Exhibit 10.1
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SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
BETWEEN THE COMPANY AND FOOTHILL CAPITAL CORPORATION
DATED JULY 5, 2000
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TABLE OF CONTENTS
PAGE(S)
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1. DEFINITIONS AND CONSTRUCTION......................................1
1.1 Definitions.......................................................1
1.2 Accounting Terms.................................................15
1.3 Code.............................................................16
1.4 Construction.....................................................16
1.5 Schedules and Exhibits...........................................16
2. LOAN AND TERMS OF PAYMENT..............................................16
2.1 Revolving Advances...............................................16
2.2 Letters of Credit................................................23
2.3 Intentionally Omitted............................................26
2.4 Intentionally Omitted............................................26
2.5 Payments.........................................................26
2.6 Overadvances.....................................................27
2.7 Interest and Letter of Credit Fees: Rates, Payments,
and Calculations. ...............................................27
2.8 Collection of Accounts...........................................29
2.9 Crediting Payments; Application of Collections...................29
2.10 Designated Account...............................................29
2.11 Maintenance of Loan Account; Statements of Obligations...........30
2.12 Fees.............................................................30
2.13 Eurodollar Rate Loans............................................31
2.14 Illegality.......................................................32
2.15 Requirements of Law..............................................33
2.16 Indemnity........................................................34
3. CONDITIONS; TERM OF AGREEMENT..........................................35
3.1 Conditions Precedent to the Initial Advance and the
Initial Letter of Credit. .......................................35
3.2 Conditions Precedent to all Advances and all Letters of Credit...36
3.3 Intentionally Omitted............................................36
3.4 Term; Automatic Renewal..........................................36
3.5 Effect of Termination............................................36
3.6 Early Termination by Borrower....................................36
4. CREATION OF SECURITY INTEREST..........................................37
4.1 Grant of Security Interest.......................................37
4.2 Negotiable Collateral............................................37
4.3 Collection of Accounts, General Intangibles,
and Negotiable Collateral. ......................................37
4.4 Delivery of Additional Documentation Required....................37
4.5 Power of Attorney................................................38
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4.6 Right to Inspect.................................................38
5. REPRESENTATIONS AND WARRANTIES.........................................38
5.1 No Encumbrances..................................................38
5.2 Eligible Accounts................................................38
5.3 Eligible Inventory...............................................39
5.4 Equipment........................................................39
5.5 Location of Inventory and Equipment..............................39
5.6 Inventory Records................................................39
5.7 Location of Chief Executive Office; FEIN.........................39
5.8 Due Organization and Qualification; Subsidiaries.................39
5.9 Due Authorization; No Conflict...................................40
5.10 Litigation.......................................................40
5.11 No Material Adverse Change.......................................40
5.12 Solvency. Borrower is Solvent...................................40
5.13 Employee Benefits................................................40
5.14 Environmental Condition..........................................40
5.15 Year 2000 Compliance.............................................41
6. AFFIRMATIVE COVENANTS..................................................41
6.1 Accounting System and Schedules..................................41
6.2 Financial Statements, Reports, Certificates......................41
6.3 Tax Returns......................................................42
6.4 Designation of Inventory.........................................42
6.5 Store Openings and Closings and Rents Reports....................43
6.6 Title to Equipment...............................................43
6.7 Maintenance of Equipment.........................................43
6.8 Taxes............................................................43
6.9 Insurance........................................................43
6.10 No Setoffs or Counterclaims......................................44
6.11 Location of Inventory and Equipment..............................44
6.12 Compliance with Laws.............................................44
6.13 Employee Benefits................................................44
6.14 Leases...........................................................45
7. NEGATIVE COVENANTS.....................................................45
7.1 Indebtedness.....................................................45
7.2 Liens............................................................46
7.3 Restrictions on Fundamental Changes..............................46
7.4 Disposal of Assets...............................................46
7.5 Change Name......................................................46
7.6 Guarantee........................................................46
7.7 Nature of Business...............................................46
7.8 Prepayments and Amendments.......................................46
7.9 Change of Control................................................46
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7.10 Consignments.....................................................47
7.11 Distributions....................................................47
7.12 Accounting Methods...............................................47
7.13 Advances, Investments and Loans..................................47
7.14 Transactions with Affiliates.....................................47
7.15 Suspension.......................................................48
7.16 Use of Proceeds..................................................48
7.17 Change in Location of Chief Executive Office; Inventory
and Equipment with Bailees.......................................48
7.18 No Prohibited Transactions Under ERISA...........................48
7.19 Financial Covenants..............................................49
7.20 Capital Expenditures.............................................49
8. EVENTS OF DEFAULT......................................................49
9. THE LENDER GROUP'S RIGHTS AND REMEDIES.................................51
9.1 Rights and Remedies..............................................51
9.2 Remedies Cumulative..............................................53
10. TAXES AND EXPENSES.....................................................53
11. WAIVERS; INDEMNIFICATION...............................................54
11.1 Demand; Protest; etc.............................................54
11.2 The Lender Group's Liability for Collateral......................54
11.3 Indemnification..................................................54
12. NOTICES................................................................54
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.............................55
14. DESTRUCTION OF BORROWER'S DOCUMENTS....................................56
15. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.............................56
15.1 Assignments and Participations...................................56
15.2 Successors.......................................................59
16. AMENDMENTS; WAIVERS....................................................59
16.1 Amendments and Waivers...........................................59
16.2 No Waivers; Cumulative Remedies..................................60
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17. AGENT; THE LENDER GROUP................................................60
17.1 Appointment and Authorization of Agent...........................60
17.2 Delegation of Duties.............................................61
17.3 Liability of Agent-Related Persons...............................61
17.4 Reliance by Agent................................................61
17.5 Notice of Default or Event of Default............................62
17.6 Credit Decision..................................................62
17.7 Costs and Expenses; Indemnification..............................63
17.8 Agent in Individual Capacity.....................................64
17.9 Successor Agent..................................................64
17.10 Withholding Tax..................................................64
17.11 Collateral Matters...............................................66
17.12 Restrictions on Actions by Lenders; Sharing of Payments..........66
17.13 Agency for Perfection............................................67
17.14 Payments by Agent to the Lenders.................................67
17.15 Concerning the Collateral and Related Loan Documents.............67
17.16 Field Audits and Examination Reports; Confidentiality;
Disclaimers by Lenders; Other Reports and Information............68
17.17 Several Obligations; No Liability................................69
18. GENERAL PROVISIONS.....................................................69
18.1 Effectiveness....................................................69
18.2 Section Headings.................................................69
18.3 Interpretation...................................................69
18.4 Severability of Provisions.......................................69
18.5 Counterparts; Telefacsimile Execution............................69
18.6 Revival and Reinstatement of Obligations.........................70
18.7 Integration......................................................71
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SCHEDULES AND EXHIBITS
Schedule C-1 Commitments on Closing Date
Schedule E-1 Eligible Inventory Locations
Schedule P-1 Permitted Liens
Schedule 5.8 Subsidiaries
Schedule 5.13 ERISA Benefit Plans
Schedule 5.14 Environmental Condition
Schedule 6.11 Location of Inventory and Equipment
Schedule 7.1 Indebtedness
Exhibit A-1 Form of Assignment and Acceptance
Exhibit C-1 Form of Compliance Certificate
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SECOND AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
THIS SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (THIS
"AGREEMENT"), is entered into as of July 5, 2000, among THE CHILDREN'S PLACE
RETAIL STORES, INC., a Delaware corporation ("Borrower"), with its chief
executive office located at 915 Secaucus Road, Secaucas, New Jersey 07094, on
the one hand, and the financial institutions listed on the signature pages
hereof (such financial institutions, together with their respective successors
and assigns, are referred to hereinafter each individually as a "Lender" and
collectively as the "Lenders"), and FOOTHILL CAPITAL CORPORATION, as Agent, on
the other hand.
RECITALS
A. Borrower and Foothill are parties to that certain Amended and Restated
Loan and Security Agreement dated as of July 31, 1997 together with the Libor
Supplement thereto (as amended, the "Existing Loan Agreement").
B. Borrower and Foothill desire to amend and restate in its entirety the
Existing Loan Agreement and to provide for an agented agreement.
The parties agree that the Existing Loan Agreement is amended and restated
as follows:
1. DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. As used in this Agreement, the following terms
shall have the following definitions:
"ACCOUNT DEBTOR" means any Person who is or who may become obligated
under, with respect to, or on account of, an Account.
"ACCOUNTS" means all currently existing and hereafter arising
accounts, contract rights, Revolving Accounts, and all other forms of
obligations owing to Borrower arising out of the sale or lease of goods or the
rendition of services by Borrower, irrespective of whether earned by
performance, and any and all credit insurance, guaranties, or security therefor.
"ADJUSTED EURODOLLAR RATE" means, with respect to each Interest
Period for any Eurodollar Rate Loan, the rate per annum (rounded upwards, if
necessary, to the next whole multiple of 1/16 of 1% per annum) determined by
dividing (a) the Eurodollar Rate for such Interest Period by (b) a percentage
equal to (i) 100% minus (ii) the Reserve Percentage. The Adjusted Eurodollar
Rate shall be adjusted on and as of the effective day of any change in the
Reserve Percentage.
"ADDITIONAL FINANCING" means any increase in the Maximum Amount from
$75,000,000 to an amount not to exceed $100,000,000.
"ADVANCES" has the meaning set forth in SECTION 2.1(A).
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"AFFILIATE" means, as applied to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For purposes of this definition, "control" as applied to any Person
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of that Person, whether through the
ownership of voting securities, by contract, or otherwise.
"AGENT" means Foothill, solely in its capacity as agent for the
Lenders, and shall include any successor agent.
"AGENT ADVANCE" has the meaning set forth in SECTION 2.1(H).
"AGENT LOAN" has the meaning set forth in SECTION 2.1(G).
"AGENT-RELATED PERSONS" means Agent, together with its Affiliates,
and the officers, directors, employees, counsel, agents, and attorneys-in-fact
of Agent and such Affiliates.
"AGENT'S ACCOUNT" has the meaning set forth in SECTION 2.8.
"AGREEMENT" has the meaning set forth in the preamble hereto.
"ASSIGNEE" has the meaning set forth in SECTION 15.1.
"ASSIGNMENT AND ACCEPTANCE" has the meaning set forth in SECTION
15.1(A) and shall be in the form of EXHIBIT A-1.
"AUTHORIZED PERSON" means any officer or other authorized employee
of Borrower.
"AVAILABILITY" means, as of the date of determination, the result
(so long as such result is a positive number) of (a) the lesser of the Borrowing
Base or the Maximum Amount, LESS (b) the Revolving Facility Usage.
"BANKRUPTCY CODE" means the United States Bankruptcy Code (11 U.S.C.
Section 101 ET Seq.), as amended, and any successor statute.
"BENEFIT PLAN" means a "defined benefit plan" (as defined in Section
3(35) of ERISA) for which Borrower, any Subsidiary of Borrower, or any ERISA
Affiliate has been an "employer" (as defined in Section 3(5) of ERISA) within
the past six years.
"BORROWER" has the meaning set forth in the preamble to this
Agreement.
"BORROWER'S BOOKS" means all of Borrower's books and records
including: ledgers; records indicating, summarizing, or evidencing Borrower's
properties or assets (including the Collateral) or liabilities; all information
relating to Borrower's business operations or financial condition; and all
computer programs, disk or tape files, printouts, runs, or other computer
prepared information.
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"BORROWING" means a borrowing hereunder consisting of Advances made
on the same day by the Lenders, or by Agent in the case of an Agent Loan or an
Agent Advance.
"BORROWING BASE" has the meaning set forth in SECTION 2.1(A).
"BUSINESS DAY" means (a) any day that is not a Saturday, Sunday, or
a day on which banks in Los Angeles, California, are required or permitted to be
closed, and (b) with respect to all notices, determinations, fundings and
payments in connection with the Eurodollar Rate or Eurodollar Rate Loans, any
day that is a Business Day pursuant to clause (a) above and that is also a day
on which trading in Dollars is carried on by and between banks in the London
interbank market.
"BUSINESS PLAN" means Borrower's and its Subsidiaries' business
plans attached hereto as Exhibit B-1, together with any amendment, modification,
or revision to such business plan approved by Agent.
"CHANGE OF CONTROL" shall be deemed to have occurred at such time as
Borrower's existing shareholders cease to be the "beneficial owners" (as defined
in Rule 13d-3 under the Securities Exchange Act of 1934), directly or
indirectly, of more than 40% of the total voting power of all classes of stock
then outstanding of Borrower normally entitled to vote in the election of
directors.
"CLOSING DATE" means the date of the first to occur of the making of
the initial Advance or the issuance of the initial Letter of Credit.
"CODE" means the California Uniform Commercial Code.
"COLLATERAL" means each of the following:
(a) the Accounts,
(b) Borrower's Books,
(c) the Equipment,
(d) the General Intangibles,
(e) the Inventory,
(f) the Investment Property,
(g) the Negotiable Collateral,
(h) any money, or other assets of Borrower that now or hereafter
come into the possession, custody, or control of the Lender Group, and
(i) the proceeds and products, whether tangible or intangible, of
any of the foregoing, including proceeds of insurance covering any or all of the
Collateral, and any and all Accounts, Borrower's Books, Equipment, General
Intangibles, Inventory, Investment
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Property, Negotiable Collateral, money, deposit accounts, or other tangible or
intangible property resulting from the sale, exchange, collection, or other
disposition of any of the foregoing, or any portion thereof or interest therein,
and the proceeds thereof.
"COLLATERAL ACCESS AGREEMENT" means a landlord waiver, mortgagee
waiver, bailee letter, or acknowledgment agreement of any warehouseman,
processor, lessor, consignee, or other Person in possession of, having a Lien
upon, or having rights or interests in the Equipment or Inventory, in each case,
in form and substance satisfactory to Agent.
"COLLECTIONS" means all cash, checks, notes, instruments, and other
items of payment (including, insurance proceeds, proceeds of cash sales, rental
proceeds, and tax refunds).
"COMMITMENT" means, at any time with respect to a Lender, the
principal amount set forth beside such Lender's name under the heading
"Commitment" on SCHEDULE C-1 or on the signature page of the Assignment and
Acceptance pursuant to which such Lender became a Lender hereunder in accordance
with the provisions of SECTION 15.1, as such Commitment may be adjusted from
time to time in accordance with the provisions of SECTION 15.1 and "Commitments"
means, collectively, the aggregate amount of the commitments of all of the
Lenders.
"COMPLIANCE CERTIFICATE" means a certificate substantially in the
form of EXHIBIT C-1 and delivered by the chief accounting officer of Borrower to
Agent.
"CONSOLIDATED CURRENT ASSETS" means, as of any date of
determination, the aggregate amount of all current assets of Borrower and its
consolidated Subsidiaries that would, in accordance with GAAP, be classified on
a balance sheet as current assets.
"CONSOLIDATED CURRENT LIABILITIES" means, as of any date of
determination, the aggregate amount of all current liabilities of Borrower and
its consolidated Subsidiaries that would, in accordance with GAAP, be classified
on a balance sheet as current liabilities. For purposes of this definition, all
Obligations outstanding under this Agreement shall be deemed to be current
liabilities without regard to whether they would be deemed to be so under GAAP.
"DAILY BALANCE" means, with respect to each day during the term of
this Agreement, the amount of an Obligation owed at the end of such day.
"DEEMS ITSELF INSECURE" means that the Person deems itself insecure
in accordance with the provisions of Section 1208 of the Code.
"DEFAULT" means an event, condition, or default that, with the
giving of notice, the passage of time, or both, would be an Event of Default.
"DEFAULTING LENDER" has the meaning set forth in SECTION 2.1(F)(II).
"DEFAULTING LENDERS RATE" means the Reference Rate for the first
three days from and after the date the relevant payment is due and thereafter at
the interest rate then applicable to Advances.
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"DESIGNATED ACCOUNT" means account number 20-3024941126-6 of
Borrower maintained with Borrower's Designated Account Bank, or such other
deposit account of Borrower (located within the United States) which has been
designated, in writing and from time to time, by Borrower to Agent.
"DESIGNATED ACCOUNT BANK" means First Union National Bank, whose
office is located at 100 Fidelity Plaza, North Brunswick, New Jersey 08905 and
whose ABA number is 021200025.
"DISBURSEMENT LETTER" means an instructional letter executed and
delivered by Borrower to Agent regarding the extensions of credit to be made on
the Closing Date, the form and substance of which shall be satisfactory to
Agent.
"DOLLARS OR $" means United States dollars.
"EBITDA" means the consolidated net income of Borrower (excluding
extraordinary items) for the applicable period (a) plus all interest expense,
income tax expense, depreciation and amortization (including amortization of any
goodwill or other intangibles) for the period, (b) plus or minus losses or gains
attributable to any fixed asset sales in the period and (c) plus or minus any
other non-cash charges which have been subtracted or added in calculating
consolidated net income for the period.
"ELIGIBLE ACCOUNTS" means those Accounts created by Borrower in the
ordinary course of business, that arise out of Borrower's sale of goods or
rendition of services, that strictly comply with each and all of the
representations and warranties respecting Accounts made by Borrower to the
Lender Group in the Loan Documents, and that are and at all times continue to be
reasonably acceptable to Agent in all respects; PROVIDED, HOWEVER, that
standards of eligibility may be fixed and revised from time to time by Agent in
Agent's reasonable credit judgment. Eligible Accounts shall not include the
following:
(a) Accounts that the Account Debtor has failed to pay within 90
days of invoice date;
(b) Accounts owed by an Account Debtor or its Affiliates where 50%
or more of all Accounts owed by that Account Debtor (or its Affiliates) are
deemed ineligible under clause (a) above;
(c) Accounts with respect to which the Account Debtor is an
employee, Affiliate, or agent of Borrower;
(d) Accounts with respect to which goods are placed on consignment,
guaranteed sale, sale or return, sale on approval, bill and hold, or other terms
by reason of which the payment by the Account Debtor may be conditional;
(e) Accounts that are not payable in Dollars or with respect to
which the Account Debtor: (i) does not maintain its chief executive office in
the United States, or (ii) is not organized under the laws of the United States
or any State thereof, or (iii) is the government of any foreign country or
sovereign state, or of any state, province, municipality, or other
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political subdivision thereof, or of any department, agency, public corporation,
or other instrumentality thereof, unless (y) the Account is supported by an
irrevocable letter of credit satisfactory to Agent (as to form, substance, and
issuer or domestic confirming bank) that has been delivered to Agent and is
directly drawable by Agent, or (z) the Account is covered by credit insurance in
form and amount, and by an insurer, satisfactory to Agent;
(f) Accounts with respect to which the Account Debtor is either (i)
the United States or any department, agency, or instrumentality of the United
States (exclusive, however, of Accounts with respect to which Borrower has
complied, to the satisfaction of Agent, with the Assignment of Claims Act, 31
U.S.C. ss. 3727), or (ii) any State of the United States (exclusive, however, of
Accounts owed by any State that does not have a statutory counterpart to the
Assignment of Claims Act);
(g) Accounts with respect to which the Account Debtor is a creditor
of Borrower, has or has asserted a right of setoff, has disputed its liability,
or has made any claim with respect to the Account;
(h) Accounts with respect to which the Account Debtor is subject to
any Insolvency Proceeding, or becomes insolvent, or goes out of business; and
(i) Accounts the collection of which Agent, in its reasonable credit
judgment, believes to be doubtful by reason of the Account Debtor's financial
condition.
"ELIGIBLE INVENTORY" means Inventory consisting of first quality
finished goods held for sale in the ordinary course of Borrower's business, that
is reasonably acceptable to Agent in all respects, that is located at Borrower's
premises identified on Schedule E-1 or that is in transit to Borrower if: (a)
title to such Inventory has been transferred to Borrower, (b) the Inventory is
insured to Agent's reasonable satisfaction and (c) documentation regarding such
Inventory is reasonably acceptable to Agent, and such Inventory strictly
complies with all of Borrower's representations and warranties to the Lender
Group. If Eligible Inventory is in transit to Borrower and has been acquired
pursuant to a Letter of Credit, the Letter of Credit must have been drawn upon.
Eligible Inventory shall not include slow moving Inventory (as determined in
Agent's reasonable business judgment based upon industry practices), or obsolete
items, restrictive or custom items, raw materials, work-in-process, components
that are not part of finished goods, spare parts, packaging and shipping
materials, supplies used or consumed in Borrower's business, Inventory subject
to a security interest or lien in favor of any third Person, bill and hold
goods, Inventory that is not subject to Agent's perfected security interests,
defective goods (except for minor defects that do not affect saleability),
"seconds," and Inventory acquired on consignment.
"ELIGIBLE TRANSFEREE" means (a) a commercial bank organized under
the laws of the United States, or any state thereof, and having total assets in
excess of $5,000,000,000, or the asset based lending Affiliate of such bank, (b)
a commercial bank organized under the laws of any other country which is a
member of the Organization for Economic Cooperation and Development or a
political subdivision of any such country, and having total assets in excess of
$5,000,000,000, or the asset based lending Affiliate of such bank; provided that
such bank is acting through a branch or agency located in the United States, (c)
a
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finance company, insurance or other financial institution, or fund that is
engaged in making, purchasing, or otherwise investing in commercial loans in the
ordinary course of its business and having total assets in excess of
$500,000,000, (d) any Affiliate (other than individuals) of an existing Lender,
and (e) any other Person approved by Agent and Borrower.
"EQUIPMENT" means all of Borrower's present and hereafter acquired
machinery, machine tools, motors, equipment, furniture, furnishings, fixtures,
vehicles (including motor vehicles and trailers), tools, parts, goods (other
than consumer goods, farm products, or Inventory), wherever located, including,
(a) any assets acquired by Borrower with the proceeds of a Capital Expenditure
Loan, (b) any interest of Borrower in any of the foregoing, and (c) all
attachments, accessories, accessions, replacements, substitutions, additions,
and improvements to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974,
29 U.S.C. ss.ss. 1000 et seq., amendments thereto, successor statutes, and
regulations or guidance promulgated thereunder.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) which, within the meaning of Section 414 of the IRC, is: (i) under
common control with Borrower; (ii) treated, together with Borrower, as a single
employer; (iii) treated as a member of an affiliated service group of which
Borrower is also treated as a member; or (iv) is otherwise aggregated with the
Borrower for purposes of the employee benefits requirements listed in IRC
Section 414(m)(4).
"ERISA EVENT" means (a) a Reportable Event with respect to any
Benefit Plan or Multiemployer Plan, (b) the withdrawal of Borrower, any of its
Subsidiaries or ERISA Affiliates from a Benefit Plan during a plan year in which
it was a "substantial employer" (as defined in Section 4001(a)(2) of ERISA), (c)
the providing of notice of intent to terminate a Benefit Plan in a distress
termination (as described in Section 4041(c) of ERISA), (d) the institution by
the PBGC of proceedings to terminate a Benefit Plan or Multiemployer Plan, (e)
any event or condition (i) that provides a basis under Section 4042(a)(1), (2),
or (3) of ERISA for the termination of, or the appointment of a trustee to
administer, any Benefit Plan or Multiemployer Plan, or (ii) that may result in
termination of a Multiemployer Plan pursuant to Section 4041A of ERISA, (f) the
partial or complete withdrawal within the meaning of Sections 4203 and 4205 of
ERISA, of Borrower, any of its Subsidiaries or ERISA Affiliates from a
Multiemployer Plan, or (g) providing any security to any Plan under Section
401(a)(29) of the IRC by Borrower or its Subsidiaries or any of their ERISA
Affiliates.
"EURODOLLAR RATE" means, with respect to the Interest Period for a
Eurodollar Rate Loan, the interest rate per annum (rounded upwards, if
necessary, to the next whole multiple of 1/16 of 1% per annum) at which United
States dollar deposits are offered to Wells Fargo (or its Affiliates) by major
banks in the London interbank market (or other Eurodollar Rate market selected
by Agent) on or about 11:00 a.m. (California time) two Business Days prior to
the commencement of such Interest Period in amounts comparable to the amount of
the Eurodollar Rate Loans requested by and available to Borrower in accordance
with this Agreement.
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"EURODOLLAR RATE LOANS" means any Advance (or any portion thereof)
made or outstanding hereunder during any period when interest on such Advance
(or portion thereof) is payable based on the Adjusted Eurodollar Rate.
......"EURODOLLAR RATE MARGIN" means 1.50% initially and shall be
subject to adjustment on July 31, 2000, and quarterly thereafter to the
following levels corresponding to the following reported 12 month trailing
EBITDA:
Eurodollar
EBITDA RATE MARGIN
------ -----------
equal to or greater than $75,000,000 1.25%
less than $75,000,000 but equal to or
greater than $60,000,000 1.50%
less than $60,000,000 but equal to or
greater than $55,000,000 2.00%
less than $55,000,000 2.50%
"EVENT OF DEFAULT" has the meaning set forth in SECTION 8.
"FEIN" means Federal Employer Identification Number.
"FISCAL MONTH" means months computed on the retail basis of four
weeks, five weeks and four weeks per fiscal quarter.
"FISCAL YEAR" means a retail year ending on the Saturday closest to
January 31.
"FOOTHILL" means Foothill Capital Corporation, a California
corporation.
"FUNDING DATE" means the date on which a Borrowing occurs.
"GAAP" means generally accepted accounting principles as in effect
from time to time in the United States, consistently applied.
"GENERAL INTANGIBLES" means all of Borrower's present and future
general intangibles and other personal property (including contract rights,
rights arising under common law, statutes, or regulations, choses or things in
action, goodwill, patents, trade names, copyrights, blueprints, drawings,
purchase orders, customer lists, monies due or recoverable from pension funds,
route lists, rights to payment and other rights under any royalty or licensing
agreements, infringement claims, computer programs, information contained on
computer disks or tapes, literature, reports, catalogs, deposit accounts,
insurance premium rebates, tax refunds, and tax refund claims), other than
goods, Accounts, and Negotiable Collateral.
"GOVERNING DOCUMENTS" means the certificate or articles of
incorporation, by-laws, or other organizational or governing documents of any
Person.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
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"HAZARDOUS MATERIALS" means (a) substances that are defined or
listed in, or otherwise classified pursuant to, any applicable laws or
regulations as "hazardous substances," "hazardous materials," "hazardous
wastes," "toxic substances," or any other formulation intended to define, list,
or classify substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, or "EP
toxicity", (b) oil, petroleum, or petroleum derived substances, natural gas,
natural gas liquids, synthetic gas, drilling fluids, produced waters, and other
wastes associated with the exploration, development, or production of crude oil,
natural gas, or geothermal resources, (c) any flammable substances or explosives
or any radioactive materials, and (d) asbestos in any form or electrical
equipment that contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of 50 parts per million.
"INDEBTEDNESS" means: (a) all obligations of Borrower for borrowed
money, (b) all obligations of Borrower evidenced by bonds, debentures, notes, or
other similar instruments and all reimbursement or other obligations of Borrower
in respect of letters of credit, bankers acceptances, interest rate swaps, or
other financial products, (c) all obligations of Borrower under capital leases,
(d) all obligations or liabilities of others secured by a Lien on any property
or asset of Borrower, irrespective of whether such obligation or liability is
assumed, and (e) any obligation of Borrower guaranteeing or intended to
guarantee (whether guaranteed, endorsed, co-made, discounted, or sold with
recourse to Borrower) any indebtedness, lease, dividend, letter of credit, or
other obligation of any other Person.
"INDEMNIFIED LIABILITIES" has the meaning set forth in SECTION 11.3.
"INSOLVENCY PROCEEDING" means any proceeding commenced by or against
any Person under any provision of the Bankruptcy Code or under any other
bankruptcy or insolvency law, assignments for the benefit of creditors, formal
or informal moratoria, compositions, extensions generally with creditors, or
proceedings seeking reorganization, arrangement, or other similar relief.
"INTANGIBLE ASSETS" means, with respect to any Person, that portion
of the book value of all of such Person's assets that would be treated as
intangibles under GAAP.
"INTEREST PERIOD" means, for any Eurodollar Rate Loan, the period
commencing on the Business Day such Eurodollar Rate Loan is disbursed or
continued, or on the Business Day on which a Reference Rate Loan is converted to
such Eurodollar Rate Loan, and ending on the date that is one, two or three
months thereafter, as selected by Borrower and notified to Agent as provided in
SECTIONS 2.13(A) AND (B).
"INVENTORY" means all present and future inventory in which Borrower
has any interest, including goods held for sale or lease or to be furnished
under a contract of service and all of Borrower's present and future raw
materials, work in process, finished goods, and packing and shipping materials,
wherever located.
"INVENTORY RESERVES" means reserves (determined from time to time by
Agent in its discretion) for (a) the estimated costs relating to unpaid freight
charges, warehousing or storage charges, taxes, duties, and other similar unpaid
costs associated with the acquisition of
9
Eligible In-Transit Inventory by Borrower, plus (b) the estimated reclamation
claims of unpaid sellers of Inventory sold to Borrower.
"INVESTMENT PROPERTY" means all of Borrower's presently existing and
hereafter acquired or arising investment property (as that term is defined in
Section 9115 of the Code).
"IRC" means the Internal Revenue Code of 1986, as amended, and the
regulations thereunder.
"L/C" has the meaning set forth in SECTION 2.2(A).
"L/C GUARANTY" has the meaning set forth in SECTION 2.2(A).
"LENDER" AND "LENDERS" have the respective meanings set forth in the
preamble to this Agreement, and shall include any other Person made a party to
this Agreement in accordance with the provisions of SECTION 15.1.
"LENDER GROUP" means, individually and collectively, each of the
individual Lenders and Agent.
"LENDER GROUP EXPENSES" means all: reasonable costs or expenses
(including taxes, and insurance premiums) required to be paid by Borrower under
any of the Loan Documents that are paid or incurred by the Lender Group;
reasonable fees or charges paid or incurred by the Lender Group in connection
with the Lender Group's transactions with Borrower, including, fees or charges
for photocopying, notarization, couriers and messengers, telecommunication,
public record searches (including tax lien, litigation, and UCC searches and
including searches with the patent and trademark office, the copyright office,
or the department of motor vehicles), filing, recording, publication, appraisal
(including periodic Collateral appraisals); environmental audits; costs and
expenses incurred by Agent in the disbursement of funds to Borrower (by wire
transfer or otherwise); charges paid or incurred by Agent resulting from the
dishonor of checks; costs and expenses paid or incurred by Agent to correct any
default or enforce any provision of the Loan Documents, or in gaining possession
of, maintaining, handling, preserving, storing, shipping, selling, preparing for
sale, or advertising to sell the Collateral, or any portion thereof,
irrespective of whether a sale is consummated; reasonable costs and expenses
paid or incurred by the Lender Group in examining Borrower's Books; costs and
expenses of third party claims or any other suit paid or incurred by the Lender
Group in enforcing or defending the Loan Documents or in connection with the
transactions contemplated by the Loan Documents or the Lender Group's
relationship with Borrower or any guarantor; and the Lender Group's reasonable
attorneys fees and expenses incurred in advising, structuring, drafting,
reviewing, administering, amending, terminating, enforcing, defending, or
concerning the Loan Documents (including attorneys fees and expenses incurred in
connection with a "workout," a "restructuring," or an Insolvency Proceeding
concerning Borrower or any guarantor of the Obligations), irrespective of
whether suit is brought.
"LETTER OF CREDIT" means an L/C or an L/C Guaranty, as the context
requires.
10
"LETTER OF CREDIT AMOUNT" means 0.75% per annum initially and shall
be subject to adjustment on July 31, 2000 and quarterly thereafter to the
following levels corresponding to the following reported 12 month trailing
EBITDA:
EBITDA. L/C AMOUNT
------- ----------
Equal to or greater than $55,000,000 0.75%
less than $55,000,000 1.00%
"LIEN" means any interest in property securing an obligation owed
to, or a claim by, any Person other than the owner of the property, whether such
interest shall be based on the common law, statute, or contract, whether such
interest shall be recorded or perfected, and whether such interest shall be
contingent upon the occurrence of some future event or events or the existence
of some future circumstance or circumstances, including the lien or security
interest arising from a mortgage, deed of trust, encumbrance, pledge,
hypothecation, assignment, deposit arrangement, security agreement, adverse
claim or charge, conditional sale or trust receipt, or from a lease,
consignment, or bailment for security purposes and also including reservations,
exceptions, encroachments, easements, rights-of-way, covenants, conditions,
restrictions, leases, and other title exceptions and encumbrances affecting Real
Property.
"LOAN ACCOUNT" has the meaning set forth in SECTION 2.11.
"LOAN DOCUMENTS" means this Agreement, the Disbursement Letter, the
Letters of Credit, the Lockbox Agreements, the Stock Pledge, any note or notes
executed by Borrower and payable to the Lender Group, and any other agreement
entered into, now or in the future, in connection with this Agreement.
"LOCKBOX ACCOUNT" shall mean a depositary account established
pursuant to one of the Lockbox Agreements.
"LOCKBOX AGREEMENTS" means those certain Lockbox Operating
Procedural Agreements and those certain Depository Account Agreements, in form
and substance satisfactory to Agent, each of which is among Borrower, Agent, and
one of the Lockbox Banks.
"LOCKBOX BANKS" means First Union National Bank, or any replacement
bank chosen by Borrower and acceptable to Agent.
"LOCKBOXES" has the meaning set forth in SECTION 2.8.
"MATERIAL ADVERSE CHANGE" means (a) a material adverse change in the
business, prospects, operations, results of operations, assets, liabilities or
condition (financial or otherwise) of Borrower, (b) the material impairment of
Borrower's ability to perform its obligations under the Loan Documents to which
it is a party or of the Lender Group to enforce the Obligations or realize upon
the Collateral, (c) a material adverse effect on the value of the Collateral or
the amount that the Lender Group would be likely to receive (after giving
consideration to delays in payment and costs of enforcement) in the liquidation
of such
11
Collateral, or (d) a material impairment of the priority of the Lender Group's
Liens with respect to the Collateral.
"MAXIMUM AMOUNT" means $75,000,000, initially, and $75,000,000 plus
the amount of the Additional Financing if it is provided by the Lenders.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" (as defined in
SECTION 4001(A)(3) of ERISA) to which Borrower, any of its Subsidiaries, or any
ERISA Affiliate has contributed, or was obligated to contribute, within the past
six years.
"NEGOTIABLE COLLATERAL" means all of Borrower's present and future
letters of credit, notes, drafts, instruments, certificated and uncertificated
securities (including the shares of stock of subsidiaries of Borrower, but
limited to 66% of the outstanding shares of each class of stock of any foreign
Subsidiary), investment property, security entitlements, documents, personal
property leases (wherein Borrower is the lessor), chattel paper, and Borrower's
Books relating to any of the foregoing.
"NRLV" means at any time of determination thereof, the ratio,
expressed as a percentage, of the net retail liquidation value of Borrower's
Inventory divided by the retail value of such Inventory, all as set forth in the
most recent appraisal delivered to, and approved by Agent.
"OBLIGATIONS" means all loans, Advances, debts, principal, interest
(including any interest that, but for the provisions of the Bankruptcy Code,
would have accrued), contingent reimbursement obligations under any outstanding
Letters of Credit, liabilities (including all amounts charged to Borrower's Loan
Account pursuant hereto), obligations, fees, charges, costs, or Lender Group
Expenses (including any fees or expenses that, but for the provisions of the
Bankruptcy Code, would have accrued), lease payments, guaranties, covenants, and
duties owing by Borrower to the Lender Group of any kind and description
(whether pursuant to or evidenced by the Loan Documents or pursuant to any other
agreement between the Lender Group and Borrower, and irrespective of whether for
the payment of money), whether direct or indirect, absolute or contingent, due
or to become due, now existing or hereafter arising, and including any debt,
liability, or obligation owing from Borrower to others that the Lender Group may
have obtained by assignment or otherwise, and further including all interest not
paid when due and all Lender Group Expenses that Borrower is required to pay or
reimburse by the Loan Documents, by law, or otherwise.
"ORIGINATING LENDER" has the meaning set forth in SECTION 15.1(E).
"OVERADVANCE" has the meaning set forth in SECTION 2.6.
"PARTICIPANT" has the meaning set forth in SECTION 15.1(C).
"PBGC" means the Pension Benefit Guaranty Corporation as defined in
Title IV of ERISA, or any successor thereto.
"PERMITTED LIENS" means (a) Liens held by the Lender Group, (b)
Liens for unpaid taxes that either (i) are not yet due and payable or (ii) are
the subject of Permitted
12
Protests, (c) Liens set forth on SCHEDULE P-1, (d) the interests of lessors
under operating leases and purchase money security interests and Liens of
lessors under capital leases to the extent that the acquisition or lease of the
underlying asset is permitted under SECTION 7.21 and so long as the Lien only
attaches to the asset purchased or acquired and only secures the purchase price
of the asset, (e) Liens arising by operation of law in favor of warehousemen,
landlords, carriers, mechanics, materialmen, laborers, or suppliers, incurred in
the ordinary course of business of Borrower and not in connection with the
borrowing of money, and which Liens either (i) are for sums not yet due and
payable, or (ii) are the subject of Permitted Protests, (f) Liens arising from
deposits made in connection with obtaining worker's compensation or other
unemployment insurance, (g) Liens or deposits to secure performance of bids,
tenders, or leases (to the extent permitted under this Agreement), incurred in
the ordinary course of business of Borrower and not in connection with the
borrowing of money, (h) Liens arising by reason of security for surety or appeal
bonds in the ordinary course of business of Borrower, (i) Liens of or resulting
from any judgment or award that would not cause a Material Adverse Change and as
to which the time for the appeal or petition for rehearing of which has not yet
expired, or in respect of which Borrower is in good faith prosecuting an appeal
or proceeding for a review, and in respect of which a stay of execution pending
such appeal or proceeding for review has been secured, and (j) with respect to
any Real Property, easements, rights of way, zoning and similar covenants and
restrictions, and similar encumbrances that customarily exist on properties of
Persons engaged in similar activities and similarly situated and that in any
event do not materially interfere with or impair the use or operation of the
Collateral by Borrower or the value of the Lender Group's Lien thereon or
therein, or materially interfere with the ordinary conduct of the business of
Borrower.
"PERMITTED PROTEST" means the right of Borrower to protest any Lien
(other than any such Lien that secures the Obligations), tax (other than payroll
taxes or taxes that are the subject of a United States federal tax lien), or
rental payment, provided that (a) a reserve with respect to such obligation is
established on the books of Borrower in an amount that is reasonably
satisfactory to Agent, (b) any such protest is instituted and diligently
prosecuted by Borrower in good faith, and (c) Agent is satisfied that, while any
such protest is pending, there will be no impairment of the enforceability,
validity, or priority of any of the Liens of the Lender Group in and to the
Collateral.
"PERSON" means and includes natural persons, corporations, limited
liability companies, limited partnerships, general partnerships, limited
liability partnerships, joint ventures, trusts, land trusts, business trusts, or
other organizations, irrespective of whether they are legal entities, and
governments and agencies and political subdivisions thereof.
"PLAN" means any employee benefit plan, program, or arrangement
maintained or contributed to by Borrower or with respect to which it may incur
liability.
"PRO-RATA SHARE" means, with respect to a Lender, a fraction
(expressed as a percentage), the numerator of which is the amount of such
Lender's Commitment and the denominator of which is the aggregate amount of the
Commitments.
"REAL PROPERTY" means any estates or interests in real property now
owned or hereafter acquired by Borrower.
13
"REFERENCE RATE" the rate of interest announced within Wells Fargo
at its principal office in San Francisco as its "prime rate", with the
understanding that the "prime rate" is one of Wells Fargo's base rates (not
necessarily the lowest of such rates) and serves as the basis upon which
effective rates of interest are calculated for those loans making reference
thereto and is evidenced by the recording thereof after its announcement in such
internal publication or publications as Wells Fargo may designate.
"REFERENCE RATE LOANS" means any advance (or portion thereof) made
or outstanding hereunder during any period when interest on such Advance is
payable based on the Reference Rate.
"RENEWAL DATE" has the meaning set forth in SECTION 3.4.
"REPORTABLE EVENT" means any of the events described in SECTION
4043(C) of ERISA or the regulations thereunder other than a Reportable Event as
to which the provision of 30 days notice to the PBGC is waived under applicable
regulations.
"REQUIRED LENDERS" means, at any time, Agent together with such
other Lenders whose Pro Rata Shares together with Agent aggregate 50.1% or more
of the Commitments; PROVIDED, HOWEVER, that in all circumstances Required
Lenders shall include at least one Lender that is not the Agent or an Affiliate
of Agent.
"REQUIREMENT OF LAW" means, as to any Person: (a) (i) all statutes
and regulations and (ii) court orders and injunctions, arbitrators' decisions,
and/or similar rulings, in each instance by any Governmental Authority or
arbitrator applicable to or binding upon such Person or any of such Person's
property or to which such Person or any of such Person's property is subject;
and (b) that Person's organizational documents, by-laws and/or other instruments
which deal with corporate or similar governance, as applicable.
"RESERVE PERCENTAGE" for any Interest Period means, as of the date
of determination thereof, the maximum percentage (rounded upward, if necessary
to the nearest 1/100th of 1%), as determined by Agent (or its Affiliates) in
accordance with its (or their) usual procedures (which determination shall be
conclusive in the absence of manifest error), that is in effect on such date as
prescribed by the Board of Governors of the Federal Reserve System for
determining the reserve requirements (including supplemental, marginal, and
emergency reserve requirements) with respect to eurocurrency funding (currently
referred to as "eurocurrency liabilities") having a term equal to such Interest
Period by Agent or its Affiliates.
"RETIREE HEALTH PLAN" means an "employee welfare benefit plan"
within the meaning of SECTION 3(1) of ERISA that provides benefits to
individuals after termination of their employment, other than as required by
Section 601 of ERISA.
"REVOLVING ACCOUNTS" means any Account arising from an agreement to
extend credit on an ongoing basis through the use of a device such as a credit
card or the like, whether or not subject to regulation under Federal Reserve
Board Regulation Z, or any state statute or regulation on truth-in-lending.
14
"REVOLVING FACILITY USAGE" means, as of any date of determination,
the aggregate amount of Advances and undrawn or unreimbursed Letters of Credit
outstanding.
"SETTLEMENT" has the meaning set forth in SECTION 2.1(H)(I).
"SETTLEMENT DATE" has the meaning set forth in SECTION 2.1(H)(I).
"SOLVENT" means, with respect to any Person on a particular date,
that on such date (a) at fair valuations, all of the properties and assets of
such Person are greater than the sum of the debts, including contingent
liabilities, of such Person, (b) the present fair salable value of the
properties and 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, (c) such Person is able to realize upon its
properties and assets and pay its debts and other liabilities, contingent
obligations and other commitments as they mature in the normal course of
business, (d) such Person does not intend to, and does not believe that it will,
incur debts beyond such Person's ability to pay as such debts mature, and (e)
such Person is not engaged in business or a transaction, and is not about to
engage in business or a transaction, for which such Person's properties and
assets would constitute unreasonably small capital after giving due
consideration to the prevailing practices in the industry in which such Person
is engaged. In computing the amount of contingent liabilities at any time, it is
intended that such liabilities will be computed at the amount that, in light of
all the facts and circumstances existing at such time, represents the amount
that reasonably can be expected to become an actual or matured liability.
"STOCK PLEDGE" means that certain Security Agreement-Stock Pledge,
dated as of January 31, 1999, between Borrower and Foothill.
"SUBSIDIARY" of a Person means a corporation, partnership,
limited liability company, or other entity in which that Person directly or
indirectly owns or controls the shares of stock or other ownership interests
having ordinary voting power to elect a majority of the board of directors (or
appoint other comparable managers) of such corporation, partnership, limited
liability company, or other entity.
"VOIDABLE TRANSFER" has the meaning set forth in SECTION 15.8.
"WELLS FARGO" means Wells Fargo Bank, National Association.
"YEAR 2000 COMPLIANT" means, with regard to any Person, that
all software in goods produced or sold by, or utilized by and material to the
business operations or financial condition of, such entity are able to interpret
and manipulate data on and involving all calendar dates correctly and without
causing any abnormal ending scenario, including in relation to dates in and
after the year 2000.
1.2 ACCOUNTING TERMS. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP. When used herein, the term
"financial statements" shall include the notes and schedules thereto. Whenever
the term "Borrower" is used in respect of a financial covenant or a related
definition, it shall be understood to mean Borrower on a consolidated basis
unless the context clearly requires otherwise.
15
1.3 CODE. Any terms used in this Agreement that are defined in the
Code shall be construed and defined as set forth in the Code unless otherwise
defined herein.
1.4 CONSTRUCTION. Unless the context of this Agreement clearly
requires otherwise, references to the plural include the singular, references to
the singular include the plural, the term "including" is not limiting, and the
term "or" has, except where otherwise indicated, the inclusive meaning
represented by the phrase "and/or." The words "hereof," "herein," "hereby,"
"hereunder," and similar terms in this Agreement refer to this Agreement as a
whole and not to any particular provision of this Agreement. An Event of Default
shall "continue" or be "continuing" until such Event of Default has been waived
in writing by the requisite members of the Lender Group. Section, subsection,
clause, schedule, and exhibit references are to this Agreement unless otherwise
specified. Any reference in this Agreement or in the Loan Documents to this
Agreement or any of the Loan Documents shall include all alterations,
amendments, changes, extensions, modifications, renewals, replacements,
substitutions, and supplements, thereto and thereof, as applicable.
1.5 SCHEDULES AND EXHIBITS. All of the schedules and exhibits
attached to this Agreement shall be deemed incorporated herein by reference.
2. LOAN AND TERMS OF PAYMENT.
2.1 REVOLVING ADVANCES.
(a) AMOUNTS. Subject to the terms and conditions of this Agreement,
each Lender agrees to make advances ("Advances") to Borrower in an amount at any
one time outstanding not to exceed such Lender's Pro Rata Share of an amount
equal to the lesser of (i) the Maximum Amount LESS the outstanding balance of
all undrawn or unreimbursed Letters of Credit, or (ii) the Borrowing Base LESS
the aggregate amount of all undrawn or unreimbursed Letters of Credit. For
purposes of this Agreement, "Borrowing Base", as of any date of determination,
shall mean the result of:
(w) 90% of Eligible Accounts, PLUS
(x) the lower of (1) 30% of the retail value of
Borrower's Eligible Inventory or (2) 65% of the cost of Borrower's
Eligible Inventory; PLUS
(y) an amount equal to 30% of the retail selling price
of Inventory to be acquired pursuant to outstanding commercial
Letters of Credit, but not to exceed the lower of: (a) the amount of
the Letter of Credit or (b) 65% of Borrower's Cost for such
Inventory. Such Letters of Credit must not allow partial draws
unless such draws are for finished goods Inventory concurrently
transferred to Borrower, and draws thereunder must require
documentation reflecting the transfer of title to Borrower (in form
and substance satisfactory to Agent) of first quality finished goods
Inventory conforming to Borrower's contract with the seller;
PROVIDED, HOWEVER, that the Borrowing Base based upon subsections
(X) and (Y); in the aggregate, shall not exceed 90% of the NRLV of
Borrower's gross Inventory for months other than June through
October of each year and 95% of the NRLV of Borrower's gross
Inventory for the months of June through October of each year; LESS
16
(z) the aggregate amount of reserves, if any,
established by Agent under SECTIONS 2.1(B), 6.15 AND 10.
(b) RESERVES. Anything to the contrary in this SECTION 2.1
notwithstanding, Agent may (i) reduce the advance rates based upon Eligible
Accounts and Eligible Inventory without declaring an Event of Default if it
determines in its reasonable business judgment that there has occurred a
Material Adverse Change; and (ii) establish reserves against the Borrowing Base
in such amounts as Agent in its reasonable judgment (from the perspective of an
asset-based lender) shall deem necessary or appropriate, including reserves on
account of (y) sums that Borrower is required to pay (such as taxes,
assessments, insurance premiums, or, in the case of leased assets, rents or
other amounts payable under such leases) and has failed to pay under any section
of this Agreement or any other Loan Document and (z) without duplication of the
foregoing, amounts owing by Borrower to any Person to the extent secured by a
Lien on, or trust over, any of the Collateral, which Lien or trust, in the
reasonable determination of Agent (from the perspective of an asset-based
lender), would be likely to have a priority superior to the Liens of Agent (such
as landlord liens, ad valorem taxes, or sales taxes where given priority under
applicable law) in and to such item of the Collateral.
(c) REVOLVING NATURE. Amounts borrowed pursuant to this SECTION 2.1
may be repaid and, subject to the terms and conditions of this Agreement,
reborrowed at any time during the term of this Agreement.
(d) PROCEDURE FOR BORROWING. Each Borrowing shall be made upon
Borrower's irrevocable request therefor delivered to Agent (which notice must be
received by Agent no later than 10:00 a.m. (California time) on the Funding Date
if such advance is for $8,000,000 or less or no later than 10:00 a.m.
(California time) on the Business Day immediately preceding the requested
Funding Date if such advance is for more than $8,000,000) specifying (i) the
amount of the Borrowing; and (ii) the requested Funding Date, which shall be a
Business Day.
(e) AGENT'S ELECTION. Promptly after receipt of a request for a
Borrowing pursuant to SECTION 2.1(D) in excess of $8,000,000, the Agent shall
elect, in its discretion, (i) to have the terms of SECTION 2.1(F) apply to such
requested Borrowing, or (ii) to make an Agent Loan pursuant to the terms of
SECTION 2.1(G) in the amount of the requested Borrowing. Any requested Borrowing
of $8,000,000 or less shall be made as an Agent Loan pursuant to the terms of
SECTION 2.1(G).
(f) MAKING OF ADVANCES.
(i) In the event that the Agent shall elect to have the terms
of this SECTION 2.1(F) apply to a requested Borrowing in excess of $8,000,000 as
described in SECTION 2.1(E), then promptly after receipt of a request for a
Borrowing pursuant to SECTION 2.1(D), the Agent shall notify the Lenders, not
later than 1:00 p.m. (California time) on the Business Day immediately preceding
the Funding Date applicable thereto, by telephone and promptly followed by
telecopy, or other similar form of transmission, of the requested Borrowing.
Each Lender shall make the amount of such Lender's Pro Rata Share of the
requested Borrowing available to the Agent in same day funds, to such account of
the Agent as
17
the Agent may designate, not later than 11:00 a.m. (California time) on the
Funding Date applicable thereto. After the Agent's receipt of the proceeds of
such Advances, upon satisfaction of the applicable conditions precedent set
forth in SECTIONS 3.1 and 3.2, the Agent shall make the proceeds of such
Advances available to Borrower on the applicable Funding Date by transferring
same day funds equal to the proceeds of such Advances received by the Agent to
the Designated Deposit Account; PROVIDED, HOWEVER, that, subject to the
provisions of SECTION 2.1(L), the Agent shall not request any Lender to make,
and no Lender shall have the obligation to make, any Advance if the Agent shall
have received written notice from any Lender, or otherwise has actual knowledge,
that (A) one or more of the applicable conditions precedent set forth in
SECTIONS 3.1 or 3.2 will not be satisfied on the requested Funding Date for the
applicable Borrowing, or (B) the requested Borrowing would exceed the
Availability on such Funding Date.
(ii) Unless Agent receives notice from a Lender on or prior to
the Closing Date or, with respect to any Borrowing after the Closing Date, at
least one Business Day prior to the date of such Borrowing, that such Lender
will not make available as and when required hereunder to Agent for the account
of Borrower the amount of that Lender's Pro Rata Share of the Borrowing, Agent
may assume that each Lender has made or will make such amount available to Agent
in immediately available funds on the Funding Date and Agent may (but shall not
be so required), in reliance upon such assumption, make available to Borrower on
such date a corresponding amount. If and to the extent any Lender shall not have
made its full amount available to Agent in immediately available funds and Agent
in such circumstances has made available to Borrower such amount, that Lender
shall on the Business Day following such Funding Date make such amount available
to Agent, together with interest at the Defaulting Lenders Rate for each day
during such period. A notice from Agent submitted to any Lender with respect to
amounts owing under this subsection shall be conclusive, absent manifest error.
If such amount is paid to Agent such payment to Agent shall constitute such
Lender's Advance on the date of Borrowing for all purposes of this Agreement. If
such amount is not paid to Agent on the Business Day following the Funding Date,
Agent will notify Borrower of such failure to fund and, upon demand by Agent,
Borrower shall pay such amount to Agent for Agent's account, together with
interest thereon for each day elapsed since the date of such Borrowing, at a
rate per annum equal to the interest rate applicable at the time to the Advances
composing such Borrowing. The failure of any Lender to make any Advance on any
Funding Date shall not relieve any other Lender of any obligation hereunder to
make an Advance on such Funding Date, but no Lender shall be responsible for the
failure of any other Lender to make the Advance to be made by such other Lender
on any Funding Date. Any Lender that fails to make any Advance that it is
required to make hereunder on any Funding Date and that has not cured such
failure by making such Advance within one Business Day after written demand upon
it by Agent to do so, shall constitute a "Defaulting Lender" for purposes of
this Agreement until such Advance is made.
(iii) Agent shall not be obligated to transfer to a Defaulting
Lender any payments made by Borrower to Agent for the Defaulting Lender's
benefit; nor shall a Defaulting Lender be entitled to the sharing of any
payments hereunder. Amounts payable to a Defaulting Lender shall instead be paid
to or retained by Agent. Agent may hold and, in its discretion, re-lend to
Borrower the amount of all such payments received or retained by it for the
account of such Defaulting Lender. Solely for the purposes of voting or
consenting to matters with respect to the Loan Documents and determining Pro
Rata Shares, such Defaulting Lender
18
shall be deemed not to be a "Lender" and such Defaulting Lender's Commitment
shall be deemed to be zero. This section shall remain effective with respect to
such Defaulting Lender until (A) the Obligations under this Agreement shall have
been declared or shall have become immediately due and payable or (B) the
requisite non-Defaulting Lenders, Agent, and Borrower shall have waived such
Defaulting Lender's default in writing. The operation of this section shall not
be construed to increase or otherwise affect the Commitment of any
non-Defaulting Lender, or relieve or excuse the performance by Borrower of their
duties and obligations hereunder.
(g) MAKING OF AGENT LOANS.
(i) In the event the Agent shall elect to have the terms of
this SECTION 2.1(G) apply to a requested Borrowing in excess of $8,000,000 as
described in SECTION 2.1(E) or in the event of any requested Borrowing of
$8,000,000 or less, Agent shall make an Advance in the amount of such Borrowing
(any such Advance made solely by Agent pursuant to this SECTION 2.1(G) being
referred to as an "Agent Loan" and such Advances being referred to collectively
as "Agent Loans") available to Borrower on the Funding Date applicable thereto
by transferring same day funds to Borrower's Designated Deposit Account. Each
Agent Loan is an Advance hereunder and shall be subject to all the terms and
conditions applicable to other Advances, except that all payments thereon shall
be payable to Agent solely for its own account (and for the account of the
holder of any participation interest with respect to such Advance). Subject to
the provisions of SECTION 2.1(L), the Agent shall not make any Agent Loan if the
Agent shall have received written notice from any Lender, or otherwise has
actual knowledge, that (i) one or more of the applicable conditions precedent
set forth in SECTIONS 3.1 or 3.2 will not be satisfied on the requested Funding
Date for the applicable Borrowing, or (ii) the requested Borrowing would exceed
the Availability on such Funding Date. Agent shall not otherwise be required to
determine whether the applicable conditions precedent set forth in SECTIONS 3.1
or 3.2 have been satisfied on the Funding Date applicable thereto prior to
making, in its sole discretion, any Agent Loan.
(ii) The Agent Loans shall be secured by the Collateral and
shall constitute Advances and Obligations hereunder, and shall bear interest at
the rate applicable from time to time to Obligations pursuant to SECTION 2.7.
(h) AGENT ADVANCES.
(i) Agent hereby is authorized by Borrower and the Lenders,
from time to time in Agent's sole discretion, (1) after the occurrence of a
Default or an Event of Default (but without constituting a waiver of such
Default or Event of Default), or (2) at any time that any of the other
applicable conditions precedent set forth in SECTION 3.1 or 3.2 have not been
satisfied, to make Advances to Borrower on behalf of the Lenders which Agent, in
its reasonable business judgment, deems necessary or desirable (A) to preserve
or protect the Collateral, or any portion thereof, (B) to enhance the likelihood
of, or maximize the amount of, repayment of the Obligations, or (C) to pay any
other amount chargeable to Borrower pursuant to the terms of this Agreement,
including Lender Group Expenses and the costs, fees, and expenses described in
SECTION 10 (any of the Advances described in this SECTION 2.1(H) being
hereinafter referred to as "Agent Advances"); PROVIDED, that Agent shall not
make any Agent Advances to Borrower
19
without the consent of the Required Lenders if the amount thereof would exceed
$8,000,000 in the aggregate at any one time.
(ii) Agent Advances shall be repayable on demand and secured by
the Collateral, shall constitute Advances and Obligations hereunder, and shall
bear interest at the rate applicable from time to time to the Obligations
pursuant to SECTION 2.7.
(i) SETTLEMENT. It is agreed that each Lender's funded portion of
the Advances is intended by the Lenders to be equal at all times to such
Lender's Pro Rata Share of the outstanding Advances. Such agreement
notwithstanding, the Agent and the Lenders agree (which agreement shall not be
for the benefit of or enforceable by Borrower) that in order to facilitate the
administration of this Agreement and the other Loan Documents, settlement among
them as to the Advances, the Agent Loans, and the Agent Advances shall take
place on a periodic basis in accordance with the following provisions:
(i) The Agent shall request settlement ("Settlement") with the
Lenders on a weekly basis, or on a more frequent basis if so determined by the
Agent, (1) for itself, with respect to each Agent Loan and Agent Advance, and
(2) with respect to Collections received, as to each by notifying the Lenders by
telephone and promptly followed by telecopy, or other similar form of
transmission, of such requested Settlement, no later than 1:00 p.m. (California
time) on the Business Date immediately preceding the date of such requested
Settlement (the "Settlement Date"). Such notice of a Settlement Date shall
include a summary statement of the amount of outstanding Advances, Agent Loans,
and Agent Advances for the period since the prior Settlement Date, the amount of
repayments received in such period, and the amounts allocated to each Lender of
the principal, interest, fees, and other charges for such period. Subject to the
terms and conditions contained herein: (y) if a Lender's balance of the
Advances, Agent Loans, and Agent Advances exceeds such Lender's Pro Rata Share
of the Advances, Agent Loans, and Agent Advances as of a Settlement Date, then
Agent shall by no later than 1:00 p.m. (California time) on the Settlement Date
transfer in same day funds to the account of such Lender as Lender may
designate, an amount such that each such Lender shall, upon receipt of such
amount, have as of the Settlement Date, its Pro Rata Share of the Advances,
Agent Loans, and Agent Advances; and (z) if a Lender's balance of the Advances,
Agent Loans, and Agent Advances is less than such Lender's Pro Rata Share of the
Advances, Agent Loans, and Agent Advances as of a Settlement Date, such Lender
shall no later than 1:00 p.m. (California time) on the Settlement Date transfer
in same day funds to such account of the Agent as the Agent may designate, an
amount such that each such Lender shall, upon transfer of such amount, have as
of the Settlement Date, its Pro Rata Share of the Advances, Agent Loans, and
Agent Advances. Such amounts made available to the Agent under clause (z) of the
immediately preceding sentence shall be applied against the amounts of the
applicable Agent Loan or Agent Advance and, together with the portion of such
Agent Loan or Agent Advance representing Foothill's Pro Rata Share thereof,
shall constitute Advances of such Lenders. If any such amount is not made
available to the Agent by any Lender on the Settlement Date applicable thereto
to the extent required by the terms hereof, the Agent shall be entitled to
recover for its account such amount on demand from such Lender together with
interest thereon at the Defaulting Lenders Rate.
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(ii) In determining whether a Lender's balance of the Advances,
Agent Loans, and Agent Advances is less than, equal to, or greater than such
Lender's Pro Rata Share of the Advances, Agent Loans, and Agent Advances as of a
Settlement Date, Agent shall, as part of the relevant Settlement, apply to such
balance the portion of payments actually received by Agent with respect to
principal, interest, fees payable by Borrower and allocable to the Lenders
hereunder, and proceeds of Collateral. To the extent that a net amount is owed
to any such Lender after such application, such net amount shall be distributed
by Agent to that Lender as part of such Settlement; PROVIDED, HOWEVER, that the
closing fee payable by Borrower under SECTION 2.12(B) shall be distributed to
the Lenders within three Business Days following the Closing Date without regard
to the netting of amounts owing to or owed by any Lender as part of a
Settlement.
(iii) Between Settlement Dates, the Agent, to the extent no
Agent Advances or Agent Loans are outstanding, may pay over to Foothill any
payments received by the Agent, which in accordance with the terms of the
Agreement would be applied to the reduction of the Advances, for application to
Foothill's Pro Rata Share of the Advances. If, as of any Settlement Date,
Collections received since the then immediately preceding Settlement Date have
been applied to Foothill's Pro Rata Share of the Advances other than to Agent
Loans or Agent Advances, as provided for in the previous sentence, Foothill
shall pay to the Agent for the accounts of the Lenders, and Agent shall pay to
the Lenders, to be applied to the outstanding Advances of such Lenders, an
amount such that each Lender shall, upon receipt of such amount, have, as of
such Settlement Date, its Pro Rata Share of the Advances. During the period
between Settlement Dates, the Agent with respect to Agent Loans and Agent
Advances, and each Lender with respect to the Advances other than Agent Loans
and Agent Advances, shall be entitled to interest at the applicable rate or
rates payable under this Agreement on the daily amount of funds employed by the
Agent or the Lenders, as applicable.
(j) NOTATION. The Agent shall record on its books the principal
amount of the Advances owing to each Lender, including the Agent Loans and Agent
Advances owing to the Agent, and the interests therein of each Lender, from time
to time. In addition, each Lender is authorized, at such Lender's option, to
note the date and amount of each payment or prepayment of principal of such
Lender's Advances in its books and records, including computer records, such
books and records constituting rebuttably presumptive evidence, absent manifest
error, of the accuracy of the information contained therein.
(k) LENDERS' FAILURE TO PERFORM. All Advances (other than Agent
Loans and Agent Advances) shall be made by the Lenders simultaneously and in
accordance with their Pro Rata Shares. It is understood that (i) no Lender shall
be responsible for any failure by any other Lender to perform its obligation to
make any Advances hereunder, nor shall any Commitment of any Lender be increased
or decreased as a result of any failure by any other Lender to perform its
obligation to make any Advances hereunder, and (ii) no failure by any Lender to
perform its obligation to make any Advances hereunder shall excuse any other
Lender from its obligation to make any Advances hereunder.
(l) OVERADVANCES. Agent may make voluntary Overadvances without the
written consent of the Required Lenders for amounts charged to the applicable
Loan Account for interest, fees or Lender Group Expenses pursuant to SECTION
2.1(H)(I)(2)(C). If the conditions
21
for borrowing under SECTION 3.2(D) cannot be fulfilled, the Agent may, but is
not obligated to, knowingly and intentionally continue to make Advances
(including Agent Loans) to Borrower such failure of condition notwithstanding,
so long as, at any time, (i) either (A) the outstanding Revolving Facility Usage
would not exceed the Borrowing Base for more than 60 consecutive days or more
than once in any 180 day period, and the maximum outstanding overadvance amount
shall not exceed $2,000,000 or (B) (y) the outstanding Revolving Facility Usage
would not exceed the Borrowing Base by more than the amount proposed by Agent
and agreed to by the Required Lenders, and (z) such Advances are made pursuant
to a plan (proposed by Agent and agreed to by the Required Lenders) for the
elimination of the outstanding Revolving Facility Usage in excess of the
Borrowing Base, and (ii) the outstanding Revolving Facility Usage (except for
and excluding amounts charged to the applicable Loan Account for interest, fees,
or Lender Group Expenses) does not exceed the Maximum Amount. The foregoing
provisions are for the sole and exclusive benefit of the Agent and the Lenders
and are not intended to benefit Borrower in any way. The Advances and Agent
Loans, as applicable, that are made pursuant to this SECTION 2.1(L) shall be
subject to the same terms and conditions as any other Agent Advance or Agent
Loan, as applicable, except that the rate of interest applicable thereto shall
be the rates set forth in SECTION 2.7(C)(I) without regard to the presence or
absence of a Default or Event of Default; PROVIDED, that the Required Lenders
may, at any time, revoke Agent's authorization contained in this SECTION 2.1(L)
to make Overadvances (except for and excluding amounts charged to the applicable
Loan Account for interest, fees, or Lender Group Expenses), any such revocation
to be in writing and to become effective upon Agent's receipt thereof; PROVIDED
FURTHER, HOWEVER, that the making of such Overadvances shall not constitute a
waiver of such Event of Default arising therefrom.
In the event Agent obtains actual knowledge that Revolving Facility
Usage exceeds the amount permitted by the preceding paragraph, regardless of the
amount of or reason for such excess, Agent shall notify Lenders as soon as
practicable (and prior to making any (or any further) intentional Overadvances
(except for and excluding amounts charged to the applicable Loan Account for
interest, fees, or Lender Group Expenses) unless Agent determines that prior
notice would result in imminent harm to the Collateral or its value), and
Lenders thereupon shall, together with Agent, jointly determine the terms of
arrangements that shall be implemented with Borrower intended to reduce, within
a reasonable time, the outstanding principal amount of the Advances to Borrower
to an amount permitted by the preceding paragraph. In the event any Lender
disagrees over the terms of reduction and/or repayment of any Overadvance, the
terms of reduction and/or repayment thereof shall be implemented according to
the determination of the Required Lenders.
Each Lender shall be obligated to settle with Agent as provided in
SECTION 2.1(I) for the amount of such Lender's Pro Rata Share of any
unintentional Overadvances by Agent reported to such Lender, any intentional
Overadvances made as permitted under this SECTION 2.1(L), and any Overadvances
resulting from the charging to the applicable Loan Account of interest, fees, or
Lender Group Expenses.
(m) EFFECT OF BANKRUPTCY. If a case is commenced by or against any
Borrower under the Bankruptcy Code, or other statute providing for debtor
relief, then, without the approval of Required Lenders the Lender Group shall
not make additional loans or provide additional financial accommodations under
the Loan Documents to such Borrower as debtor or
22
debtor-in-possession, or to any trustee for such Borrower, nor consent to the
use of cash collateral (provided that the applicable Loan Account shall continue
to be charged, to the fullest extent permitted by law, for accruing interest,
fees, and Lender Group Expenses).
(n) ADDITIONAL FINANCING. At Borrower's request, subject to each of
the following conditions, Agent and Lenders may provide the Additional
Financing:
(i) no Event of Default shall exist;
(ii) any increases in the Maximum Amount (and any concurrent
increases in the maximum amount of the Letter of Credit facility) will be in a
minimum amount of $5,000,000 and $5,000,000 increases thereto (provided that the
Maximum Amount will not in any event exceed $100,000,000 and the maximum Letter
of Credit facility will not exceed $80,000,000), and at the effective date
thereof, Borrower shall pay to Agent for the ratable benefit of Lenders, an
amendment fee in the amount of 0.125% of the amount of any increase in the
Maximum Amount;
(iii) Agent and Lenders shall have received and approved
Borrower's updated Business Plan;
(iv) Borrower shall have Borrowing Base Availability (without
being limited by the Maximum Amount) as of the end of each of the three months
prior to such increase of at least $5,000,000;
(v) Borrower shall have given Agent and Lenders not less than
60 days advance written notice of its desire for the Additional Financing during
which time Agent shall use its best efforts to obtain additional binding
commitments of new Lenders or from existing Lenders; and
(vi) Agent shall have received binding commitments of new
Lenders (or from existing Lenders) for the increase in the Maximum Amount.
2.2 LETTERS OF CREDIT.
(a) AGREEMENT TO CAUSE ISSUANCE; AMOUNTS; OUTSIDE EXPIRATION DATE.
Subject to the terms and conditions of this Agreement, Agent agrees to issue
letters of credit for the account of Borrower (each, an "L/C") or to issue
guarantees of payment (each such guaranty, an "L/C Guaranty") with respect to
letters of credit issued by an issuing bank for the account of Borrower. Agent
shall have no obligation to issue a Letter of Credit if any of the following
would result:
(i) 100% of the aggregate amount of all undrawn and
unreimbursed Letters of Credit, would exceed the Borrowing Base less the amount
of outstanding Advances (including any Agent Advances and Agent Loans); or
(ii) the aggregate amount of all undrawn or unreimbursed
Letters of Credit would exceed the lower of: (x) the Maximum Amount less the
amount of
23
outstanding Advances (including any Agent Advances and Agent Loans); or (y)
$60,000,000 or up to $80,000,000 in accordance with SECTION 2.1(N) relating to
Additional Financing.
Borrower expressly understands and agrees that Agent shall have no obligation to
arrange for the issuance by issuing banks of the letters of credit that are to
be the subject of L/C Guarantees. Borrower and the Lender Group acknowledge and
agree that certain of the letters of credit that are to be the subject of L/C
Guarantees may be on the Closing Date. Each Letter of Credit shall have an
expiry date no later than the date on which this Agreement is scheduled to
terminate under SECTION 3.4 (without regard to any potential renewal term) and
all such Letters of Credit shall be in form and substance acceptable to Agent in
its sole discretion. If the Lender Group is obligated to advance funds under a
Letter of Credit, Borrower immediately shall reimburse such amount to Agent and,
in the absence of such reimbursement, the amount so advanced immediately and
automatically shall be deemed to be an Advance hereunder and, thereafter, shall
bear interest at the rate then applicable to Advances under SECTION 2.7.
(b) INDEMNIFICATION. Borrower hereby agrees to indemnify, save,
defend, and hold the Lender Group harmless from any loss, cost, expense, or
liability, including payments made by the Lender Group, expenses, and reasonable
attorneys fees incurred by the Lender Group arising out of or in connection with
any Letter of Credit. Borrower agrees to be bound by the issuing bank's
regulations and interpretations of any letters of credit guarantied by the
Lender Group and opened to or for Borrower's account or by Agent's
interpretations of any Letter of Credit issued by Agent to or for Borrower's
account, even though this interpretation may be different from Borrower's own,
and Borrower understands and agrees that the Lender Group shall not be liable
for any error, negligence, or mistake, whether of omission or commission, in
following Borrower's instructions or those contained in the Letter of Credit or
any modifications, amendments, or supplements thereto. Borrower understands that
the L/C Guarantees may require the Lender Group to indemnify the issuing bank
for certain costs or liabilities arising out of claims by Borrower against such
issuing bank. Borrower hereby agrees to indemnify, save, defend, and hold the
Lender Group harmless with respect to any loss, cost, expense (including
reasonable attorneys fees), or liability incurred by the Lender Group under any
L/C Guaranty as a result of the Lender Group's indemnification of any such
issuing bank.
(c) SUPPORTING MATERIALS. Borrower hereby authorizes and directs any
bank that issues a letter of credit guaranteed by an L/C Guaranty to deliver to
Agent all instruments, documents, and other writings and property received by
the issuing bank pursuant to such letter of credit, and to accept and rely upon
Agent's instructions and agreements with respect to all matters arising in
connection with such letter of credit and the related application. Borrower may
or may not be the "applicant" or "account party" with respect to such letter of
credit.
(d) COSTS OF LETTERS OF CREDIT. Any and all charges, commissions,
fees, and costs incurred by Agent relating to the letters of credit guaranteed
by an L/C Guaranty shall be considered Lender Group Expenses for purposes of
this Agreement and immediately shall be reimbursable by Borrower to Agent.
(e) INDEMNIFICATION. Immediately upon the termination of this
Agreement, Borrower agrees to either (i) provide cash collateral to be held by
Agent in an
24
amount equal to 105% of the maximum amount of the Lender Group's obligations
under outstanding Letters of Credit, or (ii) cause to be delivered to Agent
releases of all of the Lender Group's obligations under outstanding Letters of
Credit. At Agent's discretion, any proceeds of Collateral received by Agent
after the occurrence and during the continuation of an Event of Default may be
held as the cash collateral required by this SECTION 2.2(E).
(f) INCREASED COSTS. If by reason of (i) any change in any
applicable law, treaty, rule, or regulation or any change in the interpretation
or application by any governmental authority of any such applicable law, treaty,
rule, or regulation, or (ii) compliance by the issuing bank or the Lender Group
with any direction, request, or requirement (irrespective of whether having the
force of law) of any governmental authority or monetary authority including,
without limitation, Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect (and any successor thereto):
(i) any reserve, deposit, or similar requirement is or shall be
imposed or modified in respect of any Letters of Credit issued hereunder, or
(ii) there shall be imposed on the issuing bank or the Lender
Group any other condition regarding any letter of credit, or Letter of Credit,
as applicable, issued pursuant hereto;
and the result of the foregoing is to increase, directly or indirectly, the cost
to the issuing bank or the Lender Group of issuing, making, guaranteeing, or
maintaining any letter of credit, or Letter of Credit, as applicable, or to
reduce the amount receivable in respect thereof by such issuing bank or the
Lender Group, then, and in any such case, Agent may, at any time within a
reasonable period after the additional cost is incurred or the amount received
is reduced, notify Borrower, and Borrower shall pay on demand such amounts as
the issuing bank or Agent may specify to be necessary to compensate the issuing
bank or Agent for such additional cost or reduced receipt, together with
interest on such amount from the date of such demand until payment in full
thereof at the rate set forth in SECTION 2.7(A) or (C)(I), as applicable. The
determination by the issuing bank or Agent, as the case may be, of any amount
due pursuant to this SECTION 2.2(F), as set forth in a certificate setting forth
the calculation thereof in reasonable detail, shall, in the absence of manifest
or demonstrable error, be final and conclusive and binding on all of the parties
hereto.
(g) PARTICIPATIONS.
(i) PURCHASE OF PARTICIPATIONS. Immediately upon issuance of
any Letter of Credit in accordance with this SECTION 2.2, each Lender shall be
deemed to have irrevocably and unconditionally purchased and received without
recourse or warranty, an undivided interest and participation in the credit
support or enhancement provided through the Agent to such issuer in connection
with the issuance of such Letter of Credit, equal to such Lender's Pro Rata
Share of the face amount of such Letter of Credit (including, without
limitation, all obligations of Borrower with respect thereto, and any security
therefor or guaranty pertaining thereto).
25
(ii) DOCUMENTATION. Upon the request of any Lender, the Agent
shall furnish to such Lender copies of any Letter of Credit, reimbursement
agreements executed in connection therewith, application for any Letter of
Credit and credit support or enhancement provided through the Agent in
connection with the issuance of any Letter of Credit, and such other
documentation as may reasonably by requested by such Lender.
(iii) OBLIGATIONS IRREVOCABLE. The obligations of each Lender
to make payments to the Agent with respect to any Letter of Credit or with
respect to any credit support or enhancement provided through the Agent with
respect to a Letter of Credit, and the obligations of Borrower to make payments
to the Agent, for the account of the Lenders, shall be irrevocable, not subject
to any qualification or exception whatsoever, including, without limitation, any
of the following circumstances:
(A) any lack of validity or enforceability of this
Agreement or any of the other Loan Documents;
(B) the existence of any claim, setoff, defense, or other
right which any Borrower may have at any time against a beneficiary named in a
Letter of Credit or any transferee of any Letter of Credit (or any Person for
whom any such transferee may be acting), any Lender, the Agent, the issuer of
such Letter of Credit, or any other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated herein or any
unrelated transactions (including any underlying transactions between such
Borrower or any other Person and the beneficiary named in any Letter of Credit);
(C) any draft, certificate, or any other document
presented under the Letter of Credit proving to be forged, fraudulent, invalid,
or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(D) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan Documents; or
(E) the occurrence of any Default or Event of Default.
2.3 INTENTIONALLY OMITTED.
2.4 INTENTIONALLY OMITTED.
2.5 PAYMENTS.
(a) PAYMENTS BY BORROWER.
(i) All payments to be made by Borrower shall be made without
set-off, recoupment, deduction, or counterclaim, except as otherwise required by
law. Except as otherwise expressly provided herein, all payments by Borrower
shall be made to Agent for the account of the Lenders or Agent, as the case may
be, at Agent's address set forth in SECTION 12, and shall be made in immediately
available funds, no later than 11:00 a.m. (California time) on the date
specified herein. Any payment received by Agent later than 11:00 a.m.
(California time), at the option of Agent, shall be deemed to have been received
on the
26
following Business Day and any applicable interest or fee shall continue to
accrue until such following Business Day.
(ii) Whenever any payment is due on a day other than a Business
Day, such payment shall be made on the following Business Day, and such
extension of time shall in such case be included in the computation of interest
or fees, as the case may be.
(iii) Unless Agent receives notice from Borrower prior to the
date on which any payment is due to the Lenders that Borrower will not make such
payment in full as and when required, Agent may assume that Borrower has made
such payment in full to Agent on such date in immediately available funds and
Agent may (but shall not be so required), in reliance upon such assumption,
distribute to each Lender on such due date an amount equal to the amount then
due such Lender. If and to the extent Borrower has not made such payment in full
to Agent, each Lender shall repay to Agent on demand such amount distributed to
such Lender, together with interest thereon at the Reference Rate for each day
from the date such amount is distributed to such Lender until the date repaid.
(b) APPORTIONMENT AND APPLICATION OF PAYMENTS. Except as otherwise
provided with respect to Defaulting Lenders, aggregate principal and interest
payments shall be apportioned ratably among the Lenders (according to the unpaid
principal balance of the Advances to which such payments relate held by each
Lender) and payments of the fees (other than fees designated for Agent's
separate account) shall, as applicable, be apportioned ratably among the
Lenders. All payments shall be remitted to Agent and all such payments not
relating to specific Advances, and not constituting payment of specific fees and
all proceeds of Collateral received by Agent, shall be applied, first, to pay
any fees or expense reimbursements then due to Agent from Borrower; second, to
pay any fees or expense reimbursements then due to the Lenders from Borrower;
third, to pay interest due in respect of all Advances, including Agent Loans and
Agent Advances; fourth, to pay or prepay principal of Agent Loans and Agent
Advances; fifth, ratably to pay principal of the Advances (other than Agent
Loans and Agent Advances) and unreimbursed obligations in respect of Letters of
Credit; and sixth, ratably to pay any other Obligations due to Agent or any
Lender by Borrower. Agent shall promptly distribute to each Lender, pursuant to
the applicable wire transfer instructions received from each Lender in writing,
such funds as it may be entitled to receive, subject to a Settlement delay as
provided for in SECTION 2.1(H).
2.6 OVERADVANCES. If, at any time or for any reason, the amount of
Obligations owed by Borrower to the Lender Group pursuant to SECTIONS 2.1 and
2.2 is greater than either the Dollar or percentage limitations set forth in
SECTIONS 2.1 and 2.2 (an "Overadvance"), Borrower immediately shall pay to
Agent, in cash, the amount of such excess to be used by Agent to reduce the
Obligations pursuant to the terms of SECTION 2.5(B).
2.7 INTEREST AND LETTER OF CREDIT FEES: RATES, PAYMENTS, AND CALCULATIONS.
(a) Interest Rate. Except as provided in SECTION 2.7(C), below, all
Obligations shall bear interest on the Daily Balance as follows:
27
(i) each Eurodollar Rate Loan shall bear interest at a
per annum rate equal to the Adjusted Eurodollar Rate plus the
Eurodollar Rate Margin; and
(ii) all other Obligations (except for undrawn Letters
of Credit) shall bear interest at a per annum rate equal to the
Reference Rate.
(b) LETTER OF CREDIT FEE. Borrower shall pay Agent, for the benefit
of the Lender Group, a fee (in addition to the charges, commissions and letter
of credit usage fees and costs set forth in SECTION 2.2(D), but with a limit of
0.25% for Wells Fargo's issuance fee) equal to 0.75% per annum times the
aggregate undrawn amount of all Letters of Credit outstanding as of the end of
the day.
(c) DEFAULT RATE. Upon the occurrence and during the continuation of
an Event of Default, (i) all Obligations (except for undrawn Letters of Credit)
shall bear interest on the Daily Balance at a per annum rate equal to three
percentage points above the Reference Rate, and (ii) the Letter of Credit fee
provided in SECTION 2.6(B) shall be increased to 3.75% per annum times the
aggregate undrawn amount of all outstanding Letters of Credit.
(d) Intentionally Omitted.
(e) PAYMENTS. Interest in respect of Reference Rate Loans and Letter
of Credit fees payable hereunder shall be due and payable, in arrears, on the
first day of each month during the term hereof. Interest in respect of each
Eurodollar Rate Loan shall be due and payable, in arrears, on (i) the last day
of the applicable Interest Period, and (ii) the first day of each month
occurring during the term thereof. Borrower hereby authorizes Foothill, at its
option, without prior notice to Borrower, to charge such interest and Letter of
Credit fees, all Foothill Expenses (as and when incurred), the charges,
commissions, fees, and costs provided for in SECTION 2.2(D) (as and when accrued
or incurred), the fees and charges provided for in SECTION 2.12 (as and when
accrued or incurred), and all installments or other payments due under any Loan
Document to Borrower's Loan Account, which amounts thereafter shall accrue
interest at the rate then applicable to Advances hereunder. Any interest not
paid when due shall be compounded and shall thereafter accrue interest at the
rate then applicable to Advances hereunder.
(f) COMPUTATION. The Reference Rate as of the date of this Agreement
is 9.50% per annum. In the event the Reference Rate is changed from time to time
hereafter, the applicable rate of interest hereunder automatically and
immediately shall be increased or decreased by an amount equal to such change in
the Reference Rate. All interest and fees chargeable under the Loan Documents
shall be computed on the basis of a 360 day year for the actual number of days
elapsed.
(g) INTENT TO LIMIT CHARGES TO MAXIMUM LAWFUL RATE. In no event
shall the interest rate or rates payable under this Agreement, plus any other
amounts paid in connection herewith, exceed the highest rate permissible under
any law that a court of competent jurisdiction shall, in a final determination,
deem applicable. Borrower and the Lender Group, in executing and delivering this
Agreement, intend legally to agree upon the rate or rates of interest
28
and manner of payment stated within it; PROVIDED, HOWEVER, that, anything
contained herein to the contrary notwithstanding, if said rate or rates of
interest or manner of payment exceeds the maximum allowable under applicable
law, then, ipso facto as of the date of this Agreement, Borrower is and shall be
liable only for the payment of such maximum as allowed by law, and payment
received from Borrower in excess of such legal maximum, whenever received, shall
be applied to reduce the principal balance of the Obligations to the extent of
such excess.
2.8 COLLECTION OF ACCOUNTS. Borrower shall at all times maintain
lockboxes (the "Lockboxes") and, immediately after the Closing Date, shall
instruct all Account Debtors with respect to the Accounts, General Intangibles,
and Negotiable Collateral of Borrower to remit all Collections in respect
thereof to such Lockboxes. Borrower, Agent, and the Lockbox Banks shall enter
into the Lockbox Agreements, which among other things shall provide for the
opening of a Lockbox Account for the deposit of Collections at a Lockbox Bank.
Borrower agrees that all Collections and other amounts received by Borrower from
any Account Debtor or any other source immediately upon receipt shall be
deposited into a Lockbox Account. No Lockbox Agreement or arrangement
contemplated thereby shall be modified by Borrower without the prior written
consent of Agent. Upon the terms and subject to the conditions set forth in the
Lockbox Agreements, all amounts received in each Lockbox Account shall be wired
each Business Day into an account (the "Agent's Account") maintained by Agent at
a depositary selected by Agent.
2.9 CREDITING PAYMENTS; APPLICATION OF COLLECTIONS. The receipt of
any Collections by Agent (whether from transfers to Agent by the Lockbox Banks
pursuant to the Lockbox Agreements or otherwise) immediately shall be applied
provisionally to reduce the Obligations outstanding under SECTION 2.1, but shall
not be considered a payment on account unless such Collection item is a wire
transfer of immediately available federal funds and is made to the Agent's
Account or unless and until such Collection item is honored when presented for
payment. Should any Collection item not be honored when presented for payment,
then Borrower shall be deemed not to have made such payment, and interest shall
be recalculated accordingly. Anything to the contrary contained herein
notwithstanding, any Collection item shall be deemed received by Agent only if
it is received into the Agent's Account on a Business Day on or before 11:00
a.m. California time. If any Collection item is received into the Agent's
Account on a non-Business Day or after 11:00 a.m. California time on a Business
Day, it shall be deemed to have been received by Agent as of the opening of
business on the immediately following Business Day. Prior to the occurrence of
an Event of Default or Agent reasonably deeming itself insecure, and so long as:
(a) the outstanding balance of the Obligations is $33,500,000 or less, and (b)
the outstanding balance of the Obligations (other than L/Cs and L/C Guarantees)
is $5,000,000 or less, monies shall, at Borrower's option, be transferred from
the Lock Box to Agent or to Borrower's operating account on a daily basis, and
if transferred to Borrower's operating account such monies will not be applied
to the Obligations.
2.10 DESIGNATED ACCOUNT. Agent and the Lender Group are authorized
to make the Advances and the Letters of Credit under this Agreement based upon
telephonic or other instructions received from anyone purporting to be an
Authorized Person, or without instructions if pursuant to SECTION 2.7(E).
Borrower agrees to establish and maintain the Designated Account with the
Designated Account Bank for the purpose of receiving the proceeds of the
Advances requested by Borrower and made by the Lender Group hereunder.
29
Unless otherwise agreed by Agent and Borrower, any Advance requested by Borrower
and made by the Lender Group hereunder shall be made to the Designated Account.
2.11 MAINTENANCE OF LOAN ACCOUNT; STATEMENTS OF OBLIGATIONS. Agent
shall maintain an account on its books in the name of Borrower (the "Loan
Account") on which Borrower will be charged with all Advances made by the Lender
Group to Borrower or for Borrower's account, including, accrued interest, Lender
Group Expenses, and any other payment Obligations of Borrower. In accordance
with SECTION 2.9, the Loan Account will be credited with all payments received
by Agent from Borrower or for Borrower's account, including all amounts received
in the Agent's Account from any Lockbox Bank. Agent shall render statements
regarding the Loan Account to Borrower, including principal, interest, fees, and
including an itemization of all charges and expenses constituting the Lender
Group Expenses owing, and such statements shall be conclusively presumed to be
correct and accurate and constitute an account stated between Borrower and the
Lender Group unless, within 30 days after receipt thereof by Borrower, Borrower
shall deliver to Agent written objection thereto describing the error or errors
contained in any such statements.
2.12 FEES. Borrower shall pay to Agent for the ratable benefit of
the Lender Group (except where otherwise indicated) the following fees:
(a) AGENT'S FEE. On the Closing Date, a loan fee of $100,000 which
shall solely be for the account of Agent, which fee shall be fully earned and
non-refundable on the Closing Date;
(b) CLOSING FEE. Borrower shall pay the Agent for the ratable
benefit of Lenders a facility fee in an amount equal to $93,750 per year. The
facility fee for the first three years of the Line will be fully earned on the
Closing Date, but shall be payable on each July 31 commencing with July 31,
2000, through and including July 31, 2002. In the event that the term of this
Agreement extends beyond the Renewal Date, then the facility fee shall be paid
on the Renewal Date and each anniversary thereafter while the Line is still in
effect, and in each case shall be fully earned for each annual extension on the
date when due.
(c) AMENDMENT FEE. Borrower shall pay Agent, for the ratable benefit
of the Lenders, an amendment fee in the amount of $21,250 (calculated as a
$31,250 fee less a $10,000 credit from Amendment Number Four to the Existing
Loan Agreement).
(d) APPRAISALS; FINANCIAL EXAMINATION AND APPRAISAL FEES. The Agent
or its designee, at the sole expense of Borrower, shall conduct annual
appraisals of Borrower's Inventory. Borrower shall pay to Agent a fee of $650
per day per examiner and $1,000 per day per appraiser for financial analyses and
examinations of Borrower and Collateral appraisals, plus out-of-pocket expenses
for each such analysis, examination, and appraisal of Borrower performed by
Agent or its designee; PROVIDED, HOWEVER, that so long as no Event of Default
has occurred and is continuing, Agent shall not charge Borrower for more than
one examination per year. Borrower shall not be liable to pay more than $12,500
per year (exclusive of Agent's out of pocket expenses) for each annual appraisal
of Inventory, nor more than $5,000 per year (exclusive of Agent's out of pocket
expenses) for any seasonal updates to such appraisals, in
30
either case only so long as at the time such appraisals and updates are
conducted there does not exist any Event of Default.
(e) SERVICING FEE. On the first day of each month during the term of
this Agreement, and thereafter so long as any Obligations are outstanding, a
servicing fee in an amount equal to $3,000.
2.13 EURODOLLAR RATE LOANS. Any other provisions herein to the
contrary notwithstanding, the following provisions shall govern with respect to
Eurodollar Rate Loans as to the matters covered:
(a) BORROWING; CONVERSION; CONTINUATION. Borrower may from time to
time, on or after the Closing Date (and subject to the satisfaction of the
requirements of SECTIONS 3.1 AND 3.2), request in a written or telephonic
communication with Agent: (i) Advances to constitute Eurodollar Rate Loans; (ii)
that Reference Rate Loans be converted into Eurodollar Rate Loans; or (iii) that
existing Eurodollar Rate Loans continue for an additional Interest Period. Any
such request shall specify the aggregate amount of the requested Eurodollar Rate
Loans, the proposed funding date therefor (which shall be a Business Day, and
with respect to continued Eurodollar Rate Loans shall be the last day of the
Interest Period of the existing Eurodollar Rate Loans being continued), and the
proposed Interest Period (in each case subject to the limitations set forth
below). Eurodollar Rate Loans may only be made, continued, or extended if, as of
the proposed funding date therefor, each of the following conditions is
satisfied:
(v) no Event of Default exists;
(w) no more than five Interest Periods may be in
effect at any one time;
(x) the amount of each Eurodollar Rate Loan borrowed,
converted, or continued must be in an amount not less than $5,000,000 and
integral multiples of $1,000,000 in excess thereof;
(y) Agent shall have determined that the Interest Period
or Adjusted Eurodollar Rate is available to it and can be readily
determined as of the date of the request for such Eurodollar Rate Loan by
Borrower; and
(z) Agent shall have received such request at least two
Business Days prior to the proposed funding date therefor.
Any request by Borrower to borrow Eurodollar Rate Loans, to convert
Reference Rate Loans to Eurodollar Rate Loans, or to continue any existing
Eurodollar Rate Loans shall be irrevocable, except to the extent that any Lender
shall determine under SECTIONS 2.13(A), 2.14 OR 2.15 that such Eurodollar Rate
Loans cannot be made or continued.
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(b) DETERMINATION OF INTEREST PERIOD. By giving notice as set forth
in SECTION 2.12(A), Borrower shall select an Interest Period for such Eurodollar
Rate Loan. The determination of the Interest Period shall be subject to the
following provisions:
(i) in the case of immediately successive Interest
Periods, each successive Interest Period shall commence on the day
on which the next preceding Interest Period expires;
(ii) if any Interest Period would otherwise expire on a
day which is not a Business Day, the Interest Period shall be
extended to expire on the next succeeding Business Day; provided,
however, that if the next succeeding Business Day occurs in the
following calendar month, then such Interest Period shall expire on
the immediately preceding Business Day;
(iii) if any Interest Period begins on the last Business
Day of a month, or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period, then the Interest Period shall end on the last Business Day
of the calendar month at the end of such Interest Period; and
(iv) Borrower may not select an Interest Period which
expires later than the Maturity Date.
(c) AUTOMATIC CONVERSION: OPTIONAL CONVERSION BY AGENT. Any
Eurodollar Rate Loan shall automatically convert to a Reference Rate Loan upon
the last day of the applicable Interest Period, unless Agent has received a
request to continue such Eurodollar Rate Loan at least two Business Days prior
to the end of such Interest Period in accordance with the terms of SECTION
2.13(A). Any Eurodollar Rate Loan shall, at Agent's option, upon notice to
Borrower, immediately convert to a Reference Rate Loan in the event that (i) an
Event of Default shall have occurred and be continuing or (ii) this Agreement
shall terminate, and Borrower shall pay to Agent, for the benefit of the
Lenders, any amounts required by SECTION 2.16 as a result thereof.
2.14 ILLEGALITY. Any other provision herein to the contrary
notwithstanding, if the adoption of or any change in any Requirement of Law or
in the interpretation or application thereof by a Governmental Authority made
subsequent to the Closing Date shall make it unlawful for any Lender to make or
maintain Eurodollar Rate Loans as contemplated by this Agreement, (a) the
obligation of such Lender hereunder to make Eurodollar Rate Loans, continue
Eurodollar Rate Loans as such, and convert Reference Rate Loans to Eurodollar
Rate Loans shall forthwith be suspended and (b) such Lender's then outstanding
Eurodollar Rate Loans, if any, shall be converted automatically to Reference
Rate Loans on the respective last days of the then current Interest Periods with
respect thereto or within such earlier period as required by law; PROVIDED,
HOWEVER, that before making any such demand, each Lender agrees to use
reasonable efforts (consistent with its internal policy and legal and regulatory
restrictions and so long as such efforts would not be disadvantageous to it, in
its reasonable discretion, in any legal, economic, or regulatory manner) to
designate a different lending office if the making of such a designation would
allow such Lender or its lending office to continue to perform its
32
obligations to make Eurodollar Rate Loans. If any such conversion of a
Eurodollar Rate Loan occurs on a day which is not the last day of the then
current Interest Period with respect thereto, Borrower shall pay to such Lender
such amounts, if any, as may be required pursuant to SECTION 2.15. If
circumstances subsequently change so that such Lender shall determine that it is
no longer so affected, such Lender will promptly notify Agent and Borrower, and
upon receipt of such notice, the obligations of such Lender to make or continue
Eurodollar Rate Loans or to convert Reference Rate Loans into Eurodollar Rate
Loans shall be reinstated.
2.15 REQUIREMENTS OF LAW.
(a) If the adoption of or any change in any Requirement of Law or in
the interpretation or application thereof by a Governmental Authority made
subsequent to the Closing Date or compliance by any Lender with any request or
directive (whether or not having the force of law) from any central bank or
other Governmental Authority made subsequent to the Closing Date
(i) shall subject such Lender to any tax, levy, charge,
fee, reduction, or withholding of any kind whatsoever with respect
to Eurodollar Rate Loans, or change the basis of taxation of
payments to such Lender in respect thereof (except for the
establishment of a tax based on the net income of Foothill or
changes in the rate of tax on the net income of such Lender);
(ii) shall in respect of Eurodollar Rate Loans impose,
modify or hold applicable any reserve, special deposit, compulsory
loan, or similar requirement against assets held by, deposits or
other liabilities in or for the account of, Advances or other
extensions of credit by, or any other acquisition of funds by, any
office of such Lender; or
(iii) shall impose on such Lender any other condition
with respect to Eurodollar Rate Loans;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing, or maintaining Eurodollar Rate Loans or to increase the cost to such
Lender in respect of Eurodollar Rate Loans, by an amount which such Lender deems
to be material, or to reduce any amount receivable hereunder in respect of
Eurodollar Rate Loans, or to forego any other sum payable thereunder or make any
payment on account thereof in respect of Eurodollar Rate Loans, then, in any
such case, Borrower shall promptly pay to Agent (for the benefit of such
Lender), upon such Lender's demand, any additional amounts necessary to
compensate such Lender for such increased cost or reduced amount receivable;
PROVIDED, HOWEVER, that before making any such demand, each Lender agrees to use
reasonable efforts (consistent with its internal policy and legal and regulatory
restrictions and so long as such efforts would not be disadvantageous to it, in
its reasonable discretion, in any legal, economic, or regulatory manner) to
designate a different Eurodollar lending office if the making of such
designation would allow such Lender or its Eurodollar lending office to continue
to perform its obligations to make Eurodollar Rate Loans or to continue to fund
or maintain Eurodollar Rate Loans and avoid the need for, or materially reduce
the amount of, such increased cost. If a Lender becomes entitled to claim any
additional
33
amounts pursuant to this SECTION 2.15, such Lender shall promptly notify Agent
and Borrower of the event by reason of which it has become so entitled. A
certificate as to any additional amounts payable pursuant to this SECTION 2.15
submitted in reasonable detail by such Lender to Agent and Borrower shall be
conclusive in the absence of manifest error. Within five Business Days after a
Lender notifies Agent and Borrower of any increased cost pursuant to the
foregoing provisions of this SECTION 2.15, Borrower may convert all Eurodollar
Rate Loans then outstanding into Reference Rate Loans in accordance with SECTION
2.13 and, additionally, reimburse such Lender for any cost in accordance with
SECTION 2.16. This covenant shall survive the termination of this Agreement and
the payment of the Advances and all other amounts payable hereunder for nine
months following such termination and repayment.
(b) If a Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof by a Governmental Authority made
subsequent to the Closing Date or compliance by such Lender or any Person
controlling such Lender with any request or directive regarding capital adequacy
(whether or not having the force of law) from any Governmental Authority made
subsequent to the Closing Date does or shall have the effect of increasing the
amount of capital required to be maintained or reducing the rate of return on
such Lender's or such Person's capital as a consequence of its obligations
hereunder to a level below that which such Lender or such Person could have
achieved but for such change or compliance (taking into consideration such
Lender's or such Person's policies with respect to capital adequacy) by an
amount deemed by such Lender to be material, then from time to time, after
submission by such Lender to Agent and Borrower of a prompt written request
therefor, Borrower shall pay to Agent (for the benefit of such Lender) such
additional amount or amounts as will compensate such Lender or such Person for
such reduction. This covenant shall survive the termination of this Agreement
and the payment of the Advances and all other amounts payable hereunder for nine
months following such termination and repayment.
2.16 INDEMNITY. Borrower agrees to indemnify Agent and each Lender
and to hold Agent and each Lender harmless from any loss or expense which Agent
and each Lender may sustain or incur as a consequence of (a) default by Borrower
in payment when due of the principal amount of or interest on any Eurodollar
Rate Loan, (b) default by Borrower in making a Borrowing of, conversion into, or
continuation of Eurodollar Rate Loans after Borrower has given a notice
requesting the same in accordance with the provisions of this Agreement, (c)
default by Borrower in making any prepayment of a Eurodollar Rate Loan after
Borrower has given a notice thereof in accordance with the provisions of this
Agreement, or (d) the making of a prepayment of Eurodollar Rate Loans on a day
which is not the last day of an Interest Period with respect thereto (whether
due to the termination of this Agreement, upon an Event of Default, or
otherwise), including, in each case, any such loss or expense (but excluding
loss of margin or anticipated profits) arising from the reemployment of funds
obtained by it or from fees payable to terminate the deposits from which such
funds were obtained; PROVIDED, HOWEVER, that Agent or any Lender, if requesting
indemnification, shall have delivered to the Borrower a certificate as to the
amount of such loss or expense, which certificate shall be conclusive in the
absence of manifest error. Calculation of all amounts payable to Agent or any
such Lender under this SECTION 2.16 shall be made as though such Lender had
actually funded the relevant Eurodollar Rate Loan through the purchase of a
deposit bearing interest at the Eurodollar Rate in an amount equal to the amount
of such Eurodollar Rate Loan and having a maturity comparable
34
to the relevant Interest Period; PROVIDED, HOWEVER, that each Lender may fund
each of the Eurodollar Rate Loans in any manner it sees fit, and the foregoing
assumption shall be utilized only for the calculation of amounts payable under
this SECTION 2.16. This covenant shall survive the termination of this Agreement
and the payment of the Loans and all other amounts payable hereunder for a
period of nine months thereafter.
3. CONDITIONS; TERM OF AGREEMENT.
3.1 CONDITIONS PRECEDENT TO THE INITIAL ADVANCE AND THE INITIAL
LETTER OF CREDIT. The obligation of the Lender Group to make the initial Advance
and to issue the initial Letter of Credit is subject to the fulfillment, to the
satisfaction of Agent and its counsel, of each of the following conditions on or
before the Closing Date:
(a) the Closing Date shall occur on or before July 7, 2000;
(b) Agent shall have received and filed amendments to its financing
statements;
(c) Agent shall have received each of the following documents, duly
executed, and each such document shall be in full force and effect:
(1) the Disbursement Letter; and
(2) an amendment to the Stock Pledge;
(d) Agent shall have received a certificate from the Secretary of
Borrower attesting to the resolutions of Borrower's Board of Directors
authorizing its execution, delivery, and performance of this Agreement and the
other Loan Documents to which Borrower is a party and authorizing specific
officers of Borrower to execute the same;
(e) Agent shall have received copies of Borrower's Governing
Documents, as amended, modified, or supplemented to the Closing Date, certified
by the Secretary of Borrower;
(f) Agent shall have received a certificate of status with respect
to Borrower, dated within 10 days of the Closing Date, such certificate to be
issued by the appropriate officer of the jurisdiction of organization of
Borrower, which certificate shall indicate that Borrower is in good standing in
such jurisdiction;
(g) Agent shall have received a certificate of insurance, together
with the endorsements thereto, as are required by SECTION 6.10, the form and
substance of which shall be satisfactory to Agent and its counsel;
(h) Agent shall have received an opinion of Borrower's counsel in
form and substance satisfactory to Agent in its sole discretion;
35
(i) all other documents and legal matters in connection with the
transactions contemplated by this Agreement shall have been delivered, executed,
or recorded and shall be in form and substance satisfactory to Agent and its
counsel.
3.2 Conditions Precedent to all Advances and all Letters of Credit.
The following shall be conditions precedent to all Advances and all Letters of
Credit hereunder:
(a) the representations and warranties contained in this Agreement
and the other Loan Documents shall be true and correct in all material respects
on and as of the date of such extension of credit, as though made on and as of
such date (except to the extent that such representations and warranties relate
solely to an earlier date);
(b) except for good faith disputes between Borrower and landlords,
no Default or Event of Default shall have occurred and be continuing on the date
of such extension of credit, nor shall either result from the making thereof;
(c) no injunction, writ, restraining order, or other order of any
nature prohibiting, directly or indirectly, the extending of such credit shall
have been issued and remain in force by any governmental authority against
Borrower, the Lender Group or any of their Affiliates; and
(d) the amount of any requested Advance or Letter of Credit shall
not exceed Availability at such time.
3.3 INTENTIONALLY OMITTED.
3.4 TERM; AUTOMATIC RENEWAL. This Agreement shall become effective
upon the execution and delivery hereof by Borrower and the Lender Group and
shall continue in full force and effect for a term ending on July 31, 2003 (the
"Renewal Date") and automatically shall be renewed for successive one year
periods thereafter, unless sooner terminated pursuant to the terms hereof.
Either Borrower or Agent (on behalf of the Lender Group) may terminate this
Agreement effective on the Renewal Date or on any year anniversary of the
Renewal Date by giving the other party at least 90 days prior written notice.
The foregoing notwithstanding, Agent (on behalf of the Lender Group) shall have
the right to terminate the Lender Group's obligations under this Agreement
immediately and without notice upon the occurrence and during the continuation
of an Event of Default.
3.5 EFFECT OF TERMINATION. On the date of termination of this
Agreement, all Obligations (including contingent reimbursement obligations of
Borrower with respect to any outstanding Letters of Credit) immediately shall
become due and payable without notice or demand. No termination of this
Agreement, however, shall relieve or discharge Borrower of Borrower's duties,
Obligations, or covenants hereunder, and the Lender Group's continuing security
interests in the Collateral shall remain in effect until all Obligations have
been fully and finally discharged and the Lender Group's obligation to provide
additional credit hereunder is terminated.
3.6 EARLY TERMINATION BY BORROWER. The provisions of SECTION 3.4
that allow termination of this Agreement by Borrower only on the Renewal Date
and certain
36
anniversaries thereof notwithstanding, Borrower has the option, at any time upon
90 days prior written notice to Agent, to terminate this Agreement by paying to
Agent (for the ratable benefit of the Lender Group), in cash, the Obligations
(including an amount equal to 105% of the undrawn amount of the Letters of
Credit), in full. Any cash relating to Letter of Credit Obligations that is not
used for Letter of Credit draws or reimbursements shall be returned to Borrower
by Agent when the Lender Group no longer has any exposure regarding Letters of
Credit or any draws thereunder.
4. CREATION OF SECURITY INTEREST.
4.1 GRANT OF SECURITY INTEREST. Borrower hereby grants to Agent for
the benefit of the Lender Group a continuing security interest in all currently
existing and hereafter acquired or arising Collateral in order to secure prompt
repayment of any and all Obligations and in order to secure prompt performance
by Borrower of each of its covenants and duties under the Loan Documents. The
security interests of Agent for the benefit of the Lender Group in the
Collateral shall attach to all Collateral without further act on the part of the
Lender Group or Borrower. Anything contained in this Agreement or any other Loan
Document to the contrary notwithstanding, and other than: (a) sales of Inventory
to buyers in the ordinary course of business, (b) sales of Equipment in any 12
month period having an aggregate net book value of $500,000 with the proceeds
being applied to the Obligations, and (c) sale or disposal of Collateral (other
than Inventory) in connection with the closing of Borrower's stores, Borrower
has no authority, express or implied, to dispose of any item or portion of the
Collateral.
4.2 NEGOTIABLE COLLATERAL. In the event that any Collateral,
including proceeds, is evidenced by or consists of Negotiable Collateral,
Borrower, immediately upon the request of Agent, shall endorse and deliver
physical possession of such Negotiable Collateral to Agent.
4.3 COLLECTION OF ACCOUNTS, GENERAL INTANGIBLES, AND NEGOTIABLE
COLLATERAL. At any time, Agent or Agent's designee may (a) notify customers or
Account Debtors of Borrower that the Accounts, General Intangibles, or
Negotiable Collateral have been assigned to Agent for the benefit of the Lender
Group or that Agent for the benefit of the Lender Group has a security interest
therein, and (b) collect the Accounts, General Intangibles, and Negotiable
Collateral directly and charge the collection costs and expenses to the Loan
Account. Borrower agrees that it will hold in trust for the Lender Group, as the
Lender Group's trustee, any Collections that it receives and immediately will
deliver said Collections to Agent in their original form as received by
Borrower.
4.4 DELIVERY OF ADDITIONAL DOCUMENTATION REQUIRED. At any time upon
the request of Agent, Borrower shall execute and deliver to Agent all financing
statements, continuation financing statements, fixture filings, security
agreements, pledges, assignments, control agreements, endorsements of
certificates of title, applications for title, affidavits, reports, notices,
schedules of accounts, letters of authority, and all other documents that Agent
reasonably may request, in form satisfactory to Agent, to perfect and continue
perfected the Liens of the Lender Group in the Collateral, and in order to fully
consummate all of the transactions contemplated hereby and under the other the
Loan Documents.
37
4.5 POWER OF ATTORNEY. Borrower hereby irrevocably makes,
constitutes, and appoints Agent (and any of Agent's officers, employees, or
agents designated by Agent) as Borrower's true and lawful attorney, with power
to (a) if Borrower refuses to, or fails timely to execute and deliver any of the
documents described in SECTION 4.4, sign the name of Borrower on any of the
documents described in SECTION 4.4, (b) at any time that an Event of Default has
occurred and is continuing or the Lender Group deems itself insecure, sign
Borrower's name on any invoice or bill of lading relating to any Account, drafts
against Account Debtors, schedules and assignments of Accounts, verifications of
Accounts, and notices to Account Debtors, (c) send requests for verification of
Accounts, (d) endorse Borrower's name on any Collection item that may come into
the Lender Group's possession, (e) at any time that an Event of Default has
occurred and is continuing or the Lender Group deems itself insecure, notify the
post office authorities to change the address for delivery of Borrower's mail to
an address designated by Agent, to receive and open all mail addressed to
Borrower, and to retain all mail relating to the Collateral and forward all
other mail to Borrower, (f) at any time that an Event of Default has occurred
and is continuing or the Lender Group deems itself insecure, make, settle, and
adjust all claims under Borrower's policies of insurance and make all
determinations and decisions with respect to such policies of insurance, and (g)
at any time that an Event of Default has occurred and is continuing or Agent
deems itself insecure, settle and adjust disputes and claims respecting the
Accounts directly with Account Debtors, for amounts and upon terms that Agent
determines to be reasonable, and Agent may cause to be executed and delivered
any documents and releases that Agent determines to be necessary. The
appointment of Agent as Borrower's attorney, and each and every one of Agent's
rights and powers, being coupled with an interest, is irrevocable until all of
the Obligations have been fully and finally repaid and performed and the Lender
Group's obligation to extend credit hereunder is terminated.
4.6 RIGHT TO INSPECT. Agent (through any of its officers, employees,
or agents), shall have the right, from time to time hereafter to inspect
Borrower's Books and to check, test, and appraise the Collateral in order to
verify Borrower's financial condition or the amount, quality, value, condition
of, or any other matter relating to, the Collateral.
5. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lender Group to enter into this Agreement,
Borrower makes the following representations and warranties which shall be true,
correct, and complete in all respects as of the date hereof, and shall be true,
correct, and complete in all respects as of the Closing Date, and at and as of
the date of the making of each Advance and Letter of Credit made thereafter, as
though made on and as of the date of such Advance and Letter of Credit (except
to the extent that such representations and warranties relate solely to an
earlier date) and such representations and warranties shall survive the
execution and delivery of this Agreement:
5.1 NO ENCUMBRANCES. Borrower has good and indefeasible title to the
Collateral, free and clear of Liens except for Permitted Liens.
5.2 ELIGIBLE ACCOUNTS. The Eligible Accounts are, at the time of the
creation thereof and as of each date on which Borrower includes them in a
Borrowing Base calculation or certification, bona fide existing obligations
created by the sale and delivery of Inventory or the rendition of services to
Account Debtors in the ordinary course of Borrower's business,
38
unconditionally owed to Borrower without defenses, disputes, offsets,
counterclaims, or rights of return or cancellation other than normal returns or
disputes in the normal course of business. The property giving rise to such
Eligible Accounts has been delivered to the Account Debtor, or to the Account
Debtor's agent for immediate shipment to and unconditional acceptance by the
Account Debtor. At the time of the creation of an Eligible Account and as of
each date on which Borrower includes an Eligible Account in a Borrowing Base
calculation or certification, Borrower has not received notice of actual or
imminent bankruptcy, insolvency, or material impairment of the financial
condition of any applicable Account Debtor regarding such Eligible Account.
5.3 ELIGIBLE INVENTORY. All Eligible Inventory is now and at all
times hereafter shall be of good and merchantable quality, free from defects,
except for minor defects arising in the ordinary course of business.
5.4 EQUIPMENT. All of the Equipment is used or held for use in
Borrower's business and is fit for such purposes.
5.5 LOCATION OF INVENTORY AND EQUIPMENT. The Inventory and Equipment
are not stored with a bailee, warehouseman, or similar party (without Agent's
prior written consent) and are located only at the locations identified on
SCHEDULE 6.11 or otherwise permitted by SECTION 6.11.
5.6 INVENTORY RECORDS. Borrower keeps correct and accurate records
itemizing and describing the kind, type, quality and quantity of its Inventory
and Borrower's cost therefor in accordance with the retail method of accounting.
5.7 LOCATION OF CHIEF EXECUTIVE OFFICE; FEIN. The chief executive
office of Borrower is located at the address indicated in the preamble to this
Agreement and Borrower's FEIN is 31-1241495.
5.8 DUE ORGANIZATION AND QUALIFICATION; SUBSIDIARIES.
(a) Borrower is duly organized and existing and in good standing
under the laws of the jurisdiction of its incorporation and qualified and
licensed to do business in, and in good standing in, any state where the failure
to be so licensed or qualified reasonably could be expected to cause a Material
Adverse Change.
(b) Set forth on SCHEDULE 5.8, is a complete and accurate list of
Borrower's direct and indirect Subsidiaries, showing: (i) the jurisdiction of
their incorporation; (ii) the number of shares of each class of common and
preferred stock authorized for each of such Subsidiaries; and (iii) the number
and the percentage of the outstanding shares of each such class owned directly
or indirectly by Borrower. All of the outstanding capital stock of each such
Subsidiary has been validly issued and is fully paid and non-assessable.
(c) Except as set forth on SCHEDULE 5.8, no capital stock (or any
securities, instruments, warrants, options, purchase rights, conversion or
exchange rights, calls, commitments or claims of any character convertible into
or exercisable for capital stock) of any direct or indirect Subsidiary of
Borrower is subject to the issuance of any security, instrument,
39
warrant, option, purchase right, conversion or exchange right, call, commitment
or claim of any right, title, or interest therein or thereto.
5.9 DUE AUTHORIZATION; NO CONFLICT. Borrower is duly organized and
existing and in good standing under the laws of the state of its incorporation
and qualified and licensed to do business in, and in good standing in, any state
where the failure to be so licensed or qualified could reasonably be expected to
have a material adverse effect on the business, operations, condition (financial
or otherwise), finances, or prospects of Borrower or on the value of the
Collateral to Foothill.
5.10 LITIGATION. There are no actions or proceedings pending by or
against Borrower before any court or administrative agency and Borrower does not
have knowledge or belief of any pending, threatened, or imminent litigation,
governmental investigations, or claims, complaints, actions, or prosecutions
involving Borrower or any guarantor of the Obligations, except for: (a) ongoing
collection matters in which Borrower is the plaintiff; and (b) current matters
that, if decided adversely to Borrower, would not materially impair the prospect
of repayment of the Obligations or materially impair the value or priority of
the Lender Group's security interests in the Collateral.
5.11 NO MATERIAL ADVERSE CHANGE. All financial statements relating
to Borrower or any guarantor of the Obligations that have been delivered by
Borrower to the Lender Group have been prepared in accordance with GAAP (except,
in the case of unaudited financial statements, for the lack of footnotes and
being subject to year-end audit adjustments) and fairly present Borrower's (or
such guarantor's, as applicable) financial condition as of the date thereof and
Borrower's results of operations for the period then ended. There has not been a
Material Adverse Change with respect to Borrower (or such guarantor, as
applicable) since the date of the latest financial statements submitted to the
Lender Group on or before the Closing Date.
5.12 SOLVENCY. BORROWER IS SOLVENT. No transfer of property is being
made by Borrower and no obligation is being incurred by Borrower in connection
with the transactions contemplated by this Agreement or the other Loan Documents
with the intent to hinder, delay, or defraud either present or future creditors
of Borrower.
5.13 EMPLOYEE BENEFITS. None of Borrower, any of its Subsidiaries,
or any of their ERISA Affiliates maintains or contributes to any Benefit Plan,
other than those listed on SCHEDULE 5.13. Borrower, each of its Subsidiaries and
each ERISA Affiliate have satisfied the minimum funding standards of ERISA and
the IRC with respect to each Benefit Plan to which it is obligated to
contribute. No ERISA Event has occurred nor has any other event occurred that
may result in an ERISA Event that reasonably could be expected to result in a
Material Adverse Change. None of Borrower or its Subsidiaries, any ERISA
Affiliate, or any fiduciary of any Plan is subject to any direct or indirect
liability with respect to any Plan under any applicable law, treaty, rule,
regulation, or agreement. None of Borrower or its Subsidiaries or any ERISA
Affiliate is required to provide security to any Plan under Section 401(a)(29)
of the IRC.
5.14 ENVIRONMENTAL CONDITION. Except as set forth on SCHEDULE 5.14,
none of Borrower's properties or assets has ever been used by Borrower or, to
the best of Borrower's
40
knowledge, by previous owners or operators in the disposal of, or to produce,
store, handle, treat, release, or transport, any Hazardous Materials. None of
Borrower's properties or assets has ever been designated or identified in any
manner pursuant to any environmental protection statute as a Hazardous Materials
disposal site, or a candidate for closure pursuant to any environmental
protection statute. No lien arising under any environmental protection statute
has attached to any revenues or to any real or personal property owned or
operated by Borrower. Borrower has not received a summons, citation, notice, or
directive from the Environmental Protection Agency or any other federal or state
governmental agency concerning any action or omission by Borrower resulting in
the releasing or disposing of Hazardous Materials into the environment.
5.15 YEAR 2000 COMPLIANCE. Borrower is Year 2000 Compliant.
6. AFFIRMATIVE COVENANTS.
Borrower covenants and agrees that, so long as any credit hereunder
shall be available and until full and final payment of the Obligations, Borrower
shall do all of the following:
6.1 ACCOUNTING SYSTEM AND SCHEDULES.
(a) Borrower shall maintain a standard and modern system of
accounting in accordance with GAAP with ledger and account cards or computer
tapes, discs, printouts, and records pertaining to the Collateral which contain
information as from time to time may be requested by Agent. Borrower also shall
keep proper books of account showing all sales, claims, and allowances on its
Inventory.
(b) Schedules of Accounts. With such regularity as Agent shall
require, Borrower shall provide Agent with schedules describing all Accounts.
Agent's failure to request such schedules or Borrower's failure to execute and
deliver such schedules shall not affect or limit the Lender Group's security
interests or other rights in and to the Accounts.
6.2 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES. Borrower agrees to
deliver to Agent: (a) as soon as available, but in any event within 30 days
after the end of each month (or 45 days after the end of fiscal quarter) during
each of Borrower's fiscal years, a company prepared balance sheet, income
statement, and cash flow statement covering Borrower's operations during such
period; and (b) as soon as available, but in any event within 90 days after the
end of each of Borrower's Fiscal Years, financial statements of Borrower for
each such Fiscal Year, audited by independent certified public accountants
reasonably acceptable to Agent and certified, without any going concern or other
material qualifications, by such accountants to have been prepared in accordance
with GAAP, together with a certificate of such accountants addressed to Agent
stating that such accountants do not have knowledge of the existence of any
event or condition constituting an Event of Default, or that would, with the
passage of time or the giving of notice, constitute an Event of Default. Such
audited financial statements shall include a balance sheet, profit and loss
statement, and cash flow statement, and, if prepared, such accountants' letter
to management. If Borrower is a parent company of one or more Subsidiaries, or
Affiliates, or is a Subsidiary or Affiliate of another company, then, in
addition to the financial statements referred to above, Borrower agrees to
deliver financial statements prepared on a
41
consolidating basis so as to present Borrower and each such related entity
separately, and on a consolidated basis.
Together with the above, Borrower also shall deliver to Lenders
Borrower's Form 10-Q Quarterly Reports, Form 10-K Annual Reports, and Form 8-K
Current Reports, and any other filings made by Borrower with the Securities and
Exchange Commission, if any, as soon as the same are filed, or any other
information that is provided by Borrower to its public shareholders, and any
other report reasonably requested by Agent relating to the Collateral and
financial condition of Borrower.
Each month, together with the financial statements provided pursuant
to SECTION 6.2(A), Borrower shall deliver to Agent a certificate signed by its
chief financial officer to the effect that: (i) all reports, statements, or
computer prepared information of any kind or nature delivered or caused to be
delivered to Agent hereunder have been prepared in accordance with GAAP and
fairly present the financial condition of Borrower; (ii) Borrower is in timely
compliance with all of its covenants and agreements hereunder; (iii) the
representations and warranties of Borrower contained in this Agreement and the
other Loan Documents are true and correct in all material respects on and as of
the date of such certificate, as though made on and as of such date (except to
the extent that such representations and warranties relate solely to an earlier
date); and (iv) on the date of delivery of such certificate to Agent there does
not exist any condition or event that constitutes an Event of Default (or, in
each case, to the extent of any non-compliance, describing such non-compliance
as to which he or she may have knowledge and what action Borrower has taken, is
taking, or proposes to take with respect thereto).
Borrower shall have issued written instructions to its independent
certified public accountants authorizing them to communicate with Agent and to
release to Agent whatever financial information concerning Borrower that Agent
may request. Borrower hereby irrevocably authorizes and directs all auditors,
accountants, or other third parties to deliver to Agent, at Borrower's expense,
copies of Borrower's financial statements, papers related thereto, and other
accounting records of any nature in their possession, and to disclose to Agent
any information they may have regarding the Collateral or the financial
condition of Borrower.
6.3 TAX RETURNS. Deliver to Agent copies of each of Borrower's
future federal income tax returns, and any amendments thereto, concurrently with
the filing thereof with the Internal Revenue Service.
6.4 DESIGNATION OF INVENTORY. Borrower shall now and from time to
time hereafter, but not less frequently than weekly (to be delivered each Monday
based upon the close of business on the preceding Saturday), execute and deliver
to Agent a designation of Inventory specifying the retail selling price of
Borrower's Inventory, and not less frequently than monthly, execute and deliver
to Agent a designation of Inventory specifying Borrower's Cost, and further
specifying such other information as Agent may reasonably request. Such
designation shall separately report Inventory that is subject to a letter of
credit issued by any Person other than Agent. Borrower will not include
Inventory in transit in its Inventory reports until such Inventory has been paid
for by draws under applicable letters of credit or has been acquired by Borrower
without letter of credit financing.
42
6.5 STORE OPENINGS AND CLOSINGS AND RENTS REPORTS. Borrower shall
give Agent reasonable prior notice of new store openings and closing of its
stores. Borrower shall make timely payment of all rents on real property leases
where Borrower is the lessee within applicable grace periods, and shall provide
Agent with a monthly report specifying the status of such payments. In the event
that Borrower becomes delinquent in its rent payments, then Agent can establish
reserves against the Borrowing Base for the amount of any landlord liens arising
from such delinquency.
6.6 TITLE TO EQUIPMENT. Upon Agent's request, Borrower shall within
30 days of such request deliver to Agent, properly endorsed, any and all
evidences of ownership of, certificates of title, or applications for title to
any items of Equipment with a market value of $100,000 or more other than
Equipment leased or to be leased.
6.7 MAINTENANCE OF EQUIPMENT. Maintain the Equipment in good
operating condition and repair (ordinary wear and tear excepted), and make all
necessary replacements thereto so that the value and operating efficiency
thereof shall at all times be maintained and preserved. Other than those items
of Equipment that constitute fixtures on the Closing Date, Borrower shall not
permit any item of Equipment to become a fixture to real estate or an accession
to other property, and such Equipment shall at all times remain personal
property.
6.8 TAXES. Cause all assessments and taxes, whether real, personal,
or otherwise, due or payable by, or imposed, levied, or assessed against
Borrower or any of its property to be paid in full, before delinquency or before
the expiration of any extension period, except to the extent that the validity
of such assessment or tax shall be the subject of a Permitted Protest. Borrower
shall make due and timely payment or deposit of all such federal, state, and
local taxes, assessments, or contributions required of it by law, and will
execute and deliver to Agent, on demand, appropriate certificates attesting to
the payment thereof or deposit with respect thereto. Borrower will make timely
payment or deposit of all tax payments and withholding taxes required of it by
applicable laws, including those laws concerning F.I.C.A., F.U.T.A., state
disability, and local, state, and federal income taxes, and will, upon request,
furnish Agent with proof satisfactory to Agent indicating that Borrower has made
such payments or deposits.
6.9 INSURANCE.
(a) Borrower, at its expense, shall keep the Collateral insured
against loss or damage by fire, theft, explosion, sprinklers, and all other
hazards and risks, and in such amounts, as are ordinarily insured against by
other owners in similar businesses. Borrower also shall maintain business
interruption, public liability, product liability, and property damage insurance
relating to Borrower's ownership and use of the Collateral, as well as insurance
against larceny, embezzlement, and criminal misappropriation.
(b) All such policies of insurance shall be in such form, with such
companies, and in such amounts as may be reasonably satisfactory to Agent. All
such policies of insurance (except those of public liability and property
damage) shall contain a 438BFU lender's loss payable endorsement, or an
equivalent endorsement in a form satisfactory to Agent, showing Agent as sole
loss payee thereof, and shall contain a waiver of warranties, and shall specify
that
43
the insurer must give at least 10 days prior written notice to Agent before
canceling its policy for any reason. Borrower shall deliver to Agent certified
copies of such policies of insurance and evidence of the payment of all premiums
therefor. All proceeds payable under any such policy shall be payable to Agent
to be applied on account of the Obligations.
6.10 NO SETOFFS OR COUNTERCLAIMS. Make payments hereunder and under
the other Loan Documents by or on behalf of Borrower without setoff or
counterclaim and free and clear of, and without deduction or withholding for or
on account of, any federal, state, or local taxes.
6.11 LOCATION OF INVENTORY AND EQUIPMENT. Keep the Inventory and
Equipment only at the locations identified on SCHEDULE 6.11; PROVIDED, HOWEVER,
that Borrower may amend SCHEDULE 6.11 so long as such amendment occurs by
written notice to Agent not less than 30 days prior to the date on which the
Inventory or Equipment is moved to such new location, so long as such new
location is within the continental United States, Alaska, Hawaii or Puerto Rico,
and so long as, at the time of such written notification, Borrower provides any
financing statements necessary to perfect and continue perfected the Lien of
Agent for the benefit of the Lender Group in such assets, and Borrower will use
its best efforts to obtain a Collateral Access Agreement if requested by Agent.
6.12 COMPLIANCE WITH LAWS. Comply with the requirements of all
applicable laws, rules, regulations, and orders of any governmental authority,
including the Fair Labor Standards Act and the Americans With Disabilities Act,
other than laws, rules, regulations, and orders the non-compliance with which,
individually or in the aggregate, would not have and could not reasonably be
expected to cause a Material Adverse Change.
6.13 EMPLOYEE BENEFITS.
(a) Deliver to Agent: (i) promptly, and in any event within 10
Business Days after Borrower or any of its Subsidiaries knows or has reason to
know that an ERISA Event has occurred that reasonably could be expected to
result in a Material Adverse Change, a written statement of the chief financial
officer of Borrower describing such ERISA Event and any action that is being
taking with respect thereto by Borrower, any such Subsidiary or ERISA Affiliate,
and any action taken or threatened by the IRS, Department of Labor, or PBGC.
Borrower or such Subsidiary, as applicable, shall be deemed to know all facts
known by the administrator of any Benefit Plan of which it is the plan sponsor,
(ii) promptly, and in any event within three Business Days after the filing
thereof with the IRS, a copy of each funding waiver request filed with respect
to any Benefit Plan and all communications received by Borrower, any of its
Subsidiaries or, to the knowledge of Borrower, any ERISA Affiliate with respect
to such request, and (iii) promptly, and in any event within three Business Days
after receipt by Borrower, any of its Subsidiaries or, to the knowledge of
Borrower, any ERISA Affiliate, of the PBGC's intention to terminate a Benefit
Plan or to have a trustee appointed to administer a Benefit Plan, copies of each
such notice.
(b) Cause to be delivered to Agent, upon Agent's request, each of
the following: (i) a copy of each Plan (or, where any such plan is not in
writing, complete description thereof) (and if applicable, related trust
agreements or other funding instruments) and
44
all amendments thereto, all written interpretations thereof and written
descriptions thereof that have been distributed to employees or former employees
of Borrower or its Subsidiaries; (ii) the most recent determination letter
issued by the IRS with respect to each Benefit Plan; (iii) for the three most
recent plan years, annual reports on Form 5500 Series required to be filed with
any governmental agency for each Benefit Plan; (iv) all actuarial reports
prepared for the last three plan years for each Benefit Plan; (v) a listing of
all Multiemployer Plans, with the aggregate amount of the most recent annual
contributions required to be made by Borrower or any ERISA Affiliate to each
such plan and copies of the collective bargaining agreements requiring such
contributions; (vi) any information that has been provided to Borrower or any
ERISA Affiliate regarding withdrawal liability under any Multiemployer Plan; and
(vii) the aggregate amount of the most recent annual payments made to former
employees of Borrower or its Subsidiaries under any Retiree Health Plan.
6.14 LEASES. Pay when due all rents and other amounts payable under
any leases to which Borrower is a party or by which Borrower's properties and
assets are bound, unless such payments are the subject of a Permitted Protest.
To the extent that Borrower fails timely to make payment of such rents and other
amounts payable when due under its leases, Agent shall be entitled, in its
discretion, to reserve an amount equal to such unpaid amounts against the
Borrowing Base.
7. NEGATIVE COVENANTS.
Borrower covenants and agrees that, so long as any credit hereunder
shall be available and until full and final payment of the Obligations, Borrower
will not do any of the following:
7.1 INDEBTEDNESS. Create, incur, assume, permit, guarantee, or
otherwise become or remain, directly or indirectly, liable with respect to any
Indebtedness, except:
(a) Indebtedness evidenced by this Agreement, together with
Indebtedness to issuers of letters of credit that is the subject of L/C
Guarantees;
(b) Indebtedness set forth in SCHEDULE 7.1;
(c) Indebtedness secured by Permitted Liens;
(d) refinancings, renewals, or extensions of Indebtedness permitted
under clauses (b) and (c) of this SECTION 7.1 (and continuance or renewal of any
Permitted Liens associated therewith) so long as: (i) the terms and conditions
of such refinancings, renewals, or extensions do not materially impair the
prospects of repayment of the Obligations by Borrower, (ii) the net cash
proceeds of such refinancings, renewals, or extensions do not result in an
increase in the aggregate principal amount of the Indebtedness so refinanced,
renewed, or extended, (iii) such refinancings, renewals, refundings, or
extensions do not result in a shortening of the average weighted maturity of the
Indebtedness so refinanced, renewed, or extended, and (iv) to the extent that
Indebtedness that is refinanced was subordinated in right of payment to the
Obligations, then the subordination terms and conditions of the refinancing
Indebtedness must be at least as favorable to the Lender Group as those
applicable to the refinanced Indebtedness;
45
(e) leases, whether operating leases or capital leases of existing
or after acquired Equipment; and
(f) Indebtedness subordinated to the Obligations on terms and
conditions satisfactory to Agent.
7.2 LIENS. Create, incur, assume, or permit to exist, directly or
indirectly, any Lien on or with respect to any of its property or assets, of any
kind, whether now owned or hereafter acquired, or any income or profits
therefrom, except for Permitted Liens (including Liens that are replacements of
Permitted Liens to the extent that the original Indebtedness is refinanced under
SECTION 7.1(D) and so long as the replacement Liens only encumber those assets
or property that secured the original Indebtedness).
7.3 RESTRICTIONS ON FUNDAMENTAL CHANGES. Without Lender's prior
written consent, enter into any merger, consolidation, reorganization, or
recapitalization, or reclassify its capital stock, or liquidate, wind up, or
dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
assign, lease, transfer, or otherwise dispose of, in one transaction or a series
of transactions, all or any substantial part of its property or assets.
7.4 DISPOSAL OF ASSETS. Sell, lease, assign, transfer, or otherwise
dispose of any material portion of Borrower's properties or assets other than
sales of (a) Inventory to buyers in the ordinary course of Borrower's business
as currently conducted and (b) Equipment having a fair market value, in the
aggregate, of up to $500,000 in any Fiscal Year.
7.5 CHANGE NAME. Change Borrower's name, FEIN, corporate structure
(within the meaning of SECTION 9402(7) of the Code), or identity, or add any new
fictitious name.
7.6 GUARANTEE. Guarantee or otherwise become in any way liable with
respect to the obligations of any third Person except by endorsement of
instruments or items of payment for deposit to the account of Borrower or which
are transmitted or turned over to Agent.
7.7 NATURE OF BUSINESS. Make any change in the principal nature of
Borrower's business.
7.8 PREPAYMENTS AND AMENDMENTS.
(a) Except in connection with a refinancing permitted by SECTION
7.1(D), prepay, redeem, retire, defease, purchase, or otherwise acquire any
Indebtedness owing to any third Person, other than the Obligations in accordance
with this Agreement, and
(b) Directly or indirectly, amend, modify, alter, increase, or
change any of the terms or conditions of any agreement, instrument, document,
indenture, or other writing evidencing or concerning Indebtedness permitted
under SECTIONS 7.1(B), (C), or (D).
7.9 CHANGE OF CONTROL. Except for transfers of shares by Borrower's
existing shareholders to members of their immediate family, cause, permit, or
suffer, directly or indirectly, any Change of Control.
46
7.10 CONSIGNMENTS. Consign any Inventory or sell any Inventory on
bill and hold, sale or return, sale on approval, or other conditional terms of
sale.
7.11 DISTRIBUTIONS. Make any distribution or declare or pay any
dividends (in cash or other property, other than capital stock) on, or purchase,
acquire, redeem, or retire any of Borrower's capital stock, of any class,
whether now or hereafter outstanding; PROVIDED, HOWEVER, Borrower may buy back
certain of its capital stock so long as (i) no Event of Default or Default
exists and (ii) there has been at least $17,000,000 of borrowing Availability
under SECTION 2.1 (without being limited by the Maximum Amount) as of the end of
each of the three months preceding such payment or purchase, and on such date,
after taking into account the payment or purchase of such stock.
7.12 ACCOUNTING METHODS. Modify or change its method of accounting
or enter into, modify, or terminate any agreement currently existing, or at any
time hereafter entered into with any third party accounting firm or service
bureau for the preparation or storage of Borrower's accounting records without
said accounting firm or service bureau agreeing to provide Agent information
regarding the Collateral or Borrower's financial condition. Borrower waives the
right to assert a confidential relationship, if any, it may have with any
accounting firm or service bureau in connection with any information requested
by Agent pursuant to or in accordance with this Agreement, and agrees that Agent
may contact directly any such accounting firm or service bureau in order to
obtain such information.
7.13 ADVANCES, INVESTMENTS AND LOANS. Make any Investment except:
(a) Investments in cash and cash equivalents;
(b) so long as no Event of Default shall have occurred and be
continuing, or would occur as a consequence thereof, Borrower and its
Subsidiaries may (i) make loans and advances to employees for moving and travel
expenses and other similar expenses, in each case incurred in the ordinary
course of business, and (ii) make other loans and advances to directors,
officers, employees and Pada Industrial (Far East) Co., Ltd. so long as (A)
there has been at least $6,500,000 of borrowing Availability pursuant to SECTION
2.1 (without being limited by the Maximum Amount) as of the end of each of the
three months preceding such loan or advance and on such date after taking into
account the particular loan or advance and (B) such loans and advances in the
aggregate shall not exceed $6,000,000 outstanding at any one time; and
(c) Investments in existence on the date hereof and so long as no
Event of Default shall have occurred and be continuing, or would occur as a
consequence thereof, extensions, renewals, modifications, restatements or
replacements thereof so long as the aggregate dollar amount of all such
extensions, renewals, modifications, restatements, or replacements does not
exceed the amount of such Investments in existence on the date hereof.
7.14 TRANSACTIONS WITH AFFILIATES. Directly or indirectly enter into
or permit to exist any material transaction with any Affiliate of Borrower
except for: (a) transactions that are in the ordinary course of Borrower's
business, upon fair and reasonable terms, that are fully disclosed to Agent, and
that are no less favorable to Borrower than would be obtained in arm's
47
length transaction with a non-Affiliate, (b) the employment agreement between
Borrower and Ezra Dabah, and (c) the advisory agreement between Borrower and SKM
Investors.
7.15 SUSPENSION. Suspend or go out of a substantial portion of its
business.
7.16 USE OF PROCEEDS. Use (a) the proceeds of the Advances for any
purpose other than (i) on the Closing Date, to pay transactional costs and
expenses incurred in connection with this Agreement, and (ii) thereafter,
consistent with the terms and conditions hereof, for its lawful and permitted
corporate purposes.
7.17 CHANGE IN LOCATION OF CHIEF EXECUTIVE OFFICE; INVENTORY AND
EQUIPMENT WITH BAILEES. Relocate its chief executive office to a new location
without providing 30 days prior written notification thereof to Agent and so
long as, at the time of such written notification, Borrower provides any
financing statements or fixture filings necessary to perfect and continue
perfected the Lien of Agent (for the benefit of the Lender Group) and also
provides to Agent a Collateral Access Agreement with respect to such new
location. The Inventory and Equipment shall not at any time now or hereafter be
stored with a bailee, warehouseman, or similar party without Agent's prior
written consent.
7.18 NO PROHIBITED TRANSACTIONS UNDER ERISA. Directly or indirectly:
(a) engage, or permit any Subsidiary of Borrower to engage, in any
prohibited transaction which is reasonably likely to result in a civil penalty
or excise tax described in SECTIONS 406 of ERISA or 4975 of the IRC for which a
statutory or class exemption is not available or a private exemption has not
been previously obtained from the Department of Labor;
(b) permit to exist with respect to any Benefit Plan any accumulated
funding deficiency (as defined in SECTIONS 302 of ERISA and 412 of the IRC),
whether or not waived;
(c) fail, or permit any Subsidiary of Borrower to fail, to pay
timely required contributions or annual installments due with respect to any
waived funding deficiency to any Benefit Plan;
(d) terminate, or permit any Subsidiary of Borrower to terminate,
any Benefit Plan where such event would result in any liability of Borrower, any
of its Subsidiaries or any ERISA Affiliate under Title IV of ERISA;
(e) fail, or permit any Subsidiary of Borrower to fail, to make any
required contribution or payment to any Multiemployer Plan;
(f) fail, or permit any Subsidiary of Borrower to fail, to pay any
required installment or any other payment required under SECTION 412 of the IRC
on or before the due date for such installment or other payment;
(g) amend, or permit any Subsidiary of Borrower to amend, a Plan
resulting in an increase in current liability for the plan year such that either
of Borrower, any
48
Subsidiary of Borrower or any ERISA Affiliate is required to provide security to
such Plan under SECTION 401(A)(29) of the IRC; or
(h) withdraw, or permit any Subsidiary of Borrower to withdraw, from
any Multiemployer Plan where such withdrawal is reasonably likely to result in
any liability of any such entity under Title IV of ERISA;
which, individually or in the aggregate, results in or reasonably would be
expected to result in a claim against or liability of Borrower, any of its
Subsidiaries or any ERISA Affiliate in excess of $100,000.
7.19 FINANCIAL COVENANTS. Fail to maintain:
(a) Current Ratio. A ratio of Consolidated Current Assets divided by
Consolidated Current Liabilities of at least 1.1:1.0, measured on a fiscal
quarter-end basis; and
(b) EBITDA. EBITDA for the prior three month period of at least the
following amounts for each of the following fiscal quarters:
FISCAL QUARTER ENDING ON OR ABOUT MINIMUM QUARTERLY EBITDA
--------------------------------- ------------------------
July 31, 2000 $ 3,782,000
October 31, 2000 $24,372,000
January 31, 2001 $30,665,000
Borrower shall provide Foothill with its projections for the fiscal years ending
on or about January 31, 2002 and January 31, 2003 on or before January 31, 2001
and January 31, 2002 respectively, which projections shall be acceptable to
Foothill. Foothill shall establish the quarterly EBITDA covenant for the fiscal
years ending on or about January 31, 2002 and January 31, 2003 based upon such
projections if they are acceptable, and if the projections are not acceptable
EBITDA shall be 105% of the 2001 covenants.
7.20 CAPITAL EXPENDITURES. Make capital expenditures in each of the
following Fiscal Years in excess of the applicable amount set forth below:
FISCAL YEAR ENDING ON OR ABOUT MAXIMUM CAPITAL EXPENDITURES
------------------------------ ----------------------------
January 31, 2001 $60,000,000
January 31, 2002 $75,000,000
January 31, 2003 and $90,000,000
each fiscal year thereafter
8. EVENTS OF DEFAULT.
Any one or more of the following events shall constitute an event of
default (each, an "Event of Default") under this Agreement:
49
8.1 If Borrower fails to pay when due and payable or when declared
due and payable, any portion of the Obligations (whether of principal, interest
(including any interest which, but for the provisions of the Bankruptcy Code,
would have accrued on such amounts), fees and charges due the Lender Group,
reimbursement of Lender Group Expenses, or other amounts constituting
Obligations);
8.2 If Borrower fails or neglects to perform, keep, or observe any
term, provision, condition, covenant, or agreement contained in this Agreement,
in any of the Loan Documents, or in any other present or future agreement
between Borrower and the Lender Group; PROVIDED, HOWEVER, that Borrower's
failure or neglect to comply with SECTIONS 6.1(B), 6.2, 6.3, 6.4, 6.5, 6.6, 6.8,
6.11 and 6.13 shall not constitute an Event of Default hereunder unless such
failure or neglect continues for five days or more;
8.3 If there is a material impairment of the prospect of repayment
of any portion of the Obligations owing to the Lender Group or a material
impairment of the value or priority of the Lender Group's security interests in
the Collateral;
8.4 If any material portion of Borrower's properties or assets is
attached, seized, subjected to a writ or distress warrant, or is levied upon, or
comes into the possession of any third Person;
8.5 If an Insolvency Proceeding is commenced by Borrower;
8.6 If an Insolvency Proceeding is commenced against Borrower and
any of the following events occur: (a) Borrower consents to the institution of
the Insolvency Proceeding against it; (b) the petition commencing the Insolvency
Proceeding is not timely controverted; (c) the petition commencing the
Insolvency Proceeding is not dismissed within 45 calendar days of the date of
the filing thereof; provided, however, that, during the pendency of such period,
the Lender Group shall be relieved of its obligation to extend credit hereunder;
(d) an interim trustee is appointed to take possession of all or a substantial
portion of the properties or assets of, or to operate all or any substantial
portion of the business of, Borrower; or (e) an order for relief shall have been
issued or entered therein;
8.7 If Borrower is enjoined, restrained, or in any way prevented by
court order from continuing to conduct all or any material part of its business
affairs;
8.8 If a notice of Lien, levy, or assessment is filed of record with
respect to any of Borrower's properties or assets by the United States
Government, or any department, agency, or instrumentality thereof, or by any
state, county, municipal, or governmental agency, or if any taxes or debts owing
at any time hereafter to any one or more of such entities becomes a Lien,
whether choate or otherwise, upon any of Borrower's properties or assets and the
same is not paid on the payment date thereof;
8.9 If (a) an action or proceeding is brought against Borrower which
is reasonably likely to be decided adversely to Borrower, and such adverse
decision would materially impair the prospect of repayment of the Obligations or
materially impair the value or priority of the Lender Group's security interests
in the Collateral, or (b) if a judgment or other
50
claim in excess of $500,000 becomes a lien or encumbrance upon any material
portion of Borrower's properties or assets and shall remain outstanding 30 days
or longer;
8.10 If there is a default in an agreement involving Indebtedness of
$500,000, or more, or any material agreement to which Borrower is a party with
one or more third Persons resulting in a right by such third Persons,
irrespective of whether exercised, to accelerate the maturity of Borrower's
obligations thereunder;
8.11 If Borrower makes any payment on account of Indebtedness that
has been contractually subordinated in right of payment to the payment of the
Obligations, except to the extent such payment is permitted by the terms of the
subordination provisions applicable to such Indebtedness;
8.12 If any material misstatement or misrepresentation exists now or
hereafter in any warranty, representation, statement, or report made to the
Lender Group by Borrower or any officer, employee, agent, or director of
Borrower, or if any such warranty or representation is withdrawn; or
8.13 If the obligation of any guarantor under its guaranty or other
third Person under any Loan Document is limited or terminated by operation of
law or by the guarantor or other third Person thereunder, or any such guarantor
or other third Person becomes the subject of an Insolvency Proceeding.
9. THE LENDER GROUP'S RIGHTS AND REMEDIES.
9.1 RIGHTS AND REMEDIES. Upon the occurrence, and during the
continuation, of an Event of Default Agent may, pursuant to SECTIONS 17.4 and
17.5, without notice of its election and without demand, do any one or more of
the following, all of which are authorized by Borrower:
(a) Declare all Obligations, whether evidenced by this Agreement, by
any of the other Loan Documents, or otherwise, immediately due and payable;
(b) Cease advancing money or extending credit to or for the benefit
of Borrower under this Agreement, under any of the Loan Documents, or under any
other agreement between Borrower and the Lender Group;
(c) Terminate this Agreement and any of the other Loan Documents as
to any future liability or obligation of the Lender Group, but without affecting
the Lender Group's rights and security interests in the Collateral and without
affecting the Obligations;
(d) Settle or adjust disputes and claims directly with Account
Debtors for amounts and upon terms which Agent considers advisable, and in such
cases, Agent will credit Borrower's Loan Account with only the net amounts
received by Agent in payment of such disputed Accounts after deducting all
Lender Group Expenses incurred or expended in connection therewith;
51
(e) Cause Borrower to hold all returned Inventory in trust for the
Lender Group, segregate all returned Inventory from all other property of
Borrower or in Borrower's possession and conspicuously label said returned
Inventory as the property of the Lender Group;
(f) Without notice to or demand upon Borrower or any guarantor, make
such payments and do such acts as Agent considers necessary or reasonable to
protect its security interests in the Collateral. Borrower agrees to assemble
the Collateral if Agent so requires, and to make the Collateral available to
Agent as Agent may designate. Borrower authorizes Agent to enter the premises
where the Collateral is located, to take and maintain possession of the
Collateral, or any part of it, and to pay, purchase, contest, or compromise any
encumbrance, charge, or Lien that in Agent's determination appears to conflict
with the Liens of Agent (for the benefit of the Lender Group) in the Collateral
and to pay all expenses incurred in connection therewith. With respect to any of
Borrower's owned or leased premises, Borrower hereby grants Agent a license to
enter into possession of such premises and to occupy the same, without charge,
for up to 120 days in order to exercise any of the Lender Group's rights or
remedies provided herein, at law, in equity, or otherwise;
(g) Without notice to Borrower (such notice being expressly waived),
and without constituting a retention of any collateral in satisfaction of an
obligation (within the meaning of Section 9505 of the Code), set off and apply
to the Obligations any and all (i) balances and deposits of Borrower held by the
Lender Group (including any amounts received in the Lockbox Accounts), or (ii)
indebtedness at any time owing to or for the credit or the account of Borrower
held by the Lender Group;
(h) Hold, as cash collateral, any and all balances and deposits of
Borrower held by the Lender Group, and any amounts received in the Lockbox
Accounts, to secure the full and final repayment of all of the Obligations;
(i) Ship, reclaim, recover, store, finish, maintain, repair, prepare
for sale, advertise for sale, and sell (in the manner provided for herein) the
Collateral. Agent is hereby granted a license or other right to use, without
charge, Borrower's labels, patents, copyrights, rights of use of any name, trade
secrets, trade names, trademarks, service marks, and advertising matter, or any
property of a similar nature, as it pertains to the Collateral, in completing
production of, advertising for sale, and selling any Collateral and Borrower's
rights under all licenses and all franchise agreements shall inure to the Lender
Group's benefit;
(j) Sell the Collateral at either a public or private sale, or both,
by way of one or more contracts or transactions, for cash or on terms, in such
manner and at such places (including Borrower's premises) as Agent determines is
commercially reasonable. It is not necessary that the Collateral be present at
any such sale;
(k) Agent shall give notice of the disposition of the Collateral as
follows:
(A) Agent shall give Borrower and each holder of a security
interest in the Collateral who has filed with Agent a written request for
notice, a notice in writing
52
of the time and place of public sale, or, if the sale is a private sale or some
other disposition other than a public sale is to be made of the Collateral, then
the time on or after which the private sale or other disposition is to be made;
(B) The notice shall be personally delivered or mailed, postage
prepaid, to Borrower as provided in SECTION 12, at least five days before the
date fixed for the sale, or at least five days before the date on or after which
the private sale or other disposition is to be made; no notice needs to be given
prior to the disposition of any portion of the Collateral that is perishable or
threatens to decline speedily in value or that is of a type customarily sold on
a recognized market. Notice to Persons other than Borrower claiming an interest
in the Collateral shall be sent to such addresses as they have furnished to
Agent;
(C) If the sale is to be a public sale, Agent also shall
give notice of the time and place by publishing a notice one time at least
five days before the date of the sale in a newspaper of general circulation
in the county in which the sale is to be held;
(l) Agent may credit bid and purchase at any public sale; and
(m) Any deficiency that exists after disposition of the Collateral
as provided above will be paid immediately by Borrower. Any excess will be
returned, without interest and subject to the rights of third Persons, by Agent
to Borrower.
9.2 REMEDIES CUMULATIVE. The Lender Group's rights and remedies
under this Agreement, the Loan Documents, and all other agreements shall be
cumulative. The Lender Group shall have all other rights and remedies not
inconsistent herewith as provided under the Code, by law, or in equity. No
exercise by the Lender Group of one right or remedy shall be deemed an election,
and no waiver by the Lender Group of any Event of Default shall be deemed a
continuing waiver. No delay by the Lender Group shall constitute a waiver,
election, or acquiescence by it.
10. TAXES AND EXPENSES.
If Borrower fails to pay any monies (whether taxes, assessments,
insurance premiums, or, in the case of leased properties or assets, rents or
other amounts payable under such leases) due to third Persons, or fails to make
any deposits or furnish any required proof of payment or deposit, all as
required under the terms of this Agreement, then, to the extent that Agent
determines that such failure by Borrower could result in a Material Adverse
Change, in its discretion and without prior notice to Borrower, Agent may do any
or all of the following: (a) make payment of the same or any part thereof; (b)
set up such reserves in Borrower's Loan Account as Agent deems necessary to
protect the Lender Group from the exposure created by such failure; or (c)
obtain and maintain insurance policies of the type described in SECTION 6.9, and
take any action with respect to such policies as Agent deems prudent. Any such
amounts paid by Agent shall constitute Lender Group Expenses. Any such payments
made by Agent shall not constitute an agreement by the Lender Group to make
similar payments in the future or a waiver by the Lender Group of any Event of
Default under this Agreement. Agent need not inquire as to, or contest the
validity of, any such expense, tax, or Lien and the receipt of the usual
53
official notice for the payment thereof shall be conclusive evidence that the
same was validly due and owing.
11. WAIVERS; INDEMNIFICATION.
11.1 DEMAND; PROTEST; ETC. Borrower waives demand, protest, notice
of protest, notice of default or dishonor, notice of payment and nonpayment,
nonpayment at maturity, release, compromise, settlement, extension, or renewal
of accounts, documents, instruments, chattel paper, and guarantees at any time
held by the Lender Group on which Borrower may in any way be liable.
11.2 THE LENDER GROUP'S LIABILITY FOR COLLATERAL. So long as the
Lender Group complies with its obligations, if any, under Section 9207 of the
Code, the Lender Group shall not in any way or manner be liable or responsible
for: (a) the safekeeping of the Collateral; (b) any loss or damage thereto
occurring or arising in any manner or fashion from any cause; (c) any diminution
in the value thereof; or (d) any act or default of any carrier, warehouseman,
bailee, forwarding agency, or other Person. All risk of loss, damage, or
destruction of the Collateral shall be borne by Borrower.
11.3 INDEMNIFICATION. Borrower shall pay, indemnify, defend, and
hold each Agent-Related Person, each Lender, each Participant, and each of their
respective officers, directors, employees, counsel, agents, and
attorneys-in-fact (each, an "Indemnified Person") harmless (to the fullest
extent permitted by law) from and against any and all claims, demands, suits,
actions, investigations, proceedings, and damages, and all reasonable attorneys
fees and disbursements and other costs and expenses actually incurred in
connection therewith (as and when they are incurred and irrespective of whether
suit is brought), at any time asserted against, imposed upon, or incurred by any
of them in connection with or as a result of or related to the execution,
delivery, enforcement, performance, and administration of this Agreement and any
other Loan Documents or the transactions contemplated herein, and with respect
to any investigation, litigation, or proceeding related to this Agreement, any
other Loan Document, or the use of the proceeds of the credit provided hereunder
(irrespective of whether any Indemnified Person is a party thereto), or any act,
omission, event or circumstance in any manner related thereto (all the
foregoing, collectively, the "Indemnified Liabilities"). Borrower shall have no
obligation to any Indemnified Person under this SECTION 11.3 with respect to any
Indemnified Liability that a court of competent jurisdiction finally determines
to have resulted from the gross negligence or willful misconduct of such
Indemnified Person. This provision shall survive the termination of this
Agreement and the repayment of the Obligations.
12. NOTICES.
Unless otherwise provided in this Agreement, all notices or demands
by any party relating to this Agreement or any other Loan Document shall be in
writing and (except for financial statements and other informational documents
which may be sent by first-class mail, postage prepaid) shall be personally
delivered or sent by registered or certified mail (postage prepaid, return
receipt requested), overnight courier, or telefacsimile to Borrower or to Agent,
as the case may be, at its address set forth below:
54
IF TO BORROWER: THE CHILDREN'S PLACE RETAIL STORES, INC.
915 Secaucus Road
Secaucus, New Jersey 07094
Attn: Chief Financial Officer
Fax No. 201.558.2837
THE CHILDREN'S PLACE RETAIL STORES, INC.
915 Secaucus Road
Secaucus, New Jersey 07094
Attn: General Counsel
Fax No. 201.558.2840
WITH COPIES TO: STROOCK & STROOCK & LAVAN LLP
180 Maiden Lane
New York, New York 10038
Attn: Jeffrey S. Lowenthal, Esq.
Fax No. 212.806.6006
IF TO AGENT OR THE FOOTHILL CAPITAL CORPORATION
LENDER GROUP IN CASE 60 State Street
OF AGENT: Suite 1150
Boston, Massachusetts 02109
Attn: Todd Colpitts, Vice President
Fax No. 617.722.9493
WITH COPIES TO: BUCHALTER, NEMER, FIELDS & YOUNGER
601 So. Figueroa Street
Suite 2400
Los Angeles, California 90017
Attn: Robert C. Colton, Esq.
Fax No. 213.896.0400
The parties hereto may change the address at which they are to
receive notices hereunder, by notice in writing in the foregoing manner given to
the other. All notices or demands sent in accordance with this SECTION 12, other
than notices by Agent in connection with Sections 9504 or 9505 of the Code,
shall be deemed received on the earlier of the date of actual receipt or three
days after the deposit thereof in the mail. Borrower acknowledges and agrees
that notices sent by Agent in connection with Sections 9504 or 9505 of the Code
shall be deemed sent when deposited in the mail or personally delivered, or,
where permitted by law, transmitted by telefacsimile or other similar method set
forth above.
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS
EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT), THE CONSTRUCTION,
INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE
PARTIES
55
HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER
OR RELATED HERETO OR THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA. THE PARTIES
AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND
FEDERAL COURTS LOCATED IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA OR, AT
THE SOLE OPTION OF THE LENDER GROUP, IN ANY OTHER COURT IN WHICH THE LENDER
GROUP SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER
JURISDICTION OVER THE MATTER IN CONTROVERSY. BORROWER AND EACH MEMBER OF THE
LENDER GROUP WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT
EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO
VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION
13. BORROWER AND EACH MEMBER OF THE LENDER GROUP HEREBY WAIVES THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW OR STATUTORY CLAIMS. BORROWER AND EACH MEMBER OF THE LENDER GROUP
REPRESENTS THAT IT HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE
EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT
TO A TRIAL BY THE COURT.
14. DESTRUCTION OF BORROWER'S DOCUMENTS.
All documents, schedules, invoices, agings, or other papers
delivered to Agent may be destroyed or otherwise disposed of by Agent four
months after they are delivered to or received by Agent, unless Borrower
requests, in writing, the return of said documents, schedules, or other papers
and makes arrangements, at Borrower's expense, for their return.
15. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.
15.1 ASSIGNMENTS AND PARTICIPATIONS.
(a) Any Lender may, with the written consent of Agent, assign and
delegate to one or more Eligible Transferees (each an "Assignee") all, or any
ratable part, of the Obligations, the Commitments, and the other rights and
obligations of such Lender hereunder and under the other Loan Documents, in a
minimum amount of $5,000,000; PROVIDED, HOWEVER, that Borrower and Agent may
continue to deal solely and directly with such Lender in connection with the
interest so assigned to an Assignee until (i) written notice of such assignment,
together with payment instructions, addresses, and related information with
respect to the Assignee, shall have been given to Borrower and Agent by such
Lender and the Assignee; (ii) such Lender and its Assignee shall have delivered
to Borrower and Agent a fully executed
56
Assignment and Acceptance ("Assignment and Acceptance") in the form of EXHIBIT
A-1; and (iii) the assignor Lender or Assignee has paid to Agent for Agent's
sole and separate account a processing fee in the amount of $5,000. Anything
contained herein to the contrary notwithstanding, the consent of Agent shall not
be required (and payment of any fees shall not be required) if such assignment
is in connection with any merger, consolidation, sale, transfer, or other
disposition of all or any substantial portion of the business or loan portfolio
of such Lender.
(b) From and after the date that Agent notifies the assignor Lender
that it has received a fully executed Assignment and Acceptance and payment of
the above-referenced processing fee, (i) the Assignee thereunder shall be a
party hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, shall have the rights
and obligations of a Lender under the Loan Documents, and (ii) the assignor
Lender shall, to the extent that rights and obligations hereunder and under the
other Loan Documents have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations under
this Agreement (and in the case of an Assignment and Acceptance covering all or
the remaining portion of an assigning Lender's rights and obligations under this
Agreement and the other Loan Documents, such Lender shall cease to be a party
hereto and thereto), and such assignment shall effect a novation between
Borrower and the Assignee.
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the Assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (1) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties, or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency, or value of this Agreement or any other Loan Document furnished
pursuant hereto; (2) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of
Borrower or any guarantor or the performance or observance by Borrower or any
guarantor of any of its obligations under this Agreement or any other Loan
Document furnished pursuant hereto; (3) such Assignee confirms that it has
received a copy of this Agreement, together with such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (4) such Assignee will,
independently and without reliance upon Agent, such assigning Lender, or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (5) such Assignee appoints and
authorizes Agent to take such action as agent on its behalf and to exercise such
powers under this Agreement as are delegated to Agent by the terms hereof,
together with such powers as are reasonably incidental thereto; and (6) such
Assignee agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Lender.
(d) Immediately upon each Assignee's making its processing fee
payment under the Assignment and Acceptance, this Agreement shall be deemed to
be amended to the extent, but only to the extent, necessary to reflect the
addition of the Assignee and the resulting adjustment of the Commitments of the
Assignor and Assignee arising therefrom. The
57
Commitment allocated to each Assignee shall reduce such Commitment of the
assigning Lender pro tanto.
(e) Any Lender may at any time, with the written consent of Agent,
which consent shall not be unreasonably withheld, sell to one or more Persons (a
"Participant") participating interests in the Obligations, the Commitment, and
the other rights and interests of that Lender (the "Originating Lender")
hereunder and under the other Loan Documents; PROVIDED, HOWEVER, that (i) the
Originating Lender's obligations under this Agreement shall remain unchanged,
(ii) the Originating Lender shall remain solely responsible for the performance
of such obligations, (iii) Borrower and Agent shall continue to deal solely and
directly with the Originating Lender in connection with the Originating Lender's
rights and obligations under this Agreement and the other Loan Documents, (iv)
no Originating Lender shall transfer or grant any participating interest under
which the Participant has the sole and exclusive right to approve any amendment
to, or any consent or waiver with respect to, this Agreement or any other Loan
Document, except to the extent such amendment to, or consent or waiver with
respect to this Agreement or of any other Loan Document would (A) extend the
final maturity date of the Obligations hereunder in which such participant is
participating; (B) reduce the interest rate applicable to the Obligations
hereunder in which such Participant is participating; (C) release all or a
material portion of the Collateral (except to the extent expressly provided
herein or in any of the Loan Documents) supporting the Obligations hereunder in
which such Participant is participating; (D) postpone the payment of, or reduce
the amount of, the interest or fees hereunder in which such Participant is
participating; or (E) change the amount or due dates of scheduled principal
repayments or prepayments or premiums in respect of the Obligations hereunder in
which such Participant is participating; and (v) all amounts payable by Borrower
hereunder shall be determined as if such Originating Lender had not sold such
participation; except that, if amounts outstanding under this Agreement are due
and unpaid, or shall have been declared or shall have become due and payable
upon the occurrence of an Event of Default, each Participant shall be deemed to
have the right of set-off in respect of its participating interest in amounts
owing under this Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement; PROVIDED, HOWEVER, that no Participant may exercise any such right of
setoff without the notice to and consent of Agent. The rights of any Participant
shall only be derivative through the Originating Lender with whom such
Participant participates and no Participant shall have any direct rights as to
the other Lenders, Agent, Borrower, the Collections, the Collateral, or
otherwise in respect of the Advances or the Letters of Credit. No Participant
shall have the right to participate directly in the making of decisions by the
Lenders among themselves. The provisions of this SECTION 15.1(E) are solely for
the benefit of the Lender Group, and Borrower shall have no rights as a third
party beneficiary of any of such provisions.
(f) In connection with any such assignment or participation or
proposed assignment or participation, a Lender may disclose to a third party all
documents and information which it now or hereafter may have relating to
Borrower or Borrower's business.
(g) Notwithstanding any other provision in this Agreement, any
Lender may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in this Agreement in favor of any
Federal Reserve Bank in accordance with Regulation A of the FRB or U.S. Treasury
Regulation 31 CFR ss.203.14, and such
58
Federal Reserve Bank may enforce such pledge or security interest in any manner
permitted under applicable law.
15.2 SUCCESSORS. This Agreement shall bind and inure to the benefit
of the respective successors and assigns of each of the parties; PROVIDED,
HOWEVER, that Borrower may not assign this Agreement or any rights or duties
hereunder without the Lenders' prior written consent and any prohibited
assignment shall be absolutely void. No consent to assignment by the Lenders
shall release Borrower from its Obligations. A Lender may assign this Agreement
and its rights and duties hereunder pursuant to SECTION 15.1 and, except as
expressly required pursuant to SECTION 15.1, no consent or approval by Borrower
is required in connection with any such assignment.
16. AMENDMENTS; WAIVERS.
16.1 AMENDMENTS AND WAIVERS. No amendment or waiver of any provision
of this Agreement or any other Loan Document, and no consent with respect to any
departure by Borrower therefrom, shall be effective unless the same shall be in
writing and signed by the Required Lenders (or by Agent at the written request
of the Required Lenders) and Borrower and then any such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given; provided, however, that no such waiver, amendment, or consent
shall, unless in writing and signed by all the Lenders and Borrower and
acknowledged by Agent, do any of the following:
(a) increase or extend the Commitment of any Lender;
(b) postpone or delay any date fixed by this Agreement or any other
Loan Document for any payment of principal, interest, fees, or other amounts due
to the Lenders (or any of them) hereunder or under any other Loan Document;
(c) reduce the principal of, or the rate of interest specified
herein on, any Loan, or any fees or other amounts payable hereunder or under any
other Loan Document;
(d) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Advances, which is required for the Lenders or
any of them to take any action hereunder;
(e) increase the advance rate with respect to Advances (except for
the restoration of an advance rate after the prior reduction thereof), or change
SECTION 2.1(B);
(f) amend this Section or any provision of the Agreement providing
for consent or other action by all Lenders;
(g) release Collateral other than as permitted by SECTION 17.11;
(h) change the definition of "Required Lenders";
(i) release Borrower from any Obligation for the payment of money;
or
59
(j) amend any of the provisions of ARTICLE 17.
and, PROVIDED FURTHER, that no amendment, waiver or consent shall, unless in
writing and signed by Agent, affect the rights or duties of Agent under this
Agreement or any other Loan Document; and, PROVIDED FURTHER, that the limitation
contained in clause (e) above shall not be deemed to limit the ability of Agent
to make Advances or Agent Loans, as applicable, in accordance with the
provisions of SECTIONS 2.1(G), (H), or (l). The foregoing notwithstanding, any
amendment, modification, waiver, consent, termination, or release of or with
respect to any provision of this Agreement or any other Loan Document that
relates only to the relationship of the Lender Group among themselves, and that
does not affect the rights or obligations of Borrower, shall not require consent
by or the agreement of Borrower.
16.2 NO WAIVERS; CUMULATIVE REMEDIES. No failure by Agent or any
Lender to exercise any right, remedy, or option under this Agreement, any other
Loan Document, or any present or future supplement hereto or thereto, or in any
other agreement between or among Borrower and Agent and/or any Lender, or delay
by Agent or any Lender in exercising the same, will operate as a waiver thereof.
No waiver by Agent or any Lender will be effective unless it is in writing, and
then only to the extent specifically stated. No waiver by Agent or the Lenders
on any occasion shall affect or diminish Agent's and each Lender's rights
thereafter to require strict performance by Borrower of any provision of this
Agreement. Agent's and each Lender's rights under this Agreement and the other
Loan Documents will be cumulative and not exclusive of any other right or remedy
which Agent or any Lender may have.
17. AGENT; THE LENDER GROUP.
17.1 APPOINTMENT AND AUTHORIZATION OF AGENT. Each Lender hereby
designates and appoints Foothill as its Agent under this Agreement and the other
Loan Documents and each Lender hereby irrevocably authorizes 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. Agent agrees to
act as such on the express conditions contained in this ARTICLE 17. The
provisions of this ARTICLE 17 are solely for the benefit of Agent and the
Lenders, and Borrower shall not have any rights as a third party beneficiary of
any of the provisions contained herein; provided, however, that the provisions
of SECTIONS 17.10, 17.11, and 17.16(D) also shall be for the benefit of
Borrowers. Any provision to the contrary contained elsewhere in this Agreement
or in any other Loan Document notwithstanding, Agent shall not have any duties
or responsibilities, except those expressly set forth herein, nor shall Agent
have or be deemed to have any fiduciary relationship with any Lender, 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 Agent. Except as expressly otherwise provided in this
Agreement, Agent shall have and may use its sole discretion with respect to
exercising or refraining from exercising any discretionary rights or taking or
refraining from taking any actions which Agent is expressly entitled to take or
assert under or pursuant to this Agreement and the other Loan Documents,
including making the determinations contemplated by SECTION 2.1(B). Without
limiting the generality of the foregoing, or of any other provision of the Loan
Documents that provides rights or powers to Agent, Lenders agree that Agent
shall have
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the right to exercise the following powers as long as this Agreement remains in
effect: (a) maintain, in accordance with its customary business practices,
ledgers and records reflecting the status of the Advances, the Collateral, the
Collections, and related matters; (b) execute and/or file any and all financing
or similar statements or notices, amendments, renewals, supplements, documents,
instruments, proofs of claim for Lenders, notices and other written agreements
with respect to the Loan Documents; (c) make Advances for itself or on behalf of
Lenders as provided in the Loan Documents; (d) exclusively receive, apply, and
distribute the Collections as provided in the Loan Documents; (e) open and
maintain such bank accounts and lock boxes as Agent deems necessary and
appropriate in accordance with the Loan Documents for the foregoing purposes
with respect to the Collateral and the Collections; (f) perform, exercise, and
enforce any and all other rights and remedies of the Lender Group with respect
to Borrower, the Advances, the Collateral, the Collections, or otherwise related
to any of same as provided in the Loan Documents; and (g) incur and pay such
Lender Group Expenses as Agent may deem necessary or appropriate for the
performance and fulfillment of its functions and powers pursuant to the Loan
Documents.
17.2 DELEGATION OF DUTIES. Except as otherwise provided in this
Section, Agent may execute any of its duties under this Agreement or any other
Loan Document by or through agents, employees, or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties.
Agent shall not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects as long as such selection was made in
compliance with this Section and without gross negligence or willful misconduct.
The foregoing notwithstanding, Agent shall not make any material delegation of
duties to subagents or non-employee delegees without the prior written consent
of Required Lenders (it being understood that routine delegation of such
administrative matters as filing financing statements, or conducting appraisals
or audits, is not viewed as a material delegation that requires prior Required
Lender approval).
17.3 LIABILITY OF AGENT-RELATED PERSONS. None of the Agent-Related
Persons shall (i) be liable for any action taken or omitted to be taken by any
of them under or in connection with this Agreement or any other Loan Document or
the transactions contemplated hereby (except for its own gross negligence or
willful misconduct), or, (ii) be responsible in any manner to any of the Lenders
for any recital, statement, representation or warranty made by Borrower, or any
Subsidiary or Affiliate of Borrower, or any officer or director thereof,
contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement, or other document referred to or provided for
in, or received by 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 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 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
Borrower, or any of Borrower's Subsidiaries or Affiliates.
17.4 RELIANCE BY AGENT. Agent shall be entitled to rely, and shall
be fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex, or telephone
message, statement or other document or conversation
61
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 Borrower or counsel to any Lender), independent
accountants, and other experts selected by Agent. Agent shall be fully justified
in failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Required Lenders or all Lenders, as applicable, and until such instructions are
received, Agent shall act, or refrain from acting, as it deems advisable so long
as it is not grossly negligent or guilty of wilful misconduct. If Agent so
requests, it shall first be indemnified to its reasonable satisfaction by
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. 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 Lenders, as applicable, and such request and any action
taken or failure to act pursuant thereto shall be binding upon all of the
Lenders.
17.5 NOTICE OF DEFAULT OR EVENT OF DEFAULT. 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,
fees, and expenses required to be paid to Agent for the account of Agent or the
Lenders, except with respect to actual knowledge of the existence of an
Overadvance, and except with respect to Defaults and Events of Default of which
Agent has actual knowledge, unless Agent shall have received written notice from
a Lender or Borrower referring to this Agreement, describing such Default or
Event of Default, and stating that such notice is a "notice of default." Agent
promptly will notify the Lenders of its receipt of any such notice or of any
Event of Default of which Agent has, or is deemed to have, actual knowledge. If
any Lender obtains actual knowledge of any Event of Default, such Lender
promptly shall notify the other Lenders and Agent of such Event of Default. Each
Lender shall be solely responsible for giving any notices to its Participants,
if any. Subject to SECTION 17.4, Agent shall take such action with respect to
such Default or Event of Default as may be requested by the Required Lenders;
PROVIDED, HOWEVER, that:
(a) At all times, Agent may propose and, with the consent of
Required Lenders (which shall not be unreasonably withheld and which shall be
deemed to have been given by a Lender unless such Lender has notified Agent to
the contrary in writing within three days of notification of such proposed
actions by Agent) exercise, any remedies on behalf of the Lender Group; and
(b) At all times, once Required Lenders or all Lenders, as the case
may be, have approved the exercise of a particular remedy or pursuit of a course
of action, Agent may, but shall not be obligated to, make all administrative
decisions in connection therewith or take all other actions reasonably
incidental thereto (for example, if the Required Lenders approve the foreclosure
of certain Collateral, Agent shall not be required to seek consent for the
administrative aspects of conducting such sale or handling of such Collateral).
17.6 CREDIT DECISION. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by Agent hereinafter taken, including any review of the affairs of Borrower
and its Subsidiaries or Affiliates, shall be deemed to constitute any
representation or warranty by any Agent-Related
62
Person to any Lender. Each Lender represents to 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 Borrower and any other Person (other
than the Lender Group) party to a Loan Document, and all applicable bank
regulatory laws relating to the transactions contemplated hereby, and made its
own decision to enter into this Agreement and to extend credit to Borrower. 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 Borrower, and any other
Person (other than the Lender Group) party to a Loan Document. Except for
notices, reports, and other documents expressly herein required to be furnished
to the Lenders by Agent, 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 Borrower, and any other Person party to a Loan Document that
may come into the possession of any of the Agent-Related Persons.
17.7 COSTS AND EXPENSES; INDEMNIFICATION. Agent may incur and pay
Lender Group Expenses to the extent Agent deems reasonably necessary or
appropriate for the performance and fulfillment of its functions, powers, and
obligations pursuant to the Loan Documents, including without limiting the
generality of the foregoing, but subject to any requirements of the Loan
Documents that it obtain any applicable consents or engage in any required
consultation, court costs, reasonable attorneys fees and expenses, costs of
collection by outside collection agencies and auctioneer fees and costs of
security guards or insurance premiums paid to maintain the Collateral, whether
or not Borrower is obligated to reimburse Agent or Lenders for such expenses
pursuant to the Loan Agreement or otherwise. Agent is authorized and directed to
deduct and retain sufficient amounts from Collections to reimburse Agent for
such out-of-pocket costs and expenses prior to the distribution of any amounts
to Lenders. In the event Agent is not reimbursed for such costs and expenses
from Collections, each Lender hereby agrees that it is and shall be obligated to
pay to or reimburse Agent for the amount of such Lender's Pro Rata Share
thereof. Whether or not the transactions contemplated hereby are consummated,
the Lenders shall indemnify upon demand the Agent-Related Persons (to the extent
not reimbursed by or on behalf of Borrower and without limiting the obligation
of Borrower to do so), according to their Pro Rata Shares, from and against any
and all Indemnified Liabilities; PROVIDED, HOWEVER, that no Lender shall be
liable for the payment to the Agent-Related Persons of any portion of such
Indemnified Liabilities resulting solely from such Person's gross negligence,
bad faith, or willful misconduct. Without limitation of the foregoing, each
Lender shall reimburse Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including attorney fees and expenses) incurred by 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, to the extent that Agent is not
reimbursed for such
63
expenses by or on behalf of Borrower. The undertaking in this SECTION 17.7 shall
survive the payment of all Obligations hereunder and the resignation or
replacement of Agent.
17.8 AGENT IN INDIVIDUAL CAPACITY. Foothill 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 Borrower and its
Subsidiaries and Affiliates and any other Person party to any Loan Documents as
though Foothill were not Agent hereunder without notice to or consent of the
Lenders. The Lenders acknowledge that, pursuant to such activities, Foothill and
its Affiliates may receive information regarding Borrower or their Affiliates
and any other Person party to any Loan Documents that is subject to
confidentiality obligations in favor of Borrower or such other Person and that
prohibit the disclosure of such information to the Lenders, and the Lenders
acknowledge that, in such circumstances (and in the absence of a waiver of such
confidentiality obligations, which waiver Agent will use its reasonable best
efforts to obtain), Agent shall be under no obligation to provide such
information to them. With respect to the Agent Loans and Agent Advances,
Foothill shall have the same rights and powers under this Agreement as any other
Lender and may exercise the same as though it were not Agent, and the terms
"Lender" and "Lenders" include Foothill in its individual capacity.
17.9 SUCCESSOR AGENT. Agent may resign as Agent following notice of
such resignation ("Notice") to the Lenders and Borrower, and effective upon the
appointment of and acceptance of such appointment by, a successor Agent. If
Agent resigns under this Agreement, the Required Lenders shall appoint any
Lender or Eligible Transferee as successor Agent for the Lenders. If no
successor Agent is appointed within 30 days of such retiring Agent's Notice,
Agent may appoint a successor Agent, after consulting with the Lenders and
Borrower. In any such event, upon the acceptance of its appointment as successor
Agent hereunder, such successor Agent shall succeed to all the rights, powers
and duties of the retiring Agent and the term "Agent" shall mean such successor
Agent and the retiring Agent's appointment, powers, and duties as Agent shall be
terminated. After any retiring Agent's resignation hereunder as Agent, the
provisions of this SECTION 17 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this Agreement.
17.10 WITHHOLDING TAX.
(a) If any Lender is a "foreign corporation, partnership or trust"
within the meaning of the IRC and such Lender claims exemption from, or a
reduction of, U.S. withholding tax under Sections 1441 or 1442 of the IRC, such
Lender agrees with and in favor of Agent and Borrower, to deliver to Agent and
Borrower:
(i) if such Lender claims an exemption from, or a reduction of,
withholding tax under a United States tax treaty, properly completed IRS Forms
1001 and W-8 before the payment of any interest in the first calendar year and
before the payment of any interest in each third succeeding calendar year during
which interest may be paid under this Agreement;
(ii) if such Lender claims that interest paid under this
Agreement is exempt from United States withholding tax because it is effectively
connected with
64
a United States trade or business of such Lender, two properly completed and
executed copies of IRS Form 4224 before the payment of any interest is due in
the first taxable year of such Lender and in each succeeding taxable year of
such Lender during which interest may be paid under this Agreement, and IRS Form
W-9; and
(iii) such other form or forms as may be required under the IRC
or other laws of the United States as a condition to exemption from, or
reduction of, United States withholding tax.
Such Lender agrees to promptly notify Agent and Borrower of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction.
(b) If any Lender claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form 1001 and
such Lender sells, assigns, grants a participation in, or otherwise transfers
all or part of the Obligations of Borrower, such Lender agrees to notify Agent
and Borrower of the percentage amount in which it is no longer the beneficial
owner of Obligations of Borrower to such Lender. To the extent of such
percentage amount, Agent and Borrower will treat such Lender's IRS Form 1001 as
no longer valid.
(c) If any Lender claiming exemption from United States withholding
tax by filing IRS Form 4224 with Agent sells, assigns, grants a participation
in, or otherwise transfers all or part of the Obligations of Borrower to such
Lender, such Lender agrees to undertake sole responsibility for complying with
the withholding tax requirements imposed by Sections 1441 and 1442 of the IRC.
(d) If any Lender is entitled to a reduction in the applicable
withholding tax, Agent may withhold from any interest payment to such Lender an
amount equivalent to the applicable withholding tax after taking into account
such reduction. If the forms or other documentation required by subsection (a)
of this Section are not delivered to Agent, then Agent may withhold from any
interest payment to such Lender not providing such forms or other documentation
an amount equivalent to the applicable withholding tax.
(e) If the IRS or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that Agent or Borrower did not
properly withhold tax from amounts paid to or for the account of any Lender
(because the appropriate form was not delivered, was not properly executed, or
because such Lender failed to notify Agent and Borrower of a change in
circumstances which rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason) such Lender shall indemnify Agent and
Borrower fully for all amounts paid, directly or indirectly, by Agent or
Borrower as tax or otherwise, including penalties and interest, and including
any taxes imposed by any jurisdiction on the amounts payable to Agent or
Borrower under this Section, together with all costs and expenses (including
attorneys fees and expenses). The obligation of the Lenders under this
subsection shall survive the payment of all Obligations and the resignation of
Agent.
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17.11 COLLATERAL MATTERS.
(a) The Lenders hereby irrevocably authorize Agent, to release any
Lien on any Collateral (i) upon the termination of the Commitments and payment
and satisfaction in full by Borrower of all Obligations; and upon such
termination and payment Agent shall deliver to Borrower, at Borrower's sole cost
and expense, all UCC termination statements and any other documents necessary to
terminate the Loan Documents and release the Liens with respect to the
Collateral; (ii) constituting property being sold or disposed of if a release is
required or desirable in connection therewith and if Borrower certifies to Agent
that the sale or disposition is permitted under SECTION 7.4 of this Agreement or
the other Loan Documents (and Agent may rely conclusively on any such
certificate, without further inquiry); (iii) constituting property in which
Borrower owned no interest at the time the Lien was granted or at any time
thereafter; or (iv) constituting property leased to Borrower under a lease that
has expired or been terminated in a transaction permitted under this Agreement.
Except as provided above, Agent will not release any Lien on any Collateral
without the prior written authorization of the Lenders. Upon request by Agent or
Borrower at any time, the Lenders will confirm in writing Agent's authority to
release any such Liens on particular types or items of Collateral pursuant to
this SECTION 17.11; PROVIDED, HOWEVER, that (i) Agent shall not be required to
execute any document necessary to evidence such release on terms that, in
Agent's opinion, would expose Agent to liability or create any obligation or
entail any consequence other than the release of such Lien without recourse,
representation, or warranty, and (ii) such release shall not in any manner
discharge, affect or impair the Obligations or any Liens (other than those
expressly being released), upon (or obligations of Borrower in respect of) all
interests retained by Borrower, including, the proceeds of any sale, all of
which shall continue to constitute part of the Collateral.
(b) Agent shall have no obligation whatsoever to any of the Lenders
to assure that the Collateral exists or is owned by Borrower, is cared for,
protected, or insured or has been encumbered, or that the Liens of the Agent
(for the benefit of the Lender Group) have been properly or sufficiently or
lawfully created, perfected, protected, or enforced or are entitled to any
particular priority, or to exercise at all or in any particular manner or under
any duty of care, disclosure, or fidelity, or to continue exercising, any of the
rights, authorities and powers granted or available to Agent pursuant to any of
the Loan Documents, it being understood and agreed that in respect of the
Collateral, or any act, omission or event related thereto, subject to the terms
and conditions contained herein, Agent may act in any manner it may deem
appropriate, in its sole discretion given Agent's own interest in the Collateral
in its capacity as one of the Lenders and that Agent shall have no other duty or
liability whatsoever to any Lender as to any of the foregoing, except as
otherwise provided herein.
17.12 RESTRICTIONS ON ACTIONS BY LENDERS; SHARING OF PAYMENTS.
(a) Each of the Lenders agrees that it shall not, without the
express consent of Agent, and that it shall, to the extent it is lawfully
entitled to do so, upon the request of Agent, set off against the Obligations
any amounts owing by such Lender to Borrower or any accounts of Borrower now or
hereafter maintained with such Lender. Each of the Lenders further agrees that
it shall not, unless specifically requested to do so by Agent, take or cause to
be taken any action, including the commencement of any legal or equitable
proceedings, to foreclose any Lien on, or otherwise enforce any security
interest in, any of the Collateral the
66
purpose of which is, or could be, to give such Lender any preference or priority
against the other Lenders with respect to the Collateral.
(b) Subject to SECTION 17.8, if, at any time or times any Lender
shall receive (i) by payment, foreclosure, setoff, or otherwise, any proceeds of
Collateral or any payments with respect to the Obligations of Borrower to such
Lender arising under, or relating to, this Agreement or the other Loan
Documents, except for any such proceeds or payments received by such Lender from
Agent pursuant to the terms of this Agreement, or (ii) payments from Agent in
excess of such Lender's Pro Rata Share of all such distributions by Agent, such
Lender shall promptly (1) turn the same over to Agent, in kind, and with such
endorsements as may be required to negotiate the same to Agent, or in same day
funds, as applicable, for the account of all of the Lenders and for application
to the Obligations in accordance with the applicable provisions of this
Agreement, or (2) purchase, without recourse or warranty, an undivided interest
and participation in the Obligations owed to the other Lenders so that such
excess payment received shall be applied ratably as among the Lenders in
accordance with their Pro Rata Shares; PROVIDED, HOWEVER, that if all or part of
such excess payment received by the purchasing party is thereafter recovered
from it, those purchases of participations shall be rescinded in whole or in
part, as applicable, and the applicable portion of the purchase price paid
therefor shall be returned to such purchasing party, but without interest except
to the extent that such purchasing party is required to pay interest in
connection with the recovery of the excess payment.
17.13 AGENCY FOR PERFECTION. Agent and each Lender hereby appoints
each other Lender as agent for the purpose of perfecting the Liens of the Lender
Group in assets which, in accordance with Division 9 of the UCC can be perfected
only by possession. Should any Lender obtain possession of any such Collateral,
such Lender shall notify Agent thereof, and, promptly upon Agent's request
therefor shall deliver such Collateral to Agent or in accordance with Agent's
instructions.
17.14 PAYMENTS BY AGENT TO THE LENDERS. All payments to be made by
Agent to the Lenders shall be made by bank wire transfer or internal transfer of
immediately available funds pursuant to the instructions set forth on SCHEDULE
C-1, or pursuant to such other wire transfer instructions as each party may
designate for itself by written notice to Agent. Concurrently with each such
payment, Agent shall identify whether such payment (or any portion thereof)
represents principal, premium or interest on revolving advances or otherwise.
17.15 CONCERNING THE COLLATERAL AND RELATED LOAN DOCUMENTS. Each
member of the Lender Group authorizes and directs Agent to enter into this
Agreement and the other Loan Documents relating to the Collateral, for the
ratable benefit (subject to SECTION 4.1) of the Lender Group. Each member of the
Lender Group agrees that any action taken by Agent, Required Lenders, or all
Lenders, as applicable, in accordance with the terms of this Agreement or the
other Loan Documents relating to the Collateral and the exercise by Agent,
Required Lenders, or all Lenders, as applicable, of their respective powers set
forth therein or herein, together with such other powers that are reasonably
incidental thereto, shall be binding upon all of the Lenders.
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17.16 FIELD AUDITS AND EXAMINATION REPORTS; CONFIDENTIALITY;
DISCLAIMERS BY LENDERS; OTHER REPORTS AND INFORMATION. By signing this
Agreement, each Lender;
(a) is deemed to have requested that Agent furnish such Lender,
promptly after it becomes available, a copy of each field audit or examination
report (each a "Report" and collectively, "Reports") prepared by Agent, and
Agent shall so furnish each Lender with such Reports;
(b) expressly agrees and acknowledges that Agent (i) does not make
any representation or warranty as to the accuracy of any Report, and (ii) shall
not be liable for any information contained in any Report;
(c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that Agent or other party performing any
audit or examination will inspect only specific information regarding Borrower
and will rely significantly upon Borrower's books and records, as well as on
representations of Borrower's personnel;
(d) agrees to keep all Reports and other material information
obtained by it pursuant to the requirements of this Agreement in accordance with
its reasonable customary procedures for handling confidential information; it
being understood and agreed by Borrower that in any event such Lender may make
disclosures (i) reasonably required by any bona fide potential or actual
Assignee, transferee, or Participant in connection with any contemplated or
actual assignment or transfer by such Lender of an interest herein or any
participation interest in such Lender's rights hereunder, (ii) of information
that has become public by disclosures made by Persons other than such Lender,
its Affiliates, assignees, transferees, or participants, or (iii) as required or
requested by any court, governmental or administrative agency, pursuant to any
subpoena or other legal process, or by any law, statute, regulation, or court
order; PROVIDED, HOWEVER, that, unless prohibited by applicable law, statute,
regulation, or court order, such Lender shall notify Borrower of any request by
any court, governmental or administrative agency, or pursuant to any subpoena or
other legal process for disclosure of any such non-public material information
concurrent with, or where practicable, prior to the disclosure thereof; and
(e) without limiting the generality of any other indemnification
provision contained in this Agreement, agrees: (i) to hold Agent and any such
other Lender preparing a Report harmless from any action the indemnifying Lender
may take or conclusion the indemnifying Lender may reach or draw from any Report
in connection with any loans or other credit accommodations that the
indemnifying Lender has made or may make to Borrower, or the indemnifying
Lender's participation in, or the indemnifying Lender's purchase of, a loan or
loans of Borrower; and (ii) to pay and protect, and indemnify, defend, and hold
Agent and any such other Lender preparing a Report harmless from and against,
the claims, actions, proceedings, damages, costs, expenses and other amounts
(including, attorney costs) incurred by Agent and any such other Lender
preparing a Report as the direct or indirect result of any third parties who
might obtain all or part of any Report through the indemnifying Lender.
In addition to the foregoing: (x) any Lender may from time to time request of
Agent in writing that Agent provide to such Lender a copy of any report or
document provided by Borrower to Agent, and, upon receipt of such request, Agent
shall provide a copy of same to such Lender
68
promptly upon receipt thereof; (y) to the extent that Agent is entitled, under
any provision of the Loan Documents, to request additional reports or
information from Borrower, any Lender may, from time to time, reasonably request
Agent to exercise such right as specified in such Lender's notice to Agent,
whereupon Agent promptly shall request of Borrower the additional reports or
information specified by such Lender, and, upon receipt thereof, Agent promptly
shall provide a copy of same to such Lender; and (z) any time that Agent renders
to Borrower a statement regarding the Loan Account, Agent shall send a copy of
such statement to each Lender.
17.17 SEVERAL OBLIGATIONS; NO LIABILITY. Notwithstanding that
certain of the Loan Documents now or hereafter may have been or will be executed
only by or in favor of Agent in its capacity as such, and not by or in favor of
the Lenders, any and all obligations on the part of Agent (if any) to make any
Advances shall constitute the several (and not joint) obligations of the
respective Lenders on a ratable basis, according to their respective
Commitments, to make an amount of such Advances not to exceed, in principal
amount, at any one time outstanding, the amount of their respective Commitments.
Nothing contained herein shall confer upon any Lender any interest in, or
subject any Lender to any liability for, or in respect of, the business, assets,
profits, losses, or liabilities of any other Lender. Each Lender shall be solely
responsible for notifying its Participants of any matters relating to the Loan
Documents to the extent any such notice may be required, and no Lender shall
have any obligation, duty, or liability to any Participant of any other Lender.
Except as provided in SECTION 17.7, no member of the Lender Group shall have any
liability for the acts of any other member of the Lender Group. No Lender shall
be responsible to Borrower or any other Person for any failure by any other
Lender to fulfill its obligations to make Advances, nor to advance for it or on
its behalf in connection with its Commitment, nor to take any other action on
its behalf hereunder or in connection with the financing contemplated herein.
18. GENERAL PROVISIONS.
18.1 EFFECTIVENESS. This Agreement shall be binding and deemed
effective when executed by Borrower and the Lender Group.
18.2 SECTION HEADINGS. Headings and numbers have been set forth
herein for convenience only. Unless the contrary is compelled by the context,
everything contained in each section applies equally to this entire Agreement.
18.3 INTERPRETATION. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against the Lender Group or
Borrower, whether under any rule of construction or otherwise. On the contrary,
this Agreement has been reviewed by all parties and shall be construed and
interpreted according to the ordinary meaning of the words used so as to fairly
accomplish the purposes and intentions of all parties hereto.
18.4 SEVERABILITY OF PROVISIONS. Each provision of this Agreement
shall be severable from every other provision of this Agreement for the purpose
of determining the legal enforceability of any specific provision.
18.5 COUNTERPARTS; TELEFACSIMILE EXECUTION. This Agreement may be
executed in any number of counterparts and by different parties on separate
counterparts, each of
69
which, when executed and delivered, shall be deemed to be an original, and all
of which, when taken together, shall constitute but one and the same Agreement.
Delivery of an executed counterpart of this Agreement by telefacsimile shall be
equally as effective as delivery of an original executed counterpart of this
Agreement. Any party delivering an executed counterpart of this Agreement by
telefacsimile also shall deliver an original executed counterpart of this
Agreement but the failure to deliver an original executed counterpart shall not
affect the validity, enforceability, and binding effect of this Agreement.
18.6 REVIVAL AND REINSTATEMENT OF OBLIGATIONS.
(a) If the incurrence or payment of the Obligations by Borrower or
any guarantor of the Obligations or the transfer by any or all of such parties
to the Lender Group of any property of either or both of such parties should for
any reason subsequently be declared to be void or voidable under any state or
federal law relating to creditors' rights, including provisions of the
Bankruptcy Code relating to fraudulent conveyances, preferences, and other
voidable or recoverable payments of money or transfers of property
(collectively, a "Voidable Transfer"), and if the Lender Group is required to
repay or restore, in whole or in part, any such Voidable Transfer, or elects to
do so upon the reasonable advice of its counsel, then, as to any such Voidable
Transfer, or the amount thereof that the Lender Group is required or elects to
repay or restore, and as to all reasonable costs, expenses, and attorneys fees
of the Lender Group related thereto, the liability of Borrower or such guarantor
automatically shall be revived, reinstated, and restored and shall exist as
though such Voidable Transfer had never been made.
70
18.7 INTEGRATION. This Agreement, together with the other Loan
Documents, reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date set forth in the first paragraph of this Agreement.
THE CHILDREN'S PLACE RETAIL STORES, INC.,
a Delaware corporation
By /s/ Seth L. Udasin
----------------------------------
Title: VP & CFO
------------------------------
FOOTHILL CAPITAL CORPORATION,
a California corporation, as Agent and as a Lender
By /s/ Steve M. Cole
----------------------------------
Title: SVP
------------------------------
FLEET RETAIL FINANCE INC.,
as a Lender
By /s/ Robert Deangelis
----------------------------------
Title: SVP
-------------------------------
71
COMMITMENTS ON CLOSING DATE
Foothill Capital Corporation $50,000,000
Fleet Retail Finance Inc. $25,000,000
-----------
Total $75,000,000
72
SCHEDULE E-1
Eligible Inventory
See Schedule 6.11
SCHEDULE P-1
Permitted Liens
1. Security Interest filed April 19, 1999 of Raymond Leasing Corporation in
leased forklift machines securing the lease obligation.
2. Security Interest filed August 27, 1997 of International Leasing Corporation
in five traffic counting machines securing a lease obligation.
3. Security Interest filed July 13, 1999 of Newcourt Communications Finance
Corporation in telecommunications equipment securing a lease obligation.
4. Security Interest filed May 7, 1999 of Forsythe/McArthur Associate Inc. in
computer communications equipment securing a lease obligation.
5. Security Interest filed January 22, 1996 of General Electric Capital Corp. in
pattern making equipment securing a lease obligation.
SCHEDULE 5.8
Subsidiaries of The Children's Place Retail Stores, Inc.
o The Children's Place (Hong Kong) Limited, a Hong Kong corporation
Number of Shares of Stock of Subsidiary: 10,000
Number (and Percentage) Owned by Parent: 9,999 (99.99%)
o TCPIP Holding Company, Inc., a Delaware corporation
Number of Shares of Stock of Subsidiary: 1,000
Number (and Percentage) Owned by Parent: 1,000 (100%)
o thechildrensplace.com, inc., a Delaware corporation
Number of Shares of Stock of Subsidiary: 10,000
Number (and Percentage) Owned by Parent: 10,000 (100%)
o The Children's Place (Australia) Pty. Ltd., an Australian corporation
Number of Shares of Stock of Subsidiary: _____
Number (and Percentage) Owned by Parent: _____ (100%)
SCHEDULE 5.13
ERISA Benefit Plans
The Children's Place 401(k) Plan
SCHEDULE 5.14
Environmental Condition
In connection with Schedule 5.14, the only exception involves the purchase of
certain children's pearl necklaces from The Children's Place's agent, March
Development of Taiwan, in or about October 1991. The Children's Place sold the
pearl necklaces to Leonard Howard who distributed the necklaces to Name Brand
Stores. The United States Testing Company, Inc. determined that the necklaces
contained straight chain hydrocarbon (oil) that was within each pearl. A sample
of the liquid filled necklace indicated that it is free from bacterial
contamination and did not have detectable viable bacteria. Accordingly, The
Children's Place took measures to properly dispose of all of the necklaces which
had been sold and/or distributed. The oil in the remaining necklaces has been
drained into a drum. Safety-Kleen, an environmental substance cleanup company,
has disposed of this drum.
SCHEDULE 6.11
Locations of Inventory and Equipment
915 Secaucus Road, Secaucus, New Jersey
45 Enterprise Avenue, Secaucus, New Jersey
300 Delaware Avenue, Suite 1262, Wilmington, Delaware
1 Hung-To Road, Suite 2706, Kwun Tong, Kowloon, Hong Kong
See Attached Store List
THE CHILDREN'S PLACE
351 STORES
11-Sep-00
STORE # STORE NAME ADDRESS CITY
------- ---------- ------- ----
2 Willowbrook Willowbrook Mall 2630 Willowbrook Mall Rt. 46 Wayne
5 East Brunswick Brunswick Sq. 755 St. Hghwy 18 #530 E. Brunswick
6 Paramus Paramus Park Mall 1210 Paramus Park Mall Paramus
7 Springfield Springfield Mall 1200 Balt. Pike Springfield
9 Deptford Deptford Mall 1750 Deptford Center Road Deptford
15 Woodbridge Woodbridge Center 444 & 445 Woodbridge Center Drive Woodbridge
17 Rockaway Rt. 80 & Mt. Hope Ave. Rockaway Twnsq. Rockaway
19 Lake Forest Lake Forest 701 Russell Avenue Gaithersburg
23 Hawthorn Hawthorn Center 226 Hawthorn Center Vernon Hills
24 Roosevelt Field Roosevelt Field Mall #11428 Garden City
25 Grand Rapids Woodland Mall 3167 28th Street S.E. Grand Rapids
26 Twelve Oaks Twelve Oaks Mall 27742 Novi Rd. Suite A Novi
28 Fairlane Fairlane Town Center J-137 18900 Michigan Ave. Dearborn
29 Oakland Oakland Mall 608 W. 14 Mile Rd. Troy
31 Fair Oaks Fair Oaks Shopping Center 11930-U Lee Jackson Hghw Fairfax
33 White Plains The Galleria at White Plains 100 Main Street White Plains
35 Lakeside Unit 2060 14600 Lakeside Circle Sterling Heights
37 Stratford Sq. Stratford Square 418 Stratford Square Bloomingdale
44 Southlake Southlake Mall 1922 Southlake Mall Merrillville
66 Willow Grove Willow Grove Pk #2013 2500 Moreland Rd. Willow Grove
69 Garden State Garden State Plaza Routes 4 & 17 Paramus
70 Burlington Burlington Mall 1016 Burlington Mall Road Burlington
77 Eastpoint Eastpoint Mall Northpoint Blvd & Eastern Ave Baltimore
81 Princeton The Market Place 3885 Route 27 Princeton
83 Market St. The Gallery at Market St 9th & Market St. Philadelphia
88 Walt Whitman Walt Whitman 160 Walt Whitman Road Suite 1005 Huntington Station
91 Harlem Irving Harlem-Irving Plaza 4156 N. Harlem Ave. Norridge
93 Columbia Columbia Mall #2099 Little Patuxent Parkway. Columbia
94 White Marsh White Marsh Mall #2056 8200 Perry Hall Blvd. Parkville
96 Staten Island Staten Island Mall 2655 Richmond Ave Staten Island
100 Henrietta Market Place Mall 190 Miracle Mile Drive Rochester
101 Annapolis Annapolis Mall Space 159 Annapolis
104 Northriverside N. Riverside Park G8 7501 W. Cermak Rd. N. Riverside
107 Green Acres Green Acres Mall 2010 Green Acres Mall Valley Stream
109 Arsenal Mkt. Arsenal Marketplace 455 Arsenal St Space B-17 Watertown
113 Lynnhaven Lynnhaven Mall #B-10 701 Lynnhaven Pkwy Virginia Beach
DATE DATE
STORE # STORE NAME STATE TYPE SIZE OPENED RENO
------- ---------- ----- ---- ---- ------ ----
2 Willowbrook NJ Regular 3,856 8/1/70
5 East Brunswick NJ Regular 4,767 10/1/73 9/23/99
6 Paramus NJ Regular 4,767 3/1/74
7 Springfield PA Regular 2,990 9/1/74
9 Deptford NJ Regular 3,572 12/1/95
15 Woodbridge NJ Regular 2,955 10/28/77
17 Rockaway NJ Regular 6,810 7/31/78 4/13/00
19 Lake Forest MD Regular 4,707 9/11/78
23 Hawthorn IL Regular 4,267 8/1/79
24 Roosevelt Field NY Regular 2,975 4/1/94 8/1/97
25 Grand Rapids MI Regular 5,230 8/24/79
26 Twelve Oaks MI Regular 3,867 4/1/92
28 Fairlane MI Regular 4,458 11/27/79
29 Oakland MI Regular 4,939 2/26/80
31 Fair Oaks VA Regular 4,861 7/31/80
33 White Plains NY Regular 4,577 8/6/80
35 Lakeside MI Regular 4,778 8/21/80
37 Stratford Sq. IL Regular 3,800 3/9/81
44 Southlake IN Regular 4,902 8/17/81
66 Willow Grove PA Regular 4,000 8/11/82
69 Garden State NJ Regular 6,581 10/26/82 11/11/99
70 Burlington MA Regular 4,311 11/11/82 6/9/98
77 Eastpoint MD Regular 4,000 8/21/82 5/1/97
81 Princeton NJ Outlet 5,005 10/2/75
83 Market St. PA Regular 3,968 8/11/77 7/26/00
88 Walt Whitman NY Regular 4,526 7/15/80 5/1/97
91 Harlem Irving IL Regular 4,500 2/13/81
93 Columbia MD Regular 4,630 8/6/81 2/1/97
94 White Marsh MD Regular 5,070 8/12/81
96 Staten Island NY Regular 4,805 8/8/81
100 Henrietta NY Regular 3,238 3/3/83
101 Annapolis MD Regular 4,042 3/1/83
104 Northriverside IL Regular 4,337 7/27/81
107 Green Acres NY Regular 3,864 8/27/83
109 Arsenal Mkt. MA Regular 3,539 11/13/83
113 Lynnhaven VA Regular 3,405 3/3/82
THE CHILDREN'S PLACE
351 STORES
11-Sep-00
STORE # STORE NAME ADDRESS CITY
------- ---------- ------- ----
600 Livingston Livingston Mall 83 Livingston Mall Livingston
604 Ford City Ford City 7601 S. Cicero Ave Space #1476. Chicago
605 Harmon Cove Harmon Cove Outlet 20 Enterprise Ave Secaucus
610 Kittery Maine Outlet US Route 1 Kittery
628 Holyoke Holyoke Mall at Ingleside 50 Holyoke Street Holyoke
641 Glenbrook Sq. Glenbrook Square M-22. 4201 Coldwater Rd. Ft. Wayne
644 Jefferson Valley Jefferson Valley Mall 650 Lee Blvd. G-1A Yorktown Heights
663 Danbury Danbury Fair #156 7 Backus Ave Danbury
665 Owings Mills Owings Mills Town Center 10300 Mill Run Cir Owings Mills
666 Emerald Sq. Emerald Square 236 Emerald Square N. Attleboro
667 Walden Walden Galleria Space #G210 Buffalo
669 Chesterfield Chesterfield Towne Ctr. 11500 Midlothian Tnpk. Richmond
670 Independence Independence Mall Smith's Lane & Route 3 Kingston
673 Columbus City Columbus City Center 185 Columbus City Ctr. Columbus
674 Franklin Mills Franklin Mills 1442 Franklin Mills Circle Philadelphia
675 Manhattan Mall Manhattan Mall 901 Avenue of The Americas, Level C-2 New York
676 Irondequoit Irondequoit Mall 351 Irondequoit Mall Drive Rochester
677 Buckland Buckland Hills 194 Buckland St. Ste. 1114 Manchester
678 St. Charles St. Charles Towne Ctr. 5000 Route 301 South Waldorf
681 Lincolnwood Lincolnwood Town Ctr Sp A11 3333 W Touhy Ave Lincolnwood
682 Queens Center Queens Center Sp.#'s H410/411/412 90-15 Queens Blvd Elmhurst
683 Freehold Freehold Raceway Mall 3710 Highway 9 Suite 2105 Freehold
685 Carousel Carousel Center 9593 Carousel Center Syracuse
686 Bellevue Ctr. Bellevue Center 7620 Highway 70 South Nashville
687 Tri - County Tri-County Mall 11700 Princeton Pk. SP C208-209 Cincinnati
688 Florence Florence Mall #2014 Mall Road Florence
689 Exton Exton Square Mall 222 Exton Square Mall Exton
691 York York Galleria Whiteford Rd. & Mt. Zion Rd. York
693 Northgate Northgate Mall 9635 Colerain Ave. Cincinnati
695 Hanes Hanes Mall 3320 Hanes Mall Suite 5520 Winston-Salem
696 Coral Spring Coral Square Mall 9357 W. Atlantic Blvd. Coral Springs
697 Silver City Silver City Galleria 2 Galleria Mall Drive East Taunton
698 Crystal Run The Galleria at Crystal Run 33 Crystal Run Road Middletown
699 Kings Plaza Kings Plaza Mall 5344 Kings Plaza Brooklyn
701 Rockingham Rockingham Park Mall 99 Rockingham Park Blvd Salem
702 Charlestown Charlestown Center 3800 Main St. Space G114 St. Charles
DATE DATE
STORE # STORE NAME STATE TYPE SIZE OPENED RENO
------- ---------- ----- ---- ---- ------ ----
600 Livingston NJ Regular 3,762 2/1/73
604 Ford City IL Regular 4,019 7/27/83
605 Harmon Cove NJ Outlet 7,270 11/17/83 6/5/98
610 Kittery ME Outlet 6,433 10/18/83
628 Holyoke MA Regular 4,000 10/13/84
641 Glenbrook Sq. IN Regular 3,830 4/4/85
644 Jefferson Valley NY Regular 3,846 8/15/85
663 Danbury CT Regular 3,015 2/1/96
665 Owings Mills MD Regular 4,329 7/30/86 2/22/99
666 Emerald Sq. MA Regular 4,553 9/2/89 4/13/00
667 Walden NY Regular 3,679 8/3/89 3/20/98
669 Chesterfield VA Regular 4,576 12/9/89
670 Independence MA Regular 4,205 10/4/89 2/21/98
673 Columbus City OH Regular 5,291 4/27/90 4/13/00
674 Franklin Mills PA Outlet 5,419 4/20/90 11/17/99
675 Manhattan Mall NY Regular 6,142 12/6/89 7/19/99
676 Irondequoit NY Regular 4,721 3/2/90
677 Buckland CT Regular 4,160 3/17/90 3/10/00
678 St. Charles MD Regular 4,875 3/30/90
681 Lincolnwood IL Regular 6,156 9/27/90 8/2/00
682 Queens Center NY Regular 6,060 8/10/90 3/7/99
683 Freehold NJ Regular 4,670 8/1/90
685 Carousel NY Regular 5,140 10/15/90
686 Bellevue Ctr. TN Regular 5,487 8/11/90
687 Tri - County OH Regular 3,975 11/8/90 7/31/99
688 Florence KY Regular 4,967 7/12/90 7/16/99
689 Exton PA Regular 3,800 9/21/90
691 York PA Regular 4,076 3/28/93
693 Northgate OH Regular 5,320 8/16/90
695 Hanes NC Regular 4,673 10/6/90 7/28/99
696 Coral Spring FL Regular 5,059 11/23/90
697 Silver City MA Regular 3,279 3/1/92 7/14/00
698 Crystal Run NY Regular 4,000 7/19/92
699 Kings Plaza NY Regular 4,502 8/8/92
701 Rockingham NH Regular 3,877 11/27/92
702 Charlestown IL Regular 4,222 8/27/93
THE CHILDREN'S PLACE
351 STORES
11-Sep-00
STORE # STORE NAME ADDRESS CITY
------- ---------- ------- ----
703 Mall of America Mall of America S110 South Avenue Bloomington
706 Marley Station Marley Station 7900 Governor Richie Highway Space B-125 Glen Burnie
707 South Shore South Shore Plaza #1013 250 Granite Street Braintree
708 Natick Natick Mall 1245 Worcester Road Space 2124 Natick
709 Maplewood Maplewood Mall 2047C Maplewood Mall Maplewood
710 Crossgates Crossgates Mall 1 Crossgates Mall Road Albany
711 Saugus Square One 1277 Broadway Drive Space N-217 Saugus
712 Worcester Worcester Commons Fashion Outlet 110 Front St Suite 129 Worcester
714 Sunrise Sunrise Mall Space #8A, Building Q 349 Sunrise Mall Massapequa
715 Newport Newport Centre 30 Mall Drive West Space #161 Jersey City
716 Nanuet Nanuet Mall Space 2128 Upper Level 75 W. Route 59 Nanuet
717 Meriden Meriden Square Space #S-1010 470 Lewis Avenue Meriden
718 Towson Towson Town Center 825 Dulaney Valley Road Suite #A252 Towson
719 Northshore Northshore Mall Junction of Routes 114 & 128 Space E-151 Peabody
720 Eastview Eastview Mall 7979 Victor-Pittsford Road Victor
721 Woodfield The Woodfield Mall Space G-315 Schaumburg
722 Maine Mall Maine Mall Space #S161 364 Maine Mall South Portland
723 Greenwood Park Greenwood Park Mall 1251 US 31 North Space C-5 Greenwood
724 Crabtree Crabtree Valley Mall 4325 Glenwood Ave Space L 123 Lower Level Raleigh
725 Orland Square Orland Square Mall 828 Orland Square Mall Orland Park
726 86th Street 86th Street 173 E. 86th & 3rd Ave. New York
727 Solomon Pond Solomon Pond 580 Donald Lynch Boulevard #N-245 Marlborough
728 Kenwood Kenwood Towne Centre 7875 Montgomery Road Suite #88 Cincinnati
729 Great Northern Great Northern Mall 4155 Rt. 31 #C-142 Clay
730 Bay Terrace Bay Terrace 211-17 26th Avenue Bayside Queens
731 Bayridge Bayridge (86th & 4th) 417-419 86th St. Bayridge Brooklyn
732 Montgomery Montgomery Mall 233 Montgomery Mall E19 North Wales
733 Castleton Square Castleton Square 6020 E. 82nd Street #530 Indianapolis
734 Bridgewater Bridgewater Commons 400 Commons Way 341 Bridgewater
735 Quaker Bridge Quakerbridge Mall 173 Quakerbridge Mall #G 6/7 Lawrenceville
736 Mall of New Hampshire The Mall of New Hampshire 1500 South Willow Street H-25 Manchester
737 Crystal Mall Crystal Mall 850 Hartford Turnpike #211-212 Waterford
738 Monmouth Mall Monmouth Mall Routes 35&36 Eatontown
739 Smith Haven Smith Haven Mall Routes 25&347 #N-3 Lake Grove
740 South Shore South Shore Mall 1701 Sunrise Highway #D-8 Bay Shore
741 Apple Blossom Apple Blossom Mall 1850 Apple Blossom Drive S-123 Winchester
DATE DATE
STORE # STORE NAME STATE TYPE SIZE OPENED RENO
------- ---------- ----- ---- ---- ------ ----
703 Mall of America MN Regular 5,040 6/12/93
706 Marley Station MD Regular 4,004 10/23/93
707 South Shore MA Regular 2,981 7/23/94
708 Natick MA Regular 3,907 10/12/94
709 Maplewood MN Regular 3,827 11/23/94
710 Crossgates NY Regular 4,238 10/30/94 6/24/98
711 Saugus MA Regular 3,674 11/4/94
712 Worcester MA Outlet 3,795 10/29/94
714 Sunrise NY Regular 3,775 4/7/95
715 Newport NJ Regular 3,387 3/25/95
716 Nanuet NY Regular 3,530 10/21/95
717 Meriden CT Regular 3,352 3/24/95
718 Towson MD Regular 4,000 8/4/95
719 Northshore MA Regular 2,581 8/5/95
720 Eastview NY Regular 3,556 10/7/95
721 Woodfield IL Regular 3,840 10/12/95
722 Maine Mall ME Regular 3,325 10/2/95
723 Greenwood Park IN Regular 3,211 3/10/96
724 Crabtree NC Regular 3,737 3/9/96
725 Orland Square IL Regular 3,790 7/18/96
726 86th Street NY Regular 3,500 9/12/96
727 Solomon Pond MA Regular 3,696 8/8/96
728 Kenwood OH Regular 4,476 8/2/96
729 Great Northern NY Regular 3,211 10/31/96
730 Bay Terrace NY Regular 3,052 10/23/96
731 Bayridge NY Regular 4,000 10/30/96
732 Montgomery PA Regular 3,085 10/22/96
733 Castleton Square IN Regular 3,411 11/7/96
734 Bridgewater NJ Regular 3,720 9/20/96
735 Quaker Bridge NJ Regular 3,713 11/1/96
736 Mall of New Hampshire NH Regular 3,825 11/2/96
737 Crystal Mall CT Regular 4,433 11/22/96
738 Monmouth Mall NJ Regular 3,215 11/8/96
739 Smith Haven NY Regular 3,734 11/13/96
740 South Shore NY Regular 4,102 11/13/96
741 Apple Blossom VA Regular 3,353 2/27/97
THE CHILDREN'S PLACE
351 STORES
11-Sep-00
STORE # STORE NAME ADDRESS CITY
------- ---------- ------- ----
742 Concord Mall Concord Mall 4737 Concord Pike #150 Wilmington
743 River Oaks River Oaks Shopping Center 115 River Oaks Center B-27 Calumet City
744 Eastland Center Eastland Center 18000 Vernier Road #820A Harper Woods
745 Oxford Valley Oxford Valley Mall 2300 E. Lincoln Highway #158 Langhorne
746 Cherry Hill Mall Cherry Hill Mall 2000 Rt. 38 Suite 851 Cherry Hill
747 Christiana Mall Christiana Mall 446 Christiana Mall Road #508 Newark
748 Potomac Mills Potomac Mills 2700 Potomac Mills Circle #767 Woodbridge
750 Riverhead Tanger Outlet Center Tanger Drive #908 Riverhead
751 Ross Park Mall Ross Park Mall 1000 Ross Park Mall Drive C2 Pittsburgh
752 Hamilton Mall Hamilton Mall 4403 Black Horse Pike Mays Landing
753 Gurnee Mills Gurnee Mills 6170 West Grand Avenue #431 Gurnee
754 Tuttle Crossing Tuttle Crossing 5043 Tuttle Crossing Boulevard #108 Dublin
755 Fox Valley Center Fox Valley Shopping Center 2200 Fox Valley Center D-14 Aurora
756 Ridgedale Center Ridgedale Center 12553 Wayzata Blvd. #103 Minnetonka
757 Eastland Mall Eastland Mall 800 North Green River Road #440 Evansville
758 Cambridgeside Galleria Cambridgeside Galleria 100 Cambridgeside Place #W-214 Cambridge
759 Dayton Mall Dayton Mall 2700 Miamisburg-Centerville Road #354 Dayton
760 Pheasant Lane Pheasant Lane Mall 310 Daniel Webster Highway #E253 Nashua
761 Crossroads The Crossroads 66505 Westnedge #135 Portage
762 Spring Hill Mall Spring Hill Mall 1542 Spring Hill Mall West Dundee
763 Tippecanoe Tippecanoe Mall 2415 Sagamore Parkway South #G13 Lafayette
764 Westfarms Westfarms 500 Westfarms Mall Farmington
765 Randhurst Randhurst 999 Elmhurst Road #2565 Mount Prospect
766 Ocean County Mall Ocean County Mall 1201 Hooper Avenue #1010-11 Toms River
767 South Hills Village South Hills Village 447 South Hills Village Pittsburgh
768 Brass Mill Center Brass Mills Center 1156 Brass Mills Center Waterbury
769 Menlo Park Menlo Park Mall 445 Menlo Park Mall Edison
770 Poughkeepsie Galleria Poughkeepsie Galleria 790 South Road Poughkeepsie
771 Echelon Mall Echelon Mall 2250 Echelon Mall Voorhees
772 Mall @ Fairfield Commons Mall at Fairfield Commons 2727 Fairfield Commons Beavercreek
773 Burnsville Center Burnsville Center 2063 Burnsville Center Burnsville
774 Broadway Mall Broadway Mall 883 Broadway Mall Hicksville
775 Monroeville Mall Monroeville Mall 200 Mall Drive Monroeville
776 Four Seasons Town Centre Four Season Town Centre 141 Four Seasons Town Centre Greensboro
777 Niagara Factory Outlet Prime Outlets at Niagara Factory, USA 1822 Military Road Niagara Falls
778 Trumbull Shopping Park Trumbull Shopping Park 5065 Main Street Trumbull
DATE DATE
STORE # STORE NAME STATE TYPE SIZE OPENED RENO
------- ---------- ----- ---- ---- ------ ----
742 Concord Mall DE Regular 3,600 2/13/97
743 River Oaks IL Regular 3,791 2/26/97
744 Eastland Center MI Regular 4,034 2/13/97
745 Oxford Valley PA Regular 3,646 2/20/97
746 Cherry Hill Mall NJ Regular 3,691 2/27/97
747 Christiana Mall DE Regular 3,192 2/20/97
748 Potomac Mills VA Outlet 4,520 4/30/97 2/6/99
750 Riverhead NY Outlet 4,500 5/2/97
751 Ross Park Mall PA Regular 3,828 5/23/97
752 Hamilton Mall NJ Regular 3,813 5/16/97
753 Gurnee Mills IL Outlet 3,979 4/16/97
754 Tuttle Crossing OH Regular 3,270 7/24/97
755 Fox Valley Center IL Regular 4,219 8/14/97
756 Ridgedale Center MN Regular 3,774 7/24/97
757 Eastland Mall IN Regular 3,440 5/14/97
758 Cambridgeside Galleria MA Regular 3,271 6/25/97
759 Dayton Mall OH Regular 3,800 7/10/97
760 Pheasant Lane NH Regular 3,635 7/2/97
761 Crossroads MI Regular 3,177 4/24/97
762 Spring Hill Mall IL Regular 3,280 8/7/97
763 Tippecanoe IN Regular 3,600 6/18/97
764 Westfarms CT Regular 4,322 8/1/97
765 Randhurst IL Regular 4,212 9/11/97
766 Ocean County Mall NJ Regular 4,028 8/29/97
767 South Hills Village PA Regular 3,802 10/10/97
768 Brass Mill Center CT Regular 3,596 9/17/97
769 Menlo Park NJ Regular 4,695 9/25/97
770 Poughkeepsie Galleria NY Regular 3,315 11/1/97
771 Echelon Mall NJ Regular 4,531 8/15/97
772 Mall @ Fairfield Commons OH Regular 4,000 10/30/97
773 Burnsville Center MN Regular 3,769 8/28/97
774 Broadway Mall NY Regular 4,150 10/27/97
775 Monroeville Mall PA Regular 5,000 11/6/97
776 Four Seasons Town Centre NC Regular 3,523 8/29/97
777 Niagara Factory Outlet NY Outlet 4,896 5/15/97
778 Trumbull Shopping Park CT Regular 2,866 6/25/97
THE CHILDREN'S PLACE
351 STORES
11-Sep-00
STORE # STORE NAME ADDRESS CITY
------- ---------- ------- ----
780 King of Prussia King of Prussia 160 N. Goph Road King of Prussia
781 World Trade Center World Trade Center, Concourse 400 World Trade Center New York
782 Roosevelt Mall Roosevelt Mall 2327 Cottman Avenue Philadelphia
783 Ohio Factory Shops Ohio Factory Shops Factory Shops Bd. Jeffersonville
784 Beachwood Place Beachwood Place 26300 Cedar Road Beachwood
785 Oakbook Center Oakbrook Center 560 Oakbrook Center Oakbrook
786 Mall St. Matthews Mall St. Matthews 5000 Shelbyville Rd Suite #1530 Louisville
788 Summit Mall Summit Mall 3265 West Market Street Akron
789 Chestnut Hill Chestnut Hill Mall 8514 Germantown Avenue Philadelphia
793 Mall @ Steamtown Mall at Steamtown 231 Lackawanna/Wyomin Ave. Scranton
801 Connecticut Post Mall Connecticut Post Mall 1201 Boston Post Road Milford
802 Perimeter Mall Perimeter Mall 4400 Ashford Dunwoody Road Atlanta
803 Gwinnett Place Gwinnett Place 2100 Pleasant Hill Road Duluth
804 St. Clair Square St. Clair Square 230 St. Clair Square Fairview Heights
805 Mid Rivers Mall Mid-Rivers Mall 2440 Mid-Rivers Mall St. Peters
806 Southland Center Southland Center 23000 Eureka Road Taylor
807 Meridian Mall Meridian Mall 1982 Grand River Ave. Okemos
808 Hickory Hollow Mall Hickory Hollow Mall 5252 Hickory Hollow Parkway Suite 1017 Antioch
809 Rivergate Mall Rivergate Mall 1000 Two Mile Pkw. Goodlettsville
810 Oak Court Mall Oak Court Mall 4465 Poplar Ave. Memphis
811 Hamilton Place Hamilton Place 2100 Hamilton Place Boulevard Chattanooga
812 Oakdale Mall Oakdale Mall Harry L Drive & Reynolds Ave. Johnson City
813 Sangertown Square Sangertown Square Rt. 5 & 5A New Hartford
814 Southern Park Mall Southern Park Mall 7401 Market Street Youngstown
815 Great Lakes Mall Great Lakes Mall 7850 Mentor Ave. Mentor
817 Granite Run Mall Granite Run Mall 1067 W. Baltimore Pike Media
818 Millcreek Mall Mill Creek Mall 265 Mill Creek Mall Erie
819 Westgate Mall Westgate Mall 205 W. Blackstock Road Spartanburg
820 Fox Run Mall Fox Run Mall 50 Fox Run Road Newington
821 41st Street & Broadway 41st & Broadway, 1460 Broadway, New York
822 Fox River Mall Fox River Mall 4301 W. Wisconsin Ave. Appleton
823 Haywood Mall Haywood Mall 700 Haywood Rd. Greenville
824 Oak Park Mall Oakpark Mall 11215 West 95th Street Overland Park
825 Kensington Valley Factory Shops Kensington Valley Factory Shop 1475 N. Burkhart Road, Space C-180 Howell
826 Northwest Plaza Northwest Plaza 253 Northwest Plaza St. Ann
827 Carolina Place Mall Carolina Place Mall 11025 Carolina Place Pkwy Suite D-4 Pineville
DATE DATE
STORE # STORE NAME STATE TYPE SIZE OPENED RENO
------- ---------- ----- ---- ---- ------ ----
780 King of Prussia PA Regular 3,119 7/10/97
781 World Trade Center NY Regular 3,747 9/25/97
782 Roosevelt Mall PA Regular 4,643 7/25/97
783 Ohio Factory Shops OH Outlet 4,787 9/12/97
784 Beachwood Place OH Regular 3,233 9/19/97
785 Oakbook Center IL Regular 4,394 9/4/97
786 Mall St. Matthews KY Regular 3,714 11/6/97
788 Summit Mall OH Regular 3,690 11/13/97
789 Chestnut Hill PA Regular 5,000 7/3/97
793 Mall @ Steamtown PA Regular 3,890 11/7/97
801 Connecticut Post Mall CT Regular 3,706 2/20/98 6/23/00
802 Perimeter Mall GA Regular 3,216 3/6/98
803 Gwinnett Place GA Regular 2,944 3/13/98
804 St. Clair Square IL Regular 4,958 3/18/98
805 Mid Rivers Mall MO Regular 2,999 2/18/98
806 Southland Center MI Regular 4,848 3/17/98
807 Meridian Mall MI Regular 3,587 7/23/98
808 Hickory Hollow Mall TN Regular 3,806 3/12/98
809 Rivergate Mall TN Regular 3,502 5/8/98
810 Oak Court Mall TN Regular 3,341 5/6/98
811 Hamilton Place TN Regular 3,095 3/19/98
812 Oakdale Mall NY Regular 3,582 4/20/98
813 Sangertown Square NY Regular 4,088 3/7/98
814 Southern Park Mall OH Regular 3,055 4/29/98
815 Great Lakes Mall OH Regular 3,458 8/24/98
817 Granite Run Mall PA Regular 3,333 4/30/98
818 Millcreek Mall PA Regular 4,155 3/20/98
819 Westgate Mall SC Regular 4,279 3/27/98
820 Fox Run Mall NH Regular 4,337 3/26/98
821 41st Street & Broadway NY Regular 3,871 11/25/98
822 Fox River Mall WI Regular 3,098 2/26/98
823 Haywood Mall SC Regular 4,320 3/12/98
824 Oak Park Mall KS Regular 3,723 3/6/98
825 Kensington Valley Factory Shops MI Outlet 5,000 11/4/98
826 Northwest Plaza MO Regular 4,000 10/26/98
827 Carolina Place Mall NC Regular 3,630 7/24/98
THE CHILDREN'S PLACE
351 STORES
11-Sep-00
STORE # STORE NAME ADDRESS CITY
------- ---------- ------- ----
828 Lehigh Valley Mall Lehigh Valley Mall Rt. 22 at Rt. 145 North Whitehall
829 The Grand Avenue The Grand Ave. 275 W. Wisconsin Ave. Milwaukee
830 Five Oaks Outlet Tanger Outlet Center Five Oaks 1645 Parkway Seivierville
831 Commerce II Outlet Tanger Factory Outlet Center 800 Steven B. Tanger Blvd. Commerce
832 Montgomery Mall Montgomery Mall 7101 Democracy Blvd. Bethesda
833 Cary Towne Center Cary Towne Center 1105 Walnut Street Suite G 1126 Cary
834 SouthPark Center South Park Center 500 South Park Center Strongsville
835 Augusta Mall Augusta Mall 3450 Wrightsboro Road Augusta
836 Coral Ridge Mall Coral Ridge Mall Hwy, 965 & I 80 Coralville
837 Town Center @ Cobb Town Center at Cobb 400 Ernest W. Barrett Parkway Kennesaw
838 Springfield Mall Springfield Mall 6741 Springfield Mall Springfield
839 Fayette Mall Fayette Mall 3473 Nicholasville Road Lexington
840 Wheaton Plaza Wheaton Plaza Viers Mill Road Wheaton
841 Auburn Mall Auburn Mall 385 Southbridge Street Auburn
842 Cumberland Mall Cumberland Mall 3849 South Delsea Drive Vineland
843 Park City Center Park City Center 660 Park City Center Lancaster
845 Eastland Mall Eastland Mall 5641 Central Ave. Charlotte
846 Austin Street Austin Street 70-34 & 70-36 Austin Street Forest Hills
847 Great Lakes Crossing Great Lakes Crossing 4286 Baldwin Road Auburn Hills
848 Lafayette Square Lafayette Square 3919 Lafayette Road Indianapolis
849 Crossroads Mall Crossroads Mall 7400 Dodge Street Omaha
850 Fulton Street Fulton Street 471-485 Fulton Street Brooklyn
851 Lake Success Shopping Center Lake Success Shopping Center 1500 Union Turpike New Hyde Park
852 Bangor Mall Bangor Mall 663 Stillwater Ave. Bangor
853 Northwoods Mall Northwoods Mall 2150 Northwoods Blvd N. Charleston
854 Southpark Mall Southpark Mall 348 Southpark Circle Colonial Heights
855 Dover Mall Dover Mall 1088 Dover Mall Dover
856 34th Street 34th Street 22 West 34th Street New York
901 Potomac Yard Center Potomac Yard Center 3425 Jefferson-Davis Highway Alexandria
902 Rosedale Center Rosedale Shopping Center 117 Rosedale Space 220 Roseville
903 Oglethorpe Mall Oglethorpe Mall 7804 Abercorn Street Savannah
904 Cross Creek Mall Cross Creek Mall 117 Cross Creek Mall Fayetteville
905 Charleston Town Center Mall Charleston Town Center Mall 2075 Charleston Town Ctr. Charleston
906 Southlake Mall Southlake Mall 1238 Southlake Mall Morrow
907 Oak View Mall Oak View Mall 3001 South 144th Street Suite 2125 Omaha
908 Westminster Mall Westminister Mall 5403 W. 88th Avenue Westminster
DATE DATE
STORE # STORE NAME STATE TYPE SIZE OPENED RENO
------- ---------- ----- ---- ---- ------ ----
828 Lehigh Valley Mall PA Regular 2,996 7/22/98
829 The Grand Avenue WI Regular 3,531 3/20/98
830 Five Oaks Outlet TN Outlet 6,000 4/24/98
831 Commerce II Outlet GA Outlet 5,000 4/30/98
832 Montgomery Mall MD Regular 3,452 3/7/98
833 Cary Towne Center NC Regular 3,237 8/7/98
834 SouthPark Center OH Regular 3,979 8/6/98
835 Augusta Mall GA Regular 3,454 7/22/98
836 Coral Ridge Mall IA Regular 3,863 7/29/98
837 Town Center @ Cobb GA Regular 3,163 7/31/98
838 Springfield Mall VA Regular 3,086 7/28/98
839 Fayette Mall KY Regular 4,207 8/4/98
840 Wheaton Plaza MD Regular 3,990 5/1/98
841 Auburn Mall MA Regular 4,209 7/30/98
842 Cumberland Mall NJ Regular 4,025 7/31/98
843 Park City Center PA Regular 3,837 10/29/98
845 Eastland Mall NC Regular 3,890 10/30/98
846 Austin Street NY Regular 4,250 8/13/98
847 Great Lakes Crossing MI Outlet 4,830 11/12/98
848 Lafayette Square IN Regular 3,500 10/28/98
849 Crossroads Mall NE Regular 3,643 11/2/98
850 Fulton Street NY Regular 4,800 8/6/98
851 Lake Success Shopping Center NY Regular 4,160 8/6/98
852 Bangor Mall ME Regular 3,756 11/12/98
853 Northwoods Mall SC Regular 3,286 10/27/98
854 Southpark Mall VA Regular 2,990 10/23/98
855 Dover Mall DE Regular 4,116 10/27/98
856 34th Street NY Regular 6,200 11/20/98
901 Potomac Yard Center VA Regular 3,169 3/9/99
902 Rosedale Center MN Regular 3,225 3/4/99
903 Oglethorpe Mall GA Regular 4,300 3/8/99
904 Cross Creek Mall NC Regular 3,065 4/10/99
905 Charleston Town Center Mall WV Regular 3,741 3/10/99
906 Southlake Mall GA Regular 4,061 4/13/99
907 Oak View Mall NE Regular 4,460 3/5/99
908 Westminster Mall CO Regular 5,936 3/5/99
THE CHILDREN'S PLACE
351 STORES
11-Sep-00
STORE # STORE NAME ADDRESS CITY
------- ---------- ------- ----
909 Regency Square Regency Square 9501 Arlington Express Way Jacksonville
910 Town Center Plaza Town Center Plaza 4832 W. 119th Street Leawood
911 Macon Mall Macon Mall 3661 Eisenhower Parkway Macon
912 Prime Outlets Hagerstown Prime Outlets Hagerstown 615 Prime Outlets Hagerstown
913 Governor's Square Governor's Square 1500 Apalachee Parkway Tallahassee
914 Plymouth Meeting Mall Plymouth Meeting Mall 500 Germantown Pike Plymouth Meeting
915 Independence Center Independence Center 2064 Independence Center Independence Center
916 Northwoods Mall Northwoods 4501 War Memorial Drive Peoria
917 The Mall at The Source The Mall at the Source 1504 Old Country Road Westbury
918 Oakwood Mall Oakwood Mall 4800 Golf Road Eau Claire
919 MacArthur Center Mac Arthur Center 300 Monticello Center Norfolk
920 Sawgrass Mills Sawgrass Mills 12801 W. Sunrise Blvd. Sunrise
921 1321 Kings Highway Kings Highway 1319 Kings Highway Brooklyn
922 North DeKalb Mall North Dekalb Mall Lawrenceville Hwy Suite 1009 Decatur
923 Greenwood Mall Greenwood Mall US 231 Bowling Green
924 Market Place Mall Market Place Mall 2000 N. Neil Street Champaign
925 Chesterfield Mall Chesterfield Mall 211 Chesterfield Mall Chesterfield
926 Dulles Town Center Dulles Town Center 21100 Dulles Town Circle Suite 183 Dulles
927 The Citadel The Citadel 750 Citadel Dr. East Suite 2056 Colorado Springs
928 Northgate Mall Northgate Mall 1058 West Club Blvd. Durham
929 Bergen Mall Bergen Mall 2701 Bergen Mall Paramus
930 Towne East Square Towne East Square 7700 E. Kellogg Suite 851 Wichita
932 Westfield Shoppingtown Crestwood Plaza, 104 Crestwood Plaza St. Louis
933 The Mall at Barnes Crossing The Mall @ Barnes Crossing 1001 Barnes Crossing Road #132 Tupelo
934 Mall of Georgia at Millcreek Mall of Georgia at Millcreek 185 @ Highway 20 Buford
935 2039 Broadway (70th & Broadway) 2039 Broadway (Store entrance is on Amsterdam Avenue) New York
936 Cottonwood Mall Cottonwood Mall 4835 South Highland Drive Salt Lake City
937 Crossroads Mall 1700 28th Street, Suite 172 Boulder
938 South Towne Center South Town Center 10450 South State Street # 1118 Sandy
939 Providence Place 34 Providence Place Providence
940 Northwest Arkansas Mall Northwest Arkansas Mall 4201 North Shiloh Drive Fayetteville
941 University Mall Shopping Center University Mall Shopping Center E 205 University Mall B-34 Orem
942 Chapel Hills Mall Chapel Hill Mall 1710 Iragate Blvd #487 Colorado Springs
943 Concord Mills 8111 Concord Mills Blvd., Ste. 214 Concord
944 River Town Crossings Rivertown Parkway & Wilson Ave. Grandville
945 Jersey Gardens 651 Kapkowski Rd., Space #2204 Elizabeth
DATE DATE
STORE # STORE NAME STATE TYPE SIZE OPENED RENO
------- ---------- ----- ---- ---- ------ ----
909 Regency Square FL Regular 3,808 3/11/99
910 Town Center Plaza KS Regular 3,214 2/26/99
911 Macon Mall GA Regular 3,930 3/10/99
912 Prime Outlets Hagerstown MD Outlet 5,907 2/12/99
913 Governor's Square FL Regular 3,800 2/19/99
914 Plymouth Meeting Mall PA Regular 3,898 2/15/99
915 Independence Center MO Regular 4,253 3/5/99
916 Northwoods Mall IL Regular 3,870 2/24/99
917 The Mall at The Source NY Outlet 6,301 2/17/99
918 Oakwood Mall WI Regular 3,728 2/25/99
919 MacArthur Center VA Regular 3,975 3/12/99
920 Sawgrass Mills FL Outlet 3,748 4/23/99
921 1321 Kings Highway NY Regular 3,450 3/1/99
922 North DeKalb Mall GA Regular 4,000 3/6/99
923 Greenwood Mall KY Regular 4,000 5/11/99
924 Market Place Mall IL Regular 4,059 4/24/99
925 Chesterfield Mall MO Regular 4,318 4/22/99
926 Dulles Town Center VA Regular 3,978 5/4/99
927 The Citadel CO Regular 3,749 4/23/99
928 Northgate Mall NC Regular 4,063 4/17/99
929 Bergen Mall NJ Outlet 6,000 4/23/99
930 Towne East Square KS Regular 4,179 3/11/99
932 Westfield Shoppingtown MO Regular 3,553 10/20/99
933 The Mall at Barnes Crossing MS Regular 3,434 7/13/99
934 Mall of Georgia at Millcreek GA Regular 3,798 8/13/99
935 2039 Broadway (70th & Broadway) NY Regular 3,050 7/12/99
936 Cottonwood Mall UT Regular 3,787 6/22/99
937 Crossroads Mall CO Regular 3,551 10/22/99
938 South Towne Center UT Regular 4,101 7/14/99
939 Providence Place RI Regular 4,200 8/20/99
940 Northwest Arkansas Mall AR Regular 4,356 7/15/99
941 University Mall Shopping Center UT Regular 4,949 7/20/99
942 Chapel Hills Mall CO Regular 4,000 7/28/99
943 Concord Mills NC Outlet 4,749 9/17/99
944 River Town Crossings MI Regular 4,017 11/3/99
945 Jersey Gardens NJ Outlet 4,948 10/21/99
THE CHILDREN'S PLACE
351 STORES
11-Sep-00
STORE # STORE NAME ADDRESS CITY
------- ---------- ------- ----
946 2187 Broadway 2187 Broadway New York
947 Greenway Center Green Way Center 7499 Greenbelt Road Store 22 Greenbelt
948 Myrtle Beach Factory Stores The Myrtle Beach Factory Stores 4630 Highway 501 Myrtle Beach
949 Lenox Square Lenox Center 3393 Peachtree Road NE Atlanta
950 Golf Mill Shopping Center Golf Mill 350 Golf Mill Center Niles
951 Grand Traverse Mall Grand Traverse Mall 3200 S. Airport Road West Traverse City
952 The Westchester The Westchester 125 Westchester Avenue Suite 3050 White Plains
953 69th Street 69th Street 82-84 S. 69th Street Upper Darby
954 Valley West Mall Valley West Mall 1551 Valley West Drive Suite 154 West Des Moines
955 Genesee Valley Center 3225 S. Linden Flint
956 The Florida Mall 8001 S. Orange Bloosom Tr., #1238 Orlando
957 Virginia Center Commons Virginia Center Commons 10101 Brook Road Suite 814 Glen Allen
958 State Street 39 South State Street Chicago
959 Old Orchard Center 84 Old Orchard Center Skokie
960 Downtown Crossing 349-351 Washington Street Boston
961 Union Square 36 East 16th Street New York
962 The Fashion Centre @ Pentagon City Fashion Centre at Pentagon City 1100 S. Hayes Street Suite 2010 Arlington
963 Six Flags Factory Outlet Six Flags Factory Outlet 537 Monmouth Road Jackson Township
964 Northpark Mall Northpark Mall 101 North Rangeline Road #142 Joplin
965 West Town Mall West Town Mall 7600 Kingston Pike Knoxville
966 Knoxville Town Center 3000 A Mall Road, North Knoxville
967 Madison Square 5901 University Drive Huntsville
968 West Ridge Mall 1801 SW Wanamaker Topeka
969 Arbor Place Mall 1420 Arbor Place Mall Douglasville
970 Palisades Avenue 55-63 West Palisades Avenue Englewood
971 Franklin Park Mall 5001 Monroe Street 556 Franklin Park Mall Toledo
972 SouthPark Mall South Park Mall 4500 16th Street Moline
975 The Empire - Empire East 4001 W. 41st Street Sioux Falls
976 Montgomery Mall 2979 Montgomery Mall Montgomery
977 Spotsylvania Mall 310 Spotsylvania Mall Fredricksburg
979 Washington Heights 600 West 181 Street (Nicholas Avenue) New York
980 Fashion Place 6191 South State, Suite 232 Murray
981 North Point Mall 2034 North Point Circle Alpharetta
982 Miami International Mall 1455 NW 107th Avenue, Suite 760 Miami
983 Columbiana Centre 100 Columbiana Circle Columbia
984 The Sands Shopping Center 3519 Long Beach Road Oceanside
DATE DATE
STORE # STORE NAME STATE TYPE SIZE OPENED RENO
------- ---------- ----- ---- ---- ------ ----
946 2187 Broadway NY Regular 4,000 8/17/99
947 Greenway Center MD Regular 3,340 5/11/99
948 Myrtle Beach Factory Stores SC Outlet 6,000 7/22/99
949 Lenox Square GA Regular 5,066 5/14/99
950 Golf Mill Shopping Center IL Regular 4,352 4/17/99
951 Grand Traverse Mall MI Regular 3,511 5/11/99
952 The Westchester NY Regular 4,709 5/10/99
953 69th Street PA Regular 5,300 4/23/99
954 Valley West Mall IA Regular 3,750 7/22/99
955 Genesee Valley Center MI Regular 3,973 10/22/99
956 The Florida Mall FL Regular 4,240 11/6/99
957 Virginia Center Commons VA Regular 3,895 7/23/99
958 State Street IL Regular 5,308 11/26/99
959 Old Orchard Center IL Regular 4,800 8/27/99
960 Downtown Crossing MA Regular 5,428 11/5/99
961 Union Square NY Regular 3,913 7/29/99
962 The Fashion Centre @ Pentagon City VA Regular 3,406 5/14/99
963 Six Flags Factory Outlet NJ Outlet 4,965 5/11/99
964 Northpark Mall MO Regular 3,578 7/20/99
965 West Town Mall TN Regular 4,200 5/14/99
966 Knoxville Town Center TN Regular 4,144 10/22/99
967 Madison Square AL Regular 3,591 10/23/99
968 West Ridge Mall KS Regular 3,800 10/25/99
969 Arbor Place Mall GA Regular 4,250 10/13/99
970 Palisades Avenue NJ Regular 5,000 11/15/99
971 Franklin Park Mall OH Regular 3,651 7/14/99
972 SouthPark Mall IL Regular 3,183 8/20/99
975 The Empire - Empire East SD Regular 3,821 10/25/99
976 Montgomery Mall AL Regular 3,630 11/3/99
977 Spotsylvania Mall VA Regular 3,710 10/28/99
979 Washington Heights NY Regular 6,000 9/23/99
980 Fashion Place UT Regular 3,600 10/27/99
981 North Point Mall GA Regular 3,628 10/21/99
982 Miami International Mall FL Regular 4,480 10/24/99
983 Columbiana Centre SC Regular 3,630 10/23/99
984 The Sands Shopping Center NY Regular 7,500 12/3/99
THE CHILDREN'S PLACE
351 STORES
11-Sep-00
STORE # STORE NAME ADDRESS CITY
------- ---------- ------- ----
985 Town Center at Boca Raton 240 Town Center Boca Raton
987 Five Towns Shopping Center 253-01 Rockaway Blvd. Woodmere
988 Bruckner Plaza 1937 Tumbull Avenue Bronx
989 Woodbury Commons 632 Blue Bird Court Central Valley
1001 Parkchester 1420 Metropolitan Avenue Bronx
1002 Walnut Street Rittenhouse Claridge, 1722-24 Walnut Street Philadelphia
1003 North Ave & Kingsbury Road 1574 North Kingsbury Street Chicago
1004 Pioneer Place 385 Southwest Yamshill, Space 1300 Portland
1005 Palisades Center 3751 Palisades Center Drive West Nyack
1006 Sunvalley Shopping Center 464 Sunvalley Mall Concord
1007 Panama City Mall E-2160 Martin Luther King Jr. Blvd. Panama City
1008 Mall of the Bluffs 1751 Madison Avenue, Suite 326 Council Bluffs
1009 The Esplanade 1401 W. Esplanade Avenue, Suite 1606 Kenner
1010 Meadowood Mall 5435 Meadowood Mall Circle Reno
1011 CoolSprings Galleria 1800 Galleria Blvd., Suite 2120 Franklin
1012 Valley River Center 269 Valley River Center Eugene
1013 Ridgmar 1936 Green Oaks Road Fort Worth
1014 Boulevard Mall 1211 Niagara Falls Blvd., Space #629 Amherst
1015 Bellevue Square 250 Bellevue Square Bellevue
1016 Stonestown Galleria 3251 20th Ave., Suite 120/122 San Francisco
1017 Katy Mills 5000 Katy Mills Circle, Suite 614 Katy
1018 Lloy Center 1010 Lloyd Center Portland
1019 Clackamas Town Center 12000 SE 82 Ave., Suite #1017 Portland
1021 North Star Mall 7400 San Pedro Road, Space 252 San Antonio
1022 Capital Mall 625 Black Lake Blvd, Suite 226 Olympia
1023 Oakwood Center 197 Westbank Expressway, Space 1295 Gretna
1024 Opry Mills Mall 2828 Opryland Drive, suite #471 Nashville
1025 Cape Cod Mall Rt. 132/Iannough Road Hyannis
1026 Mall of America (babyPLACE) 276 North Garden Bloomington
1028 Myrtle Avenue 57 - 37/41 Myrtle Avenue Queens
1029 First Colony Mall 16535 South West Freeway, Suite 310 Sugarland
1030 Serramonte Center 117-A Serramonte Center Daly City
1031 Vancouver Mall 8700 NE Vancouver Mall Drive, Suite 144 Vancouver
1032 Stoneridge Shopping Center 1248 Stoneridge Mall Pleasanton
1033 South County Center 55 South County Centerway St. Louis
1034 Golden East Crossing 1100 North Wesleyan Blvd, Suite 158 Rocky Mount
DATE DATE
STORE # STORE NAME STATE TYPE SIZE OPENED RENO
------- ---------- ----- ---- ---- ------ ----
985 Town Center at Boca Raton FL Regular 3,821 11/23/99
987 Five Towns Shopping Center NY Regular 10,000 12/2/99
988 Bruckner Plaza NY Regular 4,200 11/19/99
989 Woodbury Commons NY Outlet 4,900 11/24/99
1001 Parkchester NY Regular 4,000 2/21/00
1002 Walnut Street PA Regular 3,960 2/28/00
1003 North Ave & Kingsbury Road IL Regular 5,220 2/26/00
1004 Pioneer Place OR Regular 3,808 3/28/00
1005 Palisades Center NY Regular 4,249 2/18/00
1006 Sunvalley Shopping Center CA Regular 3,900 2/29/00
1007 Panama City Mall FL Regular 4,172 3/7/00
1008 Mall of the Bluffs IA Regular 3,989 2/25/00
1009 The Esplanade LA Regular 3,872 3/9/00
1010 Meadowood Mall NV Regular 4,003 2/24/00
1011 CoolSprings Galleria TN Regular 3,500 2/22/00
1012 Valley River Center OR Regular 3,652 3/5/00
1013 Ridgmar TX Regular 4,180 3/10/00
1014 Boulevard Mall NY Regular 3,688 2/24/00
1015 Bellevue Square WA Regular 3,754 4/4/00
1016 Stonestown Galleria CA Regular 4,497 3/10/00
1017 Katy Mills TX Outlet 5,406 2/25/00
1018 Lloy Center OR Regular 3,952 3/1/00
1019 Clackamas Town Center OR Regular 3,782 4/14/00
1021 North Star Mall TX Regular 3,355 3/4/00
1022 Capital Mall WA Regular 4,252 3/8/00
1023 Oakwood Center LA Regular 3,595 2/29/00
1024 Opry Mills Mall TN Outlet 5,790 5/10/00
1025 Cape Cod Mall MA Regular 4,015 4/7/00
1026 Mall of America (babyPLACE) MN Regular 1,915 3/3/00
1028 Myrtle Avenue NY Regular 4,884 4/13/00
1029 First Colony Mall TX Regular 4,204 3/10/00
1030 Serramonte Center CA Regular 5,373 3/12/00
1031 Vancouver Mall WA Regular 3,559 3/10/00
1032 Stoneridge Shopping Center CA Regular 4,195 4/13/00
1033 South County Center MO Regular 4,429 5/12/00
1034 Golden East Crossing NC Regular 3,873 4/11/00
THE CHILDREN'S PLACE
351 STORES
11-Sep-00
STORE # STORE NAME ADDRESS CITY
------- ---------- ------- ----
1035 Cordova Mall 5100 North Ninth Avenue, Suite #A125 Pensacola
1036 Miller Hill Mall 1600 Miller Trunk Hwy., Space #F06A Duluth
1038 Century III Mall 3075 Clairton Road West Mifflin
1039 Grapevine Mills 3000 Grapevine Mills Parkway, Suite 600 Grapevine
1040 Cherry Creek Shopping Center 3000 E. First Avenue Denver
1043 Acadiana Mall 5725 Johnston St., Space #A-257 Lafayette
1044 Oakridge Mall 190 Oakridge Mall San Jose
1045 Galleria 13355 Dallas Parkway, Suite 3625 Dallas
1046 Town East Mall 1056 Town East Mall Mesquite
1047 Chicago Ridge Mall 311 Chicago Ridge Mall, Space G11 Chicago Ridge
1048 West Towne Mall 48B West Towne Madison
1049 The Mall @ Cortana 9773 Cortana Place Baton Rouge
1050 Solano Mall 1350 Travis Blvd., Suite 1467-A Fairfield
1052 River Hills Mall 1850 Adams Street, Box 320 Mankato
1054 Boynton Beach Mall 801 N. Congress Avenue, Room 817 Boynton Beach
1056 Cherry Vale Mall 7200 Harrison Avenue, Unit E-60 Rockford
1057 Gateway mall 149 Gateway Mall Lincoln
1058 Chesapeake Square 4200 Portsmouth Blvd., Space 550 Chesapeake
1059 Oviedo Marketplace 1210 Oviedo Marketplace Blvd., Space #1035 Oviedo
1060 Layton Hills Mall 1014 Layton Hills Mall Layton
1061 Chautauqua Mall 318 East Fairmount Ave., Space #620 Lakewood
1062 Quail Springs Mall 2501 W. Memorial Road Oklahoma City
1065 Tanger Outlet at Branson 300 Tanger Blvd., Suite 208 Branson
1067 Waterford Lakes Town Center 441 N. Alafaya Trail Orlando
1088 Mall del Norte 5300 San Dario, Suite 110-B Laredo
1097 Darinor Plaza 500 Connecticut Avenue Norwalk
1101 Freeport 42 Main St. Freeport
DATE DATE
STORE # STORE NAME STATE TYPE SIZE OPENED RENO
------- ---------- ----- ---- ---- ------ ----
1035 Cordova Mall FL Regular 3,890 4/1/00
1036 Miller Hill Mall MN Regular 4,280 5/5/00
1038 Century III Mall PA Regular 3,804 5/3/00
1039 Grapevine Mills TX Outlet 5,134 3/10/00
1040 Cherry Creek Shopping Center CO Regular 4,500 4/20/00
1043 Acadiana Mall LA Regular 3,796 4/6/00
1044 Oakridge Mall CA Regular 3,645 4/14/00
1045 Galleria TX Regular 3,685 5/12/00
1046 Town East Mall TX Regular 3,966 5/9/00
1047 Chicago Ridge Mall IL Regular 3,809 3/10/00
1048 West Towne Mall WI Regular 4,560 4/15/00
1049 The Mall @ Cortana LA Regular 4,107 5/15/00
1050 Solano Mall CA Regular 3,893 4/5/00
1052 River Hills Mall MN Regular 4,450 4/14/00
1054 Boynton Beach Mall FL Regular 3,742 5/26/00
1056 Cherry Vale Mall IL Regular 3,709 5/9/00
1057 Gateway mall NE Regular 3,650 5/9/00
1058 Chesapeake Square VA Regular 4,199 4/10/00
1059 Oviedo Marketplace FL Regular 4,031 5/5/00
1060 Layton Hills Mall UT Regular 3,343 4/15/00
1061 Chautauqua Mall NY Regular 3,652 4/6/00
1062 Quail Springs Mall OK Regular 4,000 5/11/00
1065 Tanger Outlet at Branson MO Outlet 5,004 4/4/00
1067 Waterford Lakes Town Center FL Regular 3,711 5/20/00
1088 Mall del Norte TX Regular 4,007 5/2/00
1097 Darinor Plaza CT Regular 3,659 5/19/00
1101 Freeport ME Outlet 7,212 6/24/00
SCHEDULE 7.1
Indebtedness
None
EXHIBIT A-1
FORM OF ASSIGNMENT AND ACCEPTANCE
This ASSIGNMENT AND ACCEPTANCE (this "ASSIGNMENT AND ACCEPTANCE")
dated as of ____________, 200__ is made between _________________ (the
"ASSIGNOR") and _________________ (the "ASSIGNEE").
RECITALS
A. The Assignor is party to that certain Second Amended and Restated
Loan and Security Agreement, dated as of July 5, 2000 (as amended, amended and
restated, modified, supplemented or renewed from time to time, the "LOAN
AGREEMENT"), among The Children's Place Retail Stores, Inc. ("Borrower"), the
several financial institutions from time to time party thereto (including the
Assignor, collectively, the "LENDERS"), and Foothill Capital Corporation, a
California corporation, as agent for the Lenders (the "AGENT"). Any terms
defined in the Loan Agreement and not defined in this Assignment and Acceptance
are used herein as defined in the Loan Agreement;
B. As provided under the Loan Agreement, the Assignor has committed
to making Loans (the "COMMITTED LOANS") to the Borrower in an aggregate amount
not to exceed $ (the "COMMITMENT");
C. [The Assignor has made Committed Loans in the aggregate principal
amount of $__________ to the Borrower] [No Committed Loans are outstanding under
the Loan Agreement];
D. [The Assignor has acquired a participation in the Agent's
liability under Letters of Credit in an aggregate outstanding principal amount
of $____________ (the "L/C OBLIGATIONS")] [No Letters of Credit are outstanding
under the Loan Agreement]; and
E. The Assignor wishes to assign to the Assignee [part of the] [all]
rights and obligations of the Assignor under the Loan Agreement in respect of
its Commitment, [together with a corresponding portion of each of its
outstanding Committed Loans and L/C Obligations,] in an amount equal to
$_________ (the "ASSIGNED AMOUNT") on the terms and subject to the conditions
set forth herein and the Assignee wishes to accept assignment of such rights and
to assume such obligations from the Assignor on such terms and subject to such
conditions.
NOW THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
1. ASSIGNMENT AND ACCEPTANCE.
(a) Subject to the terms and conditions of this Assignment and
Acceptance, (i) the Assignor hereby sells, transfers, delegates, and assigns to
the Assignee, and (ii) the Assignee hereby purchases, assumes and undertakes
from the Assignor, without recourse and without representation or warranty
(except as provided in this Assignment and Acceptance)
Exhibit A-1, Page 1
__% (the "ASSIGNEE'S PERCENTAGE SHARE") of (A) the Commitment [and the Committed
Loans and the L/C Obligations] of the Assignor and (B) all related rights,
benefits, obligations, liabilities and indemnities of the Assignor under and in
connection with the Loan Agreement and the other Loan Documents.
[If appropriate, add paragraph specifying payment to Assignor by
Assignee of outstanding principal of, accrued interest on, and fees with respect
to, Committed Loans and L/C Obligations assigned.]
(b) With effect on and after the Effective Date (as defined in
Section 5 hereof), the Assignee shall be a party to the Loan Agreement and
succeed to all of the rights and be obligated to perform all of the obligations
of a Lender under the Loan Agreement, including the requirements concerning
confidentiality (if any) and the payment of indemnification to the Agent, with a
Commitment in an amount equal to the Assigned Amount. The Assignee agrees that
it will perform in accordance with their terms all of the obligations which by
the terms of the Loan Agreement are required to be performed by it as a Lender.
It is the intent of the parties hereto that the Commitment of the Assignor
shall, as of the Effective Date, be reduced by an amount equal to the Assigned
Amount and the Assignor shall relinquish its rights and be released from its
obligations under the Loan Agreement to the extent such obligations have been
assumed by the Assignee; PROVIDED, HOWEVER, the Assignor shall not relinquish
the rights under the Loan Agreement to the extent such rights relate to the time
prior to the Effective Date.
(c) After giving effect to the assignment and assumption set forth
herein, on the Effective Date the Assignee's Commitment will be $ .
(d) After giving effect to the assignment and assumption set forth
herein, on the Effective Date the Assignor's Commitment will be $ .
2. PAYMENTS.
(a) As consideration for the sale, assignment and transfer
contemplated in Section 1 hereof, the Assignee shall pay to the Assignor on the
Effective Date in immediately available funds an amount equal to $_______,
representing the Assignee's Percentage Share of the principal amount of all
Committed Loans.
(b) The [Assignor] [Assignee] further agrees to pay to the Agent a
processing fee in the amount of ___________________ ($_______), as specified in
Section 15.1(a) of the Loan Agreement.
3. REALLOCATION OF PAYMENTS.
Any interest, fees and other payments accrued to the Effective Date
with respect to the Commitment [,] [and] Committed Loans [and L/C Obligations]
shall be for the account of the Assignor. Any interest, fees and other payments
accrued on and after the Effective Date with respect to the Assigned Amount
shall be for the account of the Assignee. Each of the Assignor and the Assignee
agrees that it will hold in trust for the other party any interest, fees and
other amounts which it may receive to which the other party is entitled pursuant
Exhibit A-1, Page 2
to the preceding sentence and pay to the other party any such amounts which it
may receive promptly upon receipt.
4. INDEPENDENT CREDIT DECISION.
The Assignee (a) acknowledges that it has received a copy of the
Loan Agreement and the Schedules and Exhibits thereto, together with copies of
the most recent financial statements referred to in SECTION 6.3 of the Loan
Agreement, and such other documents and information as it has deemed appropriate
to make its own credit and legal analysis and decision to enter into this
Assignment and Acceptance; and (b) agrees that it will, independently and
without reliance upon the Assignor, the Agent or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit and legal decisions in taking or not taking
action under the Loan Agreement.
5. EFFECTIVE DATE; NOTICES.
(a) As between the Assignor and the Assignee, the effective date for
this Assignment and Acceptance (the "Effective Date") shall be the later of: (i)
____________, 199_; and (ii) the first day on which the following conditions
precedent have been satisfied:
(i) Assignment and Acceptance shall be executed and delivered
by the Assignor and the Assignee;
(ii) the consent of the Agent required for an effective
assignment of the Assigned Amount by the Assignor to the Assignee under SECTION
15.1(A) of the Loan Agreement shall have been duly obtained and shall be in full
force and effect as of the Effective Date;
(iii) the Assignee shall pay to the Assignor all amounts due to
the Assignor under this Assignment and Acceptance;
(iv) the processing fee referred to in Section 2(b) hereof and in
SECTION 15.1 of the Loan Agreement in the amount of _______________________
($______), shall have been paid to the Agent; and
(v) the Assignor shall have assigned and the Assignee shall have
assumed a percentage equal to the Assignee's Percentage Share of the rights and
obligations of the Assignor under the Loan Agreement.
(b) Promptly following the execution of this Assignment and
Acceptance, the Assignor shall deliver to the Borrower and the Agent for
acknowledgement by the Agent, a Notice of Assignment [substantially] in the form
attached hereto as SCHEDULE 1.
6. AGENT.
[(a)].The Assignee hereby appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers under the Loan
Agreement as are delegated to the Agent by the Lenders pursuant to the terms of
the Loan Agreement.
Exhibit A-1, Page 3
[INCLUDE ONLY IF ASSIGNOR IS AGENT] [(b) The Assignee shall assume
no duties or obligations held by the Assignor in its capacity as Agent under the
Loan Agreement.]
7. WITHHOLDING TAX.
The Assignee (a) represents and warrants to the Lenders, the Agent
and the Borrower that under applicable law and treaties no tax will be required
to be withheld by the Lenders with respect to any payments to be made to the
Assignee hereunder, (b) agrees to furnish (if it is organized under the laws of
any jurisdiction other than the United States or any State thereof) to the Agent
and the Borrower prior to the time that the Agent or the Borrower is required to
make any payment of principal, interest or fees hereunder, duplicate executed
originals of either U.S. Internal Revenue service Form 4224 or U.S. Internal
Revenue Service Form 1001 (wherein the Assignee claims entitlement to the
benefits of a tax treaty that provides for a complete exemption from U.S.
federal income withholding tax on all payments hereunder) and agrees to provide
new Forms 4224 or 1001 upon the expiration of any previously delivered form or
comparable statements in accordance with all applicable U.S. laws and
regulations and amendments thereto, duly executed and completed by the Assignee,
and (c) agrees to comply with all applicable U.S. laws and regulations with
regard to such withholding tax exemption.
8. REPRESENTATIONS AND WARRANTIES.
(a) The Assignor represents and warrants that (i) it is the legal
and beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any lien or other adverse claim; (ii) it is
duly organized and existing and it has the full power and authority to take, and
has taken, all action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be executed or
delivered by it in connection with this Assignment and Acceptance and to fulfill
its obligations hereunder; (iii) no notices to, or consents, authorizations or
approvals of, any person are required (other than any already given or obtained)
for its due execution, delivery and performance of this Assignment and
Acceptance, and apart from any agreements or undertakings or filings required by
the Loan Agreement, no further action by, or notice to, or filing with, any
person is required of it for such execution, delivery or performance; and (iv)
this Assignment and Acceptance has been duly executed and delivered by it and
constitutes the legal, valid and binding obligation of the Assignor, enforceable
against the Assignor in accordance with the terms hereof, subject, as to
enforcement, to bankruptcy, insolvency, moratorium, reorganization and other
laws of general application relating to or affecting creditors' rights and to
general equitable principles.
(b) The Assignor makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Loan Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Agreement or any other instrument or document furnished pursuant thereto. The
Assignor makes no representation or warranty in connection with, and assumes no
responsibility with respect to, the financial condition of the Borrower, or the
performance or observance by the Borrower, of any of its obligations under the
Loan Agreement or any other instrument or document furnished in connection
therewith.
Exhibit A-1, Page 4
(c) The Assignee represents and warrants that (i) it is duly
organized and existing and is an Eligible Transferee and it has full power and
authority to take, and has taken, all action necessary to execute and deliver
this Assignment and Acceptance and any other documents required or permitted to
be executed or delivered by it in connection with this Assignment and
Acceptance, and to fulfill its obligations hereunder; (ii) no notices to, or
consents, authorizations or approvals of, any person are required (other than
any already given or obtained) for its due execution, delivery and performance
of this Assignment and Acceptance; and apart from any agreements or undertakings
or filings required by the Loan Agreement, no further action by, or notice to,
or filing with any person is required of it for such execution, delivery or
performance; (iii) this Assignment and Acceptance has been duly executed and
delivered by it and constitutes the legal, valid and binding obligation of the
Assignee, enforceable against the Assignee in accordance with the terms hereof,
subject, as to enforcement, to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application relating to or affecting
creditors' rights and to general equitable principles.
9. FURTHER ASSURANCES.
The Assignor and the Assignee each hereby agrees to execute and
deliver such other instruments, and take such other action, as either party may
reasonably request in connection with the transactions contemplated by this
Assignment and Acceptance, including the delivery of any notices or other
documents or instruments to the Borrower or the Agent, which may be required in
connection with the assignment and assumption contemplated hereby.
10. MISCELLANEOUS.
(a) Any amendment or waiver of any provision of this Assignment and
Acceptance shall be in writing and signed by the parties hereto. No failure or
delay by either party hereto in exercising any right, power or privilege
hereunder shall operate as a waiver thereof and any waiver of any breach of the
provisions of this Assignment and Acceptance shall be without prejudice to any
rights with respect to any other or further breach thereof.
(b) All payments made hereunder shall be made without any set-off or
counterclaim.
(c) The Assignor and the Assignee shall each pay its own costs and
expenses incurred in connection with the negotiation, preparation, execution and
performance of this Assignment and Acceptance.
(d) This Assignment and Acceptance may be executed in any number of
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same agreement.
(e) THIS ASSIGNMENT AND ACCEPTANCE SHALL BE DEEMED TO HAVE BEEN MADE
IN THE STATE OF CALIFORNIA AND SHALL BE GOVERNED BY AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF SUCH STATE, EXCEPT THAT NO DOCTRINE OF CHOICE OF LAW
SHALL BE USED TO APPLY THE LAWS OF ANY OTHER STATE OR JURISDICTION. The Assignor
and Assignee each agrees that, in addition to any other courts that may have
jurisdiction under
Exhibit A-1, Page 5
applicable laws or rules, any action or proceeding to enforce
or arising out of this Assignment and Acceptance may be commenced in the
Superior Court of the State of California for Los Angeles County, or in the
United States District Court for the Central District of California, and the
Assignor and Assignee each consents and submits in advance to such jurisdiction
and agrees that venue will be proper in such courts on any such matter. Each
party to this Assignment and Acceptance hereby irrevocably waives, to the
fullest extent it may effectively do so, the defense of an inconvenient forum to
the maintenance of such action or proceeding.
(f) THE ASSIGNOR AND THE ASSIGNEE EACH HEREBY WAIVES TRIAL BY JURY,
RIGHTS OF SETOFF, AND THE RIGHT TO IMPOSE COUNTERCLAIMS IN ANY LITIGATION IN ANY
COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF THIS ASSIGNMENT AND
ACCEPTANCE, THE LOAN AGREEMENT, ANY RELATED DOCUMENTS AND AGREEMENTS OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, OR STATEMENTS (WHETHER ORAL OR WRITTEN)
DELIVERED PURSUANT HERETO OR THERETO, OR ANY OTHER CLAIM OR DISPUTE HOWSOEVER
ARISING, BETWEEN THE ASSIGNOR AND THE ASSIGNEE. THE ASSIGNOR AND THE ASSIGNEE
EACH CONFIRMS THAT THE FOREGOING WAIVERS ARE INFORMED AND FREELY MADE.
[Other provisions to be added as may be negotiated between the
Assignor and the Assignee, provided that such provisions are not inconsistent
with the Loan Agreement.]
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment and Acceptance to be executed and delivered by their duly authorized
officers as of the date first above written.
[ASSIGNOR]
By:
-----------------------------------------
Title:
--------------------------------------
By:
-----------------------------------------
Title:
--------------------------------------
Address:
--------------------------------
--------------------------------
Exhibit A-1, Page 6
[ASSIGNEE]
By:
---------------------------------------
Title:
------------------------------------
By:
---------------------------------------
Title:
------------------------------------
Address:
------------------------------
------------------------------
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Exhibit A-1, Page 7
SCHEDULE 1
NOTICE OF ASSIGNMENT AND ACCEPTANCE
___________, 200___
Foothill Capital Corporation
11111 Santa Monica Boulevard
Suite 1500
Los Angeles, CA 90025-3333
Attn: ________________
[Name and Address of Borrower]
Ladies and Gentlemen:
We refer to the Second Amended and Restated Loan and Security
Agreement, dated as of July 5, 2000 (as amended, amended and restated, modified,
supplemented or renewed from time to time, the "Loan Agreement"), among The
Children's Retail Stores, Inc. ("Borrower"), the several financial institutions
from time to time party thereto (collectively, the "Lenders"), and Foothill
Capital Corporation, as agent for the Lenders (the "Agent"). Terms defined in
the Loan Agreement are used herein as therein defined.
1. We hereby give you notice of, and request your consent to, the
assignment by ______ (the "ASSIGNOR") to ________________ (the "ASSIGNEE") of
_____% of the right, title and interest of the Assignor in and to the Loan
Agreement (including, without limitation, the right, title and interest of the
Assignor in and to the Commitments of the Assignor[,] [and] all outstanding
loans made by the Assignor [and the Assignor's participation in the Letters of
Credit]) pursuant to the Assignment and Acceptance Agreement attached hereto
(the "ASSIGNMENT AND ACCEPTANCE"). Before giving effect to such assignment, the
Assignor's Commitment is $_________[,] [and] the aggregate amount of its
outstanding loans is $_______[, and its participation in L/C Obligations is
$___________].
2. The Assignee agrees that, upon receiving the consent of the Agent to such
assignment, the Assignee will be bound by the terms of the Loan Agreement as
fully and to the same extent as if the Assignee were the Lender originally
holding such interest in the Loan Agreement.
3. The following administrative details apply to the Assignee:
(A) Notice Address:
Assignee name:
------------------------------
Address:
------------------------------
------------------------------
Exhibit A-1, Page 8
(B) Payment Instructions:
Account No.:
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At:
------------------------------------
------------------------------------
------------------------------------
Reference:
------------------------------------
Attention:
------------------------------------
4. You are entitled to rely upon the representations, warranties and
covenants of each of the Assignor and Assignee contained in the Assignment and
Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Notice of Assignment and Acceptance to be executed by their respective duly
authorized officials, officers or agents as of the date first above mentioned.
Very truly yours,
[NAME OF ASSIGNOR]
By:
------------------------------------
Title:
---------------------------------
By:
------------------------------------
Title:
---------------------------------
[NAME OF ASSIGNEE]
By:
Title:
By:
Title:
ACKNOWLEDGED:
_____________________________ ,
a ______ corporation, as Borrower
By:
---------------------------------
Title:
------------------------------
Exhibit A-1, Page 9
ACKNOWLEDGED AND ASSIGNMENT
CONSENTED TO:
FOOTHILL CAPITAL CORPORATION,
a California corporation, as Agent
By:
---------------------------
Title:
------------------------
Exhibit A-1, Page 10
EXHIBIT C-1
COMPLIANCE CERTIFICATE SAMPLE COPY
Date _______________, 2001
FOOTHILL CAPITAL CORPORATION
11111 Santa Monica Boulevard, Suite 1500
Santa Monica, California 90025-3333
Attention: ________________________
RE: SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT,
DATED AS OF JULY 5, 2000 (THE "AGREEMENT") BY AND AMONG
FOOTHILL CAPITAL CORPORATION AS AGENT ("AGENT") FOR
CERTAIN FINANCIAL INSTITUTIONS , THE FINANCIAL
INSTITUTIONS AND THE CHILDREN'S PLACE RETAIL STORES,
INC. ("BORROWER").
Dear _______________:
In accordance with Section 6.2 of the Agreement, this letter shall serve as
certification to Agent that to the best of my knowledge: (i) all financial
statements have been prepared in accordance with GAAP and fairly represent the
financial condition of Borrower, (ii) the representations and warranties of
Borrower set forth in the Agreement and other Loan Documents are true and
correct in all material respects on and as of the date of this certification,
(iii) as demonstrated on Exhibit 1 attached hereto, Borrower is in compliance
with each of its financial covenants set forth in Sections 7.19 and 7.20 of the
Agreement as of the date of this certification, and (iv) there does not exist
any condition or event that constitutes a Default or Event of Default. Such
certification is made as of the fiscal month ending ______________, 200__.
Sincerely,
Chief Financial Officer
Schedule C-1