Multicurrency Credit Agreement - Borders Group Inc., Borders Inc., Walden Book Co. Inc. and BGP (UK) Ltd., PNC Bank NA, First National Bank of Chicago and Bankers Trust Co.
EXECUTION COPY
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AMENDED AND RESTATED
MULTICURRENCY
CREDIT AGREEMENT
by and among
BORDERS GROUP, INC., BORDERS, INC.,
WALDEN BOOK COMPANY, INC. and BGP (UK) LIMITED
and
THE LENDERS PARTY HERETO,
and
PNC BANK, NATIONAL ASSOCIATION, as Administrative Agent,
THE FIRST NATIONAL BANK OF CHICAGO, as Syndication Agent
and
BANKERS TRUST COMPANY, as Real Estate Administrative Agent
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Dated as of October 17, 1997
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ARTICLE I
CERTAIN DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.01 Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
1.03 Accounting Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE II
REVOLVING CREDIT AND SWING LOAN FACILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.01 (a) Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(b) Prior Revolving Credit Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(c) Increase in Commitments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
(d) Swing Loan Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.02 Nature of Lenders' Obligations with Respect to Revolving Credit Loans . . . . . . . . . . . . . . . . . 31
2.03 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
(a) Revolving Credit Facility Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
(b) Calculation of Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.04 Reduction of Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.05 (a) Revolving Credit Loan Requests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
(b) Swing Loan Requests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.06 (a) Making Revolving Credit Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
(b) Making Swing Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.07 (a) Borrowings to Repay Swing Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
(b) Irrevocable Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.08 (a) Evidence of Revolving Credit Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
(b) Evidence of Swing Loan Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
(c) Promissory Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
2.09 Utilization of Commitments in Optional Currencies . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
(a) Periodic Computations of Dollar Equivalent Amounts
of Loans and Letters of Credit Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
(b) Notices from Lenders That Optional Currencies Are
Unavailable to Fund New Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
(c) Notices From Lenders That Optional Currencies Are
Unavailable to Fund Renewals of the Euro-Rate Option . . . . . . . . . . . . . . . . . . . . . . . . 36
(d) Requests for Additional Optional Currencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
2.10 Letter of Credit Subfacility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
(a) Issuance of Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
(b) Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
(c) Letter of Credit Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
(d) Disbursements, Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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(e) Repayment of Participation Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
(f) Documentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
(g) Determinations to Honor Drawing Requests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
(h) Nature of Participation and Reimbursement Obligations . . . . . . . . . . . . . . . . . . . . . . . 39
(i) Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
(j) Liability for Acts and Omissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
(k) Termination of Letter of Credit Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
(l) Transitional Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
(m) Resignation of Issuing Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
2.11 Currency Repayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
2.12 Optional Currency Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
ARTICLE III
BID LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
3.01 Bid Loan Requests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
3.02 Bidding for, Accepting and Making Bid Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
(a) Bidding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
(b) Accepting Bids . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
(c) Funding Bid Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
(d) Several Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
3.03 Evidence of Bid Loan Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE IV
INTEREST RATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
4.01 Interest Rate Options on Revolving Credit Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
(a) Selection of Interest Rate Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
(b) Interest Rate Options Available . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
4.02 Rate Quotations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
4.03 Euro-Rate Unascertainable; Illegality; Increased Costs;
Deposits Not Available . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
4.04 Selection of Interest Rate Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
4.05 Interest Rates Payable on Swing Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
4.06 Interest Rates Payable on Bid Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
4.07 Interest After Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
4.08 Maximum Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE V
PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
5.01 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
5.02 Pro Rata Treatment of Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
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5.03 Interest Payment Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
5.04 Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
5.05 Mandatory Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
(a) Currency Fluctuations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
(b) Application Among Interest Rate Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
5.06 Additional Compensation in Certain Circumstances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
(a) Increased Costs or Reduced Return Resulting From
Taxes, Reserves, Capital Adequacy Requirements,
Expenses, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
(b) Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
(c) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
(d) Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
5.07 Interbank Market Presumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
5.08 Judgment Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
(a) Currency Conversion Procedures for Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
(b) Indemnity in Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE VI
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
6.01 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
(a) Organization and Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
(b) Capitalization and Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
(c) Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
(d) Power and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
(e) Validity and Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
(f) No Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
(g) Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
(h) Title to Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
(i) Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
(j) Use of Proceeds; Margin Stock; Section 20 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . 60
(k) Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
(l) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
(m) Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
(n) No Event of Default; Compliance with Instruments . . . . . . . . . . . . . . . . . . . . . . . . . 62
(o) Patents, Trademarks, Copyrights, Licenses, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . 62
(p) Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
(q) Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
(r) Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
(s) Investment Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
(t) Plans and Benefit Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
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(u) Employment Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
(v) Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
(w) Senior Debt Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
(x) Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
6.02 Updates to Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
ARTICLE VII
CONDITIONS OF LENDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
7.01 Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
7.02 Each Additional Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
7.03 Subsequent Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
ARTICLE VIII
COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
8.01 Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
(a) Preservation of Existence, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
(b) Payment of Liabilities, Including Taxes, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . 71
(c) Maintenance of Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
(d) Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
(e) Maintenance of Patents, Trademarks, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
(f) Visitation Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
(g) Keeping of Records and Books of Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
(h) Plans and Benefit Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
(i) Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
(j) Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
(k) Subsequent Credit Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
(l) Subsidiary Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
8.02 Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
(a) Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
(b) Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
(c) Contingent Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
(d) Loans and Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
(e) Dividends and Related Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
(f) Liquidations, Mergers, Consolidations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
(g) Dispositions of Assets or Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
(h) Affiliate Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
(i) Subsidiaries, Partnerships and Joint Ventures . . . . . . . . . . . . . . . . . . . . . . . . . . 80
(j) Continuation of or Change in Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
(k) Plans and Benefit Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
(l) Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
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(m) Issuance of Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
(n) Changes in Organizational Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
(o) Minimum Fixed Charge Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
(p) Maximum Leverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
(q) Minimum Tangible Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
(r) Modifications of Other Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
(s) Prepayment of Note Put Agreement Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . 82
(t) Lease Financing Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
(u) Foreign Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
(v) Inconsistent Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
8.03 Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
(a) Quarterly Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
(b) Annual Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
(c) Certificates of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
(d) Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
(e) Notice of Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
(f) Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
(g) Other Reports and Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
(h) Notices Regarding Benefit Arrangements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
(i) Access to the Company's Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
(j) Notices Regarding Lease Financing Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . 86
(k) Notices Regarding Repurchases of Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
ARTICLE IX
GUARANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
9.01 Guaranty of Payment and Performance of Guaranteed Obligations . . . . . . . . . . . . . . . . . . . . . 87
9.02 Certain Waivers of the Guarantors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
9.03 Obligations Unconditional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
9.04 Waiver of Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
9.05 Actions with Respect to Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
9.06 Effect of Bankruptcy; Revival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
9.07 Survival of Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
9.08 Right of Set-Off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
9.09 Limitation on Amount of Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
9.10 Limitation on Scope of Certain Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
ARTICLE X
DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
10.01 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
10.02 Consequences of Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
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ARTICLE XI
THE AGENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
11.01 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
11.02 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
11.03 Nature of Duties; Independent Credit Investigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
11.04 Actions in Discretion of Agents; Instructions from the Lenders . . . . . . . . . . . . . . . . . . . . . . . 97
11.05 Exculpatory Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
11.06 Reimbursement and Indemnification of Agents by Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
11.07 Reliance by Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
11.08 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
11.09 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
11.10 Lenders in Their Individual Capacities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
11.11 [RESERVED] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
11.12 Equalization of Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
11.13 Successor Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
11.14 Availability of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
11.15 Calculations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
11.16 Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
ARTICLE XII
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
12.01 Modifications, Amendments or Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
12.02 No Implied Waivers; Cumulative Remedies; Writing Required . . . . . . . . . . . . . . . . . . . . . . . . 103
12.03 Reimbursement and Indemnification by the Borrowers; Taxes . . . . . . . . . . . . . . . . . . . . . . . . 103
(a) Reimbursement and Indemnification of Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
(b) Reimbursement and Indemnification of Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
12.04 Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
12.05 Funding by Branch, Subsidiary or Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
(a) Notional Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
(b) Actual Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
12.06 Notices; Lending Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
12.07 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
12.08 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
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12.09 Prior Understanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
12.10 Duration; Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
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TABLE OF CONTENTS
12.11 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
(a) Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
(b) Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
(c) Other Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
(d) Federal Reserve Bank Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
12.12 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
(b) Sharing Information With Affiliates of the Lenders . . . . . . . . . . . . . . . . . . . . . 108
12.13 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
12.14 Agent's or Lender's Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
12.15 Exceptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
12.16 CONSENT TO FORUM; WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
12.17 Waivers by Borrowers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
12.18 Tax Withholding Forms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
12.19 Effective Date Transition Provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
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LIST OF SCHEDULES AND EXHIBITS
SCHEDULE 1.01(A) - EURO-RATE MARGIN/LETTER OF CREDIT FEE, BASE RATE MARGIN, FACILITY FEE RATE
SCHEDULE 1.01(B) - COMMITMENTS OF LENDERS
SCHEDULE 1.01(C) - EXISTING LIENS
SCHEDULE 2.01(b) - CARRYOVER REVOLVING CREDIT LOANS
SCHEDULE 2.10(l) - CARRYOVER LETTERS OF CREDIT
SCHEDULE 6.01(a) - QUALIFICATIONS TO DO BUSINESS
SCHEDULE 6.01(b) - OPTIONS ON COMPANY STOCK
SCHEDULE 6.01(c) - SUBSIDIARIES; RIGHTS TO PURCHASE SUBSIDIARY SHARES
SCHEDULE 6.01(h) - OWNED AND LEASED REAL PROPERTY
SCHEDULE 6.01(l) - TAX ARRANGEMENTS WITH KMART
SCHEDULE 6.01(m) - CONSENTS AND APPROVALS
SCHEDULE 6.01(p) - INSURANCE POLICIES
SCHEDULE 6.01(t) - EMPLOYEE BENEFIT PLAN DISCLOSURES
SCHEDULE 6.01(v) - ENVIRONMENTAL DISCLOSURES
SCHEDULE 8.02(a) - EXISTING INDEBTEDNESS
EXHIBIT 1.01(A) - ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT 2.05(a) - REVOLVING CREDIT LOAN REQUEST
EXHIBIT 2.05(b) - SWING LOAN REQUEST
EXHIBIT 3.01 - BID LOAN REQUEST
EXHIBIT 3.02 - FORM OF DESIGNATION AGREEMENT
EXHIBIT 7.01(e)(i) - OPINIONS OF COUNSEL
EXHIBIT 8.03(c) - COMPLIANCE CERTIFICATE
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CREDIT AGREEMENT
THIS AMENDED AND RESTATED MULTICURRENCY CREDIT AGREEMENT is dated as of
March 28, 1995, and amended and restated as of October 17, 1997, is made by and
among BORDERS GROUP, INC. (the "Company"), Borders, Inc. ("Borders"), Walden
Book Company, Inc. ("Walden") and BGP (UK) Limited ("Books Holding") (the
Company, Borders, Walden and Books Holding hereinafter referred to individually
as a "Borrower" or jointly as the "Borrowers"), the LENDERS (as hereinafter
defined), PNC BANK, NATIONAL ASSOCIATION, in its capacity as administrative
agent for the Lenders under this Agreement (hereinafter referred to in such
capacity as the "Administrative Agent"), THE FIRST NATIONAL BANK OF CHICAGO, in
its capacity as syndication agent for the Lenders under this Agreement
(hereinafter referred to in such capacity as the "Syndication Agent") and
BANKERS TRUST COMPANY, in its capacity as real estate administrative agent for
the Lenders under this Agreement (hereinafter referred to in such capacity as
the "Real Estate Administrative Agent").
WITNESSETH:
WHEREAS, the Company, Borders, Walden, Planet Music, Inc. ("Planet"), the
Lenders, the Administrative Agent and the Syndication Agent (collectively, the
"Prior Agreement Parties") are parties to that certain Credit Agreement dated as
of March 28, 1995 (as heretofore amended, the "Prior Agreement"); and
WHEREAS, the Prior Agreement Parties desire to amend and restate the Prior
Agreement to (i) increase the aggregate amount of Commitments, (ii) eliminate
Planet as a Borrower, (iii) add Books Holding as a Borrower, (iv) eliminate and
add certain financial institutions as Lenders, and (v) amend certain other terms
and conditions of the Prior Agreement.
NOW, THEREFORE, the parties hereto, in consideration of their mutual
covenants and agreements hereinafter set forth and intending to be legally bound
hereby, covenant and agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.01 Certain Definitions. In addition to words and terms defined
elsewhere in this Agreement, the following words and terms shall have the
following meanings, respectively, unless the context hereof clearly requires
otherwise:
Administrative Agent shall mean PNC Bank, National Association,
and its successors and assigns.
Affiliate as to any Person shall mean any other Person (i) which
directly or indirectly controls, is controlled by, or is under common control
with such Person, (ii) which beneficially owns or holds 5% or more of any class
of the voting or other equity interests of such Person, or (iii) 5% or more of
any class of voting interests or other equity interests of which is
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beneficially owned or held, directly or indirectly, by such Person. Control,
as used in this definition, shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of
a Person, whether through the ownership of voting securities, by contract or
otherwise, including the power to elect a majority of the directors or trustees
of a corporation or trust, as the case may be.
Agents shall mean the Administrative Agent, Syndication Agent and
the Real Estate Administrative Agent.
Agreement shall mean this Credit Agreement as the same may be
supplemented or amended from time to time including all schedules and exhibits.
Assignee Lender shall mean a financial institution which becomes
a party to this Agreement by executing an Assignment and Assumption Agreement.
Assignment and Assumption Agreement shall mean an Assignment and
Assumption Agreement by and among a Purchasing Lender, the Transferor Lender and
the Administrative Agent, as Administrative Agent and on behalf of the remaining
Lenders, substantially in the form of Exhibit 1.01(A) or in such other form as
may be acceptable to the Administrative Agent.
Assignor Lender shall mean the selling Lender pursuant to an
Assignment and Assumption Agreement.
Authorized Officer shall mean the Chief Executive Officer,
President, Chief Operating Officer, Chief Financial Officer, Vice
President-Finance, Vice President, Group Planning and Resource Management, Vice
President, Planning or Treasurer of any Borrower.
Base Rate shall mean the greater of (i) the interest rate per
annum announced from time to time by the Administrative Agent at its Principal
Office as its then prime rate, which rate may not be the lowest rate then being
charged commercial borrowers by the Administrative Agent, or (ii) the Federal
Funds Effective Rate plus 1/2% per annum. Such interest rate shall change
automatically from time to time effective as of the effective date of each
change, as determined by the Administrative Agent in its sole discretion.
Base Rate Borrowing Tranche shall mean a Borrowing Tranche
consisting of all Revolving Credit Loans to which a Base Rate Option applies.
Base Rate Option shall mean the option of the Borrowers to have
Revolving Credit Loans bear interest at the rate and under the terms and
conditions set forth in Section 4.01(a)(i).
BBA shall have the meaning assigned to that term in the
definition of Euro-Rate.
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Benefit Arrangement shall mean at any time an "employee benefit
plan," within the meaning of Section 3(3) of ERISA, which is neither a Plan nor
a Multiemployer Plan and which is maintained, sponsored or otherwise contributed
to, by the Company or any of its Subsidiaries.
Bid shall have the meaning assigned to such term in Section 3.02.
Bid Loan Borrowing Date shall mean, with respect to any Bid Loan,
the date for the making thereof which shall be a Business Day.
Bid Loan Euro-Rate Option shall mean the option of the Borrowers
to request that the Lenders submit Bids to make Bid Loans bearing interest at a
rate per annum quoted by such Lenders at the Euro-Rate in effect two Business
Days before the Borrowing Date of such Bid Loan plus a Euro-Rate Bid Loan
Spread.
Bid Loan Fixed Rate Option shall mean the option of the Borrowers
to request that the Lenders submit Bids to make Bid Loans bearing interest at a
fixed rate per annum quoted by such Lenders as a numerical percentage (and not
as a spread over the Euro-Rate).
Bid Loan Period shall have the meaning assigned to such term in
Section 3.01.
Bid Loan Request shall have the meaning assigned to such term in
Section 3.01.
Bid Loans shall mean collectively and Bid Loan shall mean
separately all of the Bid Loans or any Bid Loan made by any of the Lenders to
the Borrowers pursuant to Sections 3.01 and 3.02.
Books Etc. shall mean Books Etc. Limited, company number
1580771, organized and existing under the laws of the United Kingdom, and its
permitted successors and assigns.
Books Holding shall mean BGP (UK) Limited, company number
3434045, organized and existing under the laws of the United Kingdom, and its
permitted successors and assigns.
Borders shall mean Borders, Inc., a corporation organized and
existing under the laws of the State of Colorado, and its permitted successors
and assigns.
Borders' Note shall mean that certain promissory note in the
original principal amount of $192,114,261, dated May 23, 1995, executed by
Borders and payable to Walden and which has been assigned to WPI.
Borrowers shall mean collectively and Borrower shall mean
separately the Company, Borders, Walden and Books Holding and, after the
Subsequent Effective Date, Books Etc..
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Borrowing Date shall mean, with respect to any Loan, the date for
the making thereof or the renewal or conversion thereof to the same or a
different Interest Rate Option, which shall be a Business Day.
Borrowing Tranche shall mean specified portions of Loans
outstanding to each Borrower as follows: (i) any Loans to one Borrower to which
a Euro-Rate Option or a Bid Loan Fixed Rate Option applies and which have the
same Interest Period and which are denominated in the same currency shall
constitute one Borrowing Tranche and (ii) all Loans to which a Base Rate Option
applies shall constitute one Borrowing Tranche.
BPI shall mean Borders Properties, Inc., a corporation organized
and existing under the laws of the State of Delaware, and its permitted
successors and assigns.
Business Day shall mean any day other than a Saturday or Sunday
or a legal holiday on which commercial banks are authorized or required to be
closed for business in Pittsburgh, Pennsylvania or Chicago, Illinois, and (i) if
the applicable Business Day relates to any Loan to which the Euro-Rate Option
applies, such day must also be a day on which dealings are carried on in the
London Interbank market, and (ii) with respect to advances or payments of Loans
or any other matters relating to Loans denominated in an Optional Currency, such
day also shall be a day on which (a) deposits in the relevant Optional Currency
are carried on in the applicable interbank market, and (b) all applicable banks
into which Loan proceeds may be deposited are open for business and foreign
exchange markets are open for business in the principal financial center of the
country of such Optional Currency.
Capitalized Lease of a Person means any lease of property by
such Person as lessee which would be capitalized on a balance sheet of such
Person prepared in accordance with GAAP.
Capitalized Lease Obligations of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with GAAP.
Capitalized Rent Expense shall mean an amount equal to four times
the sum of Rent Expense and Lease Financing Rent Expense.
Change in Control shall mean (a) the direct or indirect
acquisition or ownership by any Person or any syndicate or other group formed or
existing for the purpose of acquiring, holding or disposing of securities of the
Company within the meaning of Section 13(d)(3) of the Securities Exchange Act of
1934 of stock of the Company having in the aggregate more than 30% of the voting
power in the general election of directors (including securities convertible by
their terms into stock having such voting power) or (b) during any period of 12
consecutive calendar months, commencing on the date of this Agreement, an event
or circumstance as a result of which those individuals (the "Continuing
Directors") who (i) were directors of the Company on the first day of each such
period or (ii) subsequently became directors of the Company and whose initial
election or initial nomination for election subsequent to that date was approved
by a majority of the
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Continuing Directors then on the Board of Directors of the Company, cease to
constitute a majority of the Board of Directors of the Company.
Commitment shall mean as to any Lender at any date, the
obligation of such Lender at such date to (a) make Revolving Credit Loans and
(b) participate in Swing Loans, in an aggregate principal amount at any one time
outstanding not to exceed the amount set forth opposite its name on Schedule
1.01(B) in the column labeled "Amount of Commitment," as such Schedule may be
amended or supplemented from time to time in accordance with the provisions of
Sections 2.01(c) and 12.11 hereof, and Commitments shall mean the aggregate
Commitments of all of the Lenders, in either case as such amounts may be reduced
or terminated pursuant to Section 2.04 hereof or cancelled pursuant to Section
10.02 hereof.
Company shall mean Borders Group, Inc., a corporation organized
and existing under the laws of the State of Michigan, and its permitted
successors and assigns.
Computation Date shall have the meaning assigned to that term in
Section 2.09(a).
Consolidated Cash Flow from Operations for any period of
determination shall mean the sum of Consolidated Net Income (excluding (i)
extraordinary gains, but not losses and (ii) income or loss of any Person in
which the Company owns less than 50% of the shares of capital stock, partnership
interests or membership interests), depreciation, amortization, interest
expense, Rent Expense, Lease Financing Rent Expense and income tax expense, in
each case of the Company and its Subsidiaries for such period determined and
consolidated in accordance with GAAP; provided, however, that there shall be
excluded in calculating Consolidated Net Income any losses attributable to the
use of a fair value methodology for recognition and measurement of impairment of
goodwill not identified with impaired assets in accordance with Accounting
Principles Board Opinion No. 17.
Consolidated Funded Indebtedness shall mean as of any date of
determination, the aggregate of the Indebtedness for borrowed money (including
any Capitalized Lease Obligations and any Contingent Obligations in respect of
borrowed money or Capitalized Lease Obligations of third Persons) of the Company
and its Subsidiaries, all as determined and consolidated in accordance with
GAAP, plus the amount of the Contingent Obligations arising under the Lease
Financing Guarantee.
Consolidated Net Income shall mean for any period the aggregate
of the net income of the Company and its Subsidiaries for such period determined
and consolidated in accordance with GAAP.
Consolidated Tangible Net Worth shall mean as of any date of
determination total stockholders' equity less intangible assets of the Company
and its Subsidiaries as of such date determined and consolidated in accordance
with GAAP.
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Consolidated Total Capital shall mean as of any date of
determination the sum of (a) total stockholders' equity of the Company and its
Subsidiaries as of such date determined and consolidated in accordance with
GAAP, plus (b) Consolidated Funded Indebtedness.
Contingent Obligation of any Person shall mean any obligation of
such Person guaranteeing or in effect guaranteeing any liability or obligation
of any other Person (other than, if the first Person is a Borrower, another
Borrower) in any manner, whether directly or indirectly, including any
agreement, undertaking or arrangement to indemnify or hold harmless any other
Person (other than, if the first Person is a Borrower, another Borrower), any
performance bond or other suretyship arrangement, any contingent agreement to
purchase or provide funds for such liability or obligation, any comfort letter,
any take-or-pay contract, and any other form of assurance against loss, except
endorsements of negotiable or other instruments for deposit or collection in the
ordinary course of business.
Designated Lender shall mean a special purpose corporation that
is engaged in making, purchasing or otherwise investing in commercial loans in
the ordinary course of its business, that issues (or the parent of which issues)
commercial paper rated at least "Prime- 2" (or the then equivalent grade) by
Moody's Investor Service, Inc. ("Moody's") or "A-2" (or the then equivalent
grade) by Standard and Poor's Ratings Services, a division of The McGraw-Hill
Companies, Inc. ("S&P"), that is organized under the laws of the United States
or any state thereof, and that is not otherwise a Lender, but has been
designated by a Lender to fund Bid Loans pursuant to a Designation Agreement.
Designating Lender shall have the meaning assigned to such term
in Section 3.02(c).
Designation Agreement shall mean a designation agreement entered
into by a Lender (other than a Designated Lender), a Designated Lender and the
Company (on its behalf and on behalf of the Borrowers), and accepted by the
Administrative Agent, in substantially the form of Exhibit 3.02(c) hereto.
Distributions shall have the meaning assigned to such term in
Section 8.02(e).
Dollar, Dollars, U.S. Dollars and the symbol $ shall mean lawful
money of the United States of America.
Dollar Equivalent shall mean, with respect to any amount of any
currency, the Equivalent Amount of such currency expressed in Dollars.
Domestic Joint Venture shall mean individually and Domestic Joint
Ventures shall mean collectively any corporation, partnership, limited liability
company, joint venture or other entity (i) organized under the laws of any state
of the United States of America for the purpose of doing business primarily in
the United States of America and (ii) in which the Company and its Subsidiaries
own less than 50% of the capital stock, partnership interests, membership
interests or other ownership interests.
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Domestic Purchase means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which the
Company or any of its Subsidiaries (a) acquires (i) any ongoing business
organized under the laws of any state of the United States of America for the
purpose of doing business primarily in the United States of America or (ii) all
or substantially all of the assets of any Person or division thereof which
assets are located primarily in the United States of America, whether through
purchase of assets, merger or otherwise, or (b) directly or indirectly acquires
(in one transaction or as the most recent transaction in a series of
transactions) all or substantially all of the securities of a corporation
organized under the laws of any state of the United States of America for the
purpose of doing business primarily in the United States of America, which
securities have ordinary voting power for the election of directors (other than
securities having such power only by reason of the happening of a contingency)
or all or substantially all (by percentage and voting power) of the outstanding
partnership interests of a partnership or membership interests of a limited
liability company, in either case which partnership or limited liability company
is organized under the laws of any state of the United States of America for the
purpose of doing business primarily in the United States of America.
Domestic Subsidiary shall mean individually and Domestic
Subsidiaries shall mean collectively any Subsidiary of any Borrower organized
under the laws of any state of the United States of America for the purpose of
doing business primarily in the United States of America.
Effective Date shall mean the effective date of the amendment and
restatement of the Prior Agreement, which shall occur on October 17, 1997 or, if
all the conditions specified in Sections 7.01 and 7.02 have not been satisfied
or waived by such date, not later than November 30, 1997, as designated by the
Company by at least three (3) Business Days' advance notice to the
Administrative Agent, or such other date as the Company and the Lenders agree.
The closing on the Effective Date shall take place at 10:00 A.M., Chicago time,
on the Effective Date at the offices of Schiff Hardin & Waite, 7200 Sears Tower,
Chicago, Illinois 60606, or at such other time and place as the parties agree.
Environmental Complaint shall mean any written complaint
(including but not limited to any complaint alleging a cause of action for
personal injury or property damage or natural resource damage or equitable
relief), order, notice of violation, citation, request for information issued
pursuant to any Environmental Laws by an Official Body, subpoena or other
written notice of any type relating to, arising out of, or issued pursuant to
any of the Environmental Laws or any Environmental Conditions, as the case may
be.
Environmental Conditions shall mean any conditions of the
environment, including the work place, the ocean, natural resources (including
flora or fauna), soil, surface water, ground water, any actual or potential
drinking water supply sources, substrata or the ambient air, relating to or
arising out of, or caused by the use, handling, storage, treatment, recycling,
generation, transportation, release, spilling, leaking, pumping, emptying,
discharging, injecting, escaping, leaching, disposal, dumping, threatened
release or other management or mismanagement of Regulated Substances.
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Environmental Laws shall mean all federal, state, local and
foreign Laws and regulations, including permits, licenses, authorizations,
bonds, orders, judgments, consent decrees issued, or entered into, pursuant
thereto, relating to pollution or protection of human health or the environment
or employee safety in the work place.
Equivalent Amount shall mean, at any time, as determined by the
Administrative Agent (which determination shall be conclusive absent manifest
error), with respect to an amount of any currency (the "Reference Currency")
which is to be computed as an equivalent amount of another currency (the
"Equivalent Currency"): (i) if the Reference Currency and the Equivalent
Currency are the same, the amount of such Reference Currency, or (ii) if the
Reference Currency and the Equivalent Currency are not the same, the amount of
such Equivalent Currency converted from such Reference Currency at the
Administrative Agent's spot selling rate (based on the market rates then
prevailing and available to the Administrative Agent) for the sale of such
Equivalent Currency for such Reference Currency at a time determined by the
Administrative Agent on the second Business Day immediately preceding the event
for which such calculation is made.
Equivalent Currency shall have the meaning assigned to that term
in the definition of Equivalent Amount.
ERISA shall mean the Employee Retirement Income Security Act of
1974, as the same may be amended or supplemented from time to time, and any
successor statute of similar import, and the rules and regulations thereunder,
as from time to time in effect.
ERISA Group shall mean, at any time, the Borrowers and all
members of a controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control and all other entities which,
together with the Borrowers, are treated as a single employer under Section 414
of the Internal Revenue Code.
Euro-Rate shall mean the following:
(A) with respect to the Dollar Loans comprising any
Euro-Rate Borrowing Tranche for any Interest Period, the interest rate per annum
determined by the Administrative Agent by dividing (the resulting quotient
rounded upward to the nearest 1/100th of 1% per annum) (i) the rate of interest
determined by the Administrative Agent in accordance with its usual procedures
(which determination shall be conclusive absent manifest error) to be the
average of the London interbank offered rates for Dollars quoted by British
Bankers' Association ("BBA") as set forth on Dow Jones Market Service display
page 3750 (or appropriate successor or, if BBA or its successor ceases to
provide such quotes, a comparable replacement) at approximately 11:00 a.m.
London time two (2) Business Days prior to the first day of such Interest Period
for an amount comparable to such Borrowing Tranche and having a Borrowing Date
and a maturity comparable to such Interest Period by (ii) a number equal to 1.00
minus the Euro-Rate Reserve Percentage. Such Euro-Rate may also be expressed by
the following formula:
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Average of London interbank offered rates
on Dow Jones Market Service display page 3750 quoted
Euro-Rate = by BBA or appropriate successor
-------------------------------
1.00 - Euro-Rate Reserve Percentage
The Euro-Rate shall be adjusted with respect to any Euro-Rate Borrowing Tranche
outstanding on the effective date of any change in the Euro- Rate Reserve
Percentage as of such effective date. The Administrative Agent shall give
prompt notice to the Borrowers of the Euro-Rate as determined or adjusted in
accordance herewith, which determination shall be conclusive absent manifest
error.
(B) with respect to Optional Currency Loans comprising any
Euro-Rate Borrowing Tranche for any Interest Period, the interest rate per annum
determined by the Administrative Agent by dividing (the resulting quotient
rounded upward to the nearest 1/100th of 1 percent per annum) (i) the rate of
interest per annum ("LIBO Rate") determined by the Administrative Agent in
accordance with its usual procedures (which determination shall be conclusive
absent manifest error) to be the rate of interest per annum for deposits in the
relevant Optional Currency quoted by BBA as set forth on the relevant Dow Jones
Market Service display page (or, if no such quotation is available on such Dow
Jones Market Service display page, on the appropriate Reuters Screen) at
approximately 9:00 a.m., Eastern time, two (2) Business Days prior to the first
day of such Interest Period for an amount comparable to such Borrowing Tranche
and having a Borrowing Date and a maturity comparable to such Interest Period by
(ii) a number equal to 1.00 minus the Euro-Rate Reserve Percentage. Such
Euro-Rate may also be expressed by the following formula:
Euro-Rate = LIBO Rate
-------------------------------
1 - Euro-Rate Reserve Percentage
The Euro-Rate shall be adjusted with respect to any Euro-Rate Option
outstanding on the effective date of any change in the Euro-Rate Reserve
Percentage as of such effective date. The Administrative Agent shall give
prompt notice to the Borrower of the Euro-Rate as determined or adjusted in
accordance herewith, which determination shall be conclusive absent manifest
error. The Euro-Rate for any Loans shall be based upon the Euro-Rate for the
currency in which such Loans are requested.
Euro-Rate Bid Loan shall mean any Bid Loan that bears interest
under the Bid Loan Euro-Rate Option.
Euro-Rate Bid Loan Spread shall mean the spread quoted by a
Lender in its Bid to apply to such Lender's Bid Loan if such Lender's Bid is
accepted. The Euro-Rate Bid Loan Spread shall be quoted as a percentage rate
per annum and expressed in multiples of 1/100th of one percentage point to be
either added to (if it is positive) or subtracted from (if it is negative) the
Euro-Rate in effect two (2) Business Days before the Borrowing Date with respect
to such Bid Loan. Interest on Euro-Rate Bid Loans shall be computed based on a
year of 360 days and actual days elapsed.
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Euro-Rate Borrowing Tranche shall mean a Borrowing Tranche
consisting of all Revolving Credit Loans to one Borrower to which the Euro-Rate
Option applies and which have the same Interest Period.
Euro-Rate Margin shall mean, at any time, for any Revolving
Credit Loans accruing interest at the Euro-Rate Option, a percentage equal to
the "Euro-Rate Margin" set forth in Schedule 1.01(A) opposite the then-current
Fixed Charge Coverage Ratio.
Euro-Rate Option shall mean the option of the Borrowers to have
Revolving Credit Loans bear interest at the rate and under the terms and
conditions set forth in Section 4.01(a)(ii) or to have Bid Loans made at a Bid
Loan Euro-Rate Option.
Euro-Rate Reserve Percentage shall mean the maximum percentage
(expressed as a decimal rounded upward to the nearest 1/100 of 1%) as determined
by the Administrative Agent which is in effect during any relevant period, (i)
as prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the reserve requirements (including supplemental,
marginal and emergency reserve requirements) with respect to eurocurrency
funding (currently referred to as "Eurocurrency Liabilities") of a member bank
in such System; or (ii) to be maintained by a Lender as required for reserve
liquidity, special deposit, or a similar purpose by any governmental or monetary
authority of any country or political subdivision thereof (including any central
bank), against (A) any category of liabilities that includes deposits by
reference to which a Euro-Rate is to be determined, or (B) any category of
extension of credit or other assets that includes Loans or Borrowing Tranches to
which a Euro-Rate applies.
Event of Default shall mean any of the Events of Default
described in Section 10.01.
Expiration Date shall mean, with respect to the Commitments,
October 16, 2002, or such earlier date as of which the Commitments shall have
been terminated pursuant to Section 2.04 hereof or cancelled pursuant to Section
10.02 hereof.
Facility Fee shall mean the fee referred to in Section 2.03(b).
Facility Fee Rate shall mean at any time a rate per annum equal
to the greater of (i) the "Facility Fee Rate" set forth on Schedule 1.01(A)
opposite the then-current Fixed Charge Coverage Ratio or (ii) the "Facility Fee
Rate" as defined in, and as then in effect under, the Lease Credit Agreement.
Federal Funds Effective Rate for any day shall mean the rate per
annum (based on a year of 360 days and actual days elapsed and rounded upward to
the nearest 1/100 of 1%) announced by the Federal Reserve Bank of New York (or
any successor) on such day as being the weighted average of the rates on
overnight Federal funds transactions arranged by Federal funds brokers on the
previous trading day, as computed and announced by such Federal Reserve Bank (or
any successor) in substantially the same manner as such Federal Reserve Bank
computes and announces the weighted average it refers to as the "Federal Funds
Effective Rate" as of the date of
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<PAGE> 20
this Agreement; provided, if such Federal Reserve Bank (or its successor) does
not announce such rate on any day, the "Federal Funds Effective Rate" for such
day shall be the Federal Funds Effective Rate for the last day on which such
rate was announced.
Fee Letters shall mean those certain letter agreements dated
September, 1997, between the Company and any or all of the Agents, and all other
letter agreements between the Company and any party hereto under which the
parties thereto designate that such letter agreement is a fee letter for
purposes of this Agreement, as the same may be supplemented or amended from time
to time in accordance therewith.
Fees shall mean the Facility Fee, and the fees payable under the
Fee Letters.
Financed Lease shall mean a lease of real property, improvements
on real property or real property and improvements thereon by the Company or any
of its Subsidiaries entered into pursuant to the Participation Agreement.
Financial Projections shall have the meaning assigned to that
term in Section 6.01(i)(B).
Fiscal Quarter shall mean the 13/14 week period commencing on the
day after the last day of the preceding Fiscal Quarter and ending on the Sunday
preceding the last Wednesday in each of April (first), July (second), October
(third) and January (fourth) of each Fiscal Year.
Fiscal Year shall mean the 52/53 week period commencing on the
day after the last day of the preceding Fiscal Year and ending on the Sunday
preceding the last Wednesday in January. By way of illustration, the Company's
1996 Fiscal Year ended January 26, 1997.
Fixed Charge Coverage Ratio shall mean the ratio of Consolidated
Cash Flow from Operations to Fixed Charges.
Fixed Charges shall mean for any period of determination the sum
of interest expense, Rent Expense, Lease Financing Rent Expense and scheduled
principal installments on Indebtedness (as adjusted for prepayments, and
including amortization payments under Capitalized Leases), in each case of the
Company and its Subsidiaries for such period determined and consolidated in
accordance with GAAP.
Fixed Rate shall mean a fixed interest rate quoted by a Lender in
its Bid to apply such Lender's Bid Loan over the term of such Bid Loan if such
Lender's Bid Loan is accepted.
Fixed Rate Bid Loan shall mean a Bid Loan that bears interest
under the Bid Loan Fixed Rate Option.
Foreign Joint Venture shall mean individually and Foreign Joint
Ventures shall mean collectively any corporation, partnership, limited liability
company, joint venture or other
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<PAGE> 21
entity (i) organized under the laws of any jurisdiction other than a state of
the United States of America or formed primarily for the purpose of doing
business outside of the United States of America and (ii) in which the Company
and its Subsidiaries own less than 50% of the capital stock, partnership
interests, membership interests or other ownership interests.
Foreign Purchase means any transaction, or any series of related
transactions, consummated on or after the Effective Date, by which the Company
or any of its Subsidiaries (a) acquires (i) any ongoing business organized under
the laws of any jurisdiction other than a state of the United States of America
or formed primarily for the purpose of doing business outside the United States
of America or (ii) all or substantially all of the assets of any Person or
division thereof are located outside the United States of America, whether
through purchase of assets, merger or otherwise, or (b) directly or indirectly
acquires (in one transaction or as the most recent transaction in a series of
transactions) all or substantially all of the securities of a corporation
organized under the laws of any jurisdiction other than a state of the United
States of America or formed primarily for the purpose of doing business outside
the United States of America, which securities have ordinary voting power for
the election of directors (other than securities having such power only by
reason of the happening of a contingency) or all or substantially all (by
percentage and voting power) of the outstanding partnership interests of a
partnership or membership interests of a limited liability company, in either
case which partnership or limited liability company is organized under the laws
of any jurisdiction other than a state of the United States of America or formed
primarily for the purpose of doing business outside the United States of
America.
Foreign Subsidiary shall mean individually and Foreign
Subsidiaries shall mean collectively any Subsidiary of the Company organized
under the laws of any jurisdiction other than a state of the United States of
America or formed primarily for the purpose of doing business outside the United
States of America.
Fulfillment shall mean Borders Fulfillment, Inc., a corporation
organized and existing under the laws of the State of Delaware, and its
permitted successors and assigns.
Funding Office shall mean, with respect to Loans denominated in
Dollars, the main lending office of the Administrative Agent in Pittsburgh,
Pennsylvania and, with respect to Loans denominated in Optional Currencies, such
lending office, affiliate or correspondent bank of the Administrative Agent as
may be designated by the Administrative Agent with respect to any Optional
Currency.
GAAP shall mean generally accepted accounting principles as are
in effect in the United States of America from time to time, subject to the
provisions of Section 1.03, and applied on a basis consistent with the
Historical Statements both as to classification of items and amounts.
Governmental Acts shall have the meaning assigned to that term in
Section 2.10(i).
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<PAGE> 22
Guaranteed Obligations shall have the meaning assigned to that
term in Section 9.01.
Guarantors shall mean collectively and Guarantor shall mean
separately the Company, Borders, Walden, Books Holding, Planet, BPI, WPI,
OnLine, Outlet, Fulfillment, Library, and any new Subsidiary which executes a
letter agreement pursuant to the provisions of this Agreement.
Historical Statements shall have the meaning assigned to that
term in Section 6.01(i)(i).
Indebtedness shall mean as to any Person at any time, any and all
indebtedness, obligations or liabilities (whether matured or unmatured,
liquidated or unliquidated, direct or indirect, absolute or contingent, or joint
or several) of such Person for or in respect of: (i) borrowed money, (ii)
amounts raised under or liabilities in respect of any note purchase or
acceptance credit facility, (iii) reimbursement or repurchase obligations under
any letter of credit, note or accounts receivable financing arrangement,
currency swap agreement, interest rate swap, cap, collar or floor agreement or
other interest rate management device, (iv) Capitalized Lease Obligations, (v)
obligations, whether or not assumed, secured by Liens on or payable out of the
proceeds or production from Property now or hereafter owned or acquired by such
Person, (vi) any other transaction (including forward sale or purchase
agreements and conditional sales agreements) having the commercial effect of a
borrowing of money entered into by such Person to finance its operations or
capital requirements (but not including trade payables and accrued expenses
incurred in the ordinary course of business which are not represented by a
promissory note or other evidence of indebtedness and which are not more than
thirty (30) days past due), or (vii) any Contingent Obligation in respect of
borrowed money or Capitalized Lease Obligations of another Person.
Ineligible Security shall mean any security which may not be
underwritten or dealt in by member banks of the Federal Reserve System under
Section 16 of the Banking Act of 1933 (12 U.S.C. Section 24, Seventh), as
amended.
Insolvency Proceeding shall mean, with respect to any Person, (a)
a case, action or proceeding with respect to such Person (i) before any court or
any other Official Body under any bankruptcy, insolvency, reorganization or
other similar Law now or hereafter in effect, or (ii) for the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator
(or similar official) of the Company or any of its Subsidiaries or otherwise
relating to the liquidation, dissolution, winding-up or relief of such Person,
or (b) any general assignment for the benefit of creditors, composition,
marshaling of assets for creditors, or other similar arrangement in respect of
such Person's creditors generally or any substantial portion of its creditors
undertaken under any Law.
Interest Payment Date shall mean each date specified for the
payment of interest in Section 5.03.
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<PAGE> 23
Interest Period shall mean with respect to a Euro-Rate Borrowing
Tranche, a period of one, two, three or six months commencing on a Business Day
selected by the Company pursuant to this Agreement. Such Interest Period shall
end on (but exclude) the day which corresponds numerically to such date one,
two, three or six months thereafter; provided, however, that if there is no such
numerically corresponding day in such next, second, third or sixth succeeding
month, such Interest Period shall end on the last Business Day of such next,
second, third or sixth succeeding month. If an Interest Period would otherwise
end on a day which is not a Business Day, such Interest Period shall end on the
next succeeding Business Day; provided, however, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.
Interest Rate Option shall mean any Euro-Rate Option or Base Rate
Option.
Interim Statements shall have the meaning assigned to that term
in Section 6.01(i)(i).
Internal Revenue Code shall mean the Internal Revenue Code of
1986, as the same may be amended or supplemented from time to time, and any
successor statute of similar import, and the rules and regulations thereunder,
as from time to time in effect.
Investments shall have the meaning assigned to such term in
Section 8.02(d).
Issuing Bank shall mean PNC Bank, National Association, and its
successors and assigns.
Joint Venture shall mean any Foreign Joint Venture or Domestic
Joint Venture, and Joint Ventures shall mean all Foreign Joint Ventures and
Domestic Joint Ventures.
Kmart shall mean Kmart Corporation, a corporation organized and
existing under the laws of the State of Michigan.
Kmart Agreements shall mean the Kmart Indemnity, the Kmart
Intercompany Agreement, the Kmart Registration Rights Agreement and the Kmart
Tax Agreement.
Kmart Indemnity shall mean that certain Lease Guaranty,
Indemnification and Reimbursement Agreement, dated May 24, 1995, entered into by
the Company and/or one or more of the other Borrowers, on the one hand, and
Kmart, on the other hand, as such document may be from time to time amended,
supplemented, restated or otherwise modified subject to Section 8.02(r).
Kmart Intercompany Agreement shall mean that certain Intercompany
Agreement, dated May 24, 1995, entered into by the Company, on the one hand, and
Kmart, on the other hand, as such document may be from time to time amended,
supplemented, restated or otherwise modified subject to Section 8.02(r).
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<PAGE> 24
Kmart Registration Rights Agreement shall mean that certain
Registration Rights Agreement, dated May 24, 1995, entered into by the Company,
on the one hand, and Kmart, on the other hand, as such document may be from time
to time amended, supplemented, restated or otherwise modified subject to Section
8.02(r).
Kmart Tax Agreement shall mean that certain Tax Allocation and
Indemnification Agreement, dated May 24, 1995, entered into by the Company, on
the one hand, and Kmart, on the other hand, as such document may be from time to
time amended, supplemented, restated or otherwise modified subject to Section
8.02(r).
Labor Contracts shall mean all employment agreements, employment
contracts, collective bargaining agreements and other agreements between the
Company or Subsidiary of the Company and its employees.
Law shall mean any law (including common law), constitution,
statute, treaty, regulation, rule, ordinance, opinion, release, ruling, order,
injunction, writ, decree or award of any Official Body.
Lease Credit Agreement shall mean the Amended and Restated Credit
Agreement, dated as of November 22, 1995 and amended and restated as of the
Effective Date, among Wilmington Trust Company (not in its individual capacity,
except as expressly stated therein, but solely as owner trustee) as borrower,
the Lenders parties thereto, PNC Bank, National Association in its capacity as
Administrative Agent for such Lenders from time to time parties thereto, The
First National Bank of Chicago in its capacity as Syndication Agent thereunder
and Bankers Trust Company, as Real Estate Administrative Agent thereunder, as
the same may be amended, modified or supplemented from time to time.
Lease Financing Guarantee shall mean the Amended and Restated
Guarantee Agreement, dated as of November 22, 1995 and amended and restated as
of the Effective Date, by and among Borders, Walden, the Company, Planet, BPI,
WPI, Books Holding, OnLine, Outlet, Fulfillment, and Library executed in favor
of PNC Bank, National Association, as Administrative Agent for the several
lenders from time to time parties to the Lease Credit Agreement, as the same may
be amended, modified or supplemented from time to time.
Lease Financing Payment shall mean any payment by the Company or
any of its Subsidiaries (i) under the Lease Financing Guarantee in respect of
Contingent Obligations described in Section 8.02(c)(viii) (other than in respect
of Basic Rent (as defined in the Lease Credit Agreement, (ii) to purchase or
otherwise acquire all or any portion of any Property subject to any Financed
Lease, including, without limitation, all payments pursuant to the exercise by
the Company or any of its Subsidiaries of any Purchase Option (as defined in a
Financed Lease) or (iii) that constitutes a payment of the Termination Value or
the Maximum Residual Guarantee Amount (as each such term is defined in the Lease
Credit Agreement).
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<PAGE> 25
Lease Financing Rent Expense shall mean all Basic Rent (as
defined in the Lease Credit Agreement) payable by the Company and its
Subsidiaries, as lessee or sublessee under a Financed Lease.
Lenders shall mean the banks and financial institutions named on
Schedule 1.01(B) and their respective successors and assigns as permitted
hereunder, each of which is referred to herein as a Lender, and when used in
reference to a Bid Loan or a related term, shall also mean any or all Designated
Lender(s).
Lending Office shall mean, with respect to each Lender, the
office(s) specified for such Lender in Schedule 1.01(B) or such other office(s)
as such Lender may specify in writing to the Administrative Agent.
Letter of Credit shall have the meaning assigned to that term in
Section 2.10(a).
Letter of Credit Borrowing shall mean an extension of credit
resulting from a drawing under any Letter of Credit which shall not have been
reimbursed on the date when made and shall not have been converted into a
Revolving Credit Loan under Section 2.10(d).
Letter of Credit Fee shall mean at any time a percentage fee
equal to the "Euro-Rate Margin" set forth in Schedule 1.01(A) opposite the
then-current Fixed Charge Coverage Ratio.
Letter of Credit Outstandings shall mean at any time the sum of
(i) the aggregate undrawn face amount of outstanding Letters of Credit and (ii)
the aggregate amount of all unpaid and outstanding reimbursement obligations of
the Borrowers in respect of Letters of Credit.
Leverage Ratio shall mean the ratio (expressed as a percentage)
of Consolidated Funded Indebtedness to Consolidated Total Capital.
Library shall mean The Library, Ltd., a corporation organized and
existing under the laws of the State of Missouri, and its permitted successors
and assigns.
Lien shall mean any mortgage, deed of trust, pledge, lien,
security interest, charge or other encumbrance or security arrangement of any
nature whatsoever, whether voluntarily or involuntarily given, including any
conditional sale or title retention arrangement, and any assignment, deposit
arrangement or lease intended as, or having the effect of, security.
Loan Documents shall mean this Agreement, all applications and
agreements in respect of Letters of Credit, the Fee Letters, and any other
instruments, certificates or documents delivered or contemplated to be delivered
hereunder or thereunder or in connection herewith or therewith, as the same may
be supplemented or amended from time to time in accordance herewith or
therewith, and Loan Document shall mean any of the Loan Documents.
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<PAGE> 26
Loans shall mean collectively and Loan shall mean separately all
Revolving Credit Loans, Swing Loans and Bid Loans or any Revolving Credit Loan,
Swing Loan or Bid Loan.
Material Adverse Effect shall mean (a) a material adverse effect
upon the validity or enforceability of this Agreement or any other Loan
Document, (b) a material adverse effect on the business, properties, assets,
financial condition or results of operations of the Company and its Subsidiaries
taken as a whole, (c) a material impairment of the ability of any Borrower or
the Company and its Subsidiaries taken as a whole to duly and punctually pay or
perform its or their Indebtedness, or (d) a material impairment of the ability
of any of the Agents or any of the Lenders, to the extent permitted, to enforce
its legal remedies pursuant to this Agreement or any other Loan Document.
Multiemployer Plan shall mean any employee benefit plan that is a
"multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA and to
which the Company or any member of the ERISA Group is then making or accruing an
obligation to make contributions or at any time in the past has made or had an
obligation to make such contributions.
Multiple Employer Plan shall mean a Plan which has two or more
contributing sponsors (including the Company or any member of the ERISA Group)
at least two of whom are not under common control, as such a plan is described
in Sections 4063 and 4064 of ERISA.
Note Put Agreements shall mean those certain Note Put Agreements
dated as of November 10, 1994, by and among Kmart, Borders and National Tenant
Finance Corporation, as such documents may be from time to time amended,
supplemented, restated or otherwise modified subject to Section 8.02(r).
Notices shall have the meaning assigned to that term in Section
12.06.
Obligation shall mean any obligation or liability of any of the
Borrowers to any of the Agents or any of the Lenders, howsoever created, arising
or evidenced, whether direct or indirect, absolute or contingent, now or
hereafter existing, or due or to become due, under or in connection with this
Agreement or any other Loan Document.
Offered Amount shall have the meaning assigned to such term in
Section 3.02.
Official Body shall mean any national, federal, state, local or
other government or political subdivision or any agency, authority, bureau,
central bank, commission, department or instrumentality of either, or any court,
tribunal, grand jury or arbitrator, in each case whether foreign or domestic.
OnLine shall mean Borders OnLine, Inc., a corporation organized
and existing under the laws of the State of Delaware, and its permitted
successors and assigns.
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Optional Currency shall mean, subject to availability, any of the
following currencies: Australian Dollars ("AUD"), British Pounds Sterling
("GBP"), Canadian Dollars ("CAD"), Deutsche Mark ("DEM"), French Francs
("FRF"), Italian Lira ("ITL"), Spanish Pesetas ("ESP"), Japanese Yen ("JPY"),
Singapore Dollar ("SGD"), and any other currency approved pursuant to Section
2.09(d).
Original Currency shall have the meaning assigned to such term in
Section 5.08(a).
Outlet shall mean Borders Outlet, Inc., a corporation organized
and existing under the laws of the State of Colorado, and its permitted
successors and assigns.
Overnight Rate shall mean for any day with respect to any Loans
in an Optional Currency, the rate of interest per annum as determined by the
Administrative Agent at which overnight deposits in such currency, in an amount
approximately equal to the amount with respect to which such rate is being
determined, would be offered for such day in the offshore interbank market.
Participation Advance shall mean, with respect to any Lender,
such Lender's payment in respect of its participation in a Letter of Credit
Borrowing according to its Ratable Share pursuant to Section 2.10(e).
Participation Agreement shall mean the Amended and Restated
Participation Agreement dated as of November 22, 1995 and amended and restated
as of the Effective Date, among Wilmington Trust Company (not in its individual
capacity, except as expressly stated therein, but solely as owner trustee), PNC
Bank, National Association, as Administrative Agent for the several lenders from
time to time parties to the Lease Credit Agreement, The First National Bank of
Chicago in its capacity as Syndication Agent thereunder, Bankers Trust Company
in its capacity as Real Estate Administrative Agent thereunder, and Sam Project
Funding Corp. I, as the same may be amended, modified or supplemented from time
to time.
Partnership Interests shall have the meaning given to such term
in Section 6.01(c).
PBGC shall mean the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA or any successor.
Permitted Investments shall mean:
(i) direct obligations of the United States of America or
any agency or instrumentality thereof or obligations backed by the full faith
and credit of the United States of America maturing in twelve (12) months or
less from the date of acquisition;
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(ii) commercial paper maturing in 180 days or less rated
not lower than A-1 by Standard & Poor's Corporation or P-1 by Moody's Investors
Service, Inc. on the date of acquisition;
(iii) demand deposits, time deposits or certificates of
deposit maturing within one year in any Lender or any commercial bank whose
commercial paper (or that of its parent corporation) is rated not lower than A-1
by Standard & Poor's Corporation or P-1 by Moody's Investors Service, Inc. on
the date of acquisition;
(iv) adjustable rate preferred stock with an express (or
implied) rating not lower than A by Standard & Poor's Corporation or A by
Moody's Investors Service, Inc. on the date of acquisition; and
(v) investments in any investment company registered under
the Investment Company Act of 1940, as amended (or any series thereof) (A) that
prices its shares in accordance with Rule 2a-7 under such Act, (B) which holds
at least ninety percent (90%) of its assets in the investments itemized in (i)
through (iv) above, and (C) which has net asset value exceeding $100,000,000 on
the date of acquisition.
Permitted Joint Venture Activity shall mean (i) any Investment by
the Company or any Unrestricted Subsidiary which is a Domestic Subsidiary in any
Joint Venture or any Contingent Obligations of the Company or any Unrestricted
Subsidiary which is a Domestic Subsidiary in respect of any Indebtedness of any
Joint Venture, provided that the aggregate amount of all such Investments and
Contingent Obligations does not at any time exceed 15% of Consolidated Tangible
Net Worth, determined as of the last day of the Fiscal Quarter most recently
ended, and (ii) any Contingent Obligations of the Company or any Unrestricted
Subsidiary which is a Domestic Subsidiary, or Indebtedness of the Company or any
Unrestricted Subsidiary which is a Domestic Subsidiary constituting
reimbursement obligations under letters of credit, relating to leases executed,
as lessee, by a Joint Venture, provided, that the portion of such Contingent
Obligations and Indebtedness which constitute current liabilities determined and
consolidated in accordance with GAAP is limited to lease payments (whether such
amounts are fixed or percentage rent, fees, costs, accelerated payment
requirements or otherwise) not in excess of an aggregate of $15,000,000 in any
Fiscal Year with respect to all Joint Ventures.
Permitted Lease Contingent Obligations shall mean all guarantees,
sureties or other forms of secondary liability in respect of real property
leases which have been assigned (which term shall also include new leases
entered into between the landlord and a third Person in respect of real property
being vacated by any of the Borrowers) by any of the Borrowers or any Subsidiary
of any of the Borrowers to any Person (other than any of the Borrowers or any
such Subsidiary), the terms of which assignment, or the landlord's consent
therefor, or of any such guarantee, surety or other agreement or instrument,
require any of the Borrowers or such Subsidiary to remain liable for rent and
other performance in respect of the assigned lease.
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Permitted Liens shall mean:
(i) Liens for taxes, assessments, or similar charges,
incurred in the ordinary course of business and which are not yet due and
payable;
(ii) pledges or deposits made in the ordinary course of
business to secure payment of worker's compensation, or to participate in any
fund in connection with worker's compensation, unemployment insurance, old-age
pensions or other social security programs;
(iii) Liens of mechanics, materialmen, warehousemen,
carriers, or other like Liens, securing obligations incurred in the ordinary
course of business that are not yet due and payable and Liens of landlords
securing obligations to pay lease payments that are not yet due and payable or
in default;
(iv) pledges or deposits made in the ordinary course of
business to secure performance of bids, tenders, contracts (other than for the
repayment of Indebtedness) or leases, not in excess of the aggregate amount due
thereunder, or to secure statutory obligations, or surety, appeal, indemnity,
performance or other similar bonds required in the ordinary course of business;
(v) encumbrances consisting of zoning restrictions,
easements or other restrictions on the use of real Property, none of which
materially impairs the use of such Property or the value thereof, and none of
which is violated in any material respect by existing or proposed structures or
land use;
(vi) Liens on Property leased by the Company or any
Subsidiary of the Company under Capital Leases permitted under this Agreement
securing obligations of the Company or any such Subsidiary to the lessor under
such Capital Leases;
(vii) any Lien existing on the date of this Agreement and
described on Schedule 1.01(C); provided that the principal amount secured
thereby is not hereafter increased and no additional assets become subject to
such Lien;
(viii) Purchase Money Security Interests;
(ix) the following, (A) if the validity or amount thereof
is being contested in good faith by appropriate and lawful proceedings
diligently conducted so long as levy and execution thereon have been stayed and
continue to be stayed or (B) if a final judgment is entered and such judgment is
discharged within thirty (30) days of entry, and in either case individually or
in the aggregate, they could not reasonably be expected to have a Material
Adverse Effect;
(1) Liens for taxes, assessments or similar charges due and
payable and subject to interest or penalty, provided that the Borrower maintains
such reserves or other appropriate
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provisions as shall be required by GAAP and pays all such taxes, assessments or
charges forthwith upon the commencement of proceedings to foreclose any such
Lien;
(2) Liens upon, and defects of title to, Property,
including any attachment of Property or other legal process prior to
adjudication of a dispute on the merits; or
(3) Liens of mechanics, materialmen, warehousemen,
carriers, or other statutory nonconsensual Liens;
(x) Liens on assets of the Borrowers securing
indebtedness of the Company and its Subsidiaries incurred to refinance the
Contingent Obligations arising under the Lease Financing Guarantee as permitted
by Section 8.02 (c)(vii); provided, however that such Liens may only attach to
the property previously subject to the Financed Lease being refinanced; and
(xi) Liens on assets of the Company and its Subsidiaries
not otherwise permitted by clauses (i) through (x) above, so long as any
Indebtedness secured thereby is permitted under the terms of Section 8.02(a),
and the aggregate fair market value of all property secured by such Liens does
not at any time exceed 5% of Consolidated Tangible Net Worth (determined as of
the last day of the Fiscal Quarter most recently ended).
Permitted Restricted Subsidiary Activity shall mean (i) any
Investment by the Company or any Unrestricted Subsidiary which is a Domestic
Subsidiary in any Restricted Subsidiary or any Contingent Obligations of the
Company or any Unrestricted Subsidiary which is a Domestic Subsidiary in respect
of any Indebtedness of any Restricted Subsidiary, provided that (a) the
aggregate amount of all such Investments and Contingent Obligations does not at
any time exceed 20% of Consolidated Tangible Net Worth, determined as of the
last day of the Fiscal Quarter most recently ended, and (b) the aggregate amount
of all such Investments and Contingent Obligations made by the Company or any
Unrestricted Subsidiary which is a Domestic Subsidiary with respect to any
Restricted Subsidiary which is a Foreign Subsidiary does not exceed 15% of
Consolidated Tangible Net Worth, determined as of the last day of the Fiscal
Quarter most recently ended, and (ii) any Contingent Obligations of the Company
or any Unrestricted Subsidiary which is a Domestic Subsidiary, or Indebtedness
of the Company or any Unrestricted Subsidiary which is a Domestic Subsidiary
constituting reimbursement obligations under letters of credit, relating to
leases executed, as lessee, by a Restricted Subsidiary, provided, that, the
portion of such Contingent Obligations and Indebtedness which constitute current
liabilities determined and consolidated in accordance with GAAP is limited to
lease payments (whether such amounts are fixed or percentage rent, fees, costs,
accelerated payment requirements or otherwise) not in excess of an aggregate of
$15,000,000 in any Fiscal Year with respect to all Restricted Subsidiaries.
Permitted Sutro Refinancing Indebtedness shall mean Indebtedness
of the Company or any other Borrower which is incurred solely to pay obligations
of Borders under Section 2.2 of any of the Note Put Agreements.
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Person shall mean any individual, corporation, partnership,
limited liability company, association, joint-stock company, trust,
unincorporated organization, joint venture, government or political subdivision
or agency thereof, or any other entity.
Plan shall mean at any time an employee pension benefit plan
(including a Multiple Employer Plan but not a Multiemployer Plan) which is
covered by Title IV of ERISA or is subject to the minimum funding standards
under Section 412 of the Internal Revenue Code and either (i) is maintained by
any member of the ERISA Group for employees or former employees of any member of
the ERISA Group or (ii) has at any time within the preceding five years been
maintained by any entity which was at such time a member of the ERISA Group for
employees or former employees of any entity which was at such time a member of
the ERISA Group.
Planet shall mean Planet Music, Inc., a corporation organized and
existing under the laws of the State of North Carolina, and its permitted
successors and assigns.
Potential Default shall mean any event or condition which with
notice, passage of time or a determination by the Administrative Agent or the
Required Lenders, or any combination of the foregoing, would constitute an Event
of Default.
Principal Office shall mean the main lending office of the
Administrative Agent in Pittsburgh, Pennsylvania.
Prior Agreement shall have the meaning assigned to that term in
the preamble to this Agreement.
Prior Lenders shall mean the lenders which are party to the Prior
Agreement.
Prior Revolving Credit Loans shall have the meaning assigned to
that term in Section 2.01(b).
Prohibited Transaction shall mean any prohibited transaction as
defined in Section 4975 of the Internal Revenue Code or Section 406 of ERISA for
which neither an individual nor a class exemption has been issued by the United
States Department of Labor.
Property shall mean any and all property, whether real, personal,
tangible, intangible or mixed, both owned and leased pursuant to Capital Leases,
of any Person.
Purchase means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which the
Company or any of its Subsidiaries (a) acquires any ongoing business or all or
substantially all of the assets of any Person or division thereof, whether
through purchase of assets, merger or otherwise, or (b) directly or indirectly
acquires (in one transaction or as the most recent transaction in a series of
transactions) all or substantially all of the securities of a corporation, which
securities have ordinary voting power for the election of directors (other than
securities having such power only by reason of the happening
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of a contingency) or all or substantially all (by percentage and voting power)
of the outstanding partnership interests of a partnership or membership
interests of a limited liability company.
Purchase Money Security Interest shall mean Liens upon tangible
personal Property securing loans to any Borrower or Subsidiary of a Borrower or
deferred payments by such Borrower or Subsidiary for the purchase of such
tangible personal Property.
Ratable Share shall mean the proportion that a Lender's
Commitment bears to the Commitments of all of the Lenders.
Real Estate Administrative Agent shall mean Bankers Trust
Company, and its successors and assigns.
Reference Currency shall have the meaning assigned to that term
in the definition of Equivalent Amount.
Register shall have the meaning assigned to that term in Section
12.11.
Regulated Substances shall mean any substance, including any
solid, liquid, semisolid, gaseous, thermal, thoriated or radioactive material,
refuse, garbage, wastes, chemicals, petroleum products, by-products, coproducts,
impurities, dust, scrap, heavy metals, any substance defined as a "hazardous
substance," "pollutant," "pollution," "contaminant," "hazardous or toxic
substance," "extremely hazardous substance," "toxic chemical," "toxic waste,"
"hazardous waste," "industrial waste," "residual waste," "solid waste,"
"municipal waste," "mixed waste," "infectious waste," "chemotherapeutic waste,"
"medical waste," "regulated substance" or any related materials, substances or
wastes as now or hereafter defined pursuant to any Environmental Laws, the
generation, manufacture, extraction, processing, distribution, treatment,
storage, disposal, transport, recycling, reclamation, use, reuse, spilling,
leaking, dumping, injection, pumping, leaching, emptying, discharge, escape,
release or other management or mismanagement of which is regulated by the
Environmental Laws.
Regulation U shall mean Regulation U, T, G or X as promulgated by
the Board of Governors of the Federal Reserve System, as amended from time to
time.
Rent Expense shall mean all fixed rents payable by the Company
and its Subsidiaries, as lessee or sublessee under a lease of Property (other
than rents payable under Financed Leases), but shall be exclusive of any amounts
required to be paid by the Company and its Subsidiaries (whether or not
designated as rents or additional rents) on account of maintenance, repairs,
insurance, taxes, assessments, utilities, operating and labor costs, and similar
charges. Fixed rents under any so-called "percentage leases" shall be computed
based on the actual amount of rent paid, and not on the basis of the minimum
rents, if any, required to be paid by the lessee regardless of sales volume or
gross revenues. The term Rent Expense shall exclude any payments made in
respect of any Capitalized Lease.
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Reportable Event shall mean a reportable event described in
Section 4043 of ERISA and regulations thereunder with respect to a Plan or
Multiemployer Plan.
Repurchase Amount shall mean (a) $100,000,000 plus (b) the
aggregate amount paid to the Company (whether in cash or in shares of the
Company's stock), from time to time and at any time since the Effective Date, by
officers, employees or directors of the Company or any of its Subsidiaries in
connection with the exercise of options to purchase shares of the Company's
stock, plus (c) the realized tax benefit (as calculated by the Company in a
manner satisfactory to the Administrative Agent), for tax periods after the
Effective Date resulting from the exercise of such options or resulting from the
lapse of restrictions on (and vesting of rights in) certain shares of the
Company's stock subject to the Management Stock Purchase Plan from time to time
and at any time since May 1, 1995. For purposes of calculating the Repurchase
Amount, to the extent shares of the Company's stock are delivered to the Company
in payment of the exercise price of options, or in payment of taxes associated
with the exercise of options or the vesting of restricted shares, such delivered
shares are deemed to be repurchased by the Company at fair market value (as
defined in the Company's stock option plan) on the date of delivery to the
Company. Such delivered share repurchases will serve to reduce the available
Repurchase Amount.
Requested Amount shall have the meaning assigned to such term in
Section 3.01.
Required Lenders shall mean (i) Lenders whose Commitments
aggregate at least 51% of the Commitments of all of the Lenders, or (ii) if the
Commitments shall have been terminated, Lenders whose outstanding Loans
aggregate at least 51% of the total principal amount of the outstanding Loans
hereunder. For purposes of this definition, in addition to outstanding Loans,
each Lender shall be deemed to have outstanding Loans in an amount equal to its
Ratable Share of any Letter of Credit Outstandings and, as provided in Section
10.02(c), after the occurrence and during the continuation of an Event of
Default, and after termination of the Commitments, each Lender shall have voting
rights hereunder in the proportion the outstanding balance of all of its Loans
(including Bid Loans) and Letters of Credit Outstanding hereunder bears to the
total outstanding amount of all Loans (including Bid Loans) and Letters of
Credit Outstanding hereunder.
Restricted Subsidiary shall mean individually and Restricted
Subsidiaries shall mean collectively any Subsidiary of the Company (other than
Unrestricted Subsidiaries).
Revolving Credit Loan Request shall mean a request for Revolving
Credit Loans made in accordance with Section 2.05(a).
Revolving Credit Loans shall mean collectively and Revolving
Credit Loan shall mean separately all Revolving Credit Loans or any Revolving
Credit Loan made by the Lenders or one of the Lenders to the Borrowers pursuant
to Section 2.01 or 2.10(d). A Bid Loan is not a Revolving Credit Loan, except
that it will be treated as a Revolving Credit Loan following a termination of
the Commitments hereunder pursuant to Section 10.02(a) or 10.02(b).
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Revolving Facility Usage shall mean at any time the sum of the
Dollar Equivalent amount of the Revolving Credit Loans outstanding and the
Dollar Equivalent amount of the Letter of Credit Outstandings.
Section 20 Subsidiary shall mean the Subsidiary of the bank
holding company controlling any Lender, which Subsidiary has been granted
authority by the Federal Reserve Board to underwrite and deal in certain
Ineligible Securities.
Shares shall have the meaning assigned to that term in Section
6.01(b).
Solvent shall mean, with respect to any Person on a particular
date, that on such date (i) the fair value of the Property of such Person is
greater than the total amount of liabilities, including, without limitation,
contingent liabilities, of such Person, (ii) the present fair saleable value of
the assets of such Person is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they become absolute
and matured, (iii) such Person is able to realize upon its assets and pay its
debts and other liabilities, contingent obligations and other commitments as
they mature in the normal course of business, (iv) such Person does not intend
to, and does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature, and (v) such
Person is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person's property would constitute
unreasonably small capital after giving due consideration to the prevailing
practice in the industry in which such Person is engaged. In computing the
amount of contingent liabilities at any time, it is intended that such
liabilities will be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.
Sterling Swing Loans shall have the meaning assigned to that term
in Section 2.01(d)(ii).
Subsequent Effective Date shall mean the date on which (i) Books
Etc. becomes an Unrestricted Subsidiary, (ii) the Administrative Agent has
received all deliveries from Books Etc. required by Section 7.03 in a form
reasonably satisfactory to the Administrative Agent and its counsel and (iii)
all of the conditions in Section 7.03 have been satisfied.
Subsidiary of any Person at any time shall mean (i) any
corporation or trust of which 50% or more (by number of shares or number of
votes) of the outstanding capital stock or shares of beneficial interest
normally entitled to vote for the election of one or more directors or trustees
(regardless of any contingency which does or may suspend or dilute the voting
rights) is at such time owned directly or indirectly by such Person or one or
more of such Person's Subsidiaries, or any partnership of which such Person is a
general partner or of which 50% or more of the partnership interests is at the
time directly or indirectly owned by such Person or one or more of such Person's
Subsidiaries, or any limited liability company of which 50% or more of the
membership interests is at the time directly or indirectly owned by such Person
or one or more of such Person's Subsidiaries or (ii) any corporation, trust,
partnership, limited liability company or other entity which
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is controlled or capable of being controlled by such Person or one or more of
such Person's Subsidiaries.
Subsidiary Shares shall have the meaning assigned to that term in
Section 6.01(c).
Swing Lenders shall mean PNC Bank, National Association and The
First National Bank of Chicago, in their capacity as Lenders of Swing Loans, and
their permitted successors and assigns.
Swing Loan Facility shall mean a discretionary line of credit,
available in Dollars, offered to the Borrowers by the Swing Lenders in equal
shares in an aggregate principal amount not to exceed $25,000,000; provided,
however, that for the first ten (10) Business Days after the Effective Date,
Sterling Swing Loans (made in British Pounds Sterling) may be offered to Books
Holding by the Swing Lenders in such shares as may be determined by the Swing
Lenders in an aggregate principal Dollar Equivalent Amount not to exceed
$75,000,000.
Swing Loan Request shall mean a request for Swing Loans made in
accordance with Section 2.05(b) hereof.
Swing Loans shall mean collectively and Swing Loan shall mean
separately all Swing Loans or any Swing Loan (including any Sterling Swing
Loans) made by the Swing Lenders to the Borrowers pursuant to Section 2.01(d)
hereof.
Syndication Agent shall mean The First National Bank of Chicago,
and its successors and assigns.
Total Facility Usage shall mean at any time the sum of Revolving
Facility Usage, the Swing Loans outstanding and the Bid Loans outstanding.
Unrestricted Subsidiary shall mean individually and Unrestricted
Subsidiaries shall mean collectively any Subsidiary of the Company (i) of which
80% or more of the outstanding shares of capital stock, partnership interests or
membership interests are owned by the Company (whether directly or through one
or more Subsidiaries of the Company) and (ii) that has executed and delivered
this Agreement as a Guarantor or has executed and delivered a letter agreement
in form and substance satisfactory to the Administrative Agent under which such
Subsidiary agrees to be bound by the provisions of Article IX hereof, together
with such legal opinions and other documents and instruments as the
Administrative Agent may request.
Walden shall mean Walden Book Company, Inc., a corporation
organized and existing under the laws of the State of Colorado, and its
permitted successors and assigns.
Wholly-owned Subsidiary shall mean individually and Wholly-owned
Subsidiaries shall mean collectively any Subsidiary of the Company of which all
of the outstanding
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shares of capital stock or other equity interests are owned by the Company
(whether directly or through one or more Wholly-owned Subsidiaries of the
Company).
WPI shall mean Waldenbooks Properties, Inc., a corporation
organized and existing under the laws of the State of Delaware, and its
permitted successors and assigns.
1.02 Construction. Unless the context of this Agreement
otherwise clearly requires, the following rules of construction shall apply to
this Agreement and each of the other Loan Documents:
(a) references to the plural include the singular, the
plural, the part and the whole; "or" has the inclusive meaning represented by
the phrase "and/or," and "including" has the meaning represented by the phrase
"including without limitation";
(b) references to "determination" of or by the
Administrative Agent or the Lenders shall be deemed to include good faith
estimates by the Administrative Agent or the Lenders (in the case of
quantitative determinations) and good faith beliefs by the Administrative Agent
or the Lenders (in the case of qualitative determinations) and such
determination shall be conclusive absent manifest error;
(c) the words "hereof," "herein," "hereunder," "hereto"
and similar terms in this Agreement or any other Loan Document refer to this
Agreement or such other Loan Document as a whole and not to any particular
provision of this Agreement or such other Loan Document;
(d) the section and other headings contained in this
Agreement or such other Loan Document and the Table of Contents (if any)
preceding this Agreement or such other Loan Document are for reference purposes
only and shall not control or affect the construction of this Agreement or such
other Loan Document or the interpretation thereof in any respect;
(e) article, section, subsection, clause, schedule and
exhibit references are to this Agreement or other Loan Document, as the case may
be, unless otherwise specified;
(f) reference to any Person includes such Person's
successors and assigns but, if applicable, only if such successors and assigns
are permitted by this Agreement or other Loan Document, as the case may be, and
reference to a Person in a particular capacity excludes such Person in any other
capacity;
(g) reference to any agreement (including this
Agreement and any other Loan Document together with the schedules and exhibits
hereto or thereto), document or instrument means such agreement, document or
instrument as amended, modified, replaced, substituted for, superseded or
restated;
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(h) relative to the determination of any period of
time, "from" means "from and including," "to" means "to but excluding" and
"through" means "through and including"; and
(i) references to "shall" and "will" are intended
to have the same meaning.
1.03 Accounting Principles. Except as otherwise provided in
this Agreement, all computations and determinations as to accounting or
financial matters and all financial statements to be delivered pursuant to this
Agreement shall be made and prepared in accordance with GAAP (including
principles of consolidation where appropriate), and all accounting or financial
terms shall have the meanings ascribed to such terms by GAAP; provided, however,
that if any change in GAAP or the application thereof occurs hereafter, or if
the Company adopts a change to its accounting principles or methods with the
agreement of its independent certified public accountants, and such change
results in a change in the calculation of any financial covenant or restriction
set forth herein, then the parties hereto agree to enter into and diligently
pursue negotiations in order to amend such financial covenant or restriction so
as to equitably reflect such change, with the desired result that the criteria
for evaluating the financial condition and results of operations of the Company
and its Subsidiaries shall be the same after such change as if such change had
not been made. Pending the resolution of any such negotiations, the Borrowers
agree to provide to each of the Lenders such unaudited financial information and
pro forma statements using the accounting methods and principles used in the
preparation of the audited financial statements for the fiscal year ended
January 26, 1997, as are necessary to enable the Lenders to test the financial
covenants contained herein.
ARTICLE II
REVOLVING CREDIT AND SWING LOAN FACILITIES
2.01 (a) Commitments. Subject to the terms and
conditions hereof and relying upon the representations and warranties herein set
forth, each Lender severally agrees to make Revolving Credit Loans in either
Dollars or one or more Optional Currencies to the Borrowers at any time or from
time to time on or after the Effective Date to, but not including, the
Expiration Date in an aggregate Dollar Equivalent principal amount not to exceed
at any one time such Lender's Commitment minus (i) such Lender's Ratable Share
of the Dollar Equivalent amount of the Letter of Credit Outstandings and (ii) in
the case of each Swing Lender, such Swing Lender's Swing Loans outstanding;
provided, however, that in no event shall Revolving Credit Loans (or Sterling
Swing Loans) be made to Books Holding prior to the funding of the Purchase of
Books Etc. and its Subsidiaries (including Books Etc. Properties Limited), and
thereafter in no event shall the Dollar Equivalent amount of all Revolving
Credit Loans and Sterling Swing Loans made to Books Holding exceed the purchase
price payable in cash for Books Etc. and its Subsidiaries (including Books Etc.
Properties Limited, and including escrowed and deferred purchase price payments
and debt of Books Etc. and its Subsidiaries refinanced in conjunction with or
after such Purchase) plus from time to time after the funding of the Purchase of
Books Etc. and its Subsidiaries (including Books Etc. Properties Limited), an
amount equal to the interest payable on the amounts borrowed by Books
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Holding; provided, further, that after the Subsequent Effective Date in no
event shall the Dollar Equivalent amount of all Revolving Credit Loans made to
Books Etc. exceed 5% of Consolidated Tangible Net Worth (determined as of the
last day of the Fiscal Quarter most recently ended). After giving effect to
any such Revolving Credit Loans and any other Loans made on or before the
Borrowing Date of such Revolving Credit Loans, the aggregate amount of the
Total Facility Usage shall not exceed the aggregate amount of the Commitments.
Within such limits of time and amount and subject to the other provisions of
this Agreement, the Borrowers may borrow, repay and reborrow pursuant to this
Section 2.01.
(b) Prior Revolving Credit Loans. Schedule 2.01
(b) lists the Revolving Credit Loans outstanding for each Lender under the Prior
Agreement prior to the Effective Date (the "Prior Revolving Credit Loans") and
the Revolving Credit Loans to be outstanding for each Lender hereunder as of the
Effective Date. On the Effective Date, any such Prior Revolving Credit Loans
which are held by a Prior Lender which will continue to be a Lender on and after
the Effective Date shall be deemed to continue as Revolving Credit Loans made
hereunder. Any Prior Lender which has determined not to continue to be a Lender
after the Effective Date will be repaid its Revolving Credit Loans in full and
the Borrower will pay such Prior Lender up to but not including the Effective
Date the amount of all interest, Fees and additional costs described in Section
5.06(b) owing to any such Prior Lender. Any Lender hereunder which was not a
Prior Lender or any Prior Lender that has increased its Commitment as of the
Effective Date shall purchase from Prior Lenders or other Lenders hereunder or
shall otherwise fund Revolving Credit Loans in an amount such that, after the
Effective Date, the amount of outstanding Revolving Credit Loans from each
Lender shall equal such Lender's respective Ratable Share, as modified to give
effect to the Effective Date, of outstanding Revolving Credit Loans. To the
extent that any Prior Revolving Credit Loans bear interest at the Euro-Rate
Option, the Borrowers shall pay any additional costs described in Section
5.06(b) incurred by any Lender, and the Borrowers shall pay any similar
additional costs incurred by any Lender which becomes or continues to be a
Lender on and after the Effective Date and assumes or funds a portion of any
Revolving Credit Loan for the remainder of an Interest Period which is
outstanding on the Effective Date.
(c) Increase in Commitments. Following the
Effective Date at any time the Syndication Agent (in consultation with the other
Agents and the Company) shall have the right to solicit additional financial
institutions to become Lenders for purposes of this Agreement, or to encourage
any Lender to increase its Commitment, provided that (i) each financial
institution that becomes a Lender shall agree to become party to, and shall
assume and agree to be bound by, this Agreement, subject to all terms and
conditions hereof; (ii) neither the Administrative Agent nor the Real Estate
Administrative Agent shall have any obligation to the Borrowers or to any Lender
to solicit additional financial institutions or any increase in the Commitment
of any Lender pursuant to this Section 2.01(c); (iii) no Lender shall have an
obligation to the Borrowers, the Agents or any other Lender to increase its
Commitment or its Ratable Share; and (iv) in no event shall the addition of any
Lender or Lenders or the increase in the Commitment of any Lender increase the
Commitments to an amount greater than $500,000,000. Upon the addition of any
Lender, or the increase in the Commitment of any Lender, Schedule 1.01(B) shall
be amended by the Administrative Agent and the Borrowers to reflect such
addition or such increase, and the Administrative Agent shall deliver to the
Lenders and the Company a copy of revised Schedule
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1.01(B). If, at any time that the Commitments are increased pursuant to this
Section 2.01(c), there are Revolving Credit Loans then outstanding or Letters
of Credit Outstanding, each new Lender, and each existing Lender that has
increased its Commitment, shall purchase Revolving Credit Loans and Letters of
Credit Outstandings from each other Lender in an amount such that, after such
purchase or purchases, the amount of outstanding Revolving Credit Loans and
Letters of Credit Outstandings from each Lender shall equal such Lender's
respective Ratable Share, as modified to give effect to such increase,
multiplied by the aggregate amount of Revolving Credit Loans outstanding and
Letters of Credit Outstandings from all Lenders. To the extent that any
outstanding Revolving Credit Loans bear interest at the Euro-Rate Option, the
Borrowers shall pay any additional costs described in Section 5.06(b) incurred
by any Lender.
(d) Swing Loan Facility. (i) Subject to the terms
and conditions hereof (including fulfillment of those conditions set forth in
Article VII, as applicable) and relying upon the representations and warranties
herein set forth, and in order to facilitate loans and repayments, each of the
Swing Lenders may, at its option, cancelable at any time for any reason
whatsoever, make Swing Loans to the Borrowers at any time or from time to time
after the Effective Date to, but not including, the Expiration Date, in an
aggregate principal amount not to exceed $12,500,000, subject to reduction as
provided herein, to be made in accordance with the following provisions, and
provided, that, except with respect to Sterling Swing Loans, no Swing Lender's
Swing Loans outstanding hereunder shall exceed its Commitment minus (i) the
Dollar Equivalent amount of its Ratable Share of the Letter of Credit
Outstandings and (ii) the Dollar Equivalent amount of its outstanding Revolving
Credit Loans. Within such limits of time and amount and subject to the other
provisions of this Agreement, the Borrowers may borrow, repay and reborrow
pursuant to this Section 2.01(d).
(ii) Subject to the terms and conditions hereof
(including fulfillment of those conditions set forth in Article VII, as
applicable) and relying upon the representations and warranties herein set
forth, and in order to facilitate loans and repayments, each of the Swing
Lenders may, at its option, cancellable at any time for any reason whatsoever,
make Swing Loans to Books Holding at any time or from time to time after the
Effective Date to, but not including, the tenth Business Day following the
Effective Date, in British Pounds Sterling (the "Sterling Swing Loans") in an
aggregate principal Dollar Equivalent amount not to exceed $75,000,000, subject
to reduction as provided herein, to be made in accordance with the following
provisions. For the period during which Sterling Swing Loans are outstanding,
PNC Bank, National Association's Swing Loans outstanding may exceed its
Commitment minus (i) the Dollar Equivalent amount of its Ratable Share of the
Letter of Credit Outstandings and (ii) the Dollar Equivalent amount of its
outstanding Revolving Credit Loans. Within such limits of time and amount and
subject to the other provisions of this Agreement, the Borrowers may borrow,
repay and reborrow pursuant to this Section 2.01(d)(ii).
2.02 Nature of Lenders' Obligations with Respect to
Revolving Credit Loans. Each Lender shall be obligated to participate in each
request for Revolving Credit Loans in accordance with its Ratable Share. The
aggregate Dollar Equivalent amount of each Lender's Revolving Credit Loans
outstanding hereunder to the Borrowers at any time shall never exceed its
Commitment, minus its Ratable Share of the Dollar Equivalent amount of Letters
of Credit
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Outstanding, minus for any Swing Lender its Swing Loans outstanding, subject to
Section 5.05(a). The obligations of each Lender hereunder are several. The
failure of any Lender to perform its obligations hereunder shall not affect the
Obligations of the Borrowers to any other party nor shall any other party be
liable for the failure of such Lender to perform its obligations hereunder.
The Lenders shall have no obligation to make Revolving Credit Loans hereunder
on or after the Expiration Date.
2.03 Fees.
(a) Revolving Credit Facility Fee. The Borrowers
agree to pay to the Administrative Agent in Dollars for the account of each
Lender, as consideration for such Lender's Commitment, a nonrefundable facility
fee calculated on a daily basis by multiplying the Facility Fee Rate by such
Lender's Commitment (whether used or unused). All Facility Fees shall be
payable in arrears on the last Business Day of each March, June, September and
December after the Effective Date and on the Expiration Date or upon
acceleration of the Obligations. The Facility Fee Rate shall be subject to
adjustment quarterly to the highest percentage, based on the Fixed Charge
Coverage Ratio, as set forth on Schedule 1.01(A) or on Schedule I to the Lease
Credit Agreement. Each adjustment in the Facility Fee Rate shall be effective
on the second Business Day next following delivery to the Administrative Agent
of the financial statements or certificate required to be delivered by the
Company pursuant to Section 8.03(a) showing the basis for such adjustment. In
the event that such financial statements or certificate shall not have been
delivered to the Administrative Agent on the date required for such delivery
pursuant to Section 8.03(a), then on the second Business Day following such
date, the Facility Fee Rate shall be increased to the highest Facility Fee Rate
set forth on Schedule 1.01(A) or Schedule I to the Lease Credit Agreement,
provided that after delivery of such financial statements or certificate
(effective two Business Days following delivery) the Facility Fee Rate shall be
adjusted to the Facility Fee Rate that would have been effective had such
financial statements or certificate been timely delivered.
(b) Calculation of Fees. All Fees shall be
calculated on the basis of a year of 360 days and the actual number of days
elapsed.
2.04 Reduction of Commitment. The Company shall have the
right at any time and from time to time upon five (5) Business Days' prior
written notice to the Administrative Agent to permanently reduce, in whole
multiples of $5,000,000 of principal, or to terminate (provided no Letters of
Credit are outstanding) the Commitments without penalty or premium, except as
set forth in Section 5.06(b)(i), provided that any such reduction or termination
shall be accompanied by (a) the payment in full of any Fees then accrued on the
amount of such reduction or termination, (b) prepayment of the Revolving Credit
Loans, Swing Loans and/or Bid Loans, together with the full amount of interest
and Fees accrued on the principal sum to be prepaid (and all amounts referred to
in Section 5.06 hereof), to the extent that the Total Facility Usage exceeds the
Commitments as so reduced or terminated. The Borrowers may not reduce the
Commitments below the amount of any Letter of Credit Outstandings. If at any
time the Commitments are reduced to an amount which is less than the Swing Loan
Facility then in effect, the Swing Loan Facility shall automatically, without
notice of any kind, be reduced to the amount of the Commitments then in effect.
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2.05 (a) Revolving Credit Loan Requests. Except as
otherwise provided herein, the Company may from time to time prior to the
Expiration Date request the Lenders to make Revolving Credit Loans, or to renew
or convert the Interest Rate Option applicable to existing Revolving Credit
Loans, by delivering to the Administrative Agent, not later than 10:00 A.M.
Eastern time (i) three (3) Business Days prior to the proposed Borrowing Date
with respect to the making of Revolving Credit Loans in Dollars to which the
Euro-Rate Option applies or the date of conversion to or the renewal of the
Euro-Rate Option for any such Loans, (ii) four (4) Business Days prior to the
proposed Borrowing Date with respect to making of Revolving Credit Loans in an
Optional Currency or the date of conversion to or renewal of the Euro-Rate
Option for Revolving Credit Loans in an Optional Currency; and (iii) one (1)
Business Day prior to the proposed Borrowing Date with respect to the making of
Revolving Credit Loans to which the Base Rate Option applies of a duly completed
request therefor substantially in the form of Exhibit 2.05(a) or a request by
telephone immediately confirmed in writing by letter, facsimile or telex in such
form (each, a "Revolving Credit Loan Request"), it being understood that the
Administrative Agent may rely on the authority of any individual making such a
telephonic request without the necessity of receipt of such written
confirmation. Each Revolving Credit Loan Request shall be irrevocable and shall
specify (i) the proposed Borrowing Date; (ii) the currency in which such
Revolving Credit Loans shall be funded; (iii) the aggregate amount of the
proposed Revolving Credit Loans (expressed in the currency in which such
Revolving Credit Loans shall be funded and also as a Dollar Equivalent if such
Revolving Credit Loans shall be funded in an Optional Currency) comprising each
Borrowing Tranche, (A) the amount of which for each Euro-Rate Borrowing Tranche
(I) in the case of Revolving Credit Loans denominated in Dollars, shall be in
integral multiples of $1,000,000 and not less than $15,000,000, and (II) in the
case of Revolving Credit Loans denominated in Optional Currencies, shall be in
an amount of such Optional Currency reasonably comparable to the minimum amount
specified for Revolving Credit Loans denominated in Dollars in the foregoing
clause (I) as shall be advised by the Administrative Agent in light of the
prevailing market conditions and conventions at the time of such Borrowing and
(B) for each Base Rate Borrowing Tranche, shall not be less than the lesser of
$2,000,000 (and in integral multiples of $1,000,000 in excess thereof) or the
maximum amount available for borrowing; (iv) the Borrower which is to receive
the proceeds of the Revolving Credit Loans; (v) whether the Euro-Rate Option or
Base Rate Option shall apply to the proposed Revolving Credit Loans comprising
the Borrowing Tranche; and (vi) in the case of a Euro-Rate Borrowing Tranche, an
appropriate Interest Period for the proposed Revolving Credit Loans comprising
such Borrowing Tranche.
(b) Swing Loan Requests. Except as otherwise
provided herein, the Company may from time to time prior to the Expiration Date
request the Swing Lenders to make Swing Loans by delivery to the Administrative
Agent not later than 11:00 A.M. Eastern time on the proposed Borrowing Date of a
duly completed request therefor substantially in the form of Exhibit 2.05(b)
hereto or a request by telephone immediately confirmed in writing by letter,
facsimile or telex (each, a "Swing Loan Request"), it being understood that the
Administrative Agent may rely on the authority of any individual making such a
telephonic request without the necessity of receipt of such written
confirmation. Each Swing Loan Request shall be irrevocable and shall specify
the proposed Borrowing Date, the aggregate amount of the proposed Swing Loans
and the Borrower which is to receive the proceeds of such Swing Loans. The
aggregate amount of Swing Loans requested shall not be less than $1,000,000 and
shall be in integral multiples of $500,000.
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2.06 (a) Making Revolving Credit Loans. The
Administrative Agent shall, promptly after receipt by it of a Revolving Credit
Loan Request pursuant to Section 2.05(a), notify the Lenders of its receipt of
such Revolving Credit Loan Request specifying: (i) the proposed Borrowing Date
and the time and method of disbursement of such Revolving Credit Loans; (ii) the
aggregate amount, type and currency of such Revolving Credit Loans and the
applicable Interest Period (if any); (iii) if the Revolving Credit Loan will be
denominated in an Optional Currency, the designated Funding Office for such
Revolving Credit Loans, (iv) the apportionment among the Lenders of the
Revolving Credit Loans as determined by the Administrative Agent in accordance
with each Lender's Ratable Share and (iv) the Borrower which is to receive the
proceeds of the Revolving Credit Loans. Each Lender shall remit the principal
amount of each Revolving Credit Loan to be made by it to the Administrative
Agent at the designated Funding Office such that the Administrative Agent is
able to, and the Administrative Agent shall, to the extent the Lenders have made
funds available to it for such purpose, fund such Revolving Credit Loans to the
designated Borrower in immediately available funds at the designated Funding
Office prior to 2:00 P.M. local time on the Borrowing Date, provided that if any
Lender fails to remit such funds to the Administrative Agent in a timely manner
the Administrative Agent may elect in its sole discretion to fund with its own
funds the Revolving Credit Loan of such Lender on the Borrowing Date and such
Lender shall be subject to the repayment obligation in Section 11.14.
(b) Making Swing Loans. So long as the Swing
Lenders elect to make Swing Loans, the Administrative Agent shall, promptly
after receipt by it of a Swing Loan Request pursuant to Section 2.05(b), notify
the Swing Lenders of its receipt of such Swing Loan Request specifying: (i) the
proposed Borrowing Date and the time and method of disbursement of such Swing
Loans; (ii) the aggregate amount of such Swing Loans; (iii) the apportionment
among the Swing Lenders of the Swing Loans as determined by the Administrative
Agent and (iv) the Borrower which is to receive the proceeds of the Swing Loans.
Each Swing Lender shall remit its Swing Loan to the Administrative Agent such
that the Administrative Agent is able to, and the Administrative Agent shall, to
the extent the Swing Lenders have made funds available to it for such purpose,
fund such Swing Loans to the designated Borrower in Dollars and immediately
available funds at the Principal Office prior to 2:00 P.M. Eastern time on the
Borrowing Date, provided that pursuant to Section 2.01(d)(ii), the Sterling
Swing Loans shall be made available to Books Holdling in British Pounds Sterling
at the Funding Office of the Administrative Agent prior to 5:00 P.M. London time
on the Borrowing Date.
2.07 (a) Borrowings to Repay Swing Loans. The
Swing Lenders may at their option, exercisable at any time, demand repayment of
the Swing Loans and each Lender shall make a Revolving Credit Loan in an amount
equal to such Lender's Ratable Share of the aggregate principal amount of the
outstanding Swing Loans, plus, if the Swing Lenders so request, accrued interest
thereon, provided that no Lender shall be obligated in any event to make
Revolving Credit Loans in excess of its Commitment minus its Ratable Share of
the Dollar Equivalent amount of the Letter of Credit Outstandings. In the event
any Swing Loans shall be repaid with Revolving Credit Loans, such Revolving
Credit Loans shall bear interest at the Base Rate Option and shall be deemed to
have been properly requested in accordance with Section 2.05(a) without regard
to any of the requirements of that provision; provided, however, that Sterling
Swing Loans shall be repaid in British Pounds Sterling if and to the extent that
Revolving Credit Loans are requested for such
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purpose in accordance with the requirements of Section 2.05(a). The
Administrative Agent shall provide notice to the Lenders (which may be a
telephonic or written notice by letter, facsimile or telex) that such Revolving
Credit Loans are to be made under this Section 2.07 and of the apportionment
among the Lenders, and the Lenders shall be unconditionally obligated to fund
such Revolving Credit Loans (whether or not the conditions specified in Section
7.02 are then satisfied) by the time the Administrative Agent so requests,
which shall not be earlier than 12:00 noon Eastern time on the Business Day
next succeeding the date the Administrative Agent gives the demand notice to
the Lenders or, with respect to Sterling Swing Loans made pursuant to Section
2.01(d)(ii), four (4) Business Days after the Administrative Agent gives the
demand notice to the Lenders. Demand notice in respect of all outstanding
Sterling Swing Loans shall be given no later than the tenth Business Day
following the Effective Date. If for any reason a Lender is prohibited from
funding its Ratable Share of Revolving Credit Loans to repay the principal
amount of the Swing Loans outstanding, such Lender shall purchase a
participation in the Swing Loans equal to its Ratable Share of the principal
amount of Swing Loans outstanding.
(b) Irrevocable Obligation. Each Lender's
obligation to make its Ratable Share of Revolving Credit Loans to repay the
principal amount of the Swing Loans outstanding or to purchase its Ratable Share
of the principal amount of the Swing Loans shall be irrevocable and shall not be
subject to any qualification or exception whatsoever and shall be made under all
circumstances, including without limitation any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement or any of the Loan
Documents; (ii) the existence of any claim, setoff, defense or other right which
the Borrowers may have at any time against any Agent, any Swing Lender, any
Lender or any other Person, whether in connection with this Agreement, any
Letter of Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transactions between the Company or any
of its Subsidiaries and the beneficiary named in any Letter of Credit); or (iii)
the occurrence of any Event of Default, Potential Default, or termination of the
Commitments or this Agreement.
2.08 (a) Evidence of Revolving Credit Obligations.
The Obligations of the Borrowers to repay the aggregate unpaid principal amount
of the Revolving Credit Loans made to them by each Lender, together with
interest thereon, shall be recorded by each such Lender from time to time on a
ledger or other record of such Lender, or such Lender shall record such
information in its computer systems; provided that any failure to make any such
record shall in no way detract from the Borrowers' Obligations. The aggregate
unpaid amount of the Revolving Credit Loans shown on the records of such Lender
shall be rebuttably presumptive evidence of the principal amount owing and
unpaid.
(b) Evidence of Swing Loan Obligations. The
Obligations of the Borrowers to repay the aggregate unpaid principal amount of
the Swing Loans made to them by each Swing Lender, together with interest
thereon, shall be recorded by each such Swing Lender from time to time on a
ledger or other record of such Swing Lender, or such Swing Lender shall record
such information in its computer systems; provided that any failure to make any
such record shall in no way detract from the Borrowers' Obligations. The
aggregate unpaid amount of the Swing Loans shown on the records of such Swing
Lender shall be rebuttably presumptive evidence of the principal amount owing
and unpaid.
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(c) Promissory Notes. Any Lender may request that
any Loans made by it to any Borrower be evidenced by a promissory note. In such
event, such Borrower shall prepare, execute and deliver to such Lender a
promissory note payable to the order of such Lender (or, if requested by such
Lender, to such Lender and its registered assigns) and in a form approved by the
Administrative Agent. Thereafter, the Loans evidenced by such promissory note
and interest thereon shall at all times (including after assignment pursuant to
Section 12.11(a)) be represented by one or more promissory notes in such form
payable to the order of the payee named therein (or, if such promissory note is
a registered note, to such payee and its registered assigns).
2.09 Utilization of Commitments in Optional Currencies.
(a) Periodic Computations of Dollar Equivalent
Amounts of Loans and Letters of Credit Outstanding. The Administrative Agent
will determine the Dollar Equivalent amount of (i) proposed Revolving Credit
Loans, Sterling Swing Loans made pursuant to Section 2.01(d)(ii) or Letters of
Credit to be denominated in an Optional Currency as of the requested Borrowing
Date or date of issuance, as the case may be, (ii) outstanding Revolving Credit
Loans or Letters of Credit Outstanding denominated in an Optional Currency as of
the last Business Day of each month, and (iii) outstanding Revolving Credit
Loans denominated in an Optional Currency as of the end of each Interest Period
(each such date under clauses (i) through (iii), a "Computation Date").
(b) Notices from Lenders That Optional Currencies
Are Unavailable to Fund New Loans. The Lenders shall be under no obligation to
make the Revolving Credit Loans requested by the Company which are denominated
in an Optional Currency if the Required Lenders notify the Administrative Agent
(or the Administrative Agent determines in its own discretion) by 5:00 p.m.
(Eastern time) four (4) Business Days prior to the Borrowing Date for such
Revolving Credit Loans that the Optional Currency requested by the Company is
not available to fund such Revolving Credit Loans. In the event the Agent timely
receives a notice from the Required Lenders, or if the Administrative Agent
makes such determination, pursuant to the preceding sentence, the Administrative
Agent will notify the Company no later than 12:00 noon (Eastern time) three (3)
Business Days prior to the Borrowing Date for such Revolving Credit Loans that
the Optional Currency is not then available for such Revolving Credit Loans, and
the Administrative Agent shall promptly thereafter notify the Lenders of the
same. If the Company receives a notice described in the preceding sentence, the
Company may, by notice to the Agent not later than 5:00 p.m. (Eastern time)
three (3) Business Days prior to the Borrowing Date for such Revolving Credit
Loans, withdraw the Revolving Credit Loan Request for such Revolving Credit
Loans. If the Company withdraws such Revolving Credit Loan Request, the
Administrative Agent will promptly notify each Lender of the same and the
Lenders shall not make such Revolving Credit Loans. If the Company does not
withdraw such Revolving Credit Loan Request before such time, (i) the Company
shall be deemed to have requested that the Revolving Credit Loans referred to in
its Revolving Credit Loan Request shall be made in Dollars in an amount equal to
the Dollar Equivalent amount of such Revolving Credit Loans and shall bear
interest under the Base Rate Option, and (ii) the Administrative Agent shall
promptly deliver a notice to each Lender stating: (A) that such Revolving
Credit Loans shall be made in Dollars and shall bear interest under the Base
Rate Option,
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(B) the aggregate amount of such Revolving Credit Loans, and (C) such Lender's
Ratable Share of such Revolving Credit Loans.
(c) Notices From Lenders That Optional Currencies
Are Unavailable to Fund Renewals of the Euro-Rate Option. If the Company
delivers a Revolving Credit Loan Request requesting that the Lenders renew the
Euro-Rate Option with respect to an outstanding Borrowing Tranche of Revolving
Credit Loans denominated in an Optional Currency, the Lenders shall be under no
obligation to renew such Euro-Rate Option if the Required Lenders notify the
Administrative Agent (or the Administrative Agent determines in its own
discretion) by 5:00 p.m. (Eastern time) four (4) Business Days prior to
effective date of such renewal that the Optional Currency requested by the
Company is not available to fund Revolving Credit Loans in such Optional
Currency. In the event the Administrative Agent timely receives a notice from
the Required Lenders or if the Administrative Agent makes such determination
pursuant to the preceding sentence, the Administrative Agent will notify the
Company no later than 12:00 noon (Eastern time) three (3) Business Days prior to
the renewal date that the renewal of such Revolving Credit Loans in such
Optional Currency is not then available, and the Administrative Agent shall
promptly thereafter notify the Lenders of the same. If the Administrative Agent
shall have so notified the Company that any such continuation of Optional
Currency Loans is not then available, any notice of renewal with respect thereto
shall be deemed withdrawn, and such Optional 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 Optional Currency Loans. The Agent
will promptly notify the Company and the Lenders of any such redenomination, and
in such notice, the Administrative Agent will state the aggregate Dollar
Equivalent amount of the redenominated Optional Currency Loans as of the
Computation Date with respect thereto and such Lender's Ratable Share thereof.
(d) Requests for Additional Optional Currencies.
The Company may deliver to the Administrative Agent a written request that
Revolving Credit 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 "Optional Currency" herein provided that such currency must be
freely traded in the offshore interbank foreign exchange markets, freely
transferable, freely convertible into Dollars and available to the Lenders in
the applicable interbank market. The Administrative Agent will promptly notify
the Lenders of any such request promptly after the Administrative Agent receives
such request. The requested currency shall be approved as an Optional Currency
hereunder only if the Administrative Agent and the Required Lenders approve of
the Company's request. The Administrative Agent will promptly notify the
Company of the acceptance or rejection of the Company's request.
2.10 Letter of Credit Subfacility.
(a) Issuance of Letters of Credit. The Company
may request the issuance of a letter of credit (each a "Letter of Credit") on
behalf of itself or another Borrower by delivering to the Issuing Bank a
completed application and agreement for letters of credit in such form as the
Issuing Bank may specify from time to time by no later than 10:00 A.M. Eastern
time at least five (5) Business Days, or such shorter period as may be agreed to
by the Issuing Bank, in advance of the proposed date of issuance. Subject to the
terms and conditions hereof, and provided
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that the applicable conditions set forth in Section 7.02 shall have been
satisfied, and in reliance on the agreements of the other Lenders set forth in
this Section 2.10, the Issuing Bank will issue a Letter of Credit denominated
in either Dollars or an Optional Currency; provided that each Letter of Credit
shall (A) have a maximum maturity of twelve (12) months from the date of
issuance, (B) in no event expire (including without limitation any "evergreen"
provisions providing for renewal absent advance notice by the applicable
Borrower or the Issuing Bank) later than ten (10) Business Days prior to the
Expiration Date; and provided that in no event shall (i) the Dollar Equivalent
Amount of Letter of Credit Outstandings (including the proposed Letter of
Credit) exceed, at any time, $25,000,000, or (ii) the Revolving Facility Usage
(including the proposed Letter of Credit) and the Swing Loans outstanding
exceed, at any time, the Commitments or (iii) the Total Facility Usage
(including the proposed Letter of Credit) exceed, at any time the aggregate
amount of the Commitments. Any amendment of an existing Letter of Credit shall
be deemed to be an issuance of a new Letter of Credit and shall be subject to
the requirements set forth herein pursuant to a form of application acceptable
to the Issuing Bank.
(b) Participations. Immediately upon issuance of
each Letter of Credit, and without further action, each Lender shall be deemed
to, and hereby agrees that it shall, have irrevocably purchased for such
Lender's own account and risk from the Issuing Bank an individual risk
participation interest in such Letter of Credit and drawings thereunder in an
amount equal to such Lender's Ratable Share of the maximum amount which is or at
any time may become available to be drawn thereunder. Promptly after the
Issuing Bank shall have issued any Letter of Credit, the Issuing Bank shall
notify the Lenders of the face amount, the currency, the Dollar Equivalent
amount, the date of issuance and the expiry date thereof. In addition, the
Issuing Bank shall provide to the Lenders within fifteen (15) days after the
close of each calendar quarter prior to the Expiration Date a summary of the
Letters of Credit issued during such calendar quarter setting forth the face
amount, the currency, the Dollar Equivalent amount as of the last Business Day
of such calendar quarter, date of issuance and expiry date of each such Letter
of Credit.
(c) Letter of Credit Fees. The Borrowers shall
pay in Dollars (i) to the Issuing Bank for the ratable account of the Lenders
the Letter of Credit Fee and (ii) to the Issuing Bank for its own account a
fronting fee as agreed to in the Fee Letter, which fees shall be computed on the
daily average Dollar Equivalent amount of Letter of Credit Outstandings and on
the basis of a year of 360 days and the actual number of days elapsed, and shall
be payable in arrears commencing with the last Business Day of each March, June,
September and December following issuance of each Letter of Credit and on the
Expiration Date. The Borrowers shall also pay to the Issuing Bank in Dollars
for the Issuing Bank's sole account the Issuing Bank's then in effect customary
fees and administrative expense payable with respect to the Letters of Credit as
the Issuing Bank may generally charge or incur from time to time in connection
with the issuance, maintenance, modification (if any), assignment or transfer
(if any), negotiation and administration of Letters of Credit.
(d) Disbursements, Reimbursement.
(i) Each Borrower shall be obligated
immediately to reimburse the Issuing Bank in Dollars for the Dollar Equivalent
amount of any drawing under any Letters of
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Credit issued for its account. Such amounts advanced shall become, at the time
the amounts are advanced, Revolving Credit Loans made in Dollars from the
Lenders to such Borrower. Such Revolving Credit Loans shall bear interest at
the rate applicable under the Base Rate Option unless the Company elects to
have a different Interest Rate Option apply to such Revolving Credit Loans
pursuant to and in accordance with the provisions contained in Section 4.01.
(ii) The Issuing Bank will notify (A) the Company of each
demand or presentment for payment or other drawing under each Letter of Credit,
and (B) the Lenders of the aggregate amount of Revolving Credit Loans required
to be made by the Lenders pursuant to such demand, presentment for payment or
other drawing under the Letters of Credit. Before 12:00 noon (Eastern time) on
the date of any such Revolving Credit Loans, each Lender shall remit such
Lender's Ratable Share of such Revolving Credit Loans in Dollars in immediately
available funds to the Administrative Agent for credit to the account of the
Issuing Bank.
(e) Repayment of Participation Advances.
(i) Upon (and only upon) receipt by the Issuing Bank for its
account of immediately available funds from any Borrower (i) in reimbursement of
any payment made by the Issuing Bank under the Letter of Credit with respect to
which any Lender has made a Participation Advance, or (ii) in payment of
interest on such a payment made by the Issuing Bank under such a Letter of
Credit, the Issuing Bank will pay to each Lender, in the same funds as those
received by the Issuing Bank, the amount of such Lender's Ratable Share of such
funds, except the Issuing Bank shall retain the amount of the Ratable Share of
such funds of any Lender that did not make a Participation Advance in respect of
such payment by the Issuing Bank.
(ii) If the Issuing Bank is required at any time to return
to any Borrower, or to a trustee, receiver, liquidator, custodian, or any
official in any Insolvency Proceeding, any portion of the payments made by any
Borrower to the Issuing Bank pursuant to Section 2.10(e)(i) in reimbursement of
a payment made under the Letter of Credit or interest or fee thereon, each
Lender shall, on demand of the Issuing Bank, forthwith return to the Issuing
Bank the amount of its Ratable Share of any amounts so returned by the Issuing
Bank plus interest thereon from the date such demand is made to the date such
amounts are returned by such Lender to the Issuing Bank, at a rate per annum
equal to the Federal Funds Effective Rate in effect from time to time.
(f) Documentation. Each Borrower agrees to be bound by the
terms of the Issuing Bank's application and agreement for Letters of Credit and
the Issuing Bank's written regulations and customary practices relating to
Letters of Credit, though such interpretation may be different from such
Borrower's own. In the event of a conflict between such application or
agreement and this Agreement, this Agreement shall govern. It is understood and
agreed that, except in the case of gross negligence or willful misconduct, the
Issuing Bank shall not be liable for any error, negligence and/or mistakes,
whether of omission or commission, in following any Borrower's
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instructions or those contained in the Letters of Credit or any modifications,
amendments or supplements thereto.
(g) Determinations to Honor Drawing Requests. In
determining whether to honor any request for drawing under any Letter of Credit
by the beneficiary thereof, the Issuing Bank shall be responsible only to
determine that the documents and certificates required to be delivered under
such Letter of Credit have been delivered and that they comply on their face
with the requirements of such Letter of Credit.
(h) Nature of Participation and Reimbursement
Obligations. The obligation of the Lenders to participate in Letters of Credit
pursuant to Section 2.10(b), the obligation of the Lenders pursuant to Section
2.10(d) to fund Revolving Credit Loans upon a draw under a Letter of Credit and
the Obligations of the Borrowers to reimburse the Issuing Bank upon a draw under
Letter of Credit pursuant to Section 2.10 shall be absolute, unconditional, and
irrevocable and shall be performed strictly in accordance with the terms of such
Sections under all circumstances, including the following circumstances:
(i) any set-off, counterclaim, recoupment, defense or
other right which such Lender may have against the Issuing Bank, any Agent, any
Borrower or any other Person for any reason whatsoever;
(ii) the failure of any Borrower or any other Person,
in connection with a Letter of Credit Borrowing, to comply with the conditions
set forth in Sections 2.01, 2.05, 2.06 or 7.02 or as otherwise set forth in this
Agreement for the making of a Revolving Credit Loan, it being acknowledged that
such conditions are not required for the making of a Letter of Credit Borrowing
and the obligation of the Lenders to make Participation Advances under Section
2.10(d);
(iii) any lack of validity or enforceability of any
Letter of Credit;
(iv) the existence of any claim, set-off, defense or
other right which any Borrower or any Lender may have at any time against a
beneficiary or any transferee of any Letter of Credit (or any Persons for whom
any such transferee may be acting), the Issuing Bank, the Administrative Agent,
the Syndication Agent, the Real Estate Administrative Agent or other Lender or
any other Person or, whether in connection with this Agreement, the transactions
contemplated herein or any unrelated transaction (including any underlying
transaction between any Borrower or Subsidiaries of a Borrower and the
beneficiary for which any Letter of Credit was procured);
(v) 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 even if the Issuing Bank has been notified thereof;
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(vi) payment by the Issuing Bank under any Letter of
Credit against presentation of a demand, draft or certificate or other document
which does not comply with the terms of such Letter of Credit;
(vii) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of any
Borrower or the Company and its Subsidiaries taken as a whole;
(viii) any breach of this Agreement or any other Loan
Document by any party thereto;
(ix) the occurrence or continuance of an Insolvency
Proceeding with respect to any Borrower;
(x) the fact that an Event of Default or a Potential
Default shall have occurred and be continuing;
(xi) the Expiration Date shall have passed or this
Agreement or the Commitments hereunder shall have been terminated; or
(xii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing.
(i) Indemnity. In addition to amounts payable as
provided in Section 12.03, the Borrowers hereby agree to protect, indemnify, pay
and save harmless the Issuing Bank from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of counsel and allocated costs of internal
counsel) which the Issuing Bank may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Letter of Credit, other than as a
result of (A) the gross negligence or willful misconduct of the Issuing Bank as
determined by a final judgment of a court of competent jurisdiction or (B)
subject to the following clause (ii), the wrongful dishonor by the Issuing Bank
of a proper demand for payment made under any Letter of Credit or (ii) the
failure of the Issuing Bank to honor a drawing under any such Letter of Credit
as a result of any act or omission, whether rightful or wrongful, of any present
or future de jure or de facto government or governmental authority (all such
acts or omissions herein called "Governmental Acts").
(j) Liability for Acts and Omissions. As between any
Borrower and the Issuing Bank, such Borrower assumes all risks of the acts and
omissions of, or misuse of the Letters of Credit by, the respective
beneficiaries of such Letters of Credit. In furtherance and not in limitation
of the foregoing, the Issuing Bank shall not be responsible for: (i) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for issuance of any
such Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part,
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which may prove to be invalid or ineffective for any reason; (iii) failure of
the beneficiary of any such Letter of Credit to comply fully with any
conditions required in order to draw upon such Letter of Credit; (iv) errors,
omissions, interruptions or delays in transmission or delivery of any messages,
by mail, cable, telegraph, telex or otherwise, whether or not they be in
cipher; (v) errors in interpretation of technical terms; (vi) any loss or delay
in the transmission or otherwise of any document required in order to make a
drawing under any such Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; or (viii) any consequences arising
from causes beyond the control of the Issuing Bank, including any Governmental
Acts, and none of the above shall affect or impair, or prevent the vesting of,
any of the Issuing Bank's rights or powers hereunder.
In furtherance and extension and not in limitation of the
specific provisions set forth above, any action taken or omitted by the Issuing
Bank under or in connection with the Letters of Credit issued by it or any
documents and certificates delivered thereunder shall not put the Issuing Bank
under any resulting liability to the Borrowers except to the extent such action
was taken or omitted as a result of the Issuing Bank's gross negligence or
willful misconduct.
The Lenders may not commence a proceeding against the
Issuing Bank for wrongful disbursement under a Letter of Credit as a result of
acts or omissions constituting gross negligence or willful misconduct of the
Issuing Bank until the Lenders have made the Revolving Credit Loans described in
Section 2.10(d), and the Borrowers may not commence such a proceeding until such
Revolving Credit Loans have been repaid.
(k) Termination of Letter of Credit Facility. In the
event that (i) any restriction is imposed on the Issuing Bank (including,
without limitation, any legal lending limit imposed by the United States of
America or any political subdivision thereof) which in the judgment of the
Issuing Bank after consultation with the Company would prevent the Issuing Bank
from issuing Letters of Credit or maintaining its commitment to issue Letters of
Credit or (ii) there shall have occurred, at any time during the term of this
Agreement (A) any outbreak of hostilities or other national or international
crisis or change in economic conditions if the effect of such outbreak, crisis
or change would make the issuance of Letters of Credit or the discount or sale
thereof impractical, (B) the enactment, publication, decree or other
promulgation of any Law which would have a Material Adverse Effect, or (C) the
taking of any action by any Official Body in respect of its monetary or fiscal
affairs which would have a material adverse effect on the creation of Letters of
Credit in the United States of America, then the Issuing Bank, in the case of
the occurrence of any event described above, shall give written notice of the
occurrence of such event to the Company and the Lenders, whereupon the
commitment of the Issuing Bank to issue Letters of Credit shall terminate on the
effective date of such notice.
(l) Transitional Letters of Credit. Schedule 2.10(l)
contains a list of certain letters of credit issued for the account of the
Borrowers by the Issuing Bank prior to the Effective Date. On the Effective
Date, (a) such letters of credit shall be deemed to be Letters of Credit issued
pursuant to this Section 2.10, and (b) all liabilities of any Borrower with
respect to such letters of credit shall constitute Obligations of such Borrower
with respect to Letters of Credit in accordance with this Agreement and the Loan
Documents as though such Borrower had executed
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an application with respect thereto under this Agreement. On and after the
Effective Date, the Borrowers shall pay Letter of Credit Fees and such other
fees as provided in the second sentence of Section 2.10(c), in each case when
due pursuant to Section 2.10(c), with respect to each Letter of Credit set
forth on Schedule 2.10(l).
(m) Resignation of Issuing Bank. The Issuing Bank (i)
may resign as Issuing Bank or (ii) shall resign if such resignation is requested
by the Required Lenders (if the Issuing Bank is a Lender, the Issuing Bank's
Loans and its Commitment shall be considered in determining whether the Required
Lenders have requested such resignation) or required by Section 5.04(b), in
either case of (i) or (ii) by giving not less than thirty (30) days' prior
written notice to the Company; provided that the Issuing Bank may only be
replaced if all Letters of Credit have expired or been terminated or replaced.
If the Issuing Bank shall resign under this Agreement, then either (a) the
Required Lenders shall appoint from among the Lenders a successor Issuing Bank,
subject to the consent of the Company (unless and until an Event of Default has
occurred and is continuing after which no consent of the Company shall be
required), such consent not to be unreasonably withheld, or (b) if a successor
Issuing Bank shall not be so appointed and approved within the thirty (30) day
period following such Issuing Bank's notice to the Lenders of its resignation,
then such Issuing Bank shall appoint, with the consent of the Company (unless
and until an Event of Default has occurred and is continuing after which no
consent of the Company shall be required), such consent not to be unreasonably
withheld, a successor Issuing Bank, until such time as the Required Lenders
appoint and the Company consents to the appointment of a successor Issuing Bank.
Upon its appointment pursuant to either clause (a) or (b) above, such successor
Issuing Bank shall succeed to the rights, powers and duties of such Issuing Bank
and the term "Issuing Bank" shall mean such successor Issuing Bank, effective
upon its appointment, and the former Issuing Bank's rights, powers and duties as
Issuing Bank shall be terminated without any other or further act or deed on the
part of such former Issuing Bank or any of the parties to this Agreement. After
the resignation of the Issuing Bank hereunder, the provisions of Sections
2.10(i) and (j) and 12.03 shall inure to the benefit of such former Issuing Bank
and such former Issuing Bank shall not by reason of such resignation be deemed
to be released from liability for any actions taken or not taken by it while it
was an Issuing Bank under this Agreement.
2.11 Currency Repayments.
Notwithstanding anything contained herein to the contrary,
the entire amount of principal of and interest on any Loan made in an Optional
Currency shall be repaid in the same Optional Currency in which such Loan was
made, provided, however, that if it is impossible or illegal for the Borrowers
to effect payment of a Loan in the Optional Currency in which such Loan was
made, or if the Borrowers default on their obligations to do so, the Required
Lenders (or the Swing Lenders with respect to any Sterling Swing Loan) may at
their option permit such payment to be made (i) at and to a different location,
subsidiary, affiliate or correspondent of Agent, or (ii) in the Equivalent
Amount of Dollars or (iii) in an Equivalent Amount of such other currency
(freely convertible into Dollars) as the Required Lenders may solely at their
option designate. Upon any events described in (i) through (iii) of the
preceding sentence, the Borrowers shall make such payment and the Borrowers
agree to hold each Lender harmless from and against any loss incurred by any
Lender arising from the cost to such Lender of any premium, any costs of
exchange, the cost
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of hedging and covering the Optional Currency in which such Loan was originally
made, and from any change in the value of Dollars, or such other currency, in
relation to the Optional Currency that was due and owing. Such loss shall be
calculated for the period commencing with the first day of the Interest Period
for such Loan and continuing through the date of payment thereof. Without
prejudice to the survival of any other agreement of any Borrower hereunder,
such Borrower's obligations under this Section 2.15 shall survive termination
of this Agreement.
2.12 Optional Currency Amounts.
Notwithstanding anything contained herein to the
contrary, the Administrative Agent may, with respect to notices by the Company
for Loans in an Optional Currency or voluntary prepayments of less than the
full amount of an Optional Currency Borrowing Tranche, engage in reasonable
rounding of the Optional Currency amounts requested to be loaned or repaid;
and, in such event, Administrative Agent shall promptly notify the Company and
the Lenders of such rounded amounts and the Company's request or notice shall
thereby be deemed to reflect such rounded amounts.
ARTICLE III
BID LOANS
3.01 Bid Loan Requests. Except as otherwise provided
herein, the Company may from time to time prior to the Expiration Date request
that the Lenders make Bid Loans by delivery to the Administrative Agent not
later than 10:00 A.M. Eastern time of a duly completed request therefor
substantially in the form of Exhibit 3.01 hereto or a request by telephone
immediately confirmed in writing by letter, facsimile or telex (each, a "Bid
Loan Request") at least one (1) Business Day prior to the proposed Bid Loan
Borrowing Date if the Company is requesting Fixed Rate Bid Loans and four (4)
Business Days prior to the proposed Bid Loan Borrowing Date if the Company is
requesting Euro-Rate Bid Loans, it being understood that the Administrative
Agent may rely on the authority of any individual making such a telephonic
request without the necessity of receipt of such written confirmation. Each
Bid Loan Request shall be irrevocable, shall be accompanied by payment of any
Fee provided for in the Fee Letters (which Fee shall be nonrefundable) and
shall specify (a) the proposed Bid Loan Borrowing Date, (b) whether the Company
is electing the Fixed Rate Bid Loan Option or the Euro-Rate Bid Loan Option,
(c) the term of the proposed Bid Loan (the "Bid Loan Period") which may be no
less than seven (7) days and no longer than two hundred and seventy (270) days
if the Company is requesting a Fixed Rate Bid Loan and one, two, three or six
months if the Company is requesting a Euro-Rate Bid Loan and the last day
thereof shall end no later than the Expiration Date, (d) the Borrower which is
to receive such Bid Loan and (e) the maximum principal amount (the "Requested
Amount") of such Bid Loan, which shall be not less than $10,000,000 and shall
be an integral multiple of $1,000,000. After giving effect to such Bid Loan
and any other Loan made on or before the Bid Loan Borrowing Date, the aggregate
amount of Total Facility Usage shall not exceed the aggregate amount of the
Commitments of the Lenders. There shall be at least five (5) Business Days
between Bid Loan Borrowing Dates.
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3.02 Bidding for, Accepting and Making Bid Loans.
(a) Bidding. The Administrative Agent shall
promptly after receipt by it of a Bid Loan Request pursuant to Section 3.01
notify the Lenders of its receipt of such Bid Loan Request specifying (i) the
proposed Bid Loan Borrowing Date, (ii) whether the proposed Bid Loan shall be a
Fixed Rate Bid Loan or a Euro-Rate Bid Loan, (iii) the Bid Loan Period, (iv)
the Borrower which is to receive the proceeds of such Bid Loan, and (v) the
principal amount of the proposed Bid Loan. Each Lender may submit a bid (a
"Bid") to the Administrative Agent substantially in the form attached to
Exhibit 3.01 not later than 10:00 A.M. Eastern time on the proposed Bid Loan
Borrowing Date specified in any Bid Loan Request by telephone (immediately
confirmed in writing by letter, facsimile or telex). Each Bid shall specify:
(A) the principal amount of proposed Bid Loan offered by such Lender (the
"Offered Amount") which (i) may be less than, but shall not exceed, the
Requested Amount, (ii) shall be at least $5,000,000, and shall be an integral
multiple of $1,000,000 and (iii) may exceed such Lender's Commitment, and (B)
the Fixed Rate which shall apply to such proposed Bid Loan if the Company has
requested a Fixed Rate Bid Loan or the Euro- Rate Bid Loan Spread which shall
apply to such proposed Bid Loan if the Company has requested a Euro-Rate Bid
Loan. Interest on Bid Loans shall be quoted and computed on the basis of a
year of 360 days and actual days elapsed. Any Bid Loan may be funded by such
Lender's Designated Lender as provided in Section 3.02(c)(i), however, such
Lender shall not be required to specify in its Bid whether such Bid Loans will
be funded by such Designated Lender. If any Bid omits information required
hereunder or contains other conditions or unrelated incentives or information,
the Administrative Agent shall reject such Bid and may in its sole discretion
attempt to notify the Lender submitting such Bid. If the Administrative Agent
so notifies a Lender, such Lender may resubmit its Bid, provided that it does
so prior to 10:00 A.M. Eastern time on the Bid Loan Borrowing Date. The
Administrative Agent shall promptly notify the Company of the Bids which it
receives from the Lenders at or before 11:00 A.M. Eastern time, on the Bid Loan
Borrowing Date. If the Administrative Agent in its capacity as a Lender shall,
in its sole discretion, make a Bid, it shall notify the Company of such Bid
before 9:30 A.M. Eastern time on the proposed Bid Loan Borrowing Date if the
Company is requesting a Fixed Rate Bid Loan or three (3) Business Days before
the proposed Bid Loan Borrowing Date if the Company is requesting a Euro-Rate
Bid Loan.
(b) Accepting Bids. The Company shall
irrevocably accept or reject Bids by notifying the Administrative Agent of such
acceptance or rejection by telephone (immediately confirmed in writing by
letter, facsimile or telex) by 11:30 A.M. Eastern time on the proposed Bid Loan
Borrowing Date if the Company is requesting a Fixed Rate Bid Loan or three (3)
Business Days before the proposed Bid Loan Borrowing Date if the Company is
requesting a Euro-Rate Bid Loan. If the Borrowers elect to accept any Bids,
their acceptance must meet the following conditions: (i) the total amount which
the Borrowers accept from all Lenders must be at least $10,000,000 and be in
integral multiples of $1,000,000 and may not exceed the Requested Amount; (ii)
the Company must accept Bids based solely on the amount of the Fixed Rates or
Euro-Rate Bid Loan Spreads, as the case may be, which each of the Lenders
quoted in their Bids in ascending order of the amount of Fixed Rates or
Euro-Rate Bid Loan Spreads; (iii) the Borrowers may not borrow Bid Loans from
any Lender on the Bid Loan Borrowing Date in an amount exceeding such Lender's
Offered Amount; and (iv) if two or more Lenders make Bids at the same Fixed
Rate (if the Company requested a Fixed Rate Bid Loan) or Euro-Rate Bid Loan
Spread (if the Company requested a Euro-
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Rate Bid Loan) and the Company desires to accept a portion but not all of the
Bids at such Fixed Rate or Euro-Rate Bid Loan Spread, as the case may be, the
Borrowers shall accept a portion of each Bid equal to the product of the
Offered Amount of such Bid times the fraction obtained by dividing the total
amount of Bids which the Company is accepting at such Fixed Rate or Euro-Rate
Bid Loan Spread, as the case may be, by the sum of the Offered Amounts of the
Bids at such Fixed Rate or Euro-Rate Bid Loan Spread; provided that the Company
shall round the Bid Loans allocated to each such Lender upward or downward as
the Company may select to integral multiples of $500,000. The Administrative
Agent shall (i) promptly notify a Lender that has made a Bid of the amount of
its Bid that was accepted or rejected and (ii) as promptly as practical notify
all of the Lenders of all Bids submitted and those which have been accepted.
(c) Funding Bid Loans.
(i) Any Lender (each a "Designating Lender") may at any
time designate one "Designated Lender" to fund Bid Loans which the Designating
Lender is required to fund subject to the terms of this Section 3.02(c)(i). No
Lender shall be entitled to make more than one such designation. The parties to
each such designation shall execute and deliver to the Administrative Agent, for
its acceptance, a Designation Agreement. Upon receipt of an appropriately
completed Designation Agreement executed by a Designating Lender and a designee
representing that it is a Designated Lender and the Company (on its behalf and
on behalf of the Borrowers), the Administrative Agent will accept such
Designation Agreement and give prompt notice thereof to the Company, whereupon,
from and after the effective date specified in the Designation Agreement, the
Designated Lender shall fund Bid Loans on behalf of its Designating Lender
pursuant to Section 3.02 after the Company has accepted a Bid (or a portion
thereof) of the Designating Lender. Each Designating Lender shall serve as the
agent (in its capacity as a Designating Lender) of the Designated Lender and
shall on behalf of the Designated Lender give and receive all communications and
notices and take all actions hereunder, including without limitation votes,
approvals, waivers, consents and amendments under or relating to this Agreement
or the other Loan Documents. Any such notice, communication, vote approval,
waiver, consent or amendment shall be signed by the Designating Lender as agent
(in its capacity as a Designating Lender) for the Designated Lender and shall
not be signed by the Designated Lender. The Company, the Agents and the Lenders
may rely thereon without any requirement that the Designated Lender sign or
acknowledge the same.
(ii) Each Lender (or its Designated Lender, if
appropriate) whose Bid or portion thereof is accepted shall remit the principal
amount of its Bid Loan to the Administrative Agent by 1:00 P.M. Eastern time on
the Bid Loan Borrowing Date. Any Designated Lender which funds a Bid Loan shall
on and after the time of such funding become the obligee under such Bid Loan and
be entitled to receive payment thereof when due. No Lender shall be relieved of
its obligation to fund a Bid Loan, and no Designated Lender shall assume such
obligation, prior to the time such Bid Loan is funded. The Administrative Agent
shall make such funds available to the designated Borrower in Dollars in
immediately available funds at the Principal Office at or before 3:00 P.M.
Eastern Time on the Bid Loan Borrowing Date provided that the conditions
precedent to the making of such Bid Loan set forth in Section 7.02 have been
satisfied not later than 10:00 A.M. Eastern time on the proposed Borrowing Date.
If such conditions precedent have not been satisfied
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prior to such time, then (i) the Administrative Agent shall not make such funds
available, (ii) the Bid Loan Request shall be deemed to be canceled and (iii)
the Administrative Agent shall return the amount previously funded to the
Administrative Agent by each applicable Lender (or its Designated Lender, if
appropriate) no later than the next following Business Day. The Company shall
immediately notify the Administrative Agent of any failure to satisfy the
conditions precedent to the making of Bid Loans under Section 7.02. The
Administrative Agent may assume that the Borrowers have satisfied such
conditions precedent if the Company (i) has delivered to the Administrative
Agent the documents required to be delivered under Section 7.02, (ii) the
Company has not notified the Administrative Agent that the Borrowers have not
satisfied any other conditions precedent, and (iii) the Administrative Agent
has no actual notice of such a failure.
(d) Several Obligations. The obligations of the
Lenders to make Bid Loans after their Bids have been accepted are several. No
Lender shall be responsible for the failure of any other Lender (or its
Designated Lender, if appropriate) to make any Bid Loan which another Lender has
agreed to make.
3.03 Evidence of Bid Loan Obligations. The Obligation of each
Borrower to repay the aggregate unpaid principal amount of the Bid Loans made to
it by each Lender, together with interest thereon, shall be recorded by each
Lender making a Bid Loan from time to time on a ledger or other record of such
Lender, or such Lender shall record such information in its computer systems;
provided that any failure to make any such record shall in no way detract from
the Borrowers' Obligations. The aggregate unpaid amount of the Bid Loans shown
on the records of any such Lender shall be rebuttably presumptive evidence of
the principal amount owing and unpaid.
ARTICLE IV
INTEREST RATES
4.01 Interest Rate Options on Revolving Credit Loans.
(a) Selection of Interest Rate Options. The Borrowers
shall pay interest in respect of the outstanding unpaid principal amount of the
Revolving Credit Loans as selected by the Company from the Base Rate Option or
the Euro-Rate Option set forth below applicable to the Revolving Credit Loans,
it being understood that, subject to the provisions of this Agreement, the
Company may select different Interest Rate Options and different Interest
Periods to apply simultaneously to the Revolving Credit Loans comprising
different Borrowing Tranches and may convert to or renew one or more Interest
Rate Options with respect to all or any portion of the Revolving Credit Loans
comprising any Borrowing Tranche; provided that there shall not be at any one
time outstanding more than six (6) Euro-Rate Borrowing Tranches, and provided
further that until the earlier of (i) such time as the Commitments shall equal
$500,000,000 or (ii) three months from the Effective Date, Revolving Credit
Loans shall be made only at (A) the Base Rate Option or (B) at the Euro-Rate
Option with an Interest Period of one month. Interest on the principal amount
of each Loan made in an Optional Currency shall be paid by the Borrowers in such
Optional Currency.
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(b) Interest Rate Options Available. The Borrowers shall
have the right to select from the following Interest Rate Options applicable to
the Revolving Credit Loans, except that the Borrowers may not select the Base
Rate to apply to a Loan to be made in an Optional Currency:
(i) Base Rate Option: A fluctuating rate per annum
(computed on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed) equal to the Base Rate;
(ii) Euro-Rate Option: A rate per annum (computed on
the basis of a year of 360 days and actual days elapsed, provided that, for
Loans made in an Optional Currency for which a 365-day basis is the only market
practice available to the Administrative Agent, such rate shall be calculated on
the basis of a year of 365 or 366 days, as the case may be for the actual days
elapsed) equal to the Euro-Rate plus the Euro-Rate Margin. The Euro-Rate Margin
shall be subject to adjustment quarterly to the percentage, based on the Fixed
Charge Coverage Ratio, as set forth on Schedule 1.01(A). Each adjustment in the
Euro-Rate Margin shall be effective on the second Business Day next following
delivery to the Administrative Agent of the financial statements or certificate
required to be delivered by the Company pursuant to Section 8.03(a) showing the
basis for such adjustment. In the event that such financial statements or
certificate shall not have been delivered to the Administrative Agent on the
date required for such delivery pursuant to Section 8.03(a), then on the second
Business Day following such date, the Euro-Rate Margin shall be increased to the
highest Euro-Rate Margin set forth on Schedule 1.01(A), provided that after
delivery of such financial statements or certificate (effective two Business
Days following delivery) the Euro-Rate Margin shall be adjusted to the Euro-Rate
Margin that would have been effective had such financial statements or
certificate been timely delivered. Each Euro-Rate Borrowing Tranche shall bear
interest from and including the first day of the Interest Period applicable
thereto, but not including, the last day of such Interest Period. No Interest
Period may end after the Expiration Date.
4.02 Rate Quotations. The Company may call the Administrative
Agent on or before the date on which a Revolving Credit Loan Request is to be
delivered to receive an indication of the interest rates and the applicable
currency exchange rates then in effect, but it is acknowledged that such
projection shall not be binding on the Administrative Agent or the Lenders nor
affect the rate of interest or the calculation of Equivalent Amounts which
thereafter are actually in effect when the election is made.
4.03 Euro-Rate Unascertainable; Illegality; Increased Costs;
Deposits Not Available.
(a) If on any date on which a Euro-Rate would otherwise
be determined, the Administrative Agent shall have determined that:
(i) adequate and reasonable means do not exist for
ascertaining such Euro-Rate, or
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(ii) a contingency has occurred which materially and
adversely affects the London interbank market or any other applicable interbank
market, the Administrative Agent shall have the rights specified in Section
4.03(c).
(b) if at any time any Lender shall have
determined that:
(i) the making, maintenance or funding of any
Revolving Credit Loan to which a Euro-Rate Option applies has been made
impracticable or unlawful by compliance by such Lender in good faith with any
Law or any interpretation or application thereof by any Official Body or with
any request or directive of any such Official Body (whether or not having the
force of Law), or
(ii) such Euro-Rate Option will not adequately and
fairly reflect the cost to such Lender of the establishment or maintenance of
any such Revolving Credit Loan, or
(iii) after making all reasonable efforts, deposits
of the relevant amount in Dollars or in the Optional Currency(as applicable)for
the relevant Interest Period for a Revolving Credit Loan to which a Euro-Rate
Option applies are not available to such Lender in the London interbank market
at the effective cost of funding of a proposed Euro-Rate Loan, the
Administrative Agent shall have the rights specified in Section 4.03(c).
(c) In the case of any event specified in Section
4.03(a) above, the Administrative Agent shall promptly so notify the Lenders and
the Company thereof and in the case of an event specified in Section 4.03 (b)
above, such Lender shall promptly so notify the Administrative Agent and enclose
a certificate with such notice as to the specific circumstances of such notice
and the Administrative Agent shall promptly send copies of such notice and
certificate to the other Lenders and the Company. Upon such date as shall be
specified in such notice (which shall not be earlier than the date such notice
is given) the obligation of (A) the Lenders in the case of such notice given by
the Administrative Agent or (B) such Lender in the case of such notice given by
such Lender, to allow the Borrowers to select, convert to or renew a Euro-Rate
Option or select an Optional Currency (as applicable) shall be suspended until
the Administrative Agent shall have later notified the Company or such Lender
shall have later notified the Administrative Agent, of the Administrative
Agent's or such Lender's, as the case may be, determination that the
circumstances giving rise to such previous determination no longer exist. If at
any time the Administrative Agent makes a determination under subsection (a) or
(b) of this Section 4.03 and the Company has previously notified the
Administrative Agent of its selection of, conversion to or renewal of a
Euro-Rate Option and such Euro-Rate Option has not yet gone into effect, such
notification shall be deemed to provide for selection of, conversion to or
renewal of the Base Rate Option. If any Lender notifies the Administrative
Agent of a determination under subsection (b) of this Section 4.03, the
Borrowers shall, subject to the Borrowers' indemnification Obligations under
Section 5.06(b), as to any Revolving Credit Loan of the Lender to which a
Euro-Rate Option applies, on the date specified in such notice either (i) as
applicable, convert such Loan to the Base Rate Option or select a different
Optional Currency or Dollars or (ii) prepay such Loan in accordance with Section
5.04. Absent due notice from the Company of conversion or prepayment, such Loan
shall automatically be converted to the Base Rate Option and or into a Dollar
Loan, as appropriate, upon such specified date.
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4.04 Selection of Interest Rate Options. Revolving Credit
Loans for which the Company has selected the Base Rate Option shall continue as
such unless and until the Company chooses to convert such Revolving Credit Loans
to a Euro-Rate Borrowing Tranche. If the Borrowers fail to select a new
Interest Period to apply to any Borrowing Tranche at the expiration of an
existing Interest Period applicable to such Euro-Rate Borrowing Tranche in
accordance with the provisions of Section 2.05(a), the Borrowers shall be deemed
to have converted such Euro-Rate Borrowing Tranche to the Base Rate Option
commencing upon the last day of the existing Interest Period.
4.05 Interest Rates Payable on Swing Loans. The Borrowers
shall pay interest in respect of the outstanding unpaid principal amount of any
Swing Loan at a fluctuating rate per annum (computed on the basis of a year of
365 or 366 days, as the case may be, and actual days elapsed) equal to the Base
Rate ; provided however that the Borrowers shall pay interest in respect of the
outstanding unpaid principal amount of any Sterling Swing Loan at a fluctuating
rate per annum (computed on the basis of a year of 365 or 366 days for actual
days elapsed) equal to the sum of (a)(i) the Euro-Rate for deposits in British
Pound Sterling quoted by BBA as set forth on the relevant Dow Jones Market
Service display page for each day during which such Sterling Swing Loan is
outstanding divided by (ii) a number equal to 1.00 minus the Euro-Rate Reserve
Percentage (as defined in clause (B) of the definition of "Euro-Rate" herein)
plus (b) 300 basis points.
4.06 Interest Rates Payable on Bid Loans. The Borrowers
shall pay interest in respect of the outstanding unpaid principal amount of any
Bid Loan at the rate quoted by the Lender making such Bid Loan and accepted by
the Borrowers in accordance with Section 3.02.
4.07 Interest After Default. To the extent permitted by
Law, upon the occurrence of an Event of Default and until such time such Event
of Default shall have been cured or waived:
(a) the Letter of Credit Fees and the rate of
interest for each Loan otherwise applicable pursuant to Section 2.10 or Section
4.01, 4.05 or 4.06 shall be increased by 2.0% per annum; and
(b) each other Obligation hereunder if not paid
when due shall bear interest at a rate per annum equal to the sum of the Base
Rate plus an additional 2.0% per annum from the time such Obligation becomes
due and payable and until it is paid in full.
(c) The Borrowers acknowledge that such
increased rates reflect, among other things, the fact that such Loans or other
amounts have become a substantially greater risk given their default status and
that the Lenders are entitled to additional compensation for such risk; and,
all such interest shall be payable by the Borrowers upon demand by
Administrative Agent.
4.08 Maximum Interest Rate. If at any time the
designated rate applicable to any Loan made by any Lender exceeds such Lender's
highest lawful rate, the rate of interest on such Lender's Loan shall be
limited to such Lender's highest lawful rate.
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ARTICLE V
PAYMENTS
5.01 Payments. All payments and prepayments to be made in
respect of principal, interest, Fees or other amounts due from the Borrowers
hereunder shall be payable prior to 11:00 A.M. (Eastern time) on the date when
due without presentment, demand, protest or notice of any kind, all of which are
hereby expressly waived by the Borrowers, and without setoff, counterclaim or
other deduction of any nature, and an action therefor shall immediately accrue.
Such payments shall be made to the Administrative Agent at the Principal Office
in Dollars except that payments as principal or interest on Loans made in
Optional Currencies shall be made in the applicable Optional Currency to the
designated Funding Office, and in immediately available funds, and the
Administrative Agent shall promptly distribute such amounts in immediately
available funds, provided that in the event payments are received by 11:00 A.M.
(Eastern time) by the Administrative Agent and such payments are not distributed
on the same day received by the Administrative Agent, the Administrative Agent
shall pay the Federal Funds Effective Rate in the case of loans or other amounts
due in Dollars, or the Overnight Rate in the case of Loans or other amounts due
in an Optional Currency with respect to the amount of such payments for each day
held by the Administrative Agent and not distributed to the Lenders (or the
Syndication Agent). The Administrative Agent's and each Lender's statement of
account, ledger or other relevant record shall, in the absence of manifest
error, be conclusive as the statement of the amount of principal of and interest
on the Loans and other amounts owing under this Agreement and the Fee Letters
(including the Equivalent Amounts of the applicable currencies where such
computations are required)and shall be deemed an "account stated." Unless the
Interest Period in respect thereof is continued or converted in accordance with
Section 4.02, all Revolving Credit Loans to which a Euro-Rate Option applies
shall be due and payable on the last day of the applicable Interest Period. All
Bid Loans shall be due and payable on the last day of the applicable Bid Loan
Period. All Loans outstanding on the Expiration Date shall be due and payable
in full on the Expiration Date.
5.02 Pro Rata Treatment of Lenders. Each borrowing of Revolving
Credit Loans shall be allocated to each Lender according to its Ratable Share,
and each selection of, conversion to or renewal of any Interest Rate Option and
each payment or prepayment by the Borrowers with respect to principal, interest,
Fees, or other amounts due with respect to the Revolving Credit Loans (except
for Fees payable under the Fee Letters, any payments with respect to the Swing
Loans or Bid Loans, and except as provided in Section 4.03(b), 5.04(b), 5.06 or
12.03) shall be made in proportion to the applicable Revolving Credit Loans
outstanding from each Lender and if no such Loans are then outstanding, in
proportion to the Ratable Share of each Lender.
5.03 Interest Payment Dates. Interest on Loans to which the Base
Rate Option applies shall be due and payable in arrears on the first Business
Day of each month after the Effective Date and on the Expiration Date or upon
acceleration of the Obligations. Interest on Loans (whether Revolving Credit
Loans or Bid Loans) to which the Euro-Rate Option applies shall be due and
payable in the currency in which such loan was made on the last day of each
Interest Period for those Loans and, if any such Interest Period is longer than
three months, also on the last day of every third month during such Interest
Period. Interest on Fixed Rate Bid Loans shall be due and payable on the last
day of each Bid Loan Period and, if any Bid Loan Period is longer than 90 days,
also on the
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90th day (and the 180th day if applicable) during such Interest Period.
Interest on Sterling Swing Loans shall be due and payable in British Pounds
Sterling on the date such Sterling Swing Loans are repaid with Revolving Credit
Loans pursuant to Section 2.07(a). Interest on mandatory prepayments of
principal under Sections 2.04 or 5.05 shall be due on the date such mandatory
prepayment is due. Interest on the principal amount of each Loan or other
Obligation shall be due and payable on demand after such principal amount or
other Obligation becomes due and payable (whether on the stated maturity date,
upon acceleration or otherwise).
5.04 Prepayments.
(a) The Borrowers shall have the right at their option
from time to time to prepay the Loans in whole or part without premium or
penalty (except as provided in subsection (b) below or in Section 5.06) to the
designated Funding Office in the currency in which such Loan was made:
(i) at any time with respect to any Loan to which the
Base Rate Option applies;
(ii) on the last day of the applicable Interest
Period with respect to Revolving Credit Loans to which a Euro-Rate Option
applies,
(iii) on the date specified in a notice by any Lender
pursuant to Section 4.03(b) with respect to any Loan to which a Euro-Rate Option
applies,
(iv) on the date specified in the notice required by
this Section 5.04(a) with respect to any Bid Loan, provided that the Company
shall have received the prior written consent of the holder of such Bid Loan to
such prepayment.
Whenever the Borrowers desire to prepay any part of the Revolving
Credit Loans, the Company shall provide a prepayment notice to the
Administrative Agent at least one (1) Business Day prior to the date of
prepayment of the Revolving Credit Loans setting forth the following
information:
(w) the Borrower which intends to make the proposed
prepayment;
(x) the date, which shall be a Business Day, on which
the proposed prepayment is to be made;
(y) a statement indicating the application of the
prepayment among the Revolving Credit Loans, Swing Loans and Bid
Loans; and
(z) the total principal amount and currency of such
prepayment, the Dollar Equivalent amount of which shall not be less
than $5,000,000 (or $1,000,000 in the case of Swing Loans).
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All prepayment notices shall be irrevocable. The principal amount of
the Loans for which a prepayment notice is given, together with interest on such
principal amount, except with respect to Loans to which the Base Rate Option
applies, shall be due and payable on the date specified in such prepayment
notice as the date on which the proposed prepayment is to be made in the
currency in which such Loan was made. If the Borrowers prepay a Loan but fail
to specify the applicable Borrowing Tranche which is being prepaid, the
prepayment shall be applied (i) first to Swing Loans, next to Revolving Credit
Loans and then to Bid Loans; and (ii) after giving effect to the allocations in
clause (i) above and in the preceding sentence, first to Loans to which the Base
Rate Option applies and then to Loans to which the Euro-Rate Option applies, and
then to Optional Currency Loans. Any prepayment hereunder shall be subject to
the Borrowers' Obligation to indemnify the Lenders under Section 5.06(b).
(b) In the event any Lender (i) gives notice under Section
4.03(b) or Section 5.06(a), (ii) does not fund Revolving Credit Loans because
the making of such Loans would contravene any Law applicable to such Lender,
(iii) does not approve any action as to which consent of the Required Lenders is
requested by the Borrowers and obtained hereunder or (iv) becomes subject to the
control of an Official Body (other than normal and customary supervision), then,
unless an Event of Default shall have occurred and be continuing, the Borrowers
shall have the right at their option, with the consent of the Administrative
Agent, which shall not be unreasonably withheld, to prepay the Loans of such
Lender in whole together with all interest accrued thereon and terminate such
Lender's Commitment, within ninety (90) days after (w) receipt of such Lender's
notice under Section 4.03(b) or 5.06(a), (x) the date such Lender has failed to
fund Revolving Credit Loans because the making of such Loans would contravene a
Law applicable to such Lender, (y) the date of obtaining the consent which such
Lender has not approved or (z) the date such Lender became subject to the
control of an Official Body, as applicable; provided that the Borrowers shall
also pay to such Lender at the time of such prepayment any amounts required
under Section 5.06 and any accrued interest due on such amount and any related
Fees; and provided further, that the Borrowers shall post cash collateral or
other security satisfactory to the Administrative Agent in an amount equal to
such Lender's Ratable Share of any Letter of Credit Outstandings; and provided
further, that the remaining Lenders shall have no obligation hereunder to
increase their Commitments. Notwithstanding the foregoing, the Administrative
Agent may only be replaced subject to the requirements of Section 11.13.
(c) In the event any Lender does not approve any increase in
the aggregate Commitments as to which increase the Company has obtained the
consent of all other Lenders whose Commitments will not otherwise be prepaid and
terminated pursuant to this Section 5.04(c), then, unless an Event of Default
shall have occurred and be continuing, the Borrowers shall have the right at
their option, with the consent of the Administrative Agent, which shall not be
unreasonably withheld, to prepay the Loans of such Lender in whole together with
all interest accrued thereon and terminate such Lender's Commitment (or Lenders'
Commitments) within ninety (90) days after the date the Company has obtained the
consent of all such other Lenders; provided, that the termination of such
Lender's Commitment (or Lenders' Commitments) pursuant to this Section 5.04(c)
shall only be permitted if the Borrowers have identified one or more Assignee
Lenders acceptable to the Administrative Agent which Assignee Lenders have
agreed to the increase in the aggregate Commitments and such termination is
accomplished by means of an assignment
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pursuant to Section 12.11 which does not reduce the aggregate amount of the
Commitments after giving effect to the addition of any such Assignee Lenders;
and provided further, that the remaining Lenders shall have no obligation
hereunder to increase their Commitments.
(d) Each Lender agrees that upon the occurrence of any
event giving rise to increased costs or other special payments under Section
4.03 or 5.06 with respect to such Lender, it will if requested by the Company,
use reasonable efforts (subject to overall policy considerations of such Lender)
to designate another Lending Office for any Loans or Letters of Credit affected
by such event, provided that such designation is made on such terms that such
Lender and its Lending Office suffer no economic, legal or regulatory
disadvantage, as determined by such Lender, with the object of avoiding the
consequence of the event giving rise to the operation of such Section. Nothing
in this Section 5.04(d) shall affect or postpone any of the Obligations of any
Borrower or the rights of any Agent or any Lender provided in this Agreement.
5.05 Mandatory Prepayments.
(a) Currency Fluctuations. If on any Computation Date
the Total Facility Usage is equal to or greater than 105% of the Commitments as
a result of a change in exchange rates between one (1) or more Optional
Currencies and Dollars, then the Administrative Agent shall notify the Company
of the same. The Company shall pay or prepay Loans (subject to the Company's
indemnity obligations under Sections 5.04 and 5.06) within one (1) Business Day
after receiving such notice such that the Total Facility Usage shall not exceed
the aggregate Commitments after giving effect to such payments or prepayments.
(b) Application Among Interest Rate Options. All
prepayments required pursuant to this Section 5.05 shall first be applied among
the Interest Rate Options to the principal amount of the Loans subject to the
Base Rate Option, then to Dollar Loans subject to a Euro-Rate Option and then to
Optional Currency Loans subject to the Euro-Rate Option. In accordance with
Section 5.06(b), the Company shall indemnify the Lenders and any Lending Office
for any loss or expense, including loss of margin, incurred with respect to any
such prepayments applied against Loans subject to a Euro-Rate Option on any day
other than the last day of the applicable Interest Period.
5.06 Additional Compensation in Certain Circumstances.
(a) Increased Costs or Reduced Return Resulting From
Taxes, Reserves, Capital Adequacy Requirements, Expenses, Etc. If any Law,
guideline or interpretation or any change in any Law, guideline or
interpretation or application thereof by any Official Body charged with the
interpretation or administration thereof or compliance with any request or
directive (whether or not having the force of Law) of any central bank or other
Official Body:
(i) subjects any Agent, the Issuing Bank or any
Lender to any tax or changes the basis of taxation with respect to this
Agreement, the other Loan Documents, the Loans, the Letters of Credit or
payments by the Borrowers of principal, interest, Fees, or other amounts due
from the Borrowers hereunder or under the other Loan Documents (except for taxes
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on the net income of any such Agent, the Issuing Bank, any Lender or any
Lending Office of any Lender),
(ii) imposes, modifies or deems applicable any reserve,
special deposit or similar requirement against credits or commitments to extend
credit extended by, or assets (funded or contingent) of, deposits with or for
the account of, or other acquisitions of funds by, any Agent, the Issuing Bank,
any Lender or any Lending Office of any Lender, or
(iii) imposes, modifies or deems applicable any capital
adequacy or similar requirement (A) against assets (funded or contingent) of, or
letters of credit, other credits or commitments to extend credit extended by,
any Lender, or (B) otherwise applicable to the obligations of any Agent, the
Issuing Bank or any Lender or any Lending Office of any Lender under this
Agreement, and the result of any of the foregoing is to increase the cost to,
reduce the income receivable by, or impose any additional expense (including
loss of margin) upon any Agent, the Issuing Bank or Lender or its Lending Office
with respect to this Agreement, the other Loan Documents or the making,
maintenance or funding of any part of the Loans or maintaining or participating
in the Letters of Credit (or, in the case of any capital adequacy or similar
requirement, to have the effect of reducing the rate of return on any Agent's,
the Issuing Bank's or any Lender's capital, taking into consideration such
Agent's, Issuing Bank's or Lender's customary policies with respect to capital
adequacy) by an amount which such Agent, Issuing Bank or Lender in its sole
discretion deems to be material, such Agent, Issuing Bank or Lender shall from
time to time notify the Company and the Administrative Agent of the amount
determined in good faith (using any averaging and attribution methods employed
in good faith) by such Agent, Issuing Bank or Lender to be necessary to
compensate such Agent, Issuing Bank or Lender for such increase in cost,
reduction of income or additional expense. Such notice shall set forth in
reasonable detail the basis for such determination. Such amount shall be due
and payable by the Borrowers to such Agent, Issuing Bank or Lender ten (10)
Business Days after such notice is given.
(b) Indemnity. In addition to the compensation
required by subsection (a) of this Section 5.06, the Borrowers shall indemnify
each Lender against all liabilities, losses or expenses (including loss of
margin, any loss or expense incurred in liquidating or employing deposits from
third parties and any loss or expense incurred in connection with funds acquired
by a Lender to fund or maintain Loans subject to the Euro-Rate Option or the Bid
Loan Fixed Rate Option) which such Lender sustains or incurs as a consequence of
any:
(i) payment, prepayment, conversion or renewal of
any Loan to which the Euro-Rate Option or any Bid Loan Fixed Rate Option applies
on a day other than the last day of the corresponding Interest Period or Bid
Loan Period, as applicable, (whether or not such payment or prepayment is
mandatory, voluntary or automatic, through acceleration or otherwise, and
whether or not such payment or prepayment is then due),
(ii) attempt by the Borrowers to revoke (expressly,
by later inconsistent notices or otherwise) in whole or part any Revolving
Credit Loan Request under Section 2.05 or, conversion/continuation notice under
Section 2.05 or prepayment notice under Section 5.04, or
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(iii) default by the Borrowers in the performance or
observance of any covenant or condition contained in this Agreement or any other
Loan Document, including any failure of the Borrowers to pay when due (by
acceleration or otherwise) any principal, interest, Fee or any other amount due
hereunder.
If any Lender sustains or incurs any such loss or expense it shall
from time to time notify the Company of the amount determined in good faith by
such Lender (which determination may include such assumptions, allocations of
costs and expenses and averaging or attribution methods as such Lender shall
deem reasonable) to be necessary to indemnify such Lender for such loss or
expense. Such notice shall set forth in reasonable detail the basis for such
determination. Such amount shall be due and payable by the Borrowers to such
Lender ten (10) Business Days after such notice is given.
(c) Taxes. Any and all payments made by the Borrowers
hereunder or under the Loan Documents shall be made, in accordance with the
provisions hereof, free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions, charges or withholdings,
and all liabilities with respect thereto, excluding, in the case of each Agent,
the Issuing Bank, each Lender and each Lending Office, taxes on the overall net
income of such entity imposed by the jurisdiction under the Laws of which such
entity is organized or any taxing authority thereof or therein (all of such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If the Borrowers shall
be required by Law to deduct any Taxes from or in respect of any sum payable
hereunder or under any Loan Document, (i) the sum payable shall be increased as
may be necessary so that, after making all required deductions (including
deductions applicable to additional sums payable under this Section 5.06(c)),
such Lender, the Issuing Bank or such Agent, as the case may be, receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrowers shall make such deductions, and (iii) the Borrowers shall pay
the full amount deducted to the relevant taxation authority or other authority
in accordance with applicable Law. In addition, the Company agrees to pay any
present or future stamp, transfer, recording, filing or documentary taxes, fees
or any other excise or property taxes, charges, or similar levies which arise
from any payment made hereunder or from the execution, delivery, or registration
of, or otherwise with respect to, this Agreement. All such Taxes shall be paid
by the Borrowers prior to the date on which penalties attach thereto or interest
accrues thereon; provided that if any penalties or interest become due, the
Borrowers may make prompt payment thereof to the appropriate governmental
authority. The Borrowers shall indemnify each Lender, the Issuing Bank and each
Agent for the full amount of such Taxes (including any taxes on amounts payable
under this Section 5.06(c)) paid by such Lender, the Issuing Bank or such Agent
and any liability (including penalties, interest and expenses) arising therefrom
or with respect thereto, whether or not such Taxes were correctly or legally
asserted. Any indemnification payment shall be due and payable to such Lender,
the Issuing Bank or such Agent ten (10) Business Days after the date such
Lender, the Issuing Bank or such Agent makes written demand therefor. Within 30
days after the date of any payment of any Taxes by the Company, the Company
shall furnish to such Lender, the Issuing Bank or such Agent, at its address
referred to herein, the original or a certified copy of a receipt evidencing
payment thereof. If no Taxes are payable in respect of any payment by the
Company, the Company shall, if so requested, provide a certificate of an
Authorized Officer of the Company to that effect.
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(d) Survival. The Obligations of the Borrowers under
this Section 5.06 shall survive and continue in full force and effect
notwithstanding (i) the execution and delivery of this Agreement and the other
Loan Documents, (ii) the making of the Loans, (iii) the repayment of the Loans,
(iv) the payment in full of all interest, Fees and all other Obligations and (v)
the termination of all obligations of the Agents, the Issuing Bank and the
Lenders to the Borrowers under all Loan Documents.
5.07 Interbank Market Presumption. For all purposes of this
Agreement with respect to any aspects of the Euro-Rate, any Loan under the
Euro-Rate Option or any Optional Currency, each Lender and the Administrative
Agent shall be presumed to have obtained rates, funding currencies, deposits,
and the like in the applicable interbank market regardless whether it did so or
not; and, each Lender's and the Administrative Agent's determination of amounts
payable under, and actions required or authorized by, Section 4.03 and 5.06
shall be calculated, at each Lender's and the Administrative Agent's option, as
though each Lender and the Administrative Agent funded all Loans under the
Euro-Rate Option through the purchase of deposits of the types and maturities
corresponding to the deposits used as a reference in accordance with the terms
hereof in determining the Euro-Rate applicable to such Loans, whether in fact
that is the case.
5.08 Judgment Currency.
(a) Currency Conversion Procedures for Judgments.
If for the purposes of obtaining judgment in any court it is
necessary to convert a sum due hereunder in any currency (the "Original
Currency") into another currency (the "Other Currency"), the parties hereby
agree, to the fullest extent permitted by Law, that the rate of exchange used
shall be that at which in accordance with normal banking procedures each Lender
could purchase the Original Currency with the Other Currency after any premium
and costs of exchange on the Business Day preceding that on which final judgment
is given.
(b) Indemnity in Certain Events.
The obligation of the Borrowers in respect of any sum due
from Borrowers to any Lender hereunder shall, notwithstanding any judgment in an
Other Currency, whether pursuant to a judgment or otherwise, be discharged only
to the extent that, on the Business Day following receipt by any Agent, by the
Issuing Bank or by any Lender of any sum adjudged to be so due in such Other
Currency, such Agent, Issuing Bank or Lender may in accordance with normal
banking procedures purchase the Original Currency, with such Other Currency. If
the amount of the Original Currency so purchased is less than the sum originally
due to such Agent, Issuing Bank or Lender in the Original Currency, the
Borrowers agree, as a separate obligation and notwithstanding any such judgment
or payment, to indemnify such Agent, Issuing Bank or Lender against such loss.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.01 Representations and Warranties. The Borrowers, jointly and
severally, represent and warrant to the Agents, the Issuing Bank and each of the
Lenders as follows:
(a) Organization and Qualification. The Company and
each of its Subsidiaries is a corporation or partnership, duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization. The Company and each of its Subsidiaries has the lawful power to
own or lease its properties and to engage in the business it presently conducts
or proposes to conduct. The Company and each of its Subsidiaries is duly
licensed or qualified and in good standing in each jurisdiction listed on
Schedule 6.01(a) and in all other jurisdictions where the property owned or
leased by it or the nature of the business transacted by it or both makes such
licensing or qualification necessary, except where the failure to be so
licensed, qualified or in good standing individually or in the aggregate could
not reasonably be expected to have a Material Adverse Effect.
(b) Capitalization and Ownership. All of the issued
and outstanding shares of capital stock of the Company have been validly issued
and are fully paid and nonassessable. There are no options, warrants or other
rights outstanding to purchase any shares of capital stock of the Company except
any options, warrants or other rights issued pursuant to stock purchase or
option programs established by the Board of Directors of the Company for the
benefit of any of its employees, officers or directors or as indicated on
Schedule 6.01(b).
(c) Subsidiaries. Schedule 6.01(c) states the name of
each of the Company's Subsidiaries, its jurisdiction of incorporation, its
authorized capital stock, the issued and outstanding shares (referred to herein
as the "Subsidiary Shares") and the owners thereof if it is a corporation and
its outstanding partnership interests (the "Partnership Interests") if it is a
partnership. The Company and each of its Subsidiaries has good and marketable
title to all of the Subsidiary Shares and Partnership Interests it purports to
own, free and clear in each case of any Lien. All Subsidiary Shares and
Partnership Interests have been validly issued and all Subsidiary Shares are
fully paid and nonassessable. All capital contributions and other consideration
required to be made or paid in connection with the issuance of the Partnership
Interests have been made or paid, as the case may be. There are no options,
warrants or other rights outstanding to purchase any such Subsidiary Shares or
Partnership Interests except as indicated on Schedule 6.01(c).
(d) Power and Authority. Each Borrower has full power
to enter into, execute, deliver and carry out this Agreement and the other Loan
Documents to which it is a party, to incur the Indebtedness contemplated by the
Loan Documents and to perform its Obligations under the Loan Documents to which
it is a party and all such actions have been duly authorized by all necessary
proceedings on its part (including any required consent or authorization of
stockholders).
(e) Validity and Binding Effect. This Agreement has
been duly and validly executed and delivered by each Borrower, and each other
Loan Document which any Borrower is required to execute and deliver on or after
the Effective Date will have been duly
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executed and delivered by such Borrower on the required date of delivery of
such Loan Document. This Agreement and each other Loan Document constitutes or
will constitute the legal, valid and binding obligation of each Borrower which
is or will be a party thereto on and after its date of delivery thereof,
enforceable against such Borrower in accordance with its terms, except to the
extent that enforceability of any of such Loan Document may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforceability of creditors' rights generally or limiting the
right of specific performance.
(f) No Conflict. Neither the execution and delivery of
this Agreement or the other Loan Documents by any Borrower nor the consummation
of the transactions herein or therein contemplated nor the incurrence of the
Indebtedness contemplated by the Loan Documents nor the compliance with the
terms and provisions hereof or thereof will conflict with, constitute a default
under or result in any breach of (i) the terms and conditions of the certificate
of incorporation, by-laws or other organizational documents of any Borrower or
(ii) any Law or any agreement or instrument or order, writ, judgment, injunction
or decree to which any Borrower is a party or by which it or any of its
Properties may be subject or bound, or result in the creation or enforcement of
any Lien, charge or encumbrance whatsoever upon any Property (now or hereafter
acquired) of any Borrower.
(g) Litigation. There are no actions, suits,
proceedings or investigations pending or, to the knowledge of any Borrower,
threatened against the Company or any of its Subsidiaries at law or equity
before any Official Body or arbitrator which individually or in the aggregate
could reasonably be expected to have a Material Adverse Effect. None of the
Company or any of its Subsidiaries is in violation of any order, writ,
injunction or any decree of any Official Body which individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect.
(h) Title to Properties. The real property owned or
leased by the Company and its Subsidiaries is described on Schedule 6.01(h).
The Company and its Subsidiaries have good and marketable title to or valid
leasehold interests in all Properties and other rights which they purport to own
or lease or which are reflected as owned or leased on their books and records,
free and clear of all Liens and encumbrances except Permitted Liens, and subject
to the terms and conditions of the applicable leases, except to the extent that
the failure to do so individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect. All leases of Property of the
Company and its Subsidiaries are in full force and effect without the necessity
for any consent which has not previously been obtained upon consummation of the
transactions contemplated hereby.
(i) Financial Statements.
(i) Historical Statements. The Company has
delivered to each of the Lenders copies of its audited consolidated year-end
financial statements for and as of the end of the Fiscal Year ended January 26,
1997 (the "Annual Statements"). In addition, the Company has delivered to each
of the Lenders copies of its unaudited consolidated interim financial statements
for the Fiscal Quarter ended July 27,1997 (the "Interim Statements") (the Annual
and Interim Statements
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being collectively referred to as the "Historical Statements"). The Historical
Statements were compiled from the books and records maintained by the Company's
management, are correct and complete and fairly represent the consolidated
financial condition of the Company and its Subsidiaries as of their dates and
the results of operations for the fiscal periods then ended and have been
prepared in accordance with GAAP consistently applied (except as disclosed in
such financial statements), subject (in the case of the Interim Statements) to
normal year-end audit adjustments.
(ii) Financial Projections. The Company has
delivered to each of the Lenders financial projections of the Company and its
Subsidiaries for the period from January 27,1997 through January 26, 2003
derived from various assumptions of the Company's management (the "Financial
Projections"). The Financial Projections accurately reflect the liabilities of
the Company and its Subsidiaries upon consummation of the transactions
contemplated hereby as of the Effective Date.
(iii) Absence of Undisclosed Liabilities. Neither
the Company nor any of its Subsidiaries has any material liabilities, contingent
or otherwise, or forward or long-term commitments that are not disclosed in the
audited year-end financial statements delivered to the Lenders pursuant to
subsection (A) above or Section 8.03(b) or in the notes thereto, other than as
incurred in the ordinary course of business after the date of such statements.
Except as disclosed therein or on the Schedules hereto, there are no unrealized
or anticipated losses from any commitments of the Company or any Subsidiary of
the Company which individually or in the aggregate could reasonably be expected
to have a Material Adverse Effect. Since the date of the most recent audited
year-end financial statements delivered to the Lenders pursuant to subsection
(A) above or Section 8.03(b), no circumstances or events have occurred which
could reasonably be expected to have a Material Adverse Effect.
(j) Use of Proceeds; Margin Stock; Section 20
Subsidiaries.
(i) the Borrowers intend to use the proceeds of
the Loans in accordance with Section 8.01(j);
(ii) neither the Company nor any of its
Subsidiaries engages or intends to engage principally, or as one of its
important activities, in the business of extending credit for the purpose,
immediately, incidentally or ultimately, of purchasing or carrying margin stock
(within the meaning of Regulation U). No part of the proceeds of any Loan has
been used, immediately, incidentally or ultimately, to purchase or carry any
margin stock (other than common stock of the Company repurchased in accordance
with Section 8.02(e)) or to extend credit to others for the purpose of
purchasing or carrying any margin stock or to refund Indebtedness originally
incurred for such purpose, or for any purpose which entails a violation of or
which is inconsistent with the provisions of the regulations of the Board of
Governors of the Federal Reserve System. Neither the Company nor any of its
Subsidiaries holds or intends to hold margin stock in such amounts that more
than 25% of the reasonable value of the assets of the Company or any of its
Subsidiaries are or will be represented by margin stock; and
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(iii) the Borrowers do not intend to use any
portion of the proceeds of the Loans, directly or indirectly (i) knowingly to
purchase any Ineligible Securities from a Section 20 Subsidiary during any
period in which such Section 20 Subsidiary makes a market in such Ineligible
Securities, (ii) knowingly to purchase during the underwriting or placement
period Ineligible Securities being underwritten or privately placed by a Section
20 Subsidiary, or (iii) to make payments of principal or interest on Ineligible
Securities underwritten or privately placed by a Section 20 Subsidiary and
issued by or for the benefit of any Borrower or any Affiliate of any Borrower.
(k) Full Disclosure. On the Effective Date, neither
this Agreement nor any other Loan Document, nor any certificate, statement,
agreement or other documents furnished to the Administrative Agent or any Lender
in connection herewith or therewith, contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained herein and therein, in light of the circumstances under which they
were made, not misleading. On the Effective Date, there is no fact known to any
Borrower which could reasonably be expected to have a Material Adverse Effect
and which has not been set forth in this Agreement or in the certificates,
statements, agreements or other documents furnished in writing to the
Administrative Agent and the Lenders prior to or on the Effective Date in
connection with the transactions contemplated hereby.
(l) Taxes. All federal, state, local and other tax
returns required to have been filed with respect to the Company and each of its
Subsidiaries have been filed and payment or adequate provision has been made for
the payment of all taxes, fees, assessments and other governmental charges which
have or may become due pursuant to said returns or to assessments received
except to the extent that such taxes, fees, assessments and other charges are
being contested in good faith by appropriate proceedings diligently conducted
and for which such reserves or other appropriate provisions, if any, as shall be
required by GAAP shall have been made. There are no agreements or waivers
extending the statutory period of limitations applicable to any federal income
tax return of the Company and its Subsidiaries for any period. No tax liens
have been filed and no claims are pending or, to the knowledge of the Borrowers,
threatened with respect to taxes which could reasonably be expected to have a
Material Adverse Effect. The charges, accruals and reserves on the books of the
Company and its Subsidiaries in respect of any taxes or other governmental
charges are maintained in accordance with GAAP. Except as disclosed on Schedule
6.01(l), there are no agreements or other arrangements with any Person whereby
the Company or any of its Subsidiaries has any obligation to such Person in
respect of the payment of any taxes or other governmental charges. For purposes
of this Section, the Borrowers make no representations with respect to (i) any
tax returns filed by Kmart, (ii) the payment of any fees, assessments or other
governmental charges which have or may become due pursuant to said returns by
Kmart or assessments received by Kmart and (iii) any agreements or waivers
extending the statutory period of limitations applicable to any said returns of
Kmart.
(m) Consents and Approvals. No consent, approval,
exemption, order or authorization of, or a registration or filing with any
Official Body or any other Person is required by Law or any agreement in
connection with the execution and delivery of this Agreement and the other Loan
Documents by any Borrower, the incurrence of the Indebtedness contemplated by
the
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Loan Documents, the consummation of the transactions herein and therein
contemplated and the compliance with the terms and provisions hereof and
thereof, except as listed on Schedule 6.01(m), all of which shall have been
obtained or made on or prior to the Effective Date except as otherwise
indicated on Schedule 6.01(m).
(n) No Event of Default; Compliance with Instruments.
No Event of Default or Potential Default has occurred and is continuing.
Neither the Company nor any of its Subsidiaries is in violation of (i) any term
of its certificate of incorporation, by-laws, or other organizational documents
or (ii) any agreement or instrument or order, writ, judgment, injunction or
decree to which it is a party or by which it or any of its Properties may be
subject or bound where such violation individually or in the aggregate could
reasonably be expected to have a Material Adverse Effect.
(o) Patents, Trademarks, Copyrights, Licenses, Etc.
The Company and each of its Subsidiaries owns or possesses all the material
patents, trademarks, service marks, trade names, copyrights, licenses,
registrations, franchises, permits and rights necessary to own and operate its
properties and to carry on its business as presently conducted and planned to be
conducted by the Company or such Subsidiary, without known conflict with the
rights of others.
(p) Insurance. Schedule 6.01(p) describes all
insurance policies and other bonds to which the Company or any of its
Subsidiaries is a party, all of which are valid and in full force and effect. No
notice has been given or claim made and no grounds exist to cancel or avoid any
of such policies or bonds or to reduce the coverage provided thereby. Such
policies and bonds provide adequate coverage from reputable and financially
sound insurers in amounts sufficient to insure the assets and risks of the
Company and each of its Subsidiaries in accordance with prudent business
practice in the industry of the Company and its Subsidiaries.
(q) Compliance with Laws. The Company and its
Subsidiaries are in compliance in all respects with all applicable Laws (other
than Environmental Laws which are specifically addressed in subsection (v)) in
all jurisdictions in which the Company or any of its Subsidiaries is presently
or will be doing business except where the failure to do so individually or in
the aggregate could not reasonably be expected to have a Material Adverse
Effect.
(r) Material Contracts. All contracts which are
material to the business operations of the Company and its Subsidiaries are
valid, binding and enforceable upon the Company and each such Subsidiary and
each of the other parties thereto in accordance with their respective terms, and
there is no default thereunder, to the Borrowers' knowledge, with respect to
parties other than the Company or its Subsidiaries.
(s) Investment Companies. Neither the Company nor any
of its Subsidiaries is an "investment company" registered or required to be
registered under the Investment Company Act of 1940 or under the "control" of an
"investment company" as such terms are defined in the Investment Company Act of
1940 and none of them shall become such an "investment company" or under such
"control." None of the Borrowers or any Subsidiaries of any Borrower is
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subject to any other federal or state statute or regulation limiting its ability
to incur Indebtedness for borrowed money.
(t) Plans and Benefit Arrangements. Except as set
forth on Schedule 6.01(t):
(i) The Company and each of its Subsidiaries is
in compliance in all material respects with any applicable provisions of ERISA
with respect to all Benefit Arrangements. There has been no Prohibited
Transaction with respect to any Benefit Arrangement that individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect.
(ii) Neither the Company nor any of its
Subsidiaries maintains or contributes to any Plan, Multiemployer Plan or
Multiple Employer Plan.
(iii) To the extent that any Benefit Arrangement
is insured, the Company and all of its Subsidiaries have paid when due all
premiums required to be paid for all periods except where the failure to make
such payment individually or in the aggregate could not reasonably be expected
to have a Material Adverse Effect. To the extent that any Benefit Arrangement
is funded other than with insurance, the Company and all of its Subsidiaries
have made when due all contributions required to be paid for all periods except
where the failure to make such contribution individually or in the aggregate
could not reasonably be expected to have a Material Adverse Effect.
(iv) All Benefit Arrangements have been
administered in accordance with their terms and applicable Law except where the
failure to do so could not reasonably be expected to have a Material Adverse
Effect.
(v) Neither the Company nor any of its
Subsidiaries maintains or contributes to or otherwise has any liability under
any Benefit Arrangement under which benefits are provided to former employees of
the Company or any of its Subsidiaries.
(vi) No claims or lawsuits are pending or, to
the knowledge of the Borrowers, threatened with respect to any Benefit
Arrangement, other than normal claims for benefits.
(vii) As of the Effective Date neither the
Company nor any member of the ERISA Group maintains, sponsors or contributes to
any Plan, Multiemployer Plan or Multiple Employer Plan.
(u) Employment Matters. The Company and each
Subsidiary of the Company is in compliance with the Labor Contracts and all
applicable federal, state and local labor and employment Laws including those
related to equal employment opportunity and affirmative action, labor relations,
minimum wage, overtime, child labor, medical insurance continuation, worker
adjustment and relocation notices, immigration controls and worker and
unemployment compensation, where the failure to comply individually or in the
aggregate could reasonably be
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expected to have a Material Adverse Effect. There are no outstanding
grievances, arbitration awards or appeals therefrom arising out of the Labor
Contracts or current or threatened strikes, picketing, handbilling or other
work stoppages or slowdowns at facilities of any of the Borrowers which, in any
case, individually or in the aggregate could reasonably be expected to have a
Material Adverse Effect.
(v) Environmental Matters. Except as disclosed on
Schedule 6.01(v):
(i) Neither the Company nor any Subsidiary of
the Company has received any Environmental Complaint from any Official Body or
private Person alleging that it or any prior or subsequent owner of its Property
is a potentially responsible party under the Comprehensive Environmental
Response, Cleanup and Liability Act, 42 U.S.C. Section 9601, et seq., and none
of the Borrowers has any reason to believe that such an Environmental Complaint
might be received. There are no pending or, to the Borrowers' knowledge,
threatened Environmental Complaints relating to the Company or any Subsidiary of
the Company or, to the Borrowers' knowledge, any prior or subsequent owner of
their Property pertaining to, or arising out of, any Environmental Conditions.
(ii) Except for conditions, violations or
failures which individually or in the aggregate could not reasonably be expected
to have a Material Adverse Effect, there are no circumstances at, on or under
the Company's and its Subsidiaries' Property that constitute a breach of or
non-compliance with any of the Environmental Laws, and there are no past or
present Environmental Conditions at, on or under such Property or, to the
Borrowers' knowledge, at, on or under adjacent property, that prevent compliance
with the Environmental Laws at such Property or that otherwise would require
that any removal, remediation or other corrective action or cleanup be taken
with respect to such Property or any adjacent property.
(iii) Neither the Property of the Company and
its Subsidiaries nor any structures, improvements, equipment, fixtures,
activities or facilities thereon or thereunder contain or use Regulated
Substances except in compliance with Environmental Laws or under circumstances
where any failure to comply with Environmental Laws could not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect.
There are no processes, facilities, operations, equipment or any other
activities at, on or under such Property, or, to the Borrowers' knowledge, at,
on or under adjacent property, that have resulted or are currently resulting in
the release or threatened release of Regulated Substances onto such Property,
except to the extent that such releases or threatened releases are not a breach
of or otherwise not a violation of the Environmental Laws, and except where such
releases or threatened releases individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect.
(iv) There are no aboveground storage tanks,
underground storage tanks or underground piping associated with such tanks, used
for the management of Regulated Substances at, on or under the Property of the
Company and its Subsidiaries that (a) do not have a full operational secondary
containment system in place, and (b) are not otherwise in compliance with all
Environmental Laws. There are no abandoned underground storage tanks or
underground piping associated with such tanks, previously used for the
management of Regulated Substances at, on or
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under such Property that have not either been closed in place in accordance
with Environmental Laws or removed in compliance with all applicable
Environmental Laws and no contamination associated with the use of such tanks
exists on such Property.
(v) The Company and each Subsidiary of the
Company has obtained all permits, licenses, authorizations, plans and approvals
necessary under the Environmental Laws for the conduct of its business as
presently conducted except where the failure to do so individually or in the
aggregate could not reasonably be expected to have a Material Adverse Effect.
The Company and each Subsidiary of the Company has submitted all notices,
reports and other filings required by the Environmental Laws to be submitted to
an Official Body which pertain to past and current operations on their Property
except where the failure to do so individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect.
(vi) Except for violations which individually or
in the aggregate could not reasonably be expected to have a Material Adverse
Effect, all past and present on-site generation, storage, processing, treatment,
recycling, reclamation, disposal or other use or management of Regulated
Substances at, on, or under the Property of the Company and its Subsidiaries and
all off-site transportation, storage, processing, treatment, recycling,
reclamation, disposal or other use or management of Regulated Substances has
been done in accordance with the Environmental Laws.
(w) Senior Debt Status. The Obligations of each
Borrower under this Agreement and each of the other Loan Documents to which it
is a party do rank and will rank at least pari passu in priority of payment with
all other Indebtedness of such Borrower except Indebtedness of such Borrower to
the extent secured by Permitted Liens. There is no Lien upon or with respect to
any of the properties or income of any Borrower or Subsidiary of any Borrower
which secures indebtedness or other obligations of any Person except for
Permitted Liens.
(x) Solvency. After giving effect to each incurrence of
Indebtedness hereunder, and the payment of all Fees, costs and expenses payable
by each of the Borrowers hereunder, each of the Borrowers is Solvent.
6.02 Updates to Schedules. Should any of the information or
disclosures provided on any of the Schedules attached hereto become outdated or
incorrect in any material respect, the Company shall promptly provide the
Administrative Agent in writing with such revisions or updates to such Schedule
as may be necessary or appropriate to update or correct same; provided that,
except for the amendment of Schedule 1.01(B) as contemplated by Section 2.01(c)
and 12.11 and the amendment of Schedule 6.01(c) in connection with any new
Subsidiary of the Company as permitted herein, no Schedule shall be deemed to
have been amended, modified or superseded by any such correction or update, nor
shall any breach of warranty or representation resulting from the inaccuracy or
incompleteness of any such Schedule be deemed to have been cured thereby, unless
and until the Required Lenders, in their sole and absolute discretion, shall
have accepted in writing such revisions or updates to such Schedule.
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ARTICLE VII
CONDITIONS OF LENDING
The obligation of each Lender to make Revolving Credit Loans, the
obligation of any Lender to make Bid Loans and the obligation of the Issuing
Bank to issue Letters of Credit hereunder is subject to the performance by each
of the Borrowers of its Obligations to be performed hereunder at or prior to the
making of any such Loans or issuance of such Letters of Credit and to the
satisfaction of the following further conditions:
7.01 Effective Date. On the Effective Date:
(a) The representations and warranties of each of the
Borrowers contained in Article VI shall be true and accurate on and as of the
Effective Date with the same effect as though such representations and
warranties had been made on and as of such date (except representations and
warranties which relate solely to an earlier date or time, which representations
and warranties shall be true and correct on and as of the specific dates or
times referred to therein); no Event of Default or Potential Default under this
Agreement shall have occurred and be continuing or shall exist; and there shall
be delivered to the Administrative Agent for the benefit of each Lender a
certificate of each of the Borrowers, dated the Effective Date and signed by an
Authorized Officer of each of the Borrowers, to each such effect;
(b) There shall be delivered to the Administrative
Agent for the benefit of each Lender a certificate dated the Effective Date and
signed by the Secretary or an Assistant Secretary of each of the Borrowers,
certifying as appropriate as to:
(i) all corporate action taken by such Borrower
in connection with this Agreement and the other Loan Documents (which shall
include copies of all Board of Directors and stockholder resolutions);
(ii) the names of the officer or officers
authorized to sign this Agreement and the other Loan Documents and the true
signatures of such officer or officers and specifying the Authorized Officers
permitted to act on behalf of such Borrower for purposes of this Agreement and
the true signatures of such officers, on which the Administrative Agent and each
Lender may conclusively rely; and
(iii) copies of its organizational documents,
including its certificate of incorporation and bylaws as in effect on the
Effective Date certified by the appropriate state official where such documents
are filed in a state office together with certificates from the appropriate
state officials as to the continued existence and good standing of such Borrower
in each state where organized or where its principal executive office is
located.
(c) There shall have been delivered to the
Administrative Agent for the benefit of each Lender a certificate dated the
Effective Date and signed by an Authorized Officer of the Company containing
calculations in detail satisfactory to the Administrative Agent showing
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the Fixed Charge Coverage Ratio as of the end of the most recently ended Fiscal
Quarter and the Consolidated Tangible Net Worth as of the Effective Date.
(d) The Agreement and the other Loan Documents
shall have been duly executed and delivered to the Administrative Agent for the
benefit of the Lenders.
(e) There shall be delivered to the Administrative
Agent for the benefit of each Lender a written opinion of Dickinson, Wright,
Moon, Van Dusen & Freeman, counsel for the Borrowers and the Guarantors, a
written opinion of Baker & McKenzie, U.K. counsel to the Borrowers and the
Guarantors, and a written opinion of the General Counsel of the Company, dated
the Effective Date and in form and substance satisfactory to the Agents and
their counsel:
(i) as to the matters set forth in Exhibit
7.01(e)(i); and
(ii) as to such other matters incident to the
transactions contemplated herein as the Agents may reasonably request.
(f) All legal details and proceedings in connection
with the transactions contemplated by the Agreement and the other Loan Documents
shall be in form and substance satisfactory to the Administrative Agent and
counsel for the Administrative Agent, and the Administrative Agent shall have
received all such other counterpart originals or certified or other copies of
such documents and proceedings in connection with such transactions, in form and
substance satisfactory to the Administrative Agent and said counsel, as the
Administrative Agent or said counsel may reasonably request.
(g) The Borrowers shall pay or cause to be paid to the
Administrative Agent for itself and for the account of the Lenders (to the
extent not previously paid) the Fees, and all other fees accrued through the
Effective Date and the costs and expenses for which the Agents and the Lenders
are entitled to be reimbursed.
(h) All material consents required to effectuate the
transactions contemplated hereby as set forth on Schedule 6.01(m) shall have
been obtained.
(i) The making of the Loans shall not contravene any
Law applicable to any Borrower, any Agent, the Issuing Bank or any of the
Lenders.
(j) No action, proceeding, investigation, regulation or
legislation shall have been instituted, threatened or proposed before any court,
governmental agency or legislative body to enjoin, restrain or prohibit, or to
obtain damages in respect of this Agreement or the consummation of the
transactions contemplated hereby or which, in the Administrative Agent's sole
discretion, would make it inadvisable to consummate the transactions
contemplated by this Agreement or any of the other Loan Documents.
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(k) The Lenders shall have received copies of the
Annual Statements, the Interim Statements and the Financial Projections each in
form and substance satisfactory to the Lenders.
(l) The Administrative Agent shall have received a copy
of a letter to the Company from the independent certified public accountants of
the Borrowers acknowledging that the Company has advised such accountants that
the Agents and the Lenders are relying on the financial statements of the
Company and its Subsidiaries and such accountants' audit reports thereon.
(m) The Administrative Agent shall have received a duly
executed and completed Loan Request for any Loans to be advanced on the
Effective Date.
(n) The Issuing Bank shall have received a duly
executed and completed application for Letter of Credit for any Letter of Credit
to be issued on the Effective Date.
(o) The Administrative Agent shall have received such
other documents as any Lender or its counsel may have reasonably requested.
7.02 Each Additional Loan. At the time of making any Loans or
issuing any Letter of Credit, other than any Loans made or Letters of Credit
issued on the Effective Date hereunder (or the Subsequent Effective Date), and
after giving effect to the proposed borrowings: the representations and
warranties of the Borrowers contained in Article VI shall be true on and as of
the date of such Loan or Letter of Credit with the same effect as though such
representations and warranties had been made on and as of such date (except
representations and warranties which expressly relate solely to an earlier date
or time, which representations and warranties shall be true and correct on and
as of the specific dates or times referred to therein); no Event of Default or
Potential Default shall have occurred and be continuing or shall exist; the
making of such Loans or issuance of such Letter of Credit shall not contravene
any Law applicable to the Company or any of its Subsidiaries, any Agent or any
of the Lenders; the Company shall have delivered to the Administrative Agent a
duly executed and completed Loan Request; and the Company shall have delivered
to the Issuing Bank a duly executed and completed application for a Letter of
Credit.
7.03 Subsequent Effective Date. On the Subsequent Effective Date
and prior to the Lenders making any Loans to Books Etc.:
(a) There shall be delivered to the Administrative
Agent for the benefit of each Lender a letter agreement from Books Etc. agreeing
to be bound by this Agreement as a Borrower (but not as a Guarantor) and a
letter agreement from each Subsidiary of Books Etc. agreeing to be bound by this
Agreement as a Guarantor only in respect of the obligations of Books Etc.
(b) The representations and warranties of each of the
Borrowers contained in Article VI shall be true and accurate with respect to
Books Etc. on and as of the Subsequent Effective Date with the same effect as
though such representations and warranties had been made on and as of such date
(except representations and warranties which relate solely to an
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earlier date or time, which representations and warranties shall be true and
correct on and as of the specific dates or times referred to therein); no Event
of Default or Potential Default under this Agreement shall have occurred and be
continuing or shall exist; and there shall be delivered to the Administrative
Agent for the benefit of each Lender a certificate of Books Etc., dated the
Subsequent Effective Date and signed by an Authorized Officer of Books Etc., to
each such effect;
(c) There shall be delivered to the Administrative
Agent for the benefit of each Lender a certificate dated the Subsequent
Effective Date and signed by the Secretary or an Assistant Secretary of Books
Etc., certifying as appropriate as to:
(i) all corporate action taken by Books Etc. in
connection with this Agreement and the other Loan Documents (which shall include
copies of all Board of Directors and stockholder resolutions);
(ii) the names of the officer or officers
authorized to sign this Agreement and the other Loan Documents and the true
signatures of such officer or officers and specifying the Authorized Officers
permitted to act on behalf of Books Etc. for purposes of this Agreement and the
true signatures of such officers, on which the Administrative Agent and each
Lender may conclusively rely; and
(iii) copies of its organizational documents,
including its certificate of incorporation and bylaws (or equivalent thereof)
as in effect on the Subsequent Effective Date certified by the appropriate
government official where such documents are filed in a government office
together with certificates from the appropriate government officials as to the
continued existence and good standing of Books Etc. in the jurisdiction where
organized or where its principal executive office is located.
(d) There shall be delivered to the Administrative
Agent for the benefit of each Lender a written opinion of Dickinson, Wright,
Moon, Van Dusen & Freeman, counsel for the Borrowers and the Guarantors, a
written opinion of Baker & McKenzie, U.K. counsel to the Borrowers and the
Guarantors, and a written opinion of the General Counsel of the Company, dated
the Subsequent Effective Date and in form and substance satisfactory to the
Administrative Agent and its counsel:
(i) as to the matters set forth in Exhibit
7.01(e)(i); and
(ii) as to such other matters incident to the
transactions contemplated herein as the Administrative Agent may reasonably
request.
(e) All legal details and proceedings in connection
with the transactions contemplated by the Agreement and the other Loan Documents
shall be in form and substance satisfactory to the Administrative Agent and its
counsel and the Administrative Agent shall have received all such other
counterpart originals or certified or other copies of such documents and
proceedings in connection with such transactions, in form and substance
satisfactory to the
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Administrative Agent and said counsel, as the Administrative Agent or said
counsel may reasonably request.
(f) The making of the Loans shall not contravene any
Law applicable to Books Etc., any Agent, the Issuing Bank or any of the Lenders.
(g) The Administrative Agent shall have received a duly
executed and completed Loan Request for any Loans to be advanced to Books Etc.
on the Subsequent Effective Date.
(h) The Administrative Agent shall have received such
other documents as any Lender or its counsel may have reasonably requested.
ARTICLE VIII
COVENANTS
8.01 Affirmative Covenants. The Borrowers, jointly and
severally, covenant and agree that until payment in full of the Loans and
interest thereon, expiration or termination of all Letters of Credit,
satisfaction of all of the Borrowers' Obligations under the Loan Documents and
termination of the Commitments, the Borrowers shall comply at all times with the
following affirmative covenants:
(a) Preservation of Existence, etc. Each Borrower
shall, and shall cause each of its Subsidiaries to maintain its corporate
existence and its license or qualification and good standing in each
jurisdiction in which its ownership or lease of property or the nature of its
business makes such license or qualification necessary; provided that (i)
Borrowers may engage in transactions permitted by Section 8.02(f), and (ii) with
respect to Subsidiaries of the Borrowers (other than Borrowers themselves), such
Subsidiaries may fail to do so to the extent that such failure individually or
in the aggregate could not reasonably be expected to have a Material Adverse
Effect.
(b) Payment of Liabilities, Including Taxes, etc. Each
Borrower shall, and shall cause each of its Subsidiaries to, duly pay and
discharge all liabilities to which it is subject or which are asserted against
it, promptly as and when the same shall become due and payable, including all
taxes, assessments and governmental charges upon it or any of its Properties,
income or profits, prior to the date on which penalties attach thereto, except
to the extent that such liabilities, including taxes, assessments or charges,
are being contested in good faith and by appropriate and lawful proceedings
diligently conducted and for which such reserve or other appropriate provisions,
if any, as shall be required by GAAP shall have been made, and except to the
extent that failure to discharge any such liabilities individually or in the
aggregate could not reasonably be expected to have a Material Adverse Effect;
provided that the Borrowers and their Subsidiaries will pay all such liabilities
forthwith upon the commencement of proceedings to foreclose any Lien which may
have attached as security therefor.
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(c) Maintenance of Insurance. Each Borrower shall, and
shall cause each of its Subsidiaries to, insure its Properties against loss or
damage by fire and such other insurable hazards as such assets are commonly
insured (including fire, extended coverage, property damage, worker's
compensation, public liability and business interruption insurance) and against
other risks (including errors and omissions) in such amounts as similar
properties and assets are insured by prudent companies in similar circumstances
carrying on similar businesses, and with reputable and financially sound
insurers, including self-insurance to the extent customary, all as reasonably
determined by the Administrative Agent. At the request of the Administrative
Agent, the Company shall deliver from time to time a summary schedule indicating
all insurance then in force with respect to each of the Borrowers.
(d) Maintenance of Properties. Each Borrower shall,
and shall cause each of its Subsidiaries to, maintain in good repair, working
order and condition (ordinary wear and tear excepted) in accordance with the
general practice of other businesses of similar character and size, all Property
useful or necessary to its business, and from time to time, each such Borrower
will make or cause to be made all appropriate repairs, renewals or replacements
thereof except to the extent that the failure to do so individually or in the
aggregate could not reasonably be expected to have a Material Adverse Effect.
(e) Maintenance of Patents, Trademarks, etc. Each
Borrower shall, and shall cause each of its Subsidiaries to, maintain in full
force and effect all patents, trademarks, trade names, copyrights, licenses,
franchises, permits and other authorizations necessary for the ownership and
operation of its properties and business, except to the extent that the failure
so to maintain the same individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect.
(f) Visitation Rights. Each Borrower shall, and shall
cause each of its Subsidiaries to, permit any of the officers or authorized
employees or representatives of the Administrative Agent or any of the Lenders
to visit and inspect any of its properties and to examine and make excerpts from
its books and records and discuss its business affairs, finances and accounts
with its officers, all in such detail and at such times and as often as any of
the Lenders may reasonably request. Each Lender shall provide the Company and
the Administrative Agent with reasonable notice prior to any visit or
inspection; provided that no such notice shall be required after the occurrence
and during the continuation of a Potential Default or an Event of Default. In
the event any Lender desires to conduct an audit of any Borrower, such Lender
shall make a reasonable effort to conduct such audit contemporaneously with any
audit to be performed by the Administrative Agent. At the request of either
Agent, but not more frequently than once a year, the Borrowers and their
respective Authorized Officers shall hold a meeting of the Lenders, at which the
Borrowers will present an analysis of the financial performance of the Company
and its Subsidiaries during the previous Fiscal Year and a discussion of the
expected results of operations for the then current Fiscal Year.
(g) Keeping of Records and Books of Account. The
Company shall, and shall cause each Subsidiary of the Company to, maintain and
keep proper books of record and account which enable the Company and its
Subsidiaries to issue financial statements in accordance
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with GAAP and as otherwise required by applicable Laws or any Official Body
having jurisdiction over the Company or any Subsidiary of the Company, and in
which full, true and correct entries shall be made in all material respects of
all its dealings and business and financial affairs.
(h) Plans and Benefit Arrangements. The Company shall,
and shall cause each of its Subsidiaries to, comply with ERISA, the Internal
Revenue Code and other applicable Laws applicable to Benefit Arrangements except
where failure to comply individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect. Without limiting the generality of
the foregoing, the Company shall make, and cause each of its Subsidiaries to
make, in a timely manner, all contributions due to Benefit Arrangements.
(i) Compliance with Laws. Each Borrower shall, and
shall cause each of its Subsidiaries to, comply with all applicable Laws,
including all Environmental Laws, in all respects, provided that it shall not be
deemed to be a violation of this Section 8.01(i) if any failure to comply with
any Law would not result in fines, penalties, remediation costs, other similar
liabilities or injunctive relief which individually or in the aggregate could
reasonably be expected to have a Material Adverse Effect.
(j) Use of Proceeds. The Borrowers will use the
proceeds of the Loans only for working capital and general corporate purposes,
repurchases of the Company's common stock in accordance with Section 8.02(e) and
Purchases and Investments as permitted by this Agreement, and such uses shall
not contravene any applicable Law or any other provision thereof. No part of the
proceeds of any Loan has been or will be used, immediately, incidentally or
ultimately, to purchase or carry any margin stock (other than common stock of
the Company repurchased in accordance with Section 8.02(e)) or to extend credit
to others for the purpose of purchasing or carrying any margin stock or to
refund Indebtedness originally incurred for such purpose, or for any purpose
which entails a violation of or which is inconsistent with the provisions of the
regulations of the Board of Governors of the Federal Reserve System. No more
than 25% of the reasonable value of the assets of the Company or any of its
Subsidiaries will be represented by margin stock. The Borrowers shall not use
any portion of the proceeds of the Loans, directly or indirectly (i) knowingly
to purchase any Ineligible Securities from a Section 20 Subsidiary during any
period in which such Section 20 Subsidiary makes a market in such Ineligible
Securities, (ii) knowingly to purchase during the underwriting or placement
period Ineligible Securities being underwritten or privately placed by a Section
20 Subsidiary, or (iii) to make payments of principal or interest on Ineligible
Securities underwritten or privately placed by as Section 20 Subsidiary and
issued by or for the benefit of any Borrower or any Affiliate of any Borrower.
(k) Subsequent Credit Terms. The Company shall notify
the Administrative Agent in writing not less than ten (10) Business Days prior
to any Borrower entering into any credit agreement or any amendment or
modification to any existing credit agreement in either case as otherwise
permitted hereunder, pursuant to which any Borrower agrees to representations,
warranties or covenants which are more restrictive, as determined in the sole
discretion of the Administrative Agent, than the representations, warranties or
covenants hereof (the "More Restrictive Provisions"). Upon the execution of
such new credit agreement, amendment or modification, the corresponding
covenants, terms and conditions of this Agreement shall be and shall
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be deemed to be automatically and immediately amended to conform with and to
include the applicable More Restrictive Provisions of such new credit
agreement, amendment or modification; provided, that the foregoing shall not be
applicable to or be deemed to affect any provision of this Agreement if any new
credit agreement, amendment or modification is less restrictive. Each of the
Borrowers hereby agrees promptly to execute and deliver any and all such
documents and instruments and to take all such further actions as the
Administrative Agent may, in its sole discretion, deem necessary or appropriate
to effectuate the provisions of this Section 8.01(k).
(l) Subsidiary Guaranties. If (i) any Restricted
Subsidiary's total assets determined in accordance with GAAP at the end of any
Fiscal Quarter constitute more than 10% of Consolidated Tangible Net Worth
determined at the end of such Fiscal Quarter or (ii) any Restricted Subsidiary's
net income determined in accordance with GAAP for any rolling four Fiscal
Quarter period exceeds 10% of Consolidated Net Income for such four Fiscal
Quarters, the Company shall cause such Restricted Subsidiary to agree to be
bound by the provisions of Article IX hereof and to execute a letter agreement
to such effect in form and substance satisfactory to the Administrative Agent
and to deliver such legal opinions and other documents and instruments as the
Administrative Agent may request.
8.02 Negative Covenants. The Borrowers, jointly and severally,
covenant and agree that until payment in full of the Loans and interest thereon,
expiration or termination of all Letters of Credit, satisfaction of all of the
Borrowers' Obligations under the Loan Documents and termination of the
Commitments, the Borrowers shall comply at all times with the following negative
covenants:
(a) Indebtedness. Each of the Borrowers shall not, and
shall not permit any of its Subsidiaries to, at any time create, incur, assume
or suffer to exist any Indebtedness, except:
(i) Indebtedness under the Loan Documents;
(ii) Indebtedness existing on the Effective
Date as set forth on Schedule 8.02(a) (including any extensions or renewals
thereof provided there is no increase in the amount thereof or other significant
change in the terms thereof unless otherwise specified on Schedule 8.02(a));
(iii) Capitalized Lease Obligations;
(iv) interest rate swap, cap, collar or floor
agreements or other interest rate management devices with any Lender,
referencing an aggregate notional amount not to exceed, based on the reasonable
business judgment of the Company, the maximum principal amount outstanding at
any time of all Indebtedness of the Company and its Subsidiaries on a
consolidated basis plus an amount equal to 50% of Capitalized Rent Expense, with
such interest rate management devices to be entered into for hedging purposes
only and not for speculation;
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(v) Indebtedness secured by Purchase Money
Security Interests, so long as the amount of such Indebtedness does not exceed
the purchase price of the property which is subject to such Purchase Money
Security Interests;
(vi) Indebtedness of an Unrestricted Subsidiary
which is a Domestic Subsidiary to another Unrestricted Subsidiary which is a
Domestic Subsidiary or to the Company;
(vii) Indebtedness of the Company to an
Unrestricted Subsidiary which is a Domestic Subsidiary so long as such
Indebtedness is unsecured;
(viii) Contingent Obligations as and to the
extent permitted under Section 8.02(c);
(ix) Indebtedness of the Company and its
Domestic Subsidiaries in addition to Indebtedness otherwise permitted by clause
(i) to (viii) above with an aggregate principal Dollar Equivalent amount
outstanding not to exceed 20% of Consolidated Tangible Net Worth (determined as
of the last day of the Fiscal Quarter most recently ended);
(x) unsecured Indebtedness of Foreign
Subsidiaries which are not Borrowers with an aggregate principal Dollar
Equivalent amount outstanding not to exceed $10,000,000 or Indebtedness of one
Foreign Subsidiary to another Foreign Subsidiary;
(xi) Permitted Sutro Refinancing Indebtedness, so
long as (A) the aggregate principal amount of any such Indebtedness outstanding
does not exceed $36,000,000, (B) the aggregate principal amount of any such
Indebtedness incurred, at the date of incurrence, is at least 85% of the face
value of the amount of "Notes" (as defined in the Note Put Agreements) purchased
by Borders as required by Section 2.2 of the Note Purchase Agreements, (C) any
such Indebtedness is incurred no sooner than the relevant "Tenant Purchase Date"
(as defined in the Note Put Agreements), (D) the representations, warranties and
covenants contained in the documentation with respect to any such Indebtedness
are no more restrictive, as determined in the reasonable discretion of the
Administrative Agent, than the representations, warranties or covenants hereof,
(E) the maturity of any such Indebtedness is not less than two years from the
date of incurrence, and (F) on or before the date of incurrence, the Borrowers
shall have delivered to the Lenders proforma financial statements, in form and
substance satisfactory to the Lenders, showing that, during the term of such
Indebtedness, based on reasonable projections of the financial performance of
the Borrowers, the Borrowers will not be in violation of any of the financial
covenants contained in Section 8.02; and
(xii) Indebtedness of the Borrowers under the
Lease Financing Guarantee, so long as the conditions specified in Section
8.02(c)(vii) have been satisfied, or any refinancing of any or all of such
Indebtedness on substantially the terms described in Section 21.1 of the Form of
Lease attached as Exhibit G to the Participation Agreement.
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(b) Liens. Each of the Borrowers shall not, and shall
not permit any of its Subsidiaries to, at any time create, incur, assume or
suffer to exist any Lien on any of its Property now owned or hereafter acquired,
or agree or become liable to do so, except Permitted Liens.
(c) Contingent Obligations. Each of the Borrowers
shall not, and shall not permit any of its Subsidiaries to, at any time,
directly or indirectly, become or be liable in respect of any Contingent
Obligations, except for:
(i) Contingent Obligations of the Company or any
Unrestricted Subsidiary which is a Domestic Subsidiary in respect of obligations
of the Company or any Unrestricted Subsidiary which is a Domestic Subsidiary;
(ii) Permitted Lease Contingent Obligations,
provided that the portion of all such Permitted Lease Contingent Obligations
which constitute current liabilities determined and consolidated in accordance
with GAAP (whether such amounts are fixed or percentage rent, fees, costs,
accelerated payments or otherwise), shall not exceed Fifteen Million Dollars
($15,000,000) at any one time;
(iii) Contingent Obligations arising by operation
of any applicable law which individually or in the aggregate could not
reasonably be expected to have Material Adverse Effect;
(iv) any Contingent Obligations arising under the
Note Put Agreements;
(v) any Contingent Obligations arising under any
computer leases with respect to which Kmart is the lessee and any of the
Borrowers is the user of such computer equipment;
(vi) any Contingent Obligations arising under any
of the Kmart Agreements;
(vii) Contingent Obligations arising under the
Lease Financing Guarantee, provided, however, that the aggregate amount of
Contingent Obligations permitted thereunder shall not exceed $250,000,000;
(viii) Contingent Obligations constituting a
Permitted Joint Venture Activity, provided no Event of Default or Potential
Default has occurred and is continuing or would result therefrom and subject to
Section 8.02(u);
(ix) Contingent Obligations constituting a
Permitted Restricted Subsidiary Activity, provided no Event of Default or
Potential Default has occurred and is continuing or would result therefrom and
subject to Section 8.02(u);
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(x) Contingent Obligations of the Company or any
Unrestricted Subsidiary which is a Domestic Subsidiary in respect of all
obligations other than operating lease obligations of any Unrestricted
Subsidiary which is a Foreign Subsidiary, subject to Section 8.02(u); and
(xi) Contingent Obligations of the Company or any
Unrestricted Subsidiary which is a Domestic Subsidiary in respect of operating
lease obligations of any Unrestricted Subsidiary which is a Foreign Subsidiary
provided that the portion of all such Contingent Obligations which constitute
current liabilities determined and consolidated in accordance with GAAP is
limited to lease payments (whether such amounts are fixed or percentage rent,
fees, costs, accelerated payments of otherwise) not in excess of an aggregate of
$15,000,000 in any Fiscal Year with respect to all Unrestricted Subsidiaries
which are Foreign Subsidiaries; and
(xii) Contingent Obligations of any Unrestricted
Subsidiary which is a Foreign Subsidiary in respect of obligations of another
Unrestricted Subsidiary which is a Foreign Subsidiary.
(d) Loans and Investments. Each of the Borrowers shall
not, and shall not permit any of its Subsidiaries to, at any time make or suffer
to remain outstanding any loan or advance to, or purchase, acquire or own any
stock, bonds, notes or securities of, or any partnership interest (whether
general or limited) in, or any other investment or interest in, or make any
capital contribution to, any other Person, or agree, become or remain liable to
do any of the foregoing (collectively, "Investments"), except:
(i) trade credit extended on usual and customary
terms in the ordinary course of business;
(ii) advances to employees to meet expenses
incurred by such employees in the ordinary course of business;
(iii) Permitted Investments;
(iv) Investments by the Company in any
Unrestricted Subsidiary which is a Domestic Subsidiary or by any Unrestricted
Subsidiary which is a Domestic Subsidiary in the Company or an Unrestricted
Subsidiary which is a Domestic Subsidiary, so long as any loans or advances are
unsecured;
(v) Investments by the Company or any
Unrestricted Subsidiary which is a Domestic Subsidiary in any Unrestricted
Subsidiary which is a Foreign Subsidiary, so long as any loans or advances are
unsecured; provided, however, that any such Investments permitted by this clause
(v) plus any Foreign Purchases pursuant to clause (viii) below may not exceed in
the aggregate 15% of Consolidated Tangible Net Worth (determined as of the last
day of the Fiscal Quarter most recently ended) and subject to Section 8.02(u);
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(vi) a Purchase of Books Etc. and its
Subsidiaries (including Books Etc. Properties Limited), corporations organized
and existing under the laws of England for a total purchase price (including
Indebtedness assumed) not to exceed $75,000,000, so long as no Potential Default
or Event of Default has occurred and is continuing or would result therefrom;
(vii) Domestic Purchases (a) so long as no
Potential Default or Event of Default has occurred and is continuing or would
result therefrom, (b) so long as the assets or business subject to such Domestic
Purchase is in substantially the same or a similar type of business as the
Company and its Subsidiaries, (c) so long as the Board of Directors of any
Person to be acquired has approved the terms of the Purchase, and (d) so long as
the Company delivers to the Lenders on or before the date on which it or any of
its Subsidiaries agrees to or consummates any Domestic Purchase proforma
financial statements, in form and substance satisfactory to the Administrative
Agent, showing that no Event of Default or Potential Event of Default will occur
under Sections 8.02(o), (p) or (q) over the 12 month period following the
effective date of the Purchase, based on reasonable projections of the financial
performance of the Borrowers;
(viii) Foreign Purchases (a) so long as no
Potential Default or Event of Default has occurred and is continuing or would
result therefrom, (b) so long as the assets or business subject to such Foreign
Purchase is in substantially the same or a similar type of business as the
Company and its Subsidiaries, (c) so long as the Board of Directors of any
Person to be acquired has approved the terms of the Foreign Purchase, (d) so
long as the aggregate purchase amount payable in cash for all Foreign Purchases
permitted by this clause (viii) plus all Investments pursuant to clause (v)
above does not exceed 15% of Consolidated Tangible Net Worth (determined as of
the last day of the Fiscal Quarter most recently ended) and subject to Section
8.02(u); and (e) so long as the Company delivers to the Lenders on or before the
date on which it or any of its Subsidiaries agrees to or consummates any Foreign
Purchase proforma financial statements, in form and substance satisfactory to
the Administrative Agent, showing that no Event of Default or Potential Event of
Default will occur under Sections 8.02(o), (p) or (q) over the 12 month period
following the effective date of the Purchase, based on reasonable projections of
the financial performance of the Borrowers;
(ix) loans and advances, in addition to those
permitted under Section 8.02(d)(ii), to employees in an aggregate principal
amount not to exceed $10,000,000;
(x) Investments constituting Permitted Joint
Venture Activities, provided no Event of Default or Potential Default has
occurred and is continuing or would result therefrom and subject to Section
8.02(u);
(xi) Investments constituting Permitted
Restricted Subsidiary Activities, provided no Event of Default or Potential
Default has occurred and is continuing or would result therefrom and subject to
Section 8.02(u);
(xii) repurchases of the Company's common stock
in accordance with Section 8.02(e); and
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(xiii) Investments by one Foreign Subsidiary in
another Foreign Subsidiary.
(e) Dividends and Related Distributions. The Company
shall not, and shall not permit any of its Subsidiaries to, make or pay, or
agree to become or remain liable to make or pay, any dividend or other
distribution of any nature (whether in cash, property, securities or otherwise)
on account of or in respect of its shares of capital stock or partnership
interests or on account of the purchase, redemption, retirement or acquisition
of its shares of capital stock (or warrants, options or rights therefor)
(collectively, "Distributions"), except:
(i) the Company may make open market
repurchases of shares of its common stock, and it may receive shares of its
common stock as payment of the exercise price of options, or as payment of taxes
associated with the exercise of options or the vesting of restricted shares,
which such delivered shares are deemed to be repurchased by the Company at fair
market value (as defined in the Company's stock option plan) on the date of
delivery to the Company, so long as the aggregate amount paid by the Company
with respect to all such repurchases (including all such deemed repurchases)
does not at any time exceed the Repurchase Amount in effect from time to time
and no Event of Default or Potential Default has occurred and is continuing or
would result therefrom;
(ii) the Company may engage in stock splits
(including reverse stock splits) or pay dividends in stock;
(iii) Wholly-owned Subsidiaries may make
Distributions to the Company or another Wholly-owned Subsidiary;
(iv) Subsidiaries other than Wholly-owned
Subsidiaries may make Distributions so long as (a) the aggregate amount of
Distributions made by any such Subsidiary to any Person other than the Company
or a Subsidiary of the Company in any Fiscal Year does not exceed 50% of such
Person's pro rata share (based on the percentage of stock or other equity
interests owned by such Person) of such Subsidiary's net income for such Fiscal
Year as determined in accordance with GAAP and (b) no later than ten (10) days
prior to any such Distribution, the Company shall have given written notice to
the Lenders and the Agents thereof, together with calculations demonstrating
that such Distribution complies with this clause (iv); and
(v) the Company may pay dividends on its
preferred stock so long as the dividend rate on such preferred stock (after
taking into account all other fees and amounts payable on such preferred stock)
is less than the interest rate payable on the Loans.
(f) Liquidations, Mergers, Consolidations.
Each of the Borrowers shall not, and shall not permit any of its Subsidiaries
to, dissolve, liquidate or wind-up its affairs, or become a party to any merger
or consolidation, provided that any Borrower (other than the Company) may
consolidate or merge into another Borrower and any Subsidiary of a Borrower may
consolidate or merge into any Borrower or any Wholly-owned Subsidiary of a
Borrower so long as
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(i) the Borrower or a Wholly-owned Subsidiary is the surviving corporation of
such consolidation or merger and (ii) no Event of Default shall have occurred
and be continuing or result therefrom.
(g) Dispositions of Assets or Subsidiaries. Each of the
Borrowers shall not, and shall not permit any of its Subsidiaries to, sell,
convey, assign, lease, abandon or otherwise transfer or dispose of, voluntarily
or involuntarily, any of its Property (including sale, assignment, discount or
other disposition of accounts, contract rights, chattel paper, equipment or
general intangibles with or without recourse or any shares of capital stock,
shares of beneficial interest or partnership interests of a Subsidiary of such
Borrower), except:
(i) transactions involving the sale of inventory
in the ordinary course of business;
(ii) any sale, transfer or lease of Property,
including without limitation any store closures, in the ordinary course of
business which are no longer necessary or required in the conduct of the
Borrower's or Subsidiary's business;
(iii) any sale or transfer of Property in order
to concurrently or subsequently lease as lessee such Property, so long as such
sale and leaseback occurs in the ordinary course of business;
(iv) any sale, transfer or lease of Property, by
any Subsidiary of an Unrestricted Subsidiary to such Unrestricted Subsidiary or
to another Unrestricted Subsidiary which is a Domestic Subsidiary;
(v) any sale, transfer or lease of Property in
the ordinary course of business which is replaced by substitute Property; and
(vi) any transfers to Kmart of "Premises"
pursuant to the Kmart Indemnity (as such term is defined therein) if and to the
extent that any such transfer does not cause an Event of Default under Section
10.01(f) hereof.
(h) Affiliate Transactions. Each of the Borrowers
shall not, and shall not permit any of its Subsidiaries to, enter into or carry
out any transaction (including purchasing property or services from or selling
property or services to any Affiliate of any Borrower (other than another
Borrower) or other Person) unless such transaction (i) is not otherwise
prohibited by this Agreement, (ii) is entered into in the ordinary course of
business upon fair and reasonable arm's-length terms and conditions which are
fully disclosed to the Administrative Agent and (iii) is in accordance with all
applicable Law.
(i) Subsidiaries, Partnerships and Joint Ventures.
Each of the Borrowers shall not, and shall not permit any of its Subsidiaries
to, become or agree to become a general or limited partner, joint venturer or
member in any partnership, joint venture or limited liability company, as the
case may be, provided that the Company or any of its Wholly-owned Subsidiaries
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may own or create (A) any Wholly-owned Subsidiary, (B) any Unrestricted
Subsidiary, (C) any Restricted Subsidiary so long as (1) the aggregate of all
Purchases by the Company and its Subsidiaries of or Investments in or to such
Restricted Subsidiary is otherwise permitted by this Agreement, and (2) no such
Restricted Subsidiary shall have Indebtedness which is recourse to or
guaranteed by the Company or any of its Subsidiaries except as otherwise
permitted under this Agreement and (D) any Foreign Joint Venture so long as
(1) the aggregate of all Purchases by the Company and its Subsidiaries of or
Investments by the Company and its Subsidiaries in or to any such Joint
Ventures is otherwise permitted by this Agreement, and (2) no such Joint
Venture shall have Indebtedness which is recourse to or guaranteed by the
Company or any of its Subsidiaries except as otherwise permitted by this
Agreement.
(j) Continuation of or Change in Business. Each of the
Borrowers shall not, and shall not permit any of its Subsidiaries to, engage in
any business other than (a) with respect to the Borrowers, substantially as
conducted and operated by such Person during the Fiscal Year 1997 and (b) with
respect to any Subsidiary of a Borrower, substantially as conducted and operated
by a Borrower or in a business reasonably incidental and complementary thereto
or in an education-related retail business.
(k) Plans and Benefit Arrangements. Each of the
Borrowers shall not, and shall not permit any of its Subsidiaries to:
(i) adopt, sponsor, maintain or make
contributions to any Plan, any Multiemployer Plan, any Multiple Employer Plan or
except as set forth on Schedule 6.01(t), any Benefit Arrangement that provides
benefits to retirees; or
(ii) engage in a Prohibited Transaction with any
Benefit Arrangement which, alone or in conjunction with any other circumstances
or set of circumstances resulting in liability under ERISA, would have a
Material Adverse Effect.
(l) Fiscal Year. Each of the Borrowers shall not, and
shall not permit any of its Subsidiaries to, change its Fiscal Quarter or change
its Fiscal Year.
(m) Issuance of Stock. Each of the Borrowers (other
than the Company and any Unrestricted Subsidiary) shall not, and shall not
permit any of its Subsidiaries (other than Unrestricted Subsidiaries) to, issue
any additional shares of its capital stock or any options, warrants or other
rights in respect thereof, except to the Company or any Wholly-owned Subsidiary,
provided, however, that the Company shall not issue any preferred stock unless
the dividend rate thereon is permitted by Section 8.02(e)(v).
(n) Changes in Organizational Documents. Each of the
Borrowers shall not, and shall not permit any of its Subsidiaries to, amend in
any respect its certificate of incorporation (including any provisions or
resolutions relating to capital stock), by- laws or other organizational
documents in the event such change would be adverse to the Lenders.
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(o) Minimum Fixed Charge Coverage Ratio. The Borrowers
shall not permit the Fixed Charge Coverage Ratio, calculated as of the end of
each Fiscal Quarter for the previous four Fiscal Quarters then ended, to be less
than 1.50 to 1.0.
(p) Maximum Leverage Ratio. The Borrowers shall not
permit the Leverage Ratio (i) calculated as of the end of the third and fourth
Fiscal Quarter of Fiscal Year 1997 to exceed 60%, (ii) calculated as of the end
of each Fiscal Quarter of the Fiscal Year 1998 to exceed 60%, (iii) calculated
as of the end of each Fiscal Quarter of the Fiscal Year 1999 to exceed 55%, or
(iv) calculated as of the end of each Fiscal Quarter thereafter to exceed 50%.
(q) Minimum Tangible Net Worth. The Borrowers shall
not at any time permit Consolidated Tangible Net Worth to be less than the sum
of (i) $430,000,000 plus (ii) 50% of the Consolidated Net Income for each Fiscal
Quarter in which net income was earned (with no deduction for a net loss) during
the period from July 28, 1997 through the last day of the Fiscal Quarter
immediately preceding the date of determination, plus (iii) 100% of the net cash
proceeds to the Company of any public or private issuance of equity securities,
minus (iv) the aggregate amount paid by the Company with respect to any
repurchase of its common stock and (v) in any event, without deduction of the
intangible assets arising from the Purchase permitted by Section 8.02(d)(vi).
(r) Modifications of Other Documents. The Borrowers
shall not permit or otherwise consent to any amendment to or modification of any
of the Kmart Agreements, the Lease Credit Agreement, the Lease Financing
Guarantee, the Participation Agreement, any Financed Lease or any other
Operative Agreement (as defined in the Lease Credit Agreement), or any of the
Note Put Agreements which could reasonably be expected to have a Material
Adverse Effect, which would have the effect of materially increasing the
obligations of or burdens on the Borrowers or any of their Subsidiaries
thereunder or which would have the effect of shortening or deleting any notice
or cure period provided for therein.
(s) Prepayment of Note Put Agreement Obligations. Each
of the Borrowers shall not, and shall not permit any of its Subsidiaries to,
make any payment or prepayment in respect of Borders' obligations under any of
the Note Put Agreements at any time before a "Tenant Purchase Date" as defined
in the Note Put Agreements.
(t) Lease Financing Payments. Each of the Borrowers
shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly, make any Lease Financing Payment, provided, however, that a Borrower
may make a Lease Financing Payment if (i) both before and after giving effect to
such Lease Financing Payment, no Event of Default or Potential Default exists or
would exist and the representations and warranties contained in Article VI are
and will be true and correct, and the Company shall have delivered to the
Administrative Agent an officer's certificate to both such effects, (ii) the
notice required by Section 8.03(j)(i) of this Agreement has been given to the
Administrative Agent and each of the Lenders, (iii) the Company shall have
delivered to the Administrative Agent no later than ten (10) days prior to the
date of any such Lease Financing Payment cash flow projections for the twelve
months following such Lease Financing Payment, in
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form and substance reasonably satisfactory to the Administrative Agent, (a)
showing that the Borrowers' working capital requirements and borrowing needs
are not and will not be adversely affected by such Lease Financing Payment and
(b) containing calculations in sufficient detail to demonstrate on a pro forma
basis compliance as of the end of each Fiscal Quarter within such twelve month
period with all financial covenants contained in Section 8.02, (iv) after
giving effect to such Lease Financing Payment, the aggregate amount of all
Lease Financing Payments made by the Borrowers as permitted by this Section
8.02(t) is less than $20,000,000 and (v) the Lease Financing Payment is
otherwise permitted by this Agreement. For purposes of clause (iv) of this
Section 8.02(t), the amount of any Lease Financing Payment made by the
Borrowers to purchase Property subject to any Financed Lease shall not be
included in determining the aggregate amount of Lease Financing Payments made
by the Borrowers once all of such Property is sold by such Borrower to any
Person that is not an Affiliate of the Company.
(u) Foreign Activities. Notwithstanding anything in
this Section 8.02, the Company shall not, and shall not permit any of its
Subsidiaries to (i) incur any Contingent Obligation permitted under Section
8.02(c)(x), or (ii) make any Investment permitted under Section 8.02(d)(v)
[Foreign Investments], Section 8.02(d)(viii) [Foreign Purchases], Section
8.02(d)(x) in respect of a Foreign Joint Venture [Foreign Joint Venture
Activities], Section 8.02(d)(xi) in respect of a Foreign Restricted Subsidiary
[Foreign Restricted Subsidiary Activities] if immediately after incurring such
Contingent Obligation or making such Investment, the aggregate amount of all
such Contingent Obligations and Investments would exceed 25% of Consolidated
Tangible Net Worth, determined as of the last day of the Fiscal Quarter most
recently ended.
(v) Inconsistent Agreements. Each of the Borrowers
shall not, and shall not permit any of its Subsidiaries to, become or remain
subject to any dividend restriction either in its organizational documents or in
any agreement or contract to which it is a party (other than restrictions in
Section 8.02(e) and in the Lease Financing Guarantee), nor shall any of them
enter into any indenture, agreement, instrument or other arrangement which, (a)
directly or indirectly prohibits or restrains, or has the effect or prohibiting
or restraining, or could reasonably be expected to impose materially adverse
conditions upon, the incurrence of the Obligations under the Loan Documents, any
provisions of this Agreement (including without limitation Article IX hereof) or
the amending of any of the Loan Documents, or (b) contains any provision which
would be violated or breached by the making of Loans to any Borrower, the
incurrence of Indebtedness by any Borrower hereunder, or by the performance by
any Borrower or any of its Subsidiaries of any of its obligations under any Loan
Document.
8.03 Reporting Requirements. The Borrowers, jointly and
severally, covenant and agree that until payment in full of the Loans and
interest thereon, expiration or termination of all Letters of Credit,
satisfaction of all of the Borrowers' Obligations under the Loan Documents and
termination of the Commitments, the Borrowers will furnish or cause to be
furnished to the Administrative Agent and each of the Lenders:
(a) Quarterly Financial Statements. As soon as
available and in any event within forty-five (45) calendar days after the end of
each of the first three Fiscal Quarters in
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each Fiscal Year, consolidated financial statements of the Company and its
Subsidiaries, consisting of a consolidated balance sheet as of the end of such
Fiscal Quarter and related consolidated statements of income, stockholders'
equity and cash flows for the Fiscal Quarter then ended and the Fiscal Year
through that date, all in reasonable detail and certified (subject to normal
year-end audit adjustments) by an Authorized Officer of the Company as having
been prepared in accordance with GAAP, consistently applied, and setting forth
in comparative form the respective financial statements for the corresponding
date and period in the previous Fiscal Year. As soon as available and in any
event within forty-five (45) calendar days after the end of each Fiscal Year of
the Company, a certificate of the Company signed by an Authorized Officer of
the Company setting forth the calculation of the Fixed Charge Coverage Ratio as
of the end of such Fiscal Year.
(b) Annual Financial Statements. As soon as available
and in any event within ninety (90) days after the end of each Fiscal Year of
the Company, consolidated financial statements of the Company and its
Subsidiaries consisting of a consolidated balance sheet as of the end of such
Fiscal Year, and related consolidated statements of income, stockholders' equity
and cash flows for the Fiscal Year then ended, all in reasonable detail and
setting forth in comparative form the financial statements as of the end of and
for the preceding Fiscal Year, and certified by independent certified public
accountants of nationally recognized standing satisfactory to the Administrative
Agent. The certificate or report of accountants shall be free of qualifications
(other than any consistency qualification that may result from a change in the
method used to prepare the financial statements as to which such accountants
concur) and shall not indicate the occurrence or existence of any event,
condition or contingency which would materially impair the prospect of payment
or performance of any covenant, agreement or duty of any of the Borrowers under
any of the Loan Documents.
(c) Certificates of the Company. Concurrently with the
financial statements of the Company furnished to the Administrative Agent and to
the Lenders pursuant to Sections 8.03(a) and 8.03(b), a certificate of the
Company signed by an Authorized Officer of the Company, in the form of Exhibit
8.03(c), (i) to the effect that, the representations and warranties of the
Borrowers contained in Article VI are true on and as of the date of such
certificate with the same effect as though such representations and warranties
had been made on and as of such date (except representations and warranties
which expressly relate solely to an earlier date or time), the Borrowers have
performed and complied with all covenants and conditions hereof, and no Event of
Default or Potential Default exists and is continuing on the date of such
certificate and (ii) containing calculations in sufficient detail to demonstrate
compliance as of the date of the financial statements with all financial
covenants contained in Section 8.02 and (iii) describing any Permitted Joint
Venture Activity or Permitted Restricted Subsidiary Activity engaged in, or any
Purchase made, during the period covered by such financial statements.
(d) Notice of Default. Promptly after any officer of
any Borrower has learned of the occurrence of an Event of Default or Potential
Default, a certificate signed by an Authorized Officer of the Company setting
forth the details of such Event of Default or Potential Default and the action
which the Borrowers propose to take with respect thereto.
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(e) Notice of Litigation. Promptly after the
commencement thereof, notice of all actions, suits, proceedings or
investigations before or by any Official Body, arbitrator or any other Person
against any Borrower or Subsidiary of any Borrower which involve a claim or
series of claims in excess of $10,000,000 or which if adversely determined could
reasonably be expected to have a Material Adverse Effect.
(f) Certain Events. Written notice of:
(i) promptly after the adoption thereof, any
amendment to the organizational documents of any Borrower;
(ii) promptly, the enactment or adoption of any
Law which could reasonably be expected to have a Material Adverse Effect;
(iii) promptly, and in any event within two (2)
Business Days after any Borrower's receipt thereof, a copy of any notice
received by the Borrowers that a default (whether matured or unmatured) has
occurred under the Kmart Indemnity (as distinct from a request for reimbursement
under Section 2(a) thereof); and
(iv) promptly, and in any event within two (2)
Business Days after any Borrower's receipt thereof, a copy of any notice
received by the Borrowers under any of the Note Put Agreements.
(g) Other Reports and Information. Promptly upon their
becoming available to the Company:
(i) any reports including management letters
submitted to the Company by independent accountants in connection with any
annual, interim or special audit;
(ii) any reports, notices or proxy statements
generally distributed by the Company to its stockholders on a date no later than
the date supplied to the stockholders;
(iii) regular or periodic reports, including
Forms 10-K, 10-Q and 8-K, registration statements and prospectuses, filed by the
Company with the Securities and Exchange Commission; and
(iv) such other reports and information as the
Lenders may from time to time reasonably request.
(h) Notices Regarding Benefit Arrangements. Promptly
upon becoming aware of the occurrence thereof, notice (including the nature of
the event and, when known, any action taken or threatened by the Internal
Revenue Service or the PBGC with respect thereto) of:
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(i) any Reportable Event with respect to the
Company or any of its Subsidiaries (regardless of whether the obligation to
report said Reportable Event to the PBGC has been waived),
(ii) any Prohibited Transaction that could
subject the Company or any of its Subsidiaries to a civil penalty assessed
pursuant to Section 502(i) of ERISA or a tax imposed by Section 4975 of the
Internal Revenue Code in connection with any Benefit Arrangement or any trust
created thereunder,
(iii) any change in the coverage or terms of any
Benefit Arrangement, where the effect of such change is to materially increase
the unfunded liability of any of the Borrowers or any of their Subsidiaries
under such Benefit Arrangement, or
(iv) any claim or lawsuit is commenced or, to
the knowledge of any of the Borrowers, threatened with respect to any Plan,
Multiemployer Plan or Benefit Arrangement, which, if successful, could result in
a material liability of the Company or any of its Subsidiaries.
(i) Access to the Company's Auditors. The Company
hereby irrevocably authorizes all accountants and third parties to disclose and
deliver to the Lenders, upon the reasonable request of the Administrative Agent
and at the Company's expense, all financial information, books and records, work
papers, management reports and other information in their possession relating to
the financial condition of the Company and its Subsidiaries (other than those
subject to attorney-client privilege or written confidentiality agreements
furnished to the Administrative Agent).
(j) Notices Regarding Lease Financing Agreements.
(i) promptly upon the occurrence of any event
requiring the Company or any Subsidiary of the Company, or any election by the
Company or any Subsidiary of the Company, to make any Lease Financing Payment,
and in any event not less than ten (10) days prior to the date of any such Lease
Financing Payment, written notice thereof setting forth the details thereof; and
(ii) promptly, and in any event within five (5)
days after the occurrence thereof, written notice of any matured or unmatured
default under the Lease Credit Agreement, the Lease Financing Guarantee or any
matured or unmatured default under any Financed Lease.
(k) Notices Regarding Repurchases of Stock. Promptly,
and in any event within five (5) Business Days, after the repurchase by the
Company of any its common stock, written notice thereof (including the number of
shares repurchased, the amount paid by the Company with respect to such
repurchase and the date of such repurchase).
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ARTICLE IX
GUARANTIES
9.01 Guaranty of Payment and Performance of Guaranteed
Obligations. Each Guarantor, jointly and severally, hereby absolutely,
irrevocably and unconditionally guarantees prompt, full and complete payment
when due, whether at stated maturity, upon acceleration or otherwise, and at all
times thereafter, of (a) the principal of and interest (including any interest
which accrues after the commencement of any Insolvency Proceeding or would
accrue but for the operation of Law, whether or not allowed or allowable as a
claim in such Insolvency Proceeding) on all Loans made by the Lenders to each of
the Borrowers (or, in the case of a Guarantor/Borrower, each of the other
Borrowers) and all other Obligations and (b) all other amounts from time to
time owing to the Lenders, the Swing Lenders, the Issuing Bank or the Agents by
the Borrowers (or, in the case of a Guarantor/Borrower, the other Borrowers)
under this Agreement and the other Loan Documents (the "Guaranteed
Obligations"), it being the intent of each Guarantor that the guaranty set forth
herein shall be a guaranty of payment and not of collection.
9.02 Certain Waivers of the Guarantors. Each Guarantor waives
notice of the acceptance of its guaranty hereunder and of the extension or
incurrence of the Guaranteed Obligations or any part thereof. Each Guarantor
further waives all setoffs and counterclaims and presentment, protest, notice,
filing of claims with a court in the event of receivership, bankruptcy or
reorganization of any Borrower (or, in the case of a Guarantor/Borrower, any
other Borrower), demand or action on delinquency in respect of the Guaranteed
Obligations or any part thereof, including any right to require any of the
Agents, the Swing Lenders, the Issuing Bank or any Lenders to sue or collect any
of the Guaranteed Obligations from any Borrower (or, in the case of a
Guarantor/Borrower, any other Borrower), any other Guarantor or any other person
obligated with respect to the Guaranteed Obligations or any part thereof or
otherwise to enforce payment thereof against any collateral securing the
Guaranteed Obligations or any part thereof.
9.03 Obligations Unconditional. Each Guarantor hereby agrees
that, to the fullest extent permitted by Law, its obligations hereunder shall be
continuing, absolute and unconditional under any and all circumstances and not
subject to any reduction, limitation, impairment, termination, defense (other
than indefeasible payment in full), setoff, counterclaim or recoupment
whatsoever (all of which are hereby expressly waived by it to the fullest extent
permitted by Law), whether by reason of any claim of any character whatsoever,
including, without limitation, any claim of waiver, release, surrender,
alteration or compromise. The validity and enforceability of the guaranty of
each Guarantor hereunder shall not be impaired or affected by any of the
following: (a) any extension, modification or renewal of, or indulgence with
respect to, or substitution for, the Guaranteed Obligations or any part thereof
or any agreement relating thereto at any time; (b) any failure or omission to
perfect or maintain any Lien on, or preserve rights to, any security or
collateral or to enforce any right, power or remedy with respect to the
Guaranteed Obligations or any part thereof or any agreement relating thereto, or
any collateral securing the Guaranteed Obligations or any part thereof; (c) any
waiver of any right, power or remedy or of any default with respect to the
Guaranteed Obligations or any part thereof or any agreement relating thereto or
with respect to any collateral securing the Guaranteed Obligations or any part
thereof; (d) any release, surrender,
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compromise, settlement, waiver, subordination or modification, with or without
consideration, of any collateral securing the Guaranteed Obligations or any
part thereof, any other guaranties with respect to the Guaranteed Obligations
or any part thereof, or any other obligations of any Person with respect to the
Guaranteed Obligations or any part thereof; (e) the unenforceability or
invalidity of the Guaranteed Obligations or any part thereof or the lack of
genuineness, unenforceability or invalidity of any agreement relating thereto
or with respect to any collateral securing the Guaranteed Obligations or any
part thereof; (f) the application of payments received from any source to the
payment of Indebtedness other than the Guaranteed Obligations, any part thereof
or amounts which are not covered by the guaranty of each Guarantor hereunder
even though the Agents, the Lenders, the Swing Lenders and the Issuing Bank
might lawfully have elected to apply such payments to any part or all of the
Guaranteed Obligations or to amounts which are not covered by the guaranty of
each Guarantor hereunder; (g) any change of ownership of any Borrower (or, in
the case of a Guarantor/Borrower, any other Borrower) or the insolvency,
bankruptcy or any other change in the legal status of any Borrower (or, in the
case of a Guarantor/Borrower, any other Borrower); (h) any change in, or the
imposition of, any Law, decree, regulation or other governmental act which does
or might impair, delay or in any way affect the validity, enforceability or the
payment when due of the Guaranteed Obligations; (i) the failure of any Borrower
(or, in the case of a Guarantor/Borrower, any other Borrower) to maintain in
full force, validity or effect or to obtain or renew when required all
governmental and other approvals, licenses or consents required in connection
with the Guaranteed Obligations or the guaranty of each Guarantor hereunder, or
to take any other action required in connection with the performance of all
obligations pursuant to the Guaranteed Obligations or the guaranty of each
Guarantor hereunder; (j) the existence of any claim, setoff or other rights
which any Guarantor may have at any time against any Borrower (or, in the case
of a Guarantor/Borrower, any other Borrower) or any other Guarantor in
connection herewith or with any unrelated transaction; (k) the Agents', the
Lenders', the Swing Lenders' or the Issuing Bank's election, in any case or
proceeding instituted under chapter 11 of the United States Bankruptcy Code, of
the application of Section 1111(b)(2) of the United States Bankruptcy Code; (l)
any borrowing, use of cash collateral, or grant of a security interest by any
Borrower (or, in the case of a Guarantor/Borrower, any other Borrower), as
debtor in possession, under Section 363 or 364 of the United States Bankruptcy
Code; (m) the disallowance of all or any portion of any of the Agents', the
Lenders', the Swing Lenders' or the Issuing Bank's claims for repayment of the
Guaranteed Obligations under Section 502 or 506 of the United States Bankruptcy
Code; or (n) any other fact or circumstance which might otherwise constitute
grounds at law or equity for the discharge or release of any Guarantor from its
obligations hereunder, all whether or not such Guarantor shall have had notice
or knowledge of any act or omission referred to in the foregoing clauses (a)
through (n) of this paragraph. It is agreed that each Guarantor's liability
hereunder is independent of any other guaranties or other obligations at any
time in effect with respect to the Guaranteed Obligations or any part thereof
and that each Guarantor's liability hereunder may be enforced regardless of the
existence, validity, enforcement or non-enforcement of any such other
guaranties or other obligations or any provision of any applicable Law
purporting to prohibit payment by any Guarantor of the Guaranteed Obligations
in the manner agreed upon among the Agents, the Lenders, the Swing Lenders, the
Issuing Bank and the Borrowers (or, in the case of a Guarantor/Borrower, any
other Borrower).
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9.04 Waiver of Subrogation. Until payment in full of the
Guaranteed Obligations, expiration or termination of all Letters of Credit,
satisfaction of all of the Borrowers' Obligations under the Loan Documents and
termination of the Commitments, each Guarantor hereby agrees that it shall have
no right of subrogation with respect to the Guaranteed Obligations and hereby
waives any right to enforce any remedy which the Agents or the Lenders or the
Swing Lenders or the Issuing Bank now have or may hereafter have against any of
the Borrowers (or, in the case of a Guarantor/Borrower, any other Borrower), any
endorser or any other Guarantor of all or any part of the Guaranteed
Obligations, and each Guarantor hereby waives any benefit of, and any right to
participate in, any security or collateral given to the Agents or the Lenders or
the Swing Lenders or the Issuing Bank to secure payment of the Guaranteed
Obligations or any part thereof or any other liability of any of the Borrowers
to the Agents or the Lenders or the Swing Lenders or the Issuing Bank.
9.05 Actions with Respect to Collateral. Each Guarantor
authorizes the Agents, the Lenders, the Swing Lenders and the Issuing Bank to
take any action or exercise any remedy with respect to any collateral from time
to time securing the Guaranteed Obligations, which the Agents, the Lenders, the
Swing Lenders and the Issuing Bank in their sole discretion shall determine,
without notice to such Guarantor. Notwithstanding any reference herein to any
collateral securing any of the Guaranteed Obligations, it is acknowledged that,
on the Effective Date, none of the Guarantors nor any of their Subsidiaries has
granted, or has any obligation to grant, any Lien on any of its Property as
security for the Guaranteed Obligations. In the event the Agents, the Lenders,
the Swing Lenders or the Issuing Bank in their sole discretion elect to give
notice of any action with respect to any collateral securing the Guaranteed
Obligations or any part thereof, the Administrative Agent shall give ten (10)
days written notice to each Guarantor in accordance with the provisions of
Section 12.06. Each Guarantor consents and agrees that none of the Agents nor
the Lenders nor the Swing Lenders nor the Issuing Bank shall be under any
obligation to marshall any assets in favor of such Guarantor or against or in
payment of any or all of the Guaranteed Obligations.
9.06 Effect of Bankruptcy; Revival. In the event that
acceleration of the time for payment of any of the Guaranteed Obligations is
stayed upon the insolvency, bankruptcy or reorganization of any Borrower (or, in
the case of a Guarantor/Borrower, any other Borrower), or otherwise, all such
amounts shall nonetheless be payable by any Guarantor forthwith upon demand by
the Administrative Agent to such Guarantor. Each Guarantor further agrees that,
to the extent that any Borrower (or, in the case of a Guarantor/Borrower, any
other Borrower) makes a payment or payments to any of the Lenders on the
Guaranteed Obligations, or the Agents or the Lenders or the Swing Lenders or the
Issuing Bank receive any proceeds of collateral securing the Guaranteed
Obligations, which payment or receipt of proceeds or any part thereof is
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be returned or repaid to such Borrower (or, in the case of a
Guarantor/Borrower, any other Borrower), its estate, trustee, receiver, debtor
in possession or any other party (including without limitation any Guarantor)
under any Law or equitable cause, then to the extent of such payment, return or
repayment, the obligation or part thereof which has been paid, reduced or
satisfied by such amount shall be reinstated and continued in full force and
effect as of the date when such initial payment, reduction or satisfaction
occurred.
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9.07 Survival of Guaranty. Subject to provisions of Section
9.06, the guaranty of each Guarantor hereunder shall continue in effect until
payment in full of the Guaranteed Obligations, expiration or termination of all
Letters of Credit, satisfaction of all of the Borrowers' Obligations under the
Loan Documents, termination of the Commitments and the other conditions of the
guaranty of each Guarantor hereunder have been satisfied.
9.08 Right of Set-Off. If an Event of Default shall occur and be
continuing, the Agents, any Lender, Swing Lender or Issuing Bank to whom any
obligation is owed by any Guarantor hereunder or under any other Loan Document
or any participant of such Lender, Swing Lender or Issuing Bank which has agreed
in writing to be bound by the provisions of Section 11.12 and any branch,
Subsidiary or Affiliate of such Lender, Swing Lender or Issuing Bank or
participant anywhere in the world shall have the right, in addition to all other
rights and remedies available to it, without notice to such Guarantor, to
set-off against and apply to the then unpaid balance of all the Guaranteed
Obligations any debt owing to, and any other funds held in any manner for the
account of, any of the Guarantors by such Agent, Lender, Swing Lender or Issuing
Bank or participant or by such branch, Subsidiary or Affiliate, including all
funds in all deposit accounts (whether time or demand, general or special,
provisionally credited or finally credited, or otherwise) now or hereafter
maintained by any of the Guarantors for its own account (but not including funds
held in custodian or trust accounts) with such Agent, Lender, Swing Lender or
Issuing Bank or participant or such branch, Subsidiary or Affiliate. Such right
shall exist whether or not any Agent, Lender, Swing Lender or Issuing Bank shall
have made any demand under this Agreement, whether or not such debt owing to or
funds held for the account of any of the Guarantors is or are matured or
unmatured and regardless of the existence or adequacy of any collateral,
guaranty or any other security, right or remedy available to any Agent, Lender,
Swing Lender or Issuing Bank.
9.09 Limitation on Amount of Guaranty. If in any action or
proceeding involving any state, federal or foreign bankruptcy, insolvency or
other law affecting the rights of creditors generally, the guaranty of any
Guarantor would be held or determined to be void, invalid or unenforceable on
account of the amount of the aggregate liability under such guaranty, then,
notwithstanding any other provision of this Article IX to the contrary, the
aggregate amount of such liability shall, without any further action of the
Agents, the Lenders, the Swing Lenders, the Issuing Bank or any other Person, be
automatically limited and reduced to the highest amount which is valid and
enforceable as determined in such action or proceeding. An acknowledgment of
such limit may be contained in the letter agreement executed after the Effective
Date by any additional Guarantor if required by applicable Law.
9.10 Limitation on Scope of Certain Guarantees. Notwithstanding
anything in this Article IX to the contrary, on and after the Subsequent
Effective Date, the Guaranteed Obligations of the Subsidiaries of Books Etc.
under the letter agreements which they will execute and deliver on such
Subsequent Effective Date, will only be those Obligations of Books Etc. and not
any Obligations of other Borrowers hereunder.
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ARTICLE X
DEFAULT
10.01 Events of Default. An Event of Default shall mean the
occurrence or existence of any one or more of the following events or conditions
(whatever the reason therefor and whether voluntary, involuntary or effected by
operation of Law):
(a) Any of the Borrowers (i) shall fail to pay when due any
principal of any Loan (including scheduled installments, mandatory prepayments
or the payment due at maturity), or (ii) shall fail to pay any interest on any
Loan or any other amount owing hereunder or under the other Loan Documents
within 5 Business Days after such interest or other amount becomes due in
accordance with the terms hereof or thereof;
(b) Any representation or warranty made or deemed made at any
time by any of the Borrowers herein or by any of the Borrowers in any other Loan
Document, or in any certificate, other instrument or statement furnished
pursuant to the provisions hereof or thereof, shall prove to have been false or
misleading in any material respect as of the time it was made, deemed made or
furnished;
(c) Any of the Borrowers shall default in the observance or
performance of any covenant contained in Section 8.01(j), Section 8.02 or
8.03(d);
(d) Any of the Borrowers shall default in the observance or
performance of any other covenant, condition or provision hereof or of any other
Loan Document and such default shall continue unremedied for a period of fifteen
(15) Business Days after any Authorized Officer or the General Counsel of any
Borrower becomes aware of the occurrence thereof (such grace period to be
applicable only in the event such default can be remedied by corrective action
of the Borrowers as determined by the Administrative Agent in its sole
discretion);
(e) A default or event of default shall occur at any time under
the terms of any other agreement involving borrowed money or the extension of
credit or any other Indebtedness under which any Borrower or Subsidiary of any
Borrower may be obligated as a borrower or guarantor in excess of $5,000,000 (or
to Kmart in respect of the Kmart Indemnity in excess of $1,000,000) in the
aggregate, and such breach, default or event of default consists of the failure
to pay (beyond any period of grace permitted with respect thereto, whether
waived or not) any Indebtedness when due (whether at stated maturity, by
acceleration or otherwise) or if such breach or default permits or causes the
acceleration of any Indebtedness (whether or not such right shall have been
waived) or the termination of any commitment to lend;
(f) Any of the following occurs: (i) an Event of Default shall
have occurred under the Kmart Indemnity such that Kmart shall have the right
thereunder to exercise the rights granted to it pursuant to Sections 3(c)(ii) or
3(c)(iii) thereof in respect of more than two (2) Premises (as such term is
defined therein), (ii) a Triggering Event shall have occurred under any of the
Note Put Agreements (other than a Triggering Event which is "a Rating Decline"
or a "Restructuring Event" (as such terms are defined in the Note Put
Agreements)) and such Triggering Event shall continue unremedied for a period of
sixty (60) days or (iii) any of the Borrowers shall receive a "Put Notice" (as
defined in the Note Put Agreements) which states the occurrence of a Triggering
Event that is a "Lease/Lease Guaranty Default" or a "Lease Guaranty Termination"
(as such terms are defined in the Note Put Agreements), or (iv) any of the
Borrowers shall receive a Put Notice which states the occurrence solely of a
Rating Decline or a Restructuring
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Event, and, within five (5) Business Days of receipt of such Put Notice, the
Borrowers shall have failed to deliver to the Lenders documentation
satisfactory to the Required Lenders showing that the Notes as to which the Put
Notice was received will be refinanced on the Tenant Purchase Date with
Permitted Sutro Refinancing Indebtedness on the terms permitted under Section
8.02(a)(xi) hereof;
(g) Any final judgments or orders for the payment of money in
excess of $5,000,000 in the aggregate shall be entered against all or any of the
Borrowers by a court having jurisdiction in the premises (other than a judgment
or order as to which such Borrower's insurance company has accepted full
liability in writing) which judgment is not discharged, satisfied, vacated,
bonded or stayed pending appeal within a period of thirty (30) days from the
date of entry;
(h) Any of the Loan Documents shall cease to be a legal, valid
and binding agreement enforceable against the party executing the same or such
party's successors and assigns (as permitted under the Loan Documents) in
accordance with the respective terms thereof or shall in any way be terminated
(except in accordance with its terms) or become or be declared ineffective or
inoperative in any material respect or shall in any way be challenged or
contested or cease to give or provide the respective rights, titles, interests,
remedies, powers or privileges intended to be created thereby;
(i) Any Borrower or Guarantor ceases to be Solvent or admits in
writing its inability to pay its debts as they mature;
(j) Any of the following occurs: (i) any Reportable Event, which
the Administrative Agent determines in good faith constitutes grounds for the
termination of any Plan by the PBGC or the appointment of a trustee to
administer or liquidate any Plan, shall have occurred and be continuing; (ii)
proceedings shall have been instituted or other action taken to terminate any
Plan, or a termination notice shall have been filed with respect to any Plan;
(iii) a trustee shall be appointed to administer or liquidate any Plan; (iv) the
PBGC shall give notice of its intent to institute proceedings to terminate any
Plan or Plans or to appoint a trustee to administer or liquidate any Plan; (v)
any Borrower or its Subsidiary adopts, sponsors, maintains or makes
contributions to any Plan, any Multiemployer Plan, any Multiple Employer Plan or
any Benefit Arrangement that provides benefits to retirees (other than the
Benefit Arrangement of Walden described on Schedule 6.01(t)); and, in the case
of each occurrence of (i), (ii), (iii), (iv) above or any occurrence under such
Benefit Arrangement of Walden, the Administrative Agent determines in good faith
that the amount of the liability of the Company and its Subsidiaries in respect
thereof could reasonably be expected to individually or in the aggregate have a
Material Adverse Effect;
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(k) Any Borrower or Guarantor ceases to conduct its business as
contemplated or such Borrower or Guarantor is enjoined, restrained or in any way
prevented by court order from conducting all or any material part of its
business and such injunction, restraint or other preventive order is not
dismissed within thirty (30) days after the entry thereof;
(l) Any Change in Control shall occur;
(m) Any circumstances or events shall occur which individually or
in the aggregate could reasonably be expected to have a Material Adverse Effect;
(n) A proceeding shall have been instituted in a court having
jurisdiction in the premises seeking a decree or order for relief in respect of
any Borrower or Guarantor in an involuntary case under any applicable
bankruptcy, insolvency, reorganization or other similar law now or hereafter in
effect, or for the appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator, conservator (or similar official) of any Borrower or
Guarantor for any substantial part of its property, or for the winding-up or
liquidation of its affairs, and such proceeding shall remain undismissed or
unstayed and in effect for a period of thirty (30) consecutive days or such
court shall enter a decree or order granting any of the relief sought in such
proceeding; or
(o) Any Borrower or Guarantor shall commence a voluntary case
under any applicable bankruptcy, insolvency, reorganization or other similar law
now or hereafter in effect, shall consent to the entry of an order for relief in
an involuntary case under any such law, or shall consent to the appointment or
taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator, conservator (or other similar official) of itself or for any
substantial part of its property or shall make a general assignment for the
benefit of creditors, or shall fail generally to pay its debts as they become
due, or shall take any action in furtherance of any of the foregoing; or
(p) Any matured default shall have occurred under the Lease Credit
Agreement or any Financed Lease, whether or not any obligations thereunder have
been accelerated.
10.02 Consequences of Event of Default.
(a) If an Event of Default specified under subsections (a)
through (m) or subsection (p) of Section 10.01 shall occur and be continuing,
the Lenders, the Issuing Bank and the Agents shall be under no further
obligation to make Loans or issue Letters of Credit, as the case may be, and (i)
the Administrative Agent may, and upon the request of the Required Lenders
shall, by written notice to the Company, cancel the Commitments, (ii) the
Administrative Agent may, and upon the request of the Required Lenders shall, by
written notice to the Company, declare the unpaid principal amount of the
Revolving Credit Loans and Swing Loans then outstanding and all interest
accrued thereon, any unpaid Fees and all other Obligations (other than the Bid
Loans) of the Borrowers to the Lenders, the Swing Lenders and the Issuing Bank
to be forthwith due and payable, and the same shall thereupon become and be
immediately due and payable without presentment, demand, protest or any other
notice of any kind, all of which are hereby expressly waived, and (iii) the
Administrative Agent may, and upon the request of the Required Lenders shall,
require the
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Borrowers to, and the Borrowers shall thereupon, deposit in a non-interest
bearing account with the Administrative Agent, as cash collateral for its
Obligations under the Loan Documents, an amount equal to the maximum amount
currently or at any time thereafter available to be drawn on all outstanding
Letters of Credit, and the Borrowers hereby pledge to the Administrative Agent
for the benefit of the Agents, the Lenders, the Swing Lenders and the Issuing
Bank, and grant to the Administrative Agent for the benefit of the Agents, the
Lenders, the Swing Lenders and the Issuing Bank a security interest in, all
such cash as security for such Obligations, provided that, upon the curing of
all existing Events of Default to the satisfaction of the Required Lenders, the
Administrative Agent shall return such cash collateral to the Borrowers, and
provided further that within 14 days after cancellation of the Commitments or
acceleration of the Revolving Credit Loans and all other Obligations of the
Borrowers to the Agents, the Lenders, the Swing Lenders and the Issuing Bank
and before any judgment or decree for the payment therefor shall have been
obtained or entered, the Required Lenders, in their sole discretion, may by
notice to the Company and the Administrative Agent rescind and annul any such
cancellation or acceleration; and
(b) If an Event of Default specified under subsections (i), (n)
or (o) of Section 10.01 shall occur, the Commitments shall automatically
terminate and be of no further force and effect, the Agents, the Lenders, the
Swing Lenders and the Issuing Bank shall be under no further obligations to make
Loans or issue Letters of Credit hereunder and the unpaid principal amount of
the Loans then outstanding and all interest accrued thereon, any unpaid Fees and
all other Obligations of the Borrowers to the Agents, the Lenders, the Swing
Lenders and the Issuing Bank shall be immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived; and
(c) If any Event of Default shall occur and be continuing, the
Lenders which have any Bid Loans then outstanding to the Borrower (the "Bid Loan
Lenders") shall not be entitled to accelerate payment of the Bid Loans or to
exercise any right or remedy related to the collection of the Bid Loans until
the Commitments shall be terminated hereunder pursuant to this Section 10.02.
Upon such a termination of the Commitments: (i) references to Revolving Credit
Loans in Section 10.02 shall be deemed to apply also to the Bid Loans and the
Bid Loan Lenders shall be entitled to all enforcement rights given to a holder
of a Revolving Credit Loan in this Section 10.02, and (ii) the definition of
"Required Lenders" shall be changed as provided in Section 1.01 so that each
Lender shall have voting rights hereunder in proportion to its Ratable Share of
all Loans (including Bid Loans) and Letters of Credit Outstanding hereunder.
(d) If an Event of Default shall occur and be continuing, the
Agents, any Lender, Swing Lender or Issuing Bank to whom any Obligation is owed
by any Borrower hereunder or under any other Loan Document or any participant of
such Lender, Swing Lender or Issuing Bank which has agreed in writing to be
bound by the provisions of Section 11.12 and any branch, Subsidiary or Affiliate
(including any Lending Office) of such Lender, Swing Lender
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or Issuing Bank or participant anywhere in the world shall have the right, in
addition to all other rights and remedies available to it, without notice to
such Borrower, to set-off against and apply to the then unpaid balance of all
the Loans and all other Obligations of the Borrowers under any Loan Document
any debt owing to, and any other funds held in any manner for the account of,
the Borrowers by such Lender, Swing Lender or Issuing Bank or participant or by
such branch, Subsidiary or Affiliate, including all funds in all deposit
accounts (whether time or demand, general or special, provisionally credited or
finally credited, or otherwise) now or hereafter maintained by any of the
Borrowers for its own account (but not including funds held in custodian or
trust accounts) with such Lender, Swing Lender or Issuing Bank or participant
or such branch, Subsidiary or Affiliate. Such right shall exist whether or not
any Agent, Lender, Swing Lender or Issuing Bank shall have made any demand
under this Agreement or any other Loan Document, whether or not such debt owing
to or funds held for the account of any of the Borrowers is or are matured or
unmatured, regardless of any difference between the currency of the Loans or
other Obligations and the currency of such debt owing to or funds held for the
account of the Borrowers, and regardless of the existence or adequacy of any
collateral, guaranty or any other security, right or remedy available to any
Agent, Lender, Swing Lender or Issuing Bank; and
(e) If an Event of Default shall occur and be continuing, and
whether or not the Administrative Agent shall have accelerated the maturity of
Revolving Credit Loans and Swing Loans to the Borrowers pursuant to any of the
foregoing provisions of this Section 10.02, any Agent, or any Lender or any
Swing Lender or the Issuing Bank, if owed any amount with respect to the Loans,
may proceed to protect and enforce its rights by suit in equity, action at law
and/or other appropriate proceeding, whether for the specific performance of any
covenant or agreement contained in this Agreement or any of the Loan Documents,
including as permitted by applicable Law the obtaining of the ex parte
appointment of a receiver, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of such Agent or such Lender or such Swing Lender or
such Issuing Bank; and
(f) From and after the date on which the Administrative Agent has
taken any action pursuant to this Section 10.02 and until all Obligations of the
Borrowers have been paid in full, any and all proceeds received by the
Administrative Agent from the exercise of any remedy by the Administrative
Agent, shall be applied as follows:
(i) first, to reimburse the Administrative Agent, the
Syndication Agent, the Real Estate Administrative Agent, the Lenders and the
Issuing Bank for out-of-pocket costs, expenses and disbursements, including
reasonable attorneys' and paralegals' fees and legal expenses, incurred by the
Administrative Agent, the Syndication Agent, the Real Estate Administrative
Agent, the Lenders and the Issuing Bank in connection with the collection of any
Obligations of any of the Borrowers under any of the Loan Documents;
(ii) second, to the repayment of all Indebtedness then due
and unpaid of the Borrowers to the Agents, the Lenders, the Swing Lenders and
the Issuing Bank incurred under this Agreement or any of the Loan Documents,
whether of principal, interest, fees, expenses or otherwise, in such manner as
the Administrative Agent may determine in its discretion; and
(iii) the balance, if any, as required by Law.
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(f) In addition to all of the rights and remedies
contained in this Agreement or in any of the other Loan Documents, the
Administrative Agent shall have all of the rights and remedies under applicable
Law, all of which rights and remedies shall be cumulative and non-exclusive, to
the extent permitted by Law. The Administrative Agent may, and upon the request
of the Required Lenders shall, exercise all post-default rights granted to the
Administrative Agent and the Lenders under the Loan Documents or applicable Law.
ARTICLE XI
THE AGENTS
11.01 Appointment. Each Lender hereby irrevocably designates,
appoints and authorizes PNC Bank, National Association to act as Administrative
Agent for such Lender under this Agreement and to execute and deliver or accept
on behalf of each of the Lenders the other Loan Documents. Each Lender hereby
irrevocably designates, appoints and authorizes The First National Bank of
Chicago (or its Affiliate, First Chicago Capital Markets, Inc.) to act as
Syndication Agent and Bankers Trust Company to act as Real Estate Administrative
Agent. Each Lender hereby irrevocably authorizes, and each assignee or
participant of any Lender shall be deemed irrevocably to authorize, the
Administrative Agent to take such action on its behalf under the provisions of
this Agreement and the other Loan Documents and any other instruments and
agreements referred to herein, and to exercise such powers and to perform such
duties hereunder as are specifically delegated to or required of the
Administrative Agent by the terms hereof, together with such powers as are
reasonably incidental thereto. Each Lender hereby irrevocably authorizes, and
each assignee or participant of any Lender shall be deemed irrevocably to
authorize, the Syndication Agent and/or the Real Estate Administrative Agent to
take such action on its behalf under the provisions of this Agreement and the
other Loan Documents and any other instruments and agreements referred to
herein, and to exercise such powers and to perform such duties hereunder as are
specifically delegated to or required of the Syndication Agent and/or the Real
Estate Administrative Agent by the terms hereof, together with such powers as
are reasonably incidental thereto. PNC Bank agrees to act as the Administrative
Agent, First Chicago agrees to act as Syndication Agent and Bankers Trust
Company agrees to act as Real Estate Administrative Agent on behalf of the
Lenders to the extent provided in this Agreement.
11.02 Delegation of Duties. Each Agent may perform any of its
duties hereunder by or through agents or employees (provided such delegation
does not constitute a relinquishment of its duties as Agent) and, subject to
Sections 11.05 and 11.06, shall be entitled to engage and pay for the advice or
services of any attorneys, accountants or other experts concerning all matters
pertaining to its duties hereunder and to rely upon any advice so obtained.
11.03 Nature of Duties; Independent Credit Investigation. The
Agents shall have no duties or responsibilities except those expressly set forth
in this Agreement and no implied covenants, functions, responsibilities, duties,
obligations, or liabilities shall be read into this Agreement or otherwise
exist. The duties of the Agents shall be mechanical and administrative in
nature; the Agents shall not have by reason of this Agreement a fiduciary or
trust relationship in
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respect of any Lender; and nothing in this Agreement, expressed or implied, is
intended to or shall be so construed as to impose upon the Agents any
obligations in respect of this Agreement except as expressly set forth herein.
Without limiting the generality of the foregoing, the use of the term "agent"
in this Agreement with the reference to the Agents 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. Each Lender expressly
acknowledges (i) that none of the Agents has made any representations or
warranties to it and that no act by any of the Agents hereafter taken,
including any review of the affairs of any of the Borrowers, shall be deemed to
constitute any representation or warranty by such Agent to any Lender; (ii)
that it has made and will continue to make, without reliance upon any of the
Agents, its own independent investigation of the financial condition and
affairs and its own appraisal of the creditworthiness of each of the Borrowers
in connection with this Agreement and the making and continuance of the Loans
hereunder; and (iii) except as expressly provided herein, that none of the
Agents shall have any duty or responsibility, either initially or on a
continuing basis, to provide any Lender with any credit or other information
with respect thereto, whether coming into its possession before the making of
any Loan or at any time or times thereafter.
11.04 Actions in Discretion of Agents; Instructions from the
Lenders. Each of the Agents agrees, upon the written request of the Required
Lenders, to take or refrain from taking any action of the type specified as
being within such Agent's rights, powers or discretion herein, provided that
none of the Agents nor any of their directors, officers, employees, agents,
attorneys or Affiliates shall be required to take any action which exposes such
Agent or any such Person to personal liability or which is contrary to this
Agreement or any other Loan Document or applicable Law. In the absence of a
request by the Required Lenders, each Agent shall have authority, in its sole
discretion, to take or not to take any such action, unless this Agreement
specifically requires the consent of the Required Lenders or all of the Lenders.
Any action taken or failure to act pursuant to such instructions or discretion
shall be binding on the Lenders, subject to Section 11.05. Subject to the
provisions of Section 11.05, no Lender shall have any right of action whatsoever
against any of the Agents as a result of such Agent's acting or refraining from
acting hereunder in accordance with the instructions of the Required Lenders, or
in the absence of such instructions, in the absolute discretion of such Agent.
11.05 Exculpatory Provisions. None of the Agents nor any of their
directors, officers, employees, agents, attorneys or Affiliates shall (a) be
liable to any Lender for any action taken or omitted to be taken by it or them
hereunder, or in connection herewith including pursuant to any Loan Document,
unless caused by its or their own gross negligence or willful misconduct, (b) be
responsible in any manner to any of the Lenders for the effectiveness,
enforceability, genuineness, validity or the due execution of this Agreement or
any other Loan Documents or for any recital, representation, warranty, document,
certificate, report or statement herein or made or furnished under or in
connection with this Agreement or any other Loan Documents, or (c) be under any
obligation to any of the Lenders to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions hereof or
thereof on the part of any of the Borrowers, or the financial condition of any
of the Borrowers, or the existence or possible existence of any Event
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of Default or Potential Default. None of the Agents nor any Lender nor any of
their respective directors, officers, employees, agents, attorneys or
Affiliates shall be liable to any of the Borrowers for consequential or
punitive damages resulting from any breach of contract, tort or other wrong in
connection with the negotiation, documentation, administration or collection of
the Loans, the Letters of Credit or any of the Loan Documents.
11.06 Reimbursement and Indemnification of Agents by Lenders. Each
Lender agrees to reimburse and indemnify each of the Agents (to the extent not
reimbursed by the Borrowers and without limiting the Obligation of the Borrowers
to do so) in proportion to its Ratable Share from and against all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, or
reasonable out-of-pocket costs, expenses or disbursements, of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against any of the
Agents, in its capacity as such, in any way relating to or arising out of this
Agreement or any other Loan Documents or any action taken or omitted by any of
the Agents hereunder or thereunder, provided that no Lender shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements (a) if the same
results from an Agent's gross negligence or willful misconduct, or (b) if such
Lender was not given notice of the subject claim and the opportunity to
participate in the defense thereof, at its expense (except that such Lender
shall remain liable to the extent such failure to give notice does not result in
a loss to the Lender), or (c) if the same results from a compromise and
settlement agreement entered into without the consent of such Lender, which
shall not be unreasonably withheld. In addition, each Lender agrees promptly
upon demand to reimburse each of the Agents (to the extent not reimbursed by the
Borrowers and without limiting the Obligation of the Borrowers to do so) in
proportion to its Ratable Share for all amounts due and payable by the Borrowers
to such Agent in connection with such Agent's periodic audit of the Borrowers'
books, records and business properties.
11.07 Reliance by Agents. Each of the Agents shall be entitled to
rely upon any writing, telegram, telex or teletype message, resolution, notice,
consent, certificate, letter, cablegram, statement, order or other document or
conversation by telephone or otherwise believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person or Persons, and upon
the advice and opinions of counsel and other professional advisers selected by
the Agents. Each of the Agents shall be fully justified in failing or refusing
to take any action hereunder unless it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action.
11.08 Notice of Default. An Agent shall not be deemed to have
knowledge or notice of the occurrence of any Potential Default or Event of
Default unless such Agent has received written notice from a Lender or the
Borrowers referring to this Agreement, describing such Potential Default or
Event of Default and stating that such notice is a "notice of default."
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11.09 Notices. The Administrative Agent shall promptly send to
each Lender a copy of all notices received from the Borrowers pursuant to the
provisions of this Agreement or the other Loan Documents promptly upon receipt
thereof. The Administrative Agent shall promptly notify the Company and the
other Lenders of each change in the Base Rate and the effective date thereof.
11.10 Lenders in Their Individual Capacities. With respect to its
Commitments, the Revolving Credit Loans, the Swing Loans and the Bid Loans made
by it, each Agent shall have the same rights and powers hereunder as any other
Lender and may exercise the same as though it were not an Agent, and the term
"Lenders" shall, unless the context otherwise indicates, include the Agents in
their individual capacity. PNC Bank, First Chicago, Bankers Trust Company and
their Affiliates and each of the Lenders and their respective Affiliates may,
without liability, except as prohibited herein, make loans to, accept deposits
from, discount drafts for, act as trustee under indentures of, and generally
engage in any kind of banking or trust business with, the Borrowers and their
Affiliates, in the case of the Agents, as though they were not acting as Agents
hereunder and in the case of each Lender, as though such Lender were not a
Lender hereunder.
11.11 [RESERVED].
11.12 Equalization of Lenders. The Lenders and the holders of any
participations in any Revolving Credit Loans agree among themselves that, with
respect to all amounts received by any Lender or by any participant, whether
received by voluntary payment, by realization upon security, by the exercise of
the right of set-off or banker's lien, by counterclaim or by any other non-pro
rata source, equitable adjustment will be made in the manner stated in the
following sentence so that, in effect, all such excess amounts will be shared
ratably among the Lenders and such participants in proportion to their interests
in payments under the Revolving Credit Loans, except as otherwise provided in
Sections 4.03(b), 5.04(b), 5.06 or 12.03. The Lenders or any such participant
receiving any such amount shall purchase for cash from each of the other Lenders
or participants an interest in such Revolving Credit Loans in such amount as
shall result in a ratable participation by the Lenders and each such participant
in the aggregate unpaid amount under the Revolving Credit Loans, provided that
if all or any portion of such excess amount is thereafter recovered from the
Lender or the participant making such purchase, such purchase shall be rescinded
and the purchase price restored to the extent of such recovery, together with
interest or other amounts, if any, required by law (including court order) to be
paid by the Lender or the participant making such purchase.
11.13 Successor Agents. The Administrative Agent (i) may resign as
Administrative Agent or (ii) shall resign if such resignation is requested by
the Required Lenders (if the Administrative Agent is a Lender, the
Administrative Agent's Loans and its Commitment shall be considered in
determining
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whether the Required Lenders have requested such resignation) or required by
Section 5.04(b), in either case of (i) or (ii) by giving not less than thirty
(30) days' prior written notice to the Company. The Syndication Agent (i) may
resign as Syndication Agent or (ii) shall resign if such resignation is
requested by the Required Lenders (if the Syndication Agent is a Lender, the
Syndication Agent's Loans and its Commitment shall be considered in determining
whether the Required Lenders have requested such resignation) or required by
Section 5.04(b), in either case of (i) or (ii), by giving not less than thirty
(30) days' prior written notice to the Company. The Real Estate Administrative
Agent (i) may resign as Real Estate Administrative Agent or (ii) shall resign
if such resignation is requested by the Required Lenders (if the Real Estate
Administrative Agent is a Lender, the Real Estate Administrative Agent's Loans
and its Commitment shall be considered in determining whether the Required
Lenders have requested such resignation) or required by Section 5.04(b), in
either case of (i) or (ii), by giving not less than thirty (30) days' prior
written notice to the Company. If any of the Agents shall resign under this
Agreement, then either (a) the Required Lenders shall appoint from among the
Lenders a successor agent for the Lenders, subject to the consent of the
Company (unless and until an Event of Default has occurred and is continuing
after which no consent of the Company shall be required), such consent not to
be unreasonably withheld, or (b) if a successor agent shall not be so appointed
and approved within the thirty (30) day period following such Agent's notice to
the Lenders of its resignation, then such Agent shall appoint, with the consent
of the Company (unless and until an Event of Default has occurred and is
continuing after which no consent of the Company shall be required), such
consent not to be unreasonably withheld, a successor agent who shall serve as
Administrative Agent or Syndication Agent or Real Estate Administrative Agent,
as applicable, until such time as the Required Lenders appoint and the Company
consents to the appointment of a successor agent. Upon its appointment
pursuant to either clause (a) or (b) above, such successor agent shall succeed
to the rights, powers and duties of such Agent and the term "Administrative
Agent" or "Syndication Agent" or "Real Estate Administrative Agent" shall mean
such successor agent, effective upon its appointment, and the former Agent's
rights, powers and duties as Agent shall be terminated without any other or
further act or deed on the part of such former Agent or any of the parties to
this Agreement. After the resignation of any Agent hereunder, the provisions
of this Article XI shall inure to the benefit of such former Agent and such
former Agent shall not by reason of such resignation be deemed to be released
from liability for any actions taken or not taken by it while it was an Agent
under this Agreement.
11.14 Availability of Funds. Unless the Administrative Agent shall
have been notified by a Lender or Swing Lender prior to the date upon which a
Loan is to be made that such Lender or Swing Lender does not intend to make
available to the Administrative Agent in the applicable currency such Lender's
or Swing Lender's portion of such Loan, the Administrative Agent may assume that
such Lender or Swing Lender has made or will make such proceeds available to the
Administrative Agent on such date and the Administrative Agent may, in reliance
upon such assumption (but shall not be required to), make available to the
Borrowers a corresponding amount in the applicable currency. If such
corresponding amount is not in fact made available to the Administrative Agent
by such Lender or Swing Lender in the applicable currency, the Administrative
Agent shall be entitled to recover such amount on demand from such Lender or
Swing Lender (or, if such Lender or Swing Lender fails to pay such amount
forthwith upon such demand from the Borrowers) together with interest thereon,
in respect of each day during the period commencing on the date such amount was
made available to the Borrowers and ending on the date the Administrative Agent
recovers such amount, at a rate per annum equal to the applicable Federal Funds
Effective Rate if recovered from such Lender or Swing Lender or equal to the
applicable interest rate in respect of the Loan if recovered from the Borrowers.
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11.15 Calculations. In the absence of gross negligence or willful
misconduct, the Administrative Agent shall not be liable for any error in
computing the amount payable to any Agent, Lender, Swing Lender or Issuing Bank
whether in respect of the Loans, Fees or any other amounts due to the Agents,
the Lenders, the Swing Lenders or the Issuing Bank under this Agreement. In the
event an error in computing any amount payable to any Agent, Lender, Swing
Lender or Issuing Bank is made, the Administrative Agent, the Borrowers and each
affected Agent, Lender, Swing Lender and Issuing Bank shall, forthwith upon
discovery of such error, make such adjustments as shall be required to correct
such error, and any compensation therefor will be calculated at the Federal
Funds Effective Rate or the Overnight Rate if such computation relates to a Loan
made or Letter of Credit issued in an Optional Currency.
11.16 Beneficiaries. Except as expressly provided herein, the
provisions of this Article XI are solely for the benefit of the Agents, the
Lenders, the Swing Lenders, the Issuing Bank and the Borrowers shall not have
any rights to rely on or enforce any of the provisions hereof. In performing
their functions and duties under this Agreement, the Agents shall act solely as
agent of the Lenders and do not assume and shall not be deemed to have assumed
any obligation toward or relationship of agency or trust with or for any of the
Borrowers.
ARTICLE XII
MISCELLANEOUS
12.01 Modifications, Amendments or Waivers. With the written
consent of the Required Lenders, the Administrative Agent, acting on behalf of
all the Lenders, and the Company on behalf of the Borrowers may from time to
time enter into written agreements amending or changing any provision of this
Agreement or any other Loan Document or the rights of the Lenders or the
Borrowers hereunder or thereunder, or may grant written waivers or consents to a
departure from the due performance of the Obligations of the Borrowers hereunder
or thereunder. Any such agreement, waiver or consent made with such written
consent shall be effective to bind all the Lenders and the Borrowers; provided,
that, without the written consent of each Lender, no such agreement, waiver or
consent may be made which will:
(a) increase the amount of the Commitment of such Lender
hereunder or extend the Expiration Date with respect to such Lender;
(b) increase the aggregate amount of the Commitments of the
Lenders to an amount greater than $500,000,000;
(c) release any Guarantor the assets of which represent 5% or
more of the consolidated total assets of the Company and its Subsidiaries;
(d) whether or not any Loans are outstanding, extend the time for
payment of principal or interest of any Loan made or to be made by such Lender,
the Facility Fee or any other fee payable to such Lender, or reduce the
principal amount of or the rate of interest borne by any
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Loan made or to be made by such Lender or reduce the Facility Fee or any other
fee payable to such Lender, or otherwise affect the terms of payment of the
principal of or interest of any Loan made or to be made by such Lender, or the
Facility Fee or any other fee payable to such Lender; or
(e) amend Sections 5.02, 11.05 or 11.12, this Section 12.01 or
Section 12.11, alter any provision regarding the pro rata treatment of the
Lenders, change the definition of Required Lenders, or change any requirement
providing for the Lenders or the Required Lenders to authorize the taking of any
action hereunder.
No agreement, waiver or consent which would modify the interests, rights or
obligations of the Administrative Agent in its capacity as Administrative Agent
or as the issuer of Letters of Credit shall be effective without the written
consent of the Administrative Agent. No Agreement, waiver or consent which
would modify the interests, rights or obligations of the Syndication Agent in
its capacity as Syndication Agent shall be effective without the written consent
of the Syndication Agent. Any provision of a Fee Letter may be amended,
supplemented or waived by written consent of the parties thereto. No agreement,
waiver or consent which would modify the interests, rights or obligations of the
Real Estate Administrative Agent in its capacity as Real Estate Administrative
Agent shall be effective without the written consent of the Real Estate
Administrative Agent. No agreement, waiver or consent which would modify the
interests, rights or obligations of the Issuing Bank in its capacity as Issuing
Bank shall be effective without the written consent of the Issuing Bank. No
Agreement, waiver or consent which would modify the interests, rights or
obligations of any Swing Lender in its capacity as Swing Lender shall be
effective without the written consent of such Swing Lender. Notwithstanding the
foregoing: (1) no amendment, waiver, or consent shall, unless in writing and
signed by the Designating Lender on behalf of each Designated Lender affected
thereby, (a) subject such Designated Lender to any additional obligations, (b)
reduce the principal of, interest on, or other amounts due with respect to, the
Bid Loan Note made payable to such Designated Lender, (c) postpone any date
fixed for any payment of principal of, or interest on, or other amounts due with
respect to, the Bid Loan Note made payable to such Designated Lender, or (d)
amend the definition of Required Banks hereunder in a manner which adversely
affects the rights of such Designated Lender.
12.02 No Implied Waivers; Cumulative Remedies; Writing Required.
No course of dealing and no delay or failure of the Administrative Agent, the
Syndication Agent, the Real Estate Administrative Agent, any Swing Lender, any
Lender or the Issuing Bank in exercising any right, power, remedy or privilege
under this Agreement (including without limitation Article IX hereof) or any
other Loan Document shall affect any other or future exercise thereof or
operate as a waiver thereof; nor shall any single or partial exercise thereof
or any abandonment or discontinuance of steps to enforce such a right, power,
remedy or privilege preclude any further exercise thereof or of any other
right, power, remedy or privilege. The rights and remedies of the
Administrative Agent, the Syndication Agent, the Real Estate Administrative
Agent, the Lenders and the Issuing Bank under this Agreement (including without
limitation Article IX hereof) and any other Loan Documents are cumulative and
not exclusive of any rights or remedies which they would otherwise have. Any
waiver, permit, consent or approval of any kind or character on the part of any
Lender or the Issuing Bank of any breach or default under this Agreement
(including without
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limitation Article IX hereof) or any such waiver of any provision or condition
of this Agreement (including without limitation Article IX whereof) must be in
writing and shall be effective only to the extent specifically set forth in
such writing.
12.03 Reimbursement and Indemnification by the Borrowers; Taxes.
(a) Reimbursement and Indemnification of Agents. The Borrowers
unconditionally agree to pay or reimburse each of the Agents and save each of
the Agents harmless against (i) liability for the payment of all reasonable
out-of-pocket costs, expenses and disbursements, including fees and expenses of
counsel and consultants, incurred by each of the Agents (A) in connection with
the development, negotiation, preparation, printing, execution, administration,
syndication, interpretation and performance of this Agreement and the other Loan
Documents (subject to the limitations agreed in the Fee Letters), (B) relating
to any requested amendments, waivers or consents pursuant to the provisions
hereof, (C) in connection with the enforcement of this Agreement (including
without limitation Article IX hereof) or any other Loan Document or collection
of amounts due hereunder or thereunder or the proof and allowability of any
claim arising under this Agreement (including without limitation Article IX
hereof) or any other Loan Document, whether in bankruptcy or receivership
proceedings or otherwise, and (D) in any workout, restructuring or in connection
with the protection, preservation, exercise or enforcement of any of the terms
hereof or of any rights hereunder or under any other Loan Document or in
connection with any foreclosure, collection or bankruptcy proceedings, and (ii)
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses (including fees and expenses of counsel and consultants)
or disbursements of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against any of the Agents, in its capacity as such, in
any way relating to or arising out of this Agreement (including without
limitation Article IX hereof) or any other Loan Documents or any action taken or
omitted by any of the Agents hereunder or thereunder, provided that the
Borrowers shall not be liable to an Agent for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements (A) if the same results from such Agent's gross
negligence or willful misconduct, or (B) if the Borrowers were not given notice
of the subject claim and the opportunity to participate in the defense thereof,
at their expense (except that the Borrowers shall remain liable to the extent
such failure to give notice does not result in any additional loss to the
Borrowers), or (C) if the same results from a compromise or settlement agreement
entered into without the consent of the Borrowers, which consent shall not be
unreasonably withheld. In addition, the Borrowers agree to reimburse and pay
all reasonable out-of-pocket expenses of each of the Agents' regular employees
and agents engaged periodically to perform audits of the Borrowers' books,
records and business properties.
(b) Reimbursement and Indemnification of Lenders. The
Borrowers agree unconditionally upon demand to pay or reimburse to each Lender
and the Issuing Bank and to save such Lender and the Issuing Bank harmless
against (i) liability for the payment of all reasonable out-of-pocket costs,
expenses and disbursements (including fees and expenses of counsel for each
Lender and the Issuing Bank) incurred by such Lender or the Issuing Bank (A) in
connection with the enforcement of this Agreement (including without limitation
Article IX hereof) or any other Loan Document, or collection of amounts due
hereunder or thereunder or the proof and allowability of any
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claim arising under this Agreement (including without limitation Article IX
hereof) or any other Loan Document, whether in bankruptcy or receivership
proceedings or otherwise, and (B) in any workout, restructuring or in
connection with the protection, preservation, exercise or enforcement of any of
the terms hereof or of any rights hereunder or under any other Loan Document or
in connection with any foreclosure, collection or bankruptcy proceedings, and
(ii) all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including fees and expenses of counsel) or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against such Lender or the Issuing Bank, in its
capacity as such, in any way relating to or arising out of this Agreement
(including without limitation Article IX and Section 11.06 hereof) or any other
Loan Documents or any action taken or omitted by such Lender or the Issuing
Bank hereunder or thereunder, provided that the Borrowers shall not be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements (A) if the same
results from such Lender's or the Issuing Bank's gross negligence or willful
misconduct, or (B) if the Borrowers were not given notice of the subject claim
and the opportunity to participate in the defense thereof, at their expense
(except that the Borrowers shall remain liable to the extent such failure to
give notice does not result in any additional loss to the Borrowers), or (C) if
the same results from a compromise or settlement agreement entered into without
the consent of the Borrowers, which consent shall not be unreasonably withheld.
The Lenders and the Issuing Bank will attempt to minimize the fees and expenses
of legal counsel for the Lenders and the Issuing Bank which are subject to
reimbursement by the Borrowers hereunder by considering the usage of one law
firm to represent the Lenders, the Issuing Bank and the Agents if appropriate
under the circumstances.
12.04 Holidays. Whenever any payment or action to be made or taken
hereunder shall be stated to be due on a day which is not a Business Day, such
payment or action shall be made or taken on the next following Business Day
(except as provided in the definition of "Interest Period"), and such extension
of time shall be included in computing interest or fees, if any, in connection
with such payment or action.
12.05 Funding by Branch, Subsidiary or Affiliate.
(a) Notional Funding. Each Lender shall have the right from time
to time, without notice to the Borrowers, to deem any branch, Subsidiary or
Affiliate (which for the purposes of this Section 12.05 shall mean any
corporation or association which is directly or indirectly controlled by or is
under direct or indirect common control with any corporation or association
which directly or indirectly controls such Lender) of such Lender to have made,
maintained or funded any Loan in Dollars or in any Optional Currency to which
the Euro-Rate Option applies at any time, provided that immediately following
(on the assumption that a payment was then due from the Borrowers to such other
office) and as a result of such change the Borrowers would not be under any
greater financial obligation pursuant to Sections 4.03 or 5.06 than they would
have been in the absence of such change. Notional funding offices may be
selected by each Lender without regard to the Lender's actual methods of making,
maintaining or funding the Loans or any sources of funding actually used by or
available to such Lender.
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(b) Actual Funding. Each Lender shall have the right from time
to time to make or maintain any Loan by arranging for a branch, Subsidiary or
Affiliate of such Lender to make or maintain such Loan subject to the last
sentence of this Section 12.05(b). If any Lender causes a branch, Subsidiary or
Affiliate to make or maintain any part of the Loans hereunder, all terms and
conditions of this Agreement shall, except where the context clearly requires
otherwise, be applicable to such part of the Loans to the same extent as if such
Loans were made or maintained by such Lender, provided that in no event shall
any Lender's use of such a branch, Subsidiary or Affiliate to make or maintain
any part of the Loans hereunder cause such Lender or such branch, Subsidiary or
Affiliate to incur any cost or expenses payable by the Borrowers hereunder or
require the Borrowers to pay any other compensation to any Lender (including any
expenses incurred or payable pursuant to Sections 4.03 or 5.06) which would
otherwise not be incurred.
12.06 Notices; Lending Offices. All notices, requests, demands,
directions and other communications (as used in this Section 12.06 collectively
referred to as "notices") given to or made upon any party hereto under the
provisions of this Agreement shall be by telephone or in writing (including
telex or facsimile communication) unless otherwise expressly permitted hereunder
and shall be delivered or sent by telex or facsimile to the respective parties
at the addresses and numbers set forth under their respective names on the
signature pages hereto, on Schedule 1.01(B) or in accordance with any subsequent
unrevoked written direction from any party to the others. All notices shall,
except as otherwise expressly herein provided, be effective (a) in the case of
telex or facsimile, when received, (b) in the case of hand- delivered notice,
when hand delivered, (c) in the case of telephone, when telephoned, provided,
however, that in order to be effective, telephonic notices must be confirmed in
writing no later than the next day by letter, facsimile or telex, (d) if given
by mail, four (4) days after such communication is deposited in the United
States mails with first class postage prepaid, return receipt requested, and (e)
if given by any other means (including by air courier), when delivered;
provided, that notices to the Administrative Agent shall not be effective until
received. Any Lender giving any notice to any Borrower shall simultaneously
send a copy thereof to the Administrative Agent, and the Administrative Agent
shall promptly notify the other Lenders of the receipt by it of any such notice.
Schedule 1.01(B) lists the Lending Offices of each Lender. Each Lender may
change its Lending Office by written notice to the other parties hereto.
12.07 Severability. The provisions of this Agreement are intended
to be severable. If any provision of this Agreement shall be held invalid or
unenforceable in whole or in part in any jurisdiction such provision shall, as
to such jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without in any manner affecting the validity or enforceability
thereof in any other jurisdiction or the remaining provisions hereof in any
jurisdiction.
12.08 Governing Law. Each Letter of Credit and Section 2.10 shall
be subject to the Uniform Customs and Practice for Documentary Credits (1993
Revision), International Chamber of Commerce Publication No. 500, as the same
may be revised or amended from time to time, and to the extent not inconsistent
therewith the internal laws of the State of Illinois without regard to its
conflict of laws principles. The balance of this Agreement shall be deemed to
be a contract under the Laws of the State of Illinois and for all purposes shall
be governed by and construed and enforced
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in accordance with the internal laws of the State of Illinois without regard to
its conflict of laws principles.
12.09 Prior Understanding. This Agreement and the Loan Documents
supersede all prior understandings and agreements, whether written or oral,
between the parties hereto and thereto relating to the transactions provided for
herein and therein, including any prior confidentiality agreements and
commitments.
12.10 Duration; Survival. All representations and warranties of
the Borrowers contained herein or made in connection herewith shall survive the
making of Loans and issuance of Letters of Credit and shall not be waived by the
execution and delivery of this Agreement, any investigation by the Agents, the
Lenders or the Issuing Bank, the making of Loans, issuance of Letters of Credit,
or payment in full of the Loans. All covenants and agreements of the Borrowers
contained herein relating to the payment of principal, interest, Fees, premiums,
additional compensation or expenses and indemnification, including those set
forth in Article V and Section 12.03, shall survive payment in full of the
Loans, expiration or termination of the Letters of Credit and termination of the
Commitments.
12.11 Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of the Lenders, the Agents, the Issuing Bank, the
Borrowers and their respective successors and assigns, except that none of the
Borrowers may assign or transfer any of its rights and Obligations hereunder or
any interest herein. Each Lender may, at its own cost, make assignments of or
sell participations in all or any part of its Commitment and the Loans made by
it to one or more Lenders or other Persons, subject to the terms set forth
herein:
(a) Assignment. In the case of an assignment, (i) without the
consent of any party, any Lender may assign to any of its Affiliates or to any
Person in accordance with the provisions of Sections 2.01(b) or 2.01(c), or to
any other Lender (subject to the further clauses below), all or any portion of
its Commitment or Bid Loans; (ii) any Lender may assign to any other Person
(subject to the further clauses below) with the prior consent of the
Administrative Agent and the Company (unless and until an Event of Default has
occurred and is continuing after which no consent of the Company shall be
required), which consent may not be unreasonably withheld, all or any portion of
its Commitment or Bid Loans; (iii) any partial assignment shall not be less than
$5,000,000 and in multiples of $1,000,000 in excess thereof; (iv) if an
assignment is made of any Lender's Commitment, such Assignor Lender must
simultaneously assign the same proportion of each of its Revolving Credit Loans
then outstanding and the same proportion of its Ratable Share of any Letters of
Credit Outstandings; (v) a Lender (other than a Designated Lender) may assign a
Bid Loan to another Person (other than a Designated Lender) only if it is
simultaneously assigning all or a portion of its Commitment to such Person or
such Person is already a Lender hereunder and a Designated Lender may only
assign a Bid Loan to the Lender which designated the Designated Lender to fund
such Bid Loan; (vi) any assignment must be made pursuant to an Assignment and
Assumption Agreement, and (vii) the Assignor Lender shall pay to the
Administrative Agent a service fee in the amount of $3,500 for each assignment.
Upon acceptance by the Administrative Agent of the Assignment and Assumption
Agreement, the Assignee Lender shall have, to the extent
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of such assignment (unless otherwise provided therein), the same rights,
benefits and obligations as it would have if it had been a signatory Lender
hereunder, the Commitments reflected on Schedule 1.01(B) shall be adjusted
accordingly, and the Administrative Agent shall deliver a revised Schedule
1.01(B) to the Company and the Lenders. The Administrative Agent shall maintain
a copy of each Assignment and Assumption Agreement delivered to it, and a
register for the recordation of the names and addresses of the Lenders, the
Commitments of the Lenders, and the principal amount of the Revolving Credit
Loans and Bid Loans outstanding from time to time (the "Register"). Entries in
the Register shall be conclusive and binding for all purposes, absent manifest
error, and the Borrowers, the Administrative Agent and the Lenders may treat
each Person whose name is recorded in the Register as a Lender for all purposes
of this Agreement and each other Loan Document. The Register shall be available
for inspection by the Borrowers or any Lender at any reasonable time and from
time to time upon reasonable prior notice.
(b) Participations. In the case of a participation, (i) the
participant's rights against such Lender in respect of such participation shall
be those set forth in the agreement executed by such Lender in favor of the
participant relating thereto, and (ii) such agreement shall include an agreement
to be bound by the provisions of Section 11.12, and shall not include any voting
rights except with respect to changes of the type referenced in clauses (a),
(b), (c) or (d) under Section 12.01. All of such Lender's obligations under
this Agreement or any other Loan Document shall remain unchanged and all amounts
payable by any Borrower hereunder or thereunder shall be determined as if such
Lender had not sold such participation. Such Lender shall remain the owner of
any such participated interest for all purposes of this Agreement. The
Borrowers, the Agents and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. All such participants shall be entitled to
the benefit of the provisions of Sections 4.03, 5.06, 9.08, 10.02(c) and
Sections 12.03(b) and (c).
(c) Other Provisions. Any assignee or participant which is not
incorporated under the Laws of the United States of America or a state thereof
shall deliver to the Borrowers and the Administrative Agent the form of
certificate described in Section 12.18 relating to federal income tax
withholding and the Lender who makes an assignment or sells a participation
shall cause the assignee or participant to comply with the provisions of Section
12.18. Each Lender may furnish any publicly available information concerning
the Company or its Subsidiaries and any other information concerning the Company
or its Subsidiaries in the possession of such Lender from time to time to
assignees and participants (including prospective assignees or participants),
provided that such assignees and participants agree to be bound by the
provisions of Section 12.12.
(d) Federal Reserve Bank Transfer. Notwithstanding anything to
the contrary, any Lender may at any time assign all or any portion of its rights
under this Agreement and the other Loan Documents to a Federal Reserve Bank, and
no such assignment shall release such assigning Lender from its obligations
hereunder.
12.12 Confidentiality. (a) The Agents and the Lenders each agree
to keep confidential all information obtained from the Company or any of its
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Subsidiaries which is nonpublic and confidential or proprietary in nature
(including any information the Company or any of its Subsidiaries specifically
designates as confidential), except as provided below, and to use such
information only in connection with their respective capacities under this
Agreement and for the purposes contemplated hereby. Any Agent or Lender shall
be permitted to disclose such information (i) to Affiliates, outside legal
counsel, accountants and other professional advisors who need to know such
information in connection with the administration and enforcement of this
Agreement, subject to agreement of such Persons to maintain the
confidentiality, (ii) to assignees and participants (including prospective
assignees and participants) as contemplated by Section 12.11, (iii) to the
extent requested by any bank regulatory authority or, with notice to the
Company, as otherwise required by applicable Law or by any subpoena or similar
legal process, or in connection with any investigation or proceeding arising
out of the transactions contemplated by this Agreement, (iv) if it becomes
publicly available other than as a result of a breach of this Agreement or
becomes available from a source not known to such Agent or Lender to be subject
to confidentiality restrictions, or (v) if the Company shall have consented to
such disclosure.
(b) Sharing Information With Affiliates of the Lenders. Each
Borrower acknowledges that from time to time financial advisory, investment
banking and other services may be offered or provided to the Company or one or
more of its Affiliates (in connection with this Agreement or otherwise) by any
Lender or by one or more Subsidiaries or Affiliates of such Lender and each of
the Borrowers hereby authorizes each Lender to share any information delivered
to such Lender by the Company and its Subsidiaries pursuant to this Agreement,
or in connection with the decision of such Lender to enter into this Agreement,
to any such Subsidiary or Affiliate of such Lender, it being understood that any
such Subsidiary or Affiliate of any Lender receiving such information shall be
bound by the provisions of Section 12.12 as if it were a Lender hereunder. Such
authorization shall survive the repayment of the Loans and other Obligations and
the termination of the Commitments.
12.13 Counterparts. This Agreement may be executed by different
parties hereto on any number of separate counterparts, each of which, when so
executed and delivered, shall be an original, and all such counterparts shall
together constitute one and the same instrument.
12.14 Agent's or Lender's Consent. Whenever any Agent's or any
Lender's or the Issuing Bank's consent is required to be obtained under this
Agreement or any of the other Loan Documents as a condition to any action,
inaction, condition or event, each Agent and each Lender and the Issuing Bank
shall be authorized to give or withhold such consent in its sole and absolute
discretion (unless such consent is not to be unreasonably withheld) and to
condition its consent upon the giving of collateral, the payment of money or any
other matter.
12.15 Exceptions. The representations, warranties and covenants
contained herein shall be independent of each other and no exception to any
representation, warranty or covenant shall be deemed to be an exception to any
other representation, warranty or covenant contained herein unless expressly
provided, nor shall any such exceptions be deemed to permit any action or
omission that would be in contravention of applicable Law.
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12.16 CONSENT TO FORUM; WAIVER OF JURY TRIAL. (a) EACH BORROWER
HEREBY IRREVOCABLY CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF THE CIRCUIT
COURT OF COOK COUNTY AND THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF ILLINOIS, AND WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT
AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY CERTIFIED OR REGISTERED
MAIL DIRECTED TO SUCH BORROWER AT THE ADDRESSES PROVIDED FOR IN SECTION 12.06
AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT THEREOF.
EACH BORROWER WAIVES ANY OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION
INSTITUTED AGAINST IT AS PROVIDED HEREIN AND AGREES NOT TO ASSERT ANY DEFENSE
BASED ON LACK OF JURISDICTION OR VENUE.
(b) EACH BORROWER, EACH AGENT, EACH OF THE LENDERS AND THE
ISSUING BANK HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR
COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT TO THE FULL EXTENT PERMITTED BY LAW.
12.17 Waivers by Borrowers. Except as otherwise provided for in
this Agreement and the other Loan Documents, each of the Borrowers waives (i)
presentment, demand and protest and notice of presentment, protest, default,
non-payment, maturity, release, compromise, settlement, extension or renewal of
any or all commercial paper, accounts, contract rights, documents, instruments,
chattel paper and guaranties at any time held by any of the Borrowers on which
such Borrower may in any way be liable and hereby ratifies and confirms what the
Administrative Agent may do in this regard; (ii) the benefit of all valuation,
appraisement and exemption laws; and (iii) any right such Borrower may have upon
payment in full of its Obligations to require the Administrative Agent or any
Lender to terminate its security interest in any property of the Borrowers until
termination of this Agreement in accordance with its terms and the execution by
the Administrative Agent and each of the Borrowers, and by any Person whose
loans to the Borrowers are used in whole or in part to satisfy the Obligations,
of an agreement indemnifying the Agents and the Lenders from any loss or damage
the Agents or the Lenders may incur as the result of dishonored checks or other
items of payment received by the Agents from the Borrowers and applied to the
Obligations.
12.18 Tax Withholding Forms. Each Lender or assignee or
participant of a Lender that is not incorporated under the Laws of the United
States of America or a state thereof agrees that it will deliver to each of the
Company and the Administrative Agent two (2) duly completed copies of the
following: (i) Internal Revenue Service Form W-9, 4224 or 1001, or other
applicable form prescribed by the Internal Revenue Service, certifying that such
Lender, assignee or participant is entitled to receive payments under this
Agreement and the other Loan Documents without deduction or withholding of any
United States federal income taxes, or is subject to such tax at a reduced rate
under an applicable tax treaty, or (ii) Internal Revenue Service Form W-8 or
other applicable form
-108-
<PAGE> 117
or a certificate of the Lender, assignee or participant indicating that no such
exemption or reduced rate is allowable with respect to such payments. Each
assignee or participant shall deliver such form or certificate on or before the
effective date of such assignment or participation. Each Lender, assignee or
participant which so delivers a Form W-8, W-9, 4224 or 1001 further undertakes
to deliver to each of the Company and the Administrative Agent two (2)
additional copies of such form (or a successor form) on or before the date that
such form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form so delivered by it, and such
amendments thereto or extensions or renewals thereof as may be reasonably
requested by the Company or the Administrative Agent, either certifying that
such Lender, assignee or participant is entitled to receive payments under this
Agreement and the other Loan Documents without deduction or withholding of any
United States federal income taxes or is subject to such tax at a reduced rate
under an applicable tax treaty or stating that no such exemption or reduced
rate is allowable. The Administrative Agent shall be entitled to withhold
United States federal income taxes at the full withholding rate unless the
Lender, assignee or participant establishes an exemption or that it is subject
to a reduced rate as established pursuant to the above provisions.
12.19 Effective Date Transition Provision. Immediately after the
Effective Date, Wells Fargo Bank, N.A., Credit Lyonnais, NationsBank, N.A.
(Carolinas), U.S. National Bank of Oregon, Mitsubishi Trust and Banking Corp.,
The Fuji Bank, Limited, The Sumitomo Bank, Ltd. and The Tokai Bank, Ltd. shall
cease to be Lenders under, and shall cease to have any rights, benefits or
obligations under, this Agreement or any other Loan Document, except Wells
Fargo Bank, N.A., Credit Lyonnais, NationsBank, N.A. (Carolinas), U.S. National
Bank of Oregon, Mitsubishi Trust and Banking Corp., The Fuji Bank, Limited, The
Sumitomo Bank, Ltd. and The Tokai Bank, Ltd. shall continue to have: (a)
obligations arising under Section 11.06 insofar as such obligations relate to
events occurring prior to the Effective Date; and (b) rights and benefits
arising under Sections 5.06 and 12.03(b) insofar as such rights and benefits
relate to events occurring prior to the Effective Date.
-109-
<PAGE> 118
IN WITNESS WHEREOF, the parties hereto, by their officers thereunto
duly authorized, have executed this Agreement as of the day and year first
above written.
BORDERS GROUP, INC., AS BORROWER AND
AS GUARANTOR UNDER ARTICLE IX
By:_________________________________
Title:______________________________
Address for Notices:
500 East Washington Street
Ann Arbor, Michigan 48104
Telecopier No. (313) 995-8265
Attention: Thomas D. Carney
Telephone No. (313) 913-1977
BORDERS, INC., AS BORROWER AND
AS GUARANTOR UNDER ARTICLE IX
By:_________________________________
Title:______________________________
Address for Notices:
c/o Borders Group, Inc.
500 East Washington Street
Ann Arbor, Michigan 48104
Telecopier No. (313) 995-8265
Attention: Thomas D. Carney
Telephone No. (313) 913-1977
<PAGE> 119
WALDEN BOOK COMPANY, INC., AS
BORROWER AND AS GUARANTOR UNDER
ARTICLE IX
By:________________________________
Title:_____________________________
Address for Notices:
c/o Borders Group, Inc.
500 East Washington Street
Ann Arbor, Michigan 48104
Telecopier No. (313) 995-8265
Attention: Thomas D. Carney
Telephone No. (313) 913-1977
BGP (UK) LIMITED, AS BORROWER AND
AS GUARANTOR UNDER ARTICLE IX
By:________________________________
Title:_____________________________
Address for Notices:
c/o Borders Group, Inc.
500 East Washington Street
Ann Arbor, Michigan 48104
Telecopier No. (313) 995-8265
Attention: Thomas D. Carney
Telephone No. (313) 913-1977
<PAGE> 120
PLANET MUSIC, INC., AS
GUARANTOR UNDER ARTICLE IX
By:____________________________________
Title:_________________________________
Address for Notices:
c/o Borders Group, Inc.
500 East Washington Street
Ann Arbor, Michigan 48104
Telecopier No. (313) 995-8265
Attention: Thomas D. Carney
Telephone No. (313) 913-1977
BORDERS PROPERTIES, INC., AS
GUARANTOR UNDER ARTICLE IX
By:____________________________________
Title:_________________________________
Address for Notices:
c/o Borders Group, Inc.
500 East Washington Street
Ann Arbor, Michigan 48104
Telecopier No. (313) 995-8265
Attention: Thomas D. Carney
Telephone No. (313) 913-1977
<PAGE> 121
WALDENBOOKS PROPERTIES, INC. AS
GUARANTOR UNDER ARTICLE IX
By:____________________________________
Title:_________________________________
Address for Notices:
c/o Borders Group, Inc.
500 East Washington Street
Ann Arbor, Michigan 48104
Telecopier No. (313) 995-8265
Attention: Thomas D. Carney
Telephone No. (313) 913-1977
BORDERS ONLINE, INC., AS
GUARANTOR UNDER ARTICLE IX
By:____________________________________
Title:_________________________________
Address for Notices:
c/o Borders Group, Inc.
500 East Washington Street
Ann Arbor, Michigan 48104
Telecopier No. (313) 995-8265
Attention: Thomas D. Carney
Telephone No. (313) 913-1977
<PAGE> 122
BORDERS OUTLET, INC., AS
GUARANTOR UNDER ARTICLE IX
By:____________________________________
Title:_________________________________
Address for Notices:
c/o Borders Group, Inc.
500 East Washington Street
Ann Arbor, Michigan 48104
Telecopier No. (313) 995-8265
Attention: Thomas D. Carney
Telephone No. (313) 913-1977
<PAGE> 123
BORDERS FULFILLMENT, INC., AS
GUARANTOR UNDER ARTICLE IX
By:____________________________________
Title:_________________________________
Address for Notices:
c/o Borders Group, Inc.
500 East Washington Street
Ann Arbor, Michigan 48104
Telecopier No. (313) 995-8265
Attention: Thomas D. Carney
Telephone No. (313) 913-1977
THE LIBRARY, LTD., AS
GUARANTOR UNDER ARTICLE IX
By:____________________________________
Title:_________________________________
Address for Notices:
c/o Borders Group, Inc.
500 East Washington Street
Ann Arbor, Michigan 48104
Telecopier No. (313) 995-8265
Attention: Thomas D. Carney
Telephone No. (313) 913-1977
<PAGE> 124
PNC BANK, NATIONAL ASSOCIATION, AS
ADMINISTRATIVE AGENT
By:____________________________________
Title:_________________________________
THE FIRST NATIONAL BANK OF CHICAGO,
AS SYNDICATION AGENT
By:____________________________________
Title:_________________________________
BANKERS TRUST COMPANY,
AS REAL ESTATE ADMINISTRATIVE AGENT
By:____________________________________
Title:_________________________________
PNC BANK, NATIONAL ASSOCIATION
By:____________________________________
Title:_________________________________
THE FIRST NATIONAL BANK OF CHICAGO
By:____________________________________
Title:_________________________________
BANKERS TRUST COMPANY
By:____________________________________
Title:_________________________________
<PAGE> 125
FIRST UNION NATIONAL BANK
By:____________________________________
Title:_________________________________
FLEET NATIONAL BANK
By:____________________________________
Title:_________________________________
KEYBANK NATIONAL ASSOCIATION
By:____________________________________
Title:_________________________________
COMERICA BANK
By:____________________________________
Title:_________________________________
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By:____________________________________
Title:_________________________________
UNION BANK OF CALIFORNIA, N.A.
By:____________________________________
Title:_________________________________
CORESTATES BANK, N.A.
By:____________________________________
Title:_________________________________
<PAGE> 126
BANQUE NATIONALE DE PARIS
By:____________________________________
Title:_________________________________
SUNTRUST BANK, ATLANTA
By:____________________________________
Title:_________________________________
BANK BOSTON, N.A.
By:____________________________________
Title:_________________________________
HIBERNIA NATIONAL BANK
By:____________________________________
Title:_________________________________
THE NORTHERN TRUST COMPANY
By:____________________________________
Title:_________________________________
THE BANK OF NEW YORK
By:____________________________________
Title:_________________________________
<PAGE> 127
MERCANTILE BANK
By:____________________________________
Title:_________________________________
THE DAI-ICHI KANGYO BANK, LTD. -
CHICAGO BRANCH
By:____________________________________
Title:_________________________________
FIRST HAWAIIAN BANK
By:____________________________________
Title:_________________________________
BANK ONE, NATIONAL ASSOCIATION
By:____________________________________
Title:_________________________________
LONG TERM CREDIT BANK OF JAPAN
By:____________________________________
Title:_________________________________
WACHOVIA BANK, N.A.
By:____________________________________
Title:_________________________________
<PAGE> 128
EXHIBIT 1.01(A)
FORM OF
ASSIGNMENT AND ASSUMPTION AGREEMENT
Reference is made to the Amended and Restated Multicurrency
Credit Agreement dated as of October _____, 1997, (the "Credit Agreement")
among Borders Group, Inc. (the "Company"), Borders, Inc. ("Borders"), Walden
Book Company, Inc. ("Walden") and BGP (UK) Limited ("Books Holding") (the
Company, Borders, Walden and Books Holding hereinafter referred to,
individually, as a "Borrower" and, collectively, as the "Borrowers"), the
Lenders (as defined in the Credit Agreement), PNC Bank, National Association,
as Administrative Agent for the Lenders (the "Administrative Agent"), The First
National Bank of Chicago, as Syndication Agent for the Lenders (the
"Syndication Agent") and Bankers Trust Company, as Real Estate Administrative
Agent for the Lenders (the "Real Estate Administrative Agent"). Unless
otherwise defined herein, terms defined in the Credit Agreement are used herein
with the same meanings.
__________ (the "Assignor") and __________ (the "Assignee"),
intending to be legally bound hereby, make this Assignment and Assumption
Agreement (this "Assignment and Assumption") as of the ____ day of __________,
_______, and hereby agree as follows:
1. The Assignor hereby sells and assigns to the
Assignee, and the Assignee hereby purchases and assumes from the Assignor,
WITHOUT RECOURSE to the Assignor, an interest in and to all of the Assignor's
rights and obligations under the Credit Agreement as of the Effective Date (as
defined below), including without limitation, such percentage interest in the
Assignor's Commitment as in effect on the Effective Date, in the Revolving
Credit Loans [and Bid Loans] owing to the Assignor on the Effective Date, and
in the Assignor's Ratable Share of Letter of Credit Outstandings, such that
after giving effect to the assignment and assumption provided for herein, the
Commitment and Ratable Share of the Assignee shall be as set forth on Schedule
I hereof.(1)
2. The Assignor (i) represents and warrants that it is
the legal and beneficial owner of the interest being assigned by it hereunder
and that such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or any of the Loan Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or any of the Loan Documents or any other instrument or document
furnished pursuant thereto; and (iii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of any of the
Borrowers or Guarantors or the performance or observance by any Borrower or
Guarantor of any of its obligations under the Credit Agreement or any of the
Loan Documents or any other instrument or document furnished pursuant thereto.
3. The Assignee (i) confirms that it has received a copy
of the Credit Agreement, together with copies of the financial statements (if
any) referred to in Sections 6.01(i) and 8.03(a)
____________________
(1)Assignor must assign the same proportion of its Commitment,
each of its Revolving Credit Loans then outstanding and its
Ratable Share of the Letter of Credit Outstandings
<PAGE> 129
and (b) of the Credit Agreement and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into this Assignment and Assumption; (ii) confirms that it is able to fund the
Loans as required by the Credit Agreement; (iii) agrees that it will,
independently and without reliance upon any of the Agents, or any other Lender,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Credit Agreement; (iv) appoints and authorizes each of the Agents to
take such actions on its behalf and to exercise such powers under the Loan
Documents as are delegated to each such Agent by the terms thereof; (v) agrees
that it will become a party to and be bound by the Credit Agreement on the
Effective Date (including without limitation the provisions of Section 12.11)
as if it were an original Lender thereunder and will have the rights and
obligations of a Lender thereunder and will perform in accordance with its
terms all of the obligations which by the terms of the Credit Agreement are
required to be performed by it as a Lender; and (vi) specifies as its address
for notices the office set forth beneath its name on the signature pages
hereof.
4. The effective date of this Assignment and Assumption
shall be __________, _______ (the "Effective Date"). Following the execution
of this Assignment and Assumption, it will be delivered to the Administrative
Agent for acceptance and recording by the Administrative Agent, together with
any consents required under Section 12.11 of the Credit Agreement.
5. Upon such acceptance by the Administrative Agent, as
of the Effective Date, (i) the Assignee shall be a party to the Credit
Agreement and, to the extent provided in this Assignment and Assumption, have
the rights and obligations of a Lender thereunder and under the Loan Documents
and (ii) the Assignor shall, to the extent provided in this Assignment and
Assumption, relinquish its rights and be released from its obligations under
the Credit Agreement.
6. Upon such acceptance, from and after the Effective
Date, the Administrative Agent shall make all payments under the Credit
Agreement in respect of the interest assigned hereby (including, without
limitation, all payments of principal, interest, Fees and Letter of Credit Fees
with respect thereto) to the Assignee. The Assignor and Assignee shall make
all appropriate adjustments in payments under the Credit Agreement for periods
prior to the Effective Date directly between themselves.
7. The Assignor makes this assignment to the Assignee in
consideration of the payment by the Assignee to the Assignor of the amount
previously agreed to by the Assignor and the Assignee.
8. This Assignment and Assumption shall be governed by
and construed in accordance with the internal laws of the State of Illinois.
9. [This section is applicable only if the Assignee is
incorporated outside of the United States.] Assignee has delivered to each of
the Administrative Agent and the Company on or prior to the Effective Date two
duly completed copies of Internal Revenue Service Form W-9, 4224 or 1001, or
other applicable form prescribed by the Internal Revenue Service, certifying
that such Assignee is entitled to receive payments under the Credit Agreement
and the other Loan Documents without deduction or withholding of any United
States federal income taxes, or is subject to such tax
-121-
<PAGE> 130
at a reduced rate under an applicable tax treaty. [Alternative: Assignee has
delivered to each of Administrative Agent and the Company on or prior to the
Effective Date two duly completed copies of Internal Revenue Service Form W-8
of Assignee indicating that Assignee is subject to withholding of United States
federal income taxes.]
[NAME OF ASSIGNOR]
By:
_____________________________
Name: ______________________
Title:_______________________
[NAME OF ASSIGNEE]
By:
_____________________________
Name: ______________________
Title:_______________________
Notice of Address:
_________________________________
_________________________________
_________________________________
Telephone No.:
__________________
Telecopier No.:
__________________
Attn:
___________________________
CONSENTED TO [ACCEPTED] this _______
day of ____________, _______.
[ADMINISTRATIVE AGENT]
[COMPANY]*
By: ______________________________
Title: ___________________________
* If applicable
-122-
<PAGE> 131
SCHEDULE I
AMOUNTS ASSIGNED TO ASSIGNEE
Amount of
Ratable Share
of
Amount of Letter of Credit
Amount of Revolving Credit Outstandings [Amount of Bid
Commitment Loans Assigned Assigned as of Loans Assigned as
Assigned as of the as of the the Effective of the Effective
Effective Date Effective Date Date Date
$__________ $__________ $__________ $__________]
Ratable Share _______%
(1)Includes undrawn face amount of Letters of Credit Outstandings.
-123-
<PAGE> 132
EXHIBIT 2.05(A)
FORM OF
REVOLVING CREDIT LOAN REQUEST
TO: PNC Bank, National Association as Administrative Agent
One PNC Plaza, 4th Floor Annex
249 5th Avenue
Pittsburgh, PA 15265
Telephone No.: (412) 762-3627
Telecopier No.: (412) 762-8672
Attention: Multi-Bank Loan Administration - Arlene Ohler
FROM: Borders Group, Inc.
RE: Amended and Restated Multicurrency Credit Agreement (the
"Credit Agreement") dated as of October _______, 1997
by and among Borders Group, Inc., Borders, Inc., Walden Book
Company, Inc. and BGP(UK) Limited as Borrowers, the Lenders,
as defined therein, PNC Bank, National Association, as
Administrative Agent, The First National Bank of Chicago, as
Syndication Agent and Bankers Trust Company, as Real Estate
Administrative Agent.
Pursuant to Section 2.05(a) of the Credit Agreement, the
undersigned hereby makes the following Revolving Credit Loan Request:
1. Proposed Borrowing Date
(which must be a Business Day) _____________________
2. Currency _____________________
3. Aggregate principal amount of
Revolving Credit Loans (expressed
in the currency listed in 2 above and
in a Dollar Equivalent Amount)
comprising the new Borrowing Tranche(2) $____________
____________________
(2)Any Euro-Rate Borrowing Tranche, in the case of Revolving Credit Loans
denominated in Dollars, shall be not less than $15,000,000 and in integral
multiples of $1,000,000 in excess thereof and, in the case of Revolving Credit
Loans denominated in an Optional Currency, shall be in an amount reasonably
comparable to the minimum amount for Revolving Credit Loans denominated in
Dollars. Any Base Rate Borrowing Tranche shall be not less than $2,000,000 (and
in integral multiples of $1,000,000) or the maximumamount available.
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<PAGE> 133
4. Borrower to receive proceeds of the
Revolving Credit Loans $_________________
5. Interest Rate Option applicable to the new Borrowing Tranche
(Choose one):
________ a. Base Rate Option
________ b. Euro-Rate Option for an Interest Period of
(choose one):
_________ i. 1 month ________ iii. 3 months
_________ ii. 2 months _________ iv. 6 months
6. As of the date hereof and the date of making of the Revolving
Credit Loans: the representations and warranties contained in
Article VI of the Credit Agreement are and will be true (except
representations and warranties that expressly relate solely to an
earlier date or time, which representations and warranties were
true on and as of the specific date referred to therein), no
Event of Default or Potential Default has occurred and is
continuing or shall exist, and the making of the Revolving Credit
Loans shall not contravene any Law applicable to the Company or
any of its Subsidiaries, any Agent or any of the Lenders.
Capitalized terms used but not defined herein shall have the meanings given
to them in the Credit Agreement.
The undersigned certifies to the accuracy of the foregoing.
BORDERS GROUP, INC.
By
_________________________________
Its
_________________________________
Date
_________________________________
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<PAGE> 134
EXHIBIT 2.05(b)
FORM OF
SWING LOAN LOAN REQUEST
TO: PNC Bank, National Association, as Administrative Agent
One PNC Plaza, 4th Floor Annex
249 5th Avenue
Pittsburgh, PA 15265
Telephone No.: (412) 762-3627
Telecopier No.: (412) 762-8672
Attention: Multi-Bank Loan Administration - Arlene Ohler
FROM: Borders Group, Inc.
RE: Amended and Restated Multicurrency Credit Agreement (the
"Credit Agreement") dated as of October _______, 1997 by and among
Borders Group, Inc., Borders, Inc., Walden Book Company, Inc. and BGP(UK)
Limited as Borrowers, the Lenders, as defined
therein, PNC Bank, National Association, as Administrative Agent, The First
National Bank of Chicago, as Syndication Agent and
Bankers Trust Company, as Real Estate Administrative Agent.
Pursuant to Section 2.05(b) of the Credit Agreement, the
undersigned hereby makes the following Swing Loan Request:
1. Proposed Borrowing Date
(which must be a Business Day)
__________________
2. Aggregate principal amount of
Swing Loans(3) $
__________________
3. Borrower to receive proceeds of
Swing Loans $
__________________
4. As of the date hereof and the date of making of the
Swing Loans: the representations and warranties
contained in Article VI of the Credit Agreement are and
will be true (except representations and warranties that
expressly relate solely to an earlier date or time,
which representations and warranties were true on and as
of the specific date referred to therein), no Event of
Default or Potential Default has occurred and is
continuing or shall exist, and the making of the Swing
Loans shall not contravene any Law
____________________
(3)Not less than $1,000,000 and in integral multiples of $500,000 in excess
thereof.
-126-
<PAGE> 135
applicable to the Company or any of its Subsidiaries, any
Agent or any of the Lenders.
Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement.
-127-
<PAGE> 136
The undersigned certifies to the accuracy of the foregoing.
BORDERS GROUP, INC.
By
______________________________
Its
______________________________
Date
______________________________
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<PAGE> 137
EXHIBIT 3.01
FORM OF
BID LOAN REQUEST
TO: PNC Bank, National Association as Administrative Agent
One PNC Plaza, 4th Floor Annex
249 5th Avenue
Pittsburgh, PA 15265
Telephone No.: (412) 762-3627
Telecopier No.: (412) 762-8672
Attention: Multi-Bank Loan Administration - Arlene Ohler
FROM: Borders Group, Inc.
RE: Amended and Restated Multicurrency Credit Agreement (the
"Credit Agreement") dated as of October _______, 1997 by and
among Borders Group, Inc., Borders, Inc., Walden Book Company,
Inc. and BGP(UK) Limited as Borrowers, the Lenders, as defined
therein, PNC Bank, National Association, as Administrative
Agent, The First National Bank of Chicago, as Syndication
Agent and Bankers Trust Company, as Real Estate Administrative
Agent.
The Company hereby gives you notice pursuant to Section 3.01
of the Credit Agreement that the Borrowers request Bid Loans under the Credit
Agreement, and in that connection set forth below the terms on which such Bid
Loans are requested to be made:
1. Proposed Bid Loan Borrowing Date
(which must be a Business Day)
_________________
2. Interest Rate Option applicable to the Bid Loan
(Choose one):
______ a. Fixed Rate Bid Loan Option
______ b. Euro-Rate Bid Loan Option for an
Interest Period of (choose one):
_________ i. 1 month ________ iii. 3 months
_________ ii. 2 months _________ iv. 6 months
3. Proposed Bid Loan Period(4)
____________________
(4)If electing a Fixed Rate Bid Loan Option, the proposed Bid Loan Period
shall be not less than 7 days and not more than 270 days; if electing a
Euro-Rate Bid Loan Option, the proposed Bid
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<PAGE> 138
4. Borrower to receive proceeds
of Bid Loans ____________________
_________________
Loan Period shall be 1, 2, 3 or 6 months and, in any case, shall end no later
than the Expiration Date.
-130-
<PAGE> 139
5. Maximum aggregate principal
amount of Revolving Credit Bid
Loans(5) $
------
6. As of the date hereof and the date of making of the
Bid Loans: the representations and warranties
contained in Article VI of the Credit Agreement are
and will be true (except representations and
warranties that expressly relate solely to an
earlier date or time, which representations and
warranties were true on and as of the specific date
referred to therein), no Event of Default or
Potential Default has occurred and is continuing or
shall exist, and the making of the Bid Loans shall
not contravene any Law applicable to the Company or
any of its Subsidiaries, any Agent or any of the
Lenders.
Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement.
The undersigned certifies to the accuracy of the foregoing.
BORDERS GROUP, INC.
By
--------------------------
Its
--------------------------
Date
--------------------------
____________________
(5)Shall be not less than $10,000,000 and in integral multiples of
$1,000,000.
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<PAGE> 140
FORM OF BID
TO: PNC Bank, National Association as Administrative Agent
One PNC Plaza, 4th Floor Annex
249 5th Avenue
Pittsburgh, PA 15265
Telephone No.: (412) 762-3627
Telecopier No.: (412) 762-8672
Attention: Multi-Bank Loan Administration - Arlene Ohler
FROM: [Name of Lender]
RE: Amended and Restated Multicurrency Credit Agreement (the
"Credit Agreement") dated as of October _______, 1997 by and
among Borders Group, Inc., Borders, Inc., Walden Book Company,
Inc. and BGP(UK) Limited as Borrowers, the Lenders, as defined
therein, PNC Bank, National Association, as Administrative
Agent, The First National Bank of Chicago, as Syndication
Agent and Bankers Trust Company, as Real Estate Administrative
Agent.
The undersigned hereby makes a Bid pursuant to Section 3.02(a)
of the Credit Agreement, in response to the Bid Loan Request made by the
Company on __________, _______ and in that connection sets forth below the
terms on which such Bid is made:
Bid No. 1 Bid No. 2 Bid No. 3
1. Principal Amount(6)
------- ------- -------
2. Fixed Rate (if applicable)
------- ------- -------
3. Euro-Rate Bid Loan
Spread (if applicable) ------- ------- -------
4. Bid Loan Period and
Last day thereof(7) ------- ------- -------
______________________
(6)Not less than $5,000,000 or greater than the Requested Amount, and in
integral multiples of $1,000,000 in excess thereof. Multiple bids will be
accepted by the Administrative Agent.
(7)If electing a Fixed Rate Bid Loan Option, the proposed Bid Loan Period
shall not be less than 7 days and not more than 270 days; if electing a
Euro-Rate Bid Loan Option, the proposed Bid Loan Period shall be 1, 2, 3 or 6
months and, in either case, shall end no later than the Expiration Date.
-132-
<PAGE> 141
Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement.
-133-
<PAGE> 142
The undersigned hereby confirms that it is prepared,
subject to the conditions set forth in the Credit Agreement, to extend credit
to the Borrowers upon acceptance by the Company of this Bid in accordance with
Section 3.02(c) of the Agreement.
Very truly yours,
[NAME OF LENDER],
By:________________________
Its:_______________________
Date:______________________
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<PAGE> 143
FORM OF BID ACCEPT/REJECT LETTER
TO: PNC Bank, National Association, as Administrative Agent
One PNC Plaza, 4th Floor Annex
249 5th Avenue
Pittsburgh, PA 15265
Telephone No.: (412) 762-3627
Telecopier No.: (412) 762-8672
Attention: Multi-Bank Loan Administration - Arlene Ohler
FROM: [Name of Lender]
RE: Amended and Restated Multicurrency Credit Agreement (the
"Credit Agreement") dated as of October _______, 1997 by and
among Borders Group, Inc., Borders, Inc., Walden Book Company,
Inc. and BGP (UK) Limited as Borrowers, the Lenders, as
defined therein, PNC Bank, National Association, as
Administrative Agent, The First National Bank of Chicago, as
Syndication Agent and Bankers Trust Company, as Real Estate
Administrative Agent.
In accordance with Section 3.02(a) of the Credit Agreement, we
have received a summary of bids in connection with our Bid Loan Request dated
_____________, _____ and in accordance with Section 3.02(b) of the Credit
Agreement, we hereby accept the following bids for maturity on [date]:
Euro-Rate Bid
Fixed Rate Loan Spread
Principal Amount(8) (if applicable) (if applicable) Lender
$_________ __________ __________ __________
$_________ __________ __________ __________
We hereby reject the following bids:
Euro-Rate Bid
Fixed Rate Loan Spread
Principal Amount (if applicable) (if applicable) Lender
$_________ __________ __________ __________
$_________ __________ __________ __________
____________________
(8)Aggregate not less than $10,000,000 or greater than the
Requested Amount, and in integral multiples of $1,000,000.
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The amount of $_____________ should be deposited in PNC Bank,
National Association account number [______________________] on the Bid Loan
Borrowing Date.
Very truly yours,
BORDERS GROUP, INC.
By:_________________________
Its:________________________
Date:_______________________
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EXHIBIT 3.02(c)
FORM OF DESIGNATION AGREEMENT
Dated _______________ __, 199_
Reference is made to the Amended and Restated
Multi-Currency Credit Agreement dated as of October 17, 1997 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement')
among Borders Group, Inc., Borders, Inc., Walden Book Company, Inc., BGP U.K.
Limited (collectively, the "Borrowers"), the Lenders parties thereto, PNC Bank,
National Association, as Administrative Agent for the Lenders, The First
National Bank of Chicago, as Syndication Agent for the Lenders, and Bankers
Trust Company, as Real Estate Administrative Agent for the Lenders. Terms
defined in the Credit Agreement are used herein with the same meaning.
[NAME OF DESIGNOR] (the "Designor"), [NAME OF
DESIGNEE] (the "Designee"), the Administrative Agent and the Borrowers agree as
follows:
1. The Designor hereby designates the Designee, and the
Designee hereby accepts such designation, to have a right to make Bid Loans
pursuant to Article III of the Credit Agreement. Any assignment by Designor to
Designee of its rights to make a Bid Loan pursuant to such Article III shall be
effective at the time of the funding for such Bid Loan and not before such
time.
2. Except as set forth in Section 7 below, the Designor
makes no representation or warranty and assumes no responsibility pursuant to
this Designation Agreement with respect to (a) any statements, warranties or
representations made in or in connection with any Loan Document or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of any Loan Document or any other instrument and documents furnished
pursuant thereto and (b) the financial condition of the Company or Subsidiary
of the Company or the performance or observance by the Company or any
Subsidiary of the Company of any of their respective obligations under any Loan
Documents or any other instrument or document furnished pursuant thereto. (It
is acknowledged that the Designor may make representations and warranties of
the type described above in other agreements to which the Designor is a party.)
3. The Designee (a) confirms that it has received a copy
of each Loan Document, together with copies of the financial statements
referred to in Section 6.01(i) of the Credit Agreement and such other
documents and information as it has deemed appropriate to make its own
independent credit analysis and decision to enter into this Designation
Agreement; (b) agrees that it will, independently and without reliance upon any
of the Agents, the Designor or any other Lender and based on such documents and
information as it shall deem appropriate at the time continue to make its own
credit decisions in taking or not taking action under any Loan Document; (c)
confirms that it is a Designated Lender; (d) appoint and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers and discretion under any Loan Document as are delegated to the
Administrative Agent by the terms thereof, together with such powers and
discretion as are reasonably incidental thereto; and (e) agrees that it will
perform in accordance with
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their terms all of the obligations which by the terms of any Loan Document are
required to be performed by it as a Lender.
4. The Designee hereby appoints Designor (in Designor's
capacity as the designating lender and not as the referral bank) as Designee's
agent and attorney in fact, and grants to Designor an irrevocable power of
attorney, to deliver and receive all communications and notices under the
Credit Agreement and other Loan Documents and to exercise on Designee's behalf
all rights to vote and to grant and make approvals, waivers, consents or
amendment to or under the Credit Agreement or other Loan Documents. Any
document executed by the Designor on the Designee's behalf in connection with
the Credit Agreement or other Loan Documents shall be binding on the Designee.
The Borrowers , the Agents and each of the Lenders may rely on and are
beneficiaries of the preceding provisions.
5. Following the execution of this Designation Agreement
by the Designor and its Designee, it will be delivered to the Administrative
Agent for acceptance and recording by the Administrative Agent. The effective
date for this Designation Agreement (the "Effective Date") shall be the date of
acceptance hereof by the Administrative Agent, unless otherwise specified on
the signature page thereto.
6. The Administrative Agent shall not institute or join
any other person in instituting against the Designee any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding, or other
proceeding under any federal or state bankruptcy or similar law, for one year
and a day after the Expiration Date of the Credit Agreement.
7. The Company shall not institute or join any other
person in instituting against the Designee any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding, or other proceeding under
any federal or state bankruptcy or similar law, for one year and a day after
the Expiration Date of the Credit Agreement.
8. The Designor unconditionally agrees to pay or
reimburse the Designee and save the Designee harmless against all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
or asserted by any of the parties to the Loan Documents against the Designee,
in its capacity as such, in any way relating to or arising out of this
Designation Agreement or any other Loan Documents or any action taken or
omitted by the Designee hereunder or thereunder, provided that the Designor
shall not be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
if the same results from the Designee's gross negligence or willful misconduct.
9. Upon such acceptance and recording by the
Administrative Agent, as of the Effective Date, the Designee shall be a party
to the Credit Agreement with a right to make Bid Loans as a Lender pursuant to
Article III of the Credit Agreement and shall have the rights and obligations
of a Lender related thereto.
10. This Designation Agreement shall be governed by, and
construed in accordance with, the laws of the State of Illinois, without
reference to the provisions thereof regarding conflicts of law.
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11. This Designation Agreement may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Designation
Agreement by facsimile transmission shall be effective as delivery of a
manually executed counterpart of this Designation Agreement.
IN WITNESS WHEREOF, the Designor and the Designee, intending
to be legally bound, have caused this Designation Agreement to be executed by
their officers thereunto duly authorized as of the date first written above.
Effective Date: _____________ __, 199_
[NAME OF DESIGNOR], as Designor
By:
-----------------------------------------
Title:
--------------------------------------
[NAME OF DESIGNEE], as Designee
By:
-----------------------------------------
Title:
--------------------------------------
Applicable Lending Office (and address for notices):
[ADDRESS]
Accepted this ____ day of
___________, 199_
PNC BANK, NATIONAL ASSOCIATION BORDERS GROUP, INC., for itself and for
as Administrative Agent the Borrowers under the Credit Agreement
By: By:
--------------------------- ---------------------------
Title: Title:
------------------------ ------------------------
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EXHIBIT 7.01(e)(i)
FORM OF OPINION OF THE BORROWERS' COUNSEL
The Lenders that are Parties
to the Credit Agreement referred
to below, PNC Bank, National Association
as Administrative Agent, The First National
Bank of Chicago as Syndication Agent,
and Bankers Trust Company, as Real Estate
Administrative Agent,
c/o Schiff Hardin & Waite
7200 Sears Tower
Chicago, Illinois 60606
RE: AMENDED AND RESTATED MULTICURRENCY CREDIT AGREEMENT
WITH BORDERS GROUP, INC. ET AL.
We have acted as counsel to Borders Group, Inc., a
Michigan corporation (the "Company"), Borders, Inc., a Colorado corporation
("Borders"), Walden Book Company, Inc., a Colorado corporation ("Walden") and
BGP (UK) Limited., a corporation organized under the laws of the United Kingdom
("Books Holding"), (the Company, Borders, Walden and Books Holding hereinafter
referred to individually as a "Borrower" and, collectively, as the
"Borrowers"), in connection with the negotiation, execution and delivery of
that certain Amended and Restated Multicurrency Credit Agreement (the "Credit
Agreement") dated as of October ____, 1997, among the Borrowers, the financial
institutions which are parties thereto (the "Lenders"), PNC Bank, National
Association, in its capacity as administrative agent for the Lenders under the
Credit Agreement, The First National Bank of Chicago in its capacity as
syndication agent for the Lenders under the Credit Agreement and Bankers Trust
Company, in its capacity as real estate administrative agent for the Lenders
under the Credit Agreement. This opinion is furnished to you at the request of
the Borrowers as required by Section 7.01(e)(i) of the Credit Agreement.
Capitalized terms not defined in this opinion shall have the meanings given to
them in the Credit Agreement.
In connection with this opinion, we have examined an
original, executed copy of the Credit Agreement, and the other documents,
instruments and agreements executed and delivered in connection with the
transactions contemplated by the Credit Agreement (collectively, the "Loan
Documents").
We have also examined, in addition to the Loan
Documents, originals, or copies certified or otherwise identified to our
satisfaction, of such corporate records, agreements, instruments and documents
of the Borrowers, certificates and other statements of public officials and
corporate officers, and such other documents as we have deemed necessary as a
basis for the opinions expressed below.
In rendering our opinion, we have assumed (i) the
corporate power of all parties to the documents examined by us other than the
Borrowers, (ii) the due authorization, execution and delivery of each document
examined by us by all parties to such documents other than the Borrowers, (iii)
the genuineness of all signatures, (iv) the authenticity of all documents
submitted to us as originals, and (v) the conformity to original documents of
all documents submitted to us as
<PAGE> 149
copies. In rendering our opinion, we have also relied as to certain factual
matters on certificates by officers of the Borrowers and certificates by
governmental officials, copies of which have been delivered to you. Nothing
has come to our attention which causes us to believe that any factual matters
contained in such certificates are untrue in any material respects.
Based on the foregoing and subject to the assumptions
and qualifications set forth in this opinion, we are of the opinion that:
(1) Each of the Borrowers (i) is duly organized and
is validly existing in good standing under the laws of the jurisdiction of its
respective incorporation, and (ii) is duly qualified to do business and is in
good standing as a foreign corporation in each state in which it owns or leases
any property or conducts any business, except to the extent that failure to so
qualify would not individually or in the aggregate have a Material Adverse
Effect.
(2) Each of the Borrowers has the power and
authority to own its property and to carry on its business as now conducted,
and has the power and authority to execute, deliver and perform its obligations
under the Loan Documents to which it is a party.
(3) Each of the Loan Documents to which it is a
party constitutes the legal, valid, and binding obligation of each Borrower
enforceable against such Borrower in accordance with its terms.
(4) The execution, delivery and performance by each
Borrower of the Loan Documents to which it is a party does not require the
consent or approval of, or other action by or filing with, any state or Federal
governmental body or other regulatory authority and will not be in
contravention of or in conflict with any state or Federal law or regulation
having applicability to such Borrower or its Property.
(5) The execution, delivery and performance of the
Loan Documents do not violate any term or provision of any Borrower's
certificate or articles of incorporation or by-laws.
(6) The execution, delivery and performance of the
Loan Documents will not conflict with, breach or constitute a default under, or
constitute grounds for the acceleration of the maturity of, any agreement,
indenture, undertaking or other instrument, known to us after diligent
investigation, to which any Borrower is a party or by which it or any of its
property may be bound or affected.
(7) The execution, delivery and performance of the
Loan Documents will not result in the creation or imposition of (or the
obligation to create or impose) any Lien on any Borrower's Property pursuant to
the provisions of any of the foregoing.
(8) The execution, delivery and performance of the
Loan Documents do not conflict with or result in the violation of any judgment,
order or decree of any court, regulatory agency or arbitrator, known to us
after diligent investigation, to which any Borrower is a party or by which it
or any of its Property may be bound or affected.
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(9) The courts of the State of Michigan and of the
United Kingdom would give effect to the agreement contained in the Loan
Documents that such Loan Documents shall be governed by and construed in
accordance with the internal laws of the State of Illinois.
(10) To our knowledge after diligent investigation,
no judgments are outstanding or administrative orders pending against any
Borrower, nor are there any pending or threatened lawsuits, investigations,
claims against or governmental proceedings affecting any Borrower or its
Property which individually or in the aggregate could reasonably be expected to
have a Material Adverse Effect.
(11) The execution, delivery and performance of the Loan
Documents will not violate Regulations G, T, U, or X of the Board of
Governors of the Federal Reserve System.
(12) None of the Borrowers nor any Subsidiary of any
Borrower is an "investment company" as such term is defined in the Investment
Company Act of 1940, as amended.
(13) All payments by Books Holding under the Credit Agreement
may be made without deduction of any tax imposed by the United
Kingdom. Neither the Credit Agreement nor the arrangements contemplated
thereby give rise to any registration or stamp or other tax or duty in or
imposed by the United Kingdom or any authority or agency thereof.
(14) Books Holding is subject to the jurisdiction of the
courts of the United Kingdom and is not entitled to claim any immunity from
suit or execution of judgment on the ground of sovereignty or otherwise.
(15) The choice of law provisions in the Credit Agreement
(providing for the same to be governed by and construed in accordance
with the laws of the State of Illinois) are valid and binding under the law of
the United Kingdom and would be recognized and upheld by the courts of the
United Kingdom.
(16) The submission by Books Holding to the jurisdiction
of the state and United States federal courts sitting in the State of
Illinois contained in the Credit Agreement is a valid submission and any final
judgment for a sum of money obtained against Books Holding in any such court
will be enforceable against Books Holding in the United Kingdom. We know of no
public policy at the date hereof which would prevent or hinder the enforcement
of such a final judgment in the United Kingdom.
(16) It is not necessary in order to enable the
Administrative Agent, the Syndication Agent, the Real Estate Administrative
Agent or any Lender to claim and enforce in the United Kingdom any right
afforded to the Administrative Agent, the Syndication Agent, the Real Estate
Administrative Agent or such Lender by or in connection with the Credit
Agreement or by reason of the execution, delivery and performance of the
Credit Agreement by the Administrative Agent, the Syndication Agent, the Real
Estate Administrative Agent or any Lender that the Administrative Agent, the
Syndication Agent, the Real Estate Administrative Agent or any Lender be
licensed, qualified or otherwise entitled to carry on business in or otherwise
registered with any authority in the United Kingdom.
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(17) None of the Administrative Agent, the Syndication
Agent, the Real Estate Administrative Agent or any Lender will be
deemed resident, domiciled or carrying on business in or subject to the laws of
the United Kingdom by reason of the execution, delivery, performance or
enforcement by the Administrative Agent, the Syndication Agent, the Real Estate
Administrative Agent or any Lender of the Credit Agreement.
The foregoing opinions are subject to the following
qualifications:
(i) Our opinion expressed in paragraph 3 above
concerning the enforceability of the Loan Documents is subject to (A) the
effect of applicable bankruptcy, insolvency, reorganization, moratorium and
other similar laws and court decisions of general application affecting the
enforceability of creditors' rights generally, and (B) general principles of
equity (regardless of whether such enforceability is considered is a proceeding
in equity or law).
Very truly yours,
[LAW FIRM NAME]
By:
------------------------------------
[Partner's Name]
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EXHIBIT 8.03(C)
FORM OF COMPLIANCE CERTIFICATE
[For the quarter ended ____________]
Reference is made to that certain Amended and
Restated Multicurrency Credit Agreement (as amended, the "Credit Agreement")
dated as of October ____, 1997 by and among Borders Group, Inc., Borders, Inc.,
Walden Book Company, Inc. and BGP (UK) Limited, as Borrowers, the Lenders, as
defined therein, PNC Bank, National Association, as Administrative Agent, The
First National Bank of Chicago, as Syndication Agent and Bankers Trust Company,
as Real Estate Administrative Agent.
Capitalized terms used but not defined herein shall
have the meanings given to them in the Credit Agreement. This certificate is
being delivered pursuant to the requirements of Section 8.03(c) of the Credit
Agreement.
The undersigned, an Authorized Officer of the Company, hereby certifies that:
1. The undersigned has reviewed the terms of the
Credit Agreement and the other Loan Documents and has made, or
caused to be made under his supervision, a review of the
transactions and conditions of the Borrowers during the
accounting period covered by the financial statements being
delivered simultaneously herewith;
2. Such review has not disclosed the existence
during such accounting period, and the undersigned does not
have knowledge of the existence as of the date hereof, of any
Event of Default or any Potential Default; and
3. The representations and warranties contained
in Article VI of the Credit Agreement are true on and as of
the date hereof (except representations and warranties that
expressly relate solely to an earlier date or time, which
representations and warranties were true on and as of the
specific date referred to therein).
The undersigned hereby further certifies that the following calculations
demonstrate for the Fiscal Quarter ending ____________, _____ (the "Period"),
which is the [First] [Second] [Third] [Fourth] Fiscal Quarter, compliance by
the Borrowers with the financial covenants contained in Section 8.02 of Credit
Agreement.
<PAGE> 153
1. Indebtedness
a. Aggregate outstanding principal amount of
all Indebtedness $__________
b. Capitalized Rent Expense
(i) Rent Expense $__________
(ii) Lease Financing Rent Expense $__________
(iii) 4 x ((I) + (ii)) $__________
c. Maximum aggregate notional amount of all
interest rate management devices permitted
by Section 8.02(a)(iv) [a + (b x 50%)] $__________
d. Actual aggregate notional amount of all
interest rate management devices. $__________
e. Consolidated Tangible Net Worth (see
8(b)(iii) below $__________
f. Maximum aggregate amount of additional
Indebtedness of the Company and its
Domestic Subsidiaries permitted by
Section 8.02(a)(ix) [e x 20%] $__________
g. Actual aggregate amount of additional
Indebtedness of the Company and its Domestic
Subsidiaries $__________
h. Maximum aggregate amount of Indebtedness of
Foreign Subsidiaries to third parties permitted by Section 8.02(a)(x) $10,000,000
i. Actual aggregate amount of Indebtedness of
Foreign Subsidiaries to third parties $__________
2. Permitted Liens
a. Consolidated Tangible Net Worth (See 8(b)(iii) below) $__________
b. Maximum aggregate fairmarket value of all property
secured by Liens permitted under clause (xi) of the definition
of "Permitted Liens" [a x 5%] $__________
c. Actual aggregate fair market value of all property secured
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by Liens permitted under clause (xi) of the definition
of "Permitted Liens" $__________
3. Contingent Obligations
a. Maximum aggregate amount of current portion
of Permitted Lease Contingent Obligations
permitted by Section 8.02(c)(ii) $15,000,000
b. Actual aggregate amount of current portion of
Permitted Lease Contingent Obligations $__________
c. Maximum aggregate amount of current portion
Contingent Obligations of the Company or any
Unrestricted Subsidiary which is a Domestic Subsidiary
in respect of operating lease obligations of any
Unrestricted Subsidiary which is a Foreign Subsidiary $15,000,000
d. Actual aggregate amount of Contingent Obligations
of the Company or any Unrestricted Subsidiary which
is a Domestic Subsidiary in respect of operating lease
obligations of any Unrestricted Subsidiary which
is a Foreign Subsidiary $__________
4. Loans and Investments
a. Consolidated Tangible Net Worth (see 8(b)(iii) below) $__________
b. Maximum aggregate amount of all Investments by
Company and Domestic Subsidiaries in Foreign
Unrestricted Subsidiaries permitted by Section 8.02(d)(v)
plus Foreign Purchases [a x 15%] $__________
c. Actual aggregate amount of all Investments
permitted by Section 8.02(d)(v) by Company and Domestic
Subsidiaries in Foreign Unrestricted Subsidiaries $__________
d. Actual aggregate amount of all Foreign Purchases
by Company and Domestic Subsidiaries $__________
e. c + d $__________
f. Maximum aggregate principal amount of all
loans to employees $10,000,000
g. Actual aggregate principal amount of all
loans to employees $__________
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5. Dividends and Distributions
a. Maximum permitted aggregate amount of repurchases
of the Company's stock
i. aggregate amount paid by
officers, employees, and
directors in connection with the
exercise of options $__________
ii. realized tax benefit $__________
iii. ($100,000 + i + ii ) $__________
b. Actual aggregate amounts paid for repurchases of
the Company's stock $__________
c. See Schedule 1 hereto
6. Minimum Fixed Charge Coverage Ratio
a. Minimum Fixed Charge Coverage Ratio 1.50 to 1.0
b. Actual Fixed Charge Coverage Ratio:
(i) Consolidated Cash Flow from Operations:
(A) Consolidated Net income
for the preceding four
Fiscal Quarters $_________
(B) Less Extraordinary gains ($________)
(C) Plus Income (minus loss)
of minority investments $_________
(D) Plus Depreciation and
amortization $_________
(E) Plus Interest expense $_________
(F) Plus Rent Expense $_________
(G) Plus Lease Financing
Rent Expense $_________
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(H) Plus Income Tax expense $_________
(I) Exclude Losses attributable
to use of fair value
methodology for
recognition and
measurement of
impairment of goodwill
in accordance with
Accounting Principles
Board Opinion No. 17 $_________
(J) Consolidated Cash Flow
from Operations [A-B-C+
D+E+F+G+H-I] $_________
(ii) Fixed Charges:
(A) Interest Expense $_________
(B) Rent Expense $_________
(C) Lease Financing
Rent Expense $_________
(D) Scheduled principal
installments on
Indebtedness $_________
(E) Fixed charges
[A+B+C+D] $_________
c. Ratio of (i)(J) to (ii)(E) ______ to 1.0
7. Maximum Leverage Ratio (expressed as a percentage)
a. Required Leverage Ratio
I. third and fourth Fiscal Quarter in
Fiscal Year 1997 60%
ii. each Fiscal Quarter in
Fiscal Year 1998 60%
iii. each Fiscal Quarter in
Fiscal Year 1999 55%
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iv. each Fiscal Quarter after
Fiscal Year 1999 50%
b. Actual Leverage Ratio:
(i) Consolidated Funded
Indebtedness (Indebtedness
for borrowed money, including
Capitalized Lease Obligations
($__________) plus Contingent
Obligations in respect of
borrowed money or Capitalized
Lease Obligations ($__________)
plus Contingent Obligations arising under
the Lease Financing Guarantee ($__________) $__________
(ii) Consolidated Total Capital:
(A) Total stockholders equity $__________
(B) Consolidated Funded
Indebtedness (see (I)
above) $__________
(C) (A) + (B) $__________
(iii) Ratio of (i) to (ii)(C) ____%
8. Minimum Tangible Net Worth
--------------------------
a. Required Consolidated Tangible Net Worth:
(i) $430,000,000
(ii)(A) Consolidated Net Income for
the period from July 28,
1997 through the end of the
Fiscal Quarter immediately
preceding the date hereof $_________
(B) 50% x (A) $_________
(iii) Net cash proceeds of any
issuance of equity
securities $_________
(iv) the aggregate amount paid
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to repurchase stock $_________
(v) (i) + (ii)(B) + (iii) - (iv) $__________
b. Actual Consolidated Tangible Net Worth:
(i) Total stockholders' equity
as of the end of the Period $_________
(ii) Intangible assets of the
Company and its Subsidiaries
on a consolidated basis as
of the end of the Period
(excluding intangible assets from
the Books Etc. Limited Purchase
permitted by Section 8.02(d)(vi)) $_________
(iii) (i) - (ii) $__________
9. Foreign Activities
a. Consolidated Tangible Net Worth
(See 8(b)(iii)above $__________
b. Maximum permitted aggregate amount of
Contingent Obligations permitted under
Section 8.02(c)(x) and Investments permitted under
Section Section 8.02(d)(v), 8.02(d)(viii), 8.02(d)(x) in
respect of a Foreign Joint Venture, and
Section 8.02(d)(xi) in respect of a Foreign Restricted
Subsidiary [a x 25%] $__________
c. Actual aggregate amount of
Contingent Obligations permitted under
Section 8.02(c)(x) and Investments permitted under
Section Section 8.02(d)(v), 8.02(d)(viii), 8.02(d)(x) in
respect of a Foreign Joint Venture, and
Section 8.02(d)(xi) in respect of a Foreign Restricted
Subsidiary $__________
10. Permitted Joint Venture Activity
a. Consolidated Tangible Net Worth
(See 8(b)(iii) above) $__________
b. Maximum permitted aggregate amount of
all Investments in Joint Ventures
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and Contingent Obligations of the Company or
any Unrestricted Subsidiary which is a
Domestic Subsidiary in respect of
Indebtedness of Joint Ventures
[a x 15%] $__________
c. Actual aggregate amount of all
Investments in Joint Ventures ($________) and
Contingent Obligations of the Company or any
Unrestricted Subsidiary which is a Domestic
Subsidiary in respect of Indebtedness of
Joint Ventures($________) $__________
d. Maximum permitted aggregate amount of current
portion Contingent Obligations of the Company or
any Unrestricted Subsidiary which is a Domestic
Subsidiary relating to Leases of Joint Ventures $15,000,000
e. Actual aggregate amount of
Contingent Obligations of the Company or
any Unrestricted Subsidiary which is a
Domestic Subsidiary relating to Leases of Joint Ventures $__________
11. Permitted Restricted Subsidiary Activity
a. Consolidated Tangible Net Worth
(See 8(b)(iii) above) $__________
b. Maximum permitted aggregate amount of all
Investments by the Company or Unrestricted Domestic
Subsidiary in Restricted Subsidiaries
and Contingent Obligations of the Company
or any Unrestricted Subsidiary which is a Domestic
Subsidiary in respect of Indebtedness of Restricted
Subsidiaries [a x 20%] $__________
c. Actual aggregate amount of all Investments
by the Company or Unrestricted Domestic Subsidiary
in Restricted Subsidiaries ($_________)
and Contingent Obligations of the Company
or any Unrestricted Subsidiary which is a
Domestic Subsidiary in respect of Indebtedness of Restricted
Subsidiaries ($________) $__________
d. Maximum permitted aggregate amount of
all Investments by the Company or Unrestricted Domestic
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Subsidiary and Contingent Obligations of the
Company or any Unrestricted Subsidiary which is
a Domestic Subsidiary in respect of Indebtedness
of Restricted Subsidiaries which are Foreign
Subsidiaries [a x 15%] $__________
e. Actual aggregate amount of
all Investments by the Company or Unrestricted Domestic
Subsidiary and Contingent Obligations of the
Company or any Unrestricted Subsidiary which is
a Domestic Subsidiary in respect of Indebtedness
of Restricted Subsidiaries which are Foreign
Subsidiaries $__________
f. Maximum permitted aggregate amount of
Contingent Obligations of the Company or any
Unrestricted Subsidiary which is a Domestic
Subsidiary relating to Leases of Restricted Subsidiaries $15,000,000
g. Actual aggregate amount of
Contingent Obligations of the Company or
any Unrestricted Subsidiary which is a
Domestic Subsidiary relating
to Leases of Restricted Subsidiaries $__________
11. Description of any Permitted Joint Venture Activity
or Permitted Restricted Subsidiary Activity engaged
in, or any Purchase Made, During the Period
[Describe transactions, including amounts involved]
IN WITNESS WHEREOF, the undersigned has caused this Compliance
Certificate to be executed and delivered this _____ day of _____________, _____.
BORDERS GROUP, INC.
By:
------------------------------------
Title:
---------------------------------
[Authorized Officer]
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<PAGE> 161
Schedule 1
Maximum
Distribution
Minority to Minority Actual Distributions
Shareholders pro Shareholders Made to Minority
Minority Net Income rata Share of Net (50% of pro Shareholders
Subsidiary Shareholders Percent Ownership Year to Date Income rata share) During FiscalYear
------------ ------------ ----------------- ------------ --------------------- ----------- -------------------
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<PAGE> 162
SCHEDULE 1.01(A)
EURO-RATE MARGIN/LETTER OF CREDIT FEE
BASE RATE MARGIN, FACILITY FEE RATE (1)
LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V
-----------------------------------------------------------------------------------------------------------------
If the
If the Company's Fixed If the
Company's Fixed Charge Coverage Company's Fixed
Charge Coverage Ratio EXCEEDS Charge Coverage If the
If the Ratio EXCEEDS 1.80 : 1.00 AND Ratio EXCEEDS Company's Fixed
Company's Fixed 2.00 : 1.00 AND IS LESS THAN OR 1.60 TO 1.0 AND Charge Coverage
Charge Coverage IS LESS OR EQUAL TO IS LESS THAN OR Ratio IS LESS
Ratio EXCEEDS EQUAL TO 2.00 : 1.00. EQUAL TO THAN OR EQUAL
2.20 : 1.00. 2.20 : 1.00. 1.80 : 1.00. TO 1.60 TO 1.00.
-----------------------------------------------------------------------------------------------------------------
Euro-Rate
Margin/ Letter
of Credit Fee 14.5 17.5 20.0 22.5 32.5
-----------------------------------------------------------------------------------------------------------------
Base Rate
Margin 0 0 0 0 0
-----------------------------------------------------------------------------------------------------------------
Facility Fee
Rate 8.0 10.0 12.5 15.0 17.5
-----------------------------------------------------------------------------------------------------------------
(1) All prices are expressed in basis points. A basis point is equal to 1/100
of 1%.
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<PAGE> 163
SCHEDULE 1.01(B)
COMMITMENTS OF LENDERS
ADDRESS FOR AMOUNT OF RATABLE
NAME OF LENDER NOTICES COMMITMENT SHARE*
PNC Bank, National National Corporate Banking--Chicago Office $ 45,333,333.33 10.67%
Association 500 West Monroe Street
Chicago, IL 60661
FAX # (312) 906-3420
Phone # (312) 906-3426
Attn: Mr. Peter F.Stack
The First National Bank of 14th Floor, Suite 0086 $ 45,018,518.52 10.59%
Chicago One First National Plaza
Chicago, IL 60670
FAX # (312) 732-8587
Phone # (312) 732-6132
Attn: Mr. Paul E. Rigby
Bankers Trust Company 130 Liberty Street, 34th Floor $ 45,018,518.52 10.59%
New York, NY 10006
FAX # (212) 250-7218
Phone # (212) 250-5175
Attn: Ms. Patricia Hogan
First Union National Bank One First Union Center, DC5 $ 25,185,185.19 5.92%
Charlotte, NC 28288-0745
FAX # (704) 374-2802
Phone # (704) 374-2641
Attn: Ms. Mary Amatore
* Ratable Shares used for calculating Required Lenders, but not for loan
operation purposes, such as fundings and payments.
155
<PAGE> 164
ADDRESS FOR AMOUNT OF RATABLE
NAME OF LENDER NOTICES COMMITMENT SHARE*
Fleet National Bank One Federal Street, OF0320 $ 25,185,185.19 5.92%
Boston, MA 02110-2010
FAX # (617) 346-0689
Phone # (617) 346-0611
Attn: Mr. Richard M. Seufert
127 Public Square $ 25,185,185.19 5.92%
KeyBank National Cleveland, OH 44114-1306
Association FAX # (216) 689-4981
Phone # (216) 689-3589
Attn: Mr. Thomas Crandell
Comerica Bank One Detroit Center $ 25,185,185.19 5.92%
500 Woodward Ave.
Mail Code 3268-9th Floor
Detroit, MI 48226-3289
FAX # (313) 222-9514
Phone # (313) 222-5060
Attn: Mr. David C. Bird
Morgan Guaranty Trust c/o J.P. Morgan & Company, Inc. $ 18,888,888.89 4.44%
Company of New York 22nd Floor
60 Wall Street
New York, NY 10260
FAX # (212) 648-5018
Phone # (212) 648-8063
Attn: Ms. Deborah Broadheim
* Ratable Shares used for calculating Required Lenders, but not for loan
operation purposes, such as fundings and payments.
156
<PAGE> 165
ADDRESS FOR AMOUNT OF RATABLE
NAME OF LENDER NOTICES COMMITMENT SHARE*
Union Bank of California, 350 California Street $ 18,888,888.89 4.44%
N.A. 6th Floor
San Francisco, CA 94104-1402
FAX # (415) 705-7085
Phone # (415) 705-7021
Attn: Mr. Timothy P. Streb
CoreStates Bank, N.A. 1345 Chestnut Street, FC 1-8-8-14 $ 15,740,740.74 3.70%
Philadelphia, PA 19101-7618
FAX # (215) 973-7671
Phone # (215) 973-2318
Attn: Ms. Anne Marie Fitzsimmons
Banque Nationale de Paris Suite 500 $ 15,740,740.74 3.70%
209 South LaSalle Street
Chicago, IL 60604
FAX # (312) 977-1380
Phone # (312) 977-2211
Attn: Mr. Frederick Moryl
SunTrust Bank, Atlanta 24th Floor $ 15,740,740.74 3.70%
25 Park Place
Atlanta, GA 30303
FAX # (404) 588-8505
Phone # (404) 724-3457
Attn: Mr. Roger P. Shreero
*Ratable Shares used for calculating Required Lenders, but not for loan
operation purposes, such as fundings and payments.
157
<PAGE> 166
ADDRESS FOR AMOUNT OF RATABLE
NAME OF LENDER NOTICES COMMITMENT SHARE*
Bank Boston, N.A. 100 Federal Street $ 15,740,740.74 3.70%
Boston, MA 02110
FAX # (617) 434-6685
Phone # (617) 434-5280
Attn: Ms. Judith Kelly
Hibernia National Bank 12th Floor $ 12,592,592.59 2.96%
313 Carondelet Street
New Orleans, LA 70130
FAX # (504) 533-5344
Phone # (504) 533-2911
Attn: Mr. Jeffrey Peck
The Northern Trust Company Floor B-11 $ 9,444,444.44 2.22%
50 South LaSalle Street
Chicago, IL 60675
FAX # (312) 444-5055
Phone # (312) 557-8205
Attn: Ms. Nicole R. Kidder
The Bank of New York One Wall Street, 8th Floor $ 9,444,444.44 2.22%
New York, NY 10286
FAX # (212) 635-1483, 1481
Phone # (212) 635-7885
Attn: Mr. Michael V. Flannery
Mercantile Bank 12th Floor $ 9,444,444.44 2.22%
721 Locust Street
St. Louis, MO 63101
FAX # (314) 425-2203
Phone # (314) 425-2459
Attn: Mr. Steve Reese
*Ratable Shares used for calculating Required Lenders, but not for loan
operation purposes, such as fundings and payments.
158
<PAGE> 167
ADDRESS FOR AMOUNT OF RATABLE
NAME OF LENDER NOTICES COMMITMENT SHARE*
The Dai-Ichi Kangyo Bank, 10 S. Wacker Drive $ 9,444,444.44 2.22%
Ltd.--Chicago Branch 26th Floor
Chicago, IL 60606
FAX # (312) 876-2011
Phone # (312) 715-6361
Attn: Mr. Michael Pleasants
First Hawaiian Bank 999 Bishop Street $ 9,444,444.44 2.22%
11th Floor
Honolulu, HI 96813
FAX # (808) 525-6372
Phone # (808) 525-6289
Attn: Mr. Charles Jenkins
Bank One, National 7th Floor $ 9,444,444.44 2.22%
Association 100 East Broad Street
Columbus, OH 43215
FAX # (614) 248-5518
Phone # (614) 248-6390
Attn: Mr. Larry Christ
Long Term Credit Bank of Suite 800 $ 9,444,444.44 2.22%
Japan 190 South LaSalle Street
Chicago, IL 60670
FAX # (312) 704-8505
Phone # (312) 704-5482
Attn: Mr. Curtis Flammini
*Ratable Shares used for calculating Required Lenders, but not for loan
operation purposes, such as fundings and payments.
159
<PAGE> 168
ADDRESS FOR AMOUNT OF RATABLE
NAME OF LENDER NOTICES COMMITMENT SHARE*
Wachovia Bank 28th Floor $ 9,444,444.44 2.22%
191 Peachtree Street
Atlanta, GA 30303
FAX # (404) 332-6898
Phone # (404) 332-4036
Attn: Ms. Katie S. Proctor
TOTAL $425,000,000 100%
*Ratable Shares used for calculating Required Lenders, but not for loan
operation purposes, such as fundings and payments.
160