EXHIBIT 10.30
EXECUTION COPY
================================================================================
$300,000,000
AMENDED AND RESTATED
REVOLVING CREDIT FACILITY
DATED AS OF NOVEMBER 20, 2001
AMONG
NORDSTROM, INC.,
AS BORROWER,
THE FINANCIAL INSTITUTIONS NAMED HEREIN,
AS LENDERS,
BANK OF AMERICA, N.A.,
AS ADMINISTRATIVE AGENT,
BANK ONE, NA,
AS SYNDICATION AGENT
AND
U.S. BANK NATIONAL ASSOCIATION,
AS DOCUMENTATION AGENT
================================================================================
BANC OF AMERICA SECURITIES LLC,
AS SOLE LEAD ARRANGER AND BOOK MANAGER
TABLE OF CONTENTS
PAGE
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ARTICLE 1 DEFINITIONS AND RELATED MATTERS................................................................ 1
Section 1.1 Definitions........................................................................ 1
Section 1.2. Related Matters.................................................................... 17
ARTICLE 2 AMOUNTS AND TERMS OF THE CREDIT FACILITIES..................................................... 18
Section 2.1. Revolving Loans.................................................................... 18
Section 2.2. Bid Loans.......................................................................... 20
Section 2.3. Use of Proceeds.................................................................... 23
Section 2.4. Interest; Interest Periods; Conversion/Continuation................................ 23
Section 2.5. Notes, Etc. ....................................................................... 26
Section 2.6. Fees............................................................................... 26
Section 2.7. Termination and Reduction of Revolving Commitments................................. 27
Section 2.8. Repayments and Prepayments......................................................... 27
Section 2.9. Manner of Payment.................................................................. 28
Section 2.10. Pro Rata Treatment................................................................. 29
Section 2.11 Sharing of Payments................................................................ 29
Section 2.12. Mandatory Suspension and Conversion of Euro-Dollar Rate Loans...................... 30
Section 2.13. Regulatory Changes................................................................. 30
Section 2.14. Compensation for Funding Losses.................................................... 31
Section 2.15. Certificates Regarding Yield Protection, Etc. ..................................... 32
Section 2.16 Taxes.............................................................................. 32
Section 2.17. Applicable Lending Office; Discretion of Lenders as to Manner of Funding........... 33
ARTICLE 3 CONDITIONS TO LOANS............................................................................ 33
Section 3.1. Closing Conditions................................................................. 33
Section 3.2. Conditions Precedent to Loans...................................................... 35
ARTICLE 4 REPRESENTATIONS AND WARRANTIES................................................................. 35
Section 4.1. Organization, Powers and Good Standing............................................. 35
Section 4.2. Authorization, Binding Effect, No Conflict, Etc. .................................. 36
Section 4.3. Financial Information.............................................................. 36
Section 4.4. No Material Adverse Changes........................................................ 37
Section 4.5. Litigation......................................................................... 37
Section 4.6. Agreements: Applicable Law......................................................... 37
Section 4.7. Taxes.............................................................................. 37
Section 4.8. Governmental Regulation............................................................ 38
Section 4.9. Margin Regulations................................................................. 38
Section 4.10. Employee Benefit Plans............................................................. 38
Section 4.11. Disclosure......................................................................... 38
Section 4.12. Solvency........................................................................... 39
Section 4.13. Title to Properties................................................................ 39
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ARTICLE 5 AFFIRMATIVE COVENANTS OF THE BORROWER.......................................................... 39
Section 5.1. Financial Statements and Other Reports............................................. 39
Section 5.2. Records and Inspection............................................................. 40
Section 5.3. Corporate Existence, Etc. ......................................................... 41
Section 5.4 Payment of Taxes and Claims........................................................ 41
Section 5.5. Maintenance of Properties.......................................................... 41
Section 5.6. Maintenance of Insurance........................................................... 41
Section 5.7. Conduct of Business; Compliance with Law........................................... 42
Section 5.8. Further Assurances................................................................. 42
Section 5.9. Future Information................................................................. 42
Section 5.10. Subordination of Intercompany Debt................................................. 42
ARTICLE 6 NEGATIVE COVENANTS OF THE BORROWER............................................................. 43
Section 6.1. Liens.............................................................................. 43
Section 6.2. Restricted Payments................................................................ 45
Section 6.3. Financial Covenants................................................................ 45
Section 6.4. Restriction on Fundamental Changes................................................. 46
Section 6.5. Asset Dispositions................................................................. 47
Section 6.6. Transactions with Affiliates....................................................... 47
Section 6.7. Limitation on Negative Pledges..................................................... 47
Section 6.8. Limitation on Investments in Nordstrom.com, LLC.................................... 48
ARTICLE 7 EVENTS OF DEFAULT, ETC. ....................................................................... 48
Section 7.1. Events of Default.................................................................. 48
Section 7.2. Remedies........................................................................... 50
Section 7.3 Allocation of Payments After Event of Default...................................... 51
ARTICLE 8 THE AGENT AND THE LENDERS...................................................................... 52
Section 8.1 Appointment and Authorization of Agent............................................. 52
Section 8.2 Delegation of Duties............................................................... 52
Section 8.3 Liability of Agent................................................................. 52
Section 8.4 Reliance by Agent.................................................................. 53
Section 8.5. Notice of Default.................................................................. 53
Section 8.6. Credit Decision; Disclosure of Information by Agent................................ 54
Section 8.7. Indemnification of Agent........................................................... 54
Section 8.8. Agent in its Individual Capacity................................................... 55
Section 8.9. Successor Agent.................................................................... 55
Section 8.10. Lender Parties..................................................................... 56
Section 8.11. Enforcement by the Agent........................................................... 56
Section 8.12. Syndication Agent and Documentation Agent.......................................... 56
ARTICLE 9 MISCELLANEOUS ................................................................................. 56
Section 9.1. Expenses........................................................................... 56
Section 9.2. Indemnity.......................................................................... 57
Section 9.3. Waivers; Modifications in Writing.................................................. 57
Section 9.4. Cumulative Remedies: Failure or Delays............................................. 58
Section 9.5. Notices, Etc. ..................................................................... 58
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Section 9.6. Successors and Assigns; Designations............................................... 59
Section 9.7. Set Off............................................................................ 61
Section 9.8. Survival of Agreements, Representations and Warranties............................. 61
Section 9.9. Execution in Counterparts.......................................................... 61
Section 9.10. Complete Agreement................................................................. 62
Section 9.11. Limitation of Liability............................................................ 62
Section 9.12. WAIVER OF TRIAL BY JURY............................................................ 62
Section 9.13. Confidentiality.................................................................... 62
Section 9.14. Binding Effect; Continuing Agreement............................................... 63
Section 9.15. NO ORAL AGREEMENTS................................................................. 63
EXHIBITS
Exhibit 2.1(c) Form of Notice of Borrowing
Exhibit 2.1(c)(iii) Form of Notice of Responsible Officers
Exhibit 2.2(b)(i) Form of Bid Loan Quote Request
Exhibit 2.2(b)(ii) Form of Bid Loan Quote
Exhibit 2.4(b)(ii) Form of Notice of Conversion/Continuation
Exhibit 2.5(a)(i) Form of Revolving Loan Note
Exhibit 2.5(a)(ii) Form of Bid Loan Note
Exhibit 3.1(d) Form of Closing Officer's Certificate
Exhibit 5.1(c) Form of Compliance Certificate
Exhibit 9.6(b) Form of Assignment and Assumption
SCHEDULES
Schedule 1.1(a) Lender Information
Schedule 1.1(b) Controlling Stockholders
Schedule 1.1(c) Existing Liens
Schedule 1.1(d) Revolving Commitments
Schedule 4.1 Organization of Borrower and Subsidiaries
Schedule 4.5 Material Litigation
Schedule 9.5 Borrower Information
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AMENDED AND RESTATED
CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of November 20, 2001 (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 ONE, NA, as Syndication Agent (in such capacity, the "Syndication Agent"),
U.S. BANK NATIONAL ASSOCIATION, as Documentation Agent (in such capacity, the
"Documentation Agent"), and BANK OF AMERICA, N.A., as administrative agent for
the Lenders (in such capacity, and any successor in such capacity, the "Agent").
The Lenders, the Syndication Agent, the Documentation Agent and the Agent are
collectively referred to herein as the "Lender Parties" and each individually as
a "Lender Party."
RECITALS
WHEREAS, the Borrower has requested that the Lenders provide a revolving
credit facility in an aggregate amount of $300,000,000 (the "Credit Facility")
for the purposes hereinafter set forth;
WHEREAS, the Lenders have agreed to make the requested Credit Facility
available to the Borrower on the terms and conditions hereinafter set forth; and
WHEREAS, this Agreement amends and restates the Existing Credit
Agreement.
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
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(b)(iii).
"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 Partly be deemed to be an Affiliate of the Borrower. For the
avoidance of doubt, the parties agree that, as of the date hereof, 1700
Seventh LP, a Washington limited partnership, is not an Affiliate of the
Borrower.
"Agent" means Bank of America or any successor agent appointed in
accordance with Section 8.9.
"Agent-Related Persons" means the Agent (including any successor
administrative agent), together with its Affiliates (including, in the
case of Bank of America in its capacity as the Agent, BAS), and the
officers, directors, employees, agents and attorneys-in-fact of such
Persons and Affiliates.
"Agent's Account" means the account of the Agent identified as
such on Schedule 1.1(a), 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(a), or such other office as the Agent may hereafter
designate by notice to the Borrower and each Lender Party.
"Agreement" means this Credit Agreement as it may be amended or
modified from time to time and including 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,
such 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, such Lender's Domestic Lending Office.
"Applicable Margin" means, at any time, with respect to Facility
Fees, Utilization Fees, or Euro-Dollar Rate Loans, as applicable, the
appropriate applicable percentage corresponding to the long term,
senior, unsecured, non-credit enhanced debt rating of the Borrower in
effect from time to time as shown below:
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Long Term, Senior,
Unsecured, Non-Credit Applicable Margin for Applicable Margin Applicable Margin
Level Enhanced Debt Rating of Borrower Euro-Dollar Rate Loans for Facility Fees for Utilization Fees
- ----- -------------------------------- ---------------------- ----------------- --------------------
I. >/= A from S&P .320% 0.08% .100%
or
>/= A2 from Moody's
II. >/= A- but < A from S&P .400% .100% .125%
or
>/= A3 but < A2 from Moody's
III. >/= BBB+ but < A- from S&P .500% .125% .125%
or
>/= Baa1 but < A3 from Moody's
IV. >/= BBB but < BBB+ from S&P .575% .175% .250%
or
>/= Baa2 but < Baa1 from Moody's
V. </= BBB- from S&P .775% .225% .250%
and
</= Baa3 from Moody's
or
unrated by S&P and Moody's
Notwithstanding the above, (i) if at any time there is a split in
ratings between S&P and Moody's of one level, the applicable percentage
shall be determined by the higher of the two ratings (e.g. A-/Baa1
results in Level II pricing) and (ii) if at any time there is a split
between S&P and Moody's of two or more levels, the applicable level
shall be one level below the higher of the S&P or Moody's rating (e.g.
A-/Baa2 results in Level III pricing, as does A-/Baa3).
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 debt rating in effect at any date is the debt rating that is in
effect at the close of business on such date. The Applicable Margin
shall be determined and, if necessary, adjusted on the date (each, a
"Determination Date") on which there is any change in the Borrower's
debt ratings. Each Applicable Margin shall be effective from one
Determination Date until the next Determination Date. Any adjustment in
the Applicable Margin shall be applicable to all existing Euro-Dollar
Rate Loans as well as any new Euro-Dollar Rate Loans made. The Borrower
shall notify the Agent in writing immediately upon any change in its
debt ratings.
"Assignment" is defined in Section 9.6(b).
"Assignment and Assumption" is defined in Section 9.6(b).
"Bank of America" means Bank of America, N.A. or any successor
thereto.
"Bankruptcy Code" means Title 11 of the United States Code (11
U.S.C. Section 101 et seq.), as amended, modified, succeeded or replaced
from time to time.
"BAS" means Banc of America Securities LLC or any successor
thereto.
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"Base Rate" means a fluctuating rate of interest per annum equal
to the higher of (i) the Federal Funds Rate plus one-half of one percent
(.50%) or (ii) the Prime 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(a).
"Bid Loan Borrowing" is defined in Section 2.2(a).
"Bid Loan Note" means a Bid Loan Note made by the Borrower, in
substantially the form of Exhibit 2.5(a)(ii), payable to the order of a
Lender, evidencing the obligation of the Borrower to repay the Bid Loans
made by such Lender, and includes any Bid Loan Note issued in exchange
or substitution therefor.
"Bid Loan Quote" is defined in Section 2.2(b)(ii).
"Bid Loan Quote Request" is defined in Section 2.2(b)(i).
"Borrower" means Nordstrom, Inc., a Washington corporation, and
its successors and permitted assigns.
"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, conditioned or delayed so
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, San Francisco,
California or Charlotte, North Carolina 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 or ownership 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 in accordance with GAAP are or
should be capitalized on the balance sheet of such Persons. The amount
of any Capitalized Lease shall be the capitalized amount thereof as
determined in accordance with GAAP.
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"Change of Control" means that 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 40% or more
of the combined voting power of all Voting Stock of the Borrower.
"Closing Date" means the date of this Agreement.
"Code" means the Internal Revenue Code of 1986 and the rules and
regulations promulgated thereunder, as amended, modified, succeeded or
replaced from time to time.
"Compliance Certificate" is defined in Section 5.1(c).
"Contingent Obligation" means, as to any Person, any obligation,
direct or indirect, contingent or otherwise, of such Person which does
or would reasonably be expected to result in the direct payment of money
(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, (iii) to lease or
purchase property, securities or services primarily for the purpose of
assuring the holders of Debt or other obligations of another Person or
(iv) 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 Obligation shall be the greater of (a) the
amount of the Debt or obligation guaranteed or otherwise supported
thereby or (b) the maximum amount guaranteed or supported by the
Contingent Obligation. The term "Contingent Obligation," as used with
respect to the Borrower or any Subsidiary, shall not include (1) the
obligations of the Borrower under any 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 or any Subsidiary
in the ordinary course of its business (but any such other obligation
shall be excluded only to the extent that such other obligation is for
the benefit, directly or indirectly, of any Person that is a
Wholly-Owned Subsidiary (direct or indirect) of the Borrower); or (2)
any obligation which a Subsidiary does or may have to sell to,
repurchase from or indemnify the purchaser with respect to accounts
discounted or sold by the Borrower or such Subsidiary in the ordinary
course of its business (but any such other obligation shall be excluded
only to the extent that such obligation is for the benefit, directly or
indirectly, of any Person that is a Wholly-Owned Subsidiary (direct or
indirect) of the Borrower); (3) supply, service or licensing agreements
(A) between or among Nordstrom.com LLC, a Delaware limited liability
company, and its successors on the one hand, and the Borrower or its
other Subsidiaries, on the other hand, and
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(B) between or among the Borrower or its Subsidiaries and any
Affiliate(s), in each case, so long as such agreements comply with
Section 6.6; (4) environmental indemnities routinely given as part of
sale, lease or other disposition or acquisition of real estate, or (5)
"indemnities" for attorneys' fees and costs which are incidental to
another transaction and/or damages arising from breach of the terms of
such transaction.
"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
Schedule 1.1(b) hereto and the spouse and lineal descendants of any such
individual.
"Coverage Ratio" is defined in Section 6.3(a).
"CP Adjusted LIBOR Rate" means with respect to any Euro-Dollar
Rate Loan for any Interest Period that begins during the calendar month
of December and ends on or after January 1 of the immediately succeeding
calendar year, the rate per annum equal to the A1/P1 or A2/P2 (as
applicable, based on the Borrower's then applicable commercial paper
rating) non-financial commercial paper-index (as quoted by BAS and U.S.
Bank, National Association).
"Debt" means, with respect to any Person, the aggregate amount
of, without duplication: (i) all obligations for borrowed money
(including, except as otherwise provided in subpart (iii) below,
purchase money indebtedness) other than funds borrowed by the Borrower
or any Subsidiary from the Borrower or another Subsidiary; (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 (which trade
payables are deemed to include any consignment purchases) arising in the
ordinary course of business that are not overdue; (iv) the principal
portion of all obligations under (a) Capitalized Leases and (b) any
synthetic lease, tax retention operating lease, off-balance sheet loan
or similar off-balance sheet financing product of such Person where such
transaction is considered borrowed money indebtedness for tax purposes
but is classified as an operating lease in accordance with GAAP; (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;
(vii) all Contingent Obligations; (viii) the aggregate amount paid to,
or borrowed by, such Person as of such date under a sale of receivables
or similar transaction (regardless of whether such transaction is
effected without recourse to such
6
Person or in a manner that would not be reflected on the balance sheet
of such Person in accordance with GAAP); (ix) all Debt of any
partnership or unincorporated joint venture to the extent such Person is
legally obligated with respect thereto; and (x) all net obligations with
respect to interest rate protection agreements, foreign currency
exchange agreements, commodity purchase or option agreements or other
interest or exchange rate or commodity price hedging agreements.
"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.
"Documentation Agent" means U.S. Bank National Association or any
successor thereto.
"Dollars" and "$" mean 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(a) 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 with respect to the Borrower and
its consolidated Subsidiaries, Net Income plus, to the extent deducted
in determining such Net Income, the sum of (a) Interest Expense, (b)
income tax expense, (c) depreciation expense, (d) amortization expense
and (e) Rent Expense, in each case as determined in accordance with
GAAP.
"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(c) 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 any waiver of notice 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 Code with respect to a Plan; (iii) the
provision by the administrator of a 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
7
Borrower or any member of the Controlled Group from a 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.
"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(a) as its Euro-Dollar
Lending Office or, subject to the terms hereof, such other office,
branch or Affiliate as such Lender may hereafter designate as its
Euro-Dollar Lending Office by notice to the Borrower and the Agent.
"Euro-Dollar Rate" means with respect to any Euro-Dollar Rate
Loan (i) for any Interest Period beginning during the calendar month of
December and ending on or after January 1 of the immediately succeeding
calendar year, the greater of (a) the CP Adjusted LIBOR Rate or (b) the
Euro-Dollar Rate determined pursuant to clause (ii) below, and (ii) for
any other Interest Period, a rate per annum determined by the Agent to
be equal to the quotient obtained by dividing (a) the Interbank Offered
Rate by (b) 1 minus 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, for any day during any
Interest Period, the reserve percentage (expressed as a decimal) in
effect on such day, whether or not applicable to any Lender, under
regulations issued from time to time by the Federal Reserve Board of
Governors for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) with
respect to Eurocurrency funding (currently referred to as "Eurocurrency
liabilities"). The Euro-Dollar Rate for each outstanding Euro-Dollar
Rate Loan shall be adjusted automatically as of the effective date of
any change in the Euro-Dollar Reserve Requirement.
"Event of Default" means any of the events specified in Section
7.1.
"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
any Governmental Authority or taxing authority
8
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 any Governmental Authority in
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 Credit Agreement" means that certain Amended and
Restated Credit Agreement, dated as of October 15, 1999, by and among
the Borrower, the financial institutions party thereto as lenders
thereunder and Bank of America, N.A., as agent for such lenders, as it
has been amended, supplemented or otherwise modified from time to time.
"Existing Liens" means the Liens described on Schedule 1.1(c).
"Facility Fee" is defined in Section 2.6(a).
"Federal Funds Rate" means, for any period, a fluctuating per
annum interest rate equal to, for each day during such period, (i) the
weighted average of the rates on overnight federal funds transactions
with members of the Federal Reserve System arranged by federal funds
brokers, as published for such day (or, if such day is not a Business
Day, for the preceding Business Day) by the Federal Reserve Bank of New
York; or (ii) if the rate in clause (i) above is not so published for
any day which is a Business Day, the Federal Funds Rate for such day
shall be the discount rate charged to Bank of America by the Federal
Reserve Bank on such day on such transactions as determined by the
Agent.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System, or any successor thereto.
"Fee Letter" means that certain letter agreement, dated as of
September 21, 2001, among the Borrower, the Agent and BAS regarding
certain fees relating to this Agreement, as the same may be amended,
supplemented or otherwise modified in writing from time to time by the
Borrower, the Agent and BAS.
"Fees" means, collectively, the fees defined in 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.
"Funded Debt" means, with respect to any Person, the aggregate
amount of, without duplication: (i) all obligations for borrowed money
(including, except as otherwise provided in subpart (iii) below,
purchase money indebtedness) other than funds borrowed by the Borrower
or any Subsidiary from the Borrower or another Subsidiary;
9
(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 (which
trade payables are deemed to include any consignment purchases) arising
in the ordinary course of business that are not overdue; (iv) the
principal portion of all obligations under (a) Capitalized Leases and
(b) any synthetic lease, tax retention operating lease, off-balance
sheet loan or similar off-balance sheet financing product of such Person
where such transaction is considered borrowed money indebtedness for tax
purposes but is classified as an operating lease in accordance with
GAAP; (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; and (vi) the aggregate amount paid to, or borrowed by, such
Person as of such date under a sale of receivables or similar
transaction (regardless of whether such transaction is effected without
recourse to such Person or in a manner that would not be reflected on
the balance sheet of such Person in accordance with GAAP).
"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 from time to time and applied on
a consistent basis.
"Governmental Approval" means an authorization, consent,
approval, permit or license issued by, or a registration, qualification
or filing with, any Governmental Authority.
"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(a).
"Interbank Offered Rate" means for any Interest Period with
respect to any Euro-Dollar Rate Loan: (i) the rate per annum equal to
the rate determined by the Agent to be the offered rate that appears on
the page of the Telerate screen (or any successor thereto) that displays
an average British Bankers Association Interest Settlement Rate for
deposits in Dollars (for delivery on the first day of such Interest
Period) with a term equivalent to such Interest Period, determined as of
approximately 11:00 A.M. (London time) two Business Days prior to the
first day of such Interest Period, or (ii) if the rate referenced in the
preceding clause (i) does not appear on such page or service or such
page or service shall cease to be available, the rate per annum equal to
the rate determined by the Agent to be the offered rate on such other
page or other service that displays an average British Bankers
Association Interest Settlement Rate for deposits in Dollars (for
delivery on the first day of such Interest Period) with a term
equivalent to such Interest Period, determined as of approximately 11:00
A.M. (London time) two Business Days prior to the first day of such
Interest Period.
10
"Interest Expense" means the consolidated interest expense
(including the amortization of debt discount and premium, the interest
component under Capitalized Leases and the implied interest component
under synthetic leases, tax retention operating leases, off-balance
sheet loans or similar off-balance sheet financing products) of the
Borrower and its Subsidiaries, as determined in accordance with GAAP.
"Interest Period" means, subject to the conditions set forth
below:
(i) with respect to each Euro-Dollar Rate Loan, the period
commencing on the Funding Date specified in the related Notice of
Borrowing or Notice of Conversion/Continuation 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(b)(i).
Notwithstanding the foregoing: (a) if a Euro-Dollar Rate Loan is
continued, the Interest Period applicable to the continued Euro-Dollar
Rate 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 (1) 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 (2) 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, Inc., a
Colorado corporation, as amended from time to time.
"Lender" means each of those banks and other financial
institutions identified as such on the signature pages hereto and such
other institutions that may become Lenders pursuant to Section 9.6(b).
"Lender Party" means each of the Lenders, the Agent, the
Syndication Agent and the Documentation Agent.
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"Leverage Margin" means, with respect to Euro-Dollar Rate Loans
and Base Rate Loans outstanding during the fiscal quarter immediately
following the dates set forth below, (i) if the actual Leverage Ratio as
of such date is less than or equal to the corresponding Leverage Ratio
set forth below or for any period subsequent to October 31, 2002, 0% and
(ii) if the actual Leverage Ratio as of such date is greater than the
corresponding Leverage Ratio set forth below, .125%.
Last Day of Fiscal Quarter Leverage Ratio
- -------------------------- --------------
October 31, 2001, January 31, 2002 and April 30, 2002 4.5 to 1.0
July 31, 2002 4.25 to 1.0
October 31, 2002 4.00 to 1.0
"Leverage Ratio" is defined in Section 6.3(b).
"Lien" means any lien, mortgage, pledge, security interest,
charge, or encumbrance of any kind (including any conditional sale or
other title retention agreement or 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.
"Margin Regulations" means Regulations T, U and X of the Federal
Reserve Board, as amended from time to time, or any successor
regulations.
"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, liabilities, results of operations or condition (financial or
otherwise) 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.
"Material Contractual Obligation" means a Contractual Obligation,
the violation of which could reasonably be expected to have a Material
Adverse Effect.
12
"Maturity Date" means November 20, 2004.
"Moody's" means Moody's Investors Service, Inc. and any successor
or assignee of the business of such company in the business of rating
debt.
"Multiemployer Plan" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA.
"Net Income" means, for any period with respect to the Borrower
and its consolidated Subsidiaries, net income (or net loss), excluding
the effect of extraordinary or other non-recurring gains and losses, as
determined in accordance with GAAP.
"Note" means a Revolving Loan Note or Bid Loan Note.
"Notice of Borrowing" is defined in Section 2.1(c)(i).
"Notice of Conversion/Continuation" is defined in Section
2.4(b)(ii).
"Notice of Responsible Officers" is defined in Section
2.1(c)(iii).
"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 under the Loan
Documents, 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(c).
"PBGC" means the Pension Benefit Guaranty Corporation, as defined
in Title IV of ERISA, or any successor.
"Permitted Liens" means, with respect to any asset, the Liens (if
any) permitted to exist on such asset in accordance with 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
13
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 (other than then outstanding Euro-Dollar Rate
Loans) owing hereunder not paid when due, 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 to each then outstanding Euro-Dollar Rate
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.
"Prime Rate" means the per annum rate of interest established
from time to time by Bank of America as its "Prime Rate." Such rate is a
rate set by Bank of America based upon various factors including Bank of
America's costs and desired return, general economic conditions and
other factors, and is used as a reference point for pricing some loans,
which may be priced at, above, or below such announced rate. Any change
in such rate announced by Bank of America shall take effect at the
opening of business on the day specified in the public announcement of
such change.
"Recourse Agreement" means the Recourse Agreement, dated as of
March 1, 2001, between the Borrower and Nordstrom Credit, Inc., a
Colorado corporation, for the benefit of Nordstrom fsb, a federal
savings bank, as amended from time to time.
"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.
"Rent Expense" means the consolidated rent expense of the
Borrower and its Subsidiaries, as determined in accordance with GAAP.
"Required Lenders" means Lenders having more than 50% of the
Revolving Commitments or, if the Revolving Commitments have terminated,
Lenders holding more
14
than 50% of the aggregate unpaid principal amount of the Loans.
"Responsible Officer" is defined in Section 2.1(c)(iii).
"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(d), as modified or
terminated from time to time pursuant to the terms hereof.
"Revolving Commitment Percentage" means, for each Lender, the
percentage identified on Schedule 1.1(d) opposite such Lender's name, as
such percentage may be modified in accordance with the terms hereof.
"Revolving Commitment Termination Date" is defined in Section
2.7(a).
"Revolving Committed Amount" means THREE HUNDRED MILLION DOLLARS
($300,000,000), as such amount may be reduced in accordance with Section
2.7.
"Revolving Loan Note" means a Revolving Loan Note made by the
Borrower, in substantially in the form of Exhibit 2.5(a)(i), payable to
the order of a Lender, evidencing the obligation of the Borrower to
repay the Revolving Loans made by such Lender and includes any Revolving
Loan Note issued in exchange or substitution therefor.
"Revolving Loans" is defined in Section 2.1(a)(i).
"S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., or any successor or assignee of the
business of such division in the business of rating debt.
"SEC" means the United States Securities and Exchange Commission,
and any successor thereto.
"Senior Officer" means, with respect to the Borrower, the
chairman of the board of directors, the president, the chief executive
officer, the chief operating officer, the chief financial officer, or
the vice president and treasurer of the Borrower.
15
"Solvent" and "Solvency" mean, with respect to any Person as of a
particular date, that on such date (a) such Person is able to pay its
debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (b) such
Person does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person's ability to pay as such debts
and liabilities mature in their ordinary course, (c) such Person is not
engaged in a business or a transaction, and is not about to engage in a
business or a transaction, for which such Person's assets would
constitute unreasonably small capital after giving due consideration to
the prevailing practice in the industry in which such Person is engaged
or is about to engage, (d) the fair value of the assets of such Person
is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person and (e) the present
fair saleable value of the assets of such Person is not less than the
amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured. In computing
the amount of contingent liabilities at any time, it is intended that
such liabilities will be computed at the amount which, in light of all
the facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured
liability.
"Subsidiary" means, with respect to any Person, any other Person
of which more than 50% of the Voting Stock is at the time directly or
indirectly owned by such first Person. Unless otherwise indicated,
"Subsidiary" refers to a Subsidiary of the Borrower.
"Syndication Agent" means Bank One, NA or any successors thereto.
"Taxes" means any income, stamp, excise, property 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.
"Type" is defined in the definition of "Loan."
"Utilization Fee" is defined in Section 2.6(b).
"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; provided,
however, that with respect to Nordstrom.com LLC, such Subsidiary shall
be deemed Wholly-Owned at such time as the Borrower, directly or
indirectly, owns not less than 90% of all Capital Stock of such
Subsidiary, the remaining Capital Stock being held by senior management
or previous senior management of Nordstrom.com, LLC or its upstream
owners.
16
SECTION 1.2. RELATED MATTERS.
(a) 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," "hereto," "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. References in
this Agreement to "Articles," "Sections," "Subsections," "Exhibits,"
"Schedules," "Recitals" and "Preambles" 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.
(b) 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.
(c) 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. In the event that any
"Accounting Change" (as defined below) shall occur and such change
results in a material change in the resulting financial covenants,
standards or terms in this Agreement, then the Borrower and the Lender
Parties agree to enter into negotiations in order to amend such
provisions of this Agreement so as to equitably reflect such Accounting
Changes with the desired result that the criteria for evaluating the
Borrower's financial condition shall be the same after such Accounting
Changes as they would be if such Accounting Changes had not been made.
Until such time as such an amendment shall have been executed and
delivered by the Borrower, the Agent and the Required Lenders, all
financial covenants, standards and terms in this Agreement shall
continue to be calculated or construed as if such Accounting Changes had
not occurred. "Accounting Changes" refers to changes in accounting
principles required by the promulgation of any rule, regulation,
pronouncement or opinion by the Financial Accounting Standards Board of
the American Institute of Certified Public Accountants or, if
applicable, the SEC.
(d) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
17
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS (OTHER THAN THE RULES
REGARDING CONFLICTS OF LAWS) OF THE STATE OF WASHINGTON.
(e) Headings. The Article and Section headings used in this
Agreement are for convenience of reference only and shall not affect the
construction hereof.
(f) 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.
(g) Time. All references to time herein shall be references to
Pacific Standard Time or Pacific Daylight Time, as the case may be,
unless specified otherwise.
ARTICLE 2
AMOUNTS AND TERMS OF THE CREDIT FACILITIES
SECTION 2.1. REVOLVING LOANS.
(a) General Terms.
(i) 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
revolving loans (each a "Revolving Loan") to the Borrower;
provided that (A) the sum of all Revolving Loans outstanding plus
all Bid Loans outstanding shall not exceed the Revolving
Committed Amount and (B) with respect to each individual Lender,
such Lender's pro rata share of outstanding Revolving Loans shall
not exceed such Lender's Revolving Commitment Percentage of the
Revolving Committed Amount.
(ii) Revolving Loans may be voluntarily prepaid pursuant
to Section 2.8(c) and, subject to the provisions of this
Agreement, any amounts so prepaid or otherwise repaid in
accordance with their terms may be re-borrowed, up to the amount
available under this Section 2.1 at the time of such reborrowing.
(b) Type of Loans and Amounts.
(i) Loans made under this Section 2.1 may be Base Rate
Loans or Euro-Dollar Rate Loans, subject, however, to Sections
2.4(c) and 2.11.
(ii) Each Borrowing of Revolving Loans shall be in a
minimum
18
aggregate amount of $1,000,000 and integral multiples of
$100,000 in excess thereof, 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 excess thereof, in the case
of a Borrowing of Euro-Dollar Rate Loans.
(c) Notice of Borrowing.
(i) When the Borrower desires to borrow Revolving Loans
pursuant to this Section 2.1, it shall provide telephonic notice
to the Agent followed promptly by a written Notice of Borrowing
substantially in the form of Exhibit 2.1(c), duly completed and
executed by a Responsible Officer (a "Notice of Borrowing"), (A)
no later than 10:00 a.m. on the proposed Funding Date, in the
case of a Borrowing of Base Rate Loans, or (B) no later than
10:00 a.m. at least three Euro-Dollar Business Days before the
proposed Funding Date, in the case of a Borrowing of Euro-Dollar
Rate Loans.
(ii) 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.
(iii) 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
2.1(c)(iii), duly completed and executed by a Senior Officer (a
"Notice of Responsible Officers"). 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
Officers 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 Officers, Notice of Continuation/Conversion or any
other notice given under the Loan Documents to the extent the
Agent believes in good faith that such signature is of a Senior
Officer or a Responsible Officer of the Borrower.
(iv) Any Notice of Borrowing (or telephonic notice)
delivered pursuant to this Section 2.1 shall be irrevocable and,
subject to Section 2.12(a), the Borrower shall be bound to make a
Borrowing in accordance therewith.
(v) The Agent shall promptly notify each Lender of the
contents of any Notice of Borrowing (or telephonic notice)
received by it, and such Lender's pro rata portion of the
Borrowing requested. Prior to 11:00 a.m. on the date
19
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 Dollars and in
immediately available funds, to the Agent at the Agent's Account.
(d) Funding. Not later than 1:00 p.m. on the applicable 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.
(e) Several Obligations. No Lender shall be responsible for the
failure or delay by any other Lender in its obligation to make Revolving
Loans hereunder; provided, however, that the failure of any Lender to
fulfill its obligations hereunder shall not relieve any other Lender of
its obligations hereunder. Unless the Agent shall have been notified by
any Lender prior to the date of any such Revolving Loan that such Lender
does not intend to make available to the Agent its portion of the
Revolving Loans to be made on such date, the Agent may assume that such
Lender has made such amount available to the Agent on the date of such
Loans, and the Agent, in reliance upon such assumption, may (in its sole
discretion but without any obligation to do so) make available to the
Borrower a corresponding amount. If such corresponding amount is not in
fact made available to the Agent, the Agent shall be able to recover
such corresponding amount from such Lender. If such Lender does not pay
such corresponding amount upon the Agent's demand therefor, the Agent
will promptly notify the Borrower, and the Borrower shall pay such
corresponding amount to the Agent not later than the Business Day after
receipt of such notice from the Agent. The Agent shall also be entitled
to recover from such Lender or the Borrower, as the case may be,
interest on such corresponding amount in respect of each day from the
date such corresponding amount was made available by the Agent to the
Borrower to the date such corresponding amount is recovered by the Agent
at a per annum rate equal to (i) from the Borrower at the applicable
rate for such Revolving Loan pursuant to the Notice of Borrowing or (ii)
from such Lender, at a rate per annum equal to, during the period to but
excluding the date two Business Days after demand therefor, the Federal
Funds Rate, and, thereafter, the Base Rate plus two percent (2%) per
annum. Notwithstanding anything else contained in this Agreement or the
other Loan Documents, in the event the Borrower is required to make any
payment in accordance with this Section 2.1(e) which causes payment
prior to the end of an Interest Period, such repayment shall be without
any cost or fee described in Section 2.14.
SECTION 2.2. BID LOANS.
(a) 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 (i) the sum of all Bid Loans
outstanding plus all Revolving Loans outstanding shall not exceed the
Revolving Committed Amount; (ii) the aggregate amount of Bid Loans
20
requested for any Funding Date and with the same Interest Period (each a
"Bid Loan Borrowing") shall be at least $2,000,000 and in integral
multiples of $1,000,000 in excess thereof; and (iii) all Interest
Periods applicable to Bid Loans shall be subject to Section 2.4(c). 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.
(b) Bid Loan Procedures.
(i) When the Borrower wishes to request offers to make Bid
Loans, it shall provide telephonic notice to the Agent (which
shall promptly notify the Lenders) followed promptly by written
notice substantially in the form of Exhibit 2.2(b)(i), duly
completed and executed by a Responsible Officer (a "Bid Loan
Quote Request"), so as to be received no later than 10:00 a.m. 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(c), 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 be deemed 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.
(ii) Each Lender may, but shall not be obligated to, in
response to any Bid Loan Quote Request submit one or more written
quotes substantially in the form of Exhibit 2.2(b)(ii), 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; and (B) the principal
amount of the Bid Loan for which each such offer is being made
shall be at least $2,000,000 and multiples of $l,000,000 in
excess thereof; provided that the aggregate principal amount of
all Bid Loans for which a Lender submits Bid Loan Quotes (1) may
be greater or less than the Revolving Commitment of such Lender
but (2) may not exceed the principal amount of the Bid Loan
Borrowing for which offers were requested. Each Bid Loan Quote by
a Lender other than the Agent must be submitted to the Agent by
fax not later than 8:00 a.m. 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, in its capacity as a Lender,
(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 7:45 a.m. 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
21
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.
(iii) The Agent shall, as promptly as practicable after
any Bid Loan Quote is submitted (but in any event not later than
8:30 a.m. on the Funding Date, or 7:45 a.m. on the Funding Date
with respect to any Bid Loan Quote submitted by the Agent, in its
capacity as a Lender, (or its Applicable Lending Office)), notify
the Borrower of the terms (A) of any Bid Loan Quote submitted by
a Lender that is in accordance with Section 2.2(b)(ii) 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 (1) the aggregate principal
amount of the Bid Loan Borrowing for which offers have been
received and (2) (A) the respective principal amounts and (B) 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).
(iv) Not later than 9:00 a.m. 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(b)(iii) (and the failure of the Borrower to give such notice
by such time shall constitute nonacceptance), and the Agent shall
promptly notify each affected Lender. In the case of acceptance,
such notice shall specify the aggregate principal amount of
offers for 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
$1,000,000 and multiples of $1,000,000 in excess thereof; (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 $2,000,000 and multiples of
$1,000,000 and shall not cause the limits specified in Section
2.2(a) 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(b)(ii) or otherwise fails to comply with
the requirements of this Agreement (including Section 2.2(a)). If
offers are made by two or more Lenders with the same Absolute
Rates for a greater aggregate principal amount than the
22
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 excess thereof) 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.
(v) Subject to the terms set forth in this Agreement, any
Lender whose offer to make any Bid Loan has been accepted shall,
prior to 10:00 a.m. 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 amount so received by the Agent shall,
subject to the terms and conditions of this Agreement, be made
available to the Borrower on or before 11:00 a.m. 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 of the Borrower and its Subsidiaries (including loans made by
the Borrower to its Subsidiaries), 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.
Notwithstanding the foregoing, the proceeds of the Loans shall not be used to
finance any acquisition of all or substantially all of the Capital Stock of
another Person unless the board of directors (or other comparable governing
body) of such Person has duly approved such acquisition.
SECTION 2.4. INTEREST; INTEREST PERIODS; CONVERSION/CONTINUATION.
(a) Interest Rate and Payment.
(i) 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 plus the Leverage 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 plus the Leverage Margin; and (C) if such
Loan is a Bid Loan, at the Absolute Rate quoted by the Lender
making such Bid Loan pursuant to Section 2.2(b)(ii).
(ii) Notwithstanding the foregoing provisions of this
Section 2.4(a), during the existence of an Event of Default, any
principal, overdue interest or
23
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.
(iii) Accrued interest shall be payable in arrears (A) in
the case of a Base Rate Loan, on the last Business Day of each
month; (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 by reason of maturity, mandatory
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
interest at the Post-Default Rate.
(b) Conversion or Continuation of Revolving Loans.
(i) Subject to this Section 2.4(b) and Sections 2.4(c) and
2.14, 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, and (B) on the last day of the Interest
Period applicable thereto, to (1) convert all or any part of its
outstanding Euro-Dollar Rate Loans to Base Rate Loans, or (2) 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)
(2), 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 Euro-Dollar Rate Loan automatically
shall be converted into a Base Rate Loan.
(ii) If the Borrower elects to convert or continue a
Revolving Loan under this Section 2.4(b), it shall provide
telephonic notice to the Agent (which shall promptly notify, the
Lenders) followed promptly by a written Notice of
Conversion/Continuation substantially in the form of Exhibit
2.4(b)(ii), duly completed and executed by a Responsible Officer
(a "Notice of Continuation/Conversion") (A) not later than 10:00
a.m. at least three Euro-Dollar Business Days before the 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 10:00 a.m. on the Business Day next
preceding the proposed conversion or continuation date.
(iii) 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(b) in converting or continuing any Loan (or a
part thereof) pursuant to any telephonic notice.
24
(iv) Any Notice of Conversion/Continuation (or telephonic
notice) 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(b), or if no notice is so given
with respect to a Euro-Dollar Rate Loan as to which the Interest
Period expires, then such Euro-Dollar Rate Loan automatically
shall be converted into a Base Rate Loan.
(v) Bid Loans may not be continued or converted but
instead must be repaid in full at the end of the applicable
Interest Period.
(c) Interest Periods and Minimum Amounts. Notwithstanding
anything herein to the contrary, (i) all Interest Periods applicable to
Euro-Dollar Rate Loans and Bid Loans shall comply with the definition of
"Interest Period," and (ii) there may be no more than five different
Interest Periods for all Euro-Dollar Rate Loans and Bid Loans
outstanding at any one time. For purposes of the foregoing clause (ii),
Interest Periods applicable to Loans of different Types shall constitute
different Interest Periods even if they are coterminous.
(d) Computations. Interest on each Loan and all Fees and other
amounts payable hereunder or under 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 that are based upon the Prime Rate, a 365 or 366-day
year, as the case may be, for 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 or the Leverage
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.
(e) Maximum Lawful Rate of Interest. The rate of interest payable
on any Loan or other amount shall in no event exceed the maximum rate of
non-usurious interest 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 2.4(e) 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(e).
25
SECTION 2.5. NOTES, ETC.
(a) Loans Evidenced by Notes. The Revolving Loans made by each
Lender shall be evidenced by a single Revolving Loan Note payable to
such Lender. The Bid Loans made by each Lender shall be evidenced by a
single Bid Loan Note payable to such Lender. Each Note shall, by its
terms, mature in accordance with the provisions of this Agreement
applicable to the relevant Loans.
(b) 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.
(a) Facility Fee. The Borrower shall pay to the Agent, for the
pro rata benefit of the Lenders, a per annum facility fee (the "Facility
Fee") equal to the Applicable Margin for the Facility Fee, in effect
from time to time, based upon the then Revolving Commitments, whether or
not used, for each day from and after the Closing Date until the
Revolving Commitment Termination Date. The Facility 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 Facility Fee payable in
sufficient time for the Borrower to make timely payments of the correct
amount without incurring any penalty or interest at the Post-Default
Rate.
(b) Utilization Fee. If, on any day, the aggregate principal
amount of all Loans outstanding exceeds 50% of the Revolving Committed
Amount, the Borrower shall pay to the Agent, for the pro rata benefit of
the Lenders, a per annum utilization fee (the "Utilization Fee") equal
to (a) the Applicable Margin for the Utilization Fee, in effect from
time to time, multiplied by (b) the aggregate principal amount of all
Loans outstanding on such day. The Utilization 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 each Utilization Fee payable
in sufficient time for the Borrower to make timely payments of the
correct amount without incurring any penalty or interest at the
Post-Default Rate.
(c) 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.
(d) Fees Non-Refundable. All Fees shall be fully earned when
payable
26
hereunder or under the Fee Letter and shall be non-refundable.
SECTION 2.7. TERMINATION AND REDUCTION OF REVOLVING COMMITMENTS.
(a) Each Lender's Revolving Commitment shall terminate without
further action on the part of such Lender on the earlier to occur of (i)
the Maturity Date, and (ii) the date of complete (but not partial)
termination of the Revolving Commitments pursuant to Section 2.7(b) or
Section 7.2 (such earlier date being referred to herein as the
"Revolving Commitment Termination Date").
(b) Upon not less than five Business Days' prior written notice
to the Agent, 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
Committed Amount to an amount not less than the then aggregate principal
amount of all outstanding Loans. 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 in integral multiples of $1,000,000 in excess thereof.
SECTION 2.8. REPAYMENTS AND PREPAYMENTS.
(a) Repayment. The unpaid principal amount of all Loans, together
with accrued but unpaid interest and all other sums owing thereunder
shall be due and payable in full on the Revolving Commitment Termination
Date.
(b) Excess Revolving Loans. If at any time the aggregate
principal amount of all outstanding Loans exceeds the Revolving
Committed Amount, the Borrower shall, not later than the Business Day
after 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.
(c) Optional Prepayments.
(i) Subject to this Section 2.8(c), 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 in
excess thereof (or, alternatively, the whole amount of Revolving
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 2.14. Bid Loans may not be
voluntarily prepaid at any time.
(ii) If the Borrower elects to prepay a Revolving Loan
under this Section 2.8(c), it shall deliver to the Agent a notice
of optional prepayment (A) with respect to a Base Rate Loan, not
later than 10:00 a.m. on the proposed
27
repayment date or (B) with respect to a Euro-Dollar Rate Loan,
not later than 10:00 a.m. at least three Euro-Dollar Business
Days before the proposed prepayment date. Any 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.
(d) 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.
SECTION 2.9. MANNER OF PAYMENT.
(a) 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
defense 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 11:00 a.m. on the due date
thereof. Any payments received after 11:00 a.m. on any Business Day
shall be deemed received on the next succeeding Business Day. Not later
than 12:00 Noon 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. 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.
(b) 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(a), 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.
(c) Subject to Sections 2.10 and 7.3, all payments made by the
Borrower under the Loan Documents shall be applied to the Obligations as
the Borrower may direct; provided that if the Borrower does not provide
any such direction to the Agent, all amounts paid or received shall be
applied, subject to Section 2.10, as the Agent may reasonably deem
appropriate.
(d) 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 (subject to accrual of
interest and fees for the period of extension), except that, in the case
of Euro-Dollar Rate Loans, if the extension would cause the payment to
be made in the next following calendar month, then such payment
28
shall instead be made on the preceding Business Day.
SECTION 2.10. PRO RATA TREATMENT.
Except to the extent otherwise expressly provided herein,
(a) Revolving Loans shall be made by the Lenders pro rata
according to their respective Revolving Commitment Percentages.
(b) Each reduction of the Revolving Committed Amount and each
payment of Revolving Loans, interest on Revolving Loans, Facility Fees
and Utilization Fees shall be applied pro rata among the Lenders
according to their respective Revolving Commitment Percentages.
(c) Each payment 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.
SECTION 2.11. SHARING OF PAYMENTS.
The Lenders agree among themselves that, except to the extent otherwise
provided herein, in the event that any Lender shall obtain payment in respect of
any Loan, or any other obligation owing to such Lender under this Agreement
through the exercise of a right of setoff, banker's lien or counterclaim, or
pursuant to a secured claim under Section 506 of the Bankruptcy Code or other
security or interest arising from, or in lieu of, such secured claim, received
by such Lender under any applicable bankruptcy, insolvency or other similar law
or otherwise, or by any other means, in excess of its pro rata share of such
payment as provided for in this Agreement, such Lender shall promptly pay in
cash or purchase from the other Lenders a participation in such Loans and other
obligations in such amounts, and make such other adjustments from time to time,
as shall be equitable to the end that all Lenders share such payment in
accordance with their respective ratable shares as provided for in this
Agreement. The Lenders further agree among themselves that if payment to a
Lender obtained by such Lender through the exercise of a right of setoff,
banker's lien, counterclaim or other event as aforesaid shall be rescinded or
must otherwise be restored, each Lender which shall have shared the benefit of
such payment shall, by payment in cash or a repurchase of a participation
theretofore sold, return its share of that benefit (together with its share of
any accrued interest payable with respect thereto) to each Lender whose payment
shall have been rescinded or otherwise restored. Except as otherwise expressly
provided in this Agreement, if any Lender or the Agent shall fail to remit to
any other Lender an amount payable by such Lender or the Agent to such other
Lender pursuant to this Agreement on the date when such amount is due, such
payments shall be made together with interest thereon for each date from the
date such amount is due until the date such amount is paid to the Agent or such
other Lender at a rate per annum equal to the Federal Funds Rate. If under any
applicable bankruptcy, insolvency or other
29
similar law, any Lender receives a secured claim in lieu of a setoff to which
this Section 2.11 applies, such Lender shall, to the extent practicable,
exercise its rights in respect of such secured claim in a manner consistent with
the rights of the Lenders under this Section 2.11 to share in the benefits of
any recovery on such secured claim.
SECTION 2.12. 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
2.12(b), 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:
(a) 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 (as referenced in the definition
of "Interbank Offered Rate" appearing in Section 1.1) are not available
to the Agent in the relevant interbank market for purposes of
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
(b) 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 2.13. REGULATORY CHANGES.
(a) Increased Costs. If, on or after the date hereof, any
Regulatory Change 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 (i) 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 (ii) to reduce
the amount of any sum received or receivable by such Lender Party (or
30
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 Office if such designation will avoid the need for
giving such notice and will not be otherwise materially disadvantageous
to such Lender.
(b) 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 2.14. 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) 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(b) or an acceleration pursuant to Section
7.2, but excluding any prepayment pursuant to Section 2.1(e)) 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 or failure to make such a Loan due to
circumstances described in Section 2.12), 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 2.12
or from any wrongful actions or omissions or default (including under Section
2.1(e)) of such Lender.
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SECTION 2.15. CERTIFICATES REGARDING YIELD PROTECTION, ETC.
Any request by any Lender Party for payment of additional amounts
pursuant to Sections 2.13, 2.14 and 2.16 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 2.16. TAXES.
(a) Tax Liabilities Imposed on a Lender. Any and all payments by
the Borrower hereunder or under any of the Loan Documents shall be made,
in accordance with the terms hereof and thereof, subject to the
provisions of this Section 2.16 and Section 2.17, free and clear of and
without deduction for any and all Taxes other than Excluded Taxes. If
the Borrower shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder to any Lender, (i) the sum payable
shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable
under this Section 2.16) such Lender receives an amount equal to the sum
it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions, (iii) the Borrower shall pay the
full amount deducted to the relevant Governmental Authority in
accordance with Applicable Law, and (iv) the Borrower shall deliver to
such Lender evidence of such payment to the relevant Governmental
Authority. Notwithstanding any other provision of this Section 2.16, the
Borrower shall not be required to pay any additional amounts pursuant to
this Section 2.16(a) with respect to Taxes that are attributable to such
Lender's failure to fully comply with Section 2.16(c) and/or the
certifications provided by such Lender being inaccurate.
(b) Other Taxes. In addition, the Borrower agrees to pay, upon
written notice from a Lender and prior to the date when penalties attach
thereto, all other Taxes (other than Excluded Taxes) that arise from any
payment made hereunder or from the execution, delivery or registration
of, or otherwise with respect to, this Agreement.
(c) Foreign Lender. Each Lender (which, for purposes of this
Section 2.16, shall include any Affiliate of a Lender that makes any
Euro-Dollar Loan pursuant to the terms of this Agreement) that is not a
"United States person" (as such term is defined in Section 7701(a)(30)
of the Code) shall submit to the Borrower and the Agent on or before the
Closing Date (or, in the case of a Person that becomes a Lender after
the Closing Date by assignment, promptly upon such assignment), two duly
completed and signed copies of (A) either (1) Form W-8BEN or Form W-8ECI
of the United States Internal Revenue Service, or a successor applicable
form, certifying that such Lender is entitled to benefits under an
income tax treaty to which the United States is a party which reduces to
zero the rate of withholding tax on payments of interest or certifying
that the income receivable pursuant to this Agreement is effectively
connected with the conduct of a trade or business in the United States,
or (B) an Internal Revenue Service Form W-8 or W-9, or a successor
applicable form, entitling such Lender to receive a complete exemption
from
32
United States backup withholding tax. Each such Lender shall,
from time to time after submitting either such form, submit to the
Borrower and the Agent such additional duly completed and signed copies
of such forms (or such successor forms or other documents as shall be
adopted from time to time by the relevant United States taxing
authorities) as may be (1) reasonably requested in writing by the
Borrower or the Agent and (2) appropriate under then current United
States laws or regulations. Upon the reasonable request of the Borrower
or the Agent, each Lender that has not provided the forms or other
documents, as provided above, on the basis of being a United States
person shall submit to the Borrower and the Agent a certificate to the
effect that it is such a "United States person."
SECTION 2.17. 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, nor shall the Borrower be required to pay, any
greater amount under Sections 2.13 or 2.16 as a result of the transfer of any
such Loan than such Lender would be entitled to receive, or the Borrower
obligated to pay, immediately prior thereto unless (a) such 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 obligation of the Lenders to enter into this Credit Agreement shall
be subject to satisfaction (or waiver) of the following conditions:
(a) Loan Documents. The Agent shall have received duly executed
copies of (i) this Agreement and (ii) the Notes, all of which shall be
in form and substance satisfactory to the Agent.
(b) Corporate Documents. The Agent shall have received the
following:
(i) Charter Documents. Copies of the articles or
certificate of incorporation of the Borrower certified to be true
and complete as of a recent date by
33
the appropriate Governmental Authority of the state of its
incorporation and certified by a secretary or assistant secretary
of the Borrower to be true and correct as of the Closing Date.
(ii) Bylaws. A copy of the bylaws of the Borrower
certified by a secretary or assistant secretary of the Borrower
to be true and correct as of the Closing Date.
(iii) Resolutions. Copies of resolutions of the board of
directors of the Borrower or an authorized committee thereof,
approving and adopting the transactions contemplated herein and
authorizing execution and delivery of the Loan Documents,
certified by a secretary or assistant secretary of the Borrower
to be true and correct and in full force and effect as of the
Closing Date.
(iv) Good Standing. Copies of a certificate of good
standing, existence or its equivalent with respect to the
Borrower certified as of a recent date by the appropriate
Governmental Authority of the state of its incorporation.
(v) Incumbency. An incumbency certificate of the Borrower
certified by a secretary or assistant secretary of the Borrower
to be true and correct as of the Closing Date.
(c) Opinion of Counsel. The Agent shall have received an opinion
or opinions (which shall cover, among other things, authority, legality,
validity, binding effect and enforceability), satisfactory to the Agent,
addressed to the Lender Parties and dated as of the Closing Date, from
legal counsel to the Borrower.
(d) Closing Officer's Certificate. The Agent shall have received
a certificate executed by the chief financial officer of the Borrower in
the form of Exhibit 3.1(d).
(e) Material Adverse Change. There shall not have occurred a
Material Adverse Change since January 31, 2001.
(f) Litigation. Except as disclosed in Schedule 4.5, 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 (i) in which
there is a reasonable possibility of an adverse determination that could
result in a material liability or have a Material Adverse Effect or (ii)
that in any manner draws into question the validity, legality or
enforceability of any Loan Document or any transaction contemplated
thereby.
(g) Fees, Expenses and Interest Paid. The Borrower shall have
paid all Fees and expenses due and owing pursuant to the terms of this
Agreement for which the Borrower shall have been billed on or before the
Closing Date.
(h) General. All other documents and legal matters in connection
with the
34
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 the 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:
(a) Closing Date. The conditions precedent set forth in Section
3.1 shall have been satisfied or waived in writing by the Lenders as of
the Closing Date.
(b) Notice of Borrowing. The Borrower shall have delivered to the
Agent, (i) in the case of a Revolving Loan, a Notice of Borrowing, duly
executed and completed in accordance with Section 2.1, and the Borrower
shall have otherwise complied with all of the terms of Section 2.1 or
(ii) in the case of a Bid Loan, a Bid Loan Quote Request, duly executed
and completed, in accordance with Section 2.2, and the Borrower shall
have otherwise complied with all of the terms of Section 2.2.
(c) 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.
(d) No Default. No Default or Event of Default shall exist or
result from the making of the Loan.
(e) 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(c) and 3.2(d)
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, 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 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 hereby and thereby.
Except as would not reasonably be expected
35
to have a Material Adverse Effect, each of the Borrower and its 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 its Subsidiaries is duly
qualified, in good standing and 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. All Subsidiaries of the Borrower are listed on Schedule 4.1, which may
be updated by the Borrower from time to time.
SECTION 4.2. AUTHORIZATION, BINDING EFFECT, NO CONFLICT, ETC.
(a) 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.
(b) No Conflict. The execution, delivery and performance by the
Borrower of each Loan Document, and the consummation of the transactions
contemplated thereby, do not and will not (i) violate any provision of
the charter or other organizational documents of the Borrower, (ii)
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 Material Contractual Obligation of the Borrower (including the
Investment Agreement), (iii) violate any Applicable Law binding on the
Borrower, or (iv) result in or require the creation or imposition of any
Lien on any assets or properties of the Borrower or any of its
Subsidiaries.
(c) 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.
(a) The balance sheets of the Borrower and its consolidated
Subsidiaries as of January 31, 2000 and January 31, 2001 and the related
statements of earnings, stockholder's equity and cash flow 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, 2001,
were prepared in accordance with GAAP consistently applied and fairly
present the financial position of the Borrower and its consolidated
Subsidiaries as of the respective dates thereof and the results of
operations and cash flow for the periods then ended. Neither the
Borrower nor any of its consolidated Subsidiaries on such dates had any
36
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.
(b) The unaudited balance sheet of the Borrower and its
consolidated Subsidiaries as of July 31, 2001 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 July 31, 2001, were prepared in accordance with
GAAP consistently applied (except to the extent noted therein) and
fairly present the financial position of the Borrower and its
consolidated Subsidiaries as of such date and the results of operations
and cash flow for the periods covered thereby, subject to normal
year-end audit adjustments. Neither the Borrower nor any of its
consolidated Subsidiaries on such date had any 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, 2001, there has been no Material Adverse Change.
SECTION 4.5. LITIGATION.
Except as disclosed in Schedule 4.5, 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 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 other
organizational or governing documents or any of its Material Contractual
Obligations.
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
37
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 is the Borrower 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 its Subsidiaries constitutes less than 25% of the
value, as determined in accordance with the Margin Regulations, of all assets of
the Borrower. The proceeds of the Loans have been used solely in accordance with
Section 2.3.
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 and have not incurred any liability to the PBGC in connection with any
Plan.
During the five-year period prior to the date this representation is
made or deemed made, no ERISA Event has occurred and is continuing with respect
to any Plan (whether or not terminated). Neither the 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), whether or not vested,
under such Plan determined in accordance with Financial Accounting Standards
Board Statement 87 using the actuarial assumptions and methods 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
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 on and as of the date made or given and has not omitted a material fact
necessary in order to make such information not misleading in light of the
circumstances under which such information was furnished. 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.
38
SECTION 4.12. SOLVENCY.
The Borrower is, individually and on a consolidated basis with its
Subsidiaries, Solvent.
SECTION 4.13. TITLE TO PROPERTIES.
The Borrower and each of its Subsidiaries is the owner of, and has good
and marketable title to, or has a valid license or lease to use, all of its
material properties and assets, and none of such properties or assets is subject
to any Liens other than Permitted Liens.
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:
(a) 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 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 and its
consolidated Subsidiaries 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.
(b) 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 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 and its consolidated
Subsidiaries as of the dates indicated and its results of operations and
cash flows for the
39
periods indicated, subject to normal year-end adjustments.
(c) together with each delivery of financial statements pursuant
to Sections 5.1(a) and 5.1(b), a certificate of the chief financial
officer or the president of the Borrower, substantially in the form of
Exhibit 5.1(c) (a "Compliance Certificate"), duly executed and
completed, setting forth the calculations required to establish
compliance with Section 6.3, as of the date of such financial
statements. The financial statements required by Sections 5.1(a) and
5.1(b) and the Compliance Certificate required by this Section 5.1(c)
shall be delivered in printed form.
(d) 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.
(e) 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.
(f) within five Business Days after the 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.
(g) 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 (i) that could
reasonably be expected to have a Material Adverse Effect or (ii) that
questions the validity or enforceability of any Loan Document.
(h) promptly notify the Agent of any move of its principal
executive office from the State of Washington.
(i) 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.
SECTION 5.2. RECORDS AND INSPECTION.
The Borrower shall, and shall cause each Subsidiary to, maintain
adequate books, records
40
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 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.
41
SECTION 5.7. CONDUCT OF BUSINESS; COMPLIANCE WITH LAW.
The Borrower shall not change the general character of its business as
conducted at the Closing Date 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 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, acts of war or terrorism 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 Material Contractual Obligations.
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.
Except for Debt evidenced by the Recourse Agreement, 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 as in effect on July 24, 1997.
42
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:
(a) Liens securing the Obligations and Existing Liens;
(b) (i) 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 appropriate provisions
are being maintained in accordance with GAAP (and as to which
foreclosure, distraint, levy, sale or similar proceedings have not yet
commenced with respect to the property subject to any such Lien on
account thereof); (ii) 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 are 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 (and as to which foreclosure, distraint, levy,
sale or similar proceedings have not yet commenced with respect to the
property subject to any such Lien on account thereof); (iii) 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; (iv) easements, rights-of-way, covenants, consents, reservations,
encroachments, variations and other restrictions, conditions (including
those conditions commonly referred to as "CC&Rs"), charges or
encumbrances (whether or not recorded) that do not materially interfere
with the ordinary conduct of the Borrower's business; (v) building
restrictions, zoning laws and other statutes, laws, rules, regulations,
ordinances and restrictions; (vi) leases, subleases, easements or
similar use rights granted in the ordinary course of business to others
not materially interfering with the business of, and consistent with
past practices of, the Borrower and (vii) construction, operation and
reciprocal easement agreements entered into in the ordinary course of
business that do not materially interfere with the ordinary conduct of
the Borrower's business and not relating to the repayment of Debt;
(c) any attachment or judgment Lien, not otherwise constituting
an Event of
43
Default, in existence less than 30 days after the entry thereof or with
respect to which (i) execution has been stayed, (ii) payment is covered
in full by insurance and the insurer has not denied coverage, or (iii)
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;
(d) precautionary Uniform Commercial Code financing statements
regarding consignments, provided that any such financing statements do
not describe any property other than the assets acquired through the
consignment and proceeds thereof;
(e) Liens securing Debt of the Borrower or any Subsidiary,
including Capitalized Leases, used to finance the acquisition of fixed
assets (including, without limitation, equipment and vehicles) of the
Borrower or such Subsidiary, the construction of additional buildings or
the expansion otherwise of their respective facilities, provided that
such Debt (i) does not exceed the cost to the Borrower or such
Subsidiary of the assets acquired with the proceeds of such Debt, (ii)
in the case of new construction or expansion of existing facilities, is
either a construction or permanent loan secured by the facilities
constructed and/or the real property on which such facilities are
located and related equipment and fixtures, leases, rents, reserves and
other personal property (which for this purpose shall not include
inventory and intellectual property) to the extent located on or
commonly considered to be part of the real property as applicable, and
(iii) in the case of other asset financing, is incurred within twelve
months following the date of the acquisition (which for this purpose
shall, in the case of a construction project, be the date that
construction is completed and the asset constructed is placed into
service); provided that any such Lien does not encumber any property
other than the assets acquired with the proceeds of such Debt, related
reserve funds, related personal property (which for this purpose shall
not include inventory and intellectual property) and proceeds of any of
the foregoing;
(f) 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 and proceeds thereof and such Lien was not created in
contemplation of such acquisition;
(g) Liens arising from the sale or securitization of receivables,
to the extent the Debt arising from such securitization is permitted
hereunder at the time such Debt was incurred;
(h) any Lien constituting a renewal, extension or replacement of
any Existing Lien or any Lien permitted by clauses (e) or (f) of this
Section 6.1, provided such Lien is limited to all or a part of the
property subject to the Lien extended, renewed or replaced;
(i) Liens granted by a Subsidiary of the Borrower in favor of the
Borrower or another Subsidiary of the Borrower;
(j) covenants contained in the following agreements which require
the grant of
44
security for the obligations evidenced thereby if security is given for
some other obligation: (i) that certain Indenture dated as of March 11,
1998 between the Borrower and Wells Fargo Bank West, National
Association (formerly known as Norwest Bank Colorado, National
Association), as Trustee, as in effect on the Closing Date, (ii) that
certain senior Indenture dated as of January 13, 1999 between the
Borrower and Wells Fargo Bank West, National Association, as Trustee, as
in effect on the Closing Date; (iii) that certain subordinated Indenture
dated as of January 13, 1999 between the Borrower and Wells Fargo Bank
West, National Association, as Trustee, as in effect on the Closing
Date; and (iv) that certain Indenture dated as of November 15, 1984
between Nordstrom Credit, Inc. and Wells Fargo Bank West, National
Association (formerly known as First Interstate Bank of Denver, N.A.),
as Trustee, as in effect on the Closing Date; provided, however, that
this clause (j) shall not be deemed to restrict additional Debt from
being issued under any of the foregoing agreements or any supplement
thereto so long as the covenants contained therein relating to the grant
of security therefore are not modified in a manner adverse to the
Lenders;
(k) leases, licenses, subleases or sublicenses granted to others
(including, without limitation, licenses of intellectual property) not
interfering in any material respect with the business of the Borrower
and its Subsidiaries; and
(l) other Liens incidental to the conduct of the business or the
ownership of the assets of the Borrower or any Subsidiary that (i) were
not incurred in connection with borrowed money, (ii) 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, (iii) do not encumber intellectual property and (iv) do not
secure obligations aggregating in excess of $100,000,000.
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) Restricted Payments by any Subsidiary to the Borrower, (b) Restricted
Payments (other than purchases or other acquisition for value of any of any
Capital Stock of the Borrower or any Subsidiary) so long as 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) and
(c) purchases or other acquisitions for value of any of any Capital Stock of the
Borrower or any Subsidiary; provided that the aggregate consideration paid for
all such purchases and other acquisitions after the Closing Date shall not
exceed (i) if the Leverage Ratio has been less than 3.5 to 1.0 as of the last
day of the two most recently ended Fiscal Quarters, the sum of $200,000,000 plus
50% of Net Income earned since October 31, 2001 or (ii) if the Leverage Ratio
has not been less than 3.5 to 1.0 as of the last day of the two most recently
ended Fiscal Quarters, the sum of $100,000,000 plus 25% of Net Income earned
since October 31, 2001.
SECTION 6.3. FINANCIAL COVENANTS.
(a) Coverage Ratio. As of the last day of each Fiscal Quarter,
for the twelve
45
month period ending on such date, the Borrower shall not permit the
ratio of (i) EBITDAR for such period to (ii) the sum of (A) Interest
Expense for such period plus (B) Rent Expense for such period (the
"Coverage Ratio") to be less than the amount set forth below for the
corresponding dates:
Last Day of Fiscal Quarter Coverage Ratio
-------------------------- --------------
October 31, 2001, January 31, 2002,
April 30, 2002 and July 31, 2002 2.7 to 1.0
October 31, 2002 2.8 to 1.0
January 31, 2003 and thereafter 3.0 to 1.0
(b) Leverage Ratio. As of the last day of each Fiscal Quarter,
for the twelve month period ending on such date, the Borrower shall not
permit the ratio of (i) the sum of (A) Funded Debt as of the last day of
such period and (B) the product of (1) Rent Expense for such period
times (2) six to (ii) EBITDAR for such period (the "Leverage Ratio") to
be greater than the amount set forth below for the corresponding dates:
Last Day of Fiscal Quarter Leverage Ratio
-------------------------- --------------
October 31, 2001, January 31, 2002 and
April 30, 2002 4.75 to 1.0
July 31, 2002 4.50 to 1.0
October 31, 2002 4.25 to 1.0
January 31, 2003 and thereafter 4.00 to 1.0
</Table>
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 either before or 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 so long as it does not cause
or could not be reasonably expected to cause a Material Adverse Effect, (c) the
Borrower's interest (direct or indirect) in Nordstrom.com, LLC may be sold or
transferred, and (d) in addition to transactions permitted under Section 6.5
(which permitted transactions shall not be restricted by this Section 6.4), 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
46
transactions, to the Borrower or another Subsidiary.
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, transfer or otherwise dispose of
during any Fiscal Year property or other assets (other than (a) sales of
inventory in the ordinary course of business, (b) the sale or disposition
(direct or indirect) of Nordstrom.com, LLC and (c) the sale or disposition of
the Borrower's interest in 1700 Seventh LP) constituting, in the aggregate, 10%
or more of the consolidated assets of the Borrower and its Subsidiaries, as
calculated on a book value basis. Notwithstanding the foregoing limitation, the
Borrower and its Subsidiaries shall be permitted to sell their receivables in a
transaction to securitize such receivables, and such sales of receivables shall
not be included in the computation above.
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 6.6 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, (ii) transactions pursuant to (A) the Investment Agreement, (B) the
Recourse Agreement and (C) any 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 (including agreements under
which the Borrower has an obligation to repurchase from or indemnify the
purchaser with respect to accounts discounted or sold by the Borrower) and (iii)
so long as Nordstrom.com, LLC, a Delaware limited liability company, is subject
to subpart (c) of this Section 6.6, supply, service or licensing agreements
between or among Nordstrom.com LLC and its successors on the one hand, and the
Borrower and its other Subsidiaries, on the other hand, so long as such
agreements are fair and reasonable to the Borrower and such other Subsidiaries
under the circumstances.
SECTION 6.7. LIMITATION ON NEGATIVE PLEDGES.
The Borrower will not, nor will it permit its Subsidiaries to, enter
into, assume or become subject to any agreement prohibiting or otherwise
restricting the creation or assumption of any Lien upon its inventory, patents,
copyrights and/or trademarks, whether now owned or hereafter acquired (but not
including such assets which are licensed from third parties to the Borrower or
any Subsidiary), or requiring the grant of any security interest in any of its
inventory and/or intellectual property for such obligation if security is given
for some other obligation except (a) as set forth in
47
the Loan Documents, and (b) as set forth in that Guaranty Agreement dated as of
February 29, 2000 with respect to extensions of credit made to 1700 Seventh
L.P., which guaranty is given by the Borrower in favor of Bank of America, N.A.,
as administrative agent, and (c) in connection with any Lien permitted by
Section 6.1 or any document or instrument governing any such Lien, provided that
any such restriction relates only to the asset or assets subject to such Lien.
SECTION 6.8. LIMITATION ON INVESTMENTS IN NORDSTROM.COM, LLC.
So long as Nordstrom.com, LLC is not a Wholly-Owned Subsidiary, the
Borrower will not, nor will it permit its Subsidiaries to, directly or
indirectly, (A) lend money or extend credit or make advances to, or guaranty any
Debt owed by, Nordstrom.com, LLC, or (B) purchase or acquire any Capital Stock,
obligations or securities of, or any other interest in, or make capital
contributions to, or otherwise make investments in, Nordstrom.com, LLC in an
aggregate amount exceeding $175,000,000 for all such extensions of credit or
investments occurring after the Closing Date.
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"):
(a) Failure to Make Payments. The Borrower (i) 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 (ii)
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;
(b) Default in Other Debt. (i) 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 (ii) any other breach or default (or other
event or condition), beyond any period of grace provided therefor, shall
occur 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 such 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
48
in this Section 7.1(b) is cured or waived prior to any action being
taken pursuant to Section 7.2(a) or 7.2(b), 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;
(c) Breach of Certain Covenants.
(i) The Borrower shall fail to perform, comply with or
observe any agreement, covenant or obligation under Section 2.3,
under Sections 6.2 through 6.5 inclusive, or under Section 5.1(d)
or 5.3 (insofar as it requires the preservation of the corporate
existence of the Borrower);
(ii) The Borrower shall fail to perform, comply with or
observe any agreement, covenant or obligation under Section 6.1
or under Sections 6.6 through 6.8 inclusive and such failure
shall not have been remedied within ten days; or
(iii) The Borrower shall fail to perform, comply with or
observe any agreement, covenant or obligation under Sections
5.1(a), (b) or (c) and such failure shall not have been remedied
within five days;
(d) 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.l(a), 7.1(b) and 7.1(c)) and such failure
shall not have been remedied within 30 days after the earlier to occur
of (i) the Borrower's knowledge thereof or (ii) written notice thereof
by the Agent to the Borrower; or
(e) Breach of Representation or 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);
(f) 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 over 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 occurs: (i) the Borrower or any of its
Subsidiaries consents to the institution of the involuntary case or
proceeding; (ii) the petition commencing the involuntary case or
proceeding is not timely controverted; (iii) the petition commencing the
involuntary case or proceeding remains undismissed and unstayed for a
period of 60 days; or (iv) an order for relief is issued or entered
therein;
49
(g) 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 over 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; or shall make a
general assignment for the benefit of creditors; or shall generally not
pay, or shall admit in writing its inability to pay, its debts as they
become due; or the board of directors of the Borrower or any of its
Subsidiaries (or any committee thereof) shall adopt any resolution or
otherwise authorize action to approve any of the foregoing;
(h) 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 or unstayed for a
period of 60 days;
(i) 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
obligated to make or accrue a contribution is placed in reorganization
or terminates;
(j) Change of Control. A Change of Control shall occur; or
(k) 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:
(a) If an Event of Default occurs under Section 7.1(f) or 7.1(g),
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
50
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.
(b) If an Event of Default occurs, other than under Section
7.1(f) or 7.1(g), the Agent shall (i) with the consent 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 (ii) with the consent 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.
(c) The Agent shall, with the consent of the Required Lenders,
enforce any and all rights and interests created and existing under the
Loan Documents, including, without limitation, all rights of set-off.
Notwithstanding the fact that enforcement powers reside primarily
with the Agent, each Lender has, to the extent permitted by law, a
separate right of payment and shall be considered a separate "creditor"
holding a separate "claim" within the meaning, and for the purposes, of
Section 101(5) of the Bankruptcy Code or any other insolvency statute.
SECTION 7.3 ALLOCATION OF PAYMENTS AFTER EVENT OF DEFAULT.
Notwithstanding any other provisions of this Agreement, after the
occurrence and during the continuance of an Event of Default, all amounts
collected or received by the Agent or any Lender on account of amounts
outstanding under any of the Loan Documents shall be paid over or delivered as
follows:
FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation reasonable attorneys' fees) of
the Agent or any of the Lenders in connection with enforcing the rights
of the Lenders under the Loan Documents and any protective advances made
by the Agent or any of the Lenders, pro rata as set forth below;
SECOND, to the payment of any fees owed to the Agent or any
Lender, pro rata as set forth below;
THIRD, to the payment of all accrued interest payable to the
Lenders hereunder, pro rata as set forth below;
FOURTH, to the payment of the outstanding principal amount of the
Loans and all other obligations which shall have become due and payable
under the Loan Documents, pro rata as set forth below; and
FIFTH, the payment of the surplus, if any, to whoever may be
lawfully entitled to
51
receive such surplus.
In carrying out the foregoing, (a) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category and (b) each of the Lenders shall receive an amount equal to
its pro rata share (based on the proportion that the then outstanding Loans held
by such Lender bears to the aggregate then outstanding Loans) of amounts
available to be applied.
ARTICLE 8
THE AGENT AND THE LENDERS
SECTION 8.1 APPOINTMENT AND AUTHORIZATION OF AGENT.
Each Lender hereby irrevocably (subject to Section 8.9) appoints,
designates and authorizes the Agent to take such action on its behalf under the
provisions of this Agreement and each other Loan Document and to exercise such
powers and perform such duties as are expressly delegated to it by the terms of
this Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere herein or in any other Loan Document, the Agent shall not
have any duties or responsibilities, except those expressly set forth herein,
nor shall the Agent have or be deemed to have any fiduciary relationship with
any Lender or participant, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the Agent.
Without limiting the generality of the foregoing sentence, the use of the term
"Agent" herein and in the other Loan Documents with reference to the Agent is
not intended to connote any fiduciary or other implied (or express) obligations
arising under agency doctrine of any applicable law. Instead, such term is used
merely as a matter of market custom, and is intended to create or reflect only
an administrative relationship between independent contracting parties.
SECTION 8.2 DELEGATION OF DUTIES.
The Lender Parties agree that the Agent may execute any of its duties
under this Agreement or any other Loan Document with respect to the Lender
Parties by or through agents, employees or attorneys-in-fact and shall be
entitled to advice of counsel and other consultants or experts concerning all
matters pertaining to such duties. The Lender Parties agree that the Agent shall
not be responsible to the other Lender Parties for the negligence or misconduct
of any agent or attorney-in-fact that it selects in the absence of gross
negligence or willful misconduct.
SECTION 8.3 LIABILITY OF AGENT.
No Agent-Related Person shall (a) be liable to any Lender Party for any
action taken or omitted to be taken by any of them under or in connection with
this Agreement or any other Loan Document or the transactions contemplated
hereby and thereby (except for its own gross negligence or willful misconduct in
connection with its duties expressly set forth herein), or
52
(b) be responsible in any manner to any Lender or participant for any recital,
statement, representation or warranty made by the Borrower or any officer
thereof, contained herein or in any other Loan Document, or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Agent under or in connection with, this Agreement or any other Loan
Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure of
the Borrower or any other party to any Loan Document to perform its obligations
hereunder or thereunder. No Agent-Related Person shall be under any obligation
to any Lender or participant to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of the Borrower or any Affiliate thereof.
SECTION 8.4 RELIANCE BY AGENT.
(a) The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, communication, signature,
resolution, representation, notice, consent, certificate, affidavit,
letter, telegram, facsimile, telex or telephone message, statement or
other document or conversation believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to
the Borrower), independent accountants and other experts selected by the
Agent. As among the Lender Parties, the Agent shall be fully justified
in failing or refusing to take any action under any Loan Document unless
it shall first receive such advice or concurrence of the Required
Lenders as it deems appropriate and, if it so requests, it shall first
be indemnified to its satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this
Agreement or any other Loan Document in accordance with a request or
consent of the Required Lenders or all the Lenders, if required
hereunder, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and participants.
Where this Agreement expressly permits or prohibits an action unless the
Required Lenders otherwise determine, the Agent shall, and in all other
instances, the Agent may, but shall not be required to, initiate any
solicitation for the consent or a vote of the Lenders.
(b) For purposes of determining compliance with the conditions
specified in Section 3.1, each Lender that has signed this Agreement
shall be deemed to have consented to, approved or accepted or to be
satisfied with, each document or other matter either sent by the Agent
to such Lender for consent, approval, acceptance or satisfaction, or
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender.
SECTION 8.5. NOTICE OF DEFAULT.
The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default, except with respect to defaults
in the payment of principal, interest and fees required to be paid to the Agent
for the account of the Lenders, unless the Agent shall
53
have received written notice from a Lender or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". The Agent will notify the Lenders of its
receipt of any such notice. The Agent shall take such action with respect to
such Default or Event of Default as may be directed by the Required Lenders in
accordance with Section 7.2; provided, however, that unless and until the Agent
has received any such direction, the Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable or in the best interest
of the Lenders.
SECTION 8.6. CREDIT DECISION; DISCLOSURE OF INFORMATION BY AGENT.
Each Lender acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by the Agent hereinafter
taken, including any consent to and acceptance of any assignment or review of
the affairs of the Borrower or any Affiliate thereof, shall be deemed to
constitute any representation or warranty by any Agent-Related Person to any
Lender as to any matter, including whether Agent-Related Persons have disclosed
material information in their possession. Each Lender represents to the Agent
that it has, independently and without reliance upon any Agent-Related Person
and based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Borrower and
its Subsidiaries, and all Applicable Laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to the Borrower hereunder. Each Lender also represents that it
will, independently and without reliance upon any Agent-Related Person and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrower and its Subsidiaries. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
the Agent herein, the Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the business,
prospects, operations, property, financial and other condition or
creditworthiness of the Borrower or any of its Affiliates which may come into
the possession of any Agent-Related Person.
SECTION 8.7. INDEMNIFICATION OF AGENT.
Whether or not the transactions contemplated hereby are consummated, the
Lenders shall indemnify upon demand each Agent-Related Person (to the extent not
reimbursed by or on behalf of the Borrower and without limiting the obligation
of the Borrower to do so), pro rata, and hold harmless each Agent-Related Person
from and against any and all claims, damages, losses, liabilities, costs, and
expenses (including, without limitation, reasonable attorneys' fees) that may be
incurred by or asserted or awarded against any Agent-Related Person, in each
case arising out of or in connection with or by reason of (including, without
limitation, in connection with any investigation, litigation, or proceeding or
preparation of defense in connection therewith) the Loan Documents, any of the
transactions contemplated herein and therein or the actual or proposed use of
the proceeds of the Loans, except to the extent such claim, damage,
54
loss, liability, cost, or expense is found in a final, non-appealable judgment
by a court of competent jurisdiction to have resulted from such Agent-Related
Person's gross negligence or willful misconduct; provided, however, that no
action taken in accordance with the directions of the Required Lenders shall be
deemed to constitute gross negligence or willful misconduct for purposes of this
Section 8.7. Without limitation of the foregoing, each Lender shall reimburse
the Agent upon demand for its ratable share of any costs or out-of-pocket
expenses (including reasonable attorneys fees and the allocated costs of
internal counsel) incurred by the Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement, any other
Loan Document, or any document contemplated by or referred to herein and
therein, to the extent that the Agent is not reimbursed for such expenses by or
on behalf of the Borrower. The undertaking in this Section 8.7 shall survive
termination of the Revolving Commitments, the payment of all Obligations
hereunder and the resignation or replacement of the Agent.
SECTION 8.8. AGENT IN ITS INDIVIDUAL CAPACITY.
Bank of America and its Affiliates may make loans to, issue letters of
credit for the account of, accept deposits from, acquire equity interests in and
generally engage in any kind of banking, trust, financial advisory, underwriting
or other business with the Borrower and its Affiliates as though Bank of America
were not the Agent hereunder and without notice to or consent of the Lenders.
The Lenders acknowledge that, pursuant to such activities, Bank of America or
its Affiliates may receive information regarding the Borrower or its Affiliates
(including information that may be subject to confidentiality obligations in
favor of the Borrower or such Affiliate) and acknowledge that the Agent shall be
under no obligation to provide such information to them. With respect to its
Loans, Bank of America shall have the same rights and powers under this
Agreement as any other Lender and may exercise such rights and powers as though
it were not the Agent, and the terms "Lender" and "Lenders" include Bank of
America in its individual capacity.
SECTION 8.9. SUCCESSOR AGENT.
The Agent may resign as Agent upon 30 days' notice to the Lenders and
the Borrower. If the Agent resigns under this Agreement, the Required Lenders
shall appoint from among the Lenders a successor administrative agent for the
Lenders the appointment of which successor administrative agent shall require
the consent of the Borrower at all times other than during the existence of a
Default or an Event of Default (which consent of the Borrower shall not be
unreasonably withheld or delayed). If no successor administrative agent is
appointed prior to the effective date of the resignation of the Agent, the Agent
may appoint, after consulting with the Lenders and the Borrower, a successor
administrative agent from among the Lenders. Upon the acceptance of its
appointment as successor administrative agent hereunder, such successor
administrative agent shall succeed to all the rights, powers and duties of the
retiring Agent and the term "Agent" shall mean such successor administrative
agent and the retiring Agent's appointment, powers and duties as Agent shall be
terminated. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article 8 and Sections 9.4 and 9.9 shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was Agent under
55
this Agreement. If no successor administrative agent has accepted appointment as
Agent by the date which is 30 days following a retiring Agent's notice of
resignation, the retiring Agent's resignation shall nevertheless thereupon
become effective and the Lenders shall perform all of the duties of the Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
administrative agent with the consent of the Borrower as provided for above.
SECTION 8.10. 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 or be obligated under any of the provisions hereof (except that
the provisions of Section 8.9 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 8.11. ENFORCEMENT BY THE AGENT.
Each Lender agrees that, except with the prior written consent of the
Agent or as provided in Section 9.7, 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 8.12. SYNDICATION AGENT AND DOCUMENTATION AGENT.
Neither the Syndication Agent nor the Documentation Agent, in such
capacity, shall have any right, power, obligation, liability, duty or
responsibility whatsoever under the Loan Documents, and neither the Syndication
Agent nor the Documentation 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 either the Syndication Agent or the Documentation Agent in
deciding to enter into this Agreement or in taking or not taking any action
hereunder.
ARTICLE 9
MISCELLANEOUS
SECTION 9.1. EXPENSES.
The Borrower shall pay on demand:
(a) any and all attorneys' fees and disbursements (including
allocated costs of in-house counsel) and out-of-pocket costs and
expenses incurred by the Agent in connection with the development,
drafting, negotiation and administration of the Loan Documents, any
amendments thereto and the syndication and closing of the transactions
56
contemplated thereby (subject to, with respect to the expenses incurred
prior to the Closing Date, the limitations agreed to in writing between
the Agent and the Borrower); and
(b) 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.
(a) The Borrower shall indemnify, defend and hold harmless each
Lender Party and its Affiliates and the officers, directors, employees,
agents, attorneys, successors and assigns of each Lender Party and its
Affiliates (collectively, the "Indemnitees") from and against (i)
subject to the provisions of Section 2.16, 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(a)(i) 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 materially disadvantageous to such Lender), and (ii) 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.
(b) To the extent that the undertaking to indemnify and hold
harmless set forth in Section 9.2(a) 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.
SECTION 9.3. WAIVERS; MODIFICATIONS IN WRITING.
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
57
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,
provided further:
(a) no amendment, waiver, consent, forbearance or other agreement
that has the effect of (i) 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, (other than as a result of
waiving the applicability of the Post-Default Rate of interest), (ii)
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 (it being
understood and agreed that a waiver of any Default or Event of Default
or a waiver of any mandatory reduction in the Revolving Commitments
shall not constitute a change in the terms of any Revolving Commitment
of any Lender), (iii) altering the rights and obligations of the
Borrower to prepay the Loans, or (iv) 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 each of the Lenders affected thereby;
(b) no amendment that has the effect of (i) increasing the duties
or obligations of the Agent, (ii) increasing the standard of care or
performance required on the part of the Agent, or (iii) reducing or
eliminating the indemnities or immunities to which the Agent is entitled
(including any amendment of this Section 9.3), shall be effective unless
the same shall be signed by or on behalf of the Agent; and
(c) any waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
Except as required herein, 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 DELAYS.
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.
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, materials sent to security holders and/or to the SEC and routine
communications, which may be sent by first-class mail,
58
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 effective when delivered to 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(a) (in the case of the Lender
Parties) or Schedule 9.5 (in the case of the Borrower).
SECTION 9.6. SUCCESSORS AND ASSIGNS; DESIGNATIONS.
(a) 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.
(b) Subject to the terms of this Section 9.6(b), each Lender
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 financial institutions; provided, however, that (i) 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; (ii) 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 in
which case no consent of the Borrower is required) and the Agent, which
consents shall not be unreasonably withheld or delayed; (iii) the
parties to the Assignment shall execute and deliver to the Agent an
Assignment and Assumption substantially in the form of Exhibit 9.6(b)
(an "Assignment and Assumption"); and (iv) 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).
(c) Each Lender 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
financial 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(c). If any Lender sells or grants a Participation, (i) such
Lender shall make
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and receive all payments for the account of its participant, (ii) such
Lender's obligations under this Agreement shall remain unchanged, (iii)
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, (iv)
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 (v) the agreement
evidencing the Participation 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 (A) 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 (B) 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 2.12, 2.13, 2.14 and 2.16 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.
(d) Each Lender may at any time assign or pledge any portion of
its rights under the Loan Documents to a Federal Reserve Bank and no
such assignment or pledge shall be subject to the provisions of Sections
9.6(b) or 9.6(c).
(e) Subject to the terms and conditions of Section 9.13, 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.
(f) Notwithstanding anything to the contrary contained herein, so
long as any action in accordance with this Section 9.6(f) does not cause
increased costs or expenses for the Borrower, any Lender (a "Granting
Lender") may grant to a special purpose funding vehicle (an "SPC") the
option to fund all or any part of any Loan that such Granting Lender
would otherwise be obligated to fund pursuant to this Agreement;
provided that (i) nothing herein shall constitute a commitment by any
SPC to fund any Loan, (ii) if an SPC elects not to exercise such option
or otherwise fails to fund all or any part of such Loan, the Granting
Lender shall be obligated to fund such Loan pursuant to the terms
hereof, (iii) no SPC shall have any voting rights pursuant to Section
9.3 and (iv) with respect to notices, payments and other matters
hereunder, the Borrower, the Agent and the Lenders shall not be
obligated to deal with an SPC, but may limit their communications and
other dealings relevant to such SPC to the applicable Granting Lender.
The funding of a Loan by an SPC hereunder shall utilize the Revolving
Commitment of the Granting Lender to the same extent that, and as if,
such Loan were
60
funded by such Granting Lender. Each party hereto hereby agrees that no
SPC shall be liable for any indemnity or payment under this Agreement
for which a Lender would otherwise be liable for so long as, and to the
extent, the Granting Lender provides such indemnity or makes such
payment. Notwithstanding anything to the contrary contained in this
Agreement, any SPC may disclose any non-public information relating to
its funding of Loans to any rating agency, commercial paper dealer or
provider of any surety or guarantee to such SPC so long as such
disclosure is clearly designated as being made on a confidential basis.
This Section 9.6(f) may not be amended without the prior written consent
of each Granting Lender, all or any part of whose Loan is being funded
by an SPC at the time of such amendment.
SECTION 9.7. SET OFF.
In addition to any rights now or hereafter granted under Applicable Law
and to the extent not prohibited by law or Contractual Obligation of such Lender
Party, 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 9.8. SURVIVAL OF AGREEMENTS, REPRESENTATIONS AND WARRANTIES.
All agreements, representations and warranties made herein shall survive
the execution and delivery of this Agreement and the other Loan Documents, 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 on such agreements, representations and warranties made herein.
Without limitation, the agreements and obligations of the Borrower contained in
Sections 2.13, 2.16, 9.1, and 9.2 and the obligations of the Lenders under
Section 8.7 shall survive the payment in full of all other Obligations.
SECTION 9.9. 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.
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SECTION 9.10. COMPLETE AGREEMENT.
This Agreement, together with the other Loan Documents and the Fee
Letter, represents the entire agreement of the parties hereto and supercedes all
prior agreements and understandings, oral or written, if any, including any
commitment letters or correspondence relating to the Loan Documents or the
transactions contemplated therein.
SECTION 9.11. 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 9.12. 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 9.13. CONFIDENTIALITY.
Each Lender Party agrees that it shall keep confidential any non-public
information from time to time supplied to it under any Loan Document; provided,
however, that nothing herein shall prevent the disclosure of any such
information to (a) the extent a Lender Party in good faith believes such
disclosure is required by Applicable Law, (b) counsel for a Lender Party or to
its accountants, (c) bank examiners or auditors or comparable Persons, (d) any
Affiliate of a Lender Party with reason to need to know such information
pursuant to such Lender Party's performance under the Loan Documents, (e) any
other Lender Party, or any assignee, transferee or participant, or any potential
assignee, transferee or participant, of all or any portion of any Lender Party's
rights under this Agreement who is notified of the confidential nature of the
information or (f) any other Person in connection with any litigation concerning
this Agreement or the transactions contemplated hereby to which any one or more
of the Lender Parties is a party and for which such disclosure is necessary in
the prosecution or defense of such case; provided, however, that disclosures
under subparts (b), (c), (d) and (e) shall be made with a clear designation that
the information is being disclosed on a confidential basis`. No Lender Party
shall have any obligation under this Section 9.13 to the extent any such
information becomes available on a non-confidential basis from a source other
than the Borrower which source such Lender Party reasonably believes to be
authorized to make such information public.
62
SECTION 9.14. BINDING EFFECT; CONTINUING AGREEMENT.
(a) This Agreement shall become effective at such time when all
of the conditions set forth in Section 3.1 have been satisfied or waived
by the Lenders and it shall have been executed by the Borrower, the
Agent, and each Lender, and thereafter this Agreement shall be binding
upon and inure to the benefit of the Borrower, the Agent and each Lender
and their respective successors and assigns.
(b) This Agreement shall be a continuing agreement and shall
remain in full force and effect until all Loans, interest, Fees and
other Obligations have been paid in full and the Revolving Commitments
are terminated. Upon termination, the Borrower shall have no further
obligations (other than the indemnification provisions that survive)
under the Loan Documents; provided that should any payment, in whole or
in part, of the Obligations be rescinded or otherwise required to be
restored or returned by the Agent or any Lender, whether as a result of
any proceedings in bankruptcy or reorganization or any similar reason,
then the Loan Documents shall automatically be reinstated and all
amounts required to be restored or returned and all costs and expenses
incurred by the Agent or any Lender in connection therewith shall be
deemed included as part of the Obligations.
SECTION 9.15. NO ORAL AGREEMENTS.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO
FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON
LAW.
63
SIGNATURE PAGE
NORDSTROM, INC.
AMENDED AND RESTATED CREDIT AGREEMENT
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Agreement to be duly executed and delivered as of the date first above
written.
BORROWER: NORDSTROM, INC.
By: /s/ Robert E. Campbell
------------------------------------
Name: Robert E. Campbell
------------------------------------
Title: V.P Treasurer
------------------------------------
SIGNATURE PAGE
NORDSTROM, INC.
AMENDED AND RESTATED CREDIT AGREEMENT
AGENT: BANK OF AMERICA, N.A.,
By: /s/ Amy Krovocheck
------------------------------------
Name: Amy Krovocheck
------------------------------------
Title: Vice-President
------------------------------------
LENDERS: BANK OF AMERICA, N.A.
By: /s/ Amy Krovocheck
------------------------------------
Name: Amy Krovocheck
------------------------------------
Title: Vice-President
------------------------------------
SIGNATURE PAGE
NORDSTROM, INC.
AMENDED AND RESTATED CREDIT AGREEMENT
BANK ONE, NA, individually as a Lender
and in its capacity as Syndication Agent
By: /s/ Catherine A. Muszynski
------------------------------------
Name: Catherine A. Muszynski
------------------------------------
Title: Vice-President
------------------------------------
SIGNATURE PAGE
NORDSTROM, INC.
AMENDED AND RESTATED CREDIT AGREEMENT
U.S. BANK NATIONAL ASSOCIATION,
individually as a Lender and in its capacity
as Documentation Agent
By: /s/ James R. Farmer
------------------------------------
Name: James R. Farmer
------------------------------------
Title: Vice-President
------------------------------------
SIGNATURE PAGE
NORDSTROM, INC.
AMENDED AND RESTATED CREDIT AGREEMENT
KEY BANK NATIONAL ASSOCIATION
By: /s/ Kevin D. Smith
------------------------------------
Name: Kevin D. Smith
------------------------------------
Title: Vice-President
------------------------------------
SIGNATURE PAGE
NORDSTROM, INC.
AMENDED AND RESTATED CREDIT AGREEMENT
WELLS FARGO BANK, N.A.
By: /s/ Steven J. Anderson
------------------------------------
Name: Steven J. Anderson
------------------------------------
Title: Senior Vice-President
------------------------------------
SIGNATURE PAGE
NORDSTROM, INC.
AMENDED AND RESTATED CREDIT AGREEMENT
THE BANK OF NEW YORK
By: /s/ Charlotte Sohn Fuiks
------------------------------------
Name: Charlotte Sohn Fuiks
------------------------------------
Title: Vice-President
------------------------------------
SIGNATURE PAGE
NORDSTROM, INC.
AMENDED AND RESTATED CREDIT AGREEMENT
FIFTH THIRD BANK
By: /s/ Jeff Assenmacher
------------------------------------
Name: Jeff Assenmacher
------------------------------------
Title: Large Corporate Officer
------------------------------------
SIGNATURE PAGE
NORDSTROM, INC.
AMENDED AND RESTATED CREDIT AGREEMENT
THE NORTHERN TRUST COMPANY
By: /s/ Melissa A. Whitson
------------------------------------
Name: Melissa A. Whitson
------------------------------------
Title: Vice-President
------------------------------------