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EXHIBIT 99.14
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$200,000,000
AMENDED AND RESTATED
MULTICURRENCY CREDIT AGREEMENT
DATED AS OF MAY 22, 1998
AMONG
PAYLESS SHOESOURCE, INC.,
PAYLESS SHOESOURCE HOLDINGS, INC.
PSS INVESTMENT II, INC.
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
AS AGENT,
THE BANK OF NEW YORK
AND
THE FIRST NATIONAL BANK OF CHICAGO,
AS CO-AGENTS,
AND
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
ARRANGED BY
BA SECURITIES, INC.
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS ..............................................................1
1.01 Certain Defined Terms ................................................1
1.02 Other Interpretive Provisions .......................................21
1.03 Accounting Principles ...............................................22
1.04 Currency Equivalents Generally ......................................22
ARTICLE II THE CREDITS ............................................................22
2.01 Amounts and Terms of Commitments ....................................22
2.02 Notes ...............................................................23
2.03 Procedure for Borrowing .............................................23
2.04 Conversion and Continuation Elections ...............................24
2.05 Utilization of Commitments in Offshore Currencies ...................25
2.06 Voluntary Termination or Reduction of Commitments ...................27
2.07 Optional Prepayments ................................................27
2.08 Currency Exchange Fluctuations ......................................27
2.09 Mandatory Prepayments of Loans ......................................28
2.10 Repayment ...........................................................28
2.11 Interest ............................................................28
2.12 Fees ................................................................29
(a) Arrangement, Agency Fees ..................................29
(b) Commitment Fees ...........................................29
2.13 Computation of Fees and Interest ....................................29
2.14 Payments by the Company .............................................30
2.15 Payments by the Banks to the Agent ..................................31
2.16 Sharing of Payments, Etc. ...........................................32
ARTICLE III THE LETTERS OF CREDIT .................................................32
3.01 The Letter of Credit Subfacility. ...................................32
3.02 Issuance, Amendment and Renewal of Letters of Credit ................33
3.03 Risk Participations, Drawings and Reimbursements ....................36
3.04 Repayment of Participations .........................................37
3.05 Role of the Issuing Bank ............................................38
3.06 Obligations Absolute ................................................38
3.07 Letter of Credit Fees ...............................................39
3.08 Uniform Customs and Practice ........................................40
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ARTICLE IV
TAXES, YIELD PROTECTION AND ILLEGALITY ................................40
4.01 Taxes .......................................................40
4.02 Illegality ..................................................41
4.03 Increased Costs and Reduction of Return .....................42
4.04 Funding Losses ..............................................43
4.05 Inability to Determine Rates ................................43
4.06 Reserves on Offshore Rate Loans .............................44
4.07 Certificates of Banks .......................................44
4.08 Survival ....................................................44
4.09 Replacement of Certain Banks ................................44
ARTICLE V
CONDITIONS PRECEDENT ..................................................46
5.01 Conditions of Initial Credit Extensions .....................46
(a) Credit Agreement and Notes ............................46
(b) Resolutions; Incumbency ...............................46
(c) Organization Documents; Good Standing .................46
(d) Legal Opinions ........................................46
(e) Payment of Fees .......................................47
(f) Certificate ...........................................47
(g) Subsidiary Guaranty ...................................47
(h) Other Documents .......................................47
5.02 Conditions to All Credit Extensions .........................47
(a) Notice of Borrowing or Issuance .......................47
(b) Continuation of Representations and Warranties ........47
(c) No Existing Default ...................................48
(d) Certificate ...........................................48
(e) Solvency Certificate ..................................48
ARTICLE VI
REPRESENTATIONS AND WARRANTIES ........................................49
6.01 Corporate Existence and Power ...............................49
6.02 Corporate Authorization; No Contravention ...................50
6.03 Governmental Authorization ..................................50
6.04 Binding Effect ..............................................50
6.05 Litigation ..................................................50
6.06 No Default ..................................................50
6.07 ERISA Compliance ............................................51
6.08 Use of Proceeds; Margin Regulations .........................51
6.09 Taxes .......................................................51
6.10 Financial Condition .........................................52
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6.11 Environmental Matters ......................................52
6.12 Regulated Entities .........................................52
6.13 Subsidiaries ...............................................52
6.14 Insurance ..................................................52
6.15 Swap Obligations ...........................................53
6.16 Full Disclosure ............................................53
ARTICLE VII
AFFIRMATIVE COVENANTS ................................................53
7.01 Financial Statements .......................................53
7.02 Certificates; Other Information ............................54
7.03 Notices ....................................................55
7.04 Preservation of Corporate Existence, Etc ...................55
7.05 Maintenance of Property ....................................56
7.06 Insurance ..................................................56
7.07 Payment of Tax Obligations .................................56
7.08 Compliance with Laws .......................................56
7.09 Compliance with ERISA ......................................56
7.10 Inspection of Property and Books and Records ...............56
7.11 Environmental Laws .........................................57
7.12 Use of Proceeds ............................................57
7.13 Additional Guarantors ......................................57
ARTICLE VIII
NEGATIVE AND FINANCIAL COVENANTS .....................................57
8.01 Limitation on Liens ........................................57
8.02 Disposition of Assets ......................................59
8.03 Consolidations and Mergers .................................60
8.04 Loans and Investments ......................................60
8.05 Limitation on Indebtedness .................................61
8.06 Transactions with Affiliates ...............................62
8.07 Contingent Obligations .....................................62
8.08 Restricted Payments ........................................63
8.09 ERISA ......................................................63
8.10 Conduct of Business ........................................63
8.11 Accounting Changes .........................................64
8.12 Financial Covenants ........................................64
(a) Fixed Charge Coverage Ratio ........................64
(b) Leverage Ratio .....................................64
(c) Consolidated Tangible Net Worth ....................64
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ARTICLE IX
EVENTS OF DEFAULT ...........................................64
9.01 Event of Default...................................64
(a) Non-Payment.................................64
(b) Representation or Warranty .................64
(c) Specific Defaults ..........................64
(d) Other Defaults .............................64
(e) Cross-Default ..............................65
(f) Insolvency; Voluntary Proceedings 65
(g) Involuntary Proceedings ....................65
(h) ERISA ......................................65
(i) Monetary Judgments .........................66
(j) Change of Control ..........................66
(k) Subsidiary Guaranty ........................66
9.02 Remedies ..........................................66
9.03 Rights Not Exclusive ..............................67
ARTICLE X
THE AGENT ...................................................67
10.01 Appointment and Authorization; "Agent" ............67
10.02 Delegation of Duties ..............................68
10.03 Liability of Agent ................................68
10.04 Reliance by Agent .................................68
10.05 Notice of Default .................................69
10.06 Credit Decision ...................................69
10.07 Indemnification of Agent ..........................69
10.08 Agent in Individual Capacity ......................70
10.09 Successor Agent ...................................70
10.10 Withholding Tax ...................................70
10.11 Co-Agents .........................................72
ARTICLE XI
MISCELLANEOUS ...............................................72
11.01 Amendments and Waivers ............................72
11.02 Notices ...........................................73
11.03 No Waiver; Cumulative Remedies ....................74
11.04 Costs and Expenses ................................74
11.05 Company Indemnification ...........................74
11.06 Payments Set Aside ................................75
11.07 Successors and Assigns.............................75
11.08 Assignments, Participations, etc. .................75
11.09 Confidentiality ...................................77
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11.10 Set-off ................................................77
11.11 Notification of Addresses, Lending Offices, Etc. .......78
11.12 Counterparts ...........................................78
11.13 Severability ...........................................78
11.14 No Third Parties Benefited .............................78
11.15 Governing Law and Jurisdiction .........................78
11.16 Waiver of Jury Trial ...................................79
11.17 Judgment ...............................................79
11.18 Entire Agreement .......................................79
11.19 Effect of Restatement ..................................80
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SCHEDULES
Schedule 2.01 Commitments and Pro Rata Shares
Schedule 6.07 ERISA
Schedule 6.10 Permitted Liabilities
Schedule 6.11 Environmental Matters
Schedule 6.13 Subsidiaries and Minority Interests
Schedule 8.01 Permitted Liens
Schedule 8.04 Permitted Investments
Schedule 8.05 Permitted Indebtedness
Schedule 8.07 Contingent Obligations
Schedule 11.02 Lending Offices; Addresses for Notices
EXHIBITS
Exhibit A Form of Notice of Borrowing
Exhibit B Form of Notice of Conversion/Continuation
Exhibit C Form of Compliance Certificate
Exhibit D-1 [omitted]
Exhibit D-2 [omitted]
Exhibit E Form of Assignment and Acceptance Agreement
Exhibit F Form of Promissory Note
Exhibit G Form of Reaffirmation of Guaranty
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AMENDED AND RESTATED MULTICURRENCY CREDIT AGREEMENT
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This AMENDED AND RESTATED MULTICURRENCY CREDIT AGREEMENT is entered into
as of May 22, 1998, among Payless ShoeSource, Inc., a Missouri corporation (the
"Company"), Payless Shoe Source Holdings, Inc. a Delaware corporation
("Holdco"), PSS Investment II, Inc., a Nevada corporation ("Nevada") the
several financial institutions from time to time party to this Agreement
(collectively, the "Banks"; individually, a "Bank"), and Bank of America
National Trust and Savings Association, as agent for the Banks.
R E C I T A L S:
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A. The Company, the Agent and certain financial institutions have entered
into that certain revolving multicurrency credit facility dated as of April 22,
1996 (as heretofore amended, supplemented or otherwise modified, the "Existing
Credit Agreement"), pursuant to which the Banks party thereto agreed to make
certain financial accommodations to the Company on the terms and conditions set
forth therein;
B. The Company has requested that the Existing Credit Agreement be amended
and restated in order to make certain changes to the Existing Credit Agreement;
and
C. The Company, the Agent and the Banks desire to amend and restate the
Existing Credit Agreement on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and undertakings
herein contained, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Company, Holdco, Nevada,
the Banks and the Agent hereby amend and restate the Existing Credit Agreement
as follows:
ARTICLE I
DEFINITIONS
1.01. Certain Defined Terms. The following terms have the following
meanings:
"Acquisition" means any transaction or series of related transactions for
the purpose of or resulting, directly or indirectly, in (a) the acquisition of
all or substantially all of the assets of a Person, or of any business or
division of a Person, (b) the acquisition of in excess of 50% of the capital
stock, partnership interests, membership interests or equity of any Person, or
otherwise causing any Person to become a Subsidiary, or (c) a merger or
consolidation or any other combination with another Person (other than a Person
that is a Subsidiary) provided that Holdco or the Subsidiary is the surviving
entity.
"Affiliate" means, as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control
with, such Person. A Person shall be deemed
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to control another Person if the controlling Person possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of the other Person, whether through the ownership of voting
securities, membership interests, by contract, or otherwise.
"Agent" means BofA in its capacity as agent for the Banks hereunder, and
any successor agent arising under Section 10.09.
"Agent-Related Persons" means, at any time, the Agent at such time,
together with its Affiliates (including, in the case of BofA, the Arranger),
and the officers, directors, employees, agents and attorneys-in-fact of such
Persons and Affiliates.
"Agent's Payment Office" means (a) in respect of payments in Dollars, the
address for payments set forth on Schedule 11.02 or such other address as the
Agent may from time to time specify in accordance with Section 11.02, and (b)
in the case of payments in any Offshore Currency, such address as the Agent may
from time to time specify in accordance with Section 11.02.
"Agreed Alternative Currency" has the meaning specified in subsection
2.05(d).
"Agreement" means this Amended and Restated Multicurrency Credit
Agreement, as the same may be amended, supplemented, restated or otherwise
modified from time to time.
"Agreement Currency" has the meaning specified in Section 11.17.
"Applicable Commitment Fee Percentage" means, subject to the last sentence
of this definition, for any period, the applicable of the following percentages
in effect with respect to such period:
Applicable Commitment
Fixed Charge Coverage Ratio Fee Percentage
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Level I Status .075%
Level II Status .10%
Level III Status .125%
Level IV Status .15%
The Fixed Charge Coverage Ratio shall be calculated by Holdco as of the end of
each of its fiscal quarters and shall be reported to the Agent pursuant to the
Compliance Certificate delivered in accordance with subsection 7.02(b). The
Applicable Commitment Fee Percentage shall be adjusted, if necessary, quarterly
as of the tenth day after the delivery of the Compliance Certificate referred
to above; provided that, if such certificate, together with the financial
statements to which such certificate relates, are not delivered by the date
required pursuant to Section 7.01 and subsection 7.02(b), then from and after
such date until such certificate is so delivered, the Applicable Commitment Fee
Percentage shall be equal to .225%. Until adjusted as described above, the
Applicable Commitment Fee Percentage shall be equal to that in effect under the
Existing Credit Agreement immediately prior to the Restatement Date.
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"Applicable Currency" means, as to any particular payment or Loan, Dollars
or the Offshore Currency in which it is denominated or is payable.
"Applicable Margin" means, subject to the second to last sentence of this
definition, for any period, the applicable of the following percentages in
effect with respect to such period:
Fixed Charge Coverage Ratio Applicable Margin
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Level I Status .225%
Level II Status .30%
Level III Status .375%
Level IV Status .45%
The Fixed Charge Coverage Ratio shall be calculated by Holdco as of the end of
each of its fiscal quarters and shall be reported to the Agent pursuant to the
Compliance Certificate delivered in accordance with subsection 7.02(b). The
Applicable Margin shall be adjusted, if necessary, quarterly as of the tenth
day after the delivery of the Compliance Certificate referred to above;
provided that, if such certificate, together with the financial statements to
which such certificate relates, are not delivered by the date required pursuant
to Section 7.01 and subsection 7.02(b), then from and after such date until
such certificate is so delivered, the Applicable Margin shall be equal to .75%.
Until adjusted as described above, the Applicable Margin shall be equal to
that in effect under the Existing Credit Agreement immediately prior to the
Restatement Date. The Applicable Margin for any Interest Period shall be the
Applicable Margin in effect on the first day of such Interest Period and shall
not change during such Interest Period.
"Arranger" means BA Securities, Inc., a Delaware corporation.
"Assignee" has the meaning specified in subsection 11.08(a).
"Assignment and Acceptance" has the meaning specified in subsection
11.08(a).
"Attorney Costs" means and includes all reasonable out-of-pocket fees and
disbursements of any law firm or other external counsel, the allocated cost of
internal legal services and all disbursements of internal counsel.
"Bank" has the meaning specified in the introductory clause hereto.
"Banking Day" means any day other than a Saturday, Sunday or other day on
which commercial banks in New York City, Chicago or San Francisco are
authorized or required by law to close and (a) with respect to disbursements
and payments in Dollars, a day on which dealings are carried on in the
applicable offshore Dollar interbank market, and (b) with respect to any
disbursements and payments in and calculations pertaining to any Offshore
Currency Loan, a day
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on which commercial banks are open for foreign exchange business in London,
England, and on which dealings in the relevant Offshore Currency are carried on
in the applicable offshore foreign exchange interbank market in which
disbursement of or payment in such Offshore Currency will be made or received
hereunder.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11
U.S.C. Section 101, et seq.).
"Base Rate" means, for any day, the higher of:
(a) 0.50% per annum above the latest Federal Funds Rate; and (b) the
rate of interest in effect for such day as publicly announced from time to time
by BofA in San Francisco, California, as its "reference rate." (The "reference
rate" is a rate set by BofA based upon various factors including BofA's costs
and desired return, general economic conditions and other factors, and is used
as a reference point for pricing some loans, which may be priced at, above, or
below such announced rate.)
Any change in the reference rate announced by BofA shall take effect at
the opening of business on the day specified in the public announcement of such
change.
"Base Rate Loan" means a Loan that bears interest based on the Base Rate.
"BofA" means Bank of America National Trust and Savings Association, a
national banking association.
"Borrowing" means a borrowing hereunder consisting of Loans of the same
Type and in the same Applicable Currency made to the Company on the same day by
the Banks under Article II and, other than in the case of Base Rate Loans,
having the same Interest Period.
"Borrowing Date" means any date on which a Borrowing occurs under Section
2.03.
"Business Day" means any day other than a Saturday, Sunday or other day on
which commercial banks in New York City, Chicago or San Francisco are
authorized or required by law to close and, if the applicable Business Day
relates to any Offshore Rate Loan, means a Banking Day.
"Capital Adequacy Regulation" means any guideline, request or directive of
any central bank or other Governmental Authority, or any other law, rule or
regulation, whether or not having the force of law, in each case, regarding
capital adequacy of any bank or of any corporation controlling a bank.
"Capital Lease" has the meaning specified in the definition of "Capital
Lease Obligations."
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"Capital Lease Obligations" means the principal component of all monetary
obligations of Holdco or any of its Subsidiaries under any leasing or similar
arrangement which, in accordance with GAAP, is classified as a capital lease
("Capital Lease").
"Cash Collateralize" means to pledge and deposit with or deliver to the
Agent, for the benefit of the Agent, the Issuing Bank and the Banks, as
collateral for the L/C Obligations, cash or deposit account balances pursuant
to documentation in form and substance reasonably satisfactory to the Agent and
the Issuing Bank (which documents are hereby consented to by the Banks).
Derivatives of such term shall have corresponding meanings.
"Certificate Bank" has the meaning specified in subsection 4.09(a).
"Change in Control" means (a) the acquisition by any 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 25% or more of the outstanding shares of voting stock
of Holdco, or (b) during any period of twelve consecutive calendar months,
individuals who at the beginning of such period constituted Holdco's board of
directors (together with any new directors whose election by the Holdco's board
of directors or whose nomination for election by the Holdco's stockholders was
approved by a vote of at least a majority of the directors then still in office
who either were directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reasons other
than death or disability to constitute a majority of the directors then in
office, or (c) Holdco shall cease to own directly or indirectly 100% of the
issued and outstanding capital stock of each of Nevada and the Company.
"Closing Date" means April 22, 1996.
"Code" means the Internal Revenue Code of 1986, and regulations promulgated
thereunder, in each case, as amended from time to time.
"Commitment", as to each Bank, has the meaning specified in Section 2.01.
"Compliance Certificate" means a certificate substantially in the form of
Exhibit C.
"Computation Date" has the meaning specified in subsection 2.05(a).
"Consolidated Interest Expense" means, for any period, the sum of total
interest expense (including that attributable to Capital Leases in accordance
with GAAP) of Holdco and its Subsidiaries on a consolidated basis with respect
to all outstanding Indebtedness of Holdco and its Subsidiaries, including,
without limitation, all commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers' acceptance financing, all as
determined on a consolidated basis for Holdco and its consolidated Subsidiaries
in accordance with GAAP.
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"Consolidated Net Income" means, for any period for any Person, the
aggregate of the net income of such Person for such period, determined in
accordance with GAAP on a consolidated basis, provided that (i) the net income
of any other Person which is not a Subsidiary of such Person shall be included
in the Consolidated Net Income of such Person only to the extent of the amount
of cash dividends or distributions paid to such Person or to a consolidated
Subsidiary of such Person and (ii) the net income of any other Person acquired
in a pooling of interests transaction for any period prior to the date of such
acquisition shall be excluded from the Consolidated Net Income of such Person .
There shall be excluded in computing Consolidated Net Income for any Person the
excess (or the deficit), if any, of (i) any gain which must be treated as an
extraordinary item under GAAP or any gain realized upon the sale or other
disposition of any real property or equipment that is not sold in the ordinary
course of business or of any capital stock owned by such Person or a Subsidiary
of such Person over (ii) any loss which must be treated as an extraordinary item
under GAAP or any loss realized upon the sale or other disposition of any real
property or equipment that is not sold in the ordinary course of business or of
any capital stock owned by such Person or a Subsidiary of such Person. Without
limiting the foregoing, all costs and expenses of the Company relating to
management retention incentive payments which are treated as extraordinary items
shall be excluded in computing Consolidated Net Income of Holdco.
"Consolidated Rental Expense" means, for any period, the sum of the
aggregate payments of Holdco and its Subsidiaries on a consolidated basis under
agreements to rent or lease any real or personal property (exclusive of Capital
Lease Obligations), all as determined on a consolidated basis for Holdco and
its consolidated Subsidiaries in accordance with GAAP.
Consolidated Tangible Net Worth" of a Person means, without duplication,
(a) total stockholders' equity of such Person less (b) the net book value of
all assets of such Person and its consolidated Subsidiaries which would be
treated as intangibles under GAAP, including, without limitation, goodwill and
trademarks, but excluding, however, lease rights associated with acquisitions
of below-market leases.
"Contingent Obligation" means, as to any Person, any direct or indirect
liability of that Person, whether or not contingent, with or without recourse,
(a) with respect to any Indebtedness, lease, dividend, letter of credit or
other obligation (the "primary obligations") of another Person (the "primary
obligor"), including any obligation of that Person (i) to purchase, repurchase
or otherwise acquire such primary obligations or any security therefor, (ii) 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, (iii) 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 (iv) otherwise to assure or hold
harmless the holder of any such primary obligation against loss in respect
thereof (each, a "Guaranty Obligation"); (b) with respect to any Surety
Instrument issued for the account of that Person or as to which that Person is
otherwise liable for reimbursement of drawings or payments; (c) to purchase any
materials, supplies or other property from, or to obtain the services
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of, another Person if the relevant contract or other related document or
obligation requires that payment for such materials, supplies or other property,
or for such services, shall be made regardless of whether delivery of such
materials, supplies or other property is ever made or tendered, or such services
are ever performed or tendered, or (d) in respect of any Swap Contract. The
amount of any Contingent Obligation shall, in the case of Guaranty Obligations,
be deemed equal to the stated or determinable amount of the primary obligation
in respect of which such Guaranty Obligation is made or, if not stated or if
indeterminable, the maximum reasonably anticipated liability in respect thereof;
provided that if any Guaranty Obligation (a) is limited to an amount less than
the obligations guaranteed or supported the amount of the corresponding
Contingent Obligation shall be equal to the lesser of the amount determined
pursuant to the initial clause of this sentence and the amount to which such
guaranty is so limited or (b) is limited to recourse against a particular asset
or assets of such Person the amount of the corresponding Contingent Obligation
shall be equal to the lesser of the amount determined pursuant to the initial
clause of this sentence and the fair market value of such asset or assets at the
date for determination of the amount of the Contingent Obligation. In the case
of other Contingent Obligations other than in respect of Swap Contracts, such
Contingent Obligations shall be equal to the maximum reasonably anticipated
liability in respect thereof and, in the case of Contingent Obligations in
respect of Swap Contracts, such Contingent Obligations shall be equal to the
Swap Termination Value.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust or other instrument, document or agreement
to which such Person is a party or by which it or any of its property is bound.
"Conversion/Continuation Date" means any date on which, under Section
2.04, the Company (a) converts Loans of one Type to another Type, or (b)
continues as Loans of the same Type, but with a new Interest Period, Loans
having Interest Periods expiring on such date.
"Credit Extension" means and includes (a) the making of any Loans
hereunder and (b) the Issuance of any Letters of Credit hereunder.
"Default" means any event or circumstance which, with the giving of notice
pursuant to this Agreement, the expiration of any cure period specified herein,
or both, would (if not cured or otherwise remedied during such cure period)
constitute an Event of Default.
"Disposition" has the meaning specified in Section 8.02.
"Dollar Equivalent" means, at any time, (a) as to any amount denominated
in Dollars, the amount thereof at such time, (b) as to any amount denominated
in an Offshore Currency, the equivalent amount in Dollars as determined by the
Agent at such time on the basis of the Spot Rate for the purchase of Dollars
with such Offshore Currency on the most recent Computation Date provided for in
subsection 2.05(a) and (c) as to any amount denominated in an Offshore L/C
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Currency, the equivalent amount in Dollars as determined by the Issuing Bank at
such time on the basis of the Spot Rate for the purchase of Dollars with such
Offshore L/C Currency.
"Dollars", "dollars" and "$" each mean lawful money of the United States.
"EBITR" means, for any period, for Holdco and its Subsidiaries on a
consolidated basis, determined in accordance with GAAP, the sum of (a)
Consolidated Net Income for such period plus (b) all amounts treated as
expenses for taxes to the extent included in the determination of such
Consolidated Net Income plus (c) Consolidated Interest Expense to the extent
included in the determination of such Consolidated Net Income plus (d)
Consolidated Rental Expense to the extent included in the determination of such
Consolidated Net Income.
"Effective Amount" means (a) with respect to any Loans on any date, the
aggregate outstanding principal Dollar Equivalent amount thereof after giving
effect to any Borrowings and prepayments or repayments of Loans occurring on
such date; and (b) with respect to any outstanding L/C Obligations on any date,
the Dollar Equivalent amount of such L/C Obligations on such date after giving
effect to any Issuances of Letters of Credit occurring on such date and any
other changes in the aggregate amount of the L/C Obligations as of such date,
including as a result of any reimbursements of outstanding unpaid drawings
under any Letters of Credit or any reductions in the maximum amount available
for drawing under Letters of Credit taking effect on such date.
"Eligible Assignee" means (a) a commercial bank or financial institution
organized under the laws of the United States, or any state thereof, and having
a combined capital and surplus of at least $200,000,000; (b) a commercial bank
or financial institution organized under the laws of any other country which is
a member of the Organization for Economic Cooperation and Development (the
"OECD"), or a political subdivision of any such country, and having a combined
capital and surplus of at least $200,000,000, provided that such bank or
financial institution is acting through a branch or agency located in the
United States; and (c) a Person that is primarily engaged in the business of
commercial banking and that is (i) a Subsidiary of a Bank, (ii) a Subsidiary of
a Person of which a Bank is a Subsidiary, or (iii) a Person of which a Bank is
a Subsidiary.
"Environmental Claims" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for release or injury
to the environment.
"Environmental Laws" means all federal, state or local laws, statutes,
common law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Authorities, in each case
relating to environmental, health, safety and land use matters.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and regulations promulgated thereunder.
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"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Company within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension Plan;
(b) a withdrawal by the Company or any ERISA Affiliate from a Pension Plan
subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations which is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Company or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan
is in reorganization the liability with respect to which has not been
satisfied; (d) the filing of a notice of intent to terminate, the treatment of
a Plan amendment as a termination under Section 4041 or 4041A of ERISA, or the
commencement of proceedings by the PBGC to terminate a Pension Plan or
Multiemployer Plan; (e) an event or condition which might reasonably be
expected to constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Pension Plan or
Multiemployer Plan; or (f) the imposition of any liability under Title IV of
ERISA, other than PBGC premiums due but not delinquent under Section 4007 of
ERISA, upon the Company or any ERISA Affiliate.
"Eurodollar Reserve Percentage" has the meaning specified in the definition
of "Offshore Rate".
"Event of Default" means any of the events or circumstances specified in
Section 9.01.
"Exchange Act" means the Securities Exchange Act of 1934, and regulations
promulgated thereunder, in each case, as amended from time to time.
"Existing Credit Agreement" has the meaning specified in the recitals
hereto.
"FDIC" means the Federal Deposit Insurance Corporation, and any
Governmental Authority succeeding to any of its principal functions.
"Federal Funds Rate" means, for any day, the rate set forth in the weekly
statistical release designated as H.15(519), or any successor publication,
published by the Federal Reserve Bank of New York (including any such successor,
"H.15(519)") on the preceding Business Day opposite the caption "Federal Funds
(Effective)"; or, if for any relevant day such rate is not so published on any
such preceding Business Day, the rate for such day will be the arithmetic mean
as determined by the Agent of the rates for the last transaction in overnight
Federal funds arranged prior to 9:00 a.m. (New York City time) on that day by
each of three leading brokers of Federal funds transactions in New York City
selected by the Agent.
"Fee Letter" has the meaning specified in subsection 2.12(a).
-9-
17
"FRB" means the Board of Governors of the Federal Reserve System, and any
Governmental Authority succeeding to any of its principal functions.
"Fixed Charge Coverage Ratio" means, for any period, the ratio of (a) EBITR
to (b) the sum of Consolidated Interest Expense plus Consolidated Rental
Expense, in each case, for such period; provided, however, that with respect to
fiscal quarters ended prior to the Restatement Date, all relevant computations
otherwise required to be made for Holdco and its Subsidiaries on a consolidated
basis shall be made for the Company and its Subsidiaries on a consolidated
basis.
"FX Trading Office" means the Foreign Exchange Trading Center of the Agent,
or such other of the Agent's offices as the Agent may designate from time to
time.
"Further Taxes" means any and all present or future taxes, levies,
assessments, imposts, duties, deductions, fees, withholdings or similar charges
(including, without limitation, net income taxes and franchise taxes), and all
liabilities with respect thereto, imposed by any jurisdiction on account of
amounts payable or paid pursuant to Section 4.01.
"GAAP" means generally accepted accounting principles set forth from time
to time in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of (a) in the case of
computations pursuant to Section 8.12, the Closing Date and (b) in all other
cases, the applicable date.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Guarantors" means, collectively, each of the Material Subsidiaries of the
Company signatory to the Subsidiary Guaranty and such other Material
Subsidiaries from time to time party to such Subsidiary Guaranty pursuant to
Section 7.13.
"Guaranty Obligation" has the meaning specified in the definition of
"Contingent Obligation."
"Holdco" means Payless ShoeSource Holdings, Inc., a Delaware corporation
the name of which is expected to be changed to Payless ShoeSource, Inc.
"Honor Date" has the meaning specified in subsection 3.03(b).
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"Indebtedness" 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 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 or
bank under such agreement in the event of default are limited to repossession or
sale of such property); (f) all principal obligations with respect to Capital
Leases; (g) all indebtedness referred to in clauses (a) through (f) above
secured by (or for which the holder of such Indebtedness 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 Indebtedness;
and (h) all Guaranty Obligations in respect of indebtedness or obligations of
others of the kinds referred to in clauses (a) through (g) above. In the event
any of the foregoing Indebtedness is limited to recourse against a particular
asset or assets of such Person, the amount of the corresponding Indebtedness
shall be equal to the lesser of the amount of such Indebtedness and the fair
market value of such asset or assets at the date for determination of the amount
of such Indebtedness. In addition, the amount of any Indebtedness which is also
a Contingent Obligation shall be determined as provided in the definition of
"Contingent Obligation."
"Indemnified Liabilities" has the meaning specified in Section 11.05.
"Indemnified Person" has the meaning specified in Section 11.05.
"Independent Auditor" has the meaning specified in subsection 7.01(a).
"Insolvency Proceeding" means, with respect to any Person, (a) any case,
action or proceeding with respect to such Person before any court or other
Governmental Authority relating to bankruptcy, reorganization, insolvency,
liquidation, receivership, dissolution, winding-up or relief of debtors, or (b)
any general assignment for the benefit of creditors, composition, marshalling of
assets for creditors, or other, similar arrangement in respect of its creditors
generally or any substantial portion of its creditors; undertaken under U.S.
Federal, state or foreign law, including the Bankruptcy Code.
"Interest Payment Date" means, as to any Loan other than a Base Rate Loan,
the last day of each Interest Period applicable to such Loan and, as to any Base
Rate Loan, the last Business Day of each calendar quarter; provided, however,
that if any Interest Period for an Offshore Rate Loan exceeds three months the
date that falls three months after the beginning of such Interest Period and
after each Interest Payment Date thereafter is also an Interest Payment Date.
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"Interest Period" means, with respect to any Offshore Rate Loan, the period
commencing on the Borrowing Date of such Loan or on the Conversion/Continuation
Date on which a Loan is converted into or continued as an Offshore Rate Loan,
and ending on the date one, two, three or six months thereafter as selected by
the Company in its Notice of Borrowing or Notice of Conversion/Continuation;
provided that:
(a) if any Interest Period would otherwise end on a day that is not a
Business Day, that Interest Period shall be extended to the following Business
Day unless, in the case of an Offshore Rate Loan, the result of such extension
would be to carry such Interest Period into another calendar month, in which
event such Interest Period shall end on the preceding Business Day;
(b) any Interest Period pertaining to an Offshore Rate Loan that begins on
the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at the end of
such Interest Period; and
(c) no Interest Period shall extend beyond the scheduled Revolving
Termination Date.
"Investments" has the meaning specified in Section 8.04.
"IRS" means the Internal Revenue Service, and any Governmental Authority
succeeding to any of its principal functions under the Code.
"Issuance Date" has the meaning specified in subsection 3.01(a).
"Issue" means, with respect to any Letter of Credit, to issue or to extend
the expiry of, or to renew or increase the amount of, such Letter of Credit; and
the terms "Issued," "Issuing" and "Issuance" have corresponding meanings.
"Issuing Bank" means, with respect to any Letter of Credit, BofA or any
Bank which at the request of the Company agrees, in such Bank's sole discretion,
to become an Issuing Bank for purposes of Issuing Letters of Credit pursuant to
Article III.
"Judgment Currency" has the meaning specified in Section 11.17.
"L/C Advance" means each Bank's participation in any L/C Borrowing in
accordance with its Pro Rata Share.
"L/C Amendment Application" means an application form for amendment of
outstanding standby or commercial documentary letters of credit as shall at any
time be in use at the Issuing Bank, as the Issuing Bank shall request.
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"L/C Application" means an application form for issuances of standby or
commercial documentary letters of credit as shall at any time be in use at the
Issuing Bank, as the Issuing Bank shall request.
"L/C Borrowing" means an extension of credit resulting from a drawing under
any Letter of Credit which shall not have been reimbursed on the date when made
nor converted into a Borrowing of Loans under subsection 3.03(b).
"L/C Commitment" means the commitment of the Issuing Bank to Issue, and the
commitment of the Banks severally to participate in, Letters of Credit from time
to time Issued or outstanding under Article III; provided that the L/C
Commitment is a part of the combined Commitments, rather than a separate,
independent commitment.
"L/C Obligations" means, at any time, the sum of (a) the aggregate undrawn
amount of all Letters of Credit then outstanding, plus (b) the amount of all
unreimbursed drawings under all Letters of Credit, including all outstanding L/C
Borrowings.
"L/C-Related Documents" means the Letters of Credit, the L/C Applications,
the L/C Amendment Applications and any other document relating to any Letter of
Credit, including any of the Issuing Bank's standard form documents for letter
of credit issuances.
"Lending Office" means, as to any Bank, the office or offices of such Bank
specified as its "Lending Office" or "Domestic Lending Office" or "Offshore
Lending Office", as the case may be, on Schedule 11.02, or such other office or
offices as such Bank may from time to time notify the Company and the Agent.
"Letters of Credit" means any letters of credit (whether standby letters
of credit or commercial documentary letters of credit) Issued by the Issuing
Bank pursuant to Article III.
"Level I Status" exists at any date if at such date the Fixed Charge
Coverage Ratio is greater than 2.25:1.0.
"Level II Status" exists at any date if at such date the Fixed Charge
Coverage Ratio is less than or equal to 2.25:1.0 but greater than 2.0:1.0.
"Level III Status" exists at any date if at such date the Fixed Charge
Coverage Ratio is less than or equal to 2.0:1.0 but greater than 1.75:1.0.
"Level IV Status" exists at any date if at such date the Fixed Charge
Coverage Ratio is less than or equal to 1.75:1.0.
"Lien" means any security interest, mortgage, deed of trust, pledge,
hypothecation, assignment, charge or deposit arrangement, encumbrance, lien
(statutory or other), conditional sale
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21
or other title retention agreement, the interest of a lessor under a Capital
Lease, any financing lease having substantially the same economic effect as any
of the foregoing, or the filing of any financing statement naming the owner of
the asset to which such lien relates as debtor, under the Uniform Commercial
Code or any comparable law) but, in any such case, not including the interest of
a lessor under an operating lease.
"Loan" means an extension of credit by a Bank to the Company under Article
II, and may be a Base Rate Loan or an Offshore Rate Loan (each, a "Type" of
Loan).
"Loan Documents" means this Agreement, any Notes, the Fee Letter, the
Subsidiary Guaranty, the Parent Guaranty, the L/C-Related Documents and all
other documents delivered to the Agent or any Bank by any Loan Party or the
Guarantors in connection herewith.
"Loan Party" means each and any of Holdco, Nevada and the Company.
"Margin Stock" means "margin stock" as such term is defined in Regulation
G, T, U or X of the FRB.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties or financial
condition of Holdco or Holdco and its Subsidiaries taken as a whole; (b) a
material impairment of the ability of the Company to perform its obligations
under any Loan Document; or (c) a material adverse effect upon the legality,
validity, binding effect or enforceability against the Loan Parties, or any
Guarantor of any of the Loan Documents.
"Material Subsidiary" means, at any time, (a) Payless ShoeSource
Merchandising, Inc., a Kansas corporation, Payless ShoeSource Distribution,
Inc., a Kansas corporation, and Payless ShoeSource Worldwide, Inc., a Kansas
corporation, and (b) any other domestic Subsidiary of Holdco (other than the
Company and Nevada) the total assets of which constitute 5% or more of the total
consolidated assets of Holdco and its Subsidiaries, in each case, determined in
accordance with GAAP.
"Minimum Tranche" means, in respect of Loans comprising part of the same
Borrowing, or to be converted or continued under Section 2.04, (a) in the case
of Base Rate Loans, $3,000,000 or any multiple of $1,000,000 in excess thereof,
and (b) in the case of Offshore Rate Loans, the Dollar Equivalent amount of
$3,000,000 or any multiple of 1,000,000 units of the Applicable Currency in
excess thereof.
"Multiemployer Plan" means a "multiemployer plan", within the meaning of
Section 4001(a)(3) of ERISA, to which the Company or any ERISA Affiliate makes,
is making, or is obligated to make contributions or, during the preceding three
calendar years, has made, or been obligated to make, contributions.
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"Nevada" means PSS Investment II, Inc., a Nevada corporation which, after
giving effect to the Reorganization, will be a Wholly-Owned Subsidiary of Holdco
and will own all of the issued and outstanding shares of capital stock of the
Company.
"Note" means a promissory note executed by the Company in favor of a Bank
pursuant to Section 2.02, in substantially the form of Exhibit F.
"Notice of Borrowing" means a notice in substantially the form of Exhibit
A.
"Notice of Conversion/Continuation" means a notice in substantially the
form of Exhibit B.
"Obligations" means all advances, debts, liabilities, obligations,
covenants and duties arising under any Loan Document owing by any Loan Party or
any Guarantor to any Bank, the Agent, or any Indemnified Person, whether direct
or indirect (including those acquired by assignment pursuant to subsection
11.08(a), absolute or contingent, due or to become due, now existing or
hereafter arising.
"Offshore Currency" means, at any time, Italian lire, Canadian dollars,
British pound sterling and French francs, and any Agreed Alternative Currency.
"Offshore Currency Loan" means any Offshore Rate Loan denominated in an
Offshore Currency.
"Offshore L/C Currency" means, at any time, any Offshore Currency and,
with respect to any Letter of Credit, any other currency agreed to by the
Issuing Bank thereof.
"Offshore Rate" means, for any Interest Period, with respect to Offshore
Rate Loans comprising part of the same Borrowing, the rate of interest per annum
(rounded upward to the next 1/16th of 1%) determined by the Agent as follows:
Offshore Rate = LIBOR
------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Reserve Percentage" means for any day for any Interest
Period (a) with respect to Offshore Rate Loans denominated in Dollars,
the maximum reserve percentage (expressed as a decimal, rounded upward to
the next 1/100th of 1%) in effect on such day (whether or not applicable
to any Bank) under regulations issued from time to time by the FRB for
determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to
Eurocurrency funding (currently referred to as "Eurocurrency
liabilities") and (b) with respect to all other Offshore Rate Loans,
zero; and
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"LIBOR" means the rate of interest per annum determined by the Agent
to be the arithmetic mean of the rates of interest per annum notified to
the Agent by each Reference Bank as the rate of interest at which
deposits in the Applicable Currency in the approximate amount of the
amount of the Loan to be made or continued as, or converted into, an
Offshore Rate Loan by such Reference Bank and having a maturity
comparable to such Interest Period would be offered to major banks in the
London interbank market at their request at approximately 11:00 a.m.
(London time) two Banking Days prior to the commencement of such Interest
Period.
The Offshore Rate shall be adjusted automatically as to all Offshore
Rate Loans then outstanding as of the effective date of any change in the
Eurodollar Reserve Percentage.
"Offshore Rate Loan" means a Loan that bears interest based on the
Offshore Rate, and may be an Offshore Currency Loan or a Loan denominated in
Dollars.
"Organization Documents" means, for any corporation, the certificate or
articles of incorporation, the bylaws, any certificate of determination or
instrument relating to the rights of preferred shareholders of such corporation,
any shareholder rights agreement, and all applicable resolutions of the board of
directors (or any committee thereof) of such corporation.
"originating Bank" has the meaning specified in subsection 11.08(d).
"Other Taxes" means any present or future stamp, court or documentary taxes
or any other excise or property taxes, charges or similar levies which arise
from any payment made hereunder or from the execution, delivery, performance,
enforcement or registration of, or otherwise with respect to, this Agreement or
any other Loan Documents.
"Overnight Rate" means, for any day, the rate of interest per annum at
which overnight deposits in the Applicable Currency, in an amount approximately
equal to the amount with respect to which such rate is being determined, would
be offered for such day by BofA's London Branch to major banks in the London or
other applicable offshore interbank market.
"Parent Guarantors" means Holdco and Nevada.
"Parent Guaranty" means a guaranty of the Obligations of the Company by the
Parent Guarantors dated as of the date hereof in form and substance reasonably
satisfactory to the Agent.
"Participant" has the meaning specified in subsection 11.08(d).
"PBGC" means the Pension Benefit Guaranty Corporation, or any Governmental
Authority succeeding to any of its principal functions under ERISA.
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"Pension Plan" means a pension plan (as defined in Section 3(2) of ERISA)
subject to Title IV of ERISA (other than a Multiemployer Plan) which the Company
sponsors, maintains, or to which it makes, is making, or is obligated to make
contributions, or in the case of a multiple employer plan (as described in
Section 4064(a) of ERISA) has made contributions at any time during the
immediately preceding five (5) plan years.
"Permitted Liens" has the meaning specified in Section 8.01.
"Permitted Swap Obligations" means all obligations (contingent or
otherwise) of Holdco or any Subsidiary existing or arising under Swap Contracts,
provided that each of the following criteria is satisfied: (a) such obligations
are (or were) entered into by such Person in the ordinary course of business for
the purpose of directly mitigating risks associated with liabilities,
commitments or assets held or reasonably anticipated by such Person, or changes
in the value of securities issued by such Person in conjunction with a
securities repurchase program not otherwise prohibited hereunder, and not for
purposes of speculation or taking a "market view;" and (b) such Swap Contracts
do not contain any provision ("walk-away" provision) exonerating the
non-defaulting party from its obligation to make payments on outstanding
transactions to the defaulting party.
"Person" means an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture or Governmental Authority.
"Plan" means an employee benefit plan (as defined in Section 3(3) of ERISA)
which the Company sponsors or maintains or to which the Company makes, is
making, or is obligated to make contributions (other than a Multiemployer Plan)
and includes any Pension Plan.
"Present Value" means, with respect to each lease of Holdco and its
Subsidiaries treated as an "operating" lease for purposes of external financial
reporting, the periodic minimum or base rental payments due and payable during
the primary term (giving effect to any extension terms as to which Holdco or its
Subsidiaries have become contractually obligated) of such lease on or after the
date of determination discounted to an equivalent value as of the date of
determination. For purposes of computing the Present Value: (a) the discount
rate utilized to calculate the Present Value of any Existing Lease (as defined
below) shall be the rate actually utilized by the Company prior to the Closing
Date for purposes of calculating the present value of such operating lease for
disclosure of the present value of all operating leases in the consolidated
external financial reports of Holdco and its Affiliates; (b) the discount rate
utilized to calculate the Present Value of any Additional Lease (as defined
below) during the fiscal year in which the term of such lease commences (its
"First Lease Year") shall be the Year-To-Date Rate (as defined below) as of the
end of the fiscal quarter for which the computation is made; and (c) the
discount rate for any Additional Lease during any fiscal year other than its
First Lease Year shall be the Year-To-Date Rate as of the end of its First Lease
Year. For purposes of this definition: (i) "Existing Lease" means any
operating lease with a term commencing before February 4, 1996; (ii) "Additional
Lease" means any operating lease with a term commencing after February 3, 1996;
and (iii) "Year-To-Date Rate" means the weekly year-to-
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date average of the Friday rates of the ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ Index for corporate
issues of "medium" quality with terms of 10 years or more ("Index") as published
in The Wall Street Journal (or similar publication). In the event that the
Index ceases to be published, the Index shall be replaced by a similar index
reflecting rates applicable to corporate issues with similar terms and credit
quality as the Index as jointly selected by the Company and the Agent. The
discount rate applied to any extension of any Existing Lease or Additional Lease
shall be: (A) if the dollar amount of base rent payable during such extension is
prescribed in the original operating lease, the discount rate originally
applicable to such Existing Lease or Additional Lease, as applicable; and (B) in
all other cases, the discount rate determined as if such extension period
constituted an Additional Lease.
"Present Value of Operating Leases" means, at any time, the sum of the
Present Value of each operating lease of Holdco and its Subsidiaries.
"Pro Rata Share" means, as to any Bank at any time, the percentage
equivalent (expressed as a decimal, rounded to the ninth decimal place) at such
time of such Bank's Commitment divided by the combined Commitments of all Banks.
"Reference Banks" means BofA, The First National Bank of Chicago and The
Bank of New York.
"Reorganization" means the series of mergers and related transactions
described in the Form S-4 Registration Statement of Holdco filed with the
Securities and Exchange Commission on April 21, 1998.
"Reportable Event" means, any of the events set forth in Section 4043(c)
of ERISA or the regulations thereunder, other than any such event for which the
30-day notice requirement under ERISA has been waived in regulations issued by
the PBGC.
"Required Banks" means (a) at any time prior to the Revolving Termination
Date, Banks then holding at least 51% of the then aggregate unpaid principal
amount of the Loans, or, if no Loans are outstanding, Banks then having at least
51% of the aggregate amount of the Commitments and (b) at all other times, Banks
then holding at least 51% of the then aggregate unpaid principal amount of the
Credit Extensions.
"Requirement of Law" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person or
any of its property or to which the Person or any of its property is subject.
"Responsible Officer" means the chief executive officer, president or any
vice president of Holdco or the Company, as the context may require, or any
other officer having substantially the same authority and responsibility; or,
with respect to compliance with financial covenants, the chief
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financial officer or the treasurer of Holdco, or any other officer having
substantially the same authority and responsibility.
"Restatement Date" has the meaning specified in Section 11.19.
"Revolving Termination Date" means the earlier to occur of:
(a) November 9, 2002; and
(b) the date on which the Commitments terminate in accordance with the
provisions of this Agreement.
"Same Day Funds" means (a) with respect to disbursements and payments in
Dollars, immediately available funds, and (b) with respect to disbursements and
payments in an Offshore Currency, same day or other funds as may be reasonably
determined by the Agent to be customary in the place of disbursement or payment
for the settlement of international banking transactions in the relevant
Offshore Currency.
"SEC" means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
"Spot Rate" for a currency means the rate quoted by the Agent as the spot
rate for the purchase by the Agent of such currency with another currency
through its FX Trading Office at approximately 11:00 a.m. (Chicago time) on the
date two Banking Days prior to the date as of which the foreign exchange
computation is made.
"Subsidiary" of a Person means any corporation, association, partnership,
limited liability company, joint venture or other business entity of which more
than 50% of the voting stock, membership interests or other equity interests
(in the case of Persons other than corporations), is owned or controlled
directly or indirectly by the Person, or one or more of the Subsidiaries of the
Person, or a combination thereof. Unless the context otherwise clearly
requires, references herein to a "Subsidiary" refer to a Subsidiary of Holdco.
"Subsidiary Guaranty" means the Subsidiary Guaranty dated as of April 22,
1996, executed and delivered by the Guarantors in favor of the Agent and the
Banks, as the same may be amended, supplemented, restated or otherwise modified
from time to time in accordance with its terms and the terms hereof.
"Surety Instruments" means all letters of credit (including standby and
commercial), banker's acceptances, bank guaranties, shipside bonds, surety
bonds, performance bonds and similar instruments.
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27
"Swap Contract" means any agreement, whether or not in writing, relating
to any transaction that is a rate swap, basis swap, forward rate transaction,
commodity swap, commodity option, equity or equity index swap or option, bond,
note or ▇▇▇▇ option, interest rate option, forward foreign exchange
transaction, cap, collar or floor transaction, currency swap, cross-currency
rate swap, swaption, currency option or any other, similar transaction
(including any option to enter into any of the foregoing) or any combination of
the foregoing, and, unless the context otherwise clearly requires, any master
agreement relating to or governing any or all of the foregoing.
"Swap Termination Value" means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a) the amount(s) determined as the
▇▇▇▇-to-market value(s) for such Swap Contracts, as determined by the Company
based upon one or more mid-market or other readily available quotations
provided by any recognized dealer in such Swap Contracts (which may include any
Bank.)
"Taxes" means any and all present or future taxes, levies, assessments,
imposts, duties, deductions, fees, withholdings or similar charges, and all
liabilities with respect thereto, excluding, in the case of each Bank and the
Agent, respectively, taxes imposed on or measured by its net income by the
jurisdiction (or any political subdivision thereof) under the laws of which
such Bank or the Agent, as the case may be, is organized or maintains a lending
office.
"Total Capitalization" means, at any time, the sum at such time of (a)
Holdco's total stockholders' equity plus (b) Total Debt plus (c) the
consolidated non-current deferred taxes of Holdco and its Subsidiaries.
"Total Debt" means, at any time, the sum of (a) the current and long-term
indebtedness obligations for money borrowed, drawn and unreimbursed letters of
credit, drawn and unreimbursed surety bonds, the current portion of mandatory
redeemable preferred stock of Holdco, Capital Lease Obligations and, without
duplication, Contingent Obligations in respect of any of the foregoing, in each
case, of Holdco and its Subsidiaries on a consolidated basis, plus (b) the
Present Value of Operating Leases.
"Type" has the meaning specified in the definition of "Loan."
"Unfunded Pension Liability" means the excess of a Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Plan's assets, determined in accordance with the assumptions used for funding
the Pension Plan pursuant to Section 412 of the Code for the applicable plan
year.
"United States" and "U.S." each means the United States of America.
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"Wholly-Owned Subsidiary" means any corporation in which (other than
directors' qualifying shares required by law) 100% of the capital stock of each
class having ordinary voting power, and 100% of the capital stock of every other
class, in each case, at the time as of which any determination is being made, is
owned, beneficially and of record, by Holdco (or, where the context so
indicates, by another Loan Party), or by one or more of the other Wholly-Owned
Subsidiaries, or both.
1.02 Other Interpretive Provisions.
(a) The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms.
(b) The words "hereof", "herein", "hereunder" and similar words
refer to this Agreement as a whole and not to any particular provision of this
Agreement; and subsection, Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
(c) (i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other
writings, however evidenced.
(ii) The term "including" is not limiting and means "including
without limitation."
(iii) In the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and
including"; the words "to" and "until" each mean "to but excluding", and
the word "through" means "to and including."
(iv) References to "Holdco" or "Holdco and its Subsidiaries"
when used relative to time periods prior to the Restatement Date shall,
as applicable, be deemed references to "the Company" or "the Company and
its Subsidiaries" solely with respect to such prior periods.
(d) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not prohibited by
the terms of any Loan Document, and (ii) references to any statute or regulation
are to be construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting the statute or
regulation.
(e) The captions and headings of this Agreement are for convenience
of reference only and shall not affect the interpretation of this Agreement.
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(f) This Agreement and other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and shall
each be performed in accordance with their terms.
(g) This Agreement is the result of negotiations among and has been
reviewed by counsel to the Agent and the Loan Parties, and is the product of all
parties. Accordingly, it shall not be construed against the Banks or the Agent
merely because of the Agent's or Banks' involvement in its preparation.
1.03. Accounting Principles.
(a) Unless the context otherwise clearly requires, all accounting
terms not expressly defined herein shall be construed, and all financial
computations required under this Agreement shall be made, in accordance with
GAAP, consistently applied.
(b) References herein to "fiscal year" and "fiscal quarter" refer to
such fiscal periods of Holdco. Currently, the fiscal year of Holdco ends on the
Saturday closest to January 31 of each year.
1.04. Currency Equivalents Generally. For all purposes of this Agreement
(but not for purposes of the preparation of any financial statements delivered
pursuant hereto), the equivalent in any Offshore Currency or other currency of
an amount in Dollars, and the equivalent in Dollars of an amount in any Offshore
Currency or other currency, shall be determined at the Spot Rate.
ARTICLE II
THE CREDITS
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2.01. Amounts and Terms of Commitments. Each Bank severally agrees, on the
terms and conditions set forth herein, to make loans to the Company from time to
time on any Business Day during the period from the Closing Date to, but not
including, the Revolving Termination Date, in an aggregate principal Dollar
Equivalent amount not to exceed at any time outstanding the amount set forth
opposite the Bank's name in Schedule 2.01 under the heading "Commitment" (such
amount as the same may be reduced pursuant to Section 2.06 or as a result of one
or more assignments pursuant to Section 11.08, the Bank's "Commitment");
provided, however, that, after giving effect to any Borrowing of Loans, the
aggregate principal Dollar Equivalent amount of all outstanding Loans and L/C
Obligations shall not exceed the combined Commitments. Within the limits of
each Bank's Commitment, and subject to the other terms and conditions hereof,
the Company may borrow under this Section 2.01, prepay pursuant to Section 2.07
and reborrow pursuant to this Section 2.01.
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2.02. Notes. The Loans made by each Bank shall be evidenced by one or
more Notes. Each such Bank shall endorse on the schedules annexed to its Note
the date, amount and maturity of each Loan made by it and the amount and
Applicable Currency 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 and each Bank's record shall be rebuttably presumptive evidence
of the matters set forth therein 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.
2.03. Procedure for Borrowing.
(a) Each Borrowing shall be made upon the Company's irrevocable written
notice delivered to the Agent in the form of a Notice of Borrowing (which notice
must be received by the Agent prior to 12:00 noon (Chicago time) (i) four
Business Days prior to the requested Borrowing Date, in the case of Offshore
Currency Loans; (ii) three Business Days prior to the requested Borrowing Date,
in the case of Offshore Rate Loans denominated in Dollars; and (iii) one
Business Day prior to the requested Borrowing Date, in the case of Base Rate
Loans, in any such case, specifying:
(A) the amount of the Borrowing, which shall be in an aggregate
amount not less than the Minimum Tranche;
(B) the requested Borrowing Date, which shall be a Business
Day;
(C) the Type of Loans comprising the Borrowing;
(D) the duration of the Interest Period applicable to any
Offshore Rate Loans included in such notice. If the Notice of
Borrowing fails to specify the duration of the Interest Period for
any Borrowing comprised of Offshore Rate Loans, such Interest Period
shall be one month; and
(E) in the case of a Borrowing comprised of Offshore Currency
Loans, the Applicable Currency;
provided, however, that with respect to any Borrowing to be made on the Closing
Date, the Notice of Borrowing shall be delivered to the Agent not later than
12:00 noon (Chicago time) one Business Day before the Closing Date and such
Borrowing will consist of Base Rate Loans only.
(b) The Dollar Equivalent amount of any Borrowing in an Offshore
Currency will be determined by the Agent for such Borrowing on the Computation
Date therefor in accordance with subsection 2.05(a). Upon receipt of the Notice
of Borrowing, the Agent will promptly notify each Bank thereof and of the amount
of such Bank's Pro Rata Share of the Borrowing. In the case of a Borrowing
comprised of Offshore Currency Loans, such notice will provide the approximate
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amount of each Bank's Pro Rata Share of the Borrowing, and the Agent will, upon
the determination of the Dollar Equivalent amount of the Borrowing as specified
in the Notice of Borrowing, promptly notify each Bank of the exact Dollar
Equivalent amount of such Bank's Pro Rata Share of the Borrowing.
(c) Each Bank will make the amount of its Pro Rata Share of each Borrowing
available to the Agent for the account of the Company at the Agent's Payment
Office on the Borrowing Date requested by the Company in Same Day Funds and in
the requested currency (i) in the case of a Borrowing comprised of Loans in
Dollars, by 12:00 noon (Chicago time) and (ii) in the case of a Borrowing
comprised of Offshore Currency Loans, by such time as the Agent may specify. The
proceeds of all such Loans will then be made available to the Company by the
Agent at such office by crediting the account of the Company on the books of
BofA with the aggregate of the amounts made available to the Agent by the Banks
and in like funds as received by the Agent.
(d) After giving effect to any Borrowing, unless the Agent shall otherwise
consent, there may not be more than nine different Interest Periods in effect.
2.04 Conversion and Continuation Elections.
(a) The Company may, upon irrevocable written notice to the Agent in
accordance with subsection 2.04(b):
(i) elect, as of any Business Day, in the case of Base Rate Loans,
or as of the last day of the applicable Interest Period, in the case of
any other Type of Loans denominated in Dollars, to convert any such Loans
(or any part thereof in an amount not less than the Minimum Tranche) into
Loans in Dollars of any other Type; or
(ii) elect, as of the last day of the applicable Interest Period, to
continue any Loans having Interest Periods expiring on such day (or any
part thereof in an amount not less than the Minimum Tranche).
(b) The Company shall deliver a Notice of Conversion/Continuation to be
received by the Agent not later than 12:00 noon (Chicago time) at least (i)
three Business Days in advance of the Conversion/Continuation Date, if the Loans
are to be converted into or continued as Offshore Rate Loans denominated in
Dollars; (ii) four Business Days in advance of the continuation date, if the
Loans are to be continued as Offshore Currency Loans; and (iii) one Business Day
in advance of the Conversion/Continuation Date, if the Loans are to be converted
into Base Rate Loans, specifying:
(A) the proposed Conversion/Continuation Date;
(B) the aggregate amount of Loans to be converted or continued;
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(C) the Type of Loans resulting from the proposed conversion
or continuation; and
(D) other than in the case of conversions into Base Rate
Loans, the duration of the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable to
Offshore Rate Loans in Dollars, the Company has failed to timely select a new
Interest Period to be applicable to such Offshore Rate Loans or if any Default
or Event of Default then exists, unless, in either case, the Company has elected
to and does repay such Loans on or prior to the expiration date of such Interest
Period, the Company shall be deemed to have elected to convert such Offshore
Rate Loans into Base Rate Loans effective as of the expiration date of such
Interest Period. If the Company has failed to select a new Interest Period to
be applicable to Offshore Currency Loans prior to the fourth Business Day in
advance of the expiration date of the current Interest Period applicable thereto
as provided in subsection 2.04(b), or if any Default or Event of Default shall
then exist, the Company shall be deemed to have elected to continue such
Offshore Currency Loans on the basis of a one month Interest Period.
(d) The Agent will promptly notify each Bank of its receipt of a
Notice of Conversion/Continuation, or, if no timely notice is provided by the
Company, the Agent will promptly notify each Bank of the details of any
automatic conversion. All conversions and continuations shall be made ratably
according to the respective outstanding principal amounts of the Loans with
respect to which the notice was given held by each Bank.
(e) Unless the Required Banks otherwise consent, during the existence
of a Default or Event of Default, the Company may not elect to have a Loan in
Dollars converted into or continued as an Offshore Rate Loan in Dollars or an
Offshore Currency Loan continued on the basis of an Interest Period exceeding
one month.
(f) After giving effect to any conversion or continuation of Loans,
unless the Agent shall otherwise consent, there may not be more than nine
different Interest Periods in effect.
2.05 Utilization of Commitments in Offshore Currencies.
(a) The Agent will determine the Dollar Equivalent amount with
respect to any (i) Borrowing comprised of Offshore Currency Loans as
of the requested Borrowing Date, (ii) outstanding Offshore Currency
Loans as of the last Banking Day of each month, (iii) outstanding
Offshore Currency Loans as of any redenomination date pursuant to
this Section 2.05 or Section 4.05, (iv) Issuance or renewal of any
Letter of Credit denominated in an Offshore L/C Currency as of the
requested date of Issuance or renewal and (v) outstanding Letter of
Credit denominated in an Offshore L/C Currency as of the last
Banking Day of each month (each such date under clauses (i) through
(v) a "Computation Date").
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(b) In the case of a proposed Borrowing comprised of Offshore
Currency Loans, the Banks shall be under no obligation to make Offshore Currency
Loans in the requested Offshore Currency as part of such Borrowing if the Agent
has received notice from any of the Banks by 5:00 p.m. (Chicago time) four
Business Days prior to the day of such Borrowing that such Bank cannot provide
Loans in the requested Offshore Currency, in which event the Agent will give
notice to the Company no later than 12:00 noon (Chicago time) on the third
Business Day prior to the requested date of such Borrowing that the Borrowing in
the requested Offshore Currency is not then available, and notice thereof also
will be given promptly by the Agent to the Banks. If the Agent shall have so
notified the Company that any such Borrowing in a requested Offshore Currency is
not then available, the Company may, by notice to the Agent not later than 5:00
p.m. (Chicago time) three Business Days prior to the requested date of such
Borrowing, withdraw the Notice of Borrowing relating to such requested
Borrowing. If the Company does so withdraw such Notice of Borrowing, the
Borrowing requested therein shall not occur and the Agent will promptly so
notify each Bank. If the Company does not so withdraw such Notice of Borrowing,
the Agent will promptly so notify each Bank and such Notice of Borrowing shall
be deemed to be a Notice of Borrowing that requests a Borrowing comprised of
Base Rate Loans in an aggregate amount equal to the amount of the originally
requested Borrowing as expressed in Dollars in the Notice of Borrowing; and in
such notice by the Agent to each Bank the Agent will state such aggregate amount
of such Borrowing in Dollars and such Bank's Pro Rata Share thereof.
(c) In the case of a proposed continuation of Offshore Currency
Loans for an additional Interest Period pursuant to Section 2.04, the Banks
shall be under no obligation to continue such Offshore Currency Loans if the
Agent has received notice from any of the Banks by 5:00 p.m. (Chicago time) four
Business Days prior to the day of such continuation that such Bank cannot
continue to provide Loans in the relevant Offshore Currency, in which event the
Agent will give notice to the Company not later than 12:00 noon (Chicago time)
on the third Business Day prior to the requested date of such continuation that
the continuation of such Offshore Currency Loans in the relevant Offshore
Currency is not then available, and notice thereof also will be given promptly
by the Agent to the Banks. If the Agent shall have so notified the Company that
any such continuation of Offshore Currency Loans is not then available, any
Notice of Continuation/Conversion with respect thereto shall be deemed withdrawn
and such Offshore Currency Loans shall be redenominated into Base Rate Loans in
Dollars with effect from the last day of the Interest Period with respect to any
such Offshore Currency Loans. The Agent will promptly notify the Company and
the Banks of any such redenomination and in such notice by the Agent to each
Bank the Agent will state the aggregate Dollar Equivalent amount of the
redenominated Offshore Currency Loans as of the Computation Date with respect
thereto and such Bank's Pro Rata Share thereof.
(d) The Company shall be entitled to request that Loans hereunder
also be permitted to be made in any other lawful currency (other than Dollars),
in addition to the currencies specified in the definition of "Offshore Currency"
herein, that in the opinion of the Required Banks is at such time freely traded
in the offshore interbank foreign exchange markets and is freely transferable
and freely convertible into Dollars (an "Agreed Alternative Currency"). The
Company
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shall deliver to the Agent any request for designation of an Agreed Alternative
Currency in accordance with Section 11.02, to be received by the Agent not later
than 12:00 noon (Chicago time) at least 10 Business Days in advance of the date
of any Borrowing hereunder proposed to be made in such Agreed Alternative
Currency. Upon receipt of any such request the Agent will promptly notify the
Banks thereof, and each Bank will use its best efforts to respond to such
request within two Business Days of receipt thereof. Each Bank may grant or
accept such request in its sole discretion. The Agent will promptly notify the
Company of the acceptance or rejection of any such request.
2.06 Voluntary Termination or Reduction of Commitments. The Company may,
upon not less than three Business Days' prior notice to the Agent, terminate the
Commitments, or permanently reduce the Commitments by an aggregate minimum
Dollar Equivalent amount of $5,000,000 or any Dollar Equivalent multiple of
$1,000,000 in excess thereof; unless, after giving effect thereto and to any
prepayments of Loans made on the effective date thereof, the then outstanding
principal Dollar Equivalent amount of the Loans and L/C Obligations would exceed
the amount of the combined Commitments then in effect. Once reduced in
accordance with this Section 2.06, the Commitments may not be increased. Any
reduction of the Commitments shall be applied to each Bank according to its Pro
Rata Share. All accrued commitment fees to, but not including the effective
date of any reduction or termination of Commitments, shall be paid on the
effective date of such reduction or termination.
2.07 Optional Prepayments. Subject to Section 4.04, the Company may, at any
time or from time to time, upon irrevocable notice to the Agent as described
below, ratably prepay Loans in whole or in part, in minimum Dollar Equivalent
amounts of $3,000,000 or any Dollar Equivalent multiple of $1,000,000 in excess
thereof or such other amount necessary to repay any Offshore Currency Loan in
full. The Company shall deliver a notice of prepayment in accordance with
Section 11.02 to be received by the Agent not later than 12:00 noon (Chicago
time) (a) at least four Business Days in advance of the prepayment date if the
Loans to be prepaid are Offshore Currency Loans, (b) at least three Business
Days in advance of the prepayment date if the Loans to be prepaid are Offshore
Rate Loans in Dollars, and (iii) at least one Business Day in advance of the
prepayment date if the Loans to be prepaid are Base Rate Loans. Such notice of
prepayment shall specify the date and amount of such prepayment and whether such
prepayment is of Base Rate Loans or Offshore Rate Loans, or any combination
thereof, and the Applicable Currency. Such notice shall not thereafter be
revocable by the Company and the Agent will promptly notify each Bank thereof
and of such Bank's Pro Rata Share of such prepayment. If such notice is given
by the Company, the Company shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified therein,
together with accrued interest to each such date on the amount prepaid and any
amounts required pursuant to Section 4.04.
2.08 Currency Exchange Fluctuations. Subject to Section 4.04, if on any
Computation Date the Agent shall have determined that the aggregate Dollar
Equivalent principal amount of all Loans and L/C Obligations then outstanding
exceeds the combined Commitments of the Banks by more than $500,000, due to a
change in applicable rates of exchange between Dollars and Offshore
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Currencies, then the Agent shall give notice to the Company that a prepayment is
required under this Section 2.08, and the Company agrees thereupon to make
prepayments of Loans within one Business Day of such notice such that, after
giving effect to such prepayment the aggregate Dollar Equivalent amount of all
Loans does not exceed the combined Commitments.
2.09 Mandatory Prepayments of Loans. Subject to Section 4.04, if on any
date the Effective Amount of all Loans then outstanding plus the Effective
Amount of all L/C Obligations exceeds the aggregate Commitments (other than as a
result of currency exchange fluctuations), the Company shall immediately, and
without notice or demand, prepay the outstanding principal amount of the Loans
in an amount equal to the lesser of such excess and the amount of the
outstanding Loans and, if any excess shall still remain, shall Cash
Collateralize the L/C Obligations to the extent of such remaining excess.
2.10 Repayment. The Company shall repay to the Banks on the Revolving
Termination Date or on such earlier date as such Loans may become due and
payable pursuant to subsection 9.02(b) the aggregate principal amount of Loans
outstanding on such date.
2.11 Interest.
(a) Each Loan shall bear interest on the outstanding principal
amount thereof from the applicable Borrowing Date at a rate per annum equal to
the Offshore Rate plus the Applicable Margin or the Base Rate, as the case may
be (and subject to the Company's right to convert to other Types of Loans under
Section 2.04).
(b) Interest on each Loan shall be paid in arrears on each Interest
Payment Date. Interest shall also be paid on the date of any prepayment of
Loans under Section 2.07, 2.08 or 2.09 for the portion of the Loans so prepaid
and upon payment (including prepayment) in full thereof and, during the
existence of any Event of Default, interest shall be paid on demand of the Agent
at the request or with the consent of the Required Banks.
(c) Notwithstanding subsections 2.11(a) and 3.03(d), while any Event
of Default exists, for the period commencing after the Company's receipt of
notice from the Agent at the request, or with the consent, of the Required Banks
or after acceleration, the Company shall pay interest (after as well as before
entry of judgment thereon to the extent permitted by law) on the principal
amount of all outstanding Loans and other Obligations, at a rate per annum which
is determined by adding 2% per annum to the Applicable Margin then in effect for
such Loans and, in the case of Obligations not subject to an Applicable Margin,
at a rate per annum equal to the Base Rate plus 2%; provided, however, that, on
and after the expiration of any Interest Period applicable to any Offshore Rate
Loan outstanding on the date of occurrence of such Event of Default for the
period commencing after the Company's receipt of notice from the Agent at the
request, or with the consent, of the Required Banks or acceleration, the
principal amount of such Loan shall, during the continuation of such Event of
Default or after acceleration, bear interest at a rate per annum equal to the
Base Rate plus 2%.
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(d) Anything herein to the contrary notwithstanding, the Obligations
of the Company to any Bank hereunder shall be subject to the limitation that
payments of interest shall not be required for any period for which interest is
computed hereunder, to the extent (but only to the extent) that contracting for
or receiving such payment by such Bank would be contrary to the provisions of
any law applicable to such Bank limiting the highest rate of interest that may
be lawfully contracted for, charged or received by such Bank, and in such event
the Company shall pay such Bank interest at the highest rate permitted by
applicable law.
2.12 Fees.
(a) Arrangement, Agency Fees. The Company shall pay an arrangement
fee to the Arranger for the Arranger's own account, and shall pay an agency fee
to the Agent for the Agent's own account, as required by the letter agreement
("Fee Letter") between the Company and the Arranger and Agent dated March 13,
1996.
(b) Commitment Fees. The Company shall pay to the Agent for the
account of each Bank a commitment fee equal to the Applicable Commitment Fee
Percentage times the average daily unused portion of such Bank's Commitment,
computed on a quarterly basis in arrears on the last Business Day of each
calendar quarter based upon the daily utilization for that quarter as calculated
by the Agent. For purposes hereof, each Bank's Commitment shall be deemed
utilized to the extent of its Pro Rata Share of all outstanding Loans and L/C
Obligations. Such commitment fee shall accrue from the Closing Date to the
Revolving Termination Date and shall be due and payable quarterly in arrears on
the last Business Day of each calendar quarter commencing with the first
calendar quarter ending after the Closing Date through the Revolving Termination
Date, with the final payment to be made on the Revolving Termination Date;
provided that, in connection with any reduction or termination of Commitments
under Section 2.06, the accrued commitment fee calculated for the period ending
on such date shall also be paid on the date of such reduction or termination,
with the following quarterly payment being calculated on the basis of the period
from such reduction or termination date to such quarterly payment date. The
commitment fees provided in this subsection shall accrue at all times after the
above-mentioned commencement date, including at any time during which one or
more conditions in Article V are not met.
2.13 Computation of Fees and Interest.
(a) All computations of interest for Base Rate Loans and of fees
shall be made on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed. All computations of interest for Offshore Rate Loans shall
be made on the basis of a 360-day year and actual days elapsed (which results in
more interest being paid than if computed on the basis of a 365-day year).
Interest and fees shall accrue during each period during which interest or such
fees are computed from the first day thereof to the last day thereof.
(b) For purposes of determining utilization of each Bank's
Commitment in order to calculate the commitment fee due under subsection
2.12(b), the amount of any outstanding
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Offshore Currency Loan on any date shall be determined based upon the Dollar
Equivalent amount as of the most recent Computation Date with respect to such
Offshore Currency Loan.
(c) Each determination of an interest rate or a Dollar Equivalent
amount by the Agent shall be rebuttably presumptive evidence thereof in the
absence of manifest error. The Agent will, at the request of the Company or any
Bank, deliver to the Company or the Bank, as the case may be, a statement
showing the quotations used by the Agent in determining any interest rate or
Dollar Equivalent amount.
(d) If any Reference Bank's Commitment terminates (other than on
termination of all the Commitments), or for any reason whatsoever such Reference
Bank ceases to be a Bank hereunder, such Reference Bank shall thereupon cease to
be a Reference Bank, and the Offshore Rate shall be determined on the basis of
the rates as notified by the remaining Reference Bank(s). In such event, the
Company (with the consent of the Agent) may designate another Bank as a
Reference Bank hereunder.
(e) Each Reference Bank shall use its best efforts to furnish
quotations of rates to the Agent as contemplated hereby. If any of the
Reference Banks fails to supply such rates to the Agent upon its request, the
rate of interest shall be determined on the basis of the quotations of the
remaining Reference Bank(s).
2.14 Payments by the Company.
(a) All payments to be made by the Company shall be made without
set-off, recoupment or counterclaim. Except as otherwise expressly provided
herein, all payments by the Company shall be made to the Agent for the account
of the Banks at the Agent's Payment Office, and, with respect to principal of,
interest on, and any other amounts relating to, any Offshore Currency Loan,
shall be made in the Offshore Currency in which such Loan is denominated or
payable, and, with respect to all other amounts payable hereunder, shall be made
in Dollars. Such payments shall be made in Same Day Funds, and (i) in the case
of Offshore Currency payments, no later than such time on the dates specified
herein as may be determined by the Agent to be necessary for such payment to be
credited on such date in accordance with normal banking procedures in the place
of payment, and (ii) in the case of any Dollar payments, no later than 12:00
noon (Chicago time) on the date specified herein. The Agent will promptly
distribute to each Bank its Pro Rata Share (or other applicable share as
expressly provided herein) of such principal, interest, fees or other amounts,
in like funds as received. Any payment which is received by the Agent later
than 12:00 noon (Chicago time), or later than the time specified by the Agent as
provided in clause (i) above (in the case of Offshore Currency payments), shall
be deemed to have been received on the following Business Day and any applicable
interest or fee shall continue to accrue.
(b) Subject to the provisions set forth in the definition of
"Interest Period" herein, whenever any payment is due on a day other than a
Business Day, such payment shall be made on
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the following Business Day, and such extension of time shall in such case be
included in the computation of interest or fees, as the case may be.
(c) Unless the Agent receives notice from the Company prior to the
date on which any payment is due to the Banks that the Company will not make
such payment in full as and when required, the Agent may assume that the Company
has made such payment in full to the Agent on such date in Same Day Funds and
the Agent may (but shall not be so required), in reliance upon such assumption,
distribute to each Bank on such due date an amount equal to the amount then due
such Bank. If and to the extent the Company has not made such payment in full
to the Agent, each Bank shall repay to the Agent on demand such amount
distributed to such Bank, together with interest thereon at the Federal Funds
Rate or, in the case of a payment in an Offshore Currency, the Overnight Rate,
for each day from the date such amount is distributed to such Bank until the
date repaid.
2.15 Payments by the Banks to the Agent.
(a) Unless the Agent receives notice from a Bank on or prior to the
Closing Date or, with respect to any Borrowing after the Closing Date, at least
one Business Day prior to the date of such Borrowing, that such Bank will not
make available as and when required hereunder to the Agent for the account of
the Company the amount of that Bank's Pro Rata Share of the Borrowing, the Agent
may assume that each Bank has made such amount available to the Agent in Same
Day Funds on the Borrowing Date and the Agent may (but shall not be so
required), in reliance upon such assumption, make available to the Company on
such date a corresponding amount. If and to the extent any Bank shall not have
made its full amount available to the Agent in Same Day Funds and the Agent in
such circumstances has made available to the Company such amount, that Bank
shall on the Business Day following such Borrowing Date make such amount
available to the Agent, together with interest at the Federal Funds Rate or, in
the case of any Borrowing consisting of Offshore Currency Loans, the Overnight
Rate, for each day during such period. A notice of the Agent submitted to any
Bank with respect to amounts owing under this subsection 2.15(a) shall be
conclusive, absent manifest error. If such amount is so made available, such
payment to the Agent shall constitute such Bank's Loan on the date of Borrowing
for all purposes of this Agreement. If such amount is not made available to the
Agent on the Business Day following the Borrowing Date, the Agent will notify
the Company of such failure to fund and, upon demand by the Agent, the Company
shall pay such amount to the Agent for the Agent's account, together with
interest thereon for each day elapsed since the date of such Borrowing, at a
rate per annum equal to the interest rate applicable at the time to the Loans
comprising such Borrowing.
(b) The failure of any Bank to make any Loan on any Borrowing Date
shall not relieve any other Bank of any obligation hereunder to make a Loan on
such Borrowing Date, but no Bank shall be responsible for the failure of any
other Bank to make the Loan to be made by such other Bank on any Borrowing Date.
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2.16 Sharing of Payments, Etc. If, other than as expressly provided
elsewhere herein, any Bank shall obtain on account of the Loans made by it any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) in excess of its ratable share (or other share
contemplated hereunder), such Bank shall immediately (a) notify the Agent of
such fact, and (b) purchase from the other Banks such participations in the
Loans made by them as shall be necessary to cause such purchasing Bank to share
the excess payment pro rata with each of them; provided, however, that if all or
any portion of such excess payment is thereafter recovered from the purchasing
Bank, such purchase shall to that extent be rescinded and each other Bank shall
repay to the purchasing Bank the purchase price paid therefor, together with an
amount equal to such paying Bank's ratable share (according to the proportion of
(i) the amount of such paying Bank's required repayment to (ii) the total amount
so recovered from the purchasing Bank) of any interest or other amount paid or
payable by the purchasing Bank in respect of the total amount so recovered. The
Company agrees that any Bank so purchasing a participation from another Bank
may, to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off, but subject to Section 11.10) with respect to
such participation as fully as if such Bank were the direct creditor of the
Company in the amount of such participation. The Agent will keep records (which
shall be conclusive and binding in the absence of manifest error) of
participations purchased under this Section 2.16 and will in each case notify
the Banks following any such purchases or repayments.
ARTICLE III
THE LETTERS OF CREDIT
---------------------
3.01 The Letter of Credit Subfacility.
(a) On the terms and conditions set forth herein (i) the Issuing
Bank agrees, (A) from time to time on any Business Day during the period from
the Closing Date to, but not including, the Revolving Termination Date to issue
Letters of Credit denominated in Dollars or an Offshore L/C Currency for the
account of the Company, and to amend or renew Letters of Credit previously
issued by it, in accordance with subsections 3.02(c) and 3.02(d), and (B) to
honor drafts under the Letters of Credit; and (ii) the Banks severally agree to
participate in Letters of Credit Issued for the account of the Company; provided
that the Issuing Bank shall not be obligated to Issue, and no Bank shall be
obligated to participate in, any Letter of Credit if as of the date of Issuance
of such Letter of Credit (the "Issuance Date"): (A) the Effective Amount of all
L/C Obligations plus the Effective Amount of all Loans exceeds the aggregate
Commitments or (B) the participation of any Bank in the Effective Amount of all
L/C Obligations plus the Effective Amount of the Loans of such Bank exceeds such
Bank's Commitment. Within the foregoing limits, and subject to the other terms
and conditions hereof, the Company's ability to obtain Letters of Credit shall
be fully revolving, and, accordingly, the Company may, during the foregoing
period, obtain Letters of Credit to replace Letters of Credit which have expired
or which have been drawn upon and reimbursed.
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(b) The Issuing Bank shall be under no obligation to Issue any
Letter of Credit if:
(i) any order, judgment or decree of any Governmental
Authority or arbitrator shall by its terms purport to enjoin or restrain
the Issuing Bank from Issuing such Letter of Credit, or any Requirement
of Law applicable to the Issuing Bank or any request or directive
(whether or not having the force of law) from any Governmental Authority
with jurisdiction over the Issuing Bank shall prohibit, or request that
the Issuing Bank refrain from, the Issuance of letters of credit
generally or such Letter of Credit in particular or shall impose upon the
Issuing Bank with respect to such Letter of Credit any restriction,
reserve or capital requirement (for which the Issuing Bank is not
otherwise compensated hereunder) not in effect on the Closing Date, or
shall impose upon the Issuing Bank any unreimbursed loss, cost or expense
which was not applicable on the Closing Date and which the Issuing Bank
in good ▇▇▇▇▇ ▇▇▇▇▇ material to it and for which the Issuing Bank is not
compensated hereunder.
(ii) the Issuing Bank has received written notice from any
Bank, the Agent or the Company, on or prior to the Business Day prior to
the requested date of Issuance of such Letter of Credit, that one or more
of the applicable conditions contained in Article V is not then
satisfied;
(iii) the expiry date of any requested Letter of Credit is (A)
more than 360 days after the date of Issuance, unless the Required Banks
and the Issuing Bank have approved such expiry date in writing, or (B)
after five Business Days prior to the scheduled Revolving Termination
Date, unless all of the Banks have approved such expiry date in writing;
(iv) any requested Letter of Credit is not in a form
reasonably acceptable to the Issuing Bank, or the Issuance of a Letter of
Credit shall violate any applicable policies of the Issuing Bank; or
(v) any standby Letter of Credit is for the purpose of
supporting the issuance of any letter of credit by any other Person.
3.02 Issuance, Amendment and Renewal of Letters of Credit.
(a) Each Letter of Credit shall be issued upon the irrevocable
written request of the Company received by the Issuing Bank (with a copy sent by
the Company to the Agent) at least two Business Days (or such shorter time as
the Issuing Bank may agree in a particular instance in its sole discretion)
prior to the proposed date of issuance. Each such request for issuance of a
Letter of Credit shall be by facsimile or electronic transmission, confirmed
immediately in an original writing, in the form of an L/C Application, and shall
specify in form and detail satisfactory to the Issuing Bank: (i) the proposed
date of issuance of the Letter of Credit (which shall be a Business
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Day); (ii) the face amount of the Letter of Credit; (iii) the expiry date of the
Letter of Credit; (iv) the name and address of the beneficiary thereof; (v) the
documents to be presented by the beneficiary of the Letter of Credit in case of
any drawing thereunder; (vi) the full text of any certificate to be presented by
the beneficiary in case of any drawing thereunder; (vii) the currency (which
shall be Dollars or an Offshore L/C Currency) in which the Letter of Credit is
to be denominated; and (viii) such other matters as the Issuing Bank may
reasonably require.
(b) If the Agent is not the Issuing Bank, by 12:00 noon (Chicago
time) on the Business Day next preceding the requested date of issuance of a
Letter of Credit, the Issuing Bank will confirm with the Agent (by telephone or
in writing) that the Agent has received a copy of the L/C Application or L/C
Amendment Application from the Company and, if not, the Issuing Bank will
provide the Agent with a copy thereof. Unless the Issuing Bank has received
notice on or before the Business Day immediately preceding the date the Issuing
Bank is to issue a requested Letter of Credit from the Agent (i) directing the
Issuing Bank not to issue such Letter of Credit because such issuance is not
then permitted under subsection 3.01(a)(ii) as a result of the limitations set
forth in clauses (A) and (B) thereof or subsection 3.01(b)(ii); or (ii) that one
or more conditions specified in Article V are not then satisfied; then, subject
to the terms and conditions hereof, the Issuing Bank shall, on the requested
date, issue a Letter of Credit for the account of the Company in accordance with
the Issuing Bank's usual and customary business practices.
(c) From time to time while a Letter of Credit is outstanding and
prior to the Revolving Termination Date, the Issuing Bank will, upon the written
request of the Company received by the Issuing Bank (with a copy sent by the
Company to the Agent) at least two Business Days (or such shorter time as the
Issuing Bank may agree in a particular instance in its sole discretion) prior to
the proposed date of amendment, amend any Letter of Credit issued by it. Each
such request for amendment of a Letter of Credit shall be made by facsimile,
confirmed immediately in an original writing, made in the form of an L/C
Amendment Application and shall specify in form and detail satisfactory to the
Issuing Bank: (i) the Letter of Credit to be amended; (ii) the proposed date of
amendment of the Letter of Credit (which shall be a Business Day); (iii) the
nature of the proposed amendment; and (iv) such other matters as the Issuing
Bank may reasonably require. The Issuing Bank shall be under no obligation to
amend any Letter of Credit if: (A) the Issuing Bank would have no obligation at
such time to issue such Letter of Credit in its amended form under the terms of
this Agreement; or (B) the beneficiary of any such Letter of Credit does not
accept the proposed amendment to the Letter of Credit.
(d) The Issuing Bank and the Banks agree that, while a Letter of
Credit is outstanding and prior to the Revolving Termination Date, at the option
of the Company and upon the written request of the Company received by the
Issuing Bank (with a copy sent by the Company to the Agent) at least two
Business Days (or such shorter time as the Issuing Bank may agree in a
particular instance in its sole discretion) prior to the proposed date of
notification of renewal, the Issuing Bank shall be entitled to authorize the
automatic renewal of any Letter of Credit issued by it; provided that the
Issuing Bank shall not be entitled to authorize such automatic renewal if, at
least one Business Day prior to the proposed date of notification of renewal, it
shall have received notice
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from the Agent (i) directing the Issuing Bank not to renew such Letter of Credit
because such renewal is not then permitted under subsection 3.01(a)(ii) as a
result of the limitations set forth in clauses (A) and (B) thereof or subsection
3.01(b)(ii); or (ii) that one or more conditions specified in Article V are not
then satisfied. Each such request for renewal of a Letter of Credit shall be
made by facsimile, confirmed immediately in an original writing, in the form of
an L/C Amendment Application, and shall specify in form and detail satisfactory
to the Issuing Bank: (i) the Letter of Credit to be renewed; (ii) the proposed
date of notification of renewal of the Letter of Credit (which shall be a
Business Day); (iii) the revised expiry date of the Letter of Credit; and (iv)
such other matters as the Issuing Bank may require. The Issuing Bank shall be
under no obligation to renew, and no Bank shall be obligated to participate in,
any Letter of Credit if: (A) the Issuing Bank would have no obligation at such
time to issue or amend, and no Bank would be obligated to participate in, such
Letter of Credit in its renewed form under the terms of this Agreement; or (B)
the beneficiary of any such Letter of Credit does not accept the proposed
renewal of the Letter of Credit. If any outstanding Letter of Credit shall
provide that it shall be automatically renewed unless the beneficiary thereof
receives notice from the Issuing Bank that such Letter of Credit shall not be
renewed, and if at the time of renewal the Issuing Bank would be required to
authorize the automatic renewal of such Letter of Credit in accordance with this
subsection 3.02(d) upon the request of the Company but the Issuing Bank shall
not have received any L/C Amendment Application from the Company with respect to
such renewal or other written direction by the Company with respect thereto, the
Issuing Bank shall nonetheless renew such Letter of Credit, and the Company and
the Banks hereby authorize such renewal, and, accordingly, the Issuing Bank
shall be deemed to have received an L/C Amendment Application from the Company
requesting such renewal.
(e) The Issuing Bank may, at its election (or as required by the
Agent at the direction of the Required Banks), deliver any notices of
termination or other communications to any Letter of Credit beneficiary or
transferee, and take any other action as necessary or appropriate, at any time
and from time to time, in order to cause the expiry date of such Letter of
Credit to be a date not later than the scheduled Revolving Termination Date.
(f) This Agreement shall control in the event of any conflict with
any L/C-Related Document (other than any Letter of Credit). In addition, unless
the Company and the Issuing Bank shall otherwise expressly agree in writing, any
purported grant of a Lien (or any requirement to do so) contained in any L/C
Related Document shall be ineffective and null and void.
(g) The Issuing Bank will also deliver to the Agent, concurrently or
promptly following its delivery of a Letter of Credit, or amendment to or
renewal of a Letter of Credit, to an advising bank or a beneficiary, a true and
complete copy of each such Letter of Credit or amendment to or renewal of a
Letter of Credit.
(h) Within five Business Days after the end of each month, the Agent
will send to each Bank a statement reflecting the outstanding Letters of Credit
as of the end of such month.
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3.03 Risk Participations, Drawings and Reimbursements.
(a) Immediately upon the Issuance of each Letter of Credit, each
Bank shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the Issuing Bank a participation in such Letter of Credit and each
drawing thereunder in an amount equal to the product of (i) the Pro Rata Share
of such Bank, times (ii) the maximum amount available to be drawn under such
Letter of Credit and the amount of such drawing, respectively. For purposes of
Section 2.01, each Issuance of a Letter of Credit shall be deemed to utilize the
Commitment of each Bank by an amount equal to the amount of such participation
for so long as any related L/C Obligations shall be outstanding.
(b) In the event of any request for a drawing under a Letter of
Credit by the beneficiary or transferee thereof, the Issuing Bank will promptly
notify the Company and the Agent. Provided that it shall have received such
notice, the Company shall reimburse the Issuing Bank prior to 12:00 noon
(Chicago time) on each date that any amount is paid by the Issuing Bank under
any Letter of Credit (each such date, an "Honor Date") in an amount equal to the
amount so paid by the Issuing Bank; provided that, if such Letter of Credit is
denominated in an Offshore L/C Currency, the Company shall pay to the Issuing
Bank the Dollar Equivalent of the amount of such Offshore L/C Currency paid by
the Issuing Bank under such Letter of Credit. In the event the Company fails to
reimburse the Issuing Bank for the full amount of any drawing under any Letter
of Credit by 12:00 noon (Chicago time) on the Honor Date, the Issuing Bank will
promptly notify the Agent and the Agent will promptly notify each Bank thereof,
and the Company shall be deemed to have requested that Base Rate Loans be made
by the Banks to be disbursed on the Honor Date under such Letter of Credit,
subject to the amount of the unutilized portion of the Commitment and subject to
the conditions set forth in Section 5.02 other than any notice requirements.
Any notice given by the Issuing Bank or the Agent pursuant to this subsection
3.03(b) may be oral if immediately confirmed in writing (including by
facsimile); provided that the lack of such an immediate confirmation shall not
affect the conclusiveness or binding effect of such notice.
(c) Each Bank shall upon any notice pursuant to subsection 3.03(b)
make available to the Agent for the account of the relevant Issuing Bank an
amount in Dollars and in immediately available funds equal to its Pro Rata Share
of the amount of the Dollar Equivalent of the drawing, whereupon the
participating Banks shall (subject to subsection 3.03(d)) each be deemed to have
made a Loan consisting of a Base Rate Loan to the Company in that amount. If
any Bank so notified fails to make available to the Agent for the account of the
Issuing Bank the amount of such Bank's Pro Rata Share of such amount by no later
than 2:00 p.m. (Chicago time) on the Honor Date, then interest shall accrue on
such Bank's obligation to make such payment, from the Honor Date to the date
such Bank makes such payment, at a rate per annum equal to the Federal Funds
Rate in effect from time to time during such period. The Agent will promptly
give notice of the occurrence of the Honor Date, but failure of the Agent to
give any such notice on the Honor Date or in sufficient time to enable any Bank
to effect such payment on such date shall not relieve such Bank from its
obligations under this Section 3.03.
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(d) With respect to any unreimbursed drawing that is not converted
into Loans consisting of Base Rate Loans to the Company in whole or in part as
contemplated by subsection 3.03(b), because of the Company's failure to satisfy
the conditions set forth in Section 5.02 other than any notice requirements or
for any other reason, the Company shall be deemed to have incurred from the
Issuing Bank an L/C Borrowing in the amount of such drawing, which L/C Borrowing
shall be due and payable on demand (together with interest) and shall bear
interest at a rate per annum equal to the Base Rate, and each Bank's payment to
the Issuing Bank pursuant to subsection 3.03(c) shall be deemed payment in
respect of its participation in such L/C Borrowing and shall constitute an L/C
Advance from such Bank in satisfaction of its participation obligation under
this Section 3.03.
(e) Each Bank's obligation in accordance with this Agreement to make
the Loans or L/C Advances, as contemplated by this Section 3.03, as a result of
a drawing under a Letter of Credit, shall be absolute and unconditional and
without recourse to the Issuing Bank and shall not be affected by any
circumstance, including (i) any set-off, counterclaim, recoupment, defense or
other right which such Bank may have against the Issuing Bank, the Company or
any other Person for any reason whatsoever; (ii) the occurrence or continuance
of a Default, an Event of Default or a Material Adverse Effect; or (iii) any
other circumstance, happening or event whatsoever, whether or not similar to any
of the foregoing; provided, however, that each Bank's obligation to make Loans
under this Section 3.03 is subject to the conditions set forth in Section 5.02.
3.04 Repayment of Participations.
(a) Upon (and only upon) receipt by the Agent for the account of the
Issuing Bank of immediately available funds from the Company (i) in
reimbursement of any payment made by the Issuing Bank under the Letter of Credit
with respect to which any Bank has paid the Agent for the account of the Issuing
Bank for such Bank's participation in the Letter of Credit pursuant to Section
3.03 or (ii) in payment of interest thereon, the Agent will pay to each Bank, in
the same funds as those received by the Agent for the account of the Issuing
Bank, the amount of such Bank's Pro Rata Share of such funds, and the Issuing
Bank shall receive the amount of the Pro Rata Share of such funds of any Bank
that did not so pay the Agent for the account of the Issuing Bank.
(b) If the Agent or the Issuing Bank is required at any time to
return to the Company, or to a trustee, receiver, liquidator, custodian, or any
official in any Insolvency Proceeding, any portion of the payments made by the
Company to the Agent for the account of the Issuing Bank pursuant to subsection
3.04(a) in reimbursement of a payment made under the Letter of Credit or
interest or fee thereon, each Bank shall, on demand of the Agent, forthwith
return to the Agent or the Issuing Bank the amount of its Pro Rata Share of any
amounts so returned by the Agent or the Issuing Bank plus interest thereon from
the date such demand is made to the date such amounts are returned by such Bank
to the Agent or the Issuing Bank, at a rate per annum equal to the Federal Funds
Rate in effect from time to time.
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3.05 Role of the Issuing Bank.
(a) Each Bank and the Company agree that, in paying any drawing
under a Letter of Credit, the Issuing Bank shall not have any responsibility to
obtain any document (other than any sight draft and certificates expressly
required by the Letter of Credit) or to ascertain or inquire as to the validity
or the authority of the Person executing or delivering any such document.
(b) No Agent-Related Person nor any of the respective
correspondents, participants or assignees of the Issuing Bank shall be liable to
any Bank for: (i) any action taken or omitted in connection herewith at the
request or with the approval of the Banks (including the Required Banks, as
applicable); (ii) any action taken or omitted in the absence of gross negligence
or willful misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any L/C-Related Document.
(c) The Company hereby assumes all risks of the acts or omissions of
any beneficiary or transferee with respect to its use of any Letter of Credit;
provided, however, that this assumption is not intended to, and shall not,
preclude the Company's pursuing such rights and remedies as it may have against
the beneficiary or transferee at law or under any other agreement. No
Agent-Related Person, nor any of the respective correspondents, participants or
assignees of the Issuing Bank, shall be liable or responsible for any of the
matters described in clauses (a) through (g) of Section 3.06; provided, however,
anything in such clauses to the contrary notwithstanding, that the Company may
have a claim against the Issuing Bank, and the Issuing Bank may be liable to the
Company, to the extent, but only to the extent, of any direct, as opposed to
consequential or exemplary, damages suffered by the Company which the Company
proves were caused by the Issuing Bank's willful misconduct or gross negligence
or the Issuing Bank's wrongful dishonor of any Letter of Credit after the
presentation to it by the beneficiary of a sight draft and certificate(s)
strictly complying with the terms and conditions of such Letter of Credit. In
furtherance and not in limitation of the foregoing: (i) the Issuing Bank may
accept documents that appear on their face to be in order, without
responsibility for further investigation; and (ii) the Issuing Bank shall not be
responsible for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign such Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or in part, which
may prove to be invalid or ineffective for any reason.
3.06 Obligations Absolute. The obligations of the Company under this
Agreement and any L/C-Related Document to reimburse the Issuing Bank for a
drawing under a Letter of Credit, and to repay any L/C Borrowing and any drawing
under a Letter of Credit converted into Loans, shall be unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement and each such other L/C-Related Document under all circumstances,
including the following:
(a) any lack of validity or enforceability of this Agreement or any
L/C-Related Document;
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(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the obligations of the Company in respect of any
Letter of Credit or any other amendment or waiver of or any consent to departure
from all or any of the L/C-Related Documents;
(c) the existence of any claim, set-off, defense or other right that
the Company may have at any time against any beneficiary or any transferee of
any Letter of Credit (or any Person for whom any such beneficiary or any such
transferee may be acting), the Issuing Bank or any other Person, whether in
connection with this Agreement, the transactions contemplated hereby or by the
L/C-Related Documents or any unrelated transaction;
(d) any draft, demand, certificate or other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect; or any loss or delay in the transmission or otherwise of any document
required in order to make a drawing under any Letter of Credit;
(e) any payment by the Issuing Bank under any Letter of Credit
against presentation of a draft or certificate that does not strictly comply
with the terms of any Letter of Credit; or any payment made by the Issuing Bank
under any Letter of Credit to any Person purporting to be a trustee in
bankruptcy, debtor-in-possession, assignee for the benefit of creditors,
liquidator, receiver or other representative of or successor to any beneficiary
or any transferee of any Letter of Credit, including any arising in connection
with any Insolvency Proceeding;
(f) any exchange, release or non-perfection of any collateral, or
any release or amendment or waiver of or consent to departure from any other
guarantee, for all or any of the obligations of the Company in respect of any
Letter of Credit; or
(g) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including any other circumstance that might
otherwise constitute a defense available to, or a discharge of, the Company or a
guarantor.
3.07 Letter of Credit Fees.
(a) The Company shall pay to the Agent for the account of each of
the Banks a letter of credit fee with respect to the Letters of Credit equal to
the Applicable Margin times the average daily maximum amount available to be
drawn on the outstanding Letters of Credit, computed on a quarterly basis in
arrears on the last Business Day of each calendar quarter based upon Letters of
Credit outstanding for that quarter as calculated by the Agent. Such letter of
credit fees shall be due and payable quarterly in arrears on the last Business
Day of each calendar quarter during which Letters of Credit are outstanding,
commencing on the first such quarterly date to occur after the Closing Date,
through the Revolving Termination Date (or such later date upon which the
outstanding Letters of Credit shall expire), with the final payment to be made
on the Revolving Termination Date (or such later expiration date).
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(b) The Company shall pay to the Issuing Bank a letter of credit
fronting fee for each Letter of Credit Issued by the Issuing Bank in an amount
agreed to by the Company and the Issuing Bank. Such Letter of Credit fronting
fee shall be due and payable on each date of Issuance of a Letter of Credit or
at such other time as may be agreed upon between the Company and the Issuing
Bank.
(c) The Company shall pay to the Issuing Bank from time to time on
demand the normal issuance, presentation, amendment and other processing fees,
and other standard costs and charges, of the Issuing Bank relating to letters of
credit as from time to time in effect.
3.08 Uniform Customs and Practice. The Uniform Customs and Practice for
Documentary Credits as published by the International Chamber of Commerce most
recently at the time of issuance of any Letter of Credit shall (unless otherwise
expressly provided in the Letters of Credit) apply to the Letters of Credit.
ARTICLE IV
TAXES, YIELD PROTECTION AND ILLEGALITY
--------------------------------------
4.01 Taxes.
-----
(a) Any and all payments by the Company to each Bank or the Agent
under this Agreement and any other Loan Document shall be made free and clear
of, and without deduction or withholding for, any Taxes. In addition, the
Company shall pay all Other Taxes.
(b) If the Company shall be required by law to deduct or withhold any
Taxes, Other Taxes or Further Taxes from or in respect of any sum payable
hereunder to any Bank or the Agent, then:
(i) the sum payable shall be increased as necessary so that,
after making all required deductions and withholdings (including
deductions and withholdings applicable to additional sums payable
under this Section 4.01), such Bank or the Agent, as the case may be,
receives and retains an amount equal to the sum it would have
received and retained had no such deductions or withholdings been
made;
(ii) the Company shall make such deductions and withholdings;
(iii) the Company shall pay the full amount deducted or
withheld to the relevant taxing authority or other authority in
accordance with applicable law; and
(iv) the Company shall also pay to each Bank or the Agent for
the account of such Bank, at the time interest is paid, Further Taxes
in the amount that the respective
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Bank specifies as necessary to preserve the after-tax yield the Bank would
have received if such Taxes, Other Taxes or Further Taxes had not been
imposed.
(c) The Company agrees to indemnify and hold harmless each Bank and
the Agent for the full amount of (i) Taxes, (ii) Other Taxes, and (iii) Further
Taxes in the amount that the respective Bank specifies as necessary to preserve
the after-tax yield the Bank would have received if such Taxes, Other Taxes or
Further Taxes had not been imposed, and any liability (including penalties,
interest, additions to tax and expenses) arising therefrom or with respect
thereto, whether or not such Taxes, Other Taxes or Further Taxes were correctly
or legally asserted. Payment under this indemnification shall be made within 30
days after the date the Bank or the Agent makes written demand therefor.
(d) Within 30 days after the date of any payment by the Company of
Taxes, Other Taxes or Further Taxes, the Company shall furnish to each Bank or
the Agent the original or a certified copy of a receipt evidencing payment
thereof, or other evidence of payment satisfactory to such Bank or the Agent.
(e) If the Company is required to pay any amount to any Bank or the
Agent pursuant to subsection (b) or (c) of this Section 4.01, then such Bank
shall use reasonable efforts (consistent with legal and regulatory restrictions)
to change the jurisdiction of its Lending Office so as to eliminate any such
additional payment by the Company which may thereafter accrue, if such change in
the sole judgment of such Bank is not otherwise disadvantageous to such Bank.
(f) Notwithstanding anything to the contrary contained in this
Agreement, in no event shall the Company be either (i) obligated to pay any
amount to any Bank or the Agent pursuant to subsection (b) or (c) of this
Section 4.01 or (ii) prohibited from deducting or withholding for any applicable
Taxes pursuant to subsection (a) of this Section 4.01, if the Bank or Agent
fails to deliver forms to the Company in accordance with Section 10.10 on a
timely basis, unless such failure would not have occurred but for a change in
law or regulation or in the interpretation thereof by any governmental or
regulatory agency or body charged with the administration or interpretation
thereof, or the introduction of any law or regulation, that occurs on or after
the Closing Date.
4.02 Illegality.
(a) If any Bank determines that the introduction of any Requirement
of Law, or any change in any Requirement of Law, or in the interpretation or
administration of any Requirement of Law, has made it unlawful, or that any
central bank or other Governmental Authority has asserted that it is unlawful,
for any Bank or its applicable Lending Office to make Offshore Rate Loans
(including Offshore Rate Loans in any Applicable Currency), then, on notice
thereof by the Bank to the Company through the Agent, any obligation of that
Bank to make Offshore Rate Loans shall be suspended until the Bank notifies the
Agent and the Company that the circumstances giving rise to such determination
no longer exist.
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(b) If a Bank determines that it is unlawful to maintain any
Offshore Rate Loan, the Company shall, upon its receipt of notice of such fact
and demand from such Bank (with a copy to the Agent), prepay in full such
Offshore Rate Loans of that Bank then outstanding, together with interest
accrued thereon and amounts required under Section 4.04, either on the last day
of the Interest Period thereof, if the Bank may lawfully continue to maintain
such Offshore Rate Loans to such day, or immediately, if the Bank may not
lawfully continue to maintain such Offshore Rate Loan. If the Company is
required to so prepay any Offshore Rate Loan, then concurrently with such
prepayment, the Company shall (without regard to whether the conditions
specified in Section 5.02 have been satisfied) borrow from the affected Bank, in
the amount of such repayment, a Base Rate Loan.
(c) Before giving any notice to the Agent under this Section 4.02,
the affected Bank shall designate a different Lending Office with respect to its
Offshore Rate Loans if such designation will avoid the need for giving such
notice or making such demand and will not, in the judgment of the Bank, be
illegal or otherwise disadvantageous to the Bank.
4.03 Increased Costs and Reduction of Return.
(a) If any Bank determines that, due to either (i) the introduction
of or any change (other than any change by way of imposition of or increase in
reserve requirements included in the calculation of the Offshore Rate) in the
interpretation of any law or regulation after the Closing Date or (ii) the
compliance by that Bank with any guideline or request from any central bank or
other Governmental Authority (whether or not having the force of law) after the
Closing Date, there shall be any increase in the cost to such Bank of agreeing
to make or making, funding or maintaining any Offshore Rate Loans or
participating in Letters of Credit, or, in the case of the Issuing Bank, any
increase in the cost to the Issuing Bank of agreeing to issue, issuing or
maintaining any Letter of Credit or of agreeing to make or making, funding or
maintaining any unpaid drawing under any Letter of Credit, then the Company
shall be liable for, and shall from time to time, upon demand (with a copy of
such demand to be sent to the Agent), pay to the Agent for the account of such
Bank, additional amounts as are sufficient to compensate such Bank for such
increased costs.
(b) If any Bank shall have determined that (i) the introduction of
any Capital Adequacy Regulation, (ii) any change in any Capital Adequacy
Regulation, (iii) any change in the interpretation or administration of any
Capital Adequacy Regulation by any central bank or other Governmental Authority
charged with the interpretation or administration thereof, or (iv) compliance by
the Bank (or its Lending Office) or any corporation controlling the Bank with
any Capital Adequacy Regulation, in any such case, after the Closing Date
affects or would affect the amount of capital required or expected to be
maintained by the Bank or any corporation controlling the Bank and (taking into
consideration such Bank's or such corporation's policies with respect to capital
adequacy and such Bank's desired return on capital) determines that the amount
of such capital is increased as a consequence of its Commitment, loans, credits
or obligations under this Agreement, then, upon demand of such Bank to the
Company through the Agent, the Company shall
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pay to the Bank, from time to time as specified by the Bank, additional amounts
sufficient to compensate the Bank for such increase.
4.04 Funding Losses. The Company shall reimburse each Bank and hold each
Bank harmless from any loss or expense which the Bank may sustain or incur as a
consequence of:
(a) the failure of the Company to make on a timely basis any payment
of principal of any Offshore Rate Loan;
(b) the failure of the Company to borrow, continue or convert a Loan
after the Company has given (or is deemed to have given) a Notice of Borrowing
or a Notice of Conversion/ Continuation except as set forth in subsection
2.05(b) or (c) ;
(c) the failure of the Company to make any prepayment in accordance
with any notice delivered under Section 2.07;
(d) the prepayment (including pursuant to Section 2.07 or 2.08) or
other payment (including after acceleration thereof) of an Offshore Rate Loan on
a day that is not the last day of the relevant Interest Period; or
(e) the automatic conversion under Section 2.04 of any Offshore Rate
Loan to a Base Rate Loan on a day that is not the last day of the relevant
Interest Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its Offshore Rate Loans or from fees payable
to terminate the deposits from which such funds were obtained or from charges
relating to any Offshore Currency Loans. For purposes of calculating amounts
payable by the Company to the Banks under this Section 4.04 and under subsection
4.03(a), each Offshore Rate Loan made by a Bank (and each related reserve,
special deposit or similar requirement) shall be conclusively deemed to have
been funded at the LIBOR used in determining the Offshore Rate for such Offshore
Rate Loan by a matching deposit or other borrowing in the interbank market for a
comparable amount and for a comparable period, whether or not such Offshore Rate
Loan is in fact so funded.
4.05 Inability to Determine Rates. If any two of the three Reference
Banks determine that for any reason adequate and reasonable means do not exist
for determining the Offshore Rate for any requested Interest Period with respect
to a proposed Offshore Rate Loan, or the Required Banks determine that the
Offshore Rate applicable pursuant to subsection 2.11(a) for any requested
Interest Period with respect to a proposed Offshore Rate Loan does not
adequately and fairly reflect the cost to the Banks of funding such Loan, the
Agent will promptly so notify the Company and each Bank. Thereafter, the
obligation of the Banks to make or maintain Offshore Rate Loans hereunder shall
be suspended until the Agent upon the instruction of the Required Banks revokes
such notice in writing. Upon receipt of such notice, the Company may revoke any
Notice of Borrowing or Notice of Conversion/Continuation then submitted by it.
If the Company does not revoke such Notice, the
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Banks shall make, convert or continue the Loans, as proposed by the Company, in
the amount specified in the applicable notice submitted by the Company, but such
Loans shall be made, converted or continued as Base Rate Loans instead of
Offshore Rate Loans. In the case of any Offshore Currency Loans, the Borrowing
or continuation shall be in an aggregate amount equal to the Dollar Equivalent
amount of the originally requested Borrowing or continuation in the Offshore
Currency, and to that end any outstanding Offshore Currency Loans which are the
subject of any continuation shall be redenominated and converted into Base Rate
Loans in Dollars with effect from the last day of the Interest Period with
respect to any such Offshore Currency Loans.
4.06 Reserves on Offshore Rate Loans. The Company shall pay to each
Bank, in respect of any Offshore Currency Loans, additional costs arising under
any applicable regulations of the central bank or other relevant Governmental
Authority in the country in which the Offshore Currency of such Offshore Rate
Loan circulates on the unpaid principal amount of each Offshore Rate Loan equal
to the actual costs of such reserves allocated to such Loan by the Bank (as
determined by the Bank in good faith, which determination shall be conclusive),
payable on each date on which interest is payable on such Loan, provided the
Company shall have received at least 15 days' prior written notice (with a copy
to the Agent) of such additional interest from the Bank. If a Bank fails to
give notice 15 days prior to the relevant Interest Payment Date, such additional
interest shall be payable 15 days from receipt of such notice.
4.07 Certificates of Banks. Any Bank or any Bank's participant claiming
reimbursement or compensation under this Article IV shall deliver to the Company
(with a copy to the Agent) a certificate setting forth in reasonable detail the
amount payable to the Bank hereunder and such certificate shall be conclusive
and binding on the Company in the absence of manifest error. Notwithstanding
anything to the contrary contained in this Agreement, no amounts shall be
payable by the Company pursuant to Section 4.03, 4.04 or 4.06 with respect to
any period commencing more than 180 days before the delivery of the certificate
contemplated by this Section 4.07 unless such amounts are claimed as a result of
the retroactive effect of any newly enacted or adopted law, rule or regulation
and such certificate is delivered within 180 days after such enactment or
adoption.
4.08 Survival. The agreements and obligations of the Company in this
Article IV shall survive the payment of all other Obligations.
4.09 Replacement of Certain Banks.
(a) Notwithstanding any other provision of this Agreement, the
Company, at any time after any Bank or any Bank's participant has (i) delivered
a certificate pursuant to Section 4.07 or notified the Agent that it is unable
to extend or maintain any Offshore Rate Loans (including Offshore Currency
Loans) or (ii) failed to fund a Loan at any time that such Bank shall have been
committed to make such Loan or in the event such Bank may be replaced pursuant
to the provisions of subsection 11.08(e) (in any such case, a "Certificate
Bank"), shall have the right to replace the Certificate Bank in accordance with
this Section 4.09. Notwithstanding the foregoing, in no event may the Company
replace the Certificate Bank pursuant to this Section 4.09 if (i) the
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Agent shall have received notice from the Required Banks specifying that a
Default or an Event of Default shall have occurred and be continuing and (ii)
such Default or Event of Default shall not have been subsequently cured or
waived.
(b) The Company, in exercising its right to replace the Certificate
Bank, shall (i) reduce the Commitment of such Bank to zero and (ii) (A) agree
with one or more Banks to concurrently increase the respective Commitments of
such Bank or Banks by an aggregate amount not in excess of the amount of the
Commitment of the Certificate Bank prior to the exercise of this Section 4.09,
in full substitution of the Certificate Bank, (B) add one or more additional
Eligible Assignees as signatories to this Agreement for Commitments equal to the
amount of the Commitment of the Certificate Bank prior to the Company's exercise
of this Section 4.09, in full substitution of the Certificate Bank or (C) any
combination of increases in Commitments pursuant to (A) above and additional new
lenders pursuant to (B) above, so long as the aggregate sum of the increases in
Commitments plus the additional Commitments of the additional lenders equals the
amount of the Commitment of the Certificate Bank prior to the exercise of this
Section 4.09 and no new lender has a Commitment of less than $5,000,000. Any
new lender becoming a signatory to this Agreement shall, without further action,
be considered a Bank for all purposes of this Agreement at the time of execution
of an appropriate Assignment and Acceptance.
(c) The Company shall have the right to select any additional
Eligible Assignee or Eligible Assignees to become signatories to this Agreement
pursuant to subsection 4.09(b) above, subject to the consent of the Agent,
which consent shall not be unreasonably withheld.
(d) The Company shall give the Agent and any Certificate Bank being
replaced not less than five Business Days' notice of the date (which shall be a
Business Day) on which such Certificate Bank shall be replaced.
(e) Each Bank or additional lender which replaces a Certificate Bank
pursuant to this Section 4.09 shall acquire all (or if more than one Bank or
lender is replacing a Certificate Bank the aggregate shall severally acquire
all) of the then outstanding Loans and L/C Obligations of the Certificate Bank.
(f) At the time of replacement, the Certificate Bank shall have been
paid in full the principal of, and interest accrued and unpaid to the date of
replacement on, all outstanding Loans and unreimbursed L/C Obligations of the
Certificate Bank, and all accrued and unpaid to the date of replacement fees
owing to the Certificate Bank.
(g) After a Certificate Bank is replaced pursuant to this Section
4.09, it shall have no further rights (other than rights which by the terms
hereof survive the termination hereof) or obligations hereunder (and shall no
longer be a "Bank" for purposes hereof); provided that a replaced Certificate
Bank shall retain its rights and obligations as a Bank hereunder with respect
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to the period before it was so replaced (except to the extent that it shall have
assigned or otherwise transferred such rights).
ARTICLE V
CONDITIONS PRECEDENT
--------------------
5.01 Conditions of Initial Credit Extensions. The obligation of each Bank
to make its initial Credit Extension under the Existing Credit Agreement was
subject to the condition that the Agent shall have received on or before the
date of the initial Credit Extension all of the following, in form and substance
reasonably satisfactory to the Agent and each Bank, and in sufficient copies for
each Bank:
(a) Credit Agreement and Notes. This Agreement and the Notes
executed by each party thereto;
(b) Resolutions; Incumbency.
(i) copies of the resolutions of the board of directors of the
Company and each Guarantor authorizing the transactions contemplated
hereby, certified by the Secretary or an Assistant Secretary of the
Company and such Guarantor; and
(ii) a certificate of the Secretary or Assistant Secretary of
the Company and each Guarantor certifying the names and true signatures
of the officers of the Company and such Guarantor authorized to execute,
deliver and perform, as applicable, this Agreement and all other Loan
Documents to be delivered by such Person hereunder;
(c) Organization Documents; Good Standing. Each of the following
documents:
(i) the articles or certificate of incorporation and the
bylaws of the Company and each Guarantor as in effect on the Closing
Date, certified by the Secretary or Assistant Secretary of the Company
and such Guarantor as of such date; and
(ii) a good standing certificate for the Company from the
Secretary of State (or similar, applicable Governmental Authority) of the
states of Missouri, its state of incorporation, and Kansas and for each
Guarantor from the Secretary of State (or similar, applicable
Governmental Authority) of its state of incorporation as of a recent
date, together with bring-down certificates by facsimile, dated the
Closing Date;
(d) Legal Opinions. An opinion of each of (i) ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
counsel to the Company and the Guarantors, substantially in the form of Exhibit
D-1 to the Existing Agreement,
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and (ii) ▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇., general counsel of The May Department Stores
Company, substantially in the form of Exhibit D-2 to the Existing Agreement,
addressed to the Agent and the Banks;
(e) Payment of Fees. Evidence of payment by the Company of all
accrued and unpaid fees to the extent then due and payable on the Closing Date;
(f) Certificate. A certificate signed by a Responsible Officer on
behalf of the Company, dated as of the Closing Date, stating that:
(i) the representations and warranties contained in Article VI
are true and correct on and as of such date, as though made on and as of
such date;
(ii) no Default or Event of Default exists or would result
from the initial Credit Extension;
(iii) there has occurred since February 3, 1996, no event or
circumstance that has resulted or could reasonably be expected to result
in a Material Adverse Effect; and
(iv) as of February 3, 1996, the Present Value of Operating
Leases was $885,500,000;
(g) Subsidiary Guaranty. The Subsidiary Guaranty executed and
delivered by a duly authorized officer of each of the Guarantors party thereto;
and
(h) Other Documents. Such other approvals, opinions, documents or
materials as the Agent or any Bank may reasonably request.
5.02 Conditions to All Credit Extensions. The obligation of each Bank to
make any Loan to be made by it (including its initial Loan) and the obligation
of the Issuing Bank to issue, and of each Bank to participate in, any Letter of
Credit are subject to the satisfaction of the following conditions precedent on
the relevant Borrowing Date or Issuance Date:
(a) Notice of Borrowing or Issuance. The Agent shall have received
(with, in the case of the initial Loan only, a copy for each Bank) a Notice of
Borrowing or in the case of any Issuance of any Letter of Credit, the Agent and
the Issuing Bank shall have received an L/C Application or L/C Amendment
Application, as required under Section 3.02;
(b) Continuation of Representations and Warranties. The
representations and warranties in Article VI shall be true and correct on and as
of such Borrowing Date or Issuance Date with the same effect as if made on and
as of such Borrowing Date or Issuance Date (except to the extent such
representations and warranties expressly refer to an earlier date, in which case
they shall be true and correct as of such earlier date); and
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(c) No Existing Default. No Default or Event of Default shall exist
or shall result from such Borrowing or Issuance.
Each Notice of Borrowing and L/C Application or L/C Amendment Application
submitted by the Company hereunder shall constitute a representation and
warranty by the Company hereunder, as of the date of each such notice and as of
each Borrowing Date or Issuance Date, that the conditions in subsection 5.02(a),
(b) and (c) are satisfied.
5.03 Effectiveness. This Agreement shall become effective upon the
execution and delivery hereof by the Loan Parties and the Banks and the delivery
by the Loan Parties to the Agent of the following documents and the satisfaction
of the following conditions on or prior to June 30, 1998:
(a) Charter Documents; Good Standing Certificates. Copies of the
certificate of incorporation of each of the Parent Guarantors, together
with all amendments thereto, both certified by the appropriate
governmental officer in its jurisdiction of incorporation, together with a
good standing certificate issued by the Secretary of State of the
jurisdiction of its incorporation.
(b) By-Laws and Resolutions. Copies, certified by the Secretary or
Assistant Secretary of each of the Loan Parties, of its by-laws (other
than those of the Company) and of its Board of Directors' resolutions
authorizing the execution, delivery and performance by such Loan Party of
the Loan Documents.
(c) Secretary's Certificate. An incumbency certificate, executed by
the Secretary or Assistant Secretary of each of the Loan Parties, which
shall identify by name and title and bear the signature of the officers
authorized to sign the Loan Documents.
(d) Certificate. A certificate signed by a Responsible Officer on
behalf of Holdco, dated as of the Restatement Date, stating that:
(i) The representations and warranties in Article VI are true
and correct on and as of such date as if made on and as of such date
(except to the extent such representations and warranties expressly
refer to an earlier date, in which case they shall be true and
correct as of such earlier date); and
(ii) on such date both before and after giving effect to this
Agreement, no Default or Event of Default exists nor, giving effect
to this Agreement, would any Default or Event of Default result from
the Reorganization.
(e) Solvency Certificate. A certificate in form and substance
satisfactory to the Agent signed by its Chief Financial Officer on behalf of
Holdco and dated as of the
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Restatement Date with respect to the solvency of the Loan Parties after
giving effect to the Reorganization and related intercompany transactions.
(f) Legal Opinions. A written opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇,
counsel to the Loan Parties addressed to the Agent and the Banks in form
and substance reasonably acceptable to the Agent and its counsel.
(g) Reaffirmation of Guaranty. A reaffirmation of guaranty in the
form of Exhibit G hereto duly executed by each of the Subsidiary
Guarantors.
(h) Parent Guaranty. The Parent Guaranty duly executed by each of
the Parent Guarantors.
(i) Regorganization. The Reorganization shall have been consummated
and evidence thereof delivered by the Loan Parties to the Agent.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
------------------------------
Each Loan Party represents and warrants to the Agent and each Bank that:
6.01 Corporate Existence and Power. Each Loan Party and each of its
Subsidiaries:
(a) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation;
(b) has the power and authority and all governmental licenses,
authorizations, consents and approvals to own its assets, carry on its business
and to execute, deliver, and perform its obligations under the Loan Documents;
(c) is duly qualified as a foreign corporation and is licensed and
in good standing under the laws of each jurisdiction where its ownership, lease
or operation of property or the conduct of its business requires such
qualification or license except where the failure to do so could not reasonably
be expected to have a Material Adverse Effect; and
(d) is in compliance with all Requirements of Law; except where the
failure to do so or to so comply could not reasonably be expected to have a
Material Adverse Effect.
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6.02 Corporate Authorization; No Contravention. The execution, delivery
and performance by each Loan Party and the Guarantors of this Agreement and each
other Loan Document have been duly authorized by all necessary corporate action,
and do not and will not:
(a) contravene the terms of any of such Person's Organization
Documents;
(b) conflict with or result in any breach or contravention of, or
the creation of any Lien under, any document evidencing any material Contractual
Obligation to which such Person is a party or any order, injunction, writ or
decree of any Governmental Authority to which such Person or its property is
subject; or
(c) violate any Requirement of Law applicable to such Person.
6.03 Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, any Loan Party or
any Guarantor of the Agreement or any other Loan Document.
6.04 Binding Effect. This Agreement and each other Loan Document
constitutes the legal, valid and binding obligation of each Loan Party,
enforceable against each Loan Party in accordance with their respective terms,
except as enforceability may be limited by applicable bankruptcy, insolvency, or
similar laws affecting the enforcement of creditors' rights generally or by
equitable principles relating to enforceability.
6.05 Litigation. There are no actions, suits, proceedings, claims or
disputes pending, or, to the best knowledge of any Loan Party, threatened or
contemplated, at law, in equity, in arbitration or before any Governmental
Authority, against any Loan Party and its Subsidiaries or any of their
respective properties which:
(a) purport to affect or pertain to this Agreement or any other Loan
Document, or any of the transactions contemplated hereby or thereby; or
(b) may reasonably be expected to have a Material Adverse Effect.
No injunction, writ, temporary restraining order or any order of any
nature has been issued by any court or other Governmental Authority purporting
to enjoin or restrain the execution, delivery or performance of this Agreement
or any other Loan Document, or directing that the transactions provided for
herein or therein not be consummated as herein or therein provided.
6.06 No Default. No Default or Event of Default exists or would result
from the incurring of any Obligations by the Company. As of the Closing Date,
no Loan Party nor any Subsidiary of a Loan Party was in default under or with
respect to any Contractual Obligation in any respect which, individually or
together with all such defaults, could reasonably be expected to have a
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Material Adverse Effect, or that would, if such default had occurred after such
date, create an Event of Default under subsection 9.01(e).
6.07 ERISA Compliance. Except as specifically disclosed in Schedule
6.07:
(a) Each Plan is in compliance with the applicable provisions of
ERISA, the Code and other federal or state law except where the failure to do so
or to so comply could not reasonably be expected to have a Material Adverse
Effect. Each Plan which is intended to qualify under Section 401(a) of the Code
has received a favorable determination letter from the IRS and, to the best
knowledge of any Loan Party, nothing has occurred which would cause the loss of
such qualification. Each Loan Party and each ERISA Affiliate has made all
required contributions to any Plan subject to Section 412 of the Code, and no
application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of any Loan
Party, threatened claims, actions or lawsuits, or action by any Governmental
Authority, with respect to any Plan which has resulted or could reasonably be
expected to result in a Material Adverse Effect. There has been no prohibited
transaction or violation of the fiduciary responsibility rules with respect to
any Plan which has resulted or could reasonably be expected to result in a
Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to
occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) no Loan
Party nor any ERISA Affiliate has incurred, or reasonably expects to incur, any
liability under Title IV of ERISA with respect to any Pension Plan (other than
premiums due and not delinquent under Section 4007 of ERISA); (iv) no Loan Party
nor any ERISA Affiliate has incurred, or reasonably expects to incur, any
liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Section 4201 or
4243 of ERISA with respect to a Multiemployer Plan; and (v) no Loan Party nor
any ERISA Affiliate has engaged in a transaction that could be subject to
Section 4069 or 4212(c) of ERISA.
6.08 Use of Proceeds; Margin Regulations. The proceeds of the Loans are
to be used solely for the purposes set forth in and permitted by Section 7.12.
No Loan Party nor any Subsidiary of a Loan Party is generally engaged in the
business of purchasing or selling Margin Stock or extending credit for the
purpose of purchasing or carrying Margin Stock.
6.09 Taxes. Holdco and its Subsidiaries have filed all Federal and other
material tax returns and reports required to be filed, and have paid all Federal
and other material taxes, assessments, fees and other governmental charges
levied or imposed upon them or their properties, income or assets otherwise due
and payable, except those which are being contested in good faith by appropriate
proceedings and for which adequate reserves have been provided in accordance
with GAAP. There is no proposed tax assessment against any Loan Party or any
Subsidiary that would, if made, have a Material Adverse Effect.
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6.10 Financial Condition.
(a) The audited consolidated financial statements of the Company and
its Subsidiaries for the fiscal year ended February 3, 1996 and the related
consolidated statements of income or operations, shareholders' equity and cash
flows for the fiscal year ended on that date:
(i) were prepared in accordance with GAAP consistently applied
throughout the period covered thereby, except as otherwise expressly noted
therein;
(ii) fairly present the financial condition of the Company and
its Subsidiaries as of the date thereof and results of operations for the
period covered thereby; and
(iii) except as specifically disclosed in Schedule 6.10, show
all material indebtedness and other liabilities, direct or contingent, of
the Company and its consolidated Subsidiaries as of the date thereof,
including liabilities for taxes, material commitments and Contingent
Obligations.
(b) Since February 3, 1996 there has been no Material Adverse
Effect.
6.11 Environmental Matters. Each Loan Party conducts in the ordinary
course of business a review of the effect of existing Environmental Laws and
existing Environmental Claims on its business, operations and properties, and as
a result thereof each of the Loan Parties has reasonably concluded that, except
as specifically disclosed in Schedule 6.11, such Environmental Laws and
Environmental Claims could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
6.12 Regulated Entities. No Loan Party or its Subsidiary, nor any Person
controlling a Loan Party is an "Investment Company" within the meaning of the
Investment Company Act of 1940. No Loan Party is subject to regulation under
the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, any state public utilities code, or any other Federal
or state statute or regulation limiting its ability to incur Indebtedness.
6.13 Subsidiaries. As of the Closing Date, the Company had no
Subsidiaries other than those specifically disclosed in part (a) of Schedule
6.13. The Loan Parties have no Material Subsidiaries other than those
specifically disclosed in part (b) of Schedule 6.13 or as disclosed pursuant to
subsection 7.03(e) (including their jurisdictions of incorporation). As of the
Closing Date, the Company had no equity investments in any other corporation or
entity other than those specifically disclosed in part (c) of Schedule 6.13.
6.14 Insurance. The properties of each Loan Party and its Subsidiaries
are insured as required by Section 7.06.
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6.15 Swap Obligations. No Loan Party nor any of its Subsidiaries has
incurred any outstanding obligations under any Swap Contracts, other than
Permitted Swap Obligations.
6.16 Full Disclosure. None of the representations or warranties made by
any Loan Party in the Loan Documents as of the date such representations and
warranties are made or deemed made, and none of the statements contained in any
exhibit, report, statement or certificate furnished by or on behalf of any Loan
Party or any Subsidiary of a Loan Party in connection with the Loan Documents
(including the offering and disclosure materials delivered by or on behalf of
any Loan Party to the Banks prior to the Closing Date) taken as a whole,
contains any untrue statement of a material fact or omits any material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they are made, not misleading as of
the time when made or delivered.
ARTICLE VII
AFFIRMATIVE COVENANTS
---------------------
So long as any Bank shall have any Commitment hereunder, or any Loan or
other Obligation shall remain unpaid, unless the Required Banks waive compliance
in writing:
7.01 Financial Statements. Holdco shall deliver to the Agent, with
sufficient copies for each Bank:
(a) as soon as available, but not later than 120 days after the end
of each fiscal year (commencing with fiscal year ending January 1999), a copy of
the audited consolidated balance sheet of Holdco and its Subsidiaries, as at the
end of such year and the related consolidated statements of income or
operations, shareholders' equity and cash flows for such year, setting forth in
each case in comparative form the figures for the previous fiscal year, and
accompanied by the opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or another
nationally-recognized independent public accounting firm ("Independent Auditor")
which report shall state that such consolidated financial statements present
fairly the financial position for the periods indicated in conformity with GAAP
applied on a consistent basis. Such opinion shall not be qualified or limited,
in either case, because of a restricted or limited examination by the
Independent Auditor of any material portion of Holdco's or any Subsidiary's
records;
(b) as soon as available, but not later than 120 days after the end
of each fiscal year (commencing with the first fiscal year ending after the
Restatement Date), a copy of the unaudited consolidated balance sheet of the
Company and its Subsidiaries as of the end of such fiscal year and the related
consolidated statements of income, shareholders' equity and cash flows for the
period commencing on the first day and ending on the last day of such fiscal
year, and certified by a Responsible Officer of the Company as fairly
presenting, in accordance with GAAP, the financial position and the results of
operations of the Company and the Subsidiaries;
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(c) as soon as available, but not later than 60 days after the end
of each of the first three fiscal quarters of each fiscal year (commencing with
the first fiscal quarter ending after the Restatement Date), a copy of the
unaudited consolidated balance sheet of Holdco and its Subsidiaries as of the
end of such quarter and the related consolidated statements of income,
shareholders' equity and cash flows for the period commencing on the first day
and ending on the last day of such quarter, and certified by a Responsible
Officer of Holdco as fairly presenting, in accordance with GAAP (subject to
ordinary, good faith year-end audit adjustments and the absence of notes
thereto), the financial position and the results of operations of Holdco and its
Subsidiaries; and
(d) with respect to the Company's fiscal quarter ended May 2, 1998,
as soon as available, but not later than 60 days after the end of such fiscal
quarter, the financial information with respect to the Company and its
Subsidiaries required to be delivered with respect to such fiscal quarter by
Section 7.01(b) of the Existing Credit Agreement.
To the extent included therein, the information required to be
delivered pursuant to this Section 7.01 may be delivered by delivery of the
financial statements and reports required to be delivered pursuant to subsection
7.02(c).
7.02 Certificates; Other Information. Holdco shall furnish to the Agent,
with sufficient copies for each Bank:
(a) concurrently with the delivery of the financial statements
referred to in subsection 7.01(a), a certificate of the Independent Auditor
stating that in making the examination necessary therefor no knowledge was
obtained of any Default or Event of Default, except as specified in such
certificate;
(b) concurrently with the delivery of the financial statements
referred to in subsections 7.01(a), (c) and (d), a Compliance Certificate
executed by a Responsible Officer;
(c) promptly, but not later than five days after the date of filing
with the SEC, copies of all financial statements and reports that Holdco sends
to its shareholders, and copies of all financial statements and regular,
periodical or special reports (including Forms 10-K, 10-Q and 8-K) that Holdco
or any Subsidiary may make to, or file with, the SEC;
(d) promptly after the creation or acquisition of any Material
Subsidiary, the name of such Material Subsidiary, a description of its business,
its net worth and the value of its assets; and
(e) promptly, such additional information regarding the business,
financial or corporate affairs of each Loan Party or any Subsidiary as the
Agent, at the request of any Bank, may from time to time request.
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7.03 Notices. Each Loan Party shall promptly notify the Agent:
(a) upon any Responsible Officer becoming aware of the occurrence of
any Default or Event of Default;
(b) of any matter that has resulted, or may, in the judgment of such
Loan Party, reasonably be expected to result in a Material Adverse Effect,
including (i) breach or non-performance of, or any default under, a Contractual
Obligation of such Loan Party or any of its Subsidiaries; (ii) any dispute,
litigation, investigation, proceeding or suspension between such Loan Party or
any of its Subsidiaries and any Governmental Authority; or (iii) the
commencement of, or any material development in, any litigation or proceeding
affecting such Loan Party or any of its Subsidiaries, including pursuant to any
applicable Environmental Laws;
(c) upon any Responsible Officer becoming aware of the occurrence of
any ERISA Event (but in no event more than 10 days after such ERISA Event), and
deliver to the Agent and each Bank a copy of any notice with respect to such
ERISA Event that is filed with a Governmental Authority and any notice delivered
by a Governmental Authority to such Loan Party or any ERISA Affiliate with
respect to such ERISA Event;
(d) of any material change in accounting policies or financial
reporting practices by such Loan Party or any of its consolidated Subsidiaries;
and
(e) of any Subsidiary (including its jurisdiction of incorporation)
which is not a Guarantor being or becoming a Material Subsidiary.
Each notice under this Section 7.03 shall be accompanied by a
written statement by a Responsible Officer setting forth details of the
occurrence referred to therein, and stating what action such Loan Party or any
affected Subsidiary proposes to take with respect thereto and at what time
(although the failure to take any such action shall not constitute a Default or
Event of Default under this Agreement). Each notice under subsection 7.03(a)
shall describe the provisions of this Agreement or other Loan Document that have
been breached or violated.
7.04 Preservation of Corporate Existence, Etc. Each Loan Party shall,
and shall cause each Material Subsidiary to:
(a) preserve and maintain in full force and effect its corporate
existence and good standing under the laws of its state or jurisdiction of
incorporation except as otherwise permitted by this Agreement;
(b) preserve and maintain in full force and effect all governmental
rights, privileges, qualifications, permits, licenses and franchises necessary
or desirable in the normal conduct of its business except in connection with
transactions permitted by Section 8.03 and sales
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of assets permitted by Section 8.02 and except for any of the foregoing the
expiration or termination of which could not reasonably be expected to have a
Material Adverse Effect;
(c) use reasonable efforts, in the ordinary course of business, to
preserve its business organization and goodwill; and
(d) preserve or renew all of its registered patents, trademarks,
trade names and service marks, the non-preservation of which could reasonably be
expected to have a Material Adverse Effect.
7.05 Maintenance of Property. Each Loan Party shall maintain, and shall
cause each of its Subsidiaries to maintain, and preserve all its material
property which is used in its business in good working order and condition,
ordinary wear and tear excepted except where the failure to so maintain or
preserve could not reasonably be expected to have a Material Adverse Effect.
7.06 Insurance. Each Loan Party shall maintain, and shall cause each of
its Subsidiaries to maintain, with financially sound and reputable independent
insurers, insurance with respect to its properties and business against loss or
damage of the kinds customarily insured against by Persons engaged in the same
or similar business, of such types and in such amounts as are customarily
carried under similar circumstances by such other Persons, provided that Holdco
and its Subsidiaries may self-insure against such risks and in such amounts as
is usually self-insured by companies engaged in similar businesses and owning
similar properties in the same general areas in which such Loan Party and its
Subsidiaries operate.
7.07 Payment of Tax Obligations. Each Loan Party shall, and shall cause
each of its Subsidiaries to, pay and discharge as the same shall become due and
payable, all tax liabilities, assessments and governmental charges or levies
upon it or its properties or assets, unless the same are being contested in good
faith by appropriate proceedings and adequate reserves in accordance with GAAP
are being maintained by such Loan Party or such Subsidiary.
7.08 Compliance with Laws. Each Loan Party shall comply, and shall cause
each of its Subsidiaries to comply, with all Requirements of Law of any
Governmental Authority having jurisdiction over it or its business, except where
the failure to so comply could not reasonably be expected to cause a Material
Adverse Effect.
7.09 Compliance with ERISA. Each Loan Party shall, and shall cause each
of its ERISA Affiliates to: (a) maintain each Plan in compliance in all
material respects with the applicable provisions of ERISA, the Code and other
federal or state law; (b) cause each Plan which is qualified under Section
401(a) of the Code to maintain such qualification; and (c) make all required
contributions to any Plan subject to Section 412 of the Code.
7.10 Inspection of Property and Books and Records. Each Loan Party shall
maintain and shall cause each of its Subsidiaries to maintain proper books of
record and account, in which full,
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true and correct entries in conformity with GAAP consistently applied shall be
made of all financial transactions and matters involving the assets and business
of such Loan Party and such Subsidiary. Each Loan Party shall permit, and shall
cause each of its Subsidiaries to permit, representatives and independent
contractors of the Agent and representatives of any Bank to visit and inspect
any of their respective properties, to examine their respective corporate,
financial and operating records, and make copies thereof or abstracts therefrom,
and to discuss their respective affairs, finances and accounts with their
respective directors, officers, and, in the presence of Holdco if Holdco shall
so request, independent public accountants, all at such reasonable times during
normal business hours and as often as may be reasonably desired, upon reasonable
advance notice to Holdco.
7.11 Environmental Laws. Each Loan Party shall, and shall cause each of
its Subsidiaries to, conduct its operations and keep and maintain its property
in compliance with all Environmental Laws except where the failure to do so or
to so comply could not reasonably be expected to have a Material Adverse Effect.
7.12 Use of Proceeds. The Company shall use the proceeds of the Loans for
general corporate purposes and not in contravention of any Requirement of Law
(including Regulation G, T, U and X of the FRB) or of any Loan Document.
7.13 Additional Guarantors. In the event any Person shall hereafter
become a Material Subsidiary, Holdco shall promptly cause such Material
Subsidiary to become a party to the Subsidiary Guaranty.
ARTICLE VIII
NEGATIVE AND FINANCIAL COVENANTS
--------------------------------
So long as any Bank shall have any Commitment hereunder, or any Loan or
other Obligation shall remain unpaid, unless the Required Banks waive compliance
in writing:
8.01 Limitation on Liens. No Loan Party shall, nor shall it suffer or
permit any of its Subsidiaries to, directly or indirectly, make, create, incur,
assume or suffer to exist any Lien upon or with respect to any part of its
property, whether now owned or hereafter acquired, other than the following
("Permitted Liens"):
(a) any Lien existing on property of such Loan Party or any of its
Subsidiaries on the Closing Date and set forth in Schedule 8.01 securing
Indebtedness outstanding on such date;
(b) any Lien created under any Loan Document;
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(c) Liens for taxes, fees, assessments or other governmental charges
which are not delinquent or remain payable without penalty, or to the extent
that non-payment thereof is permitted by Section 7.07; provided that no notice
of lien has been filed or recorded under the Code;
(d) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other similar Liens arising in the ordinary course
of business which are not delinquent for more than 90 days or remain payable
without penalty or which are being contested in good faith and by appropriate
proceedings, which proceedings have the effect of preventing the forfeiture or
sale of the property subject thereto;
(e) Liens (other than any Lien imposed by ERISA) consisting of
pledges or deposits required in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other social security
legislation;
(f) Liens on the property of such Loan Party or any of its
Subsidiaries securing (i) the non-delinquent performance of bids, trade
contracts (other than for borrowed money), leases, statutory obligations, (ii)
contingent obligations on surety and appeal bonds, and (iii) other
non-delinquent obligations of a like nature; in each case, incurred in the
ordinary course of business and treating as non-delinquent any delinquency which
is being contested in good faith and by appropriate proceedings, which
proceedings have the effect of preventing the forfeiture or sale of the property
subject thereto;
(g) Liens consisting of judgment or judicial attachment liens with
respect to judgments that do not constitute an Event of Default and in the
aggregate do not exceed $10,000,000;
(h) easements, rights-of-way, restrictions and other similar
encumbrances which, in the aggregate, are not substantial in amount, and which
do not in any case materially detract from the value of the property subject
thereto or interfere with the ordinary conduct of the businesses of such Loan
Party and its Subsidiaries;
(i) Liens on assets of corporations which become Subsidiaries after
the Closing Date; provided, however, that such Liens existed at the time the
respective corporations became Subsidiaries and were not created in anticipation
thereof;
(j) Liens arising solely by virtue of any statutory or common law
provision relating to banker's liens, rights of set-off or similar rights and
remedies as to deposit accounts or other funds maintained with a creditor
depository institution; provided that (i) such deposit account is not a
dedicated cash collateral account and is not subject to restrictions against
access by such Loan Party in excess of those set forth by regulations
promulgated by the FRB, and (ii) such deposit account is not intended by such
Loan Party or any of its Subsidiaries to provide collateral to the depository
institution;
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(k) Liens securing reimbursement obligations incurred in the
ordinary course of business for letters of credit, which Liens encumber only
goods, or documents of title covering goods, which are purchased in transactions
for which such letters of credit are issued;
(l) any extension, renewal or substitution of or for any of the
foregoing Liens; provided that (i) the Indebtedness or other obligation or
liability secured by the applicable Lien shall not exceed the Indebtedness or
other obligation or liability existing immediately prior to such extension,
renewal or substitution and (ii) the Lien securing such Indebtedness or other
obligation or liability shall be limited to the property which, immediately
prior to such extension, renewal or substitution, secured such Indebtedness or
other obligation or liability; and
(m) other Liens securing Indebtedness or other obligations not at
any time exceeding $50,000,000 in aggregate principal amount.
8.02 Disposition of Assets. No Loan Party shall, nor shall it suffer or
permit any of its Subsidiaries to, directly or indirectly, sell, assign, lease,
convey, transfer or otherwise dispose of (collectively, a "Disposition")
(whether in one or a series of transactions) any property (including accounts
and notes receivable, with or without recourse) or enter into any agreement to
do any of the foregoing, except:
(a) Dispositions of inventory, or used, worn-out, obsolete or
surplus equipment and other assets, all in the ordinary course of business;
(b) Dispositions of equipment to the extent that such equipment is
exchanged for credit against the purchase price of similar replacement
equipment, or the proceeds of such sale are reasonably promptly applied to the
purchase price of such replacement equipment;
(c) Dispositions of assets (including leasehold interests and
related assets) in connection with sale/leasebacks of stores developed by such
Loan Party or any of its Subsidiaries in the ordinary course of business in
amounts and under circumstances consistent with past practices;
(d) Dispositions of assets received in connection with the
bankruptcy or reorganization of suppliers and customers and in settlement of
delinquent obligations of, and other disputes with, customers and suppliers
arising in the ordinary course of business;
(e) Dispositions of assets between and among a Loan Party and its
Wholly- Owned Subsidiaries and the Disposition of assets from any other
Subsidiary to a Loan Party or a Wholly-Owned Subsidiary of a Loan Party;
(f) Dispositions not otherwise permitted hereunder which are made
for fair market value; provided that (i) at the time of any Disposition, no
Event of Default shall exist or shall result from such Disposition and (ii) the
aggregate sales price of all assets so sold by Holdco and its
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Subsidiaries, together, shall not exceed in any fiscal year 5% (but for the
fiscal year ending January 1997, 10%) of the total consolidated assets of Holdco
and its Subsidiaries, determined in accordance with GAAP, as of the beginning of
such fiscal year; and
(g) Dispositions of Investments in joint ventures made pursuant to
Section 8.04(i).
Upon the permitted Disposition by any Guarantor of all or
substantially all of its assets to any Person (and after the subsequent
distribution of the consideration received therefor by such Guarantor to any
Loan Party or another Guarantor), such Guarantor shall be automatically released
from its obligations under the Subsidiary Guaranty. The Agent shall provide
written confirmation of such release to Holdco upon Holdco's request therefor.
8.03 Consolidations and Mergers. No Loan Party shall, nor shall it
suffer or permit any of its Subsidiaries to, merge with or consolidate into any
Person, except:
(a) a Loan Party or any of its Subsidiaries may merge with or
consolidate into any Person, provided that (i) at the time of such merger or
consolidation, no Event of Default shall exist or result from the consummation
of such merger or consolidation and (ii) such Loan Party or such Subsidiary
shall be the continuing or surviving corporation;
(b) any Subsidiary (other than the Company) may merge with or
consolidate into any Loan Party, provided that such Loan Party shall be the
continuing or surviving corporation, or with any one or more Subsidiaries,
provided that if any transaction shall be between a Subsidiary and a
Wholly-Owned Subsidiary, the Wholly-Owned Subsidiary shall be the continuing or
surviving corporation and if any transaction shall be between a Subsidiary and a
Guarantor, the Guarantor shall be the continuing or surviving corporation or the
surviving Subsidiary becomes a Guarantor; and
(c) any Subsidiary (other than the Company) may sell all or
substantially all of its assets (upon voluntary liquidation or otherwise), to
any Loan Party or another Wholly-Owned Subsidiary or as otherwise permitted by
Section 8.02.
Any Disposition of assets which would be permitted by Section 8.02 may also be
accomplished via a merger or consolidation of a Subsidiary and such merger or
consolidation shall be permitted pursuant to this Section 8.03.
8.04 Loans and Investments. No Loan Party shall purchase or acquire, nor
shall it suffer or permit any of its Subsidiaries to purchase or acquire, or
make any commitment therefor, any capital stock, equity interest, or any
obligations or other securities of, or any interest in, any Person (other than a
Loan Party), or make or commit to make any Acquisitions, or make or commit to
make any advance, loan, extension of credit or capital contribution to or any
other investment in, any
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Person (other than a Loan Party) including any Affiliate of a Loan Party
(together, "Investments"), except for:
(a) Investments held by such Loan Party or its Subsidiaries in the
form of cash equivalents or short term marketable securities;
(b) extensions of credit in the nature of accounts receivable or
notes receivable arising from the sale or lease of goods or services in the
ordinary course of business;
(c) extensions of credit by a Loan Party to another Loan Party, by
such Loan Party to any of its Wholly-Owned Subsidiaries or by any of its
Subsidiaries to such Loan Party or one of its Wholly-Owned Subsidiaries;
(d) advances to employees for moving, relocation and travel
expenses, drawing accounts and similar expenditures and loans to employees in
the ordinary course of business;
(e) Investments received in connection with the bankruptcy or
reorganization of suppliers and customers and in settlement of delinquent
obligations of, and other disputes with, suppliers and customers arising in the
ordinary course of business;
(f) Investments of the Company and its Subsidiaries in existence as
of the Closing Date and set forth on Schedule 8.04;
(g) any extension or renewal of any of the foregoing;
(h) Investments incurred in order to consummate an Acquisition of
any Person principally engaged in a business substantially similar to the
business of the Company; provided that (i) such Acquisition is undertaken in
accordance with all applicable Requirements of Law and (ii) the prior, effective
written consent or approval to such Acquisition of the board of directors or
equivalent governing body of the acquiree is obtained;
(i) Investments by a Loan Party or its Subsidiaries in Wholly-Owned
Subsidiaries of such Loan Party which are principally engaged in a business
substantially similar to the business of the Company; and
(j) other Investments made after the Closing Date not exceeding
$50,000,000 in the aggregate.
8.05 Limitation on Indebtedness. No Loan Party shall, nor shall it
suffer or permit any of its Subsidiaries to, create, incur, assume, suffer to
exist, or otherwise become or remain directly or indirectly liable with respect
to, any Indebtedness except:
(a) Indebtedness incurred pursuant to this Agreement;
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(b) Indebtedness consisting of Contingent Obligations permitted
pursuant to Section 8.07;
(c) Indebtedness existing on the Closing Date and set forth in
Schedule 8.05;
(d) Indebtedness constituting an Investment permitted pursuant to
Section 8.04;
and
(e) Other Indebtedness of such Loan Party and its Subsidiaries so
long as after giving pro forma effect to the incurrence of such Indebtedness as
if such Indebtedness had been incurred on the last date of the most recently
completed fiscal quarter the ratio of (i) Total Debt to (ii) Total
Capitalization would not have been greater than 60%; provided, however, that the
amount of such other Indebtedness which is Indebtedness of Subsidiaries
(exclusive of Indebtedness of the Company and Indebtedness owing to Holdco or
its Subsidiaries) shall at no time exceed an amount equal to 5% of Holdco's
Consolidated Tangible Net Worth at such time; provided further, however, that
solely for purposes of computations under this subsection 8.05(e), all such
other Indebtedness outstanding at the time of such incurrence shall be included
in the definitions of "Total Debt" and "Total Capitalization".
8.06 Transactions with Affiliates. No Loan Party shall, nor shall it
suffer or permit any of its Subsidiaries to, enter into any transaction with any
Affiliate of the Loan Party (other than a Loan Party or any Guarantor) (a)
except upon fair and reasonable terms no less favorable to such Loan Party or
such Subsidiary than would obtain in a comparable arm's-length transaction with
a Person not an Affiliate of such Loan Party or such Subsidiary and (b) except
for arrangements for the provision of management services in the ordinary course
of business.
8.07 Contingent Obligations. No Loan Party shall, nor shall it suffer or
permit any Subsidiary to, create, incur, assume or suffer to exist any
Contingent Obligations except:
(a) endorsements for collection or deposit in the ordinary course of
business;
(b) Permitted Swap Obligations;
(c) Contingent Obligations of the Company and its Subsidiaries
existing as of the Closing Date and listed in Schedule 8.07;
(d) Contingent Obligations with respect to Surety Instruments
incurred in the ordinary course of business;
(e) in addition to other Contingent Obligations permitted hereunder,
Contingent Obligations which do not exceed $1,000,000 in the aggregate at any
one time outstanding;
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(f) Guaranty Obligations of such Loan Party or of any Guarantor with
respect to any Indebtedness permitted pursuant to subsection 8.05(e);
(g) the Subsidiary Guaranty; and
(h) the Parent Guaranty.
8.08 Restricted Payments. No Loan Party shall, nor shall it suffer or
permit any of its Subsidiaries to, declare or make any dividend payment or other
distribution of assets, properties, cash, rights, obligations or securities on
account of any shares of any class of its capital stock, or purchase, redeem or
otherwise acquire for value any shares of its capital stock or any warrants,
rights or options to acquire such shares, now or hereafter outstanding, except
that:
(a) any Subsidiary may pay ratable dividends and make ratable
distributions to its equity holders;
(b) Holdco and any of its Subsidiaries may declare and make dividend
payments or other distributions payable solely in its common stock; and
(c) Holdco may declare or pay cash dividends to its stockholders and
purchase, redeem or otherwise acquire shares of its capital stock or warrants,
rights or options to acquire any such shares for cash; provided that,
immediately after giving effect to such proposed action (or, in the case of
dividends declared not earlier than 45 days prior to the payment thereof, at the
time of such declaration), no Default or Event of Default would exist.
8.09 ERISA. No Loan Party shall, nor shall it suffer or permit any of
its ERISA Affiliates to: (a) engage in a prohibited transaction or violation of
the fiduciary responsibility rules with respect to any Plan which has resulted
or could reasonably expected to result in liability of the Loan Party in an
aggregate amount in excess of $10,000,000; or (b) engage in a transaction that
could be reasonably expected to be subject to Section 4069 or 4212(c) of ERISA.
8.10 Conduct of Business. Holdco will, and will cause each of its
Subsidiaries to, carry on and conduct its business in substantially the same
manner and in substantially the same, related or, in Holdco's reasonable
business judgement, materially synergistic fields of enterprise as it is
presently conducted. The Loan Parties shall (a) cause assets (including rights
as franchisor under franchising arrangements (but not including the assets of
franchisees)) generating at least 90% of the consolidated revenues of Holdco and
its Subsidiaries to be owned or leased by the Company at all times and (b) cause
assets (including rights as franchisor under franchising arrangements (but not
including the assets of franchisees)) generating at least 90% of Consolidated
Net Income of Holdco and its Subsidiaries to be owned or leased by the Company
and the Material Subsidiaries existing as of the Closing Date at all times.
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8.11 Accounting Changes. No Loan Party shall, nor shall it suffer or
permit any of its Subsidiaries to, make any significant change in accounting
treatment or reporting practices, except as permitted by GAAP or SEC reporting
requirements, or change the fiscal year of such Loan Party or of any Subsidiary.
8.12 Financial Covenants.
(a) Fixed Charge Coverage Ratio. For the period of four consecutive
fiscal quarters ending on the last day of each fiscal quarter, Holdco shall not
permit the Fixed Charge Coverage Ratio to be less than 1.5:1.0.
(b) Leverage Ratio. Holdco shall not permit the ratio of (i) Total
Debt to (ii) Total Capitalization to be greater than 60% as of the last day of
any fiscal quarter.
(c) Consolidated Tangible Net Worth. Holdco shall not permit
Consolidated Tangible Net Worth as of the last day of any fiscal quarter to be
less than $650,000,000.
ARTICLE IX
EVENTS OF DEFAULT
-----------------
9.01 Event of Default. Any of the following shall constitute an "Event
of Default":
(a) Non-Payment. The Company fails to pay, (i) when and as required
to be paid herein, any amount of principal of any Loan, or (ii) within five days
after the same becomes due, any interest, fee or any other amount payable
hereunder or under any other Loan Document; or
(b) Representation or Warranty. Any representation or warranty by
any Loan Party or any of its Subsidiaries made or deemed made herein, in any
other Loan Document, or which is contained in any certificate, document or
financial or other statement by any Loan Party, any of its Subsidiaries, or any
Responsible Officer, furnished at any time under this Agreement, or in or under
any other Loan Document, is incorrect in any material respect on or as of the
date made or deemed made; or
(c) Specific Defaults. Any Loan Party fails to perform or observe
any term, covenant or agreement (i) contained in Section 8.01, 8.04 or 8.07 and
such failure continues unremedied for five Business Days or (ii) contained in
either subsection 7.03(a) or Section 7.12 or in any other provision of Article
VIII; or
(d) Other Defaults. Any Loan Party fails to perform or observe any
other term or covenant contained in this Agreement or any other Loan Document,
and such default shall
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continue unremedied for a period of 20 days after the date upon which written
notice thereof is given to the Company by the Agent or any Bank; or
(e) Cross-Default. Any Loan Party or any of its Subsidiaries (i)
fails to make any payment in respect of any Indebtedness or Contingent
Obligation having an aggregate principal amount (including undrawn committed or
available amounts and including amounts owing to all creditors under any
combined or syndicated credit arrangement) of more than $10,000,000 when due
(whether by scheduled maturity, required prepayment, acceleration, demand, or
otherwise) and such failure continues after the applicable grace or notice
period, if any, specified in the relevant document on the date of such failure;
or (ii) fails to perform or observe any other condition or covenant, or any
other event shall occur or condition exist, under any agreement or instrument
relating to any such Indebtedness or Contingent Obligation, and such failure
continues after the applicable grace or notice period, if any, specified in the
relevant document on the date of such failure if the effect of such failure,
event or condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Indebtedness (or a trustee
or agent on behalf of such holder or holders or beneficiary or beneficiaries) to
cause such Indebtedness to be declared to be due and payable prior to its stated
maturity, or such Contingent Obligation to become payable or cash collateral in
respect thereof to be demanded; or
(f) Insolvency; Voluntary Proceedings. Any Loan Party or any
Material Subsidiary (i) ceases or fails to be solvent, or generally fails to
pay, or admits in writing its inability to pay, its debts as they become due,
subject to applicable grace periods, if any, whether at stated maturity or
otherwise; (ii) voluntarily ceases to conduct its business in the ordinary
course; (iii) commences any Insolvency Proceeding with respect to itself; or
(iv) takes any action to effectuate or authorize any of the foregoing; or
(g) Involuntary Proceedings. (i) Any involuntary Insolvency
Proceeding is commenced or filed against any Loan Party or any Material
Subsidiary, or any writ, judgment, warrant of attachment, execution or similar
process, is issued or levied against a substantial part of any Loan Party's or
any Material Subsidiary's properties, and any such proceeding or petition shall
not be dismissed, or such writ, judgment, warrant of attachment, execution or
similar process shall not be released, vacated or fully bonded within 60 days
after commencement, filing or levy; (ii) any Loan Party or any Material
Subsidiary admits the material allegations of a petition against it in any
Insolvency Proceeding, or an order for relief (or similar order under non-U.S.
law) is ordered in any Insolvency Proceeding; or (iii) any Loan Party or any
Material Subsidiary acquiesces in the appointment of a receiver, trustee,
custodian, conservator, liquidator, mortgagee in possession (or agent therefor),
or other similar Person for itself or a substantial portion of its property or
business; or
(h) ERISA. (i) An ERISA Event shall occur with respect to a Pension
Plan or Multiemployer Plan which has resulted in liability of any Loan Party
under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in
an aggregate amount in excess of $10,000,000; (ii) the aggregate amount of
Unfunded Pension Liability among all Pension Plans at
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any time exceeds $10,000,000; or (iii) any Loan Party or any ERISA Affiliate
shall fail to pay when due, after the expiration of any applicable grace period,
any installment payment with respect to its withdrawal liability under Section
4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of
$10,000,000; or
(i) Monetary Judgments. One or more final judgments, final orders,
decrees or arbitration awards is entered against any Loan Party or any of its
Subsidiaries involving in the aggregate a liability (to the extent not covered
by independent third-party insurance as to which the insurer does not dispute
coverage) as to any single or related series of transactions, incidents or
conditions, of $10,000,000 or more (determined after allowance for the
application of any insurance proceeds to such judgment or order), and the same
shall remain unsatisfied, unvacated and unstayed pending appeal for a period of
10 days after the entry thereof; or
(j) Change of Control. There occurs any Change of Control; or
(k) Subsidiary Guaranty. The Subsidiary Guaranty shall fail to
remain in full force and effect (except, with respect to any Material
Subsidiary, upon the merger or consolidation of such Material Subsidiary with
and into any Loan Party or any other Material Subsidiary which is a Guarantor),
or any action shall be taken to discontinue or to assert the invalidity or
unenforceability of the Subsidiary Guaranty (after giving effect to any
applicable grace period set forth therein), or any Guarantor shall fail to
comply with any of the terms or provisions of the Subsidiary Guaranty, or any
Guarantor denies that it has any further liability under the Subsidiary
Guaranty, or gives notice to such effect other than as a consequence of the
satisfaction of its obligations thereunder.
(l) Parent Guaranty. The Parent Guaranty shall fail to remain in
full force and effect, or any action shall be taken to discontinue or to assert
the invalidity or unenforceability of the Parent Guaranty (after giving effect
to any applicable grace period set forth therein), or any Parent Guarantor shall
fail to comply with any of the terms or provisions of the Parent Guaranty, or
any Parent Guarantor denies that it has any further liability under the Parent
Guaranty, or gives notice to such effect other than as a consequence of the
satisfaction of its obligations thereunder.
9.02 Remedies. If any Event of Default occurs and is continuing, the
Agent shall, at the request of, or may, with the consent of, the Required Banks,
(a) declare the commitment of each Bank to make Loans and to issue
and participate in Letters of Credit to be terminated, whereupon such
commitments shall be terminated;
(b) declare the unpaid principal amount of all outstanding Loans,
all interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Company; and
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(c) exercise on behalf of itself and the Banks all rights and
remedies available to it and the Banks under the Loan Documents or applicable
law;
provided, however, that upon the occurrence and during the continuance of any
Event of Default specified in subsection (f) or (g) of Section 9.01 with respect
to the Company, the obligation of each Bank to make Loans and the obligation of
any Issuing Bank to issue Letters of Credit shall automatically terminate and
the unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable without further
act of the Agent or any Bank. In addition, following the occurrence and during
the continuance of an Event of Default, so long as any Letter of Credit has not
been fully drawn and has not been canceled or expired by its terms, upon demand
by the Agent, the Company shall, upon the request of the Required Banks, Cash
Collateralize the dollar amount of the aggregate undrawn amount of all Letters
of Credit. Such funds shall be promptly applied by the Agent to reimburse the
Issuing Bank for drafts drawn from time to time under the Letters of Credit.
Such funds, if any, remaining following the payment of all Obligations in full
or the earlier termination of all Events of Default shall, unless the Agent is
otherwise directed by a court of competent jurisdiction, be promptly paid over
to the Company.
9.03 Rights Not Exclusive. The rights provided for in this Agreement and
the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.
ARTICLE X
THE AGENT
---------
10.01 Appointment and Authorization; "Agent". Each Bank hereby
irrevocably (subject to Section 10.09) appoints, designates and authorizes the
Agent to take such action on its behalf under the provisions of this Agreement
and each other Loan Document and to exercise such powers and perform such duties
as are expressly delegated to it by the terms of this Agreement or any other
Loan Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall the Agent
have or be deemed to have any fiduciary relationship with any Bank, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agent. Without limiting the generality of the
foregoing sentence, the use of the term "agent" in this Agreement with reference
to the Agent is not intended to connote any fiduciary or other implied (or
express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties.
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10.02 Delegation of Duties. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
10.03 Liability of Agent. None of the Agent-Related Persons shall (i) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (ii) be responsible in any manner to any of the Banks for any recital,
statement, representation or warranty made by the Company or any Subsidiary or
Affiliate of the Company, or any officer thereof, contained in this Agreement or
in any other Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Agent under or in
connection with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of the Company or any other party to
any Loan Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Bank to ascertain or
to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the properties, books or records of the Company or any of the Company's
Subsidiaries or Affiliates.
10.04 Reliance by Agent.
(a) The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to the
Company), independent accountants and other experts selected by the Agent. The
Agent shall be fully justified in failing or refusing to take any action under
this Agreement or any other Loan Document unless it shall first receive such
advice or concurrence of the Required Banks as it deems appropriate and, if it
so requests, it shall first be indemnified to its satisfaction by the Banks
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this Agreement
or any other Loan Document in accordance with a request or consent of the
Required Banks and such request and any action taken or failure to act pursuant
thereto shall be binding upon all of the Banks.
(b) For purposes of determining compliance with the conditions
specified in Section 5.01, each Bank that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter either sent by the Agent to such Bank for consent,
approval, acceptance or satisfaction, or required thereunder to be consented to
or approved by or acceptable or satisfactory to the Bank.
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10.05 Notice of Default. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default, except with
respect to defaults in the payment of principal, interest and fees required to
be paid to the Agent for the account of the Banks, unless the Agent shall have
received written notice from a Bank or the Company referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default". The Agent will notify the Banks of its receipt of any such
notice. The Agent shall take such action with respect to such Default or Event
of Default as may be requested by the Required Banks in accordance with Article
IX; provided, however, that unless and until the Agent has received any such
request, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable or in the best interest of the Banks.
10.06 Credit Decision. Each Bank acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Agent hereinafter taken, including any review of the affairs of
Holdco and its Subsidiaries, shall be deemed to constitute any representation or
warranty by any Agent-Related Person to any Bank. Each Bank represents to the
Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of
Holdco and its Subsidiaries, and all applicable bank regulatory laws relating to
the transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to the Company hereunder. Each Bank also
represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of the Company. Except for notices,
reports and other documents expressly herein required to be furnished to the
Banks by the Agent, the Agent shall not have any duty or responsibility to
provide any Bank with any credit or other information concerning the business,
prospects, operations, property, financial and other condition or
creditworthiness of the Company which may come into the possession of any of the
Agent-Related Persons.
10.07 Indemnification of Agent. Whether or not the transactions
contemplated hereby are consummated, the Banks shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Company and without limiting the obligation of the Company to do so), pro rata,
from and against any and all Indemnified Liabilities; provided, however, that no
Bank shall be liable for the payment to the Agent-Related Persons of any portion
of such Indemnified Liabilities resulting solely from such Person's gross
negligence or willful misconduct. Without limitation of the foregoing, each
Bank shall reimburse the Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including Attorney Costs) incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or
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legal advice in respect of rights or responsibilities under, this Agreement, any
other Loan Document, or any document contemplated by or referred to herein, to
the extent that the Agent is not reimbursed for such expenses by or on behalf of
the Company. The undertaking in this Section 10.07 shall survive the payment of
all Obligations hereunder and the resignation or replacement of the Agent.
10.08 Agent in Individual Capacity. BofA and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Company and its
Subsidiaries and Affiliates as though BofA were not the Agent hereunder and
without notice to or consent of the Banks. The Banks acknowledge that, pursuant
to such activities, BofA or its Affiliates may receive information regarding the
Company or its Affiliates (including information that may be subject to
confidentiality obligations in favor of the Company or such Subsidiary) and
acknowledge that the Agent shall be under no obligation to provide such
information to them. With respect to its Loans, BofA shall have the same rights
and powers under this Agreement as any other Bank and may exercise the same as
though it were not the Agent, and the terms "Bank" and "Banks" include BofA in
its individual capacity.
10.09 Successor Agent. The Agent may, and at the request of the Required
Banks shall, resign as Agent upon 30 days' notice to the Banks. If the Agent
resigns under this Agreement, the Required Banks shall appoint from among the
Banks a successor agent for the Banks which successor agent shall be approved by
the Company. If no successor agent is appointed prior to the effective date of
the resignation of the Agent, the Agent may appoint, after consulting with the
Banks and the Company, a successor agent from among the Banks. Upon the
acceptance of its appointment as successor agent hereunder, such successor agent
shall succeed to all the rights, powers and duties of the retiring Agent and the
term "Agent" shall mean such successor agent and the retiring Agent's
appointment, powers and duties as Agent shall be terminated. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Article X and
Sections 11.04 and 11.05 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Agreement. If no
successor agent has accepted appointment as Agent by the date which is 30 days
following a retiring Agent's notice of resignation, the retiring Agent's
resignation shall nevertheless thereupon become effective and the Banks shall
perform all of the duties of the Agent hereunder until such time, if any, as the
Required Banks appoint a successor agent as provided for above.
10.10 Withholding Tax.
(a) If any Bank is a "foreign corporation, partnership or trust"
within the meaning of the Code and such Bank claims exemption from, or a
reduction of, U.S. withholding tax under Sections 1441 or 1442 of the Code, such
Bank agrees with and in favor of the Agent and the Company, to deliver to the
Agent and the Company:
(i) if such Bank claims an exemption from, or a reduction of,
withholding tax under a United States tax treaty, two properly completed
and executed copies of IRS
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Form 1001 before the payment of any interest in the first calendar year
and before the payment of any interest in each third succeeding calendar
year during which interest may be paid under this Agreement;
(ii) if such Bank claims that interest paid under this
Agreement is exempt from United States withholding tax because it is
effectively connected with the conduct of a United States trade or
business by such Bank, two properly completed and executed copies of IRS
Form 4224 before the payment of any interest is due in the first taxable
year of such Bank and in each succeeding taxable year of such Bank during
which interest may be paid under this Agreement; and
(iii) such other form or forms as may be required under the
Code or other laws of the United States as a condition to exemption from,
or reduction of, United States withholding tax.
Such Bank agrees to promptly notify the Agent and the Company of
any change in circumstances which would modify or render invalid any
claimed exemption or reduction.
(b) If any Bank claims exemption from, or reduction of, withholding
tax under a United States tax treaty by providing IRS Form 1001 and such Bank
sells, assigns, grants a participation in, or otherwise transfers all or part of
the Obligations of the Company to such Bank, such Bank agrees to notify the
Agent and the Company of the percentage amount in which it is no longer the
beneficial owner of Obligations of the Company to such Bank. To the extent of
such percentage amount, the Agent and the Company will treat such Bank's IRS
Form 1001 as no longer valid.
(c) If any Bank claiming exemption from United States withholding
tax by filing IRS Form 4224 with the Agent sells, assigns, grants a
participation in, or otherwise transfers all or part of the Obligations of the
Company to such Bank, such Bank agrees to undertake sole responsibility for
complying with the withholding tax requirements imposed by Sections 1441 and
1442 of the Code.
(d) If any Bank is entitled to a reduction in the applicable
withholding tax, the Agent or the Company may withhold from any interest payment
to such Bank an amount equivalent to the applicable withholding tax after taking
into account such reduction. However, if the forms or other documentation
required by subsection (a) of this Section 10.10 are not delivered to the Agent
or the Company, then the Agent or the Company may withhold from any interest
payment to such Bank not providing such forms or other documentation an amount
equivalent to the applicable withholding tax imposed by Sections 1441 and 1442
of the Code, without reduction.
(e) If the IRS or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that the Agent or the Company did
not properly withhold tax from amounts paid to or for the account of any Bank
(because the appropriate form was not delivered or
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was not properly executed, or because such Bank failed to notify the Agent or
the Company of a change in circumstances which rendered the exemption from, or
reduction of, withholding tax ineffective, or for any other reason) such Bank
shall indemnify the Agent and the Company fully for all amounts paid, directly
or indirectly, by the Agent or the Company as tax or otherwise, including
penalties and interest, and including any taxes imposed by any jurisdiction on
the amounts payable to the Agent or the Company under this Section 10.10,
together with all costs and expenses (including Attorney Costs). The obligation
of the Banks under this subsection shall survive the payment of all Obligations
and the resignation or replacement of the Agent.
10.11 Co-Agents. None of the Banks identified on the facing page or
signature pages of this Agreement as a "co-agent" shall have any right, power,
obligation, liability, responsibility or duty under this Agreement other than
those applicable to all Banks as such. Without limiting the foregoing, none of
the Banks so identified as a "co-agent" shall have or be deemed to have any
fiduciary relationship with any Bank. Each Bank acknowledges that it has not
relied, and will not rely, on any of the Banks so identified in deciding to
enter into this Agreement or in taking or not taking action hereunder.
ARTICLE XI
MISCELLANEOUS
-------------
11.01 Amendments and Waivers. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent with respect to any
departure by the Company or any Guarantor therefrom, shall be effective unless
the same shall be in writing and signed by the Required Banks (or by the Agent
at the written request of the Required Banks) and the Company or any Guarantor,
as applicable, and then any such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given; provided,
however, that no such waiver, amendment, or consent shall, unless in writing and
signed by all the Banks and the Company and acknowledged by the Agent, do any of
the following:
(a) increase or extend the Commitment of any Bank (or reinstate any
Commitment terminated pursuant to Section 9.02);
(b) postpone or delay any date fixed by this Agreement or any other
Loan Document for any payment of principal, interest other than default
interest, fees or other amounts due to the Banks (or any of them) hereunder or
under any other Loan Document;
(c) reduce the principal of, or the rate of interest specified
herein on any Loan, or (subject to clause (ii) below) any fees or other amounts
payable hereunder or under any other Loan Document;
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(d) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Loans which is required for the Banks or any of
them to take any action hereunder;
(e) release (other than a release provided for in the last paragraph
of Section 8.02) any Guarantor from the Subsidiary Guaranty; or
(f) amend this Section 11.01, or Section 2.14, or any provision
herein providing for consent or other action by all Banks;
and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Agent in addition to the Required Banks or all the
Banks, as the case may be, affect the rights or duties of the Agent under this
Agreement or any other Loan Document, and (ii) the Fee Letter may be amended, or
rights or privileges thereunder waived, in a writing executed by the parties
thereto.
11.02 Notices.
(a) All notices, requests, consents, approvals, waivers and other
communications shall be in writing (including, unless the context expressly
otherwise provides, by facsimile transmission, provided that any matter
transmitted by any Loan Party by facsimile (i) shall be immediately confirmed by
a telephone call to the recipient at the number specified on Schedule 11.02, and
(ii) shall be followed promptly by delivery of a hard copy original thereof) and
mailed, faxed or delivered, to the address or facsimile number specified for
notices on Schedule 11.02; or, if directed to any Loan Party or the Agent, to
such other address as shall be designated by such party in a written notice to
the other parties, and if directed to any other party, at such other address as
shall be designated by such party in a written notice to Holdco and the Agent.
(b) All such notices, requests and communications shall, when
transmitted by overnight delivery, or faxed, be effective when delivered for
overnight (next-day) delivery, or transmitted in legible form by facsimile
machine, respectively, or if mailed, upon the third Business Day after the date
deposited into the U.S. mail, or if delivered, upon delivery; except that
notices pursuant to Article II or X to the Agent shall not be effective until
actually received by the Agent.
(c) Any agreement of the Agent and the Banks herein to receive
certain notices by telephone or facsimile is solely for the convenience and at
the request of the Loan Parties. The Agent and the Banks shall be entitled to
rely on the authority of any Person purporting to be a Person authorized by the
Company to give such notice and the Agent and the Banks shall not have any
liability to the Company or other Person on account of any action taken or not
taken by the Agent or the Banks in reliance upon such telephonic or facsimile
notice. The obligation of the Company to repay the Loans shall not be affected
in any way or to any extent by any failure by the Agent and the Banks to receive
written confirmation of any telephonic or facsimile notice or the
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receipt by the Agent and the Banks of a confirmation which is at variance with
the terms understood by the Agent and the Banks to be contained in the
telephonic or facsimile notice.
11.03 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Agent or any Bank, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. No consent to any departure by a Parent
Guarantor from any provision hereof or of the Parent Guaranty shall be effective
unless in writing and signed by the Required Banks (or by the Agent at the
written request of the Required Banks).
11.04 Costs and Expenses. The Company shall:
(a) whether or not the transactions contemplated hereby are
consummated, pay or reimburse the Agent promptly after demand for all reasonable
out-of-pocket costs and expenses incurred by the Agent in connection with the
development, preparation, delivery, administration and execution of, and any
amendment, supplement, waiver or modification to (in each case, whether or not
consummated), this Agreement, any Loan Document and any other documents prepared
in connection herewith or therewith, and the consummation of the transactions
contemplated hereby and thereby, including reasonable Attorney Costs incurred by
the Agent with respect thereto; and
(b) pay or reimburse the Agent, the Arranger and each Bank promptly
after demand for all reasonable out-of-pocket costs and expenses (including
reasonable Attorney Costs) incurred by them in connection with the exercise,
enforcement, attempted enforcement, or preservation of any rights or remedies
under this Agreement or any other Loan Document during the existence of an Event
of Default or after acceleration of the Loans (including in connection with any
"workout" or restructuring regarding the Loans, and including in any Insolvency
Proceeding or appellate proceeding).
11.05 Company Indemnification. Whether or not the transactions
contemplated hereby are consummated, the Company shall indemnify, defend and
hold the Agent-Related Persons, and each Bank and each of its respective
officers, directors, employees, 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 Attorney Costs) 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 Person in any way relating to or arising out of this Agreement
or any Loan Document, or the transactions contemplated hereby, or any action
taken or omitted by any such 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,
or related to any Offshore Currency transactions entered into in connection
herewith, whether or not any Indemnified Person is a party thereto (all
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the foregoing, collectively, the "Indemnified Liabilities"); provided that the
Company shall have no obligation hereunder to any Indemnified Person with
respect to Indemnified Liabilities to the extent resulting from the gross
negligence or willful misconduct of such Indemnified Person. The agreements in
this Section 11.05 shall survive payment of all other Obligations.
11.06 Payments Set Aside. To the extent that the Company makes a payment
to the Agent or the Banks, or the Agent or the Banks exercise their right of
set-off, and such payment or the proceeds of such set-off or any part thereof
are subsequently invalidated, declared to be fraudulent or preferential, set
aside or required (including pursuant to any settlement entered into by the
Agent or such Bank in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any Insolvency Proceeding or otherwise, then (a)
to the extent of such recovery the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such set-off had not occurred, and (b)
each Bank severally agrees to pay to the Agent upon demand its pro rata share of
any amount so recovered from or repaid by the Agent.
11.07 Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that the Company may not assign or transfer any
of its rights or obligations under this Agreement without the prior written
consent of the Agent and each Bank.
11.08 Assignments, Participations, etc.
(a) Any Bank may, with the written consent of the Company (which
consent shall not be unreasonably withheld) at all times other than during the
existence of an Event of Default, the Agent and the Issuing Bank, if applicable,
at any time assign and delegate to one or more Eligible Assignees (provided that
no written consent of the Company, the Agent or the Issuing Bank, if applicable,
shall be required in connection with any assignment and delegation by a Bank to
an Eligible Assignee that is an Affiliate of such Bank) (each an "Assignee")
all, or any ratable part of all, of the Loans, the Commitments and the other
rights and obligations of such Bank hereunder, in a minimum amount of
$5,000,000; provided, however, that the Company and the Agent may continue to
deal solely and directly with such Bank in connection with the interest so
assigned to an Assignee until (i) written notice of such assignment, together
with payment instructions, addresses and related information with respect to the
Assignee, shall have been given to the Company and the Agent by such Bank and
the Assignee; (ii) such Bank and its Assignee shall have delivered to the
Company and the Agent an Assignment and Acceptance in the form of Exhibit E
("Assignment and Acceptance") together with any Note or Notes subject to such
assignment and (iii) the assignor Bank or Assignee has paid to the Agent a
processing fee in the amount of $3,500.
(b) From and after the date that the Agent notifies the assignor
Bank that it has received (and provided its consent with respect to) an executed
Assignment and Acceptance and payment of the above-referenced processing fee,
(i) the Assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
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Assignment and Acceptance, shall have the rights and obligations of a Bank under
the Loan Documents, and (ii) the assignor Bank shall, to the extent that rights
and obligations hereunder and under the other Loan Documents have been assigned
by it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Loan Documents.
(c) Within five Business Days after its receipt of notice by the
Agent that it has received an executed Assignment and Acceptance and payment of
the processing fee, (and provided that it consents to such assignment in
accordance with subsection 11.08(a)), the Company shall execute and deliver to
the Agent, new Notes evidencing such Assignee's assigned Loans and Commitment
and, if the assignor Bank has retained a portion of its Loans and its
Commitment, replacement Notes in the principal amount of the Loans retained by
the assignor Bank (such Notes to be in exchange for, but not in payment of, the
Notes held by such Bank). Immediately upon each Assignee's making its
processing fee payment under the Assignment and Acceptance, this Agreement shall
be deemed to be amended to the extent, but only to the extent, necessary to
reflect the addition of the Assignee and the resulting adjustment of the
Commitments arising therefrom. The Commitment allocated to each Assignee shall
reduce such Commitments of the assigning Bank pro tanto. The Agent shall not
deliver any new Notes executed by the Company unless the Agent shall have
received the old Notes to be replaced or customary indemnification in favor of
the Agent and the Company with respect to lost or destroyed notes. Such old
Notes shall be promptly returned to the Company.
(d) Any Bank may at any time sell to one or more commercial banks or
other Persons not Affiliates of the Company (a "Participant") participating
interests in any Loans, the Commitment of that Bank and the other interests of
that Bank (the "originating Bank") hereunder and under the other Loan Documents;
provided, however, that (i) the originating Bank's obligations under this
Agreement shall remain unchanged, (ii) the originating Bank shall remain solely
responsible for the performance of such obligations, (iii) the Company and the
Agent shall continue to deal solely and directly with the originating Bank in
connection with the originating Bank's rights and obligations under this
Agreement and the other Loan Documents, and (iv) no Bank shall transfer or grant
any participating interest under which the Participant has rights to approve any
amendment to, or any consent or waiver with respect to, this Agreement or any
other Loan Document, except to the extent such amendment, consent or waiver
would require unanimous consent of the Banks as described in the first proviso
to Section 11.01. In the case of any such participation, the Participant shall
be entitled to the benefit of Sections 4.01, 4.03 and 11.05 as though it were
also a Bank hereunder. Notwithstanding the immediately preceding sentence, all
amounts payable by the Company or any Subsidiary under this Agreement and each
other Loan Document shall be determined as if no such participation had been
sold.
(e) Notwithstanding any other provision in this Agreement, any Bank
may at any time create a security interest in, or pledge, all or any portion of
its rights under and interest in this Agreement and the Note held by it in favor
of any Federal Reserve Bank in accordance with Regulation A of the FRB or U.S.
Treasury Regulation 31 CFR Section 203.14, and such Federal Reserve Bank may
enforce such pledge or security interest in any manner permitted under
applicable law.
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Notwithstanding any such pledge, such Bank shall remain liable to the Company
and the Issuing Bank as if such pledge had not been made. In the event of any
enforcement or proposed enforcement of such pledge the Company shall have the
right to replace such Bank pursuant to the provisions of Section 4.09.
11.09 Confidentiality. Each Bank agrees to take and to cause its
Affiliates to take normal and reasonable precautions and exercise due care to
maintain the confidentiality of all information identified as "confidential" or
"secret" by a Loan Party and provided to it by Holdco or any Subsidiary, or by
the Agent on Holdco's or such Subsidiary's behalf, under this Agreement or any
other Loan Document, and neither it nor any of its Affiliates shall use any such
information other than in connection with or in enforcement of this Agreement
and the other Loan Documents or in connection with other business now or
hereafter existing or contemplated with Holdco or any Subsidiary; except to the
extent such information (a) was or becomes generally available to the public
other than as a result of disclosure by the Bank, or (b) was or becomes
available on a non-confidential basis from a source other than Holdco; provided
that such source is not bound by a confidentiality agreement with Holdco known
to the Bank; provided, however, that any Bank may disclose such information (i)
at the request or pursuant to any requirement of any Governmental Authority to
which the Bank is subject or in connection with an examination of such Bank by
any such authority; (ii) pursuant to subpoena or other court process; (iii) when
required to do so in accordance with the provisions of any applicable
Requirement of Law; (iv) to the extent reasonably required in connection with
any litigation or proceeding to which the Agent, any Bank or their respective
Affiliates may be party; (v) to the extent reasonably required in connection
with the exercise of any remedy hereunder or under any other Loan Document; (vi)
to such Bank's independent auditors and other professional advisors; (vii) to
any Participant or Assignee, actual or potential, provided that such Person
agrees in writing to keep such information confidential to the same extent
required of the Banks hereunder; (viii) as to any Bank or its Affiliate, as
expressly permitted under the terms of any other document or agreement regarding
confidentiality to which Holdco or any Subsidiary is party or is deemed party
with such Bank or such Affiliate; and (ix) to its Affiliates, provided that such
Affiliate uses such information only in connection with this Agreement and
agrees in writing to keep such information confidential.
11.10 Set-off. In addition to any rights and remedies of the Banks
provided by law, if an Event of Default exists or the Loans have been
accelerated, each Bank is authorized at any time and from time to time, without
prior notice to the Company, any such notice being waived by the Company to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held by,
and other indebtedness at any time owing by, such Bank to or for the credit or
the account of the Company against any and all Obligations owing to such Bank,
now or hereafter existing, irrespective of whether or not the Agent or such Bank
shall have made demand under this Agreement or any Loan Document and although
such Obligations may be contingent or unmatured. Each Bank agrees promptly to
notify the Company and the Agent after any such set-off and application made by
such Bank; provided, however, that the failure to give such notice shall not
affect the validity of such set-off and application.
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11.11 Notification of Addresses, Lending Offices, Etc. Each Bank shall
notify the Agent in writing of any changes in the address to which notices to
the Bank should be directed, of addresses of any Lending Office, of payment
instructions in respect of all payments to be made to it hereunder and of such
other administrative information as the Agent shall reasonably request.
11.12 Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.
11.13 Severability. The illegality or unenforceability of any provision
of this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.
11.14 No Third Parties Benefited. This Agreement is made and entered
into for the sole protection and legal benefit of the Loan Parties, the Banks,
the Agent and the Agent-Related Persons, and their permitted successors and
assigns, and no other Person shall be a direct or indirect legal beneficiary of,
or have any direct or indirect cause of action or claim in connection with, this
Agreement or any of the other Loan Documents.
11.15 Governing Law and Jurisdiction.
(a) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF ILLINOIS; PROVIDED THAT THE AGENT
AND THE BANKS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF ILLINOIS OR
OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF ILLINOIS, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, EACH OF THE LOAN PARTIES, THE AGENT AND THE BANKS
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. EACH OF THE LOAN PARTIES, THE AGENT AND THE BANKS
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT
OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. EACH LOAN PARTY, THE AGENT
AND THE BANKS EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER
PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY ILLINOIS LAW.
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11.16 Waiver of Jury Trial. EACH LOAN PARTY, THE BANKS AND THE AGENT
EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION,
PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST
ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER
WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE LOAN PARTIES,
THE BANKS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL
BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE
PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED
BY OPERATION OF THIS SECTION 11.16 AS TO ANY ACTION, COUNTERCLAIM OR OTHER
PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION
HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
11.17 Judgment. If, for the purposes of obtaining judgment in any court,
it is necessary to convert a sum due hereunder or any other Loan Document in one
currency into another currency, the rate of exchange used shall be that at which
in accordance with normal banking procedures the Agent could purchase the first
currency with such other currency on the Business Day preceding that on which
final judgment is given. The obligation of the applicable Loan Party in respect
of any such sum due from it to the Agent hereunder or under the other Loan
Documents shall, notwithstanding any judgment in a currency (the "Judgment
Currency") other than that in which such sum is denominated in accordance with
the applicable provisions of this Agreement (the "Agreement Currency"), be
discharged only to the extent that on the Business Day following receipt by the
Agent of any sum adjudged to be so due in the Judgment Currency, the Agent may
in accordance with normal banking procedures purchase the Agreement Currency
with the Judgment Currency. If the amount of the Agreement Currency so
purchased is less than the sum originally due to the Agent in the Agreement
Currency, the applicable Loan Party agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Agent or the Person to whom
such obligation was owing against such loss. If the amount of the Agreement
currency so purchased is greater than the sum originally due to the Agent in
such currency, the Agent agrees to return the amount of any excess to the
applicable Loan Party (or to any other Person who may be entitled thereto under
applicable law).
11.18 Entire Agreement. This Agreement, together with the other Loan
Documents supersedes the commitment letter dated March 13, 1996 among the
Company, BofA and the Arranger and embodies the entire agreement and
understanding among the Loan Parties, the Banks and the Agent, and supersedes
all prior or contemporaneous agreements and understandings of such Persons,
verbal or written, relating to the subject matter hereof and thereof.
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11.19 Effect of Restatement. This Agreement shall, except as otherwise
expressly set forth herein, supersede the Existing Credit Agreement from and
after the effective date hereof (the "Restatement Date") with respect to the
transactions hereunder and with respect to the Loans and Letters of Credit
outstanding under the Existing Credit Agreement as of Restatement Date. The
parties hereto acknowledge and agree, however, that (i) this Agreement and all
other Loan Documents executed and delivered herewith do not constitute a
novation, payment and reborrowing or termination of the Obligations under the
Existing Credit Agreement and the other Loan Documents as in effect prior to the
Restatement Date, (ii) such Obligations are in all respects continuing with only
the terms being modified as provided in this Agreement and the other Loan
Documents, and (iii) all references in the other Loan Documents to the Credit
Agreement shall be deemed to refer without further amendment to this Agreement.
[signature pages follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in Chicago, Illinois, by their proper and duly
authorized officers as of the day and year first above written.
PAYLESS SHOESOURCE HOLDINGS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Title: Chief Financial Officer
------------------------------
PSS INVESTMENT II, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Title: Vice President & Treasurer
------------------------------
PAYLESS SHOESOURCE, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------
Title: Chief Executive Officer
------------------------------
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Title: Chief Financial Officer
------------------------------
89
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as a Bank
By:
--------------------------------
Name: J. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------
Title: Assistant Vice President
-----------------------------
By:
--------------------------------
Name:
------------------------------
Title: Assistant Vice President
-----------------------------
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent
By:
--------------------------------
Name: J. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------
Title: Assistant Vice President
-----------------------------
NATIONSBANK, N.A.
By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Title: Vice President
-----------------------------
THE BANK OF NEW YORK
By:
--------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
------------------------------
Title: Vice President
-----------------------------
COMMERCE BANK, N.A.
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90
By:
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------
Title: Vice President
------------------------------
FIRST UNION NATIONAL BANK
By:
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. Southern
------------------------------
Title: Vice President
------------------------------
THE FIRST NATIONAL BANK OF CHICAGO
By:
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
Title: Vice President
------------------------------
▇▇▇▇▇ FARGO BANK, N.A.
By:
---------------------------------
Name: Frida Youliuos
------------------------------
Title: Vice President
------------------------------
PNC BANK, NATIONAL ASSOCIATION
By:
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Title: Assistant Vice President
------------------------------
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▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇, N.A.
By:
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Title: Vice President
------------------------------
UMB BANK, n.a.
By:
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. Page
------------------------------
Title: Executive Vice President
------------------------------
ROYAL BANK OF CANADA
By:
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------
Title: Retail Group Manager
------------------------------
MARINE MIDLAND BANK
By:
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. Putlip
------------------------------
Title: Officer No. 9135
------------------------------
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