the aggregate amount
of such obligations referred to in this clause (iii) does not at
any time exceed $10,000,000.
"Interest Period" shall mean, with respect to any Eurodollar
Loan, each period commencing on the date such Eurodollar Loan is
made or Converted from an Alternate Base Rate Loan or the last
day of the next preceding Interest Period for such Eurodollar
Loan and ending on the numerically corresponding day in the
first, second, third, sixth, ninth or twelfth calendar month
thereafter, as the Company may select, except that each Interest
Period which commences on the last Business Day of a calendar
month (or on any day for which there is no numerically
corresponding day in the appropriate subsequent calendar month)
shall end on the last Business Day of the appropriate subsequent
calendar month; provided, that (a) no Interest Period for a
Eurodollar Loan shall end after the Termination Date, and
(b) each Interest Period which would otherwise end on a day which
is not a Business Day shall end on the next succeeding Business
Day or, if such next succeeding Business Day falls in the next
succeeding calendar month, on the next preceding Business Day.
"Level" means any of the four ratio ranges applicable to the
Debt to EBITDA ratio as set forth in the table contained in the
definition of "Applicable Margin."
"LIBOR Base Rate" shall mean, with respect to any Eurodollar
Loans to be made or Continued or Converted from Alternate Base
Rate Loans on any day for any Interest Period therefor, the
applicable per annum London interbank offered rate for deposits
in U.S. Dollars appearing on Telerate Page 3750 as of 11:00 a.m.
(London time) two Business Days prior to the first day of such
Interest Period, and having a maturity approximately equal to
such Interest Period. If no London interbank offered rate of
such maturity then appears on Telerate Page 3750, then the LIBOR
Base Rate shall be equal to the London interbank offered rate for
deposits in U.S. Dollars maturing immediately before or
immediately after such maturity, whichever is higher, as
determined by the Agent from Telerate Page 3750. If Telerate
Page 3750 is not available, the applicable LIBOR Base Rate for
the relevant Interest Period shall be the rate determined by the
Agent to be the rate at which The Northern Trust Company offers
to place deposits in U.S. Dollars with first-class banks in the
London interbank market at approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period,
in the approximate amount of The Northern Trust Company's
relevant portion of the Eurodollar Loan to be made or Continued
and having a maturity approximately equal to such Interest
Period.
"LIBOR Rate" shall mean, for any Eurodollar Loan for any
Interest Period therefor, a rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) determined by the Agent to
be equal to (a) the LIBOR Base Rate for such Loan for such
Interest Period divided by (b) the remainder of 1 minus the
Reserve Requirement for such Loan for such Interest Period.
"Lien" shall mean, with respect to any property, any
mortgage, lien, pledge, charge, security interest or encumbrance
similar to the foregoing of any kind in respect thereof,
including the interest of a vendor or lessor under any
conditional sale, capital lease or other title retention
agreement.
"Loan" shall mean any Eurodollar Loan or Alternate Base Rate
Loan or Bid Loan. A reference to a "type" of Loan refers to
Eurodollar Loans as a group or Alternate Base Rate Loans as a
group.
"Loan Fraction" shall mean, for each Bank at any time, a
fraction the numerator of which equals the remainder obtained by
subtracting (a) the aggregate principal amount of then
outstanding Loans made by such Bank from (b) such Bank's
Commitment and the denominator of which equals the remainder
obtained by subtracting (x) the aggregate principal amount of
Loans then outstanding from (y) the aggregate Commitments of all
of the Banks.
"Majority Banks" shall mean Banks holding at least 51% of
the aggregate amount of the Commitments; provided, that, if the
Commitments shall have terminated, Majority Banks shall mean
Banks holding at least 51% of the aggregate unpaid principal
amount of the Loans; provided further, however, in the event any
Bank holds 51% or more of the Commitments or unpaid Loans at any
time, then Majority Banks shall mean such Bank plus at least one
other Bank.
"Margin Stock" shall mean margin stock within the meaning of
Regulations U and X.
"Member Dealers' Equity" shall mean, as of the time of any
determination, the total of (a) the par value (or stated value on
the books of the Company) of the capital stock of all classes of
the Company, plus (or minus in the case of a surplus deficit) (b)
the amount of the consolidated surplus, whether capital or
earned, of the Company and its Subsidiaries; provided, that in no
event shall amounts attributable to treasury stock be included in
Member Dealers' Equity.
"Multiemployer Plan" shall mean a multiemployer plan defined
as such in Section 3(37) of ERISA to which contributions have
been made by the Company or any ERISA Affiliate as a
"contributing sponsor" (within the meaning of Section 4001(a)(13)
of ERISA) and which is covered by Title IV of ERISA.
"Non Pro-Rata Loan Fraction" shall mean for each Bank at any
time, a fraction the numerator of which equals the Commitment of
such Bank and the denominator of which equals the aggregate
Commitments of all of the Banks.
"Notes" shall mean the Revolving Notes and the Bid Loan
Notes.
"Offer to Make Bid Loans" shall mean (a) a telephonic offer
to make Bid Loans made by an Authorized Officer on behalf of a
Bank to the Company containing the information specified in
Section 2.2(c) hereof or (b) a written Offer to Make Bid Loans in
substantially the form of Exhibit D hereto, duly completed and
executed by an Authorized Officer on behalf of a Bank.
"Patronage Indebtedness" shall mean subordinated
indebtedness of the Company issued to its members as all or part
of a patronage dividend and evidenced by a certificate bearing
subordination language substantially the same as that set forth
in Schedule 5 hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
or any entity succeeding to any or all of its functions under
ERISA.
"Pension Plan" shall mean a Plan which is a "defined benefit
plan" within the meaning of Section 3(35) of ERISA.
"Person" shall mean any individual, corporation, limited
liability company, voluntary association, partnership, trust,
estate, unincorporated organization or government (or any agency,
instrumentality or political subdivision thereof).
"Plan" shall mean any plan, program or arrangement which
constitutes an "employee benefit plan" within the meaning of
Section 3(3) of ERISA.
"Post-Default Rate" shall mean a rate per annum equal to two
percent (2%) above the rate applicable to such Loan, but in no
event less than a rate per annum equal to two percent (2%) above
the Alternate Base Rate as in effect at the time of such default.
"Prime Rate" shall mean on any day the prime rate
established by The Northern Trust Company and in effect on such
day. Each change in the Prime Rate shall be effective from the
date of the announcement by The Northern Trust Company of a
change in its prime rate. Neither the Prime Rate nor the prime
rate of The Northern Trust Company is intended to constitute the
lowest rate of interest charged by The Northern Trust Company or
any Bank.
"Quarterly Dates" shall mean the last Business Day of each
March, June, September and December, commencing in June, 2000.
"Refinanced Debt" shall mean the Debt which is outstanding
under the agreements identified as "Refinanced Debt Agreements"
on Schedule 3 hereto.
"Regulations D, U and X" shall mean, respectively,
Regulations D, U and X of the Board of Governors of the Federal
Reserve System (or any successor), as the same may be amended or
supplemented from time to time.
"Regulatory Change" shall mean any change after the date of
this Agreement in federal, state or foreign law or regulations
(including, without limitation, Regulation D) or the adoption or
making after such date of any interpretation, directive or
request applying to a Bank (whether or not having the force of
law) by any court or governmental or monetary authority.
"Request for Bid Loans" shall mean (a) a telephonic request
for bids on Bid Loans made by an Authorized Officer on behalf of
the Company to a Bank, which request shall contain the
information specified in Section 2.2(b) or (b) a written Request
for Bid Loans in substantially the form of Exhibit C hereto, duly
completed and executed by an Authorized Officer on behalf of the
Company.
"Reserve Requirement" shall mean, for any Interest Period
for any Eurodollar Loan, the sum (expressed as a decimal) of (a)
the average maximum rate at which reserves (including any
marginal, supplemental or emergency reserves) are required to be
maintained during such Interest Period under Regulation D by
member banks of the Federal Reserve System against "Eurocurrency
liabilities" and (b) any other reserves required to be maintained
by such member banks by reason of any Regulatory Change against
(i) any category of liabilities which includes deposits by
reference to which the LIBOR Base Rate is to be determined or
(ii) any category of extensions of credit or other assets which
includes a Eurodollar Loan.
"Revolving Note" shall mean a promissory note executed by
the Company payable to a Bank pursuant to Section 2.8(b) in
substantially the form of Exhibit A hereto evidencing Loans
(other than Bid Loans).
"Subsidiary" shall mean any Person of which or in which the
Company or its other Subsidiaries owns, directly or indirectly,
more than fifty percent (50%) of (a) the combined voting power of
all classes of stock having general voting power under ordinary
circumstances to elect a majority of the board of directors of
such Person, if it is a corporation, (b) the capital interest or
profits interest of such Person, if it is a partnership, joint
venture or similar entity, or (c) the beneficial interest of such
Person, if it is a trust, association or other unincorporated
organization.
"Substantial Part" shall mean (a) in the context of the
consolidated assets of the Company and its Subsidiaries, assets
which constitute 10% or more thereof and (b) in the context of
assets' contribution to Consolidated Net Earnings, assets which
contributed 15% or more thereof.
"Surety Instruments" means all letters of credit (including
standby and commercial), banker's acceptances, bank guaranties,
shipside bonds, surety bonds and similar instruments.
"Syndication Agent" means Bank of America, National
Association, together with its successors and assigns in such
capacity.
"Termination Date" shall mean May 2, 2005.
"Voting Stock" shall mean, with respect to any corporation,
any shares of stock of such corporation whose holders are
entitled under ordinary circumstances to vote for the election of
directors of such corporation (irrespective of whether at the
time stock of any other class or classes shall have or might have
voting power by reason of the happening of any contingency).
1.2. Accounting. Unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall
be made, and all financial statements and certificates and
reports as to financial matters required to be furnished to the
Agent or the Banks hereunder shall be prepared, in accordance
with GAAP applied on a basis consistent with the audited
consolidated financial statements of the Company and its
Subsidiaries referred to in Section 7.2 hereof. In the event
that the Company or the Majority Banks believe that there has
been a change in GAAP from those utilized in preparing the
financial statements referred to in Section 7.2 which materially
affect (whether favorably or adversely) compliance or measurement
under the financial covenants of this Agreement, each of the
Banks and the Company agree to negotiate an amendment to this
Agreement to bring the Company into substantially the same
compliance or measurement with respect to the financial covenants
as immediately preceding such change in GAAP. If no resolution
of such item or items of compliance or measurement is effected,
the Company and each of the Banks agree, for the purposes of the
disputed item or items only, to determine compliance by using
GAAP.
Section 2. The Loans.
2.1. The Revolving Loans.
(a) Each Bank severally agrees, on the terms of this Agreement,
to make loans to the Company during the period from and including
the date hereof to but not including the Termination Date in an
aggregate principal amount at any one time outstanding up to but
not exceeding the amount of such Bank's Commitment as then in
effect. Subject to the terms of this Agreement, during such
period the Company may borrow, repay and reborrow the amount of
the Commitments by means of Alternate Base Rate Loans and
Eurodollar Loans and may Convert Loans of one type into Loans of
the other type or Continue Eurodollar Loans; provided, that no
more that five (5) Eurodollar Loans may be outstanding from each
Bank at any one time; and provided further, that the Commitment
of each Bank shall be deemed utilized from time to time to the
extent of the aggregate amount of the Bid Loans made by such
Bank.
(b) The Loans (other than Bid Loans) to be made on any day shall
be in an aggregate amount not less than that specified in
Section 4.4 and shall consist of Loans of the same type (except
as otherwise provided in Section 2.2 with respect to Bid Loans).
2.2. The Bid Loans.
(a) Each Bank severally agrees that, on the terms of this
Agreement, the Company may borrow Bid Loans under this
Section 2.2 from time to time on any Business Day during the
period from the date hereof until the Termination Date, in the
manner set forth below; provided, that following the making of
each Bid Loan, the aggregate amount of Loans then outstanding
shall not exceed the aggregate amount of Commitments.
(b) Bid Loans shall constitute utilization of the Commitments.
The Company may request the making of Bid Loans under this
Section 2.2 by making a Request for Bid Loans, specifying the
date and aggregate amount of the proposed Bid Loans, the maturity
date for repayment of each Bid Loan (which maturity date may be
overnight or up to one year later but may not be later than the
Termination Date), the interest payment date or dates relating
thereto, and any other terms to be applicable to such Bid Loans,
not later than 11:30 a.m. (Chicago time) on the Business Day of
the proposed Bid Loans. Each telephonic Request for Bid Loans
shall be made upon all the Banks and shall be promptly confirmed
by written Request for Bid Loans sent by telecopier the same day
to each Bank and the Agent.
(c) Each Bank may, if, in its sole discretion, it elects to do
so, irrevocably offer to make one or more Bid Loans to the
Company in response to any Request for Bid Loans at a rate or
rates of interest specified by such Bank in its sole discretion,
by notice to the Company before 12:30 p.m. (Chicago time) on the
date of such proposed Bid Loans by making an Offer to Make Bid
Loans specifying the minimum amount (which shall be at least
$1,000,000 and an integral multiple of $500,000 in excess
thereof) and maximum amount of each Bid Loan which such Bank
would be willing to make as part of such proposed Bid Loans
(which amounts may not exceed such Bank's then unused
Commitment), the rate or rates of interest therefor (which rate
or rates shall include all adjustments, including adjustments in
respect of reserve requirements and assessments) and such Bank's
Applicable Lending Office with respect to such Bid Loan. Unless
otherwise agreed by the Agent and the Company, no such offer
shall contain qualifying, conditional or similar language or
propose terms other than or in addition to those set forth in the
applicable Request for Bid Loans and, in particular, no such
offer may be conditioned upon acceptance by the Company of all of
the principal amount of the Bid Loans for which such offer is
being made. If any Bank shall not make an offer before 12:30
p.m. (Chicago time), it shall be deemed to have elected not to
make an offer, and such Bank shall not be obligated to, and shall
not, make any Bid Loan. Each telephonic Offer to Make Bid Loans
shall be promptly confirmed by a written Offer to Make Bid Loans
sent by telecopy the same day to the Company and the Agent.
(d) The Company shall, in turn, before 1:00 p.m. (Chicago time)
on the date of such proposed Bid Loans, either
(i) cancel the relevant Request for Bid
Loans by giving telephonic notice to that effect
to the Banks and the Agent, which notice shall be
confirmed in writing by telecopy sent the same day
to the Agent and each Bank, or
(ii) accept one or more of the offers made by
any Bank or Banks pursuant to paragraph (c) above
in its sole discretion but only in ascending order
of interest rates, by giving telephonic notice to
the Banks whose offers are being accepted and the
Agent of the interest rate, term and amount of
each Bid Loan (which amount shall be equal to or
greater than the minimum amount, and equal to or
less than the maximum amount notified to the
Company by such Bank in its Offer to Make Bid
Loans for such Bid Loan, pursuant to paragraph (c)
above) to be made by each Bank, and reject any
remaining offers made by Banks pursuant to
paragraph (c) above by giving the Banks and the
Agent telephonic notice to that effect; provided,
that the Company may not accept any offer if the
Agent has advised the Company that such offer
fails to comply with paragraph (c) above or
otherwise fails to comply with the requirements of
this Agreement (including, without limitation,
paragraph (a) above). If offers are made by two
or more Banks with the same interest rates for a
greater aggregate principal amount than the amount
in respect of which offers are accepted, the
principal amount of Bid Loans in respect of which
offers are accepted shall be allocated by the
Company among such Banks as nearly as possible (in
multiples of $500,000) in proportion to the
aggregate principal amount of such offers.
Determinations by the Company of the amounts of
Bid Loans shall be conclusive, absent manifest
error.
(e) If the Company notifies the Banks that the relevant Request
for Bid Loans is canceled pursuant to paragraph (d)(i) above, no
Bid Loans shall be made in respect thereof.
(f) If the Company accepts one or more of the offers made by any
Bank or Banks pursuant to paragraph (d)(ii) above, the Company
shall confirm such acceptance in writing by telecopy sent the
same day to the Agent and each Bank.
(g) Each Bank that is to make a Bid Loan shall, before 2:00 p.m.
(Chicago time) on the date of such Bid Loan specified in the
notice received from the Company pursuant to paragraph (b) make
available the amount of such Bid Loan for the account of its
Applicable Lending Office to the Agent. Upon fulfillment of the
applicable conditions set forth in Section 6 and after receipt by
the Agent of such funds, the Agent will make such funds available
to the Company at the Agent's address. Promptly after the making
of each Bid Loan, the Agent will notify each Bank of the amount
and type thereof, the amount of each Commitment utilized thereby
and the dates upon which the same commenced and are scheduled to
terminate.
(h) The Bid Loans to be made on a particular date shall be in an
aggregate amount not less than $1,000,000 or an integral multiple
of $500,000 in excess thereof and, following the borrowing
thereof, the Company shall be in compliance with the limitation
set forth in the proviso to the first sentence of Section 2.2(a).
(i) Within the limits set forth in this Section 2.2, the Company
may from time to time borrow, repay and reborrow Bid Loans under
this Section 2.2.
(j) The Company shall repay to the Agent for the account of each
Bank which has made a Bid Loan, on the maturity date of each Bid
Loan (such maturity date being that specified by the Company for
repayment of such Bid Loan in the related Request for Bid Loans
delivered pursuant to paragraph (a) above and provided in the
applicable loan account or Bid Loan Note, if any), the then
unpaid principal amount of such Bid Loan. The Company shall have
no right to prepay any principal amount of any Bid Loan except
(i) on the terms, specified by the Company for such Bid Loan in
the related Request for Bid Loans delivered pursuant to paragraph
(a) above and set forth in the applicable loan account or Bid
Loan Note, if any, or (ii) with the consent of the applicable
Bank. The Company agrees to provide the Agent with written
notice of any prepayment of Bid Loans on the date such Loans are
prepaid.
(k) The Company shall pay interest on the unpaid principal
amount of each Bid Loan from the date of such Bid Loan to the
date the principal amount of such Bid Loan is repaid in full, at
the rate of interest for such Bid Loan specified by the Bank
making such Bid Loan in its Offer to Make Bid Loans delivered
pursuant to paragraph (c) above, payable on the interest payment
date or dates specified by the Company for such Bid Loan in the
related Request for Bid Loans delivered pursuant to paragraph (a)
above, as provided in the applicable loan account or Bid Loan
Note, if any.
2.3. Notice of Borrowings. The Company shall give the Agent
(which shall promptly notify the Banks) notice of each borrowing
of Alternate Base Rate Loans or Eurodollar Loans under
Section 2.1 as provided in Section 4.5 hereof. Not later than
1:00 p.m., Chicago time on the date specified for each such
borrowing hereunder, each Bank shall make available the amount of
the Alternate Base Rate Loan or the Eurodollar Loan to be made by
it on such date to the Agent, at such account as it shall
specify, in immediately available funds, for the account of the
Company. The amount so received by the Agent shall, subject to
the terms and conditions of this Agreement, be made available to
the Company by depositing the same, in immediately available
funds, in an account of the Company maintained at the Agent.
2.4. Changes of Commitments.
(a) Increases in Commitments.
(i) If no Default has occurred and is continuing, the Company
may, once during each calendar year prior to the Termination Date
commencing May 2, 2000, request an increase in the aggregate
Commitments, by giving written notice to the Agent and each Bank
(each such notice an "Increase Request"). Concurrently with
delivering an Increase Request, the Company may seek additional
commitments from other financial institutions ("New Bank(s)").
An Increase Request may request an increase in the aggregate
Commitments of at least $5,000,000 but not more than $50,000,000;
provided, that in no event shall the aggregate Commitments of the
Banks (including New Banks) hereunder exceed $225,000,000 at any
time. Each Bank may, in its sole and absolute discretion, commit
to increase its Commitment by all or a part of the increase
requested in the Increase Request by delivering to the Company
and the Agent a commitment valid for a period of 30 days
("Commitment Increase Notice") to such effect, which Commitment
Increase Notice shall refer to this Section 2.4(a)(i) and which
shall be given no later than 10 Business Days after the date of
the Increase Request (the period between the date of the Increase
Request and the 10 Business Day deadline for response being
referred to as the "Consent Period"). The existing Commitment of
any Bank shall not be increased in connection with an Increase
Request if such Bank (x) by notice ("Decline Notice") declines to
increase its Commitment during the Consent Period or (y) fails to
respond to the Company and the Agent within the Consent Period
(each such Bank giving a Decline Notice or failing to respond on
or before the expiration of the Consent Period being called a
"Declining Bank" and each other Bank being called an "Increasing
Bank").
(ii) Upon expiry of the Consent Period (or sooner if all existing
Banks and New Banks respond sooner), if the commitments of the
Increasing Banks specified in their respective Commitment
Increase Notices and the New Bank(s) in their commitment letters
equal or exceed the Increase Request, the Agent shall allocate
such commitments up to the amount specified in the Increase
Request to the Increasing Banks and New Bank(s) based on the
ratio of each Increasing Bank's commitment specified in its
Commitment Increase Notice (or New Bank in its commitment letter)
to the aggregate of all commitments of the Increasing Banks
specified in the Commitment Increase Notices and New Bank(s) in
their commitment letters.
(iii) Upon expiry of the Consent Period, if the commitments
of the Increasing Banks specified in their respective Commitment
Increase Notices and the New Bank(s) in their commitment letters
are less than the Increase Request, the Company may agree to
accept such commitments from the Increasing Banks and New
Bank(s). Upon expiry of the Consent Period (or sooner if all
existing Banks and New Banks respond sooner), the Company may add
New Bank(s) with commitments up to the amount specified in their
commitment letters provided, that (A) no Default shall have
occurred and be continuing, (B) the aggregate amount of
Commitments plus increases in Increasing Bank existing
Commitments and New Bank commitments does not exceed
$225,000,000, (C) any such New Bank assumes all the rights and
obligations of a "Bank" hereunder pursuant to accession
documentation as the Agent shall specify and described below and
(D) such New Bank is reasonably satisfactory to the Agent. If
the Company does accept such commitments, the Agent shall
allocate such commitments to each of the Increasing Banks and New
Bank(s) based on the ratio of its commitment specified in its
Commitment Increase Notice or commitment letter to the aggregate
of all commitments of the Increasing Banks and New Bank(s)
specified in their Commitment Increase Notices and commitment
letters.
(iv) Upon allocation of the increased commitments to the
Increasing Banks and/or New Bank(s), the Company shall deliver
such documentation as the Agent may reasonably require to
evidence the Company's authority to incur the increased
obligations hereunder, including, without limitation, documents
similar to those described in Section 6.1(b) - (e) inclusive, and
if requested by the Increasing Banks and/or New Banks,
replacement Notes to the Increasing Banks and/or new notes to the
New Bank(s) reflecting the Commitment of each Increasing Bank and
New Bank. Such new and replacement notes, if any, shall be
deemed to constitute a "Note" or "Notes" hereunder for all
purposes and such new and increased commitments shall constitute
a "Commitment" or "Commitments" hereunder for all purposes. The
Agent shall promptly provide each of the Banks a revised
Schedule 1 reflecting the Commitments of the Banks.
(v) Any New Bank may become a "Bank" under this Agreement by
executing and delivering to the Company and the Agent an
Accession Agreement (an "Accession Agreement") in substantially
the form of Exhibit H hereto and such related documentation as
shall be reasonably satisfactory in form and substance to the
Agent, pursuant to which such New Bank shall assume the rights,
privileges, duties and obligations of a "Bank" hereunder. Upon
the effectiveness of any such Accession Agreement and related
documentation, the New Bank shall become a "Bank" for all
purposes of this Agreement having the Commitments specified in
such Accession Agreement. The Agent shall promptly provide a
copy of each Accession Agreement to each of the Banks.
(vi) If any Alternate Base Rate Loans or Eurodollar Loans shall
be outstanding at the time an Accession Agreement and/or increase
in Commitments becomes effective, the Company shall repay such
portion of such Loans and borrow an equal principal amount of new
Alternate Base Rate Loans and Eurodollar Loans from each New Bank
which has acceded and/or Increasing Bank so that after giving
effect to such prepayment and borrowing Alternate Base Rate Loans
and Eurodollar Loans are held pro rata among the Banks in
accordance with the Commitments (or, if any Bid Loan has been
outstanding, so that such Alternate Base Rate Loans and
Eurodollar Loans are held in such proportion as they would be
held if such New Bank and/or Increasing Bank had been a Bank
hereunder that had not made any Bid Loans (and whose loan amounts
were determined as provided in Section 4.2)). The Banks shall
make disbursements among themselves to give effect to such
prepayment and borrowing pursuant to instructions from the Agent.
The Company shall pay accrued interest to the date of prepayment
on any Loans so prepaid, together with any amounts payable as a
result of such prepayment pursuant to Section 5.5, such
prepayments being due on the date of such prepayments. Any
Eurodollar Loans made by any New Bank and/or Increasing Bank
shall (if not made on the first day of the relevant Interest
Period hereunder) bear interest from the date they are made to
the end of the then current Interest Period(s) for Eurodollar
Loans hereunder at, in the case of the New Bank, such rate(s) per
annum as shall be set forth in the Accession Agreement or, in the
case of any Increasing Bank, at a rate per annum equal the cost
of funding such Loan in the London interbank market for the
period to the end of the Interest Period plus the Applicable
Margin.
(b) Reductions/Terminations of Commitment. The Company shall
have the right to terminate or reduce the aggregate amount of the unused
Commitments at any time or from time to time, provided, that:
(i) the Company shall give notice of each such termination
or reduction as provided in Section 4.5 hereof;
(ii) each partial reduction shall be in minimum amounts
of $5,000,000 or an integral multiple of $1,000,000
in excess thereof;
(iii)the aggregate amount of Commitments shall not be reduced
below the aggregate outstanding principal amount of
Loans; and
(iv) no such reduction shall cause the Commitment of any Bank
to be reduced below the outstanding principal amount
of Loans made by such Bank.
(c) No Reinstatement. Commitments once terminated or reduced
may not be reinstated.
2.5. Fees.
(a) The Company shall pay to the Agent for the account of each
Bank (to be paid to each Bank pro rata based on such Bank's
Commitment without giving effect to any usage thereof) an annual
facility fee for the period from and including the date hereof to
but not including the date such Commitment is terminated or the
Termination Date, at the Applicable Margin specified for
"Facility Fee" in the definition of Applicable Margin. The
accrued Facility Fee in respect of the Commitments shall be
payable in arrears on the Quarterly Dates and on the earlier of
the date the Commitments are terminated or the Termination Date.
(b) On or before the date hereof, the Company shall pay to the
Agent for the account of each Bank an irrevocable upfront fee as
shall be set forth in a letter agreement dated the date of this
Agreement between the Company and the Agent based on each Bank's
Commitment on the date hereof.
(c) The Company shall pay to the Agent for the account of the
Agent an agent's fee and such other fees as shall be set forth in
a letter agreement dated the date of this Agreement between the
Agent and the Company.
2.6. Lending Offices. The Loans of each type made by each Bank
shall be made and maintained at such Bank's Applicable Lending
Office for Loans of such type and Bid Loans made by each Bank
shall be made and maintained at the Applicable Lending Office
specified in the relevant Offer to Make Bid Loans.
2.7. Several Obligations; Remedies Independent. The failure of
any Bank to make any Loan to be made by it on the date specified
therefor shall not relieve any other Bank of its obligation, if
any, to make any Loan on such date, but neither any Bank nor the
Agent shall be responsible for the failure of any other Bank to
make a Loan to be made by such other Bank. The amounts payable
by the Company at any time hereunder and under the Notes, if any,
to each Bank shall be a separate and independent debt, and each
Bank shall be entitled to protect and enforce its rights arising
out of this Agreement and the Notes, if any, and it shall not be
necessary for any other Bank or the Agent to consent to, or be
joined as an additional party in, any proceedings for such
purposes.
2.8. Loan Accounts. (a) The Loans made by each Bank shall be
evidenced by one or more accounts or records maintained by such
Bank in the ordinary course of business. The accounts or records
maintained by the Agent and each Bank shall be conclusive absent
manifest error of the amount of the Loans made by the Banks to
the Company, and the interest and payments thereon. Any failure
so to record or any error in doing so shall not, however, limit
or otherwise affect the obligation of the Company hereunder to
pay any amount owing with respect to the Loans.
(b) Upon the request of any Bank made through the Agent, the
Loans (other than Bid Loans) made by such Bank may be evidenced
by one or more Revolving Notes, and the Bid Loans made by such
Bank may be evidenced by one or more Bid Loan Notes, each instead
of loan accounts. Each such Bank shall endorse on the schedules
annexed to its Note(s) the date, amount and maturity of each Loan
made by it and the amount of each payment of principal made by
the Company with respect thereto. Each such Bank is irrevocably
authorized by the Company to endorse its Note(s) and each Bank's
record shall be conclusive absent manifest error; provided,
however, that the failure of a Bank to make, or an error in
making, a notation thereon with respect to any Loan shall not
limit or otherwise affect the obligations of the Company
hereunder or under any such Note to such Bank.
2.9. Voluntary Conversion or Continuation of Loans. Subject to
Section 4.4 hereof, the Company shall have the right to Convert
Loans (other than Bid Loans) of one type into Loans of another
type or Continue Eurodollar Loans as such at any time, provided,
that: (a) the Company shall give the Agent written notice of
each such Conversion or Continuation as provided in Section 4.5
hereof; and (b) Eurodollar Loans may be Continued or Converted
only on the last day of an Interest Period for such Loans. So
long as any Default or Event of Default shall have occurred and
be continuing, no Loan may be Converted or Continued (upon
expiration of the current Interest Period) into or as a
Eurodollar Loan unless the Agent and each of the Banks shall
otherwise consent in writing.
Section 3. Payments of Principal and Interest.
3.1. Repayment of Loans. The Company unconditionally promises to
pay to the Agent for the account of each Bank, the principal of
such Bank's Loans on the earlier of (a) the Termination Date,
(b) the date on which all amounts outstanding under this
Agreement have been declared or have automatically become due and
payable (whether by acceleration or otherwise), or (c) in the
case of any Bid Loan, on the maturity date for such Bid Loan as
specified by the Company in the Request for Bid Loans.
3.2. Prepayments of Loans.
(a) The Company shall have no right to prepay any principal
amount of any Alternate Base Rate Loans or Eurodollar Loans other
than as provided in paragraph (b) below.
(b) The Company may, upon the giving of such notice as is
specified in Section 4.5 hereof, and if such notice is given the
Company shall, prepay the outstanding principal amounts of the
Alternate Base Rate Loans or Eurodollar Loans in whole or ratably
(in accordance with the outstanding principal amounts of Loans of
such type then held by the Banks) in part, together with accrued
interest to the date of such prepayment on the principal amount
prepaid; provided, however, (i) partial prepayment shall be in an
aggregate principal amount not less than that specified in
Section 4.4 and (ii) Eurodollar Loans prepaid on a day other than
the last day of an Interest Period shall be subject to
Section 5.5.
3.3. Interest.
(a) The Company promises to pay to the Agent for the account of
each Bank, interest on the unpaid principal amount of each Loan
(other than any Bid Loan) made by such Bank for the period from
and including the date of such Loan to but excluding the date
such Loan shall be paid in full, (i) while such Loan is an
Alternate Base Rate Loan, at a rate per annum equal to the
Alternate Base Rate (as in effect from time to time); and
(ii) while such Loan is a Eurodollar Loan, for each Interest
Period relating thereto, at a rate per annum equal to the LIBOR
Rate for such Loan for such Interest Period plus the Applicable
Margin specified in "LIBOR Rate plus" in the definition of
"Applicable Margin."
(b) Notwithstanding the foregoing, the Company will pay to the
Agent for the account of each Bank, interest at the Post-Default
Rate on any principal of any Loan (including any Bid Loan) made
by such Bank, and (to the fullest extent permitted by law) on any
interest or other amount payable by the Company hereunder or
under any Note, if any, held by such Bank which shall not be paid
in full when due (whether at stated maturity, by acceleration or
otherwise), for each day during the period from and including the
due date thereof to but excluding the date the same is paid in
full (or the date the same is no longer due as a result of a
notice of acceleration being rescinded).
(c) Accrued interest shall be payable (i) in the case of an
Alternate Base Rate Loan, quarterly on the Quarterly Dates or at
maturity if earlier, (ii) in the case of a Eurodollar Loan, on
the last day of each Interest Period therefor and if such
Interest Period is in excess of three months, the day three
months after the commencement of such Interest Period and
thereafter the day three months after each preceding payment date
or maturity, and (iii) in the case of any Alternate Base Rate
Loan or Eurodollar Loan, upon the payment or prepayment thereof
or the Conversion of such Loan to a Loan of another type (but
only on the principal amount so paid, prepaid or Converted),
except that interest payable at the Post-Default Rate shall be
payable from time to time on demand and interest on any
Eurodollar Loan that is Converted into an Alternate Base Rate
Loan pursuant to Section 5.4 hereof shall be payable on the date
of Conversion (but only to the extent so Converted).
(d) Promptly after the determination of any interest rate
provided for herein (other than in respect of any Bid Loan) or
any change therein, the Agent shall give notice thereof to the
Banks and the Company.
Section 4. Payments; Pro Rata Treatment; Computations; Etc.
4.1. Payments.
(a) Except to the extent otherwise provided herein, all payments
of principal, interest and other amounts to be made by the
Company under this Agreement and the Notes, if any, shall be made
in Dollars, in immediately available funds, without deduction,
defense, set-off or counterclaim, to the Agent at such account as
it may specify, not later than 1:00 p.m., Chicago time, on the
date on which such payment shall become due (each such payment
made after such time to be deemed to have been made on the next
succeeding Business Day).
(b) The Agent may (but shall not be obligated to) debit the
amount of any payment which is required to be made by the Company
under this Agreement or any Note, if any, to any ordinary deposit
account of the Company with the Agent (with notice to the
Company) on or after the due date of such payment.
(c) Each payment received by the Agent under this Agreement or
any Note, if any, for the account of a Bank shall be paid
promptly to such Bank, in immediately available funds, for the
account of such Bank's Applicable Lending Office for the Loan in
respect of which such payment is made.
4.2. Pro Rata Treatment.
(a) Except to the extent otherwise provided herein: (i) each
borrowing from the Banks under Section 2.1 hereof shall be made
from the Banks, each payment of fees under Section 2.5(a) hereof
shall be made for the account of the Banks, and each termination
or reduction of the amount of the Commitments under Section 2.4
hereof shall be applied to the Commitments of the Banks, pro rata
according to the amounts of such Commitments; (ii) the making,
Conversion and Continuation of Loans of a particular type (other
than Conversions provided for by Section 5.4 hereof and Bid
Loans) shall be made pro rata among the Banks according to the
amounts of the Commitments, and the then current Interest Period
for each Loan of such type shall be coterminous; (iii) each
payment or prepayment of principal of Loans (other than Bid
Loans) by the Company shall be made for the account of the Banks
pro rata in accordance with the respective unpaid principal
amounts of the Loans of the relevant type held by the Banks; and
(iv) each payment of interest on Loans (other than Bid Loans) by
the Company shall be made for the account of the Banks pro rata
in accordance with the amounts of interest due and payable to the
respective Banks with respect to Loans of the relevant type.
(b) Notwithstanding the foregoing, if any Bid Loans shall be
outstanding, the amount of each Eurodollar Loan or Alternate Base
Rate Loan to be made on any day by any Bank shall be such amount
as is the product obtained by multiplying (i) the total amount of
the Loans to be made on such day times (ii) such Bank's Loan
Fraction on such day.
(c) Notwithstanding the foregoing, if no Bid Loans shall be
outstanding but there shall be outstanding any Eurodollar Loans
or Alternate Base Rate Loans which are not then held by the Banks
pro rata in accordance with the Commitments, the amount of each
Eurodollar Loan or Alternate Base Rate Loan to be made on any day
by any Bank shall be such amount as is obtained by (i)
determining for each Bank the product obtained by multiplying (A)
such Bank's Non-Pro Rata Loan Fraction on such day times (B) the
aggregate principal amount of all Loans to be outstanding under
this Agreement on such day (including the Loans being made on
such day) and (ii) subtracting from the amount determined for
each Bank pursuant to clause (i) the aggregate principal amount
of all Loans made by such Bank to be outstanding on such day,
other than such Loans being made on such day.
(d) Notwithstanding the foregoing, if no Bid Loans shall be
outstanding but there shall be outstanding any Eurodollar Loans
or Alternate Base Rate Loans which are not then held by the Banks
pro rata in accordance with the Commitments and an Event of
Default shall have occurred and be continuing and the Commitments
terminated and the Loans accelerated, then the Banks holding
Loans less than their pro rata share of the Commitments shall
promptly purchase participations in the Loans held by such other
Banks in such amounts, and make such other adjustments from time
to time as shall be equitable, to the end that all Banks shall
hold the Loans pro rata in accordance with the Commitments.
4.3. Computations. Interest on Eurodollar Loans, Bid Loans and
fees shall be computed on the basis of a year of 360 days for the
actual number of days elapsed (including the first day but
excluding the last day) occurring in the period for which such
interest or fees are payable. Interest on Alternate Base Rate
Loans shall be computed on the basis of a year of 365 or 366
days, as the case may be, for the actual number of days elapsed
(including the first day but excluding the last day) occurring in
the period for which such interest is payable. Each
determination by the Agent of an interest rate hereunder shall be
conclusive and binding for all purposes, absent manifest error.
4.4. Minimum Amounts. Except for Conversions or prepayments made
pursuant to Section 2.2, 2.4(a) or 5.4 hereof, each borrowing,
Conversion and prepayment of principal of Loans shall be in an
amount at least equal to $1,000,000, in the case of Alternate
Base Rate Loans, and $5,000,000, in the case of Eurodollar Loans
(borrowings, prepayments or Conversions of or into Loans of
different types or, in the case of Eurodollar Loans, having
different Interest Periods at the same time hereunder to be
deemed separate borrowings, Conversions and prepayments for
purposes of the foregoing, one for each type or Interest Period).
Anything in this Agreement to the contrary notwithstanding, the
aggregate principal amount of Eurodollar Loans having the same
Interest Period shall be at least equal to $5,000,000 and, if any
Eurodollar Loans would otherwise be in a lesser principal amount
for any period, such Loans shall be Alternate Base Rate Loans
during such period.
4.5. Certain Notices.
(a) Notices by the Company to the Agent of terminations or
reductions of Commitments, of borrowings, Conversions,
Continuations and prepayments of Loans, of the type of Loans and
of the duration of Interest Periods shall be irrevocable and
shall be effective only if received by the Agent not later than
10:00 a.m. Chicago time on the number of Business Days prior to
the date of the relevant termination, reduction, borrowing,
Conversion, Continuation or prepayment or the first day of such
Interest Period specified below:
Number of
Business
Notice Days Prior
Termination or
reduction of Commitments 2
Borrowing or repayment of,
or Conversions into,
Alternate Base Rate Loans 0
Borrowing or repayment of,
Conversions into, Continuations
as, or duration of Interest
Period for, Eurodollar Loans 2
(b) Each such notice of termination or reduction shall specify
the amount of the Commitments to be terminated or reduced. Each
such notice of borrowing (which shall be in substantially the
form of Exhibit E hereto), Conversion or Continuation (which
shall be in substantially the form of Exhibit F hereto), or
prepayment shall specify the Loans to be borrowed, Converted,
Continued or prepaid and the amount (subject to Section 4.4
hereof) and type of the Loans to be borrowed, Converted,
Continued or prepaid and the date of borrowing, Conversion,
Continuation or prepayment (which shall be a Business Day). Each
such notice of the duration of an Interest Period shall specify
the Loans to which such Interest Period is to relate. The Agent
shall promptly notify the Banks of the contents of each such
notice.
(c) In the event that the Company fails to select the type of
Loan, or the duration of any Interest Period for any Eurodollar
Loan within the time period and otherwise as provided in this
Section 4.5, such Loan (if outstanding as a Eurodollar Loan) will
be automatically Converted into an Alternate Base Rate Loan on
the last day of the then current Interest Period for such Loan or
(if outstanding as an Alternate Base Rate Loan) will remain as,
or (if not then outstanding) will be made as, an Alternate Base
Rate Loan.
4.6. Non-Receipt of Funds by the Agent. Unless the Agent shall
have been notified by a Bank or the Company (the "Payor") prior
to the time by which the Payor is scheduled to make a payment to
the Agent (a "Required Payment"), which notice shall be effective
upon receipt, that the Payor does not intend to make the Required
Payment to the Agent, the Agent may assume that the Required
Payment has been made and may in reliance upon such assumption
(but shall not be required to) make the amount thereof available
to the intended recipient(s) on such date and, if the Payor has
not in fact made the Required Payment to the Agent, the
recipient(s) of such payment shall, on demand, repay to the Agent
the amount so made available together with interest thereon in
respect of each day during the period commencing on the date such
amount was so made available by the Agent until the date the
Agent recovers such amount at a rate per annum equal to (if the
recipient is the Company) the Alternate Base Rate for such day,
and (if the recipient is a Bank) the Fed Funds Rate for such day
as determined by the Agent; and if such recipient(s) shall fail
promptly to make such payment, the Agent shall be entitled to
recover such amount, on demand, from the Payor, together with
interest as aforesaid at the Alternate Base Rate (if the Payor is
the Company) or the Fed Funds Rate (if the Payor is a Bank).
4.7. Set-off and Sharing of Payments, Etc.
(a) The Company agrees that in addition to any right of set-off,
banker's lien or counterclaim a Bank may otherwise have, each
Bank shall be entitled to apply and offset balances and other
claims of the Company at any of such Bank's or its affiliate's
offices, in Dollars or in any other currency, against any amount
payable to such Bank hereunder or under the Notes, if any, which
is not paid when due (regardless of whether such balances and
other claims are then due).
(b) If any Bank shall obtain payment of any principal of or
interest on any Loan through the exercise of any right of set-
off, banker's lien or counterclaim or similar right or otherwise
and, as a result of such payment, such Bank shall have received a
greater percentage of the principal or interest then due
hereunder by the Company to such Bank than the percentage
received by any other Banks, it shall promptly purchase from such
other Banks participations in the Loans made by such other Banks
in such amounts, and make such other adjustments from time to
time as shall be equitable, to the end that all the Banks shall
share the benefit of such excess payment pro rata in accordance
with the unpaid principal and/or interest on the Loans held by
each of the Banks. To such end all the Banks shall make
appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if such payment is rescinded or
must otherwise be restored.
(c) The Company agrees that any Bank so purchasing a
participation may exercise all rights of set-off, banker's lien,
counterclaim or similar rights with respect to such participation
as fully as if such Bank were a direct holder of Loans in the
amount of such participation.
(d) Nothing contained herein shall require any Bank to exercise
any such right or shall affect the right of any Bank to exercise,
and retain the benefits of exercising, any such right with
respect to any other indebtedness or obligation of the Company.
Section 5. Yield, Capital Maintenance and Taxes Provisions.
5.1. Additional Costs.
(a) The Company shall pay directly to each Bank from time to
time such amounts as such Bank may determine to be necessary to
compensate it for any costs which such Bank determines are
attributable to its making or maintaining of any Eurodollar Loans
or its obligation to make any Eurodollar Loans hereunder, or any
reduction in any amount receivable by such Bank hereunder in
respect of any of such Loans or such obligation (such increases
in costs and reductions in amounts receivable being herein called
"Additional Costs"), resulting from any Regulatory Change which:
(i) changes the basis of taxation of any amounts payable to such
Bank under this Agreement or its Notes, if any, in respect of any
of such Loans (other than franchise taxes and taxes on the
overall net income of such Bank or its Applicable Lending Office
imposed by the jurisdiction in which such Bank is organized or
has its principal office or such Applicable Lending Office); or
(ii) imposes or modifies any reserve, special deposit or similar
requirements (other than the Reserve Requirement utilized in the
determination of the LIBOR Rate for such Loan) relating to any
extensions of credit or other assets of, or any deposits with or
other liabilities of, such Bank or any commitment of such Bank;
or
(iii) imposes any other condition affecting this Agreement or
its Notes, if any (or any of such extensions of credit or
liabilities) or Commitment.
(b) Without limiting the effect of the provisions of
Section 5.1(a) hereof, the obligation of any Bank to make or
Continue, or to Convert Alternate Base Rate Loans into,
Eurodollar Loans hereunder shall be suspended upon notice to the
Company (with a copy to the Agent) until any Regulatory Change
ceases to be in effect (in which case the provisions of
Section 5.4 hereof shall be applicable), in the event that, by
reason of such Regulatory Change, such Bank either (i) incurs
Additional Costs based on or measured by the excess above a
specified level of the amount of a category of deposits or other
liabilities of such Bank which includes deposits by reference to
which the interest rate on Eurodollar Loans is determined or
(ii) becomes subject to restrictions on the amount of such a
category of liabilities or assets which it may hold.
(c) Without limiting the effect of the foregoing provisions of
this Section 5.1 (but without duplication), if any Bank
determines that compliance with any law or regulation or any
guideline or request from any central bank or other governmental
authority (whether or not having the force of law) affects or
would affect the amount of capital required or expected to be
maintained by such Bank or any Person controlling such Bank and
that the amount of such capital is increased by or based upon the
existence of such Bank's Commitment to lend hereunder and other
commitments of this type or any Loan, then, upon demand by such
Bank (with a copy of such demand to the Agent), the Company shall
immediately pay to the Agent for the account of such Bank, from
time to time as specified by such Bank, additional amounts
sufficient to compensate such Bank or such Person in the light of
such circumstances, to the extent that such Bank determines such
increase in capital to be allocable to the existence of such
Bank's Commitment to lend or Loans hereunder.
(d) Each Bank will notify the Company of any event occurring
after the date of this Agreement that will entitle such Bank to
compensation under paragraph (a) or (c) of this Section 5.1 as
promptly as practicable but in any event within 90 days after
such Bank obtains actual knowledge thereof; provided, however,
that if any Bank fails to give such notice within 90 days after
it obtains actual knowledge of such an event, such Bank shall,
with respect to compensation payable pursuant to this Section 5.1
in respect of any costs resulting from such event, only be
entitled to payment under this Section 5.1 for costs incurred
from and after the date 90 days before the date that such Bank
does give such notice. Each Bank will furnish to the Company a
certificate setting forth the basis and amount of each request by
such Bank for compensation under paragraph (a) or (c) of this
Section 5.1, which certificate shall be conclusive and binding on
the Company in the absence of manifest error. Determinations and
allocations by any Bank for purposes of this Section 5.1 of the
effect of any Regulatory Change, law, regulation, guideline or
request of any central bank or other monetary authority shall be
conclusive and binding on the Company absent manifest error.
5.2. Limitation on Types of Loans. Anything herein to the
contrary notwithstanding, if, on or prior to the determination of
any LIBOR Base Rate for any Interest Period:
(a) the Agent reasonably determines (which determination shall
be conclusive) that quotations of interest rates for the relevant
deposits referred to in the definition of "LIBOR Base Rate" are
not being provided in the relevant amounts or for the relevant
maturities for purposes of determining rates of interest for
Eurodollar Loans as provided herein; or
(b) the Majority Banks reasonably determine (which determination
shall be conclusive) and notify the Agent that the relevant rates
of interest referred to in the definition of "LIBOR Base Rate"
upon the basis of which the rate of interest for Eurodollar Loans
for such Interest Period is to be determined are not likely
adequately to cover the cost to such Banks of making or
maintaining such type of Loans for such Interest Period;
then the Agent shall give the Company and each Bank prompt notice
thereof and, so long as such condition remains in effect, the
Banks shall be under no obligation to make or Continue Eurodollar
Loans or to Convert Alternate Base Rate Loans into Eurodollar
Loans and the Company shall, on the last day(s) of the then
current Interest Period(s) for the outstanding Eurodollar Loans,
either prepay such Loans or Convert such Loans into Alternate
Base Rate Loans in accordance with Section 2.9 hereof.
5.3. Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Bank or
its Applicable Lending Office to honor its obligation to make or
maintain Eurodollar Loans hereunder, then such Bank shall
promptly notify the Company thereof (with a copy to the Agent)
and such Bank's obligation to make or Continue, or to Convert
Alternate Base Rate Loans into, Eurodollar Loans shall be
suspended until such time as such Bank may again make and
maintain Eurodollar Loans (in which case the provisions of
Section 5.4 hereof shall be applicable).
5.4. Treatment of Affected Loans.
(a) If the obligation of any Bank to make or Continue, or to
Convert Alternate Base Rate Loans into, Eurodollar Loans is
suspended pursuant to Section 5.1, 5.2(a) or (b) or 5.3 hereof,
such Bank's Eurodollar Loans shall be automatically Converted
into Alternate Base Rate Loans on the last day(s) of the then
current Interest Period(s) for such Eurodollar Loans (or, in the
case of a Conversion required by Section 5.3 hereof, on such
earlier date as such Bank may specify to the Company with a copy
to the Agent), and, unless and until such Bank gives notice as
provided below that the circumstances specified in Section 5.1,
5.2(a) or (b) or 5.3 hereof which gave rise to such Conversion no
longer exist:
(i) to the extent that such Bank's Eurodollar Loans have been so
Converted, all payments and prepayments of principal which would
otherwise be applied to such Bank's Eurodollar Loans shall be
applied instead to its Alternate Base Rate Loans; and
(ii) all Loans which would otherwise be made or Continued by such
Bank as Eurodollar Loans shall be made or Continued instead as
Alternate Base Rate Loans and all Loans of such Bank which would
otherwise be Converted into Eurodollar Loans shall remain as
Alternate Base Rate Loans.
(b) If such Bank gives notice to the Company (with a
copy to the Agent) that the circumstances specified in
Section 5.1, 5.2 or 5.3 hereof which gave rise to the Conversion
of such Bank's Eurodollar Loans pursuant to this Section 5.4 no
longer exist (which such Bank agrees to do promptly upon such
circumstances ceasing to exist) at a time when Eurodollar Loans
are outstanding, such Bank's Alternate Base Rate Loans shall be
automatically Converted, on the first day(s) of the next
succeeding Interest Period(s) for such outstanding Eurodollar
Loans to the extent necessary so that, after giving effect
thereto, all Eurodollar Loans are held pro rata (as to principal
amounts, types and Interest Periods) in accordance with the
Commitments.
5.5. Compensation.
(a) The Company shall pay to the Agent for the account of each
Bank, upon the request of such Bank through the Agent, such
amount or amounts as shall be sufficient to compensate it for any
loss, cost or expense which such Bank reasonably determines are
attributable to (i) any payment, prepayment or Conversion of a
Eurodollar Loan or a Bid Loan made by such Bank for any reason
(including, without limitation, the acceleration of the Loans
pursuant to Section 9 hereof or a prepayment pursuant to Section
3.2 or 5.4 (other than as a result of some culpable act of such
Bank) hereof) on a date other than the last day of the Interest
Period for such Loan (in the case of a Eurodollar Loan) or the
due date of such Loan (in the case of a Bid Loan); or (ii) any
failure by the Company for any reason (including, without
limitation, the failure of any of the conditions precedent
specified in Section 6 hereof to be satisfied) to borrow, Convert
or Continue a Eurodollar Loan or borrow a Bid Loan from such Bank
on the date for such borrowing specified in the relevant Request
for Bid Loans or notice of borrowing given pursuant to
Section 2.3 hereof, but excluding any such failure that results
from the failure or refusal of a Bank to make such Loan if all of
the conditions precedent specified in Section 6 shall have been
satisfied in respect thereof.
(b) Without limiting the effect of Section 5.5(a), such
compensation shall include an amount equal to the excess, if any,
of (i) the amount of interest which otherwise would have accrued
on the principal amount so paid, prepaid or Converted or not
borrowed for the period from the date of such payment,
prepayment, Conversion or failure to borrow to (x) in the case of
Eurodollar Loans, the last day of the then current Interest
Period for such Loan (or, in the case of a failure to borrow, the
Interest Period for such Loan which would have commenced on the
date specified for such borrowing) at the applicable rate of
interest for such Loan or (y) in the case of Bid Loans, the due
date of such Bid Loan (or, in the case of a failure to borrow,
the due date of the Bid Loan which would have been made on the
date of such borrowing) at the applicable rate of interest for
such Loan over (ii) (x) in the case of Eurodollar Loans, the
interest component of the amount such Bank would have bid in the
London interbank market for Dollar deposits of leading banks in
amounts comparable to such principal amount and with maturities
comparable to such period (as reasonably determined by such Bank)
and (y) in the case of Bid Loans, the interest rate certified by
such Bank as the rate which reflects the Bank's cost of funding
such Bid Loan. Each Bank will furnish to the Company a
certificate setting forth the basis and amount of each request by
such Bank for compensation under this Section 5.5, which
certificate shall be conclusive and binding on the Company in the
absence of manifest error.
5.6. Taxes.
(a) All payments by the Company hereunder or under the Notes, if
any, shall be made free and clear of and without deduction or
withholding for or on account of all present or future taxes,
levies, imposts, deductions, charges or withholdings and all
liabilities with respect thereto, excluding, in the case of each
Bank (or its Applicable Lending Office) and the Agent, taxes
imposed on its income, and franchise taxes imposed on it, by the
jurisdiction under the laws of which such Bank (or its Applicable
Lending Office) or the Agent is organized or any political
subdivision thereof (all such non-excluded taxes, deductions and
withholdings being hereinafter referred to as "Taxes"). If the
Company shall be required by law to deduct any Taxes from any
amount payable hereunder or under any Note, if any, (i) the
amount payable shall be increased as may be necessary so that
after making all required deductions (including deductions
applicable to additional amounts payable under this Section 5.6)
the payee receives an amount equal to the amount it would have
received had no such deductions been made and (ii) the Company
shall pay the full amount deducted to the relevant authority in
accordance with applicable law.
(b) In addition, the Company agrees to pay any present or future
stamp, documentary, excise or property taxes, charges or similar
levies which arise from any payment made hereunder or under the
Notes, if any, or from the execution, delivery or registration
of, or otherwise with respect to, this Agreement or the Notes
(hereinafter referred to as "Other Taxes").
(c) The Company will indemnify each Bank and the Agent for the
full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any jurisdiction
on amounts payable under this Section 5.6) paid by such Bank or
the Agent. This indemnification shall be made within 30 days
from the date such Bank or the Agent (as the case may be) makes
written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the
Company will furnish to the Agent the original or a certified
copy of a receipt evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement of
the Company hereunder, the agreements and obligations of the
Company contained in this Section 5.6 shall survive the payment
in full of principal and interest hereunder and under the Notes,
if any.
(f) At least five Business Days prior to the first date on which
interest or fees are payable hereunder for the account of any
Bank, each Bank that is not incorporated under the laws of the
United States of America or a state thereof agrees that it will
deliver to each of the Company and the Agent two duly completed
copies of United States Internal Revenue Service Form 1001 or
4224 or any other applicable or successor form, certifying in
either case that such Bank is entitled to receive payments under
this Agreement and the Notes, if any, without deduction or
withholding of any United States federal income taxes. Each Bank
which is so obligated to deliver a Form 1001 or 4224 or any other
applicable or successor form, further undertakes to deliver to
each of the Company and the Agent two additional copies of such
form (or a successor form) on or before the date that such form
expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form so delivered by it,
and such amendments thereto or extensions or renewals thereof as
may reasonably requested by the Company or the Agent, in each
case certifying that such Bank is entitled to receive payments
under this Agreement and the Notes, if any, 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 prior to the date on which any such
delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Bank from duly
completing and delivering any such form with respect to it and
such Bank advises the Company and the Agent that it is not
capable of receiving payments without any deduction or
withholding or United States federal income tax.
5.7. Change of Applicable Lending Office. Each Bank agrees that
if it makes any demand for payment under Section 5.1 or 5.6, or
if any adoption or change of the type described in Section 5.3
shall occur with respect to it, it will use reasonable efforts
(consistent with its internal policy and legal and regulatory
restrictions and so long as such efforts would not be materially
disadvantageous to it, as determined in its sole discretion) to
designate a different Applicable Lending Office if the making of
such a designation would reduce or eliminate the need for the
Company to make payments under Section 5.1 or 5.6, or would
eliminate or reduce the effect of any adoption or change
described in Section 5.3.
5.8. Substitution of Bank. In the event the Company is required
to pay any additional amounts pursuant to Section 5.1 or 5.6, the
Company may, so long as no Event of Default has occurred and is
continuing, require any Bank claiming such additional amounts,
upon five Business Days' prior written notice from the Company,
to assign the entire then outstanding principal amount of the
Loans owing to such Bank and the entire Commitment of such Bank
to another bank or financial institution selected by the Company
and, if such bank or financial institution is not then a Bank,
reasonably satisfactory to the Agent. Any such assignment shall
be effected in accordance with Section 11.6 and, as a condition
to such assignment, the Company shall pay all amounts due to such
Bank hereunder on the effective date of such assignment.
Section 6. Conditions Precedent.
6.1. Initial Loan. The obligation of each Bank to make its
initial Loan hereunder is subject to the receipt by the Agent of
the following documents, each of which shall be satisfactory to
the Agent and its counsel in form and substance:
(a) The Agreement and Notes. This Agreement and the Notes, if
any, duly completed and executed.
(b) Corporate Action. Certified copies of the articles of
incorporation and by-laws of the Company and all corporate action
taken by the Company approving this Agreement and the Notes, if
any, and borrowing by the Company hereunder (including a
secretary's or assistant secretary's certificate setting forth
the resolutions of the Board of Directors of the Company adopted
in respect of the transactions contemplated hereby).
(c) Incumbency. A certificate of the secretary or assistant
secretary of the Company naming and setting forth the specimen
signature of each of the officers and Authorized Officers of the
Company (i) who is authorized to sign on its behalf this
Agreement and the Notes, if any, and (ii) who will, until
replaced by another officer or officers duly authorized for that
purpose, act as its representative for the purposes of signing
documents and giving Requests for Bid Loans, notices and other
communications in connection with this Agreement and the
transactions contemplated hereby.
(d) Officer's Certificate. A certificate of a senior officer of
the Company to the effect set forth in the first sentence of
Section 6.2 hereof.
(e) Opinion of General Counsel to the Company. An opinion of
Xxxxx X. League, general counsel of the Company, substantially in
the form of Exhibit G hereto.
(f) Other Documents. Such other documents as the Agent or any
Bank may reasonably request.
6.2. Initial and Subsequent Loans. The obligations of the Banks
to make any Loan (including its initial Loan) are subject to the
further conditions precedent that, both immediately prior to such
Loan and also after giving effect thereto: (a) no Default shall
have occurred and be continuing; and (b) the representations and
warranties made by the Company in Section 7 hereof shall be true
and correct in all material respects on and as of the date of the
making of such Loans with the same force and effect as if made on
and as of such date except to the extent such representations and
warranties state that they relate solely to a specified date.
Each notice of borrowing and Request for Bid Loans by the Company
hereunder shall constitute a certification by the Company to the
effect set forth in the preceding sentence.
6.3. Bid Loans. The obligation of any Bank to make any Bid Loan
is subject to the completion of the procedures set forth in
Section 2.2.
Section 7. Representations and Warranties. The Company
represents and warrants to the Banks that:
7.1. Corporate Existence and Related Matters. Each of the
Company and its Subsidiaries: (a) in the case of the Company and
its corporate Subsidiaries, is a corporation duly organized and
validly existing under the laws of the jurisdiction of its
incorporation; (b) in the case of non-corporate Subsidiaries, are
entities duly organized, validly existing and in good standing
under the laws of the jurisdiction of their respective
organization, (c) has all requisite power, and has all material
governmental licenses, authorizations, consents and approvals,
necessary to own its assets and carry on its business as now
being or as proposed to be conducted; and (d) is qualified to do
business in all jurisdictions in which the failure so to qualify
would have a material adverse effect on the business, affairs or
financial condition of the Company or such Subsidiary.
7.2. Financial Condition.
(a) The consolidated balance sheet of the Company and its
Subsidiaries as at January 1, 2000 and the related consolidated
statements of income, stockholders' equity and cash flows of the
Company and its Subsidiaries for the fiscal year ended on said
date, with the opinion thereon (in the case of said consolidated
balance sheet and statements) of KPMG Peat Marwick, heretofore
furnished to each of the Banks, have been prepared in conformity
with GAAP applied on a basis consistent with the preceding fiscal
year and fairly present in all material respects the consolidated
financial condition of the Company and its Subsidiaries as at
said date, and the consolidated results of their operations for
the fiscal year ended on said date in accordance with GAAP.
(b) Neither the Company nor any of its Subsidiaries had on said
date any material contingent liabilities or liabilities for
taxes, except as referred to or reflected or provided for in said
balance sheets or the notes thereto as at said dates.
(c) Since January 1, 2000 through and including the date hereof,
there has been no material adverse change in the consolidated
financial condition, operations, business or prospects taken as a
whole of the Company and its Subsidiaries from that set forth in
said financial statements as at said date.
7.3. Litigation. There is no litigation, investigation or legal
or arbitral proceeding or any proceeding by or before any
governmental or regulatory authority or agency, now pending or
(to the knowledge of the Company) threatened against the Company
or any of its Subsidiaries which would have a material adverse
effect on the legality, validity or enforceability of this
Agreement and the Notes, if any, or the consolidated financial
condition, operations, business or prospects taken as a whole of
the Company and its Subsidiaries.
7.4. No Breach. The execution, delivery and performance of this
Agreement and the Notes, if any, will not conflict with or result
in a breach of, or cause the creation of a Lien or require any
consent under, (a) the articles of incorporation or by-laws of
the Company, (b) any applicable law or regulation, or any order,
injunction or decree of any court or governmental authority or
agency, or (c) any agreement or instrument to which the Company
or any of its Subsidiaries is a party or by which any of them is
bound, except for breaches which could not reasonably be expected
to have a material adverse effect on the legality, validity or
enforceability of this Agreement and the Notes, if any, or the
consolidated financial condition, operations, business or
prospects taken as a whole of the Company and its Subsidiaries.
7.5. Corporate Power and Action; Binding Effect. The Company has
all necessary corporate power and authority to execute, deliver
and perform its obligations under this Agreement and the Notes,
if any; the execution, delivery and performance by the Company of
this Agreement and the Notes, if any, have been duly authorized
by all necessary corporate action on its part; and this Agreement
has been duly and validly executed and delivered by the Company
and constitutes, and each of the Notes, if any, when executed and
delivered will constitute, legal, valid and binding obligations,
enforceable in accordance with its terms.
7.6. Approvals. No authorizations, approvals or consents of, and
no filings or registrations with, any governmental or regulatory
authority or agency are necessary for the execution, delivery or
performance by the Company of this Agreement or the Notes, if
any, or for the validity or enforceability thereof.
7.7. Margin Stock. Neither the Company nor any of its
Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose
of buying or carrying Margin Stock and no part of the proceeds of
any Loan hereunder will be used to buy or carry any Margin Stock.
7.8. ERISA.
(a) Subject to Section 7.8(c) hereof, the Company and the ERISA
Affiliates and the plan administrator of each Plan have fulfilled
in all material respects their respective obligations under ERISA
and the Code with respect to each Plan and each Plan is currently
in material compliance with the applicable provisions of ERISA
and the Code.
(b) Subject to Section 7.8(c) hereof, with respect to each Plan,
there has been no (i) "reportable event" within the meaning of
Section 4043 of ERISA and the regulations thereunder which is not
subject to the provision for waiver of the 30-day notice
requirement to the PBGC; (ii) failure to make or properly accrue
any contribution which is due to any Plan; (iii) except as set
forth on Schedule 7 hereto, action under Section 4041 of ERISA to
terminate any Pension Plan; (iv) withdrawal from any Pension Plan
with two or more contributing sponsors or the termination of any
such Pension Plan resulting in liability pursuant to Section 4063
or 4064 of ERISA; (v) institution by the PBGC of proceedings to
terminate any Pension Plan, or the occurrence of any event or
condition which might constitute grounds under ERISA for the
termination of, or the appointment of a trustee to administer,
any Pension Plan; (vi) the imposition of liability pursuant to
Section 4062(e), 4069 or 4212 of ERISA; (vii) complete or partial
withdrawal (within the meaning of Sections 4203 and 4205 of
ERISA) from any Pension Plan which is a Multiemployer Plan that
it is in reorganization or insolvency pursuant to Sections 4241
or 4245 of ERISA, or that it intends to terminate or has
terminated under Sections 4041A or 4042 of ERISA;
(viii) prohibited transaction described in Section 406 of ERISA
or 4975 of the Code which could give rise to the imposition of
any material fines, penalties, taxes or related charges; (xi)
assertion of a material claim (other than routine claims for
benefits) against any Plan (other than a Multiemployer Plan)
which could reasonably be expected to be successful; (x) receipt
from the Internal Revenue Service of notice of the failure of any
Plan to qualify under Section 401(a) of the Code, or the failure
of any trust forming part of any Plan to qualify for exemption
from taxation under Section 501(a) of the Code, if applicable; or
(xi) imposition of a lien pursuant to Section 401(a)(29) of the
Code or 412(n) of the Code or Section 302(f) of ERISA.
(c) The representations and warranties set forth in Sections
7.8(a) and (b) shall not be deemed to be breached as a result of
any event, occurrence or condition affecting or relating to a
Multiemployer Plan of which the Company does not have knowledge.
7.9. Taxes. United States federal income tax returns of the
Company and the Subsidiaries have been examined and closed
through the fiscal year of the Company ended December 31, 1995.
The Company and its Subsidiaries have filed all United States
federal income tax returns and all other material tax returns
which are required to be filed by them and have paid all material
taxes due pursuant to such returns or pursuant to any assessment
received by the Company or any of its Subsidiaries. The charges,
accruals and reserves on the books of the Company and its
Subsidiaries in respect of taxes and other governmental charges
are, in the opinion of the Company, adequate in all material
respects.
7.10 Investment Company Act. The Company is not an
"investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of
1940, as amended.
7.11 Credit Agreements. As of the date hereof, Schedule 3
hereto is a complete and correct list of each credit, loan or
purchase agreement, Guaranty Obligation or other arrangement
providing for any Debt or any extension of credit to, or Guaranty
Obligation by, the Company or any of its Subsidiaries, and the
aggregate principal or face amount outstanding or which may
become outstanding under each such arrangement is correctly
described in said Schedule 3. The Agreements identified on
Schedule 3 under the caption "Refinanced Debt Agreements" will be
terminated upon repayment of the Debt thereunder with the
proceeds of the initial Loans hereunder.
7.12 Environmental Laws.
(a) Subject to the last paragraph of this Section 7.12, the
Company and each of its Subsidiaries have obtained all permits,
licenses and other authorizations which are required under all
Environmental Laws and are in compliance in all respects with any
applicable Environmental Laws.
(b) Subject to the last paragraph of this Section 7.12, no
notice, demand, request for information, citation, summons or
order has been issued, no complaint has been filed, no penalty
has been assessed and no investigation or review is pending or
threatened by any governmental or other entity or other Person
with respect to any alleged failure by the Company or any of its
Subsidiaries to comply in any respect with any Environmental
Laws.
(c) Subject to the last paragraph of this Section 7.12, there
are no Liens arising under or pursuant to any Environmental Laws
on any of the property owned or leased by the Company or any of
its Subsidiaries.
(d) Subject to the last paragraph of this Section 7.12, there
are no conditions existing currently or likely to exist during
the term of this Agreement which would subject the Company and
its Subsidiaries or any of its property to any Lien, damages,
penalties, injunctive relief or cleanup costs under any
Environmental Laws or which require or are likely to require
cleanup, removal, remedial action or other response pursuant to
Environmental Laws by the Company and its Subsidiaries.
The representations and warranties of the Company set forth
in this Section 7.12 shall not be deemed to be breached as a
result of any event, occurrence or condition which would not
result in a material adverse effect on the business, condition
(financial or otherwise) or operations of the Company and its
Subsidiaries taken as a whole.
7.13 Subsidiaries, Etc. Set forth in Schedule 4 hereto, or
in the most recent schedule delivered pursuant to Section 8.1, is
a complete and correct list of all Subsidiaries of the Company
and the respective jurisdiction of organization of each such
Subsidiary. The Company owns, free and clear of all Liens, all
outstanding shares or other ownership interests of such
Subsidiaries.
7.14 Liens. As of the date hereof, no property of the
Company or any Subsidiary is subject to any Lien, except Liens
permitted pursuant to Section 8.6 hereof.
7.15 Subordination. All indebtedness identified as
"Patronage refund certificates payable" on the Company's most
recently furnished balance sheet is effectively subordinated to
the Loans pursuant to subordination language substantially the
same as that set forth in Schedule 5 hereto, which language
appears on all certificates evidencing such indebtedness. The
subordination language set forth in Schedule 5 hereto effectively
subordinates to the Loans and the Notes, if any, all indebtedness
evidenced by instruments bearing such language.
7.16 Compliance with Laws. The Company and each of its
Subsidiaries are in material compliance with all statutes and
governmental rules and regulations applicable to them.
Section 8. Covenants. The Company agrees that, so long as
the Commitments are in effect and until payment in
full of all Loans and all other amounts payable by
the Company hereunder and under the Notes, if any:
8.1. Financial Statements and other Information. The Company
shall deliver to each of the Banks:
(a) within 60 days after the end of each of the first three
fiscal quarterly periods of each fiscal year of the Company,
consolidated statements of income and cash flow of the Company
and its Subsidiaries for such period and for the period from the
beginning of the respective fiscal year to the end of such
period, and the related consolidated balance sheets as at the end
of such period, setting forth in respect of such statements in
comparative form the corresponding consolidated figures for the
corresponding period in the preceding fiscal year and setting
forth in respect of such balance sheets the corresponding
consolidated figures for the end of the preceding fiscal year,
accompanied by a certificate of a senior financial officer of the
Company which shall state that said financial statements fairly
present in all material respects the consolidated financial
condition and results of operations of the Company and its
Subsidiaries in accordance with GAAP for such period;
(b) within 120 days after the end of each fiscal year of the
Company, consolidated statements of income, stockholders' equity
and cash flow of the Company and its Subsidiaries for such year
and the related consolidated balance sheets as at the end of such
year, setting forth in each case in comparative form the
corresponding consolidated figures for the preceding fiscal year,
and accompanied (i) by an unqualified opinion thereon of
independent certified public accountants of recognized national
standing which shall state that said consolidated financial
statements fairly present in all material respects the
consolidated financial condition and results of operations of the
Company and its Subsidiaries as at the end of, and for, such
fiscal year, and (ii) by a certificate of such accountants
stating that, in making the examination necessary for their
opinion, they obtained no knowledge, except as specifically
stated, of any Default;
(c) promptly upon their becoming available, copies of all
registration statements and reports which the Company shall have
filed with the Securities and Exchange Commission;
(d) promptly upon the mailing thereof to the shareholders of the
Company generally, copies of all financial statements, reports
and proxy statements so mailed;
(e) promptly after the Company knows that any Default has
occurred, a notice of such Default describing the same in
reasonable detail and, together with such notice or as soon
thereafter as possible, a description of the action that the
Company has taken and proposes to take with respect thereto;
(f) promptly upon receipt thereof, a copy of any notice, demand,
request for information, citation, summons, complaint, order or
other communication from any governmental or other entity or
other Person with respect to any alleged failure by the Company
or a Subsidiary to comply in any respect with any Environmental
Laws or any assertion or allegation of any Lien or liability
thereunder involving individually or in the aggregate $1,000,000
or more;
(g) in the event there has been a sale, transfer or other
disposition of any retail location or warehouse distribution
location owned by the Company (collectively, "Company Location")
or joint venture interest owned by the Company during a fiscal
quarter, concurrently with the financial statements delivered
pursuant to paragraph (a) above, a schedule of the net investment
of the Company in each such Company Location or joint venture
interest and the proceeds received by the Company upon the
disposition of such Company Location or joint venture interest,
all in form and substance satisfactory to the Agent;
(h) concurrently with the financial statements delivered
pursuant to paragraph (b) above, a certificate of an Authorized
Officer of the Company as to a complete and current list of
Subsidiaries substantially in the form of Schedule 4 hereto; and
(i) from time to time such other information regarding the
business, affairs or financial condition of the Company or any of
its Subsidiaries as any Bank or the Agent may reasonably request.
The Company will furnish to each Bank, at the time it furnishes
each set of financial statements pursuant to paragraph (a) or (b)
above, a certificate of a senior financial officer of the Company
(i) to the effect that no Default has occurred and is continuing
(or, if any Default has occurred and is continuing, describing
the same in reasonable detail and describing the action that the
Company has taken and proposes to take with respect thereto) and
(ii) setting forth in reasonable detail the computations
necessary to determine whether the Company is in compliance with
the financial covenants herein (including Section 8.11 hereof) as
of the end of the respective fiscal quarter or fiscal year, as
applicable.
8.2. Litigation. The Company will promptly give to each Bank
notice of all material legal or arbitral proceedings, and of all
proceedings by or before any governmental or regulatory authority
or agency, and any material development in respect of such legal
or other proceeding, affecting the Company or any of its
Subsidiaries, except proceedings which would not have a material
adverse effect on the legality, validity or enforceability or
this Agreement or the Notes, if any, or the consolidated
financial condition, operations, business or prospects taken as a
whole of the Company and its Subsidiaries.
8.3. Corporate Existence, Etc. The Company will, and will cause
each of its Subsidiaries to: (a) preserve and maintain its
corporate or other existence and all of its rights, privileges
and franchises (provided, that nothing in this Section 8.3 shall
prohibit any transaction permitted under Section 8.5 hereof),
except such rights, privileges and franchises of the Company or
its Subsidiaries which the applicable Board of Directors has
determined to abandon or exit; (b) comply in all material
respects with the requirements of all applicable laws, rules,
regulations and orders of governmental or regulatory authorities,
including all Environmental Laws; (c) pay and discharge all its
obligations, including, without limitation, taxes, assessments
and governmental charges or levies imposed on it or on its income
or profits or on any of its property, franchises or assets prior
to the date on which penalties attach thereto, except for any
such obligation, tax, assessment, charge or levy which is
immaterial in amount or the payment of which is being contested
in good faith and by proper proceedings and against which
adequate reserves are being maintained; (d) maintain all of its
properties used or useful in its business in good working order
and condition, ordinary wear and tear excepted; (e) maintain
complete and accurate books and records in which full and correct
entries in conformity with GAAP shall be made of all dealings and
transactions in relation to its prospective business and
activities and (f) upon request, permit representatives of any
Bank or the Agent, during normal business hours, to visit its
premises, to examine, copy and make extracts from its books and
records, to inspect its properties, and to discuss its business
and affairs with its senior officers and accountants.
8.4. Insurance. The Company will, and will cause each of its
Subsidiaries to, keep all of its property adequately insured by
financially sound and reputable insurers in accordance with
prudent business practices and will carry such other insurance as
is customarily maintained in accordance with prudent business
practices.
8.5. Business Combinations and Asset Dispositions. The Company
will not, nor will it permit any of its Subsidiaries to,
(a) merge or consolidate with any other Person, or (b) sell, or
otherwise dispose of, or part with control of shares of stock of
a Subsidiary, or (c) sell, lease or transfer or otherwise dispose
of all of the consolidated assets of the Company and its
Subsidiaries, or assets which, together with all assets of the
Company and Subsidiaries sold, leased or otherwise disposed of
during the most recent 36-month rolling period ended on the date
of determination (excluding items described in clauses (ii),
(iii), (v), (vi) and (vii) below and Excluded Asset
Dispositions), constitute on a book value basis a Substantial
Part of the consolidated assets of the Company and its
Subsidiaries or shall have contributed a Substantial Part of
average Consolidated Net Earnings for the three fiscal years then
most recently ended, to any Person, except that:
(i) any Subsidiary may merge or consolidate with the Company
(provided, that the Company shall be the continuing or surviving
corporation), or with any one or more other Subsidiaries;
(ii) any Subsidiary may sell, lease, transfer or otherwise
dispose of any of its assets to the Company or another
Subsidiary;
(iii)any Subsidiary may sell or otherwise dispose of all or
substantially all of its assets subject to the conditions
specified in clause (v) below with respect to a sale of the stock
of such Subsidiary;
(iv) the Company may merge or consolidate with any other
corporation, provided, that (A) the Company shall be the
continuing or surviving corporation, (B) after giving effect to
such merger or consolidation, no Default or Event of Default
shall exist under this Agreement and (C) without limiting the
foregoing, assuming that the effective date of such merger or
consolidation was the last day of a fiscal quarter, no Default or
Event of Default would exist hereunder, including under Section
8.11;
(v) the Company and any Subsidiary may sell or otherwise dispose
of, or part with control of, any shares of stock of any
Subsidiary or joint venture (A) as permitted by Section 8.13, (B)
to the Company or another Subsidiary or (C) to any other Person,
provided, that all of the shares of stock of any such Subsidiary
at the time owned by the Company and all Subsidiaries shall be
sold as an entirety for such consideration which represents the
fair value (as determined in good faith by the Board of Directors
of the Company) at the time of sale of the shares of stock so
sold, provided, further, that the assets of such Subsidiary,
together with the assets of any other Subsidiaries sold or
otherwise disposed of during the most recent 36-month rolling
period ended on the date of determination, do not constitute a
Substantial Part of the consolidated assets of the Company and
its Subsidiaries and that such Subsidiary, together with any
other Subsidiaries sold or otherwise disposed of during the most
recent 36-month period, shall not have contributed a Substantial
Part of average Consolidated Net Earnings for the three fiscal
years most recently ended, and further provided, that, at the
time of such sale, such Subsidiary shall not own, directly or
indirectly, any shares of stock of any other Subsidiary (unless
all of the shares of stock of such other Subsidiary owned,
directly or indirectly, by the Company and its Subsidiary are
simultaneously being sold as permitted by this Section 8.5(v));
(vi) the Company or any Subsidiary may transfer an interest in
accounts or notes receivable on a non-recourse or a limited
recourse basis, provided, that the transfer qualifies as a sale
under GAAP and that the amount of the financing does not exceed
$200,000,000 at any one time outstanding; and
(vii)the Company or any Subsidiary may dispose of inventory
or used, worn-out or surplus equipment, all in the ordinary
course of business.
8.6. Limitation on Liens. The Company will not, nor will it
permit any of its Subsidiaries to, create, incur, assume or
suffer to exist any Lien upon any of its property, whether now
owned or hereafter acquired, except:
(a) Liens for taxes not yet due or which are being actively
contested in good faith by appropriate proceedings and as to
which such reserves or other appropriate provisions as may be
required by GAAP are being maintained;
(b) other Liens incidental to the conduct of its business or the
ownership of its property and assets which were not incurred in
connection with the borrowing of money or the obtaining of
advances or credit, and which do not in the aggregate materially
detract from the value of its property or assets or materially
impair the use thereof in the operation of its business;
(c) Liens on property or assets of a Subsidiary to secure
obligations of such Subsidiary to the Company or another
Subsidiary;
(d) Liens consisting of capitalized leases if (i) the Debt
represented by the related Capitalized Lease Obligations is
permitted under the provisions of Section 8.11, and (ii) such
Lien would be permitted by the provisions of clause (e) of this
Section 8.6;
(e) other Liens (including existing Liens), provided, that the
aggregate amount of Debt secured by all such Liens and any Liens
permitted by clause (d) above shall at no time exceed an amount
equal to 15% of Member Dealers' Equity, and further provided,
such Debt is permitted under the provisions of Section 8.11;
(f) Liens incurred in the transfer of an interest in accounts or
notes receivable which is permitted pursuant to Section 8.5(vi);
and
(g) Liens in existence on the date hereof and listed on
Schedule 6, provided, that (i) no such Lien is extended to cover
additional property after the date hereof (except to the extent
required by the terms of the Debt secured thereby or any other
agreement governing such Lien as such terms are in effect on the
date hereof), (ii) no such Lien secures any Debt other than Debt
and other obligations secured by it on the date hereof and
refinancings, refundings, renewals or extensions of such Debt or
other obligations and (iii) the amount of Debt or other
obligations secured by such Lien is not increased.
8.7. Acquisitions. The Company shall not, and shall not permit
its Subsidiaries to (whether in one transaction or a series of
transactions), purchase or acquire any capital stock or other
ownership interests of, or the business or assets of, any Person;
provided, that this Section 8.7 shall not prohibit (a) the
acquisition of inventory, supplies and materials in the ordinary
course of business of the Company and its Subsidiaries as
conducted on the date of this Agreement or (b) any other purchase
or acquisition if after giving effect to such transaction, no
Default shall exist hereunder.
8.8. Lines of Business. The Company will not, nor will it permit
any of its Subsidiaries to, engage to any substantial extent in
any line of business other than the business of distributing and
selling hardware and related services.
8.9. No Change in Subordination Terms, etc. The Company
covenants that (a) no certificate representing Patronage
Indebtedness will be amended or re-issued with the effect of
eliminating or in any way altering the subordination language
appearing therein, (b) no amendment shall be adopted to its by-
laws or any other governing document, and no agreement shall be
entered into with any of its stockholders, which would entitle a
stockholder, upon termination of his or its franchise in any of
the circumstances described in Section 12(a) of Article XVI of
the by-laws of the Company, as in effect on the date of this
Agreement, to receive consideration for his or its shares in a
form other than a promissory note of the Company with a term of,
or in excess of, four years and providing for payments in equal
annual principal installments, except to the extent specifically
provided in clauses (7) and (8) of Section 12(b) of Article XVI
of the by-laws of the Company as in effect on the date of this
Agreement and (c) notwithstanding the foregoing clause (b), in no
fiscal year shall cash payments in excess of $10,000,000 be made
under circumstances described in clauses (7) and (8) of Section
12(b) of Article XVI of the by-laws of the Company as in effect
on the date of this Agreement.
8.10 Use of Proceeds. The Company will use the proceeds of
the Loans to refinance the Refinanced Debt, for general working
capital purposes and for commercial paper liquidity purposes.
8.11 Financial Covenants.
(a) Fixed Charge Coverage Ratio. The Company will not permit,
on the last day of each fiscal quarter of the Company, the Fixed
Charge Coverage Ratio for the four fiscal quarter period ending
on such date to be less than 1.75 to 1.0.
(b) Maximum Debt Ratio. The Company will not permit the ratio
on a consolidated basis of (i) Debt to (ii) EBITDA as of the last
day of each fiscal quarter for the four fiscal quarter period
ending on such date to exceed 3.0 to 1.0 on or before the last
day of the fiscal year of the Company for fiscal year 2002 and
2.5 to 1.0 at any time thereafter. For purposes of this
Section 8.11(b), Debt shall not include the indebtedness of any
partnership or joint venture of which the Company or any
Subsidiary is a partner or member and which indebtedness is
consolidated with the indebtedness of the Company under GAAP if
and only if such indebtedness is non-recourse to the Company or
such Subsidiary.
8.12 Restrictions on Transactions with Affiliates. The
Company will not, and will not permit any Subsidiary to, directly
or indirectly, purchase, acquire or lease any property from, or
sell, transfer or lease any property (other than shares of stock
of Company) to, or otherwise deal with, in the ordinary course of
business or otherwise (a) any Affiliate, or (b) any corporation
in which an Affiliate or the Company (either directly or through
Subsidiaries) owns 10% or more of the outstanding Voting Stock,
except that (i) any such Affiliate may be a director, officer or
employee of the Company or any Subsidiary and may be paid
reasonable compensation in connection therewith and (ii) such
acts and transactions prohibited by this Section 8.12 may be
performed or engaged in if (A) specifically authorized by the
Company's Board of Directors (exclusive of any Affiliate who is a
director and who has a direct or indirect interest in such
transaction) or pursuant to any unrescinded general resolution of
such Board or the By-laws of the Company or (B) upon terms not
less favorable to the Company or a Subsidiary (as the case may
be) than if no such relationship described in clauses (a) and (b)
above existed.
8.13 Issuance of Stock by Subsidiaries. The Company will
not permit any Subsidiary (either directly, or indirectly by the
issuance of rights or options for, or securities convertible
into, such shares) to issue, sell or otherwise dispose of any
shares of any class of its stock (other than directors'
qualifying shares) except (a) to the Company or another
Subsidiary or (b) any such issuance, sale or other disposition
if, after giving effect thereto, the Company continues to own,
directly or indirectly, at least a majority of the issued and
outstanding capital of stock of each class of such Subsidiary.
8.14 Compliance with ERISA. The Company will not, and will
not permit any Subsidiary to, engage in any transaction in
connection with which the Company or any Subsidiary could be
subject to either a civil penalty assessed pursuant to Section
502(i) of ERISA or a tax imposed by Section 4975 of the Code,
terminate or withdraw from any Plan (other than a Multiemployer
Plan) in a manner, or take any other action with respect to any
such Plan (including, without limitation, a substantial cessation
of operations within the meaning of Section 4062(f) of ERISA),
which could result in any liability of the Company or any
Subsidiary to the PBGC, to a trust established pursuant to
Section 4041(c)(3)(B)(ii) or (iii) or 4042(i) of ERISA, or to a
trustee appointed under Section 4042(b) or (c) of ERISA, incur
any liability to the PBGC on account of a termination of a Plan
under Section 4064 of ERISA, fail to make full payment when due
of all amounts which, under the provisions of any Plan, the
Company or any Subsidiary is required to pay as contributions
thereto, or permit to exist any accumulated funding deficiency,
whether or not waived, with respect to any Plan (other than a
Multiemployer Plan), if, in any such case, such penalty or tax or
such liability, or the failure to make such payment, or the
existence of such deficiency, as the case may be, could have a
material adverse effect on the business, condition (financial or
otherwise) or operations of Company and its Subsidiaries taken as
a whole.
8.15 Cooperative Status. The Company will at all times
maintain its status as a cooperative for purposes of Subchapter T
of the Code.
Section 9. Events of Default. If one or more of the
following events (each, an "Event of Default") shall occur
and be continuing:
(a) The Company shall default in the payment when due of any
principal of or interest on any Loan or of any fees or other
amounts payable by it hereunder and, in the case of interest,
fees and other amounts only, such failure shall continue for
three Business Days; or
(b) The Company or any of its Subsidiaries shall default in the
payment when due of any principal of or interest on any of its
other Debt in the aggregate amount of $25,000,000 or more; or any
event specified in any note, agreement, indenture or other
document creating, evidencing or securing any such Debt shall
occur if the effect of such event is to cause, or to permit the
holder or holders of such Debt to cause, such Debt to become due,
or to be prepaid in full, prior to its stated maturity; or
(c) Any representation, warranty or certification made or deemed
made herein, or in any certificate or other writing furnished to
any Bank or the Agent pursuant to the provisions hereof, shall
prove to have been false or misleading as of the time made or
furnished in any material respect; or
(d) The Company shall default in the performance of any of its
obligations under Section 8.1(e), 8.3, 8.5, 8.6, 8.7, 8.9, 8.10,
8.11, 8.12, 8.13, 8.14 or 8.15 hereof; or
(e) The Company shall default in the performance of any of its
other obligations in this Agreement and such default shall
continue unremedied for a period of 30 days after notice thereof
to the Company by the Agent or any Bank (through the Agent); or
(f) The Company or any of its Subsidiaries shall admit in
writing its inability to, or be generally unable to, pay its
debts as such debts become due; or
(g) The Company or any of its Subsidiaries shall (i) apply for
or consent to the appointment of, or the taking of possession by,
a receiver, custodian, trustee or liquidator of itself or of all
or a substantial part of its property, (ii) make a general
assignment for the benefit of its creditors, (iii) commence a
voluntary case under the Bankruptcy Code (as now or hereafter in
effect), (iv) file a petition seeking to take advantage of any
other law relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or readjustment of debts, (v) fail to
controvert in a timely and appropriate manner, or acquiesce in
writing to, any petition filed against it in an involuntary case
under the Bankruptcy Code, or (vi) take any corporate action for
the purpose of effecting any of the foregoing; or
(h) A proceeding or case shall be commenced, without the
application or consent of the Company or any of its Subsidiaries,
in any court of competent jurisdiction, seeking (i) its
liquidation, reorganization, dissolution or winding-up, or the
composition or readjustment of its debts, (ii) the appointment of
a trustee, receiver, custodian, liquidator or the like of the
Company or such Subsidiary or of all or any substantial part of
its assets, or (iii) similar relief in respect of the Company or
such Subsidiary under any law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of
debts; and such proceeding or case shall continue undismissed, or
an order, judgment or decree approving or ordering any of the
foregoing shall be entered and continue unstayed and in effect,
for a period of 60 or more days (provided that during such period
the Banks shall have no obligation to make any new Loans or
Convert Alternate Base Rate Loans to Eurodollar Loans); or an
order for relief against the Company or such Subsidiary shall be
entered in an involuntary case under the Bankruptcy Code; or
(i) A final judgment in an amount in excess of $25,000,000 in
the aggregate is rendered against the Company or any Subsidiary
and, within 60 days after the entry thereof, such judgment is not
discharged or execution thereof stayed pending appeal, or within
60 days after the expiration of any such stay, such judgment is
not discharged; or
(j) An event or condition specified in Section 7.8(b) shall
occur or exist with respect to any Plan or Multiemployer Plan if
as a result of such event or condition, together with all other
such events or conditions, the Company or any ERISA Affiliate
shall incur or in the opinion of the Majority Banks shall be
reasonably likely to incur a liability to a Plan, a Multiemployer
Plan or the PBGC (or any combination of the foregoing) which is,
in the determination of the Majority Banks, material in relation
to the consolidated financial condition, business, operations or
prospects taken as a whole of the Company; or
(k) A Change in Control shall occur;
THEREUPON: (i) in the case of an Event of Default (other than
one referred to in paragraph (g) or (h) of this Section 9), the
Agent, upon request of the Majority Banks, may, by notice to the
Company, cancel the Commitments and/or declare the principal
amount then outstanding of, and the accrued interest on, the
Loans and all other amounts payable by the Company hereunder and
under the Notes, if any (including, without limitation, any
amounts payable under Section 5.5 hereof), to be forthwith due
and payable, whereupon such amounts shall be immediately due and
payable without presentment, demand, protest or other formalities
of any kind, all of which are hereby expressly waived by the
Company; and (ii) in the case of the occurrence of an Event of
Default referred to in paragraph (g) or (h) of this Section 9,
the Commitments shall automatically be canceled and the principal
amount then outstanding of, and the accrued interest on, the
Loans and all other amounts payable by the Company hereunder and
under the Notes, if any (including, without limitation, any
amounts payable under Section 5.5 hereof), shall automatically
become immediately due and payable without presentment, demand,
protest or other formalities of any kind, all of which are hereby
expressly waived by the Company.
Section 10. The Agent.
10.1 Appointment, Powers and Immunities. Each Bank hereby
irrevocably appoints and authorizes the Agent to act as its agent
hereunder with such powers as are specifically delegated to the
Agent by the terms of this Agreement, together with such other
powers as are reasonably incidental thereto. The Agent:
(a) shall not have any duties or responsibilities except those
expressly set forth in this Agreement, and shall not by reason of
this Agreement be a trustee for any Bank; (b) shall not be
responsible to the Banks for any recitals, statements,
representations or warranties contained in this Agreement, or in
any certificate or other documents referred to or provided for
in, or received by any of them under, this Agreement or any
document delivered in connection herewith, or for the value,
validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement, any Note, if any, or any other
document referred to or provided for herein or for any failure by
the Company or any other Person to perform any of its obligations
hereunder or thereunder; (c) shall not be required to initiate or
conduct any litigation or collection proceedings hereunder; and
(d) shall not be responsible for any action taken or omitted to
be taken by it hereunder or under any other document or
instrument referred to or provided for herein or in connection
herewith, except for its own gross negligence or willful
misconduct. The Agent may employ agents and attorneys-in-fact
and shall not be responsible for the negligence or misconduct of
any such agents or attorneys-in-fact selected by it in good
faith. The Agent may deem and treat the payee of any Note, if
any, as the holder thereof for all purposes hereof unless and
until a written notice of the assignment or transfer thereof
shall have been consented to in accordance with Section 11.6.
10.2 Reliance by Agent. The Agent shall be entitled to rely
upon any certification, notice or other communication (including
any thereof by telephone or telecopy) believed by it to be
genuine and correct and to have been signed or sent by or on
behalf of the proper Person or Persons, and upon advice and
statements of legal counsel, independent accountants and other
experts selected by the Agent. As to any matters not expressly
provided for by this Agreement, the Agent shall in all cases be
fully protected in acting, or in refraining from acting,
hereunder in accordance with instructions signed by the Majority
Banks or all the Banks if required in accordance with
Section 11.4, and such instructions of the Majority Banks or all
the Banks, as applicable, and any action taken or failure to act
pursuant thereto shall be binding on all of the Banks.
10.3 Defaults. The Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default unless the
Agent has received notice from a Bank or the Company specifying
such Default and stating that such notice is a "Notice of
Default." In the event that the Agent receives such a notice of
the occurrence of a Default, the Agent shall give prompt notice
thereof to the Banks. The Agent shall (subject to Section 10.1
and Section 10.7 hereof) take such action with respect to such
Default as shall be directed by the Majority Banks, provided,
that, unless and until the Agent shall have received such
directions, the Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to
such Default as it shall deem advisable in the best interest of
the Banks.
10.4 Rights as a Bank. With respect to its Commitments and
the Loans made by it, The Northern Trust Company in its capacity
as a Bank hereunder shall have the same rights and powers
hereunder as any other Bank and may exercise the same as though
it were not acting as the Agent, and the term "Bank" or "Banks"
shall, unless the context otherwise indicates, include The
Northern Trust Company in its individual capacity. The Northern
Trust Company and its respective affiliates may (without having
to account therefor to any Bank) accept deposits from, lend money
to and generally engage in any kind of banking, trust or other
business with the Company (and any of its Affiliates) as if it
were not acting as the Agent, and The Northern Trust Company and
its respective affiliates may accept fees and other consideration
from the Company for services in connection with this Agreement
or otherwise without having to account for the same to the Banks.
10.5 Indemnification. The Banks agree to indemnify the
Agent (to the extent not reimbursed under Section 11.3 or 11.15
hereof, but without limiting the obligations of the Company under
said Section 11.3 or 11.15), ratably in accordance with the
aggregate principal amount of the Loans made by the Banks (or, if
no Loans are at the time outstanding, ratably in accordance with
their respective Commitments), for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of this
Agreement or any other documents contemplated by or referred to
herein or the transactions contemplated hereby (including,
without limitation, the costs and expenses which the Company is
obligated to pay under Section 11.3 hereof but excluding, unless
a Default has occurred and is continuing, normal administrative
costs and expenses incident to the performance of its agency
duties hereunder) or the enforcement of any of the terms hereof
or of any such other documents, provided, that no Bank shall be
liable for any of the foregoing to the extent they arise from the
gross negligence or willful misconduct of the Agent.
10.6 Non-Reliance on Agent and other Banks. Each Bank
agrees that it has, independently and without reliance on the
Agent or any other Bank, and based on such documents and
information as it has deemed appropriate, made its own credit
analysis of the Company and its Subsidiaries and decision to
enter into this Agreement and that it will, independently and
without reliance upon the Agent or any other Bank, and based on
such documents and information as it shall deem appropriate at
the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement. The Agent
shall not be required to keep itself informed as to the
performance or observance by the Company of this Agreement or any
other document referred to or provided for herein or to inspect
the properties or books of the Company or any of its
Subsidiaries. Except for notices, reports and other documents
and information expressly required to be furnished to the Banks
by the Agent hereunder, the Agent shall not have any duty or
responsibility to provide any Bank with any credit or other
information concerning the affairs, financial condition or
business of the Company or any of its Subsidiaries (or any of
their Affiliates) which may come into the possession of the Agent
or any of its affiliates.
10.7 Failure to Act. Except for action expressly required
of the Agent hereunder, the Agent shall in all cases be fully
justified in failing or refusing to act hereunder unless it shall
receive further assurances to its satisfaction from the Banks of
their indemnification obligations under Section 10.5 hereof
against any and all liability and expense which may be incurred
by it by reason of taking or continuing to take any such action.
10.8 Resignation or Removal of Agent. Subject to the
appointment and acceptance of a successor Agent as provided
below, the Agent may resign at any time by giving 30 days' notice
thereof to the Banks and the Company, and the Agent may be
removed at any time with or without cause by the Majority Banks.
Upon any such resignation or removal, the Majority Banks shall
have the right to appoint a successor to the resigning or removed
Agent, subject to the approval of the Company which shall not be
withheld unreasonably. If no successor to such Agent shall have
been so appointed by the Majority Banks and shall have accepted
such appointment within 30 days after the Agent's giving of
notice of resignation or the Majority Banks' removal of the
Agent, then the resigning or removed Agent may, on behalf of the
Banks, appoint a successor Agent, which shall be a bank which has
an office in Chicago, Illinois and having capital and retained
earnings of at least $100,000,000. Upon the acceptance of any
appointment as an 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 resigning or
removed Agent, and the resigning or removed Agent shall be
discharged from its duties and obligations hereunder. After the
Agent's resignation or removal hereunder, the provisions of this
Section 10 shall continue in effect for its benefit in respect of
any actions taken or omitted to be taken by it while it was
acting as the Agent.
10.9 Documentation and Syndication Agent. There shall be no
rights, obligations or liabilities afforded to or imposed upon
the Documentation Agent or Syndication Agent by virtue of their
status as such.
Section 11. Miscellaneous.
11.1 Waiver. No failure on the part of the Agent or any
Bank to exercise, no delay in exercising, and no course of
dealing with respect to, any right, power or privilege under this
Agreement or any Note, if any, shall operate as a waiver thereof,
nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other
right, power or privilege. The remedies provided herein are
cumulative and not exclusive of any remedies provided by law.
11.2 Notices. All notices and other communications provided
for herein shall be given or made in writing and telecopied,
mailed or delivered, in the case of the Company or the Agent, to
its respective address or telecopy number set forth on the
signature pages hereof, and in the case of a Bank, to its notice
address or telecopy number specified in Schedule 1 hereto or, as
to any party, at such other address as shall be designated by
such party in a notice to each other party. Except as otherwise
provided in this Agreement, all such communications shall be
deemed to have been duly given when properly transmitted by
telecopier or personally delivered or, in the case of a mailed
notice, three Business Days after being deposited in the mail,
first class postage prepaid, in each case given or addressed as
aforesaid; provided, that notices to the Agent shall be effective
only upon actual receipt.
11.3 Expenses, Etc. The Company agrees to pay or reimburse
each of the Banks (in the case of clauses (b) and (c) below) and
the Agent for: (a) all reasonable out- of-pocket costs and
expenses of the Agent (including, without limitation, the
reasonable fees and expenses of Xxxxxxx, Carton & Xxxxxxx,
special counsel to the Agent), in connection with (i) the
negotiation, preparation, execution and delivery of this
Agreement and the Notes, if any, and the making of the Loans
hereunder, (ii) any amendment, modification or waiver of any of
the terms of this Agreement or any of the Notes, if any, and
(iii) any examination and inspection of the Company by the Agent
pursuant to Section 8.3(f) hereof; (b) all reasonable costs and
expenses of the Banks and the Agent (including reasonable
counsels' fees, which counsel may be employees of such Bank or
the Agent) in connection with any Default and any enforcement or
collection proceedings resulting therefrom; and (c) all transfer,
stamp, documentary or other similar taxes, assessments or charges
levied by any governmental or revenue authority in respect of
this Agreement, the Notes, if any, or any other document referred
to herein.
11.4 Amendments, Etc. Except as otherwise expressly
provided in this Agreement, any provision of this Agreement may
be waived, amended or modified only by an instrument in writing
signed by the Company, the Agent and the Majority Banks;
provided, that no amendment, modification or waiver shall, unless
by an agreement signed by the Agent and all of the Banks:
(i) increase or extend the term, or extend the time or waive any
requirement for the reduction or termination, of any of the
Commitments (except as specifically provided in Section 2.4),
(ii) extend the date fixed for the payment of principal of or
interest on any Loan or the payment of any fees, (iii) reduce the
amount of any payment of principal thereof or the rate at which
interest is payable thereon or any fee is payable hereunder,
(iv) alter the terms of Section 2.4 or of this Section 11.4,
(v) amend the definition of the term "Majority Banks" or (vi)
waive any condition precedent set forth in Section 6 hereof.
11.5 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns.
11.6 Assignments and Participations.
(a) The Company may not assign its rights or obligations
hereunder or under the Notes, if any, without the prior written
consent of all of the Banks and the Agent.
(b) Any Bank may, in the ordinary course of its business and in
accordance with applicable law, at any time sell to one or more
banks or other financing entities or investment funds
("Participants") participating interests in any Loan owing to
such Bank, the Note, if any, held by such Bank, the Commitment of
such Bank or any other interest of such Bank. Each Bank shall
promptly provide notice of the identity of each Participant to
the Company and the Agent. In the event of any such sale by a
Bank of participating interests to a Participant, such Bank shall
remain solely responsible to the other parties hereto for the
performance of such obligations, such Bank shall remain the
holder of its Notes, if any, for all purposes hereunder, all
amounts payable by the Company under this Agreement shall be
determined as if such Bank had not sold such participating
interest, and the Company and the Agent shall continue to deal
solely and directly with such Bank in connection with such Bank's
rights and obligations hereunder.
(c) Each Bank shall retain the sole right to approve, without
the consent of any Participant, any amendment, modification or
waiver of any provision hereunder other than any amendment,
modification or waiver of any provision hereunder with respect to
any Loan or Commitment in which such Participant has an interest
which forgives principal, interest or fees or reduces the
interest rate or fees payable with respect to any such Loan or
Commitment, postpones any date fixed for any regularly-scheduled
payment of principal of, or interest or fees on, any such Loan or
Commitment, releases any guarantor, if any, of any such Loan or
releases any substantial portion of collateral, if any, securing
any such Loan.
(d) The Company agrees that each Participant shall be deemed to
have the right of setoff provided in Section 4.7 in respect of
its participating interest in amounts owing hereunder to the same
extent as if the amount of its participating interest were owing
directly to it as a Bank hereunder, provided, that each Bank
shall retain the right of setoff provided in Section 4.7 with
respect to the amount of participating interests sold to each
Participant. The Banks agree to share with each Participant, and
each Participant, by exercising the right of setoff provided in
Section 4.7, agrees to share with each Bank, any amount received
pursuant to the exercise of its right of setoff, such amounts to
be shared in accordance with Section 4.7 as if each Participant
were a Bank.
(e) Any Bank may, in the ordinary course of its business and in
accordance with applicable law, at any time assign to one or more
banks or other financing entities or investment funds
("Purchaser") all or any part of its rights and obligations
hereunder. Each such assignment shall be pursuant to an
Assignment Agreement substantially in the form of Exhibit I
hereto. The consent of the Company and the Agent shall be
required prior to any assignment becoming effective with respect
to the Purchaser which is not a Bank or an affiliate thereof;
provided, however, that if a Default has occurred and is
continuing, the consent of the Company shall not be required.
The consent of the Company and the Agent shall not be
unreasonably withheld or delayed. The Banks agree to provide the
Company notice of any assignment to a Bank or an affiliate
thereof. Each such assignment shall be in an amount not less
than the lesser of (i) $10,000,000 or (ii) the remaining amount
of the assigning Bank's Commitment (calculated as the date of
such assignment).
(f) Upon (i) the delivery to the Agent of a notice of
assignment, substantially in the form attached as Exhibit "I" to
Exhibit I hereto (a "Notice of Assignment"), together with any
consents required by paragraph (e) above, and (ii) payment of a
$3,000 fee to the Agent for processing such assignment, such
assignment shall become effective on the effective date specified
in such Notice of Assignment. The Notice of Assignment shall
contain a representation by the Purchaser to the effect that none
of the consideration used to make the purchase of the Commitment
and Loans under the applicable Assignment Agreement are "plan
assets" as defined under ERISA and that the rights and interests
of the Purchaser in and under this Agreement will not be "plan
assets" under ERISA. On and after the effective date of such
assignment, such Purchaser shall for all purposes be a Bank party
to this Agreement and shall have all rights and obligations of a
Bank hereunder, to the same extent as if it were an original
party hereto, and no further consent or action by the Company,
the Banks or the Agent shall be required to release the
transferor Bank with respect to the percentage of its Commitment
and Loans assigned to such Purchaser. Upon the consummation of
any assignment to a Purchaser pursuant to this Section 11.6, if
requested by the Purchaser, the transferor Bank, the Agent and
the Company shall make appropriate arrangements so that a
replacement Note is issued to such transferor Bank and a new Note
or, as appropriate, a replacement Note, is issued to such
Purchaser, in each case in principal amounts reflecting their
Commitment, as adjusted pursuant to such assignment.
(g) The Company authorizes each Bank to disclose to any
Participant or Purchaser or any other Person acquiring an
interest hereunder by operation of law (each a "Transferee") and
any prospective Transferee any and all information in such Bank's
possession concerning the creditworthiness of the Company and its
Subsidiaries; provided, that each Transferee and prospective
Transferee agrees to be bound by Section 11.10 of this Agreement.
(h) The Company hereby agrees that each Bank and each Purchaser
shall have the unrestricted right at any time and from time to
time, and without the consent of or notice to the Company, to
pledge all or any portion of its rights under this Agreement or
the Notes, if any, to any of the twelve (12) Federal Reserve
Banks organized under Section 4 of the Federal Reserve Act,
12 U.S.C. Section 341, provided, that no such pledge or
enforcement thereof shall release such Bank or Assignee from its
obligations hereunder or thereunder.
11.7 Survival. The obligations of the Company under
Sections 5.1, 5.5, 11.3 and 11.15 hereof shall survive the
repayment of the Loans and the termination of the Commitments.
11.8 Captions. The table of contents and captions and
section headings appearing herein are included solely for
convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.
11.9 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall
constitute one and the same instrument, and any of the parties
hereto may execute this Agreement by signing any such
counterpart.
11.10 Confidentiality. Each Bank and the Agent agree to use
reasonable precautions to keep confidential, in accordance with
their customary procedures for handling confidential information
of this nature and in accordance with safe and sound banking
practices, any non-public information supplied to it by the
Company pursuant to this Agreement which, at the time it is so
supplied, is clearly identified as non-public information by a
notice in writing; provided, that nothing herein shall limit the
disclosure of any such information (a) to the extent required by
statute, rule, regulation or judicial process, (b) to counsel for
or other professional advisors to any of the Banks or the Agent,
(c) to bank examiners, auditors or accountants, (d) to any other
Bank, (e) in connection with any litigation to which any one or
more of the Agent or Banks is a party, (f) to any affiliate of
the Agent or any Bank, or (g) pursuant to Section 11.6(g).
11.11 Governing Law. THIS AGREEMENT AND THE NOTES, IF ANY,
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF ILLINOIS.
11.12 Waiver of Jury Trial. THE COMPANY, THE AGENT AND THE
BANKS HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
11.13 No Fiduciary Relationship. The Company acknowledges
and agrees that the lending relationship hereby created with the
Banks is and has been conducted on an open and arm's-length basis
in which no fiduciary relationship exists between the Company and
any Bank or the Agent and that the Company has not relied and is
not relying on any such fiduciary relationship in consummating
the transactions contemplated hereby.
11.14 Consent To Jurisdiction. THE COMPANY HEREBY ABSOLUTELY
AND IRREVOCABLY CONSENTS AND SUBMITS TO THE JURISDICTION OF THE
COURTS OF THE STATE OF ILLINOIS OR THE UNITED STATES OF AMERICA
FOR THE NORTHERN DISTRICT OF ILLINOIS IN CONNECTION WITH ANY
SUITS, ACTIONS OR PROCEEDINGS BROUGHT AGAINST THE COMPANY BY THE
AGENT OR ANY BANK ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE NOTES, IF ANY, AND IRREVOCABLY AGREES THAT ALL CLAIMS IN
RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT. THE COMPANY HEREBY WAIVES AND
AGREES NOT TO ASSERT IN SUCH SUIT, ACTION OR PROCEEDING, IN EACH
CASE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
CLAIM THAT (A) THE COMPANY IS NOT PERSONALLY SUBJECT TO THE
JURISDICTION OF ANY SUCH COURT; (B) THE COMPANY IS IMMUNE FROM
SUIT OR ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE,
ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION,
EXECUTION OR OTHERWISE) WITH RESPECT TO IT OR ITS PROPERTY;
(C) ANY SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN
INCONVENIENT FORUM; (D) THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING IS IMPROPER; OR (E) THIS AGREEMENT OR THE NOTES, IF
ANY, MAY NOT BE ENFORCED IN OR BY ANY SUCH COURT. NOTHING
CONTAINED HEREIN SHALL AFFECT ANY RIGHT THAT THE AGENT OR ANY
BANK MAY HAVE TO BRING ANY SUIT, ACTION OR PROCEEDING RELATING TO
THIS AGREEMENT OR THE NOTES, IF ANY, AGAINST THE COMPANY OR ITS
PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION.
11.15 Company Indemnification. Whether or not the
transactions contemplated hereby are consummated, the Company
shall indemnify and hold the Agent, its affiliates, each Bank and
each of their respective officers, directors, employees, counsel,
agents and attorneys-in-fact (each, an "Indemnified Person")
harmless from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses and disbursements (including attorneys fees and
disbursements, which attorneys may be employees of such
Indemnified Person) of any kind or nature whatsoever which may at
any time (including at any time following repayment of the Loans
and the termination, resignation or replacement of the Agent or
replacement of any Bank) be imposed on, incurred by or asserted
against any such Indemnified Person in any way relating to or
arising out of this Agreement or any document contemplated by or
referred to herein, or the transactions contemplated hereby, or
any action taken or omitted by any such Indemnified Person under
or in connection with any of the foregoing, including with
respect to any investigation, litigation or proceeding (including
any insolvency proceeding or appellate proceeding) related to or
arising out of this Agreement or the Loans or the use of the
proceeds thereof, whether or not any Indemnified Person is a
party thereto (all the foregoing, collectively, the "Indemnified
Liabilities"); provided, that the Company shall have no
obligation hereunder to any Indemnified Person with respect to
(a) Indemnified Liabilities resulting solely from the gross
negligence or willful misconduct of such Indemnified Person,
(b) disputes amongst the Banks and/or the Banks and the Agent,
(c) litigation between the Company and the Agent and/or the Banks
where the Company is the prevailing party on the merits pursuant
to a final non-appealable order or (d) expenses of the type
described in Section 11.3(a) to the extent incurred by a Person
other than the Agent. The agreements in this Section shall
survive payment of all other obligations.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
ACE HARDWARE CORPORATION
By:___LORI L. BOSSMANN____________________
Name:_Lori L. Bossmann____________________
Title:_Vice President, Finance____________
Address: 0000 Xxxxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxx 00000-0000
Attention: Treasurer
Telecopy No.: (000) 000-0000
THE NORTHERN TRUST COMPANY,
individually and as Administrative Agent
By:_________________________________
Name:___________________________
Title: Vice President
Address: 00 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxx Xxxxxxxx
BANK OF AMERICA, NATIONAL
ASSOCIATION, individually and as
Syndication Agent
By:_____TRACY TOULOUSE______________
Name:___Tracy J. Toulouse___________
Title:__Vice President______________
SUNTRUST BANK, individually and as
Documentation Agent
By:_________________________________
Name:___________________________
Title:__________________________
BANKS:
------
BANK ONE, NA
(Main Office Chicago)
By:____JOHN J. COMPERTH_________
Name:__John J. Comperth_________
Title:_Sr. Vice President_______
PNC BANK, NATIONAL ASSOCIATION
By:____MARGARET A. JACKETIO_____
Name:__Margaret A. Jacketio_____
Title:_Vice President___________
