$200,000,000
REVOLVING CREDIT FACILITY
Dated as of July 24, 1997
Among
NORDSTROM, INC.
as Borrower,
THE FINANCIAL INSTITUTIONS NAMED HEREIN
as Lenders,
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION
and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Managing Agents,
and
NATIONSBANK OF TEXAS, N.A.
as Agent
TABLE OF CONTENTS
Page
ARTICLE 1. DEFINITIONS AND RELATED MATTERS 1
Section 1.1 Definitions 1
Section 1.2 Related Matters 14
ARTICLE 2. AMOUNTS AND TERMS OF THE CREDIT FACILITIES 15
Section 2.1 Revolving Loan 15
Section 2.2 Bid Loans 17
Section 2.3 Use of Proceeds 19
Section 2.4 Interest; Interest Periods; Conversion/Continuation 20
Section 2.5 Notes, Etc. 22
Section 2.6 Fees 22
Section 2.7 Termination, Reduction and Extension of Revolving
Commitments 23
Section 2.8 Repayments and Prepayments 23
Section 2.9 Manner of Payment 24
Section 2.10 Pro Rata Treatment; Application of Payments 24
Section 2.11 Mandatory Suspension and Conversion of Euro-Dollar
Rate Loans 25
Section 2.12 Regulatory Changes 26
Section 2.13 Compensation for Funding Losses 27
Section 2.14 Certificates Regarding Yield Protection, Etc. 27
Section 2.15 Applicable Lending Office; Discretion of Lenders as to
Manner of Funding 27
ARTICLE 3 CONDITIONS TO LOANS 28
Section 3.1 Closing Conditions 28
Section 3.2 Conditions Precedent to Loans 28
ARTICLE 4 REPRESENTATIONS AND WARRANTIES 29
Section 4.1 Organization, Powers and Good Standing 29
Section 4.2 Authorization, Binding Effect, No Conflict, Etc. 29
Section 4.3 Financial Information 30
Section 4.4 No Material Adverse Changes 30
Section 4.5 Litigation 30
Section 4.6 Agreements; Applicable Law 31
Section 4.7 Taxes 31
Section 4.8 Governmental Regulation 31
Section 4.9 Margin Regulations 31
Section 4.10 Employee Benefit Plans 31
Section 4.11 Disclosure 32
Section 4.12 Solvency 32
i
Page
ARTICLE 5 AFFIRMATIVE COVENANTS OF THE BORROWER 32
Section 5.1 Financial Statements and Other Reports 32
Section 5.2 Records and Inspection 34
Section 5.3 Corporate Existence, Etc. 34
Section 5.4 Payment of Taxes and Claims 34
Section 5.5 Maintenance of Properties 34
Section 5.6 Maintenance of Insurance 34
Section 5.7 Conduct of Business; Compliance with Law 35
Section 5.8 Further Assurances 35
Section 5.9 Future Information 35
Section 5.10 Subordination of Intercompany Debt 35
ARTICLE 6 NEGATIVE COVENANTS OF THE BORROWER 35
Section 6.1 Liens 35
Section 6.2 Restricted Payments 37
Section 6.3 37
Financial Covenants 37
Section 6.4 Restriction on Fundamental Changes 37
Section 6.5 Asset Dispositions 38
Section 6.6 Transactions with Affiliates 38
Section 6.7 Amendments of Investment Agreement 38
ARTICLE 7 EVENTS OF DEFAULT, ETC. 39
Section 7.1 Events of Default 39
Section 7.2 Remedies 41
ARTICLE 8 THE AGENT AND THE LENDERS 41
Section 8.1 Authorization and Action 41
Section 8.2 Exculpation; Agent's Reliance, Etc. 42
Section 8.3 Agent and Affiliates 43
Section 8.4 Lender Credit Decision 43
Section 8.5 Indemnification 43
Section 8.6 Successor Agent 44
Section 8.7 Excess Payments 44
Section 8.8 Lender Parties 44
Section 8.9 Payments; Availability of Funds; Certain Notices 45
Section 8.10 Obligations of Lender Parties Several; Enforcement by
the Agent 45
Section 8.11 Managing Agents 46
ARTICLE 9 MISCELLANEOUS 46
Section 9.1 Expenses 46
ii
Page
Section 9.2 Indemnity 46
Section 9.3 Waivers; Modifications in Writing 47
Section 9.4 Cumulative Remedies; Failure or Delay 48
Section 9.5 Notices, Etc. 48
Section 9.6 Successors and Assigns 48
Section 9.7 Choice of Forum 51
Section 9.8 Set Off 51
Section 9.9 Changes in Accounting Principles 51
Section 9.10 Survival of Agreements, Representations and
Warranties 52
Section 9.11 Execution in Counterparts 52
Section 9.12 Complete Agreement 52
Section 9.13 Limitation of Liability 52
Section 9.14 WAIVER OF TRIAL BY JURY 52
Section 9.15 NO ORAL AGREEMENT 52
iii
EXHIBITS
Exhibit A-1 Form of Revolving Loan Note
Exhibit A-3 Form of Bid Loan Note
Exhibit B Form of Designation Agreement
Exhibit E-1 Form of Notice of Borrowing
Exhibit E-3 Form of Notice of Conversion/Continuation
Exhibit E-4 Form of Bid Loan Quote Request
Exhibit E-5 Form of Bid Loan Quote
Exhibit E-7 Form of Notice of Responsible Officers
Exhibit F-1 Form of Secretary's Certificate
Exhibit F-3 Form of Closing Officer's Certificate
Exhibit F-6 Form of Compliance Certificate
Exhibit G Form of Opinion of Borrower's Counsel
Exhibit H Form of Assignment and Acceptance
Exhibit I Controlling Stockholders
SCHEDULES
Schedule 1.1A Revolving Commitments
Schedule 1.1B Lender Information
Schedule 1.1D Existing Liens
Schedule 3.1.2. Closing Documents
Schedule 4.1. Organization of Borrower and Subsidiaries
Schedule 4.5. Material Litigation
Schedule 9.5. Borrower Information
CREDIT AGREEMENT
CREDIT AGREEMENT, dated as of July 24, 1997 (as amended, supplemented
or otherwise modified from time to time, the "Agreement"), by and among
NORDSTROM, INC., a Washington corporation (the "Borrower"), the banks and
other financial institutions that either now or in the future are parties
hereto (collectively the "Lenders" and each individually a "Lender"), BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION and MORGAN GUARANTY TRUST
COMPANY OF NEW YORK, as Managing Agents (the "Managing Agents"), and
NATIONSBANK OF TEXAS, N.A. (the "Agent Bank"), as agent and representative for
the Lenders (in such capacity the Agent Bank and any successor in such
capacity is referred to herein as the "Agent"). The Lenders, the Agent and
the Managing Agents are collectively referred to herein as the "Lender
Parties" and each individually as a "Lender Party".
ARTICLE 1.
DEFINITIONS AND RELATED MATTERS
Section 1.1 Definitions. The following terms with initial capital
letters have the following meanings:
"Absolute Rate" is defined in Section 2.2.2.3.
"Affiliate" means, with respect to any Person, any other
Person that, directly or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, such first
Person. The term "control" means the possession, directly or indirectly,
of the power, whether or not exercised, to direct or cause the
direction of the management or policies of a Person, whether through the
ownership of Capital Stock by contract or otherwise, and the terms
"controlled" and "common control" have correlative meanings. Unless otherwise
indicated, "Affiliate" refers to an Affiliate of the Borrower.
Notwithstanding the foregoing, in no event shall any Lender Party or any
Affiliate of any Lender Party be deemed to be an Affiliate of the Borrower.
"Agent" is defined in the Preamble.
"Agent Bank" is defined in the Preamble.
"Agent's Account" means the account of the Agent
identified as such on Schedule 1.1.B, or such other account as the Agent may
hereafter designate by notice to the Borrower and each Lender Party.
"Agent's Office" means the office of the Agent identified
as such on Schedule 1.1.B, or such other office as the Agent may hereafter
designate by notice to the Borrower and each Lender Party.
1
"Agreement" is defined in the Preamble and includes all
Schedules and Exhibits.
"Applicable Law" means all applicable provisions of all
(i) constitutions, treaties, statutes, laws, rules, regulations and ordinances
of any Governmental Authority, (ii) Governmental Approvals and (iii) orders,
decisions, judgments, awards and decrees of any Governmental Authority.
"Applicable Lending Office" means, with respect to any
Lender, (i) in the case of any payment with respect to Euro-Dollar Rate Loans,
the Lender's Euro-Dollar Lending Office, and (ii) in the case of any payment
with respect to Base Rate Loans or Bid Loans or any other payment under the
Loan Documents, the Lender's Domestic Lending Office.
"Applicable Margin" means, at any time, with respect to
the Facility Fee, Euro-Dollar Rate Loans and Base Rate Loans, as applicable,
the basis points (1/100%) per annum in respect of the Facility Fee, Euro-
Dollar Rate Loans or Base Rate Loans, as applicable, set forth in the table
below for the Level then in effect (as described below):
Level I Level II Level III Level IV Level V Level VI
Facility Fee 5.50 6.25 6.50 7.50 8.50 12.50
Euro-Dollar
Rate Loans 12.00 12.75 13.50 15.00 16.50 17.50
Base Rate
Loans 0 0 0 0 0 0
<FN>
For purposes of the foregoing table, except as provided below:
"Level I" exists at any date if, on such date, the Borrower's
long-term debt is rated AA- or higher by S&P or Aa3 or higher by Moody's.
"Level II" exists at any date if, on such date, (i) the Borrower's
long-term debt is rated A+ by S&P or A1 by Moody's and (ii) Level I does not
exist at such date.
"Level III" exists at any date if, on such date, (i) the
Borrower's long-term debt is rated A by S&P or A2 by Moody's and (ii) neither
Level I nor Level II exists at such date.
"Level IV" exists at any date if, on such date, (i) the Borrower's
long-term debt is rated A- by S&P or A3 by Moody's and (ii) none of Level I,
Level II and Level III exists at such date.
2
"Level V" exists at any date if, on such date, (i) the Borrower's
long-term debt is rated BBB+ by S&P or Baa1 by Moody's and (ii) none of Level
I, Level II, Level III and Level IV exists at such date.
"Level VI" exists at any date if, on such date, (i) the Borrower's
long-term debt is rated BBB or lower by S&P or Baa2 or lower by Moody's or is
rated by neither S&P nor Moody's and (ii) none of Level I, Level II, Level
III, Level IV and Level V exists at such date.
The credit ratings to be utilized for purposes of determining a Level
hereunder are those assigned to the senior unsecured long-term debt of the
Borrower without third-party credit enhancement, and any rating assigned to
any other Debt of the Borrower shall be disregarded. The rating in effect at
any date is that in effect at the close of business on such date.
"Assignment and Assumption" is defined in Section 9.6.2.
"Bankruptcy Code" means Title 11 of the United States Code (11 U.S.C.
Section 101 et seq.), as amended from time to time.
"Base Rate" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to the higher
of: (a) the rate of interest announced publicly by the Agent Bank from time to
time as the Agent Bank's prime rate; and (b) 1/2 of one percent per annum
above the Federal Funds Rate.
"Base Rate Loan" means a Revolving Loan, or portion thereof, that
bears interest by reference to the Base Rate.
"Bid Loan" is defined in Section 2.2.1.
"Bid Loan Borrowing" is defined in Section 2.2.1.
"Bid Loan Note" means a Bid Loan Note of the Borrower, in
substantially the form of Exhibit A-3, payable to a Lender, evidencing the
obligation of the Borrower to repay the Bid Loans made by the Lender, and
includes any Note issued in exchange or substitution therefor.
"Bid Loan Quote" is defined in Section 2.2.2.2.
"Bid Loan Quote Request" is defined in Section 2.2.2.1.
"Borrower" is defined in the Preamble.
"Borrower Account" means the account of the Borrower identified as
such on Schedule 9.5., or such other account as the Borrower may hereafter
designate by notice to the Agent, with the prior consent of the Agent (such
consent not to be withheld or delayed so
3
long as the designation of such account would not prevent the Agent from
satisfying its obligations hereunder in a timely manner).
"Borrowing" means a contemporaneous borrowing of Loans of the same
Type.
"Business Day" means any day that (i) is not a Saturday, Sunday or
other day on which banks in Seattle, Washington, Los Angeles, California or
Dallas, Texas, are authorized or obligated to close and (ii) if the applicable
Business Day relates to any Euro-Dollar Rate Loans, is a Euro-Dollar Business
Day.
"Capital Stock" means, with respect to any Person, all (i) shares,
interests, participations or other equivalents (howsoever designated) of
capital stock and other equity interests of such Person and (ii) rights (other
than debt securities convertible into capital stock or other equity
interests), warrants or options to acquire any such capital stock or other
equity interests.
"Capitalized Leases" means, as to any Person, all leases of such
Person of real or personal property that are required to be capitalized on the
balance sheet of such Persons. The amount of any Capitalized Lease shall be
the capitalized amount thereof.
"Change of Control" means any Person or two or more Persons acting in
concert (other than the Controlling Stockholders) shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 of the Securities and
Exchange Commission under the Securities Exchange Act of 1934), directly or
indirectly, of Voting Stock of the Borrower (or other securities convertible
into such Voting Stock) representing 35% or more of the combined
voting power of all Voting Stock of the Borrower.
"Closing Date" means July 31, 1997 or such earlier date on which all
conditions set forth in Section 3.1. have been satisfied.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Compliance Certificate" is defined in Section 5.1.3.
"Contingent Obligation" means, as to any Person, any obligation,
direct or indirect, contingent or otherwise, of such Person (i) with respect
to any Debt or other obligation of another Person, including any direct or
indirect guarantee of such Debt (other than any endorsement for collection in
the ordinary course of business) or any other direct or indirect obligation,
by agreement or otherwise, to purchase or repurchase any such Debt or
obligation or any security therefor, or to provide funds for the payment or
discharge of any such Debt or obligation (whether in the form of loans,
advances, stock purchases, capital contributions or otherwise), (ii) to
provide funds to maintain the financial condition of any other Person, or
(iii) otherwise to assure or hold harmless the holders of Debt or other
obligations of another Person against loss in respect thereof. The amount of
any Contingent
4
Obligation under clause (i) or (ii) shall be the greater of (a) the amount of
the Debt or obligation guaranteed or otherwise supported thereby, or (b) the
maximum amount guarantied or supported by the Contingent Obligation. The term
"Contingent Obligation," as used with respect to the Borrower, shall not
include the obligations of the Borrower under the Investment Agreement or any
other obligation which the Borrower does or may have to sell to, repurchase
from or indemnify the purchaser with respect to accounts discounted or sold by
the Borrower in the ordinary course of its business (but any such other
obligation shall be excluded only to the extent that such other obligation is
not for the benefit, directly or indirectly, of any Person that is not a
wholly owned Subsidiary (direct or indirect) of the Borrower).
"Contractual Obligation" means, as applied to any Person, any
provision of any security issued by that Person or of any indenture, agreement
or other instrument to which that Person is a party or by which it or any of
the properties owned or leased by it is bound or otherwise subject.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (irrespective of whether
incorporated) that, together with the Borrower or any Subsidiary, are or were
treated as a single employer under Section 414 of the Code.
"Controlling Stockholders" means the individuals listed on Exhibit I
hereto and the spouse and lineal descendants of any such individual.
"Debt" means, with respect to any Person, the aggregate amount of,
without duplication: (i) all obligations for borrowed money; (ii) all
obligations evidenced by bonds, debentures, notes or other similar
instruments; (iii) all obligations to pay the deferred purchase price of
property or services, except trade accounts payable not overdue arising in the
ordinary course of business; (iv) all Capitalized Leases; (v) all obligations
of others secured by a Lien on any asset owned by such Person or Persons
whether or not such obligation or liability is assumed; (vi) all obligations
of such Person or Persons, contingent or otherwise, in respect of any letters
of credit or bankers' acceptances; and (vii) all Contingent Obligations.
"Default" means any condition or event that, with the giving of notice
or lapse of time or both, would, unless cured or waived, become an Event of
Default.
"Designated Bidder" means (a) a bank or other financial institution or
(b) a special purpose corporation that is engaged in making, purchasing or
otherwise investing in commercial loans in the ordinary course of its business
and that issues (or the parent of which issues) commercial paper rated at
least "Prime-1" (or the then equivalent grade) by Moody's or "A-1" (or the
then equivalent grade) by S&P that, in the case of either clause (a) or (b),
(i) is organized under the laws of the United States or any State thereof,
(ii) shall have become a party hereto pursuant to Section 9.6 and (iii) is not
otherwise a Lender.
5
"Designation Agreement" means a designation agreement entered into by
a Lender (other than a Designated Bidder) and a Designated Bidder, and
accepted by the Agent, in substantially the form of Exhibit B hereto.
"Dollars" and "$" means lawful money of the United States of America.
"Domestic Lending Office" means the office, branch or Affiliate of any
Lender identified on Schedule 1.1.B as its Domestic Lending Office or such
other office, branch or Affiliate as the Lender may hereafter designate as its
Domestic Lending Office for one or more Types of Loans by notice to the
Borrower and the Agent.
"EBITDAR" means, for any period, net income (or net loss) plus, to the
extent deducted in determining such net income (or net loss), the sum of (a)
interest expense, (b) income tax expense, (c) depreciation expense, (d)
amortization expense and (e) rent expense, in each case determined in
accordance with GAAP for such period.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Event" means (i) (a) the occurrence of a reportable event,
within the meaning of Section 4043 of ERISA with respect to any Plan unless
the 30-day notice requirement with respect to such event has been waived by
the PBGC (provided that a reportable event arising from the disqualification
of a Plan or the distress termination of a Plan under ERISA Section 4041(c)
shall be deemed to be an ERISA Event without regard to the waiver of notice
provided by the PBGC by regulation or otherwise), or (b) the requirements of
subsection (1) of Section 4043(b) of ERISA (without regard to subsection (2)
of such Section) are met with respect to a contributing sponsor, as defined in
Section 4001(a)(13) of ERISA, of a Plan, and an event described in paragraph
(9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is reasonably
expected to occur with respect to such Plan within the following 30 days; (ii)
an application is filed with the Internal Revenue Service for a minimum
funding waiver under Section 412 of the Internal Revenue Code with respect to
a Plan; (iii) the provision by the administrator of any Plan of a notice of
intent to terminate such Plan pursuant to Section 4041(a)(2) of ERISA
(including any such notice with respect to a plan amendment referred to in
Section 4041(e) of ERISA); (iv) the cessation of operations at a facility of
the Borrower or any member of the Controlled Group in the circumstances
described in Section 4062(e) of ERISA; (v) the withdrawal by the Borrower or
any member of the Controlled Group from a Multiple Employer Plan during a plan
year for which it was a substantial employer, as defined in Section 4001(a)(2)
of ERISA; (vi) the conditions for the imposition of a lien under Section
302(f) of ERISA shall have been met with respect to any Plan; (vii) the
adoption of an amendment to a Plan requiring the provision of security to such
Plan pursuant to Section 307 of ERISA; or (viii) the institution by the PBGC
of proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or the
occurrence of any event or condition described in Section 4042 of ERISA that
constitutes grounds for the termination of, or the appointment of a trustee to
administer, a Plan.
6
"Euro-Dollar Business Day" means any Business Day on which commercial
banks are open for international business (including dealings in interbank
Dollar deposits) in London, England.
"Euro-Dollar Lending Office" means the office, branch or Affiliate of
any Lender identified on Schedule 1.1.B as its Euro-Dollar Lending Office or
such other office, branch or Affiliate as the Lender may hereafter designate
as its Euro-Dollar Lending Office by notice to the Borrower and the Agent.
"Euro-Dollar Rate" means, for any Euro-Dollar Rate Loan for any
Interest Period therefor, an interest rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) at all times equal to the rate per
annum obtained by dividing (a) the rate per annum appearing on Telerate Page
3750 (or any successor page) as the London interbank offered rate for deposits
in Dollars at approximately 11:00 a.m. (London time) two Business Days prior
to the first day of such Interest Period for a term comparable to such
Interest Period by (b) a percentage equal to 100% minus the Euro-Dollar Rate
Reserve Requirement in effect from time to time. If for any reason the rate
described in the foregoing clause (a) is not available at the time of
determination of the Euro-Dollar Rate for any Euro-Dollar Rate Loans for any
Interest Period, the term "Euro-Dollar Rate" shall mean, for any such Euro-
Dollar Rate Loans for any such Interest Period therefor, an interest rate per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) at all times
equal to the rate per annum obtained by dividing (i) the rate per annum
appearing on Reuters Screen LIBO Page as the London interbank offered rate for
deposits in U.S. dollars at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period (provided, however, if more than one rate
is specified on Reuters Screen LIBO Page, the applicable rate shall be the
arithmetic mean of all such rates) by (ii) a percentage equal to 100% minus
the Euro-Dollar Rate Reserve Requirement in effect from time to time. The
Euro-Dollar Rate shall be adjusted automatically on and as of the effective
date of any change in the Euro-Dollar Reserve Requirement.
"Euro-Dollar Rate Loan" means a Revolving Loan, or portion thereof,
that bears interest at a rate determined by reference to a Euro-Dollar Rate
(and as to which a single Interest Period is applicable).
"Euro-Dollar Reserve Requirement" means, with respect to any Euro-
Dollar Rate Loan and at any time of determination, the maximum rate at which
reserves (including any marginal, supplemental, special or emergency reserve)
are required to be maintained at such time under Regulation D (or any
successor statute) by member banks of the Federal Reserve System in New York
City with deposits exceeding $5 billion against "Euro-Currency Liabilities,"
as that term is used in Regulation D (or any successor statute) (or in respect
of any other category of liabilities that includes deposits by reference to
which the interest rate on Euro-Dollar Rate Loans is determined or any
category of extensions of credit or other assets that includes loans by a non-
United States office of any bank to United States residents).
"Event of Default" means any of the events specified in Section 7.1.
7
"Excluded Tax" means, with respect to any payment to any Lender Party,
(i) any taxes imposed on or measured by the overall net income (including a
franchise tax based on net income) of such Lender Party by the United States
of America or any political subdivision or taxing authority thereof or
therein, and (ii) any taxes imposed on or measured by the overall net income
(including a franchise tax based on net income) of such Lender Party or its
Agent's Office or Applicable Lending Office in respect of which the payment is
made, by the jurisdiction in which it is incorporated, maintains its principal
executive office or in which such Agent's Office or Applicable Lending Office
is located.
"Existing Liens" means the Liens described on Schedule 1.1.D.
"FDIC" means the Federal Deposit Insurance Corporation or any
successor.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers on such day, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York on the
Business Day next succeeding such day, provided that if such rate is not so
published for any day that is a Business Day, the Federal Funds Rate for such
day shall be the average rate charged to the Agent Bank on such day on such
transactions as determined by the Agent Bank.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any successor thereto.
"Fee Letter" means that certain letter dated May 15, 1997 between the
Borrower and the Agent regarding certain fees relating to this Agreement.
"Fees" means, collectively, the fees described or referenced in
Section 2.6.
"Fiscal Year" means the fiscal year of the Borrower, which shall be
the 12 month-period ending on January 31 in each year or such other period as
the Borrower may designate and the Agent may approve in writing. "Fiscal
Quarter" or "fiscal quarter" means any quarter of a Fiscal Year.
"Funding Date" means any date on which a Loan is (or is requested to
be) made.
"GAAP" means generally accepted accounting principles as in effect in
the United States of America (as such principles are in effect on the date
hereof).
"Governmental Approval" means an authorization, consent, approval,
permit or license issued by, or a registration or filing with, any
Governmental Authority.
8
"Governmental Authority" means any nation and any state or political
subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to
government and any tribunal or arbitrator of competent jurisdiction.
"Indemnified Liabilities" is defined in Section 9.2.1.
"Interest Period" means, subject to the next sentence:
(i) with respect to each Euro-Dollar Rate Loan, the period
commencing on the date specified in the related Notice of Borrowing or Notice
of Conversion/Continuation (or telephonic notice in lieu thereof) and ending
(subject to availability to all Lenders) one, two, three or six months
thereafter, as the Borrower may elect, as applicable; and
(ii) with respect to any Bid Loan, the period commencing on the
Funding Date specified in the related Bid Loan Quote Request and ending on any
Business Day not less than seven and not more than 30 days thereafter, as the
Borrower may request as provided in Section 2.2.2.1.
Notwithstanding the foregoing: (a) if a Euro-Dollar Rate Loan is
continued, the Interest Period applicable to the continued Loan shall commence
on the day on which the Interest Period applicable to such Euro-Dollar Rate
Loan ends; (b) any Interest Period applicable to a Euro-Dollar Rate Loan (i)
that would otherwise end on a day that is not a Business Day shall be extended
to the next succeeding Business Day, unless such succeeding Business Day falls
in another calendar month, in which case such Interest Period shall end on
the next preceding Business Day or (ii) that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of the calendar month; and (c) no Interest
Period shall end after the Maturity Date.
"Investment Agreement" means the Investment Agreement, dated as of
October 8, 1984, between the Borrower and Nordstrom Credit, as amended from
time to time.
"Lender" is defined in the Preamble and, except when used in reference
to a Revolving Loan, a Revolving Borrowing, a Revolving Loan Note, a Revolving
Commitment or a related term, shall include each Designated Bidder. For
purposes of the Sections referred to in (and subject to) the last sentence of
Section 9.6.3., "Lender" includes a holder of a Participation.
"Lender Party" is defined in the Preamble. For purposes of the
Sections referred to in (and subject to) the last sentence of Section 9.6.3.,
"Lender Party" includes a holder of a Participation.
"Lien" means any lien, mortgage, pledge, security interest, charge, or
encumbrance of any kind (including any conditional sale or other title
retention agreement or
9
any lease in the nature thereof) and any agreement to give any lien, mortgage,
pledge, security interest, charge, or other encumbrance of any kind.
"Loan" means a Base Rate Loan, Euro-Dollar Rate Loan or Bid Loan, each
of which constitutes a "Type" of Loan.
"Loan Documents" means, collectively, this Agreement, the Notes, and
any other agreement, instrument or other writing executed or delivered by the
Borrower in connection herewith, and all amendments, exhibits and schedules to
any of the foregoing.
"Managing Agent" is defined in the Preamble.
"Margin Regulations" means Regulations G, T, U and X of the Federal
Reserve Board, as amended from time to time.
"Margin Stock" means "margin stock" as defined in the Margin
Regulations.
"Material Adverse Effect" or "Material Adverse Change" means (i) a
material adverse effect on or (ii) a material adverse change in, as the case
may be, any one or more of the following: (A) the business, assets, results
of operations or financial condition of the Borrower and its Subsidiaries
taken as a whole or (B) the ability of the Borrower to perform its obligations
under any Loan Document to which it is a party or (C) the actual material
rights and remedies of any Lender Party under any Loan Document. For purposes
of Section 4.5. only, any claims, liabilities, payments or other amounts in
excess of $10,000,000 in the aggregate shall be "material" and constitute a
"Material Adverse Effect."
"Maturity Date" means July 23, 2002.
"Moody's" means Moody's Investors Service, Inc. and any successor.
"Multiemployer Plan" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA.
"NCI Credit Agreement" means that certain Revolving Credit Agreement
dated as of the date hereof by and among Nordstrom Credit, the financial
institutions party thereto as Lenders thereunder and NationsBank of Texas,
N.A., as Agent for such Lenders, as the same may be amended, supplemented or
otherwise modified from time to time.
"Net Worth" of any Person means, as of any date of determination, the
excess of Total Assets over Total Liabilities of such Person.
"Nordstrom Credit" means Nordstrom Credit, Inc., a Colorado
corporation, and any successor.
"Note" means a Revolving Loan Note or Bid Loan Note.
10
"Notice of Borrowing" is defined in Section 2.1.3.
"Notice of Conversion/Continuation" is defined in Section 2.4.2.2.
"Notice of Responsible Officer" is defined in Section 2.1.3.3.
"Obligations" means all present and future obligations and liabilities
of the Borrower of every type and description arising under or in connection
with the Loan Documents due or to become due to the Lender Parties or any
Person entitled to indemnification, or any of their respective successors,
transferees or assigns, whether for principal, interest, Fees, expenses,
indemnities or other amounts (including attorneys' fees and expenses) and
whether due or not due, direct or indirect, joint and/or several, absolute or
contingent, voluntary or involuntary, liquidated or unliquidated, determined
or undetermined, and whether now or hereafter existing, renewed or
restructured.
"Participation" is defined in Section 9.6.3.
"PBGC" means the Pension Benefit Guaranty Corporation, as defined in
Title IV of ERISA, or any successor.
"Periodic Payment Date" means the last Business Day of each month
commencing July 31, 1997.
"Permitted Liens" means, with respect to any asset, the Liens (if any)
permitted to exist on such asset under Section 6.1.
"Person" means an individual, a corporation, a partnership, a limited
liability company, a trust, an unincorporated organization or any other entity
or organization, including a government or any agency or political subdivision
thereof.
"Plan" means, at any time, any employee pension benefit plan that is
covered by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code and that is either (i) maintained by the Borrower or
any member of a Controlled Group for employees of the Borrower or such
Controlled Group or was formerly so maintained and in respect of which the
Borrower or any member of the Controlled Group could have liability under
Section 4069 of ERISA in the event such plan has been or were to be terminated
or (ii) maintained for employees of the Borrower or any member of the
Controlled Group and at least one Person other than the Borrower and the
members of the Controlled Group or was formerly so maintained and in respect
of which the Borrower or any member of the Controlled Group could have
liability under Section 4064 or 4069 of ERISA in the event such plan has been
or were to be terminated.
"Post-Default Rate" means (i) with respect to all Base Rate Loans and
any other amounts owing hereunder not paid when due (other than then
outstanding Euro-Dollar Rate Loans), a rate per annum equal at all times to
the rate otherwise applicable to Base Rate Loans plus 2.00% per annum, and
(ii) with respect each then outstanding Euro-Dollar Rate
11
Loan, a rate per annum equal at all times to the rate otherwise applicable to
such Euro-Dollar Rate Loan plus 2.00% per annum.
"Regulation D" means Regulation D of the Federal Reserve Board, as
amended from time to time.
"Regulatory Change" means (i) the adoption or becoming effective after
the date hereof of any treaty, law, rule or regulation, (ii) any change in any
such treaty, law, rule or regulation (including Regulation D), or any change
in the administration or enforcement thereof, by any Governmental Authority,
central bank or other monetary authority charged with the interpretation or
administration thereof, in each case after the date hereof, or (iii)
compliance after the date hereof by any Lender Party (or its Applicable
Lending Office or, in the case of capital adequacy requirements, any holding
company of any Lender Party) with, any interpretation, directive, request,
order or decree (whether or not having the force of law) of any such
Governmental Authority, central bank or other monetary authority.
"Required Lenders" means Lenders having more than 50% of the Revolving
Commitments or, if the Revolving Commitments have terminated, Lenders holding
more than 50% of the aggregate unpaid principal amount of the Loans.
"Responsible Officer" is defined in Section 2.1.3.3.
"Restricted Payment" means (i) any dividend or other distribution,
direct or indirect, on account of any Capital Stock of the Borrower or any
Subsidiary now or hereafter outstanding, except (a) a dividend or other
distribution payable solely in shares or equivalents of Capital Stock of the
same class as the Capital Stock on account of which the dividend or
distribution is being paid or made, and (b) the issuance of equity interests
upon the exercise of outstanding warrants, options or other rights, or (ii)
any redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any Capital Stock of the
Borrower or any Subsidiary now or hereafter outstanding.
"Revolving Commitment" means, with respect to each Lender, the amount
set forth for such Lender on Schedule 1.1.A, as reduced or terminated from
time to time pursuant to the terms hereof. "Revolving Commitments" means the
aggregate amount of the Revolving Commitments of all Lenders.
"Revolving Commitment Termination Date" is defined in Section 2.7.1.
"Revolving Commitment Usage" means, at any time, (i) with respect to
any Lender, the sum of (a) the aggregate unpaid principal amount of all
Revolving Loans made by such Lender plus (b) such Lender's pro rata share (in
accordance with the respective Revolving Commitments of the Lenders) of the
aggregate unpaid principal amount of all Bid Loans, and (ii) with respect to
all Lenders, the aggregate unpaid principal amount of all Revolving Loans and
Bid Loans, in each case at such time and giving effect to Borrowings then
requested.
12
"Revolving Loan Note" means a Revolving Loan Note made by the Borrower
payable to the order of any Lender, in the amount of the lesser of (i) such
Lender's Revolving Commitment and (ii) the aggregate principal amount of
Revolving Loans made by such Lender, which note is substantially in the form
of Exhibit A-1, as amended from time to time.
"Revolving Loans" is defined in Section 2.1.1.1.
"S&P" means Standard & Poor's Ratings Group and any successor.
"SEC" means the United States Securities and Exchange Commission, and
any successor.
"Securities Act" means the Securities Act of 1933, as amended from
time to time.
"Senior Officer" means the Chairman of the Board of Directors, any Co-
President, the Chief Executive Officer, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer or any Vice President in charge of a
principal business unit or division of the Borrower.
"Solvent" and "Solvency" mean, with respect to any Person on a
particular date, that on such date (a) the property of such Person, at a fair
valuation, is greater than the total amount of such Person's absolute and
matured debts, and (b) such Person is generally paying his, her or its debts
as they become due.
"Subsidiary" means, with respect to any Person, any other Person of
which more than 50% of the total voting power of the Capital Stock entitled to
vote in the election of the board of directors (or other Persons performing
similar functions) are at the time directly or indirectly owned by such first
Person. Unless otherwise indicated, "Subsidiary" refers to a Subsidiary of
the Borrower.
"Taxes" means any present or future income, stamp and other taxes,
charges, fees, levies, duties, imposts, withholdings or other assessments,
together with any interest and penalties, additions to tax and additional
amounts imposed by any federal, state, local or foreign taxing authority upon
any Person.
"Total Assets" of any Person means all property, whether real,
personal, tangible, intangible or otherwise, which in accordance with GAAP
would be included in determining total assets as shown on the assets portion
of a balance sheet of such Person.
"Total Liabilities" of any Person means all obligations which in
accordance with GAAP would be included in determining total liabilities as
shown on the liabilities portion of a balance sheet of such Person.
"Type" is defined in the definition of "Loan."
13
"Unfunded Vested Liabilities" means, with respect to any Plan at any
time, the amount (if any) by which (i) the present value of all vested
nonforfeitable benefits under such Plan exceeds (ii) the fair market value of
all Plan assets allocable to such benefits, all determined as of the then most
recent valuation date for such Plan, but only to the extent that such excess
represents a potential liability of the Borrower or any member of the
Controlled Group to the PBGC or the Plan under Title IV of ERISA.
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are ordinarily,
in the absence of contingencies, entitled to vote for the election of
directors (or persons performing similar functions) of such Person, even
though the right to so vote has been suspended by the happening of such a
contingency.
"Wholly-Owned" means, with respect to any Subsidiary, that all the
Capital Stock (except for directors' qualifying shares) of such Subsidiary are
directly or indirectly owned by the Borrower.
Section 1.2 Related Matters.
1.2.1. Construction. Unless the context of this Agreement clearly
requires otherwise, references to the plural include the singular, the
singular includes the plural, the part includes the whole, "including" is not
limiting, and "or" has the inclusive meaning represented by the phrase
"and/or." The words "hereof," "herein," "hereby," "hereunder" and similar
terms in this Agreement refer to this Agreement as a whole (including the
Preamble, the Recitals, the Schedules and the Exhibits) and not to any
particular provision of this Agreement. Article, section, subsection,
exhibit, schedule, recital and preamble references in this Agreement are to
this Agreement unless otherwise specified. References in this Agreement to
any agreement, other document or law "as amended" or "as amended from time to
time," or to amendments of any document or law, shall include any amendments,
supplements, replacements, renewals, waivers or other modifications.
References in this Agreement to any law (or any part thereof) include any
rules and regulations promulgated thereunder (or with respect to such part) by
the relevant Governmental Authority, as amended from time to time.
1.2.2. Determinations. Any determination or calculation contemplated
by this Agreement that is made by any Lender Party in good faith and
reasonably shall be final and conclusive and binding upon the Borrower and, in
the case of determinations by the Agent, also the other Lender Parties, in the
absence of manifest error. All consents and other actions of any Lender Party
contemplated by this Agreement may be given, taken, withheld or not taken in
such Lender Party's discretion (whether or not so expressed), except as
otherwise expressly provided herein.
1.2.3. Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial
statements required to be delivered hereunder shall be prepared on a
consolidated basis in accordance with GAAP applied on a basis consistent
14
(except for changes concurred in by the relevant independent public
accountants) with the audited financial statements of the Borrower referred to
in Section 4.3.
1.2.4. Governing Law. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS (OTHER THAN THE
RULES REGARDING CONFLICTS OF LAWS) OF THE STATE OF WASHINGTON.
1.2.5. Headings. The Article and Section headings used in this
Agreement are for convenience of reference only and shall not affect the
construction hereof.
1.2.6. Severability. If any provision of this Agreement shall be
held to be invalid, illegal or unenforceable under Applicable Law in any
jurisdiction, such provision shall be ineffective only to the extent of such
invalidity, illegality or unenforceability, which shall not affect any other
provisions hereof or the validity, legality or enforceability of such
provision in any other jurisdiction.
1.2.7. Independence of Covenants. All covenants under this Agreement
shall each be given independent effect so that if a particular action or
condition is not permitted by any such covenant, the fact that it would be
permitted by another covenant, by an exception thereto, or be otherwise within
the limitations thereof, shall not avoid the occurrence of a Default or an
Event of Default if such action is taken or condition exists.
ARTICLE 2.
AMOUNTS AND TERMS OF THE CREDIT FACILITIES
Section 2.1 Revolving Loans.
2.1.1. General Terms.
2.1.1.1. Each Lender severally agrees, upon the terms and subject
to the conditions set forth in this Agreement, at any time from and after the
Closing Date until the Business Day next preceding the Revolving Commitment
Termination Date, to make loans (each a "Revolving Loan") to the Borrower in
an aggregate principal amount not to exceed at any time outstanding, when
added to other Revolving Commitment Usage of such Lender at such time, the
Revolving Commitment of such Lender, provided that the Revolving Commitment
Usage of all Lenders at any time, in the aggregate, shall not exceed the
aggregate Revolving Commitments of all Lenders.
2.1.1.2. Revolving Loans may be voluntarily prepaid pursuant to
Section 2.8.3. and, subject to the provisions of this Agreement, any amounts
so prepaid may be re-borrowed, up to the amount available under this Section
at the time of such reborrowing.
15
2.1.2. Type of Loans and Amounts.
2.1.2.1. Loans made under this Section 2.1. may be Base Rate
Loans or Euro-Dollar Rate Loans (each a "Type" of Loan), subject, however, to
Sections 2.4.3. and 2.11.
2.1.2.2. Each Borrowing of Revolving Loans shall be in a minimum
aggregate amount of $1,000,000 and integral multiples of $100,000, in the case
of a Borrowing of Base Rate Loans, or a minimum aggregate amount of $5,000,000
and integral multiples of $1,000,000, in the case of a Borrowing of Euro-
Dollar Rate Loans.
2.1.3. Notice of Borrowing.
2.1.3.1. When the Borrower desires to borrow Revolving Loans
pursuant to Section 2.1., it shall deliver to the Agent a Notice of Borrowing
substantially in the form of Exhibit E-1, duly completed and executed by a
Responsible Officer (a "Notice of Borrowing"), (a) no later than 11:00 a.m.
(Dallas, Texas time) on the proposed Funding Date, in the case of a Borrowing
of Base Rate Loans, or (b) no later than 11:00 a.m. (Dallas, Texas time) at
least three Euro-Dollar Business Days before the proposed Funding Date, in the
case of a Borrowing of Euro-Dollar Rate Loans.
2.1.3.2. In lieu of delivering a Notice of Borrowing, the
Borrower, through a Responsible Officer, may give the Agent telephonic notice
of any proposed Borrowing of Revolving Loans by the time a Notice of Borrowing
would be required to be delivered and containing all information required for
a Notice of Borrowing; provided, however, that such notice shall be confirmed
in writing by delivery of a Notice of Borrowing to the Agent on or before the
proposed Funding Date (or, in the case of a Base Rate Borrowing, no later than
one Business Day after the Funding Date). No Lender Party shall incur any
liability to the Borrower or the other Lender Parties in acting upon any
telephonic notice that such Lender Party believes to have been given by a
Responsible Officer or for otherwise acting in good faith under this Section
2.1. and in making any Loan in accordance with this Agreement pursuant to any
telephonic notice and, upon funding of Revolving Loans by any Lender in
accordance with this Agreement pursuant to any such telephonic notice, the
Borrower shall have effected Revolving Loans hereunder.
2.1.3.3. The Borrower shall notify the Agent of the names of its
officers and employees authorized to request and take other actions with
respect to Loans on behalf of the Borrower (each a "Responsible Officer") by
providing the Agent with a Notice of Responsible Officers substantially in the
form of Exhibit E-7, duly completed and executed by a Senior Officer (a
"Notice of Responsible Officer"). The Agent shall be entitled to rely
conclusively on a Responsible Officer's authority to request and take other
actions with respect to Loans on behalf of the Borrower until the Agent
receives a new Notice of Responsible Officer that no longer designates such
Person as a Responsible Officer. The Agent shall have no duty to verify the
authenticity of the signature appearing on any Notice of Borrowing, Notice of
Responsible Officer or any other notice given under the Loan Documents.
16
2.1.3.4. Any Notice of Borrowing (or telephone notice in lieu
thereof) delivered pursuant to this Section shall be irrevocable and the
Borrower shall be bound to make a Borrowing in accordance therewith.
2.1.3.5. The Agent shall promptly notify each Lender of the
contents of any Notice of Borrowing (or telephonic notice in lieu thereof)
received by it, and such Lender's pro rata portion of the Borrowing requested.
Prior to 1:00 p.m. (Dallas, Texas time) on the date specified in such notice
as the Funding Date, each Lender, subject to the terms and conditions hereof,
shall make its pro rata portion of the Borrowing available, in immediately
available funds, to the Agent at the Agent's Account.
2.1.4. Funding. Not later than 1:00 p.m. (Dallas, Texas time) on
such Funding Date or such later time as may be agreed to by the Borrower and
the Agent, and subject to and upon satisfaction of the applicable conditions
set forth in Article 3 as determined by the Agent, the Agent shall, upon
receipt of the proceeds of the requested Loans, make such proceeds available
to the Borrower in Dollars in immediately available funds in the Borrower
Account.
Section 2.2 Bid Loans.
2.2.1. General Terms. At any time prior to the Business Day
immediately preceding the Revolving Commitment Termination Date, the Borrower
may request the Lenders to make offers to make bid loans to the Borrower (each
a "Bid Loan"), provided that (a) the aggregate unpaid principal amount of all
Bid Loans, together with all other Revolving Commitment Usage of all Lenders
at any time, shall not exceed the aggregate Revolving Commitments of all
Lenders; (b) the aggregate amount of Bid Loans requested for any Funding Date
and with the same Interest Period (each a "Bid Loan Borrowing") shall be at
least $10,000,000 and a multiple of $1,000,000; and (c) all Interest Periods
applicable to Bid Loans shall be subject to Section 2.4.3. The Lenders may,
but shall have no obligation to, make such offers, and the Borrower may, but
shall have no obligation to, accept any such offers in the manner set forth in
this Section 2.2.
2.2.2. Bid Loan Procedures.
2.2.2.1. When the Borrower wishes to request offers to make Bid
Loans, it shall give the Agent (which shall promptly notify the Lenders)
notice substantially in the form of Exhibit E-4, duly completed and executed
by a Responsible Officer (a "Bid Loan Quote Request"), so as to be received no
later than 11:00 a.m. (Dallas, Texas time) on the second Business Day before
the proposed Funding Date (or such other time and date as the Borrower and the
Agent, with the consent of the Required Lenders, may agree). Subject to
Section 2.4.3., the Borrower may request offers for up to three different Bid
Loan Borrowings in a single Bid Loan Quote Request, in which case such Bid
Loan Quote Request shall constitute a separate Bid Loan Quote Request for each
such Borrowing. Except as otherwise provided in this Section 2.2., no Bid
Loan Quote Request shall be given within five Business Days (or such other
number of days as the Borrower and the Agent, with the consent of the Required
Lenders, may agree) of any other Bid Loan Quote Request.
17
2.2.2.2. Each Lender may, but shall not be obligated to, in
response to any Bid Quote Request submit one or more written quotes
substantially in the form of Exhibit E-5, duly completed (each a "Bid Loan
Quote"), each containing an offer to make a Bid Loan for the Interest Period
requested and setting forth the Absolute Rate to be applicable to the Bid
Loan; provided that (a) a Lender may make a single submission containing one
or more Bid Loan Quotes in response to several Bid Loan Quote Requests given
at the same time; (b) the principal amount of the Bid Loan for which each such
offer is being made shall be at least $2,000,000 and a multiple of $1,000,000;
provided that the aggregate principal amount of all Bid Loans for which a
Lender submits Bid Loan Quotes (i) may be greater or less than the Revolving
Commitment of such Lender but (ii) may not exceed the principal amount of the
Bid Loan Borrowing for which offers were requested. Each Bid Loan Quote must
be submitted to the Agent by fax not later than 11:00 a.m. (Dallas, Texas
time) on the Funding Date (or such other time and date as the Borrower and the
Agent, with the consent of the Required Lenders, may agree); provided that any
Bid Loan Quote may be submitted by the Agent (or its Applicable Lending
Office) only if the Agent (or such Applicable Lending Office) notifies the
Borrower of the terms of the offer contained therein not later than 10:45
a.m. (Dallas, Texas time) on the Funding Date. Subject to Sections 3. and
7.2., any Bid Loan Quote so made shall be irrevocable except with the consent
of the Agent given on the instructions of the Borrower. Unless otherwise
agreed by the Agent and the Borrower, no Bid Loan Quote shall contain
qualifying, conditional or similar language or propose terms other than or in
addition to those set forth in the applicable Bid Loan Quote Request and, in
particular, no Bid Loan Quote may be conditioned upon acceptance by the
Borrower of all (or some specified minimum) of the principal amount of the Bid
Loan for which such Bid Loan Quote is being made.
2.2.2.3. The Agent shall, as promptly as practicable after any
Bid Loan Quote is submitted (but in any event not later than 11:30 a.m.
(Dallas, Texas time) on the Funding Date), notify the Borrower of the terms
(a) of any Bid Loan Quote submitted by a Lender that is in accordance with
Section 2.2.2.2. and (b) of any Bid Loan Quote that amends, modifies or is
otherwise inconsistent with a previous Bid Loan Quote submitted by such Lender
with respect to the same Bid Loan Quote Request. Any subsequent Bid Loan
Quote shall be disregarded by the Agent unless the subsequent Bid Loan Quote
is submitted solely to correct a manifest error in a former Bid Loan Quote.
The Agent's notice to the Borrower shall specify (i) the aggregate principal
amount of the Bid Loan Borrowing for which offers have been received, (ii) the
respective principal amounts and (iii) the rates of interest (which shall be
expressed as an absolute number and not in terms of a specified margin over
the quoting Lender's cost of funds) (the "Absolute Rate") so offered by each
Lender (identifying the Lender that made each such Bid Loan Quote).
2.2.2.4. Not later than 12:00 noon (Dallas, Texas time) on the
Funding Date (or such other time and date as the Borrower and the Agent, with
the consent of each Lender that has submitted a Bid Loan Quote may agree), the
Borrower shall notify the Agent of its acceptance or nonacceptance of the
offers so notified to it pursuant to Section 2.2.2.3. (and the failure of the
Borrower to give such notice by such time shall constitute nonacceptance), and
the Agent shall promptly notify each affected Bank. In the case of
acceptance, such notice shall specify the aggregate principal amount of offers
for
18
each Interest Period that are accepted. The Borrower may accept any Bid Loan
Quote in whole or in part; provided that (a) any Bid Loan Quote accepted in
part shall be at least $2,000,000 and a multiple of $1,000,000; (b) the
aggregate principal amount of each Bid Loan Borrowing may not exceed the
applicable amount set forth in the related Bid Loan Quote Request; (c) the
aggregate principal amount of each Bid Loan Borrowing shall be at least
$10,000,000 and a multiple of $1,000,000 and shall not cause the limits
specified in Section 2.2.1. to be violated; (d) acceptance of offers may be
made only in ascending order of Absolute Rates, beginning with the lowest rate
so offered; and (e) the Borrower may not accept any offer where the Agent has
advised the Borrower that such offer fails to comply with Section 2.2.2.2. or
otherwise fails to comply with the requirements of this Agreement (including
Section 2.2.1.). If offers are made by two or more Lenders with the same
Absolute Rates for a greater aggregate principal amount than the amount in
respect of which offers are accepted for the related Interest Period, the
principal amount of Bid Loans in respect of which such offers are accepted
shall be allocated by the Borrower among such Lenders as nearly as possible
(in amounts of at least $1,000,000 and multiples of $500,000) in proportion to
the aggregate principal amount of such offers. Determinations by the Borrower
of the amounts of Bid Loans shall be conclusive in the absence of manifest
error.
2.2.2.5. Subject to the terms set forth in this Agreement, any
Lender whose offer to make any Bid Loan has been accepted shall, prior to 1:00
p.m. (Dallas, Texas time) on the date specified for the making of such Loan,
make the amount of such Loan available to the Agent at the Agent's Account in
immediately available funds, for the account of the Borrower. The foregoing
notwithstanding, any such Bid Loan may be funded by such Lender's Designated
Bidder as provided in Section 9.6.6. No Lender shall be required to specify
in its Bid Loan Quote whether such Bid Loan will be funded by such Designated
Bidder. No Lender shall be relieved of its obligation to fund a Bid Loan and
no Designated Bidder shall assume such obligation prior to the time such Bid
Loan is funded (and upon any such funding by a Designated Bidder, prompt
written notice of such funding shall be given by such Designated Bidder to the
Borrower and the Agent but failure to give such notice shall not affect the
Borrower's obligations in respect of such Loan). The amount so received by
the Agent shall, subject to the terms and conditions of this Agreement, be
made available to the Borrower on such date by depositing the same, in
immediately available funds, in the Borrower Account.
Section 2.3 Use of Proceeds. The proceeds of the Loans shall be
used by the Borrower only for general corporate purposes, including the
payment of commercial paper. No part of the proceeds of the Loans shall be
used directly or indirectly for the purpose, whether immediate, incidental or
ultimate, of purchasing or carrying any Margin Stock or maintaining or
extending credit to others for such purpose or for any other purpose that
otherwise violates the Margin Regulations.
19
Section 2.4 Interest; Interest Periods; Conversion/Continuation.
2.4.1 Interest Rate and Payment
2.4.1.1 Each Loan shall bear interest on the unpaid principal
amount thereof, from and including the date of the making of such Loan to and
excluding the due date or the date of any repayment thereof, at the following
rates per annum: (a) for so long as and to the extent that such Loan is a
Base Rate Loan, at the Base Rate (as in effect from time to time) plus the
Applicable Margin; (b) for so long as and to the extent that such Loan is a
Euro-Dollar Rate Loan, at the Euro-Dollar Rate for each Interest Period
applicable thereto plus the Applicable Margin; and (c) if such Loan is a Bid
Loan, at the Absolute Rate quoted by the Lender making such Loan pursuant to
Section 2.2.2.2.
2.4.1.2 Notwithstanding the foregoing provisions of this Section
2.4.1., while an Event of Default exists, any principal, overdue interest or
other amount payable under this Agreement and the other Loan Documents shall
bear interest at a rate per annum equal to the Post-Default Rate, without
notice or demand of any kind.
2.4.1.3 Accrued interest shall be payable in arrears (a) in the
case of a Base Rate Loan, on each Periodic Payment Date; (b) in the case of a
Euro-Dollar Rate Loan, on the last day of each Interest Period applicable
thereto; provided that if the Interest Period applicable to a Euro-Dollar Rate
Loan is longer than three months, interest also shall be payable on the last
day of the third month of such Interest Period; (c) in the case of a Bid Loan,
on the last day of the Interest Period applicable thereto; and (d) in the case
of any Loan, when the Loan shall become due (whether at maturity, by reason of
prepayment, acceleration or otherwise). The Agent shall provide a billing to
the Borrower setting forth the amount of interest payable in sufficient time
for the Borrower to make timely payments of the correct amount without
incurring any penalty or Post-Default Interest.
2.4.2 Conversion or Continuation of Revolving Loans.
2.4.2.1 Subject to this Section 2.4.2. and Sections 2.4.3. and
2.11., the Borrower shall have the option (a) at any time, to convert all or
any part of its outstanding Base Rate Loans to Euro-Dollar Rate Loans, (b) on
the last day of the Interest Period applicable thereto, to (i) convert all or
any part of its outstanding Euro-Dollar Rate Loans to a Base Rate Loan, or
(ii) to continue all or any part of its Euro-Dollar Rate Loans as Loans of
the same Type; provided that, in the case of clause (a) or (b) (ii), there
does not exist a Default or an Event of Default at such time. If a Default or
an Event of Default shall exist upon the expiration of the Interest Period
applicable to any Euro-Dollar Rate Loan, such Loan automatically shall be
converted into a Base Rate Loan.
2.4.2.2 If the Borrower elects to convert or continue a Revolving
Loan under this Section 2.4.2., it shall deliver to the Agent (which shall
promptly notify the Lenders) a Notice of Conversion/Continuation substantially
in the form of Exhibit E-3, duly completed and executed by a Responsible
Officer (a "Notice of Continuation/Conversion") (a) not later than 11:00 a.m.
(Dallas, Texas time) at least three Business Days before the
20
proposed conversion or continuation date, if the Borrower proposes to convert
into, or to continue, a Euro-Dollar Rate Loan, and (b) otherwise not later
than 11:00 a.m. (Dallas, Texas time) on the Business Day next preceding the
proposed conversion or continuation date.
2.4.2.3 In lieu of delivering a Notice of
Continuation/Conversion, the Borrower, through a Responsible Officer, may give
the Agent telephonic notice of any proposed continuation or conversion by the
time a Notice of Continuation/Conversion would be required to be delivered and
containing all information required therefor; provided, however, that such
notice shall be confirmed in writing by delivery of a Notice of
Continuation/Conversion to the Agent on or before the proposed continuation or
conversion date. No Lender Party shall incur any liability to the Borrower or
any other Lender Party in acting upon any telephonic notice that such Lender
Party believes to have been given by a Responsible Officer or for otherwise
acting in good faith under this Section 2.4.2. and in converting or continuing
any Loan (or a part thereof) pursuant to any telephonic notice.
2.4.2.4 Any Notice of Conversion/Continuation (or telephonic
notice in lieu thereof) shall be irrevocable and the Borrower shall be bound
to convert or continue in accordance therewith. If any request for the
conversion or continuation of a Loan is not made in accordance with this
Section 2.4.2., or if no notice is so given with respect to a Euro-Dollar
Rate Loan as to which the Interest Period expires, then such Loan
automatically shall be converted into a Base Rate Loan.
2.4.3 Interest Periods & Minimum Amounts. Notwithstanding anything
herein to the contrary, (a) all Interest Periods applicable to Euro-Dollar
Rate Loans and Bid Loans shall comply with the definition of "Interest
Period," (b) there may be no more than five different Interest Periods for all
Euro-Dollar Rate Loans and Bid Loans outstanding at the same time, and (c)
Euro-Dollar Rate Loans with the same Interest Period outstanding at any time
shall be in an aggregate amount at least equal to $5,000,000 and in an
integral multiple of $1,000,000. For purposes of the foregoing clause (a),
Interest Periods applicable to Loans of different Types shall constitute
different Interest Periods even if they are coterminous.
2.4.4 Computations. Interest on each Loan and all Fees and other
amounts payable hereunder or the other Loan Documents shall be computed on the
basis of a 360-day year or, in the case of interest on Base Rate Loans, a 365
or 366-day year and the actual number of days elapsed including the first day
but excluding the last day on which such Loan is outstanding (it being
understood and agreed that if a Loan is borrowed and repaid on the same day,
one day's interest shall be payable with respect to such Loan). Any change in
the interest rate on any Loan or other amount resulting from a change in the
rate applicable thereto (or any component thereof, including the Applicable
Margin) pursuant to the terms hereof shall become effective as of the opening
of business on the day on which such change in the applicable rate (or
component) shall become effective. Each determination of an interest rate
by the Agent pursuant to any provision of this Agreement shall be conclusive
and binding on all parties for all purposes, in the absence of manifest error.
21
2.4.5 Maximum Lawful Rate of Interest. The rate of interest
payable on any Loan or other amount shall in no event exceed the maximum rate
permissible under Applicable Law. If the rate of interest payable on any Loan
or other amount is ever reduced as a result of this Section and at any time
thereafter the maximum rate permitted by Applicable Law shall exceed the rate
of interest provided for in this Agreement, then the rate provided for in this
Agreement shall be increased to the maximum rate provided by Applicable Law
for such period as is required so that the total amount of interest received
by the Lenders is that which would have been received by the Lenders but for
the operation of the first sentence of this Section 2.4.5.
Section 2.5 Notes, Etc.
2.5.1 Loans Evidenced by Notes. The Revolving Loans made by each
Lender shall be evidenced by a single Revolving Loan Note. The Bid Loans made
by each Lender shall be evidenced by a single Bid Loan Note. Each Note shall
be dated the Closing Date and stated to mature in accordance with the
provisions of this Agreement applicable to the relevant Loans.
2.5.2 Notation of Amounts and Maturities. Etc. Each Lender is
hereby irrevocably authorized to record on the schedule attached to its Notes
(or a continuation thereof) the information contemplated by such schedule.
The failure to record, or any error in recording, any such information shall
not, however, affect the obligations of the Borrower hereunder or under any
Note to repay the principal amount of the Loans evidenced thereby, together
with all interest accrued thereon. All such notations shall constitute
conclusive evidence of the accuracy of the information so recorded, in the
absence of manifest error.
Section 2.6 Fees.
2.6.1 Facility Fee. The Borrower shall pay to the Agent, for the
pro rata benefit of the Lenders, a facility fee accruing at the rate per annum
equal to the Applicable Margin in effect from time to time upon the Revolving
Commitments of the Lenders, whether or not used, for each day from and after
the Closing Date until the Revolving Commitment Termination Date. Such Fee
shall be payable quarterly in arrears on the last day of each calendar quarter
and on the Revolving Commitment Termination Date. The Agent shall provide a
billing to the Borrower setting forth the amount of the Fee payable in
sufficient time for the Borrower to make timely payments of the correct amount
without incurring any penalty or Post-Default Interest.
2.6.2 Other Fees. On the Closing Date and from time to time
thereafter as specified in the Fee Letter, the Borrower shall pay to the Agent
the fees specified in the Fee Letter.
2.6.3 Fees Non-Refundable. All Fees shall be fully earned when
payable hereunder and shall be non-refundable.
22
Section 2.7 Termination, Reduction and Extension of Revolving
Commitments.
2.7.1 Each Lender's Revolving Commitment shall terminate without
further action on the part of such Lender on the earlier to occur of (a) the
Maturity Date, and (b) the date of termination of the Revolving Commitment
pursuant to Section 2.7.2. or 7.2. (such earlier date being referred to herein
as the "Revolving Commitment Termination Date").
2.7.2 The Borrower shall have the right, at any time or from time
to time after the Closing Date, to terminate in whole or permanently reduce in
part, without premium or penalty, the Revolving Commitments of the Lenders on
a pro rata basis to an amount not less than the Revolving Commitment Usage of
all Lenders at such time by giving the Agent not less than five Business Days'
prior written notice of such termination or reduction and the amount of any
partial reduction. Any such termination or partial reduction shall be
effective on the date specified in the Borrower's notice and any such partial
reduction shall be in a minimum amount of $10,000,000 and an integral multiple
thereof.
Section 2.8 Repayments and Prepayments.
2.8.1 Repayment. The unpaid principal amount of all Revolving
Loans shall be paid in full on the Revolving Commitment Termination Date. The
unpaid principal amount of each Bid Loan shall be paid in full on the last day
of the Interest Period applicable thereto.
2.8.2 Excess Revolving Loans. If at any time the aggregate
Revolving Commitment Usage of all Lenders exceeds the aggregate amount of the
Revolving Commitments, the Borrower shall, on the Business Day on which the
Borrower learns or is notified of the excess, make mandatory prepayments of
the Revolving Loans as may be necessary so that, after such prepayment, such
excess is eliminated.
2.8.3 Optional Prepayments.
2.8.3.1 Subject to this Section 2.8.3., the Borrower may, at its
option, at any time or from time to time, prepay Revolving Loans in whole or
in part, without premium or penalty, provided that (a) any prepayment shall be
in an aggregate principal amount of at least $5,000,000 and in integral
multiples of $1,000,000 (or, alternatively, the whole amount of Loans then
outstanding) and (b) any prepayment of a Euro-Dollar Rate Loan on a day other
than the last day of the Interest Period applicable thereto shall be made
together with the amounts payable pursuant to Section 2.13. Bid Loans may not
be voluntarily prepaid at any time.
2.8.3.2 If the Borrower elects to prepay a Loan under this
Section 2.8.3., it shall deliver to the Agent a notice of optional prepayment
(a) not later than 11:00 a.m. (Dallas, Texas time) at least three Euro-Dollar
Business Days before the proposed prepayment, if the Borrower proposes to
prepay a Euro-Dollar Rate Loan, and (b) otherwise not later than 11:00 a.m.
(Dallas, Texas on the proposed prepayment date. Any
23
notice of optional prepayment shall be irrevocable, and the payment amount
specified in such notice shall be due and payable on the date specified in
such notice, together with interest accrued thereon to such date.
2.8.4 Payments Set Aside. To the extent the Agent or any Lender
receives payment of any amount under the Loan Documents, whether by way of
payment by the Borrower, set-off or otherwise, which payment is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
to be repaid to a trustee, receiver or any other party under any bankruptcy
law, other law or equitable cause, in whole or in part, then, to the extent of
such payment received, the Obligations or part thereof intended to be
satisfied thereby shall be revived and continue in full force and effect,
together with all collateral security therefor.
Section 2.9 Manner of Payment.
2.9.1 Except as otherwise expressly provided, the Borrower shall
make each payment under the Loan Documents to the Agent in Dollars and in
immediately available funds, without any deduction whatsoever, including any
deduction for any setoff, recoupment, counterclaim or Taxes (other than
Excluded Taxes), at the Agent's Office, for the account of the Applicable
Lending Offices of the Lenders entitled to such payment, by depositing such
payment in the Agent's Account not later than 12:00 noon (Dallas, Texas time)
on the due date thereof. Any payments received after 12:00 noon (Dallas,
Texas time) on any Business Day shall be deemed received on the next
succeeding Business Day. Not later than 1:00 p.m. (Dallas, Texas time) on the
day such payment is made, the Agent shall deliver to each Lender, for the
account of the Lender's Applicable Lending Office, in Dollars and in
immediately available funds, such Lender's share of the payment so made,
determined pursuant to Section 2.10. Delivery shall be made in accordance
with the written instructions satisfactory to the Agent from time to time
given to the Agent by each Lender. With respect to Borrower's payment of fees
only, Borrower may make payment therefor by check delivered to Agent by the
time set forth above.
2.9.2 Whenever any payment to be made hereunder shall be stated to
be due on a day that is not a Business Day, such payment shall instead by made
on the next succeeding Business Day.
Section 2.10 Pro Rata Treatment; Application of Payments. Except
to the extent otherwise expressly provided herein,
2.10.1 Revolving Loans shall be requested from the Lenders pro rata
according to their respective Revolving Commitments.
2.10.2 Each reduction of the Revolving Commitments of the Lenders
shall be applied to the respective Revolving Commitments of the Lenders pro
rata according to their respective Revolving Commitments before such
reduction.
24
2.10.3 Each payment or prepayment by the Borrower of principal of the
Revolving Loans shall be made and applied for the account of the Lenders pro
rata according to the respective unpaid principal amount of the Revolving
Loans owed to the Lenders, and each payment by the Borrower of interest on the
Revolving Loans shall be made and applied for the account of the Lenders pro
rata according to the respective accrued but unpaid interest on the Revolving
Loans owed to such Lenders. Each payment by the Borrower of Fees payable to
the Lenders pursuant to Section 2.6.1. shall be made and applied for the
account of the Lenders pro rata according to the respective amounts of their
Revolving Commitments.
2.10.4 Each payment or prepayment by the Borrower of principal of Bid
Loans made as part of the same Borrowing shall be made and applied for the
account of the Lenders holding such Bid Loans pro rata according to the
respective unpaid principal amount of such Bid Loans owed to such Lenders and
each payment by the Borrower of interest on Bid Loans shall be made and
applied for the account of the Lenders holding such Bid Loans pro rata
according to the respective accrued but unpaid interest on the Bid Loans owed
to such Lenders.
2.10.5 While no Event of Default exists, all payments made by the
Borrower under the Loan Documents shall be applied to the Obligations as the
Borrower may direct. While an Event of Default exists, or if the Borrower
does not provide any such direction to the Agent, all amounts paid or received
with respect to the Obligations shall be applied in the following order: (a)
First, to costs, expenses and other amounts then otherwise due for the account
of the Agent pursuant to Section 9.1., (b) second, to costs, expenses and
other amounts then otherwise due for the account of the Lenders pursuant to
Section 9.1. and Indemnified Liabilities, pro rata according the respective
amounts payable, (c) third, to accrued interest on the Loans, pro rata
according to the respective accrued but unpaid interest on the Loans then due
to the Lenders, (d) fourth, to principal of the Loans, pro rata according
to the respective principal amounts then due to the Lenders, and (e) to the
other Obligations, if any, in the order directed by the Required Lenders.
Section 2.11 Mandatory Suspension and Conversion of Euro-Dollar
Rate Loans. Each Lender's obligation to make, continue or convert Loans into
Euro-Dollar Rate Loans shall be suspended, all outstanding Euro-Dollar Rate
Loans shall be converted into Base Rate Loans on the last day of the
respective Interest Periods applicable thereto (or, if earlier, in the case of
Section 2.11.2. below, on the last day that such Lender can lawfully continue
to maintain Euro-Dollar Rate Loans) and all pending requests for the making or
continuation of, or conversion into, Euro-Dollar Rate Loans shall be
considered requests for the making or conversion into Base Rate Loans (or, in
the case of requests for conversion, disregarded) on the same Funding Date or
the end of the currently applicable Interest Period, as applicable, if:
2.11.1 on or prior to the determination of the interest rate for a
Euro-Dollar Rate Loan for any Interest Period, the Agent determines that for
any reason appropriate quotations are not available to the Agent in the
relevant interbank market for purposes of
25
determining the Euro-Dollar Rate or a Lender advises the Agent (which shall
thereupon notify the Borrower and the other Lenders) that such rate would not
accurately reflect the cost to such Lender of making, continuing, or
converting a Loan into, a Euro-Dollar Rate Loan for such Interest Period; or
2.11.2 after the date hereof a Lender notifies the Agent (which shall
thereupon notify the Borrower and the other Lenders) of its determination that
any Regulatory Change makes it unlawful or impossible for such Lender or its
Euro-Dollar Lending Office to make or maintain any Euro-Dollar Rate Loan, or
to comply with its obligations hereunder in respect thereof.
Section 2.12 Regulatory Changes.
2.12.1 Increased Costs. If, on or after the date hereof, any
Regulatory Change
2.12.1.1 shall subject any Lender Party (or its Applicable
Lending Office) to any Taxes with respect to its Euro-Dollar Rate Loans or any
Loan Document, or its obligations under or with respect to any of the
foregoing, or changes the basis of taxation of payments to any Lender Party of
principal, interest, Fees or any other amount payable under the Loan Documents
(except for any Excluded Tax or any changes in the rate of any Excluded Tax);
or
2.12.1.2 shall impose, modify or deem applicable any reserve,
special deposit, compulsory loan, insurance or similar requirement (other than
any such requirement with respect to any Euro-Dollar Rate Loan to the extent
included in the Euro-Dollar Reserve Requirement), against, or any fees or
charges in respect of, assets held by, deposits with or other liabilities for
the account of, commitments of, advances or Loans by or other credit extended
by, any Lender Party (or its Applicable Lending Office) or shall impose on any
Lender Party (or its Applicable Lending Office) or on the relevant interbank
market any other condition affecting any Euro-Dollar Rate Loan, or any
obligation to make Euro-Dollar Rate Loans,
and the effect of the foregoing is (a) to increase the cost to such
Lender Party (or its Applicable Lending Office) of making, issuing, renewing
or maintaining any Euro-Dollar Rate Loan or its Revolving Commitment in
respect thereof or (b) to reduce the amount of any sum received or receivable
by such Lender Party (or its Applicable Lending Office) hereunder or under any
other Loan Document with respect thereto, then, the Borrower shall from time
to time pay to such Lender Party, within 15 days after request by such Lender
Party, such additional amounts as are necessary in such Lender Party's
reasonable determination to compensate such Lender Party for such increased
cost or reduction; provided, however, that if the Euro-Dollar Lending Office
of any affected Lender is other than the affected Lender's main office, before
giving such notice, such affected Lender agrees to use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions) to
designate a different Euro-Dollar Lending Dollar Office if such
26
designation will avoid the need for giving such notice and will not be
otherwise disadvantageous to such Lender.
2.12.2 Capital Costs. If a Regulatory Change after the date hereof
regarding capital adequacy (including the adoption or becoming effective of
any treaty, law, rule, regulation or guideline adopted pursuant to or arising
out of the July 1988 report of the Basle Committee on Banking Regulations and
Supervisory Practices entitled "International Convergence of Capital
Measurement and Capital Standards") has or would have the effect of reducing
the rate of return on the capital of or maintained by any Lender Party or any
company controlling such Lender Party as a consequence of such Lender Party's
Loans or obligations hereunder and other commitments of this type to a level
below that which such Lender Party or company could have achieved but for such
Regulatory Change (taking into account such Lender Party's or company's
policies with respect to capital adequacy), then, the Borrower shall from time
to time pay to such Lender Party, within 15 days after request by such Lender
Party, such additional amounts as are necessary in such Lender Party's
reasonable determination to compensate such Lender Party or company for such
reduction in return, to the extent such Lender Party or company determines
such reduction to be attributable to the existence of obligations for the
account of the Borrower.
Section 2.13 Compensation for Funding Losses. The Borrower shall
pay to any Lender, upon demand by such Lender, such amount or amounts as such
Lender reasonably determines is or are necessary to compensate it for any
loss, cost, expense or liabilities incurred (including any loss, cost, expense
or liability incurred by reason of the liquidation or redeployment of deposits
but excluding loss of future margin) by it as a result of (a) any payment,
prepayment or conversion of any Euro-Dollar Rate Loan for any reason
(including by reason of a prepayment pursuant to Section 2.8.2. or an
acceleration pursuant to Section 7.2.) on a date other than the last day of an
Interest Period applicable to such Euro-Dollar Rate Loan, or (b) any Euro-
Dollar Rate Loan for any reason not being made (other than a wrongful failure
to fund by such Lender), converted or continued, or any payment of principal
of or interest thereon not being made, on the date therefor determined in
accordance with the applicable provisions of this Agreement. Notwithstanding
the foregoing, the Borrower shall not be responsible to any Lender for any
costs hereunder that result from the application of Section 2.11. or from any
wrongful actions or omissions or default (including under Section 8.9.2) of
such Lender.
Section 2.14 Certificates Regarding Yield Protection, Etc. Any
request by any Lender for payment of additional amounts pursuant to Sections
2.12. and 2.13. shall be accompanied by a certificate of such Lender Party
setting forth the basis and amount of such request. In determining the amount
of such payment, such Lender Party may use such reasonable attribution or
averaging methods as it deems appropriate and practical.
Section 2.15 Applicable Lending Office; Discretion of Lenders as to
Manner of Funding. Each Lender may make, carry or transfer Euro-Dollar Rate
Loans at, to, or for the account of an Affiliate of the Lender, provided that
such Lender shall not be entitled to receive any greater amount under Section
2.12. as a result of the transfer of any such Loan than such Lender would be
entitled to immediately prior thereto unless (a) such
27
transfer occurred at a time when circumstances giving rise to the claim for
such greater amount did not exist or (b) such claim would have arisen even if
such transfer had not occurred. Notwithstanding any other provision of this
Agreement, each Lender shall be entitled to fund and maintain its funding of
all or any part of its Euro-Dollar Rate Loans in any manner it sees fit, it
being understood, however, that for purposes of this Agreement all
determinations hereunder shall be made as if each Lender had actually funded
and maintained each Euro-Dollar Rate Loan through the purchase of deposits in
the relevant interbank market having a maturity corresponding to such Loan's
Interest Period and bearing interest at the applicable rate.
ARTICLE 3
CONDITIONS TO LOANS
Section 3.1 Closing Conditions. The occurrence of the Closing Date
shall be subject to satisfaction of the following conditions:
3.1.1 Closing Date. The Closing Date shall occur on or before July
31, 1997.
3.1.2 Certain Documents. The Agent shall have received the
documents listed on Schedule 3.1.2., all of which shall be in form and
substance satisfactory to the Agent.
3.1.3 Fees and Expenses Paid. The Borrower shall have paid all
Fees and expenses for which the Borrower shall have been billed on or before
the Closing Date.
3.1.4 General. All other documents and legal matters in connection
with the transactions contemplated by this Agreement shall have been delivered
or executed or recorded in form and substance satisfactory to the Agent and
the Agent shall have received all such counterpart originals or certified
copies thereof as Agent may reasonably request.
Section 3.2 Conditions Precedent to Loans. The obligation of the
Lenders to make any Loan on any Funding Date shall be subject to the following
conditions precedent:
3.2.1 Closing Date. The conditions precedent set forth in Section
3.1. shall have been satisfied or waived in writing by the Agent.
3.2.2 Notice of Borrowing. The Borrower shall have delivered to
the Agent, after the time the conditions set forth in Section 3.1. shall have
been satisfied or waived and otherwise in accordance with the applicable
provisions of this Agreement, a Notice of Borrowing (or telephonic notice in
lieu thereof), in the case of a Revolving Loan, or notification of acceptance
of a related Bid Loan Quote (in the case of a Bid Loan).
28
3.2.3 Representations and Warranties. All of the representations
and warranties of the Borrower contained in the Loan Documents shall be true
and correct in all material respects on and as of the Funding Date as though
made on and as of that date.
3.2.4 No Default. No Default or Event of Default shall exist or
result from the making of the Loan.
3.2.5 Satisfaction of Conditions. Each borrowing of a Loan shall
constitute a representation and warranty by the Borrower as of the Funding
Date that the conditions contained in Sections 3.2.3. and 3.2.4. have been
satisfied.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lender Parties as follows:
Section 4.1 Organization, Powers and Good Standing. Each of the
Borrower and, except as would not reasonably be expected to have a Material
Adverse Effect, its Subsidiaries (a) is duly organized as a corporation, and
validly existing and in good standing under the laws of its jurisdiction of
organization, as shown on Schedule 4.1., and (b) has all requisite corporate
power and authority and the legal right to own and operate its properties, to
carry on its business as heretofore conducted, to enter into the Loan
Documents to which it is a party and to carry out the transactions
contemplated thereby. Except as would not reasonably be expected to have a
Material Adverse Effect, each of the Borrower and the Subsidiaries possesses
all Governmental Approvals, in full force and effect, free from burdensome
restrictions, that are necessary for the ownership, maintenance and operation
of its properties and conduct of its business as now conducted, and is not in
violation thereof. Each of the Borrower and the Subsidiaries is duly
qualified and in good standing authorized to do business in each state or
other jurisdiction where the nature of its business activities conducted or
properties owned or leased requires it to be so qualified and where any
failure to be so qualified, individually or in the aggregate, could have a
Material Adverse Effect.
Section 4.2 Authorization, Binding Effect, No Conflict, Etc.
4.2.1 Authorization, Binding Effect, Etc. The execution, delivery
and performance by the Borrower of each Loan Document have been duly
authorized by all necessary corporate action on the part of the Borrower; and
each such Loan Document has been duly executed and delivered by the Borrower
and is the legal, valid and binding obligation of the Borrower, enforceable
against it in accordance with its terms, except as enforcement may be limited
by equitable principles and by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to creditors' rights generally.
4.2.2 No Conflict. The execution, delivery and performance by the
Borrower of each Loan Document, and the consummation of the transactions
contemplated
29
thereby, do not and will not (a) violate any provision of the charter or other
organizational documents of the Borrower, (b) except for consents that have
been obtained and are in full force and effect, conflict with, result in a
breach of, or constitute (or, with the giving of notice or lapse of time or
both, would constitute) a default under, or require the approval or consent of
any Person pursuant to, any Contractual Obligation of the Borrower (including
the Investment Agreement), (c) violate any Applicable Law binding on the
Borrower, or (d) result in or require the creation or imposition of any Lien
on any assets or properties of the Borrower or any of its Subsidiaries.
4.2.3 Governmental Approvals. No Governmental Approval is or will
be required in connection with the execution, delivery and performance by the
Borrower of any Loan Document or the transactions contemplated thereby.
Section 4.3 Financial Information.
4.3.1 The balance sheets of the Borrower as of January 31, 1997 and
January 31, 1996 and the statements of earnings, stockholder's equity and cash
flow of the Borrower for the Fiscal Years then ended, certified by the
Borrower's independent certified public accountants, which are included in the
Borrower's Annual Report on Form 10-K for the Fiscal Year ended January 31,
1997, were prepared in accordance with GAAP consistently applied and fairly
present the financial position of the Borrower, as of the respective dates
thereof and the results of operations and cash flow of the Borrower for the
periods then ended. The Borrower on such dates had no Contingent Obligations,
liabilities for Taxes or long-term leases, forward or long-term commitments or
unrealized losses from any unfavorable commitments that are not reflected in
the foregoing statements or in the notes thereto and that, individually or in
the aggregate, are material.
4.3.2 The unaudited balance sheet of the Borrower as of April 30,
1997 and the related statements of earnings, stockholder's equity and cash
flow for the periods then ended, certified by the Chief Financial Officer of
the Borrower, which are included in the Borrower's Quarterly Report on Form
10-Q for the Fiscal Quarter ended April 30, 1997, were prepared in accordance
with GAAP consistently applied (except to the extent noted therein) and fairly
present the financial position of the Borrower as of such date and the results
of operations and cash flow for the periods covered thereby, subject to normal
year-end audit adjustments. The Borrower on such date had no Contingent
Obligations, liabilities for Taxes or long-term leases, forward or long-term
commitments or unrealized losses from any unfavorable commitments that are not
reflected in the foregoing statements or in the notes thereto and that,
individually or in the aggregate, are material.
Section 4.4 No Material Adverse Changes. Since January 31, 1997,
there has been no Material Adverse Change.
Section 4.5 Litigation. Except as disclosed in Schedule 4.5. or
pursuant to Section 5.1.7., there are no actions, suits or proceedings pending
or, to the best knowledge of the Borrower, threatened against or affecting the
Borrower, any Subsidiary or any of its properties before any Governmental
Authority (a) in which there is a reasonable possibility of
30
an adverse determination that could result in a material liability or have a
Material Adverse Effect or (b) that in any manner draws into question the
validity, legality or enforceability of any Loan Document or any transaction
contemplated thereby.
Section 4.6 Agreements; Applicable Law. Neither the Borrower nor
any Subsidiary is in violation of any Applicable Law, or in default under its
charter documents, bylaws or any of its Contractual Obligations except for
such violations or defaults as do not result in a Material Adverse Effect. So
long as any amount shall remain outstanding under, or any Revolving Commitment
(as defined in the NCI Credit Agreement) shall remain in effect under, the NCI
Credit Agreement, the Investment Agreement is in full force and effect and has
not been amended except as permitted under Section 6.7.
Section 4.7 Taxes. All United States Federal income tax returns
and all other material tax returns required to be filed by the Borrower or any
Subsidiary have been filed and all Taxes due pursuant to such returns have
been paid, except such Taxes, if any, as are being contested in good faith and
as to which adequate reserves have been established in accordance with GAAP.
To the best knowledge of the Borrower, there has not been asserted or proposed
to be asserted any Tax deficiency against the Borrower or any Subsidiary that
would be material to the Borrower and its Subsidiaries taken as a whole and
that is not reserved against on the financial books of the Borrower.
Section 4.8 Governmental Regulation. The Borrower is neither an
"investment company" registered or required to be registered under the
Investment Company Act of 1940, as amended, or a company controlled by such a
company, nor subject to any Federal or state, statute or regulation limiting
its ability to incur Debt for money borrowed (other than the Margin
Regulations).
Section 4.9 Margin Regulations. Neither the Borrower nor any
Subsidiary is engaged principally, or as one of its important activities, in
the business of extending credit for the purposes of purchasing or carrying
Margin Stock. The value of all Margin Stock held by the Borrower and the
Subsidiaries constitutes less than 25% of the value, as determined in
accordance with the Margin Regulations, of all assets of the Borrower.
Section 4.10 Employee Benefit Plans. The Borrower and all members
of the Controlled Group have fulfilled their obligations under the minimum
funding standards of ERISA with respect to each Plan to which they are party
and have not incurred any liability to the PBGC in connection with any Plan
established or maintained by Borrower or any member of the Controlled Group.
No ERISA Event has occurred and is continuing with respect to any Plan
(whether or not terminated). Neither Borrower nor any member of the
Controlled Group is required to make or accrue a contribution or has within
any of the preceding five plan years made or accrued an obligation to make
contributions to any Multiemployer Plan. The fair market value of the assets
of each Plan is at least equal to the present value of the "benefit
liabilities" (within the meaning of Section 4001(a)(16) of ERISA) under such
Plan determined
31
using the actuarial assumptions and method used by the actuary to such Plan in
its valuation of such Plan.
Section 4.11 Disclosure. All information in any document,
certificate or written statement (other than information referred to in
Section 4.3.) furnished to the Lender Parties by or on behalf of the Borrower
with respect to the business, assets, prospects, results of operation or
financial condition of the Borrower or any Subsidiary for use in connection
with the transactions contemplated by this Agreement has been true and correct
in all material respects. There is no fact known to the Borrower (other than
matters of a general economic nature) that has had or could reasonably be
expected to have a Material Adverse Effect and that has not been disclosed
herein or in such other documents, certificates or statements.
Section 4.12 Solvency. The Borrower is, individually and together
with its Subsidiaries, Solvent.
ARTICLE 5
AFFIRMATIVE COVENANTS OF THE BORROWER
So long as any portion of the Revolving Commitments shall be in effect
and until all Obligations are paid and performed in full:
Section 5.1 Financial Statements and Other Reports. The Borrower
shall deliver to the Agent (which shall promptly provide copies to each
Lender), for the benefit of the Lenders:
5.1.1 as soon as practicable and in any event within 120 days after
the end of each Fiscal Year, the consolidated balance sheet of the Borrower
and its consolidated Subsidiaries as of the end of such year and the related
statements of earnings, stockholder's equity and cash flow of the Borrower for
such Fiscal Year, setting forth in each case in comparative form the figures
for the previous Fiscal Year, all in reasonable detail and, accompanied by an
unqualified report thereon of Deloitte & Touche LLP or other independent
certified public accountants of recognized national standing selected by the
Borrower and reasonably satisfactory to the Required Lenders, which report
shall state that such financial statements fairly present the financial
position of the Borrower as of the date indicated and its results of
operations and cash flows for the periods indicated in conformity with GAAP
(except as otherwise stated therein) and that the examination by such
accountants in connection with such financial statements has been made in
accordance with generally accepted auditing standards;
5.1.2 as soon as practicable and in any event within 60 days after
the end of each Fiscal Quarter (other than the last Fiscal Quarter of any
Fiscal Year) a consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as of the end of such quarter and the related statements of
earnings, stockholder's equity and cash flow for such quarter and the portion
of the Fiscal Year ended at the end of such quarter, setting forth in each
case
32
in comparative form the figures for the corresponding periods of the prior
Fiscal Year, all in reasonable detail and certified by the Borrower's Chief
Financial Officer as fairly presenting the financial condition of the Borrower
as of the dates indicated and its results of operations and cash flows for the
periods indicated, subject to normal year-end adjustments;
5.1.3 together with each delivery of financial statements pursuant
to Sections 5.1.1. and 5.1.2., a certificate of the Chief Financial Officer or
the President of the Borrower substantially in the form of Exhibit F-6 (a
"Compliance Certificate"), duly completed, setting forth the calculations
required to establish compliance with Section 6.3., on the date of such
financial statements;
5.1.4 within five Business Days after the Borrower becomes aware of
the occurrence of any Default or Event of Default, a certificate of a Senior
Officer of the Borrower setting forth the details thereof and the action that
the Borrower is taking or proposes to take with respect thereto;
5.1.5 promptly upon their becoming available, copies of all
material reports, notices and proxy statements sent or made available by the
Borrower to its security holders, and all material registration statements
(other than the exhibits thereto) and annual, quarterly or monthly reports, if
any, filed by the Borrower with the SEC;
5.1.6 within five Business Days after Borrower becomes aware of the
occurrence of an ERISA Event, a statement of a Senior Officer of the Borrower
setting forth the details thereof and the action that the Borrower is taking
or proposes to take with respect thereto, together with a copy of the notice,
if any, of such event given or required to be given to the PBGC; within five
days of the date the Borrower or any member of the Controlled Group becomes
obliged to make or accrue a contribution to a Multiemployer Plan, a statement
of a Senior Officer of the Borrower setting forth the details thereof and the
action that the Borrower is taking or proposes to take with respect thereto;
5.1.7 within five Business Days after the Borrower obtains
knowledge thereof, notice of all litigation or proceedings commenced or
threatened affecting the Borrower or any Subsidiary (a) that would reasonably
be expected to have a Material Adverse Effect or (b) that questions the
validity or enforceability of any Loan Document or the Investment Agreement;
5.1.8 promptly notify the Agent of any move of its principal
executive office from the State of Washington; and
5.1.9 from time to time such additional information regarding the
Borrower and its Subsidiaries or the business, assets, liabilities, prospects,
results of operation or financial condition of any such Person as the Agent,
on behalf of any Lender Party, may reasonably request.
33
Section 5.2 Records and Inspection. The Borrower shall, and shall
cause each Subsidiary to, maintain adequate books, records and accounts as may
be required or necessary to permit the preparation of financial statements
required to be delivered hereunder in accordance with sound business practices
and GAAP. The Borrower shall, and shall cause each Subsidiary to, permit such
Persons as the Agent may designate, at reasonable times during the Borrower's
regular office hours as often as may reasonably be requested and under
reasonable circumstances, to (a) visit and inspect any of its properties, (b)
inspect and copy its books and records, and (c) discuss with its officers and
its independent accountants, its business, assets, liabilities, results of
operation or financial condition.
Section 5.3 Corporate Existence, Etc. The Borrower shall, and
shall (except as otherwise permitted under Section 6.4) cause each Subsidiary
to, at all times preserve and keep in full force and effect its corporate
existence and all rights and franchises material to the Borrower and its
Subsidiaries taken as a whole.
Section 5.4 Payment of Taxes and Claims. The Borrower shall, and
shall cause each Subsidiary to, pay and discharge (a) all Taxes imposed upon
it or any of its properties or in respect of any of its franchises, business,
income or property before any material penalty shall be incurred with respect
to such Taxes, and (b) all claims of any kind (including claims for labor,
material and supplies) that, if unpaid, might by Applicable Law become a Lien
upon any material portion of the property of the Borrower and its
Subsidiaries; provided, however, that, unless and until foreclosure,
distraint, levy, sale or similar proceedings shall have commenced, the
Borrower need not pay or discharge any such Tax or claim so long as the
validity or amount thereof is being contested in good faith and by appropriate
proceedings and so long as any reserves or other appropriate provisions as may
be required by GAAP shall have been made therefor.
Section 5.5 Maintenance of Properties. The Borrower shall, and
shall cause each Subsidiary to, maintain or cause to be maintained in good
repair, working order and condition (ordinary wear and tear excepted), all
properties and other assets useful or necessary to its business, and from time
to time the Borrower shall make or cause to be made all appropriate repairs,
renewals and replacements thereto except, in each case, to the extent the
failure to do so could not reasonably be expected to have a Material Adverse
Effect. The Borrower shall, and shall cause each of its Subsidiaries to, use
reasonable efforts to prevent offsets of and defenses to its receivables and
other rights to payment.
Section 5.6 Maintenance of Insurance. The Borrower shall, and
shall cause each Subsidiary to, maintain with financially sound and reputable
insurance companies insurance (or adequate self insurance) in at least such
amounts, of such character and against at least such risks as is usually
maintained by companies of established repute engaged in the same or a similar
business in the same general area.
Section 5.7 Conduct of Business; Compliance with Law. The Borrower
shall not change the general character of its business as conducted at the
date hereof or engage, directly or through a Subsidiary, in any type of
business not reasonably related to its business as normally conducted. The
Borrower shall maintain its right to carry on business
34
in any jurisdiction where it is doing business at such time and remain in and
continuously operate the same lines of business presently engaged in except
for periodic shutdown in the ordinary course of business and interruptions
caused by strike, labor dispute, catastrophe or any other events over which it
has no control. The Borrower shall, and shall cause each of its Subsidiaries
to, conduct its business in compliance in all material respects with all
Applicable Law and all its Contractual Obligations except where failure to do
so does not result in a Material Adverse Effect.
Section 5.8 Further Assurances. At any time and from time to time,
upon the request of the Agent, the Borrower shall execute and deliver such
further documents and do such other acts and things as the Agent may
reasonably request in order to effect fully the purposes of the Loan Documents
and any other agreement contemplated thereby and to provide for payment and
performance of the Obligations in accordance with the terms of the Loan
Documents.
Section 5.9 Future Information. All data, certificates, reports,
statements, documents and other information the Borrower shall furnish to the
Lender Parties in connection with the Loan Documents shall, at the time the
information is furnished, not contain any untrue statement of a material fact,
shall be complete and correct in all material respects to the extent necessary
to give the Lender Parties sufficient and accurate knowledge of the subject
matter thereof, and shall not omit to state a material fact necessary in order
to make the statements contained therein not misleading in light of the
circumstances under which such information is furnished.
Section 5.10 Subordination of Intercompany Debt. The Borrower
shall cause all Debt of the Borrower to any of its Affiliates to be
subordinated to the prior payment in full in cash of the Obligations on terms
of subordination no less favorable to the Lender Parties than the terms of
subordination set forth in the Investment Agreement.
ARTICLE 6
NEGATIVE COVENANTS OF THE BORROWER
So long as any portion of the Revolving Commitments shall be in effect
and until all Obligations are paid and performed in full:
Section 6.1 Liens. The Borrower shall not, and shall not permit
any Subsidiary to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any asset of the Borrower or any
Subsidiary, whether now owned or hereafter acquired, except:
6.1.1 Liens securing the Obligations and Existing Liens;
6.1.2 (a) Liens for Taxes, assessments or charges of any
Governmental Authority for claims that are not material and are not yet due or
are being contested in good faith by appropriate proceedings and with respect
to which adequate reserves or other
35
appropriate provisions are being maintained in accordance with GAAP; (b)
statutory Liens of landlords and Liens of carriers, warehousemen, mechanics,
materialmen, bankers and other Liens imposed by law and created in the
ordinary course of business for amounts that are not material and are not yet
due or being contested in good faith by appropriate proceedings and with
respect to which adequate reserves or other appropriate provisions are being
maintained in accordance with GAAP; (c) Liens incurred and deposits made in
the ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security benefits or to
secure the performance (including by way of surety bonds or appeal bonds) of
tenders, bids, leases, contracts, statutory obligations or similar obligations
or arising as a result of progress payments under contracts, in each case in
the ordinary course of business and not relating to the repayment of Debt; (d)
easements, rights-of-way, covenants, consents, reservations, encroachments,
variations and other restrictions, charges or encumbrances (whether or not
recorded) that do not materially interfere with the ordinary conduct of the
Borrower's business; (e) building restrictions, zoning laws and other
statutes, laws, rules, regulations, ordinances and restrictions; and (f)
leases, subleases or easements granted in the ordinary course of business to
others not materially interfering with the business of, and consistent with
past practices of, the Borrower;
6.1.3 any attachment or judgment Lien, not otherwise constituting
an Event of Default, in existence less than 30 days after the entry thereof or
with respect to which (a) execution has been stayed, (b) payment is covered in
full by insurance, or (c) the Borrower is in good faith prosecuting an appeal
or other appropriate proceedings for review and has set aside on its books
such reserves as may be required by GAAP with respect to such judgment or
award;
6.1.4 Liens securing Debt of the Borrower or any Subsidiary,
including Capitalized Leases, used to finance the acquisition of fixed assets
of the Borrower or such Subsidiary, the construction of additional buildings
or the expansion otherwise of their respective facilities, provided that such
Debt (a) does not exceed the cost to the Borrower or such Subsidiary of the
assets acquired with the proceeds of such Debt, (b) in the case of new
construction or expansion of existing facilities, is either a construction or
permanent loan secured by the facilities constructed and the real property on
which such facilities are located, and (c) in the case of other asset
financing, is incurred within three months following the date of the
acquisition, provided that any such Lien does not encumber any property other
than the assets acquired with the proceeds of such Debt;
6.1.5 Liens existing on assets of any Person at the time such
assets are acquired, provided such Lien does not encumber any assets other
than the assets subject to such Lien at the time such assets are acquired;
6.1.6 Liens arising from the securitization of receivables, to the
extent the Debt arising from such securitization is permitted hereunder;
6.1.7 any Lien constituting a renewal, extension or replacement of
any Existing Lien or any Lien permitted by Section 6.1.4 or 6.1.5., provided
such Lien is limited to all or a part of the property subject to the Lien
extended, renewed or replaced; and
36
6.1.8 other Liens incidental to the conduct of the business or the
ownership of the assets of the Borrower or any Subsidiary that (a) were not
incurred in connection with borrowed money, (b) do not in the aggregate
materially detract from the value of the assets subject thereto or materially
impair the use thereof in the operation of such business and (c) do not secure
obligations aggregating in excess of $5,000,000.
Section 6.2 Restricted Payments. The Borrower shall not, and shall
not permit any Subsidiary to, declare, pay or make, or agree to declare, pay
or make, any Restricted Payment, except (a) dividends, distributions or
payments by any Subsidiary to the Borrower, or (b) if no Default or Event of
Default then exists or would result therefrom (assuming for this purpose that
compliance with Section 6.3. is being measured as of the end of the
immediately preceding Fiscal Quarter giving pro forma effect to the Restricted
Payment).
Section 6.3 Financial Covenants.
6.3.1 Coverage Ratio. The Borrower shall not permit the ratio as
of the last day of any period of four consecutive Fiscal Quarters of EBITDAR
for such period to the sum of interest expense (including capitalized
interest) and rent expense for such period to be less than 2.00 to 1.00.
6.3.2 Minimum Net Worth. Not permit the consolidated Net Worth of
the Borrower and its Subsidiaries as of the last day of any Fiscal Quarter, to
be less than the sum of (A) $1,100,000,000, (B) 50% of the consolidated net
income of the Borrower and its Subsidiaries for all Fiscal Quarters ended
after July 31, 1997 with respect to which such consolidated net income is a
positive number (but without reduction for any net losses for any Fiscal
Quarter ended after July 31, 1997), and (C) 50% of the amount of any net
proceeds received by the Borrower or any of its Subsidiaries after the Closing
Dat in connection with the issuance of capital stock (other than capital stock
issued to the Borrower or any of its other Subsidiaries and other than capital
stock issued pursuant to any employee stock option plan).
Section 6.4 Restriction on Fundamental Changes. The Borrower shall
not, and shall not permit any Subsidiary to, enter into any merger,
consolidation, reorganization or recapitalization, liquidate, wind up or
dissolve or sell, lease, transfer or otherwise dispose of, in one transaction
or a series of transactions, all or substantially all of its or their business
or assets, whether now owned or hereafter acquired, provided that as long as
no Default or Event of Default shall exist after giving effect thereto (a) any
Solvent Subsidiary or other Solvent Person (other than the Borrower) may be
merged or consolidated with or into the Borrower (so long as the Borrower is
the surviving entity) or any Subsidiary, (b) any Subsidiary may be liquidated,
wound up or dissolved, and (c) in addition to transactions permitted under
Section 6.5, all or substantially all of any Subsidiary's business or assets
may be sold, leased, transferred or otherwise disposed of, in one transaction
or a series of transactions, to the Borrower or another Subsidiary.
37
Section 6.5 Asset Dispositions. The Borrower shall not, and shall
not (except as permitted by Section 6.4(c)) permit any Subsidiary to, sell,
lease or otherwise dispose of during any Fiscal Year property or other assets
constituting, in the aggregate, 10% or more of the Borrower's and its
Subsidiaries' assets, taken as a whole, in terms of either book value or fair
market value, whichever is lower. Notwithstanding the foregoing limitation,
the Borrower and its Subsidiaries shall be permitted to sell their receivables
in a transaction to securitize such receivables.
Section 6.6 Transactions with Affiliates. The Borrower shall not,
and shall not permit any Subsidiary to, directly or indirectly, enter into any
transaction (including the purchase, sale, lease, or exchange of any property
or the rendering of any service) with any Affiliate of the Borrower, unless
(a) such transaction is not otherwise prohibited by this Agreement, (b) such
transaction is in the ordinary course of business and (c) if such transaction
is other than with a Wholly-Owned Subsidiary, such transaction is on fair and
reasonable terms no less favorable to the Borrower or its Subsidiary, as the
case may be, than those terms which might be obtained at the time in a
comparable arm's length transaction with a Person who is not an Affiliate or,
if such transaction is not one which by its nature could be obtained from such
other Person, is on fair and reasonable terms and was negotiated in good
faith, provided that this Section shall not restrict (i) dividends,
distributions and other payments and transfers on account of any shares of
capital stock of the Borrower or any Subsidiary otherwise permissible
hereunder, and (ii) transactions pursuant to the Investment Agreement and any
other agreement between the Borrower and any Affiliate of the Borrower
pursuant to which the Borrower sells or discounts accounts receivable in the
ordinary course of its business.
Section 6.7 Amendments of Investment Agreement. So long as any
amount shall remain outstanding under, or any Revolving Commitment (as defined
in the NCI Credit Agreement) shall remain in effect under, the NCI Credit
Agreement, the Borrower will not amend the Investment Agreement if such
amendment, waiver or relinquishment would have a Material Adverse Effect as
defined in the NCI Credit Agreement (including Section 6.7 thereof).
ARTICLE 7
EVENTS OF DEFAULT, ETC.
Section 7.1 Events of Default. The occurrence of any one or more
of the following events, acts or occurrences shall constitute an event of
default (each an "Event of Default"):
7.1.1 Failure to Make Payments. The Borrower (a) shall fail to pay
as and when due (whether at stated maturity, upon acceleration, upon required
prepayment or otherwise) any principal of any Loan, or (b) shall fail to pay
any interest, Fees or other amounts (other than principal) payable under the
Loan Documents within five days of the date when due under the Loan Documents;
or
38
7.1.2 Default in Other Debt. (a) The Borrower or any Subsidiary
shall default in the payment (whether at stated maturity, upon acceleration,
upon required prepayment or otherwise), beyond any period of grace provided
therefor, of any principal of or interest on any other Debt with a principal
amount (individually or in the aggregate) in excess of $10,000,000, or (b) any
other breach or default (or other event or condition), beyond any period of
grace provided therefor, shall occur under the NCI Credit Agreement or under
any agreement, indenture or instrument relating to any such other Debt with a
principal amount (individually or in the aggregate) in excess of $10,000,000,
if the effect of such breach or default (or such other event or condition) is
to cause, or to permit the holder or holders of the other Debt (or a Person on
behalf of such holder or holders) to cause (upon the giving of notice or
otherwise), such other Debt to become or be declared due and payable, or
required to be prepaid, redeemed, purchased or defeased (or an offer of
prepayment, redemption, purchase or defeasance be made), prior to its stated
maturity (other than by a scheduled mandatory prepayment); provided, however,
that if any such breach or default described in this Section 7.1.2. is cured
or waived prior to any action being taken pursuant to Section 7.2.1 or 7.2.2.,
the Event of Default under this Agreement in respect of such breach or default
shall be deemed cured to the extent of such cure or waiver; or
7.1.3 Breach of Certain Covenants. The Borrower shall fail to
perform, comply with or observe any agreement, covenant or obligation under
Article 6 or under Section 5.1.4. or 5.3. (insofar as it requires the
preservation of the corporate existence of the Borrower); or
7.1.4 Other Defaults Under Loan Documents. The Borrower shall fail
to perform, comply with or observe any agreement, covenant or obligation under
any provision of any Loan Document (other than those provisions referred to in
Sections 7.1.1., 7.1.2. and 7.1.3.) and such failure shall not have been
remedied within 30 days after written notice thereof by the Agent, at the
request of the Required Lenders, to the Borrower; or
7.1.5 Breach of Warranty. Any representation or warranty or
certification made or furnished by the Borrower under any Loan Document shall
prove to have been false or incorrect in any material respect when made (or
deemed made); or
7.1.6 Involuntary Bankruptcy; Appointment of Receiver, Etc. There
shall be commenced against the Borrower or any of its Subsidiaries, an
involuntary case seeking the liquidation or reorganization of the Borrower or
any of its Subsidiaries under Chapter 7 or Chapter 11, respectively, of the
Bankruptcy Code or any similar proceeding under any other Applicable Law or an
involuntary case or proceeding seeking the appointment of a receiver,
liquidator, sequestrator, custodian, trustee or other officer having similar
powers of the Borrower or any of its Subsidiaries or to take possession of all
or a substantial portion of its property or to operate all or a substantial
portion of its business, and any of the following events occur: (a) the
Borrower or any of its Subsidiaries consents to the institution of the
involuntary case or proceeding; (b) the petition commencing the involuntary
case or proceeding is not timely controverted; (c) the petition commencing the
involuntary case or proceeding remains undismissed and unstayed for a period
of 60 days; or (d) an order for relief shall have been issued or entered
therein; or
39
7.1.7 Voluntary Bankruptcy; Appointment of Receiver, Etc. The
Borrower or any of its Subsidiaries shall institute a voluntary case seeking
liquidation or reorganization under Chapter 7 or Chapter 11, respectively, of
the Bankruptcy Code or any similar proceeding under any other Applicable Law,
or shall consent thereto; or shall consent to the conversion of an involuntary
case to a voluntary case; or shall file a petition, answer a complaint or
otherwise institute any proceeding seeking, or shall consent to or acquiesce
in the appointment of, a receiver, liquidator, sequestrator, custodian,
trustee or other officer with similar powers of it or to take possession of
all or a substantial portion of its property or to operate all or a
substantial portion of its business; or shall make a general assignment for
the benefit of creditors; or shall generally not pay its debts as they become
due; or the Board of Directors of the Borrower or any of its Subsidiaries (or
any committee thereof) adopts any resolution or otherwise authorizes action to
approve any of the foregoing; or
7.1.8 Judgments and Attachments. The Borrower or any Subsidiary
shall suffer any money judgments, writs or warrants of attachment or similar
processes that, individually or in the aggregate, involve an amount or value
in excess of $10,000,000 and such judgments, writs, warrants or other orders
shall continue unsatisfied and unstayed for a period of 60 days; or
7.1.9 ERISA. The Borrower or any member of the Controlled Group
shall fail to pay when due any material amount or amounts that it shall have
become liable to pay to the PBGC or to a Plan under Title IV of ERISA; or a
proceeding shall be instituted by a fiduciary of any such Plan or Plans
against the Borrower or any member of the Controlled Group to enforce Section
515 of ERISA; or any ERISA Event shall occur which could reasonably be
expected to have a Material Adverse Effect; or the Borrower or any member of
the Controlled Group shall partially or completely withdraw from any
Multiemployer Plan; or any Multiemployer Plan to which Borrower or any member
of its Controlled Group becomes obliged to make or accrue a contribution is
placed in reorganization or terminates; or
7.1.10 Change of Control. a Change of Control shall occur; or
7.1.11 Termination of Loan Documents, Etc. Any Loan Document, or any
material provision thereof, shall cease to be in full force and effect for any
reason; or the Borrower shall contest or purport to repudiate or disavow any
of its obligations under or the validity of enforceability of any Loan
Document or any material provision thereof.
Section 7.2 Remedies. Upon the occurrence of an Event of Default:
7.2.1 If an Event of Default occurs under Section 7.1.6. or 7.1.7.,
then the Revolving Commitments shall automatically and immediately terminate,
and the obligation of the Lenders to make any Loan hereunder shall cease, and
the unpaid principal amount of the Loans and all other Obligations shall
automatically become immediately due and payable, without presentment, demand,
protest, notice or other requirements of any kind, all of which are hereby
expressly waived by the Borrower.
40
7.2.2 If an Event of Default occurs, other than under Section 7.1.6.
or 7.1.7., the Agent shall (a) upon written request of the Required Lenders,
by written notice to the Borrower, declare that the Revolving Commitments and
all pending Bid Loan Quotes (whether or not accepted) are terminated,
whereupon the obligation of the Lender Parties to make any Loan hereunder
shall cease, and/or (b) upon written request of the Required Lenders, declare
the unpaid principal amount of the Loans and all other Obligations to be, and
the same shall thereupon become, due and payable, without presentment, demand,
protest, any additional notice or other requirements of any kind, all of which
are hereby expressly waived by the Borrower.
ARTICLE 8
THE AGENT AND THE LENDERS
Section 8.1 Authorization and Action.
8.1.1 Each Lender hereby irrevocably appoints and authorizes the
Agent Bank to act as its agent hereunder and under the other Loan Documents,
to execute and deliver or accept, on its behalf, the other Loan Documents and
any other documents, instruments and agreements related thereto or hereto to
take such action on its behalf under the provisions hereof and thereof and to
exercise such rights, remedies, powers and privileges hereunder and thereunder
as are delegated to the Agent by the terms hereof and thereof, together with
such rights, remedies, powers and privileges as are reasonably incidental
thereto.
8.1.2 Except for any matters expressly subject to the consent or
approval of the Agent under the Loan Documents, the Agent shall not, without
the prior approval of the Required Lenders (or, as provided in Section 9.3.,
all of the Lenders), consent to any departure by the Borrower from the terms
of, waive any default under or otherwise amend this Agreement or any other
Loan Documents. The Agent will, to the extent practicable under the
circumstances, consult with the other Lender Parties prior to taking action on
their behalf under the Loan Documents and in acting as their Agent thereunder.
The Agent will not take any action contrary to the written direction of
Required Lenders, will take any lawful action not contrary to the provisions
of the Loan Documents prescribed in written instructions of the Required
Lenders (or, as provided in Section 9.3., all the Lenders) and, as to any
matters not expressly provided for by the Loan Documents (including
enforcement or collection), may decline to take any action, except upon the
written instructions of the Required Lenders (or, as provided in Section 9.3.,
all the Lenders). If such instructions are requested reasonably promptly, the
Agent shall be absolutely entitled to refrain from taking any action and shall
not have any liability to the Borrower or any Lender for refraining from
taking any action until it shall have received such instructions. Any
provision of this Agreement or any other Loan Document to the contrary
notwithstanding, the Agent shall in no event be required to take or refrain
from taking any action that would, in the Agent's opinion, expose the Agent to
any liability or be inconsistent with the Agent's practice in similar
situations when acting solely for its own account or be contrary to the
provisions of any Loan Document or Applicable Law.
41
8.1.3 The Agent shall not have any duties or responsibilities
except those expressly set forth in the Loan Documents. No duty to act, or
refrain from acting, and no other obligation whatsoever, shall be implied on
the basis of any right, power or authority granted to the Agent or shall
become effective in the event of any temporary or partial exercise of such
rights, power or authority. The Agent shall not be required to exercise any
right, power, remedy or privilege granted to it in any Loan Document, to
ascertain or inquire whether any Default or Event of Default has occurred and
is continuing, or to inspect the property (including the books and records) of
the Borrower or to take any other affirmative action, except as provided in
Section 7.2., or unless requested or directed to do so in accordance with the
provisions of Section 8.1.2.
8.1.4 The duties of the Agent shall be mechanical and
administrative in nature. The Agent shall not have by reason of this Agreement
a fiduciary relationship in respect of any other Lender Party. Except for
notices, reports and other documents and information expressly required to be
furnished to the Lender Parties by the Agent hereunder, the Agent shall not
have any duty or responsibility to provide any Lender Party with any credit or
other information concerning the affairs, financial condition or business of
the Borrower that may come into the possession of the Agent or any of its
Affiliates.
Section 8.2 Exculpation; Agent's Reliance, Etc. Neither the Agent
nor any of its directors, officers, agents, attorneys or employees shall be
liable to the Borrower or any other Lender Party for any action taken or
omitted to be taken by it or them under or in connection with any Loan
Document (a) with the consent or at the request of the Required Lenders (or,
as provided in Section 9.3., all the Lenders), or (b) in any other
circumstances, except for its or their own gross negligence or willful
misconduct as determined by a final judgment of a court of competent
jurisdiction. The Agent makes no warranty or representation to any other
Lender Party and shall not be responsible to any other Lender Party for any
recitals, statements, warranties or representations made in, or in connection
with, any Loan Document or for the execution, effectiveness, genuineness,
validity, enforceability, collectibility, or sufficiency of any Loan Document
or any financial information, opinions of counsel or other documents executed
and delivered pursuant thereto, or for the financial condition of the
Borrower. The Agent shall not be responsible to any Lender for the
satisfaction of any condition specified in Article 3., except receipt of items
required to be delivered to the Agent. The Agent may treat the payee of any
Note as the holder thereof until the Agent receives the related Assignment and
Assumption signed by such holder and the assignee and in form satisfactory to
the Agent. The Agent shall be entitled to rely upon any notice, certificate
or other writing believed by the Agent to be genuine and correct and to have
been signed or sent by the proper Person or Persons. The Agent shall be
entitled to consult with legal counsel, independent public accountants and
other experts selected by the Agent and to act in reliance upon the advice of
such counsel and other experts concerning its actions and duties hereunder.
Section 8.3 Agent and Affiliates. In its capacity as a Lender, the
Agent Lender shall have the same rights, powers and obligations under this
Agreement and the other Loan Documents as any other Lender and may exercise or
refrain from exercising the same as though it were not the Agent, including
the right to give or deny consent to any
42
action requiring consent or direction of the Required Lenders or all the
Lenders. The Agent and its Affiliates may accept deposits from, lend money
to, act as trustee under indentures of, enter into and otherwise be a party to
securitization transactions with and generally engage in any kind of business
with, the Borrower, any Subsidiary and any Affiliate of the Borrower, all as
if the Agent were not the Agent and without any duty to account therefor to
the Lenders. The Agent shall be entitled to receive from the Borrower its
fees or portions thereof in connection with this transaction without any
liability to account therefor to any other Lender, except as the Agent may
have expressly agreed.
Section 8.4 Lender Credit Decision. Each Lender Party acknowledges
that it has, independently and without reliance upon the Agent or any other
Lender Party and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender Party also acknowledges that it will, independently
and without reliance upon the Agent or any other Lender Party and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Loan Documents.
Section 8.5 Indemnification. The Agent shall in no event be
required to take any action under the Loan Documents or in relation thereto
unless it shall first be indemnified to its satisfaction by the other Lender
Parties against any and all liability and expense that it may incur by reason
of taking any such action. Each Lender (other than the Designated Bidders)
agrees to indemnify and hold the Agent harmless (to the extent not promptly
paid or reimbursed by the Borrower), ratably according to their respective
Revolving Commitments, from and against any and all (a) costs, expenses and
other amounts otherwise payable by the Borrower for the account of the Agent
pursuant to Section 9.1. and (b) Indemnified Liabilities that may be imposed
on, incurred by, or asserted against the Agent, except to the extent they are
finally adjudged by a court of competent jurisdiction to have directly
resulted from the gross negligence or willful misconduct of the Agent.
Section 8.6 Successor Agent. The Agent may resign at any time as
Agent under the Loan Documents by giving written notice thereof to the Lenders
and the Borrower. The Agent may be removed at any time with or without cause
by written action of the Required Lenders (other than the Agent Bank)
delivered to the Agent. Upon any such resignation or removal, the Required
Lenders shall have the right to appoint a successor Agent with the prior
consent of the Borrower (provided that such consent shall not be unreasonably
withheld and no such consent shall be required if an Event of Default shall
have occurred and is continuing). If no successor Agent shall have been so
appointed by the Required Lenders (and, if required, approved by the
Borrower), and shall have accepted such appointment, within 30 days after the
retiring Agent's notice of resignation or the removal of the Agent, then the
retiring or removed Agent may with the prior consent of the Borrower (provided
that such consent shall not be unreasonably withheld and no such consent shall
be required if an Event of Default shall have occurred and is continuing), on
behalf of the other Lender Parties, appoint a successor Agent, which shall be
a financial institution having a combined capital and surplus of at least
$100,000,000, or a branch or agency of such a financial institution, organized
or licensed to do business under the laws of the United States of America or
any State thereof. Upon the acceptance of any appointment as the Agent by a
43
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Agent, and the retiring Agent shall be discharged of its duties and
obligations under the Loan Documents. Upon any retiring Agent's resignation
or removal, the provisions of this Article 8. (as well as other expense
reimbursement, indemnification and exculpatory provisions in the other Loan
Documents) shall continue in effect for its benefit as to any actions taken or
omitted by it while it was Agent.
Section 8.7 Excess Payments. If any Lender shall obtain any
payment or other recovery (whether voluntary, involuntary, by application of
setoff or otherwise) on account of any Obligations in excess of its pro rata
share of payments and other recoveries on account of such Obligations obtained
by all Lenders, such Lender shall purchase from the other Lenders such
participations in such Obligations held by them as shall be necessary to cause
such purchasing Lender to share the excess payment or other recovery ratably
with each of the other Lenders; provided, however, that if all or any portion
of the excess payment or other recovery is thereafter recovered from such
purchasing Lender, the purchase shall be rescinded and the purchase price
restored to such Lender to the extent of such recovery, but without interest.
The Borrower agrees that any Lender so purchasing a participation from-another
Lender pursuant to this Section 8.7. may, to the fullest extent permitted by
Applicable Law and by Section 9.8., exercise all of its rights of payment
(including setoff) with respect to such participation as fully as if such
Lender were the direct creditor of the Borrower in the amount of such
participation.
Section 8.8 Lender Parties. The provisions of this Article 8 are
solely for the benefit of the Agent and the other Lender Parties and the
Borrower shall not have any rights to rely on or enforce any of the provisions
hereof (except that the provisions of Sections 8.6. are also for the benefit
of the Borrower). In performing its functions and duties under the Loan
Documents, the Agent shall act solely as agent of the Lenders and does not
assume and shall not be deemed to have assumed any obligation toward or
relationship of agency or trust with or for the Borrower.
Section 8.9 Payments; Availability of Funds; Certain Notices.
8.9.1 If the Agent shall fail to deliver to any other Lender Party
its share of any payment received from the Borrower as and when required by
Section 2.9., the Agent shall pay to such Lender its share of such payment
together with interest on such amount at the Federal Funds Rate, for each day
from the date such amount was required to be paid to such Lender until the
date the Agent pays such amount to such Lender, calculated as set forth in
Section 2.4.4.
8.9.2 Unless (a) the Agent shall have been notified by a Lender prior
to the date upon which a Loan is to be made or (b) the Agent shall have been
notified by the Borrower prior to the date on which the Borrower is required
to make any payment hereunder that such Lender or the Borrower, as the case
may be (the "Obligated Party"), does not intend to make available to the Agent
the Obligated Party's portion of such Loan or such payment, the Agent may
assume that the Obligated Party will make such amount
44
available to the Agent on such date and the Agent may, in reliance upon such
assumption (but shall not be required to), make available to the Borrower (in
the case of a Loan) or the Lenders (in the case of a payment by the Borrower)
a corresponding amount. If such corresponding amount is not in fact made
available to the Agent by the Obligated Party, the Agent shall be entitled to
recover such amount on demand from the Obligated Party (or, in the case of a
Loan, if the Lender that is the Obligated Party fails to pay such amount
forthwith upon such demand, from the Borrower). Such amount shall be payable
together with interest thereon from the day on which such corresponding amount
was made available by the Agent to the Lender or the Borrower, as applicable,
to the date of payment by the Obligated Party (or the Borrower, as
applicable), at a rate of interest equal to (i) in the case of any payment by
any other Lender Party, the Federal Funds Rate, and (ii) in the case of any
payment by the Borrower, the interest rate applicable to the Loan.
8.9.3 The Agent shall promptly notify the Lenders by telex or
telecopy of each Interest Period chosen by the Borrower, the Euro-Dollar Rate
for each Interest Period (and the relevant interest rate), the date of any
expected payment and all other material notices transmitted by the Borrower.
Section 8.10 Obligations of Lender Parties Several; Enforcement by
the Agent.
8.10.1 Each Lender Party's obligations hereunder are several, and not
joint or joint and several. The failure of any Lender Party to make any Loan
or otherwise to perform its obligations hereunder will not increase the
obligations of any other Lender Party. Notwithstanding the foregoing, any
Lender may assume, but shall have no obligation to any Person to assume, any
non-performing Lender's obligation to make a Loan. Nothing contained in this
Agreement and no action taken by the Agent or any other Lender Party pursuant
to this Agreement shall be deemed to constitute the Agent and any other Lender
Party to be a partnership, an association, a joint venture or any other kind
of entity.
8.10.2 Each Lender agrees that, except with the prior written consent
of the Agent or as provided in Section 9.8., no Lender Party shall have any
right individually to enforce any Loan Document or any provision thereof, or
make demand thereunder, it being agreed that such rights and remedies may only
be exercised by the Agent for the ratable benefit of the Lenders upon the
terms of this Agreement.
Section 8.11 Managing Agents. No Managing Agent, in such capacity,
shall have any right, power, obligation, liability, duty or responsibility
whatsoever under the Loan Documents, and no Managing Agent shall be deemed to
have any fiduciary relationship with any Lender. Each Lender acknowledges
that it has not relied, and will not rely, on any of the Managing Agents in
deciding to enter into this Agreement or in taking or not taking any action
hereunder.
45
ARTICLE 9
MISCELLANEOUS
Section 9.1 Expenses. The Borrower shall pay on demand:
9.1.1 any and all attorneys' fees and disbursements (including
allocated costs of in-house counsel) and out-of-pocket cost and expenses
incurred by the Agent in connection with the development, drafting and
negotiation of the Loan Documents, any amendments thereto and the syndication
and closing of the transactions contemplated thereby; and
9.1.2 all costs and expenses (including fees and disbursements of
in-house and other attorneys, appraisers and consultants) incurred by the
Lender Parties in any workout, restructuring or similar arrangements or, after
an Event of Default, in connection with the protection, preservation, exercise
or enforcement of any of the terms of the Loan Documents or in connection with
any foreclosure, collection or bankruptcy proceedings.
Section 9.2 Indemnity.
9.2.1 Borrower shall indemnify, defend and hold harmless each
Lender Party and its Affiliates and the officers, directors, employees,
agents, attorneys, affiliates, successors and assigns of each Lender Party and
its Affiliates (collectively, the "Indemnitees") from and against (a) any and
all transfer taxes, documentary taxes, assessments or charges made by any
Governmental Authority by reason of the execution and delivery of the Loan
Documents or the making of the Loans (provided that any Lender claiming any
additional amounts payable pursuant to this Section 9.2.1(a) shall use
reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions) to change the jurisdiction of its Applicable Lending
Office if the making of such a change would avoid the need for, or reduce the
amount of, any such additional amounts that may thereafter accrue and would
not, in the reasonable judgment of such Lender, be otherwise disadvantageous
to such Lender), and (b) any and all liabilities, losses, damages, penalties,
judgments, claims, costs and expenses of any kind or nature whatsoever
(including reasonable attorneys' fees, including allocated costs of in-house
counsel, and disbursements in connection with any actual or threatened
investigative, administrative or judicial proceeding, whether or not such
Indemnitee shall be designated a party thereto) that may be imposed on,
incurred by or asserted against such Indemnitee, in any manner relating to or
arising out of the Loan Documents, the Loans, or the use or intended use of
the proceeds of the Loans (the "Indemnified Liabilities"); provided that no
Indemnitee shall have the right to be indemnified or held harmless hereunder
for its own gross negligence, or willful misconduct, as determined by a final
judgment of a court of competent jurisdiction.
9.2.2 To the extent that the undertaking to indemnify and hold
harmless set forth in Section 9.2.1. may be unenforceable as violative of any
Applicable Law or public policy, the Borrower shall make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities that is permissible under Applicable Law. All Indemnified
Liabilities shall be payable on demand.
46
Section 9.3 Waivers; Modifications in Writing.
9.3.1 No amendment of any provision of this Agreement or any other
Loan Document (including a waiver thereof or consent relating thereto) shall
be effective unless the same shall be in writing and signed by the Agent and
the Required Lenders and, except as to a waiver or consent requested by or to
the benefit of the Borrower, the Borrower. Notwithstanding the foregoing:
9.3.1.1 no amendment, waiver, consent, forbearance or other
agreement that has the effect of (a) reducing the rate or amount, or
extending the stated maturity or due date, of any amount payable by the
Borrower to any Lender Party under the Loan Documents, (b) increasing the
amount, or extending the stated termination or reduction date, of any Lender's
Revolving Commitment hereunder or subjecting any Lender Party to any
additional obligation to extend credit, (c) altering the rights and
obligations of the Borrower to prepay the Loans, or (d) changing this Section
9.3. or the definition of the term "Required Lenders" or any other percentage
of Lenders specified in this Agreement to be the applicable percentage to act
on specified matters shall be effective unless the same shall be signed by or
on behalf of all of the Lenders (other than the Designated Bidders);
9.3.1.2 no amendment that has the effect of (a) increasing the
duties or obligations of the Agent, (b) increasing the standard of care or
performance required on the part of the Agent, or (c) reducing or eliminating
the indemnities or immunities to which the Agent is entitled (including any
amendment of this Section), shall be effective unless the same shall be signed
by or on behalf of the Agent;
9.3.1.3 no amendment that has the effect of (a) increasing the
duties or obligations of any Designated Bidder, (b) reducing the principal of,
interest on, or other amounts due with respect to the Bid Loan Note payable to
any Designated Bidder, or (c) amending the definition of Required Lenders in a
manner which adversely affects a Designated Bidder, shall be effective unless
the same shall be signed by or on behalf of such Designated Bidder; and
9.3.1.4 any waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given. No notice to
or demand on the Borrower in any case shall entitle the Borrower to any other
or further notice or demand in similar or other circumstances. Any amendment
effected in accordance with this Section 9.3. shall be binding upon each
present and future Lender Party and the Borrower.
Section 9.4 Cumulative Remedies; Failure or Delay. The rights and
remedies provided for under this Agreement are cumulative and are not
exclusive of any rights and remedies that may be available to the Lender
Parties under Applicable Law or otherwise. No failure or delay on the part of
any Lender Party in the exercise of any power, right or remedy under the Loan
Documents shall impair such power, right or remedy or operate as a waiver
thereof, nor shall any single or partial exercise of any such power, right or
remedy preclude other or further exercise thereof or of any other power, right
or remedy.
47
Section 9.5 Notices, Etc. All notices and other communications
under this Agreement shall be in writing and (except for financial statements,
other related informational documents and routine communications, which may be
sent by first-class mail, postage prepaid) shall be personally delivered or
sent by prepaid courier, by overnight, registered or certified mail (postage
prepaid), or by telex or telecopy, and shall be deemed given when received by
the intended recipient thereof. Unless otherwise specified in a notice sent
or delivered in accordance with this Section 9.5., all notices and other
communications shall be given to the parties hereto at their respective
addresses (or to their respective telex or telecopier numbers) indicated on
Schedule 1.1.B (in the case of the Lender Parties) or Schedule 9.5. (in the
case of the Borrower).
Section 9.6 Successors and Assigns; Designations.
9.6.1 This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted assigns.
The Borrower may not assign or transfer any interest hereunder without the
prior written consent of each Lender Party.
9.6.2 Subject to the terms of this Section 9.6.2, each Lender
(other than the Designated Bidders) shall have the right at any time to assign
(an "Assignment") all or any portion of such Lender's Revolving Commitment and
Loans to one or more banks or other institutions; provided, however, that (a)
each Assignment to any Person that is not then a Lender with a Revolving
Commitment shall be of a portion of the Loans and Revolving Commitments at
least equal to $10,000,000 (or, if less, all of the assigning Lender's Loans
and Revolving Commitment) and, unless otherwise agreed by the Agent, shall be
of a constant, and not a varying, percentage of all of the assigning Lender's
rights and obligations under this Agreement and the other Loan Documents; (b)
no Assignment (other than an Assignment to a Person that is then a Lender with
a Revolving Commitment or an Affiliate of such a Lender) shall be effective
without the consent of the Borrower (unless a Default or Event of Default then
exists) and the Agent, which consents shall not be unreasonably withheld or
delayed; (c) the parties to the Assignment shall execute and deliver to the
Agent an Assignment and Assumption substantially in the form of Exhibit H (an
"Assignment and Assumption"); (d) so long as the NCI Credit Agreement is in
effect, each Assignment shall be made concurrently with an assignment of, and
the applicable assignee shall concurrently assume, a ratable portion of the
assigning Lender's Revolving Commitment and Loans under the NCI Credit
Agreement; and (e) the assignee shall pay to the Agent a processing and
recordation fee of $3,500. From and after the date on which the conditions in
the foregoing clauses and the Assignment and Assumption have been satisfied,
the assignee shall be a "Lender" hereunder and, to the extent that rights and
obligations hereunder have been assigned to it, shall have the rights and
obligations of the assigning Lender hereunder, and the assigning Lender shall,
to the extent that rights and obligations hereunder have been assigned by it,
relinquish its rights and be released from its obligations under this
Agreement (and, in the case of an assignment covering all or the remaining
portion of the assigning Lender's rights and obligations under this Agreement,
shall cease to be a party hereto). The foregoing notwithstanding, each
Designated Bidder may assign to its Designating Lender (as defined in Section
9.6.6 below) any Bid Loan owing to it.
48
9.6.3 Each Lender (other than the Designated Bidders) shall have
the right at any time to grant or sell participations (each a "Participation")
in all or any portion of such Lender's Revolving Commitment and Loans to one
or more banks or other institutions without the consent of the Borrower or any
other Lender Party, subject to the terms and conditions set forth in this
Section 9.6.3. If any Lender sells or grants a Participation, (a) such Lender
shall make and receive all payments for the account of its participant, (b)
such Lender's obligations under this Agreement shall remain unchanged, (c)
such Lender shall continue to be the sole holder of its Notes and other Loan
Documents subject to the Participation and shall have the sole right to
enforce its rights and remedies under the Loan Documents, (d) the Borrower and
the other Lender Parties shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under the Loan
Documents, and (e) the Participation agreement shall not restrict such
Lender's ability to agree to any amendment of the terms of the Loan Documents,
or to exercise or refrain from exercising any powers or rights that such
Lender may have under or in respect of the Loan Documents, except that the
participant may be granted the right to consent to (i) any reduction of the
rate or amount, or any extension of the stated maturity or due date, of any
principal, interest or Fees payable by the Borrower and subject to the
Participation, or (ii) any increase in the amount or extension of the stated
termination or reduction date of the affected Revolving Commitment. A
participant shall have the rights of the Lenders under Sections 2.11., 2.12.,
9.2. and 9.8., subject to the obligations imposed by such Sections; provided
that amounts payable to any participant shall not exceed the amounts that
would have been payable under such Sections to the Lender granting the
Participation, had such Participation not been granted.
9.6.4 Each Lender may at any time assign or pledge any portion of
its rights under the Loan Documents to a Federal Reserve Bank. No such
assignment or pledge shall be subject to the provisions of Sections 9.6.2. or
9.6.3.
9.6.5 Each Lender shall have the right at any time to furnish one
or more potential assignees or participants with any information concerning
the Borrower and its Subsidiaries that has been supplied by the Borrower or
any such Subsidiary to any Lender Party. The Borrower shall supply all
reasonably requested information and execute and deliver all such instruments
and take all such further action (including, in the case of an Assignment, the
execution and delivery of replacement Notes) as the Agent may reasonably
request in connection with any Assignment or Participation arrangement.
9.6.6 Each Lender (other than the Designated Bidders) may, with the
written consent of the Borrower and the Agent (such consent not to be
unreasonably withheld), designate one or more banks or other entities to have
a right to make Bid Loans as a Lender pursuant to Section 2.2; provided,
however, that (i) no such Lender shall be entitled to make more than three
such designations, (ii) each such Lender making one or more of such
designations shall retain the right to make Bid Loans as a Lender pursuant to
Section 2.2, (iii) each such designation shall be to a Designated Bidder and
(iv) the parties to each such designation shall execute and deliver to the
Agent a Designation Agreement. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in
49
each Designation Agreement, the designee thereunder shall be a party hereto
with a right to make Bid Loans as a Lender pursuant to Section 2.2 and the
obligations related thereto. The Lender designating any Designated Bidder (a
"Designating Lender") shall act as the agent for such Designated Bidder and
deliver and receive all communications and notices under the Credit Agreement
and the other Loan Documents to and on behalf of such Designated Bidder and
shall exercise on such Designated Bidder's behalf all rights, if any, to vote
and to grant and make approvals, waivers, consents or amendments to or under
the Credit Agreement and the other Loan Documents. Any document executed by a
Designating Lender on the Designated Bidder's behalf in connection with the
Credit Agreement or other Loan Documents shall be binding on the Designee.
Section 9.7 Choice of Forum.
9.7.1 All actions or proceedings arising in connection with this
Agreement may be tried and litigated in state or Federal courts located in
Seattle, Washington, unless such actions or proceedings are required to be
brought in another court to obtain subject matter jurisdiction over the matter
in controversy. EACH OF THE BORROWER AND THE LENDER PARTIES WAIVES ANY RIGHT
IT MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS, TO ASSERT THAT IT
IS NOT SUBJECT TO THE JURISDICTION OF SUCH COURTS OR TO OBJECT TO VENUE TO THE
EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION.
9.7.2 Nothing contained in this Section shall preclude the Lender
Parties from bringing any action or proceeding arising out of or relating to
this Agreement in the courts of any place where the Borrower or any of its
assets may be found or located.
Section 9.8 Set Off. In addition to any rights now or hereafter
granted under Applicable Law, during the existence of any Event of Default,
each Lender Party is hereby irrevocably authorized by the Borrower, at any
time or from time to time, without notice to the Borrower or to any other
Person, any such notice being hereby expressly waived, to set off and to
appropriate and to apply any and all deposits (general or special, including
certificates of deposit, whether matured or unmatured, but not including trust
accounts) and any other indebtedness, in each case whether direct or indirect
or contingent or matured or unmatured at any time held or owing by such Lender
Party to or for the credit or the account of the Borrower, against and on
account of the Obligations, irrespective of whether or not such Lender Party
shall have made any demand for payment, provided that such Lender Party shall,
promptly following such set off or application, give notice to the Borrower
thereof, which notice shall contain an explanation of the basis for the set
off or application.
Section 9.9 Changes in Accounting Principles. If any changes in
generally accepted accounting principles from those used in the preparation of
the financial statements referred to in this Agreement hereafter result from
by the promulgation of rules, regulations, pronouncements, or opinions of or
required by the Financial Accounting Standards Board or the American Institute
of Certified Public Accountants (or successors thereto or agencies with
50
similar functions), or there shall occur any change in the Borrower's fiscal
or tax years and, as a result of any such changes, there shall result a change
in the method of calculating any of the financial covenants, negative
covenants, standards or other terms or conditions found in this Agreement,
then the parties hereto agree to enter into negotiations in order to amend
such provisions so as to equitably reflect such changes with the desired
result that the criteria for evaluating the Borrower's financial condition
shall be the same after such changes as if such changes had not been made.
Section 9.10 Survival of Agreements, Representations and
Warranties. All agreements, representations and warranties made herein shall
survive the execution and delivery of this Agreement, the closing and the
extensions of credit hereunder and shall continue until payment and
performance of any and all Obligations. Any investigation at any time made by
or on behalf of the Lender Parties shall not diminish the right of the Lender
Parties to rely thereon. Without limitation, the agreements and obligations
of the Borrower contained in Sections 2.11., 2.12., 9.1., and 9.2. and the
obligations of the Lenders under Section 8.5. shall survive the payment in
full of all other Obligations.
Section 9.11 Execution in Counterparts. This Agreement may be
executed in any number of counterparts, each of which counterparts, when so
executed and delivered, shall be deemed to be an original and all of which
counterparts, taken together, shall constitute but one and the same Agreement.
Faxed signatures to this Agreement shall be binding for all purposes.
Section 9.12 Complete Agreement. This Agreement, together with the
other Loan Documents, is intended by the parties as the final expression of
their agreement regarding the subject matter hereof and as a complete and
exclusive statement of the terms and conditions of such agreement.
Section 9.13 Limitation of Liability. No claim shall be made by
the Borrower or any Lender Party against any party hereto or the Affiliates,
directors, officers, employees or agents of any party hereto for any special,
indirect, consequential or punitive damages in respect of any claim for breach
of contract or under any other theory of liability arising out of or related
to the transactions contemplated by this Agreement, or any act, omission or
event occurring in connection therewith; and the Borrower and each Lender
Party waives, releases and agrees not to sue upon any claim for any such
damages, whether or not accrued and whether or not known or suspected to exist
in its favor.
Section 9.14 WAIVER OF TRIAL BY JURY. THE BORROWER AND THE LENDER
PARTIES WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY ACTION UNDER THIS AGREEMENT
OR ANY ACTION ARISING OUT OF THE TRANSACTIONS CONTEMPLATED HEREBY, REGARDLESS
OF WHICH PARTY INITIATES SUCH ACTION OR ACTIONS.
Section 9.15 NO ORAL AGREEMENTS. ORAL AGREEMENTS OR
ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR
51
FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.
52
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date first set forth above.
Borrower:
NORDSTROM, INC.
a Washington corporation
By:/s/ John A. Goesling
----------------
Name: John A. Goesling
Title: Executive Vice President
Agent:
NATIONSBANK OF TEXAS, N.A.,
as Agent
By:/s/ Charles F. Lilygren
-------------------
Name: Charles F. Lilygren
Title: Vice President
Lenders and Managing Agents:
NATIONSBANK OF TEXAS, N.A.,
as Lender
By:/s/ Charles F. Lilygren
-------------------
Name: Charles F. Lilygren
Title: Vice President
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Lender and Managing Agent
By:/s/ Maria Vickroy-Peralta
---------------------
Name: Maria Vickroy-Peralta
Title: Vice President
S-1
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK,
as Lender and Managing Agent
By:/s/ Adam J. Silver
--------------
Name: Adam J. Silver
Title: Associate
BANK ONE, COLORADO, N.A.
as Lender
By:/s/ David L. Ericson
----------------
Name: David L. Ericson
Title: Vice President
KEYBANK NATIONAL ASSOCIATION,
as Lender
By:/s/ Kathleen J. Johanson
--------------------
Name: Kathleen J. Johanson
Title: Vice President
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Lender
By:/s/ Janet M. Klein
--------------
Name: Janet M. Klein
Title: Vice President
PNC BANK, NATIONAL ASSOCIATION,
as Lender
By:/s/ Philip K. Liebscher
-------------------
Name: Philip K. Liebscher
Title: Vice President
S-2
U.S. BANK,
as Lender
By:/s/ Arnold J. Conrad
----------------
Name: Arnold J. Conrad
Title: Vice President
S-3
SCHEDULE 1.1.A
REVOLVING COMMITMENTS
Lender Revolving Commitments
NationsBank of Texas, N.A. $50,000,000
Bank of America $38,000,000
JP Morgan $38,000,000
Key Bank $20,000,000
US National Bank $20,000,000
Bank One $14,000,000
Norwest Bank $10,000,000
PNC Bank, National Association $10,000,000
Total $200,000,000
SCHEDULE 1.1.B
LENDERS INFORMATION
Agent's Address for Notice:
NATIONSBANK OF TEXAS, N.A., as Agent
901 Main Street
13th Floor
Dallas, Texas 75202
Fax: (214) 508-2515
Phone: (214) 508-3255
Attention: Molly Oxford
with a copy to:
NATIONSBANK OF TEXAS, N.A., as Agent
444 South Flower Street, Suite 1500
Los Angeles, California 90071
Fax: (213) 624-5812
Phone: (213) 236-4918
Attention: William B. Guffey
Agent's Account: NationsBank TX Dallas
ABA # 111000025
Attn: Commercial Loans
Account # 1292000883
Ref: Nordstrom, Inc.
Lenders:
Lender Domestic Lending Office Euro-Dollar
Lending Office
NationsBank of Texas, N.A. 444 South Flower Street, Suite 4100 444 South Flower Street, Suite 4100
Los Angeles, California 90071 Los Angeles, California 90071
Fax: (213) 236-5815 Fax: (213) 236-5815
Telex: Telex:
Phone: (213) 236-4918 Phone: (213) 236-4918
Attention: William B. Guffey Attention: William B. Guffey
PNC Bank, National 249 Fifth Avenue 249 Fifth Avenue
Association One PNC Plaza, 2nd Floor One PNC Plaza, 2nd Floor
Pittsburgh, PA 15222-2707 Pittsburgh,PA 15222-2707
Fax: (412) 762-6484 Fax: (412) 762-6484
Telex: Telex:
Phone: (412) 762-3202 Phone: (412) 762-3202
Attention: Philip K. Liebscher Attention: Philip K. Liebscher
Borrowing Notices to Sally Hunter Borrowing Notices to Sally Hunter
2
Lender Domestic Lending Office Euro-Dollar
Lending Office
KeyBank National 700 5th Ave. 700 5th Ave.
Association P.O. Box 90 P.O. Box 90
MS WA-31-10-4812 MS WA-31-10-4812
Seattle, WA 98111 Seattle, WA 98111
Fax: (206) 684-6035 Fax: (206) 684-6035
Telex: Telex:
Phone: (206) 684-6308 Phone: (206) 684-6308
Attention: Kathleen J. Johanson Attention: Kathleen J. Johanson
Morgan Guaranty Trust 60 Wall Street, 22nd Floor Nassau Bahamas Office
Company of New York New York, New York 10260-0060 c/o J.P. Morgan Services Inc.
Fax: (212) 648-9974 Euro-Loan Servicing Unit
Telex: 177615 MGT UT or 620106 MGT 500 Stanton Christiana Road
UW Newark, DE 19713
Phone: (212) 648-5018 Fax: (302) 634-1094
Attention: Kevin J. O'Brien Telex: 177425 MBDEL UT
Phone:
Attention:
U.S. Bank 1420 Fifth Avenue 1420 Fifth Avenue
Seattle, WA 98101 Seattle, WA 98101
Fax: (206) 587-5259 Fax: (206) 587-5259
Telex: Telex:
Phone: (206) 587-5236 Phone: (206) 587-5236
Attention: Arnold J. Conrad Attention: Arnold J. Conrad
Bank of America National 555 California Street, 41st Floor 555 California Street, 41st Floor
Trust & Savings Association San Francisco, CA 94104 San Francisco, CA 94104
Fax: (415) 622-4585 Fax: (415) 622-4585
Telex: Telex:
Phone: (415) 622-7198 Phone: (415) 622-7198
Attention: Maria Vickroy-Peralta Attention: Maria Vickroy-Peralta
Bank One, Colorado, N.A. 1125 17th Street, 3rd Floor 1125 17th Street, 3rd Floor
Denver, CO 80202 Denver, CO 80202
Fax: (303) 297-4435 Fax: (303) 297-4435
Telex: Telex:
Phone: (303) 297-4294 Phone: (303) 297-4294
Attention: David Ericson Attention: David Ericson
Norwest Bank Minnesota, 6th & Marquette 6th & Marquette
N.A. Minneapolis, MN 55479 Minneapolis, MN 55479
Fax: (612) 667-4145 Fax: (612) 667-4145
Telex: Telex:
Phone: (612) 667-5186 Phone: (612) 667-5186
Attention: Debbie Edstrom Attention: Debbie Edstrom
3
SCHEDULE 1.1.D
EXISTING LIENS
Nordstrom, Inc.
Original Principal
Lien Holder Collateral Amount
Dubuque In-Futuro, Inc. Equipment Located at the $500,000
Iowa distribution center
City of Dubuque Equipment Located at the $300,000
Iowa distribution center
SCHEDULE 3.1.2
CLOSING DOCUMENTS
Primary
Responsibility Status
MAJOR LOAN DOCUMENTS. The following, in
each case duly executed by all parties,
as appropriate
1. Credit Agreement L&W
Schedule 1.1A Revolving Commitments NB
Schedule 1.1B Lender Information NB/L&W
Schedule 1.1D Existing Liens Borrower
Schedule 3.1.2 Closing Documents L&W
Schedule 4.1 Organization of Borrower Borrower
and Subsidiaries
Schedule 4.5 Material Litigation Borrower
Schedule 9.5 Borrower Information Borrower
Exhibit A-1 Form of Revolving Loan Note L&W
Exhibit A-3 Form of Bid Loan Notes L&W
Exhibit B Form of Designation Agreement L&W
Exhibit E-1 Form of Notice of Borrowing L&W
Exhibit E-3 Form of Notice of L&W
Conversion/Continuation
Exhibit E-4 Form of Bid Loan Quote L&W
Request
Exhibit E-5 Form of Bid Loan Quote L&W
Exhibit E-7 Form of Notice of L&W
Responsible Officer
Exhibit F-1 Form of Secretary's L&W
Certificate
Exhibit F-3 Form of Closing Officer's L&W
Certificate
Exhibit F-6 Form of Compliance L&W
Certificate
Exhibit G Form of Opinion of L&W
Borrower's Counsel
Exhibit H Form of Assignment L&W
and Assumption
5
Primary
Responsibility Status
Exhibit I Controlling Stockholders Borrower
2. Notes for all Lenders L&W
CHARTER DOCUMENTATION AND CERTIFICATES. The
following, in the case of certificates
and the like duly executed by the
parties specified herein or therein:
3. For the Borrower, as of a recent date, Borrower
the charter or articles of incorporation,
as amended, certified by the appropriate
Governmental Authority of its jurisdiction
of its formation, and good standing
certificates by the appropriate
Governmental Authorities of its
jurisdiction of formation. and of each
other jurisdiction listed below:
Company Jurisdiction of Other Jurisdiction
Formation
Borrower Washington [none] [LPSL]/
Borrower
4. For the Borrower, a certificate dated the [LPSL]/
Closing Date, substantially in the form of Borrower
Exhibit F-1, including all exhibits
5. For the Borrower, an Officer's Closing [LPSL]/
Certificate,substantially in the form of Borrower
Exhibit F-3
6. For the Borrower, a Notice of Responsible [LPSL]/
Officers, substantially in the form of Borrower
Exhibit E-7
LEGAL OPINIONS. Favorable legal opinions
dated the Closing Date:
7. Of counsel to the Borrower, addressed to [LPSL]
the Agent and the Lenders in substantially
the form of Exhibit G-1
8. Of Latham & Watkins, counsel to the Agent, L&W
addressed to the Agent and the Lenders in
form and substance satisfactory to the Agent.
6
SCHEDULE 4.1
ORGANIZATION OF BORROWER AND SUBSIDIARIES
Nordstrom, Inc.
Borrower/Subsidiary Form and State of
Organization
Nordstrom, Inc. a Washington corporation
Nordstrom a Washington corporation
Distribution, Inc.
NLC, Inc. a Washington corporation
Nordstrom Credit, Inc. a Colorado corporation
Nordstrom National a national banking association
Credit Bank, N.A.
NIHC Inc. a Colorado corporation
NTN, Inc. a Colorado corporation
N2HC, Inc. a Colorado corporation
SCHEDULE 4.5
MATERIAL LITIGATION
Nordstrom, Inc.
None
SCHEDULE 9.5
BORROWER INFORMATION
Nordstrom, Inc.
Address for Notices:
Nordstrom, Inc.
Arcade Plaza Building
1321-2nd Avenue, 5th Floor
Seattle, WA 98101
Business: (206) 233-6303
Fax: (206) 233-6339
Attention: John A. Goesling
Borrower Account (for the funding of Loans): Account #
[_________________________]
PROMISSORY NOTES AND MISCELLANEOUS EXHIBITS TO CREDIT
AGREEMENT
Exhibit A-1 Form of Revolving Loan Note
Exhibit A-3 Form of Bid Loan Note
Exhibit B Form of Designation Agreement
Exhibit E-1 Form of Notice of Borrowing
Exhibit E-3 Form of Notice of Conversion/Continuation
Exhibit E-4 Form of Bid Loan Quote Request
Exhibit E-5 Form of Bid Loan Quote
Exhibit E-7 Form of Notice of Responsible Officers
Exhibit F-1 Form of Secretary's Certificate
Exhibit F-3 Form of Closing Officer's Certificate
Exhibit F-6 Form of Compliance Certificate
Exhibit G Form of Opinion of Borrower's Counsel
Exhibit H Form of Assignment and Assumption
10
EXHIBIT A-1
FORM OF
REVOLVING LOAN NOTE
$[insert amount in figures]1 Seattle, Washington
July [__], 1997
FOR VALUE RECEIVED, the undersigned, NORDSTROM, INC., a Washington
corporation (the "Borrower"), hereby promises to pay to the order of [insert
name of Lender], a [insert organizational status] (the "Lender"), for the
account of its Applicable Lending Office, the lesser of (i) the principal sum
of [insert amount in all capitalized words] ($[insert amount in figures])2 ,
or (ii) the aggregate unpaid principal amount of the Revolving Loans (the
"Loans") made by the Lender to the Borrower under the Credit Agreement
referred to below, on the dates and in the amounts set forth in the Credit
Agreement. The Borrower further promises to pay interest on the unpaid
principal amount of each such Loan from time to time outstanding on the dates
and at the rates specified in the Credit Agreement.
This Revolving Loan Note (the "Note") is one of the Revolving Loan
Notes referred to in, and is entitled to the benefits of, the Credit
Agreement, dated as of July 24, 1997 (as the same may be amended,
supplemented, replaced, renewed or otherwise modified from time to time, the
"Credit Agreement"), by and among the Borrower, each of the banks and other
financial institutions that either now or in the future are parties thereto as
lenders (including the Lender, the "Lenders"), certain Managing Agents and
NATIONSBANK OF TEXAS, N.A., a national banking association, in its capacity as
administrative agent on behalf of the Lenders (in such capacity, the "Agent"),
to which reference is hereby made for a more complete statement of the terms
and conditions on which the Loans evidenced hereby are made and are to be
repaid. The Credit Agreement provides for, among other things, the
acceleration of the maturity hereof upon the occurrence of certain events and
for voluntary and mandatory prepayments under certain circumstances and upon
certain terms and conditions.
Terms with initial capital letters used but not defined herein have
the meanings assigned to them in the Credit Agreement. All payments due
hereunder shall be made to the Agent at the time and place, in the type of
funds, and in the manner set forth in the Credit Agreement, without any
deduction whatsoever, including, without limitation, any deduction for any
set-off, recoupment, counterclaim or Taxes. The Borrower hereby waives
diligence, presentment, demand, protest, notice of dishonor and all other
demands and notices in connection with the execution, delivery, performance or
enforcement of this Note, except as otherwise set forth in the Credit
Agreement.
The Lender is authorized (but not obligated) to endorse on the
Schedule hereto, or on
- ----------------------------
1 Insert amount of Revolving Commitment of Lender.
2 Insert amount of Revolving Commitment of Lender.
A-1-1
a continuation thereof, each Loan made by the Lender and each payment or
prepayment with respect thereto. The Borrower promises to pay all costs and
expenses, including attorneys' fees and disbursements, incurred in the
collection or enforcement hereof.
Except as permitted by Section 9.6 of the Credit Agreement, this Note
may not be assigned to any Person.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF WASHINGTON. THE
BORROWER AND, BY ACCEPTANCE HEREOF, THE LENDER WAIVE THE RIGHT
TO A TRIAL BY JURY IN ANY ACTION UNDER THIS NOTE OR ANY ACTION
ARISING OUT OF THE TRANSACTIONS CONTEMPLATED HEREBY,
REGARDLESS OF WHICH PARTY INITIATES SUCH ACTION OR ACTIONS.
NORDSTROM, INC.,
a Washington corporation
By:
Name:
Title:
A-1-2
SCHEDULE
REVOLVING LOAN NOTE
Amount of
Type and Interest Interest Principal Paid Unpaid Principal Notation
Date Amount of Loan Period Rate or Prepaid Amount of Note Made By
EXHIBIT A-3
FORM OF
BID LOAN NOTE
Seattle, Washington
July [__], 1997
FOR VALUE RECEIVED, the undersigned, NORDSTROM, INC., a Washington
corporation (the "Borrower"), hereby promises to pay to the order of [insert
name of Lender], a [insert organizational status] (the "Lender"), for the
account of its Domestic Lending Office, the aggregate unpaid principal amount
of all Bid Loans (the "Loans") made by the Lender to the Borrower under the
Credit Agreement referred to below, on the dates and in the amounts set forth
in the Credit Agreement. The Borrower further promises to pay interest on the
unpaid principal amount of each such Loan from time to time outstanding on the
dates and at the rates specified in the Credit Agreement.
This Bid Loan Note (the "Note") is one of the Bid Loan Notes referred
to in, and is entitled to the benefits of, the Credit Agreement, dated as of
July 24, 1997 (as the same may be amended, supplemented, replaced, renewed or
otherwise modified from time to time, the "Credit Agreement"), by and among
the Borrower, each of the banks and other financial institutions that either
now or in the future are parties thereto as lenders (including the Lender, the
"Lenders"), certain Managing Agents and NATIONSBANK OF TEXAS, N.A., a national
banking association, in its capacity as administrative agent on behalf of the
Lenders (in such capacity, the "Agent"), to which reference is hereby made for
a more complete statement of the terms and conditions on which the Loans
evidenced hereby are made and are to be repaid. The Credit Agreement provides
for, among other things, the acceleration of the maturity hereof upon the
occurrence of certain events and for voluntary and mandatory prepayments under
certain circumstances and upon certain terms and conditions.
Terms with initial capital letters used but not defined herein have
the meanings assigned to them in the Credit Agreement. All payments due
hereunder shall be made to the Agent at the time and place, in the type of
funds, and in the manner set forth in the Credit Agreement, without any
deduction whatsoever, including, without limitation, any deduction for any
set-off, recoupment, counterclaim or Taxes. The Borrower hereby waives
diligence, presentment, demand, protest, notice of dishonor and all other
demands and notices in connection with the execution, delivery, performance or
enforcement of this Note, except as otherwise set forth in the Credit
Agreement.
The Lender is authorized (but not obligated) to endorse on the
Schedule hereto, or on a continuation thereof, each Loan made by the Lender
and each payment or prepayment with respect thereto. The Borrower promises to
pay all costs and expenses, including attorneys' fees and disbursements,
incurred in the collection or enforcement hereof.
A-3-1
Except as permitted by Section 9.6 of the Credit Agreement, this Note
may not be assigned to any Person.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF WASHINGTON. THE
BORROWER AND, BY ACCEPTANCE HEREOF, THE LENDER WAIVE THE RIGHT
TO A TRIAL BY JURY IN ANY ACTION UNDER THIS NOTE OR ANY ACTION
ARISING OUT OF THE TRANSACTIONS CONTEMPLATED HEREBY,
REGARDLESS OF WHICH PARTY INITIATES SUCH ACTION OR ACTIONS.
NORDSTROM, INC.,
a Washington corporation
By:
Name:
Title:
A-3-2
SCHEDULE
BID LOAN NOTE
Amount of
Type and Interest Interest Principal Paid Unpaid Principal Notation
Date Amount of Loan Period Rate or Prepaid Amount of Note Made By
EXHIBIT B
FORM OF DESIGNATION AGREEMENT
Dated , 19
Reference is made to the Credit Agreement dated as of July 24, 1997 (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement") among Nordstrom, Inc., a Washington corporation (the "Borrower"),
the Lenders parties thereto, and NationsBank of Texas, N.A., as Agent (the
"Agent") for the Lenders. Terms defined in the Credit Agreement are used
herein with the same meaning.
[NAME OF DESIGNOR] (the "Designor"), [NAME OF DESIGNEE] (the "Designee"),
the Agent and the Borrower agree as follows:
2. The Designor hereby designates the Designee, and the Designee
hereby accepts such designation, to have a right to make Bid Loans pursuant to
Section 2.2 of the Credit Agreement.
3. Except as set forth in Section 7 below, the Designor makes no
representation or warranty and assumes no responsibility pursuant to this
Designation Agreement with respect to (a) any statements, warranties or
representations made in or in connection with any Loan Document or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of any Loan Document or any other instrument and document furnished
pursuant thereto and (b) the financial condition of the Borrower or any Loan
Party or the performance or observance by the Borrower or any Loan Party or
any of their respective obligations under any Loan Document or any other
instrument or document furnished pursuant thereto. (It is acknowledged that
the Designor may make representations and warranties of the type described
above in other agreements to which the Designor is a party).
4. The Designee (a) confirms that it has received a copy of the
Credit Agreement and the other Loan Documents, together with copies of the
financial statements referred to in Section 4.3 of the Credit Agreement or
delivered pursuant to Section 5.1 thereof prior to the date hereof and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Designation Agreement; (b)
agrees that it will, independently and without reliance upon the Agent, the
Designor or any other Lender Party, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement or
the other Loan Documents; (c) appoints and authorizes the Agent to take such
actions on its behalf and to exercise such powers under the Loan Documents as
are delegated to the Agent by the terms thereof, together with such powers as
are reasonably incidental thereto; (d) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement or the other Loan Documents are required to be performed by
it as a Lender; and (e) specifies as its address for notices the office set
forth beneath its name on the signature pages hereof.
5. The Designee hereby appoints Designor as Designee's agent and
attorney in fact, and grants to Designor an irrevocable power of attorney, to
deliver and receive all communications and notices
B-1
under the Credit Agreement and the other Loan Documents and to exercise on
Designee's behalf all rights to vote and to grant and make approvals, waivers,
consents or amendments to or under the Credit Agreement or the other Loan
Documents. Any document executed by the Designor on the Designee's behalf in
connection with the Credit Agreement or other Loan Documents shall be binding
on the Designee. The Borrower, the Agent and each of the Lenders may rely on
and are beneficiaries of the preceding provisions of this Section 5.
6. Following the execution of this Designation Agreement by the
Designor and its Designee, it will be delivered to the Agent for acceptance
and recording by the Agent. The effective date for this Designation Agreement
(the "Effective Date") shall be the date of acceptance hereby by the Agent,
unless otherwise specified on the signature page hereto.
7. Neither the Agent nor the Borrower shall institute or join any
other person in instituting against the Designee any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding, or other
proceeding under any federal or state bankruptcy or similar law, for one year
and a day after the Maturity Date of the Credit Agreement.
[ Optional Provision: . The Designor unconditionally agrees to pay or
reimburse the Designee for, and save the Designee harmless against, all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever which
may be imposed or asserted by any of the parties to the Loan Documents against
the Designee, in its capacity as such, in any way relating to or arising out
of this Designation Agreement or any other Loan Documents or any action taken
or omitted by the Designee hereunder or thereunder, provided that the Designor
shall not be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements if the same results from the Designee's gross negligence or
willful misconduct.]
8. Upon such acceptance and recording by the Agent, as of the
Effective Date, the Designee shall be a party to the Credit Agreement with a
right to make Bid Loans as a Lender pursuant to Section 2.2 of the Credit
Agreement and the rights and obligations of a Lender related thereto.
9. THIS DESIGNATION AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF WASHINGTON.
10. This Designation Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this Designation Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart of this Designation Agreement.
B-2
IN WITNESS WHEREOF, the Designor and the Designee, intending to be
legally bound, have caused this Designation Agreement to be executed by their
officers thereunto duly authorized as of the date first above written.
Effective Date: , 19
[NAME OF DESIGNOR], as Designor
By:
Title:
[NAME OF DESIGNEE], as Designee
By:
Title:
Applicable Lending Office (and address for notices):
[ADDRESS]
Accepted this day of
, 1997
[AGENT], as Agent
By:
Title:
[BORROWER]
By:
Title:
B-3
EXHIBIT E-1
FORM OF
NOTICE OF BORROWING
TO: NATIONSBANK OF TEXAS, N.A., as Agent
901 Main Street
13th Floor
Dallas, Texas 75202
Attention: Molly Oxford
Reference is hereby made to the Credit Agreement, dated as of July 24,
1997 (as the same may be amended, supplemented, replaced, renewed or otherwise
modified from time to time, the "Credit Agreement"), by and among NORDSTROM,
INC., a Washington corporation (the "Borrower"), each of the banks and other
financial institutions that either now or in the future are parties thereto as
lenders (the "Lenders"), certain Managing Agents and NATIONSBANK OF TEXAS,
N.A., a national banking association, in its capacity as administrative agent
on behalf of the Lenders (in such capacity, the "Agent"). Terms with initial
capital letters used but not defined herein have the meanings assigned to them
in the Credit Agreement.
Pursuant to Article 2 of the Credit Agreement:
1. The Borrower hereby requests to borrow Revolving Loans in the
aggregate principal amounts and types as follows (the "Loans"): (a) Euro-
Dollar Rate Loans in the amount of $ on , 1 [with
an Interest Period of ]2 ; and (b) Base Rate Loans in the mount
of $ on , 3; and
2. The Borrower hereby represents and warrants as follows:
(a) All of the representations and warranties contained in
Article 4 of the Credit Agreement and in the other Loan Documents are true and
correct in all material respects on and as of the date hereof and shall be
true and correct in all material respects on and as of each Funding Date
proposed herein as though made on and as of each such date (except, in each
case, to the extent that such representations and warranties expressly were
made only as of a specific date);
(b) No Default or Event of Default exists or would result from
the making of the Loans; and
- ----------------------------
1 Must be a Business Day.
2 For Euro-Dollar Rate Loans. With respect to each Euro-Dollar Rate
Loan, permissible Interest Periods are periods of one, two, three or six
months.
3 Must be a Business Day.
E-1-1
(c) All other conditions to borrowing set forth in Section 3.2
of the Credit Agreement are satisfied.
Date: ,
NORDSTROM, INC.,
a Washington corporation
By: 4
Name:
Title:
- ----------------------------
4 Must be a Responsible Officer.
E-1-2
EXHIBIT E-3
FORM OF
NOTICE OF CONVERSION/CONTINUATION
TO: NATIONSBANK OF TEXAS, N.A., as Agent
901 Main Street
13th Floor
Dallas, Texas 75202
Attention: Molly Oxford
Reference is hereby made to the Credit Agreement, dated as of July 24,
1997 (as the same may be amended, supplemented, replaced, renewed or otherwise
modified from time to time, the "Credit Agreement"), by and among NORDSTROM,
INC., a Washington corporation (the "Borrower"), each of the banks and other
financial institutions that either now or in the future are parties thereto as
lenders (the "Lenders"), certain Managing Agents and NATIONSBANK OF TEXAS,
N.A., a national banking association, in its capacity as administrative agent
on behalf of the Lenders (in such capacity, the "Agent"). Terms with initial
capital letters used but not defined herein have the meanings assigned to them
in the Credit Agreement.
Pursuant to Article 2 of the Credit Agreement:
[FOR CONVERSION OF BASE RATE INTO EURO-DOLLAR RATE]
Effective as of , , the Borrower hereby requests to
convert $ of presently outstanding Base Rate Loans on ,
into Euro-Dollar Rate Loans with an Interest Period of
[one/two/three/six] months[s].
[FOR CONVERSION OF EURO-DOLLAR RATE INTO BASE RATE]
Effective as of , , the Borrower hereby requests to
convert $ of presently outstanding Euro-Dollar Rate Loans with an
Interest Period of [one/two/three/six] months[s], expiring on ,
into Base Rate Loans.
[FOR CONTINUATION OF EURO-DOLLAR RATE]
Effective as of , , the Borrower hereby requests to
continue $ continue of presently outstanding Euro-Dollar Rate
Loans with an Interest Period of expiring on ,
as Euro-Dollar Rate Loans with an
E-3-1
Interest Period of [one/two/three/six] month[s].
Date: ,
NORDSTROM, INC.,
a Washington corporation
By: 1
Name:
Title:
- ----------------------------
1 Must be a Responsible Officer.
E-3-2
EXHIBIT E-4
FORM OF
BID LOAN QUOTE REQUEST
TO: NATIONSBANK OF TEXAS, N.A., as Agent
13th Floor
901 Main Street
Dallas, Texas 75202
Attention: Molly Oxford
Reference is hereby made to the Credit Agreement, dated as of July 24,
1997 (as the same may be amended, supplemented, replaced, renewed or otherwise
modified from time to time, the "Credit Agreement"), by and among NORDSTROM,
INC., a Washington corporation (the "Borrower"), each of the banks and other
financial institutions that either now or in the future are parties thereto as
lenders (the "Lenders"), certain Managing Agents and NATIONSBANK OF TEXAS,
N.A., a national banking association, in its capacity as administrative agent
on behalf of the Lenders (in such capacity, the "Agent"). Terms with initial
capital letters used but not defined herein have the meanings assigned to them
in the Credit Agreement.
Pursuant to Section 2.2 of the Credit Agreement:
1. The Borrower hereby gives notice that it requests Bid Loan
Quotes for the following proposed Bid Loan Borrowing(s)1:
Funding Date <fn2> Amount <fn3> Interest Period <fn4>
- ----------------------------
<FN>
<fn1>
1 Up to three.
<fn2>
2 Must be a Business Day.
<fn3>
3 Each amount must be at least $10,000,000 and a multiple of $1,000,000.
<fn4>
4 A period of not less than 7 and not more than 30 days after the Funding
Date and ending on a Business Day.
</FN>
E-4-1
2. The Borrower hereby represents and warrants as follows:
(a) All of the representations and warranties contained in
Article 4 of the Credit Agreement and in the other Loan Documents are true and
correct in all material respects on and as of the date hereof and shall be
true and correct in all material respects on and as of each Funding Date
proposed herein as though made on and as of each such date (except, in each
case, to the extent that such representations and warranties expressly were
made only as of a specific date);
(b) No Default or Event of Default exists or would result from
the Bid Loan Borrowing(s); and
(c) All other conditions to borrowing set forth in Section 3.2
of the Credit Agreement are satisfied.
Date: ,
NORDSTROM, INC.,
a Washington corporation
By: 5
Name:
Title:
- ----------------------------
5 Must be a Responsible Officer.
E-4-2
EXHIBIT E-5
FORM OF
BID LOAN QUOTE
TO: NATIONSBANK OF TEXAS, N.A., as Agent
901 Main Street
13th Floor
Dallas, Texas 75202
Attention: Molly Oxford
Reference is hereby made to the Credit Agreement, dated as of July 24,
1997 (as the same may be amended, supplemented, replaced, renewed or otherwise
modified from time to time, the "Credit Agreement"), by and among NORDSTROM,
INC., a Washington corporation (the "Borrower"), each of the banks and other
financial institutions that either now or in the future are parties thereto as
lenders (the "Lenders"), certain Managing Agents and NATIONSBANK OF TEXAS,
N.A., a national banking association, in its capacity as administrative agent
on behalf of the Lenders (in such capacity, the "Agent"). Terms with initial
capital letters used but not defined herein have the meanings assigned to them
in the Credit Agreement.
In response to the Borrower's Bid Loan Quote Request dated_____
,____ (the "Bid Loan Quote Request"), we hereby make the following Bid Loan
Quote(s) on the following terms:
1. Quoting Bank:
2. Person to contact at Quoting Bank:
3. We hereby offer to make Bid Loan(s) in the following principal
amount[s],
for the following Interest Period(s) and at the following rate(s):
Funding Date <fn1> Amount <fn2> Interest Period <fn3> Quote <fn4>
- ----------------------------
<FN>
<fn1>
1 As specified in the Bid Loan Quote Request.
<fn2>
2 The principal amount bid for each Interest Period may not exceed the
principal amount requested. Bids must be made for at least $2,000,000
a multiple of $1,000,000.
<fn3>
3 As specified in the Bid Loan Quote Request.
<fn4>
4 Specify rate of interest per annum ([quoted on an "all-in basis and]
rounded to the nearest 1/10,000 of 1%).
</FN>
E-5-1
We understand and agree that the offer(s) set forth above, subject to
the satisfaction of the applicable conditions set forth in the Credit
Agreement, irrevocably obligate(s) us to make the Bid Loan(s) for which any
offer(s) are accepted, in whole or in part, subject to the third sentence of
Section 2.2.2.2 of the Credit Agreement.
Date: ,
By: 5
Name:
Title:
- ----------------------------
5 Must be an authorized officer.
E-5-2
EXHIBIT E-7
FORM OF
NOTICE OF RESPONSIBLE OFFICERS
TO: NATIONSBANK OF TEXAS, N.A., as Agent
901 Main Street
13th Floor
Dallas, Texas 75202
Attention: Molly Oxford
Reference is hereby made to the Credit Agreement, dated as of July 24,
1997 (as the same may be amended, supplemented, replaced, renewed or otherwise
modified from time to time, the "Credit Agreement"), by and among NORDSTROM,
INC., a Washington corporation (the "Borrower"), each of the banks and other
financial institutions that either now or in the future are parties thereto as
lenders (the "Lenders"), certain Managing Agents and NATIONSBANK OF TEXAS,
N.A., a national banking association, in its capacity as administrative agent
on behalf of the Lenders (in such capacity, the "Agent"). Terms with initial
capital letters used but not defined herein have the meanings assigned to them
in the Credit Agreement.
The Borrower hereby designates the following individuals as
Responsible Officers, authorized to request and take other actions with
respect to Loans on behalf of the Borrower and certifies that the signatures
and telephone numbers of those individuals are as follows:
Name Office Signature Phone No.
The Agent is hereby authorized to rely on this Notice of Responsible
Officers unless and until a new Notice of Responsible Officers is received by
it, irrespective of whether any of the information set forth herein shall have
become inaccurate or false. Additional persons may be designated as
Responsible Officers, or the designation of any person may be revoked, at any
time, by subsequent Notices of Responsible Officers signed by any person who
purports to be a Senior Officer of the Borrower.
E-7-1
The foregoing supersedes any Notice of Responsible Officers presently
in effect under the Credit Agreement.
Date: ,
NORDSTROM, INC.,
a Washington corporation
By: 1
Name:
Title:
- ----------------------------
1 Must be a Senior Officer.
E-7-2
EXHIBIT F-1
FORM OF
SECRETARY'S CERTIFICATE
TO: NATIONSBANK OF TEXAS, N.A., as Agent
901 Main Street
13th Floor
Dallas, Texas 75202
Attention: Molly Oxford
Reference is hereby made to the Credit Agreement, dated as of July 24,
1997 (as the same may be amended, supplemented, replaced, renewed or otherwise
modified from time to time, the "Credit Agreement"), by and among NORDSTROM,
INC., a Washington corporation (the "Borrower"), each of the banks and other
financial institutions that either now or in the future are parties thereto as
lenders (the "Lenders"), certain Managing Agents and NATIONSBANK OF TEXAS,
N.A., a national banking association, in its capacity as administrative agent
on behalf of the Lenders (in such capacity, the "Agent"). Terms with initial
capital letters used but not defined herein have the meanings assigned to them
in the Credit Agreement.
Pursuant to Section 3.1 of the Credit Agreement, the undersigned
hereby certifies that he or she is the duly appointed, qualified and acting
Secretary of the Borrower and hereby further certifies as follows:
1. Attached as Exhibit A is a true, correct and complete copy of
the Bylaws of the Borrower, including all amendments, as in effect on the date
hereof.
2. Attached as Exhibit B is a true, correct and complete copy of
the resolutions duly and validly adopted by the Board of Directors of the
Borrower on , . Such resolutions have not been amended or
modified and are in full force and effect in the form adopted and are the only
resolutions adopted by the Board of Directors or by any committee of, or
designated by, the Board of Directors relating to the Credit Agreement.
F-1-1
3. There have been no changes in the articles of incorporation of
the Borrower since the date of the certification thereof by the Secretary of
State of its jurisdiction of incorporation, as it is being delivered to the
Agent on the date hereof.
Date: July , 1997
Name: [Karen E. Purpur]
The undersigned certifies that he or she is the duly appointed,
qualified and acting President of the Borrower and further certifies that
[Karen E. Purpur] is the duly appointed, qualified and acting Secretary of the
Borrower and that the signature set forth above is his or her genuine
signature.
Date: July , 1997
Name:
F-1-2
EXHIBIT F-3
FORM OF
OFFICER'S CLOSING CERTIFICATE
TO: NATIONSBANK OF TEXAS, N.A., as Agent
901 Main Street
13th Floor
Dallas, Texas 75202
Attention:
Reference is hereby made to the Credit Agreement, dated as of July 24,
1997 (as the same may be amended, supplemented, replaced, renewed or otherwise
modified from time to time, the "Credit Agreement"), by and among NORDSTROM,
INC., a Washington corporation (the "Borrower"), each of the banks and other
financial institutions that either now or in the future are parties thereto as
lenders (the "Lenders"), certain Managing Agents and NATIONSBANK OF TEXAS,
N.A., a national banking association, in its capacity as administrative agent
on behalf of the Lenders (in such capacity, the "Agent"). Terms with initial
capital letters used but not defined herein have the meanings assigned to them
in the Credit Agreement.
Pursuant to Section 3.1 of the Credit Agreement, the undersigned
hereby certifies that he is the President of the Borrower and hereby further
certifies as follows:
1. I have carefully reviewed the terms of the Loan Documents to
which the Borrower is a party and have made, or caused to be made, such review
of the Borrower and its business affairs as I have considered necessary for
the purposes of preparing this Certificate.
2. I have carefully prepared and reviewed the contents of this
Certificate and have conferred with counsel for the Borrower for the purpose
of discussing the meaning of any provisions hereof that I desired to have
clarified.
3. All representations and warranties of the Borrower contained in
the Loan Documents to which the Borrower is a party are true and correct in
all Material respects as of the date hereof as if made on such date.
4. No Default or Event of Default exists on and as of the date
hereof or would result from the making of the Loans on the Closing Date.
F-3-1
5. All of the conditions precedent set forth in Section 3.1 of the
Credit Agreement have been satisfied (assuming for purposes of this paragraph
5 that those matters required to be satisfactory to the Agent are satisfactory
to the Agent).
Date: July , 1997
Name:
Title: President
F-3-2
EXHIBIT F-6
FORM OF
COMPLIANCE CERTIFICATE
TO: NATIONSBANK OF TEXAS, N.A., as Agent
901 Main Street
13th Floor
Dallas, Texas 75202
Attention: Molly Oxford
Reference is hereby made to the Credit Agreement, dated as of July 24,
1997 (as the same may be amended, supplemented, replaced, renewed or otherwise
modified from time to time, the "Credit Agreement"), by and among NORDSTROM,
INC., a Washington corporation (the "Borrower"), THE BANKS AND OTHER FINANCIAL
INSTITUTIONS FROM TIME TO TIME PARTIES THERETO AS LENDERS (the "Lenders"),
certain MANAGING AGENTS and NATIONSBANK OF TEXAS, N.A. (the "Agent Bank," as
agent and representative for the Lenders (in such capacity the Agent Bank or
any successor in such capacity is referred to herein as the "Agent"). Terms
with initial capital letters used but not defined herein have the meanings
assigned to them in the Credit Agreement.
This Compliance Certificate is being delivered pursuant to Section
5.1.5 of the Credit Agreement and relates to certain financial statements of
the Borrower (the "Financial Statements") as of and for periods ended (the
"Financial Statement Date"). The undersigned is the [Chief Financial
Officer/President] of the Borrower, and hereby further certifies as of the
date hereof, in [his/her] capacity as an officer of the Borrower, as follows:
1. I have reviewed the terms of the Loan Documents and have made,
or have caused to be made under my supervision, a review in reasonable detail
of the transactions and condition of the Borrower and its Subsidiaries during
the accounting period covered by the Financial Statements to make the
statements contained in this Compliance Certificate. I have also made such
inquiries as have been necessary of other officers of the Borrower in order to
complete this Compliance Certificate.
2. Such review has not disclosed the existence of any Default or
Event of Default during such accounting period or as of the Financial
Statement Date and I do not have knowledge of the existence, as at the date of
this certificate, of any Default or Event of Default[, except as follows:1].
I hereby further certify as of the Financial Statement Date, in my
capacity as an
- ----------------------------
1 Specify the nature and period of existence of each Default or Event of
Default (if any) and what action the Borrower has taken, is taking, or
proposes to take with respect thereto.
F-6-1
officer of the Borrower, as follows 2:
I. Section 6.3.1 Minimum Coverage Ratio for Fiscal Quarter
A. EBITDAR for Fiscal Quarter
B. Interest Expense for Fiscal Quarter
C. Rent Expense for Fiscal Quarter
D. Fixed Charge Coverage Ratio for Fiscal Quarter
E. Minimum Coverage Ratio 2.00
II. Section 6.3.2 Minimum Net Worth as of Financial Statement Date
A. Net Worth of the Borrower as of Financial Statement Date
B. Minimum Net Worth of the Borrower as of Financial Statement Date
1. Initial Amount $1,100,000,000
2. 50% of positive net income since July 31, 1997
3. 50% of net cash proceeds of equity offerings
(other than employee stock options) since July
31, 1997
- ----------------------------
2 All accounting terms used herein shall be interpreted, and all accounting
determinations hereunder shall be made, in accordance with Section 1.2.3 of
the Credit Agreement.
F-6-2
The undersigned has executed this Officers' Certificate as of the th day
of , .
Name:
Title: [Chief Financial Officer/President]
F-6-3
EXHIBIT G
FORM OF OPINION OF
BORROWER'S COUNSEL
July 24, 1997
NationsBank of Texas, N.A., as Agent
901 Main Street
13th Floor
Dallas, Texas 75202
Re: Nordstrom, Inc. -- Credit Agreement
dated as of July 24, 1997
Ladies and Gentlemen:
We have acted as counsel to Nordstrom, Inc., a Washington corporation
(the "Borrower"), in connection with the preparation of:
(i) the Credit Agreement dated as of July 24, 1997 (the "Credit
Agreement") by and among the Borrower, the Lenders thereunder (the "Lenders"),
certain Managing Agents and NationsBank of Texas, N.A., as the agent (the
"Agent") and a Lender,
(ii) the Notes dated July 24, 1997 made by the Borrower payable to
the order of each Lender; and
(iii) all other documents or instruments related to the loans
contemplated under the Credit Agreement.
Each capitalized term used and not defined herein shall have the
meaning assigned
to that term in the Credit Agreement. The Credit Agreement and the Notes are
collectively referred to as the "Loan Documents."
We have assumed with your permission that:
(a) The signatures on all documents examined by us are genuine, all
individuals executing such documents had all requisite legal capacity and
competency and (except in the case of documents signed on behalf of the
Borrower and its Subsidiaries) were duly authorized, the documents submitted
to us as originals are authentic and the
G-1
documents submitted to us as certified or reproduction copies conform to the
originals; and
(b) The Lenders have all requisite power and authority to execute,
deliver and perform their obligations under each of the Loan Documents to
which they are a party, the execution and delivery of such Loan Documents by
the Lenders and performance of such obligations by the Lenders have been duly
authorized by all necessary action and such Loan Documents are legal, valid
and binding obligations of the Lenders, enforceable against them in accordance
with their respective terms.
In rendering this opinion, we have made such inquiries and examined,
among other things, originals or copies, certified or otherwise identified to
our satisfaction, of such records, agreements, certificates, instruments and
other documents as we have considered necessary or appropriate for purposes of
this opinion. As to certain factual matters, we have relied upon certificates
of officers of the Borrower or certificates obtained from public officials.
Based on the foregoing and in reliance thereon, and subject to the
assumptions, exceptions, qualifications and limitations set forth herein, we
are of the opinion that:
1. The Borrower has been duly incorporated and is a validly
existing corporation in good standing under the laws of the State of
Washington, and has all requisite power and authority to execute, deliver and
perform its obligations under the Loan Documents and to own or lease the
properties owned or leased by it.
2. Borrower is duly qualified as a foreign corporation in each
jurisdiction in which the character of the properties owned or leased by it or
in which the transaction of any of its business makes such qualification
necessary.
3. The execution and delivery of the Loan Documents by the Borrower
and the performance of its obligations thereunder have been duly authorized by
all necessary corporate action of the Borrower, and the Loan Documents have
each been duly executed and delivered by the Borrower.
4. Each of the Loan Documents constitutes a legal, valid and
binding obligation of the Borrower, enforceable against the Borrower in
accordance with its terms.
5. The Borrower is not an "investment company" or a company
"controlled by an investment company" within the meaning of the Investment
Company Act of 1940, as amended.
6. The execution, delivery and performance by the Borrower of the
Loan Documents do not and will not (A) violate or conflict with any provision
of the charter or bylaws of the Borrower, or, to the best of our knowledge,
any order, judgment, injunction or decree of any court or other agency of
government binding on the Borrower, (B) conflict in any material respect with,
result in a material breach of or constitute a material default under any
Contractual Obligation of the Borrower identified
G-2
to us by officers of the Borrower as material, or (C) result in or require the
creation or imposition of any Lien upon any of the Borrower's assets.
7. The execution and delivery by the Borrower of the Loan Documents
on the Closing Date, and the incurrence and repayment of Debt by the Borrower
pursuant to the Loan Documents do not violate any law or regulation of the
State of Washington or the United States of America applicable to the
Borrower, which, in our experience, is generally applicable to transactions in
the nature of those contemplated by the Loan Documents, or require any action
by or in respect of, or filing with, any governmental body, agency or
official, or any authorization, consent, waiver or approval, order, judgment
or decree of any federal or Washington governmental authority, court or
regulatory body (other than those that have been obtained).
8. There is no action, suit or proceeding pending or, to the best
of our knowledge, threatened against or affecting the Borrower or any of its
Subsidiaries of the nature described in Section 4.5 of the Credit Agreement or
in which an injunction or order has been entered preventing or adversely
affecting the making of the Loans, or the consummation of the transactions
contemplated by any of the Loan Documents.
9. The Borrower and all members of any Controlled Group of which
the Borrower is a member have fulfilled their obligations under the minimum
funding standards of ERISA with respect to each Plan to which they are a
party, and have not incurred any liability to the PBGC in connection with any
Plan established or maintained by the Borrower or any member of any such
Controlled Group.
The foregoing opinions are subject to the following exceptions,
qualifications and limitations:
[Appropriate exceptions to be provided by Borrower's counsel]
This opinion is rendered to the Lenders and the Agent in connection
with the Loan Documents and may not be relied upon by any person other than
the Lenders and the Agent or by the Lenders and the Agent in any other
context, provided that the Lenders and the Agent may provide this opinion (i)
to bank examiners and other regulatory authorities should they so request or
in connection with their normal examinations, (ii) to the independent auditors
and attorneys of the Lenders or the Agent, (iii) pursuant to order or legal
process of any court or governmental agency, (iv) in connection with any legal
action to which the Lenders or the Agent are a party arising out of the
transactions contemplated by the Loan Documents, or (v) to any proposed
assignee or participant of any Lender. This opinion may not be quoted without
the prior written consent of this firm.
Very truly yours,
G-3
EXHIBIT H
FORM OF
ASSIGNMENT AND ASSUMPTION
TO: NATIONSBANK OF TEXAS, N.A., as Agent
901 Main Street
13th Floor
Dallas, Texas 75202
Attention: Molly Oxford
Dated ,
Reference is hereby made to the Credit Agreement, dated as of July 24,
1997 (as the same may be amended, supplemented, replaced, renewed or otherwise
modified from time to time, the "Credit Agreement"), by and among NORDSTROM,
INC., a Washington corporation (the "Borrower"), each of the banks and other
financial institutions that either now or in the future are parties thereto as
lenders (the "Lenders"), certain Managing Agents and NATIONSBANK OF TEXAS,
N.A., a national banking association, in its capacity as administrative agent
on behalf of the Lenders (in such capacity, the "Agent"). Terms with initial
capital letters used but not defined herein have the meanings assigned to them
in the Credit Agreement.
(the "Assignor") and
(the "Assignee) agree as follows:
1. Subject to Section 4 below, the Assignor hereby sells and
assigns to the Assignee, and the Assignee hereby purchases and assumes from
the Assignor, WITHOUT RECOURSE, a % interest in and to all of the
Assignor's rights and obligations under the Credit Agreement and the other
Loan Documents as of the Effective Date (as defined below), including, without
limitation, such percentage interest in the Assignor's Revolving Commitment as
is in effect on the Effective Date, the Revolving Loans owing to the Assignor
on the Effective Date, the Revolving Loan Note held by the Assignor, the Bid
Loans owing to the Assignor on the Effective Date and the Bid Loan Note held
by the Assignor.
2. The Assignor (a) represents and warrants that, as of the date
hereof, its Revolving Commitment (without giving effect to assignments thereof
which have not yet become effective) is $ ; (b) represents
and warrants that it is the legal and beneficial owner of the interest being
assigned by it hereunder and that such interest is free and clear of any
adverse claim; (c) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or any of the other Loan
Documents or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement or any of the other Loan
Documents or any other instrument or document furnished pursuant thereto; (d)
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of the Borrower or any of the Borrower's
obligations under the Loan Documents or any other instrument or document
furnished pursuant thereto; (e) attaches the Revolving Loan Note
H-1
referred to in paragraph 1 above and requests that the Agent exchange such
note for new Revolving Loan Notes as follows: a Revolving Loan Note, dated__,
, in the principal amount of $ , payable to the
Assignor or order, and a Revolving Loan Note, dated___,
in the principal amount of $ payable to the Assignee or
order; and (f) attaches the Bid Loan Note referred to in paragraph 1 above and
requests that the Agent exchange such note for new Bid Loan Notes as follows:
a Bid Loan Note, dated , in the principal amount of
$___, payable to the Assignor or order, and a Bid Loan Note, dated
, 19 in the principal amount of $ payable to the Assignee or
order.
3. The Assignee (a) confirms that it has received a copy of the
Credit Agreement and the other Loan Documents, together with copies of the
financial statements referred to in Section 4.3 of the Credit Agreement or
delivered pursuant to Section 5.1 thereof prior to the date hereof and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment and Assumption;
(b) agrees that it will, independently and without reliance upon the Agent,
the Assignor or any other Lender Party, and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under the Credit
Agreement or the other Loan Documents; (c) appoints and authorizes the Agent to
take such actions on its behalf and to exercise such powers under the Loan
Documents as are delegated to the Agent by the terms thereof, together with
such powers as are reasonably incidental thereto; (d) agrees that it will
perform in accordance with their terms all of the obligations which by the
terms of the Credit Agreement or the other Loan Documents are required to be
performed by it as a Lender; and (e) specifies as its address for notices the
office set forth beneath its name on the signature pages hereof.
4. The effective date of this Assignment and Assumption shall be
(a) or (b) the date on which all conditions set forth in
Section 9.6.2 of the Credit Agreement have been satisfied, whichever is later
(the "Effective Date")3. This Assignment and Assumption shall be delivered
to the Agent and the Borrower for acceptance and the fee required by Section
9.6.2 of the Credit Agreement shall be paid to the Agent.
5. From and after the Effective Date, (a) the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Assignment
and Assumption, have the rights and obligations of a Lender thereunder and
under the other Loan Documents and (b) the Assignor shall, to the extent
provided in this Assignment and Assumption, relinquish its rights and be
released from its obligations under the Credit Agreement and the other Loan
Documents.
6. From and after the Effective Date, the Agent shall make all
payments under the Credit Agreement and the other Loan Documents in respect of
the interest assigned hereby (including all payments of principal, interest
and Fees) to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments under the Credit Agreement and the other
Loan Documents for periods prior to the Effective Date directly between
- ----------------------------
3 Such Date shall be at least 1 Business Day after the delivery of this
Assignment and Assumption to the Agent and the Borrower.
H-2
themselves.
7. THIS ASSIGNMENT AND ASSUMPTION SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF WASHINGTON.
[NAME OF ASSIGNOR]
By:
Name:
Title:
Revolving Commitment after the Effective
Date: $
[NAME OF ASSIGNEE]
By:
Name:
Title:
Notice Address:
Revolving Commitment after the Effective
Date: $
Accepted this day of
,
NATIONSBANK OF TEXAS, N.A., as Agent
By:
Name:
Title:
NORDSTROM, INC.
By:
Name:
Title:
H-3