Multicurrency Revolving Credit Facility Credit Agreement - Borders Group Inc., Borders Inc., Walden Books Co. Inc., BGP (UK) Ltd., Borders (UK) Ltd., PNC Bank NA, PNC Capital Markets Inc. and Fleet National Bank
MULTICURRENCY REVOLVING CREDIT FACILITY
CREDIT AGREEMENT
by and among
BORDERS GROUP, INC., BORDERS, INC.,
WALDEN BOOK COMPANY, INC., BGP (UK) LIMITED and BORDERS (UK) LIMITED
and
THE LENDERS PARTY HERETO,
and
PNC BANK, NATIONAL ASSOCIATION, as Administrative Agent,
PNC CAPITAL MARKETS, INC., as Arranger
and
FLEET NATIONAL BANK, as Documentation Agent
Dated as of July 9, 1999
<PAGE>
ARTICLE I
CERTAIN DEFINITIONS 1
1.01 Certain Definitions 1
1.02 Construction 26
1.03 Accounting Principles 27
ARTICLE II
REVOLVING CREDIT AND SWING LOAN FACILITIES 27
2.01 (a) Commitments 27
(b) Increase in Commitments 28
(c) Swing Loan Facility 28
2.02 Nature of Lenders' Obligations with Respect to Revolving
Credit Loans 29
2.03 Fees 29
(a) Revolving Credit Facility Fee 29
(c) Calculation of Fees 29
2.04 Reduction of Commitment 29
2.05 (a) Revolving Credit Loan Requests 30
(b) Swing Loan Requests 31
2.06 (a) Making Revolving Credit Loans 31
(b) Making Swing Loans 31
2.07 (a) Borrowings to Repay Swing Loans 32
(b) Irrevocable Obligation 32
2.08 (a) Evidence of Revolving Credit Obligations 32
(b) Evidence of Swing Loan Obligations 33
(c) Promissory Notes 33
2.09 Utilization of Commitments in Optional Currencies 33
(a) Periodic Computations of Dollar Equivalent Amounts
of Loans and Letters of Credit Outstanding 33
(b) Notices from Lenders That Optional Currencies Are
Unavailable to Fund New Loans 33
(c) Notices From Lenders That Optional Currencies Are
Unavailable to Fund Renewals of the Euro-Rate Option 34
(d) Requests for Additional Optional Currencies 34
2.10 Currency Repayments 35
2.11 Optional Currency Amounts 35
2.12 European Monetary Union 35
2.13. Extension of Expiration Date 36
ARTICLE III
INTEREST RATES 38
3.01 Interest Rate Options on Revolving Credit Loans 38
(a) Selection of Interest Rate Options 38
(b) Interest Rate Options Available 38
3.02 Rate Quotations 39
3.03 Euro-Rate Unascertainable; Illegality; Increased Costs;
Deposits Not Available 39
3.04 Selection of Interest Rate Options 40
3.05 Interest Rates Payable on Swing Loans 40
3.06 Interest After Default 41
3.07 Maximum Interest Rate 41
ARTICLE IV
PAYMENTS 41
4.01 Payments 41
4.02 Pro Rata Treatment of Lenders 42
4.03 Interest Payment Dates 42
4.04 Prepayments 42
4.05 Mandatory Prepayments 44
(a) Currency Fluctuations 44
(b) Application Among Interest Rate Options 44
4.06 Additional Compensation in Certain Circumstances 45
(a) Increased Costs or Reduced Return Resulting From
Taxes, Reserves, Capital Adequacy Requirements,
Expenses, Etc. 45
(b) Indemnity 45
(c) Taxes 46
(d) Survival 47
4.07 Interbank Market Presumption 47
4.08 Judgment Currency 47
(a) Currency Conversion Procedures for Judgments 47
(b) Indemnity in Certain Events 47
ARTICLE V
REPRESENTATIONS AND WARRANTIES 48
5.01 Representations and Warranties 48
(a) Organization and Qualification 48
(b) Capitalization and Ownership 48
(c) Subsidiaries 48
(d) Power and Authority 49
(e) Validity and Binding Effect 49
(f) No Conflict 49
(g) Litigation 49
(h) Title to Properties 49
(i) Financial Statements 50
(j) Use of Proceeds; Margin Stock; Section 20
Subsidiaries 50
(k) Full Disclosure 51
(l) Taxes 51
(m) Consents and Approvals 52
(n) No Event of Default; Compliance with Instruments 52
(o) Patents, Trademarks, Copyrights, Licenses, Etc. 52
(p) Insurance 52
(q) Compliance with Laws 52
(r) Material Contracts 52
(s) Investment Companies 53
(t) Plans and Benefit Arrangements 53
(u) Employment Matters 54
(v) Environmental Matters 54
(w) Senior Debt Status 55
(x) Solvency 55
5.02 Updates to Schedules 55
ARTICLE VI
CONDITIONS OF LENDING 56
6.01 Closing Date 56
6.02 Each Additional Loan 58
6.03 Subsequent Effective Date 58
ARTICLE VII
COVENANTS 60
7.01 Affirmative Covenants 60
(a) Preservation of Existence, etc. 60
(b) Payment of Liabilities, Including Taxes, etc. 60
(c) Maintenance of Insurance 61
(d) Maintenance of Properties 61
(e) Maintenance of Patents, Trademarks, etc. 61
(f) Visitation Rights 61
(g) Keeping of Records and Books of Account 61
(h) Plans and Benefit Arrangements 62
(i) Compliance with Laws 62
(j) Use of Proceeds 62
(k) Subsequent Credit Terms 62
(l) Subsidiary Guaranties 63
(m) Clean Down 63
7.02 Negative Covenants 63
(a) Indebtedness 63
(b) Liens 65
(c) Contingent Obligations 65
(d) Loans and Investments 66
(e) Dividends and Related Distributions 68
(f) Liquidations, Mergers, Consolidations 69
(g) Dispositions of Assets or Subsidiaries 69
(h) Affiliate Transactions 69
(i) Subsidiaries, Partnerships and Joint Ventures 70
(j) Continuation of or Change in Business 70
(k) Plans and Benefit Arrangements 70
(l) Fiscal Year 70
(m) Issuance of Stock 70
(n) Changes in Organizational Documents 71
(o) Minimum Fixed Charge Coverage Ratio 71
(p) Maximum Leverage Ratio 71
(q) Minimum Tangible Net Worth 71
(r) Modifications of Other Documents 71
(s) Prepayment of Note Put Agreement Obligations 71
(t) Lease Financing Payments 71
(u) Foreign Activities 72
(v) Inconsistent Agreements 72
7.03 Reporting Requirements 73
(a) Quarterly Financial Statements 73
(b) Annual Financial Statements 73
(c) Certificates of the Company 73
(d) Notice of Default 74
(e) Notice of Litigation 74
(f) Certain Events 74
(g) Other Reports and Information 74
(h) Notices Regarding Benefit Arrangements. 75
(i) Access to the Company's Auditors 75
(j) Notices Regarding Lease Financing Agreements 75
(k) Notices Regarding Repurchases of Stock 76
ARTICLE VIII
GUARANTIES 76
8.01 Guaranty of Payment and Performance of Guaranteed
Obligations 76
8.02 Certain Waivers of the Guarantors 76
8.03 Obligations Unconditional 76
8.04 Waiver of Subrogation 78
8.05 Actions with Respect to Collateral 78
8.06 Effect of Bankruptcy; Revival 78
8.07 Survival of Guaranty 79
8.08 Right of Set-Off 79
8.09 Limitation on Amount of Guaranty 79
ARTICLE IX
DEFAULT 80
9.01 Events of Default 80
9.02 Consequences of Event of Default 82
ARTICLE X
THE AGENTS 84
10.01 Appointment 84
10.02 Delegation of Duties 85
10.03 Nature of Duties; Independent Credit Investigation 85
10.04 Actions in Discretion of Agents; Instructions from the
Lenders 85
10.05 Exculpatory Provisions 86
10.06 Reimbursement and Indemnification of Agents by Lenders 86
10.07 Reliance by Agents 87
10.08 Notice of Default 87
10.09 Notices 87
10.10 Lenders in Their Individual Capacities 87
10.11 [RESERVED] 87
10.12 Equalization of Lenders 87
10.13 Successor Agents 88
10.14 Availability of Funds 88
10.15 Calculations 89
10.16 Beneficiaries 89
ARTICLE XI
MISCELLANEOUS 89
11.01 Modifications, Amendments or Waivers 89
11.02 No Implied Waivers; Cumulative Remedies; Writing Required 90
11.03 Reimbursement and Indemnification by the Borrowers; Taxes 91
(a) Reimbursement and Indemnification of Agents 91
(b) Reimbursement and Indemnification of Lenders 92
11.04 Holidays 92
11.05 Funding by Branch, Subsidiary or Affiliate 92
(a) Notional Funding 92
(b) Actual Funding 93
11.06 Notices; Lending Offices 93
11.07 Severability 93
11.08 Governing Law 94
11.09 Prior Understanding 94
11.10 Duration; Survival 94
11.11 Successors and Assigns 94
(a) Assignment 94
(b) Participations 95
(c) Other Provisions 95
(d) Federal Reserve Bank Transfer 95
11.12 Confidentiality 95
(b) Sharing Information With Affiliates of the Lenders 96
11.13 Counterparts 96
11.14 Agent's or Lender's Consent 96
11.15 Exceptions 96
11.16 CONSENT TO FORUM; WAIVER OF JURY TRIAL 96
11.17 Waivers by Borrowers 97
11.18 Tax Withholding Forms 97
<PAGE>
LIST OF SCHEDULES AND EXHIBITS
SCHEDULE 1.01(A) -- EURO-RATE MARGIN, BASE RATE MARGIN,
FACILITY FEE RATE
SCHEDULE 1.01(B) -- COMMITMENTS OF LENDERS
SCHEDULE 1.01(C) -- EXISTING LIENS
SCHEDULE 5.01(a) -- QUALIFICATIONS TO DO BUSINESS
SCHEDULE 5.01(b) -- OPTIONS ON COMPANY STOCK
SCHEDULE 5.01(c) -- SUBSIDIARIES; RIGHTS TO PURCHASE SUBSIDIARY
SHARES
SCHEDULE 5.01(h) -- OWNED AND LEASED REAL PROPERTY
SCHEDULE 5.01(l) -- TAX ARRANGEMENTS WITH KMART
SCHEDULE 5.01(m) -- CONSENTS AND APPROVALS
SCHEDULE 5.01(p) -- INSURANCE POLICIES
SCHEDULE 5.01(t) -- EMPLOYEE BENEFIT PLAN DISCLOSURES
SCHEDULE 5.01(v) -- ENVIRONMENTAL DISCLOSURES
SCHEDULE 7.02(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 6.01(e)(i) -- OPINIONS OF COUNSEL
EXHIBIT 7.03(c) -- COMPLIANCE CERTIFICATE
<PAGE>
MULTICURRENCY CREDIT AGREEMENT
THIS MULTICURRENCY CREDIT AGREEMENT is dated as of July 9, 1999 and is made
by and among BORDERS GROUP, INC. (the "Company"), Borders, Inc. ("Borders"),
Walden Book Company, Inc. ("Walden"), BGP (UK) Limited ("Books Holding") and
Borders (UK) Limited ("Borders (UK)")(the Company, Borders, Walden, Books
Holding and Borders (UK) hereinafter referred to individually as a "Borrower" or
jointly as the "Borrowers"), each of the Guarantors (as hereinafter defined),
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"), PNC
CAPITAL MARKETS, INC., in its capacity as arranger for the Lenders under this
Agreement (hereinafter referred to in such capacity as the "Arranger") and FLEET
NATIONAL BANK, in its capacity as documentation agent for the Lenders under this
Agreement (hereinafter referred to in such capacity as the "Documentation
Agent").
WITNESSETH:
WHEREAS, the Borrowers have requested the Lenders to provide a revolving
credit facility to the Borrowers in an aggregate principal amount not to exceed
$130,000,000; and
WHEREAS, the Lenders are willing to provide such credit upon the terms and
conditions hereinafter set forth;
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 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, the Arranger and the
Documentation Agent.
AGREEMENT shall mean this Multicurrency Credit Agreement as the same
may be supplemented or amended from time to time including all schedules and
exhibits.
ARRANGER shall mean PNC Capital Markets, Inc., and its successors and
assigns.
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, any
Vice Chairman, 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 3.01(a)(i).
BBA shall have the meaning assigned to that term in the definition of
Euro-Rate.
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.
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.
BORDERS (UK) shall mean Borders (UK) Limited, company number 1580771,
organized and existing under the laws of the United Kingdom, and its permitted
successors and assigns.
BORROWERS shall mean collectively and Borrower shall mean separately
the Company, Borders, Walden, Books Holding, Borders (UK) and, after the
Subsequent Effective Date, UK Superstore.
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 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 Continuing Directors then on the Board of Directors of the
Company, cease to constitute a majority of the Board of Directors of the
Company.
CLEAN DOWN PERIOD shall have the meaning assigned to that term is
Section 7.01(m).
CLOSING DATE shall mean the date of closing of this Agreement, which
shall occur on July 9, 1999 or, if all the conditions specified in Sections 6.01
and 6.02 have not been satisfied or waived by such date, not later than July 16,
1999, 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 shall take place at 10:00 A.M., Chicago time, on the
Closing Date at the offices of Schiff Hardin & Waite, 6600 Sears Tower, 233
South Wacker Drive, Chicago, Illinois 60606, or at such other time and place as
the parties agree.
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(b) and 11.11 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 canceled pursuant to Section 9.02
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.
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.
DISTRIBUTIONS shall have the meaning assigned to such term in Section
7.02(e).
DOCUMENTATION AGENT shall mean Fleet National Bank, and its successors
and assigns.
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.
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, except as otherwise expressly provided in clause (i) of Section
7.02(d), 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.
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.
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:
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:
LIBO Rate
Euro-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 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 3.01(b)(ii).
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 9.01.
EXPIRATION DATE shall mean, with respect to the Commitments, July 7,
2000, or such later date to which the Expiration Date may be extended pursuant
to Section 2.13, or such earlier date as of which the Commitments shall have
been terminated pursuant to Section 2.04 hereof or canceled pursuant to Section
9.02 hereof.
FACILITY FEE shall mean the fee referred to in Section 2.03(a).
FACILITY FEE RATE shall mean at any time a rate per annum equal to the
"Facility Fee Rate" set forth on Schedule 1.01(A) opposite the then-current
Fixed Charge Coverage Ratio.
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 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 July 2,
1999, 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, the Utilization 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.
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
1998 Fiscal Year ended January 24, 1999. 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.
FOREIGN JOINT VENTURE shall mean individually and Foreign Joint
Ventures shall mean collectively any corporation, partnership, limited liability
company, joint venture or other 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).
GUARANTEED OBLIGATIONS shall have the meaning assigned to that term in
Section 8.01.
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 5.01(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 4.03.
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 5.01(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
7.02(d).
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 7.02(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 7.02(r).
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
7.02(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
7.02(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 October
17, 1997, 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 October 17, 1997, 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 7.02(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).
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.
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.
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, 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.
LOANS shall mean collectively and Loan shall mean separately all
Revolving Credit Loans and Swing Loans or any Revolving Credit Loan or Swing
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 7.02(r).
NOTICES shall have the meaning assigned to that term in Section 11.06.
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.
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.
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"), the European common
currency ("Euro"), French Francs ("FRF"), Italian Lira ("ITL"), New Zealand Kiwi
("NZK"), 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 4.08(a).
OTHER CURRENCY shall have the meaning assigned to such term in Section
4.08(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 AGREEMENT shall mean the Amended and Restated
Participation Agreement dated as of November 22, 1995 and amended and restated
as of October 17, 1997, 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 5.01(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) Investments in direct obligations of the United States of America
or, with respect to Foreign Subsidiaries, of the central government of the
applicable jurisdiction, or any agency thereof, maturing in twelve months or
less from the date of acquisition thereof and which are backed by the full faith
and credit of the United States of America or such other applicable
jurisdiction, as aforesaid, provided that such direct obligations of any central
government other than the United States of America or of any agency of any
central government other than the United States of America have ratings of at
least A-1 by S&P or P-1 by Moody's, or the equivalent thereof, on the date of
acquisition;
(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 organized under
the laws of the United States of America or any state thereof 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;
(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; and
(vi) demand deposits, time deposits or certificates of deposit
maturing within one year issued by any commercial bank organized under the laws
of any jurisdiction other than the United States of America or any state thereof
and whose short-term deposit rating at the time of such Investment is either of
the two (2) highest ratings then accorded by Moody's or another comparable
rating service.
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.
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 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 7.02 (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 7.02(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
operating leases executed, as lessee, by a non-wholly-owned Restricted
Subsidiary, provided, that, the portion of such Contingent Obligations and
Indebtedness which constitutes current liabilities determined and consolidated
in accordance with GAAP is limited to operating 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 non-wholly-owned 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.
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 CREDIT AGREEMENT shall mean the Amended and Restated
Multicurrency Credit Agreement dated as of March 28, 1995 and amended and
restated as of October 17, 1997, among the Company, Borders, Walden and Books
Holding as borrowers, the lenders party thereto, PNC Bank as administrative
agent, The First National Bank of Chicago, as syndication agent, and Bankers
Trust Company, as real estate administrative agent.
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 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.
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
11.11.
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 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.
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 October 17, 1997, 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 October 17, 1997 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.
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, as provided in Section 9.02(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 hereunder bears to
the total outstanding amount of all Loans 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). Revolving Facility Usage shall mean at any time the
Dollar Equivalent amount of the Revolving Credit Loans outstanding.
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
5.01(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.
SUBSEQUENT EFFECTIVE DATE shall mean the date on which (i) UK
Superstore becomes an Unrestricted Subsidiary, (ii) the Administrative Agent has
received all deliveries from UK Superstore required by Section 6.03 in a form
reasonably satisfactory to the Administrative Agent and its counsel and (iii)
all of the conditions in Section 6.03 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 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 5.01(c).
SWING LENDERS shall mean PNC Bank, National Association and Fleet
National Bank, 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 $10,000,000.
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 made by the Swing Lenders to the
Borrowers pursuant to Section 2.01(c) hereof.
TOTAL FACILITY USAGE shall mean at any time the sum of Revolving
Facility Usage and the Swing Loans outstanding.
UK SUPERSTORE shall mean the Subsidiary of the Company organized under
the laws of the United Kingdom and designated by the Company to become a
Borrower under this Agreement on the Subsequent Effective Date.
UTILIZATION FEE shall mean the fee referred to in Section 2.03(b).
UTILIZATION FEE RATE shall mean at any time a rate per annum equal to
the "Utilization Fee Rate" set forth on Schedule 1.01(A) opposite the then
current Fixed Charge Coverage Ratio.
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 Borrower or 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 this Agreement as a Borrower
or by the provisions of Article VIII hereof as a Guarantor, 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 voting equity interests and substantially all of the 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;
(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 24, 1999, 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 Closing 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, in the case of each Swing Lender, such Swing Lender's
Swing Loans outstanding, provided, however, that in no event shall the aggregate
Dollar Equivalent amount of all Revolving Credit Loans made to Books Holding,
Borders (UK) and, after the Subsequent Effective Date, UK Superstore, under this
Agreement and the Prior Credit Agreement (other than loans made under the Prior
Credit Agreement to fund the purchase of Borders (UK)) exceed 10% 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) Increase in Commitments. For a period of 90 days following the
Closing Date, the Arranger (in consultation with the Documentation Agent) 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)
the Administrative Agent shall not 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(b); (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 $130,000,000. 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 1.01(B). If, at any time that
the Commitments are increased pursuant to this Section 2.01(b), there are
Revolving Credit Loans then outstanding, each new Lender, and each existing
Lender that has increased its Commitment, shall purchase Revolving Credit Loans
from each other Lender in an amount such that, after such purchase or purchases,
the amount of outstanding Revolving Credit Loans 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 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 4.06(b) incurred by any Lender.
(c) Swing Loan Facility. Subject to the terms and conditions hereof
(including fulfillment of those conditions set forth in Article VI, 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
Closing Date to, but not including, the Expiration Date, in an aggregate
principal amount not to exceed $10,000,000, subject to reduction as provided
herein, to be made in accordance with the following provisions, and provided,
that no Swing Lender's Swing Loans outstanding hereunder shall exceed its
Commitment minus 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(c).
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 for any
Swing Lender its Swing Loans outstanding, subject to Section 4.05(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 Closing 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). 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 7.03(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
7.03(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), 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) During any period in which the Total Facility Usage exceeds 50% of
the Commitments, the Borrowers agree to pay to the Administrative Agent in
Dollars for the account of each Lender a nonrefundable utilization fee
calculated daily during such period by multiplying the Utilization Fee Rate by
the Total Facility Usage. All Utilization Fees shall be payable in arrears on
the last Business Day of each March, June, September and December after the
Closing Date and on the Expiration Date or upon acceleration of the Obligations.
(c) 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 the Commitments without penalty or premium, except as
set forth in Section 4.06(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 and/or Swing 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 4.06 hereof), to the extent that the Total Facility Usage exceeds the
Commitments as so reduced or terminated. 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.
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 $1,000,000, 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 $1,000,000 (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.
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 10.14.
(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.
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. 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. 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 6.02 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. 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, the transactions
contemplated herein or any unrelated transactions; 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.
(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 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
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 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 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 Administrative 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, (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 Administrative 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 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 may at their option permit such payment to be made (i) at and
to a different location, subsidiary, affiliate or correspondent of the
Administrative 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 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 2.10 shall survive termination of this Agreement.
2.11 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.
2.12 European Monetary Union.
(a) If, as a result of the implementation of the European monetary
union, (i) any Optional Currency ceases to be lawful currency of the nation
issuing the same and is replaced by the Euro or (ii) any Optional Currency and
the Euro are at the same time recognized by any governmental authority of the
nation issuing such currency as lawful currency of such nation and the
Administrative Agent or the Required Lenders shall so request in a notice
delivered to the Borrowers, then any amount payable hereunder by any party
hereto in such Optional Currency shall instead be payable in the Euro and the
amount so payable shall be determined by translating the amount payable in such
Optional Currency to the Euro at the exchange rate recognized on the date of
such request by the European Central Bank for the purpose of implementing
European monetary union. Prior to the occurrence of the event or events
described in clause (i) or (ii) of the preceding sentence, each amount payable
hereunder in any Optional Currency will, except as otherwise provided herein,
continue to be payable only in that Optional Currency.
(b) The Borrowers agree, at the request of any Lender to compensate
such Lender for any loss, cost, expense or reduction in return that such Lender
shall reasonably determine shall be incurred or sustained by such Lender as a
result of the implementation of European monetary union and that would not have
been incurred or sustained but for the transactions provided for herein. A
certificate of any Lender setting forth such Lender's determination of the
amount or amounts necessary to compensate such Lender shall be delivered to the
Borrowers and shall be conclusive absent manifest error so long as such
determination is made on a reasonable basis. The Borrowers shall pay such Lender
the amount shown as due on any such certificate within 10 days after receipt
thereof.
(c) The parties hereto agree, at the time of or at any time following
the implementation of European monetary union, to use reasonable efforts to
enter into an agreement amending this Agreement in order to reflect the
implementation of such monetary union, to permit (if feasible) the Euro to
qualify as an Optional Currency under the terms and conditions of the definition
of such term and to place the parties hereto in the position with respect to the
settlement of payments of the Euro as they would have been with respect to the
settlement of the Currencies it replaced.
2.13. Extension of Expiration Date.
(a) The Company may request, in a written notice given as herein
provided to the Administrative Agent and each of the Lenders, that the
Expiration Date be extended for 364 days, which notice shall specify the new
Expiration Date to be in effect following such extension (the "Requested
Expiration Date") provided that the Requested Expiration Date shall not be more
than 364 days from the date on which such request is to become effective (the
"Extension Effective Date"). The Company's request shall be delivered to the
Administrative Agent at least 40 but no more than 45 days prior to the proposed
Extension Effective Date. Each Lender shall, not less than 20 days and no more
than 30 days prior to the Extension Effective Date, notify the Borrower and the
Administrative Agent in writing of its election to extend or not to extend the
Expiration Date with respect to its pro rata share of the Commitment (based on
such Lender's Commitment as a percentage of the aggregate Commitments of all the
Lenders immediately prior to the Extension Effective Date). The Borrower may,
not later than 30 days prior to the Extension Effective Date, revoke its request
to extend the Expiration Date. If on the date 20 days prior to the Extension
Effective Date the Required Lenders and the Administrative Agent elect to extend
the Expiration Date with respect to their pro rata share of the Commitment and
the Borrower has not revoked its request to extend the Expiration Date, then,
subject to the provisions of this Section 2.13, the Expiration Date shall be
extended for 364 days. Any Lender which shall not notify the Company and the
Administrative Agent of its election to extend the Expiration Date on or prior
to the date 20 days prior to the Extension Effective Date shall be deemed to
have elected not to extend the Expiration Date with respect to its pro rata
share of the Commitment.
(b) Provided that the Required Lenders shall have elected to extend
their pro rata share of the Commitment as provided in this Section 2.13, if any
Lender shall timely notify the Borrower and the Administrative Agent pursuant to
paragraph (a) of this Section 2.13 of its election not to extend its pro rata
share of the Commitment, or shall be deemed to have elected not to extend its
pro rata share of the Commitment (any such Lender being called a "Terminating
Lender"), then the remaining Lenders (the "Continuing Lenders") or any of them
shall have the right (but not the obligation), upon notice to the Borrower and
the Administrative Agent not later than 15 days preceding the Extension
Effective Date to increase their pro rata share of the Commitments, by an amount
up to in the aggregate the pro rata share of the Commitment of any Terminating
Lenders. If Continuing Lenders have elected to increase their pro rata share of
the Commitment pursuant to the preceding sentence by an aggregate amount which
exceeds the aggregate pro rata share of the Commitment of the Terminating
Lenders, then the proposed increase in the Commitment of each such Continuing
Lender (as specified in the notice referred to in the preceding sentence) shall
be decreased pro rata so that the aggregate increase in the Commitments of such
Continuing Lenders is equal to the aggregate pro rata share of the Commitment of
the Terminating Lenders. Each increase in the Commitment of a Continuing Lender
shall be evidenced by a written instrument executed by such Continuing Lender,
the Borrower and the Administrative Agent, and shall take effect on the
Extension Effective Date.
(c) In the event the aggregate pro rata share of the Commitment amount
of the Terminating Lenders shall exceed the aggregate amount by which the
Continuing Lenders have agreed to increase their Commitments pursuant to Section
21.8(b), the Company shall have the right to, designate, at its option, one or
more other lending institutions willing to extend Commitments until the
Requested Expiration Date in an aggregate amount not greater than such excess.
Any such lending institution (an "Additional Lender") shall, on or prior to the
Extension Effective Date, execute and deliver to the Borrowers and the
Administrative Agent an Assignment and Acceptance Agreement, satisfactory to the
Borrowers and the Administrative Agent, setting forth the amount of such
Additional Lender's Commitment and containing its agreement to become, and to
perform all the obligations of, a Lender hereunder, and the Commitment of such
Additional Lender shall become effective on the Extension Effective Date.
<PAGE>
(d) If the Required Lenders shall have elected to extend their pro
rata share of the Commitment as provided in this Section 2.13, then (i)
effective on the Extension Effective Date the Commitments of the Continuing
Lenders (including any increase pursuant to Section 2.13(b)) and any Additional
Lenders equal to their pro rata share of the Commitments as provided in this
Section 2.13 shall continue until the Requested Expiration Date specified in the
notice from the Company, and as to such Lenders the term "Expiration Date", as
used herein, shall mean such Requested Expiration Date; (ii) the Commitments of
any Terminating Lender shall continue until the Extension Effective Date, and
shall then terminate (as to any Terminating Lender, the term "Expiration Date",
as used herein, shall mean the Extension Effective Date) and any such
Terminating Lender shall receive payment in full of the outstanding principal
amount, together with accrued interest to such date and any other amounts owed
by the Borrower to such Terminating Lender pursuant to this Agreement, of the
Loans of such Terminating Lender; and (iii) from and after the Extension
Effective Date, the term "Lenders" shall be deemed to include the Additional
Lenders. On the Extension Effective Date the Borrower shall make payments of
Revolving Credit Loans and request new Revolving Credit Loans to the extent
necessary so that the aggregate principal amount of outstanding Revolving Credit
Loans of each Lender is equal to its Applicable Percentage of the Commitments.
ARTICLE III
INTEREST RATES
3.01 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 five (5) Borrowing Tranches, and provided further that until the
earlier of (i) such time as the Commitments shall equal $100,000,000 or (ii)
three months from the Closing 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.
(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 7.03(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 7.03(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.
3.02 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.
3.03 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
(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 3.03(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 3.03(c).
(c) In the case of any event specified in Section 3.03(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 3.03(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 3.03 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 3.03, the Borrowers
shall, subject to the Borrowers' indemnification Obligations under Section
4.06(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 4.04.
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.
3.04 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.
3.05 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.
3.06 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 rate of interest for each Loan otherwise applicable pursuant
to Section 2.10 or Section 3.01, or 3.05 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.
3.07 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.
ARTICLE IV
PAYMENTS
4.01 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. 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 3.02, 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 Loans outstanding on the
Expiration Date shall be due and payable in full on the Expiration Date.
4.02 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, and except as provided in Section 3.03(b), 4.04(b) or 11.03) 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.
4.03 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 Closing Date and on the Expiration Date or upon
acceleration of the Obligations. Interest on 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 mandatory prepayments of principal
under Sections 2.04 or 4.05 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).
4.04 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 4.06) 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 3.03(b) with respect to any Loan to which a Euro-Rate Option applies.
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 between
the Revolving Credit Loans and Swing Loans; and
(z) the total principal amount and currency of such prepayment, the
Dollar Equivalent amount of which shall not be less than $1,000,000.
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 and then to Revolving Credit 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 4.06(b).
(b) In the event any Lender (i) gives notice under Section 3.03(b) or
Section 4.06(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 3.03(b) or 4.06(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 4.06 and any accrued interest due on such amount and any related
Fees; 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
10.13.
(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 4.04(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 4.04(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 pursuant to Section 11.11 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 3.03 or 4.06
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
4.04(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.
4.05 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 4.04 and 4.06) 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 4.05 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 4.06(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.
4.06 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 or any Lender to any tax or changes the
basis of taxation with respect to this Agreement, the other Loan Documents, the
Loans 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 on the net income of any such Agent, 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, 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, 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 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, in
the case of any capital adequacy or similar requirement, to have the effect of
reducing the rate of return on any Agent's or any Lender's capital, taking into
consideration such Agent's or Lender's customary policies with respect to
capital adequacy) by an amount which such Agent or Lender in its sole discretion
deems to be material, such Agent 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 or Lender to be necessary to compensate such Agent 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 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 4.06, 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) 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 applies on a day other than the last day of the
corresponding Interest Period (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 4.04, or
(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, 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 4.06(c)), such Lender 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 and each Agent for the full amount of such Taxes (including any
taxes on amounts payable under this Section 4.06(c)) paid by such Lender 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 or such Agent ten (10) Business Days after the date such Lender 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 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.
(d) Survival . The Obligations of the Borrowers under this Section
4.06 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 and the Lenders to the Borrowers under all Loan
Documents.
4.07 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 3.03 and 4.06 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.
4.08 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 or by any Lender of any sum adjudged to be so
due in such Other Currency, such Agent 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 or Lender in the Original Currency, the Borrowers agree, as a
separate obligation and notwithstanding any such judgment or payment, to
indemnify such Agent or Lender against such loss.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.01 Representations and Warranties. The Borrowers, jointly and severally,
represent and warrant to the Agents 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 5.01(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 5.01(b).
(c) Subsidiaries. Schedule 5.01(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 5.01(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 Closing
Date will have been duly 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 5.01(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 24, 1999 (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 April 25, 1999 (the "Interim Statements") (the Annual and Interim
Statements 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) 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
(i) above or Section 7.03(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
(i) above or Section 7.03(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 7.01(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 7.02(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
(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 Closing 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 Closing 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 Closing 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 5.01(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 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 5.01(m), all of which shall have been obtained or made on or prior to
the Closing Date except as otherwise indicated on Schedule 5.01(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 5.01(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 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
5.01(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 Closing 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
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 5.01(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. ss. 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 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.
5.02 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(b) and 11.11
and the amendment of Schedule 5.01(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.
ARTICLE VI
CONDITIONS OF LENDING
The obligation of each Lender to make Revolving Credit Loans 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 and to the
satisfaction of the following further conditions:
6.01 Closing Date. On the Closing Date:
(a) The representations and warranties of each of the Borrowers
contained in Article V shall be true and accurate on and as of the Closing 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 Closing 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 Closing 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 Closing 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 Closing Date and signed by an
Authorized Officer of the Company containing calculations in detail satisfactory
to the Administrative Agent showing 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 Closing 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 Closing Date
and in form and substance satisfactory to the Agents and their counsel:
(i) as to the matters set forth in Exhibit 6.01(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 Closing 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 5.01(m) shall have been obtained.
(i) The making of the Loans shall not contravene any Law applicable to
any Borrower, any Agent 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.
(k) The Lenders shall have received copies of the Annual Statements
and the Interim Statements 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 Closing Date.
(n) The Administrative Agent shall have received such other documents
as any Lender or its counsel may have reasonably requested.
6.02 Each Additional Loan. At the time of making any Loans other than any
Loans made on the Closing Date hereunder, and after giving effect to the
proposed borrowings: the representations and warranties of the Borrowers
contained in Article V shall be true on and as of the date of such Loan 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 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.
6.03 Subsequent Effective Date. On the Subsequent Effective Date and prior
to the Lenders making any Loans to UK Superstore:
(a) There shall be delivered to the Administrative Agent for the
benefit of each Lender a letter agreement from UK Superstore agreeing to be
bound by this Agreement as a Borrower (but not as a Guarantor) and a letter
agreement from each Subsidiary of UK Superstore agreeing to be bound by this
Agreement as a Guarantor only in respect of the obligations of UK Superstore.
(b) The representations and warranties of each of the Borrowers
contained in Article V shall be true and accurate with respect to UK Superstore
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 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 UK Superstore, dated the Subsequent Effective
Date and signed by an Authorized Officer of UK Superstore, 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 UK Superstore, certifying
as appropriate as to:
(i) all corporate action taken by UK Superstore 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
UK Superstore 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 UK Superstore 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 6.01(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
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
UK Superstore, 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 UK Superstore 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 VII
COVENANTS
7.01 Affirmative Covenants. The Borrowers, jointly and severally, covenant
and agree that until payment in full of the Loans and interest thereon,
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 7.02(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.
(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.
(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 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.
(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 Befefit 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 7.01(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 seasonal working capital and general corporate purposes, 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 7.02(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 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 7.01(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 VIII 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.
(m) Clean Down. During the period beginning on the last Business Day
in December and ending 60 days thereafter each year (the "Clean Down Period"),
the Borrowers shall cause the aggregate amount of Revolving Credit Loans and
Swing Loans outstanding to be $0. Notwithstanding the foregoing, in calculating
the Revolving Credit Loans outstanding during any Clean Down Period, the
Borrowers may exclude any Revolving Credit Loans made to Books Holding, Borders
(UK) and, after the Subsequent Effective Date, UK Superstore only to the extent
the Commitments (as defined in the Prior Credit Agreement) exceed the Total
Facility Usage (as defined in the Prior Credit Agreement) under the Prior Credit
Agreement.
7.02 Negative Covenants. The Borrowers, jointly and severally, covenant and
agree that until payment in full of the Loans and interest thereon, 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 Closing Date as set forth on
Schedule 7.02(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 7.02(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;
(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 7.02(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 (A) $10,000,000 in the first or second Fiscal Quarter or (B)
$20,000,000 in the third or fourth Fiscal Quarter; or unsecured 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 pro forma 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 7.02;
(xii) Indebtedness of the Borrowers under the Lease Financing
Guarantee, so long as the conditions specified in Section 7.02(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; and
(xiii) Indebtedness under the Prior Credit Agreement.
(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 7.02(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
7.02(u);
(x) Contingent Obligations of the Company or any Unrestricted
Subsidiary which is a Domestic Subsidiary in respect of all obligations of any
Unrestricted Subsidiary which is a Foreign Subsidiary or any wholly-owned
Restricted Subsidiary which is a Foreign Subsidiary, other than operating lease
obligations, subject to Section 7.02(u);
(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 or any
wholly-owned Restricted Subsidiary which is a Foreign Subsidiary; provided that
the portion of all such Contingent Obligations which constitutes 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 or otherwise) not in excess of an aggregate of $50,000,000
in any Fiscal Year with respect to all Unrestricted Subsidiaries which are
Foreign Subsidiaries and wholly-owned Restricted 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 7.02(u);
(vi) 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 pro forma 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;
(vii) 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 7.02(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 pro forma
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 7.02(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) loans and advances, in addition to those permitted under
Section 7.02(d)(ii), to employees in an aggregate principal amount not to exceed
$10,000,000;
(ix) 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 7.02(u), and for purposes of
this clause (ix) Section 7.02(d) the reference to "Domestic Subsidiary" in the
definition of Permitted Joint Venture Activity shall include any Subsidiary
organized under the laws of Canada or any province thereof; (x) 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 7.02(u);
(xi) repurchases of the Company's common stock in accordance with
Section 7.02(e); and
(xii) 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 (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 9.01(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 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 5.01(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 7.02(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.
(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 1999 to exceed 55% or (ii) 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)
$453,450,000 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 April 26, 1999 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.
(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 V 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 7.03(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 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 7.02, (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 7.02(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 7.02(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 7.02,
the Company shall not, and shall not permit any of its Subsidiaries to (i) incur
any Contingent Obligation permitted under Section 7.02(c)(ix) or (x), or (ii)
make any Investment permitted under Section 7.02(d)(v) [Foreign Investments],
Section 7.02(d)(vii) [Foreign Purchases], Section 7.02(d)(ix) in respect of a
Foreign Joint Venture [Foreign Joint Venture Activities], Section 7.02(d)(x) 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. For purposes of this
Section 7.02(u), the term "Foreign Joint Venture" shall not include any such
corporation, partnership, limited liability company, joint venture or other
entity organized under the laws of Canada or any province thereof.
(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 7.02(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 VIII 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.
7.03 Reporting Requirements. The Borrowers, jointly and severally, covenant
and agree that until payment in full of the Loans and interest thereon,
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 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 7.03(a) and 7.03(b), a certificate of the Company
signed by an Authorized Officer of the Company, in the form of Exhibit 7.03(c),
(i) to the effect that, the representations and warranties of the Borrowers
contained in Article V 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 7.02 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.
(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:
(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).
ARTICLE VIII
GUARANTIES
8.01 Guaranty of Payment and Performance of Guaranteed Obligations. Subject
to Section 8.10 hereof, 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 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.
8.02 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 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.
8.03 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, 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 and the Swing Lenders
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' or the Swing Lenders' 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' or the
Swing Lenders' 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 and the Borrowers (or, in the case of a
Guarantor/Borrower, any other Borrower).
8.04 Waiver of Subrogation. Until payment in full of the Guaranteed
Obligations, 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 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 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.
8.05 Actions with Respect to Collateral. Each Guarantor authorizes the
Agents, the Lenders and the Swing Lenders 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 and the Swing Lenders 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 Closing 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 or the Swing Lenders 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 11.06. Each Guarantor consents and
agrees that none of the Agents nor the Lenders nor the Swing Lenders shall be
under any obligation to marshal any assets in favor of such Guarantor or against
or in payment of any or all of the Guaranteed Obligations.
8.06 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 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.
8.07 Survival of Guaranty. Subject to provisions of Section 8.06, the
guaranty of each Guarantor hereunder shall continue in effect until payment in
full of the Guaranteed Obligations, 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.
8.08 Right of Set-Off. If an Event of Default shall occur and be
continuing, the Agents, any Lender or Swing Lender to whom any obligation is
owed by any Guarantor hereunder or under any other Loan Document or any
participant of such Lender, or Swing Lender which has agreed in writing to be
bound by the provisions of Section 10.12 and any branch, Subsidiary or Affiliate
of such Lender, Swing Lender 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 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 participant or such branch, Subsidiary or Affiliate. Such right
shall exist whether or not any Agent, Lender, or Swing Lender 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 or Swing Lender.
8.09 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 VIII to the contrary, the aggregate amount of
such liability shall, without any further action of the Agents, the Lenders, the
Swing Lenders 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 Closing Date by any additional Guarantor if
required by applicable Law.
8.10 Limitation on Scope of Certain Guarantees. Notwithstanding anything in
this Article VIII to the contrary, on and after the Subsequent Effective Date,
the Guaranteed Obligations of the Subsidiaries of UK Superstore under the letter
agreements which they will execute and deliver on such Subsequent Effective
Date, will only be those Obligations of UK Superstore and not any Obligations of
other Borrowers hereunder.
ARTICLE IX
DEFAULT
9.01 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 7.01(j), 7.01(m), Section 7.02
or 7.03(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 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 7.02(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 5.01(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;
(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.
9.02 Consequences of Event of Default.
(a) If an Event of Default specified under subsections (a) through
(h), (j) through (m) or subsection (p) of Section 9.01 shall occur and be
continuing, the Lenders and the Agents shall be under no further obligation to
make Loans and (i) the Administrative Agent may, and upon the request of the
Required Lenders shall, by written notice to the Company, cancel the
Commitments, and (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 of
the Borrowers to the Lenders, and the Swing Lenders 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
(b) If an Event of Default specified under subsections (i), (n) or (o)
of Section 9.01 shall occur, the Commitments shall automatically terminate and
be of no further force and effect, the Agents, the Lenders and the Swing Lenders
shall be under no further obligations to make Loans 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 and the Swing Lenders 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 an Event of Default shall occur and be continuing, the Agents,
any Lender or Swing Lender to whom any Obligation is owed by any Borrower
hereunder or under any other Loan Document or any participant of such Lender,
Swing Lender which has agreed in writing to be bound by the provisions of
Section 10.12 and any branch, Subsidiary or Affiliate (including any Lending
Office) of such Lender, Swing Lender 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 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 participant or such branch, Subsidiary or
Affiliate. Such right shall exist whether or not any Agent, Lender or Swing
Lender 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 or Swing Lender; and
(d) 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 9.02, any Agent, or any Lender or any Swing Lender,
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; and
(e) From and after the date on which the Administrative Agent has
taken any action pursuant to this Section 9.02 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 Arranger,
the Documentation Agent and the Lenders for out-of-pocket costs, expenses and
disbursements, including reasonable attorneys' and paralegals' fees and legal
expenses, incurred by the Administrative Agent, the Arranger, the Documentation
Agent and the Lenders 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 and the Swing Lenders
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.
(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 X
THE AGENTS
10.01 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 PNC Capital Markets, Inc. to act as
Arranger. 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 Arranger 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 Arranger by
the terms hereof, together with such powers as are reasonably incidental
thereto. PNC Bank agrees to act as the Administrative Agent and PNC Capital
Markets, Inc. agrees to act as Arranger on behalf of the Lenders to the extent
provided in this Agreement.
10.02 Delegation of Duties. Each of the Administrative Agent and the
Arranger 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 10.05 and 10.06, 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.
10.03 Nature of Duties; Independent Credit Investigation. The Documentation
Agent identified in this Agreement shall have no duties or responsibilities
hereunder, other than as a Lender. The Administrative Agent and the Arranger
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 Administrative Agent and the Arranger shall be
mechanical and administrative in nature; the Administrative Agent and the
Arranger shall not have by reason of this Agreement a fiduciary or trust
relationship in 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
Administrative Agent 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
Administrative Agent or the Arranger 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
neither the Administrative Agent nor the Arranger has made any representations
or warranties to it and that no act by the Administrative Agent or the Arranger
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 the Administrative Agents or the Arranger, 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 neither the Administrative Agent nor the
Arranger 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.
10.04 Actions in Discretion of Agents; Instructions from the Lenders. Each
of the Administrative Agent and the Arranger 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 neither the Administrative Agent nor the Arranger 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 of the Administrative Agent and the Arranger 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 10.05. Subject to the
provisions of Section 10.05, no Lender shall have any right of action whatsoever
against the Administrative Agent or the Arranger 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.
10.05 Exculpatory Provisions. Neither the Administrative Agent nor the
Arranger 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 of Default or Potential Default. Neither the Administrative Agent nor the
Arranger 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 or any of the Loan Documents.
10.06 Reimbursement and Indemnification of Agents by Lenders. Each Lender
agrees to reimburse and indemnify each of the Administrative Agent and the
Arranger (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 the Administrative Agent or the Arranger, 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 the Administrative Agent or the
Arranger 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 the gross negligence or willful misconduct of the Administrative
Agent, 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 Administrative Agent and
the Arranger (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.
10.07 Reliance by Agents. Each of the Administrative Agent and the Arranger
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 Administrative Agent or the Arranger. Each of the
Administrative Agent and the Arranger 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.
10.08 Notice of Default. Neither the Administrative Agent nor the Arranger
shall 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."
10.09 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.
10.10 Lenders in Their Individual Capacities. With respect to its
Commitments, the Revolving Credit Loans and the Swing Loans made by it, the
Administrative Agent and the Arranger 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 Administrative Agent and the Arranger in their individual capacity.
PNC Bank, PNC Capital Markets, Inc. 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
Administrative Agent and the Arranger, 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.
10.11 [RESERVED].
10.12 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 3.03(b), 4.04(b), 4.06 or 11.03. 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.
10.13 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 whether the Required Lenders have requested such resignation) or
required by Section 4.04(b), in either case of (i) or (ii) by giving not less
than thirty (30) days' prior written notice to the Company. The Arranger (i) may
resign as Arranger or (ii) shall resign if such resignation is requested by the
Required Lenders (if the Arranger is a Lender, the Arranger's Loans and its
Commitment shall be considered in determining whether the Required Lenders have
requested such resignation) or required by Section 4.04(b), in either case of
(i) or (ii), by giving not less than thirty (30) days' prior written notice to
the Company. If the Administrative Agent or the Arranger 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 Arranger, 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 "Arranger" 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
the Administrative Agent or the Arranger hereunder, the provisions of this
Article X 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.
10.14 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.
10.15 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 or Swing Lender whether in
respect of the Loans, Fees or any other amounts due to the Agents, the Lenders
or the Swing Lenders under this Agreement. In the event an error in computing
any amount payable to any Agent, Lender or Swing Lender is made, the
Administrative Agent, the Borrowers and each affected Agent, Lender or Swing
Lender 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 in an Optional Currency.
10.16 Beneficiaries. Except as expressly provided herein, the provisions of
this Article X are solely for the benefit of the Administrative Agent, the
Arranger, the Lenders, the Swing Lenders, 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 Administrative Agent and the
Arranger 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 XI
MISCELLANEOUS
11.01 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 $200,000,000;
(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 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 4.02, 7.01(m), 10.05 or 10.12, this Section 11.01
or Section 11.11, 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
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 Arranger in its capacity as Arranger shall be effective
without the written consent of the Arranger. 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 Documentation Agent in its capacity as Documentation Agent
shall be effective without the written consent of the Documentation Agent. 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.
11.02 No Implied Waivers; Cumulative Remedies; Writing Required. No course
of dealing and no delay or failure of the Administrative Agent, the Arranger,
the Documentation Agent, any Swing Lender or any Lender in exercising any right,
power, remedy or privilege under this Agreement (including without limitation
Article VIII 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 Arranger, the Documentation Agent and the Lenders
under this Agreement (including without limitation Article VIII 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 of any breach or default under this
Agreement (including without limitation Article VIII hereof) or any such waiver
of any provision or condition of this Agreement (including without limitation
Article VIII whereof) must be in writing and shall be effective only to the
extent specifically set forth in such writing.
11.03 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 VIII 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 VIII
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 VIII 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 to save such
Lender 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 ) incurred by such Lender (A) in connection with the
enforcement of this Agreement (including without limitation Article VIII 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 VIII 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 , in its capacity
as such, in any way relating to or arising out of this Agreement (including
without limitation Article VIII and Section 10.06 hereof) or any other Loan
Documents or any action taken or omitted by such Lender 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
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 will attempt to minimize the fees and
expenses of legal counsel for the Lenders which are subject to reimbursement by
the Borrowers hereunder by considering the usage of one law firm to represent
the Lenders and the Agents if appropriate under the circumstances.
11.04 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.
11.05 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 11.05 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 3.03 or 4.06 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.
(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 11.05(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 3.03 or 4.06) which would otherwise not
be incurred.
11.06 Notices; Lending Offices. All notices, requests, demands, directions
and other communications (as used in this Section 11.06 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.
11.07 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.
11.08 Governing Law. 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 in accordance with the internal laws of the State of
Illinois without regard to its conflict of laws principles.
11.09 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.
11.10 Duration; Survival. All representations and warranties of the
Borrowers contained herein or made in connection herewith shall survive the
making of Loans and shall not be waived by the execution and delivery of this
Agreement, any investigation by the Agents, the Lenders, the making of Loans 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 IV and Section 11.03, shall survive payment in full of the
Loans and termination of the Commitments.
11.11 Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the Lenders, the Agents, 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 Section 2.01(b), or to any other Lender
(subject to the further clauses below), all or any portion of its Commitment;
(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; (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; (v) any assignment must be made
pursuant to an Assignment and Assumption Agreement, and (vi) 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 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 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 10.12, 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 11.01. 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 3.03, 4.06, 8.08, 9.02(c) and Sections
11.03(b).
(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 11.18 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
11.18. 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 11.12.
(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.
11.12 Confidentiality.
(a) The Agents and the Lenders each agree to keep confidential all
information obtained from the Company or any of its 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
11.11, (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 11.12 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.
11.13 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.
11.14 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.
11.15 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.
11.16 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 11.06 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.
11.17 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.
11.18 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 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.
<PAGE>
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 VIII
By: /s/ Bruce A. Quinnell
Title: Vice Chairman
Address for Notices:
100 Phoenix Drive
Ann Arbor, Michigan 48108
Telecopier No. (734) 477-1370
Attention: Thomas D. Carney
Telephone No. (734) 477-1977
BORDERS, INC., as Borrower and
as Guarantor under Article VIII
By: /s/ Bruce A. Quinnell
Title: Vice Chairman
Address for Notices:
c/o Borders Group, Inc.
100 Phoenix Drive
Ann Arbor, Michigan 48108
Telecopier No. (734) 477-1370
Attention: Thomas D. Carney
Telephone No. (734) 734-1977
<PAGE>
WALDEN BOOK COMPANY, INC., as
Borrower and as Guarantor under
Article VIII
By: /s/ Robert F. DiRomualdo
Title: Chairman and CEO
Address for Notices:
c/o Borders Group, Inc.
100 Phoenix Drive
Ann Arbor, Michigan 48108
Telecopier No. (734) 477-1370
Attention: Thomas D. Carney
Telephone No. (734) 477-1977
BGP (UK) LIMITED, as Borrower and
as Guarantor under Article VIII
By: /s/ Robert F. DiRomualdo
Title: Director
Address for Notices:
c/o Borders Group, Inc.
100 Phoenix Drive
Ann Arbor, Michigan 48108
Telecopier No. (734) 477-1370
Attention: Thomas D. Carney
Telephone No. (734) 477-1977
BORDERS (UK) LIMITED, as Borrower
By: /s/ Robert F. DiRomualdo
Title: Director
Address for Notices:
c/o Borders Group, Inc.
100 Phoenix Drive
Ann Arbor, Michigan 48108
Telecopier No. (734) 477-1370
Attention: Thomas D. Carney
Telephone No. (734) 477-1977
<PAGE>
PLANET MUSIC, INC., as
Guarantor under Article VIII
By: /s/ Bruce A. Quinnell
Title:
Address for Notices:
c/o Borders Group, Inc.
100 Phoenix Drive
Ann Arbor, Michigan 48108
Telecopier No. (734) 477-1370
Attention: Thomas D. Carney
Telephone No. (734) 477-1977
BORDERS PROPERTIES, INC., as
Guarantor under Article VIII
By: /s/ Bruce A. Quinnell
Title:
Address for Notices:
c/o Borders Group, Inc.
100 Phoenix Drive
Ann Arbor, Michigan 48108
Telecopier No. (734) 477-1370
Attention: Thomas D. Carney
Telephone No. (734) 477-1977
WALDENBOOKS PROPERTIES, INC. as
Guarantor under Article VIII
By: /s/ Bruce A. Quinnell
Title:
Address for Notices:
c/o Borders Group, Inc.
100 Phoenix Drive
Ann Arbor, Michigan 48108
Telecopier No. (734) 477-1370
Attention: Thomas D. Carney
Telephone No. (734) 477-1977
BORDERS ONLINE, INC., as
Guarantor under Article VIII
By: /s/ Bruce A. Quinnell
Title: Vice President - Finance; Treasurer
Address for Notices:
c/o Borders Group, Inc.
100 Phoenix Drive
Ann Arbor, Michigan 48108
Telecopier No. (734) 477-1370
Attention: Thomas D. Carney
Telephone No. (734) 477-1977
<PAGE>
BORDERS OUTLET, INC., as
Guarantor under Article VIII
By: /s/ Bruce A. Quinnell
Title: Vice Chairman
Address for Notices:
c/o Borders Group, Inc.
100 Phoenix Drive
Ann Arbor, Michigan 48108
Telecopier No. (734) 477-1370
Attention: Thomas D. Carney
Telephone No. (734) 477-1977
BORDERS FULFILLMENT, INC., as
Guarantor under Article VIII
By: /s/ Robert F. DiRomualdo
Title: Chairman and CEO
Address for Notices:
c/o Borders Group, Inc.
100 Phoenix Drive
Ann Arbor, Michigan 48108
Telecopier No. (734) 477-1370
Attention: Thomas D. Carney
Telephone No. (734) 477-1977
THE LIBRARY, LTD., as
Guarantor under Article VIII
By: /s/ Bruce A. Quinnell
Title: Vice Chairman
Address for Notices:
c/o Borders Group, Inc.
100 Phoenix Drive
Ann Arbor, Michigan 48108
Telecopier No. (734) 477-1370
Attention: Thomas D. Carney
Telephone No. (734) 477-1977
<PAGE>
PNC BANK, NATIONAL ASSOCIATION,
as Administrative Agent
By: /s/ Nancy Chiles
Title: Vice President
PNC CAPITAL MARKETS, INC.,
as Arranger
By: /s/ Thomas V. Kondrak
Title: Managing Director
FLEET NATIONAL BANK,
as Documentation Agent
By: /s/ Robert T.P. Storer
Title: Senior Vice President
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Nancy Chiles
Title: Vice President
FLEET NATIONAL BANK
By: /s/ Robert T.P. Storer
Title: Senior Vice President
BANQUE NATIONALE DE PARIS
By: /s/ Arnaud Collin du Bocage
Title: Executive Vice President & General
Manager
KEY BANK NATIONAL ASSOCIATION
By: /s/ J.T. Taylor
Title: Vice President
SUNTRUST BANK, ATLANTA
By: /s/ Charles C. Pick
Title: Vice President
WACHOVIA BANK, N.A.
By: /s/ Todd J. Eagle
Title: Vice President
THE BANK OF NEW YORK
By: /s/ Michael Flannery
Title: Vice President
MERCANTILE BANK NATIONAL ASSOCIATION
By: /s/ Steve Reese
Title: Vice President
UNION BANK OF CALIFORNIA, N.A.
By: /s/ Timothy P. Streb
Title: Vice President